Fed rejects Phillips rule: The dollar receives a positive signal, EUR and GBP complete correctional growth

The US Inflation Report in June was noticeably better than forecast, which led to a reassessment of prospects for the 2nd half-year rate. Prices rose by 0.1% with year-on-year growth of 1.6%, which is slightly below +1.8% in May but still in line with forecasts. At the same time, core inflation excluding energy and food prices rose by 0.3%. This is the maximum increase since January with 2.1% year-on-year (a very good indicator from the point of view of the Fed).

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Thus, as the FOMC meeting approaches on July 31, the regulator is already receiving a second benchmark after a report on the labor market. This indicates that no emergency measures are necessary and such signal will be understood by the markets correctly. The Fed must show that it fully controls the situation, which means that one or two rate cuts to the youth of the year do not indicate a recession but merely an adequate response to a slowdown in business activity.

Fed Chairman J. Powell, speaking at the Banking Committee of the US Congress, said that the link between inflation and the state of the labor market has disappeared. This means that the Fed no longer focuses on the Phillips curve, which means that the likely worsening of the employment market in the coming months will not have any effect on its decisions.

For the dollar, the signal is more than positive and indicates that the rate cut on July 31 to which the markets have long been ready, will not entail long-term consequences. This means that the dollar will not fall, and may even resume growth at the end of the meeting.

EUR/USD pair

There is less than two weeks before the ECB meeting and the question of how actively the regulator is ready to resume stimulating the European economy remains open. It seems that the failure of 2018 is not yet developing, but in any case, the business indices have stopped falling and stabilized.

Perhaps the decisive factor in assessing the prospects for the euro area is the labor market. If unemployment continues to decline, consumer demand will remain at a sufficient level to stop external influences, such as Brexit or trade wars. If job cuts begin, then sustaining domestic demand will no longer be possible, in which case the GDP forecast will worsen and the ECB will be faced with the need to expand incentives.

So far, the dynamics are positive and the ECB in its forecasts is focused on further reducing unemployment.

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GBP/USD pair

The pound took advantage of the weakness of the dollar and partially recovered after two weeks of falling but growth does not mean a reversal. However, only sales from higher levels can resume at any moment.

The upward impulse may continue to the resistance of 1.2560/60 but the chances for further growth are low. It seems that a decline by Friday evening is more likely towards the support of 1.2505/10 with an attempt to go lower at 1.2460/70.

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Indicator analysis. Daily review of July 12, 2019 for the EUR / USD currency pair

On Thursday, technical analysis gave a strong upward, but the news made its own adjustment and the pair, after a strong top, went quite far down and closed with a question. Today, the upward trend will continue. Strong calendar news is expected at 12.30 Universal time (dollar).

Trend analysis (Fig. 1).

On Friday, the upward movement will continue with the first target of 1.1287 - the upper fractal.

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Fig. 1 (daily schedule).

Comprehensive analysis:

- indicator analysis - up;

- Fibonacci levels - up;

- volumes - up;

- candlestick analysis - up;

- trend analysis is neutral;

- Bollinger lines - down;

- weekly schedule - up.

General conclusion:

On Friday, the upward movement will continue with the first target of 1.1287 - the upper fractal.

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EURUSD: EUR to sustain gains over USD. July 12, 2019

The EUR/USD pair has been quite volatile after bouncing off the 1.1200 support area with a daily close.

The Fed is under pressure because of the low inflation and uncertainty over its key rate. Some Fed's officials believe that a half percent rate cut will boost inflation and help the economy to return to growth. Though the outlook for economic growth is "solid," boosted by consumer spending, business spending has been "lackluster" and sentiment has been soft, allowing inflation to run below the Fed's 2% goal for too long could entrench lower inflation expectations in the future and make it harder for the Fed to effectively cushion the economy with rate cuts when needed. Recently, Fed Chairman Powell has pointed to a few national surveys as evidence business confidence took a hit recently, particularly in May after President Donald Trump threatened to impose tariffs on Mexican imports unless his demands about tougher immigration enforcement were met.

