Technical analysis of ETH/USD for 23.07.2019

Crypto Industry News:

According to press reports, the Iranian Economic Commission has finalized a tariff plan for cryptocurrency miners.

According to the publication, the energy minister, Homayoon Ha'eri, announced that although the tariff system was completed, he was waiting for approval by the Iranian government - a government body consisting of various ministers and other officials elected by the president.

While Ha'eri did not develop a detailed price scheme, he said that the price depends on market factors, such as the price of fuel in the Persian Gulf.

The head of the Iranian Electric Syndicate in Iran, Ali Bakhshi, has previously offered a price of $ 0.07 per kilowatt-hour for crypto-currency miners. Electricity in Iran is currently very cheap due to government subsidies; one kilowatt-hour of electricity now costs $ 0.05, and energy is cheaper in the agricultural and industrial sectors.

To put these prices in context, Mostafa Rajabi Mashhadi, a spokesman for the energy ministry in the energy department, said earlier that the production of a single Bitcoin consumes around $ 1,400 in state subsidies. The press reports that the extraction of one Bitcoin reportedly uses as much energy as 24 buildings in Tehran in one year.

Today's news follows the announcement of the Central Bank of Iran (CBI), in which the bank's president, Abdol Hemmati, claimed that the CBI plans to authorize the extraction of cryptocurrencies.

Similar to today's energy minister statement, Hemmati said the planned law would require Iran's crypto miners to respect the price of electricity for export, instead of allowing miners to use a heavily subsidized internal power grid.

Also today, the vice president of the Islamic Republic of Iran Customs Administration, Jamal Arounaghi, announced that the agency has not yet issued a license for the import of mining equipment for cryptocurrencies. While there is a tariff system, the final decision on the license awaits approval by the government.

Technical Market Overview:

The ETH/USD pair has moved lower after a failure to break through the 50% Fibonacci retracement at the level of $234.38. The move-up looks quite strong, but to confirm the bottom for the wave Z and the termination of the whole corrective cycle, the bulls must break through the rest of the Fibonacci levels and head higher towards the key technical resistance seen at the level of $259.81. Currently, the next technical support is seen at the level of $190.94 and this is the swing low. Any violation of this level will invalidate the current wave scenario.

Weekly Pivot Points:

WR3 - $294.64

WR2 - $266.38

WR1 - $246.13

Weekly Pivot - $217.90

WS1 - $196.02

WS2 - $167.35

WS3 - $146.40

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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Control zones for USD/JPY pair on 07/23/19

Testing the 1/2 WCZ of 108.12-108.04 should give an answer about what will be the next priority. If today's trading closes below the zone, the downward momentum will continue and in order to enter the sale will require the formation of a pattern of "false breakdown" of yesterday's maximum. The first goal of the decline will be at least last week, which coincides with the weekly control zone.

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It is important to understand that the dynamics can change today. If yesterday's high remains resistance, the pair will return to the flat range.

To break the downward impulse, it will be necessary to close today's American session above the level of 108.12. This will open the way for further growth and allow you to search for favorable prices for a purchase tomorrow. For today, purchases on the breakdown zone are not profitable since there is still a chance for a false breakdown.

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

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

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

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Technical analysis of BTC/USD for 23.07.2019

Crypto Industry News:

In a TV interview, Tim Draper, a well-known supporter of Bitcoin, defended both Libra and Bitcoin against the recent pressure from governments, especially in the United States.

Asked if the world is now in the post-Bitcoin environment, he claimed that Bitcoin represents real innovation from the world of cryptocurrencies and will ultimately be a tool that will change the shape of borders, finances and government power: "I think all these other crypts are bridges, to the place in which we have a Bitcoin environment "- he said.

Draper added that the US regulators were too harsh in dealing with innovations regarding Bitcoin, Blockchain and related fields.

Bitcoin trading has become somewhat calmer on Monday after a turbulent week in which significant price fluctuations have been noted in connection with the debate on crypts in Congress.

Draper was criticized last week for Bitcoin's loud support against the government, but this time the government of India. The alleged bill to criminalize the use of cryptocurrencies, which the Indian finance minister seemed to reject, pulled Draper to openly call Delhi 'pathetic and corrupt'.

