InstaForex InstaForex
Top Articles
1 Fractal analysis of the main currency pairs on August 22
Dear colleagues. For the euro / dollar pair, the continuation of the development of the downward trend is expected...
Forecast for August 22 : Analytical review of currency pairs on the scale of H1: For the euro / dollar pair, the key levels on the H1 scale are: 1.1124, 1.1102, 1.1073, 1.1062, 1.1032 and 1.1011. Here, the price is in correction from the downward structure on August 13. Short-term movement to the bottom is except in the range of 1.1073 - 1.1062. The breakdown of the latter value will lead to a pronounced movement. Here, the goal is 1.1032. Price consolidation is near this...

Forecast for August 22 :

Analytical review of currency pairs on the scale of H1:

analytics5d5dec9cbcd67.png

For the euro / dollar pair, the key levels on the H1 scale are: 1.1124, 1.1102, 1.1073, 1.1062, 1.1032 and 1.1011. Here, the price is in correction from the downward structure on August 13. Short-term movement to the bottom is except in the range of 1.1073 - 1.1062. The breakdown of the latter value will lead to a pronounced movement. Here, the goal is 1.1032. Price consolidation is near this level and hence, the possibility of a correction. For the potential value for the downward trend, we consider the level of 1.1032.

The breakdown of the level of 1.1107 will lead to the formation of a pronounced potential for the top. In this case, the first goal is 1.1124, wherein consolidation is near this level.

The main trend is the downward cycle of August 13, the correction stage.

Trading recommendations:

Buy 1.1108 Take profit: 1.1122

Buy Take profit:

Sell: 1.1060 Take profit: 1.1035

Sell: 1.1030 Take profit: 1.1011

analytics5d5decb7cd414.png

For the pound / dollar pair, the key levels on the H1 scale are: 1.2263, 1.2219, 1.2203, 1.2184, 1.2131.1.2105 and 1.2063. Here, the price forms a local structure for the subsequent development of the upward trend and is currently in deep correction. The continuation of the movement to the top is expected after the breakdown of the level of 1.2185. In this case, the target is 1.2203, wherein consolidation is near this level. The passage of the price at the noise range 1.2203 - 1.2219 should be accompanied by a pronounced upward movement. Here, the target is 1.2263. We expect a pullback to this level from this level.

Consolidated movement is possibly in the range of 1.2131 - 1.2105. The breakdown of the latter value will have the downward structure. In this case, the potential target is 1.2063.

The main trend is the local structure for the top of August 20, the correction stage.

Trading recommendations:

Buy: 1.2185 Take profit: 1.2203

Buy: 1.2220 Take profit: 1.2260

Sell: 1.2129 Take profit: 1.2105

Sell: 1.2103 Take profit: 1.2065

analytics5d5ded1ebea0b.png

For the dollar / franc pair, the key levels on the H1 scale are: 0.9949, 0.9923, 0.9883, 0.9854, 0.9816, 0.9768, 0.9745 and 0.9714. Here, we follow the ascending structure of August 13. At the moment, we expect a movement to the level of 0.9854. Short-term upward movement, as well as consolidation is in the range of 0.9854 - 0.9883. The breakdown of the level of 0.9883 should be accompanied by a pronounced upward movement. Here, the target is 0.9923. For the potential value for the top, we consider the level of 0.9949. Upon reaching which, we expect consolidation, as well as a pullback to the bottom.

Short-term downward movement is possibly in the range of 0.9768 - 0.9745. The breakdown of the last value will lead to an in-depth correction. Here, the target is 0.9714. This level is a key support for the top.

The main trend is the upward cycle of August 13.

Trading recommendations:

Buy : 0.9816 Take profit: 0.9854

Buy : 0.9856 Take profit: 0.9881

Sell: 0.9768 Take profit: 0.9747

Sell: 0.9743 Take profit: 0.9715

analytics5d5ded3c02947.png

For the dollar / yen pair, the key levels on the scale are : 108.62, 108.14, 107.45, 106.91, 106.35, 105.94, 105.64 and 105.01. Here, we continue to monitor the ascending structure from August 12. The continuation of the movement to the top is expected after the breakdown of the level of 106.91. In this case, the target is 107.45, wherein consolidation is near this level. The breakdown of the level of 107.45 should be accompanied by a pronounced upward movement. Here, the goal is 108.14. For the potential value for the top, we consider the level of 108.62. Upon reaching which, we expect a pullback to the bottom.

The range of 105.94 - 105.64 is a key support for the top. Its passage at the price will lead to the development of a downward movement. In this case, the target is 105.01.

The main trend: building potential for the top of August 12.

