EUR/USD. May 17. Results of the day. Inflation in the eurozone is not interested in foreign exchange market participants

Trading 17 mai 2019 Commentaire »

4-hour timeframe

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The amplitude of the last 5 days (high-low): 41p – 42p – 43p – 47p – 58p.

The average amplitude over the last 5 days: 46p (50p).

The main indicator of the consumer price index in the eurozone for April was fully consistent with the forecasts of experts and amounted to +1.7% in annual terms and +0.7% in monthly terms. Only the basic consumer price index was higher than market expectations and amounted to +1.3% y/y. However, as we can see, this rather important report did not bring any changes to the current trend. The euro is still prone to fall, and the reaction to today's inflation report from traders was not even followed. Thus, we continue to draw the attention of traders to the fact that now in the first place are clearly technical factors. Namely: the non-renewal of the previous local maximum, frankly a downward trend in 2019, and the weakness of the bulls. If we add to this the absence of a positive fundamental background from Europe, it becomes clear that the path of the euro is one – to the South. Just moving down the pair will not be as fast and zealous as the pound. Now, we expect the EUR/USD pair to decline to 1.1100, but most likely the pair will go below this level. In a few hours, the US will publish a fairly important index of consumer confidence of the University of Michigan. It is expected that the value for May will exceed April. Thus, at the US session on Friday, May 17, the US dollar may receive additional support. The volatility of the instrument remains low. The downward movement is not recoilless, therefore, intraday positions are not entirely rational. The best time of deals for the pair is now 2-3 days. During this time, the pair can pass at least 70-100 points.

Trading recommendations:

The pair EUR/USD resumed its downward movement. Therefore, it is still recommended to consider sell positions with the targets at 1.1131 and 1.1118 and before the MACD indicator turns upwards.

It will be possible to return to buy positions if traders manage to consolidate back above the critical line. In this case, the first target for the long positions will be the resistance level of 1.1268.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanation of illustration:

Ichimoku Indicator:

Tenkan-Sen – red line.

Kijun-Sen – blue line.

Senkou Span A – light brown dotted line.

Senkou Span B – light purple dotted line.

Chinkou Span – green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD:

A red line and a histogram with white bars in the indicator window.

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

The dollar has a risk appetite

Trading 17 mai 2019 Commentaire »

Looking at how the US stock market in May first collapsed and then began to recover under the influence of Donald Trump's tweets, you make sure that it becomes a toy in the hands of the US President. A statement on the introduction of duties on all Chinese imports sent the S&P 500 to a knockdown, but the stock index managed to recover and mark a three-day rally after it was announced that the deal with China would be concluded earlier than people assumed. The most interesting thing is that the US dollar fell due to the escalation of the trade conflict, and then grew due to the optimism of Donald Trump. It behaves as a risky asset, although it is usually referred to as a safe haven currency. What is it?

While the rates on 10-year US Treasury bonds are 2.4%, and on German and Japanese analogs are negative in conditions of high-risk appetite and historically low volatility, the carry trade strategy with the participation of EUR/USD and USD/JPY begins to flourish. Players on the difference borrow money in countries with low borrowing costs and invest them in profitable assets. Thanks to the Fed's desire to keep the Federal funds rate at 2.5% for an infinitely long time and the belief in the imminent end of the trade war between Washington and Beijing, carry-traders felt like a fish in the water, but Donald Trump's tweets turned everything upside down. Funding currencies represented by the euro and the yen began to be in high demand, and stock indices pulled the USD index down.

Dynamics of Dow Jones and US Dollars

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The "bears" on USD/JPY felt more confident than "bulls" on EUR/USD, due to the aggravation of political problems in the Old World. Not only that the chances of the resignation of Theresa May from the post of British Prime Minister increased significantly, which drowned the pound, but also the elections to the European Parliament decided to remind themselves of the Italian populists. Vice Prime Minister Salvini said he would lift the EU's tough requirements of a 3% budget deficit from GDP, and let Brussels do what it wants. The exacerbation of political risks is a negative factor for the euro, and as the elections approach, they will increase.

