The report on the labor market supported the dollar and commodity currencies, AUD and NZD go into the side range

The number of new jobs in the US non-agricultural sector increased by 224,000 in June, significantly exceeding consensus expectations. However, the unemployment rate increased from 2.6% to 3.7% and the average wage growth slowed down to 0.2% with expectations of 0.3%. The last two parameters have slightly reduced the positive effect of the report, but the chances of a Fed rate cut at the meeting on July 31 are still high.

The growth of new jobs could be largely a response to the threat of increasing tariffs on Mexican imports, since domestic trends in the US economy clearly did not have this result. Moreover, PMI indices are slowing down in both production and services, the trade deficit at record levels, as well as the budget deficit.

Stock indices are still trading near historical highs, despite the apparent slowdown in global PMI.

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Perhaps, the reason is due to the fact that the slowdown in world trade is caused by a decrease in demand due to a trade war, which is regarded by the markets as a temporary phenomenon. Accordingly, the decline in demand is also temporary, which makes it possible in the long term not to take into account the advent of the global recession as inevitable.

NZDUSD

The quarterly poll of ANZ which was published last week, showed that the slowdown in production activity continued in Q2, which could lead to a reduction in jobs in the sector and, as a result, lead to a decrease in household income.

This week, several indicators related to inflation will be published - the price index for food, the dynamics of spending on credit cards and a report on mortgage lending. ANZ Bank believes that the negative dynamics is not temporary, and in the near future, the New Zealand economy can expect serious shocks. The reasons for a two-fold reduction in the rate of the RBNZ in August and November are serious, and the research of NIESR and a number of large commercial banks are simultaneously talking about this.

Following the Aussies, Kiwi leaves in the lateral range of 0.6592 / 6600 ... 0.6719 / 26. This range is quite wide, however there are no reasons to leave it yet. Kiwi was the only commodity currency that has been falling against the dollar in recent months; and now, this trend has stopped.

AUDUSD

The Australian dollar, as expected, declined to the nearest support of 0.6955, but there was not enough momentum to develop the movement.

The decrease in the RBA rate to the historically minimum level, is probably the latest in the current year. The head of the RBA Law stated earlier that the rate cut is a step aimed at supporting employment and increasing inflation in the range of 2-3%. Indeed, the RBA revised the long-term unemployment forecast to 4.5% compared to 5% earlier, which means that the RBA believes that Australia can maintain a lower unemployment rate without significant inflation now.

On the other hand, the latest Ai Group business surveys were mixed. Australian manufacturers reported the weakest conditions in almost three years, while the services sector expanded for the second month in a row, although somewhat slower than in May. The construction sector continued to decline in June, but the pace of decline slowed.

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If the RBA believes that it will be possible to keep unemployment at a lower level without the threat of rising inflation, then there is no point in further reducing the rate, since these steps will no longer provide economic benefits. The dynamics of construction permits show that the housing boom is over, which means that consumers are targeting lower levels of income in the future, and one or two lower rates will not increase the demand for housing.

The reason is in anticipation of the intensification of the trade war between the US and China, and the Australian economy is closely linked with both states, and in the growing likelihood of a new global crisis. In the current environment, the RBA will observe global trends and will react only when the situation changes radically.

The trend in Aussie, thus, changes to neutral. There are no reasons for the development of a downward movement without a noticeable change in the external situation. The support for 0.6955 transfers to the status of the lower boundary of the range, and the Aussie goes into horizontal drift, in anticipation of the Fed meeting on July 31 and news on trade wars.

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Wave analysis of EUR / USD and GBP / USD for July 8. Euro and pound did not receive the necessary support from America

EUR / USD

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On Friday, July 5, trading ended for EUR / USD with a decrease of 60 basis points. The main hopes of the Eurocurrency were associated with weak data on new jobs in the agricultural sector, unemployment and wages this June in America. However, the number of new jobs amounting in 224,000, is nearly 80,000 higher than the forecast. This data was enough for the bears to continue selling the tool. Thus, the current wave marking still remains in force, but the maximum of June 25 is likely to be the maximum of the three-wave ascending structure. Thus, if this assumption is true, then from June 25, it is also possible for a new downward trend or horizontal section to begin. It will depend on the news background coming from the United States and the European Union, as well as on the decisions of the Central Banks in the meetings to come.

Purchase goals:

1.1417 - 100.0% Fibonacci

1.1480 - 127.2% Fibonacci

Sales targets:

1.1180 - 0.0% Fibonacci

General conclusions and trading recommendations:

The euro / dollar pair presumably remains within the upward segment of the trend. I recommend buying euros with targets located near the estimated marks of 1.1417 and 1.1480, which equates to 100.0% and 127.2% Fibonacci, if the pair does not go below the level of 0.0%. However, moving the tool below the level of 0.0% will result in adjustments to the current markup.

