The euro is declining despite the growth of the ZEW index, the movement may accelerate by the end of the day, and the pound

Trading 13 nov 2019 Commentaire »

On Wednesday, the key environmental event is the publication of US inflation data in October. Forecasts are neutral, price increases are not expected, which is consistent with the statement by J. Powell about the limited potential for inflation growth. Today, Powell will speak to the Joint Economic Committee of Congress, any deviation from the rhetoric from the last Fed meeting can significantly increase volatility.

US stock exchanges closed in positive territory, which can be considered a sign of the resumption of positive sentiment and increased demand for risk, but the Asia-Pacific countries showed negative dynamics at night and in the morning amid protests in Hong Kong. On Wednesday, the US dollar remains the market's favorite, but the momentum has weakened significantly, and the movement until the release of inflation data will be weak both in the raw materials market and in major currency pairs.

EUR/USD

ZEW economic sentiment indicator rose significantly in November, rising to -2.1p from -20.7p a month earlier. The sharp increase in the indicator is explained by expectations of positive changes in world trade and a decrease in uncertainty. The chances of concluding an agreement between the UK and the EU have increased markedly while tariffs for cars from Europe may remain at current levels. Thus, there was hope for a trade deal between the United States and China again.

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In addition, inflationary expectations and short-term interest rates are rising in the eurozone. Everything goes to the point that the peak of the crisis, which was reflected primarily in the manufacturing sector of the eurozone, has been passed, and these changes in investor sentiment will contribute to increased demand for the euro.

At the same time, a strong bearish factor remains the start of the ECB's asset buyback program, but at the moment, it is unclear whether Lagarde is ready to change the ECB's policy or be careful. The second option is more likely, and therefore, the pressure on the euro will be insignificant due to the low probability of additional steps to stimulate in the near future.

In general, as of the morning of November 13, the euro remains slightly pressured after the breakdown of key support 1.1075. Thus, technically, the trend remains downward. Now, when trying to grow, it is more logical to sell in the resistance area of 1.1035 / 40, a decline to 1.0990 and possibly continue further to 1.0975.

GBP/USD

In the UK, an impressive amount of macroeconomic data is published this week. The data are weak and are putting additional pressure on the pound as it approaches general elections.

On the other hand, the trade balance in September fell to -3.36 billion pounds, while the deficit of the commodity balance reached -12541 billion. This is not surprising against the backdrop of a decline in industrial production, which is still below the levels of the pre-crisis 2007.

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The decline in production leads to a slowdown in GDP growth, an increase of 3 square meters which preliminarily amounted to 0.3%, that is worse than forecasts, while NIESR believes that the three-month growth in October will be only 0.1%.

The labor market report came out worse than expected, but in absolute terms, the results are still strong. As of September, the unemployment rate fell to 3.8%. The average wage growth rate of 3.6%, which gives reason to count on rising inflation. Moreover, a report on consumer prices will be published today, while data on retail and manufacturing prices will also be released.

As a result, the pound continues to stay in the range and refuses to decline, relying on political forecasts according to which Boris Johnson will be able to get a majority in the future parliament and complete Brexit in accordance with the plans of the conservatives. As practice shows, the pound usually weakens 2-3 weeks before the election. In addition, the Bank of England is gradually approaching the threshold at which the policy of easing monetary policy can begin. Over the past few decades, there have been no exceptions to the Bank of England not starting the easing cycle after the Fed, and thus, the chances of the pound to fall in the coming weeks look more convincing. Testing is likely at the support area which is 1.2770 / 2800, but going lower is still in question as long as election forecasts remain in favor of the Tories.

If polls show a strengthening of Boris Johnson's position, then the pound may resume its growth in order to test the resistance of 1.2945 / 50.

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Technical analysis recommendations for the EUR/USD and GBP/USD on November 13

Trading 13 nov 2019 Commentaire »

Economic calendar (Universal time)

Today's economic calendar is full of significant events. At 9:30, we are expected statistics from the UK, led by the consumer price index. Further important news will follow from the USA - 13:30 (data on the consumer price index in the USA) - 16:00 (Fed chairman will speak). Therefore, after the lull of the last days, some revival and activity are possible in the market.