Today, the US PPI report is going to be published. The reading is expected to be unchanged at 0.1%. The figure of Core PPI is also expected to be unchanged at 0.2%.

German annual inflation accelerated to 1.5% in June but remained below the European Central Bank's target. Inflation in the euro zone has long been below the ECB's target i.e. at 2% and the European Commission recently lowered its estimates for euro zone growth and inflation, stating that uncertainty over U.S. trade policy posed a major risk to the Euro economy. With a trade war between the United States and China hurting euro zone exporters and the Federal Reserve widely expected to cut its interest rate, the ECB is coming under pressure to ease its own policy again. Policymakers deemed annual price growth of 1.6 percent currently forecast for 2021 to be "some distance away" from that goal and said there was "no room for complacency" in the face of plummeting inflation expectations on financial markets.

Now let us look at the technical view. The price is currently residing above 1.1250 area at the trend line resistance area after breaking below with daily close. The pair has been in a strong bearish trend. It is expected to push lower towards 1.1200 and later towards 1.1050 support area.

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BITCOIN consolidating below $11,500 area to push lower. July 12, 2019

Bitcoin is trading in a bearish channel. Now it is residing at $11,000. However, it may rebound towards $11,500 again.

Bitcoin and the aggregated Crypto markets have continued to extend the downwards movement that they incurred yesterday, and Bitcoin is now approaching its next region of psychological importance that exists around $11,000. This downwards descent first began on Wednesday evening when Bitcoin rapidly surged to over $13,000, which sparked a significant amount of selling pressure that has extended into today's trading session.

Bitcoin is expected to push lower towards $10,000-500 support area. Like most cryptocurrencies, Bitcoin is under pressure. The prices of Bitcoin are back retesting the minor support line at $11,200. In a more optimistic assessment, buyers will be in control assuming there is a sharp rally, lifting prices above $14,000 or June 2019. Because of candlestick arrangements, sellers have the upper hand.

TRADING RECOMMENDATION:

As of the current scenario, the price is currently being held by the dynamic level of 20 EMA, Tenkan and Kijun line as resistance while residing below $11,500 area with a daily close. Bitcoin is most likely to advance to $10,000-500 support area. As the price remains below $11,500 area with a daily close, the bearish bias is expected to continue.

TRADING LEVEL:

SUPPORT – 10000, 10500, 11000

RESISTANCE – 11500, 12000, 12500

CURRENT BIAS – BEARISH

MOMENTUM – IMPULSIVE and VOLATILE

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EUR/USD: plan for the European session on July 12. US inflation saved the dollar from a new fall

To open long positions on EURUSD you need:

Inflation data in the US limited the upward potential in the pair. Now, buyers need a breakthrough and consolidation above a resistance of 1.1284 to continue growth, and good eurozone industrial production data will push the euro even higher in the area of 1.1311 and 1.1338, where I recommend taking profits. If the EUR/USD declines due to a weak report, long positions can be seen after a false breakdown around yesterday's support level of 1.1250, since it has already fulfilled its function once, or at a rebound from a larger low of 1.1214.

To open short positions on EURUSD you need:

Euro sellers can count on a false breakdown of the resistance of 1.1284, which will lead to a downward correction in the pair and an intermediate support test of 1.1250, from which growth has continued this morning. However, only a break of 1.1250 with good data on the rise in producer prices in the US will provide the necessary pressure on EUR/USD and a return to lows of 1.1214 and 1.1182, where I recommend taking profits. With the growth scenario for the trend, you can sell the euro on a rebound from highs of 1.1311 and 1.1338.

Indicator signals:

Moving averages

Trade is conducted above 30 and 50 moving averages, however, the upward momentum gradually loses strength.

Bollinger bands

If the euro falls, support will be provided by the lower limit of the indicator in the region of 1.1245. The breakthrough of the upper boundary in the area of 1.1280 will allow us to count on a new wave of 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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Elliott wave analysis of GBP/JPY for July 12 - 2019

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GBP/JPY is testing short-term important resistance at 135.98. A break above here will confirm that wave 2 completed with the test of 135.05 and a new impulsive rally is ready to take off towards 137.79 and above.

