Forecast for GBP/USD on August 13, 2019

GBP/USD
On Monday, the pound sterling slightly adjusted the top from strong technical support of the range of 1.1986-1.2032, corresponding to the lows of January 2017 and October 2016, and coinciding with the Fibonacci levels of the daily chart of 271.0% and 261.8%.

Convergence on the Marlin oscillator formed on the daily chart. Whether this pattern turns out to be a sign of a deeper correction, to the Fibonacci levels of 238.2%, at the price of 1.2154 or 223.6% at the price of 1.2230, or will it turn out to be a false signal and the price will consolidate at 1.1986, it will become clear either today after the release of data on employment in the UK or tomorrow, with the release of inflation indicators. According to today's data, the unemployment rate is expected to remain unchanged at 3.8%, applications for unemployment benefits in July may be slightly less than in the previous month - 32.0 thousand against 38.0 thousand. Inflation forecasts on Wednesday are negative, in particular CPI may drop from 2.0% y/y to 1.9% y/y.

On the four-hour chart, the price is steadily falling below the blue MACD indicator line, while the Marlin oscillator is in the decline zone. The current situation is neutral, we are waiting for the development of events.

Analysis are provided byInstaForex.

Washington and Beijing loosened the nuts. A thin world or calm before a storm?

The unexpected decision of the US administration to delay the introduction of 10% tariffs on a number of goods imported into the United States from China revived the markets. Investors began to buy cheaper assets.

Why did the White House retreat? Maybe the United States really wants to make concessions, or did they just see that Beijing was not afraid of their tariffs? It is enough to recall how China devalued the yuan quite simply in order to smooth out the negative effect of the duties introduced by the US.

It is noteworthy that today the People's Bank of China raised the yuan to the dollar for the first time in two weeks - up to 7.0312. Previously, the regulator continuously depreciated the national currency, as a result of which it updated lows since the spring of 2008.

Judging by the comments of Donald Trump, the US president's decision to postpone the introduction of new Chinese tariffs for a number of positions until December 15 is not a sign of progress in the Washington-Beijing trade negotiations, but rather a result of pressure from US companies.

"We are doing this taking into account the upcoming Christmas holidays so that some of the duties do not hit consumers in the United States," he said.

Thus, the head of the White House for the first time admitted that tariffs could harm the US economy.

Goldman Sachs believes that Washington's departure from its original plan to levy duties on all Chinese exports to the United States is a reaction to the fall of US stock indices.

According to Moody's, the recent events should not be seen as a de-escalation of the conflict between the United States and China: this is just a temporary delay.

"D. Trump is afraid to look weak and unable to achieve the goal. In addition, he fears that his chosen strategy of a trade war with China will be ineffective both in the eyes of his own voters and China itself," reports the Chinese publication Global Times.

"The US is making concessions as soon as negotiations between the two countries are on the verge of a complete break. Washington's latest softening said it recognizes that pressure tactics on Beijing aren't working," said Bai Ming, an analyst at the Chinese Academy of International Trade and Economic Cooperation.

However, regardless of the White House's motives, the latest news from the trade front caused a stormy positive reaction from the markets, allowing US indices to win back the decline of the beginning of the week, and the greenback appreciably strengthened against major currencies, especially against the yen. The USD/JPY pair has broken the 106 mark.

Data that was published yesterday also provided some support for the US currency, since the release showed the best (since 2006) two-month increase in core inflation in the United States. In July, the indicator increased by 0.3% in monthly terms and by 2.2% in annual terms. The fact that inflation accelerates after a sluggish start reduces the risks of aggressive easing of the monetary reserve monetary policy. The chances of a September cut in the federal funds rate by 50 basis points at once fell from 25% to less than 10%. The Fed leadership is becoming less likely to further lower interest rates.

Today, the yen against the dollar has returned to growth amid continued geopolitical risks.

Despite recent U.S. moves, markets are not waiting for a quick resolution to Washington and Beijing trade disputes, which put pressure on the entire global economy.

Analysts also note the presence of geopolitical tensions in different regions of the world, which supports the demand for the yen.

"Recent news provides more opportunities to strengthen the dollar and weaken the yen, but this does not mean that trade differences are resolved. In addition, there are many geopolitical risks, such as the situation in Hong Kong, the upcoming Brexit and the situation around Iran. Therefore, I do not expect significant demand for risky assets," said Tohru Sasaki, an analyst at JPMorgan Chase Bank.

