Technical analysis of ETH/USD for 16/08/2019:

Crypto Industry News:

Researchers at the University of Waterloo in Canada have used Blockchain technology to increase trust in electric vehicle charging systems, according to the scientific portal EurekAlert. This discovery can increase the use and extension of the overall charging infrastructure for electric vehicles.

Typically, an electric vehicle charging service provider will look for property owners to collaborate and install charging points. Electric vehicle owners can then use them for a fee, which is shared between the equipment supplier and the property owner.

The supplier operates the equipment, so the property owner must trust him that he will fairly compensate for the consumption of electricity. Similarly, the owner of an electronic vehicle must trust that he will not be charged an excessive service fee. The situation is aggravated by the fact that this is a very young industry with no established trust structure. The open Blockchain platform will allow all parties to access data and check if they have been changed.

Researchers established three steps to integrate Blockchain into the system to reduce dependence on trust.

The first is to identify the parties involved and possible trust issues. The second is to design a minimal Blockchain solution to alleviate these problems. Blockchain should closely mimic all parts of the older system that need to be replaced. Therefore, dependencies can still work with minimal modification.

Stage three is a gradual migration from the existing Blockchain hybrid/trust to a truly decentralized business model.

Technical Market Overview:

The bulls at the ETH/USD pair had been capped at the level of $189.91 after the rally was not that strong as they expected. The market has made a Shooting Star candlestick pattern at the end of the move up, so it was another clue regarding the strength of the bounce. The market is now going back down towards the level of $174.54 despite the clear bullish divergence between the price and the momentum indicator. The key technical support is located at the level of $148.27.

Weekly Pivot Points:

WR3 - $274.14

WR2 - $256.36

WR1 - $233.10

Weekly Pivot - $214.72

WS1 - $193.28

WS2 - $173.99

WS3 - $150.66

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 $238.68 to confirm the bullish momentum.

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EUR / USD: growth of American statistics, "dovish" comments by Ren and fear of dollar bulls

The euro-dollar pair expectedly sank to the base of the 11th figure and is now testing the boundaries of the 10th level. Macroeconomic data released yesterday provided significant support for the US currency, while the euro again came under pressure from the rhetoric of the European Central Bank. This combination of fundamental factors pulls the pair downward at least to the bottom line of the Bollinger Bands indicator on the daily chart, which now corresponds to the mark of 1.1070. By and large, only the uncertainty about the prospects for US-Chinese trade relations (and Fed's further reaction accordingly) is holding back the EUR/USD bears from an impulse decline to the base of the 10th figure. All other arguments speak in favor of greenback growth.

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Despite the inversion of the yield curve and the decrease in the yield of 10-year Treasuries to three-year lows (1.540%), the dollar index may soon update this year's maximum if it maintains its growth rate. Now, the indicator is at 98,053, although it was in the region of 95 points at the end of June. The dynamics of US macroeconomic indicators suggest that the Fed is unlikely to resort to aggressive measures to mitigate monetary policy in the fall. While the market already takes into account the 25-point decline in current prices, the probability of this step is estimated at almost 70%. The dollar has regained its attractiveness, especially when paired with the euro, which is waiting for large-scale action by the ECB.

However, the revaluation of the US currency is restrained. On the one hand, the greenback received strong support from macroeconomic reports. Thus, the total retail sales in the United States rose to 0.7%. which is the best result since March this year. The indicator jumped to 1.3% (excluding auto sales), and it rose to 0.9% (excluding auto and fuel sales), demonstrating consistent growth for the third month in a row. Even Donald Trump drew attention to the published figures. On his Twitter, he said that the US economy is becoming stronger against the backdrop of a slowdown in other economies, and American consumers are in great shape, as they have "got a lot of cash."