Support is now seen at 135.65 and again at 135.44 but only a break back below 135.05 will re-open the downside for a final dip closer to 134.50 to complete wave 2.

R3: 136.78

R2: 136.22

R1: 135.98

Pivot: 135.65

S1: 135.44

S2: 135.20

S3: 135.05

Trading recommendation:

We bought GBP at 135.75 and we have placed our stop at 135.00.

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Elliott wave analysis of EUR/JPY for July 12 - 2019

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By breaking back above minor resistance at 122.09 we have the first strong indication that EUR/JPY is ready to rally higher as the next impulsive rally is likely to begin. A break above resistance at 122.30 will confirm a continuation higher to and above the 123.38. In the long- term, we are waiting for EUR/JPY to ultimately break above the 127.50 peak.

Support is now see at 121.59 and only a break below here will re-open the possibility for a final dip closer to 121.00.

R3: 123.36

R2: 123.00

R1: 122.54

Pivot: 122.30

S1: 122.02

S3: 121.79

S3: 121.59

Trading recommendation:

We bought EUR at 122.10 and has placed our stop at 121.55.

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Technical analysis of ETH/USD for 12/07/2019:

Crypto Industry News:

The international giant, Visa, has registered a second investment in the cryptographic project, directing a $ 40 million funding round as part of the Anchorage project.

Visa reportedly led the round together with a large block-type venture capital company (VC) of Blockchain Capital to support the institutional crypto service Anchorage, which previously raised $ 17 million in the investment run by Andreessen Horowitz.

In the new round, both the amount of Visa and the private valuation of Anchorage were not disclosed, according to the publication. Both Visa and Anchorage are the founding members of the Facebook cryptocurrency project, Libra, which was officially disclosed on June 18.

The last round of financing is the second known Visa investment in a cryptographic company. The giant participated in a $ 30 million funding round in the Blockchain startup network in 2015 along with Nasdaq and Citi.

The new funding will be used as part of the Anchorage mission to provide an alternative to cold trust-based institutional trust services to ensure the security of customer assets. Instead, the company implements a system of multiple approvals and human reviews, as well as software based on biometrics to ensure safe crypto storage, notes the publication.

Technical Market Overview:

The ETH/USD pair is trading inside of a narrow horizontal range located between the levels of $259.81 - $275.41 as the market is waiting for a signal to resume the uptrend. The move down had been made in five waves, so it might indicate the whole corrective structure labeled as WXY in the wave 2 might have been completed already. To confirm this, the price must break back through the technical resistance located at the level of $272.02.

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 and it might have been completed, so the uptrend should resume soon.

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Technical analysis of BTC/USD for 12/07/2019:

Crypto Industry News:

The European Central Bank (ECB) reiterated its stance on Bitcoin, refusing to recognize it as the currency in the question and answer session.

Answering a private query as part of a regular Twitter interactive program managed by the hashtag "#AskECB", the bank said that it is not planning to add Bitcoin to its reserves: "Bitcoin is not a currency, it is rather an asset and it is very volatile " - officials wrote quoting chief economist Philip Lane.

This answer is a continuation of the ECB's attitude to the cryptocurrency, which the bank has already propagated in other public statements.

In May this year, the report named "Crypto-Assets: Implications for financial stability, monetary policy and payments and market infrastructure" stated that the whole phenomenon had little impact on the traditional economy.

Previously, the European Union's reserve bank also expressed its negative opinion about issuing its own digital currency, unlike movements from China and several other countries.

Technical Market Overview:

The BTCU/USD pair did not manage to break through the technical resistance at the level of $11,664 and reversed to the downside again. The local low was made at the level of $10,925 with no sign of bounce yet. The next technical support is seen at the level of $10,721 and this is the key short-term support for the bulls because any violation below this level will open the road towards the swing lows located around the level of $10,000.

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 12/07/2019:

Technical Market Overview:

The GBP/USD pair has tested the technical resistance at the level of 1.2559, but there was a Bearish Engulfing pattern made around this level. The momentum is positive, so there is a chance for another rally towards the trendline around the level of 1.2600, but it must be done quickly to surprise the bears. Please notice, the price is still trading below the descending trendline, so there is no sign of any downtrend reversal yet.

