EUR/USD: plan for the European session on July 3. Independence Day in the United States will bring calm to the market

To open long positions on EURUSD you need:

The situation has not changed in comparison with yesterday's forecast. The upward correction is still limited by the resistance of 1.1307, and for the time being, the bulls' task remains the same. A breakthrough and consolidation above this range will lead to further growth of EUR/USD along with an update of a high of 1.1338 and 1.1364, where I recommend taking profits. If the downward movement continues further, then it is best to return to long positions on a false breakdown from the support of 1.1275 or to rebound from a new monthly low around 1.1239.

To open short positions on EURUSD you need:

Further movement in the morning will depend on the report on the volume of retail trade. In case the data disappoints, another false breakout in the area of 1.1307 will be a signal to continue the downward trend, which will push EUR/USD to the area of a low of 1.1275 and will also lead to an update of a larger support of 1.1239, where I recommend taking profits. If the demand for the euro returns, then the upward potential will be limited by the resistance of 1.1338, however, it is best to open short positions to rebound immediately in the resistance area of 1.1364.

Indicator signals:

Moving averages

Trade is conducted in the region of 30 and 50 moving averages, which indicates the lateral nature of the market.

Bollinger bands

Volatility is low, which does not provide signals to enter 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
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Analysis of EUR/AUD for July 4, 2019: AUD to maintain momentum against EUR?

The euro declined significantly against the Australian dollar after being the dominant currency the pair since April 2019. The European economy is facing slower economic growth and trade war tensions.

The eurozone is struggling with the mixed economic reports and slowing economic growth which has been the main reason for the euro's recent losses. The ECB is doing its best to improve the inflation situation and boost the economic growth under the conditions of the budget deficit and global trade tensions. According to European financial watchdog, the major EU banks face a collective shortfall of 135 billion euros ($153 billion) to fully comply with global capital requirements by 2027, meaning they need to raise their capital by at least 24.4%. The European Central Bank policymakers aren't yet ready to rush into additional monetary stimulus at this month's meeting, preferring instead to wait for more data on the economy. As per current observations, the ECB may act in July based on the inflation outlook, inflation expectations and downside risks to growth.

Today the retail sales report is going to be published in the eurozone which is expected to increase to 0.4% from the previous value of -0.4%. Ahead of German factory orders and French trade balance reports with mixed expectations, the euro is expected weaken in the coming days.

On the other hand, despite the recent rate cut by the RBA, the Australian dollar managed to sustain the momentum it has gained recently. Australia's conservative government is set to secure the required support on Thursday to pass A$158 billion ($110.47 billion) worth of tax cuts over the next decade. This measure could provide a fillip to the economy that is at risk of stagnation. The tax cuts measure is a relief for Australia's central bank, which has said government action was needed to boost consumer spending in order to revive an economy that is growing at its slowest pace in a decade. Some analysis believe that the Australian economy is still open for reasonable growth, low unemployment and low and stable inflation. As the global risks persist, the RBA is expected to be flexible with the inflation and rate decisions in the coming months.

As of the current scenario, the Australian dollar, having optimistic expectations and a positive hint from the RBA, is expected to extend gains against the euro which is expected to struggle further in the process.

Now let us look at the technical view. The price is currently quite impulsive and non-volatile with the bearish gains. It is expected to pull back towards 1.6150 area before sliding lower with the target towards 1.5700 support area in the coming days. As the price remains below 1.6450 area with a daily close, the probability of certain bearish pressure is expected to be quite high.

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Trading plan for EUR/USD for July 04, 2019

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Technical outlook:

The EUR/USD pair hit 1.1270 yesterday, having reached the anticipated target. We again present the hourly chart view with a probable direction, going forward. Considering the wave structure, the drop from 1.1412 would be probably develop in 5 waves if prices drop towards 1.1234 levels. In that case, we would revise our bullish outlook to sell on rallies with a risk above 1.1412. Please note that immediate resistance is seen at 1.1322 levels as depicted on the chart view. In the event that prices continue to rally from the current levels, keeping 1.1270 low as intact, we would consider going long again. Aggressive traders might want to initiate long positions if 1.1270 levels remain intact. We remain a bit cautious at this point a shall watch the price action before committing further. 1.1322 would remain decisive for a continued bullish trend.

Trading plan:

Take full profit on short positions, target hit. Remain flat for now.

Good luck!

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Dollar weakness improves CAD and JPY prospects

The environment was clearly unsuccessful for the dollar. None of the published macroeconomic indicators added optimism to the bulls. The trade balance deficit increased from 51.2 billion to 55.5 billion in May, which is not surprising given the avalanche-like growth of problems in the manufacturing sector. The volume of production orders decreased by 0.7% in May and the trend is becoming threatening.

