Elliott wave analysis of EUR/JPY for August 1 - 2019

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The correction from 121.38 turned more complex and dipped into the 120.21-120.31 area - a little deeper than we first expected. This should complete wave ii and set the stage for a new strong rally towards at least 122.90 and likely even closer to 123.36 in wave iii.

Only an unexpected break below 120.02 will revive the larger wave II correction from 127.50, but the potential downside should remain very limited. We do not favor this scenario in any way, but it can not be excluded before resistance at 121.38 is broken.

R3: 121.38

R2: 121.18

R1: 120.87

Pivot: 120.54

S1: 120.31

S2: 120.21

S3: 120.02

Trading recommendation:

We are long EUR from 120.85 with our stop placed at 120.00

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Trading plan for EUR/USD for August 01, 2019

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Technical outlook:

The EUR/USD pair dropped lower again to the low of several weeks at 1.1034 today. This reaction was expected, but the pullback rally was too shallow, while we anticipated prices to reach 1.1200 before slipping again. Please note that a complete wave cycle seems to be coming to the bottom formation soon or it might have already bottomed out at 1.1034 today. Rather than speculating on the wrong side, we would like price action to confirm the direction. Thus, a break above 1.1160 is required as a minimum to confirm it. Looking at the fibonacci extensions depicted here, a potential bottom should be close so that we can expect EURUSD to pullback at least towards the 1.1185/90 levels, if not higher. Immediate price resistance is seen at 1.1182 for now, while interim support could be seen at 1.1034 respectively. Let us stay alert and prepare to go long towards a potential counter trend rally.

Trading plan:

Remain flat for now. Preparing to go long.

Good luck!

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The Fed sees no reason for the cycle of rate cuts, EUR and GBP will continue to fall

The results of the FOMC meeting caused noticeable disappointment in the markets, but did not go beyond the most likely scenario. The result of the two-day meeting was the refusal of the Fed to recognize the slowdown in the US economy, and the rise in the dollar and the fall in stock markets.

Therefore, the Fed lowered the rate by 0.25% and completed the QT program ahead of schedule, while the interest rate on excess reserves of commercial banks was reduced to 2.10%. The balance was also shifted to greater rigidity, which had a negative impact on the markets. J. Powell explained at the press conference that the current decline is a one-time action, and we are not talking about the beginning of a new cycle.

But is this really the case?

It is known that throughout the entire period of dealing with the consequences of the 2008 crisis, the rate on excess reserves of commercial banks exceeded the effective market rate. This specially created mechanism was designed to encourage commercial banks to keep excess reserves on the correspondent. Fed accounts, which, in turn, increased the balance, buying treasures and mortgage papers.

Starting from December 2015, the Fed simultaneously reduced the spread between the rate of excess reserves and the effective rate, which reduced the attractiveness of this instrument for commercial banks, until finally in December 2018. Rates are not equal. This process led to the fact that commercial banks began withdrawing their funds from the Fed's accounts, which, in turn, reduced investments in securities, that is, conducted a QT program.

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However, early in May, the excess reserves rate was reduced by 0.05%, and yesterday - by 0.25%, and if it continues to fall below the effective rate, the commercial banks will continue to withdraw their reserves from the Fed. How does this go together with completing a QE program? The Fed will either need to continue lowering the rate, or seek additional funds to repurchase the US government debt and simultaneously pay off liabilities to the commercial banks, which is unlikely to be done without the QE4 program.

However, the announcement of a new wave of "quantitative easing" is completely excluded. In this case, we will have to admit that the US economy is steadily slipping into recession, which is impossible primarily for political reasons. This moment was unequivocally formulated by Powell, explaining that "real economic weakness is not what we see."

At the same time, the US budget deficit continues to grow rapidly amid a decline in revenues after tax reform and rising costs, primarily not social security. In the 2nd quarter, the volume of public debt increased by 159 billion, while in the third, it is planned to grow by 433 billion since the Congress is preparing to approve a bill to abolish the threshold of public debt for two years. At the same time, foreign investors are increasingly reluctant to buy treasures. Thus, the direct buyout of state debt to the Fed is the path that the situation in the United States follows, repeating the path of the Bank of Japan.

What does this mean for the markets? Only that the initial emotional reaction will be short. Stock indexes will resume growth, while the dollar, by contrast, growth will stop. A further reduction in the rate is inevitable, as well as the inevitable resumption of government debt repurchase by the Fed.

EURUSD

The euro remains under strong pressure, against the background of the strengthening dollar, there are no internal drivers for the euro growth. Core inflation in July fell to 0.9%, which increases the chances of launching a massive ECB stimulus program in September. Today, a short pullback to 1.1105 / 10 is possible, but more likely to continue to decline. The euro also does not have supports up to 1.0850 / 70.

GBPUSD

The growing weakness of the pound is due to the increased risks of "Brexit without a deal", which, in turn, is a consequence of B. Johnson's first steps as prime minister.

The political alignment in the British Parliament is difficult. There is little chance of leaving the EU without any deal, since Johnson will not have enough support, and the case may result in the resignation of the Cabinet. Accordingly, the extension of the temporary agreement is a slightly more likely scenario, which, in turn, will extend the period of uncertainty.

Today the Bank of England will hold a regular meeting. According to the results of which, it will publish updated macroeconomic forecasts. There is no reason to expect a positive meeting, since the pound will remain under pressure. Although there may be a temporary pullback to 1.2240 / 50, growth attempts will be used for sales, and target at 1.1990.

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Technical analysis of ETH/USD for 01/08/2019:

Horizontal trading conditions in low volatility continue in this pair

Crypto Industry News:

Nasscom, the leading Indian trade organization, said it was against a widespread ban on cryptocurrencies that had recently proposed a government panel in the country.

