Review GBP / USD. 5'th of July. The forecast for the system "Regression Channels". British politicians continue to discuss

4 hour timeframe

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Technical data:

The upper linear regression channel: direction - down.

The lower linear regression channel: direction - down.

Moving average (20; smoothed) - down.

CCI: -66.3750

On Friday, July 5, the pound / dollar currency pair is trading near Murray's level "0/8" - 1.2573 without any sharp fluctuations and with minimal volatility. Today, we expect the markets to "wake up", as there will be enough reasons for this. Today is very important for the pound sterling. The pair is near its local minima and overcoming them will remove the psychological barrier from the bears, who will again rush to sell the pound. Today, the British currency will wait again for support from the United States, it cannot wait for the UK in a very long time. The most famous British politicians continue to discuss Brexit instead of, as stated earlier by May, "to unite in difficult times." First, Theresa May said that "Brexit is becoming a problem for the British", after which candidates for the replacement of Theresa May, Jeremy Hunt, and Boris Johnson who, however, did not report anything new, once again focused on the fact that one should complete the procedure of withdrawing from the jurisdiction of Brussels until October 31. It is very good that the pound sterling has ceased to react to rumors, speculations, and expectations, as it was before. Otherwise, we would have caught the British currency already around 1.1 - 1.15. Traders intend to act upon the accomplishment of a particular event. So far, in the UK, nothing happens except organizing talks, so the main attention of traders is focused on the macroeconomic statistics from the States. However, the pair pound / dollar is still inclined to fall.

Nearest support levels:

S1 - 1.2573

S2 - 1.2543

S3 - 1.2512

Nearest resistance levels:

R1 - 1.2604

R2 - 1.2634

R3 - 1.2665

Trading recommendations:

The GBP / USD currency pair has stalled and is now waiting for news. Thus, it is recommended to continue selling pound sterling with targets at 1.2543 and 1.2512, if the Heiken Ashi indicator does not turn up.

It will be possible to buy a pair of pound / dollar in small lots with targets of 1.2665 and 1.2695 after fixing the price above the moving average. However, to do this, the bulls will need fundamental support, which will be extremely difficult to obtain.

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

Explanations for illustrations:

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

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

CCI is the blue line in the indicator regression window.

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

Murray levels - multi-colored horizontal stripes.

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

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

GBP/USD: plan for the European session on July 5. Pound is waiting for news on Brexit and US labor market data

To open long positions on GBP/USD you need:

Pound buyers will count on a false breakdown in the support area of 1.2555, which will be the first signal to open long positions. However, the main task is to return to a resistance of 1.2596, which will lead to a larger upward correction in the area of 1.2639, where I recommend taking profits in the first half of the day. In case of a decline scenario below a support of 1.2555, it is best to look at long positions for a rebound from a low of 1.2513.

To open short positions on GBP/USD you need:

Bears need a break of support at 1.2555, which will increase the pressure on the pair and will lead to updating lows of 1.2513 and 1.2483, where I recommend taking profits. Failing to consolidate above a resistance of 1.2596 will also be a good signal to open short positions. With growth above this range, you can sell for a rebound from a high of 1.2639.

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

Review of EUR / USD and GBP / USD pairs: A little work before the weekend

Rest and enough! We are waiting for great achievements after yesterday's either standing or lying in place, which could not interrupt even the unexpectedly sad slowdown in retail sales growth in Europe from 1.8% to 1.3%. Thus, everyone should cheer up and immediately find the strength to force themselves to work on Friday, after a non-working Thursday.

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Although from the very morning Halifax data on housing prices in the UK are already coming out, which can show an acceleration of their growth rates from 5.2% to 5.9%, nobody cares about it at all today. The main thing is to have time to come to feelings in the late afternoon when the report of the United States Department of Labor will be published. It is expected that almost all indicators will remain unchanged, but here are two rather important, if not the most important, can seriously raise the mood of investors. In particular, it is expected that 160 thousand new jobs were created outside agriculture against 75 thousand in the previous month. Last but not least, the growth rate of the average hourly wage should accelerate from 3.1% to 3.2%. Both of the growth in the number of new jobs and the growth in wages is clearly encouraging and investors can safely wait for the growth in consumer activity.

