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1 GBP/USD: plan for the American session on June 5 (analysis of morning deals). The pound continued to grow and is ready to update new highs further. The bulls are aiming for a breakout of the resistance of 1.2686
In the first half of the day, I paid attention to the resistance of 1.2611 and recommended that it open long...
To open long positions on GBPUSD, you need: In the first half of the day, I paid attention to the resistance of 1.2611 and recommended that it open long positions at the breakdown and consolidation. If you look at the 5-minute chart, you will see how at first the bulls broke above the resistance of 1.2611, and then after a small downward correction to this range, the buy signal was confirmed from the top down, which allowed them to get to the next resistance of 1.2686. Similarly, I...

To open long positions on GBPUSD, you need:

In the first half of the day, I paid attention to the resistance of 1.2611 and recommended that it open long positions at the breakdown and consolidation. If you look at the 5-minute chart, you will see how at first the bulls broke above the resistance of 1.2611, and then after a small downward correction to this range, the buy signal was confirmed from the top down, which allowed them to get to the next resistance of 1.2686. Similarly, I recommended opening short positions from the resistance of 1.2686, which also allowed us to take a couple of dozen points from the market. At the moment, to maintain the bullish momentum, a breakout and consolidation above the resistance of 1.2686 are required, which will open a direct path for buyers of the pound to the highs of 1.2744 and 1.2798, where I recommend fixing the profits. If the pressure on the GBP/USD returns after the report on the US labor market, then you can count on support for 1.2611 only after the formation of a false breakout there. It is best to postpone long positions until the test of the lows of 1.2552 and 1.2500, counting on correction of 30-40 points within the day.

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To open short positions on GBPUSD, you need:

Sellers showed themselves from the resistance of 1.2686, where I recommended opening short positions in my morning forecast, and now the pair is locked in the side channel of 1.2611-1.2686. Going beyond this channel will depend on the fundamentals of the US economy. In the case of a breakout of 1.2686, it is best to postpone short positions until the highs of 1.2744 and 1.2798 are updated, counting on correction of 30-40 points within the day. An equally important task for the bears will be to break through and consolidate below the support of 1.2611, which will increase pressure on GBP/USD and push to a minimum of 1.2552, and the longer-term goal will be the range of 1.2500, where I recommend fixing the profits.

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Signals of indicators:

Moving averages

Trading is conducted above the 30 and 50 daily averages, which keeps the market bullish momentum.

Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger Bands

If the upper limit of the indicator breaks around 1.2655, the demand for the pound may increase. The pair will be supported by the lower border of the indicator in the area of 1.2555.

Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
Forex analysis 5 Jun 2020, 12:46 UTC+00
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2 Analysis on EUR / USD and GBP / USD for June 5, 2020
US unemployment rate drops and the nonfarm payrolls decreased. However, the euro fell very weakly, while the pound...
EUR/USD On June 4, the EUR / USD pair gained about 105 bps and thus continued construction supposed wave 3 into 3 to C to B. If this is true, then today's exit of the quotes from the reached highs may mean the completion of this wave and the transition to the construction of correctional wave 4. Thus, after a fairly long increase in quotes, a rollback from the reached maximums may finally follow. At the same time, the wave marking of the upward trend section does not yet appear to...

EUR/USD

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On June 4, the EUR / USD pair gained about 105 bps and thus continued construction supposed wave 3 into 3 to C to B. If this is true, then today's exit of the quotes from the reached highs may mean the completion of this wave and the transition to the construction of correctional wave 4. Thus, after a fairly long increase in quotes, a rollback from the reached maximums may finally follow. At the same time, the wave marking of the upward trend section does not yet appear to be fully equipped.

Fundamental component:

On Thursday, all markets of the EUR / USD currency pair focused on the results of the ECB meeting. And although there was a fairly large amount of important information, I cannot say that the increase in the instrument was connected precisely with these events. Following the meeting, the European Central Bank expanded its program to counter the economic crisis by 600 billion euros and left key rates unchanged. Christine Lagarde said at a press conference that by the end of 2020, the EU economy will lose about 8.7%. Thus, there was nothing optimistic about the euro yesterday (the report on retail sales in the EU was also weak). Nevertheless, demand for European currency remained high throughout the day, and at the same time, demand for the pound did not fall. Thus, in general, it is better to conclude that the demand for the US dollar continued to fall, and the outcome of the ECB meeting had nothing to do with it.

