Forex today: Daily analysis

Trading Discussion Trade Journals
285

Market updates on July 4

04.07.2019

What currency pairs to watch today?

After the test of the 61.8% Fibo near the 1.1270 level on H4, the EUR/USD pair has been ranging between this level and resistance at 1.1294 (50% Fibo level). The bullish strength will be confirmed if the pair manages to break the current resistance and stick above the 100-period SMA. In that case, the rise may be limited by the next resistance at 1.1343 (50-period SMA). From the downside, the break of the 1.1270 level will increase the risks of the further fall towards the 1.1252 level (200-period SMA). This is also the border of the ascending trading channel.

Yesterday, GBP/USD slid towards the 1.2556 level. On H4, the pair is currently consolidating between 1.2556 and 1.2589-1.2597 levels. The weakness of the GBP will put additional pressure to the pair. As a result, if the 1.2556 level is broken, the next support will lie at 1.2510. On the other hand, the inability of bears to break the 1.2556 level will help bulls to retest the upper border of the consolidation range between 1.2589 and 1.2597. If these levels are broken, the pair will rise to the next resistance at 1.2632.

AUD/USD was unable to stick near the strong resistance at 0.7047 and fell below the 0.7022 level at the beginning of the day. Bulls need to break this level to restore the upward moving channel. However, MACD formed a bearish divergence with the price that is why we may expect further fall. From the downside, the 0.7011 and 0.7 levels are important for bears.

The kiwi has fallen below the 0.6693 level towards the 0.6674 level, which lies close to the 23.6% Fibo and 50-period SMA. The strength of bears will be confirmed if the pair manages to fall below this level and target the next support at 0.6656. The next key level for sellers will lie at 0.6629. If buyers take back control over the market, the kiwi will retest the resistance at 0.6693. The break of this level make it possible to retest the 0.6717 level.

286

Non-farm payrolls: what pairs to watch?

05.07.2019

Analysts anticipate the level of non-farm payrolls to increase by 162K jobs (vs. 75K previously). At the same time, the level of average hourly earnings is forecast to advance by 0.3% (vs. 0.2% previously) and the unemployment rate is expected to stay stable at 3.6%. If the NFP and average hourly earnings are higher and the unemployment rate is lower than the forecasts, the USD will go up. Be careful with your trades as the USD gets super volatile after the release.

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The USD has got stronger ahead of the release, but will the situation change after 15:30 MT?

· On H4, EUR/USD has crossed the 1.1270 level (61.8% Fibo) and is currently moving downwards to the 1.1257 level, which lies close to the 200-period SMA and the lower border of the ascending channel. If the employment data is positive, the pair will fall below the 1.1257 level towards the next support at 1.1223. There is the possibility for EUR/USD to reach the next support at 1.1219 and test the next level at 1.1202, of bearish pressure is strong. On the other hand, if the employment data disappoints, EUR/USD will rise back to the resistance at 1.1288, jump above the 50% Fibo level and go higher to the next resistance at 1.1319.

· GBP/USD has been testing the lower border of the consolidation range at 1.2556 on H4. If the USD gets stronger on the release, the fall towards the next support at 1.2510 will be possible. From the upside, pay attention to the resistance levels at 1.2589, 1.2604 and 1.2635.

· USD/JPY has jumped above the 100-period SMA on H4 in anticipation of the release. The next resistance levels for the pair lie at 108.12, 108.36 and 108.49. In case of a negative release, USD/JPY will fall back to 107.74. If this level is broken, the next support will lie at 107.56. Stochastic indicator is about to form a crossover within the oversold zone, which may provide us selling opportunity.

287

Market updates on July 8

Check the charts: News for today

08.07.2019

Last Friday the NFP outperformed the estimates. It increased by 224 thousand jobs (vs. 162 thousand expected). As a result, the USD strengthened and pulled EUR/USD down. On H4, the pair has been making modest gains towards the 1.1232 level. If this level is broken, the next resistance will lie at 1.1246. RSI is moving close to the 30 level and may signal a buying opportunity if it crosses this level from bottom to top. If the USD gets stronger, there is a possibility for the pair to break the 1.1219 level. The next support will lie at 1.1202.