Although, it is not only retail sales that supported the dollar yesterday. Minor indicators have also made their respective contributions. In particular, the Empire Manufacturing manufacturing index, which is based on a survey of manufacturers in the New York Federal Reserve Region, showed positive dynamics after a significant decline in previous months. In addition, investors were unexpectedly surprised by the labor cost index. According to experts, the Fed members track this inflation indicator with a "special predilection". Therefore, its dynamics have a significant impact on the dollar. In the first quarter of this year, it collapsed to -1.6%, but in the second quarter it turned out to be much better than expected with 2.4% instead of the forecasted increase to 1.7%. This indicator allows you to assess the growth rate of the level of wages in the United States and it is a good indicator of inflationary pressure in the country. Yesterday's release looks symptomatic, against the background of the latest release of data on the increase in the consumer price index.

Yet, the single currency is impressed by an interview with Olli Rehn, an influential American publication of the Wall Street Journal. Ren is the head of the Central Bank of Finland and a member of the Governing Council of the European Central Bank. This is a fairly influential figure in the ECB camp. In particular, he was one of the favorites in the election race for the post of head of the ECB, which was subsequently won by Ms. Lagarde. Hence, Olli Rehn said that the European regulator will resort to comprehensive measures to mitigate monetary policy this fall. The ECB can not only reduce the interest rate by 10 basis points (that is, to -0.5%) but also announce new purchases of bonds worth about 50 billion euros per month as part of a quantitative easing program.

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In addition, Olli Rehn suggested that the European Central Bank at one of its next meetings could change the rules of its bond purchase program, which prohibits the regulator from acquiring more than 33% of the debt of any individual eurozone government. In other words, the ECB is ready to apply very aggressive measures to mitigate monetary policy. Draghi's actions may even exceed the expectations of most experts. This fact put strong pressure on the euro throughout the market, including paired with the dollar.

Nevertheless, despite the very unambiguous fundamental picture, the pair does not go down to the bottom, that is, to the base of the 10th figure and below. EUR/USD bears are being held back by the global trade conflict, the consequences of which could also affect Fed members. In an interview with Donald Trump yesterday, he said that a trade agreement with China should be concluded "only on the terms of Washington." Obviously, representatives of the American side in the negotiating group also take a similar position. In turn, the Chinese express their willingness to further escalate the trade war, but at the same time hope for the effectiveness of the September meeting. In fact, this question is "hanging in the air" and this fact does not allow the pair bears to develop a large-scale downward movement. In general, the pair remains within the downward trend with the first target of 1.1070, where the support level is located.

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Technical analysis of BTC/USD for 16/08/2019:

Crypto Industry News:

The CEO of Bitwise Asset Management says he still believes that US regulators will approve cryptographic ETFs. Hunter Horsley spoke during a television interview with Bitwise research director Matt Hougan.

Bitwise submitted its last ETF application to the US Securities and Exchange Commission (SEC) in January this year. This week, the regulator postponed the decision on the application - along with two other cryptographic ETF proposals - with the deadline for issuing the decision set for October 13.

Despite these changes, Horsley remained positive, noting that the SEC was relatively open to the reasons for this delay and presented the nature of its concerns.

Although Bitwise has made many attempts at various ETF applications, it has noticed that great progress has been made over the past twelve months. Horsley's perspective was repeated by Hougan, who summarized significant recent developments in the cryptographic sector, such as the entry of the trading company Susquehanna, improved arbitration and new spreads.

He also noted that cryptocurrency trust companies now have access to extensive insurance policies from Llyod's of London and that the market is maturing more widely. He claimed that a large part of SEC's concerns was resolved:

A key aspect of Bitcoin ETFs in the US is that they unlock the financial advisor market. Until now, crypto has focused mainly on retail or institutional investors. Half of the money in the United States is managed by financial advisers, and it is currently very difficult for them to gain access to this market.

Technical Market Overview:

The bounce at the BTC/USD market did not last long as the bulls have only managed to hit the level of $10 383. This level is just slightly above the 38% Fibonacci retracement of the last wave down, so the bounce was weak. The price has reversed again and now is heading back towards the technical support at the level of $9.415.

