Overview of EUR/USD on June 5. The forecast for the "Regression Channels". Traders turned away from the US dollar

4-hour timeframe

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Technical data:

The upper linear regression channel: direction – down.

The lower linear regression channel: direction – down.

The moving average (20; smoothed) – up.

CCI: 116.9452

Yesterday was very favorable for the EUR/USD. Traders continued rather cautious purchases of the euro, although there were grounds for new sales of the European currency. Inflation in the eurozone in May slowed to 1.2% y/y, which is a very low value and far from the target of 2.0%. Already at this point a week ago, the bears would have gladly rushed into battle and began to sell the euro/dollar pair. However, this did not happen yesterday, and in our view, this is a very significant moment. It is when the markets stop responding to the news in a logical way, we can assume a change in the direction of the trend. Jerome Powell in the course of his evening speech drove the market into a stupor even more. Powell once again showed concern over the trade wars between the States and its major trading partners and said that "the Fed is on the pulse" and is ready at any time to begin to stimulate the economy, if necessary. This, of course, is not an announcement of a new incentive program or a reduction in the key rate, but the head of the Fed admits such a development that causes the market to doubt the feasibility of further investment in the US dollar. And this is the second point that leads us to the conclusion about the change of the downward trend to the upward trend. On Wednesday, June 5, the States and the European Union will publish the indices of business activity in the services sector and complex in the production sector. The EU will also release a report on retail sales, and in the States – ADP report on changes in the number of employees in the private sector. There is every reason to expect that most of the reports will be below the forecast values, but what kind of market reaction will follow?

Nearest support levels:

S1 – 1.1230

S2 – 1.1200

S3 – 1.1169

Nearest resistance levels:

R1 – 1.1261

R2 – 1.1292

R3 – 1.1322

Trading recommendations:

The currency pair EUR/USD continues its recoilless upward movement. Therefore, it is recommended to continue to trade long positions with targets at 1.1292 to and 1.1322 until the reversal of the indicator Heiken Ashi down.

It is recommended to buy the US dollar after the bears return the initiative to their hands and there will be a consolidation of the euro/dollar pair under the moving average line with the first targets at 1.1169 and 1.1139.

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

Explanation of illustrations:

The upper linear regression channel – the blue line of the unidirectional movement.

The lower linear regression channel – purple line 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.

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EURUSD: Pressure on the US dollar remained after the speech of Fed Chairman Jerome Powell

On Tuesday, the European currency resumed growth after a weak inflation report in the eurozone. The pressure on the US dollar returned after the release of data on industrial orders in the US, as well as after the speech of Fed Chairman Jerome Powell, who, though not directly spoke about the likelihood of lowering interest rates, did not rule it out completely.

According to the report of the US Department of Commerce, orders for industrial goods in the US in April of this year decreased by 0.8% compared to the previous month and amounted to 499.27 billion dollars. Economists had expected a 1.1% drop from the previous month. However, excluding transport, industrial orders in April increased by 0.3% compared to the previous month. The main decline was due to a sharp reduction in orders for non-defense aircraft and spare parts, where the figure fell immediately to 25.2%.

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The indicator of business conditions in the city of New York fell in May, which is a bad signal for the economy. According to the Institute of Supply Management, the ISM-New York in May 2019 dropped to 48.6 points against 77.3 points in April. The index of expectations for six months ahead also fell to 56.3 points against 77.8 points in April.

All the attention of traders in the afternoon was focused on the speech of the head of the Fed. During the conference, which was devoted to the long-term prospects of interest rates, Fed Chairman Jerome Powell said that he was closely watching the effects of the trade conflict on the economy and would act appropriately to maintain economic growth. Thus, Powell hinted that he did not rule out the option of lowering interest rates, although he did not say so directly.

The head of the Fed also expressed concern about the inflationary background. In his opinion, the current inflation has become less sensitive to the growth of demand for labor, and therefore it is necessary to take more seriously the risk of reducing inflation expectations.

Powell also emphasized that the use of low rates to increase inflation could lead to increased imbalances in financial markets.

As for the technical picture of the EURUSD pair, the further growth prospect will directly depend on the resistance level of 1.1275. Only its breakthrough will provide buyers of risky assets with the necessary demand and will lead to the renewal of highs in the areas of 1.1320 and 1.1360. If the bulls once again fail to get beyond the resistance of 1.1275, the pressure on risky assets may increase again in the short term, which will lead to a decrease in the trading instrument in the support area of 1.1230 and 1.1200.

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Forecast for EUR/USD and GBP/USD on June 5. Jerome Powell admits the rate cut in the future

EUR/USD – 4H.

