EURUSD reaches key Fibonacci retracement level

Trading 18 mai 2020 Commentaire »

EURUSD has held support last week and price bounced higher. Short-term resistance at 1.0880 was broken and price eventually reached the 61.8% Fibonacci retracement level at 1.0925. We are now at a major Fibonacci resistance level with potential to move higher towards 1.0985.

analytics5ec2fca020f5d.jpg

EURUSD has bounced strongly towards the important Fibonacci retracement. As long as price is above 1.08-1.0790 bulls will feel safe. On the other hand bulls will need to show more signs of strength specially now that price is at key Fibonacci and close to Ichimoku resistance.

analytics5ec2fd11a3c8f.jpg

EURUSD has broken above the tenkan-sen and kijun-sen. This implies that a move towards the Kumo at 1.0985-1.0995 area is highly probable to be seen in tomorrow's session. Trend remains bearish as long as price is below the Kumo.

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

New highs for 2020 in Gold, but with worrying signs.

Trading 18 mai 2020 Commentaire »

Gold price has reached very close to out target that we noted in previous posts after breaking above the key short-term resistance at $1,720-25 area. Gold price although pushed higher today towards $1,765, the end of the day found bulls on the defensive as sellers overpowered them.

analytics5ec2fa71aaadf.jpg

Red line - bearish divergence

Green rectangle -target

As we explained in our previous analysis, although we are short-term bullish looking for a move towards $1,770, the weekly bearish divergence makes us turn bearish near the green rectangle target area. Gold price closed near the lows of the day and after a long upper tail in today's candlestick. The RSI remains below key trend line resistance with glaring weekly divergence.

analytics5ec2faeaec0c7.jpg

Black line - resistance

Gold price is still in bullish mode despite the ugly daily candlestick. Price is still above both the tenkan-sen and kijun-sen indicators at $1,723-12. This is key short-term support. Gold price will most probably touch this area as a back test of the break out. Holding above $1,700 is key for the medium-term trend. Breaking again below $1,700 will open the way for a move towards $1,640.

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

Dollar Little Changed After NAHB Housing Market Index

Trading 18 mai 2020 Commentaire »

Following the release of NAHB housing market index for May at 10:00 am ET Monday, the greenback changed little against its major opponents.

The greenback was trading at 107.49 against the yen, 0.9705 against the franc, 1.0860 against the euro and 1.2189 against the pound around 10:02 am ET.


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

*U.S. Housing Market Index Climb To 37 In May

Trading 18 mai 2020 Commentaire »

U.S. Housing Market Index Climb To 37 In May


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

Dollar Falls Vs Most Majors Ahead Of NAHB Housing Market Index

Trading 18 mai 2020 Commentaire »

The National Association of Home Builders' Housing Market Index for May will be issued at 10.00 am ET Monday.

Ahead of the data, the greenback traded mixed against its major counterparts. While the greenback rose against the yen, it dropped against the rest of major rivals.

The greenback was worth 107.43 against the yen, 0.9694 against the franc, 1.0864 against the euro and 1.2193 against the pound as of 9:55 am ET.


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

*U.S. Dollar Slide To 5-day Lows Of 1.0867 Vs Euro, 0.9689 Vs Franc

Trading 18 mai 2020 Commentaire »

U.S. Dollar Slide To 5-day Lows Of 1.0867 Vs Euro, 0.9689 Vs Franc


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

EUR/USD and GBP/USD. Results of May 18. New investigation against Donald Trump. The next stage of negotiations between Brussels

Trading 18 mai 2020 Commentaire »

4-hour timeframe

analytics5ec2f432c3fd4.jpg

Average volatility over the past five days: 69p (average).

The EUR/USD pair continues to trade calmly and slowly on Monday, May 18. Quotes did not move at all in the morning, and movement only began in the market during lunch. It cannot be said that there has been a surge of emotions in the market at the moment. The pair rose around 40 points in the US session, that is, the volatility now, as in the good old days, is low. Traders have certain excuses today. No macroeconomic statistics were planned on the first trading day of the week. Moreover, Mondays, in principle, very often are either corrective or are like semi-weekends. Therefore, there is nothing surprising in the sleepy state of the market.

Although there were no statistics on Monday, this does not mean that nothing is happening in the world and there is no news. Of course, the main newsmaker is still US President Donald Trump, who last Friday fired the Inspector General of the US State Department, Steve Linick, and immediately came under a new investigation initiated by the Democrats. This was stated by Senator Robert Menendez and member of the US House of representatives Eliot Engel. In their opinion, Linick's resignation was politically motivated. Thus, Trump is again at the center of the investigation, and his name will once again appear in an unpleasant light. Actually, the US president is no stranger. It is difficult for us to even remember or find relevant information about the last time there was such a conflicted US president. It is one thing to be at odds in the international arena, in this case, actions can be justified by concern for your own country and nation. But Trump has enemies – half the Congress and half the Senate. If earlier you could consider Russia, the Middle East countries, where wars are constantly being waged, as the US opponents' in the world, now this list also includes the EU countries (Trump also introduced trade duties against them), and China, with which there is a full-scale conflict involving several spheres of activity and areas of the economy. Thus, it is even difficult for us to guess who benefits from Trump's activities at all.

