Technical analysis of AUD/USD for June 10, 2020

analytics5ee0c654ad09d.jpg

Overview:

The AUD/USD pair broke resistance which turned to strong support at the level of 0.6882 last week. The level of 0.6882 coincides with a golden ratio (61.8% of Fibonacci), which is expected to act as major support today. The Relative Strength Index (RSI) is considered overbought because it is above 70. The RSI is still signaling that the trend is upward as it is still strong above the moving average (100). This suggests the pair will probably go up in coming hours. Accordingly, the market is likely to show signs of a bullish trend. In other words, buy orders are recommended above 0.6882 with the first target at the level of 0.7040. The level of 0.7040 will act as strong resistance and the double top is already set at the point of 0.7040. From this point, the pair is likely to begin an ascending movement to the point of 0.7040 and further to the level of 0.7099. On the other hand, if a breakout happens at the support level of 0.6830, then this scenario may become invalidated.

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

Gold – an anti-crisis asset

No matter how strong the US employment data for May look, the crisis is not over yet. And when it ends, the United States will accumulate a mountain of debt, their financial condition will deteriorate, which can undermine the status of the dollar as the main reserve currency. At such times, investors run to gold, whose positions quickly recovered after sagging to support at $1,675 per ounce, which allowed traders to form long positions following my previous recommendations.

Commerzbank notes that gold ETFs marked a three-day capital outflow, the longest since March. Impressed by the S&P 500 rally, investors were looking for money to buy stocks in time and selling products from specialized exchange-traded funds. However, in my opinion, such a strategy will quickly become unpopular: first, the precious metal was able to quickly recover its losses incurred earlier; second, stock indices need to be corrected. Their upward movement is strongly supported by the White House, which claims that, despite strong statistics on American employment, additional fiscal stimulus will still be needed.

A week ago, gold was walking on the same road with the US dollar, but even then it was clear that their direct correlation could not continue for a long time. Growth forecasts for XAU/USD are linked to expectations of a weakening of the "American". The growth of the double deficit, the expansion of the Fed's balance sheet, and the Central Bank's continued low-interest rates over a long period suggest that the upward trend in the USD index has changed to a downward one.

Dynamics of gold and the US dollar

analytics5ee0c60d3bf44.jpg

Indeed, in the second quarter alone, the Treasury will issue $ 3 trillion in bonds, which will increase the national debt to 130% of GDP. Ten years ago, we were talking about a figure of 100%. At the same time, rising yields due to expectations of a V-shaped recovery in the US economy will force the Fed to use the Japanese and Australian experience of targeting debt market rates. According to Bloomberg experts, this will happen before September, and control will be exercised over 2 or 5-year securities. By limiting the growth of profitability, Jerome Powell and company will deprive the dollar of an important trump card. At the same time, the acceleration of inflation will lead to a decrease in real rates on Treasury bonds, which is good news for gold.

Dynamics of gold and US bond yields

analytics5ee0c6263962f.jpg

The crisis is not over yet and the Fed is simply obliged to use "dovish" rhetoric at the June FOMC meeting, so as not to provoke a serious correction in the stock market, which is extremely inappropriate in the run-up to the US presidential election. The World Bank estimates that global GDP will shrink by 5.2% in 2020, and the economy of developing countries by 2.5%, for the first time in 60 years.

A technically successful assault on the dynamic resistance in the form of moving averages and the 1-3 line of the 1-2-3 pattern will increase the risks of resuming the northern march of the precious metal in the direction of the target by 161.8% according to the AB=CD pattern. Formed from the level of $ 1675 per ounce, we hold longs and increase them on breakouts of resistance.

Gold, the daily chart

analytics5ee0c63cb4dc0.jpg

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

GBP/USD: plan for the American session on June 10 (analysis of morning deals). The target remains the resistance of 1.2773

To open long positions on GBPUSD, you need:

In my morning forecast, I paid attention to the level of 1.2752 and recommended opening long positions from it when this range is broken. If you look at the 5-minute chart, you will see how the bulls easily got above this range and then held it when the price fell to this area from the top down, which formed a fairly good signal to buy the pound. However, more than 35 points of the upward movement could not be snatched from the market, which led to the departure of buyers and the pair hovering around the level of 1.2752. At the moment, the entire focus of the bulls will be shifted to the new resistance of 1.2773, which was formed after all the morning manipulations. Only weak inflation data and a wait-and-see position of the Fed with nondescript prospects for economic recovery in the 3rd quarter of this year will lead to a breakout and consolidation above the resistance of 1.2773, which will strengthen the upward momentum in the pound and open a direct path to the highs of 1.2840 and 1.2906, where I recommend fixing the profits. If the bulls fail to overcome the resistance of 1.2773 after the release of inflation data in the US, it is best to defer new long positions until the formation of a false breakout near the resistance of 1.2696 or buy the pound immediately for a rebound from this week's lows in the area of 1.2622 in the calculation of correction of 30-40 points by the end of the day.

analytics5ee0bfba68912.jpg

To open short positions on GBPUSD, you need:

Nothing much has changed for those who want to sell the pound. The task of the bears today for the second half of the day is not to let the bulls above the resistance of 1.2773, where the formation of a false breakout will be a signal to open short positions that can lead to a return of GBP/USD to the area of the middle of the side channel 1.2696, just above which the moving averages pass. It is fixing below this range that will increase the pressure on the pair and lead to the demolition of stop orders of bulls with a larger movement of the pound down in the expectation of updating the support of 1.2622, where I recommend fixing the profits. A longer-term target for bears will be a minimum of 1.2534, an update of which will lead to a break in the bull market. If the resistance of 1.2773 breaks in the second half of the day after the US inflation data, it is best to abandon short positions before the test of the maximum of 1.2840 or sell GBP/USD immediately on the rebound from the larger resistance of 1.2906 in the expectation of a downward movement of 30-40 points to the close of the day.

analytics5ee0bfce394b5.jpg

Signals of indicators:

Moving averages

Trading is conducted above the 30 and 50 daily averages, from which today in the Asian session, the bulls gained long positions in the expectation of continuing the upward trend in the pound.

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

Bollinger Bands

A break in the upper level of the indicator at 1.2775 will lead to a new upward wave, while problems with buying may start when the lower border of the indicator breaks at 1.2696, which will strengthen the bearish momentum.

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

June 10, 2020 : GBP/USD Intraday technical analysis and trade recommendations.

analytics5ee0c0083e760.jpg

analytics5ee0bfcea1638.jpgRecently, Bullish breakout above 1.2265 has enhanced many bullish movements up to the price levels of 1.2520-1.2590 where temporary bearish rejection as well as a sideway consolidation range were established (In the period between March 27- May 12).

Shortly after, transient bearish breakout below 1.2265 (Consolidation Range Lower Limit) was demonstrated in the period between May 13 - May 26.

