Indicator analysis. Daily review on EUR / USD for July 17, 2020

Trend analysis (Fig. 1).

Today, the market may continue to move downward from the level of 1.1386 (closing of yesterday's candle) with the target of 1.1345 - a 38.2% pullback level (blue dashed line). From this level, an upward rollback is possible.

analytics5f111ac47ab25.jpg

Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - down;

- Trend analysis - down;

- Bollinger Lines - down;

- Weekly schedule - down.

General conclusion:

Today, the price may continue to move down with the target of 1.1345 - a 38.2% pullback level (blue dashed line). From this level, an upward rollback.

Another possible scenario is a continuous downward trend after moving down to 1.1345 - a 38.2% pullback level (blue dashed line) with the target of 1.1311 - a 50% pullback level (blue dashed line).

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

Dollar failed to gain on the wave of profit-taking in the stock markets (a decline in the price of gold and in the USD/CAD

On Thursday, market participants shifted their attention from the topics of testing vaccines against COVID-19 and corporate reporting by companies to economic statistics and the situation with the spread of coronavirus in America.

A certain pullback in the markets, which is very similar to the banal profit taking, towards aversion to risk appetite led to an increase in the exchange rate of the US dollar against commodity currencies in the currency market, but in general, it failed to seize the initiative in a basket of major currencies. The growth in demand for the single currency in the wake of generally positive recent economic data did not allow it to do this.

The rise of the Eurocurrency is primarily due to the fact that in Europe, unlike the United States, it was possible to take control of the coronavirus pandemic, and the latest economic statistics have steadily demonstrated the continued smooth recovery of the region's economy.

On Thursday, the ECB meeting on monetary policy was held, which did not bring a surprise. All monetary policy parameters were left unchanged. Therefore, the attention of market players was drawn to the press conference of C. Lagarde, head of the European regulator. They discussed the consequences of the COVID-19 pandemic, talked about its devastating impact, but also reported the main thing that investors were waiting for - the preservation of "the need for sufficient monetary incentive." She also added that the ECB and the EU Recovery Fund will continue to support the region's economy. On this news, the euro exchange rate turned up, and on European stock markets there was even a slight pullback of the indices up.

On this day, important economic data on unemployment in Britain, the number of initial applications for unemployment benefits, retail sales and their volume in the United States, and the Philadelphia index of manufacturing activity for the month of June were published.

The unemployment rate in the UK remained unchanged at 3.9%, the number of applications for unemployment benefits declined by 28,100 and the average wage in May showed an increase of 0.7%, which was slightly higher than the forecast of 0.5%, but significantly lower than the April value in 1.7%. These statistics did not significantly affect the dynamics of the pound, which, like all currencies, remains captive to the issue of the COVID-19 pandemic.

US data also generally showed growth relative to forecasts, but are expected to be well below previous values. This is natural, because the pandemic, like in other economically developed countries of the world, caused a deep wound to the US economy.

On Thursday, all the attention of the market was largely centered around statistics on morbidity and mortality in the United States. It seems to us that traders continue to act in line with the swing, fully responding to media headlines. It is likely that they will reconsider their views today and turn their attention again to positive news, which will restimulate demand for risky assets and weaken the exchange rate of the US currency. In any case, the dynamics of futures for major European and American stock indices indicate this.

Forecast of the day:

Gold is trading in the range of 1795.15-1815.10 after reaching a local maximum. If the market sways in the direction of positivity today, then breaking through the price level of 1795.15 can lead to a decline to 1785.15.

The USD/CAD pair still remains in the range of 1.3500-1.3665. If oil prices turn up and the pair does not break the level of 1.3585, it will decline to 1.3500. At the same time, the continuation of their decline will become the basis for the price movement to 1.3665. Thus, the pair is expected to remain in the range in the near future.

analytics5f112eb63c0c5.jpg

analytics5f112ed3e9e0d.jpg

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

Technical Analysis of ETH/USD for July 17, 2020:

Crypto Industry News:

The Elon Musk Twitter account has been hijacked today following a series of attacks on accounts related to cryptocurrencies, including accounts of leading exchanges such as Binance, Coinbase and Gemini.

Musk's account pinned a tweet to his channel at 16:17 Eastern time, which suggested that the entrepreneur would double the amount of Bitcoins sent to the wallet address.

Musk has in the past discussed cryptocurrency on his Twitter channel, suggesting he owns 0.25 Bitcoin. It is known that scammers use this technique to cheat Bitcoin owners to send irreversible transactions to the digital wallet.

Bill Gates's account was also a target of attacks. While the attackers initially focused on crypto accounts, they expanded to technology leaders, including Jeff Bezos from Amazon, and then to celebrities such as Kanye West.

After ten minutes, the wallet address that was published on Musk's account already contained 3.64 Bitcoin, worth $ 34,498. Before Musk's account was hacked, the wallet received only 0.6527 Bitcoins after it was published on hacked accounts of many exchanges.

Many other accounts in the cryptocurrency space have also been hacked, including the largest exchanges in space. Binance and Coinbase have 2.2 million followers on Twitter, but Musk's account is much larger and has 36.9 million followers.

While the original tweet was soon removed, the new version reappeared within seconds, suggesting that the attack was underway.

Technical Market Outlook:

The ETH/USD pair has dropped below the 61% Fibonacci retracement located at the level of $232.04 and a new local low was made at the level of $229.02. This level will now act as a temporary support for the price. If the move down is continued, then the next targets for bears are seen at the level of $224.39. Please notice, the momentum starts to decrease as well which is in line with the short-term bearish outlook.