"Nasscom believes that the recent proposal of the inter-ministerial governmental committee to ban all cryptocurrencies, except those supported by the government, is not the most constructive measure. [...] Instead, the government should work on creating a risk-based framework for regulating and monitoring cryptocurrencies. and tokens, "we read in a local magazine.

According to the publication, Nasscom claims that cryptographic projects can always be tested in regulatory sandboxes before commissioning. The company also believes that banning cryptography will only serve to push off legitimate companies that already adhere to compliance rules.

Nasscom believes, however, that work should be done to create a regulatory framework to reduce illegal activities in the cryptographic space:

"We should strive to create a regulatory framework that will constantly monitor and prevent illegal activities. The regulation would allow law enforcement agencies to better prepare themselves to understand these new technologies, enable them to collect data on criminal proceedings and take enforcement actions".

Technical Market Overview:

Not much has changed at this market since the beginning of the week as the ETH/USD pair still keeps trading inside of a narrow price range between two levels of $189.91 - $223.38. The level of the local support at $199.68 has been tested, but the price did not break below but bounced back to the range. The bulls did not make any decision regarding the possible move higher, so the bullish momentum is decreasing as the price goes nowhere fast. In order to continue the move upwards, the bulls must break through the Fibonacci retracement levels located at $223.38, $233.77 and $244.16. Oterwise, the market will stay inside of the trading range or will be pushed lower by bears to test the technical support at the level of $189.91 again.

Weekly Pivot Points:

WR3 - $247.21

WR2 - $236.28

WR1 - $220.47

Weekly Pivot - $209.37

WS1 - $191.97

WS2 - $182.25

WS3 - $161.51

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 sooner or later.

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Technical analysis of BTC/USD for 01/08/2019:

Crypto Industry News:

The Monetary Authority of Singapore (MAS) has flagged an online scam offering Bitcoin.

On July 31, the Singapore Central Bank and the Financial Supervisory Authority issued an official warning stating that the agency had become aware of a website that invited Internet users to invest in Bitcoin through an article containing falsified information.

According to MAS, the scam website refers to fabricated statements falsely attributed to Goh Chok Tong, a local politician who in 1990-2004 was the second prime minister of Singapore. The statements were "either false or removed from the context and used in a misleading manner" - noted the regulator.

As reported by MAS, the name of the former prime minister was used to persuade people to pay at least $ 250 to a trading platform called Bitcoin Loophole, which claims to perform automated transactions on behalf of users. The platform also demanded credit card or bank account details, the regulator added, recommending the public to exercise special care and avoid sending any information to website owners.

In January 2019, the MAS issued a warning against many fake websites claiming that the Singapore Government officially accepts cryptocurrencies. As in this new case, the fraudulent program was distributed via various websites and offered opportunities to invest in the crypto using false information.

Technical Market Overview:

The BTC/USD pair has broken the short-term trendline resistance and almost tested the technical resistance located at the level of $10,166. After the Shooting-Star candlestick pattern was made at the level of $10,109, the market reversed slightly and is currently trading around the level of $9,850. In order to continue the breakout, the bulls have to move higher towards the level of $10,166 and then towards the level of $10,636.

Weekly Pivot Points:

WR3 - $11,468

WR2 - $11,040

WR1 - $10,062

Weekly Pivot - $9,661

WS1 - $8,704

WS2 - $8,287

WS3 - $7,289

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 EUR/USD for 01/08/2019:

Technical Market Overview:

The EUR/USD did not make it to the technical resistance at the level of 1.1181 and reversed quickly towards the technical support at 1.1101 that has been broken. The local low was made at the level of 1.1034 after the breakout was still unfolding. The next target for bears is located at the level of 1.1023. The trend is still down and there are no signs of a trend reversal.

Weekly Pivot Points:

WR3 - 1.1307

WR2- 1.1265

WR1 - 1.1188

Weekly Pivot - 1.1140

WS1 - 1.1055

WS2 - 1.1016

WS3 - 1.0927

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, from where the traders can expect a larger rebound.

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EUR / USD: The Fed opened the way to 1,0950, Now a word from Trump?

The dollar index reached a two-year high yesterday, responding to the outcome of the July Fed meeting. Despite the fact that the Federal Reserve tried to maintain a balance between dovish intentions and hawkish rhetoric, the market made very definite conclusions and these were in favor of the American currency. Together with the euro, the dollar confidently entered the 10th figure, outlining for itself new price horizons. If the momentum of the downward movement continues, the pair bears will soon be able to test the following: the strongest support levels - 1.0950 (lower Kumo cloud boundary on the monthly chart) and 1.0850 (lower Bollinger Bands line on the same timeframe).

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By and large, the dollar yesterday received a carte blanche for further strengthening. Almost all the factors (with the exception of one, which we will discuss a little lower), restraining the growth of the greenback, are currently leveled. In late spring and early summer, the American currency was under pressure from negative macroeconomic reports. Nonfarm suddenly sank to multi-month lows, inflation slowed down its growth, the volume of business investment declined, and indicators of industrial production were in the "red zone", not significantly falling short of forecast values. All these releases were published in the period of the next escalation of the trade war between the US and China, aggravating the fundamental picture. It was during this time period that the Fed came to the conclusion that it was necessary to ease monetary policy. Regulator members began to prepare the markets for such a step while Jerome Powell, speaking in Congress in early July, actually announced a rate cut at the next meeting. In other words, yesterday's Fed decision was widely anticipated and predictable event that was played by the market more than a month ago. Traders feared the implementation of a milder scenario - a reduction in the rate by 50 points or several rounds of decline by the end of the current year. And when the Fed actually eliminated such options, the dollar went up in the entire market. Traders feared the implementation of a milder scenario - a reduction in the rate by 50 points or several rounds of decline by the end of the current year.