Today, the picture was about the same. Important reports from the US turned out to be much better than market expectations, but if the euro started to decline, then the pound continued to grow, although, in theory, both pairs should have moved synchronously, as the news was related to both. The unemployment rate in May quite unexpectedly amounted to 13.3% and decreased compared to April. The data from the Nonfarm showed an additional 2.5 million unemployed, while markets were waiting for a new reduction of 9 million. Given the current state of the US economy, this is great news. Despite this, the US dollar only grew by 30 basis points.

General conclusions and recommendations:

The Euro-Dollar pair presumably continues to build the upward wave C in B. Thus, I recommend buying the instrument with targets located near the calculated marks of 1.1260 and 1.1406, which equates to 127.2% and 161.8% Fibonacci for each new signal "up" MACD. At this time, the instrument may begin to build correction wave 4.

GBP / USD

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On June 4, the GBP / USD pair gained just about 20 base points and about 100 more today, June 5th. Thus, the construction of the upward wave continues, and since the instrument broke the peak of wave b, the chances that wave 2 or B is completed and wave 3 or C continues to be built have increased. If this is true, then after a successful attempt to break through the maximum of wave b, the increase in the quotes will continue with targets located around the 30th figure.

Fundamental component:

In the UK, there was still little to no news for Thursday and Friday. The news and reports in the US have contributed to an even greater increase in demand for the pound and a fall in the dollar, although the reaction could be absolutely the opposite. Even the status on Friday when many take profits, which leads to a pullback, did not help the US dollar. It seems that the markets are seriously concerned about the rallies and protests that swept America and it is not clear when and how these will end.

General conclusions and recommendations:

The Pound / Dollar tool supposedly continues to build a rising wave. However, before a successful attempt to break the 1.2643 mark, I do not recommend buying the pound sterling since a false breakdown is possible. A successful attempt at a breakthrough will show that markets are ready for new purchases as part of building wave 3 or C.

Forex analysis 5 Jun 2020, 14:17 UTC+00
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3 Gold unable to find support in any way
Gold futures declined in price during both Asian trading and the European session today. On the trading floor in New...
Gold futures declined in price during both Asian trading and the European session today. On a trading floor in New York, the value of August gold futures on the last business day of the week fell by 1.11%, which sent the precious metal to the level of $ 1,708.30 per troy ounce. Support at the same time was at around 1,690.30 dollars per troy ounce, and resistance was recorded in the region of 1,761 dollars per troy ounce. Buyers in the gold market, of course, know that going against the...

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Gold futures declined in price during both Asian trading and the European session today.

On a trading floor in New York, the value of August gold futures on the last business day of the week fell by 1.11%, which sent the precious metal to the level of $ 1,708.30 per troy ounce. Support at the same time was at around 1,690.30 dollars per troy ounce, and resistance was recorded in the region of 1,761 dollars per troy ounce.

Buyers in the gold market, of course, know that going against the Fed's policies is very difficult. It is especially difficult at the moment when the regulator begins to literally bring down a huge amount of money to the market in the form of loans, grants, targeted support, etc, in order to save the drowning economy. In another scenario, all these trillions could go to purchase a more reliable and time-tested asset - gold.

For the precious metals market, there are two options for the development of events with such an avalanche of money. Firstly, you can ride it and ride well, which would be reflected in the rise in the price of gold to the desired 1800 or even higher - up to 1900 dollars per troy ounce. According to the second option, the money wave covers the market, which will inevitably die, losing all chances of survival. In this situation, gold would begin to rapidly reduce its value.

It would seem that the precious metal is about to find itself at the peak of a snow wave, but then a rival appears - the stock market, which, of course, does not want to share the victory with gold.

In this struggle for liquidity, the precious metals market is holding far worse than stock indices. Even the traditional rival of gold - a strong dollar - no longer exerts such serious pressure. As it became clear, every successful day in the stock market certainly turned out to be a doubly unlucky day for the precious metals market. And this correlation will continue.