It is assumed that if China feels D. Trump's weakness and begins to dictate its conditions, then we will again see the corresponding market reaction, the opposite of the one observed yesterday.

As for the main currency pair, it still remains within the wide lateral range.

The gloomy results of recent studies of business sentiment in Germany today have been confirmed by actual economic indicators. According to Destatis, German GDP declined 0.1% in the second quarter compared to the first quarter.

According to analysts, two negative quarterly indicators in a row will indicate a technical recession in the country, which is the locomotive of the entire European economy. However, the eurozone as a whole remains in relative safety: its GDP continued to grow in the second quarter, although only by 0.2% in quarterly terms.

Analysis are provided byInstaForex.

Control zones Bitcoin 08/19/19

Bitcoin is trading above the balance level for the second day. This became possible after stopping the fall during the test of monthly control zone in August. The middle course zone was also tested at the end of last week. The likelihood of an increase in the value of bitcoin increases. You should not expect a sharp increase in the price, however, while the balance marks are below the course, you should keep the purchases open at the end of last week. Sales can be closed completely, since the probability of falling below the level of $10,000 in August is 30%.

Favorable price for the purchase of the instrument will be at any level below $10,000. The first growth goal can be considered at the $10,749 mark. When bitcoin reaches this level, a partial consolidation of purchases and the transfer of the rest to breakeven will be required.

An alternative model has a probability of implementation below 30%, which does not make it possible to enter sales. The instrument is trading near the monthly control zone. This makes a further decline unlikely. If the decline occurs below $10,000, then the probability of a return to this mark in August will be at 70%, and in case of exit and closing of the month's trading below this level, the probability will increase to 90%.

Daily CZ - daily control zone. The area formed by important data from the futures market, which change several times a year.
Weekly CZ - weekly control zone. The zone formed by important marks of the futures market, which change several times a year.
Monthly CZ - monthly control zone. The zone, which is a reflection of the average volatility over the past year.

Analysis are provided byInstaForex.

Will the Fed limit itself to one rate cut this year? The pound will remain volatile in the near future

The pound fell in the morning following the release of a report on UK public sector borrowing, while the euro continued to trade in a narrow side channel against the US dollar in anticipation of the July Federal Reserve minutes

The publication of the minutes will show how the committee looks at a further cut in interest rates this year, and to what level the rate can be reduced.

This week, a number of Fed leaders have already expressed their views, but it is premature to draw any conclusions. Let me remind you during the Federal Open Market Committee meeting, which was held on July 30-31, they decided to lower the interest rate by a quarter point, although some economists suggested that the Fed would lower rates immediately by half a percent. This was the first drop in more than 10 years.

Meanwhile, Fed Chairman Jerome Powell signaled that this decrease was purely corrective in the middle of the cycle, and it would not be entirely correct to count on a long reduction cycle in the future. Much will depend on the data on the economy that will come in the 3rd quarter of this year. So far, the only thing that could push the issue of lowering the rate by another quarter of a percentage point into consideration is the aggravation of the trade war between the United States and China, which is now at an impasse. Let me remind you that the new trade duties will come into force on September 1 of this year. In addition, very low inflation continues to be a problem for the Fed.

Given the fact that the unemployment rate in the US is at a record low and household wages increase without creating additional inflationary pressure, the Fed is just thinking about the risks of deflation, which many Asian countries suffer from.

Do not forget about the constant criticism of the work of the committee by Donald Trump, who "hung all the dogs" on the current Fed chairman Jerome Powell for what he delays in lowering rates and resuming the asset purchase program. By the way, the eurozone and the European Central Bank may return to such a program in the near future, which will further strengthen the US dollar against a number of risky assets and create additional problems for the export of American goods. In any case, Powell is still fighting off all threats from the US president, adhering to the neutrality that is so cared for within the Federal Reserve.

As for the technical picture of the EURUSD pair, it has not changed at all. Bears will attempt to update last week's lows with a test of support levels of 1.1060 and 1.1030. If bulls make an attempt to build an upward correction in a pair, then it is best to consider short positions in the trading instrument from the upper boundary of the side channel of 1.1130. A larger resistance level is the area of 1.1160.