However, immediate bullish rebound has been expressed around the price level of 1.2080. This brought the GBPUSD back above the depicted price zone of 1.2520-1.2600 which failed to offer sufficient bearish rejection.

Hence, short-term technical outlook has turned into bullish, further bullish advancement may be expressed towards 1.2780 (Previous Key-Level) and probably 1.2950 if sufficient bullish momentum is maintained.

On the other hand, any bearish breakdown below 1.2520 pauses the bullish outlook for sometime and should be considered as an early exit signal for short-term buyers.

Trade recommendations :

Intraday traders should wait for any bearish pullback towards the price zone around 1.2520 ( Backside of the broken uptrend, considered as a recent demand level) for a low-risk BUY Entry.

T/P level to be located around 1.2600, 1.2715 and 1.2750 while S/L should be placed below 1.2450.

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

EUR/USD: plan for the American session on June 10 (analysis of morning deals). We remain to wait for the results of the Fed

To open long positions on EURUSD, you need:

Even in the first half of the day, I paid attention to the level of 1.1359. Fixing above this range should have been a signal to open long positions, however, if you look at the 5-minute chart, the bulls did not manage to catch on to this range. On the first test of the top-down level, the price failed below 1.1359, which eventually led to the formation of a new resistance of 1.1379, which should be emphasized in the second half of the day. Only weak inflation data and the Fed's wait-and-see attitude with nondescript prospects for economic recovery in the 3rd quarter of this year will lead to a breakthrough and consolidation above resistance 1.1379, which will open buyers a direct path to the highs of 1.1422 and 1.1459 with a further target of 1.1487, where I recommend taking the profit. If the statements made by Fed Chairman Jerome Powell immediately after the publication of the Fed's decision will support the US dollar, it is best to consider new long positions in EUR/USD only after the formation of a false breakout in the area of 1.1301 or to open long positions immediately on a rebound from this week's low - 1.1244, counting on correction of 30-40 points within the day.

analytics5ee0bf4eda63e.jpg

To open short positions on EURUSD, you need:

As for short positions in the euro, you need to be extremely careful with them. Only the formation of a false breakout in the resistance area of 1.1379 in the second half of the day will signal the opening of short positions in the pair, however, many traders will focus on the report on inflation in the US, which may significantly slow down, which will lead to another wave of growth in EUR/USD. In this scenario, it is best to count on short positions after updating the highs of 1.1422 and 1.1459 with the aim of a downward correction of 30-40 points within the day. However, it is likely that traders will ignore the report before the important decision of the Federal Reserve on interest rates. In the case of positive forecasts on the prospects of the economy, demand for the dollar could return. In this case, the bears' task will be to break through and consolidate below the support of 1.1301, which will increase pressure on EUR/USD and lead to a return to the lower border of the 1.1244 side channel, where I recommend fixing the profits. The entire upward trend formed on May 25 will depend on the breakdown of this level.

analytics5ee0bf6a4d0c0.jpg

Signals of indicators:

Moving averages

Trading is just above the 30 and 50 daily moving averages, which indicates the probability of continued growth of the euro.

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

Bollinger Bands

Volatility has decreased significantly before important data, which does not give signals for entering the market. A break in the lower border of the indicator in the area of 1.1320 may increase pressure on the euro.

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

Analysis and forecast for EUR/USD on June 10, 2020

Hello, dear colleagues!

According to the results of yesterday's trading, the main currency pair of the Forex market managed to close the day's session in positive territory, that is, growth. Now it is difficult to understand exactly why the US currency is weakening, however, the fact remains. It is likely that the decline of the COVID-19 epidemic and the gradual normalization of the situation, including the economic one, significantly reduced pessimism and led to an appetite for risk sentiment.

As it became known today, the European Central Bank (ECB) has started working on a scheme of outstanding loans. However, they are still refraining from detailed comments by an official of the department.

If the second wave of COVID-19 begins, thanks to the created scheme, commercial banks will be better protected from the consequences of the coronavirus pandemic. In general, the ECB has recently been quite active in its anti-crisis measures. Perhaps this factor also supports the single European currency to some extent. However, it will be interesting to know how the Fed will respond. Let me remind you that today at 19:30 (London time), the European Central Bank will publish its decision on interest rates, and will also present updated economic forecasts to market participants. Half an hour after that, Fed Chairman Jerome Powell will hold a press conference.

And today we have already received reports from the Eurozone on the final GDP data for the first quarter. The actual numbers can be seen in the economic calendar, and now in the technical analysis and trading recommendations for EUR/USD.

Daily

analytics5ee0b4c834f99.jpg

Yesterday, the pair was not only able to level losses but also completed Tuesday's trading in positive territory, ending Tuesday's trading session at 1.1340. However, data from the US on consumer prices, which will be presented this Friday, will be of the greatest importance.

For now, as expected, the main price dynamics of the main currency pair remains upward. I do not give up on the idea that if the bullish sentiment for the euro/dollar persists and it consolidates above 1.1383 (highs on May 5), the quote will have all the technical prerequisites for further growth towards the important psychological level of 1.1500. However, before that, a lot of water will leak. In the meantime, at the end of this article, we will proceed to the consideration of charts for finding trading solutions for EUR/USD.

Despite yesterday's strengthening, the players did not have enough strength to increase their resistance near the important technical level of 1.1380. I think that the mark of 1.1380 will be attempted again and, most likely, will end with a breakdown of this extremely important and technically strong level.

H4

analytics5ee0b4f57c8c0.jpg

If this mark turns out to be in the hands of euro bulls, the growth of the euro to the area of 1.1400-1.1420 is likely to continue.

Trading recommendations for the EUR/USD:

The most preferred at the moment are purchases that are recommended to be considered after a short decline in the selected zone, without fixing 1.1200.

I recommend setting the suggested goals for opening long positions near 1.1400.

All the best!

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

Dollar is not gold's rival

analytics5ee0ad6c4fbd5.jpg

In the current situation, experts note the competition that arose between the two traditional defensive assets. During the period of activation of COVID-19 pandemic, investors massively invested in both the dollar and the gold, however, the balance is now in favor of gold.

The declining moods regarding the dollar are largely facilitated by experts' statements who fear that the American currency will lose its status as the main world currency. These fears are not groundless, but the situation may change at any time. According to currency strategists at Guggenheim Investments, the uninterrupted money printing in the United States threatens the dollar as the main reserve currency. To mitigate these risks, the Fed may start buying gold. If there is a large-scale acquisition of precious metals, analysts are sure that the price of which will increase several times and will support the dollar in such a situation.

Guggenheim Investments believes that the Fed should not expect decisive action such as a noticeable reduction in interest rates and a sharp change in monetary policy in the near future. The yield on treasuries can increase while maintaining the current situation. Analysts say that this will slow down economic recovery in the United States. The regulator will not allow such inconsistencies, but will take measures to normalize the situation.