GBP / USD

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The GBP / USD pair lost 55 basis points on Friday and broke through the low of the wave e. Thus, in the best case for the pound, the pound-dollar tool must move in a horizontal trend segment. This is supported by an unsuccessful attempt to break through the 100.0% Fibonacci level. However, the market can push this level on the second or third attempt, which would mean almost a sentence for the UK currency. So far, there are ghostly chances for quotes to move away from the lows reached with the construction of wave c, with targets around 28 figures. However, the news background remains extremely negative for the pound sterling. British political circles are increasingly inclined to believe that Boris Johnson is right in his desires to leave the EU as soon as possible. Thus, the probability of a "hard" version of Brexit grows with the likelihood of a new blow to the UK economy is growing, which will invariably affect the pound rate, for which the last three years have been extremely unsuccessful. Thus, it is best to count for pounds at 1.2800 barriers.

Sales targets:

1.2431 - 127.2% Fibonacci

1.2334 - 161.8% Fibonacci

Purchase goals:

1.2783 - 0.0% Fibonacci

General conclusions and trading recommendations:

The wave pattern of the pound / dollar instrument involves the construction of an upward wave c, but only in the case of an unsuccessful attempt to break through the 100.0% Fibonacci level. Thus, I recommend very small purchases of a pair with targets located around 28 figures and an order limiting losses under the level of 100.0%. Breaking through the 1.2506 mark will allow the instrument upon building a downward trend.

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Indicator analysis. Daily review for July 8, 2019 for the EUR / USD currency pair

Trend analysis (Fig. 1).

On Monday, the price may continue the downward trend, with the first target of 1.1180 - the pullback level of 76.4% (yellow dashed line).

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Fig. 1 (daily schedule).

Comprehensive analysis:

- indicator analysis - down;

- Fibonacci levels - down;

- volumes - down;

- candlestick analysis - down;

- trend analysis - down;

- Bollinger lines - down;

- weekly schedule - down.

General conclusion:

On Monday, the price may continue the downward trend, with the first target of 1.1180 - the pullback level of 76.4% (yellow dashed line).

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Indicator analysis. Daily review for July 8, 2019 for the GBP / USD currency pair

Trend analysis (Fig. 1).

On Monday, the price will continue to move down, with the first target of 1.2481 - the lower fractal.

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Fig. 1 (daily schedule).

Comprehensive analysis:

- indicator analysis - down;

- Fibonacci levels - down;

- volumes - down;

- candlestick analysis - up;

- trend analysis - down;

- Bollinger lines - down;

- weekly schedule - down.

General conclusion:

On Monday, the price will continue to move down, with the first target of 1.2481 - the lower fractal.

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GBP/USD: plan for the European session on July 8. The pound fell on the news on the labor market, but found strong support

To open long positions on GBP/USD you need:

Pound buyers showed themselves in the area of major support at 1.2480 and even managed to return to a resistance of 1.2519. While trading is above this range, the upward correction in the pound may continue, however, it is best to open new long positions after updating the area of 1.2497 or from the new monthly low around 1.2439. The main goal of the bulls will be a breakthrough and consolidation above a resistance of 1.2558, which will provide a new influx of buyers and a test of a high at 1.2590, where I recommend taking profits.

To open short positions on GBP/USD you need:

Bears need a break of support at 1.2519, which will increase the pressure on the pair and will lead to an update of last week's low in the area of 1.2483, where I recommend taking profits. However, the main goal of the pound sellers will be larger support areas in areas of 1.2439 and 1.2405. A good signal for opening short positions in GBP/USD will be an unfortunate consolidation above the resistance of 1.2558. In a different scenario, it is best to sell at a rebound from high of 1.2590.

Indicator signals:

Moving averages

Trading is below 30 and 50 moving averages, which indicates the bearish nature of the market.

Bollinger bands

Pressure on the pound may be limited by the lower boundary of the indicator in the region of 1.2500, and a breakthrough of the upper level in the area of 1.2550 will provide a new wave of the pair's growth.

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Description of indicators

  • MA (moving average) 50 days - yellow
  • MA (moving average) 30 days - green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20
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EUR/USD: plan for the European session on July 8. US labor market data hit the euro, but a further decline is questionable

To open long positions on EURUSD you need:

Good data on the US labor market caused the euro to fall on Friday. At the moment, buyers will count on the formation of a false breakdown in the area of Friday's low of 1.1207 with confirmation of divergence on the MACD indicator. In such a scenario, I recommend that you consider long positions in euros with the main goal of breaking through and consolidating above a resistance of 1.1239, from where you can expect a 1.1268 high update and take profits on long positions. If the bears break through support at 1.1207, then new purchases in EUR/USD should be considered as a rebound from lows of 1.1182 and 1.1161.

To open short positions on EURUSD you need:

Today, bears will try to break through below a support for 1.1207, however, it is necessary to take into account the likelihood of a divergence on the MACD indicator, which may limit the downward movement in the first half of the day. A more optimal scenario for selling the euro would be a false breakdown in the resistance area of 1.1239, but I recommend that you open short positions immediately to rebound only from a high of 1.1268. If the bears achieve consolidation below the low of 1.1207, then their next target will be the support areas of 1.1182 and 1.1161.

Indicator signals:

Moving averages

Trade is conducted below 30 and 50 moving averages, which indicates a further decline in the market with the trend.

