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02.07.2020
04:28 PM


July 2, 2020 : GBP/USD Intraday technical analysis and trade recommendations.

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Recently, Bullish breakout above 1.2265 has enhanced many bullish movements up to the price levels of 1.2520-1.2590 where temporary bearish rejection as well as a sideway consolidation range were established (In the period between March 27- May 12).

Shortly after, transient bearish breakout below 1.2265 (Consolidation Range Lower Limit) was demonstrated in the period between May 13 - May 26.

However, immediate bullish rebound has been expressed around the price level of 1.2080.

This brought the GBPUSD back above the depicted price zone of 1.2520-1.2600 which failed to offer sufficient bearish rejection.

Hence, short-term technical outlook has turned into bullish, further bullish advancement was expressed towards 1.2780 (Previous Key-Level) where signs of bearish rejection were expressed.

Short-term bearish pullback was expressed, initial bearish destination was located around 1.2600 and 1.2520.

Moreover, a bearish Head & Shoulders pattern (with potential bearish target around 12265) is being demonstrated on the chart.

That's why, bearish persistence below 1.2500 ( neckline of the reversal pattern ) pauses the bullish outlook for sometime and should be considered as an early exit signal for short-term buyers.

Any bullish pullback towards 1.2520-1.2550 (recent supply zone) should be watched by Intraday traders for a valid SELL Entry.

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

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02.07.2020
04:16 PM


July 2, 2020 : EUR/USD Intraday technical analysis and trade recommendations.

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On March 20, the EURUSD pair has expressed remarkable bullish recovery around the newly-established bottom around 1.0650.

Shortly after, a sideway consolidation range was established in the price range extending between 1.0770 - 1.1000.

On May 14, evident signs of Bullish rejection as well as a recent ascending bottom have been manifested around the price zone of (1.0815 - 1.0775), which enhances the bullish side of the market in the short-term.

Bullish breakout above 1.1000 has enhanced further bullish advancement towards 1.1175 (61.8% Fibonacci Level) then 1.1315 (78.6% Fibonacci Level) where bearish rejection was anticipated.

Although the EUR/USD pair has temporarily expressed a bullish breakout above 1.1315 (78.6% Fibonacci Level), bearish rejection was being demonstrated in the period between June 10th- June 12th.

This suggested a probable bearish reversal around the Recent Price Zone of (1.1270-1.1315) to be watched by Intraday traders.

Hence, Bearish persistence below 1.1250-1.1240 (Head & Shoulders Pattern neckline) was needed to confirm the pattern & to enhance further bearish decline towards 1.1150.

Moreover, bearish breakdown below the depicted keyzone around 1.1150 is mandatory to ensure further bearish decline towards 1.1070 and 1.0990 if enough bearish pressure is maintained.

Trade recommendations :

The current bullish movement towards the price zone around 1.1300-1.1330 (recently-established supply zone) should be followed by Intraday Traders as a valid SELL Signal.T/P levels to be located around 1.1175 then 1.1100 while S/L to be placed above 1.1350 to offset the associated risk.

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

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02.07.2020
04:11 PM


EUR/GBP & GBP/JPY & EUR/JPY - Daily. Complex analysis of APLs & ZUP scenarios of price moves in July 2020

Technical scale is minor, timeframe is daily

Forex crosses EUR/GBP & GBP/JPY & EUR/JPY in mid-summer 2020 in terms of the daily timeframe. Scenarios of price moves starting from July 3, 2020

EUR vs GBP

In July 2020, EUR/GBP, the main cross currency pair, is continuing its trajectory inside the a Median Line channel (0.8850 - 0.8985 - 0.9140) of the pitchfork on the minor technical scale.

EUR/GBP move within 1/2 Median Line channel https://forexdengi.com/attachment.php?attachmentid=3880283&d=1593699640

If the lower border of the a Median Line channel on the minor technical scale is broken, support of 0.8850 which determines the dynamic will be pointed towards the borders of the pitchfork's equilibrium zones. The Minor scale is 0.8775 - 0.8620 - 0.8455 and the Minute scale is 0.8720 - 0.8585 - 0.8455.

The upper border of the a Median Line channel on the minor technical scale matches resistance of 0.9140. In case the upper border is breached, the pair could hit a new high above 0.9175. EUR/GBP is likely to carry on with the upward move towards the original line SSL at 0.9260 of the pitchfork on the minor technical scale. The new high is seen at 0.9498.

EUR/GBP in July 2020 https://forexdengi.com/attachment.php?attachmentid=3880283&d=1593699640

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EUR vs JPY

In July, 2020, the dynamic of EUR/JPY will go on within a trading range. A further trajectory will depend on which direction the trading range will be broken.

  • Resistance of 121.50 is the upper border of ISL61.8 of the equilibrium zone of the pitchfork on the Minor scale
  • Support of 121.00 is the upper border of the a Median Line channel of the pitchfork on the Minute scale

A breach of 121.00 will determine a further trajectory of this cross currency pair within the borders of the a Median Line channel (121.00 - 119.90 - 118.75) and the equilibrium zone (119.40 - 118.10 - 116.75) of the pitchfork on the Minute scale. The thing to bear in mind is the fact of testing the Median Line Minor (120.40) and the lower border ISL38.2 (119.15) of the pitchfork on the Minor technical scale.

The consequent breach of the upper border ISL61.8 of the equilibrium zone of the pitchfork on the Minor technical scale which is resistance of 121.50 and the final Shiff Line Minor (121.81) will open the door to a further rally of EUR/JPY towards the following targets:

GBP vs JPY

In July 2020, forex cross GBP/JPY is set to trade inside a trading range. Then, it will depend on which direction the price will escape this range.

  • Resistance of 135.75 coincides with the lower border of the a Median Line channel of the pitchfork on the Minute scale

Support of 134.30 – the a Median Line channel of the Minor scale

If the a Median Line Minor which is support of 134.30 is broken, GBPJPY's trajectory will be directed towards support:

  • 133.20 – original SSL Minute
  • 132.50 control line LTL Minute
  • 131.93 – local low
  • 131.50 – the lower border of the a Median Line Minor

In case these lines are breached, the original line SSL (130.30) of the pitchfork on the Minor scale is possible. Besides, the price will hit a fresh local low following 129.28.

In case resistance 135.75 is broken, this cross currency pair could extend its move within the borders of the a Median Line channel (135.75 - 136.95 - 138.25) and the equilibrium zone (138.25 - 140.30 - 142.15) pf the pitchfork on the Minute scale with the prospects for further GBP/JPY's move in the equilibrium zone (141.40 - 145.10 - 148.70) of the pitchfork on the Minor scale.

GBP/JPY in July 2020 https://forexdengi.com/attachment.php?attachmentid=3880287&d=1593699707

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This review is composed without taking into account the news background and the information on trading hours of the key financial hubs. This article does not provide directions on placing sell or buy orders but is meant for your awareness.

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

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02.07.2020
02:59 PM


Evening review on EURUSD for June 02, 2020

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The US employment report came stronger than expected. New jobs ranging about 4.8 million opened for the month of June, dropping the unemployment rate to 11.1%. Indeed, everything turned out much better than forecasts.

The data supported the US market and the dollar leaving the euro under pressure.

EURUSD:

You may keep buying euro with a stop at 1.1200.

Sales from 1.1185.