Technical Market Overview:

The recent top at the BTC/USD pair has been labeled as the top of the wave B and this is the last chance for the bears to regain control of the market because any other bullish rally above the wave B top will invalidate the current Elliott wave scenario. There is a short-term trendline that will act as dynamic support around the level of $10,066 and the market is currently testing this trendline. Any violation below the trendline will be negative for the price and the next target for bears is located at the level of $9,913, $9,826 and $9,621.

Weekly Pivot Points:

WR3 - $13,488

WR2 - $12,221

WR1 - $11,392

Weekly Pivot - $10,218

WS1 - $9,394

WS2 - $8,128

WS3 - $7,356

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 degree WXY 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 23.07.2019

Technical Market Overview:

The GBP/USD pair has broken back below the level of 1.2480 after the failed rally to the level of 1.2556. The descending trendline breakout was very short-lived and now the bears are in control of the market. After the 1.2480 support is violated, the next target is seen at the level of 1.2432 and then at the level of 1.2381. The weak and negative momentum supports the short-term bearish outlook.

Weekly Pivot Points:

WR3 - 1.2789

WR2 - 1.2679

WR1 - 1.2588

Weekly Pivot - 1.2485

WS1 - 1.2394

WS2 - 1.2201

WS3 - 1.1089

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 at the level of 1.2420 has been violated and the next target for bears is seen at the level of 1.1983

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Technical analysis of EUR/USD for 23.07.2019

Technical Market Overview:

The EUR/USD pair has broken below the technical support at the level of 1.1224, 1.1215 and 1.1193 after a failed rally towards the technical resistance at 1.1284. The volatility is limited, but the trends are still being respected by the market. The short-term key technical support is the level of 1.1181 and the long-term key technical support is seen at the level of 1.1101.

Weekly Pivot Points:

WR3 - 1.1340

WR2 - 1.1310

WR1 - 1.1257

Weekly Pivot - 1.1229

WS1 - 1.1171

WS2 - 1.1143

WS3 - 1.1089

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 23 - 2019

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A dip to 134.35 is most likely to take place. GBP/JPY may break higher through minor resistance at 135.02 for a more firm test of short-term important resistance at 136.02. This resistance needs to be broken to confirm a long-term bottom is in place with the test of 133.90.

Short-term support is seen in the 134.27 - 134.35 area and is expected to protect the downside for a break above 135.02. Thus, only an unexpected break below 133.90 will confirm that wave 2 is still developing but the potential downside is likely to be very limited.

R3: 136.28

R2: 136.02

R1: 135.28

Pivot: 135.02

S1: 134.77

S2: 134.57

S3: 134.35

Trading recommendation:

We are long GBP from 134.85

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Elliott wave analysis of EUR/JPY for July 23 - 2019

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EUR/JPY is in a bottoming process which could be completed with the test of 120.75. A break above minor resistance at 121.28 and more importantly a break above resistance at 121.53 will confirm that the pair is in search for the bottom. On the other hand, we have to accept the possibility of a final dip closer to our ideal target at 120.62 as long as minor resistance at 121.28 is able to cap the upside. The downside potential from here is likely to be very limited.

R3: 122.32

R2: 121.84

R1: 121.53

Pivot: 121.28

S1: 120.75

S2: 120.62

S3: 120.32

Trading recommendation:

We are long EUR from 120.85

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Technical analysis: Important Intraday Levels For EUR/USD, July 23, 2019

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When the European market opens, no economic data will be released. The US will publish the economic data such as Richmond Manufacturing Index, Existing Home Sales, and HPI m/m, so amid the reports, EUR/USD will move with low to medium volatility during this day. TODAY'S TECHNICAL LEVELS: Breakout BUY Level: 1.1260. Strong Resistance: 1.1254. Original Resistance: 1.1243. Inner Sell Area: 1.1232. Target Inner Area: 1.1206. Inner Buy Area: 1.1180. Original Support: 1.1169. Strong Support: 1.1158. Breakout SELL Level: 1.1152. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Important Intraday Levels for USD/JPY, July 23, 2019

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In Asia, Japan will release the BOJ Core CPI y/y and the US will publish some economic data such as Richmond Manufacturing Index, Existing Home Sales, and HPI 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: 108.63. Resistance. 2: 108.42. Resistance. 1: 108.21. Support. 1: 107.94. Support. 2: 107.73. Support. 3: 107.52. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

GBP/USD approaching support, potential bounce!