Trading recommendations:

Buy: 106.91 Take profit: 107.43

Buy : 107.47 Take profit: 108.14

Sell: Take profit:

Sell: 105.62 Take profit: 105.04

analytics5d5ded6268585.png

For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3345, 1.3319, 1.3300, 1.3246, 1.3217, 1.3182 and 1.3158. Here, the price forms the potential for the downward movement of August 20. The continuation of the movement to the bottom is expected after the breakdown of the level of 1.3246. In this case, the target is 1.3217, and near this level is a price consolidation. The breakdown of the level of 1.3217 should be accompanied by a pronounced downward movement. Here, the target is 1.3182. For the potential value for the bottom, we consider the level of 1.3158. Upon reaching which, we expect consolidation, as well as a rollback to the top.

Short-term upward movement is possibly in the range of 1.3300 - 1.3319. The breakdown of the latter value will favor the formation of an upward structure. Here, the target is 1.3345.

The main trend is the formation of potential for the bottom of August 20.

Trading recommendations:

Buy: 1.3300 Take profit: 1.3316

Buy : 1.3321 Take profit: 1.3345

Sell: 1.3246 Take profit: 1.3219

Sell: 1.3215 Take profit: 1.3182

analytics5d5ded7eb965d.png

For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6967, 0.6922, 0.6902, 0.6869, 0.6843, 0.6803, 0.6762, 0.6733 and 0.6675. Here, we are following the development of the ascending structure of August 7, and the price has formed a small potential for the top of August 14. The continuation of the upward movement is expected after the breakdown of the level of 0.6803. In this case, the first target is 0.6843. Short-term upward movement, as well as consolidation is in the range of 0.6843 - 0.6869. The breakdown of the level of 0.6870 should be accompanied by a pronounced upward movement. Here, the target is 0.6902. Price consolidation is in the range of 0.6902 - 0.6922. For the potential value for the top, we consider the level of 0.6967. Upon reaching which, we expect a pullback to the bottom.

We expect a consolidated movement in the range of 0.6762 - 0.6733. The breakdown of the level of 0.6733 will lead to the development of a downward structure. In this case, the potential target is 0.6675.

The main trend is the ascending structure of August 7, the correction stage.

Trading recommendations:

Buy: 0.6805 Take profit: 0.6840

Buy: 0.6844 Take profit: 0.6867

Sell : 0.6760 Take profit : 0.6736

Sell: 0.6730 Take profit: 0.6680

analytics5d5ded99f0c80.png

For the euro / yen pair, the key levels on the H1 scale are: 119.40, 118.65, 118.22, 117.58, 117.16 and 116.54. Here, we are following the development of local potential for the bottom of August 13. Short-term downward movement is expected in the range of 117.58 - 117.16. The breakdown of the latter value will allow us to expect movement to a potential target - 116.54, where near this level is a consolidation.

Short-term upward movement is expected in the range of 118.22 - 118.65. The breakdown of the last value will have the formation of an ascending structure for the top. Here, the first goal is 119.40.

The main trend is the formation of a local descending structure of August 13.

Trading recommendations:

Buy: 118.22 Take profit: 118.62

Buy: 118.70 Take profit: 119.40

Sell: 117.56 Take profit: 117.18

Sell: 117.14 Take profit: 116.55

analytics5d5dedb755de6.png

For the pound / yen pair, the key levels on the H1 scale are : 132.17, 131.23, 130.57, 129.66, 127.94, 127.33, 126.48 and 125.57. Here, we follow the development of the ascending structure of August 12. Short-term upward movement is expected in the range 129.00 - 129.66. The breakdown of the last value will lead to a pronounced upward movement. Here, the target is 130.57. Short-term upward movement, as well as consolidation is in the range of 130.57 - 131.23. For the potential value for the top, we consider the level of 132.17. Upon reaching which, we expect consolidation, as well as a pullback to the bottom.

Short-term downward movement is possibly in the range of 127.94 - 127.33. The breakdown of the latter value will favor the development of a downward structure. Here, the first goal is 126.48. For the potential value, we consider the level of 125.57.

The main trend is building potential for the top of August 12.

Trading recommendations:

Buy: 129.67 Take profit: 130.55

Buy: 130.60 Take profit: 131.20

Sell: 127.30 Take profit: 126.50

Sell: 126.44 Take profit: 125.60

Forex analysis 22 Aug 2019, 01:26 UTC+00
Relevance Relevance: up to 23.08.19 - 01:00 UTC+00
Close Expand on this page Go to article
2 Forecast for EUR/USD on August 22, 2019
We expect the euro to begin declining to a target of 1.0980 on August 22-23
EUR/USD The minutes published yesterday from the last Federal Reserve meeting were not only "outdated", as some consulting agencies called them in light of the fact that trade negotiations between the US and China were resumed, but also neutral in content - some FOMC members even voted against lower rates. As a result, the market probability of a rate cut in September fell from 99.2% to 98.5%, while the likelihood of a rate cut in October to 1.75% fell from 80.6% to 67.8%, and to 2.00% has...

