Review for EUR/USD. The dollar continues to decline, while the euro holds growth.

analytics5d4bbdb53368f.jpg

The market calms down after the fall of US indices. The situation still looks like a deep correction, and not as the beginning of a big crisis.

The main theme continues to be the Trump-US trade war.

There is no strong news.

The dollar continues to decline.

The euro holds growth.

We keep purchases from 1.1165.

We buy on the breakdown of 1.1250.

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

Burning forecast for EUR/USD on 08/08/2019 and trading recommendation

The bizarre US President Donald Trump, without wasting time, again criticized the Federal Reserve, accusing them of incompetence. The head of the United States believes that the Federal Reserve is too proud to admit its mistakes in the fact that he acted too hastily and tightened too sharply.

Trump verbally puts pressure on the Fed, referring to the inaction of the system, which does not seek to further reduce the base interest rate. Of course, the Federal Reserve is not under the control of the head of the US state, it has already been reminded very often by Jerome Powell, but the emotional component of the market thinks differently. Thus, the confidence of the crowd that at the autumn meeting of the Fed will reduce the rate increases, which puts pressure on the dollar.

Today, in terms of the economic calendar, one of the most boring days, the only thing there is applications for unemployment benefits in the United States. Their total number could fall by nine thousand. In particular, the number of initial applications should remain at the same level, and repeated ones will decrease by nine thousand. But given the insignificance of the changes themselves, the market will not especially notice them.

analytics5d4bc4e3748e0.png

The EUR/USD pair, as expected in the previous forecast, the quotation has kept fluctuation within the previously formed framework of 1.1180/1.1250, where due to the informational background there was a move to the upper boundary. Considering everything that happens in general terms, we see that due to pressure on the dollar, stagnation is delayed for the umpteenth time, which, in principle, is not bad, since accumulation makes it possible to work both on the breakdown of boundaries and within them.

It is likely to assume that the movement within the boundaries of 1.1180-1.1250 (+/-10p.) Will continue, where traders are better off using the "Breakout" method, analyzing clear price consolidations. Concretizing all of the above, you can stretch orders:

  • We consider long positions in the event of price consolidation higher than 1.1250, with the prospect of a move to 1.1280-1.1300.
  • We consider short positions in case of a clear consolidation of the price lower than 1.1170, with the prospect of a move to 1.1150-1.11100.

Due to the pressure of the information background, indicator analysis predictably unfolded, where indicators of technical instruments unanimously signal an upward trend. But do not lose sight of the fact that the quotation still remains within the framework of the lateral fluctuation and, in fact, the indicators on the minute and intraday periods are volatile.

analytics5d4bc500ee601.png

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

Forecast for Bitcoin and US dollar on August 8th. A good time to buy bitcoin and gold

Bitcoin – 4H.

analytics5d4bb90e0e9ef.png

As seen on the 4-hour chart, Bitcoin began to show growth and has almost completed a return to the correction level of 76.4% ($12137) after the formation of a bullish divergence in the CCI indicator, from which the retreat was previously performed. The demand for the most well-known cryptocurrency remains high, since there are enough political, economic and trade problems in the world now, which increase the demand of investors and traders for assets that are more calm, "protective". These include the yen and franc currencies, and gold, and bitcoin. Thus, Brexit, the political wars in the UK, the trade war between China and the United States, the collapse of the Chinese yuan, all this creates a dangerous situation in the world markets and causes capital to flow from risky assets to low-risk ones. Given the fact that Bitcoin is still difficult to call an ideal tool to save the value of money, this function is still used by traders, but even here there is a desire for quick profits. After all, the essence remains the same: no matter why they buy bitcoin, because of the world crises, the threats of recession, the main thing that they buy, then the asset grows, so you can earn money. That's all logic. Thus, I expect further growth of "cue ball", especially if it is possible to perform consolidation above the Fibo level of 76.4% ($12137). The forecast of the founder of Heisenberg Capital Max Keiser of about $15,000 per coin until the end of the week is unlikely to come true, but to the level of $13,115, the cryptocurrency can grow for today or tomorrow.

The Fibo grid is based on the extremes of July 10, 2019, and July 17, 2019.

Forecast for Bitcoin and trading recommendations:

Bitcoin has made a return to the Fibo level of 76.4%. Thus, I recommend buying the cryptocurrency with the target of $13115, with the stop-loss order below the level of 76.4%, if the closure is performed above the level of $12137. I recommend selling bitcoin with the target of $11544, and with the stop-loss order above the level of $12137, if the rebound from the correction level of 76.4% is performed.