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

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02.07.2020
02:36 PM


EUR/USD and GBP/USD analysis for July 2. Tensions between Washington and Beijing slowly escalate. Markets reluctant to buy

EUR/USD

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On July 1, the EUR/USD pair advanced by only 15 basis points. Thus, the current wave marking did not indicate any significant changes. However, I still expect the upward wave 5 to enter C or B area. If this scenario is true, the quotes will resume their growth up to the targets at 161.8% and 200.0% Fibonacci. Until the pair has not tested the low of the wave 4, the current version of the wave marking does not require any corrections or additions.

Fundamental factors

Wednesday was full of economic events in the US and the European Union. However, market activity remained quite low, especially on the euro/dollar pair. The economic data from the EU can be easily viewed as positive. Retail sales in Germany rose 3.8% year-on-year in May, although markets were expecting a 3.5% drop. The unemployment rate in Germany was 6.4% in June, while analysts expected it to be 6.6%. Besides, the number of jobless claims came at 69 thousand instead of the 120 thousand predicted earlier. In addition, business activity in Germany, France, Spain and other parts of the eurozone has significantly improved. Economic data from the US was not so upbeat, however. While business activity indices also exceeded market expectations, the ADP National Employment Report turned out to be much worse. Market participants are still worried about the situation around coronavirus in the United States where the daily increase in new cases hit record highs every day. At the moment, there are not so many reasons for USD to rise. What is more, today the White House has completed the list of sanctions against Chinese officials involved in creating a national security law in Hong Kong. The controversial law has caused serious disapproval from the US as well as from the European Union and other countries. However, I think that Washington has chosen the least aggressive way to respond to Beijing's actions, clearly fearing possible counter measures. Any further escalation of conflict and worsening of trade relations could be detrimental to weakening American economy. The economic data released today in the US turned out to be much better than expected. In particular, NonFarm Payrolls amounted to 4.8 million instead of the 3 million expected earlier.

Conclusion and recommendations

The euro/dollar pair continues to build the upward wave C in B area. Thus, I recommend opening long positions on the pair with the targets located near 1.1406 and 1.1570. These targets correlate with 161.8% and 200.0% Fibonacci for each upward signal on MACD indicator calculated on the formation of wave 5 in C or B.

GBP/USD

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On July 1, the GBP/USD pair gained 75 basis points, and the entire wave marking became even more complicated. Thus, the wave pattern may require some adjustments in the near future. Therefore, I recommend that you wait until the situation clears up and only after that resume trading on the pound/dollar pair.

Fundamental factors

On Wednesday, there was only one economic report issued in the UK which showed that index of business activity in the manufacturing sector settled at around 50.1. Today, there was no more statistical data from the UK. Despite this fact and the weak US data, the demand for the British currency has been high in recent days. This was reflected in the current wave marking. Yet, the US dollar has not advanced today even amid fairly good news from the US.

Conclusion and recommendations

The changes in the pound/dollar pair trajectory have formed some complex structures on the current wave marking. According to them, a downward trend could be formed soon. But at the same time, the wave pattern may require new adjustments. So, for now I do not recommend working with this instrument.

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

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02.07.2020
02:05 PM


Outlook for EUR/USD. US to impose sanctions against China. EUR needs support as people who lost jobs during pandemic

The White House is distancing from China. In fact, actions of the US authorities may lead to break the US-China trade agreement that was reached at the end of the previous year. The House of Representatives of the US Congress approved a bill that describes a number of sanctions against China and its officials involved in the development of the national security law in Hong Kong. The bill was sent to the Senate, and later, it will be passed to President Donald Trump for signature. Notably, the document mainly focuses on banks that conduct business with the Chinese officials, which are involved in the development of Hong Kong's law. The US decision to exclude Hong Kong from the export restrictions and stop all deliveries of defense sector products, including dual-use products, caused indignation among the Chinese officials. It took a lot of time to make such a decision. As a result, it soured relations between two countries.

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On June 30 th, President Xi Jinping signed a presidential order to promulgate the law. The Chinese Foreign Ministry has repeatedly warned that it is ready to respond to the United States, which has long interfered in Hong Kong's internal politics.

Amid the news, the US dollar went on losing its positions against risk assets. The US dollar was also influenced by the fact that the key interest rate could be changed only in 2023. The decision was announced during the Fed's meeting in June. At the moment, the benchmark rate is almost at the zero level. The key aim is to stabilize the government debt market and other credit markets. Besides, almost all members of the meeting voted to keep the current stimulus measures unchanged.

At the same time, in Italy, unemployment showed a rise in May. Notably, the indicator advanced when the economy was reopening. People who lost their jobs because of the quarantine imposed to contain the virus spread still have serious problems. According to the data provided by Istat, in May, the unemployment rate reached 7.8% compared to 6.6% in April. Figures for the previous month were upwardly revised. The number of unemployed people jumped by 370,000 whereas the number of employed people dropped by 84,000.

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The eurozone labor market data disappointed market participants. Despite the fact that a drop in jobs was smaller than during the quarantine, the number of unemployed advanced thus leading to a higher unemployment rate. Thus, the eurozone unemployment level increased to 7.4% in May from 7.3% in April. Economists had expected a rise to 7.7%.

The eurozone producer price index data was also rather weak. In May, the indicator declined by 0.6% compared to April due to low activity. Economists had forecast a drop of 0.5%. Excluding prices of energy, the eurozone producer prices decreased by 0.3% and by 0.6% compared to the previous year.

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Let's take a look at the euro/dollar pair. Bulls are still prevailing. The key aim is to break this week's high of 1.1290. They failed to do this early today. If the price breaks the mentioned level, it may rise to 1.1350 and 1.1390. However, if the quote breaks the support level of 1.1240, it may resume the downtrend to hit this week's low of 1.1190.

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

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02.07.2020
01:28 PM


EUR/USD. July 2. COT report. The highest rate of infection growth in the US does not allow traders to buy the dollar

EUR/USD – 1H.

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Hello, traders! On July 1, the euro/dollar pair made another attempt to close under the upward trend line. Thus, despite two attempts by bears to break into the market, the general mood of traders remains "bullish". However, only formally. On the 4-hour chart, it is much more clearly visible that the pair is now moving inside the side corridor. Meanwhile, all the attention of traders is shifting again from the economic topic to the topic of health. In recent months, America has been ranked first in the world for the number of coronavirus diseases. The authorities, including Donald Trump, made a lot of contradictory statements, but a month and a half after the beginning of the epidemic, it became clear that the United States failed to prepare for the pandemic. That is why we have received a huge number of infections and deaths. However, at this time, when European countries are experiencing low rates of proliferation. In America, they are only accelerating. The government of the country is very reluctant to comment on what is happening, regularly reading the mantra about "a large number of tests conducted". Meanwhile, the country may find itself in a new "lockdown", although this now looks unlikely. At the same time, Donald Trump wants Americans to return to work as quickly as possible and not receive high unemployment payments.

EUR/USD – 4H.

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On the 4-hour chart, the quotes of the euro/dollar pair performed a reversal in favor of the euro currency and began a new growth process in the direction of the corrective level of 76.4% (1.1294). The rebound of the pair's exchange rate from this Fibo level will again work in favor of the US dollar and some drop in quotes in the direction of the corrective level of 61.8% (1.1167). Today, the divergence is not observed in any indicator. The "bullish" mood of traders remains at this time. The US dollar is not in demand among traders.

EUR/USD – Daily.

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On the daily chart, the euro/dollar pair again performed a reversal in favor of the US currency and closed under the corrective level of 127.2% (1.1261), which allows traders to expect a continued fall in the direction of the Fibo level of 100.0% (1.1147).

EUR/USD – Weekly.