By and large, the dollar yesterday received a carte blanche for further strengthening. Almost all the factors (with the exception of one, which we will discuss a little lower) that restrains the growth of the greenback are currently leveled. In late spring and early summer, the American currency was under pressure from negative macroeconomic reports. Nonfarm suddenly sank to multi-month lows and inflation slowed down its growth. The volume of business investment declined and indicators of industrial production were in the "red zone", but not significantly falling short of forecast values. All these releases were published in the period of the next escalation of the trade war between the US and China, aggravating the fundamental picture. It was during this time period that the Fed came to the conclusion that it was necessary to ease monetary policy. Regulator members began to prepare the markets for such a step while Jerome Powell, speaking in Congress in early July, actually announced a rate cut at the next meeting. In other words, yesterday's Fed decision was widely anticipated and a predictable event that was played by the market more than a month ago. Traders feared the implementation of a milder scenario: a reduction in the rate by 50 points or several rounds of decline by the end of the current year.

It is worth noting that the American regulator tried to keep the balance in his rhetoric, so he hinted at a possible rate cut in September or at one of the meetings until the end of the year. However, this decision of the Fed will depend on the incoming data. First of all, we are talking about the state of the labor market and inflation. Ironically, the "black line" for the dollar was complete in the period when the Fed was preparing to reduce the interest rate (for the first time since 2008). Recent data on Nonfarm have shown significant growth. According to preliminary forecasts, tomorrow key indicators of the American labor market will show a similar result. Inflation remains muted but even a weak rise in inflation indicators allows the Fed to keep on waiting. Here, it is worth noting that indicators on the volume of retail sales, consumer confidence indicator, the growth rate of average hourly wages and the volume of US GDP, have demonstrated a positive trend recently. These suggest that the probability of a September rate cut is almost zero despite the ominous warnings of the regulator.

This is due to the fact of markets' reaction to the results of the July meeting of Fed members. The demand for the dollar is growing, as the Fed is very likely to be limited to a "warning shot", without any continuation in the fall. Unlike the European Central Bank, which in September will only begin to ease monetary policy. The latest data on the growth of European inflation was controversial. The general consumer price index came out slightly better than expected (1.1%), while core inflation again disappointed. The core index rose only 0.9% (with the growth forecast to 1%). Such a result increased the likelihood of aggressive easing of monetary policy parameters (rate reduction + QE resumption). In other words, the likely correlation of the actions of the Fed and the ECB is now putting additional pressure on the EUR/USD pair.

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Thus, the dollar has only one significant opponent and that is the president of the United States. After the announcement of the results of the July meeting, Donald Trump announced that "The Fed has again disappointed everyone." In his opinion, the market would like to hear from Powell about the beginning of a long and decisive cycle of rate cuts that the States would go in this context on a par with China and the European Union. Earlier, Trump has already accused China and Europe of using currency manipulations, while Washington "only obediently watches this process." After that, experts began talking about the fact that the president could initiate the use of currency intervention in the coming months. Analysts estimate the likelihood of this scenario in different ways. But almost all of the economists surveyed by Bloomberg do not exclude such a scenario.

According to American journalists, Trump can still implement this scenario, allegedly in late July. He instructed his advisers to prepare him with options for possible actions. I believe that in the wake of recent events, the likelihood of conducting currency intervention has increased. Moreover, it will increase even more if the EUR/USD pair declines to the area of the ninth figure.

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Technical analysis of GBP/USD for 01/08/2019:

Technical Market Overview:

The GBP/USD pair has hit the lower channel line at the level of 1.2230 and reversed immediately towards the technical support located at the level of 1.2100. The momentum indicator remains weak nad negative, which indicates a further possible spike towards the level of 1.1983. The trend is still down and there are no signs of a trend reversal yet.

Weekly Pivot Points:

WR3 - 1.2594

WR2- 1.2550

WR1 - 1.2446

Weekly Pivot - 1.2406

WS1 - 1.2296

WS2 - 1.2257

WS3 - 1.2154

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. All the corrections are just the local correction inside of a downtrend.

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USD/CHF testing resistance, potential drop!

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USDCHF is testing our first resistance where we are expecting a drop below this level.

Entry: 0.9966

Why it's good : Horizontal overlap resistance, 61.8% Fibonacci extension, 50% Fibonacci retracement

Stop Loss : 1.0013

Why it's good : horizontal overlap resistance

Take Profit : 0.9885

Why it's good: Horizontal overlap support, 50% Fibonacci retracement, 61.8% Fibonacci extensionanalytics5d4274b074977.png

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Forecast for USD / JPY on August 1, 2019

USD / JPY pair

Yesterday's Fed decision to lower the rate by 0.25% saved the dollar from falling to 108.28 instead of aggressive expectations of some market players by 0.50%. At the same time, it assures Jerome Powell about further actions depending only on economic data as allowed in our past review. The USD/JPY pair continued to grow this morning, even more actively with the breaking of the "bearish" technical prerequisites. Note that the price has reached and least on May 13 important technical level level of 109.03, which is approximately maximum on July 9.

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The immediate goal is the resistance of the nested line of the red price channel at 109.64. Fixing above the level opens the second target of 110.66, which is the resistance of the green price channel. On the four-hour chart, the reversal occurred from the red indicator balance line and Marlin's signal line went into the growth zone. We look forward to continued growth of the pair.

