Trading recommendations for GBP/USD pair on June 18

From the point of view of complex analysis, you can see the process of accumulation within a variable support, and now let's talk about the details.

The past trading day passed without impressive changes, the quote managed to stay on the previously set correction course, as a result of which there was another rapprochement with the level of 1.2500, where a support was already found on a systematic basis. In fact, we were faced with a difficult situation. The market is trying to change the clock component, from one fluctuation range to another. In turn, market participants are trying to cool the previously set speculative mood, which is currently subject to an external background. Thus, instead of switching to a fluctuation between the levels of 1.2620/1.2770, we are hanging around the level of 1.2500, wary of ambiguous splashes from the Brexit's trade negotiations, as well as decisions from the upcoming meeting of the Bank of England.

Regarding the theory of development, we closely monitor the two coordinates of 1.2500 (1.2450 - deviation) and 1.2770, since the dependence on the consolidation points will understand the course for the coming periods. That is, in the event of a breakdown of the first region, the chance of a resumption of fluctuations in the structure of the previous range of 1.2150 // 1.2350 // 1.2620 will be higher than the transition to a new range of 1.2770 // 1.3000 // 1.3300 and vice versa . At the same time, it is worth noting once again that in this difficult time, where the external background conditionally leads, the most relevant approach to trading is local operations, which have managed to bring us enormous income to the trade deposit since the beginning of 2020.

Analyzing the past trading day every minute, you can see that the short positions were poured twice from 7:30 and from 11:45 [UTC+00 time at the trading terminal]. In the remaining time sections, the stabilization process took place.

As discussed in the previous review, traders considered the option of keeping prices in the level of 1.2500, development in this direction continues.

In terms of volatility, the first slowdown in nine trading days is recorded, referring to the general dynamics of the market. It is worth considering that the concentration of trade forces in this case plays the role of a kind of accumulation, which will be expressed in acceleration in the near future.

Considering the trading chart in general terms, the daily period, it is worth highlighting that the quote is within the previous range, which means that one should not exclude the possibility of a resumption of the previous amplitude.

The news background of the past day contained inflation data in the United Kingdom, where, as expected, recorded a decline from 0.8% to 0.5%. This indicator will certainly be considered in the decision of the Bank of England at the upcoming meeting.

The pound did not react to inflation data, it is possible due to the fact that the indicators were confirmed with a preliminary estimate.

Data on construction in the United States will be published in the afternoon, which predicted that the construction of new homes could increase by 17.8%, and as a result, growth was only 4.3%. The indicators on the number of issued building permits, which recorded a growth of 14.4% with a forecast of 12.4%, slightly corrected the situation.

The market reaction to statistics on the United States still managed to locally support the US dollar.

In terms of general informational background, we continue the discussion regarding the Brexit divorce proceedings, where the noise reappeared. So the head of the European Commission, Ursula von der Leyen, casually overturned the information in the media that the EU is ready to make concessions in terms of fishing and trade policy. Once again, there is no specifics, so guess for yourself, and perhaps there's nothing else to guess, since these are just words.

In turn, Germany calls on EU countries to prepare for the absence of a trade deal, this is stated in the relevant internal document.

"Since September, negotiations have entered a hot phase. The UK is already intensifying threats against Brussels, wants to solve as many as possible in the shortest time, and hopes to achieve success in the last minutes of negotiations. Therefore, it is important to maintain the unity of 27 countries, continue to insist on parallel progress in all areas (a common package) and make it clear that there will be no agreement at all costs. Therefore, it is necessary to begin planning actions in case of unforeseen circumstances, both at the national and European levels, in order to prepare for the option without agreement 2.0," the document says.

Today, in terms of the economic calendar, the attention will be focused on the meeting of the Bank of England, from which they expect further expansion of the quantitative easing program. Regarding the refinancing rate, here, as it were, a conversation about reducing its level is conducted among the committee of the regulator, but it is considered as one of the possible tools. That is, the chance that the rate will be lowered at the current meeting is extremely small.

The results of the meeting of the Bank of England are scheduled for 11:00 Universal time.

analytics5eeb0dc224c31.jpg

Further development

Analyzing the current trading chart, we can see the accumulation process within the range of 1.2510/1.2565, where market participants are waiting for the results of the meeting of the Bank of England, which can give a new round of activity. In this case, you should be extremely attentive to the consolidation points, since price consolidating below 1.2500, can theoretically return the quote to the previous range of 1.2150 // 1.2350 // 1.2620.

In terms of the emotional mood of the market, the readiness of speculators for action is clearly visible here and this is indicated by the coefficient of speculative positions, since the slowdown in volatility relative to the past day.

It can be assumed that if the price consolidates below the level of 1.2500, we will have a way in the direction of 1.2450, where it is possible to extend to the average level of 1.2350. An alternative scenario should be considered if the current accumulation and the external background keep the quote above the level of 1.2500, and the quote manages to consolidate beyond 1.2585.

Based on the above information, we derive trading recommendations:

- Consider buy deals in case of price consolidation above the level of 1.2585, in the direction of 1.2620-1.2650.

- Consider sale trades if the price is consolidated below the level of 1.2500, with the goal of moving to 1.2450-1.2350.

analytics5eeb0e0323a4d.jpg

Indicator analysis

Analyzing a different sector of time frames (TF), we see that the indicators of technical tools on hourly periods signal a sale, due to the concentration of the price within the level of 1.2500. Daily intervals still work in an upward trend, giving a buy signal, but if the price is consolidated below 1.2500, the trading signal may change from buy to sell.

analytics5eeb1ed635189.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 18 was based on the time of publication of the article)

The volatility of the current time is 41 points, which is 68% lower than the daily average. It is worth considering that volatility can increase at times due to the upcoming meeting of the Bank of England, as well as speculative sentiment.

analytics5eeb1ee9bf9d9.jpg

Key levels

Resistance Zones: 1.2620; 1.2770 **; 1.2885 *; 1.3000; 1.3170 **; 1.3300 **; 1.3600; 1.3850; 1.4000 ***; 1.4350 **.

Support Zones: 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 built on the principle of conducting a transaction, with daily adjustment

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

Saudi Arabia almost cut off oil supplies to the US market

analytics5eeaf1f8073e4.jpg

According to Bloomberg, Saudi Arabia has exported approximately 133,000 barrels per day in the United Stated in June, which is equivalent to one tenth of its 1.3 million bbl per day shipment in April.

If exports in the second half of June continue to be at the same low pace, imports of Saudi oil in the US may drop to the lowest level, which will help rebalance the US oil market.

"Saudi oil inflows will also decrease if domestic refineries increase production. However, at this stage, domestic production continues to decline," said Amrita Sen, chief oil analyst at Energy Aspects. "U.S. refineries will have no choice but to reduce inventory and import from outside," she added.