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On the weekly chart, the euro/dollar pair rebounded from the lower line of the "narrowing triangle", which still allows traders to expect growth in the direction of the 1.1600 level (the upper line of the "triangle"). However, the lower charts are now in a more bearish mood, so working out this goal is being postponed for now.

Overview of fundamentals:

On July 1, the European Union released quite good data on German unemployment, as well as on business activity in the manufacturing sector. American statistics were also quite optimistic, if you do not take into account the ADP report, which was weaker than traders' expectations. However, in general, traders did not give priority to either the dollar or the euro during the day. The evening publication of the Fed minutes did not correct the situation.

News calendar for the United States and the European Union:

EU - unemployment rate (09:00 GMT).

US - unemployment rate (12:00 GMT).

US - change in the number of people employed in the non-agricultural sector (12:30 GMT).

US - change in average hourly earnings (12:30 GMT).

US - number of initial applications for unemployment benefits (12:30 GMT).

On July 2, relatively important unemployment levels will be released in the EU and the US. More important statistics will be released after lunch – Nonfarm Payrolls, which can move the market from one place.

COT (Commitments of Traders) report:

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The latest COT report, released last Friday, showed almost nothing. The "Non-commercial" group, which is the most important group and is considered to be the one that drives the market, has opened a total of only 5,000 contracts, of which 3,000 are long and 2,000 are short. The "Commercial" group (hedgers) were more active and opened almost 11,000 short-contracts, however, as we can see, in the period from June 17 to 23, the euro/dollar pair was trading first down, then up, then down again. In other words, it is impossible to conclude that the mood of traders during this period of time was the same and did not change. And the changes in the balance of forces that the latest COT report showed do not allow us to draw any conclusions for the long term.

Forecast for EUR/USD and recommendations to traders:

Today, I recommend buying the euro currency with the goal of 1.1496, if the close is made above the corrective level of 76.4% (1.1294). I recommend opening new sales of the pair with the target level of 61.8% (1.1167), if the rebound from the level of 1.1294 is made.

Terms:

"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.

"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency, not for speculative profit, but to ensure current activities or export-import operations.

"Non-reportable positions" - small traders who do not have a significant impact on the price.

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

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02.07.2020
01:27 PM


Gold is correcting down, but global growth awaits it ahead

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The price of gold this morning showed a negative trend. Precious metal futures for August delivery on a trading floor in New York became 0.16% cheaper. Their current level was around 1,777.05 dollars per troy ounce. Support for gold settled at around $ 1,754 per troy ounce, with resistance at $ 1,807.70 per troy ounce.

Last week was extremely successful for the gold market as precious metals came close to their maximum values over the past nine years. Recall that the cost managed to reach the level of 1,775.18 dollars per troy ounce. However, the strategically important value of $ 1,800 per troy ounce remained unattainable. The growth dynamics were not so strong to manage to cross this line. First of all, there were not enough external stimulating factors, and the mood of investors is too volatile and unstable.

Nevertheless, in the long run, it can be said that gold can overcome the bar not only at $ 1,800 but even at $ 1,900 per troy ounce. The main growth factor, in this case, should be an ongoing negative trend associated with the coronavirus pandemic. Recall the rapid increase in the number of cases noted in the United States and Latin America. Over the past week, the number of infected cases already reached 40% more than during the entire spread of COVID-19.

Another negative factor, but supporting gold, was the multidirectional dynamics of the restoration of the two largest economies in the world, the US and China respectively.

If the former moves with varying success, noting either strong leaps or unexpected drops, the latter, on the other hand, is growing more or less stable but the growth rate itself is not too high.

An unconditional indicator of the return of interest in precious metals as a defensive asset is the greenback, which, by the way, is currently experiencing its worst times. The dollar is weakening, and against its background, interest in gold as a safe haven asset is increasing.

Investors no longer mind about risky assets as they try to secure and preserve their assets as much as possible during this difficult time. The rate of change of trends is slow, but in the future, we can confidently talk about an increase in the cost of precious metals in general and gold in particular. So, the jump in morbidity last weekend has already led to market participants hastening to close their positions in highly profitable, but extremely risky assets. There is still no reason to re-open such positions since the epidemiological situation continues to deteriorate. Of course, the news of the creation of a vaccine against coronavirus supported the markets, but not enough to immediately return what was lost. Therefore, gold remains the main contender for one of the highest speakers in the near future.

Moreover, if the greenback cannot find a foothold in the near future, the precious metal can take advantage of the situation and start a rally to $ 2,000 per troy ounce. At least, some analysts speak of such a development perspective.

The cost of silver futures for delivery in September this morning on trading floors was marked by a slight drop of 0.08%. Its current level is in the region of 18.203 dollars per troy ounce.

In contrast, copper futures for July delivery grew slightly by 0.07% and began to cost $ 2.735 per pound.

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

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02.07.2020
01:26 PM


Unexpected rally on Asian stock markets

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Stock markets in the Asia-Pacific region experienced a rise this morning, which was a signal to the news about the final stage of preparation and release of a vaccine against coronavirus infection. Pharmaceutical Corporation Pfizer has announced that it has successfully tested the drugs it developed.

China's Shanghai Composite Index skyrocketed by 2.13% to reach 3090.57 points. The blue-chip index CSI300 also steadily climbed 2.07% to reach 4335.84 points.

The PRC financial sector index rose by a record of 3.85%. Indices of consumer goods and real estate sectors were also not far behind. The first jumped 2.3%, while the second confidently climbed 3.47%. The healthcare index, although not so significant, also went up by 0.62% more.

Hong Kong's HangSeng Index also rose by 2.85% sending it to around 2512.19 points. Even greater success was achieved by the Hang Seng China Enterprises Index, which immediately increased by 3.06% and went to the level of 10,056.86 points.

Positive dynamics in the Chinese and Hong Kong markets were provided by news from the government, which announced that it wanted to increase sales of special treasury bonds. This should support the health sector and other sectors of the economy. In total, the amount of bond placement for 1 trillion yuan over the current year is announced.

Japan's Nikkei 225 Index followed a positive trend from China and rose 0.44%.

The South Korean KOSPI Index is up by 0.88%.

Australia's ASX 200 Index also went up 1.03%

Positive trends in the Asian market are caused, first of all, by successful trials of a vaccine against coronavirus infection. However, not all market participants share such stormy emotions. Recall that earlier there was also news that another vaccine was already undergoing the finishing tests, which in the end failed. Some investors suggest recalling past experiences and being careful in this situation.

Meanwhile, the total number of people infected with coronavirus infection in the world continues to grow rapidly. To date, more than 10.5 million cases have already been reported. This may push the authorities in individual countries where the epidemiological situation is especially tense, to return to quarantine measures, which were previously slowly lifted. In this regard, I would like to note that the news about the possible release of the vaccine will not be able to support markets for too long that will inevitably return to correction unless other positive factors for growth arise.

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

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02.07.2020
01:25 PM


GBP/USD. July 2. COT report. The negative from the US outweighs the negative from the UK

GBP/USD – 1H.

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Hello, traders! According to the hourly chart, the pound/dollar pair performed a consolidation over the downward trend corridor, so the current mood of traders changed to "bullish". The growth process may continue in the near future, however, I doubt that it has any information background. The problem is that the UK continues to receive a stream of mostly negative news. The country's Prime Minister, Boris Johnson, is trying his best to instill optimism in the markets, however, he is not doing it well. There are no real and concrete actions from his government that could have a beneficial impact on the economy. However, all is not well in America now, and the problems are similar. Yesterday's Fed minutes provided no new food for thought. The US authorities are trying to agree on a new package of assistance to the economy, but if the virus does not stop spreading, it may not be the last package. So the pound has been rising in recent days, however, I don't believe this currency has a long-term basis for growth.