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Technical analysis: Important Intraday Levels For EUR/USD, August 01, 2019

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When the European market opens, some economic data will be released such as French 10-y Bond Auction, Final Manufacturing PMI, German Final Manufacturing PMI, French Final Manufacturing PMI, Italian Manufacturing PMI, and Spanish Manufacturing PMI. The US will also publish the economic data such as Natural Gas Storage, Wards Total Vehicle Sales, ISM Manufacturing Prices, Construction Spending m/m, ISM Manufacturing PMI, Final Manufacturing PMI, Unemployment Claims, and Challenger Job Cuts y/y, so amid the reports, the EUR/USD pair will move with low to medium volatility during this day. TODAY'S TECHNICAL LEVELS: Breakout BUY Level: 1.1125. Strong Resistance: 1.1119. Original Resistance: 1.1108. Inner Sell Area: 1.1097. Target Inner Area: 1.1071. Inner Buy Area: 1.1045. Original Support: 1.1034. Strong Support: 1.1023. Breakout SELL Level: 1.1017. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Important Intraday Levels for USD/JPY, August 01, 2019

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In Asia, Japan will release the 10-y Bond Auction and Final Manufacturing PMI. The US will publish some economic data such as Natural Gas Storage, Wards Total Vehicle Sales, ISM Manufacturing Prices, Construction Spending m/m, ISM Manufacturing PMI, Final Manufacturing PMI, Unemployment Claims, and Challenger Job Cuts y/y. So there is a probability the USD/JPY pair will move with low to medium volatility during this day. TODAY'S TECHNICAL LEVELS: Resistance.3 : 109.81. Resistance. 2: 109.60. Resistance. 1: 109.39. Support. 1: 109.12. Support. 2: 108.91. Support. 3: 108.69. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

USD/CAD approaching resistance, potential reversal!

Price approaching its resistance at 1.3238 where it could potentially drop to its support.

Entry: 1.3238

Why it's good : 61.8% Fibonacci extension, 50% Fibonacci retracement, Horizontal pullback resistance

Stop Loss : 1.3287

Why it's good : 100% Fibonacci extension

Take Profit : 1.3154

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

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USD/JPY reaching support , potential bounce!

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USDJPY is approaching 1st support at 109.449, potential bounce could occur!

Entry :109.449

Why it's good :23.6% Fibonacci retracement

Horizontal pullback support

Take Profit : 109.593

Why it's good : 100% Fibonacci extension *2

50% Fibonacci retracement

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USD/JPY reaching support , potential bounce!

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USDJPY is approaching 1st support at 109.449, potential bounce could occur!

Entry :109.449

Why it's good :23.6% Fibonacci retracement

Horizontal pullback support

Take Profit : 109.593

Why it's good : 100% Fibonacci extension *2

50% Fibonacci retracement

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Forecast for EUR/USD on August 1, 2019

EUR/USD

In accordance with its intentions and market expectations, the Fed lowered its rate by a quarter point yesterday. As we expected, the dollar continued to strengthen, and in all markets, including commodity. This is a sign of further strengthening of the dollar. The decline in the euro began immediately with the opening of the US session. The good mood of traders was supported by data on new jobs in the private sector from ADP for July, which showed an increase to 156 thousand from 112 thousand in June, revised to increase from 102 thousand. In total, the euro lost 80 points.

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On the daily chart, the price turned around 110.0% from the Fibonacci level, noted a target level of 123.6% (1.1073) and today went below it in the Asian session. Now the closest target is the Fibonacci level of 138.2% at a price of 1.0985, and 1.1073 becomes resistance for a possible correction.

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On the four-hour chart, the price turned down from the MACD line (indicator blue line), reinforced by the resistance of the balance line (red indicator). The Marlin oscillator signal line has penetrated deep into the "bears" zone, now it has shown a reversal upwards. Correction after a strong movement is possible, but it does not seem to be deep, since ISM Manufacturing PMI is coming out in the evening with an optimistic forecast of 52.0 against 51.7 previously.

So, we are waiting for the euro to fall to the level of 1.0985.

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Forecast for GBP/USD on August 1, 2019

GBP/USD

Yesterday, the British pound closed the day with an increase of 8 points due to an increase of 100 points in the morning. The price did not reach the resistance of the price channel of 1.2270 and moved down from the opening of the US session. The FOMC Fed rate was lowered from 2.50% to 2.25%, but Jerome Powell said that the next steps will entirely depend on the incoming data, and this has sowed investors' doubts about the September decline.

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Today, the pound is losing 30 points in the Asian session. The immediate goal is the range of 1.2032/55 (the lower limit of the range of the low on October 7, 2016). Leaving prices below the range opens up targets: 1.1987, 1.1763.

On the four-hour chart, the Marlin oscillator signal line was preserved in the zone of negative numbers, but there was a weak convergence with the price. Today's Bank of England meeting can knock the pound from falling off the track, to increase the correction - the divergence will be effective, the price can overcome yesterday's high with reaching 1.2270. But we are referring to any verbal attacks by the regulator aimed at supporting the pound. But such optimism may not follow. In any case, today or later, we are waiting for the British currency to drop to the designated targets: 1.2032/55, 1.1987.

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Fractal analysis of major currency pairs on August 1

Forecast for August 1:

Analytical review of H1-scale currency pairs:

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For the euro / dollar pair, the key levels on the H1 scale are: 1.1100, 1.1074, 1.1056, 1.1025, 1.0989 and 1.0962. Here, the subsequent targets for the downward movement are determined from the downward local structure on July 31. The continuation of the movement to the bottom is expected after the breakdown of the level of 1.1025. In this case, the target is 1.0989. Consolidation is near this level. For the potential value for the bottom, we consider the level of 1.0962. After reaching which, we expect a rollback to the correction.