GBPUSD

The British pound slightly fell against the US dollar after the release of the report on net borrowing in the UK public sector. According to data in July this year, borrowing fell by 1.3 billion pounds after a larger reduction of 3.5 billion pounds a year ago. Net public sector demand for cash in the UK in July fell by 14.8 billion pounds against 17.6 billion pounds a year ago. All this suggests that the situation with Brexit, although not so brightly, continues to affect macroeconomic indicators in various fields, which negatively affects the overall economic indicator.

In any case, the pound's further movement as a whole, like this whole year, will continue to be based on rumors and rebuttals from Brexit news, which exacerbates the overall picture and exposes the pound to excessive volatility.

As for the technical picture of the GBPUSD pair, the upward trend is limited by the resistance of 1.2175, a breakthrough of which will build a new wave of growth and lead to the renewal of highs in the areas of 1.2220 and 1.2270. The medium-term boundary of the downward channel is above this range and it would be impossible to go beyond it without a positive outcome of the situation with Brexit.

Analysis are provided byInstaForex.

The trade war between China and the United States is in full swing and could lead to a new Fed rate cut

Recently, Donald Trump decided to increase trade duties on a group of goods totaling about $ 300 billion to 15%, which was previously assumed that it would be 10%. These duties will be effective from September 2019. Also, duties will be increased not by 25%, but by 30%, for a group of goods worth $ 250 billion from October 1. This was a response to China's imposition of $ 75 billion in fees, which will be in effect from September 1 to December 15. Beijing's move was also a response to Trump's previously imposed duties. In general, a chain reaction is started. At the same time, the parties continue to report that negotiations are ongoing and from time to time they signal a certain progress that for some reason no one is watching. However, the intensity of trade relations between China and the States is clearly visible, which leads to a slowdown in the global economy, as well as the economies of the States themselves and China. Naturally, not without another message on Twitter from Trump. According to the president of the United States, China should not have introduced new duties, but now, it has run into an increase in duties from the States.

In addition, Donald Trump once again "drove" under the head of the Fed, Jerome Powell, writing on Twitter that "he does not know who the worst enemy of America is, Xi Jingping or Jerome Powell." A hint, of course, of Powell's reluctance to take and reduce the rate immediately by 100 points, as Trump wants. A little later, there was a loud statement that China had stolen billions or even trillions of dollars of intellectual property from America for years and was going to continue this activity. Trump said that "it's time to put an end to this." The US president also appealed to American companies having production facilities in China with an appeal to look for an alternative as soon as possible, and even better to return to America. The fact that the production of any product in America is more expensive than in China several times, and accordingly, the price of many goods now produced in China will increase multiple times if production is transferred to the States, Trump does not care. End consumers will pay, and the company will suffer losses, sales of which, of course, will fall due to price growth and reduced demand. Meanwhile, Trump will receive new tax revenues, or not Trump, but the new US President, whose elections will be held in 2020. It is precisely the second term of Trump's presidency that now raises a huge number of questions. China openly expects Trump to lose the election. The longer the trade war with China lasts, the worse America's economy feels, and the better ordinary citizens feel the recession, the less chance that Trump will be re-elected. Even if Trump is right and "China has profited from America for years," the electorate is primarily interested in its own welfare, prices in stores, and the lack of a deficit in the goods it needs. Under Trump, all Chinese products have risen in price, while American or European counterparts are much more expensive. If a trade war also begins with the European Union, then the Americans, who are big fans of the European automobile industry, will also experience a rise in prices for European cars. In this case, it is unlikely that Trump's fans will increase in the election. And, of course, all this will have a negative impact on the US dollar.

Analysis are provided by InstaForex

Britain on the verge of a constitutional crisis

The pound fell sharply by 100 points on the news that Boris Johnson could try to interrupt parliament for a month - from September 11 to October 14 - so that Parliament could not stop Johnson from withdrawing Britain out of the EU without an agreement.

This is a constitutional crisis. The queen has such a right to suspend the work of the parliament, at the proposal of the prime minister. However, such an action on this occasion is a clear crisis. Given the minimal majority of conservatives in parliament - it is very likely - to have a political crisis and new elections.

Analysis are provided byInstaForex.