EUR/USD

The minutes published yesterday from the last Federal Reserve meeting were not only "outdated", as some consulting agencies called them in light of the fact that trade negotiations between the US and China were resumed, but also neutral in content - some FOMC members even voted against lower rates. As a result, the market probability of a rate cut in September fell from 99.2% to 98.5%, while the likelihood of a rate cut in October to 1.75% fell from 80.6% to 67.8%, and to 2.00% has increased from 19.2% to 31.1%. That is, investors have measured the aggressiveness of expectations of a "super softening." Indeed, many simply forgot that the Fed ceases to unload its own balance, getting rid of mortgage securities, and such a measure, as historically believed, is equivalent to lowering the rate by the same 0.25%. As a result, the euro returned to Monday's range, investors with even greater calmness await the news from Jackson Hole. The event opens today, Jerome Powell is set to speak tomorrow. Trading volumes were below average yesterday.

The Marlin oscillator has not yet "cooled down" on the daily chart and there is a slight increase in the signal line.

analytics5d5e289734917.png

On the four-hour chart, yesterday's growth came to a stop on the balance indicator line. As in previous days, the price remains in the expectated range of 1.1066-1.1120. We are looking forward to breaking the range down today or tomorrow with the prospect of a decline to 1.0980 - the Fibonacci reaction level of 138.2% (daily).

analytics5d5e28acabad8.png

Forex analysis 22 Aug 2019, 05:21 UTC+00
Relevance Relevance: up to 23.08.19 - 04:00 UTC+00
Close Expand on this page Go to article
3 Trading plan for EUR / USD and GBP / USD pairs on 08.22.2019
Although the media tried to escalate the situation in anticipation of the publication of the text of the minutes of...
Honestly, contemplating the course of yesterday's bidding was still tormenting as it was more like observing a predatory beast that made for a decisive jump on its prey. And now, the nerves are already tense to the limit, sweat floods my eyes, but at the most crucial moment, something went wrong as there were accumulation of muscles and strength overshot for about a kilometer. Yes, in the wrong direction. Of course, if you look at the horizontal line that the quotes depicted yesterday, the...

Honestly, contemplating the course of yesterday's bidding was still tormenting as it was more like observing a predatory beast that made for a decisive jump on its prey. And now, the nerves are already tense to the limit, sweat floods my eyes, but at the most crucial moment, something went wrong as there were accumulation of muscles and strength overshot for about a kilometer. Yes, in the wrong direction. Of course, if you look at the horizontal line that the quotes depicted yesterday, the reaction to the content of the protocol text looks impressive - at least some movement. Although overall, the picture has not changed much and this is not surprising in many ways since investors only received confirmation of the thoughts that had been visited since the very end of the Fed meeting. At least until the end of this year, they will no longer take any steps to change the parameters of the monetary policy. Most importantly, Jerome Powell and colleagues completely ignore the curses and threats from Donald Trump, who demands an immediate reduction in the refinancing rate by 1.00%, and do not intend to soften the parameters of his monetary policy. Not only was the decision to lower the refinancing rate unanimous but there was also a suggestion to raise it altogether. The name of the new enemy, Donald Trump, who dared to express such seditious thoughts, is Neil Kashkari. In other words, The Federal Reserve does not intend to follow the fears and fears, which for the most part are nurtured by various media, and plan to make informed and careful decisions. Most importantly, the likelihood of another decrease in the refinancing rate is close to zero, at least during the current year. In any case, the content of the text of the minutes of the meeting of the Federal Committee on Open Market Operations favors precisely the strengthening of the dollar, albeit in the medium term. After all, the European Central Bank is clearly busy looking for ways to mitigate its already extremely soft monetary policy.

analytics5d5e47f687a00.png

As often happens, one particular event overshadows the macroeconomic statistics, which are taken into account when deciding on the parameters of monetary policy. After all, home sales in the secondary market of the United States grew by 2.5%, which of course, can be called a kind of recovery after a decline of 1.3%. Well, absolutely everyone ignored the data on net borrowing from the UK public sector, which fell by 2.0 billion pounds after an increase of 5.7 billion pounds.

The dynamics of home sales in the secondary market of the United States:

analytics5d5e480e3c223.png

Today, market participants will be incredibly curious to look at preliminary data on business activity indices, first in Europe and then in the United States. True, the forecasts on them are extremely disappointing, especially if we talk about the Old World. Thus, the index of business activity in the services sector should decrease from 53.2 to 53.0. But the worst thing is that the index of business activity in the manufacturing sector may decline from 46.5 to 46.2. The index is already below 50.0 points, which indicates an increase in the risks of a recession. But the horror of the situation is that this index itself has been decreasing since the fall of 2017, only occasionally giving signs of growth, and even then, it is extremely uncertain. Of course, the composite business activity index should fall from 51.5 to 51.2. Therefore, the overall picture is extremely disappointing and the European Central Bank really needs to think about how to rectify the situation and the European Central Bank really needs to think about how to rectify the situation.

