Technical Analysis of GBP/USD for May 29, 2020:

Technical Market Outlook:

The GBP/USD pair is challenging the local high of 1.2362 again. Despite the fact, that the market has made the Pin Bar candlestick that retraced the up trend almost in 100%, the bulls are pushing the prices and targeting the next level seen at 1.2381. The momentum is still strong and positive, so odd for a local up trend continuation after the range breakout are high. The last swing low and technical support is seen at the level of 1.2072, but there is still a long way to test this level of support.

Weekly Pivot Points:

WR3 - 1.2499

WR2 - 1.2389

WR1 - 1.2274

Weekly Pivot - 1.2176

WS1 - 1.2057

WS2 - 1.1949

WS3 - 1.1823

Trading Recommendations:

On the GBP/USD pair the main trend is down, but the reversal will be possible when the coronavirus pandemic is tamed. The key long-term technical support has been recently violated (1.1983) and the new one is seen at the level of 1.1404. The key long-term technical resistance is seen at the level of 1.3518. Only if one of these levels is clearly violated, the main trend might reverse (1.3518) or accelerate (1.1404). The market might have done a Double Top pattern at the level of 1.2645, so the price might move lower in the longer-term.

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Technical Analysis of EUR/USD for May 29, 2020:

Technical Market Outlook:

The EUR/USD pair has broken above the level of 1.1050 and keeps going higher inside of the ascending channel. The bulls are then pushing through and the market conditions are still in their favor, so does the increasing momentum. The next target for bulls is seen at the level of 1.1148 and 1.1190. The immediate support is seen at the levels of 1.1050, 1.1017 and 1.0991. Please notice, the market conditions are starting to become overbought, so a corrective pull-back is still on the table.

Weekly Pivot Points:

WR3 - 1.1206

WR2 - 1.1107

WR1 - 1.0997

Weekly Pivot - 1.0901

WS1 - 1.0789

WS2 - 1.0688

WS3 - 1.0567

Trading Recommendations:

On the EUR/USD pair the main long term trend is down, but the reversal is possible when the coronavirus pandemic will be tamed. The key long-term technical support is seen at the level of 1.0336 and the key long-term technical resistance is seen at the level of 1.1540. Only if one of this levels is clearly violated, the main trend might reverse (1.1540) or accelerate (1.0336).

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

Fractal analysis of the main currency pairs on May 29

Forecast for May 29:

Analytical review of currency pairs on the scale of H1:

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For the euro / dollar pair, the key levels on the H1 scale are: 1.1254, 1.1197, 1.1168, 1.1123, 1.1071, 1.1041 and 1.0994. Here, we are following the ascending structure of May 25. The continuation of the upward movement is expected after the breakdown of the level of 1.1123. In this case, the target is 1.1168. Price consolidation is in the range of 1.1168 - 1.1197. For the potential value for the top, we consider the level of 1.1254. Upon reaching which, we expect a downward pullback.

A short-term downward movement is expected in the range of 1.1071 - 1.1041, hence, there is a high probability of an upward reversal. The breakdown of the level of 1.1041 will lead to an in-depth correction. In this case, the target is 1.0994. This level is a key support for the ascending structure.

The main trend is the local structure for the top of May 25

Trading recommendations:

Buy: 1.1125 Take profit: 1.1168

Buy: 1.1198 Take profit: 1.1254

Sell: 1.1070 Take profit: 1.1041

Sell: 1.1039 Take profit: 1.1000

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For the pound / dollar pair, the key levels on the H1 scale are: 1.2566, 1.2515, 1.2438. 1.2361, 1.2259, 1.2208 and 1.2160. Here, we are following the ascending structure of May 25.The continuation of the upward movement is expected after the breakdown of the level of 1.2361. In this case, the target is 1.2438. Price consolidation is near this level. The breakdown of the level of 1.2440 should be accompanied by a pronounced upward movement. Here, the target is 1.2515. For the potential value for the top, we consider the level of 1.2566. Upon reaching which, we expect consolidation, as well as a downward pullback.

A short-term downward movement is expected in the range of 1.2259 - 1.2208. The breakdown of the last value will lead to the cancellation of the upward structure from May 25. In this case, the first target is 1.2160.

The main trend is the local structure of May 25

Trading recommendations:

Buy: 1.2361 Take profit: 1.2436

Buy: 1.2440 Take profit: 1.2515

Sell: 1.2257 Take profit: 1.2210

Sell: 1.2206 Take profit: 1.2160

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For the dollar / franc pair, the key levels on the H1 scale are: 0.9735, 0.9689, 0.9663, 0.9645, 0.9618, 0.9586, 0.9564 and 0.9533. Here, we are following the descending structure of May 25. The continuation of the downward movement is expected after the breakdown of the level of 0.9618. In this case, the target is 0.9586. Short-term downward movement, as well as consolidation is in the range of 0.9586 - 0.9564. For the potential value for the bottom, we consider the level of 0.9533. Upon reaching which, we expect an upward pullback.

A short-term upward movement is possible in the range of 0.9645 - 0.9663. The breakdown of the last level will lead to an in-depth correction. In this case, the target is 0.9689. This level is a key support for the bottom.

The main trend is the descending structure of May 25

Trading recommendations:

Buy : 0.9645 Take profit: 0.9661

Buy : 0.9665 Take profit: 0.9687

Sell: 0.9616 Take profit: 0.9590

Sell: 0.9584 Take profit: 0.9566

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For the dollar / yen pair, the key levels on the scale are : 107.60, 107.38, 107.23, 107.04, 106.77, 106.58 and 106.33. Here, we are following the development of the downward cycle of May 19. The continuation of the downward movement is expected after the breakdown of the level of 107.04. In this case, the target is 106.77. Short-term downward movement, as well as consolidation are in the range of 106.77 - 106.58. For the potential value for the bottom, we consider the level of 106.33. Upon reaching which, we expect an upward pullback.

A short-term upward movement is possible in the range of 107.23 - 107.38. The breakdown of the last level will lead to an in-depth correction. Here, the goal is 107.60. This level is a key support for the downward structure.

The main trend: the downward cycle of May 19

Trading recommendations:

Buy: 107.23 Take profit: 107.36

Buy : 107.40 Take profit: 107.60

Sell: 107.02 Take profit: 106.80

Sell: 106.76 Take profit: 106.60

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For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3942, 1.3873, 1.3829, 1.3758, 1.3705 and 1.3627. Here, we are following the development of the medium-term downward cycle of May 14. A short-term downward movement is expected in the range of 1.3758 - 1.3705. The breakdown of the latter level will allow us to expect movement to a potential target - 1.3627. Upon reaching this level, we expect consolidation, as well as an upward pullback.

A short-term upward movement is possible in the range of 1.3829 - 1.3873. The breakdown of the latter level will lead to the development of an in-depth correction. Here, the potential goal is 1.3942. We expect the initial conditions for the upward cycle to be formed to this level.