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GBPUSD approaching our first support where we are expecting a bounce above this level.

Entry: 1.2447

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

Stop Loss : 1.2384

Why it's good : Horizontal swing low support

Take Profit : 1.2556

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

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USD/CAD Approaching resistance, potential reversal!

Price is approaching its resistance area at 1.3139 where it could potentially reverse back down towards its support. .

Entry: 1.3151

Why it's good : horizontal overlap resistance, 100% & 61.8% Fibonacci extension, 23.6% Fibonacci retracement

Stop Loss : 1.3178

Why it's good : 38.2% Fibonacci retracement

Take Profit : 1.3093

Why it's good: Horizontal pullback support, 50% Fibonacci retracement

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USD/JPY approaching resistance, potential drop!

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USDJPY approaching 1st resistance at 108.11 where a reversal could occur.

Entry :108.11

Why it's good : 50% & 76.4% Fibonacci retracement

61.8% Fibonacci extension

Horizontal overlap resistance

Take Profit : 107.80

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

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Forecast for EUR/USD on July 23, 2019

EUR/USD

On Monday, the euro was trading in a narrow range of 18 points, mastering the zone of support for the price channel line and the Fibonacci level of 100.0%. This morning, the price reached the signal level of 1.1193 - at least on July 9, breaking through which will allow attacks on the downstream targets: 1.1155 - Fibonacci level 110.0%, 1.1116 - lows on May 30 and April 25, further 1.1074 - Fibonacci 123.6%.

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On the four-hour chart, it can be seen that trading took place below the MACD line all day, which in turn also strengthened daily-scale resistance. The indications of all indicators on both scales are only decreasing, we are waiting for the euro to further decline before the ECB meeting on Thursday, at which policy mitigation is expected through the use of any instrument, the most expected are a reduction in the deposit rate or, at least, a verbal announcement on the expansion of buybacks securities "in the short term."

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Forecast for GBP/USD on July 23, 2019

GBP/USD

On Monday, without waiting for the election of Boris Johnson as the head of the Conservative party and the prime minister, Finance Minister Philip Hammond and Deputy Foreign Minister Alan Duncan have resigned. The name of the new prime minister should be announced today, which obviously has a negative impact on the British pound.

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On the daily chart, the price drops to a previously defined target of 1.2290 - nothing hinders the price in supporting the price channel line.

On the four-hour chart, last night , the price touched the MACD line and today, apparently, it will go below it (1.2455). Yesterday, the signal line of the Marlin oscillator moved to the zone of negative numbers, to the zone of declining trend.

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Forecast for AUD / USD pair on July 23, 2019

AUD / USD pair

The Australian dollar is falling for the third day. we decided to update the price channels: the dark blue channel of the daily scale chart and the red channel of weekly. The convergence of the daily timeframe proved to be effective and the Marlin oscillator signal line clearly intends to move to the zone of decline. The immediate goal of the "Australian" is 0.6945, which averaged estimate of support for the price channel line and the MACD indicator line.

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On the four-hour chart, the Marlin signal line after convergence is already in the zone of decline. The price went below the balance line and MACD this morning. We are waiting for the price in the area of the specified goal at 0.6945.

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Control zones for Bitcoin on 07/23/19

Today, the pair is trading within the medium-term accumulation zone. This allows you to keep sales open at the beginning of the month. The level of $13,000 for bitcoin is now the determining resistance. Due to the fact that the instrument is traded on the Chicago Stock Exchange, the influence of futures contracts on the formation of medium-term impulses is noticeable. The priority direction of trade for the current week is the reduction.

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The second-day bitcoin is trading below the balance mark, which indicates the preponderance of market sellers. The approximate target of the fall is the level of $9800.

For the resumption of growth will require the absorption of yesterday's fall and a break above the balance point. This will allow the instrument to return to the month of June, beyond which the current movement takes place. A pattern has not yet been formed to open purchases, so sales retention is the main plan for the first half of the week.