Weekly Pivot Points:

WR3 - $13,583

WR2 - $12,879

WR1 - $12,118

Weekly Pivot - $11,389

WS1 - $10,550

WS2 - $9,816

WS3 - $9,007

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 of a higher degree.

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Technical analysis of GBP/USD for 16/08/2019:

Technical Market Overview:

The GBP/USD pair has been trading inside of a narrow range for the whole week, but just recently the bulls have managed to move the price a little bit higher towards the level of 1.2118. This level has been violated and the local high was made at the level of 1.2148. Nevertheless, the price is still trading below the short-term descending trendline, so only if this line is violated the bulls will get the chance to lift the prices toward the next target levels located at 1.2209 and 1.2248.

Weekly Pivot Points:

WR3 - 1.2303

WR2 - 1.2249

WR1 - 1.2110

Weekly Pivot - 1.2066

WS1 - 1.1921

WS2 - 1.1875

WS3 - 1.1728

Trading Recommendations:

The best strategy for current market conditions is to trade with the larger timeframe trend, which is down. All upward moves will be treated as local corrections in the downtrend. Please keep an eye on the key technical support located at the level of 1.1988, some kind of bounce might be expected after this level is hit.

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Technical analysis of EUR/USD for 16/08/2019:

Technical Market Overview:

The EUR/USD pair has moved below the 61% Fibonacci retracement that is located at the level of 1.1111 and the new low was made at the level of 1.1086 (at the time of writing). This is the ultimate clue that the bullish flag pattern has been ignored and the bears want to penetrate the lower range levels. The next target for bears is seen at the level of 1.1034. Please notice that this time of the year the volatility might get limited due to the summer season, so it might take a while to make a breakout in this market conditions. The larget timeframe trend remains bearish.

Weekly Pivot Points:

WR3 - 1.1413

WR2 - 1.1325

WR1 - 1.1264

Weekly Pivot - 1.1187

WS1 - 1.1117

WS2 - 1.1041

WS3 - 1.0978

Trading Recommendations:

The best strategy for current market conditions is to trade with the larger timeframe trend, which is down. All upward moves will be treated as local corrections in the downtrend. The downtrend is valid as long as it is completed or the level of 1.1445 clearly violated. There is an Ending Diagonal price pattern visible on the larget timeframes that indicate a possible downtrend termination soon.

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Forecast for AUD / USD pair on August 16, 2019

AUD / USD pair

As we expected in the previous review on the Australian dollar, the currency pair continues to consolidate in a complex lateral correction. On Wednesday, the fall in prices stopped on the line of the price channel on the daily chart, after which, the price went above the Fibonacci level of 23.6% this morning. The Marlin oscillator in a growing position and it is possible to continue the growth to the level of correction of 38.2% at 0.6832, coinciding with the low of June 18.

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Multivariance is retained. Growth to the first target level can occur immediately, there may be another decrease from the current levels to the MACD line on the four-hour chart. Near this level, there is a support range of 0.6727/37. Again, this corresponds to the support on the older scale. Also, there can be two scenarios from 0.68332, either a further growth or spread, and spread of unpredictable depth. Extreme growth to the strong point of resistance at 0.6888, where two lines of price channels and the MACD line on daily converge, is not cleared.

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We are waiting for the development of events. At the moment, the price is higher than the red balance indicator line on the H4 chart. The Marlin oscillator is in the growth zone, which confirms the prospect of a moderate daily growth rate to the Fibonacci level of 38.2%.

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Burning forecast for EUR/USD on 08.16.2019 and a trading recommendation

Thursday's macroeconomic reporting included statistics on retail sales in the United States, which certainly supported interest in the US currency. The volume of retail sales in monthly terms increased by 0.7%, indicators for June were revised for the worse 0.4% ----> 0.3%. It is worth considering that this indicator is one of the most important indicators of the state of the economy of the United States, since consumer spending accounts for about 70% of the country's GDP. As a result, the inertial move on the dollar continued, amid the positive US statistics and the aggravating situation in Europe.