Today, the futures for silver for July delivery reduced their value by 1.18% and went to the level of 17.848 dollars per troy ounce. Copper futures showed the opposite movement which became more expensive at 1.63% and took a position at 2,530 dollars per pound.

News 5 Jun 2020, 15:19 UTC+00
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4 Evening review on EURUSD for June 05, 2020
Nonfarm came out with 2.5 million new unemployed
Nonfarm unemployment in the USA added another 2.5 million for the month of May, this is smaller than what was expected in the forecast which is 9 million. Moreover, the data showed the decline of the euro, marginally. Nevertheless, the euro's upside remains strong. Also, there is a possibility that the euro may recover and reach the level of 1.1500. You may open purchases at the current position and a more conservative purchase after a strong pullback to the area of 1.1200.

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Nonfarm unemployment in the USA added another 2.5 million for the month of May, this is smaller than what was expected in the forecast which is 9 million.

Moreover, the data showed the decline of the euro, marginally. Nevertheless, the euro's upside remains strong.

Also, there is a possibility that the euro may recover and reach the level of 1.1500.

You may open purchases at the current position and a more conservative purchase after a strong pullback to the area of 1.1200.

Forex analysis 5 Jun 2020, 12:50 UTC+00
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5 Stock market race stopped
The stock markets of the United States of America were unable to decide on a single vector of movement following...
The stock markets of the United States of America were unable to decide on a single vector of movement following yesterday's session, so trading closed with multidirectional dynamics. Markets are in search of new stimulating factors that can make them grow again, but so far nothing more or less convincing has been happening. And statistics on the restoration of economic growth is also not too positive, which could speak of a confident increase in lost profits. Analysts believe that...

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The stock markets of the United States of America were unable to decide on a single vector of movement following yesterday's session, so trading closed with multidirectional dynamics.

Markets are in search of new stimulating factors that can make them grow again, but so far nothing more or less convincing has been happening. And statistics on the restoration of economic growth is also not too positive, which could speak of a confident increase in lost profits. Analysts believe that investors have few positive points that can strengthen their position. The ECB's decision to continue its stimulus policy, as well as the slower pace of job cuts in the United States, no longer supports market participants to the extent they would like.

Yesterday's decision of the European Central Bank regarding the increase in the repurchase of Pandemic Emergency Purchase Program securities to 600 billion euros, although it was not expected, still did not cause a surge of emotions. The total amount was, therefore, to be about 1.350 trillion euros. Recall that, according to preliminary data, the next buyback should not exceed $ 500 billion.

In addition, the European regulator did not make changes to the base interest rate on loans, which means that it still remains at a zero level. Without transformations, the deposit rate remained at the level of 0.5%. The same policy was noted with regard to the margin lending rate: it was decided to maintain it at 0.25%. All these actions of the ECB were very predictable, investors and experts did not expect anything else, so this did not add any dynamics to the market.

However, in her speech, the chairman of the regulator Christine Lagarde noted that the scale of the fall of the EU economy is enormous. In view of this, the ECB has revised its forecasts for GDP and inflation for the worse this year. The next shifts were demonstrated by expectations of economic decline by 8.7% this year. Inflation should also be at the level of 0.3%. The second quarter of this year should reflect an even larger drop, namely a 13% reduction in GDP.

As for the situation in the United States, the statistics released here on the number of applicants for unemployment benefits last week, which came to an end on May 30, showed a decrease of 249 thousand people compared to the same period earlier. Thus, the growth amounted to 1.877 million people. In general, this figure at the end of March is now at 42.6 million people. This positive is offset by other statistics, which turned out to be multidirectional in their movement.

Thus, the deficit of the foreign trade balance of America in April grew and was at around $ 49.4 billion, the previous value was $ 42.3 billion. Labor productivity declined in the first quarter of 2020 by 0.9%, which is much lower than preliminary forecasts. Experts expected to see a decrease of no less than 2.7%. The cost of labor in the country since the beginning of the year has increased by 5.1%, although it was previously stated that growth will not exceed 4.8%.

All of this, of course, forced the markets to begin downward adjustment.