Weekly Pivot Points:

WR3 - $274.89

WR2 - $261.89

WR1 - $250.42

Weekly Pivot - $236.01

WS1 - $225.12

WS2 - $210.17

WS3 - $199.13

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).

analytics5f11464568f11.jpg

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

Brief trading recommendations for EUR/USD and GBP/USD and USD/CAD on 07/17/20

analytics5f113df62262f.jpg

The EUR/USD pair felt the pressure within the area of 1.1400/1.1440 once again, which plays the role of resistance in the market. As a result, there were sales positions that returned the quote below the trend line. Based on two technical analysis signals, a rebound from the resistance level and price consolidation below the trend line, it can be assumed that market participants are still prone to further decline of the European currency.

It is recommended to sell a pair at a price lower than 1.1375 with the prospect of a move to 1.1350-1.1300

An alternative scenario will be considered if the quote returns to the area of 1.1400/1.1440, with subsequent consolidation higher than 1.1450. This step will indicate a breakdown of the resistance area, with a possible price movement towards the maximum of March 9 - 1.1500.

analytics5f113e074490f.jpg

The GBP/USD pair is highly active, during which the quote rebounded once again from the resistance level of 1.2620, which led to a flurry of sales of the pound. The rapid return of the quote towards the recent support of 1.2520 indicates that market participants are still considering the downward move as a promising trading position. That is why it is worth returning to sales, and to minimize risk, it is better to enter the market from a value of 1.2535.

It is recommended to sell a pair at a price below 1.2535 with the prospect of a move to 1.2500. The most impressive price move awaits us in the event of a breakdown of the level of 1.2500.

analytics5f113e1ae1550.jpg

For the USD/CAD currency pair, a fluctuation in a narrow range of 1.3565/1.3585 was found, which arose after a sharp upward price movement. If the price has a closed cycle of oscillation, then a breakdown of one or another border can give the market a local movement in the direction of breakdown. Thus, our trading tactic will be to work on the breakdown of one of the framework 1.3565/1.3585.

It is recommended to buy a pair at a price above 1.3585 with the prospect of a move to 1.3600-1.3620

It is recommended to sell the pair at a price lower than 1.3565 with the prospect of a move to 1.3540-1.3515

analytics5f113e2a87c9e.jpg

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

Elliott wave analysis of GBP/JPY for July 17, 2020

analytics5f112ea818aec.jpg

GBP/JPY has traded sideways for the last week, but this sideways correction is now coming to an end. We do expect a final dip closer to 133.65 to complete this correction and set the stage for the next impulsive rally through resistance at 135.92 and to 139.67.

Only a direct break above minor resistance at 135.48 will indicate that the sideways correction has come to an end and the next impulsive rally is unfolding.

R3: 136.85

R2: 135.93

R1: 135.17

Pivot: 134.50

S1: 134.00

S2: 133.65

S3: 133.24

Trading recommendation:

We will buy GBP at 134.00 or upon a break above 135.48

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

Elliott wave analysis of EUR/JPY for July 17, 2020

analytics5f112d739fd3d.jpg

We are looking for a second dip in the correction from 122.50. Previously we expected a corrective dip to 121.34. However, we will likely only see the second dip. The pair may sink just below 121.78 before the next impulsive rally to 124.43 and above occurs.

A break above 122.50 triggers for the next impulsive rally.

R3: 122.73

R2: 122.50

R1: 122.25

Pivot: 122.06

S1: 121.85

S2: 121.75

S3: 121.43

Trading recommendation:

We will buy EUR at 121.80 or upon a break above 122.50

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

EUR/USD forecast, July 17, 2020.

analytics5f1118f8aba75.jpg

On the 4 hour chart, we can see that the EUR/USD pair is trying to grow. This pair has already bounced off and prepared for a rise. It was confirmed by the William %R at the oversold level. The price is moving above the Exponential Moving Average Period 50. From this technical point of view give, the pair will try to reach the 1.1422 level for the second time as its first target and the 1.1442 level as its second target. This scenario is likely to come true if EUR/USD does not drop and close bellow the 1.1371 level.

(Disclaimer)

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

Instant Forecast For USD Index On July 17, 2020.

analytics5f11169233135.jpg

The USD Index is now moving down again below the 96.23 level. This level can be broken easily, there is a high probability for the USDX to test the 95.88 level as long as the index does not retrace upwards and closes above the 96.39 level. If this happens, all the bearish scenario will be automatically canceled.

(Disclaimer)

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

Trading plan for EUR/USD for July 17, 2020

analytics5f10fadf93802.jpg

Technical outlook:

EUR/USD has dropped from 1.1450 and is seen to be trading around 1.1380 levels at this point in writing. The single currency pair has also managed to carve a lower high at 1.1442 levels yesterday before turning lower. The minimum expected drop is towards 1.1250/60, but it can continue further towards 1.1167, initial support. Also note that 1.1167 is the fibonacci 0.382 retracement of the recent rally between 1.0775 through 1.1450 respectively. If EUR/USD manages to drop towards 1.1167, we can expect a counter trend rally before the next drop towards 1.1000 levels. Besides, note that the previous resistance which turned into support is also seen towards 1.1000 along with the fibonacci 0.618 support of the above rally.

Trading plan:

Aggressive: Holding short from @1.1400, add more @ 1.1480/90, stop @ 1.1550 and target @ 1.1167

Conservative: Flat for now, looking to sell higher @ 1.1500.

Good luck!

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

Control zones for AUDUSD on 07/17/20

Previously opened purchases must be kept. The first goal for growth is to renew weekly and monthly highs. It is important to understand that a reversal model will only form in case closing of trades occur below the WCZ 1/2 0.6949-0.6940. Until this happens, buying is the best strategy. Yesterday's decline made it possible for us to get favorable prices to open a long position.

analytics5f1139f154cbb.jpg

Closing today's trading above the week's local high will make it possible for us to talk about growth lasting until next week.

Testing the WCZ 1/2 0.6949-0.6940 will be required to obtain more favorable prices for purchasing the instrument. If this happens, then the entrance will require any absorption pattern to form on a time frame of at least m30. It is necessary to close today's trading below the WCZ 1/2 to break the upward pattern. This will allow you to exit all long positions and consider sales on Monday.

analytics5f113a0393290.jpg

Daily CZ - daily control zone. The area formed by important data from the futures market, which changes several times a year.

