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How to trade GBP/USD on June 8? Simple tips for beginners.

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Analysis of Tuesday's deals:

30M chart of the GBP/USD pair

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The GBP/USD pair showed a very volatile movement on Tuesday, more than 150 points per day. Formally, there was an exit from the horizontal channel, but the price returned to it very quickly. Thus, at the end of the day, we can also conclude that the technical picture has not changed at all. Moreover, it is rather difficult to say what caused the rather strong movement during the day, if no important macroeconomic report has been published. There were also no important fundamental events, neither in the UK nor in the US. Therefore, it is rather difficult to say why the pair has passed as many as 150 points. Nevertheless, we are inclined to believe that the flat still remains. The movement from the past few days can also be described as a swing. The essence of the matter does not change. The fact remains that there is no trend movement at this time.

5M chart of the GBP/USD pair

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The movement was quite good on the 5-minute timeframe on Friday. Despite the fact that the movement looks flat on the 30-minute time frame, we had a clear trend today on the 5-minute time frame, although the pair often changed direction during the day. However, due to the fact that the levels were chosen correctly, as well as due to their small number, there were few trading signals and all of them were not bad. The first sell signal was formed after overcoming the area of 1.2471-1.2477. After it was formed, the price went down about 30 points, but failed to reach the nearest target level of 1.2371, however, Stop loss could be set to breakeven, so there was no loss on the transaction. The next buy signal was formed when the price settled above the area of 1.2471-1.2477. After that, it went up about 90 points and ideally reached the level of 1.2577, where it was necessary to take profit on the deal. Therefore, novice traders could get 80 points of profit today, which is very good, given the not the best nature of the pair's movement.

How to trade on Wednesday:

The upward trend is formally canceled on the 30-minute timeframe, however, the pair continues to remain close to its local peaks. At this time, the pair is not exactly within the horizontal channel of 1.2471-1.2477, and only the exit from it will signal the end of the flat. Moreover, even overcoming any of the boundaries cannot guarantee the completion of a flat or "swing". The traffic is very strange right now. On the 5-minute TF it is recommended to trade at the levels 1.2371, 1.2471-1.2477, 1.2577, 1.2597-1.2616, 1.2659-1.2674. When the price passes after opening a deal in the right direction for 20 points, Stop Loss should be set to breakeven. The UK is set to publish only not the most important index of business activity in the construction industry. Meanwhile, the calendar of news and events is completely empty in the US. Thus, novice traders will again have nothing to react to during the day. However, today has shown that volatility, even in this state of affairs, can be very high.

Basic rules of the trading system:

1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal.

2) If two or more deals were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored.

3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading.

4) Trade deals are opened in the time period between the beginning of the European session and until the middle of the American one, when all deals must be closed manually.

5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel.

6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance.

On the chart:

Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now.

The MACD indicator (14,22,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).

Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.

Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.

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

How to trade EUR/USD on June 8? Simple tips for beginners.

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Analysis of Tuesday's deals:

30M chart of the EUR/USD pair

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The EUR/USD currency pair showed exactly the movement that we expected to see on Tuesday. In the first half of the day, the pair continued to fall to the lower border of the horizontal channel at 1.0636-1.0749, but then it began to grow in the afternoon. In fact, this growth does not really matter. At this time, if not a classic flat, then a movement very similar in nature has formed. Thus, in the next few hours, the euro's decline can be brought back absolutely easily and simply. Moreover, the euro's growth in the US session was not provoked by important macroeconomic statistics or "foundation". So for now, we state the following conclusion: the price is in a horizontal channel, and this is always dangerous for traders, especially for beginners. Usually the channels have clear boundaries, but in our case, the boundaries of the horizontal channel do not really matter, the pair can work them out rather inaccurately. No important event or report during the day, but, as we can see, the pair did not stand in one place.

5M chart of the EUR/USD pair

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The technical picture on the 5-minute timeframe looks pretty bad all because of the same horizontal channel and the movement inside it. If in the morning the signals were at least more or less digestible, then in the afternoon, blatantly false signals began to form. Well, we warned about a possible flat, and false signals are often formed in a flat. Nevertheless, the first signal to buy near the level of 1.0663 could have been worked out with a long position. The price rose to the level of 1.0697 and rebounded from it, forming a sell signal, after which it again dropped to the level of 1.0663 and even overcame it. Therefore, a short position should have been closed after the price settles above the level of 1.0663. As a result, it was possible to make a profit of 30 points on the first two trades. Further, on a signal to buy near the level of 1.0663, longs should have been reopened, which closed again near the level of 1.0697 - another 15 points of profit. But the sell signal turned out to be false and the pair failed to go down 15 points, so the deal closed at a loss when the price settled above the level of 1.0697. The last buy signal should not have been worked out, since it was formed too late.

How to trade on Wednesday:

The pair continues to trade inside the horizontal channel on the 30-minute timeframe, so the technical picture has not changed over the past day. As long as the price is between the levels of 1.0636 and 1.0749, there is no need to count on a trend movement. Plus, the news calendar is now empty, so traders have nothing to react to. On the 5-minute TF, it is recommended to trade at the levels of 1.0607, 1.0636, 1.0663, 1.0697, 1.0749, 1.0787-1.0806, 1.0837. When passing 15 points in the right direction, you should set Stop Loss to breakeven. The EU will release a report on GDP for the first quarter in the third assessment. It is unlikely that the third estimate will be very different from the second or the first, so the market reaction to this report is also unlikely to follow. And nothing interesting is planned in America. Therefore, we can assume that the day will again be empty in macroeconomic terms.