Yesterday, The Dow Jones Industrial Average closed in a weak plus, which amounted to 0.05%, or 11.93 points, which sent it to the level of 26,281.82 points.

The Standard & Poor's 500 index, on the contrary, started a downward trend and as a result of trading, it fell by 0.34% or 10.52 points. This pushed to the mark of 3 112.35 points.

The Nasdaq Composite Index fell 0.69%, or 67.10 points, and began to be in the region of 9 615.81 points.

The stock markets of the Asia-Pacific region also lost stable ground under their feet, which stopped their rise, and trading became multidirectional.

According to experts, the rapid growth of the indices in the Asia-Pacific region was not due to some stable factor and came as a complete surprise. He should have stopped soon because he did not receive support.

The most likely scenario here will be reaching a plateau that will determine the range of trade in a narrow corridor. This will happen until a powerful external stimulator appears, which will make you move in one direction or another.

In the meantime, market participants are closely watching the growing conflict between Washington and Beijing. Recall that on Thursday, US authorities began to discuss the next portion of sanctions against China.

Hong Kong's Hang Seng Index gained 0.12%, which allowed it to almost completely compensate for all of its past losses, which began when the National Security Bill was passed.

China's Shanghai Composite Index increased by 0.05%, which, of course, is very insignificant, but in this situation a positive point.

Japan's Nikkei 225 Index, on the other hand, showed a 0.24% decline, while the South Korean index jumped 0.67%.

Australia's ASX 200 Index fell by 0.09%.

In general, we can say that stock markets on the eve of the weekend turned out to be without significant incentives, however, these may appear already at the beginning of next week.

News 5 Jun 2020, 15:19 UTC+00
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6 June 5, 2020 : EUR/USD Intraday technical analysis and trade recommendations.
Although the EUR/USD pair is currently expressing a bullish breakout above 1.1315 (78.6% Fibonacci Level), there's...
On March 20, the EURUSD pair has expressed remarkable bullish recovery around the newly-established bottom around 1.0650. Bullish engulfing H4 candlesticks as well as the recently-demonstrated ascending bottoms indicated a high probability bullish pullback towards 1.0980 and 1.1075 (Fibo Level 50%). Shortly After, a bearish Head & Shoulders pattern was demonstrated around the price zone between (1.1075-1.1150). Shortly after, a sideway consolidation range was established in the...

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On March 20, the EURUSD pair has expressed remarkable bullish recovery around the newly-established bottom around 1.0650.

Bullish engulfing H4 candlesticks as well as the recently-demonstrated ascending bottoms indicated a high probability bullish pullback towards 1.0980 and 1.1075 (Fibo Level 50%).

Shortly After, a bearish Head & Shoulders pattern was demonstrated around the price zone between (1.1075-1.1150).

Shortly after, a sideway consolidation range was established in the price range extending between 1.0770 1.1000.

The price zone of (1.0815 - 1.0775) has been standing as a prominent Demand Zone providing quite good bullish support for the pair so far.

On May 14, Evident signs of Bullish rejection have been manifested around this price zone.

Moreover, recent ascending bottom has been established around 1.0870 which enhances the bullish side of the market in the short-term.

Short-term technical bullish outlook remains valid as long as bullish persistence is maintained above the recently-established ascending bottom around 1.0850-1.0870.

Currently, the recent bullish breakout above 1.1000 has enhanced further bullish advancement towards 1.1175 (61.8% Fibonacci Level) then 1.1315 (78.6% Fibonacci Level) where temporary bearish rejection was anticipated.

Although the EUR/USD pair is currently expressing a bullish breakout above 1.1315 (78.6% Fibonacci Level), there's negative divergence as well as recent bearish rejection being expressed on the H4 chart.

Moreover, after such a quick bullish spike, the EURUSD pair looks oversold. This suggests a probable bearish reversal around the current price levels (1.1315) to be watched by Intraday traders.

Trade recommendations :

Conservative traders are advised to wait for bearish breakout below 1.1315 as a valid SELL Signal.

T/P levels to be located around 1.1175 then 1.1100 while S/L to be located above 1.1390.