Weekly CZ - weekly control zone. The zone formed by important marks of the futures market, which changes several times a year.

Monthly CZ - monthly control zone. The zone, which is a reflection of the average volatility over the past year.

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

AUDCAD holding above long term ascending support!

analytics5f113273c3a62.jpg

Trading Recommendation

Entry: 0.94752

Reason for Entry: Market entry

Take Profit: 0.95333

Reason for Take Profit: Recent swing high, 50% Fibonacci extension

Stop Loss: 0.94364

Reason for Stop Loss: Recent swing low, ascending trendline support

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

Trading plan for GBPUSD for July 17, 2020

analytics5f10fe71de9f9.jpg

Technical outlook:

GBPUSD has been drifting sideways for the last 2 trading sessions between 1.2500 and 1.2650 levels respectively. The single currency is seen to be trading around 1.2560 levels at this point in writing and is expected to break below the 1.2500 level. It would confirm that GBPUSD is drifting towards 1.2250 and further. The wave structure is indicating that GBPUSD is into a corrective phase since 1.2800 level. This should be completed with a drop below 1.2250 level. GBPUSD is likely to drop to the 1.1900/1.2000 levels, which are also the Fibonacci 0.618 support of the previous rally between 1.1414 and 1.2800 respectively.

Trading plan:

Remain short, stop @ 1.2800, target is @ 1.1950

Good luck!

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

Forecast for EUR/USD on July 17, 2020

EUR/USD

The euro has strengthened its reversal signs over the past day. Having decreased by 30 points, the price points indicate the upcoming divergence with the Marlin oscillator with great emphasis. The signal line of the oscillator is about to move into the zone of negative values. The declining mood will become clear after the price moves below the signal level of 1.1349 - the June 23 high. In this case, the euro's nearest target is 1.1265, then 1.195, which is approaching the MACD line.

analytics5f1126b74874b.jpg

On the working scale of H4, the signal line of the Marlin oscillator went down from its own rectangular range, entering the downward trend zone. The MACD line approached the signal level of 1.1349, which strengthened the significance of this level - the stronger it is, the more important it is for the price to overcome it.

analytics5f1126c9dbfe2.jpg

However, a reversal might not form. If the price goes above the level of 1.1420, the 1.1465 target will open again. Overcoming 1.1465 paves the way to 1.1560, towards forming a less steep divergence on the daily scale.

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

Forecast for AUD/USD on July 17, 2020

AUD/USD

The Australian dollar fell by 36 points on Thursday, but it still has the opportunity to form a triple divergence with the Marlin oscillator on the daily chart. The signal line of the oscillator remained in the zone of positive values, growth to 0.7080 may resume. Perhaps, the quote falling below the level of 0.6900 (September 2019 high) can confirm a medium-term decline in the price.

analytics5f11220e95b36.jpg

The first sign of the aussie's intention to attack 0.6900 will be when the price consolidates under the MACD line on the four-hour chart. The reference point for this is yesterday's low. Consolidating the price above the signal level of 0.7000 will allow it to return to growth to the target of 0.7080.

analytics5f1122216c6dc.jpg

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

Forecast for USD/JPY on July 17, 2020

USD/JPY

We wrote in the last review: "The yen attacked the MACD line from top to bottom yesterday in the exact pattern of July 10 (Friday). Accordingly, history can repeat itself with growth on the model of July 13 (Monday)." The price chose this scenario. Now the growing sentiment increased. The price intends to reach the first bullish target level of 107.77. The Marlin oscillator also intends to enter the growth territory.

analytics5f111ee42523b.jpg

The price stopped at the MACD line on the four-hour chart. Marlin in the growth zone. Overcoming yesterday's low is a signal that shows the price's intention to continue growing to 107.77. To continue the decline, the price must now overcome not only the MACD line on the daily scale (106.94), but also the July 15 low of 106.68. Thus, the yen has created a wide range of uncertainty and free movement.

analytics5f111ef6a63a4.jpg

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

Hot forecast and trading signals for the GBP/USD pair on July 17. COT report. A statement by Bank of England Governor Andrew

GBP/USD 1H

analytics5f110759ef80f.jpg

The GBP/USD currency pair, unlike the EUR/USD pair, has been trading in different directions for more than a week. The "swing" continued on Thursday, July 16. First, buyers tried to bring the pair back to the resistance area of 1.2634-1.2660, then they failed again and again letting the pound fall into the power of sellers, who, however, did not extract any special dividends for themselves. As a result, the pair starts the new trading day in the same place as the previous ones, and there are still no advantages for either buyers or sellers. Quotes easily pass even the Kijun-sen line, which is considered a strong resistance/support, which also indicates a possible sideways movement. One way or another, it is extremely difficult for bears to go below the support level of 1.2497, and for bulls to go above the level of 1.2660. The lack of channels and trend lines also complicates the situation.

GBP/USD 15M

analytics5f11076de1b6c.jpg

Both linear regression channels turned down on the 15-minute timeframe, which allows for a new downward movement. But at the same time, both channels are very weakly directed down, more sideways, so there is no pronounced downward trend now. The latest COT report showed a serious strengthening of bullish sentiment among major traders. Professional traders opened 6,743 Buy-contracts and a total of 12 Sell-contracts during the reporting week. It is obvious that they were only interested in buying the British pound. The total net position in the "commercial" category increased by 6,700. The total number of contracts in the category of commercial traders is approximately 115,000, and the preponderance of Buy over Sell was -21 thousand before the last report. Thus, +6,700 in the net position is a serious strengthening of the bullish mood. However, the British currency did not become more expensive during the entire current week, but it also did not get cheaper. Thus, the new COT report, which will be available today, can show minimal changes among the new contracts.

