Technical analysis of BTC/USD for 06/08/2019:

Crypto Industry News:

Bitcoin.com announced that it will launch a cryptographic exchange named Exchange.Bitcoin.com. This is the latest addition to the product package that Bitcoin.com offers outside of their information service. The company has also developed a cryptocurrency casino, portfolio and P2P exchange for Bitcoin Cash, aimed at increasing the usability of the bifurcated Bitcoin alternative: "While our company believes that the Bitcoin Cash network will be accepted by the masses around the world, we also believe that it is important to promote the free market and choice" - the company said in a statement.

The stock exchange, which will be scheduled to open at the beginning of September, will note many of the largest coins, including Bitcoin, Ethereum and Litecoin. In addition, it plans to offer about 50 trading pairs, as well as Simple Ledger Protocol tokens (SLP) associated with Blockchain BCH.

The cryptocurrency marekts are on the verge of something very exciting thanks to SLP tokens - this is the beginning of a world in which we can tokenize everything, and when people realize the potential, they will begin to demand a place to exchange their tokens.

Technical Market Overview:

The BTC/USD pair has broken through the 61% Fibonacci retracement at the level of $11,548 and made a new local high at the level of $11,855. Currently, the price is consolidating the recent gains in a narrow zone located between the levels of $11,896 - $11,440. The positive and strong momentum supports the short-term bullish outlook and if the level of $11,548 is violated, then the next target is seen at the level of $11,855.

Weekly Pivot Points:

WR3 - $13,750

WR2 - $12,333

WR1 - $11,817

Weekly Pivot - $10,382

WS1 - $9,882

WS2 - $8,441

WS3 - $7,9485

Trading Recommendations:

The best strategy in the current market conditions is to trade with the larger timeframe trend, which is still up. All the shorter timeframe moves are being treated as a correction inside of the uptrend. The larger degree WXY correction might have been completed and the market might be ready for another impulsive wave up.

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Technical analysis of GBP/USD for 06/08/2019:

Technical Market Overview:

The GBP/USD market is continuing the horizontal consolidation in a narrow range as it still does not have enough upward momentum to break through the lower trendline boundary located around the level of 1.2220. The bears have pushed the prices lower again and the technical support at the level of 1.2118 will be tested soon. The lower boundary of the support zone located at the level of 1.2077 is the most important support for the short-term outlook in this pair. The momentum indicator remains weak nad negative, which, despite oversold market conditions, 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 - 1.2595

WR2 - 1.2485

WR1 - 1.2298

Weekly Pivot - 1.2184

WS1 - 1.1983

WS2 - 1.1676

WS3 - 1.0876

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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Overview of GBP/USD on August 6th. The forecast for the "Regression Channels". Northern Ireland and Scotland next in line

4-hour timeframe

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Technical data:

The upper linear regression channel: direction – down.

The lower linear regression channel: direction – down.

The moving average (20; smoothed) – down.

CCI: 30.3594

We have already written that Scotland, whose residents mostly voted "against" leaving the EU in the 2016 referendum, has repeatedly hinted at preparing for its own referendum on independence. Prime Minister Nicola Sturgeon believes that "hard" Brexit is very strong and will harm both the British economy and the Scottish economy, however, if it does not work out, the country may initiate its own break with London in the future. However, that's not all. There is a lot of displeasure on the island of Ireland, where between the two countries (Ireland and Northern Ireland), as a result of Brexit, a "tight" border may appear, since Ireland will remain part of the European Union, but Northern Ireland, as well as Scotland, will have to leave the EU. And the inhabitants of Northern Ireland also in the majority voted "against" Brexit. At the same time, Northern Ireland has the constitutional right to hold a referendum on independence. Boris Johnson has already visited the Irish island, during which he promised that there would be no backstop mechanism. However, everyone understands that if Brexit is disordered, the border will appear. Ireland and Northern Ireland, by the way, can initiate unification into one country. It is clear that this is not possible if one country remains in the EU, and the second – in the UK. Accordingly, geopolitical shifts are also possible here. However, for the United Kingdom, which may soon become just a Kingdom, this means potential new losses of territories. And for the pound, this means no positive news and no reason for any growth. If the EUR/USD pair is corrected at least from time to time, then the pound/dollar, instead of the correction, just "rests" in one place and waits for new fall factors to appear.

