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EUR/USD for July 19,2019 - Bullish divergence on the Stochastic

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EUR did exactly what I expected. Yesterday, EUR filed both my targets at 1.1240 and 1.1280. Anyway, today the sellers reacted on the overbought market from yesterday and EUR did back all the way down to 1.1214 (support). In my opinion, you should watch for potential buying opportunities due to support on the test. Upward targets are set at the price of 1.1239 and 1.1261.

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Trading recommendation:

Yellow rectangle – Support (1.1214)

Blue horizontal line- Resistance 1 (1.1239)

Blue rectangle – Resistance 2 1.1260)

Bullish divergence on the stochastic oscillator in the background is the sign of the potential rally incoming. EUR is trading in well defined trading range and there is no imbalance on this market. It is very unlikely that EUR take the major swing low at the price of 1.1200. Watch for buying opportunities with the upward targets at 1.11239 and 1.1260.

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

July 19, 2019 : EUR/USD Intraday technical analysis and trade recommendations.

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Back in June, Temporary Bullish breakout above 1.1335 was demonstrated (suggesting a high probability bullish continuation pattern).

However, the EURUSD looked overbought around 1.1400 facing a confluence of supply levels.

Thus, a bearish movement was initiated towards 1.1275 followed by a deeper bearish decline towards 1.1235 (the lower limit of the newly-established bullish channel) which failed to provide enough bullish support for the EUR/USD.

Recent bearish breakdown below 1.1235 invited further bearish momentum to move towards 1.1175.

However, significant bullish momentum was earlier demonstrated around 1.1200 bringing the EUR/USD pair again above 1.1235.

That's why, the recent bullish pullback was expected to pursue towards the price zone around 1.1275 where a confluence of resistance/supply levels came to meet the pair.

A recent double-top Bearish pattern was demonstrated around the price zone of 1.1275 where a valid Intraday SELL position was suggested in previous articles.

Recent Bearish breakdown of the pattern neckline around (1.1235) confirms the short-term trend reversal into bearish towards 1.1175.

Yesterday, the recent bullish pullback towards the depicted key zone around 1.1235 demonstrated further bullish momentum towards 1.1275 where significant bearish rejection and a bearish engulfing candlestick were demonstrated.

Fortunately, evident bearish momentum (bearish engulfing H4 candlestick) could bring the EURUSD back below 1.1235.

Further bearish decline is expected to pursue towards 1.1175 where new price action should be watched.

On the other hand, any bullish breakout above (1.1235-1.1250) should be watched as it brings the EUR/USD pair again between depicted price-zones (1.1235-1.1275) until another breakout attempt is demonstrated in either directions (More probably to the downside).

Trade recommendations :

For Intraday traders, another valid SELL entry can be offered anywhere around the broken neckline around 1.1235.

Initial Target levels to be located around 1.1200 and 1.1175.

Stop Loss should be placed above 1.1260.

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

Gold 07.19.2019 - Fake breakout of the 20-day high

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Trading recommendation:

Gold tried to sustain the break above the 20day high at $1.440 but I saw the rejection, which is the sign that Gold may back into the previous well defined trading range and also test support levels at $1.415-$1.401.

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Blue horizontal line – 20day high Resistance $1.440

Red rectangle- Support 1 ($1.415)

Red rectangle – Support 2 ($1.401)

Fake breakout of the 20day high at $1.440 in combination with the bearish divergence and overbought condition on the Stochastic oscillator are very good indications of the potential downside. Also, Gold did test the upper Bollinger band and found sellers, which adds more weakness in the futures on the Gold. My advice is to watch for selling opportunities and potential testing of $1.415 and $1.401.

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

EUR/USD: Fed and ECB compete in weakness, dollar and euro do not want to stand aside

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The "dovish" comments of high-ranking Fed officials that sounded on the eve gave the EUR / USD bulls a pretext for the attacks, allowing the pair to recover to a local maximum. However, its inability to break through the important resistance around 1.1280 again attracted sellers to the market.

Players continue to assess the consequences of the likely easing of monetary policy of the Fed and the ECB.

According to the President of the FRB of New York John Williams, in conditions of low-interest rates, it is necessary to act quickly and aggressively.

He compares the weakening of monetary policy in a strong economy with the vaccination of the population.

"If interest rates were not so close to zero, we could act slowly, waiting until there is clarity about the potentially negative effects on the economy. But if the rates are almost zero, we need the opposite approach – to apply the vaccine, so as not to get sick. When the opportunities for incentives are small, it will be optimal to reduce rates at the first signs of economic problems," J. Williams said yesterday as part of his speech at the annual meeting of the Central Bank Research Association.

"Expectations of lower rates in the future will reduce the yield of government bonds and thus, generally create more favorable financial conditions. This will allow incentives to gain momentum, support economic growth in the medium term and allow inflation to accelerate," he added.

Against the background of J. Williams' statement, the probability of reducing the federal funds rate by 50 basis points in July jumped to 70%. Only the comments of the representatives of the FRB of New York that it was about academic research, and not about the current situation, reduced the chances of aggressive monetary expansion to 46%.

On the need for preventive measures, Vice Chairman of the Fed Richard Claridaon spoke.

"There is no need to wait until everything becomes so bad that a series of sharp rate cuts will be required. We must make a decision based on where, in our opinion, the economy can move, and what is important, where the risks for it are concentrated," R. Clarida said.

The head of the Federal Reserve Bank of St. Louis, James Bullard, went even further, saying that monetary expansion would help "defuse" the trade conflict between the United States and China.

It is noteworthy that the Fed gives clear signals about the easing of the monetary rate just a week before the next meeting of the ECB.

Most experts recently interviewed by Bloomberg expect that on July 25, the ECB Board of Governors will change the wording of its statement to show that rates can be reduced, and will take action at the next meeting after the summer holidays.

Some analysts believe that in September, the European Central Bank will reduce the rate on deposits by 10 basis points, and by the same amount – in December. Meanwhile, Commerzbank believes that the regulator will reduce the rate by 20 basis points in July.

It is possible that ECB President Mario Draghi, who resigns in October, will finally try to revive economic growth and inflation in the eurozone.

According to some reports, the ECB has already thought about whether the regulator should reconsider its inflation target, which is currently lower, but close to 2% in the medium term. It is assumed that such a step would allow the Central Bank to carry out longer monetary stimulus measures.

Since the two leading central banks of the world are competing in weakness, there is a reason to believe that the EUR/USD pair is stuck in the range of 1.12-1.14 for a long time.

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

Cryptocurrency Libra puts "sticks in the wheels" of digital assets

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The most popular digital currencies continued their decline on Thursday, July 18, due to the pressure of financial regulators on the crypto asset Libra, developed by the social network Facebook. The situation is not expected to improve today, on July 19. On the contrary, the negative statements of the US authorities were supported by the Finance Ministers of the "Big Seven" (G7). Facebook management has promised not to launch Libra without the approval of regulators.