The dynamics of the index of business activity in the manufacturing sector of the eurozone:

analytics5d5e48212fddf.png

However, the forecasts for American statistics are slightly better. Of course, the index of business activity in the services sector may fall from 53.0 to 52.8, but the index of business activity in the manufacturing sector should rise from 50.4 to 50.5. Although this does not help the composite business activity index (which is expected to decrease from 52.6 to 51.7), at least there is growth on some parameters. And of course, all indices are above the 50.0 points, which means there is little economic growth without any particular risks of a recession. Let's agree that this distinguishes the United States from Europe. In addition, it is expected to reduce the total number of applications for unemployment benefits by 30 thousand. In particular, the number of initial applications for unemployment benefits should decrease by 4 thousand, and the number of repeated by another 26 thousand.

The dynamics of the business activity index in the manufacturing sector of the United States:

analytics5d5e4835210a6.png

The Euro/Dollar currency pair formed a temporary flat within the boundaries of 1.1066/1.1110, sequentially working out each side. It is likely to assume that this kind of accumulation is temporary in nature and it is worth paying attention to the lower border of 1.1066. In case of breakdown, we will go towards 1.1040-1.1020.

analytics5d5e4847933f2.png

The pound/dollar currency pair found a resistance point once again in the face of the level of 1.2150, forming as a fact of working it off. It is likely to assume that the downward mood will continue with the first descent to 1.2080.

analytics5d5e485707451.png

Forex analysis 22 Aug 2019, 10:14 UTC+00
Relevance Relevance: up to 19:00 UTC+00
Close Expand on this page Go to article
4 Forecast for GBP / USD pair on August 22, 2019
On August 22, the British pound may resume growth to 1.2225
GBP / USD pair The British pound returned below the Fibonacci level of 238.2% of the base outcome of the movement from March 13 to April 25. The signal line of the Marlin oscillator met strong resistance on the border territory of the bulls. Another exit of the price over 1.2154 may provoke continued growth to 1.2225 - to the point where the Fibonacci level coincides with 223.6% with the downward line of the price channel. On the four-hour chart, the price found support from...

GBP / USD pair

The British pound returned below the Fibonacci level of 238.2% of the base outcome of the movement from March 13 to April 25. The signal line of the Marlin oscillator met strong resistance on the border territory of the bulls. Another exit of the price over 1.2154 may provoke continued growth to 1.2225 - to the point where the Fibonacci level coincides with 223.6% with the downward line of the price channel.

analytics5d5e12fef2fcd.png

On the four-hour chart, the price found support from the balance indicator line, which indicates the preservation of the market balance mainly for purchases. The Marlin oscillator penetrated insignificantly into the zone of negative numbers. Taking into account fluctuations, the signal line of the oscillator can be accepted as being on the border with the territory of the bears. Here, the MACD line (blue color) pays more attention to itself. It turned upward, which is an indication of the direction of the medium and short-term trend.

analytics5d5e132239806.png

Thus, a high probability is the rise in prices with a target of 1.2225. It is possible to overcome this goal by working out the MACD line of a daily scale in the region of 1.2275. To develop a lowering scenario, the price needs to gain a foothold under the MACD line below 1.2072 oN the four-hour chart. The breakdown of the MACD line against its direction in the range of a turn is always associated with increased volatility.

Forex analysis 22 Aug 2019, 06:27 UTC+00
Relevance Relevance: up to 23.08.19 - 04:00 UTC+00
Close Expand on this page Go to article
5 Hot forecast for EUR/USD on 08/22/2019 and trading recommendation
The content of the text of the minutes of the Federal Open Market Committee meeting largely confirmed the assumptions...
It is clearly seen how market participants were waiting for the publication of the text of the minutes of the Federal Open Market Committee meeting, since all day quotes stood still. But as soon as the text of the minutes was published, the market came to life, and the value of the single European currency went down. Although the scale of the dollar strengthening is extremely small against the background of a static picture, it looks impressive. In many ways, a rather sluggish strengthening...

It is clearly seen how market participants were waiting for the publication of the text of the minutes of the Federal Open Market Committee meeting, since all day quotes stood still. But as soon as the text of the minutes was published, the market came to life, and the value of the single European currency went down. Although the scale of the dollar strengthening is extremely small against the background of a static picture, it looks impressive. In many ways, a rather sluggish strengthening of the dollar is due to the fact that the text of the minutes of the Federal Open Market Committee meeting confirmed the assumptions of the majority of investors - despite the angry demands of Donald Trump to immediately reduce the refinancing rate by another 1.00%, the Federal Reserve does not intend to once again soften the parameters of monetary policy during the current year. Such conclusions were already suggested because the decision to reduce the refinancing rate from 2.50% to 2.25% was not unanimous. In other words, the Federal Reserve does not intend to rush headlong following the panic sentiment fueled by various media outlets regarding the trade conflict between the United States and China. Jerome Powell and his colleagues are inclined to pursue a cautious and balanced policy, based on economic realities, rather than rumors, speculations and assumptions. In many ways, this adds points to the dollar, so that we will continue to observe its sluggish strengthening.