Basic rules of the trading system:

1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal.

2) If two or more deals were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored.

3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading.

4) Trade deals are opened in the time period between the beginning of the European session and until the middle of the American one, when all deals must be closed manually.

5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel.

6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance.

On the chart:

Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now.

The MACD indicator (14,22,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).

Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.

Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.

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

EUR/USD. State of emergency in the US and the growth of the oil market: the safe dollar reminded itself again

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The euro-dollar pair is declining for the third consecutive trading day. On Friday, EUR/USD bulls came close to the resistance level of 1.0770 (the lower boundary of the Kumo cloud on the D1 timeframe), but failed to overcome this target. After the release of the Non Farm Payrolls report, the bears seized the initiative and have been holding their grip since then: the pair is gradually sliding towards the support level of 1.0620 (the middle line of the Bollinger Bands indicator on the same timeframe). US President Joe Biden also added fuel to the fire, who just introduced a state of emergency in the United States. If traders push through the above price barrier, they will open their way to the area of the 5th figure, significantly strengthening the bearish sentiment for the pair.

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The decline in EUR/USD is primarily due to the general strengthening of the US currency. The US dollar index has been growing for the third day, gradually regaining lost positions. Today, it updated the two-week high, returning to the area of the 102nd figure. The dollar index follows the oil market, which has resumed its growth again. In particular, a barrel of Brent crude oil has already tested the $120 mark today. Let me remind you that last week OPEC+ representatives decided to increase oil production quotas by 648,000 barrels per day (in July and August) instead of the previously planned increase by 432,000 b/d. The oil market plunged somewhat after this decision was announced, but recovered quickly enough. Oil traders came to the conclusion that such a step would not reverse the situation as a whole. According to some estimates, in the third quarter, the global oil deficit will average 400,000 barrels per day.

In addition, Saudi Aramco announced that it will raise prices for all grades of exported oil for the countries of Asia, Northwest Europe and the Mediterranean with delivery in July. Thus, Riyadh signaled a shortage of supply. At least the market interpreted this step of the Saudis in this way. Meanwhile, analysts at Goldman Sachs Bank just published a disappointing forecast: they expect the price of oil to continue to rise. In their opinion, Brent will rise to $140 per barrel in the third quarter amid a decrease in supply and a recovery in energy demand in China.

The general nervousness of traders intensified yesterday and after the announcement of an emergency situation in the United States due to a potential shortage of electricity generating capacity. Biden's decree states that the emergency regime is being introduced due to the global energy crisis amid extreme weather conditions in the US. Drought and high temperatures have a negative impact on generation and at the same time increase the demand for electricity. The US president also announced a shortage of solar modules, in connection with which he exempted from duties the import of a number of necessary components from Vietnam, Thailand, Cambodia and Malaysia.

Given the growing energy crisis, the growth of the oil market, systemic disruptions in supply chains and geopolitical instability, it can be concluded that inflation will only increase in the foreseeable future, despite the fact that in May the first signs of a slowdown in the growth of the US consumer price index and PCE were noted. The US Federal Reserve, in turn, will be forced to respond to a prolonged increase in inflation by revising its strategy towards tightening. It should be recalled here that at the last meeting, the central bank discussed the idea of a 75-point rate increase, but this initiative did not find support from the majority of Committee members. According to Fed Chairman Jerome Powell, the central bank "did not actively discuss" this proposal. That is, he made it clear that the option itself was not completely rejected – everything will depend on the incoming data.

Therefore, the latest trends, which indirectly indicate a further increase in inflation, support the US currency. In addition, the demand for a safe greenback is also growing amid rising anti-risk sentiment, due to ongoing geopolitical tensions and the growing energy crisis, which is becoming clearer (the emergency regime in the United States is eloquent evidence of this).

But it should be emphasized here that all of the above assumptions that the Fed will resort to more aggressive actions are indirect and hypothetical. None of the Fed members has yet changed their point of view (at least in the public plane) towards a 75-point rate hike in June or July. Therefore, in my opinion, the dollar's current growth is emotional, situational and, accordingly, unreliable. Given this circumstance, it is advisable to go into short positions only after EUR/USD bears overcome the support level of 1.0620 (the middle line of the Bollinger Bands indicator on the daily chart). In this case, the next downward target is the 1.0550 mark – this is the Kijun-sen line on the same timeframe. In any case, longs for the pair look too risky, especially ahead of the European Central Bank's June meeting (Thursday) and the release of data on the growth of the US consumer price index (Friday).

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

Gold reclaims $1,850 and hopes for a move towards $1,900 are renewed.

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Black lines - Fibonacci retracements

Red line -support

Gold price continues making higher highs and higher lows. Gold price recently lost $1,850 and tested the next immediate support at $1,840. Despite the pull back, Gold price did not break the important low at $1,827. Gold price has formed a higher low. This setup is bullish and will confirm a new bullish signal if price breaks above recent highs. Gold price has support at recent low at $1,836 where we also find the upward sloping red support trend line. Resistance remains key at the 38% Fibonacci retracement where we have seen so far two tests and two rejections. As long as Gold price holds above the support trend line, then we should expect to see a break above the 38% level and a push towards $1,900-$1,910.

