Dollar may strengthen before Fed's final decision on monetary policy (a corrective decline in the EUR/USD and USD/JPY pairs

The dynamics of the currency market is still strongly linked to the behavior of the stock market and partly of the commodity and raw materials market, which fully confirms the argument that their multi-directional movement is promising, at least in the short-term.

Monday's trading on the currency market ended ambiguously for the US currency exchange rate. The dollar has traditionally declined in relation to the currencies of the commodity group - Australian, New Zealand and Canadian dollars, as well as to the Norwegian krone. In addition, it adjusted to the British currency and the Japanese yen, but received support against the euro. The single currency is still an outsider in the market, which is associated with the expectation of real business from the ECB and the EU in general with regard to the start of the implementation of previously announced unprecedented incentive measures for Europe, which were announced following a meeting of the European regulator last Thursday.

The situation on the currency market on Tuesday is formed against the backdrop of the expectation of the Fed's final decision on monetary policy. And this is really important, since the regulator can fully exert a noticeable influence on the exchange rate of the American currency.

So far, it is expected in the markets that the final communique of the Federal Reserve, as well as the speech of its head J. Powell, will fully confirm the decisions made earlier on large-scale stimulation of the American economy against the backdrop of the COVID-19 pandemic. If this is so, then it will undoubtedly stimulate a new wave of purchases on the stock markets, as well as commodity and commodity assets. In this situation, the dollar will continue declining against major currencies, and such dynamics will continue until about the next meeting of the regulator. However, there is a small probability that, in his commentary on the Central Bank's decision on monetary policy, J. Powell may report that the expected faster recovery of the country's economy after the pandemic could also lead to weakening stimulus measures.Such a statement or even a hint of it can provoke profit-taking in company shares and local strengthening of the dollar. But as we see it, while this probability remains, it is noticeably low.

Given the above-mentioned, it can be assumed that consolidation will continue or even a slight appreciation of the US currency may occur in the currency market before the announcement of the outcome of the Fed meeting.

Forecast of the day:

The EUR/USD pair is trading at the level of 1.1280. Declining below this level may lead to a local decline in prices to 1.1185.

The USD/JPY pair risk of continuing its decline to 107.00 if it falls and consolidates below the level of 108.00 in anticipation of the outcome of the Fed meeting on Wednesday.

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Positive sentiment dominates global markets. Review of AUD and NZD

Dominance of positive sentiment in global markets continues. On Monday, US stock indices incurred gains. Nasdaq Composite and S&P 500 returned to annual highs. The markets are still under the influence of the extremely positive US labor market report. In addition, the liquidity supply from the majority of the central banks is growing.

Oil prices exceeded $40 per barrel and slowed download growth. However, the trend remains positive as measures taken by OPEC + are giving results. The US dollar is losing ground amid positive expectations. On Tuesday, there is no reason to wait for changes in current trends. The publication of the NFIB report for May is likely to add volatility.

AUDUSD

According to the results of a monthly business survey from National Australia Bank, business conditions in May improved significantly compared to March and April. However, the reading still remains very negative. The key parameters are at the levels that were last observed during the recession of 1990. Every single industry expects worsening conditions, the employment and investment indexes do not show growth. Thus, business has not yet seen any conditions for the expansion or recovery of activity levels of the pre-virus period.

Capacity utilization increased slightly. However, the current level remains very low. Moreover, there are no signs of export growth, while consumer activity is also at its lowest levels. Capital flows are expected to be in a downward trend which began long before the COVID-19 pandemic. Negative tendencies have accumulated over the years. Therefore, it will be impossible to blame them on the coronavirus.

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China's foreign trade data for May, published at the beginning of the week, turned out to be worse than expected, especially for imports, which fell by 16.7%. Of course, part of this decline is offset by low commodity prices. However, the threat of a slowdown in import volumes remains high. This is likely to have a negative impact on Australia's export estimate at least until the June report.

According to CFTC's weekly report, the net short position on the Australian dollar increased by $116 million on a weekly basis. Therefore, growth in the estimated fair price is not based on fundamental indicators, but on positive expectations and an increase in demand for risk assets.

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The AUDUSD pair starts testing important resistance at 0.7025. Based on short-term trends, the testing is expected to be successful and the Australian dollar is likely to rise and consolidate above the level of 0.7080. As a result, an upward trend may occur. At the same time, based on the fundamental state of the Australian economy, there are no special reasons for growth. Therefore, a local peak may form in the 0.7025/80 zone, while a breakout of the resistance level may be false.