Recall, the US authorities expressed serious concern over the decision of Facebook to issue its own cryptocurrency Libra. The implementation of this initiative was planned in 2020. According to Steven Mnuchin, the head of the US Treasury, the Libra crypto asset can be used for money laundering and terrorist financing. Earlier, US President Donald Trump spoke critically about virtual currencies, considering them an unreliable asset and an easy tool in the hands of criminals. According to the head of the White House, if Facebook wants to become a bank, the company must go through the appropriate procedures and obey the laws on banking activities.

Experts believe that the situation with Libra will clear up after August 1. Next month, the US authorities will determine the further status of the cryptocurrency. The White House administration has notified Facebook of the need to take measures to protect against criminal activity. The authorities are not going to ban the digital asset, but require to remove vulnerabilities in Libra. It is necessary to find and eliminate errors in the project by 2020.

The leadership of Facebook has repeatedly been subjected to harsh criticism from the American authorities. Against the background of claims to the popular social network bitcoin rate per day fell by 0.8% to $9860. The Ethereum exchange rate fell by 0.59% to $218.8, ripple cryptocurrency (XRP) fell by 1.25% to $0.316, and Litecoin, which sank by 0.22%, was given at the auction of $92.1.

According to the observations of analysts, today is the deadline for the 37th day since Bitcoin reaches a level of $13920. Experts believe this is the day of the end of the correction. Experts also recommend monitoring the dynamics of altcoins. It is expected that most of them will overcome stagnation and grow in price.

According to financial strategists, in the near future, the cryptocurrency market will continue to fall due to pressure on Libra. According to preliminary forecasts, bitcoin will fall to $9800, Ethereum – to $200, XRP – to $0.31, and Litecoin – to $92.

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

BTC 07.19.2019 - Sell zone at the price of $11.000

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Industry news:

One of the largest crypto derivatives exchange, BitMEX is currently under investigation by the US's top regulator, CFTC. The trading platform is majorly known for the crypto derivatives trading feature. . .

Trading recommendation:

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BTC has been trading sideways at the price of $10.307 in past 24 hours. BTC did test my important resistance level around $10.800 and found sellers, which is first sign of the potential down turn. Pay attention to the resistance at the price of $11.000 cause it is good sell zone up there.

Red rectangle – Resistance ($11.000)

Purple rectangle- Support 1 ($9.081)

Purple rectangle – Support 2 ($8.236)

MACD oscillator is showing the decreasing momentum and BTC is trading near the resistance, which confirms my bearish view. Stochastic oscillator is showing the overbought condition and the bear cross on the 4H time – frame, which is another great confirmation for the further down turn. Additional, there is the potential completion of the ABC pattern up, which is negative for BTC. Watch for downside opportunities with the targets at $9.081 and $8.236. As long as the BTC is trading below the $11.000 mark, I would watch for selling opportunities

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

Dollar: love to ride – love and sleigh to carry

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The US dollar is enjoying the roller coaster. Its fall after the June FOMC meeting was replaced by a rise after the publication of strong employment statistics. Furthermore. Jerome Powell, with his comments on the advisability of reducing the rates, dropped the US dollar index. However, the growth of retail sales, industrial production and the improvement of forecasts for GDP returned the dollar to their original positions. Thanks to the "dovish" rhetoric of Fed officials and weak data on German producer prices, the EUR/USD pair pulled off the trick with the hat once again.

This behavior of the main world currency is the result of investors' doubts about how the Fed will reduce rates in July, as well as how its competitors will react to this. Uncertainty is increasing due to rumors about Washington's currency interventions that are circulating on the Forex market. For the first time since 2011, the Treasury can be active, although Steve Mnuchin at the conference of bankers in Paris said that the policy against the dollar remains unchanged. Although it may change in the near future. In the meantime, investors are forced to focus on the derivatives market, the instruments of which in the middle of the summer pretty feverish.

In particular, attention is drawn to the change in the chances of reducing the Fed rate by 50 bp at the next meeting. After the previous meeting, they soared above 40%, after the release of employment data – collapsed to the level of 2%, but FOMC officials raised them again. Thanks to the fiery speech of John Williams that the Central Bank should act aggressively in conditions of low borrowing costs, the indicator soared to 70%. Representatives of the FRB of New York even had to explain that their head did not mean the current situation and academic research.

The dynamics of the probability of changes in the Fed rate in July

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In fact, the dynamics of EUR/USD in the week to July 19 was determined exclusively by the dollar, but it was worth the euro to show its weakness, as the bulls abandoned the idea of storming the resistance at 1.1285 and 1.13. German producer prices, the leading indicator for inflation, fell by 0.4% m/m in June, which increases the risks of ECB rate cuts. According to most Reuters experts, the Central Bank will do it in September. 40% of more than a hundred respondents believe that it resuscitates QE. In the previous survey, the figure was 15%.

The key events of the week by July 26 will release data on European business activity for July and US GDP for the second quarter, which will demonstrate how the economies of the Old and New World have adapted to external shocks, as well as a meeting of the ECB Governing Council. From Mario Draghi, investors are waiting for a hint of a weakening monetary policy in September. Can't wait – the euro will fly. However, sales on the rumors of EUR/USD on the eve of an important meeting may end with purchases on the facts.

Technically, the diamond-shaped bottom pattern is still relevant to the daily chart of the pair. The breakthrough of the lower border of the triangle near the support at 1.12-1215 will allow the bears to count on the continuation of the peak to 1.1135 and below. On the contrary, a successful assault on the resistance by 1.13 and 1.1325 increase the risks of implementing the target at 161.8% according to the model AB=CD.

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

July 19, 2019 : GBP/USD Intraday technical analysis and trade recommendations.

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Since May 17, the previous downside movement within the depicted bearish channel came to a pause allowing the recent sideway consolidation range to be established between 1.2750 - 1.2550 with a prominent key-level around 1.2650.

In June , temporary bullish consolidation patterns were demonstrated above 1.2650 for a few trading sessions.

However, the price level of 1.2750 (consolidation range upper limit) has prevented further bullish advancement few times so far.

Moreover, signs of bearish rejection have been manifested (Head & Shoulders reversal pattern with neckline located around 1.2650).

Bearish breakdown below 1.2650 (reversal pattern neckline) confirmed the reversal pattern with bearish projection target located at 1.2550, 1.2510 and 1.2450.

Intermediate-term technical outlook remains under bearish pressure as long as the market keeps moving below 1.2650 (mid-range key-level and neckline of the reversal pattern).

Moreover, the recent Bearish breakdown below 1.2570 - 1.2550 (the lower limit of the depicted consolidation range) confirms a trend reversal into bearish on the short-term.

On the other hand, the recent bullish pullback towards 1.2550-1.2570 was recommended as a valid SELL opportunity for Intraday traders. All bearish Target levels have already been reached.

Quick bearish decline was expected to occur towards 1.2450-1.2400 (the lower limit of the current movement channel) where recent bullish rejection and a bullish pullback was initiated.

