Trump’s unexpected discovery (review of EUR / USD and GBP / USD on 06/19/2019)

Trading 19 juin 2019 Commentaire »

Donald Trump unexpectedly found out that since 2008 the single European currency has fallen its price from 1.60 to current values, and concluded that not only the Bank of China manipulates the yuan exchange rate. The European Central Bank also practices similar pranks. However, the reason for the outrageous tweet made by Donald Trump was yesterday's decline of the single European currency, which allegedly provoked Mario Draghi, who spoke with a regular speech. Almost all means of mass agitation and misinformation were engaged only in those that shouted about how Mario Draghi announced the imminent reduction of the refinancing rate. However, during his speech on the twentieth anniversary of the European Central Bank, he once mentioned the regulator's plans for the future, saying that " further reductions in interest rates and measures to mitigate (monetary policy) to curb any side effects remain part of our tools. "In fact, he didn't say anything new. After all, at a recent press conference following the last board meeting of the European Central Bank, Mario Draghi said in plain text that questions about lowering the refinancing rate and resuming the quantitative easing program were in fact being considered. Moreover, during his speech, fluctuations in units of European currencies did not exceed 30 points, but when the inflation data in the euro zone came out, the single European currency went down steadily. But, it was six hours before Mario Draghi's speech. The thing is that, as shown on the preliminary data, inflation was 1.2%. However, it turns out that it did not remain stable, and instead, it seriously decreased. Data for April was revised from 1.2% to 1.7%. It turns out that inflation in Europe is rapidly declining, which means, almost certainly, questions about lowering the refinancing rate and resuming the quantitative easing program at the next meeting of the European Central Bank will be considered very seriously.

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The pound stopped yesterday, awaiting the results of the second round of the election of the new head of the Conservative Party, which became known at midnight. Five candidates has attended the elections, in addition to Boris Johnson, Foreign Minister Jeremy Hunt, Environment Minister Michael Gove, Minister for International Development Rory Stewart, as well as Interior Minister Sajid Javid, who remained in the race. Those who get less than 33 votes drop out of the race. The tours themselves will be held until only two candidates remain, after which all members of the party. About one hundred forty thousand will elect the head of the Conservative Party. The action-packed Brexit series will keep all viewers in suspense for a long time. However, this did not have any particular effect, since the result turned out to be quite expected, and investors simply continue to mentally prepare for the unregulated Brexit with its unpredictable and frightening consequences.

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Today, a light warm-up will begin in the form of inflation in the UK, that should decline from 2.1% to 2.0%. Of course, this is considered as unpleasant news, but it can hardly grieve more than the almost inevitable ascension of Boris Johnson to the throne of the Prime Minister of the United Kingdom with an obligatory booth that follows such a joyous event. However, the main event of the day, of course, is the meeting of the Federal Commission on Open Market Operations and the subsequent press conference of Jerome Powell. The parameters of the monetary policy will undoubtedly remain unchanged, but the head of the Federal Reserve System is likely to announce a change in the regulator's plans, and instead of raising the refinancing rate, we will soon see its decline. On similar thoughts, this also pushes the persistence of all the representatives of the Federal Reserve System, without exception, constantly talking about precisely reducing the refinancing rate. Of course, such a step is not yet envisaged. However, they are not even talking about raising the refinancing rate. So, the society has long been prepared precisely for such a change in the course of the Federal Reserve System.

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Thus, the probability that the single European currency, to the delight of Donald Trump, will grow to 1.1225 today is quite high. If Jerome Powell continues to gradually prepare the public for a change of course and does not make sharp statements, then everything will remain as it is.

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Pound events will develop in a similar scenario, and it is worth waiting for its growth to 1.2625. However, if Jerome Powell does not fulfill the role of the herald who brought the sad news, then under the influence of lower inflation, as well as the prospects to see Boris Johnson as prime minister, the pound will move to around 1.2500.

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Simplified wave analysis and forecast for EUR / USD & GBP / USD pairs on June 19

Trading 19 juin 2019 Commentaire »

EUR / USD pair

The main euro rate is given by the rising wave of May 23. A correctional wave lasting in recent weeks appears to be fully formed. The price is within the powerful support zone. The upward movement that began yesterday has not yet undergone a reversal potential.