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As seen on the 4-hour chart, the EUR/USD pair retains the probability of continued growth in the direction of the next Fibo level of 61.8% (1.1281) and growth in general after fixing above the correction level of 76.4% (1.1241). Yesterday was marked by two quite important events. First, inflation in the European Union. According to forecasts, the consumer price index was supposed to fall to 1.4% in May, in fact, it fell to 1.2%, that is, it was lower than the already weak forecasts. Oddly enough, but traders did not rush to get rid of the European currency. Small sales followed, but the Forex market preferred to wait for the evening comments of Jerome Powell. And the Fed Chairman gave food for thought with his speech. Powell said that the possibility of reducing the key rate in the future is not excluded, which in recent days has been actively increased. He also said that, perhaps, in the future, we will need tools to stimulate the economy, if the overall economic situation continued to deteriorate. At the same time, Powell did not say that the stimulation of the economy is required already. But the markets took this information negatively, and the euro managed to avoid a fall. The consolidation of the EUR/USD pair under the Fibo level of 76.4% will allow traders to still count on a slight drop in the direction of the level of 100.0% (1.1177).

The Fibo grid was built on extremums from March 7, 2019, and March 20, 2019.

Forecast for EUR/USD and trading recommendations:

The EUR/USD pair closed above the correction level of 76.4%. Thus, I recommend buying the euro with a target of 1.1281, a protective order under the Fibo level of 76.4%. I recommend selling the EUR/USD pair after closing the quotes below the level of 76.4% for the purpose of a correction level of 1.1177 and a stop-loss order above 1.1241.

GBP/USD – 4H.

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The GBP/USD pair continues the process of growth towards the correctional level of 61.8% (1.2796) after consolidation above the level of 76.4% (1.2661). Donald Trump, who continues to be in London on an official visit, has already promised the UK an "excellent" trade deal as soon as the country leaves the European Union. According to Trump, the UK deserves a "special" place in the world, and Theresa May has done a great job as Prime Minister. Trump expects that Theresa May will not leave his post until the completion of Brexit. Trump's interests are clear, he wants Britain to leave the EU as soon as possible, and without any agreements with Brussels. If the new Prime Minister will be Boris Johnson, a former Foreign Minister, then there is nothing to worry about Trump, since Johnson himself is a supporter of fast Brexit. The pound sterling is still growing on this news, but the growth is very weak. Traders are still afraid of serious purchases of English currency. There are no emerging divergences on the current chart. Closing the pair below the Fibo level of 76.4% will work in favor of the US dollar and the resumption of the fall in the direction of the correction level of 100.0% (1.2437).

The Fibo grid was built on extremums from January 3, 2019, and March 13, 2019.

GBP/USD – 1H.

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As seen on the hourly chart, the pound/dollar pair performed a reversal in favor of the English currency, after the formation of a bullish divergence from the CCI indicator, and the closing above the Fibo level of 161.8% (1.2673). As a result, the growth process can be continued in the direction of the next corrective level of 127.2% (1.2782). The bearish divergence of the CCI indicator allowed to expect some fall, but within an hour its peak can be passed, which will lead to its cancellation.

The Fibo grid was built on extremums from April 25, 2019, and May 3, 2019.

Forecast for GBP/USD and trading recommendations:

The GBP/USD pair performed a consolidation above the correction level of 1.2673. I recommend buying the pair with a target of 1.2782, with stop-loss level below 1.2673. I recommend selling the pair at the close of quotations under the Fibo level of 161.8% (hourly chart) with a target of 1.2554 and a protective order above the level of 1.2673.

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AUD/USD. Growth contrary to: why does the Australian dollar go up?

The Australian dollar shows excellent stress resistance: despite the fact that the Reserve Bank reduced the interest rate for the first time in three years, and GDP growth rates fell to a 10-year low, "Aussie" keeps on the border of the 70th figure, trying to gain a foothold above the level of 0.7000. This behavior of the pair is explained not only by the weakness of the US currency, but also by the situation on the commodity market.

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The very fact of the RBA rate cut did not come as a surprise to the market: the head of the regulator Philip Lowe warned traders about such intentions at the end of May. Therefore, the Australian dollar "played" this decision long before the meeting. Commenting on the results of the meeting, Lowe reiterated his word, word for word, voiced earlier: "...the regulator made this decision to support employment growth and provide greater confidence that inflation will meet the medium-term target." Given the latest figures on inflation growth in Australia, such a position of the RBA looks logical and predictable.

Yet the intrigue of the June meeting persisted. The question was – does the Central Bank intend to go further along the path of easing monetary policy or it could be considered a "warning shot" without any continuation? The answer to this question was unambiguous: the Australian Central Bank is not only ready to further reduce the rate, but is likely to implement these intentions in the foreseeable future. Low consumer activity, a decline in the housing market, an unexpected increase in unemployment and a slowdown in inflation amid falling GDP growth – all this "bunch" of macroeconomic problems helps to mitigate the parameters of monetary policy. Plus, the US-China trade war, on which Australia depends more than anyone else among the advanced economies.

The data published today on the growth of the Australian economy only complemented the negative fundamental picture. Thus, GDP growth in the first quarter of this year slowed to a 10-year low, that is, to 1.8%. Australia's economy shows a downward trend for almost a year: if in the first quarter of 2018, GDP was at 3.2%, in the second – 3.1%, in the third – 2.7%, in the fourth – 2.3%, and in the first quarter of this year – 1.8%.