You can't call him a bad president, because with him the economic recovery in the US continued, which began in the era of Barack Obama. Unemployment continued to fall, the labor market continued to grow, and GDP continued to expand. But it was Trump's conflict, the inability to work in a team with other politicians, political forces and countries, that led to the fact that now the US leader does not have any advantages. Yes, you can blame the coronavirus for everything, but it only exposed the problems of a country ruled by Trump. Because for the American president, numbers, results are important, and the population, people, workers and so on are nothing more than a means to an end. In principle, political scientists may object that in many countries around the world things are the same. But the whole question lies in the fact that the US president must possess a set of qualities of a leader of a nation who knows how to think ahead, decades ahead, and understand the consequences of his actions for future generations. Trump has the qualities of an excellent businessman, but not the leader of the nation. Therefore, almost half of US politicians want his resignation. It is safe to say that in the Republican Party there are a huge number of opponents of Trump's policy who simply do not want to quarrel openly with the president, who almost immediately dismisses employees who are objectionable to him.

According to Democrats, Linick was probably fired at the personal request of Secretary of State Mike Pompeo, after he launched an investigation into the head of the State Department. Experts say that Linick has been the third official that Trump dismissed, who investigated possible illegal actions of the authorities. And this is only for the last month. Obviously, there will be no new impeachment procedure. But Trump is only once again lowering the chances of his own re-election in November.

4-hour timeframe

analytics5ec2f44859be3.jpg

Average volatility over the past five days: 123p (high).

The GBP/USD pair started to adjust on May 18 after several days and even weeks of downward movement. However, the downward trend is visible to the naked eye, so for now we believe that the declining movement will continue. The pair can only adjust against the current downward trend. The approximate goal is the Kijun-sen line. We continue to believe that the GBP/USD pair is mainly influenced by technical factors in the short term. Last week's macroeconomic reports were almost completely ignored. However, traders also have a fundamental background at their disposal, which, despite all the same problems in the UK and the US (the coronavirus epidemic, the world economic crisis), continues to put pressure on the pound. Simply because the British economy continues to look the weakest. We have written about Brexit many times, and nothing has changed on this issue at the moment. A few weeks ago we mentioned that negotiations between London and Brussels would resume, and later reported that the first round of negotiations had not been optimistic and there was also information that the second round of talks also ended without much progress.

This time, the parties were generous with comments. For example, Michael Gove said that the UK could not conclude an agreement on such terms, but noted that "a deal must be concluded". He calls on the EU to be flexible in negotiations. The most pressing issue now is the access of vessels from the EU to UK territorial waters for fishing purposes, but other problems are reported in the negotiations. For example, Irish foreign Minister Simon Coveney says that London has significantly changed the customs rules for processing goods at the border between Ireland and Northern Ireland, agreements on which were reached in the fall of 2019. Thus, according to EU representatives, London is changing the terms of the deal and does not want to make concessions or offer a reasonable alternative to the proposals of Brussels. As a result, Michel Barnier said that he was disappointed by the lack of desire of Britain to complete the negotiations and accused Britain of wanting to have access to the EU single market, while not wanting to take on responsibilities. Chief negotiator from the UK David Frost believes that the EU wants to "bind the country to the laws, norms and standards of the EU." "As soon as the EU realizes that we will not go to an agreement on this basis, we will be able to make progress," Frost concluded.

Recommendations for EUR/USD:

For short positions:

The EUR/USD pair began a new round of upward movement and even crossed the critical Kijun-sen line on the 4-hour timeframe. Thus, it is recommended to consider selling the euro with targets in the 1.0780–1.0750 range only if you take profit below the Kijun-sen line.

For long positions:

Buy orders can be opened in small lots now with the goal of the Senkou Span B line (level 1.0886), since traders have overcome the critical line.

Recommendations for GBP/USD:

For short positions:

The pound/dollar began to adjust against the downward trend. Thus, traders are advised to resume selling the pair with the target of 1.1987 in the event of a price rebound from Kijun-sen.

For long positions:

It is recommended that purchases of the GBP/USD pair be considered with a target level of 1.2325 after consolidating quotes above the critical line, but with small lots.

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

Is it worth selling the pound?