Today, in terms of macroeconomic reporting, we have data on the construction sector in the United States, where a slight increase is expected. So, a building permit for July expects an increase from 1,220M to 1,270M, and the volume of construction of new houses shows an increase of 1,253M ----> 1,257M.

USA 12:30 London time. - Building Permits, July: Prev 1,220M ----> Prog. 1,270M

USA 12:30 London time. - Started construction of houses for July: Prev 1,253M ----> Prog. 1,257M

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In the end, the EUR/USD pair managed to overcome the shaded side channel of 1.1180/1.1250, breaking through the lower boundary and rushing into the inertial stroke. Considering everything that happens in general terms, we see that the direction of the quote was chosen in the direction of the main trend, which is a good sign for many traders who worked on the decline. The temporary stopping point, relative to the current time, is the level of 1,1100, where a temporary stagnation is formed in the form of Doji candles.

It is likely to assume that the current stagnation/retracement, to some extent associated with the overheating of short positions, will serve as a regrouping of trading forces, but the incentive for a further decline is still on the market.

Specifying all of the above in trading signals:

We consider long positions in terms of a corrective move, where in case of price consolidation higher than 1.1120, you can consider the move to 1.1150.

We consider short positions in terms of the continuation of the inertial course, after a temporary stop, where positions will be considered below the current low of 1.1090-1.1080. The prospect of a fall is the band of the psychological level of 1.1000 (+/- 30 points).

From the point of view of the comprehensive indicator analysis, we see that the indicators on the minute passes have alternately taken an upward position due to the stop. Global time periods coupled with intraday ones are focused on further decline.

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Indicator analysis. Daily review on August 16, 2019 for the GBP / USD currency pair

Trend analysis (Fig. 1).

On Friday, the price will continue to move up, with the first target at 1.2215 - a pullback level of 14.6% (yellow dashed line).

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Fig. 1 (daily chart).

Comprehensive analysis:

- indicator analysis - up;

- Fibonacci levels - up;

- volumes - up;

- candlestick analysis - up;

- trend analysis - up;

- Bollinger Lines - down;

- weekly schedule - up.

General conclusion:

On Friday, the price will continue to move up.

The scenario of the lower movement is unlikely, but it is still considered. When moving down, the first lower target on 1.2015 is the lower fractal.

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Indicator analysis. Daily review on August 16, 2019 for the EUR / USD currency pair

Trend analysis (Fig. 1).

The breakdown of the support line is unlikely. After testing this line, a pullback is possible with the first target 1.1116 - a pullback level of 14.6% (yellow dashed line).

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Fig. 1 (daily chart).

Comprehensive analysis:

- indicator analysis - down;

- Fibonacci levels - up;

- volumes - up;

- candlestick analysis - up;

- trend analysis - up;

- Bollinger Lines - down;

- weekly schedule - down.

General conclusion: up.

Low probability scenario - the downward movement will continue with the first target 1.1028 - the lower fractal.

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Forecast for EUR/USD on August 16, 2019

EUR/USD

The main news yesterday was the release of excellent US retail performance in July. Base sales increased 1.0%, total sales increased 0.7%. An hour later, data on industrial production came out worse than forecast, but the euro could no longer resist a decline. Industrial production in July fell by 0.2%. Euro lost 31 points.

Good US construction data is expected today. The number of bookmarks of new homes in July may grow from 1.25 million to 1.26 million, the indicator of permits for the construction of a new house can show an increase from 1.23 million to 1.27 million. And in the eurozone the trade balance for June, published today may decrease from 20.2 billion euros to 18.7 billion.

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We expect the price to consolidate below the Fibonacci level on the daily chart 123.6% (1.1074). Formally, the underlying target of the Fibonacci level of 138.2% (1.0980) opens, but at the beginning of next week, investors can slow down in anticipation of the publication of the FOMC Fed minutes, which will be on Wednesday.

