EUR/USD. July 17. Results of the day. Inflation in the European Union has accelerated slightly

4-hour timeframe

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The amplitude of the last 5 days(high-low): 62p – 41p – 37p – 31p – 62p.

Average amplitude over the last 5 days: 47p(39p).

The most interesting macroeconomic report of today was, of course, the inflation report in the EU. As it turned out, the consumer price index in June accelerated to 1.3%, while experts predicted the preservation of the previous “figures”, that is, 1.2% y/y. Core inflation showed an increase of 1.1% in accordance with predicted values. This information was supposed to support the euro currency, as it is at least some positive news from the European Union. However, traders seem to have judged otherwise. After all, the target of 2.0% set by the European Central Bank is very far away, and in the long term, 2% of inflation has not been seen for a long time. Thus, the growth of 0.1% is not particularly pleased with the foreign exchange market. There were no more important macroeconomic publications on July 17th. We can only recall the trade war between China and the United States. After the G20 summit, many traders were overwhelmed with optimism, as Donald Trump and Xi Jinping said that the countries were returning to negotiations. However, as we wrote back then, “to return to negotiations” does not mean “to agree”. Yesterday, the US President wrote on his Twitter that the fall in the growth rate of China’s economy to the levels of 1992 is directly related to the introduction of duties by America. And that Washington can further increase the pressure on China if it imposes duties on absolutely all imports from this country. In turn, the Ministry of Foreign Affairs of China made a statement, according to which 6.2% of GDP – is “good figures” in any case, given the slowdown in global economic growth. Thus, as we can see, there is no question of any truce, and the signing of the notorious trade deal is still very far away. And not the fact that the parties will be able to agree.

Trading recommendations:

The EUR/USD pair started the weakest upward correction with the target of the critical line. Thus, now the sales of the euro are still relevant to the targets at the levels of 1.1179 and 1.1157, but after the completion of the correction round.

It is recommended to buy the euro/dollar pair not before fixing the price back above the critical line with the first targets of 1.1274 and 1.1306, but with the minimum lots, as the bulls remain extremely weak.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanation of illustration:

Ichimoku Indicator:

Tenkan-Sen – red line.

Kijun-Sen – blue line.

Senkou Span A – light brown dotted line.

Senkou Span B – light purple dotted line.

Chinkou Span – green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD Indicator:

A red line and a histogram with white bars in the indicator window.

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

EUR/USD for July 17,2019 – Double bottom confirmed

The EURUSD has been trading sideways in past 24 hours. Anyway, there was the U turn (double bottom) in the background, which is sign that EUR may trade higher towards the resistance levels at 1.1239 and 1.1254.Industry news: The Consumer Price Index (C…

GBP/USD: plan for the American session on July 17. Buyers grabbed the divergence, but the demand for the pound is very weak

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

The morning forecast for the purchase from the level of 1.2382 has fully worked itself out and now the bulls’ goal is the resistance of 1.2452, which will be difficult to reach, given that inflation in the UK coincided with the forecasts of economists. With the GBP/USD falling again to the support area of 1.2382, it is best to return to long positions under the condition of a false breakout and to rebound from the new lows of 1.2342 and 1.2266.

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

Bears will try to return to the support of 1.2383, and a repeated test of this range will lead to its breakdown and further decline of GBP/USD in the area of monthly lows of 1.2342 and 1.2266, where I recommend fixing the profit. With the growth of the pound in the second half of the day, for example, after weak fundamental data on the US, you can look at short positions on a false breakout in the area of 1.2452 or on a rebound from the maximum of 1.2498.

Indicator signals:

Moving Averages

Trading is conducted below 30 and 50 moving averages, which indicates the preservation of the downward trend.

Bollinger Bands

The breakthrough of the lower limit of the indicator in the area of 1.2385 can strengthen the downward trend in the pair.

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Description of indicators

  • MA (moving average) 50 days – yellow
  • MA (moving average) 30 days – green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20

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

EUR/USD: plan for the American session on July 17. Divergence worked, and what to do next – it is unclear

To open long positions on EURUSD, you need:

Buyers managed to hold the pair after updating the lows of yesterday and returned to the market after the divergence, which I drew attention to in my morning review. At the moment, the situation is not very clear. The bulls will strive for the resistance of 1.1236, where I recommend fixing the profit, while the repeated descent to the lows of the month to the area of 1.1195 can draw new sellers, so it is best to count on buying from this level after a false breakdown or already on a rebound from larger supports of 1.167 and 1.138.