Trading 18 mai 2020 Commentaire »

analytics5ec2f5204fdb9.jpg

The pressure on the pound decreased on Monday, and the British currency settled significantly above the psychologically important mark of $1.20. However, sterling positions still look unattractive in comparison with other currencies. Despite the fact that the GBP/USD pair has already lost more than 500 points from the local high reached at the end of April, the decline could still continue. The pound risks remaining among the outsiders and going below support of 1.20. This can happen in the coming days.

GBP/USD

analytics5ec2f533a881f.jpg

Consider the reasons. Pressure on the pound increased after the Bank of England's Chief Economist, Andy Haldane, said last Thursday that the regulator is considering different options for monetary stimulus to the economy. Negative interest rates and purchases of riskier financial assets are not excluded. This week, data on retail sales, inflation and business activity in the service sector will be released. Expectations on all points are depressing. If they are confirmed, the chances of additional monetary policy easing at the June meeting will increase.

The rhetoric of Michel Barnier added a negative effect to the GBP/USD pair. According to the EU's chief brexit negotiator, the round of talks with the UK that ended last Friday did not bring positive changes. The parties have not managed to find common ground on the most pressing issues, and there is less and less time left before the UK leaves the EU. Prime Minister Boris Johnson has made it clear that he will not ask European partners to extend the Brexit period.

There was no interest in the issue that will determine the future economic relations between England and the EU. It is not clear what countries need to bring the negotiations to a new level. Perhaps political intervention, or a face-to-face meeting of negotiators, can contribute to the breakthrough. So far, the dialogue is being held online due to the coronavirus pandemic.

analytics5ec2f57bc279b.jpg

Deutsche Bank experts recommend getting rid of the pound. Here we are talking about selling the British currency against the Norwegian krone. England is inferior to the Scandinavian country in containing the outbreak of coronavirus and normalizing economic activity. Norway has already opened the economy to the level of Sweden, while business life in the UK is still sluggish. In addition, the country continues to report more than 3,500 new cases per day.

The BoE is facing a huge budget deficit through expanded QE. Negative rates may apply. The Bank of Norway completely ruled out the prospect of negative rates, as well as QE.

Deutsche Bank advised to take a closer look at the sales of GBP/NOK at 12.33 with a target of 11.85 and a stop of 12.60.

Additionally, the Norwegian krone could benefit from a potential recovery in oil prices. Brent gained more than 8% of the cost on Monday, a barrel of the North Sea mark rose above $35.

Deutsche Bank analysts are now optimistic about oil. Demand for oil in China has almost returned to the pre-quarantine level.

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

Pound Climbs On Easing Virus Restrictions

Trading 18 mai 2020 Commentaire »

The pound advanced against its major counterparts in the European session on Monday, as easing of coronavirus restrictions in several European countries boosted market sentiment.

Restaurants, bars and beaches will re-open in Italy, while Spain has permitted some small shops to function.

Greece reopened the Acropolis in Athens, along with high schools, shopping centres and mainland travel.

Rising oil prices and comments from Fed Chair Jerome Powell also helped underpin investor sentiment.

In remarks aired on CBS's "Face the Nation", Powell said the United States would have a slow recovery from what he called the "biggest shock that the economy's had in living memory.

Survey data from IHS Markit showed that UK household finances remained under severe pressure in May.

The Household Finance Index, which measures households' overall perceptions of financial well-being, came in at 37.8 in May, up only slightly from April's eight-and-a-half year low of 34.9.

The pound rose to 0.8909 against the euro, from a 1-1/2-month low of 0.8959 set at 5:30 pm ET. The next likely resistance for the pound is seen around the 0.86 level.

After dropping to near a 2-month low of 1.1730 at 5:15 pm ET, the pound edged higher to 1.1798 against the franc. The pound is seen finding resistance around the 1.28 level.

The pound appreciated to 1.2132 against the greenback, reversing from near a 2-month low of 1.2075 seen at 5:30 pm ET. The pound is likely to find resistance around the 1.26 level.

The pound moved up to 130.15 against the yen, following a decline to near a 2-month low of 129.30 at 5:15 pm ET. On the upside, resistance is likely seen near the 135.00 level.

Data from the Ministry of Economy, Trade and Industry showed that Japan's tertiary industry activity declined for the second straight month in March.

Tertiary industry activity decreased 4.2 percent month-on-month in March after easing 0.7 percent in February.

Looking ahead, U.S. NAHB housing market index for May is due out in the New York session.


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

Comprehensive analysis of movement options for #USDX vs AUD/USD & USD/CAD & NZD/USD (H4) on May 19, 2020

Trading 18 mai 2020 Commentaire »

Minuette operational scale (H4)

Commodity currencies and the dollar index - #USDX vs AUD/USD & USD/CAD & NZD/USD - options for the development of the movement from May 19, 2020.