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There is a steady decline on the four-chart. Therefore, after consolidating the price below 1.1074, we expect the euro to fall to 1.0980.

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Elliott wave analysis of GBP/JPY for August 16 - 2019

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GBP/JPY remains locked below short-term important resistance at 129.31 which is the divider between a bottom likely being in place or more downside to come.

Time is running out for GBP/JPY to break above the pivot-point at 129.31 adding confidence in a low being in place at 126.54 for a rally towards 132.70 and above. If GBP/JPY failes to stay above minor support at 127.49 that will call for renewed downside pressure and a final dip below 126.54 to complete the long-term decline from 148.88

R3: 130.11

R2: 129.65

R1: 129.31

Pivot: 128.12

S1: 127.80

S2: 127.44

S3: 127.05

Trading recommendation:

We remain long GBP from 127.80 with our stop placed at 126.70

R1:

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Elliott wave analysis of EUR/JPY for August 16 - 2019

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The EUR/JPY pair dipped shortly below 117.69. The final dip is likely to advance to 116.73 before the decline from 127.50 bottoms. Only a direct break above minor resistance at 118.58 will ease the downside pressure but we still need a break above resistance at 119.88 to confirm a bottom being in place for a rally higher to 121.38 and above.

R3: 119.58

R2: 118.98

R1: 118.58

Pivot: 117.97

S1: 117.63

S2: 117.25

S3: 116.73

Trading recommendation:

We remain long EUR from 118.40 with our stop placed at 116.40

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Trading plan for EURUSD for August 16, 2019

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Technical outlook:

The euro continues to slide down for now with immediate highs still in place at 1.1240 levels. The drop from 1.1229 through 1.1090 yesterday could be seen as 5 waves at a lower degree. There could be a potential pullback towards 1.1160 before continuing further. Ideally, the direction remains bearish until prices remain below 1.1240 for now. An alternate scenario could be a quick rally towards 1.1260 (Fibonacci 0.618 resistance) and then a bearish reversal would continue. Price resistance remains intact at 1.1285/90 and 1.1412 respectively. A safe trading strategy would be to remain short and also be prepared to sell on rallies towards 1.1260 with a risk above 1.1290 mark. A drop below 1.1075 would be a confirmation of a continued downtrend and eliminate the alternate scenario.

Trading plan:

Remain short for now, stop remains at 1.1290, target is open below 1.1020

Good luck!

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Forecast for GBP/USD on August 16, 2019

GBP/USD

On Thursday, the release of British data on retail sales for July showed an increase of the indicator by 0.2% against the pessimistic forecast of -0.3%. By lunchtime, the pound grew 100 points against the rest of the market, almost reaching the first rising target, but by the evening, after the release of US retail sales data, it lost more than half of this growth - the US retail sales added 0.7%. As a result, the pound closed the day with a growth of 34 points.

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Thus, the convergence on the Marlin oscillator on the daily chart still worked, and the likelihood of a further decrease due to the worked convergence increased. But for the price, convergence only worked out with a minimal change, growth can continue to the next target level of 223.6% Fibonacci (1.2230). But there are no external prerequisites for this yet - good construction data is expected in the United States today: the number of bookings of new houses in July could grow from 1.25 million to 1.26 million, the indicator of issued permits for the construction of a new house can show growth from 1.23 million y/y to 1.27 million y/y. As a result, we are waiting for the implementation of the main scenario - price consolidation in the range of 1.1986-1.2032. The target range is formed by Fibonacci levels of 1.1986-1.2032.

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On a smaller four-hour chart, the price develops between the balance land MACD lines, the Marlin oscillator indicates growth - here the situation is neutral.