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The negative trend is visible, as they say, to the naked eye, so the decision of the RBA in this context looks quite reasonable, given that Australia over the past 30 years has avoided a recession. In general, the previously published economic forecasts of the RBA suggest that the interest rate will be reduced to one percent this year. Some experts suggest that the regulator will return to the issue of reducing the rate two more times, but this scenario is not currently basic. But the probability of another round of monetary policy easing at the September meeting is almost 60%.

Despite such gloomy prospects, the AUD/USD pair is quite confident going up, ignoring all the above circumstances. This is primarily due to the weakness of the US currency, which, in turn, reacts to the "dovish" comments of Fed members. And if James Bullard (who has the right to vote this year) once again urged the Open Market Operations Committee to reduce the rate, then Jerome Powell did not rule out the implementation of such a scenario for the first time. And although he noted that at the moment there is no need for this, his comments have excited the market. Following the speech of the head of the Fed, the US dollar hesitated for some time, assessing the "aftertaste" of its rhetoric. At first, greenback tried to regain its position, starting from the positive remarks of Powell about the state of the US economy. But a few hours later, the dollar again came under a wave of sales – after all, the option of lowering the rate for the first time sounded from the mouth of the head of the Federal Reserve, and the market could not ignore this fact.

The weakness of the US currency coincided with the growth of the commodity market, or rather with the growth of the cost of iron ore. This commodity is again trading around $100 per ton after a significant decline in April. The breakthrough of the dam of the Vale company (one of the three world giants for the production of iron ore), which occurred in January this year, did not pass without a trace. Vale was forced to suspend this and other mines in Brazil. According to experts, this could lead to a reduction in its production of iron ore by about 40 million tons in 2019. The national figure also fell significantly: in the first quarter of this year, Brazil reduced exports of iron ore by 12.3% compared to the same period last year, that is, to 66.3 million tons. Let me remind you that iron ore is a strategically important export product for Australia, so the current situation provides background support to the Australian dollar.

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From a technical point of view, the AUD/USD pair approached the key resistance level of 0.7010 (the upper line of the Bollinger Bands indicator on the daily chart). If the price overcomes and fixes higher, the next resistance level will be the upper limit of the Kumo cloud – the price of 0.7090.

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J. Powell reduces tension: USD weakens, the euro and the pound may strengthen by the end of the day

After the publication of the White Paper on Sunday, which brought down markets at the opening of the week, China took a small step back. The Ministry of Trade of China said on Tuesday that trade differences between the countries should be resolved through negotiations. The softening of rhetoric was seen positively by markets as a sign that China is interested in finding a mutually beneficial solution, not in intensifying confrontation.

Meanwhile, the yield of 10-year US bonds decreased at the moment to 2.069% this week, this is the minimum since September 2017, and clearly indicates the expectations of the markets at the Fed rate. According to the CME, the futures on the rate more confidently indicate not one, but two rate cuts in the current year, plus two cuts in the next 2020.

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On trading floors on Wednesday, the mood is generally positive, and it is caused by the reaction to the speech of Fed Chairman J. Powell, who promised to "properly" respond to the risks associated with the global trade war. The "proper response" in the face of the risk to the normal growth of the US economy – this is a direct hint at the softening of the Fed's position, which was perceived by the markets quite clearly.

Can we assume that the softening of the Fed's position will breathe into the falling markets an impulse to resume growth, or is it just a correction that will end with a new wave of decline? The second looks more likely. A trade war cannot be completed by the efforts of only one side, besides it applies to new participants – from June 5 from the list of countries with trade preferences with the United States, India is excluded. Published on Wednesday morning, China's service sector PMI Caixin index showed a significant slowdown in may from 54.5 p to 52.7 p, which may soon lead to a new wave of risk avoidance.

In the short term, the dollar will weaken as a result of the reaction to the reduction of tension and the general trend towards cooling of the US economy. Today, the ADP report on employment in the private sector will be published, which markets will focus on before Friday's nonfarm, the ISM report on the services sector will be released later, after a series of negative news, any deviation from forecasts can cause an excessively nervous reaction of markets and an increase in volatility.

EURUSD

The ECB before the next meeting on Thursday received an unpleasant surprise – inflation rose in May by 1.2%, which was worse than forecasts, the rate of price growth is minimal for the year, which means the probability of deterioration of forecasts following the meeting of the ECB has become slightly higher.

Today, the euro will participate in the positive win back, it is possible to increase to 1.1333, the passage of this level will improve the medium-term technical picture for the euro.

GBPUSD

Business activity in the UK manufacturing sector fell below the neutral level to 49.4 p in May, showing a minimum value for 34 months. The inflow of new orders decreased, exports fell at the fastest pace in the last 4.5 years, the second month in a row falls employment in production.

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Almost the same trends in the construction sector, the fall of the index for the third month in a row, the weakest indicator in commercial construction, indicating an increase in concern about Brexit.

The decline in business activity is accompanied by a drop in consumer spending. Retail sales, according to RBC, fell by 3% in May, the maximum decline since 1995, the trend could jeopardize the situation in the main pillar of the British economy – the services sector.