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Not only is the content of the report of the United States Department of Labor expected to be quite optimistic as many will recall the forgotten slowdown in retail sales in Europe. Thus, the single European currency is waiting for a decline to 1.1225.

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The pound may receive very little support from the Halifax data on housing prices but it will be so weak that the pound will still be forced to decline to 1.2540.

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Trading plan for EUR/USD for July 05, 2019

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Technical outlook:

The EURUSD pair was trading sideways at the moment of writing around 1.1280 levels, looking to drift lower towards the major Fibonacci support levels discussed below. We have presented a 4H chart view to have a bigger picture in terms of the larger boundary between 1.1107 and 1.1412 levels respectively. The wave structure indicates that prices have rallied into 5 waves between 1.1107 and 1.1412 levels respectively. This could be labelled as a leading diagonal, indicating that EUR/USD is setting up for an extensive rally ahead. For the above structure to hold, prices should remain above 1.1107 levels going forward and find support at a Fibonacci level. Please note that 1.1250 is the 50% retracement of the entire rally discussed earlier and is also converging with the Fibonacci extensions 1.27% as displayed here. We shall stand aside and allow prices to bounce from either 1.1250 or 1.1224 levels to enter the bullish side.

Trading plan:

Looking to buy between 1.1224 and 1.1250 levels, the stop is set below 1.1107 and target is open.

Good luck!

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EUR/USD: plan for the European session on July 4. Calm after Independence day in the US

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 with an update of highs 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 the new monthly low near 1.1239.

To open short positions on EURUSD you need:

Further movement will depend on the report on the US market and the number of people employed in the non-agricultural sector. In a good report scenario, a false breakdown around 1.1307 will be a signal to continue the downward trend, which will push EUR/USD to a low of 1.1275 and will also lead to an update of larger support at 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.

analytics5d1eef512db42.png

Description of indicators

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

Review EUR / USD. 5'th of July. The forecast for the system "Regression Channels". Nonfarm Payrolls will be important for

4 hour timeframe

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Technical data:

The upper linear regression channel: direction - up.

The lower linear regression channel: direction - up.

Moving average (20; smoothed) - down.

CCI: -61.1428

On Friday, July 5, the EUR / USD pair is no longer continuing its low-volatility movement. It simply "stuck" to the price range of 1.1275 - 1.1290. There is no demand for any of the currencies now, but there is a complete balance between the bulls and bears. Yesterday's market behavior and its total amorphousness is easily explained by the Independence Day in the USA. This is despite the unexpected action of the European markets to join in the American holiday celebrations. Today, the forex market should wake up because a large package of important macroeconomic information is expected to arrive from overseas today. First, the unemployment rate for June will be published. Second, the wages for June, and third, the number of new jobs created outside the agricultural sector, the so-called Nonfarm Payrolls. If the first two reports are clear, Nonfarm often leads to a contradiction from traders. For several times, there was no reaction at all. It is more often than not that the reaction was opposite to what would be considered logical. In general, there are problems with this report. Today, this report will have to tell traders whether to continue buying US dollars, and the Fed - whether to continue with softening the monetary policy in the next 3 months. It is clear that future FOMC decisions will not depend on this report alone, but it is from these reports that the overall economic picture is formed.

Nearest support levels:

S1 - 1.1230

S2 - 1.1169

S3 - 1.1108

Nearest resistance levels:

R1 - 1,1292

R2 - 1.1353

R3 - 1,1414

Trading recommendations:

The EUR / USD currency pair continues its downward movement and maintains the downward trend. Thus, now, it is recommended to continue trading on the decline to the goal of Murray's "4/8" level - 1.1230 until the Heiken-Ashi indicator turns up.

It is recommended to buy the Eurocurrency after traders consolidate back above the moving average line, which will change the trend an upward one, with the first goal of 1.1353.

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

Explanations for illustrations:

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

The lower linear regression channel - the violet line of the unidirectional movement.

CCI - blue line in the indicator regression window.

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

Murray levels - multi-colored horizontal stripes.

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

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

Technical analysis of ETH/USD for 05/07/2019:

Crypto Industry News:

Kuba is the newest country that is considering the use of cryptocurrency to circumvent US sanctions, the financial media reported quoting a government source.