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

Forecast for EUR/USD and GBP/USD on August 8th. The vote of confidence in Boris Johnson could be announced as early as September

EUR/USD – 4H.

analytics5d4bb84074a17.png

As seen on the 4-hour chart, the EUR/USD pair, although it moves quite actively, unlike the GBP/USD pair, still the main attention of the forex market is now focused on the UK, and accordingly to the pound sterling. In the European Union, no interesting economic reports in recent days did not come out, and in America, the main newsmaker is President Donald Trump, whose repertoire has recently become scarce. Trump's statements are now associated with criticism of the Fed. First, Trump was dissatisfied with the sharp and too rapid increase in the key rate, then – that the Fed does not want to reduce it, now – that reduces too slowly and does not want to admit their mistakes. "Our problem is not China, our economy is strong, money is flowing to us, while China is losing companies and the yuan is under siege. Our problem is the Fed, too proud to admit its mistakes on too rapid monetary tightening." I wonder if Trump means that the Fed should apologize to him or just start to lower the rate faster? Anyway, criticism of the Fed and Jerome Powell continues, and the euro/dollar, meanwhile, has complied with the rebound from the correction level of 61.8% (1.1224) that allows traders to expect some decline towards the levels of 76.4% (1.1180) and 100.0% (1.1107).

The Fibo grid is built on the extremes of May 23, 2019, and June 25, 2019.

Forecast for EUR/USD and trading recommendations:

The EUR/USD pair performed the rebound from the correction level of 61.8% (1.1224). I recommend buying EUR/USD with the targets of 1.1260 and 1.1296, with stop-loss order below the level of 1.1224, if the level of 61.8% is overcome. I recommend selling the pair with targets of 1.1180 and 1.1107, and with a stop-loss order above the level of 1.1224, since a rebound from the correction level of 61.8% has been completed.

GBP/USD – 4H.

analytics5d4bb856b9f5c.png

The pound/dollar pair seems to have taken a break and is waiting for the development of events, reports of which come from the UK in batches. The whole world is closely watching the British Parliament and the confrontation between Prime Minister Boris Johnson and opposition forces. In short, the essence of the disagreement lies in Brexit. Johnson wants in any case, according to any scenario, to withdraw Britain from the European Union on October 31. The European Union has abandoned negotiations on a new agreement on Brexit, so there is nothing for the newly minted Prime Minister. However, the idea of a hard Brexit is supported a little in the British government. The Laborites from the very beginning of Johnson's reign stated that they would not support such an option for Brexit, but they supported the second referendum, during which the people would be given the opportunity to decide the fate of Great Britain. Now, Labor is in favor of blocking Brexit with "No Deal", as they consider it the worst possible option, or even simply unacceptable. And Boris Johnson can be given a vote of confidence. It is unlikely that Johnson will agree to voluntarily leave the Prime Minister's office just a few months after winning the election. However, the opposition forces can unite in a fairly large political bloc, which will not be able to resist Johnson and his party members. In any case, the UK begins a new round of political warriors. Technically, the GBP/USD pair continues to trade under the Fibo level of 127.2% (1.2180), which keeps the chances of the pair to resume falling in the direction of the correction level of 161.8% (1.1853).

The Fibo grid is built on the extremes of January 3, 2019, and March 13, 2019.

GBP/USD – 1H.

analytics5d4bb883a1e34.png

As seen on the hourly chart, the pound/dollar pair continues to trade strictly between the correction levels of 200.0% (1.2227) and 261.8% (1.2057). Bearish divergence formed by the CCI indicator increases the chances of the pair to fall in the direction of the correction level of 261.8%. The data from the 4-hour chart, on which the key is the rebound from the Fibo level of 127.2%, is still more important.

The Fibo grid is based on the extremes of June 18, 2019, and June 25, 2019.

Forecast for GBP/USD and trading recommendations:

The GBP/USD pair may resume the process of falling. Thus, I recommend selling the pair with the target of 1.2057, with the stop-loss order above the level of the bearish divergence peak. I recommend buying the pair with the target of 1.2334 and with the stop-loss order below the level of 200.0% (hourly chart), if the closing is performed above the level of 1.2180.

