Breaking forecast on 07/25/2019 for EUR/USD and trading recommendation

The most important event of the day is the meeting of the Board of the European Central Bank on monetary policy. According to the results of which, almost certainly, interest rates will remain unchanged. However, rumors have been actively circulating over the past few days saying that the office of Mario Draghi may reduce the deposit rate, which has already had an effect on the value of the common European currency. In this regard, almost certainly, the information that the European Central Bank leaves all rates unchanged will be perceived as incredibly positive, and will allow the single European currency to recover some of its losses against the dollar.

analytics5d39465208937.png

A pair of EUR / USD is showing active downward interest since the beginning of the week. It disappointedly failed in the area of the range of 1.1100, where it formed daily stagnation of 1.1130 / 1.1155. What we have? - a certain accumulation on the eve of an important event, the ECB meeting, which puts pressure on the market quotation. In turn, traders consider several possible options at once. Let's consider them: First, the existing overheating of short positions is clearly reflected in the chart and the current stagnation is confirmed by us, thus referring to the fact that the ECB may have nothing to do and leave everything as it is. The market will exhale and the current platform, in the form of stagnation, will serve as an excellent platform for long positions and a move towards 1.1180; The second option, considering the opposite picture, the ECB lowers the rate on deposits, and already on the eve of the statement, we see a clear decline to the level of 1.1100. But with the flow of emotions, we can possibly enter 1.1130 - 1.1090 quickly.

From the point of view of a comprehensive indicator analysis, we see that the downward interest that has been drawn up is pressing on the parameters of indicators across all major time intervals, signaling active sales. It is worth considering that there are minute charts and indicators in smaller time sections due to stagnation, and at the time of the ECB meeting, the background information can reach intraday time intervals.

analytics5d394a6da9d9d.png

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

Forecast for EUR / USD pair on July 25, 2019

EUR / USD pair

The economic situation in the euro area continues to deteriorate. Yesterday's data on Services PMI business activity in the service sector decreased from 53.6 to 53.3 in July. Manufacturing PMI causes even more alarm as its figure dropped to the lowest value since January 2013 to 46.4 points. In the US, Manufacturing PMI also declined but still remains in the growth zone of 50.0. American Services PMI increased from 51.5 to 52.2. Also, Sales of new homes in the United States rose from 604 thousand (revised down from 626 thousand) to 646 thousand last month.

In such a situation, the question of today's ECB monetary policy decision sharpens even more. The market probability of reducing the rate is 54% but with not so high expectations that the ECB could not neglect it. We are not waiting for the rate cut at today's meeting but instead we are waiting for a "promise" to lower the rate in September and announce other mitigation measures. The reason is simple. In fact, there is a crisis but its acute phase may not come this year. Then, the ECB will not have any tools to overcome it. Moreover, lowering the rate now will further aggravate the situation in the European banking system.

analytics5d3924e7db0bf.png

Yesterday, the price reached the target level of 1.1116 by about 10 points, which changes the value of this level from target to signal. Overcoming its price opens the target of 1.1074 with Fibonacci level of 123.6%. Next, we are waiting for the euro at the Fibonacci level of 138.2% at a price of 1.0985.

On the four-hour chart, as we expected yesterday. Consolidation has formed under the level of 1.1155 into an additional few candles. Today, we are waiting for the indicator to turn downward and the euro will continue to fall.

analytics5d3925118817c.png

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

Technical analysis of ETH/USD for 25.07.2019

Crypto Industry News:

Hashrate is one of the key indicators of the condition of the blockchain-based on Proof of Work. Specifies the barrier that a potential attacker must overcome to perform a 51% attack, as well as the general interest of cryptocurrencies by users. In this respect, the Ethereum network seems to be at risk.

Currently, the increase of hashrate is a missing element for the Ethereum community. In the case of ETH, this indicator is still below 42% in relation to the records of all time achieved in August 2018. Bitcoin also reached historical peaks when it comes to hashrate, but since then it has defeated levels by 22%.

This is one of many measures illustrating the division of cryptocurrency markets in 2019. In previous years, all cryptocurrencies were changing simultaneously, regardless of whether prices were falling or rising. But now it seems that investors have enough time to find out which projects are worth the support and which are not. This results in a general price split (more or less half of the cryptographic currencies are below the prices of December 2018), as well as the division of the PoW network hashrate. Until now, Bitcoin and Litecoin are the only major poW tokens that have achieved the hashrate record in 2019.

According to the data, Bitcoin Cash, Bitcoin SV, and Ethereum lag behind their hashrate records. And although this may not seem an important issue, it opens up these chains to the potential for attack. Currently, carrying out a 51% attack on the Bitcoin network for 1-hour costs over 850,000. dollars, while the attack on Ethereum for an hour can be done for just over 100 thousand. dollars. Bitcoin SV is the most vulnerable to manipulation among PoW tokens, with an attack cost of only 11,000. dollars.