From the point of view, the key event for EUR/USD in the week to May 24 will be the release of data on business activity in Germany and the eurozone in May. Participating in Markit's survey, procurement managers already knew about the escalation of the US-Chinese trade conflict so the statistics can be disappointing, which will create the preconditions for the continuation of the southern hike of the main currency pair. To support the euro, the correction in world stock markets is needed. In this situation, the demand for funding currencies will increase.

Technically, a breakthrough of support at 1.1135 on the daily EUR/USD chart will increase the risks of target implementation by 161.8% using the AB = CD pattern. It corresponds to a mark of 1.1. In order to maintain hope for the activation of the "Wolfe Waves" reversal pattern and the fulfillment of its targets, the "bulls" should return quotes above 1.127.

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

U.S. Consumer Sentiment Shows Substantial Improvement In May

Trading 17 mai 2019 Commentaire »

Reflecting a spike in consumer expectations, the University of Michigan released a report on Friday showing a substantial improvement in U.S. consumer sentiment in the month of May.

The preliminary report showed the consumer sentiment index surged up to 102.4 in May from 97.2 in April, reaching its highest level in fifteen years. Economists had expected the index to inch up to 97.5.

The much bigger than expected increase by the headline index came as the index of consumer expectations soared to 96.0 in May from 87.4 in April.

"Consumers viewed prospects for the overall economy much more favorably, with the economic outlook for the near and longer term reaching their highest levels since 2004," said Surveys of Consumers chief economist Richard Curtin.

However, Curtin noted, "The gains were recorded mostly before the trade negotiations with China collapsed and China responded with their own tariffs."

The report showed consumers' view of current conditions was virtually unchanged, with the current economic conditions index ticking up to 112.4 in May from 112.3 in April.

On the inflation front, the report said one-year inflation expectations jumped to 2.8 percent in May from 2.5 percent in April and five-year inflation expectations shot up to 2.6 percent from 2.3 percent.

"Even apart from the direct impact of tariffs on prices, rising tariffs could cause a more general loss of confidence which could further diminish the pace of consumer spending," Curtin said.


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Bitcoin analysis for May 17, 2019

Trading 17 mai 2019 Commentaire »

BTC has been trading downwards as we expected. The price tested the level of $6.955. We still expect downside.

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Both of your yesterday's targets at $7.607 and $7.418 were met. We found strong reaction from sellers and strong drop on BTC. Most recently, there is the potential bearish flag in creation, which is sign that we should see more downside. The ADX is reading is above 30 and increasing, which is signal that down momentum is strong. Watch for selling opportunities on the rallies.

Downwards references are set:

$6.836

$6.500

Upward references are set:

$7.347

$8.316

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

U.S. Leading Economic Index Rises Less Than Expected In April

Trading 17 mai 2019 Commentaire »

A reading on leading U.S. economic indicators rose by slightly less than expected in the month of April, according to a report released by the Conference Board on Friday.

The Conference Board said its leading economic index edged up by 0.2 percent in April after climbing by a revised 0.3 percent in March.

Economists had expected the index to rise by 0.3 percent compared to the 0.4 percent increase originally reported for the previous month.

"Stock prices, financial conditions, and consumers' outlook on the economy buoyed the US LEI, although the manufacturing sector showed continuing weakness," said Ataman Ozyildirim, Director of Economic Research at the Conference Board.

"The Conference Board expects economic growth to moderate toward 2 percent by year end," he added. "The current expansion will enter its 11th year in July, becoming the longest expansion in US history."

The report said the coincident economic index inched up by 0.1 percent for the second consecutive month, while the lagging economic index dipped by 0.1 percent in April after rising by 0.2 percent in March.


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May 17, 2019 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 17 mai 2019 Commentaire »

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On March 29, the price levels of 1.2980 (the lower limit of the newly-established bearish movement channel) demonstrated significant bullish rejection.

This brought the GBPUSD pair again towards the price zone of (1.3160-1.3180) where the upper limit of the depicted bearish channel was located.

Since then, Short-term outlook has turned into bearish with intermediate-term bearish targets projected towards 1.2900 and 1.2850.