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Control zones for USD/CHF pair on 07/23/19

The downward movement remains a priority because the target weekly CZ of 0.9734-0.9713 was not fulfilled. This suggests the need to find favorable prices for the sale of the instrument. Margin requirements have changed, which in turn increased the size of the WCZ to 238 points, which will allow getting more profit. The first resistance will be 1/4 WCZ of 0.9864-0.9859. A test of this zone will allow you to go on sale when an offer appears.

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The intraday plan should take into account the location of the middle strike, which is just above the 1/4 WCZ. This range is an ideal target for placing a limit order.

An alternative model will be developed if the closure of today's US session occurs above the level of 0.9864. This will give the opportunity to look for sales at a better price. The determining resistance is the 1/2 WCZ of 0.9925-0.9914. Growth to this zone will provide the most favorable prices for the sale.

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

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

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

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Control zones for USD/CAD pair on 07/23/19

The main model is growth since the close of trading last month occurred below the monthly control zone. The probability of a return to the level of 1.3164 is 90%. This should be used to build both intraday and mid-term plans. It is important to note that yesterday trading closed above the 1/2 WCZ of 1.3111-1.3102, which indicates a change in priority in marginal zones.

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Buying from current levels is no longer profitable, however, any reduction can be used to enter a long position. Growth potential is estimated to be at 94 points.

To cancel the upward movement will require the absorption of yesterday's growth and closing of trades below. The probability of implementing this model is 30%, which makes it auxiliary. The main plan is to maintain already open purchases and the opening of new ones with a decline of 30 points or more.

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

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

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

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Funny elections in the UK, boring meeting of the ECB and much more (weekly review of EUR/USD and GBP/USD from 07.22.2019)

In fact, all week we have been contemplating a sluggish dollar strengthening, which unexpectedly gave way to a weakening on Thursday evening. Such a quick leap was caused by the statements of John Williams, who heads the Federal Reserve Bank of New York, and who is also a member of the Federal Commission on Open Market Operations. It is safe to say that the second member of the Federal Commission on Open Market Operations has openly announced his intention to vote for lowering the refinancing rate, not only at the end of July, but one more time before the end of this year. Yes, the market has long been ready for such a development of events, but it is based only on rumors, speculation and assumptions. In fact, only James Bullard not only openly expresses his opinion, but even during the last vote he voted just to soften the parameters of monetary policy. Now there are already two of them. And where there are two, there are three. In short, investors have received final confirmation that by the end of the year the Federal Reserve will reduce the refinancing rate twice. This was the reason for the sudden weakening of the dollar. Which, however, was short.

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At the same time, the dollar had a serious reason for growth in the form of data on retail sales, whose growth rates accelerated from 2.9% to 3.4%. Not only does this growth in retail sales indicate a high likelihood of renewed inflation, but a number of other indirect data on inflation also indicated that its slowdown is temporary. So, retail sales data dispelled all doubts about further inflation dynamics. In addition, the total number of applications for unemployment benefits fell by 34 thousand instead of the expected 20 thousand. In particular, the number of initial applications, as predicted, increased by 8 thousand. And the turn, the number of repeated applications for unemployment benefits fell not by 28 thousand, and 42 thousand. And considering the fact that it is inflation and the labor market that are the main indicators for financial markets, it is not surprising that the dollar has steadily strengthened, and even Williams' speech only halted this process. But the question immediately arises: why then does the Federal Reserve plan to lower the refinancing rate twice already, if the most important indicators look very good. The point is in other indicators that reflect the state of other sectors of the economy, and they are not so joyful. For example, the growth rate of industrial production slowed down from 2.1% to 1.3%, while the utilization of production capacity decreased from 78.1% to 77.9%. Inventories rose another 0.3%, continuing to grow for twenty-five months. The combination of slower growth in industrial production and growth in stocks clearly indicates the growing risks of the development of a crisis of overproduction. In addition, the number of building permits decreased by 6.1%, while the number of construction projects started decreased by 0.9%. So the state of affairs in the American economy is really not as rosy as it may seem at first glance. Especially if you look only at the labor market and retail sales.

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Europe responded with an unexpected increase in inflation, from 1.2% to 1.3%. But this did not impress the market at all. The dollar's growth only stopped momentarily. The fact is that everyone has long been accustomed to the periodic acceleration of inflation in Europe, which is rather quickly replaced by its slowdown. Mario Draghi can refer to various studies and scientific works, which predict a rapid increase in inflation from year to year. Who and now there. Moreover, the European Central Bank does not seem to believe all of these studies conducted on its request, otherwise it would not have postponed consideration of the issue of the refinancing rate in the middle of next year.