Bullish advancement was demonstrated towards the depicted price zone 1.2480-1.2500 (61.8% - 50% Fibonacci levels) which failed to provide enough bearish pressure.

That's why, further bullish pullback was demonstrated towards the backside of the broken consolidation range (1.2550) where another valid SELL entry was offered by the end of Yesterday's trading session.

Trade Recommendations:

Conservative traders can have a valid SELL Entry anywhere around the backside of the broken consolidation range (1.2550).

T/P levels to be located around 1.2480 and 1.2430.

S/L should be placed above 1.2590.

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

Analysis of AUDCAD for July 19, 2019: bulls to sustain the momentum

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AUD/CAD has been quite impressive with the recent bullish momentum which lead the price to reside above 0.9230 area with a daily close with a higher target in the coming days.

During the week oil prices were falling which certainly contributed to strengthening of AUD against CAD despite mixed data on the Chinese economic growth. China's GDP increased by only 6.2% in line with forecasts. However, it was the weakest growth for the last 27 years. A decrease in AUD did not take long. It started after publication of the RBA minutes meeting. Last month, the Canadian dollar was actually in the flat range of 0.90713 - 0.91962, although the support and resistance lines are still to be broken. Both currencies are under pressure due to the trade conflict between China and the US.

The Canadian economy has been suffering from the global economic uncertainty for the last few months. The Consumer Price Index of Canada has decreased to -0.2% from previous value 0.4% on a monthly basis in June. It happened mostly due to lower energy prices. The headline inflation was unchanged at 1.8% while the core CPI has decreased from 2.3% to 2.1%. On a seasonally-adjusted monthly basis, the CPI weakened to 0.1% in June following a 0.3% increase in May. Fundamentally, the Bank of Canada remains neutral, as its policy is mostly dependent on economic data. A strong month for industry-level GDP sealed the deal for the Canadian dollar at the end of the last month as the data provided an indication that the economic growth momentum was temporary. Then the jobs data highlighted a bullish backdrop for the economy.

Today, the Canadian core retail sales report was published with a decrease to -0.3% from the previous value of 0.0% which was expected to increase to 0.3%. The retail sales decreased to -0.1% from the previous value of 0.2% which was expected to increase to 0.3%.

At the same time, the recent Australian employment change report has been quite disappointing with a decline from 45.3K to 0.5K while the unemployment rate was steady at 5.2%. The Australian Bureau of Statistics showed 500K new jobs were added last month as a slump in part-time work overshadowed the 21,100 jumps in full-time employment. Overall, the employment change statistics put the market into indecision. The RBA has recently estimated that the jobless rate will need to fall to 4.5% to generate any wage pressures. In order to achieve that level, the bank chopped the interest rates twice since June to a record low of 1% as the economy grapples with subdued home prices and miserly consumer spending.

As of the current scenario, a drastic fall in retail sales along with the global economic recession indicates further weakness of CAD against AUD in the process. Despite the fact that CAD has been stronger against AUD so far this year, certain counter moves i.e. AUD gains are expected to pile up in the coming days.

TECHNICAL OVERVIEW:

The price has managed to regain certain momentum while breaking above the corrective range resistance of 0.9230 area at a daily close. The price resided above the dynamic level of 20 EMA. Since the price is above the phase with a strong daily momentum, it indicates further upward pressure towards 0.9400 resistance area in the coming days. As the price remains above 0.9200 area with a daily close, the bullish bias is expected to continue further.

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

Is it worth selling a dollar?

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Recently, traders are actively selling US currency. On Thursday, all major rivals of the dollar increased in price. The only exception was "Canadian". What is the reason for such dynamics? There are several factors that encourage market participants to get rid of the US currency.

First, in less than two weeks, the Fed can reduce the rate, and immediately by half a percent. These expectations strengthened after a series of "dovish" statements from senior representatives of the regulator on Thursday evening. The head of the FRB of New York John Williams is sure that it is better to take preventive measures on rates now than to wait for trouble. About the same thing was said by Vice President of the Fed Richard Clarida. It is necessary to act without waiting for the deterioration of macroeconomic statistics, the banker said. Traders reacted immediately to the comments, and the dollar fell across the entire spectrum of the market. However, on Friday, the situation changed a little, the New York FRB called Mr. Williams' comments scientific, unrelated to the immediate actions of the regulator. This, of course, defused the atmosphere in the markets, the dollar began to strengthen its position, but still remains under pressure.

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There is still second, third, fourth. Iran seized a foreign tanker, weak quarterly reports caused a decline in the stock market. The head of the US Treasury Steven Mnuchin hints at possible changes in dollar policy. He said that "the policy of a strong dollar has not changed", but the key role in this expression is played by the word "yet". Mnuchin also refused to comment on the current levels of the US currency and talk about the policy of the EUR/USD ratio.

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Donald Trump has repeatedly announced his desire to see the dollar weaker, because, in his opinion, the strength of the national currency can hinder the economic growth of the country. Europe and China are playing a "game of big currency manipulation," he wrote recently on Twitter and urged the US to "either match it or remain a fool." The set of these factors worsens the operating environment for the "American".

What do analysts think about Mnuchin's comments on the dollar?

The fact that the Finance Minister spoke about the national currency creates conditions for abandoning the policy of a strong dollar, which is clearly on the radar of the White House. "The risk of intervention in the coming year is higher than usual," and clarifying "for now" "will not help alleviate any concerns," CIBC representatives write.

Strategists at Nordea Investment Funds believe that the Americans left the "open door for possible currency intervention" in order to create a potential threat to the Japanese and European Central Bank. Thus, they want to prevent the introduction of "more negative interest rates".

The chances of intervention against the dollar increased, according to Barclays. However, this is largely due to the continuing pressure of the owner of the White House on the dollar. More likely, according to representatives of Scotiabank, Donald trump will continue "verbal pressure", and the Fed will also talk about a political compromise, allowing the dollar to retreat.

A unilateral intervention aimed at reducing the value of the US currency in ABN Amro is called unlikely. However, if we take into account the unpredictable actions of the presidential administration, the scenario of intervention should not be completely excluded.

The drop in stock for four consecutive days had an impact on the pair USD/JPY. The trade balance report did not save the situation either. Quotes were close to its monthly low. Further decrease and testing of June lows near 106.78 is not excluded. However, on Friday, the pair becomes more expensive due to the recovery of the dollar as a whole and due to the improvement of investors' risk appetite. The stock market is growing, and there are signs of progress in trade negotiations between the US and China. Mnuchin assured that the dialogue continues and it is not necessary to believe everything the media write.

Perhaps, the best currencies on Thursday were the British pound and the Australian dollar. "Aussie" in conjunction with the US currency was located just below its 3-month peaks. It broke through the previous resistance level, which is an excellent "bullish" signal. This means that the rate may strengthen in the near future. Today, it is decreasing.