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Technical analysis: Important Intraday Levels For EUR/USD, August 16, 2019

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When the European market opens, some economic data will be released such as Trade Balance. The US will also publish the economic data such as Prelim UoM Inflation Expectations, Prelim UoM Consumer Sentiment, Housing Starts, and Building Permits, 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: 1.1164. Strong Resistance: 1.1158. Original Resistance: 1.1147. Inner Sell Area: 1.1136. Target Inner Area: 1.1110. Inner Buy Area: 1.1084. Original Support: 1.1073. Strong Support: 1.1062. Breakout SELL Level: 1.1056. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Important Intraday Levels for USD/JPY, August 16, 2019

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In Asia, Japan will not release any economic data today, while the US will publish some economic data such as Prelim UoM Inflation Expectations, Prelim UoM Consumer Sentiment, Housing Starts, and Building Permits. 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 : 106.69. Resistance. 2: 106.44. Resistance. 1: 106.24. Support. 1: 106.01. Support. 2: 105.81. Support. 3: 105.60. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

USD/SEK coming close to key resistance. Reversal expected!

USDSEK approaching Key resistance at 9.68780. This resistance level is also the long term high.

Entry: 9.61815

Why it's good : 9.61815 also corresponds to 161.8% Fibonacci extension level where price normally gives a reaction.

Stop Loss : 9.68780

Why it's good : A close above this price, Market would have surpassed the long term high and forming a new "All-time high". This shows then that the bulls would have taken control and further upside would be expected.

Take Profit : 9.59540

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AUD/USD approaching resistance, potential reversal

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Price is approaching its resistance where a reversal is expected.

Entry: 0.6798

Why it's good : 100% Fibonacci extension, 76.4% Fibonacci retracement, horizontal swing high resistance

Stop Loss : 0.6835

Why it's good : 38.2% Fibonacci retracement

Take Profit : 0.6759

Why it's good: 61.8% Fibonacci retracement

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USD/JPY approaching resistance, potential drop!

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USDJPY is approaching 1st resistance at 0.9805, potential drop could occur!

Entry :0.9805

Why it's good : horizontal pullback resistance

100% Fibonacci extension

50% Fibonacci retracement

Take Profit : 0.9692

Why it's good : 78.6% Fibonacci retracement

100% Fibonacci extension

Horizontal swing low support

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"Viral" rate cuts apply to Asia-Pacific

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Several central banks in the Asia-Pacific region have sharply reduced their interest rates. Many regulators are ready to follow their example, since mitigation in the US and Europe provides them with a certain freedom of action. It is worth noting that the Asia-Pacific regulators not only responded to changes in the policies of the ECB and the Fed, but also try to anticipate their next steps. They expect the ECB to implement the planned measures, and possibly reduce the rate by the Federal Reserve at the September meeting.

The Bank of New Zealand cut the rate from 1.5% to 1%, although the markets did not expect such a generous surprise. We can say that in this way the regulator paved the way for a similar easing of monetary policy in Australia.

In this regard, the AUD/USD pair is prone to further decline from a fundamental point of view, despite the fact that its recovery is observed on Thursday. The growth was facilitated by positive data on the country's labor market. On Wednesday, data were published indicating an increase in wages in Australia. However, this is not enough to accelerate inflation. The moderate wage growth, coupled with the current unemployment rate, suggests that the RBA will lower the rate again by the end of this year.

"It is reasonable to expect that a long period of low interest rates will be required for progress towards reducing unemployment and confidently moving towards the target inflation rate," said the head of the Australian central bank following a meeting in early August.

The expectation of a softening of the RBA's policy makes the aussie vulnerable.

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Growing signs of global recession

The heads of the world central banks are making efforts to stimulate the economy in connection with the growing risks of a global recession. Compounding negative expectations, the US-China trade conflict is becoming increasingly violent.

However, it is far from the fact that cheap money will help to change the situation for the better, but the central bank is not backing down. High rates support exchange rates, while the United States, Europe and China are struggling to keep their national currencies in check.

The central bnk of Switzerland and England, which are issuers of two reserve currencies, also came under general influence. For example, for Switzerland, which recently initiated interventions to weaken the franc, this would mean further immersion in the negative zone.