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 1.2420 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 12/07/2019:

Technical Market Overview:

The bulls at the EUR/USD pair have managed to push the price above the technical resistance at the level of 1.1269, made a new local high at the level of 1.1285, but they have been capped by the lower channel boundary around the level of 1.1280. The momentum is positive, but the main trend is still to the downside despite the possible Ending Diagonal formation visible on the higher time-frames. It is worth to keep an eye on the EUR/UDS pair at the current price level and wait for the outcome. If the bulls will succeed then the next target is seen at the level of 1.1311.

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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Forecast for USD / JPY pair on July 12, 2019

USD / JPY pair

The dollar fell by 100 pips from the embedded line of the price channel to the lows of June 3-7 (107.87), which occurred after Jerome Powell's speech in the House of Representatives did not bypass the yen. On a daily scale, the price is now struggling with resistance by the indicator balance line.

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Yesterday, the price rebounded from the support of 107.87 which is currently fixed above the MACD line on the four-hour chart. Also on H4, the Marlin oscillator signal line is fighting for the opportunity to be on the growth territory.

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The general trend has recovered to an increase and we are waiting for the price in the range of 109.00/13, which was formed by the peaks of July 9-10 and the MACD line on the daily. Going out of the range opens the nearest target to 109.80.

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Technical analysis: Important Intraday Levels For EUR/USD, July 12, 2019

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When the European market opens, some economic data will be released such as Industrial Production m/m and German WPI m/m. The US will also publish the economic data such as Core PPI m/m and PPI 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: 1.1305. Strong Resistance: 1.1299. Original Resistance: 1.1288. Inner Sell Area: 1.1277. Target Inner Area: 1.1251. Inner Buy Area: 1.1225. Original Support: 1.1214. Strong Support: 1.1203. Breakout SELL Level: 1.11975. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD approaching resistance, potential reversal!

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EURUSD is approaching our first resistance where we expect a drop below this level to our first support level.

Entry: 1.1276

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

Stop Loss : 1.1311

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

Take Profit : 1.1243

Why it's good: 100% Fibonacci extension, 50% Fibonacci retracement, Horizontal overlap support

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AUD/USD approaching resistance, potential reversal!

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We believe price will rise to its resistance at 0.6994 before reversing back down towards its support.

Entry: 0.6994

Why it's good : 61.8% Fibonacci retracement, 100% Fibonacci extension, horizontal swing high resistance

Stop Loss : 0.7019

Why it's good : 78.6% Fibonacci retracement

Take Profit : 0.6964

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

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Technical analysis: Important Intraday Levels for USD/JPY, July 12, 2019

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In Asia, Japan will release the Revised Industrial Production m/m and the US will publish some economic data such as Core PPI m/m and PPI 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: 109.03. Resistance. 2: 108.82. Resistance. 1: 108.60. Support. 1: 108.34. Support. 2: 108.13. Support. 3: 107.91. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

USD/JPY approaching resistance, possible drop!

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Price is reaching support at 108.592, a drop could occur!

Entry :108.592

Why it's good :

horizontal pullback resistance

61.8% Fibonacci retracement

100% Fibonacci extension

Take Profit : 107.902

Why it's good :

50% Fibonacci retracement

76.4% Fibonacci retracement

61.8% Fibonacci extension

Horizontal overlap support

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Forecast for GBP/USD on July 12, 2019

GBP/USD

On Thursday, the British pound currently rose by 70 points, but pulled back from contact with the balance line on the daily scale chart, closing the day with an increase of 21 points. The convergence of the Marlin oscillator is weak, the horizontal line forming it, the level of 1.2604 may not be overcome. If successful, however, the 1.2668 target will be open - the point where the price channel line and the MACD line coincide.