GBP/USD tested the lows at 1.2480 on Friday after the employment release for the US and stuck near the 1.2510 level. On H4, bulls need to push the pair above the 1.2541 level to confirm their strength. In that case, the cable will rise as far as the 1.2589 level will be reached. From the downside, pay attention to the 1.2510 and 1.2480 levels.

After the Turkish president Recep Tayyip Erdoğan fired the head of the central bank as the Governor had not cut the interest rate, the Turkish lira fell down. On H4, USD/TRY formed a gap up at the beginning of the trading day. The rise of the pair was limited by the 100-period SMA near the 5.7557 level. If the Turkish lira continues to weaken, the next resistance levels will lie at 5.7794 and 5.8. On the other hand, the pair may correct to the support at 5.6967. The next support will lie at 5.6616.

288

Market updates on July 9

Check the charts: News for today

09.07.2019

The US dollar has continued to gain strength on the improved outlook and the cooling in the US-China trade tensions. On H4, EUR/USD slid towards the support at 1.1202. If this level is broken, the next support will lie at 1.1185. Bulls need to push the pair above the 1.1217 level. If they succeed, buying action will be limited by the 1.1232 level.

GBP/USD has tested the lows below the 1.2480 level on H4. The next support is placed at the level of the January’s flash crash at 1.2418. If the British pound is supported, the cable will try to break the descending trading channel and rise towards the resistance at 1.2541. The next key level will lie at 1.2604.

The Australian dollar weakened on the poor Business confidence data. The indicator dropped to 2 (vs. 7 previously). Combined with a stronger USD, this release pulled the aussie down. On H4, the AUD/USD pair has fallen below the 100- and 200- period SMA. The downward movement will complete the double top pattern. The next major support for the pair will be at 0.6920. After that pay attention to the 61.8% Fibo level at 0.6913. From the upside, levels at 0.6968 (38.2% Fibo) and 0.6989 will be important for bulls.

The New Zealand dollar has fallen below the support at the 50% Fibo level at 0.6608 on H4. The next support will lie at 0.6581, which is close to the 61.6% Fibo. Alternatively, the strong bullish surge may push the kiwi above the 100-period SMA at 0.6629. After that, reaching the 0.6641 and 0.6652 resistance levels seem possible.

Gold continues falling down due to the firmer USD. At the moment, it is targeting the support at $1,384. After the breakout, sellers will pay attention to the next support at $1,364. From the upside, the traders of the yellow metal will keep an eye on the $1,397 and $1,416 resistance levels.

289

Market updates on July 10

10.07.2019

Key events ahead:

BOC rate statement – 17:00 MT

The bank won’t change its rate, that is why pay attention to its tone

Testimony by the Fed chair – 17:00 MT

More hints on the expected rate cut will weaken the USD

FOMC meeting minutes – 21:00 MT

Less dovish insights will bring positive momentum to the USD

· GBP/USD has continued to move within the downward trading channel on H4. If the British pound is supported today, the pair will break the 1.2459 level. After that, the rise above the 1.2476 level seems possible. The next key level for bulls will be placed at 1.2521. From the downside, the first support lies at 1.2439, the next one – at 1.2379.

· EUR/USD has been knocking the resistance at 1.1217 on H4. If this level is broken, the further rise will be limited by the 1.1232 level. The next resistance will lie at 1.1246. If the USD gets stronger today, the pair will fall below the 1.12 level which is correlated with the long-term trendline and target the next support at 1.1187. After that, the next key level in focus of bears will be placed at 1.1178.