Bollinger bands

Failure to consolidate above the upper boundary of the indicator in the area of 1.1242 will be a signal to sell the European currency, and a breakdown of the lower boundary in the area of 1.1207 will only increase the pressure on the pair.

analytics5d22f04952379.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
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EUR/USD. Preview of the week: Powell, inflation and the Fed minutes

The euro-dollar pair started the week in a flat: during the Asian session on Monday, the pair moved minimally from Friday's closing level, but generally remained at the bottom of the 12th figure. The downward impulse of Friday has faded, and now the bears of the pair need a new informational reason to further reduce and conquer the 11th figure. There will be plenty of such reasons this week. Consider the most important events of the upcoming trading days.

Monday is nearly empty for the pair. We learn the level of industrial production in Germany during the European session. This indicator has been in the negative area for the last two months and is consistently declining (March -0.9%, April -1.8%). The May indicator should also show a negative trend (a further decline is expected to -3.2%) - this fact will put additional pressure on the euro. During the US session, the volume of consumer lending is the only topic of interest: this indicator shows the "net" dynamics of changes in the volume of loans issued to Americans. The negative dynamics of the indicator is expected, although today we will find out the data for May, so market reaction will be minimal.

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Significant macroeconomic reports are also not expected on Tuesday. Although minor releases may be of interest to investors. In particular, we are talking about the release of data on labor turnover in the United States from the Bureau of Labor Statistics. This indicator measures the level of open vacancies among the private sector at the end of the reporting month, adjusted for seasonal factors. Growth reflects an improvement in the labor market situation in the country, showing a higher demand for workers. However, this indicator will indirectly affect the euro-dollar pair, especially after the release of Friday's Nonfarms. Three representatives of the Federal Reserve are also set to speak on Tuesday: James Bullard ("dovish", has the right to vote this year), Randal Quarles (Fed Vice Chairman for Supervision, with the right to vote, supporter of the wait-and-see stance) and Raphael Bostic (centrist, without the right to vote this year).

But the most interesting events will begin to unfold on Wednesday. On this day, the Fed chairman will begin his two-day speech in the US Congress. Jerome Powell will first present this report in the Financial Services Committee of the House of Representatives, then in the Banking, Housing and Urban Affairs Committee. Last Friday, the market learned the contents of this report. He has a rather dovish character and largely repeats the theses of the June Fed meeting. The essence of the semi-annual report boils down to the fact that the Fed is ready to soften the parameters of monetary policy, in response to weak inflation, a slowdown in the export sphere and overall GDP. But the thing is that this document was prepared before the release of data on the US labor market. As is known, the June Nonfarms demonstrated the growth of the main indicators, offsetting the devastating May figures. Following the Friday release, the market began to doubt that the Fed is implementing its intentions regarding the interest rate cut - at least in the near future. Against the background of such assumptions, the dollar has risen in price against a basket of major currencies, however, the dovish Fed report cooled the fervor of dollar bulls.

Now the fate of the EUR/USD's downward trend is in Powell's hands: if he confirms the iUS regulator's intentions to lower the rate despite the growth of Nonfarms, the dollar will return to previous positions, showing weakness. Otherwise, the greenback will continue its rally, including paired with the euro. The second scenario is fraught with retaliatory measures by the White House (Trump may initiate an intervention in foreign currency), but the traders' initial reaction to Powell's hawkish tone will still be in favor of the dollar. In the context of the EUR/USD pair, this means that the price, firstly, will be consolidated in the 11th figure, and secondly, it will reach the bottom for further assault on the 10th level. Thus, Powell's speech is a key event of the current week, unless the US president moves ahead with threats to start a currency war. In this case, the dollar will plummet in the entire market - regardless of what position the head of the Fed will announce.

In addition, the minutes of the Fed's last meeting will be published on Wednesday. Considering Powell's speech and the succession of releases, this document is unlikely to affect the dynamics of the pair. The interest is only in the alignment of forces in the Fed's camp.

But a really important release will be published on Thursday. We are talking about the publication of data on the growth of American inflation. The overall consumer price index should show a negative trend, dropping to 1.6% in annual terms and down to zero - on a monthly basis. Core inflation, excluding prices for food and energy, can demonstrate low growth in monthly terms (from 0.1% to 0.2%) and remain at the same level (2.0%) in annual terms. If the real numbers are below fairly weak forecast values, the dollar may again fall under the wave of sales. Weak inflation will affect the Fed members, who are forced to reckon not only with the dynamics of the labor market, but also with the inflation dynamics. Therefore, the disappointing CPI report will in any case put downward pressure on the US currency.

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On Friday, the market will be trading under the impression of previous events. However, the economic calendar of Friday is not completely empty: the producer price index will be published in the United States, which is an early signal of changes in inflation trends. Over the past two months, it has consistently dropped and a decline is also expected in June, both in monthly and annual terms. If the CPI also comes out in the red zone, this fact will put a lot of pressure on the greenback.

In general, the euro-dollar pair will follow the US currency this week. Important fundamental events will determine the fate of the Fed's interest rate, and depending on the regulator's intentions, the dollar will choose the vector of its movement - not only paired with the euro, but throughout the market.