EUR / USD

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The players on the decline left the correction zone again and updated the minimum. The situation in its conclusions and expectations, over the past day, has not changed significantly, only some levels of support and resistance have slightly changed the location. Today, The lower boundary of the daily cloud (1.0967) remains a downward benchmark. The attraction continues to exert 1.1030 (weekly Tenkan). Also today, the resistance zone has narrowed a bit and ranges from 1.1065-90 (daily Senkou Span B + daily Kijun + weekly Fibo Kijun + daily Tenkan).

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The next decline ended with a correctional rise again. At the same time, on H1, the pair has already managed to gain a foothold above the central pivot level, which is currently at the border of the continuation of the downward trend (1.1017). Its breakdown today will continue the trend, returning relevance to the support of the classic pivot levels 1.0995 - 1.0981 - 1.0959. In the case of the development of the current upward correction, the next important upward reference is the weekly long-term trend (1.1056). Now, reliable consolidation of the above can affect the balance of power of the lower halves and will serve as the implementation of a full correction at higher time intervals.

GBP / USD

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Yesterday's movement has remained uncertain. A full rebound from the encountered resistance has not been formed, but it has not been possible to overcome the levels. It is possible that the players for the increase are gathering their strengths so that for the third time they will realize the breakdown of the significant resistance zone 1.2882 - 1.2959-63 - 1.3012 (daily Tenkan + monthly Fibo Kijun + weekly cloud + maximum extreme). Be that as it may, the short-term advantage (1.2870 day Tenkan) remains on the side of the bears so far. If they succeed in realizing a rebound, their interests will be directed to the further development of a downward correction. The reference points of which are the support zone 1.2700 - 1.2600 (daily Fibo Kijun and Kijun + monthly Tenkan + weekly Tenkan and Fibo Kijun).

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The uncertainty of the last day on H1 led to the fact that the pair continues to remain in the zone of attraction of key levels - the central pivot level (1.2844) and the weekly long-term trend (1.2836). Thus, it is now important for promotion players not only to leave the correction zone (1.2897 maximum extremum), but also to cope with the subsequent resistance of the higher halves. In addition, the prospects for lowering players today are also associated with an extremum, only minimal (1.2768). As a result, closing Monday's rising gap and securing it at a minimum will return to bearish plans.

Ichimoku Kinko Hyo (9.26.52), Pivot Points (classic), Moving Average (120)

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*S. Korea Sept M2 Money Supply Up 0.7% On Month Vs. 0.9% In August

Trading 13 nov 2019 Commentaire »

S. Korea Sept M2 Money Supply Up 0.7% On Month Vs. 0.9% In August


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*S. Korea Sept M2 Money Supply Up 7.2% On Year Vs. 7.8% In August

Trading 13 nov 2019 Commentaire »

S. Korea Sept M2 Money Supply Up 7.2% On Year Vs. 7.8% In August


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Trump’s speech at the New York Economic Club revealed tension in the US negotiations with China (rising inflation in the

Trading 13 nov 2019 Commentaire »

The speech by D. Trump, which investors expected with tension on Tuesday, did not shed light on the course of the US-Chinese negotiations, which are decisive for the markets at present.

In fact, he did not say anything new and did not give any details of how the negotiations are going on, although he touched on this topic, saying that the parties are close to signing the "phase one" of the trade agreement and that this could happen in the near future.

Therefore, the lack of detail and certainty on this issue put pressure on the US stock market, where major stock indices lost some of the growth, and the Dow closed at Monday's close.

In the currency exchange market, the ICE dollar index also rolled back down from a local maximum, and the benchmark yield of 10-year-old traders has almost completely lost its growth and is showing negative dynamics in the Asian trading session today.

Observing the overall picture, we can say that with his speech at the New York Economic Club, Trump somewhat lowered the expectations of the market regarding the early conclusion of a trade agreement. In fact, with his own words, he plunged investors into a state of some uncertainty again, which can also be dispelled only under the influence of new positive news once again.