In a public speech in the local television, the country's president, Miguel Diaz-Canel, said the plan would raise capital for around a quarter of the population, helping pay for reforms. Kuba felt a strong domino effect caused by the crisis in Venezuela, which was previously the main source of help:

"We are investigating the potential use of cryptocurrency in our domestic and international commercial transactions and we are working on this together with scientists," said Economy Minister Alejandro Gil Fernandez.

It is not clear whether Cuba will create its own cryptocurrency or want to use an existing public token, such as Bitcoin.

Venezuela developed its own state cryptocurrency last year, Petro. It was also designed to avoid sanctions, and its use to date has been limited due to the lack of international interest.

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. For now, the pair is locked in a narrow consolidation zone, but 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 05/07/2019:

Crypto Industry News:

The Canadian stock exchange Coinsquare has acquired software that allows traditional ATMs to sell a cryptocurrency, such as Bitcoin, according to a press release.

Coinsquare announced a controlling investment at Just Cash, an American fintech company that developed software that allows users to buy cryptography directly in traditional ATMs, without the need for additional hardware or a mobile application.

After investing the undisclosed amount, Just Cash will join Coinsquare and operate under the Coinsquare brand. Cole Diamond, CEO of Coinsquare, says the new initiative reflects the company's mission of adopting cryptocurrencies for general use. According to Diamond, enabling cryptographic purchases via ATMs will make the cryptocurrency finally reach the masses.

Although the press release does not specify how many Coinsquare ATMs it intends to improve, the startup can now offer cryptographic functions for millions of existing ATMs around the world.

Technical Overview:

After making the new local high at the level of $12,004, the BTC/USD pair has entered a local corrective cycle and hit the 38% Fibonacci retracement of the last wave up at the level of $11,111. Nevertheless, 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 05/07/2019:

Technical Overview:

The GBP/USD pair has been trading inside of a narrow horizontal range located between two levels of 1.2559 - 1.2605 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 05/07/2019:

Technical Overview:

The EUR/USD pair has been trading inside of a narrow range between the levels of 1.1268 - 1.1296 for the last 24 hours, but the 61% Fibonacci retracement 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. Please be aware of the NFP Payrolls figures are about to release, so the volatility might finally pick up.

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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Forecast for AUD / USD pair on July 5, 2019

AUD / USD pair

On Thursday, the Australian dollar reached the upper limit of the price channel after a slight turn over 0.7040. Hence, the marking of the downward channel on the daily scale chart changed slightly.

At the moment, a daily divergence has been formed on the Marlin oscillator, which increases the likelihood of a downward turn of the price into the medium-term timeframe. The immediate target is the strong support area for the trend line and the MACD line at 0.6944.

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Growth is possible after overcoming the price of yesterday's high and continue to the Fibonacci level of 138.2% at 0.7112. The possibility of such a scenario allows for a completely rising situation on the four-hour chart and the price is above all indicator lines and Marlin is in the growth zone. In this case, the divergence on the daily chart is formed again into a rising trend in the signal line.

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Forecast for EUR/USD on July 5, 2019

EUR/USD

For the last four days, the euro has consolidated in anticipation of today's data on employment in the United States. As we said earlier, today's market data is important for understanding the Fed's next steps in easing monetary policy. So, if the Non-Farm Employment Change turns out to be better than the forecast of 162 thousand, an opinion on one, a maximum of two rate cuts in the current year can be affirmed. As a result, on the burned out expectations of investors, the euro may be subject to being sold. This is the scenario we take for the main one. The decline's purpose is the range between the support of the price channel line on the daily scale chart (1.1228) and the MACD line, which is 15 points higher (1.1243) above this mark. If the price consolidates below the target range, a further decline may continue to the Fibonacci line 110.0% (1.1156). The Marlin oscillator signal line for daily in negative territory - the trend prevails to decrease.

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On the four-hour chart, the oscillator line reached the boundary with the growth area, here is a convenient area for turning down.

The likelihood of the euro rising for some other reason is also possible. For a pronounced growth, the price needs to consolidate above the MACD line of the four-hour scale (1.1328), the level is close to the highs of April 12 and 17. In this case, the prospect of growth to the Fibonacci level for the daily 61.8% at a price of 1.1445.