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Trading plan for EURUSD for July 08, 2019

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Technical outlook:

The EUR/USD pair has dropped lower as expected and it is likely to print one more low around the 1.1190/1.1200 mark. Please note that the above level is also the Fibonacci convergence as highlighted above. Trading point of view it is good to initiate long positions between 1.1190/1.1220 levels with risk below 1.1107 respectively. Prices are trading extremely close to a major support at 1.1180 and a turn ahead of that would be considered to be bullish. Even if prices break below 1.1180 levels, it is expected to produce a pullback rally towards 1.1340/50 levels before continuing the downtrend. Hence, in either case, a rally is expected towards 1.1340/50 levels minimum from current or around 1.1200 levels respectively. If our forecast comes true, we still maintain a bullish bias against the 1.1107 lows.

Trading plan:

Long between 1.1190/1.1220 stop below 1.1107, target is open.

Good luck!

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Technical analysis of ETH/USD for 08/07/2019:

Crypto Industry News:

The leading cryptocurrency stock exchange Binance announced that it is switching from the Omni protocol to the ERC-20 protocol in customer portfolios for Stablecoin Tether, according to the official announcement.

To make a difference, Binance claims that in the case of payouts and deposits in Tether, on July 4, 30-minute shutdowns were scheduled to commence at 08:00 AM (UTC).

The communication stresses that the Ethereum ERC-20 protocols will now be a standard, and exchange users will not be able to withdraw the Omni-based tether; however, Tether with the Omni protocol can still be deposited by sending a link to the old Tether protocol in Binance.

The Poloniex cryptographic exchange announced yesterday also support for ERP-20 based Tether deposits. Poloniex also offers deposit and withdrawal options for Omni protocols, along with Ethereum and Tron. According to Poloniex, using the Ethereum protocol for withdrawals and deposits is faster and cheaper than relying on the Omni network.

Technical Market Overview:

The ETH/USD pair has managed to break through the technical resistance at the level of $304.22 and made a new local high at the level of $310. This means that step by step the bulls are regaining the control over the market and are pushing the prices higher after the corrective cycle had been completed. The next target for bulls is seen at the level of $324.09, which is the wave (B) top. Any violation of this level will open the road towards the swing high located at the level of $362.60.

Weekly Pivot Points:

WR3 - $360.95

WR2 - $335.54

WR1 - $324.79

Weekly Pivot - $298.87

WS1 - $285.22

WS2 - $258.89

WS3 - $247.45

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 08/07/2019:

Crypto Industry News:

Recent research by Chainanalysis suggests that the number of Bitcoins spent on illegal transactions this year could reach a record high of $ 1 billion, even though the ratio of illegal to legal transactions is shrinking, according to the Bloomberg report.

According to the report, the total Bitcoin value spent on illegal activities up to now this year is expected to be 515 million dollars. Research suggests that by the end of the year this figure will double, reaching 1 billion dollars. However, the amount of Bitcoins spent on illegal services, in contrast to legal ones, falls. Chananalysis director Hannah Curtis says only 1% of Bitcoin's activity this year is an illegal activity that fell from 7% in 2012.

According to the report, 515 million dollars spent on illegal activities were used in transactions in the dark web: internet subsection, which does not appear in search engines (eg Google). The largest illegal dark web market for publishing Bitcoins is called "Hydra". Bitcoin is apparently the leading cryptocurrency in such markets, and according to the report, Monero is in second place. Often these markets deal with the distribution of drugs and/or illegal pornography.

In April, two men standing behind the web site on the dark web - NextDayGear - admitted to selling steroids and controlled substances and for money laundering. The site apparently offered injectable steroids and oral steroids, as well as Xanax, Valium, and Viagra as a means to stop unwanted side effects.

Technical Market Overview:

The BTCU/USD pair has bounced from the 50% Fibonacci retracement and slowly is getting higher. The next target for bulls is seen at the level of $12,005 and this is the key lever for bulls right now. The ABC correction seems to be completed now and the market might be ready for another wave up.

Weekly Pivot Points:

WR3 - $14,886

WR2 - $13,428

WR1 - $12,616

Weekly Pivot - $11,119

WS1 - $10,237

WS2 - $8,716

WS3 - $7,123

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 larger ABC correction might have been completed and the market might be ready for another impulsive wave up.

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Technical analysis of GBP/USD for 08/07/2019:

Technical Market Overview:

The GBP/USD pair has broken through the technical support at the levels of 1.2559, 1.2529 and 1.2505 on its way down to the new swing low made at the level of 1.2480. As we can see the price is now out of the descending channel, which is a very bearish sign. There is a Pin Bar made at the new swing low at the level of 1.1480, but so far there is not much bullish pressure on the market and the bears are still in full control of the market. The nearest technical resistance is located at the level of 1.2559 and it might be tested soon due to the oversold market conditions.

Weekly Pivot Points:

WR3 - 1.2853

WR2 - 1.2772

WR1 - 1.2630

Weekly Pivot - 1.2551

WS1 - 1.2402

WS2 - 1.2319

WS3 - 1.2180

Trading Recommendations:

The best strategy for the current market conditions is to follow the larger timeframe trend. The larger time frame trend is still down and there are no signs of any trend reversal. The key long-term technical support is seen at the level of 1.2431 and 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 08/07/2019:

Technical Market Overview:

The EUR/USD pair has broken below the technical support located at the level of 1.1268 and made another lower low at the level of 1.1207, which is another technical support. The price is getting closer to the level of 1.1181, which is the key technical support for the market. The momentum remains weak and negative, but due to the extremely oversold market conditions, there is a pull-back possibility towards the level of 1.1268. Nevertheless, the main trend is still to the downside despite the possible Ending Diagonal formation visible on the higher time-frames.