Technical Market Overview:

The ETH/USD pair has moved higher after the market bounced from the level of $199.67 and now the price is testing the 385 Fibonacci retracements again. The technical support made after the swing low at the level of $190.94 is getting closer and closer, so there is a high probability, that if the bulls will not break through the rest of the Fibonacci retracement, it will be tested soon as well.

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.

analytics5d3941ba00fab.jpg

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

Technical analysis of BTC/USD for 25.07.2019

Crypto Industry News:

The New York Financial Services Department (NYDFS), a state financial regulator, has created a new department that will be responsible for licensing and regulating activities related to cryptography.

In a statement, the NYDFS announced the creation of a Research and Innovation Division that "will house a branch of the Department responsible for licensing and supervising virtual currencies, and will assess new efforts to use technology to eliminate financial exclusion."

NYDFS requires companies involved in the issue and trading of digital assets to receive a special type of registration called BitLicense. This process aims to ensure that a business associated with cryptography adheres to certain standards regarding the disclosure and protection of consumer data, however, it is perceived by some in the cryptographic space as limiting for the industry.

In addition to the announcement of the new department, today's statement includes a number of nominations for the department. The new department will be run by Matthew Homer, who before the job in NYDFS was the head of politics and researched the fintech company Quovo. Homer also has experience at the Federal Deposit Insurance Corporation and the United States Agency for International Development.

Earlier this week, the Fidelity cryptographic wing, Fidelity Digital Assets Services (FDAS), reportedly filed a motion in NYDFS to obtain a license to operate in New York. If the application is approved, FDAS will be able to provide digital asset storage services in this state.

Technical Market Overview:

The short-term trendline on the BTC/USD market has been clearly violated and tested from the below almost immediately, but the bulls were not strong enough to break through it. The next target is seen at the level of $9,070, but so far the bears went to the level of $9,459 before the price has bounced. It looks like the bulls want to test the technical resistance at the level of $10,166 again and if the test is successful, then the next target is seen at the level of $10,636,

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.

analytics5d394051ebff9.jpg

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

Technical analysis of GBP/USD for 25.07.2019

Technical Market Overview:

Not much has happened on the GBP/USD market as the global investors are still fighting about the short-term trendline control, so the price keeps going nowhere fast. The weak and negative momentum supports the short-term bearish outlook as the bears are in control of the market despite the battle of the trendline. New local lows made at the level of 1.2417 should be soon violated as well and the level of 1.2381 should be tested again soon. In a case of a further breakout, the next target for bears is seen at the level of 1.2100 (weekly support).

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 1.2100 and 1.1983.

analytics5d393efe7e012.jpg

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

Technical analysis of EUR/USD for 25.07.2019

Technical Market Overview:

After the technical support located at the level of 1.1181 has been violated, the EUR/USD market has made a new local low at the level of 1.1127. The next target is seen at the level of 1.1103 and it might be hit very soon as the momentum is weak and negative. The bears are in full control of the market despite the oversold conditions. No signs of the short-term trend reversal yet.

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:

After the level of 1.1181 gas been violated, the best strategy for the current market conditions is to trade with the larger timeframe trend, which is still down. The Ending Diagonal pattern has not been finished yet and the bears are in full control of the market. The longer-term target is seen at the level of 1.0814.

analytics5d393dc2785c9.jpg

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

Technical analysis: Important Intraday Levels For EUR/USD, July 25, 2019

analytics5d391943ee7a4.jpg

When the European market opens, some economic data will be released such as Monetary Policy Statement, Main Refinancing Rate, German Ifo Business Climate, and Spanish Unemployment Rate. The US will also publish the economic data such as Natural Gas Storage, Unemployment Claims, Prelim Wholesale Inventories m/m, Goods Trade Balance, Durable Goods Orders m/m, and Core Durable Goods Orders m/m, so amid the reports, the EUR/USD pair will move with medium volatility during this day. TODAY'S TECHNICAL LEVELS: Breakout BUY Level: 1.1196. Strong Resistance: 1.1190. Original Resistance: 1.1179. Inner Sell Area: 1.1168. Target Inner Area: 1.1142. Inner Buy Area: 1.1116. Original Support: 1.1105. Strong Support: 1.1094. Breakout SELL Level: 1.1088. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Important Intraday Levels for USD/JPY, July 25, 2019

analytics5d39185942a09.jpg

In Asia, Japan will release the SPPI y/y and the US will publish some economic data such as Natural Gas Storage, Unemployment Claims, Prelim Wholesale Inventories m/m, Goods Trade Balance, Durable Goods Orders m/m, and Core Durable Goods Orders 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: 108.75. Resistance. 2: 108.54. Resistance. 1: 108.33. Support. 1: 108.05. Support. 2: 107.84. Support. 3: 107.63. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Forecast for GBP / USD pair on July 25, 2019