The fundamental background for the GBP/USD pair has not changed much in recent days, although quite a large amount of macroeconomic data has been received from the UK this week. However, traders ignored most of it, only taking into account that the country's economy is recovering at a much slower pace than experts expected, and unemployment has not increased since the beginning of the pandemic, which also came as a surprise. But of great importance for traders will be Friday's speech by the head of the Bank of England, Andrew Bailey. Recall that in the past few months, traders fear that the British regulator will move to a more serious easing of monetary policy parameters, given the damage caused by the coronavirus crisis and the already wounded Brexit to the British economy. Thus, negative rates are quite an objective reality for the UK in the current conditions. And at the same time, the most serious bearish factor for the pound/dollar pair. It is possible for Bailey to not touch the topic of monetary policy at all. For example, his last speech was devoted to the possibilities of creating a state cryptocurrency. However, Bailey has previously said that the BA is diligently studying the issue of lowering rates to the negative area. This means that sooner or later he will touch on this topic and announce what the regulator has come to.

There are two main scenarios as of July 17:

1) The outlook for the bulls has deteriorated during the trading week. At this time, the pair's purchases are still not relevant, since the quotes went below the ascending channel, and after four attempts, buyers still failed to overcome the important area of 1.2634-1.2660. Thus, we advise you to buy the British pound again, but not before overcoming this area. The targets in this case are the resistance levels of 1.2705 and 1.2791. Potential Take Profit in this case will be from 30 to 110 points.

2) Sellers are advised to consider short positions with the nearest target support level of 1.2497, as the pair's quotes have once again consolidated below the critical line (1.2573). However, at the same time, there is now a high probability of a sideways movement, and the pair has already rebounded from the level of 1.2497 earlier. Thus, a stronger downward movement, with the goals of the Senkou Span B line (1.2463) and the 1.2375 level, is now in question. The potential Take Profit is only about 40 points.

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

Hot forecast and trading signals for the EUR/USD pair on July 17. COT report. Lagarde anticipates economic recovery in Q3

EUR/USD 1H

analytics5f11032d98a6c.jpg

The euro/dollar pair turned around the critical Kijun-sen line on the hourly timeframe on July 16, performed an upward movement to the first resistance level of 1.1432, rebounded from it and returned to the Kijun-sen line, which, at the time of writing, it failed to overcome again. Thus, trading the pair was quite versatile the previous day. Neither the bulls nor the bears had an advantage on Thursday. As such, no buy signal was formed since there was no rebound from the Kijun-sen. But there was a signal to sell – a rebound from the level of 1.1432, but it was not obvious and absolutely counter-trend. Therefore, yesterday was extremely inconvenient for both buyers and sellers. However, the upward channel remains in force, so the trend for the pair remains upward. A rebound from the Kijun-sen line will be a signal to buy.

EUR/USD 15M

analytics5f11034168c07.jpg

Both linear regression channels turned down on the 15-minute timeframe, which indicates the beginning of a downward movement. Meanwhile, the next trading week has come to an end and we need to assess the impact of the COT report on the pair's movement. The latest COT report from July 7 was rather uninformative. The most important category of large traders "Commercial", which represents professionals who trade on the forex market for the purpose of commercial profit, opened almost 6,000 Buy-contracts and only 1,700 Sell-contracts. Thus, the net position in this category has increased by almost 4,000, which means that the bullish mood of major players has increased. At the same time, the total number of Buy-contracts for professional traders is also much higher than the number of Sell-contracts – 186,000 against 80,000. Thus, large traders continued to invest in the euro, which was fully confirmed this week, as the single currency continued to grow for most of it.

The fundamental background for the EUR/USD pair remained the same on Thursday, despite the very loud sign of the day. The summary of the results of the European Central Bank meeting was set on July 16, which is always interesting. However, the key rates remained unchanged, and the volume of the PEPP program remained at the same level, meaning that all the parameters of monetary policy did not change. Therefore, the reaction of market participants was more than restrained. To sum up, the euro rose by 50 points a few hours following the announcement of the results, without particularly changing the technical picture. And the same amount went down a few hours later. Traders only had hope for ECB President Christine Lagarde's speech. Lagarde said during a traditional press conference that the situation in the EU's economy has slightly improved, but the timing and scale of the recovery remain extremely uncertain. "The latest information indicates a resumption of economic activity in the euro area, but its level remains much lower than the values observed before the coronavirus epidemic," Lagarde said. In addition, Lagarde said she expected a greater recovery in economic activity in the third and fourth quarters, as more restrictions were lifted. The ECB chairman still believes that the eurozone needs stimulus measures for a faster and more complete economic recovery. Market participants are advised to closely monitor information coming from the EU summit on the last trading day of the week, if any. The outcome of the negotiations on the recovery fund (which Lagarde mentioned) determines the speed and scale of the EU's economic recovery.

Based on all of the above, we have two trading ideas for July 17:

1) Buyers continue to dominate the market, as quotes remain above the Kijun-sen line and inside the ascending channel. But at the same time, do not forget about the frequent pullbacks and corrections that are now inherent in the euro/dollar pair. Opening new long positions are advised with the target resistance level of 1.1432, if the quotes rebound from the Kijun-sen line (1.1371). The potential Take Profit in this case is about 55 points. The second target is the level of 1.1494.

2) Bears have not managed to cross the Senkou Span B line, the Kijun-sen line, or get out of the channel in the past few days. Sellers do not have enough power to form a new downward trend, and it is dangerous to work with corrections. Thus, we recommend selling the euro, but not before overcoming the Kijun-sen line, and ideally - after closing the price below the ascending channel, with the goals of the Senkou span B line (1.1278) and the support level of 1.1238. The potential Take Profit in this case is from 40 to 80 points.