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

EURUSD Daily candle gives hopes to bulls.

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Blue lines -bearish channel

EURUSD is trading above 1.07 once again. Today's Daily candle is a glimpse of hope for bulls as price moved as low as 1.0652 but is now trading near its daily highs. EURUSD has formed a higher low relative to the 1.0627 low a few days earlier. Although price remains inside the medium-term bearish channel, there is potential for a move towards the upper boundary near 1.0920. As long as price is above 1.0627 we remain optimistic that bulls will challenge the upper channel boundary.

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

Short-term technical analysis on GBPUSD gives hopes to bulls.

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Red line -resistance trend line

GBPUSD is trading around 1.2595 still below the key downward sloping resistance trend line. As long as price is below this trend line, GBPUSD is vulnerable to more downside. So far price pulled back towards 1.2428 but on a daily basis we see today's candle as a possible reversal to the upside candle. Price has formed a higher low which is important in order to build a bullish setup. If bulls manage to break above the red resistance trend line at 1.2630, then we will get a new bullish signal that could eventually push price towards 1.2950. Support remains at today's low. Bulls do not want to see price below this level. Breaking below this level will increase chances of a rejection and a move to new lows.

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

Ethereum respects key support and bounces higher.

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Red line - resistance trend line

Blue rectangle - horizontal support

In our previous analysis on Ethereum, we noted the importance of the $1,700 horizontal support level. Price recently tested this level once again and it was respected. Price is now bouncing higher at $1,845 with potential to reach $1,910. A descending triangle pattern has been formed. The resistance in the 4 hour chart is shown by the red downward sloping trend line. Bulls need to break above this resistance trend line in order to hope for the start of a new upward move. As long as price remains below the red trend line resistance, the chances favor a downward break below $1,700 support. Until then traders need to be patient as there is still plenty of room inside the triangle pattern for price to continue moving sideways.

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

AUD/USD still bullish post RBA

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The AUD/USD pair plunged after reaching 0.7244. It has dropped to as low as 0.7162 where it has found support. It was traded at 0.7216 at the time of writing. Technically, the price action developed a range pattern. Escaping from this formation could bring fresh opportunities.

As you already know, the Reserve Bank of Australia increased the Cash Rate from 0.35% to 0.85% above 0.60% expected. Technically, the bias remains bullish, so the rate could come back higher. Fundamentally, the sentiment could change after the US inflation data publication on Friday.

AUD/USD new range pattern

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AUD/USD is trapped between 0.7149 and 0.7282 levels. In the short term, it could continue to move sideways. Dropping below the uptrend line, the price was somehow expected to develop a strong drop.

Still, as long as it stays above the 0.7149 key support, the bias remains bullish. The price could come back higher o test and retest the near-term resistance levels before bringing new opportunities.

AUD/USD forecast

A new higher high, a valid breakout through the 0.7282 brings new long opportunities and signals further growth. This scenario could take shape if the Dollar Index drops deeper.

Staying below 0.7282 and under the uptrend line followed by a new lower low, a valid breakdown below 0.7149 could activate a larger drop and could bring new short opportunities.

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

Technical analysis of GBP/USD for June 07, 2022

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Overview :

The GBP/USD pair set above strong support at the level of 1.2548, which coincides with the 50% Fibonacci retracement level. This support has been rejected for four times confirming uptrend veracity.

Hence, major support is seen at the level of 1.2548 because the trend is still showing strength above it.

Accordingly, the pair is still in the uptrend from the area of 1.2548 and 1.2560. The GBP/USD pair is trading in a bullish trend from the last support line of 1.2548 towards the first resistance level at 1.2614 in order to test it.

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This is confirmed by the RSI indicator signaling that we are still in the bullish trending market. Now, the pair is likely to begin an ascending movement to the point of 1.2666.

The level of 1.2666 will act as second resistance and the double top is already set at the point of 1.2666.

In overall, we still prefer the bullish scenario as long as the price is above the level of 1.2666. Furthermore, if the GBP/USD pair is able to break out the top at 1.2666, the market will climb further to 1.2726.

On the other hand, if the GBP/USD pair fails to break out through the resistance level of 1.2666; the market will decline further to the level of 1.2520 (daily support 2). then this scenario may be invalidated. But in overall, we still prefer the bullish scenario.

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

Technical analysis of EUR/USD for June 07, 2022

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Overview :

The trend of EUR/USD pair movement was controversial as it took place in a narrow sideways channel, the market showed signs of instability.

Amid the previous events, the price is still moving between the levels of 1.0634 and 1.0732.

Also, the daily resistance and support are seen at the levels of 1.0732 and 1.0634 respectively.

Therefore, it is recommended to be cautious while placing orders in this area.

So, we need to wait until the sideways channel has completed. Yesterday, the market moved from its bottom at 1.0634 and it continued to rise towards the top of 1.0711.

Today, in the one-hour chart, the current rise will remain within a framework of correction.