Nearest support levels:

S1 – 1.2146

S2 – 1.2085

S3 – 1.2024

Nearest resistance levels:

R1 – 1.2207

R2 – 1.2268

R3 – 1.2329

Trading recommendations:

The GBP/USD pair continues to adjust for the purpose of moving; therefore, it is still recommended to consider the sale of the pound with the targets of 1.2085 and 1.2024, but after the Heiken Ashi indicator has turned down.

It will be possible to buy the pound/dollar pair with the targets of 1.2268 and 1.2329 not earlier than fixing the price above the moving average line. In this case, the bulls will have a chance to form an upward trend.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanation of illustrations:

The upper linear regression channel – the blue line of the unidirectional movement.

The lower linear regression channel – the purple line of the unidirectional movement.

CCI – the blue line in the indicator regression window.

The moving average (20; smoothed) - a blue line on the price chart.

Murray levels - multi-colored horizontal stripes.

Heiken Ashi is an indicator that colors bars in blue or purple.

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Technical analysis of EUR/USD for 06/08/2019:

Technical Market Overview:

The EUR/USD pair has made a short-squeeze and the new local high was made at the level of 1.1250. The market has broken above the level of 1.1181 on its way up as well and now is testing the technical support located at the level of 1.1193. This move up is still a correction withing the larget downtrend, because the larger timeframe trend remains down and there are no signs of any trend reversal yet. The market conditions are now overbought and despite the positive momentum, the correction might start any time soon.

Weekly Pivot Points:

WR3 - 1.1304

WR2 - 1.1233

WR1 - 1.1170

Weekly Pivot - 1.1096

WS1 - 1.1037

WS2 - 1.0957

WS3 - 1.0876

Trading Recommendations:

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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Control zones for NZD / USD pair on 08/06/19

To further reduce the pair, it is required to keep the price below 1/2 WCZ of 0.6551-0.6545 at today's American session. If closing is lower, the probability of updating the weekly low will remain above 70%. It is important to note that the pair was already falling to an annual low last week, which led to a sharp increase in demand.

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Today's morning surge in volatility allowed us to work out the average daily move in the direction of strengthening the pair. Thus, the probability of staying within it without breaking the structure is higher than the probability of a pair reversal.

An alternative model will be developed if the closure of today's US session occurs above the level of 0.6551. This will open the way for growth to the average course of the week and weekly CZ of 0.6617-0.6605 in the medium term. Purchases will come to the fore at tomorrow's Asian session. When opening a long position, it is important to remember that there is a significant target level of 0.6661 and the probability of a return to which is very high.

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

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

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

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Elliott wave analysis of GBP/JPY for August 6 - 2019

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GBP/JPY fell to a low of 128.39 just sky of our ideal target at 127.93. The following rally of the 128.39 low looks solid. However, firstly, it needs to break clearly above minor resistance at 130.23 to indicate a long-term low.

This also means, that as long as minor resistance at 130.23 is able to cap the upside, we still could see a second attempt to reach our ideal target at 127.93 before the long-term low is in place.

R3: 131.65

R2: 130.95

R1: 130.23

Pivot: 129.88

S1: 129.25

S2: 128.87

S3: 128.49

Trading recommendation:

We will buy GBP at 128.05 or upon a break above 130.23

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Elliott wave analysis of EUR/JPY for August 6 - 2019

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EUR/JPY saw a low at 117.67 just sky of our ideal target at 117.47. The following break above minor resistance at 118.92 is a good indication that a long-term bottom could be in place at 117.67, but we need a follow-though towards the upside and a break above resistance at 121.38 to confirm the low is in place.

The short-term minor support is seen at 118.92 and again at 118.35. Thus, it is likely to be able to protect the downside for more upside pressure towards 121.38 and above.

R3: 121.38

R2: 120.73

R1: 120.33

Pivot: 119.90

S1: 119.52

S2: 118.92

S3: 118.35

Trading recommendation:

We bought EUR at 118.95 and we have placed our stop at 118.30

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Overview of EUR/USD on August 6th. The forecast for the "Regression Channels". Trump does not like the response of China

4-hour timeframe

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Technical data:

The upper linear regression channel: direction – sideways.

The lower linear regression channel: direction – down.

The moving average (20; smoothed) – up.