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

Elliott wave analysis of GBP/JPY for August 8 - 2019

analytics5d4bb1042523c.png

We have not seen any development in the last 24 hours. GBP/JPY remains locked in a narrow band from 128.14 to 130.23. As long as the short-term important resistance at 130.23 is able to cap the upside. A final dip to our ideal target at 127.93 still can be seen, but from here or upon a direct break above 130.23 and new long-term impulsive rally is expected.

In the medium-term, a break above resistance at 132.70 will confirm that a long-term low is in place and a new impulsive rally that ultimately should take us above 148.48 is developing.

R3: 131.62

R2: 130.73

R1: 130.23

Pivot: 129.60

S1: 128.87

S2: 128.49

S3: 128.09

Trading recommendation:

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

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

Elliott wave analysis of EUR/JPY for August 8 - 2019

analytics5d4baf51ece91.png

EUR/JPY dipped to the expected corrective target at 118.40. Now it is ready to rally higher towards 122.02. A break above minor resistance at 119.36 will confirm that red wave ii is complete and red wave iii higher is developing.

Third waves tend to be the strongest wave and extend. A rally to 122.02 will make red wave iii 161.8% the length of red wave i.

Support remains at 118.40.

R3: 120.70

R2: 120.33

R1: 119.88

Pivot: 119.36

S1: 118.97

S2: 118.40

S3: 118.03

Trading recommendation:

We are long EUR from 118.95 with our stop placed at 118.30

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

EUR/USD approaching resistance, potential drop!

analytics5d4bbd23545d7.jpg

EURUSD is approaching our first resistance at 1.1281 where we might be seeing a drop below this level.

Entry: 1.1281

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

Stop Loss : 1.1325

Why it's good : horizontal swing high resistance, 76.4% fibonacci retracement

Take Profit : 1.1166

Why it's good: Horizontal overlap support, 61.8% Fibonacci extension, 38.2% Fibonacci retracement

analytics5d4bbd020f2c3.png

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

NZD/USD approaching resistance, potential reversal

analytics5d4bbcabbd244.jpg

Price approaching its resistance where a reversal could occur.

Entry: 0.6481

Why it's good : 100% Fibonacci extension, 23.6 & 50% Fibonacci retracement, horizontal pullback resistance

Stop Loss : 0.6548

Why it's good : 78.6% Fibonacci retracement

Take Profit : 0.6398

Why it's good: Horizontal swing low support

analytics5d4bbc73e7e46.png

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

USD/JPY reversing off intermediate resistance, further drop !

analytics5d4bbc05b9c94.jpg

USDJPY is reversing off intermediate support at 106.29 where we are expecting a further drop below this level.

Entry :106.29

Why it's good : horizontal overlap support

Take Profit : 105.83

Why it's good : 61.8% Fibonacci extension

Horizontal overlap support

analytics5d4bbbe566ec1.png

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

Positivity from China stopped the growth of panic sales, the yen will try to go into correction, and the Canadian dollar

On Thursday morning, the panic wave subsided after China released encouraging data on foreign trade in July. The Shanghai Composite Index shows + 0.95 %, and + 0.38 % from the Japanese Nikkei 225 as of 5.50 Universal time. On the other hand, gold went into correction after the explosive growth. Also, there is a decrease in demand for bonds.

The stalling of the global economy into a recession is postponed. Investors are catching their breath, but, apparently, the positivity will not last long, because global tensions tend to escalate.

USDCAD

The Canadian dollar is under strong pressure due to rapidly falling oil, but the loonie's exchange rate is relatively stable, as the main macroeconomic parameters still look convincing as before.

analytics5d4bba6680b1e.jpg

analytics5d4bba7b76d7a.jpg

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

Overview of GBP/USD on August 8th. Forecast according to the "Regression Channels". Jeremy Corbyn and his party declare war

4-hour timeframe

analytics5d4ba47e9eb45.png

Technical data:

The upper linear regression channel: direction – down.

The lower linear regression channel: direction – down.

The moving average (20; smoothed) – down.