The main trend is the medium-term downward trend of May 14

Trading recommendations:

Buy: 1.3829 Take profit: 1.3870

Buy : 1.3875 Take profit: 1.3940

Sell: 1.3756 Take profit: 1.3709

Sell: 1.3703 Take profit: 1.3637

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For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6792, 0.6760, 0.6705, 0.6666, 0.6614, 0.6585, 0.6552 and 0.6509. Here, we are following the development of the upward cycle of May 15.The continuation of the upward movement is expected after the breakdown of the level of 0.6666. In this case, the target is 0.6705. Price consolidation is near this level. The breakdown of the level of 0.6705 should be accompanied by a pronounced upward movement. Here, the target is 0.6760. For the potential value for the top, we consider the level of 0.6792. Upon reaching which, we expect consolidation, as well as a downward pullback.

Consolidated movement is possible in the range of 0.6614 - 0.6585. The breakdown of the last level will lead to an in-depth correction. Here, the target is 0.6552. This level is a key support for the upward structure and its breakdown will lead to the formation of initial conditions for the downward cycle. In this case, the target is 0.6509.

The main trend is the upward structure of May 15

Trading recommendations:

Buy: 0.6666 Take profit: 0.6705

Buy: 0.6707 Take profit: 0.6760

Sell : 0.6614 Take profit : 0.6587

Sell: 0.6583 Take profit: 0.6552

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For the euro / yen pair, the key levels on the H1 scale are: 120.24, 119.97, 119.51, 119.18, 119.00, 118.52, 118.25 and 117.77. Here, we continue to monitor the ascending structure of May 22. The continuation of the upward movement is expected after passing through the noise range of 119.00 - 119.18. In this case, the target is 119.51. Price consolidation is near this level. The breakdown of the level of 119.51 should be accompanied by a pronounced upward movement. Here, the goal is 119.97. For the potential value for the top, we consider the level of 120.24. Upon reaching which, we expect consolidation, as well as a downward pullback.

A short-term downward movement is possible in the range of 118.52 - 118.25, hence, the high probability of an upward reversal. The breakdown of the level of 118.25 will lead to in-depth correction. Here, the goal is 117.77. This level is a key support for the top.

The main trend is the local ascending structure of May 22

Trading recommendations:

Buy: 119.18 Take profit: 119.50

Buy: 119.53 Take profit: 119.95

Sell: 118.52 Take profit: 118.27

Sell: 118.23 Take profit: 117.85

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For the pound / yen pair, the key levels on the H1 scale are : 135.26, 134.28, 133.86, 133.16, 132.13, 131.65 and 130.98. Here, we are following the development of the ascending structure of May 15. The continuation of the upward movement is expected after the breakdown of the level of 133.16. In this case, the target is 133.86. Price consolidation is in the range of 133.86 - 134.28. For the potential value for the top, we consider the level of 135.26. Upon reaching which, we expect consolidation, as well as a downward pullback.

A short-term downward movement is possible in the range of 132.13 - 131.65. The breakdown of the last level will lead to an in-depth correction. Here, the potential target is 130.98. This level is a key support for the upward structure.

The main trend is the upward structure of May 15

Trading recommendations:

Buy: 133.16 Take profit: 133.86

Buy: 134.30 Take profit: 135.25

Sell: 132.13 Take profit: 131.66

Sell: 131.63 Take profit: 131.00

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GBP/USD: plan for the European session on May 29 (analysis of yesterday's deals). Pound returns to weekly highs, but further

To open long positions on GBP/USD, you need:

The British pound managed to defend the 1.2237 level yesterday, and after a break and consolidation above the resistance of 1.2290, demand only intensified, which allows us to expect a return to this week's highs. If you look at the 5-minute chart, you will see how a breakthrough with consolidation at resistance 1.2290, and then a test of this level from top to bottom was an excellent signal for opening long positions in GBP/USD, which I pointed out in yesterday's review on the second half of the day. Now the bulls' task is to break through and consolidate above this week's high at 1.2361, since such a scenario will lead to a major upward trend of GBP/USD, formed on May 15, 2020 with the update of levels 1.2423 and 1.2463, where I recommend taking profit. If the pressure on the pound returns in the first half of the day, I recommend considering new long positions only after forming a false breakout in the region of 1.2290 or buying GBP/USD immediately for a rebound from support 1.2237, with the aim of an upward correction of 20-30 points at the end of this week .

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To open short positions on GBP/USD, you need:

The task of sellers in the first half of the day is forming a false breakout in the region of this week's high, where resistance 1.2361 passes, which may increase pressure on the pound, as buyers will stop trying to break even higher at the end of this month. An equally important task for the bears is the return of GBP/USD to the support area of 1.2290, since consolidating below this range can lead to forming a new downward impulse that can break below 1.2237. With a growth scenario above this week's high, it's best not to rush into opening short positions, but rather wait for the levels 1.2423 and 1.2463 to be updated, where you can sell immediately for a rebound in the expectation of a correction of 20-30 points at the end of the day.

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Signals of indicators:

Moving averages

Trade is conducted above 30 and 50 moving averages, and the market is again on the side of pound buyers.

Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differs from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger bands

Growth will be limited by the upper level of the indicator at 1.2361, a breakthrough of which will lead to a new wave of growth for the pound. In case of decrease, support will be provided by the lower border of the indicator 1.2280, from which you can see purchases.

Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - Moving Average Convergence / Divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
  • Non-profit traders are speculators, such as individual traders, hedge funds and large institutions that use the futures market for speculative purposes and meet certain requirements.
  • Long nonprofit positions represent the total long open position of nonprofit traders.
  • Short nonprofit positions represent the total short open position of nonprofit traders.
  • The total non-profit net position is the difference between the short and long positions of non-profit traders.
The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD: plan for the European session on May 29 (analysis of yesterday's deals). Euro continues to gain strength amid good

To open long positions on EUR/USD, you need:

Yesterday's report on US GDP for the first quarter of this year turned out to be worse than forecasts of economists, which caused the euro to strengthen further. If you look at the 5-minute chart, you will clearly see how the breakout of resistance 1.1030 occurred, and then its test from top to bottom, which will result in forming a signal to open long positions, which I recommended doing in yesterday's review for the afternoon. Updating the high of 1.1093 led to a slight rebound in the euro before the US session closed. At the moment, the bulls will focus on resistance 1.1093, consolidating above which, by analogy with yesterday, can only strengthen the bullish trend, which will result in renewing new highs in the areas of 1.1139 and 1.1231, where I recommend taking profit. You must also remember that eurozone inflation data will be released today, which can spoil the mood of buyers. If EUR/USD decreases in the first half of the day, I recommend returning to long positions only after a false breakout has formed in the support area of 1.1063 or buy the euro immediately to rebound from the lows of 1.1030 and 1.0994 with the aim of an upward correction of 20-25 points by the end of the day, like this It was yesterday by analogy with the resistance of 1.1093.