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Forecast for GBP/USD on July 5, 2019

GBP/USD

On Thursday, the pound traded in a narrow range due to the US holiday and the expectation of today's US employment data. The forecast for new jobs outside the agricultural sector is 162 thousand. In the current situation of investors trying to predict the Fed's future monetary policy, it's not quite clear how good this figure is. Is there enough of its potential to convince the markets of just one rate cut in the coming months? And even if this figure comes out much better or worse than the forecast, it alone will not be enough without subsequent comments by representatives of the FOMC Fed.

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Technically, the pound's situation is neutral. On the daily chart, the Marlin oscillator signal line turns up, close to the zero and absolutely a neutral line. On H4, the line of the same indicator is exactly on the border that separates the growth zone from the decline zone.

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It is possible for the pound to fall after the price leaves the level of 1.2530, which has been our target level for several days already (a low of December 14, 2018). In this case, perhaps a longer decline towards the support of the price channel on the higher chart 1.2305.

Growth seems more difficult, before the price of four target levels, from each of them a reversal is possible. The first level is the starting one, this is a mastered target of 1.2610, leaving higher opens 1.2643 — the MACD line on H4, 1.2687 above it — the resistance of the price channel to daily, 1.2747 above it — the MACD line also on the daily. The last goal coincides with the high of May 27, 2019.

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Elliott wave analysis of GBP/JPY for July 5, 2019

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We continue to look for a final dip closer to 134.50 to complete the wave 2 and set the stage for a new impulsive rally in the wave 3 that will ultimately break above the 148.87 peak.

In the short term, we see resistance at 136.24 and important resistance at 136.89. And only a breakout above the later will confirm that the wave 2 has completed and the wave 3 is developing.

R3: 136.89

R2: 136.46

R1: 136.24

Pivot: 135.75

S1: 135.35

S2: 135.00

S3: 134.50

Trading recommendation:

We will buy GBP at 134.65.

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

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We still need a breakout above minor resistance at 121.84 to indicate that EUR/JPY has bottomed and a new impulsive rally in wave 3 is developing for an ultimate breakout above the 127.50 peak.

As long as minor resistance at 121.84 is able to cap the upside, we still could see a final dip closer to 121.00. Howvever, the important support at 120.94 must under no circumstance be broken, as that will leave us with a three-wave rally from 120.74 and hence a decline below here.

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 Levels For EUR/USD, July 05, 2019

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When the European market opens, some economic data will be released such as French Trade Balance and German Factory Orders m/m. The US will also publish the economic data such as Unemployment Rate, Non-Farm Employment Change, Average Hourly Earnings m/m, so amid the reports, the EUR/USD pair will move with medium to high volatility during this day. TODAY'S TECHNICAL LEVELS: Breakout BUY Level: 1.1339. Strong Resistance: 1.1333. Original Resistance: 1.1322. Inner Sell Area: 1.1311. Target Inner Area: 1.1285. Inner Buy Area: 1.1259. Original Support: 1.1248. Strong Support: 1.1237. Breakout SELL Level: 1.1231. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Important Intraday Levels for USD/JPY, July 05, 2019

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In Asia, Japan will release the Leading Indicators and Household Spending y/y. The US will also publish some economic data such as Unemployment Rate, Non-Farm Employment Change, and Average Hourly Earnings m/m. So there is a probability the USD/JPY pair will move with medium to high volatility during this day. TODAY'S TECHNICAL LEVELS: Resistance. 3: 108.43. Resistance. 2: 108.22. Resistance. 1: 108.01. Support. 1: 107.74. Support. 2: 107.53. Support. 3: 107.32. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Fractal analysis of major currency pairs on July 5

Forecast for July 5:

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, and in this case the goal is 1.1238. Price consolidation is near this level. The breakdown at level 1.1236 will allow us to count on a pronounced movement to the level of 1.1208. For the potential value to 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 corridor 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 corridor 1.2583 - 1.2555. For a potential value to 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 corridor 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, 0.9881, 0.9858, 0.9831 and 0.9802. Here, we continue to follow the development of the upward cycle from June 25, while at the moment, the price is in the correction. Continuation of the movement to the top is expected after the breakdown of 0.9881. In this case, the first goal is 0.9905. The breakdown of which will lead to the movement to the level of 0.9938. Price consolidation is near this level. 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 to 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 corridor 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. Itts price will have to develop the downward structure. Here, the potential goal is 0.9738.