Weekly Pivot Points:

WR3 - 1.1467

WR2 - 1.1414

WR1 - 1.1302

Weekly Pivot - 1.1251

WS1 - 1.1141

WS2 - 1.1087

WS3 - 1.0908

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 GBP/JPY for July 8 - 2019

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The rally from 135.15 does not follow the path of an impulsive wave. Therefore, it must be corrective that indicates more downside pressure towards our ideal target at 134.50 from where we expect a new rally to begin.

Minor resistance is now seen at 136.05 and important short-term resistance is seen at 136.89. Only a break above the later will indicate that wave 2 has completed and wave 3 to above 148.87 is developing.

R3: 136.89

R2: 136.46

R1: 136.05

Pivot: 135.75

S1: 135.35

S2: 135.00

S3: 134.50

Trade recommendation:

We are looking to buy GBP at 134.65.

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Elliott wave analysis of EUR/JPY for July 8, 2019

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The minor rally from 121.29 does not follow the path of an impulsive wave and therefore must be corrective in character. This calls for another dip to below 121.29 in the near term and a move closer to 121.00, but a breakout below 120.94 can under no circumstance be allowed. As that will leave us with a three-wave rally from 120.74 and hence a move below here.

That said, we expect that support near 121.00 will be able to protect the downside for a breakout above 121.92 and, more importantly, above 122.54 confirming that the wave II has completed and the wave III is developing above 127.50.

R3: 122.54

R2: 122.24

R1: 121.92

Pivot: 121.60

S1: 121.40

S2: 121.19

S3: 121.00

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 08, 2019

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When the European market opens, some economic data will be released such as Sentix Investor Confidence, German Trade Balance, and German Industrial Production m/m. The US will also publish the economic data such as Consumer Credit m/m, so amid the reports, the EUR/USD pair will move with low to medium volatility during this day. TODAY'S TECHNICAL LEVELS: Breakout BUY Level: 1.1282. Strong Resistance: 1.1276. Original Resistance: 1.1265. Inner Sell Area: 1.1254. Target Inner Area: 1.1228. Inner Buy Area: 1.1202. Original Support: 1.1191. Strong Support: 1.1180. Breakout SELL Level: 1.1174. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Important Intraday Levels for USD/JPY, July 08, 2019

analytics5d22af916d41d.jpgIn Asia, Japan will release the Economy Watchers Sentiment, Current Account, Core Machinery Orders m/m, and Bank Lending y/y. The US will also publish some economic data such as Consumer Credit m/m. So there is a probability the USD/JPY pair will move with low to medium volatility during this day. TODAY'S TECHNICAL LEVELS: Resistance. 3: 109.07. Resistance. 2: 108.86. Resistance. 1: 108.65. Support. 1: 108.38. Support. 2: 108.17. Support. 3: 107.96.(Disclaimer)

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Forecast for EUR/USD on July 8, 2019

EUR/USD

As we expected last week, data on new jobs in the non-agricultural sector (Nonfarm Payrolls) were higher than the forecast - 224 thousand versus 162 thousand. Were the data intentionally overestimated? By circumstantial evidence - yes; applications for unemployment benefits increased in the last 5 weeks, in the ADP estimate (published on Wednesday) 102 thousand jobs were created in the non-agricultural sector compared to the forecast of 140 thousand, the ISM employment index was lowered from 58.1 to 55.0, in the private sector, according to ADP, in June 102 thousand jobs were created against the forecast of 140 thousand. Taking into account these data, even the Nonfarm forecast of 162 thousand looks very optimistic now. The released data will likely be revised downwards later on, but the task is completed - investors lowered their expectations for rate cuts to two solid lows - in July and in September. The euro fell by 58 points. Tomorrow Jerome Powell, James Bullard, Randal Quarles, Rafael Bostic will speak and report on the "correct" understanding of the current economic situation.

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On the daily chart, the decline stopped at the Fibonacci level of 100.0% and on the line of the price channel. The price went below the indicator lines of balance and MACD, the Marlin oscillator in the declining trend zone. On the support, the price may be delayed, we do not expect a strong movement for today, but later, with overcoming Friday's low, we expect a decline to the Fibonacci level 110.0% at a price of 1.1155. Next is the goal 1.1075 - Fibonacci level of 1.1075.

analytics5d22d773683e3.png

On the four-hour chart on the Marlin oscillator, the prerequisites for the formation of convergence are created, which, if not develop into a deep correction, is able to keep the price from falling today.

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Forecast for GBP/USD on July 8, 2019

GBP/USD

On Friday, the British pound fell by 50 points, while maintaining the stability of last week's declining trend. On the daily chart, the price is lower than the indicator lines of balance (red) and MACD (blue). The balance line indicates the current price trend, the MACD line shows the direction of the current trend and is an independent support and resistance line. The signal line of the leading Marlin oscillator is in the decline zone. The purpose of the decline is the embedded line of the price channel in the area of 1.2311, exactly at the low of November 20, 2016.