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To open short positions on EUR/USD, you need:

The only thing the bears can count on today with such a powerful bullish momentum is the weak inflation rates in the eurozone, which will probably slow down, as well as the US measures against China on the Hong Kong autonomy issue. Forming a false breakout in the resistance area of 1.1093 and any negative background can force the bulls to take profits at the end of the month, which will return pressure on the pair and lead to an update of the low of 1.1063. However, consolidating below this level will not greatly affect the current technical picture, therefore, after a test of the lows 1.1030 and 1.0994, demand for the European currency will remain quite high. With a growth scenario above resistance 1.1093 in the morning, it is best not to rush into short positions, but wait until the high at 1.1139 is updated or sell EUR/USD immediately to rebound from a larger resistance 1.1231. Also, bears can focus on divergence today, which can form on the MACD indicator after an attempt by the bulls to update this week's highs.

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Signals of indicators:

Moving averages

Trade is conducted above 30 and 50 moving averages, which indicates continued growth of the euro in the short term.

Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differs from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger bands

The upper border of the indicator in the region of 1.1130 will act as resistance. In case the euro falls, support will be provided by the lower border in the area of 1.1020.

Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - Moving Average Convergence / Divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
  • Non-profit traders are speculators, such as individual traders, hedge funds and large institutions that use the futures market for speculative purposes and meet certain requirements.
  • Long nonprofit positions represent the total long open position of nonprofit traders.
  • Short nonprofit positions represent the total short open position of nonprofit traders.
  • The total non-profit net position is the difference between the short and long positions of non-profit traders.
The material has been provided by InstaForex Company - www.instaforex.com

Technical Analysis of ETH/USD for May 29, 2020:

Crypto Industry News:

The Chinese People's Bank (PBoC) explained that there is still no "schedule" for the official launch of the digital yuan. In an interview published on the central bank's website, the president of PBoC, Yi Gang, was asked about the official date of the introduction of the central bank's digital currency, to which he replied:

"These tests are routine digital research and development (R&D) work. No official release schedule has been disclosed."

The pilot test referred to by Gang was carried out in the cities of Shenzhen, Suzhou, the new Xiongan area, Chengdu and the future site of the Winter Olympic Games.

Shortly after the publication of the interview, a local state-controlled media center published an article suggesting that China could accelerate the implementation of its CBDC to counter the potential financial threat from the United States and manage the financing of aid after the COVID-19 crisis.

According to Cao, the digital currency controlled by the central bank would allow the government to track aid money and make sure it reaches companies in need. As part of COVID-19 economic damage control, China is reportedly intending to raise its deficit to GDP ratio to more than 3.6% and propose a tax reduction of 2.5 trillion yuan ($ 353 billion) for businesses this year.

Technical Market Outlook:

The ETH/USD pair keep rallying towards the level of $225.84 which is the swing high. The momentum is strong and positive, so odds for the breakout are high. The target for bears is seen at the level of $235.42. On the other hand, any violation of the blue trend line will likely result in another wave down towards the levels of $193.78 and $188.86, so please keep an eye on current price developments around this levels .

Weekly Pivot Points:

WR3 - $234.40

WR2 - $228.76

WR1 - $216.85

Weekly Pivot - $204.00

WS1 - $192.21

WS2 - $178.64

WS3 - $166.85

Trading Recommendations:

The larger time frame trend on Ethereum remains down and as long as the level of $288 is not violated, all rallies will be treated as a counter-trend corrective moves. This is why the short positions are now more preferred. The next key technical support is seen at the level of $174.82.

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

Technical Analysis of BTC/USD for May 29, 2020:

Crypto Industry News:

As part of his recent videoconference, Goldman Sachs addressed several topics about the "US economic outlook" and "implications of current policy." The bank's experts analyzed, among others topics such as inflation, gold and Bitcoin. The event took place yesterday. Unfortunately, cryptocurrency fans will not be delighted with the financiers' conclusions.

Earlier, cryptocurrency market participants hoped that Goldman Sachs would look at cryptocurrencies differently. The more that since the beginning of the year BTC has gained a lot, and the fiat currency market is probably in the vestibule to the room with the inscription "high inflation".

However, bank economists do not see the potential of BTC and believe that buying cryptocurrencies "has no real investment justification." In addition, they believe that BTC does not represent a new asset class. Not only that, digital currencies based on blockchains do not generate profits through exposure to economic growth, they have not proved to be credible protection against inflation so far and are used to facilitate money laundering and shopping in darknet.

In fact, such statements are a huge disappointment, because it is quite easy to see that fiat currencies are also used for illegal activities, while BTC is still quite effectively fighting for the name of safe haven.

Technical Market Outlook:

The BTC/USD pair has broken through the short-term trend line resistance (marked as brown on the chart) and violated the 61% Fibonacci retracement of the last swing down around the level of $9,381. The nearest technical support is seen at the level of $9,249 and $9,013. The momentum is now strong and positive, so If the level of $9,569 is clearly violated, then the next target for bulls is seen at the level of $9,704. The larger time frame trend remains down.

Weekly Pivot Points:

WR3 - $10,568

WR2 - $10,245

WR1 - $9,478

Weekly Pivot - $9,098

WS1 - $8,333

WS2 - $7,968

WS3 - 7,231

Trading Recommendations:

The larger time frame trend remains down and as long as the level of $10,791 is not violated, all rallies will be treated as a counter-trend corrective moves. This is why the short positions are now more preferred until the level of $10,791 is clearly violated. The key mid-term technical support is located at the level of $7,897.

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

Elliott wave analysis of EUR/JPY for May 29, 2020

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EUR/JPY has rallied to a high of 119.39 or just above our ideal target at 119.31. This has completed wave iii/ and we should now see a correction in wave iv/. As wave ii/ was a simple deep zig-zag correction, we should expect a complex flat correction, that doesn't correct more than 38.2% of wave iii/. Then the pair may try to hit 117.84. Wave v/ may climb to at least 120.30 and possibly even closer to 121.16 where we see solid resistance.

In the short-term, a break below minor support at 118.45 will confirm that wave iii/ has peaked and wave iv/ is in motion.

R3: 120.29

R2: 119.65

R1: 119.39

Pivot: 118.80

S1: 118.45

S2: 118.20

S3: 117.84

Trading recommendation:

We took profit of 75% of our long EUR position at 119.20 enjoying a nice profit of 355 pips. We will re-buy EUR at 118.00

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

Elliott wave analysis of GBP/JPY for May 29, 2020

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Key-resistance at 133.19 remains untouched which keeps this count as the alternate count. We believe that it is just a matter of time before the real test and likely break above key-resistance at 133.19 occur. Once broken that will call for a continuation higher to 135.00 and to 141.06.

In the short-term, we could see GBP/JPY move lower to the solid support at 131.87 before being ready to test the key-resistance again.