The main trend is the upward cycle of June 25, the stage of correction.

Trading recommendations:

Buy : 0.9905 Take profit: 0.9936

Buy : 0.9939 Take profit: 0.9980

Sell: 0.9855 Take profit: 0.9833

Sell: 0.9829 Take profit: 0.9802

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For the dollar / yen pair, the key levels on the H1 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, and in this case, the potential target is 106.77. Continuation of the movement to the top is expected after the breakdown at level 108.29. Here, the first goal is 108.70. The breakdown of which will allow and expect us to move to level 109.21. Short-term upward movement, as well as consolidation is in the corridor 109.21 - 109.56 . For the potential value to the top, we consider the level of 110.09, and the movement to which is expected at level 109.56 after the breakdown.

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: 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: 1.3142, 1.3100, 1.3069, 1.3027, 1.3001, 1.2961, 1.2943 and 1.2894. Here, we continue to monitor the local downward structure of June 25. Short-term downward movement is expected in the corridor 1.3027 - 1.3001. The breakdown of the latter value should be accompanied by a pronounced downward movement. Here, the target is 1.2961. Price consolidation is in the corridor 1.2961 - 1.2943. For the potential value to the bottom, we consider the level of 1.2894, and after reaching this level, we expect a rollback to the top.

Short-term upward movement is possible in the corridor 1.3069 - 1.3100. The breakdown of the latter value will lead to a prolonged correction. Here, the goal is 1.3142. This level is a key support for the downward structure.

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

Trading recommendations:

Buy: 1.3070 Take profit: 1.3100

Buy : 1.3102 Take profit: 1.3140

Sell: 1.3027 Take profit: 1.3003

Sell: 1.2998 Take profit: 1.2961

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For the Australian dollar / US dollar pair, 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. Continuation of the movement to the top is expected after the breakdown to the level of 0.7039. In this case, the target is 0.7077. For the potential value to the top, we consider the level of 0.7097, and upon reaching this level, we expect a consolidated movement in the corridor of 0.7077 - 0.7097, as well as a rollback to the bottom.

Short-term downward movement is possible in the corridor 0.7010 - 0.6990. The breakdown of the latter value is necessary for 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. Continuation of the movement to the bottom is expected after passing by the price of the noise range 121.41 - 121.22, and in this case, the goal is 120.92, near this level is price consolidation. For the potential value to the bottom, we consider the level of 120.48, and after reaching which, we expect a rollback to the top.

Short-term upward movement is expected in the corridor 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 1. Short-term downward movement is expected in the range of 135.24 - 134.99. The breakdown of the last value will allow and expect a movement towards a potential target - 134.50, and 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

GBP/USD: economy, protectionism and Brexit put a stick in the wheels for pound bulls

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For a long time, bulls on GBP/USD did not succeed in spreading their wings because of politics, but when the British economy began to slow down, it seemed that they started to realize that the case smelled like kerosene.

In June, business activity in the UK manufacturing sector fell to its lowest level in the last six years, and in the construction sector to the lowest level since 2009. The composite PMI index of the country sank below the critical level of 50 points for the first time since the referendum on the membership of the United Kingdom in the European Union.

The derivatives market reacted to a slowdown in business activity with an increase in the likelihood of monetary policy easing by the Bank of England in 2019 (from 25% in late June to the current 53%). Investors expect that by August 2020, the regulator will reduce the interest rate to 0.5%.

The BoE monetary easing is also likely to help increase the rate of monetary easing by stating that protectionism is slowing the global economy and forcing central banks to take measures such as lowering interest rates. According to the Bank of England, the already implemented US and China tariffs will slow down the British economy by 0.1%. It is assumed that if the White House imposes duties on cars imported to America from the EU, the British GDP will lose 0.4%.

However, the United Kingdom suffers not only from American protectionism, but also from Brexit.