CCI: 135.8122

On Monday, August 5, traders' attention was focused on data related to the escalation of the trade conflict between China and the States. First, Trump said he was raising $300 billion in duties on Chinese imports from September 1. To which China immediately responded with the collapse of its national currency, and also stopped buying agricultural products in the States. And now the question arises, does Trump still have strong cards in his hands? From September 1, all imports from China will be subject to duties. What is the next step? Increase in fees? And then? Sanctions? China, as everyone has understood, will not follow Trump's lead. China has a sufficient resource base and financial power to resist America. Of course, there will be losses for China's economy, but there will also be for the US economy. And the more damage is done to the States, the more likely that Trump will not be re-elected for a second term. And with the new president, which can be, for example, Joe Biden, it will be easier to negotiate simply because he is not Trump. Therefore, China is well aware that with the current difficult period, you just need to wait. Trump also crumbled in China's accusations that they "manipulate the exchange rate", and urged the Fed to pay attention to this point, hinting at the lack of aid in the trade war from the Fed. Well, the euro/dollar pair continues its technical correction, however, it could not consolidate above the previous local maximum, which gives reason to assume a new strengthening of the US currency.

Nearest support levels:

S1 – 1.1169

S2 – 1.1108

S3 – 1.1047

Nearest resistance levels:

R1 – 1,1230

R2 – 1.1292

R3 – 1.1353

Trading recommendations:

The EUR/USD currency pair continues its upward movement on August 6. Thus, it is recommended to buy the euro/dollar pair with the goals of 1.1230 and 1.1292 before the reversal of the Heiken Ashi indicator down.

It will be possible to sell the euro/dollar not earlier than the reverse consolidation of the pair below the moving average line with the goals of Murray levels of 1.1108 and 1.1047. In this case, the euro will return to the downward trend.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanation of illustrations:

The upper linear regression channel – the blue line of the unidirectional movement.

The lower linear regression channel – the purple line of the unidirectional movement.

CCI – the blue line in the indicator window.

The moving average (20; smoothed) - a blue line on the price chart.

Murray levels – multi-colored horizontal stripes.

Heiken Ashi is an indicator that colors bars in blue or purple.

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

Trading plan for EUR/USD for August 06, 2019

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Technical outlook:

Today, the EUR/USD pair has managed to rally past the resistance trend line, hitting above the 1.1240 levels before retracing back. The immediate price resistance still remains intact at the levels of 1.1285, and till the prices remain below that mark, the outlook remains bearish. We have taken into account the entire drop from 1.1412 through 1.1020 as the recent border being worked upon. The Fibonacci 0.618 resistance is seen at the level of 1.1260 as depicted here. This will help the prices to reverse lower. We present two possible options of the wave development here. The first option implies that wave 1 and wave 2 are formed, while wave 3 is developing. Within the wave 3, we can see wave i and wave ii at a lower degree. In order for this option to remain relevant, the prices should stay below the 1.1285 levels. The second option includes the situation when an A-B-C wave is from 1.1412 through the 1.1020 levels as a part of the ending diagonal wave for wave (C) at a larger degree. A high probable direction is lower from here.

Trading plan:

Remain short and add further at the current price at the 1.1200/05 levels. Stop above 1.1285. The target is below 1.1020.

Good luck!

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Forecast for AUD / USD pair on August 6, 2019

AUD / USD pair

After a twelve-day continuous decline, the Australian dollar corrected from supporting nested price channel line in today's Asian session. Continuation of growth is seen to the Fibonacci level of 23.6% of the entire previous fall at the level of 23.6% Fibonacci, which coincides with the minimum of June 18.

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On the four-hour chart, the signal line of the Marlin oscillator still remains in the zone of negative numbers. The MACD line (blue) is approaching the price above. The price meeting from the MACD lines may occur at the level of 0.6832, from which, naturally due to the strength of this technical level, a price reversal may occur during a medium-term decline. The target of 0.6686 is to support the embedded line of a steeper price channel (blue).

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NZD / USD: Sales still trending despite growth of New Zealand's Labor market

In the second quarter, New Zealand's unemployment rate fell to a record low of 3.9% compared to the forecast of growth to 4.3%. The growth rate in the number of employees also increased significantly. After reducing to -0.2%, the indicator jumped to 0.8% in quarterly terms, which has been the best result since the third quarter of last year. Likewise, the wage dynamics index showed positive dynamics as it rose to 0.8% after a three-month decline with a forecast of growth to 0.7%. In other words, almost all indicators of the New Zealand labor market came out in the "green zone" today, having unexpectedly supported the "kiwi". Yesterday, the NZD/USD pair tested annual lows in the area of 0.6480 and today, the pair jumped by almost 100 points during the Asian session.