NZDUSD

The New Zealand dollar continues to be a leader in terms of market growth. Over the weekend, the currency received a new batch of positivity as Prime Minister Ardern had announced the transition to the first level of alert meaning the removal of all restrictions on social distancing and public events.

Consequently, the next step will be tourism growth, one of the most important components of New Zealand's economy. Expectations of open borders will support the qiwi, regardless of whether the wave of positivity covers the global economy or not.

Speculators have reduced their net short position on NZD once againg. The trend is positive. The estimated price lags behind the spot price, but is directed upwards. Thus, the main scenario for qiwi is growth.

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The resistance level of 0.6448 turned into support. The next support zone is seen at 0.6320/30, where in case of a pullback, buy deals are likely to resume. It is preferable to hold long positions. As for new buy deals, the formation of a technical signal is necessary which is likely to appear only after a correctional decline.

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Analysis of Dow Jones Industrial Average Index For June 09, 2020

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If we look at the daily chart for the #DJI, the index is now trying to fill the SIVI (Sellside Imbalance Volume Imbalance) area (the Magenta Rectangle). From the Technical View, this happen when the Woodies CCI broke out from the ZLR (the Zero Line Reject) roughly at the time after the second Re-Accumulation. Maybe there will be a retracement to the downside, but as long as the price does not break out and closes below 25,000, the Dow Jones Industrial Average Index is set to move in a bullish bias.

(Disclaimer)

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Gold quotes are soon to rise

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Australia and New Zealand Banking Group (ANZ) forecasts gold to reach $ 1800 per ounce in September, and rise in price to $ 1900 per ounce in December despite major sales last week.

"We are optimistic about the future despite the complicated macro statistics. The reason for which is the constant rise of central bank balances and the geopolitical tensions that keep on escalating. We think that the investors, who continue to increase their allocations for precious metals, are sitting on a gold mine, " said ANZ analysts Daniel Hines and Soni Kumari.

"The start of a new rise in gold prices remains unclear. The belief that most countries already passed the pandemic increased the risks, and now that investors are raising rates, assistance measures will soon be reduced. Nevertheless, we still expect gold to reach a record level in the second half of 2020, " they added.

"Fed Chairman Powell already warned that the current recession is much worse than any recession since World War II, and that long-term unemployment can damage the economy. In addition, the US-China relations are still tense, as the US continues to blame China for the pandemic. The US has also undergone unrest because of the riots that broke out after the death of an African-American under the hands of police. "

"Nevertheless, there are signs that the market is recovering sharply. Stocks are on the rise, with most of the major indexes rising in recent weeks. The S&P 500 rose 40% from its lows in the midst of a pandemic, and is now only 7% lower than the highest record reached in February. "

Although such growth in the stock market does not mean growth in the economy itself, these conditions are likely to support investor demand in the gold market. According to the World Gold Council, the average US portfolio would yield a 3–7% risk-adjusted return over the past decade if it was distributed in gold.

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Indicator analysis. Daily review on GBP / USD for June 9, 2020

The pair traded upwards on Monday and re-tested the upper fractal 1.2648. Today, the price may begin to move downward. Economic calendar news for the dollar is expected at 14:00 UTC.

Trend analysis (Fig. 1).

Today, a downward pullback is possible from the level of 1.2724 (closing of yesterday's candle) with the first target of 1.2657 - a 14.6% retracement level (presented in a red dashed line). If this level is reached, the downward movement may continue with the next target of 1.2596 - a 23.6% retracement level (presented in a red dashed line).

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - down;

- Trend analysis - up;

- Bollinger Lines - down;

- Weekly schedule - down.

General conclusion:

Today, the price may begin to move downward with the target of 1.2657 - a 14.6% retracement level (presented in a red dotted line). If this level is reached, the downward movement may continue with the next target of 1.2596 - a 23.6% retracement level (presented in a red dashed line). Upon reaching this level, an upward pullback is possible.

Another possible scenario is an upward trend from 1.2657 - a 14.6% pullback level (presented in a red dashed line) with the target at the upper fractal 1.2756 (presented in a red dashed line).

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Indicator analysis. Daily review on EUR / USD for June 9, 2020

Trend analysis (Fig. 1).