CCI: 54.2880

In the United Kingdom, there is a new loud message every day. Just last night, we wrote that Boris Johnson, not having spent a month as Prime Minister of the country, has already fallen out of favor with the majority of parliamentarians. Of course, because of his passionate desire to implement a "hard" Brexit, and even bypassing the Parliament, knowing that the majority of 650 deputies will not support his initiative. Thus, in order to prevent an absolutely catastrophic scenario for the UK, Labor leader Jeremy Corbyn is ready to initiate a vote of no confidence in Johnson. His party has already outlined the vector of its work for the coming months – to prevent Brexit without a deal. Corbyn himself said that he was ready for a large-scale war with Johnson and will make every effort to block the destructive scenario for the Kingdom. However, not everything is so simple in the British Kingdom. The fact is that even if the vote of no confidence in Johnson is approved by a majority of deputies, a new government should be formed within the next 14 days. If this does not happen, the Parliament is dissolved and the date of new parliamentary elections is set. And the Prime Minister appoints this date. That is, Johnson can set a date for, for example, November 1, when the UK will leave the European Union without an agreement. However, there are options in which Johnson will not be able to carry out their plans. In general, we continue to observe the continuation of the epic "Brexit" from the first rows, and the key question now is: who will win in the confrontation with Johnson – opponents of "hard" Brexit. In the next few months, until October 31, there will be a lot of important and significant events. As for the pound sterling, it had no prospects for growth. Of course, technical growth is possible, which can be identified by fixing the pound/dollar pair over the moving average, but it is unlikely that it will be strong.

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 near the moving average and can neither resume the downward trend nor overcome the moving average. Technically, now there are actually buying of the greenback with targets at 1.2085 and 1.2024, as both linear regression channel is directed downwards. However, the bears openly rest in recent days.

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) – 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

Overview of EUR/USD on August 8th. Forecast according to the "Regression Channels". The prospects for the US dollar depend

4-hour timeframe

analytics5d4ba432af4d8.png

Technical data:

The upper linear regression channel: direction – sideways.

The lower linear regression channel: direction – down.

The moving average (20; smoothed) – up.

CCI: 64.1338

On Wednesday, August 7, the EUR/USD pair ended with the repeated testing of Murray's level of "4/8" - 1.1230. It was an unsuccessful attempt to gain a foothold above again. This is the moment that we consider to be the most important and significant. Why? There is no fundamental background in recent days. There are no macroeconomic reports that can support the euro from the European Union. The possible reduction of the Fed rate at the next meeting is also not a reason for the momentary sales of the US currency. But technical factors still continue to indicate a downward trend. The fact is that the previous local maximum of 1.1283 has not been updated. Now, the euro/dollar has failed to overcome the level of 1.1230. On the face of the inability of the bulls to develop their success, which can lead to a return to the forex market of the bears with the subsequent interception of the initiative. The recent fashionable theme of "reducing the Fed rate", in our opinion, is too inflated, not least by Donald Trump, who criticizes the Fed almost every day. The day before, he said that the Fed cannot admit its mistake in too fast and strong tightening of monetary policy, and does not want to reduce the key rate as soon as possible. According to Trump, the problem is not even in the trade conflict with China, namely the Fed, which does not support Trump's policy in the international arena. However, "not a united bid." The American economy still continues to look much stronger than the European one, and in the long term, this is the main factor for traders.

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:

Since the euro/dollar pair is now above the moving average, it is recommended to wait for the reversal of the Heiken Ashi indicator to go up and buy the euro currency with a target of 1.1230.

Further purchases are possible only after the pair consolidates above the level of 1.1230 with the target of 1.1292.

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

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) – blue line on the price chart.

Murray levels – multi-colored horizontal stripes.

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

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

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

Crypto Industry News:

Amazon wants to hire a software development engineer to develop the Blockchain advertising chain. The company published a job offer for a software development engineer on LinkedIn who is to work on a new solution. The online retail giant aims to expand its advertising business through the use of online retail data, industry-leading cloud services, and a rapidly growing startup culture.

The role of the selected engineer will be to analyze requirements, conduct design, implement basic components, cooperate with engineers and program managers. The position will also be responsible for operational support and system maintenance.

In addition, the engineer "will also be able to define the technical and architectural plan of systems' operation". The company has noted that it prefers candidates with experience in advertising, financial technology, and Blockchain.

Technical Market Overview:

The BTC/USD pair has made a new high at the level of $12,269 and then the Bearish Engulfing candlestick pattern was made, which made the price to reverse towards the level of $11,068. This technical support level has almost been hit, but the price has bounced again. From the Elliott wave point of view, it looks like the wave 1 might have been completed already and now the market is unfolding corrective wave 2. Wave 2 might be a more complex and time-consuming corrective pattern, so it is worth to keep an eye on the ongoing developments. So far all the moves up and down had been made in three waves only.