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On the four-hour chart, the price is higher than the indicator lines of balance and MACD, the signal line of the Marlin oscillator is rising. Another attempt is to exit the 1.2480-1.2556 range upwards is possible - the target is 1.2604 But to achieve this goal on a higher, daily scale, the Marlin line must cross the border with the growth area, and this is difficult for an indicator in its current state. In this situation, it is much easier for the price to go below the indicator lines down, which automatically triggers a downward trend.

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Forecast for EUR/USD on July 12, 2019

EUR/USD

On Thursday, the euro entered the accumulation range on July 2-4, but with the release of good economic data on the United States quickly, it quickly returned back.The number of applications for unemployment benefits last week was 209 thousand against the forecast of 220 thousand, which confirms the stability of the labor market, the CPI for June grew by 0.1% against the forecast of 0.0%, the base CPI added 0.3% against expectations 0 2%. The US budget deficit in June amounted to $-8.5 billion; previously, the June figure was better only in 2016.

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On the daily chart, the price is held by the balance line. For the development of a downward price trend, it is necessary to overcome the support of the MACD line - below 1.1240. The subsequent overcoming of the July 9 low (1.1193) offers the euro a medium-term downside prospect (1.0985 - Fibonacci reaction rate 138.2%).

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On the four-hour chart, the price "winds up" on the MACD line, the price did not consolidate in the accumulation zone of 1.1274-1.1313, which may be a sign of a reversal of the trend. The Marlin oscillator currently indicates a small upside potential, but generally decreases in the growth zone. On the basis of signs of indicators, the euro may not turn today but on Monday instead. So, we keep our main scenario for a price reversal downwards with the nearest target of 1.1155.

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Fractal analysis of major currency pairs on July 12

Forecast for July 12:

Analytical review of H1-scale currency pairs:

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For the euro / dollar pair, the key levels on the H1 scale are: 1.1363, 1.1336, 1.1317, 1.1291, 1.1257, 1.1240, 1.1218, 1.1191 and 1.1155. Here, the price forms the ascending structure of July 9. The continuation of the movement to the top is expected after the breakdown of the level of 1.1291. In this case, the goal is 1.1317. Short-term upward movement, as well as consolidation is in the range of 1.1317 - 1.1336 . For the potential value for the top, we consider the level of 1.1363. After reaching which, we expect a rollback to the bottom.

Short-term downward movement is possible in the range of 1.1257 - 1.1240. The breakdown of the latter value will lead to in-depth correction. Here, the goal is 1.1218. This level is a key support for the downward structure. Its breakdown will allow to count on the movement to the level 1.1191.

The main trend is the formation of the ascending structure of July 9.

Trading recommendations:

Buy 1.1291 Take profit: 1.1317

Buy 1.1336 Take profit: 1.1360

Sell: 1.1256 Take profit: 1.1241

Sell: 1.1238 Take profit: 1.1218

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For the pound / dollar pair, the key levels on the H1 scale are: 1.2652, 1.2633, 1.2603, 1.2580, 1.2539, 1.2514, 1.2480 and 1.2438. Here, we are following the development of the ascending structure of July 10. At the moment, we expect to move to the level of 1.2580. Short-term upward movement is possible in the range of 1.2580 - 1.2603. The breakdown of the latter value should be accompanied by a pronounced upward movement. Here, the target is 1.2633. For the potential value for the top, we consider the level of 1.2652. After reaching which, we expect consolidation, as well as a rollback to the bottom.

Consolidated movement is expected in the range of 1.2539 - 1.2514. The breakdown of the last value will lead to a prolonged correction. Here, the target is 1.2480. This level is a key support for the upward structure.

The main trend - the ascending structure of July 10.

Trading recommendations:

Buy: 1.2580 Take profit: 1.2602

Buy: 1.2604 Take profit: 1.2633

Sell: 1.2539 Take profit: 1.2515

Sell: 1.2512 Take profit: 1.2482

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For the dollar / franc pair, the key levels on the H1 scale are: 0.9952, 0.9902, 0.9881, 0.9841, 0.9820, 0.9797 and 0.9779. Here, the price forms the downward structure of July 9 and is currently in correction. The continuation of the movement to the bottom is expected after the breakdown of the level of 0.9841. In this case, the goal is 0.9820. The breakdown of which, in turn, will allow us to count on the movement to 0.9797. For the potential value for the downward trend, we consider the level of 0.9779. Upon reaching this level we expect a rollback to the correction.