Today, a downward pullback is possible from the level of 1.1296 (closing of yesterday's candle) with the target of 1.1208 - a 23.6% pullback level (presented in a red dashed line). From this level, the price may continue to move downward with the target of 1.1099 - a 38.2% retracement level (presented in a red dashed line).

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - down;

- Trend analysis - up;

- Bollinger Lines - down;

- Weekly schedule - down.

General conclusion:

Today, the price may begin to move downward from the level of 1.1296 (closing of yesterday's candle) with the target of 1.1208 - a 23.6% retracement level (presented in a red dashed line).

Another possible scenario is an upward trend from 1.1296 - a 14.6% pullback level (presented in a red dashed line) with the target at the upper fractal 1.1385 (presented in a red dashed line).

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Technical Analysis of ETH/USD for June 9, 2020:

Crypto Industry News:

The report, published by the Hong Kong Treasury Department on June 1, provided detailed data on accelerated growth of blockchain popularity in the fintech industry.

Blockchain is currently the fastest growing segment of this industry in Hong Kong. 22 of the 57 companies that started operations over the past year are based on this technology. WealthTech is the second fastest growing sector, which includes 20% of newly established companies. Next up is the payment sector - 17% and InsurTech - 9%.

The report states that since April 2019, the number of fintech companies operating in Hong Kong has exceeded 600. Since then, eight licenses for virtual banks and four licenses for virtual insurance companies have also been issued.

According to the report, DLT solutions for enterprises are the largest sub-sector in the blockchain industry in Hong Kong. He is represented by 45 percent of all companies. Cryptocurrency trading platforms cover 27 percent of the industry, followed by financial advisory companies for digital assets - 14%, and accounting companies - 9%.

Technical Market Outlook:

The ETH/USD pair has been consolidating under the upper channel line for the last 24h. No important moves were detected, no new signal appeared. The lower boundary of the consolidation zone is located at the level of $246.94 and the lower one at $235.42. The last bounce was quite strong and if bears will not regain the control of the market soon, then the bulls will push the price towards last swing high seen at $253.00. The decreasing momentum supports the short-term bearish outlook for Ethereum and the next target for bears is seen at the level of $217.65 and $215.58.

Weekly Pivot Points:

WR3 - $282.07

WR2 - $267.98

WR1 - $254.66

Weekly Pivot - $238.43

WS1 - $226.18

WS2 - $210.71

WS3 - $197.39

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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Technical Analysis of BTC/USD for June 9, 2020:

Crypto Industry News:

Grayscale, a digital asset management company, has recently attracted a lot of community interest because of its huge Bitcoin purchases. However, it turns out that this cryptocurrency fund collects not only BTC, but also Ethereum.

Grayscale's Investor Relations Director, Ray Sharif-Askary, revealed that in 2020, the company has acquired ETH worth $ 110 million in 2020. This represents 22% of all Grayscale cryptocurrency investments. This year's Grayscale purchases account for 0.4% of Ethereum's market capitalization in the last five months. Sharif-Askary has reported that more than 38% of Grayscale's current customers have more than one digital asset, a significant increase compared to only 9% a year ago.

This year, Grayscale has already purchased Bitcoins worth USD 390 million, which corresponds to 0.2% of total market capitalization. Apparently, the company buys 1.5 times more Bitcoins than it is mined.

The purchase of Ethereum by Grayscale coincided with the amazing results of the Grayscale Ethereum Trust investment fund. The shares of this fund increased by almost 800% this year, and at the last market close their price was $ 210.

Technical Market Outlook:

The BTC/USD pair did not move much overnight as the price has been seen trading between the levels of $9,381- $9,822 for the last 24h. The market is still bouncing from the ascending trend line support (marked in blue on chart) every time the price goes lower. It means, the bulls are still trying to push the price higher despite the overbought market conditions. For them any violation of the local low made after the sell-off ( the low is located at the level of $9,158) would indicate the start of the corrective cycle to the downside with a target seen at the level of $8,565.

Weekly Pivot Points:

WR3 - $11,389

WR2 - $10,828

WR1 - $10,195

Weekly Pivot - $9,652

WS1 - $9,043

WS2 - $8,494

WS3 - $7.815

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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Technical Analysis of EUR/USD for June 9, 2020:

Technical Market Outlook:

After a Shooting Star candlestick pattern was made at the supply zone located between the levels of 1.1347 - 1.1361 the EUR/USD pair has reversed a little towards the nearest technical support seen at the level of 1.1236. The key short-term technical support is still seen at the level of 1.1148. Please notice, the market has started coming off the overbought conditions, so the odds for the move down are now high. The mid-term trend on EUR/USD remains up, but the main long-term trend is still down.