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.

analytics5d4bb45657c10.jpg

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

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

Crypto Industry News:

In a local online magazine Gustavo Franco looks at the Libra project from Facebook and the potential of cryptocurrencies in the field of traditional economy. The former president of the Brazilian Central Bank also allows himself very favorable comments on digital assets:

"Bitcoin is the most spectacular of cryptocurrencies, and the business built around it can be worth up to $ 175 billion (the value of all BTC in circulation). The difference, however, is that there are no shares, no shareholders or top-down management, " wrote Franco, who was the chairman of the Brazilian central bank twice in the 1990s, and then became a private investor and founded the company Rio Bravo Investimentos.

In his article, Franco focuses not only on the potential Bitcoin itself but also on the opportunities offered by cryptocurrencies marketed by huge corporations, which in the future may exclude traditional banks from the financial equation.

In his opinion, projects such as Libra, despite the lack of advantages associated with decentralization, are still a big threat to current financial institutions, and if a cryptocurrency appears on the market, it may soon be joined by similar instruments of other corporations: "McDonald's could create a Mac, a convertible cryptocurrency for sandwiches in restaurant chains. In turn, Starbucks would introduce the Star token, for which users would buy their favorite coffee" Franco goes ahead.

Technical Market Overview:

The ETH/USD pair has made a local low at the level of $219.27 after the technical support zone located between the levels of $224.95 - $221.50 had been violated. Moreover, the price is trading below the short-term decreasing trendline resistance, which indicated the corrective pullback might take a while. Any breakout above the trendline will be a first bullish signal with a target at the level of $238.68.

Weekly Pivot Points:

WR3 - $260.89

WR2 - $241.83

WR1 - $232.61

Weekly Pivot - $214.73

WS1 - $206.31

WS2 - $187.76

WS3 - $178.82

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. We are waiting for a breakout above the level of $235.42 to confirm the bullish momentum.

analytics5d4bb26919e01.jpg

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

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

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 1.2270. 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 neutral, 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, but the choppiness of the price action is still high, so there are no clear trading setups present on this market for now.

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 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.

analytics5d4bb0070886c.jpg

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

Forecast for EUR/USD on August 8, 2019

EUR/USD

Yesterday, the euro was similar to the previous one - the average volatility with a range of more than 60 points and the closing of the day was almost at the opening level. The price line was also resisted by the balance and MACD line of the daily scale, and the embedded line of the price channel of this scale supported the line. Today, the Marlin Oscillator signal line deviated upward from the boundary dividing the growth zone trends from the decline zone.

analytics5d4bb6b082efa.png

On the four-hour chart, the Marlin signal line slowed down, taking into account the indications of a larger scale, it is possible to turn up and on H4. For the price, this can be technical support to overcome the 1.1250 benchmark (the top on August 6), and then the price can go straight to the target range of 1.1307/24.

analytics5d4bb6c63b51e.png

In order to develop a downward movement, the price should be consolidated below the trend line of the price channel of the daily chart and even go below the first target of 1.1155, as the MACD line is already approaching it on the four-hour chart, which will strengthen this support. Overcoming the price of 1.1155 opens the way to 1.1074 - to the Fibonacci level of 123.6% of daily TF. The likelihood of a rising and falling scenario offsets.

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

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

Technical Market Overview:

The EUR/USD pair has made a move up towards the level of 1.1250 and since then the market is moving sideways. The current price action looks like a pennant formation in progress, so there is still a chance for a potential move up towards the level of 1.1347 despite the overbought market conditions. The strong and positive momentum supports this short-term outlook. Only a sustained breakout below the level of 1.1167 would invalidate this pattern.

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.

analytics5d4baf15dc2cf.jpg

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

Forecast for GBP/USD on August 8, 2019

GBP/USD

The British pound traded in the range of 70 points yesterday, remaining within the weekly consolidation. Today, this consolidation may be broken up, which follows from the readings of the four-hour chart - the price has come close to the MACD line, and consolidating above it will correspond to the price going out of this range (1.2209).

analytics5d4bb4852af6f.png

The market will still have the opportunity to keep the price near the level of 1.2258, corresponding to the resistance of the line of the price channel of the daily scale, but if the rising moment is stronger and the resistance is also broken, the price will increase to 1.2410 - to the MACD line on the daily chart.

analytics5d4bb49999f5f.png

A falling scenario can be realized after the price moves below the lower boundary of consolidation at 1.2100. Here, the first target will be the range of 1.2032/55 then 1.1986. Important economic data will be published tomorrow in the UK: GDP for the 2nd quarter is expected to grow at zero, industrial production in June may show a decrease of 0.2%, construction volume may show -0.4% and the trade balance may worsen from -11 , 52 billion pounds to-11.80 billion. We are waiting for data and further developments.