Currently, the actions of the Federal Reserve are aimed at financing the US budget deficit, which creates potential risks for the dollar as the leading reserve currency. The purchase of gold by the regulator can compensate for the current risks. According to experts, such a strategy is justified, since the accumulation of precious metals is perceived by the market as a crucial step by the monetary authorities, necessary during the crisis. It can be recalled that the launch of the "perpetual motion machine" called the printing money machine can seriously weaken the dollar and ultimately deprive it of the status of a global reserve currency. The Federal Reserve will try to prevent this, using all means to normalize the situation, including buying gold.

At the moment, the gold, one of the rivals of the dollar in the world market, is at the peak of popularity. According to experts, it intends to storm the next highs and is ready for a rapid rise. Forecasts are mostly positive regarding the short-term and medium-term prospects of precious metals, and this is encouraging for the markets.

analytics5ee0c1551897b.jpg

According to the observations of the World Gold Council, the hype around this protective asset does not subside. In the first quarter of 2020, global investment demand for precious metals increased by 80%, to a four-year high. The stocks of exchange-traded "gold" funds reached an impressive 3,510 tons, and the inflow of funds into the "gold" ETFs since the beginning of the year amounted to $ 33.7 billion. In May of this year, gold reserves increased by 154 tons, and this is not the limit.

The beginning of this year turned out to be favorable for the precious metal: in the wake of the pandemic and the growing panic associated with it, investors massively bought gold. Negative political factors worsened the situation, such as the growing conflict between the US and Iran, as well as the breakdown of the OPEC + deal. As a result, the price of gold in the spring of 2020 exceeded $ 1,700 per 1 ounce for the first time in 8 years. On the first day of summer, the price of precious metal jumped to $ 1744, and on Tuesday, June 9, it declined a bit - to $ 1717 per 1 ounce. However, experts are now observing a reversal of the upward trend in the opposite direction: investors are selling gold, the demand for which is starting to decline.

Experts say that the price of gold is "overheated" now and this could provoke its collapse to $ 1,500 per ounce. Such a collapse will help the precious metal to cool down and if there is no second wave of sales, then this decline will continue. At the same time, the probability of another upheaval in the global financial markets is quite high, and experts are sure that this will support the growth of gold. In the event of a negative scenario, experts say that the precious metal will remain in the range of $ 1600- $ 1800 per 1 ounce. On the other hand, some analysts have suggested that gold prices will rise to $ 2,000 per ounce over the next 12 months.

It can be recalled that the gold traded in dollars, not only goes in conjunction with a dollar, but also competes with it to win over the financial market. According to analysts, this alignment will continue in the near future, and gold will have to compete with the dollar, fighting for the attention of investors. At the moment, the balance may lean in favor of precious metals, as there is a rumor of weakening the US currency in the market. This undermines the position of the dollar, against which the gold shines with its unchanging brilliance.

The gold and the dollar are tied by financial bonds: both are considered traditional defensive assets and are incredibly popular with investors, while being both associates and rivals in the world market. Their symbiosis can be defined as a cross between forced friendship (the so-called "sworn" friends) and constant competition. Experts are sure that this state of affairs will continue for a long time, while maintaining the balance between gold and US dollar.

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

Trader's diary. June 10, 2020. Covid19 in Russia. Russian rouble. EURUSD

analytics5ee09b96c892c.jpg

The coronavirus in Russia. The situation of the previous days repeats. The rate of infection remains high.

As we can see, the number of new cases decreased by 1,000 and exceeded the number of recovered patients by 1,000 as well. Meanwhile, in Moscow, the number of new infection cases has dropped by around 1,000 for two days (which is a good sign) and exceeds the number of recovered by another 2,000. Overall, in Russia, except Moscow, the quantity of active cases is at its highest level (see the chart above) and reaches around 234,000 (see the last column).

Hospitals in 10-15 Russian regions are overloaded with patients. Meanwhile, the decision to lift all quarantine restrictions in the country is a big blow to health workers. Moreover, the death toll is likely to increase due to the inability to provide quality medical care. It is a rather silly decision to vote on June 1 especially since amendments to the Russian Constitution have already been adopted and entered into force. That is why it is not clear why it is impossible to vote in the autumn, when there will be no epidemic.

analytics5ee09e399476c.jpg

The Russian Rouble is no longer strengthening.

It is better to buy the US dollar and the euro in the long term with the target at 85 roubles per dollar.

analytics5ee09e98752d4.jpg

EURUSD: hold your buy deals from 1.1320 with the target up to 1.1480.

Moreover, the Fed's meeting will begin today.

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

June 10, 2020 : EUR/USD Intraday technical analysis and trade recommendations.

analytics5ee0b640393da.jpg

On March 20, the EURUSD pair has expressed remarkable bullish recovery around the newly-established bottom around 1.0650.

Bullish engulfing H4 candlesticks as well as the recently-demonstrated ascending bottoms indicated a high probability bullish pullback towards 1.0980 and 1.1075 (Fibo Level 50%).

Shortly After, a bearish Head & Shoulders pattern was demonstrated around the price zone between (1.1075-1.1150).

Shortly after, a sideway consolidation range was established in the price range extending between 1.0770 1.1000.

The price zone of (1.0815 - 1.0775) has been standing as a prominent Demand Zone providing quite good bullish support for the pair so far.

On May 14, Evident signs of Bullish rejection have been manifested around this price zone.

Moreover, recent ascending bottom has been established around 1.0870 which enhances the bullish side of the market in the short-term.

Short-term technical bullish outlook remains valid as long as bullish persistence is maintained above the recently-established ascending bottom around 1.0850-1.0870.

Currently, the recent bullish breakout above 1.1000 has enhanced further bullish advancement towards 1.1175 (61.8% Fibonacci Level) then 1.1315 (78.6% Fibonacci Level) where temporary bearish rejection was anticipated.

Although the EUR/USD pair is currently expressing a bullish breakout above 1.1315 (78.6% Fibonacci Level), there's negative divergence as well as recent bearish rejection being expressed on the H4 chart.

Moreover, after such a quick bullish spike, the EURUSD pair looks oversold. This suggests a probable bearish reversal around the current price levels (1.1315) to be watched by Intraday traders.

Bearish breakout below 1.1250 (double-top neckline) is needed to confirm the depicted reversal pattern to enhance further bearish decline towards 1.1150

Trade recommendations :

Conservative traders are advised to wait for bearish breakout below 1.1250-1.1270 (Depicted Neckline) as a valid SELL Signal

T/P levels to be located around 1.1175 then 1.1100 while S/L to be located above 1.1390.

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

Gold to Exit Its Channel Soon?

Gold is trading at the $1,718 level and it maintains a bullish outlook, even if the rate is trapped within a down channel. The descending channel could be considered as a continuation pattern if the yellow metal registers an upside breakout.