GBP / USD pair

With the appointment of Boris Johnson as the new British Prime Minister in the background, the sterling pound "for form" rose yesterday by 45 points but there are a lot of questions on Brexit, of course, the assumptions of consulting agencies and investment companies regarding further developments are many and different. In the current technical situation, the pound remains under pressure. On the daily chart, yesterday's candle with the upper shadow did not reach the balance line. The signal line of the Marlin oscillator turns around without leaving the negative zone.

analytics5d3923a4caf13.png

On the four-hour chart, the current candle breaks back below the indicator line of balance. Leaving prices under the MACD line at 1.2452 will create a signal for a further decline to the target line of 1.2280 on the daily price channel.

analytics5d3923baa4763.png

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

EUR/USD approaching support, potential bounce!

analytics5d392c8c7aed0.jpg

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

Entry: 1.1120

Why it's good : horizontal swing low support

Stop Loss : 1.1187

Why it's good : 100% Fibonacci extension

Take Profit : 1.1187

Why it's good: 61.8% Fibonacci extension, 38.2% Fibonacci retracement, horizontal pullback resistance

analytics5d392c3e1cd66.png

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

NZD/USD we remain bullish above its support!

analytics5d392bd27aae0.jpg

Price is testing its support at 0.6694 where it could potentially bounce to its resistance at 0.6732..

Entry: 0.6694

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

Stop Loss : 0.6668

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

Take Profit : 0.6732

Why it's good: Horizontal overlap resistance, 38.2% Fibonacci retracement, 100% Fibonacci extension

analytics5d392b035c8e8.png

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

NZD/USD we remain bullish above its support!

analytics5d392bd27aae0.jpg

Price is testing its support at 0.6694 where it could potentially bounce to its resistance at 0.6732..

Entry: 0.6694

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

Stop Loss : 0.6668

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

Take Profit : 0.6732

Why it's good: Horizontal overlap resistance, 38.2% Fibonacci retracement, 100% Fibonacci extension

analytics5d392b035c8e8.png

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

USD/JPY reverse off resistance, further drop!

analytics5d392a848d2aa.jpg

USDJPY reversing off 1st resistance at 108.38 where a reversal could occur.

Entry :108.38

Why it's good : 61.8% Fibonacci retracement

78.6% Fibonacci retracement

61.8% Fibonacci extension

Horizontal swing high resistance

Take Profit : 107.98

Why it's good : 23.6% Fibonacci retracement

Horizontal overlap support

61.8% Fibonacci extension

analytics5d392a4a6df44.png

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

Forecast for AUD / USD pair on July 25, 2019

AUD / USD pair

On Wednesday, the Australian dollar fell by 27 points, stopping the movement on the balance line of the daily scale. The signal line of the Marlin oscillator has moved to the zone of negative numbers in terms of measured movement with a solid potential to reduce in the future. It can be compared to the decline in the previous four days around the May 15 minimum price of 0.6866. Here, a correction and a further decline of the oscillator are likely. The first target is the area of coincidence of the price channel line with the MACD line of 0.6945. Fixing below the level opens the way to 0.6866.

analytics5d3922d4be8d7.png

On the four-hour chart, there is a confident price reduction without signs of a reversal.

analytics5d3922ed865ab.png

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

Control zones EURUSD 07.25.19

Yesterday, the couple tested the monthly CZ of July. This makes it necessary to completely close short positions and look for opportunities to buy the instrument. Not far from the current price is also the range of the weekly average. All of this indicates the possibility of the emergence of large demand, which must be used to enter purchases when forming the "false breakdown" pattern on any timeframe.

analytics5d392404edacc.png

The downward impulse is a strong medium-term structure, so for the turn in the correction, it will require the appearance of large buyers. This can be seen on the closure of the US sessions.

An alternative model will be to continue the fall of the pair until the May minimum. This will entail going beyond the limits of the monthly short-circuit, which will make it possible to enter purchases at favorable prices with a probability of working out above 90%.

analytics5d39243a09bb8.png

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

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

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

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

The risk of "hard" Brexit is too high, the pound may rise in price

analytics5d384822487cf.jpg

The pound against the dollar lost 35 points, ending trading onTuesday at 1.2435. The reaction of traders to the victory of Boris Johnson was not strong, but negativity was present. This could be seen both in the dynamics of the sterling, and in the movement of the national stock market, which ended the day in negative territory. It is worth noting that the weak CBI industrial orders index contributed to the drop in the pound.

Boris Johnson is best known as an implacable supporter of the "hard" Brexit. His election significantly increased the likelihood that the UK would leave the EU without maintaining access to the single European market and customs union, which added pessimism to the market. Speaking to the legislators, the new prime minister hurried to remind him of his plans, and after which, information according to media sources told that Labor leader Jeremy Corbin could initiate a vote of no confidence for Johnson.