Of course, some Saudi shipments have no destination points yet, so the final count in the shipments to the US may probably not be accurate. However, the trend in June is unmistakable, as the flow of Saudi oil, which threatens to crush US refiners, is declining. The glut in April prompted US politicians to address this, and Senator Ted Cruz, a Republican from Texas, tweeted in April: "My message to the Saudis: TURN THE TANKERS THE HELL AROUND."

Thus, according to data from Saudi Arabia, from the second half of June, as well as in July, the country is not going to increase supplies to the US. In addition, it will help Saudi Arabia influence the world market more, since the data of US customs allow monitoring deliveries in almost real time. Less oil from Saudi Arabia is likely to reduce observed crude oil reserves in the United States, increasing its effect on price.

The recent flood of oil from Saudi Arabia into the US is largely a protracted effect of a price war. In 2019 and early 2020, Saudi Arabia supplied a relatively small amount of oil to the US, so the average supply volume was 475,000 barrels per day, according to the US government.

When the Saudi tankers unload their cargoes, US oil reserves rose to record highs, putting pressure on oil performance.

According to tanker tracking data, Riyadh reduced oil supplies in the US to 645,000 barrels per day in May, and this fall will become apparent in the second half of this month and early July, when ships arrive on the shores of the United States.

If the exports in the first half of this month drop further in figure, the supplies in the second half of next month may be affected as well. As of June 10, the US received approximately 10 million bbl Saudi oil per day, compared with the 16.9 million barrels for the whole of June last year, according to US customs data collected by Bloomberg and the Energy Information Administration.

Nevertheless, this downward trend will continue, so for loading in July, most US refineries have proposed a reduction in supplies, much more than their planned contract volumes. This is due to the fact that the latest official selling prices for Saudi oil are now at the highest level after the price war with Russia in March.

Saudi Arabia reduced supplies this month not only to the United States, but also to China (to 1.3 million barrels per day). Exports to Japan and India, however, were increased.

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

Technical Analysis of GBP/USD for June 18, 2020:

Technical Market Outlook:

The GBP/USD bulls was not strong enough to break through 61% Fibonacci retracement and the price reversed towards the level of 1.2550. Since then the price keeps consolidating in a narrow range located between the levels of 1.2509 - 1.2580. The market conditions bounced from the oversold levels, so the bulls might risk another wave up from the current levels towards the nearest technical resistance seen at the level of 1.2747. Nevertheless, they have to violate the level of 1.2674 first. The immediate technical support is seen at the level of 1.2645.

Weekly Pivot Points:

WR3 - 1.3034

WR2 - 1.2910

WR1 - 1.2681

Weekly Pivot - 1.2581

WS1 - 1.2343

WS2 - 1.2226

WS3 - 1.2014

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.

analytics5eeb0ef67cb5f.jpg

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

Technical Analysis of EUR/USD for June 18, 2020:

Technical Market Outlook:

The EUR/USD pair has bounced after the level of 1.1212 had been tested for the second time. This might be a Double Bottom price pattern made by EUR/USD bulls. If the rally will continue here, then the next target for bulls is seen at the level of 1.1361 and then at 1.1419. The market is bouncing form the oversold conditions and the momentum has broken above its fifty level already, so the odds for another leg up are quite high. Only a sustained breakout above the level of 1.1419 will signal the up trend continuation.

Weekly Pivot Points:

WR3 - 1.1560

WR2 - 1.1485

WR1 - 1.1355

Weekly Pivot - 1.1283

WS1 - 1.1138

WS2 - 1.1066

WS3 - 1.0927

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).

analytics5eeb0d064786c.jpg

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

Technical Analysis of BTC/USD for June 18, 2020:

Crypto Industry News:

South Korean experts have found in local media that cryptocurrencies are a "bad choice" as a safe asset during the COVID-19 pandemic. Professor Hong Ki-hoon of Hongik University said that crypto assets such as Bitcoin should not be considered "safe" at the level of gold, dollars or even US Treasury bonds. However, he does not deny that volatility in the financial markets causes the accumulation of more money on the cryptocurrency market.

Hong from the University of Hongik's business administration department says:

"To be a safe haven, two conditions must be met. First, asset volatility must be low, and second, when market volatility is expected to increase, value should increase. Therefore, crypto does not meet the conditions."

The professor also says about the reasons for the increase in the range of cryptography during a coronavirus outbreak:

"The reason for the rise in volume after the crash in the markets was because the spirit of investing in greater volatility worked to offset the depreciated asset value."

The article also expressed concerns about "market manipulation." He states that the cryptographic environment is not sufficiently regulated in the country. They believe that the current popularity of the market does not reduce the concerns of investors who are hesitant about buying cryptocurrency.

On the other hand, an anonymous investment expert cited by an information portal revealed:

"Individual investors are often unable to properly manage the risk associated with shares, but it is virtually impossible to assess the risk factors for cryptocurrencies. You must understand before you fully invest."

The Ministry of Economy and Finance of South Korea announced on May 27 that they are preparing to amend the Income Tax Act, which may affect the profitability of cryptocurrencies in this country.

Technical Market Outlook:

The local high during the BTC/USD bounce was made at the level of $9,530 and since then the market pulled back towards the technical support located at the level of $9,249. In a case of a pull back extension from here, the next technical support is seen at the level of $8,565 and the nearest technical resistance is still seen at the level of $9,530. The larger time frame trend remains up. The momentum indicator is totally flat around the neutral level of fifty.

Weekly Pivot Points:

WR3 - $10,691

WR2 - $10,307

WR1 - $9,752

Weekly Pivot - $9,407

WS1 - $8,828

WS2 - $8,448

WS3 - $7,903

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.

analytics5eeb0c2babf0f.jpg

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

Trading plan for EUR/USD and GBP/USD on 06/18/2020

Yesterday, Ursula von der Leyen made a very serious request to be recognized as the most amazing woman of the year. The head of the European Commission somewhat specified the concessions that the European Union is ready to make in the matter of a trade agreement with Great Britain. But at the same time, she managed to raise even more questions. What struck me most was that the European Union was supposedly ready to make some concessions on such a fundamental issue as the regulation of fishing. However, she did not specify what exactly these concessions might be. Even the European Union seems to be ready to make some concessions there on such a minor and uninteresting issue as the role of the European Commission in working out trade and economic decisions. Of course, in the absence of specifics regarding fishing, all these powers do not play any role whatsoever. The possibility of Hungarian fishermen to fish off the coast of Scotland is concerning. This is just an existential question. In short, the question remains unanswered and the market stood still in anticipation.

analytics5eeb0855c15c7.jpg

On the other hand, the markets had nothing to rely on. Yes, inflation in the UK fell from 0.8% to 0.5%, but there was nothing new in this information. Everyone knew about this since the publication of preliminary data. So the sad fact of lower inflation in the United Kingdom has long been included in the pound's value.

Inflation (UK):

analytics5eeb08646b0ed.jpg

The situation with the common European currency is similar, since inflation in Europe has declined from 0.3% to 0.1%, since the publication of the preliminary estimate, has already been included in the value of the pan-European currency. Well, construction, the volume of which decreased by another 28.4%, has never had a special impact on the markets. Although the data came out slightly better than forecasts, as they expected a decline of 34.2%.