The gold price is still bullish despite a drop below the $1,700 level. Dovish Fed's rhetoric could accelerate the current bullish momentum. The price will be driven by the fundamental factors today, Thus, the US CPI data and the FOMC meeting results may shake the markets. The yellow metal price is advacning as the USD continues droping against its rivals.

analytics5ee0b4f18a069.jpg

Gold rebounded after a false breakdown with a great separation below the median line (ML) of the descending pitchfork and after the failure to reach the $1,666 static support. The price could approach the upper median line (UML) and the R1 ($1,729) level soon, but only a valid breakout above these upside obstacles will confirm a larger increase in the short term.

As you can see on the H4 chart, the upper median line (UML) represents a strong dynamic resistance, so another rejection or a false breakout could attract the sellers again. Also, if the price fails to reach the near term resistance levels, it could sharply drop.

The price is trapped between the upper median line (ML) and the median line (UML). The fact that the price touched the median line (ML) signaled that Gold could drop deeper within this channel, within the descending pitchfork's body. However, a valid upside breakout could invalidate a larger drop and will signal a potential increase towards the $1,800 level.

  • GOLD Trading Tips

Another buying opportunity will arise if the gold price makes a valid breakout above the upper median line (UML) and above the R1 ($1,729) level. The targets are seen at the R2 level (1,774) and higher at the $1,800 psychological level.

In the short term, the yellow metal could decrease if it fails to reach the near-term resistance levels, or if it registers only a false breakout above these obstacles. The support is seen at the $1,700 level. A drop and stabilization below this level could attract more sellers.

However, a larger drop, corrective phase, will be validated only after a valid breakdown below the $1,666 static support and below the median line (ML) of the descending pitchfork. We can sell from below $1,666 with downside targets at $1,600, $1,555, and lower at the $1,484 level.

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

Trading plan for EUR/USD on June 10, 2020. The dollar is at the lows ahead of the announcement of the Fed decisions. Coronavirus

analytics5ee09500ec522.jpg

The table above shows the worsening situation of coronavirus cases around the world.

The data indicates that as of the morning of June 10, the US once again recorded an increase in the number of deaths, after declining strongly for about two days. The figure is again above 1,000 per day.

Brazil also observed a sharp jump in the number of new cases per day, recording an increase of more than 30 thousand new infections. It surpassed the highest figure recorded earlier in the country, and could exceed China's highest record of 80 thousand in the coming days.

Meanwhile, India may turn out as the new center of the pandemic, as the rate of infection in the country keeps on accelerating. It's now in sixth place in the highest number of coronavirus infections.

analytics5ee0971865e3d.jpg

The US market has finally shown signs of a decline.

Build a bearish strategy by opening sell positions from the current levels, placing stops to reach the highs of June 8.

analytics5ee097ffcd31e.jpg

EUR / USD: The dollar is at the lows ahead of the announcement of the Fed decisions. It has actually been going down sharply against risky assets in recent days.

Thus, since the rate of the euro is high, open buy positions from 1.1320, targeting the level of 1.1480.

The announcement of Fed decisions will start at 19:00 (UTC + 1).

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

Instaforex Daily Analysis - 10th June 2020

Today we take a look at and see AUDCAD how we are going to play the bounce!We use Fibonacci retracements, extensions, support/resistance, momentum and trend lines to identify trading opportunities in this exciting pair today!The material has been provided by InstaForex Company - www.instaforex.com

Analysis of EUR/USD and GBP/USD for June 10. No second wave of coronavirus in the US since it still cannot cope even with

EUR / USD

analytics5ee0a5782fa82.jpg

On June 9, the EUR/USD pair gained about 50 basis points and thus resumed the construction of the upward trend section. This morning, about 30 more points were scored. Thus, the proposed wave 4 in 3 in C to B completed its construction, and the tool began to build wave 5. If this is true, then the quotes will continue to increase with targets located near the 161.8% and 200.0% Fibonacci levels. On the contrary, an unsuccessful attempt to break any of these markers will lead to the eventual completion of construction of a wave 3 in C in B.

Fundamental component:

On Tuesday there was extremely little economic information in the European Union and America again. A report on EU GDP for the first quarter was released, which turned out to be even slightly more optimistic than expected, but the markets did not pay much attention to this event. But recently, the issue of the COVID-19 pandemic in countries such as Russia, the UK, Brazil, and the United States has recently begun to sharply reoccur. Meanwhile, there was no slowdown in the spread of coronavirus in America according to the Johns Hopkins Institute, while European countries, especially Italy, Spain, France and Germany, practically reduced the number of new cases to zero. Accordingly, it is Europe that has an excellent opportunity to begin rebuilding its economy in the near future. But America continues to work in a massive pandemic, which could not be contained by quarantine or social distance. And the events of the past two weeks (mass rallies, protests related to the murder of George Floyd), which took place and continue to take place in more than 40 cities and states, clearly did not contribute to stopping the spread of the epidemic. Thus, instead of decreasing incidence rates, they can begin to rise in the United States. The Johns Hopkins Institute predicts that up to 150 thousand people can die from coronavirus complications in the country before August this year. There has been a strong increase in incidence in 14 states of the United States in recent days. Perhaps, this is one of the reasons for the decline of the US currency in recent weeks.

General conclusions and recommendations:

The euro/dollar pair is supposedly continuing to build the upward wave C in B. Thus, I recommend buying the instrument with targets located near the calculated levels 1.1406 and 1.1570, which equates to 161.8% and 200.0% Fibonacci for each new signal "up" MACD. At this time, the instrument supposedly completed the construction of correctional wave 4.

GBP / USD

analytics5ee0b24141ecc.jpg

On June 9, the GBP/USD pair gained just a few basis points. Thus, the current wave marking has not suffered any significant changes. Consequently, the proposed wave 3 or C of the upward trend continues its construction with targets located around 61.8% and 76.4% Fibonacci. The whole wave 3 or C can be very long, especially if the pound finds support for the news background.

Fundamental component:

Nothing interesting happens at the start of a new week in the UK. And the picture will hardly change throughout this week. Only on Friday, there will be some really important reports in the UK that cannot be ignored by the markets. Until this day, markets will only analyze news from America, from where the news flow is also not too stormy. However, the Fed will hold a meeting tonight, a press conference of its representatives, providing economic forecasts. Therefore, markets can become more active in the evening.

General conclusions and recommendations:

The pound/dollar pair supposedly continues to build the rising wave. Thus, purchases remain valid with targets located near the estimated levels of 1.2844 and 1.3030, which corresponds to 61.8% and 76.4% Fibonacci. Meanwhile, a successful attempt to break the level of 1.2698 (50.0% Fibonacci) indicates the readiness of the markets for further purchases.

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

EUR/USD - Can The Rally Continue Post FOMC?

