GBP/USD. May 6. Results of the day. The second referendum in the UK may become a reality

4-hour timeframe

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The amplitude of the last 5 days (high-low): 125p - 123p - 73p - 64p - 188p.

Average amplitude over the last 5 days: 115p (85p).

In the morning, we wrote that Friday's growth of the pair is very difficult to call logical, given the nature of macroeconomic reports from America. Later, it was reported that the political crisis in Britain was gaining momentum, Laborites accused Theresa May of disclosing confidential information about the negotiations on the "deal", and the Conservative Party was defeated in the local elections in Great Britain. As you can see, there is no reason to buy the British pound. Nevertheless, on Friday, and last week as a whole, the pair has seriously strengthened, but this growth looks like an accident - either a technical correction or the results of the actions of major players who entered the market, not for the purpose of making a profit on the exchange rate difference. Thus, we expect the resumption of the downward trend. From a purely technical point of view, in the next few hours, the pair will seek to overcome the Kijun-Sen line, and if it succeeds, the probability of further downward movement will increase many times. In the meantime, there was a piece of new information that Theresa May had held a secret meeting regarding the possible holding of a second referendum. It is noted that a repeated referendum will be possible if required by the House of Commons. The House of Commons can demand it if the Conservative Party and the Labor Party failed to agree to support Theresa May's agreement on the fourth ballot in Parliament. Thus, the people of Great Britain can be offered to once again decide the fate of the country. It is also reported that there will be three voting options in the ballots: Brexit under the terms of Theresa May, "hard" Brexit and refusal to leave the EU.

Trading recommendations:

The GBP/USD currency pair is correcting against the upward trend. Formally, buy orders with a target at 1.3202 remain relevant if the pair bounces off the Kijun-Sen line.

Short positions can be considered in small lots only after the price is fixed below the Kijun-Sen line with the first target at 1.2991.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-Sen – the red line.

Kijun-Sen – the blue line.

Senkou Span A – light brown dotted line.

Senkou Span B – light purple dotted line.

Chinkou Span – green line.

Bollinger Bands indicator:

3 yellow lines.

MACD Indicator:

A red line and a histogram with white bars in the indicator window.

The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD. May 6. Results of the day. Traders ignore macroeconomic reports from the eurozone

4-hour timeframe

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The amplitude of the last 5 days (high-low): 42p - 53p - 78p - 48p - 70p.

Average amplitude over the last 5 days: 58p (57p).

The first trading day of the week takes place in low-volatility trading with a small advantage of the US currency. At the same time, the EUR/USD currency pair is being traded inside the Ichimoku cloud, so there is no clear trend as such. As part of the upward movement on Friday, the pair also failed to overcome the critical line Kijun-Sen, so the resumption of the downward movement this week looks more preferable. Also, we draw the attention of traders that the fundamental events are now either ignored by market participants, or the reaction to them should not be entirely logical. This once again leads us to the assumption that macroeconomic data now do not have significant value for traders. For example, several macroeconomic reports were published in the eurozone today, not the most important ones, but the reaction to them was completely absent. The business activity, composite and services indices of the European Union exceeded their forecast values, as well as the retail sales index for March. However, again, there was no logical, but at least a slight strengthening of the euro. Just like on Friday, there was no strengthening of the US dollar on strong news from America. The MACD indicator may turn down in the coming hours, which will return the pair to a downward trend and signal the completion of the correction. On the 24-hour chart, the downward trend is even more clearly visible, a rebound from the critical line, which also increases the chances of resuming the downward movement.

Trading recommendations:

The EUR/USD pair has adjusted to the critical line and may now resume a downward movement. The immediate target for short positions is the support level of 1.1136. A downward turn of the MACD indicator will signal the completion of the correction.

Long positions are recommended to be considered no earlier than fixing the pair above the Ichimoku cloud. In this case, the trend in the instrument will change to an upward one, but this is unlikely to happen today.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen – red line.

Kijun-sen – blue line.

Senkou Span A – light brown dotted line.

Senkou Span B – light purple dotted line.

Chinkou Span – green line.

Bollinger Bands indicator:

3 yellow lines.

MACD Indicator:

A red line and a histogram with white bars in the indicator window.

The material has been provided by InstaForex Company - www.instaforex.com

GOLD Analysis for May 6, 2019

Gold was trading with a clear-cut bearish trend. Now it is consolidating in the area between $1,265 and the $1,280 support, from where it is expected to continue with the bearish momentum being subdued by the dynamic resistance level.

Gold prices rose recently as investors were flocking to safe haven assets selling tumbling equities. The reason is that US President Donald Trump threatened to raise tariffs on Chinese imports this week as he is disappointed by too slow progress in the trade talks. On Friday, the US non-farm payrolls surpassed expectations. An unemployment rate seemingly edged down in April as labor force participation shrank. Besides, average hourly eanrings eased growth undershooting the consensus.

However, Fed's Chair Jeromy Powell may confirm the central bank's dubious stance on easing which might be reinforced by the nearest CPI data though it is expected to be unchanged at 0.4%. As USD is gaining momentum, gold is losing ground in response. Worries about a downshift in the business cycle might revive risk aversion and USD will have relatively little to keep it from capitalizing on haven flows if the Fed is going to taper stimulus. Amid broad-based strength of USD, Gold is expected to extend weakness.

From the technical viewpoint, a daily close below $1,280-$1,265 support area will indicate further downward pressure which may push the price towards $1,250 and later towards $1,225 support area in the coming days.

SUPPORT: $1,250, $1,265, $1,280

RESISTANCE: $1,300, $1,325

BIAS: BEARISH

MOMENTUM: VOLATILE

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Bitcoin analysis for May 06, 2019

BTC lost the upside momentum from last week and it started to form balance area, which is sign for the potential downward correction.

Technical picture:

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Purple horizontal rectangle – resistance cluster

Orange median line – Pitchfork median line (mean)/resistance

Upper rising green line – Diagonal resistance

The market started to balance at level of $6.100 and on the critical resistance, which may be indication of the potential downward correction in the next period. Support levels are seen at the price of $5.645 and $5.344. Strong median Pitchfork line is acting like resistance plus we got strong resistance cluster from the previous price action in the background. The MACD oscillator is suggesting the bearish divergence, which is another sign of the potential weakness on BTC. Watch for selling opportunities with the target at $5.645.

The material has been provided by InstaForex Company - www.instaforex.com

EUR./USD analysis for May 06, 2019

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EUR/USD has been trading sideways at the price of 1.1190. Price is trading inside of defined trading range. Our advice is to watch for potential down break.

Yellow rectangle – Resistance 1

Yellow rectangle – Resistance 2

Yellow horizontal line – Support 1

Yellow horizontal line – Support 2

According to the H1 time-frame, we found that there is the bearish divergence on the Stochastic oscillator in the background, which is sign of the weak buyers. Also, the resistance at 1.1202 is being confirmed and we do expect further lower price on EUR. Support levels are seen at 1.1172 and 1.1135. For any buying, we would like to see the breakout of key resistance 1.1202 and 1.1218. Watch for selling opportuntiies.