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British statistics were also ignored, although they were clearly optimistic. Inflation remained unchanged, while the growth rate of retail sales accelerated from 2.2% to 3.8%. The situation is not bad in the labor market, where, despite the increase in the number of applications for unemployment benefits from 24.5 thousand to 38.0 thousand, the unemployment rate remained unchanged. Moreover, the average wage growth rate accelerated from 3.4% to 3.6%, and taking into account premiums, that is, with processing, from 3.2% to 3.4%. Although the latter indicator expected a slowdown. But here everything is connected with the expectations of the outcome of the election of the new head of the Conservative Party. All the more so about Brexit again reminded, and in a rather interesting form. For many, it was a surprise that the UK and the European Union continue to negotiate on this issue. Europe, which, through the words of Jean-Claude Juncker, has repeatedly stated that there will be no new negotiations and no concessions should be expected, it is still trying to find some compromise to avoid an unregulated Brexit, since its consequences are rather difficult to predict. But the very same Jean-Claude Juncker has repeatedly stated that Europe has already prepared the necessary regulatory framework, designed to protect Europe from the most negative consequences. But once negotiations continue, he is somewhat cunning. At the same time, the representatives of Great Britain are extremely optimistic about the course of the negotiations, but the Europeans openly say that the British are banal blackmailing them, demanding that they make inadmissible concessions, right now. If not, then Boris Johnson will become prime minister and immediately declare withdrawal from the European Union without a deal at all, and let Europe itself rake the consequences. In other words, the parties cannot come to a compromise in any way, and they just once again reminded everyone that the consequences of an unregulated Brexit are unpredictable. And it always scares investors much more than understanding what will be bad.

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To be honest, this week there are not too many important macroeconomic data, and we will start with good news. Thus, housing sales in the secondary market of the United States should grow by 0.2%, and new homes, by as much as 6.6%. So expectations of rising inflation will receive new justification. Also, orders for durable goods can grow by 0.7%. Last but not least, preliminary data on business indices should fairly please investors. In particular, the business activity index in the services sector should grow from 51.5 to 51.6, and production from 50.6 to 51.4. As a result, the composite index of business activity may show an increase from 51.5 to 52.1. But the good news ends there. Although this is a lot. True, if this week the GDP growth rate for the second quarter does not come out, which will almost certainly show a slowdown in economic growth from 3.1% to 1.8%. And such a serious slowdown in economic growth will obviously greatly disappoint market participants. True, these data will already complete the week, so that during all the previous days the dollar will be able to continue to grow.

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True, the dollar will be able to grow only if it does not interfere with the single European currency. But this is extremely unlikely. The fact is that, unlike the United States, preliminary data on European business activity indices should show a slightly different result. Yes, the production index can grow from 47.6 to 47.7, but in the service sector it is expected to decrease from 53.6 to 53.3. The result of all this will be a decrease in the composite index of business activity from 52.2 to 52.0. But of course the main event will be the meeting of the Board of the European Central Bank. True, its results will bring nothing, except for regular streamlined phrases about the need to closely monitor the situation, as well as the intention to return to the question of the size of the refinancing rate no earlier than the middle of next year. They may still refer again to new studies that already promise a year of rising inflation, which no one has seen in their eyes for many years. In other words, the dollar has no choice but to continue to grow, and it will be able to complete the week at a mark of 1.1150.

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No macroeconomic data will be published in the UK, but even without this it will be a lot of fun, since on Tuesday the results of the election of the new head of the Conservative party, and the prime minister will be known. Virtually no one doubts that they will be Boris Johnson, who promised to withdraw the United Kingdom from the European Union in October. Obviously, the outcome of the victory of Boris Johnson will be precisely unregulated Brexit, with all its unpredictable consequences, so that the pound will be under severe pressure. It turns out that the pound will have to decline all week, and only on Friday this fascinating process will be stopped by data on the GDP of the United States for the second quarter. The benchmark for the pound is 1.2350.