Forecast:

The expected price fluctuations of the euro today are stacked in a narrow corridor between the nearest oncoming zones. Before the price rises, a repeated attempt to put pressure on the support zone is not excluded. The current flat mood may continue for several days.

Recommendations:

Today, trade deals in Euro pair can be recommended only to traders who trade in separate sessions on the smallest TFs. For longer transactions, there are no conditions in the market. When the price reaches the resistance zone, it is worth focusing on the search for selling signals.

Resistance zones:

- 1.1230 / 1.1260

Support areas:

- 1.1180 / 1.1150

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GBP / USD pair

The downward wave of the pound, which dominated in March, reached the potential reversal zone. The structure of the whole wave looks complete and the proportions of the parts are met. There is no reversal signal on the chart, therefore, the oncoming movement that began yesterday is nothing more than a rollback.

Forecast:

Today, the pound price is waiting to move between nearby areas. In the morning, a rising vector is more likely. In the area of the resistance zone, the probability of a change in direction and a return to the main course of movement increases sharply.

Recommendations:

Be careful and minimize the lot when buying a pound today and if the price reaches the resistance zone, it is recommended to look for signs of a reversal in order to search for signal sales of the instrument.

Resistance zones:

- 1.2580 / 1.2610

Support areas:

- 1.2520 / 1.2490

Explanations to the figures: The simplified wave analysis uses waves consisting of 3 parts (A – B – C). Each of these analyzes the last incomplete wave. Zones show calculated areas with the highest probability of reversal. The arrows indicate the wave marking by the method used by the author. The solid background shows the formed structure and the dotted exhibits the expected movement.

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

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Bitcoin: Buyers are building new support for continued growth

Trading 19 juin 2019 Commentaire »

The area of 8,960 is a good support level to which I have repeatedly drawn attention and apparently, cryptocurrency buyers will try to continue from him a further upward trend in the region of 10,000 USD.

An interesting report was published yesterday, indicating that the number of citizens' requests for cryptocurrency in Japan increased by 170%. The CAA study shows that in 2018, there were 3,657 requests for cryptocurrency exchanges, which is 1.7 times more than a year earlier.

Bitcoin Buy Signal (BTC):

The main goal of Bitcoin buyers remains a breakthrough of the 9,350 range, reaching the highs of 9,540 and 9,800, where I recommend taking profits. In the case of a decrease in cryptocurrency, support will be provided around the area of 8,960 and it is best to open long positions for a rebound near the minimum of 8,630.

Bitcoin Sales Signal (BTC)

I do not recommend opening short positions in Bitcoin in the current conditions since in the near future a new wave of growth may occur. Large resistance levels can be traced around 9,350 and 9540, where it will be possible to observe the profit taking in long positions, which will necessarily lead to a downward correction. The task of bears is to break through and consolidate below the support of 8 960, which will increase pressure on bitcoin and lead to a minimum of 8,630 and 8,190.

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Gold votes for Fed independence

Trading 19 juin 2019 Commentaire »

On the eve of the announcement of the FOMC meeting results, gold continues to wander around 14-month highs. He is not particularly confused by either the rally of US stock indices or the return of investor interest in the US dollar. Stocks of specialized exchange-traded funds (ETF) rose to their highest level since February, as well as rising geopolitical tensions in the Middle East. Also, the weak statistics on industrial production in China and an increase in the likelihood of erratic Brexit create a favorable environment for the XAU/USD bulls. However, after the press conference of Jerome Powell, the situation may seriously change.

Donald Trump said that he had a telephone conversation with his colleague from Beijing and their meeting on the sidelines of the G20 summit in Japanese Osaka will take place. The owner of the White House called Xi Jinping a great leader but stressed that the deal with China should be fair. The contact groups will work even before the two presidents meet, which allows us to count on the de-escalation of the conflict and gives rise to the growth of the US stock market. Improving the global risk appetite coupled with a strong US dollar puts serious pressure on gold as a rule but this time, the precious metal decided to wait for the results of the FOMC meeting.

The dynamics of US interest rates on loans, dollars and S&P 500

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On the one hand, Jerome Powell is under serious pressure from the US president, who does not tire of criticizing the Fed's monetary policy, the growing recession risks and the weak report on US employment in May. On the other hand, everything is not so bad in the US economy, as is commonly believed amid the growth of retail sales, industrial production and an increase in the yield curve signal. In addition, if the Fed unexpectedly reduces rates, it will lose its credibility. The market will say that the Central Bank went in the wake of Donald Trump.