Forex analysis 5 Jun 2020, 16:21 UTC+00
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7 June 5, 2020 : GBP/USD Intraday technical analysis and trade recommendations.
Short-term technical outlook has turned into bullish, further bullish advancement may be expressed towards 1.2780...
T/P level to be located around 1.2600, 1.2715 and 1.2750 while S/L should be placed below 1.2450

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T/P level to be located around 1.2600, 1.2715 and 1.2750 while S/L should be placed below 1.2450

Forex analysis 5 Jun 2020, 15:55 UTC+00
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8 The euro has cornered the enemy
The EUR/USD pair managed to mark the best daily rally since 2011
The beginning of June was a real benefit for Christine Lagarde and the single European currency. The ECB expanded its emergency asset purchase program due to the pandemic by €600 billion, announced that it will continue until at least June 2021, revenues are planned to be reinvested until the end of 2022, and the Frenchwoman in the best traditions of Mario Draghi said that the decision to increase the scale of QE was made unanimously. However, the former head of the Central Bank did this in...

The beginning of June was a real benefit for Christine Lagarde and the single European currency. The ECB expanded its emergency asset purchase program due to the pandemic by €600 billion, announced that it will continue until at least June 2021, revenues are planned to be reinvested until the end of 2022, and the Frenchwoman in the best traditions of Mario Draghi said that the decision to increase the scale of QE was made unanimously. However, the former head of the Central Bank did this in order to sink the euro, and its current head – in order to support Italian bonds. Spreads on their rates with their German counterparts went down, and EUR/USD quotes soared to 3-month highs.

For some, it may seem strange that monetary expansion leads to a strengthening of the regional currency, however, you need to understand that the reaction of Forex to certain events differs at different stages of the economic cycle. In times of recession, investors are obsessed with the scale of incentives that can smooth a downturn. According to an unspoken rule, the share of support in % of GDP should correspond to the size of the economy's losses. The EU has done more. Thanks to the issuance of bonds by the European Commission for €750 billion and an additional budget of €1.1 trillion, as well as earlier aid programs, the fiscal stimulus is estimated at 13% of the Eurozone's GDP. At the same time, the ECB predicts that its economy will sink by 12.6% even in the worst-case scenario associated with the second wave of COVID-19. The basic option assumes a loss of 8.7%.

The fiscal stimulus for EU countries

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Thus, the generosity of the ECB and the EU led to the strengthening of the euro. However, the EUR/USD rally was associated with the confidence of investors in the implementation of the Franco-German fiscal stimulus project. It seemed that it was implemented de facto, although it was not even de jure yet. The program must be approved at the EU summit on June 11-12. If it is adjusted, the position of the "bulls" in the single European currency will be dealt a serious blow. However, the European Commission tried to make sure that both the wolves in the face of the Netherlands, Austria, Denmark, and Sweden were fed, and the sheep (southern EU countries) were whole, so the chances of failure are small.

Along with fiscal and monetary stimulus, the longest daily rally of EUR/USD since 2011 was facilitated by the sale of the US dollar. Investors against the backdrop of the global economic recovery and the growth of global risk appetite no longer need safe-haven assets in the same volume, and the Fed's balance sheet is growing so fast that it is time to think who can now be weaker than the "American". At the June meeting, the FOMC is able to suspend the process of falling the USD index, making a hint to use the practice of targeting the yield curve. In addition, data on the US labor market for May showed that the recession may not be as bad as previously thought. Is it too early to get rid of the dollar?

Technically, the target of 88.6% for the "Bat" pattern has been reached, so I recommend closing the EUR/USD longs formed from the level of 1.099. In the future, pullbacks in the direction of 1.124 and 1.12 should be used before buying.

EUR/USD, the daily chart

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Forex analysis 5 Jun 2020, 13:21 UTC+00
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9 Comprehensive analysis of movement options for #USDX vs EUR/USD, GBP/USD, and USD/JPY (Daily) on June 8, 2020
The second week of June - the growth of the dollar? Options for the development of the movement #USDX vs EUR/USD,...
Minor operational scale (Daily) The second week of June - the growth of the dollar? Options for the development of the movement #USDX vs EUR/USD, GBP/USD, and USD/JPY (Daily) on June 8, 2020. ____________________ US dollar index From June 8, 2020, the movement of the dollar index (#USDX) will be determined depending on the direction of the breakdown of the range: resistance level of 97.40 at the lower border of the channel 1/2 Median Line of the Minuette operational scale fork; ...