Weekly Pivot Points:

WR3 - 1.1696

WR2 - 1.1546

WR1 - 1.1432

Weekly Pivot - 1.1266

WS1 - 1.1137

WS2 - 1.0969

WS3 - 1.0859

Trading Recommendations:

On the EUR/USD pair the main long term trend is down, but the local up trend continues. 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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Technical Analysis of GBP/USD for June 9, 2020:

Technical Market Outlook:

The GBP/USD keeps getting away from the upper main channel line and just a few hours ago bulls have managed to push the price towards the short-term supply zone located between the levels of 1.2747 - 1.2786. So far the price was rejected from the zone, but the momentum is still strong and positive, so another wave up is very likely. Nevertheless, the market conditions on H4 time frame are now extremely overbought, so please keep an eye on the price developments around the level of 1.2747. The immediate support is seen at the level of 1.2645.

Weekly Pivot Points:

WR3 - 1.3258

WR2 - 1.2986

WR1 - 1.2861

Weekly Pivot - 1.2596

WS1 - 1.2454

WS2 - 1.2189

WS3 - 1.2084

Trading Recommendations:

On the GBP/USD pair the main trend is down, but the local up trend continues. 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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USD/CAD testing 1st support, further upside!

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Trading Recommendation

Entry:1.3342

Reason for Entry: 61.8% fibonacci extension

Take Profit :1.3564

Reason for Take Profit: Horizontal swing high

Stop Loss: 1.3205

Reason for Stop loss: 100% fibonacci extension

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Hot forecast and trading recommendations for EUR/USD on June 9, 2020

You can call yesterday as the most boring trading day. In general, as expected, the single European currency just stood still. After all, the macroeconomic calendar is completely empty, the protests in the United States are steadily declining, and in principle there was no other serious news. So market participants were slowly gathering their strength for today's publication of another estimate of the GDP of the euro zone in the first quarter. You can be sure that due to the relaxed state, it did not pay attention to Germany.

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Meanwhile, industry data has been published in Europe's largest economy, giving some insight into the extent of the recession in the European economy as a whole. And not in the first quarter, but already in the second. The decline in industrial production in Germany accelerated from a record -8.9%, to even more terrifying -17.9%. This is the data for April. That is, for the beginning of the second quarter. The restrictive measures introduced because of the coronavirus epidemic have just begun to be removed. In other words, the recession will be incredibly deep.

Industrial production (Germany):

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So, today's main event is the publication of the third estimate of European GDP for the first quarter. It should once again show that the growth rate of 1.0%, according to the results of 2019, was replaced by a decline of as much as -3.3%. Here once again I want to draw attention to the fact that the restrictive measures introduced to curb the coronavirus epidemic began to operate only in mid-March. That is, at the very end of this very first quarter and already such a massive decline. So yes, in the end, the global economy will suffer very, very serious losses, which will take a long time to recover. It is noteworthy that the previous estimate showed a decline of -3.2%. So if the forecasts for the third assessment come true, and there is practically no doubt about it, then the final data may turn out to be even slightly worse.

GDP growth rate (Europe):

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You can see a sharp slowdown from the point of view of technical analysis. The price touching a variable level of 1.1383 ended with massive consolidations for buyers, where the initial pullback occurred, about a hundred points, returning market participants to the area of 1.1270. The subsequent fluctuation took place within the framework of 1.1270/1.1320, which was and is a process of accumulation.

In terms of a general review of the trading chart, the daily period, it is worth highlighting the inertial movement of May 26, where having a pullback, in the structure of which accumulation occurred, is the first significant adjustment in eight trading days.

We can assume that the process of fluctuating within the framework of 1.1270/1.1320 will not last long, where the method of breaking established boundaries is considered the most optimal tactic for local operations.

Specifying all of the above into trading signals:

- Buy positions are considered higher than 1.1325, with the prospect of a move to 1.1350-1.1380.

- Positions for selling are considered lower than 1.1265, with the prospect of a move to 1.1200-1.1180.

From the point of view of complex indicator analysis, we see that the indicators of technical instruments relative to hourly intervals have changed from ascending interest to descending, while the daily sections still signal purchases.