Short-term upward movement is possibly in the range of 1.1056 - 1.1074. The breakdown of the latter value will lead to a prolonged correction. Here, the goal is 1.1100. This level is a key support for the downward structure.

The main trend is the local downward structure of July 31.

Trading recommendations:

Buy 1.1056 Take profit: 1.1073

Buy 1.1076 Take profit: 1.1100

Sell: 1.1025 Take profit: 1.0990

Sell: 1.0987 Take profit: 1.0962

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For the pound / dollar pair, the key levels on the H1 scale are: 1.2254, 1.2192, 1.2158, 1.2099, 1.2069 and 1.2021. Here, we are following a downward cycle of July 19th. Short-term movement to the bottom is expected in the range of 1.2099 - 1.2069. The breakdown of the last value will allow to expect movement to the potential target - 1.2021. From this level, we expect a departure to the correction.

Short-term upward movement is possibly in the range of 1.2158 - 1.2192. The breakdown of the latter value will lead to the formation of the initial conditions for the top. Here, the potential target is 1.2254.

The main trend is the downward cycle of July 19.

Trading recommendations:

Buy: 1.2158 Take profit: 1.2191

Buy: 1.2194 Take profit: 1.2254

Sell: 1.2099 Take profit: 1.2070

Sell: 1.2067 Take profit: 1.2025

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For the dollar / franc pair, the key levels on the H1 scale are: 1.0016, 0.9999, 0.9974, 0.9952, 0.9937, 0.9915 and 0.9881. Here, the subsequent targets for the upward movement were determined from the local structure on July 31. The continuation of the movement to the top is expected after the breakdown of the level of 0.9974. In this case, the target is 0.9999. For the potential value for the top, we consider the level of 1.0016. After reaching which, we expect consolidation.

Short-term downward movement is possibly in the range of 0.9952 - 0.9937. The breakdown of the latter value will lead to in-depth correction. Here, the target is 0.9915. This level is a key support for the local ascending structure of July 31.

The main trend is the local ascending structure of July 31.

Trading recommendations:

Buy : 0.9975 Take profit: 0.9999

Buy : 1.0000 Take profit: 1.0016

Sell: 0.9952 Take profit: 0.9938

Sell: 0.9935 Take profit: 0.9917

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For the dollar / yen pair, the key levels on the scale are : 109.86, 109.48, 109.29, 108.94, 108.73 and 108.40. Here, we are following the development of the ascending structure of July 18. Short-term upward movement is expected in the range of 109.29 - 109.48. The breakdown of the last value should be accompanied by a pronounced upward movement. Here, the goal is 109.86. Upon reaching this level, we expect a rollback to the bottom.

Short-term downward movement is possibly in the range of 108.94 - 108.73. The breakdown of the latter value will lead to a prolonged correction. Here, the goal is 108.40. This level is a key support for the upward structure.

The main trend: the ascending structure of July 18.

Trading recommendations:

Buy: 109.30 Take profit: 109.46

Buy : 109.50 Take profit: 109.84

Sell: 108.94 Take profit: 108.75

Sell: 108.70 Take profit: 108.45

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For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3324, 1.3297, 1.3256, 1.3224, 1.3175, 1.3156, 1.3129 and 1.3102. Here, the next targets for the top are determined from the local ascending structure on July 31. The continuation of the movement to the top is expected after the breakdown of the level of 1.3224. Here, the goal is 1.3256. Consolidation is near this level. The breakdown of the level 1.3257 should be accompanied by a pronounced upward movement. Here, the target is 1.3297. We consider the level of 1.3324 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 possibly in the range of 1.3175 - 1.3156. The breakdown of the latter value will lead to a prolonged correction. Here, the goal is 1.3129. This level is a key support for the top.

The main trend is the local ascending structure of July 31.

Trading recommendations:

Buy: 1.3225 Take profit: 1.3255

Buy : 1.3257 Take profit: 1.3295

Sell: 1.3175 Take profit: 1.3156

Sell: 1.3153 Take profit: 1.3130

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For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6934, 0.6921, 0.6907, 0.6888 and 0.6852. Here, we expect a return to the correction after the breakdown of the level of 0.6865. In this case, the first target is 0.6888. The breakdown of the level of 0.6888 will lead to the subsequent development of the ascending structure. In this case, the target is 0.6907. The breakdown of which, in turn, will allow us to count on the movement to the level of 0.6921. For the potential value for the top, we consider the level of 0.6934. Upon reaching which, we expect pronounced initial conditions for the upward cycle.

For the downward movement, we do not yet consider subsequent targets.

The main trend is the downward structure of July 18, we expect a withdrawal to the correction.

Trading recommendations:

Buy: 0.6865 Take profit: 0.6885

Buy: 0.6888 Take profit: 0.6907

Sell : Take profit :

Sell: Take profit:

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For the euro / yen pair, the key levels on the H1 scale are: 122.07, 121.62, 121.47, 121.26, 120.92, 120.49, 120.30 and 120.05. Here, the cancellation of the ascending structure of July 25 is possible after the breakdown of the level of 120.30. In this case, the first target is 120.05. We expect a short-term downward movement in the range of 120.49 - 120.30.

The continuation of the upward trend on the H1 scale is possibly after a breakdown of the level of 120.92. In this case, the first target is 121.26. The breakdown of which, in turn, will allow us to count on movement towards the noise range of 121.47 - 121.62.

The main trend is the formation of the initial conditions for the upward cycle of July 25, the stage of deep correction.