The material has been provided by InstaForex Company - www.instaforex.com

Analysis of Gold for May 06, 2019

Gold has been trading downwards in past 15 hours, which is potential sign of the selling pressure. The 12h balance was broken on downside and the momentum is bearish. We are expecting downside.

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Double white horizontal lines – broken trading range

Blue line – Median Keltner line 20 EMA (current resistance)

Yellow horizontal line – Support

According to the M30 time-frame, we found that there is the bearish divergence on the Stochastic oscillator in the background, which is sign of the weak buyers. Also, there is the fake breakout of the Friday's high at $1.282.56, which is another sign for the potential downward movement. Intraday resistance is seen at the price of $1.280 (Median Keltner EMA and previous low) and at the price of $1.285.70. My advice is to watch for potential selling opportunities on the rallies. The downward objective is set at the price of $1.268.65.

The material has been provided by InstaForex Company - www.instaforex.com

GBP/USD: plan for the US session on May 6. The pound declines after Friday's speculative growth

To open long positions on GBP/USD, you need:

The expected demand for the pound in the support area of 1.3098 is missing, so in the second half of the day, it is best to consider long positions after updating the minimum of 1.3078, provided that the volume rises at this level or after a test of larger support at 1.3039. Bulls also have a new task. By the end of the day, they need to return to the support level of 1.3130, which will keep the upward trend and lead to a maximum test of 1.3176, where I recommend fixing the profits.

To open short positions on GBP/USD, you need:

Bears will pull the pair down to the support level of 1.3078, and if buyers do not resist there, then it is best to open long positions on the rebound from the low of 1.3039. In the case of an upward correction in the second half of the day, it is best to return to short positions on a false breakdown from the level of 1.3130 or on a rebound from 1.3176. However, we should not forget that tomorrow, Teresa May can present her next plan for leaving the EU, which will provide substantial support to the pound in the event of its approval.

Indicator signals:

Moving Averages

The downward correction in the pound led to the test of 30 and 50 moving averages, which can return new buyers to the market.

Bollinger Bands

In the case of a pound company in the second half of the day, the average border around 1.3130 and the upper border of the indicator around 1.3176 will act as resistance.

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Description of indicators

  • MA (moving average) 50 days - yellow
  • MA (moving average) 30 days - green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20
The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD: plan for the US session on May 6. Eurozone retail sales remain unchanged

To open long positions on EURUSD, you need:

Data on retail sales, which were expected to form pressure on the euro, did not cause movement in the market, as the growth was zero. It is best to return to long positions in the second half of the day after the correction down to the support area of 1.1164, provided that there is a false breakdown, or a rebound from a larger area of 1.1138. The main task of buyers is to break and consolidate above the resistance of 1.1217, which will lead EUR/USD to the maximum area of last week to 1.1260, where I recommend fixing the profit.

To open short positions on EURUSD, you need:

Bears will manifest themselves only after an unsuccessful attempt to consolidate at the level of 1.1217, which will be a signal to open short positions in the euro in order to reduce and consolidate below the support level of 1.1164, the breakdown of which will push EUR/USD to the minimum area of 1.1138, where I recommend fixing the profits. With the growth of the euro above the resistance of 1.1217 in the second half of the day, which may occur after the statements of the representatives of the Fed, it is best to open short positions to rebound from a maximum of 1.1260.

Indicator signals:

Moving Averages

Trading is conducted in the area of 30 and 50 moving averages, which continues to indicate the lateral nature of the market.

Bollinger Bands

The volatility of the indicator has decreased, which does not give signals on entering the market.

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Description of indicators

  • MA (moving average) 50 days - yellow
  • MA (moving average) 30 days - green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20
The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of USD/CHF for May 06, 2019

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Overview:

The USD/CHF pair continues moving in a bullish trend from the support levels of 1.0123 and 1.0177. Currently, the price is in an upward channel.

This is confirmed by the RSI indicator signaling that the pair is still in a bullish trend. As the price is still above the moving average (100), immediate support is seen at 1.0177.

Consequently, the first support is set at the level of 1.0177. So, the market is likely to show signs of a bullish trend around 1.0177.

In other words, buy orders are recommended above the level of 1.0177 with the first target at the level of 1.0265.

Furthermore, if the trend is able to breakout through the first resistance level of 1.0265, we should see the pair climbing towards the point of 1.0314. It would also be wise to consider where to place a stop loss; this should be set below the second support of 1.0123.

The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of EUR/USD for May 06, 2019

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Overview: The EUR/USD pair continues to move downwards from the level of 1.1192. Last week, the pair dropped from the level of 1.1192 to the bottom around 1.1111. Today, the first resistance level is seen at 1.1192 followed by 1.1216, while daily support 1 is seen at 1.1111. According to the previous events, the EUR/USD pair is still moving between the levels of 1.1192 and 1.1111; for that we expect a range of 81 pips. If the EUR/USD pair fails to break through the resistance level of 1.1111, the market will decline further to 1.1069. This would suggest a bearish market because the RSI indicator is still in a positive area and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 1.1069 with a view to test the second support. On the other hand, if a breakout takes place at the resistance level of 1.1192 (major resistance), then this scenario may become invalidated.The material has been provided by InstaForex Company - www.instaforex.com

Simplified wave analysis and forecast for EUR/USD, GBP/USD and USD/JPY on May 6

EUR/USD

In the dominant bearish wave on the euro chart from March 20, several wave zigzags of different scale are formed. In the main structure of April 12, the final part (C) develops, within the framework of which the correctional part (B) completed the formation last week. And already on the final part of the graph of May 1, the A-B sequence was formed.

Forecast:

The next sessions are expected to complete the upward rollback and the formation of a reversal. The upper limit of the preliminary target zone of the entire current bearish wave is the support zone.

Recommendations:

Short-term purchases can justify themselves only on the smallest TF. It is recommended to wait until the end of the upward pullback is completed and look for entry points to the pair's sales, while taking into account the small settlement potential of the entire decline.

Resistance zones:

- 1.1210 / 1.1240

Support zones:

- 1.1090 / 1.1060

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GBP/USD

As part of the main downward wave of March 13, which sets the main vector of movement for the pound in recent months, the correction part (B) is nearing completion. Bullish wave has a complex structure of the wrong kind. The final section started on April 25. The price reached the lower limit of a wide potential reversal zone of a large scale. There are no signals of a change of course yet.

Forecast:

The current upward movement is expected to be completed in the next sessions. Short-term break of the upper limit of the resistance zone is not excluded.

Recommendations:

Buying a pair within the intraday is possible, but it is more reasonable to reduce the lot. At the first signs of a reversal, it is recommended to exit trading transactions and start tracking the instrument's sell signals.