The ISM report on business activity in the services sector is worse than forecast and the growth rate of the sector is obviously slowing down to 55.1p in May, which is the minimum value for 22 months.

The ADP report on employment in the private sector showed an increase in new jobs by only 102 thousand, which after it failed to 41 thousand a month earlier indicates saturation of the labor market.

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The weak ADP report reinforces the likelihood that nonpharma will also come out worse than expected on Friday and this is perhaps the most important conclusion on the prospects for the dollar. So far, there is no reason why the Fed can postpone a quarter-percent rate cut at a meeting on July 31. Moreover, if the trend towards a slowdown in the US economy is developing and this is what we are seeing, then the decline can be immediately by 0.5%. Such a probability makes the dollar an outsider in the foreign exchange market in the medium term.

Today is a national holiday in the USA and banks are closed. The volatility will be low and one should not expect strong movements.

USD/CAD pair

The decision of OPEC + to extend the agreement on the reduction of oil production for 9 months had a positive impact on oil prices, which together with the declared truce on the trade war between the United States and China strengthened both stock markets and commodity currencies.

Despite the oil optimism that supports the loonie against the dollar, the problems in the Canadian economy are much the same as in the United States. The manufacturing sector is at its lows for 3.5 years and the PMI index is below 50 p. For the third month in a row, which is consistently reflected in such important components of economic health given the rapid growth of work in progress (at least since October 2010), negative dynamics of new orders, stagnation on new jobs and the sharpest drop in consumer activity since December 2015.

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According to Markit, the reason for the slowdown is obvious, which is the trade war between China and the United States that holds back development. Low trade volumes or weak export growth do not save even high oil prices.

Nevertheless, the current situation must still be considered in favor of the Canadian. First of all, the reason for this is noticeably higher inflation than in the United States. The base index was 2.1% in May, which allows the Bank of Canada not to hurry with a decrease in the rate. If the Canada labor market report is satisfactory tomorrow, the Bank of Canada at its meeting on July 10 will most likely leave the rate unchanged, which will increase the yield spread.

Technically, a Canadian looks overbought but the momentum has not yet worked out. The repeated test of support at 1.3066 can be successful, which will open the way to 1.2950.

USD/JPY pair

The business indices in the manufacturing and services sectors were worse than expected in June. Also, the consumer confidence index fell to 5-year lows at 38.7p.

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At the same time, the Tankan indices for Q2 are stable and did not add additional concern.

A member of the Board of Directors of the Bank of Japan, Funo, has directly pointed out that there is no need to immediately respond to the growing difficulties in the economy with monetary measures. Apparently, BoJ will adhere to the previously announced strategy to keep rates at the current level until the spring of 2020, which inevitably makes the yen a favorite against the dollar and during this time, it will be under pressure from the Fed.

The political component for the yen also remains bullish. There is no reason to believe that the "truce" will lead to a deal between the United States and China. Moreover, it could push Trump to intensify against the EU and Japan in areas such as cars and agriculture. According to Trump, the yen's rate is too low that makes the potential for reducing the USD/JPY pair still remains. The yen will retest the recent low of 106.76 with an eye to 105.90/106.10.

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Technical analysis of ETH/USD for 04/07/2019:

Crypto Industry News:

Ministers from the Netherlands in a statement called on the government to regulate cryptocurrencies and some cash payments due to money laundering.

Officials said that the government should prohibit cash payments above EUR 3,000, regulate cryptocurrencies and ban 500 euro banknotes, as these instruments may allegedly facilitate money laundering. The Netherlands does not recognize cryptocurrency as a legitimate currency, although last year the Dutch court considered Bitcoin to be a legitimate "transferable value" in a monetary penalty case.

According to the statement, Finance Minister Wopke Hoekstra and the Minister of Justice and Security Ferdinand Grapperhaus sent to parliament on July 1 a proposal of "money laundering". The project is asking for increased enforcement capacity by financial supervisory authorities and relevant supervisory authorities and groups, such as the financial intelligence unit, the police, the tax and investigative information services, and the prosecutor's office.

If the bill is approved, banks will also be encouraged to share information about suspicious customers. The Netherlands will also support the creation of a European Union regulatory body dealing with combating cross-border money laundering.

Technical Overview:

The ETH/USD pair broke through the local short-term trendline resistance around the level of $293 and made a new local high at the level of $302.50. This means the bounce momentum is getting stronger and soon the price might test the nearest technical resistance located at the level of $304.22. If this level is clearly violated, then the next target for bulls is the technical resistance at $324.09.