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Elliott wave analysis of GBP/JPY for June 9, 2020

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The correction from the 137.74 peak is unfolding as expected. We have already seen the 23.6% corrective target at 137.66 being exceeded. The pair may rise to support in the 136.33 - 137.10 area. A decline to the 38.2% corrective target at 136.33 is unlikely to occur. The pair may rally back to the peak at 137.74 before another decline to 136.33 to complete the correction in red wave iv.

Looking at the RSI, a break below index 41.39 will indicate the completion of red wave iv and the possible onset of red wave v to 141.06.

R3: 138.18

R2: 137.70

R1: 137.37

Pivot: 137.21

S1: 136.87

S2: 136.33

S3: 135.97

Trading recommendation:

We will re-buy the 50% position we sold at 139.07 here at 137.25 and keep our stop at 135.05 for the full position.

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Elliott wave analysis of EUR/JPY for June 9, 2020

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The expected correction in black wave iv is unfolding. We have already seen a break below the 23.6% corrective target at 122.28. It indicates a decline to the 38.2% corrective target at 120.96. The expected decline is unlikely to be in a straight line but we should rather expect a new rally towards the peak at 124.43 before another decline to the ideal target at 120.96.

Looking at the RSI indicator, we need a break below index 39.82 before wave iv/ is completed and wave v/ rises to 125.77.

R3: 122.90

R2: 122.60

R1: 122.17

Pivot: 121.85

S1: 121.46

S2: 121.25

S3: 120.96

Trading recommendation:

We took profit on our short-position from 124.20 at 122.35 and book a nice 185 pips. We will re-buy EUR here at 121.85 and place our stop at 120.85.

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Outlook for AUD/USD, June 9, 2020

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On the 4 hour chart, AUD/USD had a divergence between the price with the CCI (30). It indicates that the pair may decline before it rises and test the 0.7034 level as the first target and the 0.7083 as the secondary target. As long as the AUD/USD pair does not drop and close bellow the 0.6950 level, it is unlikely to decline.

The overall bias for the AUD/USD pair is bullish.

(Disclaimer)

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Forecast for EUR/USD on June 9, 2020

EUR/USD

The euro closed at the opening level on Monday, supported by the target level of 1.1265. The Marlin oscillator has strengthened the decline on a daily basis. On the first attempt, the price failed to overcome the immediate support, today we are waiting for a more successful attempt. Target at 1.1200.

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Price taking above support at 1.1265 is visible on the H4 chart. The signal line of the Marlin oscillator is on the territory of the declining trend - in the lower half of negative values. We are waiting for the price to try overcoming the nearest support and decrease to 1.1200 and further to 1.1125 - to the price channel line on the daily.

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It is possible to open short positions when the price overcomes the signal support of 1.1200 and with the specified goals.

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Forecast for GBP/USD on June 9, 2020

GBP/USD

Yesterday, the British pound repeated the previous test of the Fibonacci level of 100.0%, that is, the lowest base line of the entire grid of 1.2725 from February 28 (December 13-February 28). This morning, the price went above this level and quickly returned back below it. The Marlin oscillator shows the beginning of a downward reversal.

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According to Marlin, a triple divergence has formed on the four-hour chart, which is likely to foreshadow a deep correction or even a price reversal in the medium term. The first target of the decline is the Fibonacci level of 123.6% at the price of 1.2538, which is near the location of the MACD line. Consolidating under the level opens the following targets: 1.2424 and 1.2237.

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Forecast for AUD/USD on June 9, 2020

AUD/USD

The Australian dollar took advantage of the US dollar's temporary weakness and rising metal prices, and gained 52 points on Monday. The price resolutely turned down in the Asian session today, approaching the opening level of Monday. The divergence according to Marlin remained intact. We expect the price to fall further to the previously stated goals: 0.6830, 0.6680.

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The divergence on the Marlin oscillator also persisted on the four-hour chart, transforming into a more traditional look. The signal line of the oscillator crossed the border of the declining trend territory.

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It is possible to open a sale of AUD/USD when the price overcomes the signal support of 0.6975.

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Forecast for USD/JPY on June 9, 2020

USD/JPY

The yen strongly and unexpectedly strengthened on Monday without looking at the growing stock market (the S&P 500 1.20%). The price found support on the daily balance indicator line, currently declining simultaneously with it. Overcoming the support price of the MACD line (107.10) will reverse the downward trend with the goal of 102.10, but this fall is still within the correction framework.