Donald Trump, in his address to May, advised her to "stay to make a deal." Trump offers the UK to implement a tough exit scenario from the EU and at the same time promises to conclude a profitable trade agreement immediately after Brexit. As Trump is able to conclude profitable agreements, investors see well on the examples of Mexico and China, so his call is likely to remain without implementation – Britain needs good trade relations with the European Union, as the aggravation of existing trends will inevitably push the country's economy into a deep recession.

Nevertheless, short-term factors still support the growth of the pound. The first goal is 1.2736, at the end of the day, it is possible to increase to 1.2782/92, support 1.2703.

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Bitcoin. Bitcoin exchange rate continued the correction

The breakthrough of important support led to a further downward correction of bitcoin in the area of the minimum of 7 550, where the demand for cryptocurrency resumed. As I noted yesterday, the first wave of the fall was associated with the expiration of futures contracts, while a further decline was formed by profit-taking speculative players.

Signal to buy Bitcoin (BTC):

Today, buyers need a return to the resistance of 8000, which will build a new wave of growth with the update of the maximum of 8460. In case of further decline, the demand for bitcoin may return to the support area of 7554, but it is best to open long positions immediately on the rebound from the minimum of 7260.

Signal to sell Bitcoin (BTC):

Bears need to keep bitcoin below the resistance of 8000, which will increase the pressure on the cryptocurrency and allow to re-update the support of 7554, which will lead to its breakdown and reduce bitcoin to the minimum area of 7260, where I recommend fixing the profit. In a growth scenario above 8000 USD, you can sell bitcoin on a rebound from a maximum of 8220.

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GBP/USD: plan for the European session on June 5. Data on the index for the UK service sector can help the pound to reach

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

Yesterday, buyers of the pound coped with the task and fixed above the resistance of 1.2697, which now acts as a support. While trading will be conducted over this range, the demand for the British pound will remain, which may lead to an update of the maximum of 1.2744 and 1.2800, where I recommend fixing the profit. In the case of a weak report on the service sector and the return of GBP/USD under the support level of 1.2697, it is best to consider long positions after updating the minimum of 1.2650 or a rebound from the area of 1.2594.

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

Sellers of the pound will rely on weak data on the service sector, which will return the pair to the support level of 1.2697 and will allow to expect a decrease to the support of 1.2650 and 1.2594, where I recommend fixing the profit. In the scenario of growth in the first half of the day and a good report, the upward correction will be stopped by a large resistance level of 1.2744, from where you can look at the short positions immediately on the rebound.

Indicator signals:

Moving Averages

Trading is above 30 and 50 moving averages, indicating an upward correction in the pound.

Bollinger Bands

The average border of the indicator around 1.2697 keeps the pound from falling. In the scenario of a larger decline in GBP/USD, long positions can be considered to rebound from the lower limit in the area of 1.2665.

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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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EUR/USD: plan for the European session on June 5. A breakthrough of 1.1271 is needed to continue the growth of the euro

To open long positions on EURUSD, you need:

Buyers of the euro, given the divergence and weak data on the eurozone, failed to cope yesterday with the resistance of 1.1261, which is now transformed into 1.1271. To continue the growth, a breakdown of this range is necessary, and good data on the volume of retail trade in the eurozone and the producer price index will help in this, which will provide a breakthrough of 1.1271 and an exit to the highs of 1.1294 and 1.1336, where I recommend fixing the profits. With a decrease in EUR/USD, the support will be provided by the area of 1.1234, from which it is best to open long positions if a false breakout is formed. I recommend buying for a rebound from a minimum of 1.1199.

To open short positions on EURUSD, you need:

Sellers of the euro, as yesterday, will rely on weak reports on the eurozone. Therefore, an unsuccessful breakthrough and a return to the level of 1.1271 will be the first signal to open short positions of the euro, the purpose of which will be the support of 1.1234, where I recommend fixing the profit. However, the main weekly task will be to return to a minimum of 1.11199. In the scenario of further growth in the trend above 1.1271, you can look at short positions from the resistance of 1.1294 or a rebound from the maximum of 1.1336.

Indicator signals:

Moving Averages

Trading is conducted above 30 and 50 moving averages, which indicates the bullish nature of the market.

Bollinger Bands

The break of the upper limit of the indicator in the area of 1.1271 will be a signal to buy the euro.

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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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Control zones USDCHF 06/05/19

Work in the downward direction is moving to the medium-term level, however, yesterday the pair reached the range of the average weekly progress. Sales from the current marks are not profitable. For this reason, it is necessary to exit the short position and wait for more favorable prices to open new sales. Purchases are possible from the current levels and below in case the "false breakout" pattern is formed. This will determine the size of the stop and take corrective upward movement.

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It is important to note that the downward movement is strong enough. This indicates a high probability in the medium term to repeatedly update the local lows of the month.

The alternative model will be developed if the downward movement continues and today's trading closes below 0.9901. This will increase the probability of forming a corrective upward model to 90%. This should be used through the pattern of "false breakout" of the previous day's minimum.

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Day CZ - daily control zone. An area formed by important data from the futures market that changes several times a year.