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However, if the pair fails to pass through the level of 1.0732, the market will indicate a bearish opportunity below the strong resistance level of 1.0787 (the level of 1.0787 coincides with the double top too).

Since there is nothing new in this market, it is not bullish yet. Sell deals are recommended below the level of 1.0787 with the first target at 1.0634.

If the trend breaks the support level of 1.0634, the pair is likely to move downwards continuing the development of a bearish trend to the level 1.0598 in order to test the daily support 2 (horizontal green line).

This would suggest a bearish market because the RSI indicator is still in a positive area and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 1.0598 with a view to test the daily support 2.

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

June 7, 2022 : EUR/USD daily technical review and trading opportunities.

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In late September, Re-closure below the price level of 1.1700 has initiated downside-movement towards 1.1500 where some recovery was witnessed.

Shortly after, Price levels around 1.1700 managed to hold prices for a short period of time before another price decline took place towards 1.1200.

Then the EURUSD has temporarily moved-up within the depicted movement channel until downside breakout occurred recently.

Since then, the price zone around 1.1500 has applied significant SELLING pressure when a valid SELL Entry was offered upon the previous ascending movement towards it.

Shortly after, the EURUSD looked oversold while approaching the price levels of 1.0800. That's where the recent upside movement was previously initiated.

That's why, the recent movement towards 1.1200 was considered for another SELL Trade which is already running in profits now.

The current ascending movement above 1.0600 enabled further advancement towards 1.0850 where bearish rejection can be applied.

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

June 7, 2022 : EUR/USD Intraday technical analysis and trading plan.

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In late September, Re-closure below the price level of 1.1700 has initiated downside-movement towards 1.1500 where some bullish recovery was witnessed.

Shortly after, another price decline took place towards 1.1200. Then the EURUSD has temporarily moved-up within the depicted movement channel until downside breakout occurred.

The EURUSD looked oversold while approaching the price levels of 1.0800. That's when an upside movement was initiated towards 1.1200.

This recent movement towards 1.1200 was suggested for another SELL opportunity which already reached its targets.

The current ascending movement above 1.0600 may enable further advancement towards 1.0850 where bearish rejection can be applied.

On the other hand, the pair remains under selling pressure to re-visit the new daily low around 1.0350.

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

June 7, 2022 : GBP/USD Intraday technical analysis and significant key-levels.

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The short-term outlook turned bearish when the market went below 1.3600. This enhanced the bearish side of the market initially towards 1.3400 then 1.3200 which initiated a strong bullish movement towards 1.3600 for another re-test.

The recent bullish pullback towards 1.3600 should have been considered for SELL trades as it corresponded to the upper limit of the ongoing bearish channel.

Shortly after, Bearish persistence below 1.3360 enabled bearish continuation towards 1.2980 - 1.3000.

The price level of 1.3000 stood as intraday Support where a short-term sideway movement could be established . This happened before two successive bearish dips could take place towards 1.2550 and 1.2200.

Considerable bullish rejection was expressed around 1.2200. Hence, bullish breakout above 1.2550 was needed to abolish the short-term bearish scenario for sometime.

Quick bullish advancement was executed towards 1.2650 where some bearish resistance was encountered as expected

The GBP/USD pair remains under bearish pressure to challenge the new low around 1.2150 again. Hence, any bearish reversal signs around 1.2650 should be considered for SELLING the pair.

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

EUR/USD extends its range

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The EUR/USD pair rebounded as the Dollar Index plunged after reaching strong resistance levels. In the short term, the currency pair continues to move sideways, and only escaping from the current range could bring new trading opportunities.

Surprisingly or not, the EUR/USD pair bounced back despite the German Factory Orders dropped by 2.7% versus 0.4% growth expected, while the US Trade Balance came in better than expected at -87.1B versus -89.6B forecasts. Fundamentally, the ECB and the US inflation publication could really shake the markets at the end of the week.

EUR/USD rebound

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Technically, the EUR/USD pair failed to reach 1.0641 key support and now it tries to come back higher. It is trapped between 1.0757 and 1.0641 levels. Personally, I'll wait for the rate to escape from this range before I'll take action.

After dropping below the uptrend line, the EUR/USD pair was somehow expected to develop a strong downside movement but unfortunately, the rate failed to make a new lower low.

EUR/USD forecast

The EUR/USD pair could activate a larger drop if it makes a new lower low. A valid breakdown below 1.0641 brings new selling opportunities.

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

Trading Signal for GBP/USD on June 7-8, 2022: buy above 1.2505 or if breaks 1.2530 (200 EMA - bullish pennant)

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The British Pound vs. US Dollar (GBP/USD) is bouncing back after falling to lows on May 19 at 1.2429 in the European session.

Early in the American session, the pound was trading around the key level of 1.2500, this level coincides with the 21 SMA on 1-hour charts.

A little further up we can see the 200 EMA located at 1.2530 which could exert bearish pressure and become a resistance, only if it fails to break or consolidate above this level.

In the chart above, we can see the formation of a bullish pennant technical pattern. This pattern has a bullish target, the projection is equal to the distance of the size of the flagpole. Therefore, a break and consolidation above 1.2500 could reach the zone 3/8 Murray at 1.2573 -1.2590.