The growth of retail sales exceeded expectations, it was very strong spending excluding automotive fuel, which is showing strong demand. The indicators sufficiently offset the decline of the last two months, easing fears about the consequences of lower investment in the business. In addition, market participants were encouraged by reports that the EU may consider an alternative to the Irish backstop, which is a stumbling block for the two main candidates for the post of British Prime Minister. On Friday, the pound goes down. The British currency is aimed at a weekly decline, as the country is preparing to complete the race for the post of Prime Minister.

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

EUR and GBP: the pressure on the euro will increase as the ECB meeting day approaches. Buyers of the pound are full of optimism

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Buyers of the European currency ignored the data on the growth of the current account surplus of the eurozone balance of payments, while the report on producer prices in Germany did not go unnoticed.

EURUSD

The weakness of the European currency, given the likely change in the monetary policy rate of the European Central Bank, is obvious, and any negative data only add confidence to traders that the European regulator may not lower rates at the meeting in July, but will definitely change the tone of its statements and adjust forecasts.

As noted above, the German producer price index fell sharply in June of this year, falling 0.4% compared to May, when there was a decrease of only 0.1%. Compared to the same period in 2018, prices increased by only 1.2%.

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Economists had forecast a decline in producer prices of only 0.1% and an increase of 1.5%, respectively.

The report on the growth of the current account surplus of the eurozone balance of payments did not allow the European currency to resume its growth against the US dollar. According to the European Central Bank, the balance rose to 30 billion euros from 22 billion euros in April this year, and the total surplus for the 12 months to May amounted to 323 billion euros, which is 2.8% of eurozone GDP. Last year, the aggregate surplus was slightly higher at 392 billion euros.

The demand for the euro is limited and the main reason for this is the likely decrease in interest rates in the eurozone and the launch of the asset buyback program. Next week, the ECB will announce a change in the conditions in monetary policy, but it is more likely that the European regulator will take measures to stimulate the economy not earlier than September this year. During the July meeting, the interest rate forecasts for the next few years will be precisely revised, which will also have a negative impact on the positions of the European currency.

It is expected that the planned lowering of the deposit rate and the launch of the next round of asset purchases will be announced.

Let me remind you that during the last meeting, the ECB stated that the key interest rates will remain at current levels, at least until mid-2020.

Today, a number of speeches by representatives of the Federal Reserve System are planned, which, apparently, will talk about the prospects of interest rates in the United States.

Yesterday, the Fed-New York hastened to say that Williams's speech should not be regarded as a specific signal about the future monetary policy, and, as we remember, after his words, the US dollar fell sharply.

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Today, the speech of the President of the Federal Reserve Bank of St. Louis James Bullard, who said that the reduction of the key rate by a quarter of a percentage point at the moment would be appropriate. He also added that he would study the arguments in favor of a half-point rate cut, but the current situation does not require a more significant rate cut.

In the afternoon, FOMC member Eric Rosengren will speak.

As for the technical picture of the EURUSD pair, while sellers of risky assets are coping with their task, pushing the euro gradually down to the support area of 1.1200.

GBPUSD

The British pound is trying to continue its growth after a slight downward correction, which occurred on the data on the growth of borrowings of the UK public sector.

As indicated in the report, the net borrowing of the UK public sector in June this year increased by 7.2 billion pounds against 3.3 billion pounds a year ago. Economists had expected growth of only 3.9 billion pounds. The net need for public sector funds in the UK in June increased by 1.3 billion pounds against 0.7 billion pounds a year ago.

The demand for the pound remains after yesterday's statements of Michel Barnier, who acts as a negotiator for Brexit from the European Union. During his speech, he said that the EU is open to an alternative proposal for the North Irish border, which is still the main problem that trade partners cannot cope with.

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

Silver storms tops

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The attention of leading investors for a long time was riveted on gold but at the moment, it has switched to silver. The white metal is experiencing an unprecedented rally, its price is steadily increasing. Experts seek to understand the causes of what is happening.

The current situation is largely influenced by the expectation of a possible reduction in interest rates by the Fed. Analysts believe that the price of market assets has already laid down a rate reduction of 0.25%. Experts do not exclude the possibility of its decrease immediately by 0.50%. According to experts, the adoption of such a decision will be the first but not the only step of the regulator in the beginning cycle of monetary incentives. The current situation greatly affects the asset markets, laying down certain inflationary expectations. Geopolitical tensions in the Middle East and a protracted US-China trade conflict contribute to this.

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In the short term, the precious metals market will continue to grow until the end of July. Its further dynamics will depend on the decision of the Fed. The yellow metal can rise to $1,500 for 1 ounce and analysts are sure, the cost of silver will go up after it. At the moment, after the rally of gold for almost a month and its successful growth, the white metal made a breakout.

A breakout is a sharp movement of currencies or metals and overcoming any conditional boundary (top, bottom or level of consolidation). Currently, silver quotes (XAG / USD) continue to move in an uptrend. The cost of the metal with a white and gray tint reached $16.42 in Friday morning trading, July 19. After some time, XAG / USD quotes fell slightly to $ 16.39 but this does not prevent their upward movement. A number of experts expect a rebound and continued growth in the price of silver, where the goal is to exceed the level of 16.55. Experts emphasized that they expect to accelerate the growth of XAG/USD quotes is in the case of overcoming the mark of 16.25.

This silver breakout took place against the backdrop of huge amounts of precious metals on the maximum since April 2011. Recall that at that time, the price of white metal briefly tested the mark of $49 for 1 troy ounce. However, after the euphoria collapse occurred, the key level of support becomes the level of 15.20 and further to 15.50 at the moment. Strong levels of 16.20 and 17.30 "hang" above the resistance. Experts find it difficult to say whether silver will reach this area in the coming days. The decisive time will be the end of this month.

Currently, most precious metals have great potential for growth. This is especially true of silver. White metal, like yellow, has entered a long-term growth trend and is not going to stop. Experts pay attention to a number of reasons related to the current rally of silver.

The movement of XAG/USD quotes is due to the overall positive dynamics of precious metals against the background of a possible slowdown in the global economy, the expectation of easing monetary policy and a fall in real interest rates. Meanwhile, silver is "catching up" in a rally in gold. Previously, the price ratio of gold and silver rose to its maximum level since 1993. There is space for the development of a "bullish" impulse, for example, towards levels of $17.1– $17.4.

Experts remind that in the early stages when the rally of gold is gaining momentum, silver is "asleep". However, the price of the white metal begins to "catch up" closer to the end of the growth wave and sometimes exceed the dynamics of gold. The fact that silver "awoke" indicates that the current trend of growth of precious metals can end in a correction, the analysts sum up.

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

GBP/USD: plan for the American session on July 19. Retail sales helped pound buyers to return to the market

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To open long positions on GBP/USD, you need:

Buyers of the pound expectedly returned from the support level of 1.2514, which I paid attention to in my morning forecast. Data on the growth in the number of public sector borrowings damaged only part of the pound in the morning. At the moment, the bulls' goal will be to return to the highs of the week in the area of 1.2561 and break this level, which will lead to the preservation of the upward momentum with the resistance test of 1.2600, where I recommend taking the profit. If the data in the second half of the day on the US economy will support the US dollar, then in this scenario, you can look for new long positions in the pound immediately to rebound from a low of 1.2472.