Scope of construction (Europe):

analytics5eeb08723c8e3.jpg

The American construction industry is a little more important, and in fairness, it should be noted that the market shows a kind of revival at the time of publication of the data. Moreover, the data indicate some signs of recovery of the industry. In particular, the volume of construction of new houses rose by 4.3, which is particularly from 934 thousand to 974 thousand. However, the volume of construction has almost halved after three months, such growth, of course, can somehow change the overall picture of the world. Another thing is that the number of issued building permits increased by 14.4%, that is, from 1,066 thousand to 1,220 thousand, which means that construction can continue to grow. The fact of growth in the current conditions is certainly an extremely positive factor.

Number of Building Permits Issued (United States):

analytics5eeb08837235a.jpg

It is possible that the results of today's board meeting of the Bank of England will be taken out of shock. And we are not talking about expanding the program of quantitative easing, for which everyone has long been ready. In fact, after the European Central Bank took such a step, the Bank of England has simply no choice but to increase the volume of the program from 645 billion pounds to 745 billion pounds. What matters is what can happen with the refinancing rate, but this will not be touched today. Recently, there has been increasing rumors that the Bank of England still has a space for action, since its refinancing rate is not zero. That is, there is still much to reduce. Given the heaviness of the recession in the UK, the probability of lowering the refinancing rate is clearly different from zero. So if the Bank of England at least hints at the possibility of lowering the refinancing rate today, the pound is clearly not going to be too good. However, the fact of expanding the program of quantitative easing does not add optimism either.

Refinancing Rate (UK):

analytics5eeb08925fd32.jpg

The meeting of the Board of the Bank of England is not only limited to the list of events today. After all, today is Thursday, and this is the day of publication of data on applications for unemployment benefits and forecasts for them are moderately optimistic. In general, for US statistics, this is already starting to take the form of a steady trend. So, the number of initial applications may decline from 1,542 thousand to 1,150 thousand. The number of repeated applications should decline from 20,929 thousand to 20,000 thousand. Yes, the values are still prohibitive, but the tendency is to gradually decline the number of applications, which is clearly an encouraging factor.

Repeated Unemployment Claims (United States):

analytics5eeb08a2d57c7.jpg

The euro/dollar currency pair continues to concentrate in the region of 1.1210/1.1250, where traders find periodic support on a systematic basis. It can be assumed that the concentration of trading forces in this area will not last long, where, in case the price is consolidated below 1.1200, the way will open for us in the direction of 1.1180-1.1150. Otherwise, a regular rebound from this area awaits us, as it happened in the period earlier.

analytics5eeb08b1efe8b.jpg

The pound/dollar currency pair in the phase of the correction course from the level of 1.2770 found a point of variable support within the area of 1.2500, where it slowed down and formed an accumulation in the range of 1.2510/1.2565. It can be assumed that the compression process will end today, where local leaps will occur, and the existing accumulation process will become a kind of catalyst for trade forces. The best tactic is to work on the breakdown of established boundaries.

analytics5eeb08c1f052c.jpg

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

USD Index trying to raid 97.45: Analysis For June 18, 2020.

analytics5eeb07c713223.jpg

According to the 4-hour chart, the USD Index is trying to raid the nearest Liquidity Pool at about 97.45-97.50 because there is a Liquidity Void above the current price now which will act as a magnet area for the USD Index. Nevertheless, this upward movement scenario will be cancel if the USD Index goes down for retracement and closes below the 96.80 level.

(Disclaimer)

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

Technical Analysis of ETH/USD for June 18, 2020:

Crypto Industry News:

The Venezuelan government has announced that almost 15% of all fuel payments at gas stations across the country are made using Petro (PTR). This increase occurs in the first week of a new state-supported plan to promote widespread token use. According to the Ultimas Noticias report, 40% of PTR transactions went through foreign stations.

The adoption of Petro will strengthen the balance and approval of value between the primary and secondary market, "allowing the construction of an economic and stable structure of the cryptographic environment in the country."

Citizens used biometric solutions to process payments secured with oil token via gas stations in Venezuela. An article in local media, which is favorable to President Maduro, assures readers that Petro himself "has set an unprecedented milestone," as allegedly the first crypto used by seniors in the world. This claim appears despite orders issued by US President Donald Trump to sanction the use of the Venezuelan token.

Technical Market Outlook:

The ETH/USD pair is still hovering around the lower channel line. The technical resistnace located at the level of $235.42 has been too strong for bulls and new local low was made after the failed rally. Any violation of this line will likely make the level of $217.65 a temporary low for the market. The next technical support is seen at the level of $217.65 and $209.89. The nearest technical resistance is still seen at the level of $235.42. The larger time frame trend remains up.

Weekly Pivot Points:

WR3 - $269.64

WR2 - $259.20

WR1 - $244.61

Weekly Pivot - $234.84

WS1 - $219.79

WS2 - $210.55

WS3 - $195.77

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.

analytics5eeb0a3628ffb.jpg

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

AUD / USD: A devastating report on the labor market

The Australian labor market was reported today to be in the "red zone", clearly demonstrating the effects of the coronavirus crisis. All the components in the data for May are terrible, as they turned out to be "anti-records on anti-records". Fortunately, traders are already prepared for such weak figures, so the aussie reacted minimally to the publication. In addition, the Australian Non farm report provided an excellent opportunity to buy positions at a better price, although the pullback at the AUD / USD quotes was approximately 50 pips.

Laying it all in detail, the unemployment rate in May jumped to 7.1%, higher than the forecasted growth of up to 6.9%. Such is already a long-term anti-record, since the last time that the indicator recorded such a high level was back in 1999 (in the late 90s, unemployment in Australia reached almost 9%). The decrease in the number of employees is about 229 thousand.

Although the indicator came out worse than the forecasted values (experts predicted a 100-thousandth reduction), there is still a positive trend because in April, the number of employees decreased by a record 607 thousand. In addition, traders should pay attention to the structure of this indicator, since the negative dynamics of employment growth was mainly due to a decrease in part-time employment which collapsed by almost 140 thousand. Full employment, on the other hand, has shown a less significant decline, decreasing by 89 thousand. This suggests that the decline in the labor market in May will not hit so much on the dynamics of wage growth, as regular positions offer a higher level of wages and a higher level of social security.

analytics5eeafbf1d2e40.jpg

As mentioned above, the Australian dollar ignored the publications today. The AUD / USD pair started the trading day at 0.6884, and after the publication fell to the level of 0.6839. The bears were not able to reach the base of the 68th figure, not to mention even failing to breakout from the 67th price level. The reason for which is that the published figures reflected the peak values of the coronavirus crisis. Australian authorities introduced quarantine in late March to early April, gradually tightening restrictive measures until early May. The data that was published today only covered the period until the middle of the previous month, and Australia only began to emerge from the lockdown in mid-May. Thus, the next Australian Non farms should be much better in figures.