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

Technical analysis: Important Intraday Levels for USD/JPY, August 08, 2019

analytics5d4b8981adb8e.jpg

In Asia, Japan will release the Current Account and Bank Lending y/y. The US will also publish some economic data such as 30-y Bond Auction, Natural Gas Storage, Final Wholesale Inventories m/m, and Unemployment Claims. 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 : 106.71. Resistance. 2: 106.50. Resistance. 1: 106.29. Support. 1: 106.04. Support. 2: 105.83. Support. 3: 105.62. (Disclaimer)

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

Technical analysis: Important Intraday Levels For EUR/USD, August 08, 2019

analytics5d4b888461805.jpg

When the European market opens, some economic data will be released such as ECB Economic Bulletin. The US will also publish the economic data such as 30-y Bond Auction, Natural Gas Storage, Final Wholesale Inventories m/m, and Unemployment Claims, 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: 1.1258. Strong Resistance: 1.1252. Original Resistance: 1.1241. Inner Sell Area: 1.1230. Target Inner Area: 1.1204. Inner Buy Area: 1.1178. Original Support: 1.1167. Strong Support: 1.1156. Breakout SELL Level: 1.1150. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

GBP/USD. Clouds are gathering over Johnson: short positions look risky

Against the background of general price turbulence in the foreign exchange market, the pound-dollar pair stands out among other dollar pairs. Despite the intraday "ups and downs" of the US currency, the GBP/USD pair is steadily trading within a wide-range flat, without leaving the boundaries of the 21st figure. To be more precise, traders have identified for themselves the boundaries of the price band (1.2120 –1.2190), within which the pair reacts to events in the outside world.

Such phlegmatism, of course, is associated with Brexit. The Brexit topic is of absolute priority for the pound, so all other fundamental factors (even of a resonant nature) are of secondary and indirect importance for GBP/USD. Figuratively speaking, the pair lives in its own coordinate system, where the prospects of the "divorce proceedings" between London and Brussels determine the price movement vector, while US and geopolitical events are very optional.

analytics5d4bb09635d21.jpg

As you know, Boris Johnson and the leadership of the European Union could not find a common denominator in their positions, and therefore the likelihood of the implementation of a "hard" Brexit increased significantly. After the corresponding "exchange of courtesies", it became clear that Brussels did not intend to revise the text of the deal (primarily regarding the back-stop mode), while for Johnson the issue of the Irish border is of strategic importance. The prime minister of Great Britain created the so-called "military cabinet" within his government, whose primary task is to prepare the country for withdrawal from the EU without concluding a deal.

Although all these events were very expected (taking into account the previous rhetoric of the parties), the tangible reality of the hard Brexit significantly affected the pound - for example, it collapsed to two-year lows against the dollar, finding itself in the region of the 20th figure. Responding to these grim prospects, the British currency paused before a possible further decline in the price range of 1.15-1.20. Despite almost 100-point fluctuations within the 21st figure, the GBP/USD pair, by and large, is now frozen flat, waiting for further political events.

The fact is that Brexit's topic has recently narrowed, in fact, to one question: can the British Parliament prevent Johnson from implementing a hard scenario, or will the prime minister find a legal way to "get around" the House of Commons? Naturally, the same question is being asked on Downing Street. So, according to the representative of the government Dominic Cummings, the British Parliament is not able to stop Brexit. He acknowledged that deputies may raise the issue of a vote of no confidence in Johnson in September (when the meeting resumes). But at the same time, he noted that the head of government can set the date of elections, for example, November 1 - or on any other date after October 31. According to Cummings, theoretically, the prime minister can ignore the position of the deputy corps, bringing with it the initiated "mission" to the end.