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

Analysis and trading signals for beginners. How to trade the GBP/USD pair on July 17? Plan for opening and closing deals

Hourly chart of the GBP/USD pair

analytics5f10fc0e64b75.jpg

Everything is much more complicated with the GBP/USD currency pair than with the EUR/USD pair. Macroeconomic reports released in the UK this week (inflation, GDP, industrial production, wages, unemployment) can generally be regarded as weak. However, the pound sterling clearly does not show a special desire and intention to fall against the dollar. Therefore, we can now conclude that traders do not have a common trading strategy and even an answer to the question "what to do with the pound in the near future?". On the one hand, the difficult epidemiological situation in the US, which will definitely have a negative impact on the country's economy, does not make it possible for the dollar to return to growth (US dollar grows = fall of the GBP/USD pair). On the other hand, the UK still has not resolved the issue of its relations with the European Union after December 31, 2020, which is when the transition period will be completed, and Britain will officially leave the European Union. Recall that on this day, all agreements and deals between Britain and the EU will be canceled. First of all, this concerns trade agreements. There will be no free trade (without duties, quotas, or other restrictions) between the UK and the EU starting on January 1. This means that it will now be more difficult for British companies and manufacturers to export their services and goods to the EU. Just as it will be more difficult for them to interact with their European partners. All this threatens even more cuts for the British economy and, accordingly, a new fall in the British pound.

Technical analysis tells us that the pair failed to continue its growth above the 1.2665 level. Three attempts to continue the upward movement were made on July 7, 9, and 13, but all were unsuccessful. Thus, we have built a downward trend line (one of the main tools for determining the trend), which just shows that in the near future we can expect quotes to fall. The important support level of 1.2573 has been overcome once again, which allows us to expect a slight drop. There are two possible scenarios based on these technical constructions:

1) Since the pair has settled below the 1.2573 level (closing the bar below this level at the end of the hour), we advise you to sell with a goal of around 70 points down. In other words, we place the Take Profit order near the 1.2479 level.

2) If the pair closes above the trend line at the end of the next hour (we assume that this may happen near the level of 1.2658), this will be a buy signal. In this case, we recommend buying the pair, and you can consolidate the profit around the 1.2735 level manually, or by placing a Take Profit order. Both targets are positioned at a safe distance from the intended entry points.

Important speeches and reports (always contained in the news calendar) can greatly affect the movement of a currency pair. Therefore, during their exit, you are advised to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.

Beginners who trade in the forex market should remember that each transaction cannot be profitable. Developing a clear strategy and money management is the key to success in trading for a long period of time.

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

Analysis and trading signals for beginners. How to trade the EUR/USD pair on July 17? Plan for opening and closing deals

Hourly chart of the EUR/USD pair

analytics5f10f93b9c8de.jpg

Yesterday was very difficult in terms of trading. The European Central Bank meeting is an extremely important event for the currency market. Volatility increases and sharp changes in the direction of movement are possible when results are announced, summary of the press conference are released or even following the speech of ECB President Christine Lagarde. In principle, this is exactly what happened yesterday. The results of the July meeting were extremely uninteresting. The key rate (the interest rate at which commercial banks and other financial organizations are credited) remained at its minimum value of 0%. It can't be lower, because a negative loan rate will mean that the ECB will pay interest on loans itself, which violates the lending mechanism. The Deposit Rate remained unchanged, also at the ultra-low level of -0.5%. This rate means that the ECB charges depositors for placing deposits on their accounts. This is done in order to motivate investors to invest their money in the economy as much as possible, and not to keep it on deposits.In general, this monetary policy of the ECB is dovish (very soft, aimed at stimulating the economy). However, in addition to the results of the meeting itself, Lagarde gave a speech yesterday, showing some optimism, saying that the economic activity of the population is growing, and that the EU economy is expected to recover in the third and fourth quarters. The euro began to grow due to these comments, without paying attention to the technical picture. However, a few hours later, the pair began to fall again, as the markets lost optimism.

Technical analysis for the second time in two days says that the euro is getting ready to start falling. First, the price fixed below the rising channel, then sharply rebounded, then again pinned below the already updated downward channel. At the moment, we again have a signal for sales, which we advise you to work with. The following scenarios are possible on July 1:

1) We do not advise you to consider buying the euro since the price has consolidated below the rising channel and it is extremely difficult to get a buy signal in such conditions. Even if the price returns to the rising channel, it will no longer be relevant.

2) Since the pair consolidated below the rising channel at the end of the hour and spent the next three hours (three hourly candles) below it, we recommend selling and placing Take Profit orders near the targets - levels 1.1325, 1.1301, 1.1256 . The first one is the safest target. The pair usually travels the same distance (volatility) within the day. At this time, from the lowest to the highest price of each day, the pair passes approximately 75-80 points. There are approximately 60 to the first goal, therefore, when it is achieved, we recommend taking profits and exit the transaction. We recommend setting the Stop Loss level (limits possible losses on the transaction) above 1.1411.

Important speeches and reports (always contained in the news calendar) can greatly affect the movement of a currency pair. Therefore, during their exit, you are advised to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.

Beginners who trade in the forex market should remember that each transaction cannot be profitable. Developing a clear strategy and money management is the key to success in trading for a long period of time.

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

Overview of the GBP/USD pair. July 17. "Brexit by Johnson" leads the UK economy into the abyss. Andrew Bailey's speech may

4-hour timeframe

analytics5f10ec9e29862.jpg

Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - sideways.