Weekly Pivot Points:

WR3 - $16,315

WR2 - $14,938

WR1 - $12,895

Weekly Pivot - $11,624

WS1 - $9,683

WS2 - $8,320

WS1 - $6,345

Trading Recommendations:

The best strategy in the current market conditions is to trade with the larger timeframe trend, which is still up. All the shorter timeframe moves are being treated as a correction inside of the uptrend. The current cycle is wave 2 of the higher degree, which is a corrective wave and after is completed, the uptrend should resume.

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Technical analysis of BTC/USD for 04/07/2019:

Crypto Industry News:

Bitcoin traders in Zimbabwe and South Africa are recording rapidly growing bonuses on their Bitcoins, according to a report from one of the cryptocurrency portals.

Among new capital controls in South Africa and the recent Zimbabwean ban on local foreign trade in fiat, local traders reportedly saw bids reaching $ 50,000 for 1 Bitcoin when trying to buy crypto currencies from abroad.

Meanwhile, other social media commentators this week claimed that Bitcoin is allegedly sold in Zimbabwe for $ 76,000 - a bonus of over 600%. According to the screen shots from the P2P LocalBitcoins.com site on Twitter, some have tried to earn colossal profits thanks to the $ 75-76.000 / Bitcoin rate. This huge margin may be a reality reflecting the course of the black market for the dollar kept in EcoCash, which by the government has just become virtually worthless.

Technical Overview:

The BTC/USD might have completed the full corrective cycle that started at the level of $13,698 and now has broken through the technical resistance at the level of $11,307. The new local high was made at the level of $12,004. The market is rallying higher towards the top of the old wave B of the lesser degree and if this level is clearly violated the chances that the correction is terminated are very high. Please notice this is still the uptrend and the current correction is the local correction in the uptrend.

Weekly Pivot Points:

WR3 - $16,315

WR2 - $14,938

WR1 - $12,895

Weekly Pivot - $11,624

WS1 - $9,683

WS2 - $8,320

WS1 - $6,345

Trading Recommendations:

The best strategy in the current market conditions is to trade with the larger timeframe trend, which is still up. All the shorter timeframe moves are being treated as a correction inside of the uptrend. The larget correction is just around the corner, as all the major impulsive waves have been completed.

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Technical analysis of GBP/USD for 04/07/2019:

Technical Overview:

The GBP/USD pair has hit the next technical support at the level of 1.2559 and is trying to bounce, but so far no avail as the downtrend is still in force. The key support is seen at the level of 1.2505 and if this level is violated the downtrend will accelerate. On the other hand, the nearest technical resistance is seen at the level of 1.2605.

Weekly Pivot Points:

WR3 - 1.2870

WR2 - 1.2829

WR1 - 1.2757

Weekly Pivot - 1.2708

WS1 - 1.2629

WS2 - 1.2585

WS1 - 1.2508

Trading Recommendations:

The best strategy for the current market conditions is to buy the corrections in anticipation of the uptrend to resume. This strategy is valid as long as the level of 1.2505 is clearly violated. The larget time frame trend is still down and the recent rally up is the first sign the trend might be reversing. The key long-term technical resistance is seen at the level of 1.2775 and only if this level is violated, there is a chance for the trend reversal.

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Technical analysis of EUR/USD for 04/07/2019:

Technical Overview:

The EUR/USD pair has been testing the 61% Fibonacci retracement four times now and the level still holds. The weak and negative momentum support the bearish short-term outlook, but the 61% Fibo might be a good level for a temporary pull-back higher. Nevertheless, due to the weak momentum, the short-term outlook still favors the downside, unless the 61% Fibonacci holds the line for longer.

Weekly Pivot Points:

WR3 - 1.1462

WR2 - 1.1438

WR1 - 1.1392

Weekly Pivot - 1.1368

WS1 - 1.1333

WS2 - 1.1302

WS1 - 1.1259

Trading Recommendations:

The best strategy for the current market conditions is to buy the corrections in anticipation of the uptrend to resume. This strategy is valid as long as the level of 1.1181 is clearly violated. The larget time frame trend is still down, but there are signs of the trend reversal and the Ending Diagonal breakout to the upside.

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Elliott wave analysis of EUR/JPY for July 4 - 2019

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EUR/JPY could have bottomed with the test of 121.29 and begun a new impulsive rally to above 127.50. Nevertheless, we do not have enough evidence to confirm this. Therefore, we need to stay flexible and allow for a final dip closer to 121.00. If a break a break below 120.94 happens, it will leave us with only three waves up from the 120.74 low and by definition a corrective pattern.