Given this situation, the GBP / USD pair remains under pressure on Wednesday and in the future. The chances that buyers will be able to seize the initiative are extremely small. Johnson's tough stance in the coming weeks will make life harder for pound traders. The growth of the GBP / USD quotes also holds back the strengthening of the dollar. The market has adjusted expectations for an aggressive rate cut by the Fed next week, which supports the US currency.

analytics5d38480070d2b.png

In particular, the reduction of sterling on the expectations of Johnson's victory in the fight for the post of leader of the Conservative Party and the post of prime minister has been going since March. All this time, he did not miss a chance to remind him that he was aiming at the country's withdrawal from the EU at the end of October, with or without a deal.

A few minutes after it became known about Johnson's victory, Moody's representatives once again informed the markets about their grim forecast under the scenario without a deal. That is, the UK is waiting for a lower credit rating and rising loan costs.

The government bond market is on the verge. Recently, prices have skyrocketed along with other debt markets on expectations of fresh incentives from global securities. Given the depth of political risk, some investors have begun to look into safer assets to the detriment of the United Kingdom.

How pernicious Brexit will be for a pound, traders will find out very soon. Currency strategists do not rule out the fall of the GBP / USD pair to $ 1.15 from the current level of $ 1.24. Moreover, for some, the idea of the formation of parity began to emerge.

The coming months will undoubtedly be tensed for the pound. However, UBS believes that Brexit will not take place without a deal. Experts predict a new referendum, and the pair GBP / USD may rebound upwards.

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

Euro is preparing to further dive to the bottom of the ocean

analytics5d384476a20ec.jpg

The euro is waiting for grim prospects. The single European currency has already dropped to a two-month low against the dollar, and this is far from the limit. Weak economic data and expectations that the ECB will move to the active phase of easing monetary policy, specifically put pressure on the euro. Markets estimate the likelihood of a rate cut of 10 basis points on Thursday at 54%. The probability increased after the purchasing managers index in the eurozone unexpectedly fell to a three-month low of 51.5 points. Now, the ECB will definitely announce a softening of the policy, or a new phase of the quantitative easing program (QE). The single currency is rapidly becoming cheaper and has already dropped to $ 1.1127, the lowest level since May 30. If the momentum continues, in the coming days, the euro will be able to renew a two-year low of $ 1.1105, reached in May.

analytics5d38454abb620.jpg

Traders who bet on easing the ECB raised the Swiss franc, which was trading at 1.0980 franc per euro, close to a two-year high of 1.0972 reached on Tuesday. The growing franc is putting pressure on the Swiss Central Bank to take measures to protect the economy, which is very dependent on exports. Expectations of lower interest rates in developed countries put pressure on other currencies, such as the Australian dollar, which fell 0.5%, to a two-week low of 0.6973 dollars. Reducing the price of iron ore, which lasts three days in a row, can cause even more damage to currencies that are sensitive to commodity prices. The dollar, on the contrary, grows after Washington reached an agreement on the lifting of the limits of state debt. The pound rose slightly compared to the recent low, after Boris Johnson became prime minister of Great Britain. The pound is likely to continue falling after the appearance of Eurosceptic Johnson as prime minister.

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

Control zones AUDUSD 07.25.19

Today's trading plan should take into account the approach of the pair to the average value of the weekly move. Sellers need to close a short position and expect a corrective pullback. The test of the average move can allow to obtain favorable prices for the purchase of an instrument in the case of the formation of a "false breakdown" pattern of yesterday's minimum.

analytics5d391ec25094f.png

The probability of closing trades within the average move is 70%, so sales near the zone are not profitable.

It is necessary to take into account that the descending model remains a priority, as the weekly CZ of 0.6946-0.6933 has not yet been reached. An alternative model will be to go beyond the average weekly turn for the test of the specified zone. This will allow to get favorable prices for the purchase of a tool, since the probability of returning to the middle course is 90%.

analytics5d391ef414841.png

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

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

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

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

Fractal analysis of major currency pairs on July 25

Forecast for July 25:

Analytical review of H1-scale currency pairs:

analytics5d390ae4dfa64.png

For the euro / dollar pair, the key levels on the H1 scale are: 1.1212, 1.1195, 1.1174, 1.1162, 1.1142, 1.1119, 1.1104 and 1.1073. Here, we continue to follow the development of the downward cycle of July 18. At the moment, we expect to move to the level of 1.1119. Price consolidation is in the range of 1.1119 - 1.1104. For the potential value for the bottom, we consider the level of 1.1073. The movement to which, is expected after the breakdown of 1.1104.

Short-term upward movement is possible in the range of 1.1162 - 1.1174. The breakdown of the latter value will lead to a prolonged correction. Here, the target is 1.1195. We expect the registration of the expressed initial conditions for the ascending cycle to the level of 1.1212.

The main trend is a local downward structure of July 18.