· USD/CAD has been awaiting the central bank’s decision and testimony by the Fed chair. The pair has been trading within a narrow range on H4. Hawkish comments for the CAD will pull the pair below the 1.3119 level. The next support level will lie at 1.3104. After the breakout, the pair may fall below the 50-period SMA and target the 1.3084 level. On the other hand, strong USD will push the pair above the 1.3132 level. The next resistance levels will lie at 1.3146 and 1.3158. There is a possibility for the pair to complete the formation of the double bottom pattern if the pair manages to break the 1.3132 and 1.3146 levels.

· During the Asian trading session, the NZD/USD pair has tested the 0.6567 level. There was no clear reason behind this sellout. At the moment, the pair is trying to recover. On H4, it is moving towards the 50% Fibo above the 200-period SMA. If it manages to stick above this level, the rise will continue until the 0.6618 level will be reached. The support levels from the downside are 0.6581 (61.8% Fibo) and 0.6567.

· USD/JPY has been trading within the uptrend on H4. If the USD is supported today, the pair will break the resistance at 109. The next resistance will lie at 109.21. If the Fed chair provides dovish comments, the fall below the 108.71 level will be inevitable. The next support will lie at 108.51.

290

Market updates on July 11

More at: News for today

11.07.2019

Key events ahead

BOE Financial Stability Report – 12:30 MT time

Hawkish outlines will support the British pound

Speech by the BOE Governor Mark Carney – 13:00 MT time

His comments regarding future changes to the monetary policy will affect the GBP

ECB Monetary Policy Meeting Accounts – 14:30 MT time

More insights into the previous dovish meeting of the ECB

US CPI and core CPI – 15:30 MT time

Higher-than-expected figures may help the USD to recover

Testimony by the Fed Chair Jerome Powell – 17:00 MT time

Let’s hear further comments by the dovish Fed Chair

Speech by the FOMC member Quarles – 20:30 MT time

Probably the last chance for the USD bulls to see the rise of the USD today, if the comments by the FOMC member are less dovish.

Yesterday, the dovish remarks on the expectations of a rate cut by the Fed weakened the USD against other currencies. On H4, EUR/USD has managed to stick above the crossover of the 50-period and 200-period SMA near the 1.1269 level. If the USD continues to weaken, bulls will likely face the resistance at 1.1285. After the breakout, the rise will be limited by the 1.1306 level. The next key level is 1.1321. If the USD gets positive momentum, the euro will slide below the 1.1269 level. The next support levels will lie at 1.1257 and 1.1249. Pay attention to the oscillators: if RSI leaves the overbought zone and Stochastic forms a crossover it may bring a short-term selling opportunity.

GBP/USD also started to correct to the upside on dovish comments by Powell. The cable has already tested the resistance at 1.2538 on H4. The next key level will lie at 1.2587 (50% Fibo). If this level is broken, we need to pay attention to the 1.2603 and 1.2636 levels. From the downside, the support levels lie at 1.2508, 1.2496 and 1.2479. The stochastic indicator is about to form a crossover within the overbought zone.

USD/JPY, in its turn, corrected to the downside. The first resistance for the pair lies at 108.13 (38.2% Fibo), If this level is broken, the next resistance will be placed at 108.26 (50-period SMA). The strength of bulls will be proved after the next level at 108.37 is reached. On the other hand, weak USD will pull the pair to the support at 107.88 (50% Fibo). The next important level for bears lies at 107.61 (61.8% Fibo level).

Oil has been rising on the news that third of the Gulf of Mexico’s crude output was halted by a storm and the crude oil inventories for the US declined more than expected (-9.5M vs. -1.9M).

WTI jumped to its May’s highs. The crude’s price is currently moving towards the resistance at $61.23 on H4. The next resistance for WTI will lie at $62.11. From the downside, pay attention to the $60.66 and $59.73 levels.

As for Brent, its price is going up to the resistance at $67.68. The next resistance will lie at $68.11. The key support levels are $67.39, $66.5 and $66.03.