____________________

US dollar index

From May 19, 2020, the movement of the dollar index (#USDX) will be determined by the development and direction of the breakdown of the range:

  • resistance level 100.56 on the UTL control line of the Minuette operational scale forks;
  • support level 100.30 on the initial line of the SSL of the Minuette operational scale forks.

If the initial line of the SSL of the Minuette operational scale forks is broken - the support level is 100.30 - the development of the dollar index movement will be directed to the borders of the 1/2 Median Line channel (99.70-99.45-99.15) and equilibrium zones (99.05-98.65-98.25) of the Minuette operational scale forks.

In turn, the breakdown of the UTL control line of the Minuette operational scale forks - the 100.50 resistance level - will direct the development of the #USDX movement towards the goals:

local maximum 100.87.

SSL Minute start line (101.45);

the lower limit of the channel 1/2 Median Line (102.60) of the Minuette operational scale forks.

The layout of the #USDX movement options from May 19, 2020 is shown on the animated chart.

analytics5ec2b828af05a.jpg

____________________

Australian dollar vs US dollar

From May 19, 2020, the development of the movement of the Australian dollar (AUD/USD) will be determined by the development and direction of the breakdown of the boundaries of the 1/2 Median Line channel (0.6480-0.6460-0.6435) of the Minuette operational scale forks - details of working out the boundaries of this channel are shown on the animated chart.

If the resistance level 0.6480 upper border of the channel 1/2 Median Line of the Minuette operational scale forks - a variant of an upward movement of the Australian dollar to the goals:

  • control line UTL Minuette (0.6555);
  • local maximum 0.6571;
  • final line of FSL (0.6600) of the Minuette operational scale forks.

In the event of a breakdown of the lower border of the channel 1/2 Median Line Minuette-support level 0.6435 - the downward movement of AUD/USD can be continued to the goals:

local minimum 0.6374;

ultimate Shiff Line Minuette (0.6360);

zone of equilibrium (0.6295-0.6250-0.6210) of the Minuette operational scale forks.

The markup of the AUD/USD movement options from May 19, 2020 is shown on the animated chart.

analytics5ec2b80c23741.jpg

____________________

US dollar vs Canadian dollar

The development of the movement of the Canadian dollar (USD/CAD) from May 19, 2020 will be due to the development and direction of the breakdown of the boundaries of the 1/2 Median Line channel (1.4120-1.4085-1.4049) of the Minuette operational scale forks - details of the movement inside this channel look at the animated chart.

With the breakdown of the support level 1.4049 at the lower border of the 1/2 channel Median Line Minuette, the further development of the downward movement of the Canadian dollar to the goals will be determined:

  • control line LTL (1.3980) forks operational scale Minute;
  • control line LTL (1.3940) forks operational scale Minuette;
  • local minimum`s 1.3899 - 1.3849.

A breakdown of the resistance level of at the upper border of the 1/2 medium Line Minuette channel will make it possible to continue the upward movement of USD/CAD towards the goals:

  • local maximum (1.4172);
  • zone of equilibrium (1.4230 - 1.4280 - 1.4325) of the Minuette operational scale forks.

Options for the development of the USD/CAD movement from May 19, 2020 are shown on the animated chart.

analytics5ec2b7f3cb9d5.jpg

____________________

New Zealand dollar vs US dollar

The development of the movement of the New Zealand dollar (NZD/USD) from May 19, 2020 will also depend on the development and direction of the breakdown of the range:

  • resistance level is 0.5975 on the final Shiff Line Minuette;
  • support level 0.5945 at the upper boundary of the ISL38.2 balance zone of the Minuette operational scale forks.

In the breakdown of the resistance level 0.5975 on the ultimate Shiff Line Minuette upward movement in the NZ dollar may continue to initial line SSL (0.6010) of the Minuette operational scale fork and channel borders 1/2 Median Line (0.6065-0.6100-0.6130) of the Minuette operational scale forks.

Breakout ISL38.2 Minuette - support level 0.5945 - option resuming the development of the movement of NZD/USD in the equilibrium zone (0.5945-0.5905-0.5865) of the Minuette operational scale forks with the prospect of reaching the final FSL Minuette line (0.5740).

Since May 19, 2020, we have been marking up the options for the NZD/USD movement on the animated chart.

analytics5ec2b7d9483d1.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).

Formula for calculating the dollar index:

USDX = 50.14348112 * USDEUR0.576 * USDJPY0.136 * USDGBP0.119 * USDCAD0.091 * USDSEK0.042 * USDCHF0.036.

Where the power coefficients correspond to the weights of currencies in the basket:

Euro-57.6 %;

Yen-13.6 %;

Pound sterling-11.9 %;

Canadian dollar-9.1 %;

Swedish Krona - 4.2 %;

Swiss franc - 3.6 %.

The first coefficient in the formula brings the index value to 100 on the starting date - March 1973, when the main currencies began to be freely quoted relative to each other.

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