Weekly market review

Greetings, dear traders! Congratulations to everyone on the beginning of autumn and, hopefully, on the increase in volatility associated with the end of the holiday period, including the bank traders, and the Forex market, as you know, is the interbank market, and the private traders who are here – random people.

The first week of autumn is an important trading period associated with a change in order placements in anticipation of non-farm payrolls, and after them. Often, it is the "nanoc" that one ends and other tendencies of instruments related to the American dollar begin. Today, Monday, according to most professional traders, is the worst time to open new trading positions and decide on a change in trading trends. Moreover, it is also today, September 2, 2019 - is a holiday in the USA and Canada - Labor Day. Therefore, let us congratulate the United States labor teams on this holiday!

For us, this means that trading during this evening will take place in narrow ranges and it is not worth waiting for super-movements from the markets today. Only "Donald Trump" can break the "trade silence" with his Twitter. Sometimes, it seems to me that Donald is an avid trader who "rules" his unprofitable positions with his own, often diametrically opposite, statements on the network.

Today, the main trading idea related to the American dollar for me is to strengthen the dollar in USD/JPY and GBP/USD, which gave last week. I also have very interesting ideas on certain crosses, which will be published soon.

What to do for traders in a period of low volatility? Of course, developing trading skills in the "strategy tester", as well as working on the analysis of profitable / unprofitable positions of the last week, in order to understand - how you earn and how much you lose and at what volumes and at what time you have it is obtained most efficiently. Good luck in trading! And see you at the evening reviews of cross-courses!

Analysis are provided byInstaForex.

Golden cosmos

Good evening, dear traders. As promised, here's the evening forecast for gold. Sorry, was not able to publish it in the morning, because it has already started to work.

The trade wars drove gold to an incredible $ 1,550 per troy ounce. This is the largest gold trend. for many years! Over the past year, gold has passed a record of 36,000p and continues to storm the high, knocking out the stops of medium-term sellers. And just yesterday, according to perhaps the most effective Price Action trading strategy, a pattern called "daily absorption in the trend" has appeared - which speaks of an ongoing trend and after which it is recommended to buy. Today, to the American session, there was a magnificent rollback, allowing you to go into longs at the best price.

On the other hand, sellers who have been selling gold from highs for two weeks now have to hide their risks only for one single extreme - this year's high - quotation 1554. Although, gold has not yet risen above. This is a trap that will be slammed in the near future and trap sellers.

I propose to take a closer look from the rollbacks to the longs - with a take on updating 1554 and higher. Often breakdowns of weekly extremes for gold are very volatile - and give a positive slippage, on which you can earn good profit. This is the first part of the plan.

The second part is for those traders who are buying in a large amount (scalpers). The idea is very simple and is to work after the breakdown of 1554, which for example to 1560-1570, and then to return to the broken level of 1554. This is an old scalping technique in the overbought market to work on the consolidations of large buyers after the breakdown of key extremes. It is due to this that the price decline to a broken level, which becomes support.

Be that as it may, you can earn in both cases.

I wish you success in trading and follow the policy of money management!

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Forecast for EUR/USD on September 10, 2019

EUR/USD

On Monday, the euro made another attempt to work out the target level of 1.1073 - the Fibonacci level of 123.6%, but this time stopped short of positive news about the growth of Germany's trade balance in July from 18.0 billion euros to 20.2 billion and ideas of Germany to establish a parallel state structure for attracting investment through increased public debt, which turned out to be insufficient.

On the daily chart, the signal line of the Marlin Oscillator shows the intention of a reversal down from the boundary with the growth territory. This is the first, but weak and the only sign of a possible price reversal down, there are no others even on the four-hour chart.

On H4, the price develops above the indicator lines of balance and MACD. Marlin is also in the upward trend zone. If the price consolidates above the level of 1.1073, growth to the Fibonacci level of 110.0% is possible at the price of 1.1157. The development of the downward trend is possible after the price goes below the MACD line on H4 (1.1006) and under the Fibonacci level of 138.2% at the price of 1.0986. In this case, the target level is the Fibonacci level of 161.8% at the price of 1.0844.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Gold: a great opportunity to buy at the level of $1480-50

According to Bart Melek, the head of TD Securities, the strengthening of the dollar, the growth of the value of US stocks and bond yields reflected on the prospects for gold and long positions in the asset. "The yellow metal fell to just below $1,500 an ounce at the beginning of the week, and we think that the price could move to the support level between $1,480–50 if the Fed doesn't weaken the policy at the next meeting," Meleka said. At this stage, the gold market believes that the US central bank will keep rates at the current level without any unconditional commitments to aggressively lower rates in the future. "In our opinion, no matter what central banks do over the next few months, the global economy will decline due to weaker trading activity amid a trade war between the US and China."