Minor operational scale (Daily)

The second week of June - the growth of the dollar? Options for the development of the movement #USDX vs EUR/USD, GBP/USD, and USD/JPY (Daily) on June 8, 2020.

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US dollar index

From June 8, 2020, the movement of the dollar index (#USDX) will be determined depending on the direction of the breakdown of the range:

  • resistance level of 97.40 at the lower border of the channel 1/2 Median Line of the Minuette operational scale fork;
  • support level of 96.43 on the initial SSL line of the Minuette operational scale fork.

A breakout of the resistance level of 97.40 will make it relevant to develop the movement of the dollar index within the boundaries of the 1/2 Median Line channel (97.40-97.70-97.95) and equilibrium zones (97.95-98.45-98.90) of the Minuette operational scale forks with the prospect of reaching the initial SSL line (99.20) of the Minor operational scale forks and local maximum of 100.56.

With a sequential breakdown of the initial - SSL (support level 96.43) and control - LTL (96.30) lines of the Minuette operational scale forks, the downward movement of #USDX can be continued to the borders of the equilibrium zone (95.90-94.65-93.30) of the Minor operational scale forks.

The layout of the #USDX movement options from June 8, 2020 is shown on the animated chart.

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Euro vs US dollar

The single European currency EUR/USD from June 8, 2020 will develop its movement depending on the development and direction of the breakdown of the range:

  • resistance level of 1.1365 on the final Shiff Line of the Minor operational scale forks;
  • support level of 1.1290 at the upper border of the 1/2 medium Line channel in the Minuette operational scale fork.

A breakdown of the support level of 1.1290 will make it possible to develop the movement of the single European currency within the boundaries of the channel 1/2 Median Line Minute (1.1290-1.1260-1.1230) and balance zones of the operational scale forks - Minute (1.1200-1.1135-1.1085) and Minor (1.1260-1.1170-1.1065).

The sequential breakdown of the resistance level at 1.1365 ultimate Shiff Line Minor, initial - SSL (1.1395) and control UTL (1.1420) lines of the Minuette operational scale fork, it will be a possible continuation of the upward movement of EUR/USD to a local maximum of 1.1495 and end line FSL (1.1600) of the Minor operational scale fork.

The EUR/USD movement options from June 8, 2020 are shown on the animated chart.

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Great Britain pound vs US dollar

The development of the movement of Her Majesty's currency GBP/USD from June 8, 2020 will also be due to the development and direction of the breakdown of the range:

  • resistance level of 1.2655 at the lower border of the channel 1/2 Median Line of the Minuette operational scale fork;
  • support level of 1.2595 at the lower border of ISL38.2 of the Minor operational scale fork.

In case of successive breakdown of the lower boundary of the equilibrium zone ISL38.2 of the Minor operational scale forks - support level 1.2595 and the start line SSL (1.2555) of the Minuette operational scale forks, the downward movement of Her Majesty's currency will be directed to the borders of the 1/2 channel Median Line Minor (1.2330-1.2110-1.1880).

In the case of a breakdown of the resistance level of 1.2655, the GBP/USD movement will continue in the 1/2 Median Line channel (1.2655-1.2800-1.2940) of the Minuette operational scale forks with the prospect of reaching the final Shiff Line Minor (1.3024) and the upper boundary of the ISL61.8 (1.3200) balance zone of the Minor operational scale fork.

We look at the GBP/USD movement options from June 8, 2020 on the animated chart.

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US dollar vs Japanese yen

The development of the USD/JPY currency movement of the "Land of the Rising Sun" from June 8, 2020 will be determined by the development and direction of the breakdown of the boundaries of the equilibrium zone (109.00-109.50-110.10) of the Minuette operational scale forks - details of movement within this equilibrium zone are shown on the animated chart.