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However, the NZD/USD bulls failed to reverse the downward trend after a significant correction, the price again came under bearish pressure, despite the general weakening of the US currency. The New Zealand dollar is under severe pressure from the fundamental backdrop amid a worsening trade war between the US and China. Meanwhile, the Reserve Bank of New Zealand plans to cut interest rates already at the August meeting, which will be held tomorrow. In anticipation of this event, the NZD/USD pair clearly feels insecure. After all, the regulator is quite capable of announcing further steps to mitigate monetary policy.

It is worth recalling that not so long ago in the spring of this year, the RBNZ introduced a double mandate. The Central Bank not only provides employment but also is responsible for price stability. Moreover, if the labor market today showed positive dynamics, inflationary processes in the country leave much to be desired. Despite a slight increase in the second quarter, the consumer price index remains below the target level.

Obviously, the recent events of a geopolitical nature will also affect the dynamics of key macroeconomic indicators of New Zealand. Having a negative impact on the growth of the world economy in general and the economies of the leading countries of the world in particular, the trade war between the US and China is gaining momentum. New Zealand is no exception. China and Australia are the main trading partners of the island nation, hence the escalation of the trade conflict will affect the decisiveness of the members of the Reserve Bank of New Zealand accordingly.

Let me remind you that Beijing not only devalued its currency yesterday to 11-year lows at the level of 7,050, but also banned the import of agricultural products from the United States. These steps were a response to Trump's decision to introduce additional tariff to total of $300 billion. The American president decided to "spur" the Chinese to conclude a trade deal, but in the end he achieved the opposite result. The trade war continued, while in fact, the negotiation process came to yet another dead end.

It is apparent that the Central Bank of New Zealand will not be able to ignore all of the above trends. At the last meeting, the regulator rather restrained the risks, which provoked the growth of the national currency. At the same time, the published protocol of the last meeting of the RNBZ in June suggests that the regulator intends to further mitigate the monetary policy. In particular, the head of the Central Bank, Adrian Orr, said that if economic growth does not accelerate, then a rate cut may be required as a response. Since the last meeting, the economic situation in the country has not improved and uncertainty has only increased. Nevertheless, the Reserve Bank at its August meeting will take a "dovish" position with a high degree of probability, provoking another downward impulse for the NZD/USD pair.

According to experts, the regulator will reduce the interest rate to 1.25% tomorrow. At the same time, the Central Bank may announce further easing of monetary policy in November. In general, the rate until next spring will be reduced to 0.75% according to the expectations of many analysts. But currently, this scenario is not basic. Therefore, if the RBNZ members voice such intentions, the New Zealand dollar will significantly fall in price throughout the market, including in tandem with the US currency.

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If we talk about the technical side of the issue, then here, the priority is definitely beyond at the bottom. Firstly, on the daily chart, the Ichimoku indicator formed a bearish signal "Parade of Lines", in which the price is below all its main lines and under the Kumo cloud. Secondly, the pair is between the middle and lower lines of the Bollinger Bands indicator, which also indicates a downward trend. The closest downward target at the support level of 0.6440, which is the lower line of the Bollinger Bands is on W1. However, the resistance level is the lower border of the Kumo cloud on D1, which coincides with the Tenkan-sen line at the price of 0.6600.

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Technical analysis: Important Intraday Levels For EUR/USD, August 06, 2019

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When the European market opens, some economic data will be released such as German Factory Orders m/m. The US will also publish the economic data such as IBD/TIPP Economic Optimism and JOLTS Job Openings, 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: 1.1296. Strong Resistance: 1.1290. Original Resistance: 1.1279. Inner Sell Area: 1.1268. Target Inner Area: 1.1242. Inner Buy Area: 1.1216. Original Support: 1.1205. Strong Support: 1.1194. Breakout SELL Level: 1.1188. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Important Intraday Levels for USD/JPY, August 06, 2019

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In Asia, Japan will release the Leading Indicators, 30-y Bond Auction, Household Spending y/y, and Average Cash Earnings y/y. The US will also publish some economic data such as IBD/TIPP Economic Optimism and JOLTS Job Openings. 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: 106.20. Resistance. 2: 105.99. Resistance. 1: 105.78. Support. 1: 105.53. Support. 2: 105.32. Support. 3: 105.11. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Forecast for EUR/USD on August 6, 2019

EUR/USD

On Monday, the euro jumped by 96 points on political tensions between the US and China. In response to new U.S. duties, China abandoned U.S. agricultural products and devalued the yuan over the past three days from 6.89 per dollar to 7.05 per dollar. In addition, the index of business activity in the US non-manufacturing sector in June showed a decrease from 55.1 to 53.7.