A break above short-term minor resistance at 121.84 will be the first indication that a bottom is in place for renewed upside pressure.

R3: 122.24

R2: 122.13

R1: 121.84

Pivot: 121.69

S1: 121.40

S2: 121.19

S3: 120.94

Trading recommendation:

We are long EUR from 121.50 with our stop placed at 120.90.

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Technical analysis: Important intraday Level For EUR/USD, July 04,2019

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When the European market opens, some economic data such as French 10-y Bond Auction, Spanish 10-y Bond Auction, and RetailSales m/m will be released. The US will not release any economic data. So, amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Breakout BUY Level: 1.1341.

Strong Resistance: 1.1335.

Original Resistance: 1.1324.

Inner Sell Area: 1.1313.

Target Inner Area: 1.1287.

Inner Buy Area: 1.1261.

Original Support: 1.1250.

Strong Support: 1.1239.

Breakout SELL Level: 1.1233.

(Disclaimer)

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Technical analysis: Important intraday level for USD/JPY, July 04,2019

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Japan will release the 30-y Bond Auction while the US will not release any economic data. So , there is a probability the USD/JPY pair will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Resistance. 3:108.31.

Resistance. 2:108.10.

Resistance. 1:107.89.

Support. 1:107.63.

Support. 2:107.42.

Support. 3:107.21.

(Disclaimer)

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Elliott wave analysis of GBP/JPY for July 4 - 2019

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GBP/JPY has dipped to a new low and we should be prepared for a little more downside pressure towards 134.50 before wave 2 finally completes and a new impulsive rally can start developing for an ultimate break back above the 148.87 peak.

Only a direct break above minor resistance at 136.89 will indicate that the bottom already is in place.

R3: 136.89

R2: 136.43

R1: 135.81

Pivot: 135.75

S1: 135.355

S2: 135.00

S3: 134.50

Trading recommendation:

We will only buy GBP at 134.65

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Forecast for EUR/USD on July 4, 2019

EUR/USD

On Wednesday, the eurozone had released optimistic economic indicators, and the US vice versa - pessimistic, but the markets only swung against the dollar for the kind, ending the day near original positions, because on Friday the most important employment data will come out, which the Fed again drew attention to. But it paid attention in a peculiar way - it did not attach importance to the weak data for May (Non-Farm Employment Change of 75 thousand). This may be a sign that the June Nonfarms will be strong enough to sow doubt on the market in the July rate reduction. Nonfarms are the traditional manipulative tool of the Fed, but we have not noticed for a long time that it was used explicitly. Perhaps it is time to use this tool. The problem is that since November last year, yields on US government bonds have steadily decreased, so in 10-year terms it decreased from 3.15% to 1.95%, which makes it possible to keep servicing the public debt at 21.987 trillion dollars at a moderate load, but on the other hand, the state budget is not growing decisively, and expenditures over the past year have increased by 1.86%. Also, Congress is in no hurry to raise the ceiling of public debt. For "prevention", the rate can be lowered at the next meeting, while market expectations will not be deceived, but you can make comments on a strong labor market and the moderate pace of the rate cut.

So, all the attention is on Friday's labor data, and today is Independence Day in the US, in which the dollar is traditionally strengthened by 10-20 points.

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Forecast for GBP/USD on July 4, 2019

GBP/USD

Yesterday, the pound sterling had to trade in the range of 42 points in anticipation of today's respite in connection with Independence Day in the US and important Friday employment data. On the four-hour chart, the Marlin oscillator signal line, as before, is staying in a lengthy consolidation. Today, we do not expect strong movements in the pair, movement in the range of yesterday looks organic. In any case, the level of 1.2610 appears like a quite strong resistance for a thin market. Economic data in the UK will not be released today. The trend on both charts for all indicators remains declining, there are no reversal signs.

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Forecast for USD / JPY pair on July 4, 2019

USD / JPY pair

In the past two days, the Japanese yen fulfilled our main scenario. It closed the gap of the beginning of the week, focusing on supporting the balance lines and MACD on the four-hour scale chart. The Marlin oscillator signal line unfolds before the border with the territory of the trend decline on the daily chart. We are waiting for a complete price reversal from current levels. Today, the yen practically did not move in the Asian session and we do not expect any noticeable movements during the day since today is a holiday in the US. Additionally, tomorrow, there will be significant data for the markets employment indicators in the US. The forecast for jobs outside the agricultural sector in June is 160-165 thousand versus 75 thousand a month earlier. It is very likely that a high figure will weaken the boom around the triple rate cut this year and the dollar will continue to strengthen.