analytics5d5e3985e75bf.png

Today, all market attention will be focused on the publication of preliminary data on business activity indices, first in Europe and then in the United States. The forecasts are, to put it mildly, disappointing. So, in Europe they expect a decline in absolutely all indicators. In particular, the index of business activity in the manufacturing sector should decrease from 46.5 to 46.2, and in the service sector from 53.2 to 53.0. As a result, the composite index of business activity should decrease from 51.5 to 51.2. Of particular concern is the index of business activity in the manufacturing sector, which continues to fall, although it is already at a value below 50.0 points, which is the boundary below which the risk zone for a recession begins. The worst thing is that this very index of business activity in the manufacturing sector has been declining since the end of 2017, practically without making any attempts to grow.

The dynamics of the business activity index of the euro area:

analytics5d5e39a2171fe.png

In the United States, the situation with business activity indices is only slightly better. In contrast to Europe, an increase in the index of business activity in the manufacturing sector is expected from 50.4 to 50.5. But this does not help the composite business activity index, and it should fall from 52.6 to 51.7. The reason is the index of business activity in the service sector, which may decline from 53.0 to 52.8. But in any case, the situation in the United States looks a little better. Much more importantly, the business activity index in the manufacturing sector of the United States is still above 50.0 points, which indicates albeit moderate, but still growth. Moreover, a fall in the number of applications for unemployment benefits by as much as 30 thousand is expected. Moreover, both the number of initial applications and repeated ones should decrease. In particular, the number of initial applications for unemployment benefits should decrease by 4 thousand, and repeated ones by 26 thousand.

The dynamics of the business activity index of the United States:

analytics5d5e39fdcdbf2.png

After an inertial move, the EUR/USD pair went into a three-day accumulation, focusing on the boundaries of 1.1066/1.1110. Considering everything that happens in general terms, we see that the current platform in the form of a flat formation is an excellent point for the regrouping of trading forces, while maintaining bearish interest in the market.

It is likely to assume that the fluctuation in the given frames of 1.1066/1.1110 still remains for some time, but now traders are at a low start, analyzing the behavior of quotes within the lower limit of accumulation. If the price nevertheless succeeds in consolidating below the control point of 1.1066, we will open the way towards the psychological level of 1.1000 (+/- 30 points).

Let's concretize all the above into trading signals:

• We consider long positions in two versions: the first, in case of deceleration within 1.1066, followed by a rebound, where the primary prospect is in the region of 1.1100; the second option, in case the price is consolidated above 1,1120.

• We consider short positions in case of price consolidation lower than 1.1066 (not a puncture), with the prospect of a move to 1.1000 (+/- 30 points).

From the point of view of a comprehensive indicator analysis, we see that indicators on all major time periods signal a further decline in quotations, which is justified in terms of general market interest. In the event of another deceleration within 1.1066, the first signal will come from indicators at shorter time intervals (15M, 30M, 1H).

analytics5d5e3a11c221d.png

Forex analysis 22 Aug 2019, 06:43 UTC+00
Relevance Relevance: up to 18:00 UTC+00
Close Expand on this page Go to article
6 EUR/USD: "Minutes" of the Fed did not interest traders, the market is awaiting Powell's verdict
The market ignored the Fed protocol published yesterday and such a reaction of traders was very expected given the...
The market ignored the Fed protocol published yesterday and such a reaction of traders was very expected given the certain obsolescence of this document. Regulator members in their statements substantiated the July rate cut. According to most of them, this step will help inflationary growth and prevent a reduction in business investment. Members of the Fed associate the latter factor with the consequences of a trade war between the US and China, which "is unlikely to be completed in the...

The market ignored the Fed protocol published yesterday and such a reaction of traders was very expected given the certain obsolescence of this document. Regulator members in their statements substantiated the July rate cut. According to most of them, this step will help inflationary growth and prevent a reduction in business investment. Members of the Fed associate the latter factor with the consequences of a trade war between the US and China, which "is unlikely to be completed in the near future." It is worth noting here that the uncertainty in this matter only increased for the past three weeks, after the end of the July meeting. This is an important point since the growth of macroeconomic statistics can be offset by a trade conflict in the context of the regulator's further steps to mitigate monetary policy parameters.

analytics5d5e374136179.jpg

Fed members are also worried about the "continued finding of inflation rates below inflation targets." In their opinion, this factor reduces inflationary expectations. Although in the past few years, inflation has typically exceeded the two percent long-term goal. June inflation really disappointed the market, however, July figures were in the green zone ahead of forecast values. Thus, the general consumer price index showed good dynamics, rising to 1.8% in annual terms with a forecast of growth of up to 1.7% and to the level of 0.3% on a monthly basis. But core inflation, excluding food and energy prices, showed more significant growth. In monthly terms, the indicator grew to 0.3% and in annual terms, it jumped to 2.2%, which is the strongest growth rate in the last 6 months.