R3: 133.59

R2: 133.19

R1: 132.40

Pivot: 131.87

S1: 131.56

S2: 131.20

S3: 130.65

Trading recommendation:

We are long GBP from 131.95 and has placed our stop at 130.65

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

Kiwi to test 1.3822 May 29, 2020

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On the 4 hour chart, the USD/CAD pair is going to liquidity void and BIVI (buy-side imbalance volume). Both of them will act as a magnet area for Kiwi. However, this pair needs to rise above the 1.3822 level. Although there is a liquidity void above that level, from the technical point of view pay attention to the CCI (30). If the pair fails to reverse from above the 0 level or if this pair breaks out and closes below the 1.3731 level, it is likely to grow.

(Disclaimer)

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Forecast for EUR/USD on May 29, 2020

EUR/USD

Yesterday, investors' expectations for positive US data did not materialize. The volume of orders for durable goods fell by 17.2% in April after a previous drop of 14.7%. The forecast was -19.0%, but of -17.2% optimism, of course, does not cause. The second estimate of GDP for the first quarter was revised down from -4.8% to -5.0% against the forecast without change (i.e. -4.8%). As a result, the dollar index lost -0.47%, the euro grew by 68 points, the S&P 500 fell by 0.21%.

Macro statistics do not have to wait for optimism to an even greater extent today. The forecast for personal incomes of consumers for April is -7.0%, for personal expenses -12.6% versus the March contraction of -7.5%. The index of business activity in the manufacturing sector of the Chicago region in May is expected to increase from 35.4 to 40.1, but here (in the spirit of the times) there is a great emotional component, so the data may turn out to be worse.

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The euro is moving towards its first target of 1.1140 on the daily chart. Whether there will be a price reversal from this level or the euro will continue to grow higher is currently not clear, since there are no prerequisites for technical signs in any direction. Price in a local situation is a leading factor, indicators in a guided position.

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The price and indicators are growing on the H4 chart, there are no signs of a reversal. We are waiting for the price on the embedded line of the price channel of 1.1140.

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Forecast for AUD/USD on May 29, 2020

AUD/USD

The Australian dollar is consolidating for the third day at the 0.6677 level (extremum of August 7, 2019, October 1, 2019, March 9, 2020, etc.). At first glance, this is a sign of continued growth, but if the price does not manage to do this before the Marlin oscillator signal line goes into the negative area, it will fall. The purpose of growth is the record level of 0.6820. In the event of a price reversal, the first goal will be to support the embedded line of the price channel at around 0.6470.

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According to Marlin, divergence is observed on the four-hour chart, but the price is higher than the indicator lines of balance and MACD, which shows sufficient potential for continued growth, if not to the target level of 0.6820, then with the possibility of a false exit above the first target level of 0.6677. Departure of the price to the signal level of 0.6569 will confirm the Australian dollar in adherence to the main scenario - to initially drop to 0.6470, then to lower targets (0.6328, 0.6107).

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Forecast for USD/JPY on May 29, 2020

USD/JPY

The US stock market (S&P 500) lost 0.21% on Thursday due to weak economic data: the volume of orders for durable goods fell by 17.2% in April, the second estimate of GDP for the first quarter was revised down from -4.8 % to -5.0% against an unchanged forecast (i.e. -4.8%). The Japanese Nikkei 225 index is down 0.65% today in the Asian session. The currency pair itself, following the stock market, turned down from the signal level of 107.78 yesterday and approached the support of the embedded price channel line (107.37) this morning, overcoming which will allow the price to fall to the MACD indicator line (107.12), then, in case it leaves the area under the MACD line, to the target level of 106.75.

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The price has consolidated below the MACD line on the four-hour chart, the Marlin oscillator is in the negative zone. The probability of the bears' success, that is, overcoming the support of 107.37 is 62-65%.

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NZD/USD holding above trendline support preparing for a bounce!

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Trading Recommendation

Entry: 0.61800

Reason for Entry: Ascending trendline support, 61.8% Fibonacci retracement

Take Profit : 0.62408

Reason for Take Profit: 78.6% Fibonacci retracement, 61.8% Fibonacci extension

Stop Loss: 0.61499

Reason for Stop loss: Graphical swing low, 50% Fibonacci retracement

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

XAU/USD bounced off support, potential for further upside

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Trading Recommendation

Entry: 1714.301

Reason for Entry: Horizontal pullback support and 38.2% fibonacci retracement,

Take Profit: 1738.519

Reason for Take Profit: Horizontal swing high resistance, 61.8% fibonacci retracement

Stop Loss: 1703.829

Reason for Stop loss: Horizontal swing low support, 61.8% fibonacci retracement

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

Hot forecast and trading signals for the GBP/USD pair on May 29. COT report. Pound will not feel confident until there is

GBP/USD 1H

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The pound/dollar resumed the upward movement on Thursday, turning upward near the ascending trend line. Thus, the bulls held the market in their hands. Nevertheless, over the past day they were not able to update local highs, which provoked the construction of a downward trend line, and now the pair is stuck in a kind of triangle. Since the pair rebounded from the new trend line just a few hours ago, we are now expecting a downward movement to the rising trend line and the Kijun-sen line. Talk about the future prospects of bulls or bears will be possible after the pair leaves this triangle. We are still more inclined towards a new fall in the British currency.

GBP/USD 15M

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The lowest channel of linear regression is again directed upwards on the 15-minute timeframe, showing the mood of traders on May 28, but the higher channel turned sideways and showed a lateral trend, according to which a drop to 1.2210 can begin today.

COT Report

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The latest COT report showed that the total number of buy and sell transactions among large traders per week increased by 29,000 and in equal proportions. Thus, large traders began to more actively trade the pound. This became noticeable by the increased volatility of the pair at the beginning of the current trading week. During the reporting week, professional traders continued to actively sell the British currency (+8303 sales contracts) and were much less active in acquiring purchase contracts (total +4313). Thus, from our point of view, the mood for the GBP USD pair remains more downward. It is on the basis of this conclusion that we expect the pound to be sold, although it should be recognized that this week the pound is still more expensive than cheaper, but this growth cannot be called strong and confident.

The fundamental background for the British pound remains negative. The calendar of UK macroeconomic events is completely empty this week, and yesterday, statistics from overseas supported the dollar rivals. However, there is also no positive news from Great Britain. In June, Boris Johnson intends to hold talks with Brussels in person, and on July 1, the parties are likely to officially announce the completion of the "transition period" on December 31, 2020. It is on this day that the final break will take place between London and Brussels. Johnson's negotiations with Ursula von der Leyen are almost the last hope that at least some kind of agreement will be signed between the parties. If not, another blow will be dealt to the British economy. That is, it will face another reduction, and, recall, according to the latest information, the epidemic of the coronavirus and Brexit can cost the country from 33% to 50% of GDP in 2020. The budget deficit will be huge and the missing funds will have to be borrowed, which will have to be paid to ordinary British taxpayers for years.

We have two main options for the development of the event on May 29:

1) The initiative for the pound/dollar pair remains in the hands of the bulls, however, further upward movement will be possible only after breaking the downward trend. As soon as this happens, we recommend opening new purchases of the British pound with a target resistance level of 1.2399. Take Profit will be about 60 points in this case.