Trading recommendations:

Buy: 120.92 Take profit: 121.24

Buy: 121.28 Take profit: 121.47

Sell: 120.49 Take profit: 120.30

Sell: 120.28 Take profit: 120.07

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For the pound / yen pair, the key levels on the H1 scale are : 134.02, 133.48, 133.04, 132.08, 131.86 and 131.44. Here, the price is in the adjustment area of the downward structure on July 25th. The continuation to the bottom is possibly after the price passes by the noise range 132.08 - 131.86. Here, the potential target is 131.44. From this level, we expect another rollback to the top.

A more thorough development of the adjustment structure is expected after the breakdown of the level of 133.04. Here, the first target is 133.48. Consolidation is near this level. The breakdown of the level of 133.48 should be accompanied by a pronounced upward movement to the level of 134.02.

The main trend is the downward structure of July 25, the stage of correction.

Trading recommendations:

Buy: 133.04 Take profit: 133.45

Buy: 133.50 Take profit: 134.00

Sell: 131.86 Take profit: 131.50

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

#USDX vs EUR / USD vs GBP / USD vs USD / JPY. Comprehensive analysis of movement options from August 01, 2019. Analysis of

Let me bring to your attention the comprehensive analysis of the options of movement #USDX, EUR / USD, GBP / USD and USD / JPY from August 01, 2019. The proportion of these instruments in the calculation of the dollar index is 83.1%.

Minor (Daily timeframe)

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US dollar Index

On August 1, 2019 the development of the dollar index movements #USDX will be determined by the processing and the direction of the breakdown of the boundaries of equilibrium zone (98.20 - 97.90 - 97.60) Minuette operational scale fork. Look at the animated graphics for the markup movement within this zone.

The breakdown of the support level of 97.60 at the lower boundary of the ISL38.2 equilibrium zone of the Minuette operational scale fork will determine the development of the dollar index movement in the 1/2 Median Line channel (97.60 - 97.30 - 97.00) of the Minor operational scale fork.

On the other hand, during the breakdown of the upper boundary of ISL61.8 (resistance level of 98.20) of the Minuette operating scale fork, the upward movement of #USDX can be continued to the targets - maximum 98.37 - warning line UWL38.2 Minor (98.50) - control line UTL Minor (98.70) with the prospect of reaching the final FSL Minuette lines (99.40).

The markup of the #USDX movement options from August 01, 2019 is shown in the animated graphic.

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Euro vs US dollar

The development and direction of the breakdown of the equilibrium zone (1.1107 - 1.1150 - 1.1180) of the Minuette operational scale fork on August 2019 will determine the further development of the movement of the single European currency EUR / USD. See the details of the movement within this zone in the animated graphic.

The breakdown of the upper boundary of ISL38.2 (resistance level of 1.1180) of the equilibrium zone of the Minuette operational scale fork will determine the further development of the movement of the single European currency in the 1/2 Median Line channel Minuette (1.1165 - 1.1210 - 1.1245), and if there will be a breakdown of the upper boundary (1.1245) of this channel, then the upward movement can be continued to the initial SSL (1.1320) and control UTL (1.1370) lines of the Minuette operating scale fork.

Meanwhile, if EUR / USD breaks through the lower boundary of the ISL61.8 (support level of 1.1107) of the Minuette equilibrium zone of the fork, this will make it possible to continue the development of the downward movement of EUR / USD to the final Schiff Line (1.1040) and to the final FSL line (1.0950) Minuette operational scale fork.

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

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Great Britain pound vs US dollar

From August 1, 2019, Her Majesty's GBP / USD currency will begin to develop movement depending on the direction of the range breakdown :

  • resistance level of 1.2185 (upper boundary of the ISL38.2 equilibrium zone of the Minor operational scale fork);
  • support level of 1.2120 (starting line SSL for the Minuette operating scale fork)

The breakdown of the resistance level of 1.2185 at the upper boundary of the ISL38.2 equilibrium zone of the Minor operational scale fork will direct the development of the GBP / USD movement to the boundaries of the 1/2 Median Line channels of the Minor operational scale forks (1.2245 - 1.2375 - 1.2505) and Minuette (1.2505 - 1.2635 - 1.2755).

In the case of the breakdown of the initial SSL line (support level of 1.2120) of the Minuette operational scale fork, it will be possible to continue the development of the downward movement of Her Majesty's Currency towards the targets - the Median Line Minor (1.2025) - the lower boundary of the ISL61.8 (1.1865) equilibrium zone of the Minor operational scale fork - the final Schiff Line Minor (1.1785).

The details of the GBP / USD movement can be seen in the animated graphic.

analytics5d41cbb73ac75.jpg

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US dollar vs Japanese yen

Starting from August 1, 2019, the movement of the "rising sun country" currency movement will be determined by the testing and direction of the breakdown of the boundaries of 1/2 Median Line channel (107.55 - 108.30 - 109.00) of the Minor operational scale fork. The movement options inside this channel are shown in animated graphics.

A combined breakdown of the lower boundary of the 1/2 Median Line channel (support level of 107.55) of the Minor operational scale and the initial SSL line (107.40) of the Minuette operational scale will make it possible to continue the development of the downward movement USD / JPY to targets - local minimum 106.79 - control line LTL Minuette (106.60) - the upper boundary of the ISL38.2 (105.75) equilibrium zone of the Minuette operational scale fork.

If the breakdown of the upper boundary of the 1/2 Median Line channel (resistance level of 109.00) of the Minor operational scale is taken, then the movement of the rising sun currency will be directed to the 1/2 Median Line Minuette (109.35) and to the boundaries of the equilibrium zone (109.95 - 110.75 - 111.60) Minuette operational scale fork.

The details of the USD / JPY movement are presented at the animated graphic.

analytics5d41cbdf3a719.jpg

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

The formula for calculating the dollar index is:

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

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

Euro - 57.6% ;

Yen - 13.6% ;

Pound sterling - 11.9% ;

Canadian dollar - 9.1%;

Swedish krona - 4.2%;

Swiss franc - 3.6%.