CCI: -54.4076

The GBP/USD currency pair showed very weak dynamics at the trading on July 16. According to the data on the average volatility of the pair, this indicator has been steadily decreasing recently, which indicates a decrease in the activity of traders. After the quotes reached the level of 1.2665, market participants faced a rather reasonable question: what did the British pound grow on? Yes, we have repeatedly said that the growth of the pound was provoked and justified by the political, social, epidemiological and economic crisis in the United States. And since no pair or instrument can move constantly in the same direction, from time to time there are such movements. However, over the past few years (since 2016, when Brexit began), in most cases, the pound has become more expensive based on expectations, rumors, and traders' hopes for a successful outcome of Brexit. It has been four years and hopes for a successful outcome are no longer necessary. Boris Johnson, who was applauded by the whole of Great Britain at the end of last year, congratulating his party on the defeat of the Labor Party, in almost a year of his premiership and six months of absolute dominance in the country, in fact, achieved nothing. Yes, in 2020, the entire world was hit by the "coronavirus" epidemic (which it was the UK that coped with the greatest losses), but even if you do not take it into account, the country's economy continues to shrink, and its prospects are still dim. To be absolutely honest, any politician could have taken the UK out of the EU the way Johnson did. The main point was to perform the "divorce" with the European Union as "gently" and painlessly as possible for both sides. What has Boris Johnson achieved? It is simply going to sever all ties with the EU and trade with the world on its own terms under new trade agreements. A laudable desire to make the UK as independent as possible from the European Union. However, do not forget that more than 50% of British exports are sent to the EU countries. Thus, a huge number of manufacturers and entrepreneurs will feel the "Brexit by Johnson" very clearly. Moreover, the British Prime Minister clearly still intends to conclude a trade agreement with both the EU and the US. However, who said that Brussels will sooner or later agree to Johnson's demands? As for the United States, in six months the power in this country may change, and Johnson's friend Donald Trump may resign. Thus, the most important thing that all experts and political scientists note now is that the UK does not have a clear plan and strategy for when, with whom and on what terms to conclude trade agreements. And this uncertainty is pressing. It puts pressure on business, it puts pressure on residents, it puts pressure on the currency. After all, it is absolutely clear to everyone that the more damage the UK will suffer as a result of the "coronavirus crisis" and Brexit, the longer the economy will recover. The collapse of the British, of course, does not threaten, but, for example, the prospects of increasing taxes (something to cover the budget deficit) and falling living standards are absolutely real.

Thus, Britain and the US continue to compete now in who is worse off. Britain is still better off only in the issue of the pandemic, which was still managed to put out in the Foggy Albion. We believe that the fundamental growth potential of the British currency has already been exhausted. From the last significant low, the pound rose almost 8 cents. This is quite enough to consider all the negative fundamental background that regularly comes from overseas as fulfilled. Thus, we are waiting for the resumption of the downward movement in the near future. And here you need to be extremely careful and accurate. It should be understood that the fundamental background does not change for a short period of time (for example, an hour or a day). The fundamental background is an abstract concept. More important is not the background itself, but the reaction of traders to it and their interpretation of this background. Thus, we can not say that today the background has changed to negative for the pound. Based on this, we believe that each consolidation of quotes below the moving average line should be considered as having a high potential for the formation of a new downward trend. Moreover, buyers were not able to overcome the Murray level of "7/8"-1.2665 twice and the Murray level of "6/8"-1.2634 once again, forming a certain resistance zone in this area, before overcoming which we would not consider new purchases of the pair at all.

During this week, several important reports have already been released in the UK, two of which clearly upset traders. First, it is GDP for the month of May, which showed much weaker growth than expected. Secondly, this is industrial production for May – the same results. The consumer price index for June against the background of these two reports did not have much significance. Yesterday it became known that the unemployment rate in May did not increase by one tenth of a percent, remaining unchanged at 3.9%. The number of new applications for unemployment benefits in general turned out to be negative - minus 28.1 thousand. However, judging by the reaction of traders, these optimistic data are not too impressive. On the one hand, this may mean that market participants continue to ignore macroeconomic statistics, since previous reports also did not cause a particularly strong reaction. On the other hand, we can assume that these reports are clearly not enough for purchases of the British currency to continue.

At his speech on Thursday, the Chairman of the Bank of England, Andrew Bailey, did not say anything beyond interesting, telling only about the possibilities of creating a national cryptocurrency in the UK. Another performance by Bailey will take place on the last trading day of the week. And this is the most important event for the pound/dollar pair. The head of the British Central Bank may start hinting again at the possible introduction of negative rates. This was previously rumored, and Bailey himself said that the Bank of England is studying this issue, studying the experience of other countries that have resorted to this tool. Thus, if the markets hear new hints about the introduction of negative rates, this could create serious pressure on the pound.

analytics5f10ecb0da9d6.jpg

The average volatility of the GBP/USD pair continues to remain stable and is currently 93 points per day. For the pound/dollar pair, this value is "average". On Friday, July 17, thus, we expect movement within the channel, limited by the levels of 1.2454 and 1.2640. A reversal of the Heiken Ashi indicator downwards will indicate a downward movement, and the pair may re-establish itself below the moving average.

Nearest support levels:

S1 – 1.2543

S2 – 1.2512

S3 – 1.2482

Nearest resistance levels:

R1 – 1.2573

R2 – 1.2604

R3 – 1.2634

Trading recommendations:

The GBP/USD pair on the 4-hour timeframe is trading "up-down" near the moving average, then fixing above it, then below. Thus, now there is a kind of flat, and there is no trend as such. Thus, formally, sell orders can be opened when the price is fixed below the moving average line with the goals of 1.2512 and 1.2482. You can buy the pound/dollar pair if it is fixed above the moving average with the goals of 1.2604 and 1.2634.

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

Overview of the EUR/USD pair. July 17. Decisions at the EU summit may not be made. Another meeting of EU leaders may be needed

4-hour timeframe

analytics5f10ec3529635.jpg

Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - upward.