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The signal line of the Marlin oscillator is staying in the growth zone. The price will return to positive dynamics after overcoming today's high, that is, visually the current daily candle should turn white.

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The price is below the MACD indicator line (blue moving) on the four-hour chart, the Marlin oscillator indicates a predominant decrease in price in the coming hours. Price taking over the MACD line will correspond to overcoming today's high in the Asian session. But this will only be the beginning of the restoration of growth, this situation will not be a direct signal to open a purchase. To do this, the price needs to end the day with a gain, this means that there is no trading on Tuesday for the currency pair in question.

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Overview of the GBP/USD pair. June 9. The UK is getting closer and closer to a complete failure in negotiations on a "deal"

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - upward.

CCI: 145.1452

The British pound also began to adjust on the first trading day of the week. However, the correction did not last long and it was extremely weak. Moreover, towards the end of the day, the upward movement resumed. In general, the upward trend remains, and within the correction, the pound/dollar pair has not yet reached even the moving average line. Thus, at the end of Monday, the technical picture has not changed at all. In recent years, we are increasingly asking ourselves the question: what is the reason for the strengthening of the British pound? If the growth of the euro currency can still be explained logically, it is not possible to do this with the British currency. The fact is that the EU economy, although experiencing certain problems due to the "coronavirus crisis", nevertheless, they are comparable to the US. This means that the euro may well become more expensive now against the dollar because of the political crisis, racist scandal, rallies, protests, and riots that are happening now in the United States. But in the case of the pound, the situation is completely different. First, as we have already discussed in the articles "last-minute forecasts" for the pound, the COT report showed the strongest reduction in buy positions among professional market players. In other words, major banks and investment funds that operate in the foreign exchange market to make a profit have been trying their best to close as many purchase contracts as possible over the past 10 days. Usually, a reduction in the number of contracts by almost 13 thousand (although their total number was about 42 thousand) causes a strong fall in the currency, unless the same volume of contracts for sale has not decreased. The latest COT report showed a minimal change in the number of contracts for sale among speculators. Thus, we have a rather strange situation when speculators dumped purchases, in total, more new contracts were opened for sale than for purchase, and the British currency managed to get very expensive. Secondly, the British economy has been experiencing serious problems in recent years due to Brexit. Neither the American economy nor the European economy has such a problem. And if there is no "deal" with the European Union, then from 2021 Britain will start trading with the Alliance (which accounts for more than 50% of exports) under WTO rules, that is, with duties and tariffs. Of course, London will also have certain profits and preferences from the absence of a "deal". For example, British waters will not be available for EU countries to catch fish and seafood in them. Thus, Britain will have a kind of monopoly on this fishery compared to many EU countries. But this potential and profit still need to be realized, which can also take years.

Last week, the fourth round of negotiations between Brussels and London on the future relationship after the final "divorce" ended. In principle, the words of Michel Barnier are enough to describe the results of these negotiations: "I must tell the truth and it is that there has not been any significant progress in the negotiations this week." Michel Barnier also added that the EU will not agree to an agreement that will affect the integrity of the single market in the future. Also, the chief negotiator from the Alliance said that London is retreating from the commitments it made earlier, which significantly complicates the negotiation process. It is noted that the key unresolved issue is the access of European vessels to British waters for fishing in them.

Meanwhile, China has responded to Washington's accusations that it is trying to "delay or sabotage" the development of a vaccine against "coronavirus". Official Beijing asked to show proof of the words of American officials. "Since this Senator (Rick Scott) claims that the US has evidence of China's attempts to undermine the research and development of the COVID-19 vaccine, we ask him to present this evidence, there is no need to be shy," said a Chinese Foreign Ministry official. The diplomat also said that "the development of the COVID-2019 vaccine is not a battle between China and the United States, but a battle between humanity and the virus, and regardless of which country first completes research and development of the vaccine, it will be a significant contribution to the fight of humanity against the pandemic".

On Monday, no important macroeconomic information was published in either the United States or the UK. However, last Friday showed that for traders, it does not matter what kind of statistics are received, the pound continues to rise in price at this time. No major reports are scheduled for Tuesday in the UK and the United States again.