Resistance zones:

- 1.3190 / 1.3220

Support zones:

- 1.3060 / 1.3030

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USD/JPY

Since D1, ascending waves of different scale are formed on the yen charts from the beginning of the year. The last short-term wave counts down from March 25th. On April 12, within its framework, the correctional part (B) has been formed. By now, its structure looks complete and the calculated goal of the reduction has been achieved, but there are no signals of a change of course on the chart yet.

Forecast:

During the current day, the formation of an upward reversal structure is expected on the small yen charts, with the flat nature of price fluctuations. The beginning of price growth is likely at the end of the day or tomorrow.

Recommendations:

When trading a pair, you should take into account the small potential of sales. When the price reaches the support zone, it is recommended to start tracking the signals of a change of course, with the prospect of opening long positions.

Resistance zones:

- 111.40 / 111.70

Support zones:

- 110.50 / 110.20

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Explanations to the figures: Waves in the simplified wave analysis consist of 3 parts (A – B – C). The last unfinished wave is analyzed. Zones show areas with the highest probability of reversal. The arrows indicate the wave marking according to the method used by the author, the solid background is the formed structure, the dotted ones are the expected movements.

Note: The wave algorithm does not take into account the duration of tool movements over time.

The material has been provided by InstaForex Company - www.instaforex.com

EURUSD: Further direction of the euro is not defined. Fed officials talk about lowering rates

The European currency managed to regain some of the positions paired with the US dollar on Friday, even despite a good report on employment in the United States. The pressure on the dollar was formed after a series of speeches by Fed officials, who talked about the likelihood of lowering interest rates in the United States, which the White House has recently insisted on.

According to the US Department of Labor, due to the fact that American employers increased the growth rate of jobs in April this year, unemployment fell to a new low.

As indicated in the report, the number of non-agricultural jobs in April 2019 increased by 263,000. The unemployment rate fell to the lowest in the last 50 years and amounted to 3.6%. A good sign of a healthy labor market was also the growth of average hourly earnings in the private sector, which increased by 3.2% compared with the same period last year.

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Economists had expected job growth to reach 190,000, while unemployment would remain unchanged at 3.8%. Data for March has been revised. The growth of jobs amounted to 189,000.

A good report on the labor market was offset by a slowdown in non-production activity. According to the Institute for Supply Management, the Purchasing Managers Index (PMI) for the non-manufacturing sector of the United States in April fell to 55.5 points. Let me remind you that the index values above 50 indicate an increase in activity. Economists had expected the index to be 57.0 points in April.

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According to IHS Markit, the final Purchasing Managers Index (PMI) for the US service sector in April 2019 was 53 points against 55.3 points in March, which indicates a slowdown in production growth. The decline was due to weak growth in new orders.

As noted above, the speeches of the Fed representatives put temporary pressure on the US dollar. For example, the head of the Federal Reserve Bank of St. Louis, James Bullard said that the Fed's economy and policies are in excellent condition, but the outlook for monetary policy has changed noticeably, which may lead to a softening of financial conditions in the future.

Fed spokesman Charles Evans noted during an interview that if inflation weakens, the Fed may need to lower rates, and the future outlook for Fed policy depends on the rate of core inflation. Evans also noted that, despite the fundamental fundamentals of the economy, which are quite strong, downward risks persist.

As for the technical picture of the EURUSD pair, further prospects for the movement of the trading instrument seem vague. Bears can prove themselves after returning and updating the resistance level of 1.1220, while the bulls will be clearly set to hold large support of 1.1160, from which an attempt will be made to build the lower limit of the new upward channel. The goal will be to update the highs of last week around 1.1290.

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GBP/USD. May 6. The trading system "Regression Channels". New scandal in the British Parliament

4-hour timeframe

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Technical details:

The upper linear regression channel: direction - sideways.

The lower linear regression channel: direction - down.

The moving average (20; smoothed) - up.

CCI: 120.0805

On Friday, May 3, the British pound strongly strengthened against the US currency. This is a very illogical reaction of the market to what is happening. We do not even mention that most of the US reports on Friday were definitely positive. Accordingly, it would be much more logical to see the strengthening of the US dollar. Moreover, it became known that in the local elections in the UK, Theresa May's party lost control of 49 out of 248 local councils and about 1,300 deputies. There was an immediate scandal within the party when one of its members asked why Theresa may have not yet resigned. Finance Minister John McDonell accused Theresa May of disclosing confidential information regarding negotiations on the "deal" about Brexit between Labor and the Conservatives. We have already written that such negotiations, as well as Theresa May's desire to push through her version of the Brexit agreement through Parliament by any means, can cause a loss of votes among her own party members who are not supported by any variations of the Customs Union with the EU. But this option is supported by the Labor Party, and it seems that Theresa May intends to give up on this issue. Against the background of all these events, the strengthening of the British pound looks absurd.

Nearest support levels:

S1 - 1.3123

S2 - 1.3062

S3 - 1.3000

Nearest resistance levels:

R1 - 1.3184

R2 - 1.3245

R3 - 1.3306

Trading recommendations:

The pair GBP/USD has begun a round of correction against strong growth on Friday. Thus, it is now recommended to wait for the completion of this round of correction and resume trading for a raise with the targets at 1.3184 and 1.3245. The technical picture implies just such an option. But from a fundamental point of view, the resumption of the downward trend in the pair will be much more logical.

Sell positions are recommended to be considered after fixing the pair below the moving with the first targets at 1.3000 and 1.2939.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanations for illustrations:

The upper linear regression channel is the blue lines of the unidirectional movement.

The lower linear channel is the purple lines of the unidirectional movement.

CCI is the blue line in the indicator regression window.

The moving average (20; smoothed) is the blue line on the price chart.

Murray levels - multi-colored horizontal stripes.

Heiken Ashi is an indicator that colors bars in blue or purple.

The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD. May 6. The trading system "Regression Channels". The euro is still prone to fall

4-hour timeframe

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Technical details:

The upper linear regression channel: direction - down.

The lower linear regression channel: direction - down.

The moving average (20; smoothed) - sideways.

CCI: -13.6298

The new trading week starts quietly for the pair EUR/USD. The pair returned to the moving average line and now the issue with the further trend for the next few days is being resolved. We continue to believe that the euro has nothing to oppose the US dollar in the long run. Despite good indicators of GDP and inflation, the EU economy still looks much weaker than the US. This means that the US economy remains much more attractive for investment than the European one. This factor will determine the demand for the dollar and the euro. Friday's reports from Europe and the United States caused an unexpected reaction from investors. It would seem that a strong report on NonFarm Payrolls, which fell to historical lows of unemployment should cause a strong demand for the US currency. However, in practice, the US dollar has even fallen in price. TTherefore, we believe that now the fundamental factors, or rather macroeconomic reports, are not for traders forming their trading preferences. Today, May 6, the eurozone will publish the index of business activity in the services sector, the composite index of business activity and retail sales. At first glance, these are not the most significant indicators, but we note that at the time of publication of the US reports on Friday, the European markets were already closed, so today we can observe a delayed reaction to Friday's data. Accordingly, the strengthening of the dollar today is absolutely impossible to exclude.