Weekly CZ - weekly control zone. The zone formed by the important marks of the futures market, which change several times a year.

Monthly CZ - monthly control zone. The zone, which is a reflection of the average volatility over the past year.

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Control zones USDCAD 06/05/19

Today, it is necessary to consider the pattern of "false breakdown" of yesterday's low, as the pair is trading within the weekly CZ limit of 1.3382-1.3365. Going beyond the average weekly course makes it possible to talk about a return to its limits with a probability of 90%. It should be used for the fixation of sales by 100% and finding the best prices on the purchase.

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Do not forget to change the construction of the weekly control zone and other zones, since there has been a change in marginal collateral. It is important to remember that the new requirements apply to all already open positions.

An alternative model of reduction and consolidation below the weekly control zone has a probability below 30%, which makes it auxiliary. Sales from the current marks ceased to be profitable. In order to continue working in a downward direction, it is necessary to obtain more favorable prices after the growth of the pair. You should not buy a "false breakdown" without a formed model since the downward movement is a strong medium-term impulse.

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Daily CZ - daily control zone. The area formed by important data from the futures market, which change several times a year.

Weekly CZ - weekly control zone. The zone formed by important marks of the futures market, which change several times a year.

Monthly CZ - monthly control zone. The zone, which is a reflection of the average volatility over the past year.

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Forecast for EUR/USD on June 5, 2019

EUR/USD

On Tuesday, the euro slightly modified our scenario with the expected price squat to the level of 1.1216 before further upward movement – the price did not reach this level and fixed above 1.1255 – the line of the price channel. Before the price opens the target of 1.1324 (maximum of April 17), but due to the fact that the support (1.1216) has not been reached, the Marlin oscillator on the four-hour chart did not have time to discharge fully, and now the next target level may not be reached – the Marlin oscillator will be either high in the overbought zone, or, having lost strength, will form a reversal signal.

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Forecast for GBP/USD on June 5, 2019

GBP/USD

Following Tuesday's results, the British pound grew by 35 points, consolidating above the price level of 1.2660 (minimum of August 2018), anticipating the achievement of the goal of 1.2756 – the resistance of the nested line of the price channel of the higher timeframe. A notable event yesterday was the statement of US President Donald Trump about a "phenomenal" deal after the UK's exit from the EU. We would not pay attention to Trump's next "phenomenal" statement, if it were not logical in the overall geopolitical chain of US events, regarding the reform of trade agreements leading to new projects of global Transoceanic trade agreements. Perhaps, it will even be a single Settlement Agreement, instead of the abolished WTO. It's a long time, Trump will not have enough of a second presidential term. But so far, in our opinion, events are developing in this direction.

In the current situation, the signal line of the Marlin oscillator is approaching the border with the territory of the trend growth, where it can meet resistance and the price, having reached the target, turn down from it – either in correction, back to 1.2660, or in continuation of the medium-term decline on the expectations of Brexit. After May's departure, her "bad" agreement in the evaluation of politicians will become even worse in the perception of investors.

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Forecast for AUD/USD on June 5, 2019

AUD/USD

On Tuesday, the Australian dollar struggled with the resistance of the MACD line of the daily scale, to which the balance line (indicator red) rushed to the rescue, which became an irresistible resistance for the price. But this morning, thanks to a good GDP indicator for the first quarter of 0.4%, the price went above the MACD line and, in accordance with the strong positions of the leading Marlin oscillator, intends to overcome the resistance of the trend line of the price channel at 0.7012 and continue to grow.

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Fractal analysis for major currency pairs on June 5

Dear colleagues.

For the currency pair euro/dollar, we follow the development of the upward cycle from May 30 and the continuation of the upward movement is expected after the breakdown of 1.1266. For the currency pair pound/dollar, we follow the development of the upward structure from May 31 and we expect the continuation of the upward movement after the breakdown of 1.2727. For the currency pair dollar/franc, we have expanded the potential for downward movement to the level of 0.9840. For the currency pair dollar/yen, the continuation of the downward movement is expected after the breakdown of 107.76 and the level of 108.43 is the key support. For the currency pair euro/yen, the price forms the potential for the top of June 3 and the upward cycle development is expected after the breakdown of 121.98. For the currency pair pound/yen, the price is in the correction zone; the level of 137.83 is the key support for the bottom and the level of 136.52 is the key resistance for the continuation of the main trend.

Forecast for June 5:

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 1.1310, 1.1282, 1.1266, 1.1238, 1.1225, 1.1204 and 1.1182. We continue to follow the development of the upward cycle of May 30. The short-term upward movement is expected in the area of 1.1266 – 1.1282 and the breakdown of the last value will lead to a movement to the potential target – 1.1310, from this level, we expect a rollback to the bottom.

The short-term downward movement is possible in the area of 1.1238 – 1.1225 and the breakdown of the last value will lead to a prolonged correction. The goal is 1.1204 and this level is the key support for the top. Its price will have the formation of the initial conditions for the downward trend. In this case, the potential goal – 1.1182.

The main trend is the upward cycle of May 30.