Consolidated movement is possible in the range of 0.9902 - 0.9881. The breakdown of the latter value will have to form the initial conditions for the upward cycle. Here, the potential target is 0.9952.

The main trend is the formation of the downward structure of July 9, the stage of correction.

Trading recommendations:

Buy : 0.9910 Take profit: 0.9950

Sell: 0.9840 Take profit: 0.9822

Sell: 0.9818 Take profit: 0.9797

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For the dollar / yen pair, the key levels on the scale are : 108.99, 108.70, 108.42, 108.26, 107.78, 107.58, 107.41, 106.98 and 106.68. Here, we are following the downward structure of July 10th. The continuation of the movement to the bottom is expected after the breakdown of the level of 107.78. Here, the goal is 107.58, and near this level is a price consolidation. A passage at the price of the noise range 107.58 - 107.41 will lead to the development of a pronounced movement. In this case, the goal is 106.98. For the potential value for the bottom, we consider the level of 106.68. From which, we expect a rollback to the top.

Short-term upward movement is possible in the range of 108.26 - 108.42. The breakdown of the last value will lead to a prolonged correction. Here, the target is 108.70. This level is a key support for the top.

The main trend: the formation of a downward structure of July 10.

Trading recommendations:

Buy: 108.26 Take profit: 108.40

Buy : 108.43 Take profit: 108.70

Sell: 107.78 Take profit: 107.58

Sell: 107.40 Take profit: 107.00

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For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3105, 1.3079, 1.3063, 1.3039, 1.3015, 1.2995 and 1.2970. Here, we are following the formation of the downward structure of July 9th. The continuation of the movement to the bottom is expected after the breakdown of the level of 1.3039. In this case, the target is 1.3015. Short-term downward movement, as well as consolidation is in the range of 1.3015 - 1.2995. For the potential value for the bottom, we consider the level of 1.2970. After reaching which, we expect a rollback to the top.

Short-term upward movement is possible in the range of 1.3063 - 1.3079. The breakdown of the latter value will lead to in-depth correction. Here, the goal is 1.3105. This level is a key support for the downward structure of July 9.

The main trend - the formation of the potential for the downward movement of July 9.

Trading recommendations:

Buy: 1.3063 Take profit: 1.3078

Buy : 1.3081 Take profit: 1.3105

Sell: 1.3039 Take profit: 1.3015

Sell: 1.3013 Take profit: 1.2995

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For the pair Australian dollar / US dollar, the key levels on the H1 scale are : 0.7050, 0.7028, 0.7014, 0.6991, 0.6964, 0.6950, 0.6929 and 0.6900. Here, we follow the formation of the initial conditions for the upward cycle of July 10. The continuation of the movement to the top, is expected after the breakdown of the level of 0.6991. In this case, the goal is 0.7014. Short-term upward movement, as well as consolidation is in the range of 0.7014 - 0.7028. For the potential value for the top, we consider the level of 0.7050.

Short-term downward movement is possible in the range of 0.6964 - 0.6950. The breakdown of the last value will lead to in-depth correction. Here, the goal is 0.6929. This level is a key support for the upward structure.

The main trend is the formation of the ascending structure of July 10.

Trading recommendations:

Buy: 0.6991 Take profit: 0.7014

Buy: 0.7015 Take profit: 0.7026

Sell : 0.6964 Take profit : 0.6952

Sell: 0.6948 Take profit: 0.6930

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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, the price entered an equilibrium state: a mid-term descending structure of July 1. The continuation of the movement to the bottom is expected after passing by the price of the noise range 121.41 - 121.22. In this case, the goal is 120.92, and near this level, there is a 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 121.89 - 122.28. The level of 122.28 is a key support for the downward structure. Its price passage will have to form the initial conditions for the upward cycle.

The main trend is the mid-term descending structure of July 1, the equilibrium state.