However, the euro's growth is only an initial reaction from the market regarding the complication of the trade and political situation, as it was before, in the future the dollar will suppress the temporary growth of European currencies, since the dollar is the safe-haven currency.

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On the technical side, today in the Asian session, the euro reached the MACD line on the daily chart, the balance line is at the same point - resistance has strengthened. The signal line of the Marlin oscillator has moved to the growth zone, but in comparison with other indicators, this output may turn out to be false. Nevertheless, consolidating the price above the MACD line (above a high of 1.1250 this morning) may be the first signal of growth to the Fibonacci line of 76.4% in the 1.1360 area.

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On the four-hour chart, the price is higher than the indicator lines of balance and MACD, the Marlin in the overbought zone. From current levels, the euro may go into correction. A price fall below the price channel line (1.1195) will greatly weaken the upward impulse of the euro, consolidating below it will allow the price to decline to the Fibonacci level of 110.0%, to 1.1155, and a lower price will resume the strengthening of lowering sentiment.

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Forecast for GBP/USD on August 6, 2019

GBP/USD

The intensification of political friction between the US and China did not affect the British pound, as it showed an increase of only 2 points on Monday. Accordingly, the situation on the pound maintains a declining attitude towards targets of 1.2032/55 and further to 1.1986.

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On the four-hour chart, the price continues to consolidate in the range from July 30th. The signal line of the Marlin oscillator also lies in the horizontal direction. At the moment, the price is below the balance line, just above it is part of the consolidation range of the MACD line, which is an independent resistance line. We are waiting for the price to exit consolidation downwards.

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Control Zones for AUD / USD pair on 08/06/19

When building a daily trading plan, we must keep in mind that the closing of trading last month occurred below the average monthly move. It increases the likelihood of a return to the level of 1.2208 by 90%. This level is within the average daily course, which makes it an excellent target for today.

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A test of the level of 1.2208 will not break the downward impulse, which will allow us to consider the "false breakdown" pattern for entering a short position in the future.

An alternative model will be developed if today's growth exceeds the average daily move and the close of trading occurs above the 1/2 WCZ of 1.2263-1.2247. In this case, the downward impulse phase will be completed and purchases will come to the fore tomorrow. The probability of implementing this model is 30%, which makes it an auxiliary.

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

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

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

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Control areas AUDUSD 08/06/19

The pair is trading within the medium-term bearish impulse today, therefore, the growth is corrective until the pair absorbs yesterday's movement. If the close of today's trading is below Monday's high, the downward momentum will continue. The probability of updating the weekly low is 70%.

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Working within the medium-term trend frame always provides an opportunity to search for favorable prices in a prioritized direction, since before the reversal of the momentum, in most cases, there is a false breakout pattern.

Changing the direction of trade requires a breakdown of the main resistance of the WCZ 1/2 0.6823-0.6816 and the closure of today's US session above it. In this case, purchases will come to the fore, the goal of which will be the weekly zontrol zone of 0.6897-0.6884. It is important to understand that work in the upward direction remains corrective.

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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.

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Control zones EURUSD 08/06/19

At the beginning of this week, the pair experienced solid growth, which indicates the strength of market buyers. It is important to note that in one day the pair overcame the weekly move. This makes it possible to close all positions for the purchase, since the likelihood of further growth decreased to 30%. Now you need to find a significant level of resistance and track the reaction to it during the test.

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It is important to understand that stopping growth will not indicate a change in the upward momentum while the pair is trading within the correction range.

Purchases from current marks become unprofitable, since the rate is outside the weekly average move, and the monthly control zone of August is within the daily move. This indicates an increase in the likelihood of a stop and the appearance of a strong offer with the formation of a market maker level.

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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.