The labor cost index also increased. According to experts, the Fed members track this inflation indicator with a "special predilection". Hence, its dynamics have a significant impact on the dollar. In the first quarter of this year, it collapsed to -1.6% but turned out to be much better in the second quarter, reaching 2.4% than the expected forecasted increase to 1.7%. This indicator allows us to estimate the growth rate of the level of wages in the United States and accordingly, it is a good indicator of inflationary pressure in the country. I note that all the above figures were published after the July meeting. Hence, the voiced comments should be considered in the context of these releases.

Another issue that has raised concerns among Fed members is the inverse of the yield curve. Let me remind you that this fact seriously alarmed market participants since similar trends were observed in anticipation of the 2008 crisis. In addition, the inversion of the curve preceded almost all recessions in the States over the past seven decades, only in the mid-sixties the signal was false. But even then, the US economy slowed down significantly. However, members of the Committee do not panic about this. In their opinion, low profitability is a "potential source of risk", but such risks "do not look high" at the moment. Judging by the rhetoric of the protocol, Fed officials were more concerned about the high level of corporate debt and lending volumes. According to regulators, these factors create "certain risks" for Fed forecasts.

Thus, many theses of the Fed protocol published yesterday really look outdated. Key macroeconomic indicators have recently shown growth, although most of them came out after the July meeting. Indicators such as Retail sales, inflation, consumer confidence, average hourly wage growth and US GDP have recently shown positive dynamics, reflecting the growth of the US economy. On the other hand, Fed members are still concerned about the trade conflict between the United States and China, and more precisely, the consequences of this conflict. Business investment and factory production have recently continued to weaken amid unrest over the prospects for trade relations between the two superpowers. Some factors (besides the US-China conflict) could potentially weaken the business of investing in fixed assets even further. In particular, we are talking about "hard" Brexit and/or geopolitical tensions in the Far East. That is, if the unrest in Hong Kong leads to China's military intervention and the risks of implementing this option have recently increased.

analytics5d5e372c1c496.jpg

To summarize, it is worth noting that the Fed protocol has not changed market expectations. Traders still admit the probability of interest rate cuts at one of the autumn meetings and in the first half of next year. As of July 31, the Fed considered interest rate cuts a "correction" in the middle of the cycle. It is entirely possible that regulator members will come to the conclusion that the 25-point adjustment does not adequately reflect the existing risks, primarily the geopolitical plan. At least recent events increase the likelihood of such a scenario.

The EUR/USD pair actually ignored yesterday's release, continuing to trade in a given price range. The market is waiting for the main event of this week - a speech by Fed Chairman Jerome Powell, which will be held tomorrow, during the American session. His rhetoric will allow EUR/USD traders to exit the price range, either to the base of the 10th figure with testing the support level of 1.0980 or to the borders of the 12th figure.

Forex analysis 22 Aug 2019, 07:47 UTC+00
Relevance Relevance: up to 23.08.19 - 06:00 UTC+00
Close Expand on this page Go to article
7 EUR/USD. August 21st. Results of the day. The Fed called the key rate cut "a mid-cycle adjustment"
The Fed meeting's minutes didn't tell traders anything that was super important and interesting. Calmness remains on...
4-hour timeframe Amplitude of the last 5 days (high-low): 60p - 68p - 47p - 38p - 41p. Average amplitude over the last 5 days: 51p (54p). Wednesday, August 21, passed in the same calm direction as the first two trading days of the week. The only macroeconomic event of the past day was the publication of the Fed meeting's minutes. As we expected, the minutes did not contain anything interesting. In general, it rarely happens that a minutes can surprise traders with something. This...

4-hour timeframe

analytics5d5e2dcc74135.png

Amplitude of the last 5 days (high-low): 60p - 68p - 47p - 38p - 41p.

Average amplitude over the last 5 days: 51p (54p).

Wednesday, August 21, passed in the same calm direction as the first two trading days of the week. The only macroeconomic event of the past day was the publication of the Fed meeting's minutes. As we expected, the minutes did not contain anything interesting. In general, it rarely happens that a minutes can surprise traders with something. This time, based on the minutes, two members of the monetary committee opposed the rate cut, but Jerome Powell spoke in favor of cutting the rate (the impact of Donald Trump?), The minutes also said that the rate cut was caused by some adjustment in the middle of the cycle in response to changing economic prospects. Also, as always, emphasis was placed on inflation, which used to be significantly higher than 2.0%, and has currently been below the Fed target for quite some time.