However, Johnson's opponents also foresee possible scenarios, so they are preparing for appropriate countermeasures. And it is worth noting that the opposition has its own "trump card". According to the head of the Labour Party, his party is ready to initiate a vote of no confidence in the prime minister in September. Not only four opposition parties, but also a significant part of the Conservatives can support their initiative. Let me remind you that during the signal voting, many Tories did not support the "hard" Brexit option and are still opposed to this idea.

There are 650 deputies in Parliament, while Johnson can count on the support of only about 100 of them. If the entire House of Commons votes for distrust of the government, then the representatives of the Conservative Party will need to form a new government within 14 days, which could secure the support of the majority of MPs. Otherwise, Parliament is dissolved and early elections are announced. But the prime minister sets the date for new elections, and judging by the statements of his team's representatives, he will appoint them either in November or December.

analytics5d4bb0aa5c923.jpg

At the same time, Johnson may refuse to leave his post until October 31, even if a vote of no confidence is passed to him. Formally, he has the opportunity to take such a step, but in this case, Johnson will ignore the constitutional customs of Britain, and the deputies will be forced to appeal to the queen, who has the right to dismiss the prime minister immediately. According to many analysts, such a scenario is unlikely (the last time a similar situation occurred was almost 200 years ago) - but given Johnson's eccentricity and unpredictability, the option of a political demarche cannot be ruled out.

In addition, according to observers, before a vote of no confidence (or instead of it) is passed, the Parliament can, at the legislative level, oblige the prime minister to agree with Brussels a new Brexit postponement date. It is possible that Johnson himself could resign if Parliament wins the legal confrontation by blocking Britain's exit from the EU on October 31.

Thus, the pound reacted to the dispositions of the parties (Johnson and Brussels), but slowed down in anticipation of political battles in the walls of the House of Commons. As you can see, the situation is ambiguous, given the specifics of the legal relationship of state institutions in Britain. Nevertheless, short positions of GBP/USD should be treated with caution now: as soon as the British Parliament enters the matter, the pound can get significant support.

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

EUR/USD: Trump's anger, Treasuries fall and RMB rise

After a temporary respite, the dollar again came under pressure from problems of a very diverse nature. Trump criticized the Federal Reserve again (and in a rather harsh form), the yuan renewed its 11-year high again, and the yield on 10-year Treasuries collapsed to three-year lows. The dollar index is actively losing its position amid such a negative fundamental picture, reflecting the greenback being sold throughout the market.

The euro-dollar pair also follows general trends. After dropping to the 11th figure during the European session, Bulls then more than made up for it, reaching 1.1240. By and large, today EUR/USD traders repeated the price path of Tuesday, however, with one exception: the US currency looks much more vulnerable today, and not only in conjunction with the euro. For example, paired with the yen, the greenback sank to the 105th figure (five-month low), and paired with the franc slumped to the 96th figure (11-month low). In other words, the market is actively getting rid of the dollar and investing in defensive assets - by the way, gold has risen to a 6-year high today, that is, to around 1509.

204FvzfBFm-6HlEZZvPwLGRg2KiHQSeen4urCpTh

This dynamics is due to several reasons. First of all, the dollar was a victim of the general nervousness of traders. The unexpected move of the Reserve Bank of New Zealand (which suddenly dropped today by 50 bp immediately) unsettled many investors - it became completely clear that the central banks of the leading countries of the world will soften their monetary policy parameters in the foreseeable future, and the Fed is here will not be an exception.

Indeed, today, in addition to the RBNZ, the Central Bank of India has reduced the interest rate (by 35 basis points at once, to the lowest level since 2010) and the central bank of Thailand - the regulator has reduced the rate from 1.75% to 1.50%. The Thai central bank also surprised investors, as most analysts expected the rate to remain unchanged. Such a peculiar "domino effect" provided strong support for defensive instruments and equally strong downward pressure on the greenback. Wall Street reacted appropriately to the situation: the main indexes plummeted significantly when trading began. The Dow Jones Industrial Average fell by more than 2%, the S&P 500 by almost 2%, while the Nasdaq Composite by 1.6%.

The fundamental background for the dollar is too sharply painted in gloomy tones. Let me remind you that after the July meeting of the Fed (which took place just a week ago), the US currency went up sharply in almost all dollar pairs. Investors were confident that the Fed would limit itself to a "warning shot" in the form of one 25-point rate cut. By and large, Fed members, like Jerome Powell, indirectly confirmed this market assumption, although they did not exclude an alternative scenario. But a week ago, the likelihood of implementing this "alternative" scenario was minimal. However, further events unfolded with such swiftness that in just a few days dollar bulls lost ground.