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Moving up: the Bitcoin exchange rate is gaining momentum

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On Monday, August 5, analysts marked a continuation of Bitcoin activity. The leading crypto asset has shown explosive growth, having risen in price by $600 per day while increasing trading volumes, which may signal the mobilization of bulls.

Over the past day, BTC added more than 8%. The number one cryptocurrency is currently trading near the $11,600 mark. Trading volumes have soared 32% over the past two days. After breaking through the upper boundary of the daily trend channel in the range from 9120.00 to 9502.67, Bitcoin's upward movement took the form of a corrective local upward reversal. After the breakthrough of the resistance level, the market restored the upward movement in the short-term trend with the target at 12358.66, analysts say.

According to analysts, for a sustainable transition to the Bitcoin rally, it is necessary to gain a foothold above the $11,800 mark, which previously served as the starting point for a powerful correction of the PTS up to $9,300. Analysts believe that the crypto asset was supported by turbulence in the financial markets, in particular in China. As a result, investors actively acquired digital currency, which interacts little with traditional financial markets.

At the moment, the cryptocurrency market remains within the upward trend. Bitcoin has proven that there is an unrealized buying potential on the market, which has been actively manifested recently.

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Washington and Beijing raise rates in a trade war, market volatility promises to be prohibitive

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As soon as markets moved away from the the US central bank's "cold shower", since it made it clear that the decision to lower the interest rate was not the beginning of a cycle of easing monetary policy following the June meeting, US President Donald Trump has then spoiled investors' mood by threatening to introduce additional duties on Chinese imports.

China's response was not long in coming. Last weekend, Bloomberg reported that Beijing had ordered its state-owned companies to stop importing agricultural products from the United States.

In addition, China has actually begun to devalue its national currency, the rate of which for the first time in 11 years rose above 7 yuan per US dollar.

It is noteworthy that this level was unshakable even in the midst of a trade war between the two largest economies in the world last year.

The fact that the Chinese authorities let their currency to fall below a key mark suggests that this is a carefully thought-out gambit aimed at mitigating the negative effects of the trade war on the national economy and at the same time preventing the mass exodus of capital from the country. It is also possible that China is signaling to the United States that the conclusion of a trade deal between the countries is unlikely in the near future.

According to analysts, despite the fact that it is the White House that is trying to put pressure on Beijing, Donald Trump is in a losing position for a number of points. Thus, the US leader has repeatedly mentioned the need to weaken the greenback, but the latter is now in fact strengthening against the renminbi, which does not add advantages to the United States in a trade war.

Also, D. Trump needs a steadily growing stock market in order to count on re-election for a second presidential term, but the last time a strong devaluation of the renminbi shocked almost all world markets.

US stock indices are rapidly falling. The S&P 500 index lost about 100 points on Thursday and Friday.

It is highly probable that the "turbulence" will last for a rather long time, and we will see something similar to what happened at the end of last year.

Recall that back then the collapse of the stock exchanges was so rapid that even the Fed was frightened, which had previously made rather tough statements.

Based on the fact that now we are only at the beginning of a powerful market shock, then in the coming weeks, volatility will be prohibitive.

The disappointment of investors by the Federal Reserve's decision on monetary policy last week, as well as the aggravation of tension in trade negotiations between the US and China, led to the strengthening of the Japanese currency.

The USD/JPY pair significantly approached the low of 2019, which was set on January 3 at 104.85.

"This week, economic statistics for China may lead to further weakening of the renminbi. This will ensure that investor demand for the yen will be higher than for the dollar. Accordingly, a further decrease in USD/JPY and testing the psychological mark of 105.00 are potentially possible," said Akira Moroga, a strategist at Aozora Bank.

"However, the fall of the USD/JPY pair below 105.00 now seems unlikely. The US economy is not so weak as to justify a more significant weakening of the dollar against the yen," he added.

As for the main currency pair, the euro returned to the range of a medium-term consolidation of $1.11-1.14 against the US dollar.

The reason for the bears' retreat on EUR/USD was the fact that US employment growth slowed in July. Along with the escalation of trade tensions between Washington and Beijing, this reinforced expectations for the Fed to cut interest rates in September.

The disappointing July ISM business activity figures for the US non-manufacturing sector are likely to inspire the EUR/USD bulls to launch new attacks.

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

GBP/USD. 5th of August. Results of the day. The pound ignores any news except for Brexit related messages

4-hour timeframe

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Amplitude of the last 5 days (high-low): 170p - 106p - 116p - 91p - 80p.