Since there are practically no movements on the market, we can once again suggest the prospects for the euro/dollar pair in the coming weeks. Firstly, the next Fed meeting will be held on September 17-18, accordingly, there will not be a new rate cut until this time. Secondly, this Friday, Fed Chairman Jerome Powell will give a speech and his rhetoric will tell traders whether the regulator is preparing for a new decline in any case, or will nevertheless analyze economic indicators before deciding to change monetary policy. If Powell does not give clear signals about the rate cut in September, the US dollar will remain in the leading position, as there are still no special reasons, besides correctional ones, to buy the euro.

Trading recommendations:

The EUR/USD pair continues to adjust against the downward trend, and the Bollinger bands reversed to the side and narrowed to a low. Thus, now we have a pronounced flat. It is recommended to wait until its completion and only after that resume trading on the euro/dollar pair.

In addition to the technical picture, fundamental data and the time of their release should also be considered.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen is the red line.

Kijun-sen is the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dashed line.

Chikou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and bar graph with white bars in the indicators window.

Forex analysis 22 Aug 2019, 05:21 UTC+00
Relevance Relevance: up to 23.08.19 - 04:00 UTC+00
Close Expand on this page Go to article
8 Technical analysis of GBP/USD for 22/08/2019
Another attack on the technical resistance has failed, more downside to come
The GBP/USD pair has tested the technical resistance level for the second time in the last few days, but failed to break through it. If bulls eventually break through this level, then the next target for them is located at the level of 1.2209 and then at 1.2248. The positive and strong momentum supports the short-term bullish outlook towards these levels. Weekly Pivot Points: WR3 - 1.2378 WR2 - 1.2273 WR1 - 1.2217 Weekly Pivot Point - 1.2114 WS1 - 1.2060 WS2 - 1.1953 WS3 - 1.1902 ...

The GBP/USD pair has tested the technical resistance level for the second time in the last few days, but failed to break through it. If bulls eventually break through this level, then the next target for them is located at the level of 1.2209 and then at 1.2248. The positive and strong momentum supports the short-term bullish outlook towards these levels.

Weekly Pivot Points:

WR3 - 1.2378

WR2 - 1.2273

WR1 - 1.2217

Weekly Pivot Point - 1.2114

WS1 - 1.2060

WS2 - 1.1953

WS3 - 1.1902

Trading Recommendations:

The best strategy for current market conditions is to trade with the larger timeframe trend, which is down. All upward moves will be treated as local corrections in the downtrend. In order to reverse the trend from down to up, the key level for bulls is seen at 1.2429. As long as the price is trading below this level, the downtrend continues.

analytics5d5e2e8ec8830.jpg

Forex analysis 22 Aug 2019, 05:56 UTC+00
Relevance Relevance: up to 23.08.19 - 05:00 UTC+00
Close Expand on this page Go to article
9 GBP/USD. August 21st. Results of the day. Emmanuel Macron also rejected the proposal of Boris Johnson
During his first trip to Europe as Prime Minister, Boris Johnson did not find any support on the Brexit issue among...
4-hour timeframe Amplitude of the last 5 days (high-low): 56p - 100p - 100p - 68p - 116p. Average amplitude over the last 5 days: 88p (76p). British Prime Minister Boris Johnson, who has recently received more attention than the odious Donald Trump, made his first visit to the European Union, France. The purpose of the visit was to negotiate with President Emaanuel Macron on the terms of the Brexit deal, or rather, the "back-stop" clause that Johnson wants to cancel. Earlier, the...

4-hour timeframe

analytics5d5e2fc786aa5.png

Amplitude of the last 5 days (high-low): 56p - 100p - 100p - 68p - 116p.

Average amplitude over the last 5 days: 88p (76p).

British Prime Minister Boris Johnson, who has recently received more attention than the odious Donald Trump, made his first visit to the European Union, France. The purpose of the visit was to negotiate with President Emaanuel Macron on the terms of the Brexit deal, or rather, the "back-stop" clause that Johnson wants to cancel. Earlier, the first attempt to convince Brussels had already failed: the President of the European Council Donald Tusk rejected Johnson's proposal to reconsider the agreement. It became known that Macron did not support Boris Johnson's initiative to cancel the "backstop". Therefore, Johnson will now meet with German Chancellor Angela Merkel, but the hope that the UK prime minister will find support in Berlin is even less. Actually, nothing surprising has happened. We have already noted more than once that Johnson's actions very often resemble actions with the goal of creating a certain appearance. Apparently, the prime minister is trying hard to revise the agreement with the EU in order to avoid a hard scenario for leaving the EU. What for? In order to convince Parliament to vote "for" the "hard" Brexit. The reasons in this case will be simple: the EU refused to revise the agreement. The same thing is in the eyes of the British population: Johnson tried to negotiate with the EU, but the Europeans refused. That's it, Boris Johnson did everything he could. In fact, Johnson did not offer the European Union anything on the basis of which the "deal" could be reconsidered. That is, nothing at all. The British prime minister simply hoped that the EU leaders would agree to revise the agreement from "out of the blue", which had been worked on for about 2 years. Naturally, he was refused.