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Draghi "shakes out" the euro from a narrow range

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Attention in the foreign exchange markets is focused on the world central banks' decisions on rates. This week, traders have switched to the eurozone and its economy looks bleak. If the Fed wants to act proactively, the ECB, perhaps, cannot do without this measure. Under the influence of weak external demand, the German economy may slow growth this year to 0.5%. Inflation in Europe, despite a large-scale stimulus, is not able to exceed the level of 1.3%. The ECB, meanwhile, constantly cuts GDP estimates in the region.

Many Bloomberg respondents believe that the European regulator at the July meeting will signal the easing of monetary policy in September. Representatives of UBS, HSBC and Nomura are waiting for the second rate cut on deposits in December, and analysts at Commerzbank saw an opportunity to cut it by 20 bp this week. It should be noted that this bank is not alone in its opinion. The probability of reducing the cost of funds raised at the upcoming meeting of the Governing Council exceeded 50%, whereas a month ago it was about 25%.

Market expectations of Mario Draghi's "dovish" rhetoric are extremely high and can provoke a rebound in the euro on the facts. When most of the "bearish" drivers are already taken into account in the value of the currency, a sharp leap is catching newbies unawares, while professional participants are not surprised. Drawing attention to the ratio of premiums between options for the purchase and sale of the single currency, it can be understood that the number of bulls in the market is gradually increasing.

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It is possible that on the expectations of signals from Draghi, sellers of the EUR/USD pair will try to test support at the level of $1.12. However, traders need to brace for the fact that this time EUR/USD will also ride on a roller coaster. In short, the week for the main pair promises to be complex and extremely volatile.

I must say that just a day before the ECB meeting, the sale of the euro may increase. Such a movement will contribute unfavorable reports on activity in the services sector and the production of the region. The new batch of weak statistics is expected to be another proof that the eurozone economy cannot do without new incentives.

It is worth noting that the proximity of the FOMC meeting at the end of this month could keep the euro from a strong decline.

What will the Fed say?

The chances of a strong easing of the Fed policy are rather weak, but there still are. Fed as a preventive measure will reduce rates by a quarter percentage point. By the more courageous actions that traders are waiting for, the US central bank is hardly ready. In addition, now there is no need to cut rates by 50 bp, as the latest data does not signal a sharp decline in the US economy.

A low profile is taken into account in the quotes, so do not expect a strong weakening of the dollar. Traders will carefully study the text of the accompanying statement in order to understand further plans regarding US rates.

The Fed's position is not only interesting to participants of financial markets, but also the ECB. European financiers will probably want to listen to American ones before deciding to resume the quantitative easing program and lower interest rates.

If the members of the European regulator decide on some measures, this will happen not in July, but in September. In this regard, the focus of the market on Thursday will be sent to the press conference of the ECB. In previous periods, the comments of Mario Draghi, voiced after the meeting, moved the euro by 3% or more in a short time.

Will the Bank of Japan follow its colleagues?

The Bank of Japan's target inflation is 2%, However, so far this level can only be dreamed of. In June, the figure was exactly the same as a year ago - 0.7%. The regulator may well begin to reflect on the rate cut, as has already been done by his colleagues from the APR - Australia, India, Indonesia and South Korea.

On Monday, Japanese Prime Minister Shinzo Abe declared his readiness to take all necessary measures, flexibly and without hesitation, if the situation requires. The risks to the Japanese export-dependent economy are increasing. The slowdown in China's GDP growth, its trade war with the United States and the spread of protectionism led to the seventh monthly drop in Japanese exports and a weakening of industry.

"There is still uncertainty about the prospects for the global economy, such as trade friction and the exit of the UK from the European Union. We will not hesitate to respond to the risks associated with a fall, and we will take flexible and all possible steps. If necessary, the cabinet will take more aggressive and bolder economic measures than ever, " said Abe at a press conference after his ruling coalition retained a solid majority in the elections to the upper house.

Most analysts believe that the Bank of Japan will not take emergency measures yet, which cannot be said about the Fed. In this situation, the USD/JPY pair can not only descend to the horizon of 106.75, but, breaking through it, rush to the low of the beginning of the year - 105.

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Expectations of a rapid decline in interest rates, the Fed and the ECB continue to conduct markets

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For the second week in a row, the EUR/USD pair has been trading in a fairly narrow range, limited by the levels of 1.1190 and 1.1285. The markets continue to lead expectations of a quick decline in interest rates of the Fed and the ECB.