Average amplitude over the last 5 days: 113p (113p).

How much the US-China trade war affects the dollar in pairs with European currencies can be judged using the GBP/USD pair. Unlike the euro/dollar pair, bears did not begin to take profits, as it logically suggests an even greater decline in the pound. Indeed, the most interesting topic for all traders is Brexit, and there is no movement in it, there is no positive news, there is no hope for a favorable outcome. There is only one track along which the train rushes in full steam, and at the end of the track there is a wall with the inscription "hard Brexit". The train has no brakes ... The driver, Boris Johnson, does not even try to find salvation for the locomotive, but, on the contrary, throws even more coal into the furnace. Therefore, there is no reason for the foreign exchange market to stop selling the pound, even despite the escalation of the trade conflict between the United States and China, which could potentially harm the US economy and could force the Fed to cut interest rates in the future. But what does it matter for the pound if the UK can begin to lose gigantic amounts in 3 months? By the way, the pound, according to many analysts, could be cheaper than the dollar as a result of the hard Brexit. Today, the index of business activity in the UK services sector unexpectedly pleased traders, exceeding the forecast value and amounted to 51.4. However, the British currency did not really help. The weak ISM US index of business activity did not help either. In general, a correction for the pair is certainly possible, but has a lower probability of occurrence than the same euro/dollar pair. It will be possible to determine its beginning by overcoming the Kijun-sen line or by Bollinger Bands, which can turn up or to the side (as now).

Trading recommendations:

The GBP/USD currency pair may start a correction movement. Thus, it is now recommended to wait until the completion of this round and resume selling the pound with a target level of 1.2031.

It will be possible to buy the British currency not earlier than consolidating the pair above the critical line, but with extreme caution and in small lots. Ideally, the Bollinger Bands should be directed upwards. The target is 1.2254.

In addition to the technical picture, fundamental data and the time of their release should also be taken into account.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen is the red line.

Kijun-sen is the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dashed line.

Chikou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and bar graph with white bars in the indicator window.

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

EUR/USD. 5th of August. Results of the day. Donald Trump is losing the trade war with China. Another president may play it

4-hour timeframe

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Amplitude of the last 5 days (high-low): 38p - 29p - 102p - 69p - 46p.

Average amplitude over the last 5 days: 57p (55p).

After today, it is safe to say that the euro bears are sated and are now taking profits in short positions, which leads to the strengthening of the euro/dollar pair. Particularly important news was not available to traders during the day. Indexes of business activity in the services sector and composite in the eurozone were almost neutral. Two out of three similar US indices turned out to be higher than forecasts, but the most significant index of business activity in the ISM services sector turned out to be worse than the expectations of the Forex market. However, at the same time, all three US business activity indexes are confidently staying above 50.0, so there is no talk of a decline at the moment, at most, about a slight slowdown. However, the euro began to grow exactly when trade opened on Monday, August 5, and continuously increased all day. It is this factor that speaks of the technical nature of this movement. Meanwhile, China struck back against Donald Trump. The Chinese government ordered its companies to suspend the purchase of agricultural products in America, and also let the yuan go free float. For the first time in 11 years, the rate went above 7 yuan per dollar. This is also planned, or at least a deliberate step by Beijing to offset the damage from a trade war with the United States. Donald Trump, however, remains to escalate the conflict with China even more, as the parties failed to go along the peaceful path. China frankly expects that a trade war with it will harm Washington itself, and this will be enough to prevent Trump from being re-elected for a second term. And with the new president, perhaps, it will be easier to agree. In this case, what remains with Trump when frankly his plan did not work? It's right to continue to introduce further duties on Chinese imports, increase duties that are already imposed, exert any other pressure on Beijing, impose sanctions and, of course, declare in all media that China "does not want to conclude a trade deal and unfairly treats America. "

Trading recommendations:

EUR/USD continues to move up. Thus, it is now recommended to buy the euro currency in small lots with a target of 1.1233. A price rebound from the Senkou Span B line or a MACD indicator turn down will indicate a round of correction.

It will be possible to sell the euro/dollar pair with the goal of a support level of 1.1035, when bears take the initiative back into their own hands, and the rate consolidates below the critical line.

In addition to the technical picture, fundamental data and the time of their release should also be taken into account.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen is the red line.

Kijun-sen is the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dashed line.