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Forecast for EUR/AUD pair on medium-term

EUR / AUD pair

The EUR / AUD pair turned sharply downward on June 21 with the formation of a divergence in the Marlin oscillator. Yesterday, the price fell by 92 points against the general calm background for the rest of the foreign exchange market (The AUD/USD pair grew by 36 points). This is a good sign of further active cross-rate decline. The immediate goal is the nested line of the price channel in the area of 1.5760. In overcoming the support, it opens the second target of the downward nested line at 1.5555. The price level of 1.5525 is slightly lower - at least on November 15, 2018. It also close to the highs of December 20-21, 2017.

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On the four-hour chart, the price drops below the balance lines and MACD. The Marlin oscillator is in the negative zone. From the current levels, a slight upward correction is possible to discharge the oscillator before further reducing it.

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GBP/USD bounced nicely from its support, potential rise!

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GBPUSD bounced nicely from its support where we expect a further rise to its resistance.

Entry: 1.2564

Why it's good : Horizontal overlap support, 78.6% Fibonacci retracement, 61.8% Fibonacci extension

Stop Loss : -

Why it's good :-

Take Profit : 1.2641

Why it's good: horizontal pullback resistance, 50% Fibonacci retracement, 100% Fibonacci extension

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AUD/USD approaching resistance, potential reversal!

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Price is approaching its resistance where a potential reversal could occur.

Entry : 0.7080

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

Stop Loss : 0.7129

Why it's good : 78.6% Fibonacci retracement

Take Profit : 0.7013

Why it's good : 50% Fibonacci retracement, 61.8% Fibonacci extension, horizontal overlap resistance

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USD/JPY bounced up support, possible bounce!

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Price is bouncing up 1st support at 107.573, a bounce could occur.

Entry :107.573

Why it's good : 50% Fibonacci retracement, 100% Fibonacci extension, horizontal swing low support

Take Profit : 108.12

Why it's good :horizontal pullback resistance

61.8% Fibonacci extension

61.8% Fibonacci retracement

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Fractal analysis of major currency pairs on July 4

Forecast for July 4:

Analytical review of H1-scale currency pairs:

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For the euro / dollar pair, the key levels on the H1 scale are: 1.1334, 1.1312, 1.1299, 1.1269, 1.1257, 1.1238, 1.1208 and 1.1191. Here, we continue to monitor the downward structure of June 28. The continuation of the movement to the bottom is expected after the price passes the noise range 1.1269 - 1.1257. In this case, the goal is 1.1238. Price consolidation is near this level. The breakdown of the level of 1.1236 will allow us to count on a pronounced movement to the level of 1.1208. For the potential value for the bottom, we consider the level of 1.1191. After reaching which, we expect a rollback to the top.

Short-term upward movement is possible in the range of 1.1299 - 1.1312. The breakdown of the latter value will lead to in-depth correction. Here, the goal is 1.1334. This level is a key support for the downward structure.

The main trend - a local downward structure of June 28.

Trading recommendations:

Buy 1.1300 Take profit: 1.1311

Buy 1.1313 Take profit: 1.1334

Sell: 1.1257 Take profit: 1.1238

Sell: 1.1236 Take profit: 1.1210

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For the pound / dollar pair, the key levels on the H1 scale are: 1.2664, 1.2628, 1.2611, 1.2583, 1.2555 and 1.2514. Here, we are following the development of the downward structure of June 25th. Short-term downward movement is expected in the range of 1.2583 - 1.2555. For the potential value for the bottom, we consider the level of 1.2514. After reaching which, we expect to go into a correction.

Short-term upward movement is expected in the range of 1.2611 - 1.2628. The breakdown of the last value will lead to a prolonged correction. Here, the target is 1.2664. This level is a key support for the downward structure.

The main trend - the downward structure of June 25.

Trading recommendations:

Buy: 1.2611 Take profit: 1.2626

Buy: 1.2630 Take profit: 1.2664

Sell: 1.2581 Take profit: 1.2557

Sell: 1.2553 Take profit: 1.2516

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For the dollar / franc pair, the key levels on the H1 scale are: 1.0008, 0.9980, 0.9938, 0.9905, 0.9858, 0.9831 and 0.9802. Here, we continue to follow the development of the upward cycle from June 25. At the moment, the price is in the correction. The continuation of the movement to the top is expected after the breakdown of the level of 0.9905. In this case, the target is 0.9938, wherein near this level is a price consolidation. The breakdown of the level of 0.9938 should be accompanied by a pronounced upward movement. Here, the target is 0.9980. For the potential value for the top, we consider the level of 1.0008. After reaching which, we expect consolidation, as well as a rollback to the correction.