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The average volatility of the pound/dollar pair continues to decline in general and is currently 111 points. For the pound/dollar pair, this indicator is "high". On Tuesday, June 9, we expect movement within the channel, limited by the levels of 1.2622 and 1.2844. Turning the Heiken Ashi indicator down will indicate a new round of corrective movement.

Nearest support levels:

S1 – 1.2695

S2 – 1.2634

S3 – 1.2573

Nearest resistance levels:

R1 – 1.2756

R2 – 1.2817

Trading recommendations:

The GBP/USD pair resumed a strong 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 1.2756 and 1.2817 and keep the longs open until the Heiken Ashi indicator turns down. It is recommended to sell the pound/dollar pair when traders manage to return to the area below the moving average, with the first targets of 1.2512 and 1.2451.

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

Overview of the EUR/USD pair. June 9. Donald Trump continues to lose support. The American president started "waving his

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - upward.

CCI:56.7677

The EUR/USD currency pair continues to adjust at the beginning of the new trading week. However, it is still impossible to say that the correction is strong. Most likely, the pair's quotes will be able to work out the moving average line, however, it is still unclear what will happen next. Market participants show by their behavior that they are not set up to buy the US currency. And this is although there are not particularly good (and most importantly economic) reasons for buying the euro currency now either. That is, the United States and the European Union are now at approximately the same level of decline after the "coronavirus crisis". However, in the United States, there is Donald Trump, where the US dollar grew steadily during his first three years of presidency. Trump gave the impression of a strong, though shockingly conflicted leader who does everything for his country and his nation. However, the events of recent months have shown Trump from a completely different side. At first, there was a very fragile truce with China, when more than half of the duties remained in effect. Then the "coronavirus" epidemic began, which affected the United States the most, and Donald Trump was exposed many times in a very unpleasant and sometimes even stupid light, as he made statements that were immediately refuted by scientists and doctors, and completely underestimated the risks and scale of the pandemic. Then, to find those responsible for what happened, Trump began to blame China for everything, without providing any evidence for his words. After that, the situation with Hong Kong and a new batch of Trump's threats against China began. In the end, America was flooded with rallies and protests after the murder of George Floyd, which has been going on for two weeks and are not always peaceful. And all this against the background of the complete decline of the American economy. As a result, Donald Trump's political ratings plummeted at cruising speed. There is even an impression that the whole world is set against Donald Trump and we do not exclude that this is true.

Try to remember when there was a president in America who had so many enemies and detractors. After all, for the fourth year, Trump has been fighting with the Democrats, throwing mud at former presidents of the country, the same Democrats, all the officials that he did not like, and organizing trade wars with almost all of the US trade partners. And why then should Trump have many friends inside and outside the country, if the American president does nothing but threaten, insult, fight and conflict with everyone he can? Perhaps even now the US currency is getting cheaper since the strongest political crisis is brewing in the United States? And this is although the stock market has almost fully recovered from the shock in March. Trump's main opponents now are China and Joe Biden. Tell me, do you often hear statements and/or interviews by Biden or Chinese officials concerning Trump? If you add up all their statements over the past two years, this number will equal the number of tweets and statements by Trump in a couple of days. And most importantly, Trump, who quarreled with everyone with whom he can, sincerely believes that if he continues to blame, this can help him restore his ratings. And Trump's ratings are now absolutely disappointing. According to the latest opinion polls, the current American president is already 10% behind Biden. And how does the leader of the nation justify such a gap? Right! Via Twitter: "If I hadn't been subjected to fake and illegal investigations – Russia, Russia, Russia, and impeachment for three years, I would be up 25 points compared to sleepy Joe and the Democrats who do nothing. It is very unfair, but it is what it is." Donald Trump also added that "he built the world's strongest economy, for the first time in US history, and continues to do so again".

At the same time, the leader of the nation begins to lose support even among his party members. Former US Secretary of State Colin Powell said that in the upcoming elections, he will support the candidacy of Joe Biden. According to Powell, Trump "has departed from the US Constitution and poses a huge danger to the country and democracy". Thus, Powell was one of the first Republicans to publicly "turn away" from the head of the United States. And of course, Trump is criticized by the US population itself, which has repeatedly proposed to solve the problems of rallies and protests by introducing the US army to the most problematic cities and states. Naturally, this approach did not appeal to the protesters themselves, of whom there are many not only in the United States but also abroad. Especially given the fact that most Americans (according to opinion polls) consider Trump a racist.