The FOMC forecast on the federal funds rate will be important. If in December the open market Committee expected that it would increase twice in 2019, it did not expect a weakening of monetary policy in March. The futures market signals two acts of monetary expansion in the current year. If the Fed does not give a hint about any of them, the US dollar will strengthen against the main world currencies and the XAU/USD "bears" will go on the counter-attack. Thus, the importance of the Federal Reserve June meeting for gold is difficult to overestimate. The reaction of the market to its results will either show whether the precious metal has not climbed too high or on the contrary, will its success at the beginning of summer be the beginning of a long rally?

Technically, the gold update of the June highs is able to open the way for the bulls upwards in directed to the target of 161.8% according to the AB = CD pattern. It is located near the mark of $1395 per ounce. As long as quotes are above the support of $1311 (23.6% of the upward long-term wave), the situation is controlled by the buyers of the precious metal.

Gold daily chart

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Will gold win the trade war between the US and China?

Trading 19 juin 2019 Commentaire »

According to experts, the value of gold can rise to $ 1,400 per 1 ounce this year in a situation of trade opposition. The rise in the price of the yellow metal is also influenced by geopolitical and economic uncertainty about the prospects for the global economy. Also, the American economy is less susceptible to the negative impact of the trade war than the Chinese but Bank of America believes that the longer it lasts, the bigger the consequences will be.

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At the beginning of this month, the US regulator lowered the forecast for US GDP growth for the current year from 2.5 to 2.4%. According to the US Central Bank estimates, the country's GDP growth will not exceed 1.5% in 2020, which is 1.8% lower than the previous forecast. This is the second downward trend in worsening US economy, analysts warn.

Bank of America is confident that the introduction of tariffs has a negative effect on the welfare of the economy, which imposes them. "The annual increase in tariffs in the United States is an extremely deflationary fact, which provokes macroeconomic threats." The increase in tariffs on imported products from China adversely affects the demand from American consumers. According to experts, these tariffs grew on average by 4.4%, which is the highest figure since 1973. Experts warn that a full-fledged trade war can raise tariffs on all imported products to 13.8%.

In September of this year, Bank of America predicts a decline in interest rates by the Fed. The second reduction is expected in December and the third in early 2020. Experts suggest a decrease of 75 basis points (bp) early next year.

If such a scenario is implemented, low-risk assets, such as gold and US Treasury bonds, will undergo a significant revaluation. Note that the price of the yellow metal remains high at the moment, showing the best weekly result this year.

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Has the Fed come up to the Rubicon? (We expect the local recovery of the pair AUD/USD to continue and the USD/CAD decline)

Trading 19 juin 2019 Commentaire »

It will be up to you.

On the tuesday, the global markets unexpectedly received significant support. In this case, it can be a question. notorious quantitative easing.

As they say, the words are laid down on the fertile ground. The global financial policy In our opinion, it will be a bit difficult to keep up. In the case of the July meeting, it should be noted. Although it is still measured at 62.8%, it is still quite high.

It's important that we'll make it possible to make it a matter of course. inflation for the next three years.

It is possible to assume that the economy is in the middle of the American economy. If this happens to be the case, it will be true that it will be widespread. Also, we will have a noticeable negative impact on the dollar exchange rate. It would be clear that it would be a reaction. But at the same time, it will reduce the rate of inflation.

It's a matter of making decisions. It seems it will not be possible to sit in.

Forecast of the day:

The AUD / USD pair is above the level of 0.6865. She can get support after the meeting. In this case, breaking the mark of 0.6885, the pair may rush to 0.6900 and then to 0.6920.

The USD / CAD pair is trading above 1.3360, pending a decision by the Fed on monetary policy. The pair falls below the 1.3360, the pair falls below the level of 1.3360.

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Control zones GBPUSD 06.19.19

Trading 19 juin 2019 Commentaire »

The downward movement continues to be a mid-term impulse. Yesterday, the monthly low was updated and this has not yet led to the formation of an absorption pattern, so retaining a portion of sales is the main plan for today. The medium-term goal of the decline is the lower limit of the average weekly range of 1.2424.