On April 26, a bullish pullback was executed towards the price levels around 1.3000 (the bottom of March 29) where temporary bullish breakout was temporarily executed until May 13 when evident bearish rejection was demonstrated.

Hence, a bearish Head and Shoulders pattern was expressed on the H4 chart with neckline located around 1.2980.

That's why, the price zone of 1.3030-1.3060 turned to become a prominent supply-zone where a valid bearish entry was offered by the end of last week's consolidations.

Bearish persistence below 1.2980 (Neckline of the reversal pattern) enhanced further bearish decline.

Initial bearish Targets were already reached around 1.2900-1.2870 (the backside of the broken channel) which failed to provide any bullish support for the GBPUSD pair.

Currently, The GBPUSD pair looks oversold around the current price levels (1.2730). However, no signs of bullish recovery have been manifested yet.

Trade Recommendations:

For those who had a valid SELL entry around the price levels of (1.3035-1.3070). It's already running in profits. S/L should be lowered to 1.2780 to secure more profits.

Conservative traders should wait for another bullish pullback towards 1.2870-1.2905 (newly-established supply zone) to look for valid sell entries. S/L should be placed above 1.2950.

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

Analysis of Gold for May 17, 2019

Trading 17 mai 2019 Commentaire »

Gold has been trading downwards as we expected. The price tested the level of $1.275. We still expecting more downside.

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According to the 4H time-frame, we found that there is the breakout of the upward trendline (green line), which is sign that sellers are in control. We also found potential completion of the ABC upward correction, which adds even more weakness on the Gold. Our advice is to watch for potential bear flag in order to build more short positions.

Downwards reference is set:

$1.266

Upward references are set:

Swing high – $1.288

Major high – $1.302

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

Russia Economic Growth Sharply Slows In Q1

Trading 17 mai 2019 Commentaire »

Russia's economic growth slowed sharply in the first three months of the year to the weakest pace in five consecutive quarters, preliminary data from the statistical office showed on Friday. Gross domestic product grew 0.5 percent year-on-year in the first quarter from 2.7 percent in the final three months of 2018. Economists had expected 1.2 percent growth. The latest pace of growth was the slowest since the fourth quarter of 2017, when the economy expanded 0.3 percent. Capital Economic economist Liam Carson said the much weaker-than-expected year-on-year growth suggest that the economy shrunk on a quarterly basis in the first three months of the year.

"We think that this probably marks the trough and growth should pick up over the next few quarters," the economist said. "Even so, the latest data are likely to reinforce the central bank's recent dovish shift, supporting our view that an interest rate cut is on the cards at next month's meeting."

After leaving the key interest rate unchanged in April for a third successive policy session, the central bank signaled that the rate may be lowered in the near term. Carson predicted a quarter-point reduction in the interest rate to 7.50 percent at the next policy session on June 14. The previous change in the rate was a quarter-point hike in December 2018.

The bank has forecast 1.2-1.7 percent growth for this year.


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

USD/JPY analysis for May 17, 2019

Trading 17 mai 2019 Commentaire »

USD/JPY has been trading upside as we expected. The price tested the level of 110.02. The breakout of 3-balance is present. Watch for buying opportunities.

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According to the 4H time-frame, we found that there is strong bullish divergence on the Stochastic oscillator and MACD indicator, which are strong signs that buyers took from control from sellers. Most recently, we got break of the resistance at 109.75, which is positive sign for USD/JPY. Our advice is to watch for buying opportunities with the target at 110.94.

Downwards references are set:

Balance high – 109.83

Daily low – 109.30

Upward references are set:

Swing high – 110.56

Swing low acting like resistance – 110.92

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

Dollar Ticks Up Following U.S. Consumer Sentiment Index

Trading 17 mai 2019 Commentaire »

Following the release of University of Michigan's preliminary consumer sentiment index for May at 10:00 am ET Friday, the greenback edged up against its major rivals.

The greenback was trading at 109.80 against the yen, 1.0111 against the franc, 1.1169 against the euro and 1.2744 against the pound around 10:05 am ET.


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