Well, Christine Lagarde, whose speech was held yesterday in the European Parliament's Committee on Economic and Monetary Issues, once again stated that in 2020 the Eurozone economy is likely to contract by 8.7%. The head of the ECB also said that in the second quarter, losses are likely to amount to 14% of GDP. Thus, yesterday, Christine Lagarde did not inform the markets anything new and interesting. Accordingly, no reaction to her performance was followed.

On Tuesday, June 9, the European Union will publish the GDP figure for the first quarter, which, according to experts, should lose 3.2% in annual terms and 3.8% in quarterly terms. However, these figures are highly likely to attract no attention from traders, since these are obvious and expected losses of the European economy. No more macroeconomic reports are scheduled for today. Thus, the impact of macroeconomic statistics will be not weak, but rather absent.

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The average volatility of the euro/dollar currency pair as of June 9 is 98 points. Thus, the indicator value is characterized as "high" due to the last trading days. We expect the pair to move between the levels of 1.1200 and 1.1396 today. The reversal of the Heiken Ashi indicator upward may signal about a possible completion of a downward correction.

Nearest support levels:

S1 – 1.1230

S2 – 1.1108

S3 – 1.0986

Nearest resistance levels:

R1 – 1.1353

R2 – 1.1475

R3 – 1.1597

Trading recommendations:

The EUR/USD pair continues to be adjusted. Thus, after overcoming the psychological level of 1.1000, long positions remain relevant, at this time - with the goals of 1.1353 and 1.1396, but it is recommended to open them after the current correction is completed. It is recommended to return to selling the pair not before the price is re-anchored below the moving average line with the first goal of 1.1108.

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

Asia-Pacific stocks rise on positive news

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The stock market in the Asia-Pacific region showed positive dynamics today amid good news from the United States. As it became known, the number of applications for unemployment benefits significantly declined, which was encouraged by market participants and not expected by experts. Another positive news was the extension of agreements between OPEC member countries to reduce oil production for another two months.

New Zealand also provided support to the Asia-Pacific stock market. The country's authorities announced that the state managed to cope with the coronavirus pandemic and they are ready to lift the restrictive measures that have been imposed earlier. In this regard, all bans will be lifted starting tomorrow. Only the borders of the country will remain closed so far. In view of this, the government is going to focus all its forces on the active and rapid restoration of economic growth, which please investors.

China's Shanghai Composite index rose 0.24% today, which allowed it to reach its highest value in almost three months. Hong Kong's Hang Seng index, also grew modestly, which added 0.03%. Chinese foreign exchange reserves were positive here, which became 10.23 billion more last month and rose to a total of $ 3.102 trillion. This is the maximum value since February of this year. At the same time, there was an increase in the foreign trade surplus, which was facilitated by a slight decline in exports and a sharp drop in imports against the background of a decline in domestic demand, which was provoked by the same COVID-19 pandemic.

The largest gains during the trading session in Hong Kong were recorded in the shares of the following companies: CNOOC grew by 2.1%, Hang Seng Bank Ltd. added 3.4%, while China Life Insurance rose 3.3%.

However, there is a slight decline. Thus, Tencent Holdings securities fell 1%, while China Mobile shares fell even more - 1.3%.

On the other hand, Japan's Nikkei 225 Index showed positive dynamics, it was up 1.37%. And this is despite the fact that the news on the economy is not very impressive. So, the country's GDP declined by 0.6% for the first quarter of this year. This suggests that the state faced a recession again, which had not been for more than four years. However, the decline did not become serious, preliminary data were much worse - a fall of around 0.9% was expected. Perhaps, this last fact supported the stock market, forcing it to move up.

In the corporate sector of Japan, great success was achieved by car manufacturers. Securities of Nissan Motor Co. increased by 7.8%, Toyota Motor increased by1.4%, Subaru Corp. increased by 2.6%, while Mitsubishi Motors Corp. increased by 3.6%.

South Korea's Index (KOSPI) also climbed 0.11% on the first day of the new work week. At the same time, the best results here were noted again by the car manufacturer Kia Motor, whose shares jumped 2.5% in price. However, a decline was recorded by Samsung Electronics Co., which pulled back 1.1%.

At the same time, Singapore's STI index showed extremely positive dynamics. It was able to reach its maximum values for the last three months.

The stock markets in Taiwan and Indonesia rose. On the contrary, Australia did not work today, because the country has a national holiday.

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