Escalating political tensions in the UK could hamper demand for the GBP/USD pair and it could drop again. Yesterday, British Prime Minister Boris Johnson avoided the vote of no confidence. 148 deputies voted against Johnson, while 211 lawmakers voted for him.

The market risk sentiment is changing rapidly, this is seen with the fall in US bond yields and the weakness of the US dollar. This negative trend could favor the British pound and manage to consolidate above 1.26 and even reach 4/8 Murray at 1.2695.

Our trading plan for the next few hours is to buy the British pound above 1.2505 (21 SMA) or wait for a sharp break above the 200 EMA at 1.2530, with targets at 1.2573 (3/8), 1.26 and 1.2695 (4 /8). The eagle indicator is showing a positive signal which supports our bullish strategy.

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

European stocks plunge amid investor worries

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On Tuesday's trading, Europe's leading stock indices were showing a steady decline amid traders' fears of a European Central Bank (ECB) interest rate hike.

The STOXX Europe 600, a composite indicator of Europe's leading companies, fell 0.38% to 442.55 points.

Top performers amongst the STOXX Europe 600 components are real estate firm Sagax AB (+2.9%), investment company EQT AB (+2.7%) and health and hygiene products manufacturer SKF AB (+2.4%).

Stocks of low-cost carrier Wizz Air (-2.9%), software developer TeamViewer (-2.7%) and biopharmaceutical company MorphoSys AG (-2.4%) topped the decline list here.

Meanwhile, the British FTSE 100 index was down by 0.15%, the French CAC 40 lost 0.43% and the German DAX dropped by 0.62%.

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Biggest and least gainers

Swiss logistics group Interroll was down by 9% as economists at Credit Suisse, one of Switzerland's largest financial conglomerates, cut their target price for the company's shares.

The capitalisation of the British publisher Pearson dropped by 0.5%. The day before, the company's management announced the sale of its K12 Courseware business in Italy and Germany for $204.3 million to Finnish publisher Sanoma Corp.

UK waste management company Biffa Plc has soared 28%. Earlier, the media reported that investment giant Energy Capital Partners planned to buy the company for £1.36bn.

The share price of British sporting goods retailer JD Sports fell 1.7% amid allegations that the company colluded to inflate product prices with sporting goods manufacturer Elite Sports and Scottish football club Rangers.

Reasons for market decline

Experts say the main reason for the persistent decline in European stock markets on Tuesday is investor fears about the prospects of a tightening of the ECB's monetary policy. The publication of the regulator's monetary policy decision is expected next Thursday. The market hopes that the European regulator will announce further steps to halt asset purchases and increase the base rate to a non-zero level for the first time in eight years.

Market participants' fears can hardly be described as groundless. Expectations of a tighter monetary policy by the European regulator are attributed to the persistently rising inflation rate and the unclear outlook for the economy.

For example, the EU Statistics Office earlier reported that the consumer price level in the Eurozone soared by 8.1% year-on-year last month. At the same time, market analysts had earlier predicted an increase of only 7.7%. By the way, May's result was an all-time record and more than quadrupled the European Central Bank's target of 2%.

Meanwhile, Construction Purchasing Manager's Index (PMI) fell to 49.2 points in May from 50.4 points in April. For the first time in nine months, the index was below the 50-point mark separating an increase in business activity in the sector from a decline. The May decline was the biggest since February 2021.

The outcome of the vote of no confidence in British Prime Minister Boris Johnson also remains in the spotlight for European investors on Tuesday. The vote of no confidence in the politician was expressed by 148 single-party members, while 211 did not support the vote of no confidence. Thus, the Conservatives did not get the necessary number of votes to dismiss the Prime Minister, which means that Boris Johnson remains in office.

This week, European stock exchanges are waiting for Friday's report from the US Department of Labor on the nation's consumer price movements over the past month. This data will give an indication of the current state of the US economy. In addition, the Labor Department's report will traditionally be an important reference for the US Federal Reserve when deciding on further monetary policy tightening.

According to preliminary expert forecasts, the rate of inflation in the US remained at April's level of 8.3% in May.

Trading results

As for yesterday's trading session, European stock indicators showed a strong increase on Monday on the back of positive news from China.

As a result, the British FTSE 100 stock index climbed by 1% to 7608.22 points, the French CAC 40 rose by 0.98% to 6548.78 points and the German DAX surged by 1.34% to 14653.81 points.

French aircraft engine maker Safran and Societe Generale have soared 2.4% and 2.6%, respectively supported by positive recommendations from US independent investment firm Jefferies.

The share price of Dutch online food ordering and delivery company Just Eat Takeaway.com NV rose by 11.8%. Meanwhile, the German food delivery service, Delivery Hero SE, was up by 9.4%.

The capitalisation of the British-Swedish pharmaceutical company AstraZeneca lost 3.5% in trading the day before.Faroese salmon farming company Bakkafrost dropped by 3.3%.

On Monday stock market participants in Europe were focused on statistical data from China. According to previously published information, the country's purchasing managers' index for services increased in May compared with April, due to an easing of restrictions related to COVID-19 infection in China's major cities.