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, the price forms a small potential for the top of July 11. The development of this structure is possible after the breakdown of the level of 136.31. 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. 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: Take profit:

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

#USDX vs GBP / USD H4 vs EUR / USD H4. Comprehensive analysis of movement options from July 12, 2019. Analysis of APLs &

Let's take a comprehensive look at how #USDX vs EUR / USD h4 vs GBP / USD h4 will behave from July 12, 2019.

Minuette operating scale (H4)

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US dollar Index

From July 12, 2019, the dollar index #USDX will continue to develop its movement depending on the development and direction of the breakdown of the 1/2 Median Line channel boundaries (96.85 - 96.65 - 96.40) of the Minuette operational scale. More details about the movement options inside this channel are shown in the animated graphic.

In the case of a breakdown of the upper boundary of the 1/2 Median Line channel (resistance level of 96.85), Minuette operating scale fork together with ISL38.2 Minuette (96.90), the development of the dollar index movement will begin again in the equilibrium zone (96.90 - 97.20 - 97.50) of the Minuette operating scale fork, and if the breakdown of the ISL61.8 Minuette (resistance level of 97.50) happens, then updating the #USDX local maximums (97.59 - 97.77) will become necessary.

On the other hand, in case of breakdown of the support level of 96.40 (the lower boundary of the 1/2 Median Line channel of the Minuette operational scale), further development of the dollar index movement will continue in the 1/2 Median Line channel (96.40 - 96.20 - 95.95) of the Minuette operational scale fork.

The details of the #USDX movement are demonstrated in the animated graphics.

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Euro vs US Dollar

The development of the movement of the single European currency EUR / USD from July 12, 2019 will be due to the direction of the range breakdown:

resistance level of 1.1290 at the upper boundary of the ISL38.2 equilibrium zone of the Minuette operating scale fork;

support level of 1.1275 on the ultimate Schiff Line of the Minuette operating scale fork.

In case that the single European currency returns below the support level of 1.1275 (final Schiff Line Minuette), then the development of this movement will be directed to the Median Line Minuette (1.1255), and if it breaks down, it will be possible to return EUR / USD to the equilibrium zone (1.1240 - 1.1210 - 1.1180) Minuette operating scale fork.

The breakdown of the upper boundary of the ISL38.2 (resistance level of 1.1290) of the equilibrium zone of the Minuette operational scale fork will determine the continuation of the upward movement of the single European currency to the boundaries of the 1/2 Median Line Minuette channel (1.1325 - 1.1350 - 1.1380).

Details of the EUR / USD movement options are shown in the animated graphic.

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Great Britain Pound vs US Dollar

Her Majesty's currency GBP / USD continues to remain in the 1/2 Median Line channel (1.2570 - 1.2525 - 1.2480) of the Minuette operating scale, and accordingly, the further development of the movement of this instrument will depend on the development and direction of the breakdown of the above levels. The options for movement within this channels can be seen in the animated graphics.

The breakdown of the lower boundary of the 1/2 Median Line channel of the Minuette operating scale (support level of 1.2480) will determine the further development of GBP / USD movement in the equilibrium zone (1.2493 - 1.2450 - 1.2405) of the Minuette operational scale fork, with the option after the breakdown of ISL61.8 Minuette (support level of 1.2405), reaching the warning line LWL38.2 (1.2365) of the Minuette operating scale fork.

If the resistance level of 1.2570 has broken through the upper boundary of the 1/2 Median Line Minuette channel, then the upward movement of Her Majesty's currency will be directed to the initial SSL line (1.2620) and the 1/2 Median Line channel limits (1.2640 - 1.2670 - 1.2705) of the Minuette operating scale.

The details of the GBP / USD movement are presented in the animated graphic.

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The review was compiled without taking into account of the news background. The opening of trading sessions of the main financial centers does not serve as a guide to action (placing orders "sell" or "buy").