RBA chief, Philip Lowe, is also confident in the recovery of the Australian economy. According to his speech, the labor market did not receive such a strong blow relative to the regulator's earlier forecasts, so in the second half of the year, a V-shaped recovery of key indicators is expected. Other members of the Reserve Bank are also in agreement with him, virtually ruling out a further reduction in interest rates. They declared that they would maintain a wait and see attitude in this issue.

Such factors are what made traders ignore today's devastating report. However, they should be warned that if the data for June comes out in the same vein, the Australian will be under great pressure.

analytics5eeafbbc4f15e.jpg

analytics5eeafbd325a99.jpg

For now, the aussie has stood strong from the blow, maintaining its positive growth potential. In addition, the Australian dollar received support from the commodity market, as the cost of iron ore is still above $ 100 per ton. The positive effect of this fundamental factor is offset by the difficult relationship between Canberra and Beijing, as it so happened that Australia, in the midst of a pandemic, became one of the flagships of the anti-Chinese campaign. Australian authorities were one of those who called for an independent investigation on the spread of the coronavirus, and its proposal was supported by more than 120 countries. Unfortunately, China received it "with hostility", and Beijing accused Australia of "attacking China", after which the political conflict passed into the economic plane. China, in particular, increased duties on certain types of Australian goods, while refusing to import beef.

However, China cannot refuse to purchase Australian iron ore just as quickly. Last year, about 40% of Chinese imports of mineral raw materials came from Australia. To reduce its share, Chinese companies must invest more in the development of deposits in African countries, but such will take a very long time to materialize.

The escalation of Australian-Chinese political conflict continues to exert pressure on the aussie, which limits the growth potential of the AUD/USD pair to the 70th figure. In order for the quotes to reach above the level of 0.7000, Beijing and Canberra should at least sit at a negotiating table, but for now, China refuses to even take this step. Thus, from the current positions, open buy orders targeting the level of 0.6970, which is the upper line of the Bollinger Bands in the four-hour chart.

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

Markets focused on coronavirus outbreaks in the United States and China (continued consolidation of EUR/USD and GBP/USD pair

The world markets are once again starting to be shocked by a situation, which is not related to any economic news or the publication of economic statistics. All the attention of the audience was drawn to the escalation of tension on the Korean Peninsula and the outbreak of coronavirus infection in China.

On the contrary, the events of the economic plan this week were extremely positive and caused another round of demand for risky assets. The news about Fed's additional broad stimulus measures, as well as the promise of D. Trump to start implementing many infrastructure projects at the expense of the budget, were greatly welcomed by investors, which led to a weakening dollar in the currency market.

But what is interesting is that, the dollar, although has declined in general, is not significant, and it should be recognized here that the existing common problems for all regions of the world as in Asia, Europe and the two Americas, which are strictly correlated with the influence of coronavirus infection and its consequences in the first place, cannot fully exert the expected significant pressure on the exchange rate of the US currency. In addition, the investors' perception of the dollar as a safe haven currency and its associated dynamics with the movement of the stock market in the United States does not allow it to "go" into free float. However, despite this state of affairs, we still believe that as soon as real vaccines against COVID-19 appear in the near future, it will be "untied" from the dynamics of the US stock market, which will receive a strong portion of optimism and continue to rally with renewed strength.

In the meantime, consolidation in the currency market will most likely continue, at least until the end of this week while the topic of tension on the Korean Peninsula and the worsening outbreak of coronavirus disease in Beijing will be featured in the top news. In addition to these events, investors' attention will also be drawn to the final decision of the Central Bank of Switzerland and the Bank of England on monetary policy. As for the results from the meetings, no changes should be expected. Rates, as well as monetary policy, will remain unchanged.

Forecast of the day:

The EUR/USD pair is likely to consolidate in the side range of 1.1210-1.1400 amid the worsening situation with coronavirus in China and the USA. It is recommended to purchase pairs from the lower boundary of this range.

The GBP/USD pair is also consolidating in the range of 1.2480-1.2800 amid expectations of a final decision by the Bank of England on monetary policy, as well as an aggravating factor with the situation with COVID-19 in America and China. We believe that this picture will continue today. It is also recommended to purchase pairs from the lower boundary of this range.

analytics5eeaf837bd012.jpg

analytics5eeaf872d5c91.jpg

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

Hot forecast and trading recommendations for GBP/USD on June 18, 2020

The pound formally weakened yesterday, but the scale of its decline was rather symbolic. So it's not about the decline itself, but why it was practically nonexistent. At the same time, the statistics, in general, came out exactly as expected. So the reason for it is not found in macroeconomic statistics. And the answer to this question lies in Brexit. More precisely, yesterday there was at least some specifics regarding the very concessions that the European Union is supposedly ready to make regarding the trade part of the agreement. And this made investors seriously think and stop. According to Ursula von der Leyen, who heads the European Commission, the EU is ready to make some concessions on the issue of fishing, as well as reducing the role of the European Commission in the issue of its impact on economic and trade policy. However, she did not specify these issues. It is not completely clear as to what exactly could be the concessions on the part of the EU. Just as it is not clear what kind of concessions Britain is ready to make. There are too many questions. Nevertheless, at least something became known, which means that it is worth waiting for further clarifications. Consequently, the market simply froze in anticipation of answers to questions.

analytics5eeb0f22e4fb1.jpg

At the same time, one should not overestimate the significance of macroeconomic data published yesterday. Especially in the UK itself. Of course, inflation fell from 0.8% to 0.5%. But investors did not see anything new. Ever since the publication of the preliminary assessment, everyone knew about this decrease, and even then they laid it in the value of the pound.

Inflation (UK):

analytics5eeb0fb67e4bb.jpg

Although, US data showed signs of an improvement in the state of the construction industry, but not as expected. In particular, the volume of construction of new houses did not increase by 17.8%, but only by 4.3%. Which, after almost two-fold reduction in construction volumes that lasted three months, looks rather modest. The number of issued building permits has increased by as much as 14.4%. They expected growth by 12.4%. So the actual data did not greatly exceed forecasts. In other words, the dollar had reasons to grow.

New Home Construction (United States):

analytics5eeb0fc858d45.jpg

Even Brexit is fading into the background today, since the Bank of England board meeting is in the center of attention, during which a decision can be made to expand the quantitative easing program. More precisely, no one doubts that a decision will be made. But the question of interest rates is open. The fact is that recently there has been increased talk that the BoE still has room for maneuver. And of course, I mean that the BoE has the opportunity to reduce the refinancing rate, since it is not zero. Although the further expansion of the quantitative easing program is in itself a negative factor, if the BoE supplements this decision with hints of the possibility of lowering the refinancing rate in the future, the pound will quickly weaken.

Bank of England Refinancing Rate (UK):

analytics5eeb10d765d47.jpg

In terms of technical analysis, we see that the corrective move from the range level of 1.2770 still takes place in the market where the quote has been concentrated within the periodic level of 1.2500, forming as an accumulation in the range of 1.2510/1.2565.