Nearest support levels:

S1 - 1.1169

S2 - 1.1108

Nearest resistance levels:

R1 - 1.1230

R2 - 1.1292

R3 - 1.1353

Trading recommendations:

The EUR/USD currency pair has begun to adjust. Thus, short positions with targets at 1.1169 and 1.1108 remain relevant now. A reversal of the Heiken Ashi indicator down will indicate the end of the upward correction.

It is recommended to open buy orders not earlier than fixing the pair above the moving average line with the first target at 1.1230.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanations for illustrations:

The upper linear regression channel is the blue lines of the unidirectional movement.

The lower linear regression channel is the violet lines of the unidirectional movement.

CCI - the blue line in the indicator window.

The moving average (20; smoothed) is the blue line on the price chart.

Murray levels - multi-colored horizontal stripes.

Heiken Ashi is an indicator that colors bars in blue or purple.

The material has been provided by InstaForex Company - www.instaforex.com

Bitcoin. The level of 6000 USD updated successfully

The bitcoin exchange rate has updated the next psychological level of 6000 USD and retains a good potential for further growth, which can occur after another downward correction and accumulation of volume in a narrow side channel.

Over the weekend, an interesting study was published, which indicates that more and more institutional investors are interested in cryptocurrencies. The American asset management company Fidelity conducted an analysis, concluding that more than 22% of the surveyed institutional investors have already added crypto assets to their portfolio.

Signal to buy Bitcoin (BTC):

Trade moved to the new side channel 5850-6130. The task of buyers will be to hold the support of 5850, which can be accumulated a good amount to continue the upward trend. Returning to the middle of the channel 6000 will be a good signal for further opening of long positions, which will lead to a breakthrough of the maximum of 6130 and update of new levels in the area of 6240 and 6360, where I recommend fixing the profit.

Signal to sell Bitcoin (BTC):

Bears will try to keep the pair below the upper limit of the side channel of 6130, the break and consolidation below the lower limit of 5850 can lead to a larger downward correction in the area of the minimum of 5660, where I recommend fixing the profit. An unsuccessful consolidation and return under the middle of the channel 6000 will also be a signal to open short positions in Bitcoin.

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The material has been provided by InstaForex Company - www.instaforex.com

Analysis of EUR/USD divergence on May 6. The euro is looking for arguments in opposition to the dollar

4h

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As seen on the 4-hour chart, the EUR/USD pair performed a reversal in favor of the euro and consolidation above the retracement level of 100.0% (1.1177). As a result, on May 6, the growth process of quotations can be continued in the direction of the next retracement level of 76.4% (1.1241). Today, emerging divergence is not observed on any indicator. The closing of the pair below the Fibo level of 100.0% will work in favor of the US dollar and the resumption the fall in the direction of the retracement level of 127.2% (1.1102).

The Fibo grid is built according to the extremes of March 7, 2019, and March 20, 2019.

Daily

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As seen on the 24-hour chart, the pair did not reach the retracement level of 127.2% (1.1285) and is located below this level, thus maintaining the chances of a resumption of the fall in the direction of the retracement level of 161.8% (1.0941). There are no emerging divergences on the current chart. Only the closing of the pair above the Fibo level of 127.2% will work in favor of the EU currency and the resumption of growth in the direction of the retracement level of 100.0% (1.1553).

The Fibo grid is built according to the extremes of November 7, 2017, and February 16, 2018.

Forecast for EUR/USD and trading recommendations:

Buy deals on EUR/USD pair can be opened with the target at 1.1241 since the pair completed the closing above the level of 100.0%. The stop loss order should be placed below the level of 1.1177.

Sell deals on EUR/USD pair can be opened with the target at 1.1102 if the pair consolidates below the retracement level of 100.0%. The stop loss order should be placed above the level of 1.1177.

The material has been provided by InstaForex Company - www.instaforex.com

Trump shook the global markets, resisted only the dollar

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The Chinese yuan was marked by the largest fall in 10 months after US President Donald Trump threatened to raise tariffs on Chinese goods, while refuge currencies, such as the yen, are rising in price against the background of a widespread risky assets.

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Trump unexpectedly announced that this week, he will raise tariffs for Chinese goods by $ 200 billion and is ready to expand this list in the near future. This statement marked a major shift in the negotiation process. Considering that earlier, Trump positively assessed the progress in trade negotiations and highly appreciated his relations with Chinese President Xi Jinping. This statement took the markets by surprise. In a period of low market volatility for many assets and recent economic data indicating weak but steady growth in the global economy, this decision by the American president has shaken up the markets. This also began active sales of risky assets.

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Chinese currency fell by one percent, almost to its lowest level this year, about 6.80 yuan per dollar. The Mexican peso and Turkish lira lost more than a half percent. Currencies of countries that are closely related to the Chinese economy, such as the Australian and New Zealand dollars, were decreased by 0.3–0.5 percent. Rising tariffs bring bad news for risky assets. Trump has put at risk on the prospects for recovery in global growth. However, the dollar at the same time, feels more than confident and generally remained stable against a basket of major currencies. Investors weighed the prospect of a likely inflationary acceleration in the US economy, if Trump insists on raising tariffs on imported goods, which coincides with rising US interest rate expectations at the end of the year.

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Analysis of GBP/USD divergence on May 6. The British pound is stronger than the euro

4h

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As seen on the 4-hour chart, the GBP/USD pair resumed the growth process and closed above the Fibo level of 76.4% (1.3094). Thus, the growth of the pair's quotes on May 6 can be continued in the direction of the next retracement level of 100.0% (1.3296). There are no emerging divergences now. The closure of the pair below the Fibo level of 76.4% can be interpreted as a reversal in favor of the US currency and expect some fall in the direction of the retracement level OF 61.8% (1.2969).

The Fibo grid is built according to the extremes of September 20, 2018, and January 3, 2019.

1h

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As seen on the hourly chart, the GBP/USD pair has achieved significant growth and closure above the retracement level of 76.4% (1.3117). However, the pair also performed a reversal in favor of the US dollar on this chart and a return to the Fibo level of 76.4%. The retreat of quotations from this level of correction will allow traders to count on a reversal in favor of the British pound and the resumption of the growth process in the direction of the retracement level of 100.0% (1.3195). Consolidation under the Fibo level of 76.4% will increase the chances of a further fall in the direction of the retracement level of 61.8% (1.3069).

The Fibo grid is built according to the extremes of April 3, 2019, and April 25, 2019.

Forecast for GBP/USD and trading recommendations:

Buy deals on GBP/USD pair can be opened with the target at 1.3195 and a stop loss order under the retracement level of 76.4% if the pair closes above 1.3117 (hourly chart).

Sell deals on GBP/USD pair can be opened with the target at 1.3069 and a stop loss order above the level of 76.4% if the pair closes below the level of 1.3117 (hourly chart).