CCI: 40.9864

Well, here comes the "Hour X" for the Eurozone and the euro currency. Today is July 17, which means that the EU summit will begin today, during which the fate of the economic recovery fund will be decided, which involves the accumulation and further distribution of 750 billion euros to the most affected countries and sectors of the economy. In short, all EU member states support the formation of such a fund, and all agree that the amount should be at least 750 billion and that funds should be raised from foreign markets, which will then be repaid for many years. However, the European Commission proposed to distribute about 500 billion euros in the form of grants, that is, on a free basis, and only 250 - in the form of loans. This proposal is strongly opposed by Austria, Sweden, Denmark, and the Netherlands, which believe that all 750 billion euros should be provided in the form of loans. For this, they were already tacitly given the name "stingy four". However, "buying up" or "not buying up" is the second question. The first question is that these countries have the right to refuse such an offer if they do not want to share several tens of billions of euros with a conditional Italy or Spain. In principle, they can be understood. They have their budget and the more money they spend on aid, the less they will spend on their own needs. Italy, Spain, and other EU countries most affected by the pandemic and crisis are now the first floors of a high-rise building where there was a fire. For the entire house to stand and not collapse, all floors must help the most affected. However, if there is nowhere to go in a high-rise building, then in the case of the EU, some countries may well refuse the offer of the European Commission, may leave the bloc, or try to personally get more acceptable conditions for participation in this program. One way or another, all 27 member countries of the alliance should come to a common opinion. As long as they do not come to him, the financial assistance of the European economy will not be granted. And the problem here is precisely in Italy, Spain, Portugal, and Greece. Recall that Greece received huge help from the EU during the crisis of 2008-2009. Even then, the country declared a technical default. Now a similar fate may befall, for example, Italy. However, an even greater threat is that Rome may initiate the country's second exit from the EU in the last 5 years. The logic of Rome is very simple: if the EU is not helping us amid an economic crisis, then why do we need to stay in it at all? Moreover, it is in Italy that openly "anti-European" political views have been maturing recently, so if the European Union does not help, then Italians will vote for those political forces that are opposed to European integration in the next elections. And this can turn into "Itexit" ("Italy exit"). In general, the issue on the agenda is extremely important.

On the eve of the first face-to-face EU summit since the beginning of the pandemic, European Council President Charles Michel called on governments to show solidarity and will to adopt the EU budget for 2021-2027 and a plan for economic recovery after the crisis. "The COVID-19 pandemic has claimed many lives across Europe and has been a major blow to our economy and society. All our efforts must be directed towards ensuring sustainable recovery. To this end, our meeting this week will focus on the long-term budget and recovery plan," said Charles Michel. Regarding the differences of opinion between the "North" and "South" of the European Union, Michel said: "It is not surprising that there are different opinions in the EU. I assure you that we have taken into account all opinions, all differences. My task is to do everything possible to reach an agreement, and this is done unanimously by all 27 countries." Meanwhile, Italian President Sergio Mattarella said on Thursday that the EU summit on July 17-18 will be "decisive". However, the Italian President did not say why or who was "decisive". Either for Italy itself, or for its future in the EU, or for the entire alliance. However, in a conversation with Italian Prime Minister Giuseppe Conte, politicians again agreed that most of Italy's aid should be provided in the form of grants. But an adviser to the President of Lithuania Asta Skaisgiryte believes that it may take much longer to reach an agreement on the formation and distribution of the recovery fund and the EU budget for the next 7 years. The presidential adviser suggested that the EU countries will not be able to come to a common denominator again over the next two days. Skaisgiryte believes that it may need a second meeting of representatives of all EU member states, which will take place until the autumn. At the same time, Spanish Prime Minister Pedro Sanchez called on all EU countries to make some concessions to reach an agreement, and said that "the European Union is facing very difficult times".

On Thursday, July 16, there was a bit of interesting news in the European Union. Not a single macroeconomic report and the ECB meeting turned out to be passable and did not provoke strong movements in the currency market. The European Central Bank left its key interest rates on loans and deposits unchanged at 0% and -0.5% and left the volume of the PEPP program unchanged at 1.350 trillion euros. This is what market participants were preparing for, so they were not surprised. In the United States on this day, a report was published on applications for unemployment benefits, which for the reporting week added 1.3 million, if we talk about the primary. 17.3 million secondary cases were recorded. Retail sales in June increased by 7.5% mom instead of the forecast +5%. Thus, in the American trading session, the US dollar could even begin to strengthen, but in general, the euro/dollar pair conducted a rather vague trading all day.

On the last trading day of the week, in addition to the planned EU summit, the results of which will be known only at the weekend, the publication of the June inflation report in the European Union, and the University of Michigan consumer confidence index for July is also planned. We consider both of these reports very secondary. It is unlikely that they will cause any strong reaction from market participants.

analytics5f10ec4b5f471.jpg

The volatility of the euro/dollar currency pair as of July 17 is 72 points and is characterized as "average". We expect the pair to move today between the levels of 1.1308 and 1.1452. Turning the Heiken Ashi indicator upward will signal the end of the downward correction cycle.

Nearest support levels:

S1 – 1.1353

S2 – 1.1292

S3 – 1.1230

Nearest resistance levels:

R1 – 1.1414

R2 – 1.1475

R3 – 1.1536

Trading recommendations:

The EUR/USD pair has started a new round of corrective movement. Thus, it is now recommended to open buy orders with the goals of 1.1414 and 1.1452, but after the price rebounds from the moving average. It is recommended to open sell orders no earlier than when the pair is fixed below the moving average line with the first targets of 1.1308 and 1.1230.

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

Comprehensive analysis of movement options for EUR/GBP & GBP/JPY & EUR/JPY (H4) on July 17, 2020

Minute operational scale (H4)

Options for the development of the movement of the main currency pairs EUR/GBP & GBP/JPY & EUR/JPY (H4) on July 17, 2020

____________________

Euro vs Great Britain pound

From July 17, 2020, the development of the movement of the "main" cross-instrument EUR/GBP will be determined by testing and the direction of the breakdown of the channel boundaries 1/2 Median Line (0.9115 - 0.9085 - 0.9055) of the Minuette operational scale forks - see the animation chart for details of the development of the indicated levels.