Trading recommendations:

Buy 1.1162 Take profit: 1.1174

Buy 1.1175 Take profit: 1.1195

Sell: 1.1140 Take profit: 1.1120

Sell: 1.1104 Take profit: 1.1075

analytics5d390b0117dbc.png

For the pound / dollar pair, the key levels on the H1 scale are: 1.2662, 1.2623, 1.2598, 1.2558, 1.2528, 1.2468, 1.2441, 1.2420 and 1.2379. Here, the subsequent targets for the top is determined from the local ascending structure on July 23. The continuation of the movement to the top is expected after the breakdown 1.2528. In this case, the goal is 1.2558, and near this level is a price consolidation. The breakdown of the level 1.2558 should be accompanied by a pronounced upward movement. Here, the target is 1.2598. Consolidation is in the range of 1.2598 - 1.2623. For the potential value for the top, we consider the level of 1.2662. The movement to which, is expected after the breakdown of 1.2625.

Corrective movement is possible in the range 1.2468 - 1.2441. The breakdown of the last value will lead to the cancellation of the local structure. Here, the first target is 1.2420. For the potential value for the bottom, we consider the level of 1.2379.

The main trend is the local structure for the top of July 23.

Trading recommendations:

Buy: 1.2528 Take profit: 1.2556

Buy: 1.2560 Take profit: 1.2598

Sell: 1.2468 Take profit: 1.2443

Sell: 1.2420 Take profit: 1.2380

analytics5d390b5dae134.png

For the dollar / franc pair, the key levels on the H1 scale are: 0.9904, 0.9881, 0.9863, 0.9798, 0.9779, 0.9745 and 0.9731. Here, we follow the formation of the potential for the top of July 22. Short-term upward movement is expected in the range of 0.9863 - 0.9881. The breakdown of the last value will allow to expect movement towards a potential target - 0.9904, where consolidation is near this level.

The level of 0.9825 is a key support for the top. Its price passage will contribute to the development of the downward movement. Here, the goal is 0.9798. Consolidation is in the range of 0.9798 - 0.9779. The breakdown of the level of 0.9779 should be accompanied by a pronounced move to the bottom. Here, the potential target is 0.9745.

The main trend is the local downward structure of July 17, the formation of potential for the top of July 22.

Trading recommendations:

Buy : 0.9863 Take profit: 0.9880

Buy : 0.9882 Take profit: 0.9902

Sell: 0.9825 Take profit: 0.9798

Sell: 0.9796 Take profit: 0.9780

analytics5d390b790591c.png

For the dollar / yen pair, the key levels on the scale are : 108.94, 108.72, 108.39, 108.26, 107.97, 107.83 and 107.58. Here, we are following the development of the ascending structure of July 18. The continuation of the movement to the top is expected after the passage by the price of the noise range 108.26 - 108.39. In this case, the goal is 108.72. We consider the level of 108.94 to be a potential value for the top. Upon reaching this level, we expect consolidation as well as a rollback to the bottom.

Short-term downward movement is possible in the range of 107.97 - 107.83. The breakdown of the latter value will lead to a prolonged correction. Here, the goal is 107.60. This level is a key support for the upward structure.

The main trend: the ascending structure of July 18.

Trading recommendations:

Buy: 108.40 Take profit: 108.70

Buy : 108.73 Take profit: 108.94

Sell: 107.96 Take profit: 107.84

Sell: 107.81 Take profit: 107.60

analytics5d390bbb3eaed.png

For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3256, 1.3236, 1.3201, 1.3178, 1.3163, 1.3130, 1.3112 and 1.3085. Here, we are following the ascending structure of July 19th. The continuation of the movement to the top is expected after the passage of the price of the noise range 1.3163 - 1.3178. In this case, the goal is 1.3201, and near this level is a consolidation. The breakdown of the level of 1.3201 will lead to a pronounced movement. Here, the target is 1.3236. For the potential value for the top, we consider the level of 1.3256. Upon reaching which, we expect a rollback to the bottom.

Short-term downward movement is possible in the range of 1.3130 - 1.3112. The breakdown of the latter value will lead to a prolonged correction. Here, the target is 1.3085. This level is a key support for the top.

The main trend is the ascending structure of July 19.

Trading recommendations:

Buy: 1.3178 Take profit: 1.3200

Buy : 1.3203 Take profit: 1.3234

Sell: 1.3130 Take profit: 1.3112

Sell: 1.3110 Take profit: 1.3085

analytics5d390bd4a3c5e.png

For the pair Australian dollar / US dollar, the key levels on the H1 scale are : 0.7032, 0.7011, 0.6998, 0.6977, 0.6958, 0.6947 and 0.6924. Here, we follow the development of the downward structure of July 18. The continuation of the movement to the bottom is expected after the breakdown of the level of 0.6977. In this case, the goal is 0.6958. Price consolidation is in the range of 0.6958 - 0.6947. For the potential value for the bottom, we consider the level of 0.6924. After reaching which, we expect a rollback to the top.