Today, the attention of the investors will be drawn to the speech of Fed Chairman J. Powell, which is scheduled for 16.00 Universal time. He is expected to confirm the monetary rate chosen earlier by the regulator. By and large, he is unlikely to report anything new, since not much time has passed since the last meeting of the Federal Reserve and a significant amount of economic data has not been published, which the Central Bank will carefully look at when deciding on the monetary rate.

From economic data, the published values of consumer inflation in the United States, Britain and the figures for industrial production in the eurozone will be important. In our opinion, an increase in inflationary pressure in monthly terms with a growth of 0.2% in October against an increase of 0.1% in September may turn out to be positive for the dollar. If the data does not disappoint, this may lead to a resumption of the appreciation of the dollar.

Forecast of the day:

EURU/SD is trading above 1.1000. It may continue to decline if data on consumer inflation in the United States show its growth. In this case, overcoming the price level of 1.1000 will lead to a decrease in the pair to 1.0985, and then to 1.0965.

The USD/CAD pair may also continue to grow to 1.3345 if, on the one hand, it holds above 1.3235, and on the other hand, data on inflation growth in the USA will become an incentive for its increase.

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*BoJ's Kuroda: Japan's Fiscal & Monetary Policy Not Linked To MMT – Reuters

Trading 13 nov 2019 Commentaire »

BoJ's Kuroda: Japan's Fiscal & Monetary Policy Not Linked To MMT - Reuters


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Hot forecast for GBP/USD on 11/13/2019 and trading recommendation

Trading 13 nov 2019 Commentaire »

The pound bounced a little from side to side again, but this time not because of the ranting of politicians fighting for votes, but because of data on the labor market. The fact is that, in general, the data turned out to be extremely weak. Thus, the growth rate of average wages, excluding premiums, slowed down from 3.8% to 3.6%. The situation with the growth rates of the average wage, already taking into account premiums, is slightly better, as they slowed down from 3.7% to 3.6%. The decline in wage growth has never boded well, and always threatens to lower retail sales and inflation. Moreover, the number of applications for unemployment benefits increased from 13.5 thousand to 33.0 thousand. So there is something to be sad about. But after the end of the day, the pound remained virtually unchanged. The thing is that the unemployment rate corrected the situation, which magically decreased from 3.9% to 3.8%.

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And although many are clearly already tired of the endless wave of news from the United Kingdom, nevertheless, today will begin with exactly the same. However, the inflation data still cause somewhat a little more curiosity, especially since its decline is expected from 1.7% to 1.6%. Naturally, it will make everyone recall the results of a recent vote at the Bank of England regarding the refinancing rate, when two of the nine board members voted to lower the refinancing rate. After all, if inflation is reduced, then the leadership of the Bank of England may become more proponents of easing monetary policy, and the refinancing rate will be reduced earlier than expected. And such surprises bring investors only disappointment.

Inflation (UK):

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However, inflation data in the UK today will only perform the function of warming up the public, before the publication of inflation data in the United States. It is clear that American statistics have much more weight. However, there is every reason to believe that there will be no reaction to American inflation at all, since it is expected that it will remain unchanged. Here are just such forecasts are not unanimous, and it is likely that inflation in the United States will drop from 1.7% to 1.6% just like in the United Kingdom. And if these fears are confirmed, then everyone will immediately forget about inflation in the UK, and begin to massively get rid of dollars. Just a further decline in inflation may lead to the fact that the Federal Reserve System will lower the refinancing rate once again by the end of this year.

Inflation (United States):

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The pair GBP / USD, over the past day, showed extremely restrained market interest, with a volatility of slightly less than 60 points. In fact, there was a slowdown with a pullback, relative to the value of 1.2885, reflecting to us the middle of the existing flat 1.2770 / 1.3000. The end of the trading day was almost at the opening point, that is, having one of the "Doji" candle types on the market, which signaled a characteristic uncertainty in the actions of market participants. Considering the trading chart in general terms, we see the same looped fluctuation between the two control levels 1.2770 / 1.3000, which formed after an inertial stroke.

It is likely to assume that the fluctuation within the existing accumulation of 1.2835 / 1.2870 will still remain in the market, where it is worthwhile to carefully analyze the behavior of the quote and the fixation point. Thus, for example, fixing in the region of 1.2870 / 1.2885, can be characterized as a way out of the cluster and the resumption of the upward movement. Meanwhile, an alternative development may occur in case of price fixing in the region of 1.2815 / 1.2835.