GBP/USD – 4H.

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On the 4-hour chart, the pound/dollar pair continues to grow in the direction of the corrective level of 38.2% (1.2530). However, on July 2, a bearish divergence is brewing in the MACD indicator, which allows traders to count on a reversal in favor of the US currency and a resumption of the fall towards the levels of 1.2358 and 1.2250. The rebound of the pair's exchange rate from the corrective level of 38.2% will similarly work in favor of the US dollar and the beginning of a fall in quotes. Fixing above the Fibo level of 38.2% will increase the probability of further growth in the direction of the corrective level of 23.6% (1.2637).

GBP/USD – Daily.

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On the daily chart, the pair's quotes returned to the corrective level of 50.0% (1.2462). The process of falling can be resumed in the direction of the Fibo level of 38.2% (1.2215) only in the case of a rebound from 1.2462.

GBP/USD – Weekly.

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On the weekly chart, the pound/dollar pair performed a false breakdown of the lower trend line and rebound from it. Thus, until the pair's quotes are fixed under this line, there is a high probability of growth in the direction of two downward trend lines.

Overview of fundamentals:

On Wednesday, the UK released the index of business activity in the manufacturing sector, which was more than 50. However, the index of business activity in the US production turned out to be no worse. Only the ADP report was disappointing.

News calendar for the US and UK:

US - unemployment rate (12:00 GMT).

US - change in the number of people employed in the non-agricultural sector (12:30 GMT).

US - change in average hourly earnings (12:30 GMT).

US - number of initial applications for unemployment benefits (12:30 GMT).

On July 2, the most interesting events and reports are back in America. The most important of which is the Nonfarm Payrolls. If it is weak, the British dollar may continue to strengthen against the dollar today.

COT (Commitments of Traders) report:

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The latest COT report for the British pound was even less interesting than the euro report. Major market players trading the British pound were even less active during the reporting week. In total, the Non-commercial group opened only 3,500 new contracts. A more or less normal value is the number of 10,000 or more contracts. Thus, globally, the mood of major market players has not changed at all. In the last 10 days, as in the case of the euro, the British pound first fell, then rose, then fell again. The Non-commercial group was even less active, opening 2,500 new short contracts and closing 343 long ones. Well, the general changes for all groups of traders are completely depressing. Thus, the overall conclusion is disappointing. No special changes in the mood of major market players during the reporting week can be noted.

Forecast for GBP/USD and recommendations to traders:

I recommend selling the pound today with the goals of 1.2444 and 1.2358, if the closing rebound from the Fibo level of 38.2% (1.2530) is performed, especially in combination with bearish divergence. New purchases of the pair can be considered with the goal of 1.2637, if the pair performs a consolidation above the level of 1.2530.

Terms:

"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.

"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency, not for speculative profit, but to ensure current activities or export-import operations.

"Non-reportable positions" - small traders who do not have a significant impact on the price.

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

Vezi detalii
02.07.2020
01:12 PM


GBP/USD: plan for the American session on July 2

To open long positions on GBPUSD, you need:

In my morning forecast, I paid attention to the sale of the pound when forming a false breakout in the resistance area of 1.2528. If you look at the 5-minute chart, you will see how there were several tests of this range, and the third update to the level of 1.2528, after the release of data on the US labor market, and a surge in volume led to a more powerful movement of the pound down. At the moment, it is time for the bulls to think about protecting the support of 1.2451, to which the pair is now declining and where it is quite timely to pass the moving averages that play on the side of the bulls. If there is no activity at this level, it is best to postpone the opening of long positions immediately for a rebound from the minimum of 1.2386 in the expectation of a correction of 30-40 points within the day. An equally important task for the bulls is to break through and consolidate above the resistance of 1.2528, which will lead to further growth of GBP/USD to the highs of 1.2607 and 1.2676, where I recommend fixing the profits.

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To open short positions on GBPUSD, you need:

Sellers of the pound achieved their goal and formed a false breakout in the resistance area of 1.2528, from where I recommended opening short positions. The key goal of the bears for the second half of the day is to return the pair to the support level of 1.2451, since only a consolidation below this range will be a signal to open short positions in the hope of resuming the downward correction to the low of 1.2386, where I recommend fixing the profits. The longer-term goal will be the area of 1.2221. In the scenario of growth of GBP/USD in US trading, it is best to postpone sales until the next formation of a false breakout at the level of 1.2528. However, you can safely open short positions immediately for a rebound after testing the maximum of 1.2607 in the expectation of a correction of 30-40 points within the day.

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Signals of indicators:

Moving averages

Trading is conducted above the 30 and 50 daily averages, which leaves a chance of continuing the upward correction of the pound.

Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger Bands

A break in the lower border of the indicator in the area of 1.2451 should increase pressure on the British pound. Breaking the upper limit of the indicator around 1.2520 will lead to a new growth of GBP/USD.

Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
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02.07.2020
01:03 PM


EUR/USD: plan for the American session on July 2

To open long positions on EURUSD, you need:

In my morning forecast, I paid attention to purchases after fixing above the resistance of 1.1286. However, if you look at the 5-minute chart, the repeated test of this range after the breakdown was not successful, and the bears returned trading to the level of 1.1286, which crossed out the plans of buyers. As a result, everyone was waiting for reports on the US labor market, which led to the formation of a new resistance of 1.1297. In the second half of the day, the focus will be on this level, since only fixing higher will be a signal to open long positions in EUR/USD in the expectation of continuing growth to the highs of 1.1325 and 1.1381, where I recommend fixing the profits. In the scenario of a decline in the euro in the second half of the day, and good statistics on the US economy should someday benefit the dollar, it is best to postpone long positions to the test of the minimum 1.1241 and buy the euro there immediately for a rebound in the expectation of a correction of 25-30 points within the day. Larger purchases are best pushed back to the week's low of 1.1193.

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To open short positions on EURUSD, you need:

Bears coped with the task and did not let the euro go above the local weekly highs, slightly shifting the resistance to the level of 1.1297, which they should protect in the second half of the day. The formation of a false breakout on it will be a signal to sell the euro in the expectation of a decrease to the minimum of 1.1241, however, the longer-term goal remains the lower border of the side channel of 1.1193, where I recommend fixing the profits. A good report on the state of the American labor market should direct the pair to this range. If the euro rises above 1.1297, it is best to postpone short positions until the maximum of 1.1325 is updated or sell the pair immediately for a rebound from the resistance of 1.1381, counting on a correction of 25-30 points within the day.

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Signals of indicators:

Moving averages

Trading is conducted above the 30 and 50 daily moving averages, however, we do not have to talk about the advantage of euro buyers yet.

Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger Bands

A test of the lower border of the indicator around 1.1230 may limit the bullish momentum in the euro.

Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
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02.07.2020
12:24 PM


Trading recommendations for the GBP/USD pair on July 2, 2020

Using complex analysis, we can see the next round of speculative operations, which supported the previously set price price.

The trades yesterday did not differ much from the previous one. Similar speculative activity and long operations were observed, in which the US dollar was in a "sell-out". Such a phenomenon is peculiar not only to the GBP / USD currency pair, but also to its counterpart, the EUR / USD pair, where similar impulse leaps appeared but is on a slightly smaller scale.

