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Wave Analysis from InstaForex

Discussion in 'FOREX Forums' started by InstaForex Gertrude, May 10, 2016.

  1. InstaForex Gertrude

    InstaForex Gertrude Active Member

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    GBP/USD. UK wages up, but the pound is indifferent to statistics

    The British currency received little support from macroeconomic reports today. Although the published data on the UK labor market was controversial, traders focused on the positive aspects of the release. This made it possible for the GBP/USD pair to move away from today's lows and develop a minimal, but still a correction.
    [​IMG]
    But in general, the pair's situation has not changed: the pound is still under strong Brexit pressure, so any more or less large-scale price growth is perceived by the market as an occasion to open short positions. However, the lower limit of the range is very close - at the bottom of the 20th figure. To break through this level, traders need a more compelling reason, while the British are dominated by the usual market concern about the prospects of a "divorce proceedings". In other words, the pound/dollar is trapped in the grip of fundamental and technical factors. On the one hand, there is a strong support level of 1.2000, on the other hand, the lack of powerful information lines, against the background of general nervousness over the upcoming political battles in the House of Commons.
    That is why today's release did not cause much excitement among market participants. Although this is partly due to the fact that the published figures are controversial. Thus, the unemployment rate unexpectedly rose to 3.9%, although according to general expectations, it should have remained at the same level - 3.8%. The number of applications for unemployment benefits has also increased significantly - by 28 thousand. Although it is worth noting here that according to the consensus forecast, this indicator should have shown a more deplorable result: +42000. Therefore, the real numbers in the end turned out to be much better than expected. But the wage component showed the strongest result. This indicator (excluding bonuses) jumped to an 11-year high (3.9%), confirming the positive trend in recent months. Total pay, which includes bonuses, also pleased investors with a growth of up to 3.7% (a three-year high).
    It is worth recalling that the head of the Bank of England, Mark Carney, has repeatedly said that a possible increase in the rate will largely depend on the growth of wages, as this indicator spurs inflation. Of course, in the current environment, it all depends on Brexit's prospects, but if Parliament nevertheless blocks the "hard" scenario, then the likelihood of tightening monetary policy in the first half of next year cannot be ruled out. It is also worth noting that the pound paired with the dollar is now at its lowest values: the relative cheapness of the British currency will also play a role in accelerating inflation in the second half of the year.
    Thus, the correction of the GBP/USD pair allows traders to open short positions with a larger price gap in the future. The target of the downward movement is still the 1,2005 mark - this is a psychologically important level of support, to overcome which a powerful information occasion is necessary. Nevertheless, the pound-dollar pair continues to be in a downward trend, so it is advisable to use the pair's growth for a more profitable sale of the British currency.
    [​IMG]
    There is still no consensus among analysts whether the deputies of the House of Commons will be able to block the implementation of the hard Brexit scenario or not. Boris Johnson admitted yesterday that his main opponent, the leader of the Labour Party, Jeremy Corbyn, plans to drag out the country's exit from the European Union "for many years". Corbyn, in turn, does not hide the fact that he plans to initiate the issue of declaring a vote of no confidence in the prime minister. If the Conservatives cannot then form a government within 14 days, then the country will face early Parliamentary elections. True, Johnson may set the date for elections in November, that is, when the UK is already leaving the EU without any agreement.
    Anticipating such a scenario, Johnson's opponents can prevent its implementation. There is another option, which, however, was used only a few times in modern history - for example, during the Second World War and the global economic crisis of the early 30s of the last century (that is, during the Great Depression). It is about creating a "government of national unity", which is formed by members of the temporary inter-party majority. According to analysts, at the moment this is a very unlikely option, but nevertheless, it cannot be ruled out. A politically mottled Parliament can at a critical moment rally and prevent the hard Brexit.
    Thus, the outcome of the "Big Political Battle", as journalists have already dubbed the forthcoming confrontation between the prime minister and MPs, is far from a foregone conclusion. Therefore, the pair actually froze within the framework of the 20th figure, while maintaining a bearish potential. All this makes it possible for you to open short positions on the GBP/USD pair with corrective upward pullbacks while aiming for a downward goal in the price area of 1.2010
    Analysis are provided byInstaForex.
     
  2. InstaForex Gertrude

    InstaForex Gertrude Active Member

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

    [​IMG]

    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.
    [​IMG]
    "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.
    [​IMG]
    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.
    [​IMG]
    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.
     
  3. InstaForex Gertrude

    InstaForex Gertrude Active Member

    Joined:
    May 5, 2016
    Messages:
    1,819
    Likes Received:
    4
    Washington and Beijing loosened the nuts. A thin world or calm before a storm?
    [​IMG]
    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.
    [​IMG]
    "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.
    [​IMG]
    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.
    [​IMG]
    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.
     
  4. IFX Yvonne

    IFX Yvonne Member

    Joined:
    May 24, 2016
    Messages:
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    0
    Forecast for EUR/USD on August 16, 2019

    EUR/USD The main news yesterday was the release of excellent US retail performance in July. Base sales increased 1.0%, total sales increased 0.7%. An hour later, data on industrial production came out worse than forecast, but the euro could no longer resist a decline. Industrial production in July fell by 0.2%. Euro lost 31 points.

    Good US construction data is expected today. The number of bookmarks of new homes in July may grow from 1.25 million to 1.26 million, the indicator of permits for the construction of a new house can show an increase from 1.23 million to 1.27 million. And in the eurozone the trade balance for June, published today may decrease from 20.2 billion euros to 18.7 billion.

    [​IMG]

    We expect the price to consolidate below the Fibonacci level on the daily chart 123.6% (1.1074). Formally, the underlying target of the Fibonacci level of 138.2% (1.0980) opens, but at the beginning of next week, investors can slow down in anticipation of the publication of the FOMC Fed minutes, which will be on Wednesday.

    [​IMG]

    There is a steady decline on the four-chart. Therefore, after consolidating the price below 1.1074, we expect the euro to fall to 1.0980. *The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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

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