To open short positions on EURUSD, you need:

Bears can count on a false breakout in the resistance area of 1.1236, but the main task will be to re-descend to a minimum of 1.1195, the breakthrough of which will increase the pressure on the pair and lead to another local support in the area of 1.167 and 1.138, where I recommend fixing the profit. If sales from the level of 1.1236 will not be observed after it is updated, then it is best to open short positions to a rebound immediately at the maximum of 1.1261.

Indicator signals:

Moving Averages

Trading is conducted in the area of 30 and 50 moving averages, which indicates market uncertainty with a further direction.

Bollinger Bands

The breakthrough of the lower limit of the indicator in the area of 1.1205 can form a new downward wave in the pair.

analytics5d2f1968449ef.png

Description of indicators

  • MA (moving average) 50 days – yellow
  • MA (moving average) 30 days – green
  • MACD: fast EMA 12, slow EMA 26, SMA 9
  • Bollinger Bands 20

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

EURUSD challenges important support levels.

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Technical analysis of Gold for July 17, 2019

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Technical analysis of GBP/USD for July 17, 2019

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Technical analysis of NZD/USD for July 17, 2019

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EUR/USD: the Fed will reduce the rate proactively, and the ECB can bring super-soft policy to a new level

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If stock indices are an indicator of the effectiveness of the US President, as Donald Trump has repeatedly stressed, and the S&P 500 index is growing on expectations regarding the easing of the Fed’s monetary rate, then why not the head of the White House continue to criticize the Central Bank, forcing it to reduce the interest rate? In addition, this task is simplified if the regulator makes decision-making dependent on trade conflicts and the state of the world economy.

“Uncertainty about the Fed’s economic outlook has increased, especially in terms of the situation in the trade sector and global growth,” Fed Chairman Jerome Powell said yesterday.

At the same time, he once again stressed that the US Central Bank is closely monitoring the downside risks for the US economy and is ready to take appropriate measures to support its growth.

Thus, the White House only needs to maintain tension in relations with China, pushing Jerome Powell and his team to monetary expansion.

Yesterday, D. Trump said that Washington and Beijing have a long way to go in trade negotiations. He also noted that the US can introduce additional duties on goods from China worth $325 billion if required.

On July 31, the next FOMC meeting will be held, following which the federal funds rate may be reduced by 25 basis points.

The increase in the probability of a rate cut in July by 50 basis points immediately after the Fed Chairman’s speeches in Congress contributed to the weakening of greenback, but strong statistics on the United States intervened.

When retail sales in the country grow for four months in a row, exceeding the forecasts of experts in June, and industrial production begins, albeit slowly, to recover, there are doubts about the slowdown in US GDP and the feasibility of easing monetary policy on the part of the Fed.

The latest strong US statistics have allowed Macroeconomic Advisers to increase the country’s economic growth in the second quarter from 1.8% to 2.1%. At the same time, the leading indicator from the Atlanta Federal Reserve Bank indicates that US GDP will expand by 1.7%, rather than 1.3%, as was previously expected.

Apparently, the Fed rate cut by 25 basis points on July 31 is already included in the quotes. It is assumed that the dollar will respond to the decline only on the signals of the subsequent rate cuts. There is no reason to expect that it will be reduced by 50 points at the end of the month – the US economy is still in good condition. That is, the rate will be reduced proactively, to insure against a recession in the United States due to trade wars and the slowdown of the world economy.

On the eve of the head of the Federal Reserve Bank of Dallas, Robert Kaplan said that any reduction in the federal funds rate should be modest, restrained and limited. According to him, this is not the beginning of the monetary expansion cycle, but merely a tactical move due to the inversion of the Treasury yield curve.

Meanwhile, the latest weak statistics from the EU have caused a new wave of talk about a possible reduction in rates by the ECB and the resuscitation of the quantitative easing (QE) program.

According to the forecast of Societe Generale, in September, the regulator will cut the rate on deposits by 10 basis points, and before that, it will strengthen the downward bias of its statements of intent following the meeting scheduled for next week.

Recently, the nomination of the former head of the IMF Christine Lagarde as head of the ECB. Market participants expect that under her leadership, the European regulator will bring the already “soft” monetary policy to a whole new level. Given the above, the EUR/USD pair has all the chances to decline to the area of 1.10.

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