To open short positions on GBP/USD, you need:

Bears tested the support of 1.2514 in the first half of the day but failed to break below this level. At the moment, their goal is to re-descend to this range, which will certainly lead to a breakdown and a further decline in GBP/USD to the minimum area of 1.2472, where I recommend taking the profits. If the Fed representatives, whose speeches are scheduled for this afternoon, continue to talk about the necessary lowering of interest rates in the US, it is better to look for short positions on the pound only after a false breakout of the resistance of 1.2561 or a rebound from the maximum of 1.2600.

Indicator signals:

Moving Averages

Trading is conducted above 30 and 50 moving averages, which indicates the preservation of the upward momentum.

Bollinger Bands

If the pound falls in the second half of the day, the support will be provided by the lower limit of the indicator in the area of 1.2495, where bears will take profits.

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Description of indicators

  • MA (moving average) 50 days – yellow
  • MA (moving average) 30 days – green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20
The material has been provided by InstaForex Company - www.instaforex.com.

EUR/USD: plan for the American session on July 19. Weak inflation in Germany crossed out the plans of euro buyers for further

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To open long positions on EURUSD, you need:

Germany's producer price index fell sharply, putting pressure on the euro in the first half of the day after yesterday's sharp rise, which occurred amid comments from representatives of the Federal Reserve. At the moment, it is clear that the buyers of EUR/USD missed an important support level of 1.1241, and only a return to it will stop the current downward trend, which will again lead to a correction in the area of the weekly high of 1.1281, where I recommend taking the profit. To open long positions immediately for a rebound, it is best to wait for the support test of 1.1216 or enter from the lower border of the wide side channel in the area of 1.1195.

To open short positions on EURUSD, you need:

Sellers coped with the task for the first half of the day, which I described in more detail in my morning review, but to maintain pressure on the euro, it is necessary to stay below the level of 1.1241. This can be done after the release of a number of fundamental statistics on the American economy. An unsuccessful test of 1.1241 with a false breakout will be a direct signal to continue selling the euro in order to update a larger minimum of 1.1216, where I recommend taking the profit. In the scenario of EUR/USD return to the level of 1.1241 in the second half of the day, it is best to look at the short positions on the rebound from the upper border of the side channel of 1.1281.

Indicator signals:

Moving Averages

Trade is conducted in the area of the 30 and 50 moving averages, which points to market uncertainty towards the end of the week.

Bollinger Bands

The downward momentum may be limited by the lower limit of the indicator in the area of 1.1225, from where speculative sellers can exit the market.

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Description of indicators

  • MA (moving average) 50 days – yellow
  • MA (moving average) 30 days – green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20
The material has been provided by InstaForex Company - www.instaforex.com.

Technical analysis of NZD/USD for July 19, 2019

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Overview:

The NZD/USD pair broke the resistance that turned into strong support at the level of 0.6612. The level of 0.9966 coincides with a golden ratio (61.8% of Fibonacci), which is expected to act as a major support on the H1 chart today. Consequently, the first support is set at the level of 0.6612. Moreover, the RSI starts signaling an upward trend, and the trend is still showing strength above the moving average (100). Hence, the market is indicating a bullish opportunity above the area of 0.6612. So, the market is likely to show signs of a bullish trend around 0.6612 - 0.6650. In other words, buy orders are recommended above the ratio of 61.8% Fibonacci (0.6612) with the first target at the level of 0.6748 in order to test last bullish wave in the same time frame. If the pair succeeds to pass through the level of 0.6748, the market will probably continue towards the next objective at 0.6818. The daily strong support is seen at 0.6612. Thus, if a breakout happens at the support level of 0.6612/0.6600, then this scenario may be invalidated.

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

We bet on the currencies of developing countries

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The dollar was able to interrupt the losing streak and began to recover. Recall that the head of the New York Fed, John Williams, advocated proactive measures to "avoid the need to deal with too-low inflation and interest rates," as the dovish tone caused the dollar to fall. However, the dollar began to grow after the Fed noted that Williams's comments were not directly related to the regulator's policy. There will be no serious take-off in the short-term because investors still expect a rate cut this month by 25 basis points and some even by 50. One thing is for sure that the dollar has already won back these expectations and holds quite well. "Expectations of the Fed rate cut led only to moderate temporary weakness of the US dollar, which has recently become more apparent in relation to high-yielding currencies".

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The euro weakened by 0.2% to 1.1261 dollars but remained within the already familiar week range. Traders are not particularly active and are waiting for the ECB meeting to be held next week. The dollar showed itself particularly well in relation to the yen, rising by 0.3% to 10.70 yen. Also, the pound failed to withstand the dollar with a loss of 0.3% to 1.2515 dollars. British lawmakers did not even help the British currency, who approved the draft law. According to which, it would be more difficult for the new prime minister to "push" Brexit without a deal.

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You should now pay close attention to the currencies of developing countries. The weakness of the dollar and expectations of lower rates around the world will be a growth driver for them. If the Fed lowers interest rates, it will stimulate growth in investment in currencies of developing countries and other risky assets. For example, the New Zealand dollar rose by more than 1% this week. Lowering the Fed rate is likely to increase the attractiveness of high-yield Kiwi.

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

Technical analysis of EUR/USD for July 19, 2019

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Overview:

The EUR/USD pair continues to move upwards from the level of 1.1179/1.1222 (support zone). Last week, the pair rose from the level of 1.1179 to a top around 1.1222 (currently price is set at the 1.1234 price). Today, the first resistance level is seen at 1.1262 followed by 1.1295, while daily support 1 is seen at 1.1179 (23.6% Fibonacci retracement). According to the previous events, the EUR/USD pair is still moving between the levels of 1.1179 and 1.1295; so we expect a range of 116 pips. Furthermore, if the trend is able to break out through the first resistance level at 1.1222, we should see the pair climbing towards the double top (1.1295) to test it. Therefore, buy above the level of 1.1179 with the first target at 1.1262 in order to test the daily resistance 1 and further to 1.1295. Also, it might be noted that the level of 1.1295 is a good place to take profit because it will form a double top. On the other hand, in case a reversal takes place and the EUR/USD pair breaks through the support level of 1.1179, a further decline to 1.1108 can occur which would indicate a bearish market.

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

Will Washington venture on foreign exchange intervention to weaken the dollar?

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According to some analysts, the global financial market is on the verge of or is already experiencing a new phase of currency wars.

"Now, interest rates are at historic lows, so central banks can no longer influence the cost of borrowing in the usual way. The only way to further ease monetary policy for them is to weaken their national currencies. Thus, we are already in a state of currency war, although no one officially recognizes this," said Thanos Vamvakidis from Bank of America Merrill Lynch.