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Below the average course of the week is the weekly control zone of 1.2418-1.2385. The coincidence of these levels indicates the importance of this support at the medium-term level.

An alternative growth model will be developed if the closure of today's US session happens above the level of 1.2597. This will open the way for growth to the next target levels in the second half of this week.

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

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

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

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Control zones GOLD 19.06.19

Trading 19 juin 2019 Commentaire »

This week, the main resistance is the June monthly short circuit. A test of this zone will result in a sentence in most cases. A small out of the zone is possible, since the weekly range of the middle stroke is located just above it. The "false breakout" pattern of last week's high is suitable for making a trading decision to sell.

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Shopping in the current segment of the market is no longer profitable, since the likelihood of large sales has increased significantly.

An alternative model of growth and consolidation above the monthly CZ will allow to look for sales prices in the future with a probability of working off 90%. Work outside the monthly short-circuit implies the refusal of purchases and the search for the "false breakout" pattern for entering a short position.

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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.

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Technical analysis: Important intraday Level For EUR/USD, June 19,2019

Trading 19 juin 2019 Commentaire »

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When the European market opens, some economic data such as Italian Trade Balance, Current Account, and German PPI m/m will be released. The US will publish such economic data as Federal Funds Rate and Crude Oil Inventories. So, amid the reports, EUR/USD will move in a medium to high volatility during this day.

TODAY'S TECHNICAL LEVEL: Breakout BUY Level: 1.1251. Strong Resistance:1.1245.Original Resistance: 1.1234. Inner Sell Area:1.1223.Target Inner Area: 1.1197. Inner Buy Area: 1.1171. Original Support: 1.1160.Strong Support: 1.1149. Breakout SELL Level: 1.1143. (Disclaimer)

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USDCAD: USD to lose grounds ahead of FOMC meeting . June 19, 2019

Trading 19 juin 2019 Commentaire »

The Canadian dollar gained momentum and closed with a bearish daily candle yesterday after. However, the US dollar still remains the dominant currency in the pair.

Ahead of the FOMC meeting today, USD slightly gave in to CAD trying to establish a strong bullish trend in the pair. Some experts think that the Fed is expected to give details on the upcoming rate cuts in today's meeting. The US dollar may be affected by the Fed's decision. Financial markets have gotten used to the Federal Reserve adjusting its benchmark interest rate in small increments. The target range for the federal funds rate currently stands at 2.25% to 2.5%, which means the Fed many not have enough ammunition to fight a full-blown recession. That makes it more important for the Fed to be aggressive when it cuts, getting the most impact out of every step downward. Federal Reserve inflation running persistently below the Fed's 2% target, and inflation expectations falling, that means the potential negative consequences of cutting too much are meaningfully reduced. The Fed is less likely to unleash unwanted higher inflation with aggressive cuts.

At the extreme, that sort of volatility could feed into the real economy and make the Fed's job in coming weeks even more complicated. The federal funds rate has been unchanged since December after a three-year cycle of monetary policy tightening that began slowly but ended with roughly quarterly rate hikes over 2017 and 2018. Additionally, US Building Permits report was published. The reading was unchanged 1.29M. Economists expected the value to increase to 1.30M. The reading of Housing Starts report decreased to 1.27M from 1.28M but performed better than expected.

On the other hand, today Canadian CPI report is going to be published. The figure which is expected to drop to 0.1% from the previous value of 0.4%, Common CPI is expected to grow to 1.9% from the previous value of 1.8%, Median CPI is expected to be unchanged at 1.9% and Trimmed CPI is also expected to be unchanged at 2.0%. Ahead of the G20 meeting, the Canadian government is going to speak with US senator about the upcoming trade conditions. The Oil Sector and Housing market have started to stabilize which indicates a strong boost in the domestic market. Amid such news, the Canadian dollar may increase profits.

As of the current scenario, CAD is expected to regain and sustain the bearish momentum against USD. As the Fed clears the doubts, the pair is expected to create a certain direction.

Now let us look at the technical view. The price is currently residing above 1.3350 support area after an impulsive bearish daily close. If it creates a way for the price lower, then the price is expected to push towards 1.3200-20 support area. Though the pair has been quite volatile, the FOMC meeting's outcome today is expected to put pressure on the pair.

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