During the downward move from the level of 1.2770, a largest correction was recorded, so traders became concerned at such a sharp change in price. A consolidation above the level of 1.2550 suggests that there may be a failure in the tact itself, but we should remember that on the basis of the same tact, the bears managed to recover more than 77% of the movement on May 18 - June 10 . It turns out that the quote, even with such strong changes, still retained its position in the range 1.2150 // 1.2350 // 1.2620, where all the movement began.

Analyzing the past trading day every minute, we can see that a round of long positions arose at the start of the European session, where the quote once again found a foothold in the region of the mirror level 1.2350. The main price jumps were recorded in the period 13: 30-17: 30 (UTC + 1), during which the quote came close to the level of 1.2500. Afterwards, a sharp slowdown was recorded.

With regards to volatility, the indicator came out again above 120 points, which indicates a high speculative activity among market participants. Strategies on local operations with such a market sentiment is considered the most suitable when trading.

As discussed in the previous review, traders were focused on trading in the direction of the trend, but a consolidation lower than 1.2350 never happened. Instead, an alternative scenario arose, which made it possible to enter local operations above 1.2405.

Analyzing the trading chart in general terms (the daily period), we can see that the variable level of 1.2250, relative to which a round of long positions has arisen, was repeatedly used as a strong support level. The most impressive upward move from it arose on April 21, based on which the quote managed to return to the level of 1.2620.

As for macroeconomic reports, according to the data published yesterday, business activity in the UK manufacturing sector grew from 40.7 points to 50.1 points in June. However, there was no market reaction at the time of publication of the data, but half an hour before the release of the report, there was a local jump in the pound by 35 points.

The main event though was the report of the ADP on unemployment in the United States, which revealed that in June, the indicator reflected a significant increase in employment, as well as a significant revision of the data for May.

June - employment growth of 2,369,000

May - instead of a decrease in employment by 2,760,000, there was an increase of 3,065,000

"Employment in small companies began in June. As the economy slowly continues to recover, we are seeing a significant rebound in the industries that once experienced the greatest job losses. In fact, 70% of the jobs added this month were in the leisure and hospitality, trade and construction sectors, "said Ahu Yildirmaz, co-head of ADP Research Institute

Market reaction to the report was very surprising, as the US dollar began to lose ground almost throughout the market even though the ADP indicators reflected a recovery and perhaps the highest employment growth in recent years.

Meanwhile, German Chancellor Angela Merkel made a speech yesterday, where she called on the European Union to prepare in case its negotiations with the United Kingdom fails.

"I will continue to seek a good solution, but the EU and Germany must also prepare for the fact that an agreement will not be reached," Merkel said.

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Today, the latest report on the US labor market will come out, in which according to forecasts, the unemployment rate should drop from 13.3% to 12.3%, and 2,900,000 new jobs should be created. These really pleases investors as they are signs of economic recovery.

Further development

Analyzing the current trading chart, we can see that the quote consolidated above the level of 1.2500, almost reaching the area of June 24's high [1.2540]. A rebound from the levels 1.2500 / 1.2540 may still occur, especially if the upcoming data confirms the gradual economic recovery of the United States.

As for market sentiment, a high coefficient of speculative operations is recorded, which affects volatility.

It can be assumed that if the quotes break out of the region 1.2500 / 1.2540, the pair will go down to the mirror level 1.2350. But if the quotes consolidate than 1.2550 in the four-hour chart, the pair will return to the upper limit of the range 1.2150 // 1.2350 // 1.2620.

Based on the information above, we present these trading recommendations:

- Sell positions lower than 1.2460, targeting the level of 1.2350.

- Consider buy positions as an alternative operation if the quote consolidates higher than 1.2550 in the four-hour period, with the prospect of a move to the level of 1.2620.

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Indicator analysis

Analyzing the different sectors of time frames (TF), we can see that the indicators of technical instruments relative to the minute, hour and day periods signal buy due to the consolidation of prices above the level of 1.2500. To change it, the quotes must consolidate in the region of 1.2460.

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Volatility per week / Measurement of volatility: Month; Quarter Year

The measurement of volatility reflects the average daily fluctuation, calculated by Month / Quarter / Year.

(July 2 was built, taking into account the time of publication of the article)

The volatility of the current time is 66 points, which is 45% lower than the average daily value. Based on the current dynamics, as well as speculative activity, it can be assumed that daily volatility will again be above 100 points.

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Key levels

Resistance Zones: 1.2550 *; 1.2620; 1.2770 **; 1.2885 *; 1.3000; 1.3170 **; 1.3300 **; 1.3600; 1.3850; 1.4000 ***; 1.4350 **.

Support Areas: 1.2500; 1.2350 **; 1.2250; 1.2150 **; 1.2000 *** (1.1957); 1.1850; 1.1660; 1.1450 (1.1411); 1.1300; 1,1000; 1,0800; 1,0500; 1,0000.

* Periodic level

** Range Level

*** Psychological level

**** The article is built on the principle of conducting a transaction, with daily adjustments

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02.07.2020
12:13 PM


Oil holds steady

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Over the past 6 months, oil reserves have dropped to the lowest level. However, a rally in crude prices has not started yet.

The US Department of Energy reported that over the past week the country's oil inventories declined by 7.195 million barrels. In total, US oil reserves were down by 263 thousand barrels. At the same time, gasoline stockpiles increased by 1.199 million barrels, while distillates fell by 593 thousand barrels.

Today, Brent crude rose by 0.1% to $42.07 per barrel while WTI crude oil futures fell by 0.03% to $39.81 per barrel.

The rise in oil prices is capped by the rapid spread of coronavirus in some American states. On July 1, more than 50 thousand people were infected with COVID-19 in the US.

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02.07.2020
11:36 AM


BTC analysis for July 02,.2020 - Bigger downside move is expected towards the level of $8.666

Corona virus summary:

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China's local governments must increase testing capacity to prepare for potential outbreaks. Local institutions should ramp up and reserve coronavirus testing capacity in preparation for increased demand amid potential outbreaks, Reuters reports citing national health authorities.

Technical analysis:

Trading recommendation:

Watch for potential sellingopportunities due to completion of the mini abc upward correction and potential for bearish flag pattern breakout.

The downward targets are set at the price of $8,900 and $8,666

Stochastic oscillator is showing the overbought condition and fresh bear cross, which is another confirmation for our short bias..

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02.07.2020
11:29 AM


GBP/USD analysis for July 02, 2020 - Watch for selling opportunities due to overbought condiiton on the GBP

Corona virus summary:

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West Bank has gone into lockdown as virus numbers soar. The Palestinian Authority has announced a five-day lockdown across the West Bank after the total confirmed coronavirus infections in the territory more than doubled following the easing of previous restrictions.

Technical analysis:

Trading recommendation:

Watch for potential selling opportunities due to overbought condiiton and bearish divergence on the Stochastic oscillator.

Downward targets are set at the price of 1,2487 and 1,2463

Resistance is set at 1,2525

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02.07.2020
11:12 AM


Analysis of Gold for July 02,.2020 - Rejection of the support and rising trend-channel in the background. New upside swing

Corona virus summary:

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Russian prime minister Mikhail Mishustin said on Thursday the government would consider increasing budget spending by 1.8 trillion roubles ($25.6bn) to fight the coronavirus and support the economy, Reuters reports.

Some economists have said Russia's regulations surrounding budget spending have hindered its ability to adequately fund anti-crisis measures.

Technical analysis:

Trading recommendation:

Watch for potential buying opportunities on the dips due to rejection of the support in the background.