Trading recommendations:

Buy 1.1266 Take profit: 1.1280

Buy 1.1284 Take profit: 1.1310

Sell: 1.1224 Take profit: 1.1206

Sell: 1.1202 Take profit: 1.1182

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For the currency pair pound/dollar, the key levels on the H1 scale are 1.2808, 1.2789, 1.2754, 1.2727, 1.2687, 1.2667 and 1.2633. We follow the development of the upward cycle of May 31. The continuation of the upward movement is expected after the breakdown of 1.2727. In this case, the goal is 1.2754 and near this level is the price consolidation. The breakdown of the level of 1.2755 should be accompanied by a pronounced upward movement. The goal is 1.2808 and in the area of 1.2789 – 1.2808 is the price consolidation, hence, we expect a rollback to the bottom.

The short-term downward movement is possible in the area of 1.2687 – 1.2667 and the breakdown of the latter value will lead to a prolonged correction. The goal is 1.2633 and this level is the key support for the upward structure.

The main trend is the upward cycle of May 31.

Trading recommendations:

Buy: 1.2728 Take profit: 1.2752

Buy: 1.2755 Take profit: 1.2787

Sell: 1.2686 Take profit: 1.2668

Sell: 1.2664 Take profit: 1.2638

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For the currency pair dollar/franc, the key levels on the H1 scale are 1.0000, 0.9970, 0.9946, 0.9933, 0.9916, 0.9897, 0.9876 and 0.9840. We follow the development of the downward structure of May 30. The short-term downward movement is expected in the range of 0.9916 – 0.9897 and the breakdown of the last value will lead to the movement to the level – 0.9876, from this level, we expect a rollback to the top. The potential value for the downward structure is the level of 0.9840, the movement to which is possible after the breakdown of 0.9874.

The short-term upward movement is possible in the area of 0.9946 – 0.9970 and the breakdown of the latter value will lead to a prolonged correction. The target is 1.0000 and this level is the key support for the downward structure of May 30.

The main trend is the downward cycle of May 30.

Trading recommendations:

Buy: 0.9948 Take profit: 0.9970

Buy: 0.9972 Take profit: 1.0000

Sell: 0.9915 Take profit: 0.9898

Sell: 0.9895 Take profit: 0.9878

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For the currency pair dollar/yen, the key levels on the H1 scale are 108.84, 108.43, 108.18, 107.76, 107.44 and 106.99. We continue to monitor the downward structure of May 30. The short-term downward movement is expected in the area of 107.76 – 107.44 and the breakdown of the last value will lead to the movement to the potential target – 106.99, upon reaching this level, we expect a rollback to the top.

The short-term upward movement is possible in the area of 108.18 – 108.43 and the breakdown of the latter value will lead to an in-depth correction. The goal is 108.84 and this level is the key support for the downward cycle.

The main trend is the local structure for the bottom of May 30.

Trading recommendations:

Buy: 108.18 Take profit: 108.41

Buy: 108.45 Take profit: 108.82

Sell: 107.75 Take profit: 107.45

Sell: 107.42 Take profit: 107.00

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For the currency pair Canadian dollar/dollar, the key levels on the H1 scale are 1.3458, 1.3432, 1.3414, 1.3386, 1.3369, 1.3339 and 1.3313. We follow the development of the downward structure of May 31. The continuation of the development of the main trend is expected after the price passes the range of 1.3386 – 1.3369. In this case, the goal is 1.3339. We consider the level of 1.3313 as a potential value for the bottom, after reaching which, we expect to go to the correction zone.

The short-term upward movement is possible in the area of 1.3414 – 1.3432 and the breakdown of the latter value will lead to a prolonged correction. The target is 1.3458 and this level is the key support for the bottom.

The main trend is the downward structure of May 31.

Trading recommendations:

Buy: 1.3415 Take profit: 1.3431

Buy: 1.3433 Take profit: 1.3456

Sell: 1.3368 Take profit: 1.3340

Sell: 1.3337 Take profit: 1.3315

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For the currency pair Australian dollar/dollar, the key levels on the H1 scale are 0.7058, 0.7042, 0.7013, 0.7003, 0.6983, 0.6970, 0.6953 and 0.6941. We follow the upward structure of May 23. The continuation of the upward movement is expected after the price passes the range of 0.7003 – 0.7013. In this case, the goal is 0.7042. We consider the level of 0.7058 as a potential value for the top, after reaching which, we expect consolidation, as well as a rollback to the bottom.

The short term downward movement is possible in the range of 0.6983 – 0.6970 and the breakdown of the latter value will lead to a prolonged movement. The target is 0.6953 and the range of 0.6953 – 0.6941 is the key support for the upward structure.

The main trend is the upward structure of May 23.

Trading recommendations:

Buy: 0.7014 Take profit: 0.7040

Buy: 0.7044 Take profit: 0.7058

Sell: 0.6983 Take profit: 0.6971

Sell: 0.6969 Take profit: 0.6955

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For the currency pair euro/yen, the key levels on the H1 scale are 122.31, 121.98, 121.71, 121.20, 121.01, 120.56 and 119.98. The price forms the potential for upward movement of June 3 in the correction of the downward structure. The breakdown of the level of 121.71 will lead to the formation of pronounced initial conditions for the top. The goal is 121.98 and the breakdown of this level will lead to the development of an upward trend. In this case, the potential target is 122.31.