Consolidated movement is possible in the range of 0.9858 - 0.9831. The breakdown of the latter value will lead to a prolonged correction. Here, the goal is 0.9802. This level is a key support for the top. Its price will have to develop the downward structure. Here, the potential goal is 0.9738.

The main trend is the ascending cycle of June 25.

Trading recommendations:

Buy : 0.9905 Take profit: 0.9936

Buy : 0.9939 Take profit: 0.9980

Sell: Take profit:

Sell: 0.9829 Take profit: 0.9802

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For the dollar / yen pair, the key levels on the scale are : 110.09, 109.56, 109.21, 108.70, 108.29, 107.80, 107.44 and 106.77. Here, we continue to follow the development of the upward structure from June 25. At the moment, the price is in deep correction and is close to canceling this structure, for which a breakdown of the level of 107.44 is necessary. In this case, the potential target is 106.77. The continuation of the movement to the top is expected after the breakdown of the level of 108.29. Here, the first goal is 108.70. The breakdown of which will allow us to expect to move to level 109.21. Short-term upward movement, as well as consolidation is in the range of 109.21 - 109.56. For the potential value for the top, we consider the level of 110.09. The movement to which, is expected after the breakdown of the level of 109.56.

The main trend: the ascending structure of June 25, the stage of deep correction.

Trading recommendations:

Buy: 108.30 Take profit: 108.70

Buy : 108.74 Take profit: 109.20

Sell: Take profit:

Sell: 107.41 Take profit: 107.00

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For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3180, 1.3142, 1.3115, 1.3069, 1.3027, 1.3001 and 1.2961. Here, we continue to follow the local downward structure from June 25. At the moment, we expect movement to the level of 1.3027. Price consolidation is in the range of 1.3027 - 1.3001. For the potential value for the bottom, we consider the level of 1.2961. After reaching which, we expect a rollback to the top.

Short-term upward movement is possible in the range of 1.3115 - 1.3142. The breakdown of the latter value will lead to a prolonged correction. Here, the target is 1.3180. This level is the key resistance for the development of the upward structure. Its breakdown will allow to count on movement towards the potential target - 1.3235.

The main trend is a local downward structure from June 25.

Trading recommendations:

Buy: 1.3143 Take profit: 1.3180

Buy : 1.3182 Take profit: 1.3230

Sell: 1.3067 Take profit: 1.3027

Sell: 1.3001 Take profit: 1.2961

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For the pair Australian dollar / US dollar, the key levels on the H1 scale are : 0.7097, 0.7077, 0.7039, 0.7010, 0.6990 and 0.6954. Here, the price has issued a local structure for the top of July 1. The continuation of the movement to the top is expected after the breakdown of the level of 0.7039. In this case, the target is 0.7077. For the potential value for the top, we consider the level of 0.7097. Upon reaching this level, we expect a consolidated movement in the range of of 0.7077 - 0.7097, as well as a rollback to the bottom.

Short-term downward movement is possible in the range of 0.7010 - 0.6990. The breakdown of the latter value will have to the formation of a downward structure. Here, the potential target is 0.6954.

The main trend is a local rising structure of July 1.

Trading recommendations:

Buy: 0.7040 Take profit: 0.7076

Buy: 0.7077 Take profit: 0.7096

Sell : 0.7010 Take profit : 0.6992

Sell: 0.6988 Take profit: 0.6959

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For the euro / yen pair, the key levels on the H1 scale are: 122.28, 121.89, 121.67, 121.41, 121.22, 120.92 and 120.48. Here, we continue to follow the downward cycle of July 1. The

continuation of the movement to the bottom is expected after passing by the price of the noise range 121.41 - 121.22. In this case, the goal is 120.92, wherein there is a price consolidation near this level. For the potential value for the bottom, we consider the level of 120.48. After reaching which, we expect a rollback to the top.

Short-term upward movement is expected in the range of 121.67 - 121.89. The breakdown of the last value will lead to a prolonged correction. Here, the goal is 122.28. This level is a key support for the downward structure.

The main trend is the downward cycle of July 1.

Trading recommendations:

Buy: 121.67 Take profit: 121.87

Buy: 121.94 Take profit: 122.28

Sell: 121.22 Take profit: 120.94

Sell: 120.90 Take profit: 120.50

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For the pound / yen pair, the key levels on the H1 scale are : 136.31, 135.87, 135.65, 135.24, 134.99 and 134.50. Here, we are following a downward cycle of July 1st. Short-term downward movement is expected in the range of 135.24 - 134.99. The breakdown of the last value will allow to expect movement towards a potential target - 134.50. After reaching this level, we expect a rollback to the top.