2) Sellers temporarily remain in the shadow, but will be ready to join the game below the ascending trend line and below the area of 1.2196-1.2216. If the pair is fixed below this area, we advise selling the GBP/USD pair while aiming for the May 18 low at 1.2073. In this case, Take Profit will be about 110 points.

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

Hot forecast and trading signals for the EUR/USD pair on May 29. COT report. Angela Merkel does not expect that the plan

EUR/USD 1H

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The EUR/USD pair continued its upward movement on the hourly timeframe during the penultimate trading day of the week, left the side channel of 1.0750-1.1000, which was trading for several weeks. Thus, the bulls indicated their intention to build a new upward trend. We have already mentioned in our fundamental analysis articles that we do not see why the European currency can continue to grow in value in the medium term. However, the technique does not deny this possibility. The immediate goal for trading to increase is the March 27 high, which is a kind of last line of resistance on the way of the euro/dollar to forming an upward trend. If buyers manage to overcome this level as well, then the euro's position could improve significantly in the coming weeks. Upward movement is currently supported by a long-term trend line (the lowest), a short-term trend line and an upward channel.

EUR/USD 15M

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We see how buyers continue to dominate the market on the 15-minute timeframe. Both linear regression channels are directed upward, clearly signaling the upward trend of the pair. There are still no signs of a reversal of any channel. The pair cannot consolidate for a long time even below the moving average line.

COT report

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The latest COT report showed that large traders who trade for foreign exchange earnings, and not for hedging and current activities, continued to reduce euro purchases and increase sales in the reporting week. The growth of the latter was small, only 1257 contracts, but in aggregate with -3425 contracts for sale, we have a serious deterioration in the mood of traders regarding the euro. The total number of purchase contracts also decreased by 294 units, and the number of Short-deals increased by 970 units. Thus, we see that the mood of traders remains bearish and only intensifies. However, bidding this week shows that the US dollar failed to extract dividends from this, and the euro continues to rise in price. Thus, the new COT report can show an improvement in the position of large professional buyers.

The overall fundamental background for the pair remains neutral. However, yesterday,

US data on orders for durable goods and GDP provided support to the euro. Traders were not able to ignore them, since another decline was recorded in the US economy, which provoked overcoming the side channel of 1.0750-1.1000. Today, all macroeconomic reports of the day are secondary, so we do not expect them to be worked out. On the last trading day of the week and month, the pair may begin to adjust due to the desire of traders to take part of the profit on open positions. The euro may soon be under pressure again, as all the plans of the European Commission to stimulate the economy could fail. For example, Angela Merkel said that she expects "difficult negotiations" at the next EU summit and that "they (negotiations) are unlikely to be completed at it." France also notes that the proposed €750 billion plan is unlikely to be agreed upon and supported by all 27 participating countries as early as June. At the same time, it is noted that "September is already too late."

Based on the foregoing, we have two trading ideas for May 29:

1) It is possible for quotes to grow further with the goals of the resistance level for the 4-hour chart of 1.1111 and the March 27 high at 1.1147. These two goals could be fulfilled on Friday, but at least we expect a downward correction in the afternoon, which will be logical for the end of the month. In any case, before quotes leave through the lower border of the ascending channel, the pair maintains high chances of continued growth. Potential Take Profit will be from 35 to 70 points.

2) The second option - bearish - involves consolidating the EUR/USD pair under the upward channel, which will allow sellers to be engaged and start trading lower with targets at 1.0982 (Kijun-sen) - 1.0945 (upward trend line) - 1.0891 (Senkou Span B) - 1.0830 (ascending trend line). Overcoming each of the obstacles will allow you to keep short positions open. Potential Take Profit range from 40 and 200 points.

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Overview of the GBP/USD pair. May 29. Boris Johnson will personally negotiate the agreement with the European Union in the

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - upward.

CCI: 113.8901

On May 27, the British pound corrected to the moving average line but failed to gain a foothold below it, so yesterday it rebounded and resumed its upward movement. However, the previous local maximum was not reached this time, so the prospects for bulls remain very vague. However, the upward direction of the Heiken Ashi indicator shows an upward trend in the most short-term plan. The volatility of the currency pair remains average. During the past day, it was passed from a minimum to a maximum of about 110 points. The day before yesterday, the CCI indicator entered the overbought area, which indicates a very possible beginning of a downward trend in the near future. There is almost no correlation with the euro/dollar pair at the moment because both pairs are affected by different fundamental backgrounds. Thus, nothing will prevent sellers from re-entering the market. Also, both channels of linear regression continue to be directed downward, which maintains a downward trend in the medium and long term.

We have already written about the macroeconomic statistics of the last day in the article on the euro/dollar. In the UK itself, no macroeconomic events are planned for this week, so there is essentially nothing to analyze. Macroeconomic statistics from overseas yesterday provided support for the British pound in the short term, but also, as in the case of the euro currency, we do not believe that the pound has sufficient support for the fundamental or macroeconomic background to start a new upward trend. Thus, the maximum that the British currency can expect in the near future is a correction. Key issues that put pressure on the British pound in the medium and long term remain unresolved. One of these issues is most acute right now. We are talking about negotiations with Brussels on a comprehensive agreement that will determine the relationship between the Kingdom and the Alliance after 2020 when Brexit will be officially completed. Recall that negotiations on this agreement began in March and take place every month for one week, in the format of a video link. Initially, few experts and analysts expected that the parties would be able to reach an agreement in such a short time. With each successive round of negotiations, these fears were only confirmed. So far, three rounds have been completed and since the last one, the parties have stated that there has been no progress on key issues and accused each other of being unwilling to concede. And now, according to the latest information from David Frost, the official representative at the talks from London, Boris Johnson personally intends to visit Brussels in the second half of June and discuss with the head of the European Commission, Ursula von der Leyen, and the President of the European Council, Charles Michel, the prospects for an agreement. Boris Johnson will try to understand whether there are any prospects for further negotiations with Brussels. Earlier, the British Prime Minister has repeatedly stated that he is ready to sever all ties with the EU without any deals and agreements. Thus, if Johnson's visit to Brussels turns out to be unsuccessful, it is likely that London will cancel any further negotiations altogether.

Also recently, the chief economist of the Bank of England, Andy Haldane, spoke. It partly dispelled traders' fears that the regulator is preparing to introduce negative interest rates, as previously hinted by the head of the Bank of England, Andrew Bailey. He said that the BA is currently at the stage of evaluating the option of introducing negative rates, but is also considering other options for additional stimulus to the economy. BA's chief economist also said that the British economy will not be able to recover as quickly as it has shrunk, and is unlikely to reach pre-crisis levels until the end of 2021.