The Bank of England not so long ago spoke of its intention to tighten its monetary policy. Unlike other industrialized countries, Britain is facing inflationary pressures, but the growing uncertainty about Brexit is forcing the central bank to follow the worn-out path - lowering rates to mitigate the effects of an erratic exit from the European Union.

The US market fell amid another inversion of the yield curve. In the UK, the yield on 2-year government bonds increased by one basis point, and on 10-year bonds, it decreased by 2 basis points, also reversing this curve. Inversion does not always and not immediately acts as a guarantee of an immediate recession. However, given extremely pessimistic data (such as a decline in German GDP), markets may succumb to real panic.

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Storm in a glass or are investors' fears for the fate of the global and US economies justified?

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The departure of German GDP to negative territory, weak statistics on China, as well as the growth of the global debt market to a new record high of $16 trillion, raised investor concerns for the fate of the global economy and sent the US stock market to a peak. As a result of Wednesday, US stock indices lost an average of 3%.

The publication on German GDP for the second quarter, released on the eve, confirmed analysts' forecasts, however, the very fact of a decrease in the indicator by 0.1% in quarterly terms made a strong impression on investors. The figures indicate that the German economy is turning from the "locomotive" of the eurozone into the weakest link and needs not only monetary, but also fiscal incentives. However, while the increase in government spending and tax cuts in Germany are still in doubt, the ECB may launch another program of quantitative easing next month. This puts serious pressure on the bulls on EUR/USD.

Meanwhile, the US economy is still in good shape. The fact that it does not have such phenomena as the bursting of the dot-com bubble, the mortgage crisis and financial instability, supports the greenback.

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The only concern is the inverse of the yield curve of US government bonds.

For the first time since the global financial crisis of 2008, the yield on ten-year bonds was lower than the yield on two-year bonds. This phenomenon is usually perceived as a harbinger of recession in the US economy. It is important to understand that, although each recession was preceded by an inversion, not every inversion signals a recession. False positives sometimes occur. According to a Credit Suisse study, even in the worst case scenario, 22 months can elapse before a recession.

Now, it would be easy to ignore the signal of the yield curve if the world economy grew, and bright time awaited us, but this is not so. Any of such negative factors as the escalation of the US-China trade war, Brexit, Hong Kong protests and political problems in Italy could lead to a recession. According to experts, regardless of the duration of the inversion of the yield curve, the risk of a recession in the US economy in the current cycle is higher than ever.

The emergence of the inversion of the curve also indicates an increase in expectations of a rapid reduction in rates by the Fed.

"The Federal Reserve can make a difference, and the market clearly says that the regulator should lower the interest rate three times, and then the yield curve will look right. I think this is what the central bank must do so that the US economy continues to develop, it will support foreign markets. At the same time, I don't see anything good in that even after the tax reform and against the backdrop of a growing economy, we are in a cycle of lowering rates - this is all the result of the White House's foreign policy," said Ross Gerber, co-founder of investment company Gerber Kawasaki.

At first glance, the postponement of the entry into force of "Chinese" tariffs and the acceleration of US inflation should outweigh the concerns about the global recession. However, the Fed has lately been paying more attention to international risks, and not to trade wars and internal statistics. If the US central bank continues to operate in the same vein, the potential for lowering the EUR/USD pair will be limited to 1.1-1.11.

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Balancing the abyss: New Zealand dollar is on the verge of falling

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According to most analysts, the currency of New Zealand shows a downward trend. The current state of the market forms a "bearish" trend in relation to the "kiwi", which cannot but worry investors.

The situation was largely influenced by the decision of the Reserve Bank of New Zealand (RBNZ) to reduce the rate immediately by 50 basis points (bp), to 1%. The regulator explained the sharp decrease in the rate by the aggravation of the trade conflict between the US and China, as well as the loss of momentum in the New Zealand economy. The RBNZ believes that the current wage growth remains weak. At the same time, inflationary expectations are reduced, and low levels of business confidence indicate a slowdown in wage growth and low employment.