Concretizing all of the above into trading signals:

- We consider long positions in the case of price fixing in the region of 1.2870 / 1.2885.

- We consider short positions in the case of price fixing in the region of 1.2815 / 1.2835.

From the point of view of a comprehensive indicator analysis, we see that due to the rebound from the target level and subsequent accumulation, indicators on the minute and hour segments occupied the upside. Daytime periods, in turn, still maintain a downward interest.

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Technical analysis of ETH/USD for 13/11/2019:

Trading 13 nov 2019 Commentaire »

Crypto Industry News:

A Canadian research company that studies Blockchain, Blockchain Venture Capital Inc. (BVCI), has officially launched the US dollar-anchored CUSD stablecoin, according to a press release published today.

The new stablecoin appears four months after the launch of CADT - a stablecoin initiative linked to Canada's national fiat currency. BVCI made its debut of stablecoin CADT on Canada Day, July 1. The company said that with one CUSD equal to one USD, the new stablecoin will be used by people and companies, and its specific goal is cross-border transactions between the USA and Canada.

Regulated by the Canadian Center for Transaction Analysis and Reports, BVCI claims to operate in accordance with all federal regulations regarding the transfer of virtual currency. BVCI is a financial services company registered in Ontario, the most populous province of Canada.

The company noticed that thanks to stablecoin CUSD BVCI will facilitate cashless transactions thanks to dollars deposited on a trust account with a financial institution based in the USA.

Other BVCI products are BVC-Chain, a decentralized hybrid Blockchain based on Blockchain Ripple and Ethereum networks. The company has also developed BvcPay, a mobile application that works as a digital wallet, Blockchain explorer, and a trading and decentralized exchange platform. The newly launched CUSD can also be bought and serviced via BvcPay.

Technical Market Overview:

After a short bearish pressure at the ETH/USD market the bulls started to be more active, but all they have managed was to push the price towards the recent resistance level and then the liquidity dried up. A recent breakout below the short-term trendline is now being tested from below and it is worth to notice that the breakout opens the road towards the technical support at the level of $172.91, which is the key technical support for bulls. It all depends now on how the breakout will be played: whether it was a fake or a genuine one.

Weekly Pivot Points:

WR3 - $209.10

WR2 - $200.93

WR1 - $194.92

Weekly Pivot - $187.29

WS1 - $180.68

WS2 - $172.07

WS3 - $166.48

Trading Recommendations:

The best strategy in the current market conditions is to trade with the larger timeframe trend, which is still up. All the shorter timeframe moves are still being treated as a counter-trend correction inside of the uptrend. When the wave 2 corrective cycles are completed, the market might will ready for another impulsive wave up of a higher degree and uptrend continuation.

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*New Zealand Oct Food Price Index -0.3% On Month Vs. Flat In September

Trading 13 nov 2019 Commentaire »

New Zealand Oct Food Price Index -0.3% On Month Vs. Flat In September


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Trading plan for EUR/USD for November 13, 2019

Trading 13 nov 2019 Commentaire »

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Technical outlook:

The EUR/USD pair has been inching closer to the 1.0995 potential support, with each day passing. The single currency pair is seen to be trading at around 1.1013 at this point in writing and might have either formed a low at 1.1003 yesterday or drop to 1.0995 today. In either case, EUR/USD bulls should be very close to resume their rally towards 1.1500 levels at least. Please note that the following convergences are seen around 1.0995 levels: 1. The fibonacci 0.618 retracement of the rally between 1.0879 and 1.1180 levels respectively. 2. The past resistance turned into the support zone 3. The previous price support seen at 1.0994 levels. 4. Fibonacci 0.618 extension of the counter trend drop has already reached 1.1007. With the above convergences seen, we can expect a sharp bullish reversal if prices drop to 1.0995 levels. Besides, note that immediate price resistance is seen at 1.1045, so breaking above those levels would bring bulls back into play.

Trading plan:

Remain long against 1.0879, add more at 1.0995, target above 1.1180, up to 1.1500

Good luck!

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