At the same time, events in the United States is rapidly gaining momentum. Recall that in recent weeks, the problem of a new conflict and even a new "cold war" between China and America has become more acute. If just a few weeks ago the main issue was Washington's claims to Beijing over the "coronavirus", now the stumbling block is already Hong Kong. China wants to pass a law "on national security in Hong Kong", which, in fact, will give Beijing more control over the region, which has been autonomous since 1984. Washington is actively trading with Hong Kong, granting it many preferences and threatening to take them back, as well as impose sanctions against China and Hong Kong if Beijing passes this law. Yesterday, US Secretary of State Mike Pompeo told Congress that Hong Kong could not be considered autonomous if Beijing passed the law. Thus, if Hong Kong loses its autonomy, the US Congress can revoke the special trade status of this region.

Hong Kong is a special region of China with its own laws, its own political system, its own passports, and even its own language. Hong Kong also has its own judicial system, its own currency, and its own exchange. It is through Hong Kong that up to 60-70% of foreign investment flows to China. And this "window" to the outside world, Beijing has long wanted to "close", but not lose the foreign investment. Now it is the United States that can independently "close" this "window", which, in fact, will make Hong Kong an ordinary part of China, which will be subject to all the restrictions, sanctions and duties imposed by Washington and which may still be imposed in the future. Beijing wants to pass a law that will make it possible to criminalize separatism, terrorism, foreign interference, and subversion of power. That is, in fact, Beijing will have all the necessary levers to manage Hong Kong since anyone can fall under the above list. Interestingly, the Hong Kong authorities themselves support this law.

No important publications are scheduled for the last trading day of the week or month in the UK again. Thus, since only secondary reports will be released in the United States today, we believe that volatility may decrease slightly, and the pound/dollar pair may begin to adjust. At the same time, we remind you that technical indicators are now the most important tool for analysis, since most of the macroeconomic statistics continue to be ignored by market participants.

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The average volatility of the GBP/USD pair has increased due to the last three days and is now 110 points. On Friday, May 29, thus, we expect movement within the channel, limited by the levels of 1.2222 and 1.2442. Turning the Heiken Ashi indicator down will indicate a new round of downward correction. Fixing the price below the moving average will change the downward trend.

Nearest support levels:

S1 – 1.2268

S2 – 1.2207

S3 – 1.2146

Nearest resistance levels:

R1 – 1.2329

R2 – 1.2390

R3 – 1.2451

Trading recommendations:

The GBP / USD pair resumed its upward movement on the 4-hour timeframe. Thus, today it is recommended to continue trading the pound/dollar pair for an increase with the goals of 1.2390 and 1.2442 and keep the longs open until the Heiken Ashi indicator turns down. It is recommended to sell the pound/dollar pair when the bears manage to return to the area below the moving average, with the first targets of 1.2207 and 1.2146.

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

Overview of the EUR/USD pair. May 29. The loss of the American economy in the first quarter may be more than 5%. This information

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - upward.

CCI: 189.7511

The EUR/USD currency pair spent the fourth trading day of the week in a strong upward movement and left the side channel limited by the levels of 1.0750-1.1000. Thus, now the bulls have the opportunity to form an upward trend. However, the prospects for the European currency still remain very vague, if you pay attention to the fundamental background. However, most traders have opted for the euro currency, which means they should accept it and follow the "trend". The pair's volatility has been at a fairly high level of about 100 points per day for three days in a row. However, this is not panic.

Yesterday was marked by macroeconomic publications in Europe and the United States, which traders have been waiting for since the beginning of the week. Recall that in the first three trading days of the week, no important reports were published either in the United States or the European Union. At the same time, the pair diligently stormed the $ 1.10 level and still overcame it over the past day, not without the help of macroeconomic statistics, which in recent months, since the beginning of the "coronavirus" epidemic, was ignored in 95% of cases. However, yesterday's reports could not be ignored by market participants. More precisely, one report... But first things first. The first consumer price index in Germany for May was published in a preliminary assessment. As expected, the main indicator of inflation slowed to 0.6%, and the harmonized indicator - to 0.5% y/y. However, as you can easily guess, these data did not interest traders at all. We have repeatedly said that inflation has changed from "one of the most significant" reports to "one of the least important" since the beginning of the epidemic in the world. This is because inflation serves as a benchmark for many central banks. It is from inflation that regulators start when changing the parameters of monetary policy in order to stimulate economic growth. However, now there is no question of any growth anywhere (perhaps except in China), so inflation does not matter much.

We do not even consider reports on the European Union on consumer confidence and business optimism, as they did not cause any reaction from traders in normal, quiet times. But from overseas today we received a whole scattering of macroeconomic information, and in general, the package of statistics can be called very ambiguous. To begin with, the index of orders for durable goods turned out to be much better than traders expected. The main indicator decreased by only 17.2% in April, with a forecast of -19%, the indicator excluding defense and aviation orders fell by 5.8% instead of the forecast -10%, and the indicator of orders excluding transport lost only 7.4%, while experts predicted losses of around 14%. However, these figures are not at all optimistic. By and large, experts simply did not guess the scale of the reduction, but the cuts themselves did not disappear. Thus, on the one hand, the report was better than traders' expectations, but on the other – it was still a failure. Next, the first-quarter GDP in the US was published in a preliminary estimate. The previous value (also preliminary) was -4.8%, according to the new estimate of experts, the loss will be 5.0%. Thus, this report was worse than the traders' expectations. The last significant report of the day - the report on applications for unemployment benefits - showed an increase of another 2.1 million primary applications, but the indicator of secondary applications fell to 21 million, which is really good news since the value a week earlier was 25 million. This means that with the end of the quarantine (or, better yet, with the easing of the quarantine) in America, several million Americans have returned to work, which means that unemployment may already begin to decline. Thus, one report from overseas is still possible to write in the "plus" of the American currency. Unfortunately for the dollar, market participants paid attention only to the first two reports and this is logical since they reflect the current state of the US economy. Accordingly, from the point of view of the "foundation", the upward movement of the EUR/USD pair was absolutely justified yesterday.

From a technical point of view, the pair's quotes broke out of the limits of the side channel in which they were trading for several weeks and now, logically, the bulls can try to form a new upward trend. However, we still believe that the euro currency does not have strong fundamental support now either. It is only necessary to recall all the problems with agreeing and accepting all the aid packages for the European economy that have been proposed and considered in recent weeks. So far, there is no positive news, which means that the European economy may continue to shrink. Moreover, every proposal to save the economy of the European Union implies the provision of assistance to countries most affected by the epidemic (Italy, Spain, Portugal), however, these countries do not want to get into new loans and then give them back for decades, and the "Northern" countries are not going to finance the recovery fund, from which the money will then be distributed free of charge.