Trump's resonant statement about 300 billion duties, China's response (refusal to purchase American agricultural products), devaluation of the renminbi, a 50-point reduction in the RBNZ rate and easing of the monetary policy of the central bank of India and Thailand are all links in one chain. With a high degree of probability, the Fed will also not be left out in the end, resorting to another round of rate cuts this year. The only question is - 25 or 50 basis points. It is noteworthy that yesterday James Bullard, one of the most prominent representatives of the "dovish" wing of the Fed, said that the regulator should not reflexively react to the actions of the US and China, which operate on the basis of the "tooth by tooth" principle. He noted that interest rates are now at an optimal level, and before deciding on further steps, the Federal Reserve needs to analyze the reaction of the US economy to a trade war.

L5rqBLyDFiiRQs3XqgjBk2mKNLpWgJvYVrwqrv6Z

But Donald Trump is still vomiting and mosquing, accusing the Federal Reserve of almost tampering. He said that Fed members still cannot admit their mistake, which was that the regulator began to "tighten monetary policy too soon and too quickly." In his opinion, the Federal Reserve should now actively reduce the interest rate, thereby increasing US competitiveness. "The problem is not even in China, but in our central bank," the president concluded.

On the one hand, Jerome Powell has repeatedly stated that such attacks from Trump does not affect the Fed's position. On the other hand, the market again started talking about the fact that the regulator could reduce the interest rate by 50 points in the fall (or resort to a double reduction of 25 bp by the end of the year) - even without taking into account the political pressure of the White House. This fact has a significant impact on the greenback, helping EUR/USD bulls to storm the nearest resistance level of 1.1260 (the lower border of the Kumo cloud on the daily chart).

But it is worth noting here that EUR/USD bulls still can't confirm their dominance - for this they need to gain a foothold over the above resistance level, and for fidelity - to overcome the upper border of the cloud, which corresponds to the level of 1.1302. Until then, the price will fluctuate in the range of 1,1140-1,1260 in anticipation of a powerful information driver that will help traders take the pair outside one of the corridor boundaries.

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

GBP/USD. August 7. Results of the day. Is Boris Johnson provoking a constitutional crisis in the UK?

4-hour timeframe

analytics5d4b5f1ad8a30.png

Amplitude of the last 5 days (high-low): 116p - 91p - 80p - 86p - 74p.

Average amplitude over the last 5 days: 89p (96p).

Boris Johnson, due to the eccentricity of his actions, and often the illogicality, is catching up with Donald Trump by leaps and bounds. Opponents of his policy on the Brexit issue were huge before the election. Firstly, there is the Labour Party. Secondly, it is the Conservatives themselves, among whom there are enough deputies who do not support the "hard" Brexit. And now, after just a few weeks of Johnson's reign, talk of a vote of no confidence has already begun. The reason is simple - absolutely everything, and deputies, and the Bank of England, and ordinary citizens, understand that Brexit will lead the United Kingdom without an agreement with the EU in a long period of crisis. GDP will fall, there will be an outflow of capital, a reduction in investment, an increase in inflation, a depreciation of the pound sterling, and an increase in unemployment. It will take years to recover. However, some members of Parliament are simply ready to take such a step if only to leave the European Union and realize the "will of the people". Boris Johnson is at the head of this movement. However, realizing that opponents could unite in the so-called "unity government", declare a vote of no confidence and vote for Johnson's resignation, the premier already decided to play it safe and announced through his adviser Dominic Cummings that he would not resign. According to British law, even if Parliamentarians vote for Johnson's resignation, he will either have to leave his post or he should be removed from his post by the queen of Great Britain, who appointed him to this post. Thus, the option is not ruled out in which Queen Elizabeth II will have to intervene in the situation. After describing a new potential problem for Great Britain, is it worth mentioning as to why the British currency is not growing? Volatility has declined in recent days, while the pound/dollar is moving mostly sideways. Both bulls and bears are waiting for new data, reports, "numbers". However, in general, it can be said that the Forex market is not yet ready for purchases of the pound sterling.

Trading recommendations:

The GBP/USD currency pair continues the weakest upward movement, which is interpreted as a side correction. We recommend that you wait until the correction is completed, the Bollinger bands widen to one side, and only after that

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

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