Stochastic oscillator is showing fresh new bull cross, which is another indication of the buying continuation.

The upward targets are set at the price of $1,790 and $1,820.

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02.07.2020
11:08 AM


Cardano grows by 12%

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Over the past day, the Cardano cryptocurrency showed the sharpest growth of 12% and was trading at $0.092821. This is the highest level that ADA has been able to achieve in more than a year.

ADA resumed rising in May amid the reports on preparations for the launch of the long-awaited Shelley update. It will allow to introduce decentralization into the blockchain, while the existing version of Byron is a federal chain.

These changes led to the market capitalization of Cardano to $2,364104 B, 0.89% of the market capitalization of all cryptocurrencies. Cardano was trading between $0.0749 and $0.0928 over the past week. However, today, Cardano's price is still below 93.12% of its peak value.

Bitcoin advanced by 1.08% to $9.269,6

Ethereum rose by 2.28% to trade at $231.24.

Bitcoin's market capitalization previously amounted to $171.197777B or 64.66% of the total market capitalization of all cryptocurrencies, while Ethereum capitalization amounted to $ 25.811836B or 9.75% of the total cryptocurrency market volume.

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02.07.2020
10:54 AM


The trend in the stock markets of Europe and America is negative

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Trading on the stock markets of the United States of America yesterday passed without much emotion and spikes. The indices did not find a general trend to move and were marked by multidirectional changes. The Dow Jones index declined, while its S&P 500 and Nasdaq counterparts, on the contrary, showed fairly good positive dynamics by the end of trading. The latter even managed to set a record - updated its maximum, which was marked almost two weeks ago.

The Dow Jones Industrial Average parted with its 77.91 points at the close of yesterday's trading, reflecting a 0.3% decline. Its level stopped at 25,734. 97 points.

The Standard & Poor's 500 index, on the contrary, rose 0.5% or 15.57 points, which sent it to the area of 3,115. 86 points.

The Nasdaq Composite index also became the leader in daily dynamics: it immediately added 0.95%, which corresponds to 95.86 points, and its level moved to the level of 10,154.63 points.

The reason for the growth of good mood among market participants was the news about a vaccine against coronavirus infection, which is being developed by one of the US pharmaceutical companies. According to the latest data, during the testing of the vaccine, the steady appearance of antibodies that neutralize the action of the virus in the human body was revealed. This indicates that the time is approaching for the release of the vaccine to the general market, which cannot but please investors, for whom such a factor as the increase in the number of COVID-19 cases will almost cease to matter.

The pharmaceutical company also said that it is ready to start mass production of the vaccine by the end of this year, which can reach 100 million doses, provided that it is approved by the main regulator.

Against the background of good news on the creation of a vaccine against coronavirus, negative news about a sharp increase in the number of infected people in certain US states also continues to arrive. Already, the authorities of 12 of them have decided to stop lifting quarantine measures, and in some cases, restrictions have even been tightened. Such actions followed after the number of infected people has increased rapidly by 40% over the past week.

Investors in the stock market were also interested in the meeting of the US Federal Open Market Committee, which took place last Wednesday. At the next meeting, such important issues as the control of the yield curve, its analysis, and opportunities for use were raised. Also, it was recommended to develop a clear and clear sequence of actions that will help support the economy after the crisis associated with the coronavirus pandemic.

The positive also came from statistics. As it became known, the index of business activity in America in the manufacturing sector for the first month of summer became much larger and reached the level of 52.6 points. Recall that a month earlier, this indicator was only 43.1 points. The real figures were much better than the preliminary forecasts made by experts. In their opinion, there should have been an increase, but not above 49.5 points. Thus, most experts left the forecast in the negative zone, since the level below 50 points indicates a rapid deterioration in the industry. An indicator above 50 points, on the contrary, becomes evidence of an increase in activity, which happened. At the same time, no one expected such a significant rise, which, of course, encouraged stock markets. At least, there was another firm signal that the economic recovery is progressing at a good pace.

Trading on the stock markets of the European region at the end of yesterday's session was mostly in the negative zone. Almost everywhere there was a decline, and only the general EU enterprise index Stoxx Europe 600 strengthened and showed a rise.

The news about the increase in the number of cases of coronavirus in the world, as well as positive moments about the final stage of creating a vaccine, was of decisive importance.

The Stoxx Europe 600 index of the largest enterprises increased by 0.24% and moved to the level of 361.19 points.

The UK's FTSE 100 index fell 0.19%. The German DAX index fell even lower – by 0.41%. France's CAC index lost 0.19%. Italy's FTSE MIB and Spain's IBEX 35 indices registered declines. The first decreased by 0.23%, and the second – by 0.06%.

In the summer of this year, the uncertainty in the markets increased even more. The main reason for this was the rapid and unexpected growth of those infected with the coronavirus, which suggests a second wave of the pandemic, although the first is far from being overcome. The epidemiological situation has seriously deteriorated in the United States and Latin America, where a record number of patients are again registered.

As for the signals of global economic recovery, market participants paid attention to the latest statistics from China. Thus, the PMI in the manufacturing sector in the first month of summer continued to consolidate above 50 points and was at the level of 51.2 points. In the previous month, its value was 50.7 points. Thus, the indicator was able to reach its maximum level over the past year and a half. According to preliminary forecasts of analysts, the index should not have risen above 50.5 points.

At the same time, the PMI in the manufacturing sector in the EU also turned out to be better than the forecast June level. The indicator stopped at 47.4 points, while previously it was expected to rise no higher than 46.9 points. Recall that in the previous period, the indicator only reached the level of 39.4 points, which was evidence of a deep crisis. New data suggest that the crisis is gradually being overcome.

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02.07.2020
10:53 AM


Technical analysis of EUR/USD for July 02, 2020

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Overview :

The EUR/USD pair broke resistance which turned to strong support at the level of 1.1245 yesterday. The level of 1.1245 coincides with a golden ratio (78% of Fibonacci), which is expected to act as major support today.

The Relative Strength Index (RSI) is considered overbought because it is around 70. The RSI is still signaling that the trend is upward as it is still strong above the moving average (100).

This suggests the pair will probably go up in coming hours. Accordingly, the market is likely to show signs of a bullish trend.

In other words, buy orders are recommended above 1.1245 with the first target at the level of 1.1349.

From this point, the pair is likely to begin an ascending movement to the point of 1.1349 and further to the level of 1.1425.

The level of 1.1425 will act as strong resistance and the double top is already set at the point of 1.1349.

On the other hand, if a breakout happens at the support level of 1.1166, then this scenario may become invalidated.

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02.07.2020
09:16 AM


Analysis and forecast for GBP/USD on July 2, 2020

Good day, dear traders!

At yesterday's trading, the pound/dollar currency pair significantly increased, thus continuing the upward trend that began on the first day of July trading. Today is an important day for the markets. In connection with tomorrow's celebration of US Independence Day, data on the US labor market for June will be published today, at 13:30 London time. You can view forecasts for these and other reports by looking at the economic calendar. And we move on to technical analysis of GBP/USD. Given the recent close of June, I would like to start the analysis with a monthly timeframe.

Monthly

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Here, the first thing that catches the eye is the huge upper shadow of the June candle. As you can see, after reaching highs at 1.2811, the pair lost almost all of its growth and ended last month's trading at 1.2397. Bulls on the pound did not even manage to close June above the important technical level of 1.2400, which previously served as a support.