The last trading day of the week should be spent in much calmer trading. Several macroeconomic publications are also planned for this day, but they are all of a frankly secondary nature. In Germany, a report on retail sales for April will be released today, which may show a decrease of 14.3% in annual terms and 12% in monthly terms. The European Union will publish inflation for May in a preliminary estimate. The main indicator is expected to slow down to 0.2%, and the base indicator to 0.8% in annual terms. The GDP of Italy and France in the first quarter will also be known. The Italian economy may lose about 4.8% y/y, while the French economy may lose 5.8% y/y. In the afternoon, data on personal income and spending of the American population for April will be released in the United States. The first indicator is expected to decrease by 6.5%, and the second – by 12.6%. Despite the fact that almost all of today's reports may prove to be failures, we believe that there will be no reaction from traders to them. First, as we have already said, they are not of the first importance, and secondly, the markets are absolutely ready for such values, given the global crisis, quarantine, and epidemic.

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The average volatility of the euro/dollar currency pair as of May 29 is 82 points. Thus, the value of the indicator is still characterized as "average". Today, we expect the pair to move between the levels of 1.1003 and 1.1167. The reversal of the Heiken Ashi indicator downwards signals a downward correction after strong growth.

Nearest support levels:

S1 – 1.1047

S2 – 1.0986

S3 – 1.0925

Nearest resistance levels:

R1 – 1.1108

R2 – 1.1169

R3 – 1.1230

Trading recommendations:

The EUR/USD pair continues a strong upward movement and broke out of the side channel. Thus, after overcoming the upper line of the side channel near the level of 1.1000, buy orders with the goals of 1.1108 and 1.1167 became relevant, and it is recommended to keep them open until the Heiken Ashi indicator turns down. It is recommended to return to selling the pair if the price is re-anchored below the moving average line with the first goals of 1.0925 and 1.0864.

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USD: What will be the fall scenario

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An interesting picture develops on the US dollar, which alludes to the bearish trend. The greenback is cheaper relative to most competitors and, notably, to the currencies of developing countries. The dollar index changed slightly in price on Thursday. The indicator was stuck between the difficult situation with Hong Kong and the general risk appetite. The decline intensified in the US session. The dollar lost more than 1% of its value and went below 98.80 in relation to a basket of six competitors.

The short-term decline in the dollar caused the Ministry of Commerce to revise the first estimate of US GDP growth in the first quarter. Thus, economic growth declined by 5% instead of the previously announced 4.8%. This is the strongest decline since the fourth quarter of 2008. The new data already takes into account the impact of coronavirus on the economy. However, according to experts, the slowdown in the second quarter will be even stronger. The Federal Reserve may support the economy with negative rates that will cause a sharp drop in the dollar.

USDX

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So, if the Fed decides to divert its base interest rate to negative territory, it will need to go as deep as possible, that is, cut it 50-100 basis points below zero. There is no sense in introducing an insignificant negative rate; other large central banks have seen this.

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What the Fed chairman will say to this. The regulator previously allowed an unprecedented package of monetary stimulus in an attempt to support the economy, while Jerome Powell dismissed the idea of lowering the base rate of one-day lending well below zero, despite the pressure of Donald Trump.

However, speculation on this subject remained, and they can begin with a new force after disappointing economic growth and exhaustion of other options for supporting US growth.

According to analysts, reducing the rate by 50-100 basis points below zero will lead to a decrease in the yield of treasury bonds to record lows. A negative territory has been provided for the "decades", all the more so since decisions on a significant reduction in rates will most likely be taken against the background of gloomy economic forecasts and the risks of deflation.

If such a scenario enters into real life, the US currency will sharply go down. At the same time, the fall time will depend on the economic situation and asset market conditions.

"At first, negative rates can disrupt the normal course of work of short-term money markets, so the initial answer might be to buy safe G10 safe haven assets or even strengthen the dollar. As soon as the element of surprise passes, the market will adapt, currencies with positive returns and moderate fiscal policies should strengthen," Standard Chartered writes.

Meanwhile, gold is likely to test record highs in this scenario, as negative rates "will lower the opportunity cost of holding gold." Precious metals are still underestimated, and negative rates may attract retail interest in this sector.

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

Precious metals market actively looked for support

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Yesterday was a very sad day for the precious metals market. Gold declined in price and has already reached the lowest level in the last two weeks. The reasons for what happened should be sought in gradually fulfilling hopes for a more accelerated recovery of the world economy, as well as in the conflict erupting between the United States and China. Economic growth pushes investors in the opposite direction from stable assets, to which it is customary to include the precious metals market.

The price of gold declined by 0.32% and reached the level of $ 1,705.79 per troy ounce yesterday morning. Gold support stood at $ 1,696.25 per troy ounce, while resistance stood at $ 1,742 per troy ounce.

At the same time, it is now extremely important that the price of precious metals not fall below the strategically important mark of $ 1,700 per troy ounce. If this happens, the decline will not only not stop, but will become even more serious, as speculators are more likely to leave the market sinking. The pressure will thus increase, and gold can make a very undesirable peak.

The political situation in the world, on the contrary, provides gold with a certain share of support. Tensions growing between Beijing and Washington make market participants anxious to protect their assets with the help of a "safe haven" of precious metals.

Despite two multi-directional trends, most experts are confident that the period of political instability will still put much more serious pressure on investors, which will inevitably lead to an increase in the price of gold, which is expected to happen in the near future. The decision of the American government to strike back at China in the form of a new package of sanctions can be a signal to this.

Meanwhile, palladium is becoming more expensive: it increased in price by 0.1% and reached the level of $ 1,957.88 per ounce. Silver also rose by 0.06%: its level was 17.11 dollars per ounce. At the same time, the cost of copper futures for July delivery slightly grew (by 0.04%), which sent it to the level of 2.413 dollars per pound.

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

Stock markets showed uncertain growth

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The US stock market showed growth a day ago amid news of a vaccine against COVID-19. In addition, signs of a recovery in the global economy added to the positivity. Restrictions and quarantine measures are systematically lifted, which means that market participants begin to feel more confident.

At the same time, according to experts, more enthusiasm rose on the news about the opening of the economies of the world. So far, this was the most significant impulse of the market yesterday.

Securities of the tourism sector not only in America, but also in Europe, were marked by growth. Mitigating travel restrictions is causing good emotions in the market. It can be recalled that it became known the other day that Germany was ready to lift the ban on tourist trips to more than 30 countries from the middle of next month, provided that there would be no new outbreaks of coronavirus infection. At the same time, the document dealt with trips not only to EU countries; Iceland, Norway, Switzerland, Liechtenstein, and the United Kingdom will also be open to visitors.

Following Germany, another European country, Spain is also going to open borders for foreign tourists in July this year.

The travel industry was very well supported by the news of the successful test of the coronavirus vaccine. To date, several companies in the field of biotechnology have announced the work on a drug to cope with COVID-19.

This month, the consumer confidence index in America increased to the level of 86.6 points, while it was at 85.7 points earlier. Nevertheless, preliminary estimates of experts were higher: it was assumed that it would grow to 86.9 points.

At the same time, statistics on Tuesday reflected a decline in the index of economic activity in the United States over the past month. Moreover, the decline was a record 16.74 points. In comparison, in March the decrease was only 4.97 points.