The increased chances of Boris Johnson winning the fight for the chair of the country's cabinet, combined with the deterioration of macroeconomic statistics for the UK and the increased likelihood of lower interest rates, the BoE is quite capable of sending the GBP/USD pair to June lows.

UniCredit analysts note that the near-term outlook for the British currency leaves much to be desired, but they believe that London and Brussels will eventually reach a compromise, and this will provide a good impetus for the pound to recover. Although the bank lowered its forecast for GBP/USD at the end of 2019 from 1.40 to 1.38, it still implies a rally in the pair.

Analysts Svenska Handelsbanken, in turn, believe that by the end of this year, the pound sterling will strengthen against the dollar to $1.33. According to them, the deadline for Brexit will once again be postponed after October 31, and the idea of holding a second referendum will come to the fore.

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

Why is a new report on the US labor market more important than the previous ones?

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Monthly data on the number of people employed in the US non-farm sector, as a rule, have a strong impact on the dollar and other major currencies of the world. The Friday report could play an even more important role. Due to the celebration of Independence Day, many traders in the United States left for the weekend, and trading volume in the market was reduced. The process involves mostly younger players who are unlikely to make large-scale transactions.

The June report on the state of the labor market is extremely important because the Fed has openly hinted at the possibility of reducing the rate, and including the timing of easing policy, will depend on the data. If the growth in the number of jobs does not reach forecasts, then investors will immediately begin to prepare for lower rates this month. Despite the fact that the market lays an absolute probability of easing policy in July, a moderate decline in the dollar indicates their uncertainty and unwillingness to reduce rates. Weak employment figures could lead to a collapse of the US currency.

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There is one reason why the US dollar is now stronger than it could be. The fact is that experts predict a recovery in the growth rate of the number of people employed this month. This was repeatedly said by officials, in particular, the head of the Federal Reserve Bank of St. Louis, James Bullard. Recall that the May report was extremely alarming. Back then only 75 thousand jobs were created, wage growth slowed, and this trend was recorded for the third consecutive month. Yes, the US economy is slowing down, but it's hard to imagine that less than 80 thousand jobs have been created in the country for two months straight months. Nevertheless, the dollar should be in lower positions, given the recent drop in Treasury yields. On Wednesday, the 10-year Treasury yield fell to its lowest level in 2.5 years.

If you pay attention to leading indicators, the prospects for the labor market are mixed. Indeed, the ADP reported a more rapid increase in the number of people employed in the private sector, but the figure did not reach market forecasts. According to ISM, the number of people employed in the service sector grew more slowly than last month, but in May, the company mistakenly predicted strengthening, so the estimate for the current month may be a correction after the past. The mood in the markets has become worse, and the monthly average figures for the number of applications for unemployment benefits have increased. The main reason for expecting a positive report is poor performance in the previous month.

How data will affect currency pairs

In case of growth in the number of employed by 165 thousand and an increase in wages by 0.3%, EUR/USD, AUD/USD and NZD/USD will become the best currency pairs for trading. The ECB is not yet ready to cut rates, but the chances of easing policy by the end of the summer are very high. Banks in Australia and New Zealand clearly signaled the need for further rate cuts. The softest position of these two regulators makes the aussies and kiwis vulnerable to a correction against the background of good US employment data.

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If we see the figures from 135 thousand to 165 thousand, but at the same time the data for the last month will be revised upwards, the greenback's reaction will depend on the growth rate of wages and the level of unemployment. On good performance, the dollar in conjunction with the euro will go up.

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The greenback will also rise in price in pairs with Australian and New Zealand dollars. In this scenario, the USD/JPY quotes will grow, but this pair is less attractive. The fact is that traders may doubt how strongly a moderate increase in indicators will affect the decision of Fed officials.

There is another scenario: an increase in the number of employed by less than 135 thousand without accelerating the growth of wages and a significant revision of the May data. In this case, the USD/JPY and USD/CHF pair will be suitable for trading. The first one is likely to fall below 107, and the second can plummet below 0.9750. With the release of mixed data on the labor market (employment growth will accelerate, but wage growth will slow down or unemployment will rise), the dollar's response will depend on which of the changes will be the most unexpected for the market.

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

EUR/USD: waiting for Friday and tips from the US labor market

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Since the beginning of the week, the EUR/USD pair cannot determine the direction of movement against the background of a mixed information background.