EUR/USD has managed to resume the upside movement after the minor temporary drop. The pair is trading at 1.1366 and most likely it will pressure the 1.1383 previous high, a valid breakout, another higher high, will validate further gains.

You should be careful today as the US will release the CPI data, the CPI, and the Core CPI indicators are expected to increase by 0.0% in May, a higher increase could support USD. Still, the FOMC represents the most important event of this week, I believe that only a hawkish FOMC Press Conference and FOMC Statement could save the dollar from the downside.

The Federal Funds Rate is expected to remain unchanged at 0.25%, we'll see how EUR/USD will react as the pair is trading into a resistance area. One thing is certain right now, EUR/USD is strongly bullish.

analytics5ee0a7c576b54.jpg

EUR/USD increases after a minor drop and after testing the R1 (1.1243) level, it has climbed above the upper median line (UML) of the orange descending pitchfork and most likely will try to pass above the R2 (1.1383) level.

As I've said in my previous analyses, EUR/USD should increase further if the price makes a valid breakout above the upper median line (UML) and above the R2 (1.1383) level. It remains to see what will happen because another decrease after the US data and after the FOMC meeting, a false breakout above the upper median line (UML) could signal a bearish momentum.

The 1.1466 - 1.1494 area represents a major static resistance area, a failure to reach this zone or a false breakout above it will signal another leg lower. Still, another higher, a jump above 1.1383 could signal a breakout through the mentioned resistance area and the pair could approach and reach the next target at R3 (1.1622).

  • EUR/USD Trading Tips

The outlook remains bullish after the failure to stay below the upper median line (UML). Actually, the price could still close below this dynamic resistance if the USDX rebounds and increases after the CPI data and after the FOMC meeting.

Another higher high, an increase above the 1.1383 level will validate a further increase at least until the 1.1466 - 1.1494 area. A valid breakout above the upper median line (UML) could announce a significant further increase, the R3 (1.1622) could be used as an upside target as well.

A further increase could be invalidated only if the price closes today in the red, below the upper median line (UML), and if it drops and stabilizes below the R1 (1.1243) again.

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

EUR/USD and GBP/USD: Upcoming Fed decisions to affect the US dollar. The Bank of England may amend its monetary policy.

The main news for today is the decision of the Fed on interest rates, and the assessment of further prospects for economic recovery after the coronavirus pandemic, which, by the way, is not over yet, judging by the latest data.

analytics5ee07971d4cbe.jpg

Many economists are expecting the Fed to announce the preservation of a soft monetary policy aimed at protecting the US economy from the effects of the coronavirus pandemic. However, such a decision will most likely add pressure on the US dollar, which has been declining recently due to problems such as weakening trade relations with China, unrest in the country and increased demand for risky assets. Nevertheless, what is important is the signals that the Fed will give regarding the short-term dynamics of economic recovery. Cautious statements and a penchant for aggressively soft policies are sure to negatively affect the US dollar.

The current rate of the EUR / USD pair has already taken into account the high demand for risky assets. New incentives and benchmarks are needed for the quotes to continue rising. Rumors are also circulating that the Fed plans to establish control over the yield curve of treasuries, but there is a high chance that this decision will not materialize.

With regards to the coronavirus, an increase in the number of new infections was observed in early June. The rise was recorded in 14 states, particularly in rural areas of the United States. It adds not only to the problems that the US authorities are facing, but also adversely affects the rate of the US dollar.

As for macroeconomic statistics, the reports published yesterday revealed that business sentiment in the US is now improving due to the mitigation of quarantine restrictions in the country. Thus, according to the data of NFIB, the Small Business Optimism Index rose to 94.4 points in May 2020, up from its 90 points in April. Economists expected a less active rise to 92.0, so the current value was a pleasant surprise. Anyhow, the improving sentiment reflects the opinion of small companies in the US, which account for almost half of the jobs in the country private sector. Most likely, this trend will lead to an improvement in the US labor market, which showed a significant rise in May this year.

Meanwhile, the data published by the Retail Economist and Goldman Sachs regarding retail sales in the US failed to influence the position of the US dollar. According to the report, the index grew by 4.4% over the week of May 31 to June 6, but fell by 12.6% compared to last year. The report of the Redbook, on the other hand, says that retail sales fell by 3.2% in the first week of June, and dropped by 9.7% year on year.

The IBD / TIPP poll, which reflects consumer sentiment in the United States, also fell by 5.4% in June, amounting to only 47.0 points. Index values below 50.0 indicate a predominance of pessimism, and the main reason for which is still the coronavirus pandemic.

analytics5ee0a7f63f58b.jpg

As for the technical picture of the EUR / USD pair, the bulls will most likely attempt to continue the upward trend today, but the decisions of the Federal Reserve could prevent it. The central bank will surely note the recent improvements in the US labor market, and will revise some of the forecasts in this direction. Such a scenario will most likely increase the rate of the US dollar. In addition, if the data on inflation in the US comes out similar to forecasts, interest rates may remain at zero levels for a rather long period of time. Only a breakout from the resistance level of 1.1380 will raise the risky assets in the area of highs 1.1430 and 1.1490, but if the bulls fail to achieve it, the quotes will return to the level of 1.1300,

GBP / USD

The British pound continues to strengthen against the US dollar despite the lack of progress on trade negotiations between the UK and the EU. Many market participants expect that at a meeting next week, the Bank of England will increase its bond purchase program by another £ 100 billion, which could support the economy and raise the rate of the pound. The money will not only stimulate the different sectors of the UK economy, but also reduce the budget deficit in the country, which, due to costs associated with the coronavirus pandemic, has grown significantly.

The Bank of England is also set to lower interest rates to negative values, but before that happens, the regulator will resort first to other measures such as controlling the yield curve of government bonds. Since March 24, the Bank of England has already spent £ 144 billion, or 6.5% of GDP, on the purchase of government bonds. An increase in bond purchases will help avoid yield growth.

With regards to the coronavirus, the UK sees some possibilities of a second wave in the country, if the authorities and citizens fail to be vigilant. According to the London Institute of Hygiene and Tropical Diseases, the pandemic in the UK will be 2.5 times stronger if the British authorities completely resume schools and work, and cancel all the social distance measures. The quarantine restrictions in the country are now gradually being lifted, and part of educational institutions, as well as shops and catering outlets have already resumed work.

As for the technical picture of the GBP / USD pair, the demand for the pound remains quite high, the reason for which may be largely due to the weakening US dollar. A breakout from the resistance level of 1.2760 will raise the quotes to the highs 1.2840 and 1.2910, but if the bears fight on, and the decision of the Fed on interest rates lower the demand for risky assets, the nearest support levels on which the bulls can rely are in the areas of 1.2620 and 1.2530.