Concerning the emotional mood of the market, one can see speculative activity on a systematic level, which almost gives the market high activity on a daily basis. It is worth noting that the 1.2500 area has repeatedly played the role of a support, and it currently causes the greatest interest among traders.

Considering the trading chart in general terms, the daily period, it is worth highlighting that the quote returned to the previous fluctuating range of 1.2150 /1.2350//1.2620, which suggests the resumption of the old magnitude.

We can assume that the accumulation process in the range of 1.2510/1.2565 will end today, where the upcoming Bank of England meeting could burn up speculative interest, which will give the market a new round of volatility. Regarding trade transactions, you can use the tactic of breaking the established boundaries with entry to local operations.

Specifying all of the above into trading signals:

- Short positions, we consider lower than 1.2500, towards 1.2450. If the price is recorded lower than 1.2440, it is possible to consider the move to 1.2400-1.2350.

- Long positions, we consider higher than 1.2585, towards 1.2620-1.2650.

From the point of view of a comprehensive indicator analysis, we can see that the indicators of technical instruments on hourly periods have a variable downward interest due prices being concentrated near the level of 1.2500. The daily sections are still working on an inertial upward track.

analytics5eeb10e8ca9dc.jpg

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

Elliott wave analysis of EUR/GBP for June 18, 20

analytics5eeaf3ccc150d.jpg

EUR/GBP has not changed much in the last couple of weeks. However, we think that the sideways correction could be close to completion. A break above minor resistance at 0.8994 and more importantly a break above resistance at 0.9025 will confirm a strong impulsive rally towards 0.9499 and above.

A failure to break above minor resistance at 0.8994 will extend the sideways correction for a bit longer. A break higher is just a matter of time now.

R3: 0.925

R2: 0.8994

R1: 0.8970

Pivot: 0.8958

S1: 0.8937

S2: 0.8918

S3: 0.8894

Trading recommendation:

We remain long EUR from 0.8760 with our stop placed at 0.8860.

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

Elliott wave analysis of EUR/JPY for June 18, 2020

analytics5eeaf1fb1722a.jpg

EUR/JPY failed to hold above short-term important resistance at 120.31. It means that the correction in red wave iv/ was still in motion and the 61.8% corrective target at 119.84 should be the target. Red wave iv/ is likely to test 119.84

and red wave v/ may rise higher to 125.77. We need a break above minor resistance at 120.53 to indicate that red wave v/ now is unfolding, while a break above resistance at 121.23 will confirm the impulsive rally in red wave v/.

R3: 121.23

R2: 120.77

R1: 120.53

Pivot: 120.29

S1: 120.00

S2: 119.80

S3: 119.61

Trading recommendation:

Our stop at 120.25 was hit for a loss, but we have re-bought EUR at 119.95 and will place our stop at 118.95 expecting to raise our stop soon.

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

GBP/USD: plan for the European session on June 18 (analysis of yesterday's deals). Pound froze, awaits BoE's decision on

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

The British pound remains in the side channel before the important Bank of England meeting, at which, as expected, the regulator may decide to increase the bond purchase program. In yesterday's forecast I drew attention to buying the pound with a repeated decrease and forming a false breakout in the support area of 1.2522, which happened. If you look at the 5-minute chart, you will see how, after the first rebound in the European session, the bears again tried to break below 1.2522, but nothing came of it, which forced them to retreat. Nothing has changed from a technical point of view, and it is unlikely to change before the publication of the decision of the Bank of England. The bulls need the same return to the resistance level of 1.2591, and this will happen only if the regulator announces new and additional measures to help the economy in the future. A breakout of 1.2591 will lead to a re-growth of the pound to the area of this week's high of 1.2683, where I recommend taking profits. The farther target is still the area of 1.2801, the update of which will indicate the resumption of the bullish trend formed in early May of this year. If the pressure on the pound returns, it is best to return to long positions only after updating support 1.2522 and forming a false breakout there, by analogy with yesterday. You can buy GBP/USD immediately for a rebound only at this week's low - 1.2453. It is important to remember that COT reports have undergone major changes that could affect the British pound. A sharp reduction in short positions and an increase in long ones were recorded in the report for June 9, which indicates a completely possible change in the market direction in favor strengthening the pound. There was a reduction in short non-profit positions from the level of 63,014 to the level of 52,941. By the way, this is the first reduction in short positions since April 14. At this time, long non-profit positions sharply rose from 26,970 to 28,893. As a result, the nonprofit net position reduced its negative value to -24,048, versus -36,044, which indicates a possible market reversal and building a new bullish momentum in the medium term.

analytics5eeb08146f543.jpg

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

A single decision on the highly anticipated expansion of the asset repurchase program will clearly not be enough for the British pound to strengthen its position. The pressure on the pound will increase in case the Bank of England governor presents a negative assessment of the economy. Therefore, the bears will continue to count on a breakthrough of support of 1.2522, however, consolidating below this level will not lead to breaking the bullish trend. To do this, it is necessary to cope with a more serious level of 1.2453, which is where the pound sharply grew this week. A good signal to open short positions in the first half of the day will be to form a false breakout in the resistance area of 1.2591, slightly higher than which the moving averages go. In the absence of activity on the part of sellers in this range, it is best to postpone sales until the test of resistance at 1.2683, based on a rebound of 30-40 points within the day.

analytics5eeb082948cb6.jpg

Signals of indicators:

Moving averages

Trading is conducted below 30 and 50 moving average, which indicates the formation of a downward correction in the pair.

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

Bollinger bands

A breakthrough of the upper border of the indicator at 1.2560 will strengthen demand for the pound. A break of the lower border at 1.2522 will lead to a larger sale of the pair.

Description of indicators

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

EUR/USD: plan for the European session on June 18 (analysis of yesterday's deals). Euro sellers it's time to think about

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

Yesterday's data on the US real estate market limited the potential for the euro's decline, and the bears did not manage to break below the level of 1.1215, from where it was possible and necessary to open long positions. If you look at the 5-minute chart, you will see how, after selling from the level of 1.1284 in the morning, a new signal formed to buy the euro in the support area of 1.1215. The unsuccessful attempt of the bears to break through this range forced them to retreat, which preserved market equilibrium, and the pair in the side channel. From a technical point of view, nothing has changed much. Buyers of the euro must consolidate above the resistance of 1.1284 based on a return to the upper boundary of the current rising channel of 1.1349, where I recommend taking profits. If the pressure on the euro continues in the morning, then there is no need to rush into purchases. The optimal scenario is to wait for the second test of the lower boundary of the side channel of 1.1215 and form a false breakout there, similar to yesterday, which will signal the opening of long positions. I recommend buying EUR/USD immediately for a rebound from a low of 1.1164. It is worth recalling that the market is on the side of buyers of the euro. In the Commitment of Traders (COT) report for June 9, the growth of long positions was recorded, as well as the reduction of short ones, which indicates a bullish momentum for the pair. The report shows a decrease in short non-profit positions from the level of 93,172 to 98,020, while long non-profit positions sharply rose from the level of 174,412 to the level of 184,669. As a result, the positive non-profit net position rose again to 95,639, against 81,240, which indicates an increase in interest in purchases of risky assets.