It is also worth paying attention to the fact that the trading of the first summer month ended under the Kijun and Tenkan lines of the Ichimoku indicator, which played a significant role in the formation of such a candle. As a rule, after such models of candle analysis, it is difficult to count on the predominance of bullish sentiment. No, of course, there will be rises during this month, but only the confident closing of the current month above 1.2811 will finally confirm the bullish mood for the pound. This is not an easy task. A breakdown of support at 1.2250 looks most likely. If this happens, the pair risks falling to 1.2070.

Daily

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For the third day in a row, the pair is moving quite intensively in the north direction. At the time of writing, the pound/dollar pair is already trading above the most important psychological level of 1.2500, near 1.2520.

The quote broke through the resistance at 1.2463, went up through the exponential moving average and rested on the Kijun line of the Ichimoku indicator. If the growth continues, and this will happen in the case of weak data on the US labor market, the pair will rise to 1.2587. As you can see, there is a 200 exponential moving average, which can block the road to a further rise in the price and provoke a rebound down. If today's trading closes above 200 EMA, there will be prospects for growth into a strong technical resistance zone of 1.2645-1.2685.

The bearish scenario will become relevant if the bulls for the pound lose all the current growth today, and the trading ends at the level of 1.2463. Given the risk-taking mood of market participants and the weakness of the US dollar, it is most likely that the recovery will continue. If so, then the main trading recommendation for GBP/USD will be purchases that are better to open not at the peak of the market, but after corrective pullbacks.

Since the initial sharp movements in each direction are not excluded after the release of non-farms, I recommend looking for options for purchases after short-term declines in the area of 1.2470. If under the strong resistance level of 1.2540 there are reversal patterns of candle analysis on the four-hour and (or) hourly charts, this will be a signal to open short positions on the pair. Don't forget that today will be a hot day. I advise you to take your time and be careful.

Good luck!

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02.07.2020
09:11 AM


Trading recommendations for EUR/USD pair on July 2

From the point of view of complex analysis, we see the fourth rebound from the range level of 1.1180. Now, let's talk about the details

The last trading day was on the verge of touching the range level of 1.1180 [1.1165 // 1.1180 // 1.1190], where the quote managed to go below the value of 1.1190 for the first time in six days, but it did not help sellers, there was a speculative rebound almost immediately and based on which, the quote returned to the area of the beginning of the trading week.

The horizontal movement of the price is becoming more and more distinct every day, where the previously set downward tact from the area of interaction of trading forces 1.1440/1.1500 goes into the background. Will the current fluctuation become the future range? Why not? This theory was considered by traders at the beginning of the previous month, talking about the price movement between values 1.1180//1.1300//1.1440(1,1500). It is worth noting that the formation of a new range is intended as a temporary platform for regulating the emotional behavior of the market, which may later lead to another downward move.

Time will tell whether this development will be our immediate future or not. But what can be said for sure is that the existing fluctuation of 1.1180/1.1285 (1.1300) is an accumulation structure that will become a kind of catalyst for trade forces.

I think that working exclusively on the theory of development of the range is a wrong step, since speculative excitement can play the game differently. If our tactics of local operations still remain, then the best approach would be to work on the breakdown of the accumulation boundaries, which will make it possible to be on the wave of speculative interest.

Analyzing the past day in detail, you can see that the round of long positions arose once again at 12:30 and lasted until 14:00 [time on the trading terminal], after which there was a slowdown followed by a pullback. The sale of the US dollar was felt throughout the market.

In terms of volatility, an acceleration of 8% is recorded relative to the average daily indicator, which indicates an increased speculative interest in the market.

As discussed in the previous review, the trading positions worked perfectly. Initially, there were local operations towards the level of 1.1190, where they made profit-taking. And then the behavior of the quote within the range level was analyzed 1.1165//1.1180//1.1190, working on Breakdown tactics/Rebound.

Considering the trading chart in general terms (the daily period), you can see that the quote rests on the range level, relative to which stagnation is formed.

The news background of the past day contained data on the index of business activity in the European manufacturing sector, where growth was set from 39.4 to 47.4 with a forecast of 46.9. The reaction of the market was mixed. Growth was recorded immediately after the publication of PMI data, but literally half an hour later, a round of short positions appeared, which led the quote to 1.1185.

The main event is rightfully considered an ADP report in the United States, where the US dollar confidently began to lose ground, although the employment showed it was by no means bad. What confused investors? Let's look at the details. The report came out slightly worse than the forecast, but still there was a huge increase in employment of 2,369,000, and the previous data was completely revised for the better, that is, in may, instead of a decrease in employment by 2,760,000, there was an increase of 3,065,000, which may be better than this. Despite this, the dollar continued to decline, as if it was hit by a wave of sales caused by a stressful situation, just against the background of the emotional behavior of speculators in the market.

In terms of informational background, we have the publication of the minutes of the meeting of the Federal Committee on Open Market Operations of the Fed. Management members noted that the US economy will need strong support from the monetary policy for a long time to come. Based on the minutes, it is clear that the committee is not considering raising the interest rate now and in the near future.

"The modeling showed that the committee will have to maintain highly stimulating financial conditions for many years to significantly accelerate the recovery from the current serious recession," said in the minutes.

In turn, US President Donald Trump is pleased with the work of the Chairman of the Federal Reserve System (FRS), and for the first time in a long time, he does not long for his resignation.

"I am very pleased with Jerome Powell, the stock exchange is now in almost the same condition as before the coronavirus pandemic," said Donald Trump.

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Today, in terms of the economic calendar, perhaps the most important event of the week is the report of the United States Department of Labor. So, the unemployment rate should decline from 13.3% to 12.3%, and 2,900,000 new jobs should be created, which please investors, since this is the sign of economic recovery.

If the data match, and the fundamental analysis does not come under the blow of emotional speculators, then the chance to strengthen the US dollar will not take long.

Further development

Analyzing the current trading chart, we see an update of the local maximum on June 29 (1.1285 +/- 2 pip), where the quote is trying to keep the previously set round of long operations. I'm not sure if the breakdown of the local peak would mean a signal for a further upward move, since everything is very similar to a speculative bay, which can quickly change position. The pivot point for the move is the level of 1.1300, where the positions of speculators are probably directed. After that, it is possible to repeat the period earlier, where on a systematic basis, traders found resistance, thereby continuing the process of fluctuation between the values of 1.1180/1.1300 (1.1350).

It can be assumed that a slowdown will occur within the level of 1.1300, where in case of a positive reaction to the report of the US Department of Labor, the dollar will receive significant support and an impulse will appear in the new wave of speculative positions in the direction of 1.1250-1.1190.

An alternative scenario is considered in the case of holding the quote higher than 1.1310, with a local move to 1.1350. A break in the upward direction will occur only if the price consolidates above the level of 1.1360 on the four-hour period.

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Indicator analysis

Analyzing a different sector of time frames (TF), we see that indicators of technical instruments signal a purchase due to speculative activity and the return of quotes to the area of 1.1300.

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Volatility per week / Measurement of volatility: Month; Quarter; Year

Volatility measurement reflects the average daily fluctuation calculated for the Month / Quarter / Year.

(July 2 was built taking into account the time of publication of the article)

The volatility of the current time is 50 points, which is already more than half of the daily average. It can be assumed that the given round of acceleration will still remain on the market, and the information and speculative background will help in this.

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Key levels

Resistance Zones: 1.1300; 1.1440 / 1.1500; 1.1650 *; 1.1720 **; 1.1850 **; 1.2100

Support Zones: 1.1180; 1.1080 **; 1.1000 ***; 1.0850 **; 1.0775 *; 1.0650 (1.0636); 1.0500 ***; 1.0350 **; 1.0000 ***.