The short-term downward movement is expected in the area of 121.20 – 121.01 and the breakdown of the last value will cancel the upward structure from June 3. In this case, we expect the movement to the level of 120.56. We consider the level 119.98 to be a potential value for the bottom, from this level, we expect a rollback to the top.

The main trend is the design of the initial conditions for the upward cycle of June 3.

Trading recommendations:

Buy: 121.71 Take profit: 121.96

Buy: 122.00 Take profit: 122.30

Sell: 121.20 Take profit: 121.03

Sell: 120.98 Take profit: 120.58

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For the currency pair pound/yen, the key levels on the H1 scale are 138.39, 137.83, 137.49, 136.52, 135.98, 135.48 and 134.82. The price is still in the correction zone from the downward trend. The continuation of the development of the downward trend of May 21 is expected after the breakdown of 136.50. In this case, the target is 135.98 and the breakdown of which, in turn, will allow us to expect to move to the level of 135.48, consolidation is near this value, and also from here, a high probability of a reversal in the correction. We consider the level of 134.82 as a potential value for the bottom.

The short-term upward movement is expected in the area of 137.49 – 137.83 and the breakdown of the last value will lead to a prolonged correction. The target is 138.39 and the range of 138.39 – 138.76.

The main trend is the local downward structure of May 21, the stage of correction.

Trading recommendations:

Buy: 136.50 Take profit: 136.00

Buy: 135.94 Take profit: 135.50

Sell: 137.46 Take profit: 136.90

Sell: 135.44 Take profit: 134.84

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Elliott wave analysis of GBP/JPY for June 5 - 2019

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The GBP/JPY pair has recovered from 136.63. Now it is testing important resistance at 137.48. If this resistance is broken too, then we see wave 2 as complete and wave 3 developing for an ultimate break above the March peak at 148.87.

Support is seen near 136.97 which ideally will protect the downside if wave 2 is complete for a clear break above 137.48. A failure to protect the downside near 136.97 will call for a final dip closer to the 70.7% corrective target at 135.94, but this correction is running out of steam.

R3: 138.36

R2: 137.96

R1: 137.48

Pivot: 137.15

S1: 136.97

S2: 136.53

S3: 136.25

Trading recommendation:

We will buy GBP at 136.15 or upon a break above 137.48

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Technical analysis of Ethereum for 05.06.2019

Crypto Industry News:

The US regulatory body Commodity Futures Trading Commission (CFTC) is in talks with Facebook about the upcoming launch of stablecoin, cryptocurrency media report.

Referring to chairman J. Christopher Giancarlo, the publication revealed that Facebook is attempting to soften the regulatory landscape against the asset, now called GlobalCoin, which will allegedly come into use next year.

"We are very interested in understanding it better," said Giancarlo, adding that there is no formal application for regulatory approval at this time.

Facebook has caused quite a stir around its unconfirmed GlobalCoin plans, and various sources are looking at the form of a global payment network covering both the social media platform and the sister companies Whatsapp and Instagram. Users will allegedly be able to send each other funds and make purchases in the application.

At the end of May, the media announced that Facebook executives were taking part in similar preliminary discussions with US Cryptocut and Coinbase exchanges on the introduction and potential liquidity solutions. Neither party has yet confirmed the plans that came to light through two anonymous sources.

Technical Market Overview:

The ETH/USD pair has made a new low on its way down. The level that was hit was the technical support at $239.03, but the low was made at the level of $234.01. This move down is still a part of the wave 4 which is a corrective cycle. It might terminate around the level of $228.89 and then it will be labeled as three waves correction ABC or it can continue to evolve into an ABCDE Triangle pattern. Please notice, the price is still trading below the short-term descending trend line resistance as well.

Weekly Pivot Points:

WR3 - $337.31

WR2 - $312.54

WR1 - $290.33

Weekly Pivot - $263.28

WS1 - $241.64

WS2 - $214.59

WS3 - $190.10

Trading Recommendations:

The best strategy in the current market conditions is to trade in the direction of the main trend, which is still up. All the local bounces and correction should be treated as another opportunity to open the buy orders for a better price. Please notice, the larger time frame trend is up and there are no signs of any trend reversal.

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Technical analysis of Bitcoin for 05.06.2019

Crypto Industry News:

The director of Blockchain and DLT at the World Economic Forum (WEF), Sheila Warren, claims that Blockchain can be a solution to the deteriorating crisis of confidence around the world. Warren claimed that public confidence in governments, banks, media, and institutions in the United States "erodes quickly". Then she noticed that he thought that Blockchain if used correctly, might be the solution to this problem:

"This technology could provide access to information that would enable third parties or other groups to actually enter and audit what is happening. And I really think that he can build faith in institutions again"- she said.