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

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

GBP/USD: London is trying to play the hard Brexit card. Would Brussels believe it?

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The British currency entered free fall mode amid the fact that the new Prime Minister of the United Kingdom, Boris Johnson, made it very clear that the country would withdraw from the European Union at the end of October, even without a deal.

It should be noted that the passion around Brexit exciting the market is not the first time. Immediately after the referendum on Great Britain's membership in the EU back in 2016, the pound sterling collapsed by more than 10% against the US dollar, and the fall was repeated in the autumn of the same year when Theresa May (now the former prime minister) signaled that she does not intend to delay the process of the country's withdrawal from the bloc. Then, when investors believed that the government and the Parliament of the country were aiming for an orderly Brexit, the British currency rate stabilized. In April 2018, the pound even briefly touched a high of $1,434, - only 3.6% below the level marked before the referendum.

Apparently, investors are once again sounding the alarm.

"This time, the outcome of the British currency was at its highest since December 11 last year, when concerns about Brexit were at a peak without a deal," analysts at Royal Bank of Canada said.

"The ghost of Brexit is once again putting pressure on the pound. The market is becoming increasingly worried about B. Johnson's "hard" position regarding negotiations with Brussels, especially after the new prime minister's readiness to withdraw from the EU by the end of October with or without a deal, "said Antje Prake, currency strategist at Commerzbank.

"We still do not consider the UK withdrawal without a deal from the alliance as a baseline scenario, but the news background - political and economic - is likely to get worse, therefore the sterling still has room to fall," JPMorgan Asset Management believes.

UniCredit economists expect that B. Johnson may call early general elections in early September to get a mandate to secede Great Britain from the EU without an agreement.

Over the past month, the British currency has lost more than 4% in weight. The GBP/USD pair still risks moving down. According to analysts, the 1.2000 level is now psychologically important.

The situation is compounded by Boris Johnson's failure to hold contact with any leaders of the EU, while they will not resume talks with London on the terms of the divorce. The European side, in turn, insists that the only possible agreement is the one that was developed with the participation of former Prime Minister T. May.

On the eve of the publication The Sun, citing sources in the European Commission, reported that the EU considered the hard rhetoric of the new British Prime Minister Boris Johnson, as well as his assurances of readiness to make Brexit before October 31 at any cost, a bluff.

"It is difficult to estimate now how far the parties are ready to go in this confrontation, and while it lasts, the pound plays the role of an exhaust valve. However, it is obvious that the euro will also experience negative effects, and the EUR/USD pair may not hold the level of 1,1100. The matter has not yet reached the possible hard Brexit, and the German export machine is almost on its knees. The United Kingdom is almost equal to China in terms of importance for German exports, its share being approximately 7%. For the entire European Union, exports to the United Kingdom are an impressive £345 billion. Is the EU ready to cause a recession in itself, punishing one of its largest buyers?" said analysts at Saxo Bank.

"News of a concession of the position of any of the parties would be favorable for the pound. Since B. Johnson placed everything on the implementation of Brexit not by hook or by crook, rather, it will be a message that the European side agrees to the resumption of negotiations. Then a stabilization or even growth is possible for the pound in the near future," they added.

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

Softness, stiffness, obscurity. What will the Fed choose?

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Market participants pledged a quarter point reduction in quotes. Few doubt the development of this scenario. Therefore, traders are mostly interested in Jerome Powell's speech at the moment, in which they expect to catch clues on how much the regulator is ready to continue the chosen line of monetary policy. Today, it will not be easy for the US Federal Reserve to manage market expectations.

In recent years, there has been a big gap between the expectations of market participants and the Fed's forecasts. The central bank is trying to tune traders to a more stringent policy, whereas softness is preferable for the market. Now these two points of view have gone towards rapprochement, which has been the most significant market driver since October 2018.

In the past few weeks, the dollar has been influenced by a reassessment of the likelihood of aggressively easing monetary policy. However, the likelihood of such a scenario development has noticeably decreased - from 60% to 20%.

Which way will the US regulator take? The most realistic are the two options, but the third one is possible.

Softness

If the regulators hint that they, like the debt market, are cautious about the future, then shares will continue to grow. Low rates have a positive effect on business activity, fueling demand. In this scenario, the yield of government bonds will fall, however, like the dollar. Such a shift in the central bank's rhetoric is able to launch a trend for months of weakening the US currency. The dollar index can lose 9% and go to 89.

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In this case, the 1.23 mark will appear on the horizon before the EUR/USD pair. Donald Trump should be pleased. This is a dubious pleasure for the Fed because its independence will be called into question.

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Obscurity

Most likely, Jerome Powell will open all the doors and catch up with the fog, and then market participants will think on their own. Perhaps the Fed chairman will say that the future path is not predetermined, the central bank's decision depends very much on the state of the world and the US economy. This result will leave the stock markets near highs, the dollar index stalled around the mark of 98. Traders at this time will try to extract the necessary information from the data on the labor market. The outcome of trade negotiations will also play an important role. In this case, the euro will have to fight for the 1.10 mark. The reaction of the foreign exchange market could well be harsh, but not for long, emotions will quickly subside and make room for the mind. The trend change for the dollar is not expected.

Stiffness

It is quite possible that today's symbolic easing of politics will become a one-off measure and there will be no hint of further relief. Markets are hardly ready for such a surprise. The dollar will jerk up. The upward trend in USDX can accelerate and by the end of the year will send it to 103, and EUR/USD - to 1.04 or 1.05. Even more unexpected and extreme will be signals that the regulator is considering a rate hike in the near future if trade negotiations with China succeed.