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

USDCAD testing 1st support, further upside !

analytics5ee09fe88f8b9.jpg

Trading Recommendation

Entry:1.3339

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

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

Trading recommendations for GBP/USD pair on June 10

From the point of view of complex analysis, you can see the next rebound from the border of the previously passed flat, and now let's talk about the details.

The past trading day was very similar to Monday, only the rate of price change was higher. So, the quote approached the level of 1.2620 once again, where a support point was found on a regular basis, which led to a reversal move towards the value of 1.2740, thereby completing the well-known sequence. Price consolidation above the flat formation of 1.2150 // 1.2350 // 1.2620 has acquired a scale of more than 70 hours, which means that the previous borders have lost their influence, and market participants are striving for new ranges that are already at the construction stage.

Regarding the development of new ranges, it is worth paying attention to the fact that the point of the report starts above 1.2770 on a four-hour chart, where the regularity of the past relative to the levels of 1.2770 / 1.3000 / 1.3300 is taken as the basis for new boundaries. If the coordinates of 1.2770 at the current stage of consolidation does not decline, then in this case, the subsequent fluctuation between the values of 1.2620 / 1.2770 should not be excluded from the analysis, where the work will go according to the method of breakdown of the established boundaries. As we see from the reasoning above, the tactics of trading operations are focused on broken positions, which is due to the high emotional background in the market.

In terms of volatility, the acceleration process is recorded, which is already long-term, which indicates a high speculative interest of market participants.

As discussed in the previous review, traders were focused on breaking the main boundaries of 1.2620/1.2770, but at the same time they worked on local operations using the rebound method, which brought a small profit.

Considering the trading chart in general terms, the daily period, we can distinguish about 80% recovery relative to the downward inertia from March 10, which is confirmed in some way by the theory of changes in the boundaries of fluctuations in the future.

The news background of the past day included data on the number of JOLTS open vacancies in the United States, where they recorded a decline from 6,011 thousand to 5,046 thousand with a forecast of 5,300 thousand. This figure is contrary to a recent report by the US Department of Labor, where they predicted an increase in the number of new jobs, but, based on JOLTS data, there is a discrepancy.

The market reacted to macroeconomic statistics in terms of a weakening US dollar.

In terms of the general informational background, we have various emotions related to the transition period after Brexit, and so, the general treasurer in the British government Penny Mordaunt said that the UK does not intend to extend the transition period and will be released in accordance with the existing agreements, that is, in December this year.

It is worth recalling that June is the last month where the United Kingdom may request a deferment on which the EU insists, but England goes all-in.

Today, the focus of the meeting is the Federal Committee on Open Market Operations, where, as always, passions and emotions are raging. What will the Fed do? Do not panic, the regulator has already made it clear that he does not plan to touch the interest rate unnecessarily. His current main goal is to monitor and adjust actions that were already taken.

In terms of the economic calendar, we have inflation data in the United States, where they forecast a decline from 0.3% to 0.2%. This indicator played the role of a kind of indicator for monetary policy actions, thereby it may be the most interesting in anticipation of the results of the Fed.

analytics5ee097ecb8528.jpg

Further development

Analyzing the current trading chart, you can see the touch of the level of 1.2770, where the quote with surgical accuracy slows down the inertial movement that arose from the border of 1.2620. Now, you should be extremely careful in terms of analyzing price consolidating points relative to the level of 1.2770, since price consolidation above the control value in a four-hour period will indicate a predominant upward trend. Otherwise, we will expect further fluctuation within 1.2620 / 1.2770.

In terms of the emotional component of the market, here with the naked eye you can see speculative interest that pumps activity into the market.

It can be assumed that in case of testing the level of 1.2770, the quote will go towards the border of 1.2620 again, where the system of fluctuations will be closed. The main strategy is to break the specified boundaries of 1.2620 / 1.2770.

Based on the above information, we derive trading recommendations:

- We consider buying positions if the price is consolidated above 1.2770 in a four-hour period, where the prospect of the movement will be in the direction of 1.2885.

- We consider selling positions in the case of working out the level of 1.2770 in the downward direction, with the prospect of a movement to 1.2700 - 1.2620.

analytics5ee098277d81f.jpg

Indicator analysis

Analyzing a different sector of time frames (TF), we see that the indicators of technical tools regarding hourly and daily periods signal purchases, due to the inertial course, as well as the price concentration within the level of 1.2770.

analytics5ee0a9f297d51.jpg

Volatility per week / Measurement of volatility: Month; Quarter; Year

Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.

(June 10 was built taking into account the time of publication of the article)

The volatility of the current time is 80 points, which is already a lot to start the European trading session. It can be assumed that the market will continue to accelerate amid the information and news flow.

analytics5ee0aa062c689.jpg

Key levels

Resistance zones: 1.2770 **; 1.2885 *; 1.3000; 1.3170 **; 1.3300 **; 1.3600; 1.3850; 1.4000 ***; 1.4350 **.

Support Areas: 1.2620; 1.2500; 1.2350 **; 1.2250; 1.2150 **; 1.2000 *** (1.1957); 1.1850; 1.1660; 1.1450 (1.1411); 1.1300; 1.1000; 1.0800; 1.0500; 1.0000.

* Periodic level

** Range Level

*** Psychological level

**** The article is based on the principle of conducting a transaction, with daily adjustment

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

GBP/USD. June 10. COT report: The British pound continues to grow. Bear traders continue to rest. Will the FOMC meeting stop

GBP/USD – 1H.

analytics5ee08f272e649.jpg

Hello, traders! According to the hourly chart, the pound/dollar pair yesterday performed a consolidation under the upward trend corridor (like the euro/dollar), but later performed a reversal in favor of the British dollar and resumed the growth process (like the euro/dollar). Thus, the growth of the pair's quotes can be continued, but yesterday's sales signal turned out to be false. This once again confirms the strength of the current "bullish" mood. Graphic signals are not processed. In the UK, nothing supernatural happened yesterday either. Thus, how to explain the sharp growth of the British - it is unclear. Perhaps the reasons still lie in the dollar and America. But even in the United States, nothing interesting happened. It is unlikely that traders continue to get rid of the dollar on the basis of the fact that rallies and protests continue in America, caused by a racist scandal. Thus, the inexplicable growth of the British pound continues, and the pair's sales after yesterday should be treated with maximum caution.

GBP/USD – 4H.

analytics5ee08f373b478.jpg

As seen on the 4-hour chart, the pound/dollar pair also resumed the growth process, despite the fact that a little earlier it made a consolidation under the trend line. Thus, on this chart, traders witnessed another false signal to sell. Now the growth process is resumed in the direction of the corrective level of 127.2% (1.2803). Bearish divergence, which has been brewing for three days, does not seem to stop the growth of the British pound either. Closing the pair's quotes above the Fibo level of 127.2% will increase the chances of continuing growth towards the next corrective level of 161.8% (1.3002).