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Bitcoin investments must be reasonable - expert

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According to Wences Casares, one of the leading specialists in the crypto market, investors in digital assets should be allocated with 1% in their investment portfolio for investments in Bitcoin. The specialist is sure that by the time they will be justified, it's not worth counting on momentary profits.

According to the calculations of W. Casares, the chances of success of cryptocurrency number 1 are at least 50%. He does not exclude that in 7-10 years for 1 Bitcoin, it will give about $ 1 million, no matter how fantastic it may sound. Note that this is 200 times the current value of cryptocurrency number 1. For investment portfolio managers in the amount of $ 10 million, the expert recommends investing about $ 100,000 in Bitcoin (up to 1% of the portfolio, however, there is none because the risk of losing this investment also quite huge). If the leading crypto active asset depreciates, then the loss will be no more than $ 100 thousand, or 1% of the cost within 3-5 years, which is not critical. However, in the event of an active growth in the price of Bitcoin in 7–10 years, these $ 100 thousand may bring the investor $ 25 million, which is more than twice the value of the entire initial portfolio at the same time, W. Casares reminds.

The specialist recalls that cryptocurrency number 1 is still an experimental asset, and calls for careful weighing of all the pros and cons when investing in it. Speaking about the advantages of Bitcoin, W. Casares draws attention to the fact that this virtual asset potentially surpasses gold and the US dollar as a global non-political standard unit of value and settlement. Bitcoin is open and not subject to censorship, because it works on a sovereign platform, which means that no one can change transactions made in the system, as well as prevent the system from processing new transactions. This allows us to provide unprecedented economic freedom, just as the Internet has opened up broad opportunities for the transmission of information, the expert emphasizes. "Bitcoin is not an asset. It does not bring profit or dividend and has no intrinsic value. Bitcoin is money, digital gold. Yellow metal, the US dollar and national currencies also have no intrinsic value, but because they have a monetary value for a long time, people perceive them as something very valuable. The main obstacle that bitcoin has to overcome in order to succeed is to achieve wide public recognition of its own value, "W. Casares summarizes.

The expert gives quite favorable forecasts for the future of cryptocurrency number 1. He believes that Bitcoin can become a supranational currency that exists as if "on top" of other monetary units of different countries. If this crypto active succeeds, it can acquire the status of a global monetary standard for value and settlement, the expert is sure.

Currently, the owners of cryptocurrency number 1 are over 60 million people worldwide. About 1 million people are added monthly to them, underlines W. Casares. The remaining 1000 cryptocurrencies account for about 5 million owners, so in the next 5 months, Bitcoin will have more new users than other coins of all time. The turnover of the leading cryptocurrency is more than $ 1 billion per day, which exceeds the turnover of all other digital currencies, the analyst notes. He is sure that Bitcoin's chances of success are great, and its prospects are impressive, but not fully understood.

Analyzing the market for cryptocurrency number 1, as well as the history of its emergence and development, W. Casares draws attention to the price rally of Bitcoin. They are the most important component of the growing popularity of this virtual asset. Thanks to the active dissemination of information about Bitcoin, many have a desire to purchase it. Next, the price growth mechanism starts, it reaches a peak, and then there is a recession. So far, this mechanism has worked well, but one day it can cause a catastrophe, the analyst cautions. Price rally - these are the best moments for Bitcoin, but they also carry significant risks to the network.

In the event of a rapid increase in the price of Bitcoin in the next 7–10 years, cryptocurrency number 1 can pass through 6 price rallies, W. Casares believes. "It is impossible to know in advance when the price will reach the bottom or when the next rally will start, and paying for attempts to catch lower price values or, conversely, maximums may cost you a fortune. If you decide to buy bitcoins, determine the amount you can afford to lose (ideally, less than 1% of your capital), open a position and forget about it for 7 or 10 years at once, "W. Casares recommends. The specialist emphasizes that this particular waiting period is the most difficult for investors. It is not easy to sit like a hunter in ambush, waiting for better times for cryptocurrency number 1, but this is a necessary condition for success.

According to the calculations of the expert, if in the future, Bitcoin will become the global standard of value and settlement, then it probably should cost more than gold and less than the world money supply. Analyzing the Bitcoin market, W. Casares notes that the market capitalization of this digital asset fluctuates around $ 7,000, taking into account the number of people owning BTC. If this constant persists and cryptocurrency number 1 will own 3 billion people, the Bitcoin capitalization will be about $ 21 trillion (~ $ 7000 x 3 billion), or $ 1 million for BTC. This is an impressive amount and at first glance unreal, but the specialist is confident in the prospects and impressive capabilities of the leading digital asset.

The material has been provided by InstaForex Company - www.instaforex.com

Wave analysis of GBP / USD for May 6. The pound is growing, but has no news support.

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Wave counting analysis:

On May 3, the GBP / USD pair unexpectedly gained about 140 bp, which completely did not correspond to the nature of the news received on Friday, as well as the events in the UK on Saturday and Sunday. What happened is that the Conservative Party, whose leader is Theresa May, lost in the local elections in the UK, and negotiations with the Labor Party. The subject of which is the Brexit agreement, which cannot get enough votes in the parliament, may come to a dead end. Nevertheless, the pound sterling has grown, and the wave pattern is confused. Despite that, I still expect the construction of the downward of the trend, as the news background is clearly not in favor of the pound. But for now, it is necessary to wait first for the signal from the MACD (turn down), and secondly - signs of completion of the construction of the ascending set of waves, which takes its beginning last April 25.

Purchase goals:

1.3182 - 61.8% Fibonacci

1,3259 - 76.4% Fibonacci

Sales targets:

1.2867 - 0.0% Fibonacci

General conclusions and trading recommendations:

The wave pattern still suggests the construction of the descending trend section. But now, the upward trend has clearly begun. Therefore, I do not recommend buying a pair, as the instrument does not have news support, and there are constantly negative messages from the UK. However, it is seen that the increase in the instrument can be completed around the estimated marks of 61.8% and 76.4% Fibonacci. Thus, I recommend to expect the completion of the increase and plan new sales.

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Wave analysis of EUR / USD for May 6. Instead of a fall boost. Aren't the markets ready to sell euros?

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Wave counting analysis:

On Friday, May 3, bidding ended for the pair EUR / USD by 30 bp increase. However, this increase in the pair still does not affect the current wave counting, which involves building a downward trend. The news background for the pair remains neutral, with a slight bias in favor of the dollar. However, as shown on Friday's trading, even with good statistics from America, the markets do not buy the dollar too zealously, given the rather low exchange rate value of the instrument. Thus, the current wave marking cannot be called unambiguous due to the unreadiness of traders to new sales of the instrument. The MACD indicator turned up again. Accordingly, for new attempts at selling the pair, I recommend waiting for the return signal from MACD.