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

Get to the bottom: Bitcoin could crash to $4,000 before a new takeoff

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According to the calculations of the leading cryptanalyst Alessio Rastani, at the moment Bitcoin can fall to $4000 before reaching a new record high in 2020. The analyst fears that the excessive optimism of crypto investors prevents them from objectively assessing the situation on the market.

On Tuesday, July 30, BTC was trading at $9,570. Later, the number one cryptocurrency was in the price range from $9593 to $9685. Over the past day, the value of the digital asset has not changed much, the BTC domination index has consolidated at 64.3%. If on Wednesday, July 31, the level of average prices will once again support the BTC/USD pair, then bitcoin's recovery will continue, analysts are certain.

Most analysts agree that Bitcoin will adjust in the range of $8,500 to $ 8,000, after which there will be a long period of consolidation. Then we should expect a new parabolic rally from $20,000 to $30,000 as the halving approaches in May 2020, analysts say.

According to A. Rastan, the current BTC correction can be completed at much lower levels than previously thought. The analyst does not exclude the emergence of a dizzying price "roller coaster", because of which Bitcoin will first collapse to $1,800– $1,600, and then return to $14,000– $20,000. However, this scenario is unlikely, analysts say.

A cryptanalyst predicts a change in the Bitcoin price trend in the range of $4,000- $6,500 and the beginning of its growth to a new record high in the middle of 2020.

Many analysts pay attention to the difficulties that the number one cryptocurrency is experiencing when trying to recover above the level of $10,000. In this situation, the digital asset begins to slip in the range from $9,400 to $9,800. This indicates a high probability of falling to the next level of $9000, analysts say. However, the market situation will largely depend on the number of new players and their rates, which can start both the process of pulling down and also contribute to the growth of Bitcoin, analysts conclude.

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

GBP/USD. "Super Thursday" will not help the pound

The pound-dollar pair demonstrated correctional growth today after updating its annual low and reaching two-year price troughs. Bears of GBP/USD could not enter the 20th figure, after which the bulls seized the initiative and nearly 100 points passed in a day. This dynamic is mainly due to technical factors - an overabundance of short positions in the British currency makes itself felt.

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In addition, the market "remembered" that the prime minister of Britain, with all his desire, cannot single out the country from the EU - this requires the approval of the Parliament. Ironically, the House of Commons, after several years of confrontation with the government of Theresa May and Brussels, can become an unexpected ally of the Europeans, stopping the implementation mechanism of the chaotic Brexit. Deputies have already taken preventive measures by adopting an amendment to the law on self-government in Northern Ireland. This provision does not allow the prime minister to stop the Parliament's work, which can quickly block withdrawal from the EU without an agreement. In turn, Johnson can decide on early Parliamentary elections, hoping to get the majority under control. There are several other scenarios, one of which is the announcement of a vote of no confidence in the newly minted premier. In any case, Johnson faces a difficult struggle within the walls of the British Parliament, whose members, as we recall, did not support the option of a "hard" Brexit during a signal vote at the beginning of this year.

This disposition made it possible for the pound to move away from the level of two-year lows. On the other hand, the British currency continues to be under strong background pressure, as Brexit prospects remain dim - even if Parliament does not allow Johnson to withdraw the country from the Alliance without an agreement on October 31. London and Brussels are still at different poles on many issues - which includes the fate of the Irish border. Therefore, this political rebus will remain unresolved in any case - until one of the parties makes substantial concessions.

Given the current situation, any growth in the British currency should be treated with caution. Here it is worth recalling that the so-called "super-Thursday" is expected tomorrow, when several important events take place within a day: the Bank of England meeting, the release of the quarterly report on inflation and the publication of a summary of monetary policy. The news marathon is completed by Mark Carney, who will hold an extended press conference. Such a "news jackpot" is relatively rare, so traders are unlikely to ignore it, despite the undeniable priority of the Brexit issue.

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However, these issues can not be separated from each other. Last year, the head of the Bank of England warned of the extremely negative consequences of a hard Brexit. In particular, he said that if Britain withdraws from the EU without a deal, then the country will have to rely on the conditions of the WTO. The head of the English regulator even admitted the likelihood that the monetary policy in this case would be revised in the direction of easing. Since then, Carney's rhetoric has not undergone any fundamental changes. He does not tire of repeating that the prospects for monetary policy depend primarily on the prospects for the negotiation process. Moreover, the transfer of Brexit in this context will also not be an acceptable solution, since in this case the period of uncertainty will only be extended. In other words, the English regulator unequivocally associated a further increase in the interest rate with a soft Brexit, and Mark Carney consistently advocated this causal relationship.

Given the recent events, the head of the Bank of England is unlikely to toughen his rhetoric - on the contrary, he can describe in more detail the prospects for the chaotic scenario. That is why tomorrow's inflation report and monetary policy summary will play a secondary role, and the focus of GBP/USD traders will be on Carney's rhetoric. Also, do not forget that the English regulator closely monitors the dynamics of the global trade war. Let me remind you that the 12th round of talks between Beijing and Washington was completed ahead of schedule today. The parties noted "some progress" and agreed to meet again in September. The market clearly expected more from this meeting, so anti-risk sentiments returned to the market. This factor can also affect the mood of the members of the English regulator, reinforcing their "dovish" attitude.

Thus, the "super-Thursday" is unlikely to help the British currency in restoring its position. Against the background of the Brexit lull, the pound will follow the US currency in anticipation of the next news drivers. Therefore, the trading strategy for the GBP/USD pair remains unchanged - short positions for any more or less large-scale correctional growth.

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