Short-term upward movement is possible in the range of 135.65 - 135.87. The breakdown of the latter value will lead to a prolonged correction. Here, the target is 136.31. This level is a key support for the downward structure.

The main trend is the downward cycle of July 1.

Trading recommendations:

Buy: 135.65 Take profit: 135.85

Buy: 135.90 Take profit: 136.30

Sell: 135.24 Take profit: 135.00

Sell: 134.95 Take profit: 134.50

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

What to expect from the head of the ECB, Christine Lagarde?

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European leaders have decided on the candidacy for the post of head of the ECB. In October, the current IMF chief Christine Lagarde will take on the baton from Mario Draghi. This news came yesterday near the end of the US session and put pressure on the euro, which was trying to grow on the news of the ECB's refusal to cut rates in July.

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It is expected that Lagarde will take an aggressive incentive policy from Draghi. She will become not only the first woman to head the ECB, but also the first head of the central bank without experience in this field. This already raises questions about gaining the same level of confidence in the global economy as Draghi.

However, this is unlikely to be something surprising or shocking. For example, the Federal Reserve, for the first time in 30 years, was headed by a man without professional economic education. In addition, Jerome Powell can not boast the same rich experience in monetary policy, as Janet Yellen.

It should be noted that the initial decline in the euro, although it was small, indicates the desire of markets to see someone more experienced in monetary policy in this position. But the appointment has already happened, and this process does not stop.

Christine Lagarde is absolutely not the silent central banker of the old school, so you should get ready for a lot of intrigue and instability. Since Lagarde is primarily a politician, she is more likely to rely on ECB staff. That is, its decisions may depend on the ECB chief economist Philip Lane, his influence on the policy of the regulator will be significant. Lane's recent comments signaled asset purchases.

Unexpected turn in the acute period

Of course, the choice in favor of Lagarde - a surprise for many. In recent months, speculations have been circulating around the market for potential candidates such as the head of the Bundesbank, Jens Weidmann, representatives of the Bank of France Benoit Coeur and Francois Villeroy. Erkki Liikanen, former head of the Bank of Finland, was also trying on the role of the head of the ECB.

In normal times, managing monetary policy is not difficult. Now everything is different. The financial world is full of surprises and uncertainties, and besides there are no starting points, and Lagarde has had mistakes in the past.

A French court in 2016 found her guilty of professional negligence, while Lagarde held the post of a finance minister. The punishment was not established, since, according to the court, the decision was made in the context of the role it played in the country's struggle against the global financial crisis.

Not so long ago, Draghi spoke about the possibility of softening policies in order to stimulate inflation in the direction of 2%. Given that the deposit rate is already in a rather deep negative, such a move could harm the banks that have to pay the ECB for keeping their funds on its balance sheet.

Markets are nervous

Lagarde at the beginning of her role as head of the ECB will be without significant support. The three main architects of the regulator's incentive policy for the asset purchase program, lower rates and the provision of cheap long-term loans to banks have either left the central bank or will do so soon. So, Mario Draghi leaves at the end of October, Coeure's term expires at the end of the year, and former chief economist Peter Praet resigned a few weeks ago.

This alignment of forces may aggravate financial markets, given that ECB Vice President Luis de Guindos, who came last year, also has no experience in the central bank.

If the European regulator is serious about fresh incentives, then it's more likely to happen before Lagarde arrives. This will somewhat relieve the pressure on her at the beginning of the journey.

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

The pressure of easy politics is too heavy; Swedish krona as an exception

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More and more currencies fall under the pressure of the "dovish" tone of the world central banks, although the Swedish krona stands out against this background, having strengthened to a 2.5 month high against the euro after the local central bank announced that it plans to tighten the policy by early 2020. However, the focus remains on another currency - the pound - which fell on Tuesday along with the yields of British government bonds. The yield on 10-year securities fell below the main discount rate of the Bank of England for the first time since the 2008 crisis, after the markets interpreted the comments of the Bank of England CEO Mark Carney as dovish. The sterling lost 0.2%, updating its two-week low.

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"The two main driving forces today are the yen, which is considered a safe haven, and it has returned to growth, and the pound, which continues to decline," said Colin Asher, senior economist at Mizuho. The yen rose by 0.23% against the dollar and is trading at 107.6 yen, as investors are more skeptical about the possibility of an early end to the trade war, especially given the comments of US President Donald Trump that any transaction should be in favor of the US. Currencies will continue to contain signs that more and more central banks are adjusting to easing monetary policy in order to combat a slowdown in economic growth. The dovish tone of central banks reduces profitability across the board.