Warren then explained that she thought it would be labor-intensive to implement such auditing systems, but the possibility of proving the integrity of public processes and the authenticity of different media would be of great benefit. She also said that if it was not resolved, the crisis of trust she had mentioned would have far-reaching consequences.

Warren also admitted that she had some Bitcoins, "almost as a joke," but she had not connected Bitcoin and Blockchain for a long time, and only later did she learn about the technology.

Technical Market Overview:

The BTC/USD pair has hit the target level for the wave c correction at $7,484 and bounced a little so far. The nearest technical resistance is seen at the level of $7,978. Please notice, that this corrective cycle might evolve into an ABCDE Triangle pattern as well, so please keep an eye on the further developments. There is still one more wave to the upside needed to complete the whole impulsive cycle anyway.

Weekly Pivot Points:

WR3 - $10,284

WR2 - $9,622

WR1 - $9,121

Weekly Pivot - $8.545

WS1 - $8,037

WS2 - $7,438

WS3 - $6,960

Trading Recommendations:

The best strategy in the current market conditions is to trade in the direction of the main trend, which is still up. All the local bounces and correction should be treated as another opportunity to open the buy orders for a better price. Please notice, the larger time frame trend is up and there are no signs of any trend reversal.

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Technical analysis of EUR/USD for 05.06.2019

Technical Market Overview:

The EUR/USD has tried to break through the technical resistance at the level of 1.1273 and made the new local high at the level of 1.1277, but failed to continue as Shooting Star candle was made at this level. Any breakout through this zone will change the temporary outlook from bearish to bullish. Please notice, that despite such a big move up the pair is still trading inside of the consolidation zone and the key technical resistance zone must be clearly and impulsively violated to continue the move up.

Weekly Pivot Points:

WR3 - 1.1310

WR2 - 1.1261

WR1 - 1.1211

Weekly Pivot - 1.1159

WS1 - 1.1114

WS2 - 1.1061

WS3 - 1.1012

Trading Recommendations:

The best strategy in the current market conditions is to trade in the overbought and oversold market conditions as long as the price is moving inside of the consolidation zone. Any breakout in either direction (the larger time frame trend is down) will eventually give the direction for the short-term trend move and this is when the strategy for a breakout will be applicable.

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Technical analysis of GBP/USD for 05.06.2019

Technical Market Overview:

The GBP/USD pair has managed to break above the technical resistance at the level of 1.2683 and is heading towards the next technical resistance located at the level of 1.2747. The momentum is now positive and quite strong, but the market conditions are starting to become overbought. As long as the level of 1.2810 is not clearly violated, the whole bounce should be treated as an upward correction in the downtrend.

Weekly Pivot Points:

WR3 - 1.2903

WR2 - 1.2819

WR1 - 1.2711

Weekly Pivot - 1.2636

WS1 - 1.2534

WS2 - 1.2447

WS3 - 1.2331

Trading Recommendations:

The best strategy in the current market conditions is to trade in the direction of the main trend, which is still down. All the local bounces and correction should be treated as another opportunity to open the sell orders for a better price. Please notice, the larger time frame trend is down and there are no signs of any trend reversal.

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Elliott wave analysis of EUR/JPY for June 5, 2019

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EUR/JPY is about to test important resistance at 122.26 and a clear breakout above it will confirm that the wave ii has completed with the test of 120.75 and the wave iii is developing for a new impulsive rally to above 127.50.

Short-term support is now seen at 121.27 which will protect the downside for a test of the breakout above 122.26.

R3: 122.47

R2: 122.26

R1: 121.85

Pivot: 121.57

S1: 121.27

S2: 121.14

S3: 120.75

Trading recommendation:

We are long EUR from 120.75 and we will move our stop higher to 120.70.

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GBP/USD approaching resistance, potential drop!

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Price is approaching our first resistance level where we might see a corresponding drop.

Entry : 1.2747

Why it's good : Horizontal swing high resistance, 23.6% Fibonacci retracement, 61.8% Fibonacci extension

Stop Loss : 1.2872

Why it's good : Horizontal pullback resistance, 38.2% Fibonacci retracement

Take Profit : 1.2578

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AUD/USD approaching resistance, potential reversal!

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Price reversed off from its resistance where it is expected to fall further to its support. We are expected some AUD weakness later today due to a possible RBA rate cut.

Entry : 75.42

Why it's good : 38.2% Fibonacci retracement, 100% & 61.8% Fibonacci extension, horizontal pullback resistance

Stop Loss : 75.72

Why it's good : 61.8% Fibonacci retracement

Take Profit : 74.98

Why it's good : Horizontal swing low support

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EUR/JPY reversed off key resistance, a drop is possible!

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EURJPY reversed off key resistance, a drop to first support is possible

Entry: 121.64

Why it's good : 61.8% Fibonacci extension, 23.6% Fibonacci retracement, horizontal pullback resistance

Stop Loss : 122.24

Why it's good :50% Fibonacci retracement, horizontal overlap resistance

Take Profit : 120.75

Why it's good: 76.4% Fibonacci retracement, 61.8% Fibonacci extension, horizontal swing low support

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