According to Caixin, the indicator climbed to 41.4 points last month from April's 36.2 points (the lowest figure in the past 26 months). The data published the day before point to a strong recovery of the Chinese economy as well as to positive trends in the global economy. In addition, analysts forecast that the easing of coronavirus restrictions will stimulate a rapid recovery of the supply chain.

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

BTC update for June 07,.2022 - Watchf or the downside movement

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Technical analysis:

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BTC has been trading downside today and I found the brekaout of the rising trend line, which is good sign for further downside movement.

Trading recommendation:

Due to the downside fresh move today, I see potential for the downside continuation.

Watch for potential selling opportunities in case of the breakout of the pivot support at 29.300.

MACD is showing neutral reading, which is sign of indecision.

Key short-term resistance is set at $32.400

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

USD/JPY analysis for June 07, 2022 - Potential for the upside continuation

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Technical analysis:

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USD/JPY has been trading in strong upside cycle and I see potential for further upside continuation. Bullish continuation al patterns are preferable.

Trading recommendation:

Due to the strong upside cycle on both short and mid term, I see potential for bullish continuation.

Watch for buying opportunities on the pullbacks with the upside objectives at the price of 132.90 and 135.00.

MACD is showing positive reading, which is good sign that trend is still bullish.

Stochastic oscillator is showing potential oversold condition and potential for the rally.

Key support s set at the price of 132.20

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

GBP/USD analysis on June 7, 2022

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For the pound/dollar instrument, the wave markup continues to look very convincing and does not require adjustments. The downward section of the trend is completed, and the wave e-E, although it has taken a rather complex form, is also five-wave in the structure of the five-wave downward section of the trend, as well as for the euro/dollar instrument. Thus, both instruments presumably completed the construction of downward trend sections. According to the British, the construction of an upward section of the trend has begun, which is currently interpreted by me as a corrective one. I believe that it will turn out to be three-wave, but there is also a second option, in which it will take a pulsed, five-wave form. Now, presumably, the construction of a corrective wave b is continuing, after which wave c will begin with targets located around 30 figures. Wave b can take a three-wave form, as with the euro/dollar instrument. I will note once again that the wave markings of the euro and the pound are very similar now, so we can expect that both currencies will move approximately the same in the next few weeks.

There is no news background and the dollar rules the ball

The exchange rate of the pound/dollar instrument decreased by 40 basis points on June 7. However, if we consider the whole wave picture holistically, the decline in the British dollar in the last few days looks rather weak. Of course, the news background, or rather its absence, reduces the market's interest in trading. However, I believe that at the same time, the market is very correctly using the pause that has arisen to build a corrective wave. And when important data begins to arrive, the demand for the Briton may grow again. I can't make a clear conclusion that this is exactly how it will be, but there are times when the wave markup is ambiguous, that is, it assumes several scenarios. This is not the case. Over the past few months, there has not been a single situation where it would require additions or adjustments. Once the impulse downward trend section is completed, it means that we must see three waves up.

An interesting event happened yesterday in the UK. Unexpectedly for many, the Conservative Party decided to announce a vote of no confidence in Boris Johnson and failed in its desire. The Prime Minister has collected enough votes to stay in his seat, but the bell for the British prime minister is very bad. I cannot say that Boris Johnson is the best prime minister in the history of Britain. Most likely, this is not the case, but still, the personality is quite charismatic. The Briton was not too interested in this news, and given the absolute identity of the movement of the euro/dollar and pound/dollar instruments, it can be concluded that the market did not show any interest in this event. Thus, now we are waiting for the report on American inflation, which will be released tomorrow. Now it is unclear whether it will decline, as it was in April, or resume growth. Therefore, I do not undertake to make forecasts for this indicator. But if the real value surprises the market, then the movements on both instruments may be strong.

General conclusions

The wave pattern of the pound/dollar instrument still assumes the completion of the construction of wave E and the entire downward trend segment. Thus, I now advise buying the British for each MACD signal "up" with targets located above the peak of wave a, not lower than the estimated mark of 1.3042, which corresponds to 76.4% Fibonacci. Under certain circumstances, wave marking can become very complicated, but now there is no reason to assume this.analytics629f6088827a8.jpg

At the higher scale, the entire downward trend section looks fully equipped. Therefore, the continuation of the decline of the instrument below the 22nd figure is postponed indefinitely for the time being. Wave E has taken a five-wave form and looks quite complete. The construction of a minimum three-wave ascending trend section has begun.

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

EUR/USD analysis on June 7. The European currency continues to build a corrective wave

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The wave marking of the 4-hour chart for the euro/dollar instrument continues to look convincing and does not require adjustments. The instrument has completed the construction of the descending wave 5-E, which is the last in the structure of the descending trend section. If this is indeed the case, then at this time the construction of a new upward trend section has begun. It can turn out to be three-wave, or it can be pulsed. At the moment, two waves of a new section of the trend are already visible. Wave a is completed, and wave b can take a three-wave form, and in this case, the decline in the quotes of the instrument will continue with targets located around the 6th figure or slightly lower. Wave 5-E turned out to be a pronounced five-wave, so its internal wave marking is beyond doubt. The only option now in which the decline of the euro can resume for a long period is the rapid completion of the correction section of the trend and the construction of a new downward impulse. However, to identify this option, you need at least the completion of the ascending wave c, the targets of which are located about 9-10 figures.