291

Weekly Cryptonews

12.07.2019

Charlie Lee, creator of Litecoin:

“Crypto’s really risky. I’ve seen many bear markets or crashes that are 90% down … when the price does crash, it shakes off all the weak hands. So, my point was that if you can’t withstand a 90% drop, then don’t buy-in, because it’s too risky for you."

After the test of the $13,130 level on Wednesday, the price for BTC dropped to the support at $11,000. If the price for the digital currency gets more pressure from the downside, the retest of the $11,000 level (lower border of the symmetrical triangle) will be possible. In that case, the next support will lie at $10,560. The break of this level will increase the possibility of the test of the 38.2% Fibo at $10,020. If the price for the oldest crypto gets bullish momentum, it will rise to the resistance at $12,030, after that the resistance will lie at $12,370. If bulls manage to overcome these resistance levels, the test of the $12,770 level will be inevitable.

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Regulations:

· This week was remarkable for the comments by the US officials on crypto. At first, the Federal Reserve Chair Jerome Powell called Bitcoin a store of value, like gold. After that, US President Donald Trump tweeted that cryptocurrencies are not money and their value is based on thin air. According to his words, the only currency in the USA is USD.

· US Security and exchange commission (SEC) allowed conducting the first ICO to the Blockstack project.

· Turkish central bank plans to make its own cryptocurrency. It seems like the policymakers gave up on the Turkish lira, doesn’t it?

· Authorities of Iran age going to legalize mining.

· US tax regulator promised to develop new methods to deal with the tax fraud.
New developments:

· Goldman Sachs opened its own crypto department and now is ready to compete with JP Morgan.

· The news about the search in the TRON office turned out to be fake.
Current prices (last update 15:16 MT time):

Bitcoin $11,698

DASH: $148.87

Ethereum: $276.56

Litecoin: $105.62

292

5 important events this week will bring us!

15.07.2019

US retail sales and core retail sales (Tue, 15:30 MT (12:30 GMT time)) – According to analysts, both headline and core retail sales will advance by 0.1%. Higher figures will boost the USD.

Speech by the Fed Chair Jerome Powell (Tue, 20:00 MT (17:00 GMT time)) – If Mr. Powell provides supportive comments for the USD this time, the US dollar will go up.

British CPI (Wed, 11:30 MT (8:30 GMT time)) – The indicator is expected to increase by 2%. If the actual release outperforms the forecasts, the GBP will rise.

Australian jobs data (Thu, 4:30 MT (1:30 GMT time)) – Analysts anticipate the slowdown in the employment change (from +42.3K last time to +9.1K) and the stable level of the unemployment rate at 5.2%. If the actual figures of employment change are higher and the unemployment rate is lower than the forecasts, the Australian dollar will move up.

Canadian core retail sales (Fri, 15:30 MT (12:30 GMT time)) – The indicator is forecast to increase by 0.3%. Greater figures will be positive for the loonie.

Hot news:

After the release of Chinese GDP growth showed the slowdown, reaching only 6.2%, US President Donald Trump tweeted that China wants to make a trade deal soon.

293

Market updates on July 16

More at: News for today

16.07.2019

Speech by the BOE Governor Mark Carney – 15:00 MT time

If the governor’s comments regarding monetary policy are hawkish, the British pound will move up.

Speech by the FOMC member Bowman – 15:15 MT time

If the policymaker softens his comments concerning the rate cut, the USD will go up.

US retail sales and core retail sales – 15:30 MT time

The key release for the USD today. Both headline and core indicators are expected to advance by 0.1%. Higher figures will bring positive momentum for the USD.

Speech by the Fed Chair Powell – 20:00 MT time

Speech by the FOMC member Evans – 22:30 MT time

Pay attention to the hints on the rate cut by the Fed speakers.