Sales targets:

1.1097 - 161.8% Fibonacci

1.1045 - 200.0% Fibonacci

Purchase goals:

1.1324 - 0.0% Fibonacci

General conclusions and trading recommendations:

The pair continues to build the downward trend. The current wave counting implies a continuation of the decline of the pair with the closest targets 1.1097 and 1.1045, which equates to 161.8% and 200.0% Fibonacci. But this scenario can be hindered by the reluctance of the markets to sell the pair further. Thus, the MACD signal will be regarded as a new approach to sales, but I recommend selling a couple of small lots.

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Trading recommendations for the EURUSD currency pair - placement of trading orders (May 6)

By the end of the last trading week, the euro / dollar currency pair showed high volatility of 69 points, as a result of having a 50% recovery after a downward move. From the point of view of technical analysis, we have the quotes return to the level of 1.1180 after a steady decline. This recovery is directly related to the rally in pound, where at a similar time there was a rather sharp jump. And due to the high correlation between currency pairs, we saw a similar movement in the direction. Of course, this has something to do with the information background. Brexit, as we already know, has long kept the interest of speculators, since there were rumors saying that British Prime Minister Theresa May is preparing to make big compromises to the opposition. In particular, it concerns the issues of a temporary customs union with the EU, as well as the introduction of uniform rules of market turnover for certain categories of goods and the law that guarantees workers in the UK--the same rights as in the European Union. On these rumors, the pound flew more than 170 points, followed by the euro, but with a smaller amplitude.

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Today, in terms of the economic calendar, we have data on retail sales in the EU, where they expect a decline from 2.8% to 1.8%.

Further development

Analyzing the current trading chart, we see a characteristic slowdown within the level of 1.1180 (1.1175 / 1.1200). It is likely to assume further talk over the limits of this framework, where traders monitor a clear breakdown of boundaries when placing further orders.

Based on the available data, it is possible to decompose a number of variations, let's consider them:

- We consider buying positions in case of a clear price fixing higher than 1.1205.

- Positions for sale are considered in the case of a clear price fixing lower than 1.1170.

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Indicator Analysis

Analyzing a different sector of timeframes (TF), we see that in the short, intraday and medium term, there is an upward interest against the background of the recent jump.

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Weekly volatility / Measurement of volatility: Month; Quarter; Year

Measurement of volatility reflects the average daily fluctuation, based on monthly / quarterly / year.

(May 6 was based on the time of publication of the article)

The current time volatility is 29 points. In case of stagnation, we are waiting for a weak oscillation within the boundaries of the cluster. But if the framework falls, then we can expect acceleration.

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Key levels

Zones of resistance: 1.1300 **; 1.1440; 1.1550; 1.1650 *; 1.1720 **; 1.1850 **; 1.2100

Support areas: 1.1180; 1.1080 *; 1.1000 ***; 1,0850 **

* Periodic level

** Range Level

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Fractal analysis of major currency pairs on May 6

Dear colleagues.

For the currency pair Euro/Dollar, we expect the formation of a local upward structure to continue the upward movement and the level of 1.1220 is the key resistance. For the currency pair Pound/Dollar, the price has issued a local structure for the top of May 3 and the development of which is expected after the breakdown of 1.3189. For the currency pair Dollar/Franc, the range of 1.0169 – 1.0153 is the key support for the top. For the currency pair Dollar/Yen, the continuation of the development of the downward cycle of April 24 is expected after the breakdown of 110.30. For the currency pair Euro/Yen, we follow the downward structure of May 1 and the level of 123.53 is the key resistance. For the currency pair Pound/Yen, we continue to monitor the upward structure from April 26, the continuation of the upward movement is expected after the breakdown of 145.54 and the level of 144.74 is the key support.

Forecast for May 6:

Analytical review of H1-scale currency pairs:

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For the currency pair Euro/Dollar, the key levels on the H1 scale are 1.1313, 1.1271, 1.1256, 1.1220, 1.1171, 1.1147 and 1.1117. We follow the upward trend from April 25th. The resumption of the upward structure is possible after the breakdown of 1.1220. The first target is 1.1256. The passage of the price of the range of 1.1256 – 1.1271 will allow you to count on the movement to the potential target is 1.1313.

The short-term downward movement is possible in the range of 1.1171 – 1.1147 and the breakdown of the latter value will have to develop a downward structure. In this case, the first potential target is 1.1117.

The main trend is the upward structure of April 25, the stage of correction.

Trading recommendations:

Buy 1.1220 Take profit: 1.1255

Buy 1.1271 Take profit: 1.1310

Sell: 1.1169 Take profit: 1.1147

Sell: 1.1145 Take profit: 1.1173

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For the currency pair Pound/Dollar, the key levels on the H1 scale are 1.3318, 1.3247, 1.3222, 1.3185, 1.3103, 1.3074, 1.3030 and 1.2986. We determine the local structure on May 3 from the subsequent targets for the upward trend. The continuation of the upward movement is expected after the breakdown of 1.3185. In this case, the goal is 1.3222 and consolidation is near this level. The passage of the price of the range of 1.3222 – 1.3247 should be accompanied by a pronounced upward movement to the potential target of 1.3318, from which we expect a rollback to the bottom.

The short-term downward movement is expected in the area of 1.3103 – 1.3074 and the breakdown of the last value will lead to a prolonged correction. The target is 1.3030 and this level is the key support for the local upward structure.

The main trend is the upward structure of April 25, the local structure of May 3.

Trading recommendations:

Buy: 1.3185 Take profit: 1.3222

Buy: 1.3247 Take profit: 1.3318

Sell: 1.3103 Take profit: 1.3075

Sell: 1.3072 Take profit: 1.3030

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For the currency pair Dollar/Franc, the key levels on the H1 scale are 1.0264, 1.0242, 1.0227, 1.0205, 1.0182, 1.0169, 1.0153 and 1.0124. The price has issued the initial conditions for the upward cycle of May 1. The continuation of the upward movement is expected after the breakdown of 1.0205. In this case, the target is 1.0227 and in the area of 1.0227 – 1.0242 is the price consolidation. We consider the level of 1.0264 as a potential value for the top, upon reaching which, we expect a rollback to the bottom.

The range of 1.0169 – 1.0153 is the key support for the upward structure of May 1. Its price passage will have to form the initial conditions for the downward cycle. In this case, the first potential target is 1.0124.

The main trend is the initial conditions for the top of May 1, the stage of correction.

Trading recommendations:

Buy: 1.0205 Take profit: 1.0227

Buy: 1.0242 Take profit: 1.0264

Sell: Take profit:

Sell: 1.0150 Take profit: 1.0124

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For the currency pair Dollar/Yen, the key levels on the H1 scale are 111.30, 111.07, 110.90, 110.49, 110.31, 109.92 and 109.70. We continue to monitor the downward structure of April 24. The short-term downward movement is expected in the area of 110.49 – 110.31 and the breakdown of the last value should be accompanied by a pronounced downward movement. The target is 109.92. We consider the level of 109.70 to be a potential value for the bottom, upon reaching which, we expect consolidation, as well as a rollback to the top.