With a joint breakdown of the resistance level of 110.10 at the upper boundary of the ISL61.8 equilibrium zone of the Minuette operational scale forks and the final Shiff Line Minor (110.35), the upward movement of the currency of the Land of the Rising Sun can be continued to the final line FSL (112.10) of the Minuette operational scale forks and a local maximum of 112.21.

A breakout of the lower border ISL38.2 equilibrium zone of the Minuette operational scale fork - support level of 109.00 will determine the further development of the movement of USD/JPY in the zone of equilibrium (109.20-107.95-106.65) of the Minor operational scale forks with the prospect of achieving the upper border of the channel 1/2 Median Line Minor (106.15) and update local minimum 106.00.

The markup of the USD/JPY movement options from June 8, 2020 is shown on the animated chart.

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The review is compiled without taking into account the news background, the opening of trading sessions of the main financial centers, and is not a guide to action (placing "sell" or "buy" orders).

The formula for calculating the dollar index:

USDX = 50.14348112 * USDEUR0.576 * USDJPY0.136 * USDGBP0.119 * USDCAD0.091 * USDSEK0.042 * USDCHF0.036.

Where the power coefficients correspond to the weights of currencies in the basket:

Euro - 57.6 %;

Yen - 13.6 %;

Pound - 11.9 %;

Canadian dollar - 9.1 %;

Swedish Krona - 4.2 %;

Swiss franc - 3.6 %.

The first coefficient in the formula brings the index value to 100 on the starting date - March 1973, when the main currencies began to be freely quoted relative to each other.

Forex analysis 5 Jun 2020, 16:29 UTC+00
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10 Threat of dollar hegemony, or financial weapons of mass destruction
China is preparing to launch a digital currency, which could be a dangerous competition to the dollar
Recently, the Chinese government launched testing a digital version of its national currency, which is likely to be more widely used at the Beijing Winter Olympics in 2022. Some experts believe that the digital yuan can not only strengthen government control over the country's financial system, but even change the balance of power in the international economic arena. "Most of the money that is exchanged electronically is just loans and debits on accounts with different banks....

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Recently, the Chinese government launched testing a digital version of its national currency, which is likely to be more widely used at the Beijing Winter Olympics in 2022.

Some experts believe that the digital yuan can not only strengthen government control over the country's financial system, but even change the balance of power in the international economic arena.

"Most of the money that is exchanged electronically is just loans and debits on accounts with different banks. Digital cash in China is designed to be an electronic version of a banknote or coin. It just lives in a digital wallet on a smartphone, and is not in a physical wallet. The value of the digital renminbi will be provided by the state. Virtual money will be quickly circulated in the economy and also easier to use than paper money, and will also give Chinese authorities a degree of control that cannot be obtained with physical money," Bloomberg analysts said.

"In addition, a payment system based on this kind of digital banknote or coin does not depend on the financial condition of banks, their credit rating and interaction between each other. At the same time, the state has full transparency of all payments almost in real time, as well as the ability to use the data to fine-tune the economy. And most importantly, there are no technical restrictions that would prevent the system from being taken outside China, " they added.

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It is known that the digital renminbi testing program started in April in Shenzhen, Suzhou, Chengdu and Xiongang.

Although launching across the country is likely still a long way off, China's actions have raised concerns about a new threat to US financial dominance.

In particular, Aditi Kumar and Eric Rosenbach of the Harvard Kennedy School argue that the digital version of the renminbi could ultimately allow Iran and other countries to avoid Washington's sanctions or transfer money outside the control of the US government and dollar-denominated international payment systems.

However, this does not bother everyone. Former US Treasury Secretary Henry Paulson believes that, despite China's plans, the threat to the dollar's status as the main world currency does not raise serious concerns.

"Even if the digital yuan turns out to be very mobile, the dollar will still be trusted, and oil and other key commodities will still be priced in the US currency," he said.

Of course, at the moment, a mass exodus from the dollar is unlikely. However, if the digital yuan is ubiquitous, it may push countries and people living abroad to join Chinese technology and ultimately the new currency.

"It is possible that other countries will use the Chinese scheme, and then the pioneer's advantage will turn into a serious network effect," said Matthew Graham, director of Beijing-based Sino Global Capital.

News 5 Jun 2020, 15:25 UTC+00
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