The New Zealand dollar was supported today by the release of its CPI during the Asian trading session. The indicator came out in line with the forecasts as it advanced by 0.6%. On H4, NZD/USD retested the resistance at 0.6734 but failed to break it. If the USD is supported today, the pair will move lower to the support at 0.6716. The next key support levels lie at 0.67 and 0.6670. From the upside, pay attention to the resistance at 0.6734. If this level is broken, the further rise will be limited by the 0.6748 level. RSI is about to leave the overbought zone and Stochastic indicator formed a crossover. These facts may provide us a short-term selling opportunity.

The British pound weakened significantly ahead of the employment data and the speech by the BOE governor. It has tested the ground below the 1.2479 level on H4. The next support in the focus of bears will lie at 1.2439. If the cable reverses, the pair will retest the 1.2520 level. If this resistance is broken, bulls will target the 1.2538 level. Stochastic indicator formed a crossover within the oversold zone.

EUR/USD has been consolidating between the 1.1284 and the 1.1236 levels since July 11. Today it has already tested the levels below the 50-period SMA at 1.1249. If the USD is supported today, bears will break the 1.1236 level and target the next support at 1.1220. Key resistance levels for the euro are 1.1263, 1.1274 and 1.1284.

294

Crab

The Crab is another harmonic pattern that is derived from the Gartley pattern. The special thing about it is the long XA and CD swings. The point D is far away and lies beyond the starting point X. This is what differentiates the Crab from other harmonic patterns.

Learn more with article!

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295

Market updates on July 18

More at: FBS Wins the Best Forex Broker Europe Award

08:45 18.07.2019

Key events ahead

British retail sales– 11:30 MT time (9:30 GMT)

Speech by the FOMC member Williams – 21:15 MT time (18:15 GMT)

Rate Statement by the South African Reserve bank – 16:00 MT time (13:00 GMT)

The European trading session started positively for the British pound. GBP/USD has risen on comments by Michel Barnier. He noted that the EU is ready to work on alternative arrangements for the Irish border. On H4, the cable is moving towards the resistance at 1.2477. If this level is broken, the next key resistance will be placed at 1.2504. From the downside, keep an eye on the support levels at 1.2422, 1.2399 and 1.2381.

As the USD got weaker, the gold was supported yesterday. After the test of the $1,427 level, the yellow metal fell to the support at $1,421. The next support for gold will lie at $1,412. However, the uncertainty around the Fed decision on the rate cut continues, as a result, we may see the yellow metal retesting the $1,427 level with the following breakout and rise to the $1,433 level.

USD/ZAR is awaiting the decision by the South African Reserve bank scheduled at 16:00 MT. According to analysts, we will see a rate cut today. In this case, the pair will break the resistance at 50-period SMA (14.0202) on H4 and target the next one at 100-period SMA at 14.0785. If the central bank is hawkish, the pair may fall below the 13.9568 levels. The next support will lie at 13.8567.

296

Market updates on July 19

19.07.2019

Key events ahead:

Core retail sales – 15:30 MT (12:30 GMT) time

Yesterday, the speech by New York Fed President John Williams sent the US dollar lower. According to his words, the measures are needed to prevent disaster in the US economy. After that, his comments were confirmed by the FOMC member Richard Clarida. However, the comments by the NY Fed President Williams were clarified by the New York Fed, where the institution noted about the academic character of the Williams’ comments.

On H4, EUR/USD rose by 58 pips during the American trading session and tested the 200-period SMA at 1.1280. After the reassuring comments by the NY Fed, bears tried to pull the pair lower to the 50-period SMA. At the moment, EUR/USD is testing the support at 1.1253. The next support for bears will lie at 1.1237. From the upside, the first resistance lies at 1.1263. After the breakout, wait for the pair to reach the strong resistance zone at 1.1274-1.1280.

The USD/CAD pair is awaiting the release of core retail sales at 15:30 MT time. If the actual figures outperform the forecasts, the pair will slide below the 1.3019 level. The next support will lie at 1.3003, which is the lower border of the downward trading channel. Otherwise, the first resistance level will be placed at 1.3060 (50-period SMA). The next resistance will lie at 1.3077 (100-period SMA).