Short-term upward movement is possible in the range of 0.6998 - 0.7011. The breakdown of the latter value will lead to a prolonged correction. In this case, the target is 0.7032.

The main trend - the downward structure of July 18.

Trading recommendations:

Buy: 0.6998 Take profit: 0.7010

Buy: 0.7013 Take profit: 0.7030

Sell : 0.6977 Take profit : 0.6958

Sell: 0.6945 Take profit: 0.6926

analytics5d390c2884f43.png

For the euro / yen pair, the key levels on the H1 scale are: 121.08, 120.81, 120.62, 120.14 and 119.91. Here, we continue to monitor the downward structure of July 10th. The continuation of the movement to the bottom is expected after the breakdown of the level of 120.14. In this case, the potential target is 119.91. From this level, we expect a key turn to the top and the formation of the initial conditions for the upward cycle.

Short-term upward movement is possible in the range of 120.62 - 120.81. The breakdown of the latter value will lead to a prolonged correction. Here, the target is 121.08.

The main trend - the downward structure of July 10.

Trading recommendations:

Buy: 120.62 Take profit: 120.80

Buy: 120.84 Take profit: 121.06

Sell: 120.12 Take profit: 119.94

analytics5d390c439c8c8.png

For the pound / yen pair, the key levels on the H1 scale are : 136.13, 135.77, 135.51, 135.17, 134.82, 134.59, 134.29 and 133.81. Here, the continuation of the development of the ascending structure of July 18 is expected after the breakdown of the level of 135.18. In this case, the target is 135.51. There is a short-term upward movement, as well as consolidation in the range of 135.51 - 135.77. For the potential value for the top, we consider the level of 136.13. After reaching which, we expect consolidation, as well as a rollback to the bottom.

Short-term downward movement is possible in the range of 134.82 - 134.59. The breakdown of the latter value will lead to a prolonged correction. Here, the goal is 134.29. This level is a key support for the upward structure.

The main trend - the ascending structure of July 18.

Trading recommendations:

Buy: 135.18 Take profit: 135.50

Buy: 135.53 Take profit: 135.77

Sell: 134.82 Take profit: 134.60

Sell: 134.57 Take profit: 134.30

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

The chances of easing the ECB's policies have increased

analytics5d3881646a797.jpg

European currencies, especially the euro, are tensely awaiting for today's meeting of the ECB, which will be perhaps the most difficult this year. Currency strategists are waiting for the preservation of the parameters of monetary policy. In their opinion, European financiers will want to wait for the latest macroeconomic data in order to accurately assess the current picture of the economy. In addition, the Central Bank is not averse to start to see the scale of the projected rate cut by the Fed next week.

Traders are stubbornly waiting for a "surprise" in the form of a rate reduction. Some global investment banks share their judgment, suggesting that the European regulator may surprise everyone by lowering the already negative deposit rate today. This will be a kind of message to the market about further easing of monetary policy. With such a development scenario, the euro will continue to move down.

On Wednesday, the eurozone published such a leading indicator as the Market index, the value of which slipped from 52.2 to 51.5 in July. The data took by surprise the consensus analysts, who did not expect such a strong decline, which also spoiled the mood of the euro fans even more. The German report was even worse. Indicators of producers of goods decline to the lowest level in the last 7 years, suggesting a deterioration in the growth prospects of Europe's largest economy. On the other hand, the composite Purchasing Managers Index (PMI) fell in July to 51.4 from 52.6 and was the lowest since March. Analysts' forecast was 52.3.

Such news has increased speculation regarding the easing of the ECB's policy at a meeting on Thursday. Money markets are now laying down the rate by 10 basis points with a probability of 54%. Euro sales increased, while the main pair tested two-month lows.

analytics5d387f98b5258.png

It is worth noting that the weakening euro, without even waiting for it, supported the falling pound in conjunction with the dollar. The pair has grown for the first time in the last four sessions. Given that the market has already seen the weakening of the euro against the dollar, the Japanese yen and the Swiss franc, as well as the EUR / GBP pair can be regarded as the best value for money before a meeting in Europe. Thus, this helps the pound to be at its best, currency strategies comment on the current situation.

analytics5d38810c71c4b.png

If the European regulator maintains rates again, the single currency will have a chance to consolidate in the range of 1.114-1.12 in a pair with the dollar. Commerzbank is generally waiting for the euro to rise to 1.16 by the end of 2019, even if the ECB rate is reduced by 20 basis points.

5 reasons not to lower rates

Waiting for Fed action. Americans have already set up markets for a quarter-per-cent rate cut. If the Fed surprises the markets with an aggressive step or announces the beginning of a mitigation cycle, the euro may rise. This will have a downward pressure on inflation and suppress export growth in the eurozone, resulting to a further complication in the position of the regional economy. Maybe it is really worth waiting for the verdict of the American Central Bank.