analytics5eeb012040885.jpg

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

A weak report on the number of housing starts and building permits limited the pair's downside potential yesterday afternoon. Several unsuccessful attempts by the bears to break below support 1.1215 forced them to retreat. Important reports are not expected in the morning, which is quite suitable for forming a repeated attempt to break through support 1.1215. However, we can only talk about resuming the downward trend in the euro after consolidating below the level of 1.1215, which will quickly push the pair to a new low of 1.1164 and 1.1106, where I recommend taking profits. In case the euro grows in the morning, most likely sellers will again show themselves in the resistance area of 1.1284, however, it is best to open short positions from there only after forming a false breakout. You can sell EUR/USD immediately for a rebound from a larger high of 1.1349, based on a correction of 30-40 points within the day.

analytics5eeb0135227c7.jpg

Signals of indicators:

Moving averages

Trade is conducted below 30 and 50 moving averages, which indicates a further decline in the euro.

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

Bollinger bands

A break of the upper border of the indicator in the region of 1.1250 may lead to an upward correction in the euro. A break of the lower border of the indicator in the region of 1.1215 will increase the pressure on the pair.

Description of indicators

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

Forecast for USD/JPY on June 18, 2020

USD/JPY

The yen strengthened by 30 points on Wednesday due to lower stock indices, which looks like a decrease in the USD/JPY pair on the chart. Yesterday, the S&P 500 fell 0.36%, while the Nikkei 225 is losing 1.22% today. The price went below the MACD line on the daily chart, while Marlin is declining. The target at 105.90 as support for the embedded line of the price channel is open. In case we overcome support, we expect the price at the second target of 105.40.

analytics5eeadeb8ac00b.jpg

The price has consolidated under the red balance indicator line on the four-hour chart, and the Marlin oscillator line has entered the declining trend zone this morning. We are waiting for prices at the first target of 105.90.

analytics5eeadecb91695.jpg

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

Forecast for AUD/USD on June 18, 2020

AUD/USD

The Australian dollar fell by a symbolic four points yesterday, but it did the most important thing - it consolidated at the target level of 0.6900. The Marlin oscillator has penetrated into the zone of bears on a daily scale, the target at 0.6680 is open. Today's Australian employment data for May, which showed an increase in unemployment from 6.4% to 7.1%, will contribute to this.

analytics5eeadffa1e979.jpg

Marlin also infiltrated the declining trend zone on the four-hour chart, the price under the indicator lines of balance (red) and MACD (blue) - we expect the Australian currency to decline further.

analytics5eeae00d717fb.jpg

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

Forecast for EUR/USD on June 18, 2020

EUR/USD

Investors moved towards averting risk on Wednesday: the S&P 500 stock index lost 0.36%, the yield of 5-year US government bonds fell from 0.336% to 0.326% this morning, gold slightly grew by 0.02%, the dollar index strengthened by 0.06%, while the euro lost 18 points. The euro has firmly established itself in the range of target levels 1.1195-1.1265 on the daily chart, the signal line of the Marlin oscillator is approaching the border of the bears' territory.

analytics5eeae1be13b4b.jpg

But before Marlin enters this territory, the price can spend some time in the current range, since convergence on the oscillator was almost formed on a smaller, four-hour chart. Correction is possible even with a slight overlap of the upper level (1.1265).

analytics5eeae1d1a0cf5.jpg

If the price overcomes the lower limit of the 1.1195 range, then a convergence will not form and the price will continue to decline to support the embedded line of the price channel in the area of 1.1120.

In addition, the price could go into an upward correction after reaching the target level of 1.1195. The Marlin convergence will continue.

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

Hot forecast and trading signals for the GBP/USD pair on June 18. COT report. Bank of England will continue to adhere to

GBP/USD 1H

analytics5eeac910c4dea.jpg

The pound/dollar, as well as the euro/dollar, continues a rather sluggish decline inside the downward channel and has almost reached the upward trend line, which can gain serious support for trading on the rise. Therefore, formally, an upward trend is still in place in the medium term. However, we still believe that the pound has already exceeded the plan in the past few weeks. Given the scale of the problems that the British economy has faced in recent years, not even months, the national currency simply cannot show anything but a fall in the long run. Thus, we expect the upward trend line to be overcome, which will allow the bears to increase their pressure on the British pound and continue to sell it up to $1.23 (the goal for the near future). At the same time, if it is not possible to overcome the trend line, we expect to consolidate above the downward channel and resume the upward trend.

GBP/USD 15M

analytics5eeacb0540feb.jpg

Both linear regression channels are directed downward on the 15-minute timeframe, so the pair shows their readiness for a moderate downward movement.

COT Report

analytics5eeacb19e4993.jpg

The latest COT report for the British pound, published on Friday, showed a strong drop in the number of open purchase contracts among professional traders. Their number decreased by almost 7,000, but there were only 705 new open buy-positions. Thus, traders didn't buy the pound sterling very much, and nevertheless, the British currency rose in price in the reporting week. If you look at the behavior of all categories of large traders, then they closed both purchase contracts and sale contracts. A total of 25,000 contracts were closed. Thus, in general, the pound was not in demand, but at the same time it was growing against the dollar. The pair is falling more instead of growing this week, but now it's very difficult to talk about the behavior of large traders.

The fundamental background for the GBP/USD pair remains unchanged. There are no fundamentally new statements or news on the main topic for the pound sterling - Brexit. A few days ago, a wave of unfounded optimism swept the markets, which quickly vanished as soon as everyone realized that London and Brussels were not even close to concluding an agreement. Today, the Bank of England will sum up the results of the next meeting. According to experts, the British regulator will expand the quantitative easing program by 100 billion pounds. This news is unlikely to stir the markets, since all the central banks of the major economies of the world and the governments of these countries are now doing the same thing - allocating money to support the population and business. However, traders will expect information from the final communique or BoE Chairman Andrew Bailey regarding the key rate. Recently, representatives of the BoE have somehow often talked about negative rates and the possibility of their application, so it is possible that soon we will see a decrease. By and large, we expected a new rate cut back in February-March, when the coronavirus problem was not as acute as it is now. The UK economy continued to contract and experience serious problems because of Brexit, the uncertainty of future Britain-EU relations. But investors and businesses do not like uncertainty. We wrote repeatedly over recent years that a large company decided to leave Britain and move its offices or production outside the country. Thus, even without a crisis, the BoE could and should have resorted to a new easing of monetary policy. And now, from our point of view, there are practically no other options. Therefore, it may not be in June, but at one of the following meetings, the regulator may resort to new dovish measures.