GBP/USD – Daily.

analytics5ee08f4d6eb4a.jpg

On the daily chart, the pair's quotes secured above the corrective level of 61.8% (1.2711). Thus, the growth process can be continued towards the next Fibo level of 76.4% (1.3017).

GBP/USD – Weekly.

analytics5ee08f5de3a9f.jpg

On the weekly chart, the pound/dollar pair performed a false breakdown of the lower trend line and rebound from it. Thus, until the pair's quotes are fixed under this line, there is a high probability of growth in the direction of two downward trend lines.

Overview of fundamentals:

There were no interesting economic reports or news in the UK and the US on Tuesday. Thus, the information background is currently absent, which does not prevent traders from continuing to buy the British currency.

News calendar for the US and UK:

US - consumer price index (12:30 GMT).

US - consumer price index excluding food and energy prices (12:30 GMT).

US - FOMC decision on the main interest rate (18:00 GMT).

US - accompanying FOMC statement (18:00 GMT).

US - economic forecast from the FOMC (18:00 GMT).

US - FOMC press conference (18:00 GMT).

On June 10, the UK calendar is empty again, and important information about changes in the Fed's monetary policy, as well as inflation for May, is expected from the US.

COT (Commitments of Traders) report:

analytics5ee08f7669a8d.jpg

Last Friday, a new COT report was released that showed a strong reduction in long-term contracts among the "Non-commercial" group. This means that major market players who earn money by changing the exchange rate, got rid of purchases of the British during the reporting week. And yet it is the pound who has shown growth recently. Thus, the mood of major speculators does not coincide with the general mood of traders for the pound/dollar pair. It could be assumed that the total number of long contracts is the case, which could have grown significantly due to the "Commercial" or "Non-reportable" groups, but the total number of long contracts decreased during the reporting week. Thus, there was a paradoxical situation: traders sold the pound, but it eventually rose. Perhaps traders sold off the US dollar in even greater volumes? This week, the situation does not change at all, the British pound continues to grow steadily.

Forecast for GBP/USD and recommendations to traders:

I do not recommend selling the pound in the current conditions, in any case, there are no new sales signals at the moment. I recommend continuing to hold purchases of the pair with the goals of 1.2803 and 1.3002 and the stop-loss level under the ascending corridor of the hourly chart.

Terms:

"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.

"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency, not for speculative profit, but to ensure current activities or export-import operations.

"Non-reportable positions" - small traders who do not have a significant impact on the price.

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

GBP/AUD Price Movement For June 10, 2020

analytics5ee0673193621.jpg

On the 60-minute chart, we see that GBP/AUD looks moving to the upside and trying to raid the nearest Liquidity Pool at 1.8331. Importantly, please pay attention to the Divergence between the Stochastic Oscillator with the price and the rising Broadening Wedge Pattern. All these conditions indicate there is a possibility for the market turning point especially if this pair breaks out and closes below 1.8221. This move will cancel the bullish scenario for GBP/AUD.

(Disclaimer)

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

The dollar weakens ahead of the announcement of the results of the Fed meeting

The USD index rose in activity yesterday, moving to the level of 97.02, but then turned around and quickly went down, updating the three-month lows at the base of the 96th figure. Rumors about the possible decisions on the Fed meeting are the main reason for the abrupt change in the movement.

One cause of the ongoing weakening of the US dollar is the news that the Fed has decided to expand its business lending program, the purpose for which is to help the small and medium-sized businesses that suffered the most during the coronavirus pandemic. Fed members have reduced the minimum borrowing amount from $ 500 thousand to $ 250 thousand, and increased the loan term from 4 years to 5 years, with a simultaneous increase in the term for repayment of the main debt (from one year to two years). The share of the Fed in loans to small and medium-sized businesses that fall under the terms of the program was also increased to 95%.

analytics5ee07c6d44e61.jpg

Such news was very positive for the US labor market, as earlier, representatives of small and medium-sized businesses could not get support from the program of buying securities on the open market. The expansion of the program will not only contribute to an increase in the number of employees, but also decrease the unemployment figures. Unfortunately, the dollar was not optimistic to such a decision, reacting negatively instead to the Fed's commitment to the monetary policy.

Rumors also arose that the Fed is set to follow the footsteps of the Bank of Japan and the Reserve Bank of Australia regarding treasuries. Similar assumptions were already made back in May, but the talks now seem more serious, especially with the latest Fed meeting. According to data published by Bloomberg, some experts believe that the Fed will soon limit the yield of treasury bonds by buying them in the required quantities. Some Fed Representatives also assumed the likelihood of this scenario, Governor Lael Brainard in particular. In addition, Fed Vice President Richard Clarida, in response to a related question, said that the regulator plans to study "similar experiences of other central banks."

Meanwhile, Fed Chairman Jerome Powell has repeatedly stated over the past month that monetary stimulation will be unlimited until the end of the coronavirus crisis. He also said that if necessary, the Fed will use "all available tools" to help the economy. Thus, there is a high chance that the values of nonfarm payrolls are going to be ignored (especially if inflation comes out in the red zone today), and detailed talks on "available tools" will be discussed instead.

With regards to the nonfarm payrolls, the data on the US labor market really came out much better than expected. Unfortunately, the bears still prevailed, and judging by the comments of many experts, the market had too many hopes for the June meeting, based solely on May Nonfarm data alone. Thus, according to some supporters, since Powell seems to be focusing on strong reports on the US labor market only, the Fed may resort soon to an exit from the regime of extreme incentive measures.

Opposite scenario, on the other hand, sees that since the Fed expanded its business lending program, the stimulus policy remains as the "backbone" of the regulator. In addition, unemployment has already reached 13.3%, much higher than the peak of the last recession. Even if indicators are to come out much better than predicted, catastrophic situations could still occur in the labor market. Recent events will inevitably affect consumer demand, which in turn will negatively affect the profits of companies.

Thus, in this regard, the USD index came under pressure, and whether these rumors will come true or not is an open question. The outcome will be revealed tonight, in which if the Fed's rhetoric is not as soft as the market expects, the dollar will return to the borders of the 97th figure. However, if Powell confirms the rumors (especially if the Fed touches on the control of the yield curve), the dollar will again fall under the wave of sell-offs.

analytics5ee07c5c887a9.jpg

As for the EUR/USD pair, the direction of the quotes will base on the results of the Fed meeting. The decisions will determine whether the pair will continue its upward movement, or if the quotes will undergo a correction, right up to the base of the 12th figure. Nevertheless, a bullish mood still remains specially on the daily chart, since the quotes remain between the middle and upper lines of the Bollinger Bands, as well as above all the lines of the Ichimoku indicator. But despite such a technical picture, it is advisable to make trading decisions according to the results that will come out today.