Economic data. Key indicators - GDP for the second quarter and the latest data on inflation - will be released after the ECB meeting. Any additional signals about how long the slowdown will last will help economists decide on a solution, especially in recent times the statistics is ambiguous.

Latest forecasts. Typically, the ECB adjusts monetary policy when it publishes latest economic forecasts. This is due to the fact that the revised estimates help explain the motives for the increase or decrease in incentives. Updated estimates will be presented in September.

Market expectations. When deciding on a rate at the Central Bank, they do not rely on market expectations, but do not ignore them. Traders do not put in the price the full probability of reducing the rate by 10 basis points on Thursday. Therefore, the earliest easing may signal that the economic situation in the region is worse than expected.

The complexity of the mechanism. The measures that the ECB may announce will require a thorough discussion of their application. Reducing the negative rate on deposits will require an adjustment to the mechanism for regulating bank deposits. At the moment, the monetary authorities hardly have a single position on this.

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

Gold has broken the connection with the past

In the market, things that are often incomprehensible at first glance happens. And if the movement of gold and US stock indices in one direction already surprises few people, the violation of the inverse correlation between the precious metals and the US dollar puts to a standstill. The XAU / USD bulls feel comfortable around 6-month highs, even though the USD index soared to 5-week peaks. Will they continue on the same direction, although for decades, they walked in different directions?

Formally, the external background for gold can be called favorable. The victory of Boris Johnson in the fight for the post of British Prime Minister increases the risk of disorderly Brexit. The IMF reduces its global GDP forecast for 2019 to + 3.2%. In addition, tensions in the Middle East are not disappearing, and the United States and China are in no hurry to stop a trade war. On the other hand, the White House and Washington managed to resolve the issue of the national debt ceiling, and the US yield curve returned to the green zone, which reduces the possibility of a recession in the US economy.

At the same time, let us remember the 2018th: the political landscape in Britain has always been unsteady. The IMF constantly frightened investors with a crisis, and at the very height of a trade war, gold instead of growing, on the contrary, decline. The main culprit was named the American dollar, which in the conditions of monetary restriction of the Fed intercepted the status of the main asset-refuge from the precious metal and yen. As it turned out, the epic with the tightening of monetary policy was short-lived: the process of reducing the balance of the three leading central banks of the world took 11 months. After that, they returned to the idea of lowering rates.

Dynamics of asset purchases by leading Central banks

analytics5d383f247e4d1.jpg

The sluggish growth of the world economy and the fashion for monetary expansion have led to the fact that about $ 13 trillion of the global bond market is trading with negative returns. It is better to buy non-interest-bearing gold than to bear the costs due to holding securities in the portfolio.

In addition, the strength of the dollar is deceptive. If in the previous years, the USD index grew due to the Fed raising the federal funds rate, now it is due to the weakness of competitor currencies. The ECB is going to soften monetary policy, the Bank of England has sharply turned from a "hawk" into a "dove", and the Bank of Japan claims that it has enough ammunition to stimulate the economy. The positions of the "American" look vulnerable: firstly, the Fed is ready to cut rates, and secondly, the White House may surprise Forex with currency interventions for the first time in many years.

Gold clearly benefits both bonds and major world currencies. As for stocks, concerns about the correction of the S & P 500 make investors extremely cautious about buying equity securities. If stock indices are growing solely because of expectations of the Fed's monetary expansion, while corporate profits are worsening and the economy is slowing, how long the rally can be?

Technically, the further fate of the precious metal will depend on the output of quotations from the triangle. The repeated breakthrough of its upper border with the subsequent updating of the July maximum will bring the target to 161.8% according to the AB = CD pattern at arm's length.

Gold daily chart

analytics5d383f3a17ad1.jpg

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

EUR / USD. July 24th. Results of the day. European indexes of business activity have completely failed, but traders reacted

4 hour timeframe

analytics5d38ee7a74b58.png

The amplitude of the last 5 days (high-low): 34p - 75p - 78p - 19p - 64p.

Average amplitude for the last 5 days: 54p (54p).

On Wednesday, July 24, the EUR / USD pair continues its generally downward movement, despite the fact that volatility has significantly decreased. Today, again, did not bring any positive news to the Eurocurrency. The index of business activity in the areas of production and services in Germany failed, as well as the similar indices of business activity across the eurozone. It does not matter that these were only preliminary values for July, since there is no reason to expect that the final figures will be better. Business activity in the industrial sector is generally a headache for the European Union. The values of the indicator in this area are in the critical area, which captures not a slowdown, but a decline. In America, things are not much, but still better. The business activity index in the service sector increased compared to the previous month. On the other hand, in the manufacturing sector, it fell to the level of 50.0, below which the decline in this area will also be recorded. As in many other areas, the States again defeat the European Union. Yes, business activity in America does not show the best "numbers", but in the European Union things are even worse. Tomorrow, the ECB will announce the results of the meeting. Traders expect either a monetary policy easing announcement or an immediate reduction in the deposit rate. There will also be a press conference by the ECB on monetary policy, at which a restart of the quantitative incentive program can be announced. We do not expect anything optimistic from this event. At best, Draghi and the company will be as neutral and restrained as possible, which may save the Eurocurrency from new sales. Otherwise, the fall in the euro / dollar pair will continue, and Donald Trump will have new reasons to accuse the EU of deliberate depreciation of the euro.