There are two main scenarios as of June 18:

1) The initiative for the pound/dollar pair is still in the hands of buyers, since the upward trend line is still relevant. Therefore, formally, it is now relevant for long positions with targets at resistance levels of 1.2740 and 1.2946. However, we consider it inappropriate to consider purchases before you consolidate the price above the downward channel and Senkou Span B and Kijun-sen lines. Potential Take Profit in this case is from 100 to 320 points.

2) At the moment, sellers have fulfilled correctional goals and will seek to overcome the trend line in order to form a new downward trend. In this case, it is recommended to resume trading on the downside with the target support levels of 1.2401 and 1.2268. Take Profit will be from 90 to 220 points.

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

Hot forecast and trading signals for the EUR/USD pair on June 18. COT report. Bears continue to slowly push the pair to the

EUR/USD 1H

analytics5eeac55ca8208.jpg

The EUR/USD pair continued a rather weak downward movement and managed to overcome the Senkou Span B line on the hourly timeframe on on June 17. Thus, traders continue a confident, but weak, downward movement exactly in the middle of the descending channel. The first goal is still the support level of 1.1171. The first upward trend line runs near that level, which still leaves the bulls with a high chance of resuming the upward trend. If the quotes of the pair rebound off this line, then the upward movement may resume, and we will expect a signal in the form of overcoming the downward channel. At the same time, if the bears manage to overcome the trend line, the pair will get the opportunity to drop another 250 points, to the second upward trend line. We still believe that the downward movement is more likely.

EUR/USD 15M

analytics5eeac73eca589.jpg

Both linear regression channels are directed downward on the 15-minute timeframe, clearly signaling a downward trend in the short term. There are currently no signs of a possible turn up.

COT Report

analytics5eeac7538b656.jpg

The European currency continued to rise in price for most of the past week. Thus, we made assumptions that professional market players invested in the euro, respectively, according to the latest COT report, the number of buy positions should have seriously increased. Or the number of contracts for selling the euro will significantly decrease. As a result, the report showed the implementation of the first option. The number of open buy positions increased by 12,662, while sales contracts were also reduced by professional traders (-2,579). Thus, even a double effect was obtained. As for the general changes among all categories of traders in the COT report, the number of sell deals has grown over the past week. However, we all perfectly understand that speculators drive the market, and accordingly, their actions interest us. The trend is already different in the new week. Speculators stopped opening new contracts for the purchase.

The general fundamental background for the EUR/USD pair remains neutral, from our point of view. Federal Reserve Chairman Jerome Powell made two speeches in the US Congress over the past two days, however, if traders responded with restrained purchases of the dollar on Tuesday, then there was no reaction yesterday. In principle, Powell did not disclose anything of paramount importance to either the Banking Committee or the House of Representatives. It is obvious that the Fed will use the full range of tools available to it in order to overcome the coronavirus crisis as quickly and as fully as possible. Obviously, until a cure for the COVID-2019 virus can be found, stiffness and restraint in their activity will be observed among the population of any country. Several people will not go to cinemas, gyms, and other crowded places, even if they are open, being banal afraid of getting sick. This is especially true for older people and overweight people or children. They, as well as their relatives, will not travel to other countries and take vacations for trips to the sea. Thus, limiting their access to people to a minimum. Consequently, certain categories of people will spend less, and those who have lost their jobs in recent months will be preoccupied with finding a new one and, naturally, will also spend less. This will hinder US economic expansion. Traders continue to vigorously ignore the usual macroeconomic reports.

Based on the foregoing, we have two trading ideas for June 18:

1) So far, the bulls have released the initiative from their own hands, so the EUR/USD pair may continue the downward movement. Since the Senkou Span B line has been overcome, we recommend that you stay in sales with a target support level of 1.1171. If the bears manage to overcome the upward trend line, then short positions can be maintained with the support levels of 1.1088 and 1.0962 with targets. Potential Take Profit range from 65 to 270 points.

2) We recommend considering the option of resuming growth of the EUR/USD pair if the bulls manage to return to the area above the critical Kijun-sen line, as well as above the resistance area of 1.1327-1.1341 and, as a result, after consolidating above the downward channel. Then we will recommend buying the euro with targets at resistance levels of 1.1380 and 1.1506. Potential Take Profit in this case is from 30 to 160 points.

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

GBP/USD. Bank of England meeting in June: preview

Premature and almost unreasonable optimism regarding the outcome of preliminary negotiations between Boris Johnson and the leadership of the European Union quickly weathered: the pound could not gain a foothold in the 26th figure against the dollar and expectedly fell 100 points. Traders concluded that behind the beautiful mask of inspirational phrases lies the uncertainty and risk of a harsh scenario.

By and large, many experts came to this conclusion immediately after the publication of the statement of the European side. The head of the European Commission once again expressed her desire to conclude a deal, voicing her intention to intensify the dialogue. At the same time, the parties made it clear that key controversial issues remained hanging in the air - no fundamentally important and strategically significant decisions were made at the meeting. In other words, there is no trace of a breakthrough in the negotiations, which means that the prospects for a "hard divorce" between London and Brussels still look quite real. Moreover, today the head of the European Commission was no longer so optimistic - according to Ursula von der Leyen, the parties did not even reach the middle way in the process of reaching agreements. She also noted that at the moment no one can confidently predict at what stage the negotiations will be at the end of this year. Against the background of such rhetoric, Johnson's intentions announced yesterday to conclude a deal before the end of July look at least strange.

analytics5eeac2a90dcbc.jpg

Therefore, the pound almost immediately after the "mini-summit" interrupted its growth and froze in anticipation of the next news item, periodically falling to the bottom of the 25th figure. The next news feed will not have to wait long because tomorrow, that is, on Thursday, the Briton will react to the results of the June meeting of the BoE. With a high degree of probability, we can assume that the GBP/USD pair will demonstrate increased volatility tomorrow, and this volatility may also be in favor of the British currency.

According to the general opinion of the market, the June meeting of the English regulator will be accompanied by extremely soft, pessimistic rhetoric. According to the most dovish scenarios, the BoE will announce tomorrow (or it will be possible) to reduce the interest rate to zero. Also, BoE Governor Andrew Bailey can again raise the topic of negative rates, although his colleagues on the Committee had previously spoken out about this, not supporting such steps.

Of course, the English regulator has every reason to soften monetary policy. According to the latest data, the British economy fell by a record 20.4% - this is the largest drop in the country's history. Large losses were recorded in imports and exports, while the airline market crashed by 92%. Due to the closure of hotels, bars and restaurants, the services market declined by 88%. Against the backdrop of the coronavirus crisis, almost all areas of the country's economy suffered, with almost no exceptions. The industrial production indicator also showed an anti-record (-20.3%), and the production volume of the processing industry decreased by almost 30% in annual terms. Data on unemployment and inflation only added fuel to the fire - the number of applications for unemployment benefits jumped to 528,000. Salary data also came out in the red zone, both in annual and monthly terms. Including premiums, this indicator slowed down to 1%, excluding bonuses - up to 1.7% (for comparison, in March this indicator was at the level of 2.7%). Core inflation slowed down as well, reaching 1.2% (for example, in February it reached 1.8%). The general consumer price index came out at a forecasted level, but this is not easier, since on an annualized basis the indicator has slowed down to 0.5% (in monthly terms the indicator has reached zero).