Market participants are now discussing whether a hidden currency war will result in an open confrontation, and they do not rule out that US President Donald Trump may begin with it.

If the head of the White House has already organized a trade war, then why not launch a new round of currency?

It is assumed that if the US currency (and, according to the IMF, it is overestimated by 6-12%), contrary to expectations of a weakening of monetary policy, the Fed will continue to strengthen, the likelihood of increased pressure on the Treasury and the Central Bank from the US President will only increase. Currency intervention can serve as a "medicine" for a greenback that is too presumptuous from the point of view of Washington.

Over the past twenty-five years, the United States has intervened three times in the life of Forex (in 1998, 2000 and 2011), and all three times the US Treasury Department and the Fed have acted together.

If the Fed now agreed to take part in this, the budget of the US administration for the purchase of other currencies would be about $ 200 billion.

However, the Central Bank, who wants to emphasize its independence, may abandon the idea of a large-scale sale of dollars this time.

"If the Ministry of Finance decides to act alone, then this step could lead to an institutional crisis," said Deutsche Bank.

In addition, there is one caveat - before, leading central banks coordinated actions to weaken the dollar. Will the United States be able to get broad support now? Hardly, and without it, the results of currency intervention will be questionable.

Moreover, Washington's unilateral attempts to weaken the dollar could provoke other countries to fight interventions, which would increase the likelihood of a mirror competitive devaluation.

"This will lead to a real currency war, which is likely to go between the dollar and the yuan, as well as between the euro and the dollar," said Deutsche Bank strategist Alan Ruskin.

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

The super-soft theses of FOMC members provoked a sell-off of the dollar (The EUR got a chance to grow, the GBP unfolds even

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Market sentiment is rapidly changing in the direction of reducing tensions, as the Fed persistently demonstrates dovish intentions. On Thursday, two FOMC members, the head of the Federal Reserve Bank of New York, Williams, and the Vice-chairman of the Fed, Clarida, made similar statements in which they emphasized the need for quick action before the main macroeconomic indicators actually turn to the negative direction.

These statements looked so coordinated that the markets began to see the conviction that the Fed could cut the rate in June not by 0.25% but immediately by 0.5%, which immediately led to a sharp weakening of the dollar, updating the gold quotations to a 6-year maximum and falling bond yields. At CME, rate of futures almost show the same expectations for both variants of the results of the FOMC meeting.

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The market reaction was so pronounced that the New York Federal Reserve Bank even published a special explanation on Friday morning that Williams did not try to send a specific signal to the markets.

Nevertheless, the touchstone was thrown and now, the possibility of reducing the rate in July by 0.5% does not look fantastic. These changes in sentiment serve as a powerful bearish factor for the dollar, which was caught between two alternatives - either a reduction in the rate of 0.25% and a subsequent strengthening of the USD or a decrease of 0.50% and a decline in the dollar accordingly.

EUR/USD pair

According to Bloomberg, the ECB began research to find out whether the long-term inflation target set at 2% is in line with current market realities. The ECB has already hinted at a meeting in June that the target indicator should become more flexible. Any deviations from the target level can be more significant without changing the policy of the Central Bank.

In the absence of significant macroeconomic news by the end of the week, the market's attention focused on approving Christine Lagarde as head of the ECB, as well as topics on budget discussions in Italy and the upcoming ECB meeting on July 25. The consolidated view of the market is that the ECB will keep its deposit rates unchanged but will expand its preliminary recommendations. At the same time, they intend to set the stage for a rate cut in September.

Earlier, we assumed that the EUR/USD pair would trade in a range in anticipation of the ECB meeting but sharp changes in expectations at the Fed rate forced the bulls to intensify. The euro is out of range and now, testing the resistance of 1.1285 looks more likely with an attempt to consolidate higher.

GBPUSD pair

UK retail sales rose by 1.0% in June with year-on-year growth of 3.8%. Both figures have significantly exceeded expectations. Growth in retail sales has somewhat reduced concerns about inflation but it was not the reason for the sharp rise in the pound on Thursday.

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The reason is political. The House of Commons on Thursday adopted an amendment that made it difficult to commit Brexit in the absence of an agreement between London and Brussels. As of now, the Prime Minister will not be able to suspend the work of the parliament in order to prevent the deputies from blocking the exit from the EU without a deal, and the favorite race of Boris Johnson loses the possibility of completing Brexit without parliamentary approval. A total of 17 conservatives voted for the bill, indicating the ongoing split within the Conservative Party in particular and also reduces the likelihood of Brexit without a deal.

It was the reason for the sharp rise in pounds on Thursday. Reducing the likelihood of a hard Brexit supports the pound and scenarios for its further reduction become irrelevant. On Friday, the GBP/USD pair has all chances to go even higher with the resistance zone at 1.2570 / 80, then to 1.2620 / 25.

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

USD / JPY. Japanese inflation disappointed, but the southern trend has not exhausted itself

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Yesterday, the US currency sharply depreciated throughout the market, responding to unexpected comments by the head of the Federal Reserve Bank of New York, John Williams. In just a few hours, the dollar index dropped from 96.86 points to 96.35 points, showing a general weakening of the currency. During the Asian session, the dollar somewhat regained its position, but the very fact of such a situation suggests that the position of dollar bulls is precarious - even careful verbal interventions can stop the growth of the greenback.

It is noteworthy that Williams quite diplomatically voiced his concern about the current situation in the country's economy and hinted rather at the need to ease monetary policy. He said that he considered it expedient to apply preventive measures on the part of the Fed in order to "solve the existing problems" and not to deal with their consequences later. But these words were enough for the market to make the appropriate conclusions for themselves: according to traders, the Fed representative signaled a rate cut at the July meeting once by 50 basis points.

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The Federal Reserve Bank of New York clearly did not expect such a violent market reaction to the comments of their boss. Therefore, soon after his speech, the release of the FRB press service appeared, which explained Williams's position. The Federal Reserve Bank stated that he voiced only a "scientific approach" to the problem, and did not announce the next steps of the Fed. After that, the dollar won back a little, although traders are still wary of the prospects for its growth. The fact is that yesterday, at almost the same time, another representative of the Fed spoke - Richard Clarida. He also called on members of the regulator "to be proactive," as current economic growth needs support from the Fed. In other words, the likelihood of "aggressive mitigation" by the Fed is still not worth discounting, although after the last macroeconomic releases (Nonfarma, inflation, retail sales) the market has eased its concern about this. In my opinion, this is a very untimely decision.

And yet, the fact remains that the dollar is still "on horseback", although it cannot demonstrate a large-scale rally. There is uncertainty about the prospects for US-China relations, as well as background fear about possible currency interventions initiated by Trump, muffle the ambitions of dollar bulls. But the current situation can be used in trade, especially in the dollar-yen pair. The usd / jpy pullback provides a tempting opportunity to open short positions in a pair. Given the growth of geopolitical tensions, as well as the dovish intentions of the Fed, it can be assumed that the current correction will be temporary - after its completion, the price will again go to the base of the 107th figure, or to be more precise, to the resistance level of 107.05 (lower Bollinger Bands indicator line on the daily chart).