The New Zealand economy, which is predominantly export-oriented, is very vulnerable in the context of the escalation of the trade confrontation between Washington and Beijing. Many participants in international financial markets have expressed concern that a slowdown in economic growth and the threat of recession will spread throughout the world. Analysts believe that in the next few months, the global cycle of lower rates will gain momentum.

In this situation, we should expect further easing of the monetary policy of the RBNZ, analysts warn. Most economists believe that before the end of this year, the regulator can lower the interest rate at least twice. According to experts, such a measure will negatively affect the rate of the New Zealand dollar.

The next meeting of the Reserve Bank of New Zealand, dedicated to monetary policy issues, is scheduled for September 24, 2019. Until this time, the Kiwi and the NZD/USD pair will remain under pressure, analysts are certain. They believe that the short-term dynamics of NZD/USD will be determined by both the state of the US currency and economic events in the Asia-Pacific region, including news about the trade conflict between the United States and China.

At the moment, the NZD/USD pair is trading near the mark and the local support level of 0.6430, which is the low since October 2018. The high probability of a further reduction in the RBNZ rate puts pressure on NZD/USD towards its decrease, forming a steady "bearish" trend. A breakdown of the local support level of 0.6430 could cause a further drop in the NZD/USD pair, analysts warn. They recommend that traders observe short positions in the kiwi.

Further growth of the NZD/USD pair is unlikely if the Fed does not begin a cycle of aggressive reduction in interest rates due to instability in the financial markets. In the medium term, the New Zealand currency expects a bearish trend, analysts say.

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China has moved on to threats. What to expect from the yen?

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Either officials from Beijing do not follow Donald Trump's twitter, or they decided to ignore his call and go on the escalation of the conflict. On Thursday, the Chinese Treasury said the increase in US duties on domestic goods violates the consensus reached by the parties and makes it impossible to resolve the conflict through negotiations. Therefore, China has no choice but to take the necessary countermeasures. At the same time, the official department did not say what kind of measures are in question.

Analysts have already taken the news into circulation and are trying to predict the next steps of the Chinese and the consequences that the United States will face. It is believed that in the near future Beijing will nevertheless increase duties on goods from the United States, but they will not bring much damage to the US economy. China has already raised duties on $110 billion worth of goods, while a negligible $10 billion remained intact." It is possible that China will have to reduce their purchase of Treasuries, continue the devaluation of the renminbi and limit the supply of rare earths to the US.

Meanwhile, the Chinese press calls Donald Trump's concession a manifestation of weakness. The media says there is plenty of irony over how the aggressive strategy of the owner of the White House failed.

What does the defensive yen say?

After a short break, the US currency continues to lose against the Japanese yen. An attempt to gain a foothold above 106.50 was a failure.

Traders and investors have little faith that the two giants will manage to overcome trade differences and sign a bilateral agreement. Additional pressure on the dollar has a decrease in the yield of the national debt market. The yield on 10-year Treasuries dipped to 1.6%. The yield spread of the "two-year" and "ten-year" has already dropped below zero. The inversion of the yield curve is obvious. In turn, it signals an approaching recession.

It is worth noting that since the beginning of August, the US market has already twice shown the most serious one-day decline in a year. Until August 14, the most negative one-day dynamics was recorded on August 5. The reason is the aggravation of the US-China trade conflict.

On Thursday, markets evaluate data on retail sales, applications for unemployment benefits and the dynamics of industrial production. Another batch of weak statistics will increase concern about a slowdown in US GDP growth.

Such a development of events will push Treasury yields even further and force the Federal Reserve to ease the monetary policy. The continuing tension in trade relations, together with the prospect of a more active reduction in rates, make the USD/JPY pair an excellent candidate for a bear rally. You can look at around 104.50.

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