The formula for calculating the dollar index is:

USDX = 50.14348112 * USDEUR0.576 * USDJPY0.136 * USDGBP0.119 * USDCAD0.091 * USDSEK0.042 * USDCHF0.036.

where power ratios correspond to the weights of currencies in the basket:

Euro - 57.6% ;

Yen - 13.6%;

Pound sterling - 11.9% ;

Canadian dollar - 9.1%;

Swedish krona - 4.2%;

Swiss franc - 3.6%.

The first coefficient in the formula gives the index value to 100 on the starting date - March 1973, when the main currencies began to be freely quoted relative to each other.

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

What does Powell bring to the dollar?

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It seems that the head of the Fed finally convinced the market of a rate cut in the near future. Under the influence of the regulator's dovish mood, the dollar index fell from three-week highs, which it held in recent days. The "minutes" of the Fed were ignored by the market, although it followed that not all central bank officials were ready for policy easing.

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Traders preferred to listen to the words of Jerome Powell, who, in their opinion, gave a clear signal for aggressive policy easing. The head of the Federal Reserve Bank of St. Louis, James Bullard, also played a role here, stating that a quarter-percent reduction in rates is necessary to keep the US economy from slowing down due to a trade war and amid steadily low inflation.

However, today the United States published a report according to which consumer prices in the country unexpectedly rose in June by 0.1%. Economists were counting zero dynamics of the indicator.

Powell is set to hold another speech on Thursday. It is unlikely that he will add something fundamentally new to what he said yesterday regarding the prospects for policy easing, but anything can happen. If, for example, he more accurately speaks about an immediate rate cut by 0.50%, then the dollar can repeat yesterday's scenario.

The EUR/USD pair will get every chance to go towards the 1.1400 mark. Under other circumstances, there is a risk that quotes would reverse dowards.

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The trigger to pull down the main pair could be the publication of the minutes from the ECB's June meeting. However, this did not happen, the euro did not pay attention to the fact that members of the ECB almost unanimously recognized the need to prepare for easing monetary policy in the region.

It seems that Forex is entering a new phase of currency wars. Traders perceive that the US central bank's reduction in rates is a preventive measure modeled on 1995 and 1998, when the regulator acted on the lead and saved the country from recession. The central bank also weakened the policy in 2001 and 2007, when the negative had already begun to show its first sprouts, but in fact everything turned into a recession. The desire to prevent a possible recession is commendable, but not only Fed officials are thinking about it. The European regulator is also ready to cut rates and revive the quantitative easing program. It is worth saying that, perhaps, there are more reasons for the ECB than the Fed. Take, for example, the worsening estimates of GDP and inflation for 2020 and statements by German politicians that the EU needs to seriously tune in to a trade war with the US.

The euro and the dollar are weak and their condition is supported by central banks. Thus, the EUR/USD pair will continue to stay within the consolidation range of 1.12-1.14 indicated at the beginning of July.

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

The pound could rise to $1.30, but you shouldn't buy it yet - RBC

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The British currency strengthened against the US dollar for the second consecutive day. The GBP/USD pair rebounded from multi-month lows, breaking the psychological mark of 1.25 amid statements by the head of the Federal Reserve (FED) Jerome Powell, perceived by the market as a signal of the regulator's readiness to relax monetary policy.

However, the joy of "bulls" on the pound may be short-lived, since the achievements of the sterling are mainly due to the weakness of the greenback.

"Despite the local improvement of the technical picture, which implies some potential for the recovery of GBP/USD, you should not count on the stability of the upward movement," strategists at Royal Bank of Canada (RBC) said.

They revised their forecast for the Bank of England rate and no longer expect it to increase in the first quarter of 2020.

The RBC expects that in light of the weak growth of the country's economy and the continued risks of a hard Brexit, the central bank is likely to cut its rate by 25 basis points this November.

"The coming months will be a period of heightened volatility for the pound, given the possibility of holding early Parliamentary elections in the United Kingdom and a new chapter in the divorce process of Great Britain and the EU, which should be completed before October 31," analysts said.

"It is possible that by the end of the year GBP/USD will return to the level of 1.30 amid easing of the Fed's monetary rate and reducing uncertainty in the UK, but the potential risk/reward ratio does not give reason to talk about the attractiveness of long positions in the pound," they added.

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