At the end of June, the bears for usd / jpy currency pair had already tested this resistance level, and even updated the annual minimum, dropping to 106.80. However, against the background of optimistic statistics from the USA, the pair could not develop a further downward trend and returned to the range of 107.70-108.80. In the near future, a retest of the above resistance level is likely, even with a likely renewal of the annual minimum.

It is worth noting that today's price pullback usd / jpy is associated not only with the recovery of the US currency. The yen is under pressure and has its "own" problems. The fact is that today key inflation indicators were published, which demonstrated its slowdown. And although all the indicators came out at the forecast level, the Japanese currency still negatively reacted to this release. Basic inflation disappointed most of all - the consumer price index excluding prices for fresh food products is falling at a fairly sporting pace. If in April this indicator was at the level of 0.9%, in May it was 0.8%, and in June - already at around 0.6%. The structure of the published indicators suggests that inflation has slowed, mainly due to a sharp decline in energy prices and a reduction in mobile communication tariffs by the main Japanese operators.

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It is logical to assume that the fact of the fall in core inflation to the levels of 2017 will not be ignored by the Bank of Japan, whose representatives have repeatedly stated that they are still ready to expand incentives. According to some experts, the Japanese regulator realizes his intentions already at the July meeting, although according to other analysts, the main events in this context will unfold in September. The fact is that the meeting of the Japanese regulator will be held just a day before the Fed meeting (July 30 and 31, respectively). As many currency strategists believe, the Bank of Japan will not take drastic steps until the Fed has announced its verdict on the prospects for monetary policy. In other words, at the July meeting, the Japanese Central Bank may announce its actions,

Thus, as soon as the first reactions regarding the weak inflation in Japan have subsided, geopolitics will again be in the spotlight of usd / jpy traders. Increased tensions in the Middle East (primarily through the US-Iran line), an increase in the likelihood of a "tough" Brexit, a political crisis in Italy and vague prospects for trade negotiations between Washington and Beijing are a brief list of the fundamental factors that will support the Japanese currency (for account of its status as a protective asset) and, accordingly, pressure on a pair of usd / jpy. Under such conditions, a repeated assault on the resistance level 107.05 is very likely.

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

Head of the Federal Reserve Bank of New York John Williams brought hope to the markets (We expect continued growth of AUD/USD

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World markets continue to throw in the cold, then in the heat against the backdrop of the uncertainty of the future actions of the Fed in the matter of monetary policy.

In recent weeks, in the wake of positive data from the labor market, as well as a slight increase in US inflationary pressures in the markets, investors began to doubt that after lowering the key interest rate by 0.25% following the July meeting, the regulator will continue to reduce it without stopping, It is called, attained. But yesterday's largely unexpected statement by the President of the Federal Reserve Bank of New York, J. Williams, again stirred up financial markets and allowed its participants to once again hope that the Central Bank will ignore the latest positive signals and may begin a cycle of lower interest rates for the first time in 10 years.

In recent weeks, investors have started to doubt that after a 0.25% decline in the key interest rate as a result of the July meeting in a wave of positive labor-market data, as well as a slight rise in US inflation pressure in markets. The regulator will continue to reduce it without stopping what is called the"what's at stake". However, the statement by the New York Fed President, John Williams has once again expanded the financial markets, which allows participants to hope again that the CBO will ignore the latest positive signals and could begin the first-ever interest-rate-reduction cycle in 10 years.

On this wave, the US dollar was under pressure and even began to decline in relation to the single European currency, which in recent months turned into a steady-state as an outsider amid signals of a recession in the eurozone as a whole and in Germany in particular. The news led to a sharp decline in the yield of American treasuries. Therefore, the benchmark yield of 10-year-old treasuries fell, approaching the key psychological level of 2.0% and the major US stock indices switched from negative to positive territory.

So what is so unusual about the representative of the Fed? Speaking at the meeting of the Central Bank Research Association, he said that the current level of interest rates is not so high that the regulator takes a long period of time. He made it clear that it is necessary to act in the presence of the first signs of problems in the economy. Moreover, in his opinion, lowering the yield of government bonds of the US Treasury will reduce the burden on the Fed and more favorable financial conditions will help disperse inflation.

Markets responded sharply with rising demand for neither risky assets and dollar sales, finding that on July 31 (the day following a meeting of the Central Bank) it could cut off rates by 0.50% instead of the expected decrease by 0.25%. The markets reacted so sharply because the New York Fed is considered the most influential Reserve Bank in the overall structure of the Fed. In addition, investors simply could not respond to his words that "it is better to take preventive measures than to wait until the catastrophe begins."

Evaluating the abrupt change in market sentiment, we believe that today the local weakening of the dollar will continue amid rising demand for risky assets.

Forecast of the day:

The AUD/USD pair remains in a short-term uptrend. Before continuing growth, it can be adjusted down to 0.7040 and we expect the pair to continue rising to 0.7140.

The NZD/USD pair can also be adjusted to the level of 0.6745 before continuing to climb to 0.6800.

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

Simplified wave analysis and forecast for EUR/USD and GBP/USD on July 19

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EUR/USD

Since June 25, a downward wave model has been developing on the chart of the European currency. In the last 2 weeks, within its framework, a correction is formed in the flat corridor, which has a distinct zigzag shape. The wave structure looks complete. The price supports the potential reversal zone.

Forecast:

In the next day, the full completion of the upward course of the movement is expected. The formation of a reversal is most likely in the area of resistance, while the short-term puncture of the upper boundary of the zone is not excluded. The beginning of the price decline can be shifted in time to the next trading day.

Recommendations:

When buying euros, one should take into account the limited growth potential. In the area of the calculated resistance, it is recommended to track the signals of your vehicle for the sale of the instrument.

Resistance zone:

- 1.1280/1.1310

Support zone:

- 1.1230/1.1200

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GBP/USD

The high wave level of the upward wave, which started on July 17 on the chart of the British pound, makes it possible to classify it as the beginning of a new upward short-term trend. After breaking a powerful resistance level, the price rolls back down.

Forecast:

At the next trading sessions, the completion of the price reduction, reversal and price rise are expected. The upper limit of daily volatility is limited by the resistance zone. It is likely that after contact with it, the price will begin to form a full correction.

Recommendations:

Sales of the pound in the first half of the day are unpromising. It is recommended to track the buy signals. Given the limited price move up, do not leave these transactions unattended. By the end of the day, you should be ready for the appearance of the instrument sale signals.

Resistance zone:

- 1.2570/1.2600

Support zone:

- 1.2510/1.2480

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Explanations to the figures: Waves in the simplified wave analysis consist of 3 parts (A-B-C). The last unfinished wave is analyzed. Zones show areas with the highest probability of reversal. The arrows indicate the wave marking according to the method used by the author, the solid background is the formed structure, the dotted ones are the expected movements.