Based on the foregoing, we do not expect Johnson's visit to the EU to end with something encouraging for Brexit. Most likely, the prime minister will return to Britain and continue to prepare for the hard Brexit, and the Parliament, which will soon leave the holidays, will continue to prepare for a vote of no confidence in Johnson.

Well, the pound will remain in a downward trend, since the date of the hard Brexit is approaching, there is no hope that the "divorce" will take place amicably.

Trading recommendations:

The pound/dollar currency pair has begun a new round of a downward correction against an upward trend. Thus, formally, purchases of the pound sterling by minimum lots with the target of 1.2207 remain formally relevant, however, in fact, purchases of the British pound in the current conditions are fraught with increased risks.

In addition to the technical picture, fundamental data and the time of their release should also be considered.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen is the red line.

Kijun-sen is the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dashed line.

Chikou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and bar graph with white bars in the indicator window.

Forex analysis 22 Aug 2019, 05:21 UTC+00
Relevance Relevance: up to 23.08.19 - 04:00 UTC+00
Close Expand on this page Go to article
10 The focus of the market is the performance of Powell in Jackson Hole (We sell or buy EUR/USD and USD/JPY pairs based on the content of Powell's performance)
The protocol of the July Fed meeting released on Wednesday revealed nothing new. In fact, he reiterated that the...
The content of the final document presented showed that the regulator's view of the state of the economy remains positive but fears were raised about the likelihood of increased inflationary pressures against the backdrop of increased customs duties against the backdrop of the trade wars unleashed by Donald Trump and the actual negative impact of the likely development of the trade confrontation between Washington and Beijing. The protocol revealed some discrepancies in estimates of the...

The content of the final document presented showed that the regulator's view of the state of the economy remains positive but fears were raised about the likelihood of increased inflationary pressures against the backdrop of increased customs duties against the backdrop of the trade wars unleashed by Donald Trump and the actual negative impact of the likely development of the trade confrontation between Washington and Beijing. The protocol revealed some discrepancies in estimates of the level of interest rates between a member of the Open Market Committee (FOMC) but nothing more. In general, we can say that the presented document did not reveal any pitfalls or obstacles in the American Central Bank, which could show that it could radically change its course and begin to further lower interest rates.

Yet, investors are not discouraged, believing that the escalation of the US-Chinese trade war will force the Federal Reserve to change its mind. Also, over the past month, there is a lot that happened including a decrease in the Chinese Central Bank by several stages of the yuan against the dollar. Trump's message says that he can decide to lower the tax burden to stimulate the growth of the national economy. In addition, the American president once again called on the regulator to continue lowering interest rates. In addition, recently, the yield curves of 2-year-old and 10-year-old Treasuries have been reversed twice showing the inversion effect, which, according to the many decades-old traditions, indicates the likelihood of an economic recession or recession in the American economy.

However, if the Federal Reserve continues to ignore the appeals of the 45th president of the United States and focuses on the factor of prospective inflation growth due to the growth of customs duties, then it is unlikely that he will ignore the signals about the slowdown of production activity the external call in the form of the "Chinese trade threat" and the brutal prospects of continuing the collapse of the national stock market with a parallel strengthening of the dollar, which will only strengthen the losing position of US exports in the world market.

That is why markets are still aggressively waiting for continued interest rate cuts and hope that Fed Chairman Jerome Powell will be forced to touch on monetary policy at the Jackson-0Hole economic symposium beginning today and may make it clear what markets should expect to cut in value in the near future borrowing. If this happens, then we expect a local weakening of the dollar and an increase in the US and not only stock indices.

Forecast of the day:

The EUR/USD pair is trading in the range of 1.1070-1.1110 in anticipation of the performance of Jerome Powell in Jackson Hole. Today, the pair can break out of the range both up to 1.1155 and down to 1.1025. If the head of the Fed either signals a continuation of interest rate cuts, the pair will go up. However, if he does not report anything, we should expect her to fall.

A similar picture will be observed in the dynamics of the USD/JPY pair. Hints about the continuation of the reduction in rates will lead to a pair growth to 107.25, but only after overcoming the mark of 106.75. The absence of a signal about the impending reduction in rates will cause a new wave of demand for protective assets and the pair will resume falling to 105.10.

analytics5d5e410a9eff2.png

analytics5d5e412f02bd0.png

Forex analysis 22 Aug 2019, 11:46 UTC+00
Relevance Relevance: up to 24.08.19 - 07:00 UTC+00
Close Expand on this page Go to article
Popular forum posts per day
Forex TV
Start trading with
no risks and investments
With new Start-Up Bonus of $1000
Get bonus
55%
from InstaForex
on every deposit
Earn up to
$50000
for inviting friends to get StartUp Bonus from InstaForex
No investments required!