In other words, such a parade of anti-records allows the BoE to voice extremely dovish rhetoric tomorrow. There is one nuance: the British data is published with a significant slowdown: in mid-June we found out April data that reflected the peak of the coronavirus crisis. These figures a priori could not be in the green zone, given the unprecedented spring events. Therefore, the English regulator can completely turn a blind eye to outdated statistics, expressing hope for a V-shaped (or at least U-shaped) economic recovery in the second half of the year. In this scenario, the BoE will expand the QE program by 100-150 billion pounds (this fact is already taken into account in prices), but will not touch on the topic of reducing the interest rate. If at the same time, Bailey voices optimistic rhetoric regarding the prospects of the British economy in the second half of the year, then the pound will shoot up in the entire market, including paired with the dollar.

analytics5eeac2bc7c08f.jpg

Thus, the British currency is at a crossroads: paired with the greenback, it will either test the resistance level of 1.2850 (the upper line of the Bollinger Bands indicator on the daily chart) or fall to the bottom of the 23rd figure, i.e. to the lower border of the Kumo cloud on that same timeframe. The second scenario will be implemented if the regulator allows a further rate cut.

Given such a fork, it is advisable to make trading decisions on the pair following the results of tomorrow's meeting of the central bank. In my opinion, the market is too confident that the English regulator will take a dovish position. Interest in the pound will increase again if these hopes are not met (or are not fully met).

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

Overview of the GBP/USD pair. June 18. Joe Biden breaks away from Donald Trump by 13%. The UK is making a statement about

4-hour timeframe

analytics5eeab32c66838.jpg

Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - downward.

CCI: -56.2751

The British pound has also resumed its downward movement and in general, in the last few days, it has been moving identically with the euro/dollar pair. This suggests that the driver of both pairs is now the US currency. The most interesting thing is that nothing interesting is happening in the United States right now. The situation with the "coronavirus" epidemic is not improving, however, it is not getting worse. Rallies continue to take place, however, they also take place in other countries and parts of the world. There is no fresh and exciting information coming from Donald Trump. Moreover, even the topic of confrontation between China and America has somehow stalled recently, and with it the "Hong Kong issue". Thus, there is no news except for ordinary statistics. Jerome Powell's speech in Congress was interesting and even provided a little support for the US currency, however, many of the conclusions that Powell voiced could be easily done by traders themselves. And the key conclusion is this: without a complete victory over the "coronavirus", there will not be a full recovery of the economy to pre-crisis levels.

More or less news can be considered the decree on police reform, which was signed on June 16 by Donald Trump, providing for the improvement of police certification and training programs. It is noted that the standards for the use of force in detention will be new and probably more lenient. It is also reported that a more thorough selection of personnel will be conducted so that the police do not get employees with various violations.

The more interesting news is another opinion poll conducted this time by Reuters, which again showed a strong gap between the Democratic presidential candidate Joseph Biden and the current president of the country, Donald Trump. It is reported that Trump's rating fell to a seven-month low, and Biden's rating rose to a maximum. According to the latest research, 35% are ready to vote for Trump, and 48% are ready to vote for Biden. It is also reported that support for Trump among his fellow party members is also declining and has lost 13% since the beginning of March. At the same time, the head of the election staff of Donald Trump, Tim Murtaugh, said that Joseph Biden deliberately does not give extensive interviews and avoids speaking in front of the public, as he is afraid to answer questions from the press. "We hope that the media will join our call for Joe Biden to end his self – isolation and give Americans what they deserve – a thorough examination and vetting of the person who wants to become president," Murtaugh said.

At the same time, the German government made an official statement calling on EU countries to prepare for the UK's exit without any agreement. It is reported that Berlin is not waiting for the signing of the agreement in July, as Boris Johnson expects. "Since September, the negotiations have entered a hot phase. The UK is already increasing threats against Brussels, wants to solve as much as possible in the shortest possible time and hopes to achieve success in the last minutes of negotiations," the German statement said. "It is important to maintain the unity of all EU member states, continue to insist on parallel progress on all issues, and make it clear that there will be no agreement at any cost," Berlin reports.

The UK, meanwhile, made a big announcement about the world's first drug against "coronavirus". An official government statement reads: "The government has now authorized the use by the National Health Service of the world's first drug for coronavirus with a proven ability to reduce the risk of death. Trials of the drug have shown that it significantly reduces the risk of death among patients who require oxygen treatment." However, a little later it turned out that this is not a new drug, but dexamethasone, which has been known for more than 60 years. And in any case, it does not cure patients of the COVID-2019 virus, but only reduces the risk of death in particularly severe cases. Of course, this is a breakthrough, but not a cure for "coronavirus" in the full sense of the word.

On the fourth trading day of the week in the UK, it is planned to summarize the results of the Bank of England meeting. It is expected that the monetary committee will decide to expand the quantitative stimulus program by 100 billion pounds, from 645 billion to 745 billion. The key rate is likely to remain unchanged at 0.1%. If the British regulator expands the QE program, it will be a "dovish" measure that will be designed to further stimulate the British economy. Indirectly, this will mean that the UK economy is very weak at this time. However, similar programs are being adopted or discussed both in the United States and in the European Union, since all countries of the world initially underestimated the "coronavirus crisis", and now have to pour billions and trillions of dollars into their economies to save them from collapse. Thus, we expect a certain surge of emotions tomorrow when the results of the meeting will be published, however, we do not expect strong growth of the pound or the dollar.

From a technical point of view, we expect to continue moving south. However, the situation is currently unstable and traders can complete the sale of the GBP/USD pair. Thus, it is recommended to carefully monitor the situation and technical indicators. During the last two turns of the up and down movement, neither the local high nor the local low could be updated. Thus, we can say that the pair is now consolidating. This means that even more attention should be paid to "fast" indicators like Heiken Ashi and lower timeframes.

analytics5eeab343cc1f1.jpg

The average volatility of the pound/dollar pair continues to remain stable and is currently 142 points. For the pound/dollar pair, this indicator is "high". On Thursday, June 18, thus, we expect movement within the channel, limited by the levels of 1.2412 and 1.2696. A reversal of the Heiken Ashi indicator upward will indicate a possible new round of upward movement.

Nearest support levels:

S1 – 1.2512

S2 – 1.2451

S3 – 1.2390

Nearest resistance levels:

R1 – 1.2573

R2 – 1.2634

R3 – 1.2695

Trading recommendations:

The GBP/USD pair resumed its downward movement on the 4-hour timeframe, anchoring below the moving average line. Thus, today it is recommended to trade the pound/dollar pair for a decrease with the goals of 1.2451 and 1.2412. It is recommended to buy the pound/dollar pair when the quotes return to the area above the moving average, with the first targets of 1.2634 and 1.2695. It is recommended to be extremely careful with any positions now.

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