Trading recommendations:

The pair EUR / USD continues to move down. Thus, now, it is again recommended to sell the Euro-currency with the aim of the support level of 1.1101 until the MACD indicator turns upward.

Buying the euro / dollar pair is recommended not earlier than fixing the price above the Kijun-sen line with the first target resistance level of 1.1269, but with minimal lots, as the bulls remain extremely weak.

In addition to the technical picture, we 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.

Chinkou Span - green line.

Bollinger Bands indicator:

3 yellow lines.

MACD Indicator:

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

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

GBP / USD. De jure, Johnson became the prime minister, but the pair does not grow because of this

The pound-dollar pair demonstrates a large-scale correction by today's standards, rising by 100 points in a few hours at once. After a two-day steady decline, this rebound was impulsive in nature, although this impulse faded rather quickly - the price barely touched the first resistance level of 1.2530 (the middle line of the BB indicator on the daily chart). Any corrective growth in a pair of GBP/USD is a kind of gift for those who play against the British currency - and such, apparently, the vast majority. Indeed, such price movements should be used to open short positions - at least in the medium term, while political uncertainty will put pressure on the pound.

analytics5d389664a2343.jpg

It is noteworthy that today's correction is not due to British events, but to the weakness of the US currency. The market completely ignored the formal victory of Boris Johnson in the election of the leader of the Conservative Party, as well as the subsequent resignations of government ministers Theresa May. These events were too predictable and long expected, given the popularity of Johnson among ordinary conservatives. Therefore, the market won back his victory long ago - even when his main opponent (Jeremy Hunt) fell behind the leader of the political race by several tens of percent.

The rhetoric of the new prime minister of Britain also did not surprise investors - he again repeated those theses that had become the talk of the town, above all about the need for the country to leave the EU on October 31. Traders did not learn anything new and, therefore, ignored this speech. Obviously, the market will now focus on political battles between the Johnson government and members of the House of Commons, because most parliamentarians (including Tories) do not support the idea of implementing a "tough" Brexit.

There are several options for further action as the prime minister and the parliament. Experts do not rule out a new referendum, a new general election, or a no-confidence vote for Johnson. The essence of the future confrontation (which will inevitably take place) is who will defeat whom by law. The current composition of the House of Commons will by all means prevent the implementation of the "hard" Brexit without the approval of the deputies, forcing Johnson to take into account the views of parliamentarians. However, the prime minister will have to solve a difficult dilemma - whether to decide on an extraordinary general election (given the low rating of conservatives) or negotiate with the current composition of the House of Commons. But the main events in this vein will unfold somewhat later - and in the near future, Johnson will form his team, preparing for the main battle in the national parliament and Brussels.

That is why today's and yesterday's statements of Johnson, who de jure became the head of the government, did not affect the mood of the traders of GBP/USD. But the weakness of the dollar allowed the pair of bulls to update this week's high, rising to the level of 1.2530. The US currency was under pressure from major US stock indices today, which, in turn, opened in the red zone due to weak reports on corporate profits of Boeing and Caterpillar. The aircraft manufacturing company received a net loss of $ 2.9 billion in the second quarter of the current year, while Boeing received a net profit of $ 2.2 billion in the same period last year. The company's quarterly revenue fell by 35%. Such negative dynamics is associated with large write-offs due to the suspension of flights of 737 MAX aircraft (after two deadly catastrophes).

analytics5d38964b6574e.jpg

In turn, the net profit of heavy equipment maker Caterpillar, fell by almost five percent due to lower demand for construction equipment in Asia (the effects of the trade war), as well as weak sales in the energy and transportation division.

In addition, the market reacted negatively to the news that the US authorities decided to conduct an antitrust investigation against such giants as Google, Amazon, Apple and Facebook. If, as a result of the investigation, restrictions are imposed on these companies, then Internet heavyweights will have less opportunities to earn money.

Against the background of an almost empty economic calendar, these factors played a role for dollar pairs - to one degree or another. However, the reduction of the greenback is limited, especially on the eve of the release of data on the growth of the American economy and the July Fed meeting. In other words, we are dealing with a short-term corrective movement, which is unlikely to receive its continuation. And given the fact that the growth of GBP/USD is due only to the weakness of the US currency, it can be assumed that the pair will return to the base of the 24th figure in a short time.

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