Chikou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and bar graph with white bars in the indicators window.

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

EUR/USD. China crossed the Rubicon: the dollar falls amid escalating trade war

For the first time in 11 years, the Chinese yuan overcame the psychologically important level of 7.00 against the dollar. Over the past years, the USD/CNY pair has come close to this target several times, but only now did the price manage to quickly break a significant mark. Given the People's Bank of China's approach to the exchange rate of the national currency, it can be assumed that the trade war between the United States and China has entered a new phase of confrontation. The yuan has become a weapon in the global trade confrontation, and this fact does not bode well for the global economy. The foreign exchange market reacted accordingly: defensive assets began to be in high demand, while the dollar is actively losing its position in almost all pairs.

Events are developing quite rapidly: on Friday the price of USD/CNY fluctuated in its usual range (6.85-6.90), within which the pair has been since May of this year. But today the course has gone up sharply - and not only overcame the target of 7.00, but also consolidated above the indicated level. The US president responded almost immediately to this fact: on his Twitter, he said that China had deliberately devalued its currency to a record low, and there were signs of currency manipulation. Trump warned that this step is a "violation of the rules", and this fact will sooner or later weaken the Chinese economy.

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In general, the NBK's motives lie on the surface: in light of Trump's recent decisions, the regulator stimulates the export of Chinese products and removes the "heaviness" of the economy's debt burden. This is far from the first time China has resorted to such methods - for example, in August 2015, China's central bank lowered the yuan against the dollar by more than five percent in three days (from 6.209 to 6.447) in order to stimulate reduced exports. It was so unexpected that the indices of Asian and American exchanges fell by 1-2% in one day, responding to such a sharp move by the Chinese regulator.

Obviously, in this case we are dealing with countermeasures from Beijing against Donald Trump's decision to introduce additional duties worth $300 billion. In fact, the White House decided to impose additional tariffs on almost all Chinese imports, forcing China to conclude a trade deal with the United States. But as you can see, China decided to take the path of further confrontation: by devaluing the national currency, Beijing also instructed state-owned companies to suspend imports of American agricultural products. According to Bloomberg, state-owned companies of China have already stopped purchasing products from American farms in anticipation of the outcome of trade negotiations. It is worth noting that with this step, the Chinese delivered Trump not only an economic, but also a political blow. In those states of America where agriculture predominates (in particular, Iowa, Illinois, Indiana, the Great Plains region), the electoral position of the incumbent president can noticeably shake.

But the devaluation of the Chinese currency will significantly affect the commodity market. Cheap yuan will reduce the purchasing power of Chinese companies. In turn, demand will decrease even more, and this will lead to a reduction in prices. Among the most affected by this scenario will be Australia, Brazil, South Africa and India. Furthermore, this is not an exhaustive list: a decrease in the commodity market will negatively affect the black gold market, the foreign exchange market and the stock market. Again, recall that in August 2015: an unexpected decision by the central bank of China led to a drop in quotations for commodity and steel companies.

The imbalance of the global economy and turbulence in the foreign exchange market will again become a decisive factor for the Fed in the context of monetary easing. In this case, domestic economic statistics will fade into the background: even strong GDP figures and rising inflation will remain in the shadow of global shocks.

The ISM composite index for the non-productive sphere added fuel to the fire. This indicator was released today in the "red zone", following the ISM manufacturing index. The index reached a three-year low, that is, a mark of 53.7 points. It is noteworthy that this indicator is also declining at an active pace for the second month in a row.

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Such a fundamental picture exerted strong pressure on the US currency. The dollar index fell to the bottom of 97 points. In addition, the profitability of 10-year-old Treasuries is rapidly decreasing - at the moment the indicator has dropped to 1.775 - the last time it was at this level in October 2016. In turn, the euro-dollar pair shows large-scale correctional growth. Last week, the price was at the bottom of the 10th figure, while today the pair has already tested the 12th price level.

At the moment, EUR/USD cannot overcome the resistance level of 1,1201 (Kijun-sen line on the daily chart), but further escalation of the US-China conflict will allow the pair's bulls to move to the next resistance level - that is, to the level of 1.1260 (lower border Kumo clouds on D1). If one of the US Federal Reserve members voting this year mentions the need to lower the interest rate in September, a decline in the greenback will take on an avalanche-like character - in this case, the EUR/USD pair will be able to quickly return to the area of the 13th figure.

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