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On the four-hour chart, the price is also below the balance and MACD lines, but the Marlin created a price convergence, which contributes to today's correction with the upper limit level of 1.2556 - the low of 3 July.

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Forecast for USD/JPY on July 8, 2019

USD/JPY

On Friday, due to strong US employment data, the dollar rose by 65 points against the yen, breaking the resistance of the balance line on a daily scale chart. Balance trends bent in an upward direction. The reversal of the signal line of the Marlin oscillator from the zero line was confirmed. The nearest growth target is in a range of 109.00/25, formed by the embedded line of the price channel and the MACD indicator line (blue). The price output above the specified range opens the following targets for the resistance of the lines of price channels: 109.85, 110.55.

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On the four-hour chart, the price is above both indicator lines, and the Marlin oscillator signal line is also in the growth zone, although it is slightly decreasing. Perhaps this indicates the intention of the market to look around a bit before the events of the new week. A correction to the upper border of the window of last Monday (108.20) is possible. Then the Marlin oscillator signal line will turn up from the boundary with the decline territory, as it happened at the higher TF.

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USD/CHF approaching support, potential bounce!

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USDCHF is approaching our first support where we might be seeing a bounce above this level to our first support level.

Entry: 0.9884

Why it's good : horizontal overlap support, 100% Fibonacci extension, 23.6% Fibonacci retracement

Stop Loss : 0.9839

Why it's good : horizontal overlap support, 38.2% Fibonacci retracement

Take Profit : 0.9965

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

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NZD/USD bounced off support, potential further rise!

analytics5d22b88e8d36e.jpgEntry: 0.6611

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

Stop Loss : 0.6576

Why it's good : 61.8% Fibonacci retracement

Take Profit : 0.6658

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

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USD/JPY approaching resistance, possible drop!

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Price is reaching resistance at 108.740, a drop could occur!

Entry :108.740

Why it's good : horizontal swing high resistance

61.8% Fibonacci extension

50% Fibonacci retracement

Take Profit : 107.885

Why it's good :38.2% Fibonacci retracement

61.8% Fibonacci extension

Horizontal swing low support

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Fractal analysis of major currency pairs on July 8

Forecast for July 8:

Analytical review of H1-scale currency pairs:

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For the euro / dollar pair, the key levels on the H1 scale are: 1.1299, 1.1286, 1.1257, 1.1238, 1.1208, 1.1191, 1.1155 and 1.1129. Here, we continue to monitor the downward structure of June 28. Short-term downward movement is expected in the range of 1.1208 - 1.1191. The breakdown of the last value should be accompanied by a pronounced downward movement. Here, the goal is 1.1155. We consider the level of 1.1129 to be a potential value for the bottom. After reaching this level, we expect a rollback to the top.

Short-term upward movement is possible in the range of 1.1238 - 1.1257. The breakdown of the latter value will lead to in-depth correction. Here, the goal is 1.1286. The range of 1.1286 - 1.1299 is a key support for the downward structure.

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

Trading recommendations:

Buy 1.1238 Take profit: 1.1255

Buy 1.1258 Take profit: 1.1285

Sell: 1.1208 Take profit: 1.1192

Sell: 1.1189 Take profit: 1.1155

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For the pound / dollar pair, the key levels on the H1 scale are: 1.2628, 1.2611, 1.2568, 1.2539, 1.2493, 1.2466 and 1.2412. Here, we are following the development of the downward structure of June 25th. Short-term downward movement is expected in the range of 1.2493 - 1.2466. For the potential value for the bottom, we consider the level of 1.2412. The movement to which is expected after the breakdown of the level of 1.2465.

Short-term upward trend is expected in the range of 1.2539 - 1.2568. The breakdown of the last value will lead to a prolonged correction. Here, the target is 1.2611. The range of 1.2611 - 1.2628 is a key support for the downward structure from which, we expect clearance of the expressed initial conditions for the upward cycle.

The main trend - the downward structure of June 25.

Trading recommendations:

Buy: 1.2540 Take profit: 1.2566

Buy: 1.2570 Take profit: 1.2610

Sell: 1.2493 Take profit: 1.2467

Sell: 1.2464 Take profit: 1.2419

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For the dollar / franc pair, the key levels on the H1 scale are: 1.0070, 1.0008, 0.9980, 0.9938, 0.9905, 0.9881, 0.9841 and 0.9810. Here, we continue to follow the development of the ascending cycle of June 25. The continuation of the movement to the top is expected after the breakdown of the level of 0.9938. In this case, the goal is 0.9980. Price consolidation is in the range of 0.9980 - 1.0008 and hence, there is a high probability of going into a correction. For the potential value for the top, we consider the level of 1.0070.

Short-term downward movement is possible in the range of 0.9905 - 0.9881. The breakdown of the last value will lead to a prolonged correction. Here, the target is 0.9841. This level is a key support for the top. Its price will have the formation of the initial conditions for the downward cycle of 0.9810.

The main trend is the ascending cycle of June 25.