A breakdown of the support level of 0.9055 at the lower border of the channel 1/2 Median Line of the Minuette operational scale forks will make it relevant to continue the downward movement of the "main" cross-tool to the goals:

  • initial SSL line (0.9025) of the Minute operational scale fork;
  • initial SSL line (0.8990) for the Minuette operational scale fork;
  • LTL Minuette control line (0.8855);
  • minimum 0.8937 - 0.8863.

If the resistance level of 0.9115 breaks at the upper border of the channel 1/2 Median Line Minuette, the EUR/GBP movement will continue in the equilibrium zone (0.9115 - 0.9155 - 0.9195) of the Minuette operational scale forks with the prospect of reaching the final Shiff Line Minuette (0.9220).

The EUR/GBP movement options from July 17, 2020 are shown on the animated chart.

analytics5f1083631d234.jpg

____________________

Euro vs Japanese yen

The movement of the cross-pair EUR/JPY since July 17, 2020 will be continued in the channel 1/2 Median Line (123.00 - 122.00 - 121.00) of the Minute operational scale forks subject to testing and referral breakdown of the range:

  • resistance level of 122.50 - the ultimate Shiff Line Minuette;
  • support level of 122.25 - the upper bound ISL61.8 zone equilibrium of the Minuette operational scale forks.

Breakdown ISL61.8 Minuette - support level 122.25 - development of the EUR/JPY movement within the equilibrium zone (122.50 - 122.00 - 121.80) and channel 1/2 Median Line (121.80 - 121.60 - 121.35) of the Minuette operational scale forks with the possibility of reaching (after breakdown of the lower boundary of the channel 1/2ML Minuette (121.35) at the price of the instrument of the lower boundary of the channel 1/2 Median Line (121.00) of the Minute operational scale forks, control line LTL Minuette (120.65) and update the local minimum 120.24

When the resistance level of 122.50 is broken on the final Shiff Line Minuette, the EUR/JPY movement will be directed to the resistance levels:

  • 123.00 - upper limit of the channel 1/2 Median Line Minute;
  • 123.15 - initial line of SSL of the Minute operational scale forks;
  • 123.25 - final line of FSL of the Minuette operational scale forks;
  • and if there is a breakdown of these resistances, then the price of this cross-tool can continue the upward movement to the maximum 124.40.

From July 17, 2020, we look at the EUR/JPY movement options on the animated chart.

analytics5f10839642f88.jpg

____________________

Great Britain pound vs Japanese yen

The development of the movement of the EUR/JPY cross-instrument from July 17, 2020 will depend on the development and direction of the breakdown of the range:

  • resistance level of 135.05 - UTL control line of the Minuette operational scale forks;
  • support level of 134.45 - upper bound of ISL38.2 balance zone of the Minute operational scale forks.

The breakout of ISL38.2 Minute - the support level of 134.45 - will make the development of the GBP/JPY movement in the equilibrium zone relevant (134.45 - 133.15 - 131.85) of the Minute operational scale forks and channel 1/2 Median Line (132.50 - 131.65 - 130.90) of the Minuette operational scale forks.

At the break of the control line UTL of the Minuette operational scale forks - resistance 135.05 will be possible to update the local maximum 135.89 and the achievement of the price of an instrument channel borders 1/2 Median Line (137.05 - 138.15 - 139.25) of the Minute operational scale forks.

Details of the development of the GBP/JPY movement from July 17, 2020 are shown on the animated chart.

analytics5f1083c006aea.jpg

____________________

The review is compiled without taking into account the news background, the opening of trading sessions of the main financial centers and is not a guide to action (placing "sell" or "buy" orders).

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

Yuan aims to be on the reserve currency list

analytics5f10f2fd4bb67.jpg

According to the latest news from China, the country does not intend to make weapons of mass destruction from the national currency. In other words, the authorities will not use the yuan in an aggressive and unrestrained policy towards the United States of America. At the same time, the level of tension between Beijing and Washington is not taken into account.

Most likely, the Chinese authorities are trying to take a completely different path, which is not related to the volatility and instability of the currency. On the contrary, the government wants to make the yuan another reserve currency with a high level of confidence and low volatility. This is a new trend that the foreign exchange market has not had to face before.

So far, the US dollar is the main reserve currency of the world. Nevertheless, China is ready to take unprecedented steps that can bring the yuan to the international scene as a widely used currency.

Until recently, the US authorities were distrustful of the national Chinese currency, while accusing the country's government of artificially reducing the exchange rate of the yuan. In addition, many analysts point to the fact that a not too strong yuan can lead to an increase in exports in the country, and this in turn becomes a significant competitive advantage in international markets.

The US authorities have repeatedly accused Beijing of deliberately manipulating the yuan in its own interests. Recall that last year, Washington attacked Beijing for allegedly deliberately bringing the value of the national currency to the lowest and psychologically important mark of 7 yuan per dollar.

Now the situation is particularly acute, since geopolitical tensions are also coming to the fore. The new stage of the escalation of the conflict between the United States and China makes currency market participants nervous, although they are already afraid of the complex epidemiological situation in the world regarding the coronavirus pandemic.

America cannot come to terms with the national security law of Hong Kong. Last Tuesday, the US leader made a statement that he had decided to remove the special trade regime that previously existed from Hong Kong. In addition, a document was signed on special sanctions against Chinese officials who are involved in the ratification of the national security bill. Another indication of the escalating situation was the introduction of visa restrictions for a number of companies from China. However, China did not wait for a response and has already made comments on this issue. The cold war continues, which means that the exchange rate of the national currency can be extremely unstable against this background.

Meanwhile, Chinese authorities are steadily continuing to move towards internationalization of their currency, and some of its results are already visible. Thus, China's assets are increasingly appearing in the area of international markets, and this in turn causes the need for foreign investors to use the yuan.

China's national currency is traded at 6.9868 yuan per dollar this morning.

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