The short-term upward movement is possible in the area of 110.90 – 110.07 and the breakdown of the latter value will lead to a prolonged correction. The goal is 111.30 and this level is the key support for the downward structure of April 24.

The main trend is the downward structure of April 24.

Trading recommendations:

Buy: 110.90 Take profit: 111.07

Buy: 111.09 Take profit: 111.30

Sell: 110.49 Take profit: 110.31

Sell: 110.28 Take profit: 109.92

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For the currency pair Canadian Dollar/Dollar, the key levels on the H1 scale are 1.3561, 1.3534, 1.3512, 1.3483, 1.3448, 1.3433 and 1.3415. We monitor the initial conditions for the top of May 1st. We expect further development of the upward structure after the breakdown of 1.3483. In this case, the target is 1.3512 and in the area of 1.3512 – 1.3534 is the price consolidation. We consider the level of 1.3561 as a potential value for the top, upon reaching which, we expect a rollback to the bottom.

The short-term downward movement is expected in the area of 1.3448 – 1.3433 and the breakdown of the latter value will lead to an in-depth correction. The target is 1.3415 and this level is the key support for the upward structure.

The main trend is the initial conditions for the top of May 1.

Trading recommendations:

Buy: 1.3483 Take profit: 1.3512

Buy: 1.3514 Take profit: 1.3534

Sell: 1.3448 Take profit: 1.3433

Sell: 1.3413 Take profit: 1.3380

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For the currency pair Australian Dollar/Dollar, the key levels on the H1 scale are 0.7031, 0.7015, 0.7003, 0.6984, 0.6963, 0.6945 and 0.6923. We follow the development of the downward structure of April 30. The continuation of the downward movement is expected after the breakdown of 0.6984. In this case, the target is 0.6963 and in the area of 0.6963 – 0.6945 is the short-term downward movement, as well as consolidation. We consider the level of 0.6923 as a potential value for the bottom, upon reaching which, we expect a rollback to the top.

The short-term upward movement is possible in the area of 0.7003 – 0.7015 and the breakdown of the latter value will lead to an in-depth movement. The target is 0.7031 and this level is the key support for the bottom.

The main trend is the downward structure of April 30.

Trading recommendations:

Buy: 0.7015 Take profit: 0.7030

Buy: Take profit:

Sell: 0.6984 Take profit: 0.6963

Sell: 0.6961 Take profit: 0.6945

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For the currency pair Euro/Yen, the key levels on the H1 scale are 124.50, 124.25, 124.05, 123.53, 123.29, 122.94 and 122.73. We follow the development of the downward structure of May 1. The short-term downward movement is possible in the range of 123.53 – 123.29 and the breakdown of the latter value should be accompanied by a pronounced downward movement. In this case, the target is 122.94. We consider the level of 122.73 as a potential value for the bottom, upon reaching which, we expect consolidation, as well as a rollback to the top.

The short-term upward movement is possible in the area of 124.05 – 124.25 and the breakdown of the latter value will lead to a prolonged movement. The target is 124.50 and this level is the key support for the downward structure.

The main trend is the downward cycle of May 1st.

Trading recommendations:

Buy: 124.05 Take profit: 124.25

Buy: 124.30 Take profit: 124.50

Sell: 123.53 Take profit: 123.30

Sell: 123.25 Take profit: 122.94

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For the currency pair Pound/Yen, the key levels on the H1 scale are 146.63, 146.20, 146.00, 145.73, 145.29, 145.07 and 144.74. We follow the development of the upward cycle of April 26. The continuation of the upward movement is expected after the breakdown of 145.73. In this case, the target is 146.00. The passage of the price of the range of 146.00 – 146.20 will lead to a movement to the potential target of 146.63, from this level, we expect a rollback to the bottom.

The short-term downward movement is possible in the area of 145.29 – 145.07 and the breakdown of the latter value will lead to an in-depth correction. The target is 144.74 and this level is the key support for the top.

The main trend is the upward structure of April 26, the stage of correction.

Trading recommendations:

Buy: 145.75 Take profit: 146.00

Buy: 146.20 Take profit: 146.60

Sell: 145.27 Take profit: 145.07

Sell: 145.04 Take profit: 144.80

The material has been provided by InstaForex Company - www.instaforex.com

Trading Plan EURUSD 05/06/2019

The main news on Monday morning: Trump launched a new tariff war against China. Over the weekend, Trump said that he would increase the duty on goods from China to 25%, for which tariffs have already been introduced at 10% (goods worth $200 billion). Trump also threatens to impose duties on another $325 billion-worth of Chinese goods that are not yet subject to tariffs. New duties will come into force on Friday.

China has so far responded by canceling trade negotiations with the United States.

This news has affected the stock markets, but not yet the currency market.

EURUSD: Range. A possible upward trend on the euro

We are ready to buy the euro from 1.1270.

We are ready to sell the euro from 1.1110.

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The material has been provided by InstaForex Company - www.instaforex.com

D. Trump's lack of restraint pulls down world markets (selling the AUDUSD pair and buying the USDCAD pair)

It seems that the positive results of the months-long negotiations between the United States and China on trade have reached an impasse. Last weekend, the American president has once again attacked the PRC with new-old threats, which could introduce tariffs on Chinese goods worth $ 200 billion this week.

According to the established tradition, Trump tweeted that "trade negotiations with China continue, but too slowly, because they want to change the agreement." All this indicates that the US side is not able to push through new trade agreements on its own terms. The chief negotiator for the United States, R. Lighthizer, said that the negotiation process had stalled, which seemed to have outraged Trump, leading him to launch a new threat to the Chinese. The president said that he could "in the near future" introduce a 25% tariff on goods for another 325 billion dollars, which in fact concerns almost all Chinese goods imported to the USA. Earlier he "generously" stated that while negotiations are underway, the state duty on imported goods will remain at around 10%.

Naturally, in the wake of this news today, there is a sharp drop in the Chinese stock market. Major local stock indexes fell from 5.00% to 7.20%. Futures for the top three major US stock indices declined from 1.66% to 1.99%. The leader of the fall is the high-tech NASDAQ, since a significant number of companies whose shares are traded in this sector, produce their products in China. The fall in futures indicates that the US stock market is more likely to open in negative territory.

In general, watching the events taking place, we note that the failure of negotiations between Washington and Beijing will lead to severe disappointments in the markets and will be the main negative factor that will put downward pressure on stock indices, crude oil quotes and other commodity assets, first of all production goods .

On this wave, the fall in commodity and commodity currency quotations may continue. First of all, we expect the resumption of the fall of the Australian and Canadian dollars, as well as the growth in demand for defensive assets, including the Japanese yen.

Forecast of the day:

The AUDUSD pair is still above the local low of 0.6980, and overcoming the continued negativity can lead to further decline to 0.6900.

The USDCAD pair has approached a strong resistance level of 1.3500, the overcoming of which will be a signal to buy, and against this background it can continue to climb to the upper boundary of the short-term upward trend of 1.3620.