The largest world markets are under attack. Germany is showing weakness, China continues to disappoint with its performance, and there are signs that the US economy is also slowing. Given these facts and that monetary policy is not very productive, the projected decline in the price of gold should be considered as an excellent buying opportunity, since central banks need to be aggressive in their actions in order to avoid a sharp drop in global activity next year.

Analysis are provided byInstaForex.

Forecast for EUR/USD on September 16, 2019

EUR/USD

On Friday and this Monday morning, the euro lingered on the resistance of the balance line and the Fibonacci level of 123.6% of the daily scale. The euro is still calm about the price growth of oil and gold this morning due to an attack by drones on oil rigs in Saudi Arabia. Oil has jumped 9.56% since the opening of the session. According to media reports, oil production in this country fell by 50%, which seems unlikely. Nevertheless, an impetus has been set, and with the increase in oil prices, the euro is likely to continue to grow, the target of which will be the area where the line of the price channel, the Fibonacci level is 110.0% and the MACD line at the price of 1.1152.

On a four-hour chart, the price is supported by the balance line (indicator red), the signal line of the Marlin oscillator is in the growth zone. In the framework of the main increasing scenario, the euro may drop, but not lower than the support of the MACD line on H4 (1.1023). Leaving below opens an alternative scenario with the prospect of a decline to 1.0926.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Oil flies into the stratosphere

Attacks on tankers in the Persian Gulf and a downed American drone are children's toys compared to the attack on Abqaiq, the world's largest oil refinery in Saudi Arabia, through which about 7 million b/d passes. Brent and WTI have responded with the largest daily rally in history, and it cannot be said that investors have calmed down. The attack can easily be repeated, the US war with Iran is more real than ever, and who, interestingly, in such circumstances will risk actively selling black gold?

An armed attack turned off 5.7 million bpd from the game, which is about 5% of global production. Although Riyadh is trying in every possible way to convince investors that everything is under control and within a day, about a third of the losses in black gold production have already been restored, insider Bloomberg says something else. According to at least four competent sources, the restoration is likely to drag on from a few weeks to several months, and a reduction in global production will provide all possible assistance to the Brent and WTI bulls. Everyone is waiting for comments from Prince Abdulaziz bin Salman, but the very figure of this man deserves close attention.

After a member of the royal family became the Minister of Energy for the first time in history, many suspected that something was wrong. Prices rose by leaps and bounds, and the attack on Abqaiq is perceived as a bolt from the blue, but only by a majority. When a crime occurs, one always wonders, "who benefits?" For a balanced budget, Saudi Arabia needed oil at $80 per barrel, but before the appointment of Abdulaziz bin Salman as minister, there were few reasons for a rapid rally. Reducing OPEC production did not help: the Americans were actively increasing production, and China was cutting demand. For a sharp rise in prices, force majeure was needed, and in an amazing way it became a reality.

One-day oil jumps

According to Bloomberg, the maximum reserve capacity that can be put into production in the coming weeks is 3.9 million bpd. Even if Riyadh recovers a third of the losses from 5.7 million bpd, there will be a reduction in production. And with it, the growth of Brent and WTI quotes. As for Saudi Arabia, it is in its interest to spread rumors about a slow return to previous levels and the disruption of the October supplies, as well as to call other OPEC members to implement Vienna agreements, which the Saudis do.

At the same time, the issue of the United States and Iran's trade war, which the United States accused of organizing the attack on Abqaiq, does not come up on the agenda. Tehran denies any involvement, and based on the principle "who needed it most", it is very likely that it really has nothing to do with it.

Technically, after completing the targeting on the Bat (113%) and Wolfe Waves patterns, the risks of a pullback increased to the levels of 23.6% and 38.2% of wave 4-5. End of support at $66.4 and $64.4 per barrel will attract new buyers to the market.

Analysis are provided byInstaForex.