A series of disappointing data on the US economy shook the belief of the EUR/USD bears that the Fed retains a passive position in July. However, Richmond Fed President Tom Barkin made a statement that it was too early for the regulator to adjust monetary policy forced investors to turn their attention to the US currency again.

The decline in business activity in the services sector in the United States to a trough over the past two years is 55.1, a modest increase in employment in the non-agricultural sector of the United States (+102 thousand) and an increase in the country's foreign trade deficit favor the discussion about Bets at the next FOMC meeting promise to be hot.

In addition, investors continue to assess the results of the recent summit of EU leaders, at which there was a choice to nominate IMF managing director Christine Lagarde for the presidency of the ECB.

After it was announced that she would replace Mario Draghi as head of the ECB, analysts were even more convinced that the regulator would loosen monetary policy in the coming months. In their opinion, the key interest rate will be lowered by 10 basis points to -0.50%, and from November resume the program of quantitative easing (QE) or net asset purchases in the amount of €30 billion per month. These are undoubtedly negative factors for the euro, and if the Fed again postpones the decision on easing monetary policy, the EUR/USD pair will be prone to further decline, being under double pressure.

Although many investors believe that this year the Fed will lower the interest rate more than once, the leaders of the US central bank have not yet confirmed this.

Moreover, Richmond Federal Reserve Bank President Tom Barkin said that it is too early to judge whether the Fed will slow down the global economy to lower the interest rate at the next meeting scheduled for July 30-31. According to him, the US economy is still very strong, and the inflation rate is slightly below 2% - why not refrain from reducing the rate?

Investors are now waiting for the publication of the June report on the US labor market, which will be released tomorrow and shed light on how the players are right in expectations regarding the rate cut at the July Fed meeting. It is assumed that ahead of this release, the EUR/USD pair will not leave the trading range of 1.12-1.14.

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

EUR/USD. Calm before the storm: the market hid in anticipation of the Nonfarm report

Today, the windless weather on the foreign exchange market: the European session was not rich in macroeconomic reports, and the US trading platforms are completely closed: Independence Day is celebrated in the United States. The nearly empty economic calendar allows you to take a wait-and-see position, especially on the eve of Friday's releases, which will certainly provoke strong volatility.

It is noteworthy that on the eve of a "stormy Friday" the market ignored a rather alarming signal, which was voiced by US President Donald Trump. He again accused China and Europe of using currency manipulations, also complaining that Washington only obediently observes this process. The Chinese Foreign Ministry has already responded to this statement by Trump, publishing a concise refutation of the voiced accusations. Brussels ignored the words of the American president, although the reaction of Europe would hardly be different from the Chinese.

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On the one hand, the situation has exhausted itself - Donald Trump often voices his thoughts or complaints with the help of Twitter. On the other hand, the concern of the US president about this issue is alarming for some currency strategists (in particular, Bank of America), given Trump's ability to take unconventional steps in his policy. Therefore, after the head of the White House once again accused Europe and China of manipulating currency, experts began saying that the president could initiate the use of currency intervention in the coming months. Analysts estimate the likelihood of this scenario in different ways. But almost all of the economists surveyed by Bloomberg do not exclude such a scenario. Especially - if the Fed in July does not reduce the interest rate, and the ECB, in turn, will prepare the ground for the introduction of additional incentives in the autumn.

As some currency strategists believe, the White House needs a substantial dollar drawdown across the entire market - by 10-20%. In the context of the euro-dollar pair, this means that the price should rise to levels five years ago, to the area of 1.31-1.37, up to level 40. Naturally, this will cause a domino effect - eurozone inflation is not the only thing that will suffer, but the entire EU economy as a whole, after which the ECB will resort to appropriate mitigation measures. But, as they say, "in war - as war": by launching a flywheel of currency manipulations, the White House will understand perfectly well that central banks of other countries will take a defensive position, devaluing their currencies.

As you know, there are several types of interventions, among them sterilized and unsterilized. In the first version of the intervention, the New York Fed will acquire or sell securities on the open market, but will not interfere with monetary policy. Unsterilized intervention directly affects the money supply and rates. And if during sterilized currency intervention the value of the monetary base is maintained, in the second case, the intervention leads to a change in the monetary base. What kind of tool the White House will apply is an open question, and it has become increasingly discussed in the foreign exchange market. According to many analysts, Trump's rhetoric in this regard will only become tougher in the near future.