Gold reacted to the dovish speeches by the Fed members and the news that US ship took defensive action against Iranian drone. The yellow metal rose to its highest level since 2013 and tested the levels above the resistance at $1,448 on H4. Now, the price for gold is correcting to the downside. If it continues to weaken, the first support will lie at $1,423. If this level is broken, the next support will lie at $1,412. If bulls take over the market once again, XAU/USD will retest the $1,448 level.

297

5 important events this week will bring us!

22.07.2019

French and German flash services PMI, German flash manufacturing PMI (Wed, 10:15 MT and 10:30 MT (7:15 GMT and 7:30 GMT)) – According to the forecasts, French flash services PMI will decline to 52.7, while German data will show mixed results with flash manufacturing PMI increasing to 45.1 and flash services PMI falling to 55.3 points. Higher figures will support the EUR.

Speech by the RBA governor Philip Lowe (Thu, 6:05 MT (3:05 GMT)) – If the head of the bank is hawkish, the AUD will rise.

ECB monetary policy statement (Thu, 14:45 MT (11:45 GMT)) – We will wait for more hints on the possible easing by the European central bank. If they are confirmed, the EUR may suffer. Also, pay attention to the press conference with the ECB president Mario Draghi at 15:30 MT (13:30 GMT) time. His comments may show us a clearer picture of the future steps by the bank.

US core durable goods orders (Thu, 15:30 MT (13:30 GMT)) – Analysts forecast an increase by 0.2%. If the actual level of indicator is greater, the USD will go up.

US advance GDP (Fri, 15:30 MT (13:30 GMT)) – The GDP growth for the US is expected to advance by 1.8%. A higher level will be good for the USD bulls.

Hot news:

Great Britain is awaiting the leadership voting contest for the Conservative party on Tuesday. The outcome will determine the next Prime Minister of the United Kingdom. The members of the party will choose between Boris Johnson and Jeremy Hunt. Most analysts see Mr. Johnson, the hard-Brexit follower, taking the office. Some ministers do not support his candidature and resign ahead of the elections’ outcome. The political uncertainties within the leading party weaken the British pound. It is recommended to follow the headlines, as more negative news puts additional pressure on the GBP. The outcome of the contest will be announced after the 19:00 MT (16:00 GMT) time.

The oil prices surged after the British tanker was seized by the Iranian military forces over the weekend. The conflict in the Middle East is what driving crude’s prices now.

According to the Chinese press, Chinese companies started to seek for new purchases of US agricultural products. Some of the analysists see this news as the positive step towards the restart of the US-China trade talks.

298

Will the ECB president change his tone?

More at: The ECB meeting is expected

23.07.2019

The European Central Bank will publish its monetary policy statement and announce the official rate on July 25, at 14:45 MT time. After that, the ECB president Mario Draghi will conduct a press conference at 15:30 MT time. We anticipate no changes to the current interest rate, which is held at 0%. However, the ECB president Mario Draghi may throw hints on the possible changes to the current monetary policy and provide comments on the current economic outlook. Last time, Mr. Draghi suggested that the European economy needed additional stimulus for better conditions. His dovish comments pulled the euro lower. If the ECB president changes his tone this time, the situation will be different.

• If the ECB is hawkish, the euro will rise;

• If the ECB is dovish, the euro will fall.

299

Market updates on July 24

24.07.2019

EUR/USD weakened on the lower-than-expected PMIs. The data disappointed with French flash services PMI falling to 52.2 points (vs. expected 52.7 points) and German flash manufacturing PMI reaching 43.1 points (vs the forecast of 45.1 points). On H4, the pair has tested the support located at the 1.1118-1.1127 levels. If bears pull the pair lower, the next support will lie at the lows of 2017 at 1.1076. From the upside, pay attention to the resistance levels at 1.1159, 1.1166 and 1.1177. It is worth to mention that on the daily chart the pair completed the “Head and Shoulders” pattern.