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

Can the dollar expect surprises from the Fed?

analytics5ee08b147195a.jpg

The middle of this week has become a milestone for financial markets waiting for the meeting of the US Fed. Most forecasts come down to the fact that the regulator will stick to the previous monetary policy and leave the key rate at the current level. At the same time, the market minority is tensely waiting for a catch, talking about the calm before the storm.

According to analysts, the Fed does not hold anything on its chest at the moment in the form of unpleasant surprises. In this situation, the markets begin to gradually recover after the phased lifting of quarantine restrictions caused by the COVID-19 pandemic, and the Fed will not create additional pressure factors for them.

Many experts are confident that the Federal Reserve will continue its monetary policy at today's meeting, scheduled for June 10, which has been successful since March 2020. It was then, at the beginning of the pandemic, that the foundations were laid for the restoration of the global economy, contributing to its V-shaped rise, in which almost no one believed.

The actions of the Federal Reserve aimed at the speedy recovery of economic destruction significantly supported the US currency. The dollar sharply increased and strengthened its position against other currencies. After some time, the US dollar weakened again, but it used anything, even the slightest chance of recovery during the trading.

However, analysts say that a number of obstacles arise in the way of the dollar's growth. The first of these may be a "surprise" from the Fed if the regulator decides to change the rate. It can be recalled that it is now at the level of 0.25%, and any "swing" both in the direction of decrease and increase can significantly shake the position of the dollar. However, experts consider this scenario unlikely and do not see a danger to the indicated currency in the upcoming meeting of a leading financial institution.

Another barrier to the potential growth of the US currency may be the market's disappointment regarding the strength of the American economy. If its influence on global financial markets was not questioned earlier, the situation has changed now. The dollar had undeniable advantages over other world currencies, strengthened by the national economy, but now this source is running out. According to analysts, the US economy periodically shows weakness, pulling into the abyss and the dollar.

It can be noted that the United States does not have domestic cash reserves, attracting the lion's share of its current capital from abroad. In an effort to increase investment, the United States used the status of the dollar as the main world currency, attracting foreign savings, but this flow may stop. The coronavirus pandemic made its adjustments by shutting off the monetary "valve", and the economies of different countries had to devote all their efforts to survival. In such a situation, each state fights for itself, and every penny counts. A relative exception is the actions of European leaders trying to join forces to jointly restore the eurozone economy.

In the current situation, which is worsened by the rampant pandemic, the dollar seems to be a reliable island for investors, an unshakable protective asset that will remain so for many years. Indeed, throughout the pandemic, the dollar did an excellent job as an asset-seeker, but now the market has rethought a lot, including its status. Investors fear for the future fate of the US dollar and for their capital denominated in dollars. In this situation, the risk of a current account deficit in foreign exchange transactions is growing exponentially, and the key currency status will not help the dollar in this situation. Analysts say that the dollar can likely collapse, burying the hopes of the market for further progressive growth. A possible collapse of the USD will entail severe consequences in the form of rising inflation, which can quickly transform into stagflation.

A weakening US currency is the first symptom of a growing current account deficit, so a sharp surge in the US trade deficit is not exempted. If this scenario is implemented, the global leadership of the American economy, left without internal savings, essentially with an empty pocket, will turn out to be a house of cards. As a result, it will collapse any time, under the influence of any more or less negative factor. Nevertheless, experts are depending on a more positive scenario, in which the dollar will not lose its leading currency status, and the US economy, with the support of the Federal Reserve, will not become a weakness.

Analyzing the current situation, experts conclude that the neutral policy of the Federal Reserve will be the most relevant in today's realities. As for the possible change in rates, there are no prerequisites for this. The market does not expect any severe changes in the current monetary policy, despite the high risk of the second wave of a pandemic. In the event of extraordinary circumstances caused by COVID-19, changes in the rhetoric of the Federal Reserve will follow. However now, during the lull period, the regulatory measures will be symmetrical to the current situation.

According to experts, the transition of the monetary Rubicon under the name of the Fed's interest rate (either downward or upward) can seriously unbalance the market. The Fed is aware of these risks, so analysts believe that it will leave everything as it is. At the moment, the regulator is likely to maintain the rate but at the same time, the balance in the financial markets is fragile, therefore, changes are quite acceptable in the near future.

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

Indicator analysis. Daily review on GBP / USD for June 10, 2020

The pair traded on the side channel on Tuesday then went upwards after testing the 23.6% pullback level (red dotted line). Today, the price may continue to move upward. Economic calendar news for the dollar is expected at 12:30, 14:30, 18:00, and 18:30 UTC.

Trend analysis (Fig. 1).

Today, the upward trend may continue from the level of 1.2730 (closing of yesterday's candle) with the target of 1.2938 an 85.4% pullback level (blue dashed line). If this line is reached, the upward movement will continue with the next target at the resistance line 1.3073 (black bold line).

analytics5ee0895f519a9.jpg

Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - down;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

Today, the price may continue to move upward with the target of 1.2938 - an 85.4% pullback level (blue dotted line).

Another possible scenario is a downward trend from 1.2782 - a 76.4% pullback level (red dashed line) with the target of 1.2518 - a 61.8% pullback level (red dashed line). Further movement will depend on the news at 18:00 UTC.

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

Simplified wave analysis and forecast for GBP/USD and AUD/USD on June 10

GBP/USD

Analysis:

The upward wave of the British pound from March 18 reached the lower limit of a large potential reversal zone. The wave structure is not complete.

Forecast:

Today, there is a high probability of renewed pressure on the upper reversal zone. The overall upward mood of the price movement is expected and a short-term pullback to the support zone is not excluded in the next trading session.

Potential reversal zones

Resistance:

- 1.2830/1.2860

Support:

- 1.2730/1.2700

Recommendations:

There are no conditions for selling the British pound on the market today. At the end of the rollback movements, it is recommended to buy the instrument. The potential of transactions is limited by the size of the daily move.

analytics5ee0886b6f08d.jpg

AUD/USD

Analysis:

The direction of the Australian dollar since mid-March is set by an upward wave. Its last section started on May 4. Since the beginning of June, the chart has formed a flat correction. Yesterday's price rise has a reversal potential and will be the beginning of the next part of the trend wave.

Forecast:

During the next trading sessions, it is expected that the reversal structure will be completed and the active phase of the rise will begin. If the nearest resistance is broken, the rise to the next zone is possible today.

Potential reversal zones

Resistance:

- 0.7100/0.7130

- 0.7000/0.7030

Support:

- 0.6950/0.6920

Recommendations:

There are no conditions for selling the pair in the Australian market today. It is recommended to track reversal signals at the ends of all rollback movements to enter long positions.

analytics5ee088826f599.jpg

Explanation: In the simplified wave analysis (UVA), waves consist of 3 parts (A-B-C). The last incomplete wave is analyzed. The solid background of the arrows shows the formed structure, and the dotted one shows the expected movements.

Note: The wave algorithm does not take into account the duration of the tool movements in time!

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