"The moment of truth is not far off, as soon the leading central banks of the world will have to reveal intentions on their monetary policy," JPMorgan Chase experts noted.

This week, July 25, the ECB will hold a regular meeting at which, as expected, the regulator will lay the foundation for future monetary easing.

"Mario Draghi effectively began his term of office as president of the ECB, lowering the rate at the first meeting. On Thursday, he can prepare the ground for a no less spectacular care and give a signal of a softening of the monetary rate in September," Bloomberg Economics predicts.

While some analysts believe that the European Central Bank may announce a reduction in the key rate at the next meeting, others believe that the rate will remain unchanged until the end of September, that is, zero.

It is assumed that in the first case, the EUR/USD pair may sharply go down, and in the second case, there should not be strong fluctuations in quotations.

As for the Fed, there is no doubt that the regulator intends to soften its policy and, most likely, will do so already in July. However, the question still remains: how much will the US central bank cut the rate by 25 or 50 basis points?

According to the head of the Federal Reserve Bank of St. Louis, James Bullard, a decrease of only 25 basis points would be appropriate.

"The greenback can significantly weaken if the Fed gives grounds to believe that it is open not only for insurance (one-off) rate cuts," said Hans Redecker, strategist at Morgan Stanley.

BNP Paribas analysts, in turn, draws attention to the fact that the Fed's ability to mitigate policy in response to weak inflation, slowing economic growth and external risks are much more significant than those of the ECB, and the effect of lowering rates in the US, given the role of the dollar in the world, will be more palpable.

"In the near future, the single European currency may be under pressure, but we do not expect serious losses from it," said the financial institution representatives.

According to the BNP Paribas forecast, in the third quarter the EUR/USD pair will rise to the level of 1.18 and to 1.19 in the fourth.

Of the events that may have an impact on the formation of short-term trends, it is worth mentioning the publication of July releases on business activity in the eurozone and the US (July 24) and the release of data on US GDP in the United States for the second quarter (July 26).

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GBP/USD. Boris Johnson - five minutes to the prime: we continue to sell the pound

So, the political struggle in Britain reached the final stage: a large-scale voting among 160 thousand "ordinary" Conservatives ended tonight, tomorrow we will know the name of the new leader of the Conservative Party, and the day after tomorrow - he will begin his duties as prime minister of the country. However, there is no intrigue here: throughout the entire period of the election race, Boris Johnson was an obvious and inaccessible favorite - even numerous scandals and protests could not significantly lower his rating. Therefore, today we can confidently say that the odious ex-foreign minister will be the new owner of the office in Downing Street.

The inevitability of this fact is also indicated by the beginning resignations of the ministers of the Theresa May government. In particular, the representative of the British Foreign Ministry, Alan Duncan, said that he would not work in Johnson's cabinet. Similar statements were made by other ministers (in particular, justice, finance), only in a hypothetical context. Johnson himself, in his turn, has already managed to "fire" his opponent Jeremy Hunt, who today is still the Minister of Foreign Affairs.

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Obviously, when Johnson's victory becomes a legal fact, many (overwhelmingly) government members will also leave their posts. Growing political uncertainty in any conditions puts pressure on the national currency. However, in this case, the uncertain prospects of Johnson's political relationship (with both the government members and the House of Commons deputies) will be multiplied by the uncertainty about Brexit's prospects. Although traders have already managed to "accept" the victory of the ex-minister of foreign affairs, his harsh remarks about Brussels, expressed in the role of the prime minister, will put additional pressure on the pound.

In general, the game against the pound has been a win-win character for several months. Even if the GBP/USD pair showed large-scale growth (to be more precise, a large-scale correction), bears have subsequently not only returned the price to their previous positions, but also "captured" new price horizons, thus consolidating a new (two-year) low - 1.2385. Now a regular price pullback followed, but the trend, as it was downward, remained so - and the factors putting pressure on the pound, in the near future will only increase their influence.

Also, the pound ignored the promises of Boris Johnson that he would conclude a free trade agreement with the European Union. In his opinion, a compromise between London and Brussels is possible and necessary - and a common denominator can be reached within the framework of a free trade agreement, which he intends to negotiate after the British leaves the EU. He also called the problem of border control between Ireland and Northern Ireland "the only problem in the way of the Brexit deal." He also promised to look into this issue - but again, in the context of his understanding of the "compromise".