There are no news and reports, and the dollar enjoys a pause

The euro/dollar instrument fell by 40 basis points on Tuesday. The news background of today was simply absent, so the market moved the instrument only based on wave markup. And the wave marking is now almost unambiguous - it assumes a further decrease in the instrument by another 50-100 basis points. Already on Wednesday and Thursday, the news background for the instrument will be much stronger, but this does not mean that demand for the European currency will begin to grow again. American inflation may cause a decline in the European currency and the construction of the corrective wave b will be completed. And on Thursday, the ECB should announce the completion of the APP program or its readiness to raise the interest rate at the next meetings, then the demand for the European currency will already grow. Thus, the wave analysis and the news background still look very harmonious with each other.

It is the European Central Bank that can fail. Although the heads of the central banks of the Eurozone have already openly stated the need to raise the rate by 50 basis points, this does not mean that the ECB will decide on such a step. And for sure it will not dare to take such a step in June. By and large, the pressure on the ECB's position is exerted by the inflation indicator, which continues to grow and will continue to do so in the near future. The European economy is showing very modest growth, but this growth still allows you to raise the rate once or twice. I think that in 2022, we will still see a tightening of monetary policy. In addition, the APP program, according to which the ECB still buys securities for not very significant amounts monthly, should be completed this summer. Thus, I believe that monetary policy in the European Union will tighten, but at a very slow pace, much lower than in the United States. This should be enough for the euro currency to build at least a corrective section of the trend.

General conclusions

Based on the analysis, I conclude that the construction of the downward trend section is completed. If so, then now you can buy a tool with targets located near the estimated mark of 1.0947, which equates to 161.8% Fibonacci, for each MACD signal "up". It is best to wait for the completion of the construction of wave c-b, its low should be located slightly below figure 6.

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On a larger scale, it can be seen that the construction of the proposed wave E has been completed. Thus, the entire downtrend has acquired a complete look. If this is true, then in the future for several months the instrument will increase with targets located near the peak of wave D, that is, to the 15th figure.

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

Trading Signal for Gold (XAU/USD) on June 7-8, 2022: buy above $1,842 (21 SMA - descending wedge)

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Gold (XAU/USD) is rebounding from the daily low at $1,833 and is now trading above the 21 SMA and below the 200 EMA on 1-hour charts. It is currently located at $1,845, making a slight correction after having found resistance at the 200 EMA around $1,850.

According to the 1-hour chart, we can see the formation of a descending wedge. The breakout of this pattern could confirm the bullish movement of gold and it could reach the resistance zone of 6/8 Murray around $1,875 in the coming hours.

Gold benefited as US Treasury yields have fallen during the European session and are likely to continue their decline during the American session. Additionally, the US dollar index is also showing signs of weakness which favors gold.

Consolidation on the 4-hour chart and a daily close above $1,850 could mean acceleration of the bullish move, and the outlook for gold is positive as it could reach the zone of $1,865 and $1,875.

Investors are concerned about the rate hike in the US because it reduces the demand for this safe-haven asset that does not generate interest or return.

As long as it remains trading below 6/8 Murray, any momentum in gold will be considered a technical correction. The bearish pressure exerted below this zone could send gold lower again.

In the medium term, a close above $1,875(6/8) could mean an advance in gold as it could reach the psychological level of $1,900 or even the zone of 7/8 Murray at 1,937.

In the short term, our signals remain positive due to the falling wedge pattern. This technical figure should be confirmed if gold consolidates above the 200 EMA. If this happens, we could buy gold with targets at $1,869 and $1,875.

The eagle indicator has reached the extreme oversold zone since June 6 which is an imminent sign of a technical correction in the next few hours, supporting our bullish strategy.

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

Analysis of Gold for June 07,.2022 - Watch for the breakout of the sideways base

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Technical analysis:

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Gold has been trading sideways in the past 10 days and I see potential for the breakout in the next period. Watch for the breakout to confirm further direction.

Trading recommendation:

In case of the upside breakout of the resistance at $1.872, watch for buying opportunities on the intraday dups with the upside objective at $1.908

In case of the downside breakout of the support at $1.829, watch for selling opportunities on the intraday rallies with the downside objective at $1.792

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

Can ECB push euro higher?

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Dovish decisions are out of fashion now, and the new reality is forcing even the most convinced supporters of soft monetary policy to shift their stance to a hawkish one. The ECB has signaled a rate hike, but the euro is in no hurry to go higher. Monetary policy tightening makes the currency more expensive. Should we expect such a move from the euro or are market players looking at the current situation from a slightly different angle?

Rate hikes always have their negative sides. Monetary tightening aimed at fighting inflation will undermine the euro bloc's already struggling economy. According to economists at Barclays, the ECB will warn of an economic slowdown that will follow a rate hike at Thursday's meeting. This stops euro buyers from acting decisively.The first hike by 25 basis points is expected to take place at the July meeting. Rates are likely to increase by a similar amount at subsequent meetings throughout the year until December 2022. Barclays also assumes another increase in the first quarter of next year. This would bring the rate to 0.75%.

Previously, economists have written about two rate hikes of 25 basis points in 2022 and four by a similar amount in 2023.