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The material has been provided by InstaForex Company - www.instaforex.com

Burning forecast EURUSD 05/06/2019

On Friday, the EURUSD showed a strong reversal, despite solid data on the US economy - and in particular, good data came out on US employment in April.

The euro strengthened on inflation data in the eurozone.

Now the growth of the euro is possible.

We are ready to buy the euro at the break of 1.1270 upward.

We are ready to sell the euro from 1.1110 down.

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The material has been provided by InstaForex Company - www.instaforex.com

Trading recommendations for the GBPUSD currency pair - placing trade orders (May 6)

By the end of the last trading week, the pound / dollar currency pair showed a high volatility of 187 points, drawing a large impulse candle in the market. From the point of view of technical analysis, we see that after the corrective move to the range level of 1.3000, the quotation found support, restoring the upward move. Naturally, this kind of turbulence could not appear from scratch, the whole thing is in the information and news background, in particular - in Brexit. This time, there were rumors saying that Theresa May is preparing to make big compromises to the opposition. In particular, it concerns the issues of a temporary customs union with the EU, as well as the introduction of common market rules for certain categories of goods and the law guaranteeing workers in the UK the same rights as in the European Union. On these rumors, the pound flew almost instantly.

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Today, in terms of the economic calendar, we see that there is no public holiday in the UK, in the United States there are no weighty statistics.

Further development

Analyzing the current trading schedule, we see that there is a rollback, which is completely normal after this kind of rally. The point of resistance 1.3175, where the quote came, reflects the stratum from the long-term level of Fibo 38.2, as well as a number of price clusters on the history, thus the coordinates can be called the full-fledged level of resistance. It is likely to assume further formation of a pullback towards 1.3080, where it is worth analyzing the behavior of quotes and possible stagnation.

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Indicator Analysis

Analyzing a different sector of timeframes (TF), we see that in the short, intraday and medium term, there is an upward interest against the background of the recent rally.

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Weekly volatility / Measurement of volatility: Month; Quarter; Year

Measurement of volatility reflects the average daily fluctuation, based on monthly / quarterly / year.

(May 6 was based on the time of publication of the article)

The current time volatility is 57 points. It is likely to assume that volatility may still grow, but its chapel is fixated on the daily average value.

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Key levels

Zones of resistance: 1.3175 *; 1,3300 **; 1.3440; 1.3580 *; 1.3700

Support areas: 1.3000 **; 1.2920 * 1.2770 (1.2720 / 1.2770) **; 1.2620; 1,2500 *; 1.2350 **.

* Periodic level

** Range Level

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GBP/USD: plan for the European session on May 6. The pound could continue to rise in anticipation of news on Brexit

To open long positions on GBP/USD you need:

Today, the British pound could continue to grow, as tomorrow the British prime minister should present a plan for the future prospects of UK membership in the EU customs union. In case of a downward correction in the first half of the day, support at 1.3096 will be a good level for buying, and it is possible to open long positions immediately to rebound in the region of a low of 1.3060. In the event of further growth, the task of the bulls will be concentrated on breaking through and consolidating above the resistance of 1.3155, which will lead to a further upward trend with an update of highs of 1.3195 and 1.3227, where I recommend taking profits.

To open short positions on GBP/USD you need:

Today, bears will focus on the formation of a false breakdown in the resistance area of 1.3155, from which it will be possible to build the lower boundary of the new downward channel. However, the main task of sellers will be a breakthrough and a return below the support level of 1.3096, which will push the GBP/USD pair to the area of lows of 1.3060 and 1.3018, where I recommend taking profits. With a growth scenario above 1.3155, you can sell for a rebound from a high of 1.3195 and 1.3227.

Indicator signals:

Moving averages

Trade is above 30 and 50 moving averages, which indicates a further increase in the British pound.

Bollinger bands

In the event of a decline, support will be provided by the lower limit of the indicator near 1.3035. Under growth scenarios, the upside potential of the pound will be limited to the upper boundary of the indicator in the area of 1.3215.

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Description of indicators

  • MA (moving average) 50 days - yellow
  • MA (moving average) 30 days - green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20
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Fundamental Analysis of GBP/USD for May 6, 2019

The US unveiled better-than-expected preliminary GDP and positive change in employment. Besides, the unemployment rate remained at record low. Though the UK Official Bank Rate report was published unchanged, the BREXIT effect has been the louder than Bank of England's policy meeting recently.

The UK has a smaller chance of a rate hike this year. Bank of England Governor Mark Carney said on Thursday investors were underestimating how many interest rates could rise, even as the British central bank kept borrowing costs on hold due to Brexit uncertainty. Britain's economy has slowed since the Brexit referendum in 2016 but has coped better than many investors feared. Unemployment is at a 44-year low, wages are growing at the fastest pace in 10 years and consumer spending remains solid. After thorough observation of better prospects of the global economy, the BoE upgraded its forecast of economic growth in the world's fifth-largest economy to 1.5 percent, up from the decade-low 1.2 percent it predicted in February.

The UK GDP report is due Friday this week, which is expected to decrease to 0.0% from the previous value of 0.2%. So, GBP is expected to display volatility and weakness if the expectations are met. Moreover, Manufacturing Production is expected to drop as well to 0.1% from the previous value of 0.9% and Prelim GDP is expected to expand to 0.5%.

On the other hand, despite the positive employment change in the US, USD is struggling to maintain its gains over GBP. In the latest nonfarm payrolls, the unemployment rate report edged down to 3.6% which was expected to be unchanged at 3.8%, Non-Farm Employment Change was published with increase to 263k from the previous figure of 189k which was expected to decrease to 181k and Average Hourly Earnings report was published unchanged at 0.2% which was expected to increase to 0.3%.

According to Fed officials, the US central bank may need to cut interest rates if consumer inflation is stuck low failing to reach the target level around 2%. The Federal Reserve's policymakers fear they are ill-equipped to battle the next recession under their current inflation-targeting approach. This year they are well into an effort to vet new strategies for managing interest rates under the conditions of muted inflation and low borrowing costs. This week, US CPI report is going to be published on Friday which is expected to be unchanged at 0.4% and Core CPI is expected to increase to 0.2% from the previous value of 0.1%.

To sum up, this week is going to be turbulent amid a series of macroeconomic reports from the UK which are expected to be rather weak. However, any positive reading which is unlikely, may reinforce bullish gains. On the contrary, USD has found support from positive reports recently can regain momentum over GBP again.

Now let us look at the technical view. The price is currently retracing towards 1.3050-1.3100 area after breaking it recently with a strong impulsive daily close. The impulsive bullish pressure had confluence along the way, so any price correction may reinforce bullish momentum above 1.3050 area. A daily close below 1.3050 could trigger a strong counter-move to the recent bullish pressure and encourage further the bearish pressure with a target towards 1.2800. Otherwise, if the price remains above 1.3050, the bullish bias could push the price higher towards 1.3400 resistance area in the future.

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