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

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

Strange and unexpected weakening of the dollar (review of EUR / USD and GBP / USD on 07/19/2019)

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The dollar gave up its position so briskly that it was even somewhat surprising. Especially considering that the total number of applications for unemployment benefits, which decreased by 34 thousand instead of being reduced by 20 thousand. At the same time, the number of initial applications for unemployment benefits turned out to be exactly the same as expected, that is, it increased by 8 thousand. But the number of repeated applications was reduced not by 28 thousand, but by 42 thousand. And considering the much greater importance of just the number of repeated applications for unemployment benefits, the dollar's weakening really causes genuine surprise. But it is still more fun, because when this data came out, the dollar showed an upward trend, the same as at the time of the publication of data on retail sales in the UK, whose growth rates accelerated from 2.2% to 3.8%, and not to 2.6%, as predicted.

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However, everything falls into place if you look at exactly when the dollar began to rapidly lose its position. This happened when the representative of the Federal Reserve System, Mr. Williams, spoke during the next speech. He became the second member of the Federal Commission on Open Market Operations, expressly stating that he would vote to lower the refinancing rate. True, the market is already ready for this, and such statements should not have frightened investors. However, Mr. Williams added that reducing the refinancing rate alone is not enough and by the end of the year it will have to be reduced again. That is, a member of the Federal Commission on Open Market Operations expressed in a clear manner that, until yesterday, wandered around the market only as speculation and assumptions. Namely, that by the end of the year, the Federal Reserve will reduce the refinancing rate twice. So if before that there were still doubters, then last night they sharply began to reduce their positions on the dollar.

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Today, no macroeconomic data is published, so investors have nothing to rely on. Scheduled speech Bullard will not bring anything new, as he not only made a statement first about lowering the refinancing rate, but still had time to vote for this decision during the last meeting of the Federal Commission on Open Market Operations. Therefore, the most likely development of events is a technical rebound, due to the local oversold of the dollar.

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Thus, the single European currency can complete the week in the region of 1.1225 - 1.1250.

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On the other hand, the pound will gradually decline in the direction of 1.2475.

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

Wave analysis of EUR / USD and GBP / USD for July 19. Boris Johnson's election promises are blocked by the European Union

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EUR / USD

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On Thursday, July 18, trading ended with a 50 bp rise for the EUR / USD pair. Thus, the proposed correction after July 9 is delayed, but the current wave marking still involves building a new downward wave, presumably 3. At the same time, until a successful attempt to break through the minimum of wave 1 or the minimum of wave 2 or b, the option with the complication of the supposed wave with . Thus, I recommend selling the euro-dollar instrument below the indicated minimums. The news background, from my point of view, is definitely not in favor of the euro. Foreign exchange markets have come to terms with the fact that the ECB will also reduce the key rate, which will now become a minus sign. Markets await the resumption of the quantitative incentive program. Markets are waiting for a change in the head of the ECB. Markets do not expect acceleration of inflation and economic growth. From the current news and economic reports there is nothing to highlight on Friday. This is a good opportunity for bears to start selling Eurocurrency again. Although with this, the forex market can wait until next week, when the ECB meeting will be held.

Purchase goals:

1.1412 - 0.0% Fibonacci

Sales targets:

1.1106 - 100.0% Fibonacci

1.1025 - 127.2% Fibonacci

General conclusions and trading recommendations:

The euro-dollar pair still holds hopes for the upward trend. I still recommend small purchases of the euro, or simply remain in previously open purchases, with targets located near the estimated mark of 1.1412, which is equal to 0.0% Fibonacci, and an order restricting possible losses, under the minimum of wave 2 or b. Leaving the tool below the mark of 1.1181 will indicate that the tool is ready to build a downward trend.

GBP / USD

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The GBP / USD pair increased on July 18 by 115 basis points, which fully corresponds to the current wave pattern, which implies the completion of the construction of wave e, the completion of the construction of the downward trend. If this is indeed the case, then at least I am waiting for the pound-dollar tool to build three waves up or to the side, which is also possible. The main opponent of the pound is now the news background. All events in the UK do not contribute to the growth of the pound sterling in the foreign exchange markets. For example, yesterday, the Parliament of Great Britain voted for blocking a possible suspension of Parliament's work, which Boris Johnson had previously allowed in order to make a decision to withdraw from the European Union without a deal on his own. Now, he will not be able to make such a decision, bypassing Parliament. However, what now with the election promises of the country's "no-5-minute prime minister"? After all, he promised new negotiations with the EU, which will not happen, and the exit from the block on October 31, which is now also not a fact that it will be implemented. In general, the situation gets more confusing more and more each day.

Sales targets:

1.2334 - 200.0% Fibonacci

1.2194 - 261.8% Fibonacci

Purchase goals:

1.2783 - 0.0% Fibonacci

General conclusions and trading recommendations:

The wave pattern of the pound / dollar instrument assumes the completion of the construction of the downward wave e. Thus, I recommend small purchases of a pair with targets located around 28 figures and with an order restricting losses under the minimum of wave e. I do not recommend to return to sales yet.

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

Analysis of BITCOIN for July 19, 2019

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Bitcoin has been on a roller coaster ride recently. Earlier, the price went through the bearish momentum which has been recovered recently. Now BTC price is trading above $10,500 again.

The crypto markets were taken aback earlier today when Bitcoin bulls stepped up and propelled Bitcoin to surge over $10,000 in a mere matter of minutes that marked a significant change of tides for the cryptocurrency. BTC has been facing consistent selling pressure over the past several days and weeks. The recent surge came about after a long period of downwards pressure that sent Bitcoin reeling down from its year-to-date highs of $13,800, which is the price where the recent wave of selling began. Earlier this week after Bitcoin had plummeted below $10,000, the price stuck in a bear trend that was likely to send its price significantly lower. However, the recent price surge seems to invalidate this theory indicating that the bull run is back on.

The recent meteoric rise and subsequent drop have marked one of the most volatile periods in Bitcoin's history, just slightly lower to that seen in late-2017 during the massive bull run. Although the recent pullback has certainly spelled trouble for Bitcoin bulls, the cryptocurrency is still in a firm uptrend as it is currently trading up a whopping 215% from its 2019 lows. As the upward momentum persists, Bitcoin is expected to climb higher as it remains above $10,500 area with a daily close in the coming days.

TECHNICAL OVERVIEW:

The price gained impulsive bullish momentum recently that pushed the price above $10,000 with a single 1-hour candle which later settled above $10,500 with certain downward corrections. There have been no signs of Bearish Divergence. It indicates that the odds are for the price pushing above $11,000 and higher in the coming days. As the price remains above $10,000 with a daily close, the bullish bias is expected to continue.

TECHNICAL LEVELS:

SUPPORT - 9,400, 9,500, 10,000,10,500

RESISTANCE - 11,000, 11,500, 12,000

BIAS - Bullish

MOMENTUM - Volatile

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

20 July 2019





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