In other words, Johnson demonstrates his "contractual capacity", however, the ideas declared by him are unlikely to be realized, given the rather rigid position of Brussels. Therefore, the market ignored such seemingly friendly rhetoric.

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In general, according to most analysts, the first political decisions of Johnson will be made in respect of members of the House of Commons. Considering the results of the previous polls, the British Parliament is unlikely to be led by the new prime minister and will support the "hard" Brexit. Not only Labour, but many Conservatives are against this scenario and Johnson is well aware. Therefore, in order for his scenario to be realized, he will first need to enlist the support of the deputies' corps - and, most likely, no longer of the current convocation. Thus, according to The Times, Johnson plans to hold early Parliamentary elections in the near future in order to implement all of his legislative initiatives that accompany the "hard" Brexit (primarily in the tax field). True, according to other information, the deputies plan to prevent this - Johnson can take a vote of no confidence almost during the first months of his term in power. Especially if he tries to withdraw the country from the European Union without a deal on October 31. According to anonymous sources in the British press, the Labour Party initiates a Parliamentary vote on this issue at the end of the summer, and it will be supported by Conservatives from among the "centrists".

Here it is worth noting that last Thursday the House of Commons had already adopted an amendment that is intended to complicate Johnson's ability to terminate the activities of Parliament, in order to bypass the deputies to withdraw Britain from the Alliance without a deal. The MPs supported the Benn-Burt amendment, the essence of which is as follows: even if the work of the House of Commons is terminated, deputies can still hold meetings for five days, in particular, to consider the work of the Irish parliament. This amendment alone will not be able to stop the chaotic Brexit, but it will provide MPs with a temporary gap to pass laws that de jure and de facto block the country's exit from the EU without a deal.

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All this suggests that the main political battles involving Johnson will unfold in the first place not in Brussels, but in London, where the British Parliament will become the "battlefield". And although in the end, deputies can save the country from a hard Brexit, the very fact of political confrontation will put a lot of pressure on the pound. That is why a further game against the British has a practical meaning: paired with the dollar, the pound retains the potential to decline to the support level of 1.2380 (the bottom line of the Bollinger Bands indicator on the daily chart). This target pair can test in the coming days, against the background of Johnson's first statements in the role of the British prime minister.

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GBP/USD. July 22. Results of the day. Boris Johnson's victory in the elections is more likely a negative than a positive

4-hour timeframe

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The amplitude of the last 5 days (high-low): 67p - 125p - 75p - 134p - 80p.

Average amplitude for the last 5 days: 96p (92p).

The British pound sterling has adjusted to the Kijun-sen line, which is supporting the pair's upward prospects. The price rebound from it may provoke a resumption of the upward movement, but there is a more significant factor for the GBP/USD pair for the coming days - these are the results of the election of the leader of the Conservative Party and the prime minister of Great Britain. The results will be known tomorrow in the morning. It is difficult to say how the market will react, for example, to the victory of Boris Johnson. On the one hand, Johnson supports the hard Brexit, which, according to many analysts and Mark Carney, will be destructive for the country's economy. On the other hand, Parliament has already insured itself against this case and will not allow Johnson to exit without a "deal". Thus, by and large, all of Johnson's campaign promises already look dubious. If there is no hard Brexit, Theresa May's Brexit deal, then what will happen? It is this question that perfectly illustrates everything that is happening in the UK in recent months or years. We do not even have a relatively probable scenario. Thus, in such a situation, we, the traders, are left to observe what is happening and react to the news, data, performances, and the pound remains to pray that the traders do not begin to get rid of it again. Consolidating the price below the critical line will make the bears more active, which will most likely return the pair to a support level of 1.2395.

Trading recommendations:

The pound/dollar currency pair continues to make a downward correction. Formally, long positions remain relevant with the target level of 1.2588, after the completion of the current round of correction. However, longs are still associated with increased risks.

It will be possible to buy the US dollar after the reverse consolidation of the pair below the Kijun-sen line which will lead to a change in the trend into a downward one. The first goal is the support level of 1.2395.

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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