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The latest figures show that weakness in the manufacturing sector is beginning to spread to the service sector, it is alarming, and it gives the green light to central banks to soften policies. And so far only the Swedish central bank has adhered to a policy of tightening policy by the end of this year or the beginning of next year amid steady inflation and good economic prospects. The Swedish krona has updated a 2.5-month high against the euro and is growing against the dollar.

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

AUD/USD: commodity market growth and the "hangover" of dollar bulls

The Australian dollar continues to gain momentum: the AUD/USD pair confidently overcame the key mark of 0.7000 and consolidated in the middle of the 70th figure. For two days, the pair shows a nearly recoilless growth, returning lost positions. It is noteworthy that the aussie turned 180 degrees after the July meeting of the RBA, at which the regulator lowered the interest rate and allowed a further easing of monetary policy. Such an abnormal market reaction is primarily associated with the general weakening of the US currency. In addition, the aussie continues to receive support from domestic data and the commodity market - in particular, the cost of iron ore continues to stay above $100 per ton.

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And yet the main driving force behind the growth of AUD/USD is a weak greenback. After the unjustified euphoria, which was associated with the outcome of the G20 summit, a regular "hangover" gradually ensues, aggravated by loud statements by top White House officials. The essence of their comments comes down to the fact that, firstly, relief from Washington is more of a formal nature - for example, Chinese technology giant Huawei remains on the United States' blacklist, despite certain concessions processors).

Secondly, the very fact of the truce is under a big question mark - after all, a non-aggression pact was concluded rather than an armistice agreement in Osaka. Today, the White House announced a meeting between US Trade Representative Robert Lighthizer and Chinese Deputy Prime Minister Liu He, which will clear the future prospects for the negotiation process. Washington did not say exactly when this meeting will take place, but noted that it will occur "in the near future."

In general, the initial optimism of traders was replaced by concern and uncertainty that another attempt to find a compromise will be crowned with success. Similar doubts from investors have background pressure on the US dollar. To one degree or another, this also affects the US currency's postions in dollar pairs. Weak macroeconomic reports in the US only exacerbate the position of the greenback. The slowdown is demonstrated by both key and secondary economic indicators.

Take, for example, the latest releases: an indicator of consumer confidence in the US, an indicator of growth in orders for durable goods, a report on the labor market from ADP, regional indicators of production activity — all of these indicators came out in the red zone, not reaching weak forecast levels. Almost every day, US statistics disappoint investors to some extent, and today is no exception. Thus, activity in the service sector slowed to 55.1 points - this is the weakest result since July 2017. The extremely low influx of new orders (this component of the indicator updated a 2.5-year low) caused a decline in employment in this area, having a mediated effect on the overall slowdown in the US labor market.

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Experts have previously warned that the service sector will begin to slow down after the manufacturing sector, and now, apparently, these predictions are beginning to materialize. By the way, the indicator of production orders published today came out at the lowest values since the summer of 2016. The indicator is actively decreasing for the second consecutive month, and the May indicator was revised downward (-1.2% instead of the previous -0.8%). This fundamental picture does not allow the dollar to develop to feel comfortable, even with continued demand. And together with the Australian dollar, the greenback is losing its position at the expense of the aussie's "independent" growth.

The Australian dollar won back a decline in the interest rate by 0.25% and after the announcement of the expected decision, it began to recover throughout the market. Although Philip Lowe did not rule out further easing of monetary policy, the market focused on current events, pulling up the aussie. First, the strategically important raw material for Australia - iron ore - continues to grow. To date, the cost of a ton of this raw material is already $124 (for comparison, in April this figure was in the level of $80). Secondly, due to the growth in the value of exports of iron ore, Australia recorded a growth in the trade surplus by 16.2% to $4 billion in May compared with April. Judging by the price dynamics of iron ore, the June figures will exceed the May results. High demand for this type of raw materials from Chinese steel mills only confirms this assumption.

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Thus, despite the RBA's dovish position, AUD/USD buyers use the market's current situation to their advantage. Uncertain positions of the US currency against the background of a substantial growth in the commodity market makes it possible for the aussie to open new price horizons. The first resistance level is the mark 0.7060 - this is the upper line of the Bollinger Bands indicator on the daily chart. When it is overcome, the Ichimoku trend indicator will form a bullish "Parade of lines" signal, which will open the way for AUD/USD bulls to the next resistance level of 0.7180 (the top line of the Bollinger Bands indicator is already on the weekly chart). Support is the aussie's key for a 0.7000 mark.

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