Due to persistent inflationary pressures and impending policy tightening, Barclays revised its forecast for eurozone GDP growth this week. A moderate technical recession is expected at the end of the year and real GDP growth averages to 0.5% in 2023 from 1.8%.

There are concerns that the ECB's actions could destabilize the economic situation in the euro bloc, especially in peripheral countries. In this case, the regulator would have to take forced measures, i.e. to abruptly stop the rate hike program.

The risks of such developments will be higher if the Central Bank decides to raise the rate by 50 basis points at once. A disorderly widening of the spread between the core countries and the periphery may begin. The ECB will not only have to stop the cycle of monetary policy tightening early. The launch of a new quantitative easing program to close the spreads, for example, will come as a big surprise to markets. Such an outcome is negative for the euro.

The single currency is not soaring after the signals of the ECB policy tightening. Nevertheless, it managed to bounce from the dangerous May lows. It looks like the bottom at 1,0349 was broken and the parity is not expected. These levels may well be a thing of the past if the ECB continues its steady but modest cycle of rate hikes.

The downside risk for EUR/USD would be for the ECB to end its cycle earlier than the markets are currently pricing in, leaving interest rates in the eurozone much lower than in the UK, the US, and other developed markets.

Meanwhile, Morgan Stanley is positive about the upcoming event this week and makes a recommendation to buy the pair EUR/USD.

"The upcoming ECB meeting may prove a key EUR-positive catalyst. We think the time has come to buy EUR/USD," the bank said.

Growing inflation in the eurozone may cause increased concern in the ECB and force the regulator to act wider and faster than the market currently expects, according to Morgan Stanley.

In June, the EUR/USD pair maintains a consolidation period near 1.0600 and 1.0787. This week, the ECB may open the way to 1.1000.

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Clearly, it's not just about the ECB, the US dollar looks pretty strong, and it would be nice to see a weaker USD for a euro recovery.

What will it take to weaken the US dollar? Factors such as the balance of risks to global economic growth, and China's recovery from lockdowns. In addition, the Fed should soften its monetary policy due to growing worries about recession.

If the rate of Fed policy normalization slows down, and the data on the EU economy are strong enough along with the increase in rates, we can expect a rise in the EUR/USD pair to the area of 1.1400, Morgan Stanley forecasts.

Goldman Sachs economists remain positive about the medium-term outlook for the euro and expect the currency to rise to 1.1000 in the coming months.

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

Stock markets continue to plunge

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US stock futures fell on Tuesday as risk aversion sentiment gripped markets amid fears that the central bank's tight monetary policy will undermine economic growth. The dollar rose and Treasury yields stabilized.

The S&P 500 and Nasdaq 100 futures contracts dropped by at least 1% and continue declining as Treasury yields hovered at their highest levels in nearly a month.

Investors are reluctant to take the risk amid fears that the policy to combat inflation will get out of control and stifle economic recovery.

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The Stoxx50 index fell as shares of telecom and technology companies were considered. Target Corp. stock went down in the premarket after the retailer cut its profit outlook for the second time in three weeks amid an inventory surplus.

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Rising bond yields are adding to concerns about risks to economic growth as central banks start tightening their monetary policy. US benchmark Treasury yields stabilized near 3%, a psychological threshold that could burden new supply this week ahead of important inflation data.

The US Consumer Price Index for May will be released on Friday. It will help traders discern the Fed's rate path and whether the interest rate will continue to hike in 50-basis point increments. Strong hiring data last week provided some justification for the central bank's aggressive approach.

The European Central Bank is likely to announce on Thursday that it will end its asset purchases and cement the path to exiting from eight years of negative interest rates.

Earlier, the Reserve Bank of Australia stunned the market with an outsized hike to combat rising costs. The RBA responded to price pressure with its biggest rate increase in 22 years predicted by just three of 29 economists and indicated that it remained committed to "doing what is necessary" to rein in inflationary pressures.

The Moscow Exchange Index continues to gradually decline amid Western sanctions:

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Key events to watch this week::

  • Reserve Bank of India rate decision, Wednesday
  • European Central Bank rate decision, Christine Lagarde briefing, Thursday
  • US Consumer Price Index, University of Michigan consumer sentiment, Friday
  • China Consumer Price Index, PPI Friday
The material has been provided by InstaForex Company - www.instaforex.com.

Trading plan for Ripple on June 7, 2022

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Technical outlook:

Ripple dropped through the $0.38300 mark on Tuesday after printing $0.40850 highs on Monday. The crypto has then found support and has bounced back towards $0.39200 at this point of writing. Bulls might be poised to come back in control from here and hold prices above the $0.38000 mark to keep the near-term structure constructive.

Ripple has been working on a potential countertrend rally towards $0.66650 as projected on the daily chart. It has terminated the first leg around $0.46400, while the second leg seems to be completed around $0.37500 respectively. If the price holds above well, the next leg should resume higher from here and push through the initial resistance above the $0.65000 mark.

Ripple has dropped from $1.91600 through $0.33000 as seen on the daily chart, carving a meaningful downswing. Notably, the previous support around $0.36840 was also taken out with ease as bears showed their strength. Ideally, at least a pullback rally can be expected from the current levels and up to $0.66650, if not towards another high.

Trading plan:

Potential rally through $0.66650

Good luck!

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

28 June 2022



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