The Dow Jones Industrial Average index became 2.17% or 529.95 points higher by the end of trading on Tuesday, which allowed it to occupy a line of 24,995.11 points.

The Standard & Poor's 500 Index, on the contrary, reflected an increase of 36.32 points, which recorded an increase of 1.23%. The index level at the close of Tuesday's trading, thus, was at around 2991.77 points.

The Nasdaq Composite index also increased by 0.17%, or 15.63 points, and stood still at the level of 9340.22 points.

Yesterday's trading in the Asia-Pacific region began with multi-directional dynamics. Market participants behaved with restraint amid news of emerging Hong Kong protests over China's pressure and national security law. In response to the bill, the government of the United States is going to introduce control over operations, as well as freeze part of the assets owned by officials from China. Moreover, Hong Kong also risks losing its status as a global financial center.

The growing tension between China and the United States, of course, complicates the work of investors and makes them behave more restrained.

Hong Kong's Hang Seng Index is down 0.47% today. It was followed by the Shanghai Composite of China, which lost a little less - 0.2%.

On the other hand, Japan's Nikkei 225 Index felt positivity and rose 0.39%, which allowed it to slightly win back its previous losses. The country's authorities intend to begin implementing a new package of incentive measures to support the state's economy in the context of coronavirus infection in the near future. This, of course, will be an additional factor in strengthening the stock indicators of Japan.

The KOSPI index of South Korea increased by 0.2%. They are also waiting for a softening of financial policy in the form of a reduction in the key interest rate, which will favorably affect the country's overall economic indicators.

European stock indexes showed rather restrained positive dynamics this morning. The reason, albeit small, but optimistic, was the expectation of the next plan to maintain the EU economy, which the European Commission should present.

The Stoxx Europe 600 region's largest enterprises index was 0.43% higher at 350.43 points.

The UK FTSE 100 Index is up 0.98%. The German DAX Index is up 1.02%. The French CAC index added the most - 1.12%. The Italian FTSE MIB index rose moderately by 0.19%, while the Spanish IBEX 35 showed a rise of 1.32%.

One way or another, external factors add to the positive European stock market. Among them, it is necessary to highlight the decision of Germany and France to sign a joint plan of action to overcome the crisis created by the coronavirus pandemic. The budget for the future tranche for this purpose should be approximately 500 billion euros. However, not all members of the union were delighted with this news: Denmark, Austria, Switzerland and the Netherlands protested.

The escalation of the conflict between the US and China, which, however, the EU countries cannot have any significant influence on, also annoyed investors, so they remain in a position of expectation.

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

Rising tension: oil markets are under pressure

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The cost of crude oil dropped on the trading's bottom. The reasons for what happened should be considered the next round of aggravation of geopolitical tension, as well as a possible slowdown in demand growth.

It can be recalled that at the very beginning of the coronavirus pandemic, the cost of crude oil collapsed as a result of a sharp decline in demand. According to most experts, in order for the situation to return to its previous rhythm, it is necessary first of all to return the pre-coronavirus level of demand. However, this is still a long way off: the situation is complicated by the formed fears and consumer insecurity, which so far cannot be fought, since there are plenty of external pressure factors.

In this regard, even the positivity from the news of the slow but purposeful opening of the economies of the world does not give much adjustment for growth. This news is leveled by the growing conflict between the two largest economic powers - the United States and China.

As it became known, America is ready to ratify a new package of sanctions against China any time this week. It should be noted that the US government is extremely dissatisfied with the fact that Chinese colleagues want to introduce a bill on national security in Hong Kong. In response, US authorities may deprive the city of the status of a global financial center.

In addition, oil is winning back news about active negotiations between Russia and its OPEC partners. The latter put forward a proposal to extend quotas for reducing the production of black gold, which should come to an end by next month. OPEC believes that it is advisable to remove oil production for another two months. Negotiations on this issue have now entered an active phase. If we manage to come to an agreement and the decline continues, this could be a good incentive for oil growth in the market.

The price of futures for Brent crude oil for July delivery in London declined on the trading floor by 0.75%, or $ 0.27 in monetary terms yesterday morning, which sent it to the level of $ 35.90 per barrel. Yesterday's trading session ended for raw materials with an increase of 1.8% ($ 0.64).

The price of WTI crude oil futures for July delivery in electronic trading in New York also fell: a decline of 0.9%, or $ 0.31. The current level of light oil is $ 34.04 per barrel. Contracts, on the contrary, increased by 2.11%, or 0.71 dollars on Tuesday.

In general, the decline in the cost of crude oil cannot yet be called critical: it is a well-justified swing that investors should be prepared for, while there is no solid thing that would provide oil with quality support.

Analysts also argued that much will depend on the level of demand for gasoline. According to recent estimates, the demand for fuel has declined significantly: a drop is likely to occur around 30%. The main reason for this is still the COVID-19 pandemic, against which people stopped moving far from home, and gasoline consumption, of course, declined.

However, there are more positive views on the market. Some experts express confidence in the near restoration of the balance in the oil products market, which is waiting for us in the first summer month. Although this sounds extremely optimistic at first glance, there is some justice in this, since the process of returning to normal life and restoring economies has already been launched and will gain impulse in the near future.

Of course, concerns about new outbreaks of coronavirus infection persisted, but they no longer have such an effect.

Nevertheless, basic forecasts do not yet reflect a significant jump in prices on the black gold market. The cost of raw materials will continue to grow, which, by the way, will be extremely unstable. Given all the favorable factors, North Sea oil will be able to increase its average cost in the region of $ 30 per barrel only by the end of this year. And if the situation changes for the worse, then the average indicator of its price will not exceed $ 19 per barrel in annual terms.

The reduction in stocks will not play a big role either, since it will be possible to reach the pre-crisis level no earlier than in six months, and this is a rather long-term prospect. Although the price of oil will continue to move up, it will be limited by a narrow range. Experts expected that Brent crude oil will be at the level of no more than $ 45 per barrel by the end of this year.

At the same time, there is a very real danger of a fall in the cost of crude oil next summer. The excess of raw materials is still not liquidated, although there is a struggle with it, and support comes only occasionally against the background of news about the restoration of demand in the Asia-Pacific region and a possible restoration of demand in Europe. All this, however, has not yet been confirmed by real statistics and, in fact, may not even be justified.

At the moment, according to analysts, it is possible to imagine several factors that will significantly put pressure on oil. Firstly, COVID-19's second outbreak. Secondly, the agreement of all OPEC members to continue acting within the framework of the signed agreement on reducing oil production. Third, an increase in crude oil production on the territory of the United States of America if prices exceed the level of $ 30 per barrel. Fourth, the correction of consumer habits, which, first of all, will result in a reduction in the number of flights and trips by car, which will lead to a reduction in demand for gasoline and other fuels. So far, these are the main sore points for black gold, but we should also add the ongoing conflict between Washington and Beijing. It is also important that the recovering demand against the background of an excess of supply will create a struggle for sales markets, which, of course, will not add any positivity to the already shaky oil market.

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