Trading recommendations:

Buy : 0.9939 Take profit: 0.9980

Buy : 0.9982 Take profit: 1.0008

Sell: 0.9905 Take profit: 0.9883

Sell: 0.9878 Take profit: 0.9844

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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, 108.06 and 107.61. Here, we continue to follow the development of the ascending structure of June 25. The continuation of the movement to the top is expected after the breakdown of the level of 108.70. In this case, we expect a pronounced movement to the level of 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.

Short-term downward movement is possible in the range of 108.29 - 108.06. The breakdown of the last value will lead to a prolonged correction. Here, the target is 107.61. This level is a key support for the top.

The main trend: the ascending structure of June 25.

Trading recommendations:

Buy: 108.70 Take profit: 109.20

Buy : 109.23 Take profit: 109.53

Sell: 108.29 Take profit: 108.06

Sell: 108.03 Take profit: 107.65

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For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3272, 1.3238, 1.3212, 1.3174, 1.3142, 1.3051, 1.3027 and 1.3001. Here, the price forms the potential for an upward movement of July 4th. The continuation of the movement to the top is expected after the breakdown of the level of 1.3142. In this case, the target is 1.3174, wherein consolidation is near this level. The breakdown of the level of 1.3175 will lead to a pronounced movement. Here, the target is 1.3212. A short-term upward movement, as well as consolidation is in the range of 1.3212 - 1.3238. For the potential value for the top, we consider the level of 1.3272. After reaching which, we expect a rollback to the bottom.

The level of 1.3051 is a key support for the ascending structure. Its breakdown will lead to movement to level 1.3027. For the potential value for the bottom, we consider the level of 1.3001.

The main trend is the formation of potential for the upward trend of July 4.

Trading recommendations:

Buy: 1.3142 Take profit: 1.3172

Buy : 1.3176 Take profit: 1.3212

Sell: 1.3050 Take profit: 1.3028

Sell: 1.3025 Take profit: 1.3001

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For the pair Australian dollar / US dollar, the key levels on the H1 scale are : 0.7048, 0.7010, 0.6990, 0.6950, 0.6922, 0.6886 and 0.6863. Here, the price forms the potential for the downward cycle of July 4th. The continuation of the movement to the bottom is expected after the breakdown of the level of 0.6950. In this case, the target is 0.6922, wherein near this level is a price consolidation. The breakdown of the level of 0.6921 will lead to the development of a pronounced movement. Here, the target is 0.6886. For the potential value for the downward trend, we consider the level of 0.6863. After reaching which, we expect consolidation, as well as a rollback to the top.

Short-term upward movement is possible in the range of 0.6990 - 0.7010. The breakdown of the latter value will have to form an upward structure. Here, the potential target is 0.7048.

The main trend - the formation of the potential for the downward movement of July 4.

Trading recommendations:

Buy: 0.6990 Take profit: 0.7008

Buy: 0.7013 Take profit: 0.7045

Sell : 0.6950 Take profit : 0.6925

Sell: 0.6920 Take profit: 0.6888

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

Consolidated movement is possible in the range of 121.67 - 121.89. The breakdown of the latter 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: Take profit:

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 continue to monitor the downward cycle from July 1. At the moment, the price is in the correction zone. Short-term downward movement is expected in the range of 135.24 - 134.99. The breakdown of the last value will allow us 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 135.87 - 136.31, and up to the level of 136.31, we expect the potential for the upward cycle to be formalized.

The main trend is the downward cycle of July 1, the stage of correction.

Trading recommendations:

Buy: 135.90 Take profit: 136.30

Sell: 135.24 Take profit: 135.00

Sell: 134.95 Take profit: 134.50

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EUR/USD. 5th of July. Results of the day. NonFarm Payrolls - the killer of European currencies

4-hour timeframe

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The amplitude of the last 5 days (high-low): 42p - 90p - 47p - 44p - 22p.

Average amplitude for the last 5 days: 49p (51p).

The last trading day of the current week has passed with the US currency having full advantage. There was only one reason for this - the publication of the NonFarm Payrolls report for June. Analysts' forecasts predicted 162,000 new jobs outside the agricultural sector, but in reality there were 224,000. Such a strong excess of the real value over the forecast naturally provoked strong purchases of the US dollar and so the US currency rose by 60 points against the euro. Against the background of strong NonFarms, traders ignored unemployment in the United States, which rose to 3.7%, as well as weaker wage growth than originally estimated. However, the key question for the entire currency market now is: do strong NonFarm mean the end of a period of failed macroeconomic statistics in the US or is it just an accident? As we all see, the US dollar has almost completely offset all losses against the European currency, which suffered during the month when reports from the United States could not please even the most ardent optimists. Only 120 points are left to reach the year lows and such a resurrection of the US dollar occurred, by and large, without particularly strong support from the foundation. Now a new question arises: if the macroeconomic statistics ceases to disappoint, the Fed may not soften the monetary policy in 2019, respectively, the main advantage of the euro, which bulls of the euro/dollar pair could plummet into oblivion. What should the euro count on in this case? There is no answer to this question yet, but we state the fact: the US dollar is very close to "returning to the game" and in the near future it will be possible to state the resumption of a downward trend.