GBP/USD could not hold the gains after Boris Johnson was announced the next Prime Minister of Great Britain and fell to the support at 1.2427. After the slow start of the trading day, the cable has attempted to recover to the resistance at 1.2455. The next resistance levels lie at 1.2475 and 1.2495. In case of a reversal, the pair will retest the 1.2427 level. After the breakout, pay attention to the support at 1.2399.

According to Westpac, there is a chance for the Reserve bank of Australia to cut its interest rate again in November (earlier, than it was forecast before). The Australian dollar plunges on the news. On H4, the aussie has fallen below the 100-period SMA since the beginning of the day. The first support for AUD/USD will lie at 0.6967. The next one at 0.6957. If the pair goes up, there is a chance that it will test the resistance at 0.6989.

300

Market updates on July 25

More at: News for today

25.07.2019

Key events ahead:

Interest rate decision by the Central bank of Turkey – 14:00 MT (11:00 GMT) time

ECB monetary policy statement – 14:45 MT (11:45 GMT) time

ECB press conference – 15:30 MT (12:30 GMT) time

US core durable goods orders – 15:30 MT (12:30 GMT) time

During the Asian trading session, the Reserve bank of Australia governor Philip Lowe commented that the bank would ease its policy further if demand disappoints. The Australian dollar reacted negatively to his comments and fell lower. On H4, AUD/USD tested the lower border of the long-term ascending trading channel below the 0.6967 level. If bears manage to break this border, the next support will lie at 0.6957. After that pay attention to the 0.6946 level. From the upside, the first significant resistance level lies at 0.6989. The next resistance will be placed at 0.6998.

EUR/USD is consolidating near the support at 1.1127 ahead of the ECB rate decision. There’s a 50% chance of a rate cut, so pay attention to the meeting. If the euro weakens more, the pair will break the support at 1.1127 and test the support at 1.1118 on H4. The dovish ECB will increase the possibility for the pair to fall further to the 1.1076 level. On the other hand, if the central bank is less dovish, the first resistance will lie at 1.1155. The next resistance levels will be placed at 1.1166 and 1.1177.

USD/TRY, in its turn, is awaiting the decision by the Turkish central bank. After the Turkish president Recep Tayyip Erdoğan fired the head of the central bank earlier this month due to his disagreement to make the interest rate lower, now the market anticipates the rate cut decision. The US dollar has become stronger against the Turkish lira as the rate cut worries have been priced in. If the Turkish lira continues to weaken, the pair will break the 5.7048 level and return within the borders of the ascending trading channel. The next resistance will lie at 5.7219. In case of the reversal, the pair will fall below the 5.6887 level. The next support will be placed at 5.6766. (50-period SMA). The break of this level will provoke further fall to the next support at 5.6620.

301

Market updates on July 26

Check the charts: News for today

26.07.2019

Key events ahead:

US advance GDP – 15:30 MT time

Yesterday the speech by the European Central bank president Mario Draghi was not as dovish as it expected. As a result, there was a mixed performance of the EUR. Today, EUR/USD keeps consolidating between 1.1127 and 1.1155 levels. The release of the US advance GDP may bring some moves to the pair. If the GDP growth report is strong, the pair will break the 1.1127 level. The next support will lie at 1.1117. After that, pay attention to the 1.1086 level. From the upside, the levels at 1.1155, 1.1166 and 1.1177 are important.

GBP/USD weakened yesterday after the EU policymakers said to the new Prime Minister of Great Britain Boris Johnson that the current withdrawal Brexit agreement can’t be renegotiated. On H4, the pound slipped towards the support at 1.2427. If bears manage to break this level, the next support will lie at 1.2399. Alternatively, if the GBP is supported by positive news, the pair will retest the 1.2455 level and try to reach the next resistance at 1.2475 (above the 50-period SMA) in case of a breakout.