But the traders actually ignored the important, in my opinion, signal from the US president. The market is focused on the upcoming events, namely the Nonfarm, which will be published tomorrow. According to preliminary forecasts, the growth rate of people employed in the non-agricultural sector will grow to "acceptable" values, that is, to 164 thousand. This is much less than the levels at which the indicator went out during the past year and the first quarter of the current year: the indicator practically did not fall below the 200 thousandth mark, and often exceeded the 300 thousandth level. But compared to May, when the number of employed has grown by only 74 thousand, this result will look quite good - but only if the real figures coincide with the predicted ones.

Let me remind you that, according to the latest ADP report, the number of people employed in June increased by only 102 thousand. This report is the main guideline on the eve of the publication of official data. Given the relatively weak result from ADP, the June Nonfarm may also disappoint traders. In this case, the dollar is unlikely to be able to hold its position and weaken throughout the market. You should also pay attention to the indicator of the average hourly wage, which is an inflationary indicator. On a monthly basis, over the past three months, it has been at the same level - 0.2%. And on an annualized basis, the index in May is minimal, but unexpectedly dropped from 3.2% to 3.1%. In June, wages should demonstrate a positive trend - both in monthly and annual terms. If this forecast is not justified, the US currency will fall under additional pressure.

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In general, tomorrow's release either eliminates concerns about the aggressive easing of the monetary policy of the Fed, or, conversely, returns concern about this. In the second case, the EUR/USD pair will get another chance to gain a foothold in the 13th figure, breaking the resistance levels of 1.1305 (the Bollinger Bands average line on the daily chart) and 1.1340 (the Tenkan-sen line on the same timeframe). Otherwise, the bears will finally seize the initiative on the pair, up to the achievement in the medium term, up to the lower limit of the Kumo cloud on D1, that is, to the level of 1.1185.

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

GBP/USD. 4th of July. Results of the day. Donald Trump can start currency wars with China and the European Union

4-hour timeframe

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The amplitude of the last 5 days (high-low): 63p - 72p - 74p - 64p - 43p.

Average amplitude for the last 5 days: 63p (64p).

If the euro "froze in place" against the US dollar on Thursday, then the pound/dollar pair simply "died." From a low to a high of today, the pair passed 25 points. Not a single macroeconomic report was published in the UK or the United States. No new messages on the topics of the China-US trade war or Brexit were also available to traders. Even the two main newsmakers of the last time - Donald Trump and Boris Johnson - did not give high-profile interviews. The American president only once again wrote a Twitter post on the fact that China and the European Union deliberately omit the courses of their national monetary units in order to be more competitive with America. According to Trump, the United States should do the same, that is, cheapen the US dollar in the foreign exchange market. Theoretically, this is possible if America turns on the printing press again and starts to infuse "fresh" dollars into the economy. Recall that from the very first day as the president of the United States, Trump does not part with the idea that the US dollar is of "high cost". In his opinion, it is the expensive dollar that prevents the servicing of the US public debt, the country's trade policy, and also has a negative effect on the trade balance. Now, at the end of his presidency, Trump may even go for open currency interventions in order to lower the US currency. Also, the odious leader in his post threatened to open a currency war in Beijing and Brussels. As we see, relations between the United States and the European Union and China are only heating up. Trump makes it clear that either everyone will play by his rules, or there will be trade and currency wars. But do the Americans themselves support Trump's policies? Recall that in November 2020 there will be elections for a new US president ...

Trading recommendations:

The pound/dollar currency pair has begun a side correction. Thus, traders are advised to wait until it is completed and re-sell the pound sterling with the goal of a third support level of 1.2521.

It will be possible to buy the British currency no earlier than when the pair consolidates above the Kijun-sen line. In this case, the bulls will get a small chance to form an upward trend.

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

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen - the red line.

Kijun-sen - the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dotted line.

Chikou Span - green line.

Bollinger Bands indicator:

3 yellow lines.

MACD Indicator:

Red line and histogram with white bars in the indicator window.

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