Trading recommendations:

The EUR/USD pair resumed its downward movement. Thus, it is now again recommended to sell the euro with the target of 1.1177. At the beginning of the new trading week, new levels of support and resistance will be formed.

It is recommended that you buy the euro/dollar pair not earlier than when prices have consolidated above the Kijun-sen line. However, this will require a strong fundamental basis for the bulls.

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.

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EUR/USD. Do not rush in buying the dollar: The Fed chief will dot the i in Congress

The US dollar ended the first week of July in positive territory. Strong enough Nonfarm returned to the dollar bulls the hope of tightening the rhetoric of Fed members and, accordingly, changing plans for easing monetary policy. The demand for the US currency increased and the greenback changed the configuration of the main currency pairs in just a few hours of Friday.

Of course, the published data on the labor market against the backdrop of a truce with China made it possible for investors to expect certain changes. The evidence of this causal link "captivates" so the dollar can grow by inertia on Monday. But despite all the above factors, a further rally in the greenback is a big question. Certain signs suggest that the Fed will not back down on its intentions, even after the release of strong Nonfarm and political events in Osaka. Like it or not, we will know in a day, namely on Tuesday.

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The central event of the coming week is the speech of Jerome Powell before the congressmen, where he will announce the semi-annual report. This is a very important event, which takes place only twice a year. At the beginning of the year, this report was postponed several times due to the prolonged shutdown, therefore the Fed chairman voiced his position before the deputies only at the end of February. This time, the Congress is operating normally, so Powell will communicate with American deputies for two days (Tuesday and Thursday), discussing with them the economic prospects of the country and the prospects of monetary policy. In addition to the report itself before the two specialized committees, the head of the Federal Reserve will answer the questions posed. Here it is worth paying attention to several aspects in the context of recent events.

The fact is that the semi-annual report is prepared and submitted to the US Congress a few days before its "official presentation" by the head of the American regulator. In this case, the document was sent to the relevant Congress Committees on Friday, so the market found out about its key theses already at the very finale of the trading week. It is noteworthy that this report includes key messages from the June meeting of the Federal Reserve.

Let me remind you that following this meeting, the likelihood of a rate cut has increased to almost 100%. In the text of the accompanying statement, the regulator has deleted the phrase "patience". This formulation meant that the Fed is ready to take a wait-and-see attitude, maintaining the status quo for the foreseeable future. Eliminating this phrase from the final communique, the US central bank warned that it was preparing to soften the parameters of monetary policy. The "point forecast" of the Fed confirmed this assumption, however, on this issue, the views of regulator members differed: 8 members of the Fed spoke for the rate cut before the end of this year (7 of them predict two drops), while another 8 were in favor of maintaining the wait-and-see position.

A monetary policy report released Friday said that Fed members generally did not change their minds about monetary policy prospects. The regulator is still dissatisfied with the growth rate of the US economy (including in the second quarter) and the slowdown in inflation rates. Contrary to the growth of consumer spending, the volume of business investment declined, while indicators of the export sector and production orders turned out to be in a completely negative area. The Fed does not deny that all this is a consequence of the trade war with China. Regulator members explained that the introduction of additional duties led to a significant drop in both import volumes and export volumes in the United States. The general growth of uncertainty about the prospects for the White House's trade policy forced the American business sector to reduce investment, and this fact had a negative effect on the country's investment climate. In addition, the report indicates another alarming signal: the decline in global sales of technology products. This fact has limited trade and production activity, especially in Asian emerging markets.

According to Fed members, the dynamics of growth of inflation indicators is also alarming. Core inflation is below the target level, although many members of the regulator are still confident that this trend is temporary and price pressure will increase by the end of the year. Nevertheless, the figures speak for themselves: according to the latest data, in annual terms, the index came out at a two-percent level, although experts expected growth to 2.1%. The index went below this value only in February last year. The general consumer price index was also in the "red zone" - both in annual and monthly terms. In May, the consumer price index rose by only 0.1% m/m and 1.8% y/y, while analysts expected to see CPI at 0.2% and 1.9%, respectively. In other words, inflationary dynamics rightly causes concern to the Fed.

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Thus, the US Federal Reserve's semi-annual report shows the continuing intentions of the regulator to lower the interest rate in the near future. But the snag is that this report was prepared before the release of fairly strong data on the US labor market. Whether the Nonfarm influenced the position of the Fed in general and Jerome Powell in particular is an open question.

Therefore, the two-day speech of the head of the Federal Reserve in the Congress now has a particularly important role. If he focuses his attention on the uncertainty about US-China trade relations, as well as on the slowdown of many economic indicators, the dollar will collapse across the entire market as rapidly as it rose at the end of last week. But if Powell declares the expediency of maintaining a wait-and-see position, the greenback will continue its rally, and together with the euro will head towards the 10th figure. This scenario also has a reverse side - in this case, the White House may trigger available tools to weaken the dollar (using, for example, a stabilization mechanism or compensatory intervention). But, as they say, "this is a completely different story": the initial reaction of the market to Powell's "hawkish" mood will definitely be in favor of the dollar.

In general, the fate of the further rally of the US currency will depend on the Fed's position. The market reaction to the Nonfarm is premature, as the head of the regulator this week may disappoint traders with his dovish rhetoric, despite the success of the US labor market.

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