USD/JPY got stronger on the rising treasury yields. After the big bullish candlestick which was formed yesterday on H4, the pair started to consolidate in the 108.56-108.71 range. Bulls need to be supported by the positive US GDP data to break the 108.71 level and target the next resistance at 108.98. On the other hand, a break below 108.56 level will provoke further slide towards the 108.33 support.

302

5 important events this week will bring us!

29.07.2019

A monetary policy statement by the Bank of Japan (Tue, Asian session) – The rate changes are not expected, but the BOJ governor may provide comments on the future changes to the current monetary policy. Comments on further easing will make the JPY weaker.

Chinese manufacturing PMI (Wed, 4:00 MT (1:00 GMT) time) - According to the forecasts, the indicator will advance to 49.6. Higher figures will increase the risk-on sentiment in the market.

FOMC statement (Wed, 21:00 MT (18:00 GMT) time) – The market anticipates the rate cut by 25 basis points from 2.5% to 2.25%. Besides, we need to pay attention to the tone of the Fed chair and the hints on the further steps by the regulator. If Federal Reserve cuts the interest rate, the USD will go down. On the other hand, if the rate changes are postponed, the USD will be supported.

Monetary policy summary by the Bank of England (Thu, 14:00 MT (11:00 GMT)) – The bank won’t change the interest rate, but we will pay attention to the tone of the BOE amid the weak British pound, global easing of other central banks and uncertainties surrounding Brexit.

US employment data (Fri, 15:30 MT (12:30 GMT) time) – As usual, the report will include the level of average hourly earnings, unemployment rate and, of course, non-farm employment change or non-farm payrolls. While average hourly earnings and unemployment rate are expected to remain stable, the level of NFP is forecast to advance by 160 thousand payrolls. Higher figures of NFP and average hourly earnings and lower figures of unemployment rate will push the USD higher.

Hot news

The British pound fell to the lowest levels since 2017 after the British policymakers, such as Dominic Raab and Michael Dove commented about the preparations to the no-deal Brexit. On Monday, British PM Boris Johnson met with the First Minister of Scotland and Scottish Conservatives leader and they did not support the idea to leave the EU without a deal.

The trade talks between the US and China will resume on July 30-31. The key demands of China are the removal of the existing tariffs, a balanced agreement, realistic targets for further trade agreements. At the same time, the US ask for structural reforms to China’s economy and the protection of intellectual property rights. As the trade negotiations have stuck after the meeting between Chinese and US presidents in Osaka during G20, we may only wonder whether the upcoming round of negotiations will succeed.

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The British pound is awaiting the BOE meeting

30.07.2019

The monetary policy summary by the Bank of England will be out on August 1, at 14:00 MT time.

We do not anticipate any changes to the interest rate this time, but the Bank of England may throw some hints on the further steps regarding its monetary policy. Despite the risks that the new Prime Minister Boris Johnson will leave the EU without a deal, the bank seems to stick to its plan to raise interest rates gradually for now. Will the policymakers change their tone to more dovish amid the trend of global easing?

• If the BOE is hawkish, the GBP will rise.

• If the BOE is dovish, the GBP will fall.

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The US-China trade war escalates

02.08.2019

Good Friday, traders! Let’s start with the updates from the US-China trade war’s front.
Yesterday, US President Donald Trump announced an additional 10% tariff on the remaining 300 billion dollars of goods and products since September 1. China, in its turn, said about countermeasures needed as a response to this unexpected move. As a result, the risk-weighted assets dropped significantly.

The Australian dollar and the New Zealand dollar have seen huge moves to the downside. AUD/USD is currently trading at the lowest levels since January’s flash crash.

Safe-haven Japanese yen has strengthened. USD/JPY has been targeting support from June 25 at 106.76.

USD/CNH has risen to the highest levels since last November. The pair is currently trading at 6.9718.

Gold retested its recent highs at $1,448.

As for exotic currency pairs, USD/MXN and the USD/ZAR jumped higher, while USD/BRL gapped up above the 50-day SMA since the start of today’s trading session.