* Periodic level

** Range Level

*** Psychological level

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

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02.07.2020
09:03 AM


Trading plan for EUR/USD on July 1, 2020. An update on the coronavirus around the world. Latest news on the US market.

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Latest data reveals that the United States continues to observe a huge jump in coronavirus incidence to more than 50 thousand per day. This clearly suggests that a second wave of the pandemic has occurred in the country.

Trump's standing in the November elections has significantly weakened because of this, since the figures three weeks ago were stable at 20-22 thousand per day. Trump clearly failed to fight against the pandemic.

Other "leaders" of the second wave are Brazil, India, Peru and Chile.

With regards to lethality, the virus seems to have downgraded, which is good.

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US Market: A new wave of growth is brewing in the S&P 500 daily chart due to the fairly good macroeconomic data that came out this June. The ISM index was at 52, which is higher than economists' forecast, but new jobs, on the contrary, came out behind it.

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EUR/USD: Traders are waiting for the new data on US employment which will come out at 13:30 (UTC+1).

Keep buying positions from the level 1.1245.

Sell positions from 1.1180.

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

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02.07.2020
09:02 AM


Simplified wave analysis and forecast for GBP/USD, AUD/USD, and EUR/JPY on July 2

GBP/USD

Analysis:

The daily chart of the British pound is dominated by an ascending wave structure. Since April, a corrective stretched plane has been developing in its structure. Its last section started on June 10 and is not complete at the time of analysis. In the last 2 weeks, the price forms an intermediate pullback, which is close to completion. The price is within the boundaries of a strong potential reversal zone.

Forecast:

In the coming trading sessions, the upward trend is expected to complete and the formation of a reversal is expected. At the end of the day, you can wait for the beginning of a downward movement. A break below the calculated support is unlikely today.

Potential reversal zones

Resistance:

- 1.2500/1.2530

Support:

- 1.2420/1.2390

Recommendations:

Due to the expected small potential of the move up, purchases of the pound today are unpromising. It is recommended to track the instrument's sell signals in the calculated resistance zone.

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AUD/USD

Analysis:

The rate of the short-term trend of the Australian dollar since mid-March is set by an upward wave. In the area of a strong resistance level, the price has been forming a flat horizontal correction for the past month. For today, this wave is not complete.

Forecast:

Today, the pair's price is expected to move in the corridor between the nearest counter zones. An upward trend is likely in the European session. At the end of the day, you can wait for the exchange rate to change and the price to go down.

Potential reversal zones

Resistance:

- 0.6950/0.6980

Support:

- 0.6880/0.6850

Recommendations:

Trading on the pair's market today is recommended only within the intraday style, according to the expected sequence. Priority should be given to the pair's sales.

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EUR/JPY

Analysis:

On the pair's chart, the upward correction of the weekly chart scale was completed by the beginning of summer. The bearish wave that started on June 5 has a reversal potential, giving rise to a new wave of short-term trend. Since June 22, the pair's exchange rate has been adjusted. The price has reached a strong resistance zone. The correction structure is not complete at the time of analysis.

Forecast:

The most likely price movement today is in the side corridor, between the nearest counter zones. The European session is expected to complete the rise and turn, followed by a price decline in the area of settlement support. Then you should wait for a second attempt to break up.

Potential reversal zones

Resistance:

- 121.30/121.60

Support:

- 120.40/120.10

Recommendations:

Today, trading on the pair's market is only possible on an intraday. Purchases can be risky. We recommend selling the instrument with a reduced lot.

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Explanation: In the simplified wave analysis (UVA), waves consist of 3 parts (A-B-C). The last incomplete wave is analyzed. The solid background of arrows shows the formed structure, and the dotted ones show the expected movements.

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

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

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02.07.2020
08:55 AM


AUD/USD. The case when buying is risky

The Australian dollar is paired with the US currency over the past four weeks, trading in a certain price range - 0.6790-0.6970. Responding to the current news flow, the AUD alternately pushes off from the borders of the specified range, but does not leave its borders – with rare exceptions of a temporary nature. If we consider a broader time range, the Aussie is clearly showing signs of its recovery, so in the medium term, longs – "purchases on southern declines" - are the first priority. For almost a month, this strategy worked almost flawlessly, as the AUD/USD pair regained lost positions within the above range each time.

Therefore, now that Australian currency has come close to the upper boundary of the price range, long positions look risky. The ongoing political conflict between Australia and China will not allow the bulls of AUD/USD to easily break through the key resistance level of 0.7000. Buyers already stormed this price barrier in early June, but they returned to their previous positions each time, to the already familiar price niche. After several unsuccessful attempts, the bears took their advantage and lowered the price to the lower border of the above range. Against the backdrop of a difficult relationship between Canberra and Beijing, there is a chance that the AUD will repeat its June trajectory in the near future.

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Let me remind you that countries "broke the pots" in early May, when Australia called for an independent investigation of the causes of the spread of coronavirus. This proposal was supported by more than 120 countries, but was extremely negatively received by the Chinese side. Beijing accused Australia of a "political attack", although neither China nor Wuhan was mentioned in the investigation proposal. But China was mentioned by the Americans: in May, a bill was introduced in the US Senate that allows President Donald Trump to impose sanctions against China for refusing to cooperate in identifying the causes of the coronavirus pandemic. As a result, Beijing approved the investigation, but only after the pandemic. At the same time, relations between China and Australia remained strained, and this fact was reflected in trade relations.

Initially, relatively small economic sanctions followed from China (in particular, the Chinese increased duties on some types of Australian goods, while refusing to import beef), then the conflict manifested itself in other areas - for example, representatives of China called on Chinese students not to return to Australian universities "because of racist incidents," and Australia accused China of organizing cyber attacks on government servers and cyber espionage. Beijing, in turn, did not remain in debt, accusing Canberra of real, "physical" espionage - allegedly two years ago, Chinese intelligence agencies detained two Australian agents.

At the same time, the parties do not plan to sit down at the negotiating table in the near future: according to representatives of the Australian Foreign Ministry, the Chinese colleagues do not respond to their respective requests. Australian Prime Minister, Scott Morrison, said yesterday that relations between the two countries "remain extremely difficult." He said this at the presentation of the country's updated military strategy, according to which Australia will increase its defense budget by $ 48 billion over the next 10 years. In particular, Australians plan to purchase anti-ship missiles and an underwater surveillance system, as well as spend money to strengthen their cybersecurity capabilities. At the same time, Scott Morrison stressed that the United States remains the "basis of the Australian security policy."

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Such a disposition does not allow counting on large-scale, and most importantly, steady growth of the Australian currency. China is one of Australia's main trading partners, so further worsening of the political conflict will negatively affect AUD's position.

This fact must be taken into account, given the fact that the AUD/USD pair approached the "ceiling" of the price range. Alternatively, you can make a rather risky trading decision by opening longs from current positions and with a target at around 0.6990-0.7000, counting on the dollar's negative reaction to Nonpharma, which will be published at the start of the American session. But in my opinion, this option is too risky (especially against the background of a good ADP report) - and the possible "catch" will be very modest. Therefore, under the prevailing conditions, a wait-and-see position seems more appropriate. It is necessary to wait for the next downward pullback (for example, to the support level of 0.6820, which corresponds to the lower line of Bollinger Bands indicator coinciding with the line Kijun-sen on the daily chart) to open long positions above the resistance level of 0.6990.

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

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