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The pound came under fire from the White House
Criticism of the US president allowed the GBP/USD pair to ride on a roller coaster.
When Donald Trump begins to comment on what is happening in the market or in any particular country, investors are nervous. His interview with the Sun newspaper shocked fans of the British pound. The US President criticized Theresa May's plan of the agreement with the EU and called the retired Foreign Minister Boris Johnson a great politician, which reduced the likelihood of strengthening trade relations between London and Washington and forced the GBP/USD quotes to collapse to the bottom of...

When Donald Trump begins to comment on what is happening in the market or in any particular country, investors are nervous. His interview with the Sun newspaper shocked fans of the British pound. The US President criticized Theresa May's plan of the agreement with the EU and called the retired Foreign Minister Boris Johnson a great politician, which reduced the likelihood of strengthening trade relations between London and Washington and forced the GBP/USD quotes to collapse to the bottom of the 31st figure. After the meeting between Trump and May, it turned out that the press was misinterpreted by the information, and the owner of the White House was looking forward to Brexit, then to go on rapprochement with the UK.

Politics remains to be the joker who at any moment can appear on the table and change the balance of power in the currency pairs connected with the sterling. The pound reacted positively to the resignation of supporters of the hard Brexit Boris Johnson and David Davis, but as new layoffs in the government arose, the question emerged as to whether Theresa May will be able to maintain her post? And then such revelations from Donald Trump! I would venture to assume that he was dissatisfied with the content of the program of the British Prime Minister, seriously expecting the break of many ties. In fact, the draft agreement is a document in which only the financial services sector will suffer from divorce. Otherwise, it makes only minor adjustments to the existing relationship.

Deutsche Bank believes that investors will soon cease to be nervous and will find the strength to buy the GBP/USD. The bank forecasts the pair to grow to 1.41 by the end of this year, which contrasts with the median estimate of Bloomberg experts (1.34). As the main argument in favor of its "bullish" position Deutsche Bank leads soft Brexit.

Forecasts for GBP/USD

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The second important driver of the change in the pound's quotes is the normalization of the monetary policy of the BoE. Sterling will have a very interesting week in terms of the economic calendar, which allows us to call it the most interesting G10 currency. Releases of data on the labor market, inflation, retail sales and the size of net borrowing of the private sector will keep fans of the "sterling" in suspense.

In general, the situation has much in common with the May events, when the futures market estimated the probability of an increase in the repo rate at the Bank of England's next meeting at 80% or above. This is the figure that appears now in relation to the August meeting of the Committee on Monetary Policy. Then the "dovish" rhetoric of Mark Carney and the block of disappointing statistics became the starting point of the GBP/USD peak. Since then, the pair has lost about 9%, the head of the BoE has replaced anger to mercy, and the number of "hawkish" MPC, ready to tighten monetary policy even tomorrow, increased from two to three.

Technically, after reaching the target by 88.6% on the "Double top" pattern, a natural rebound in the direction of 23.6%, 38.2% and 50% of the CD wave followed. The development of the "bullish" attack on GBP/USD is facilitated by the implementation of the "Wolfe Wave" model.

GBP/USD daily chart

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Forex analysis 16 Jul 2018, 22:30 UTC+00
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Elliott wave analysis of EUR/NZD for July 17, 2018
Despite wave b/ moving higher to 1.7327, we continue to look for a deeper decline in wave c/ of ii/, closer to the...
Despite wave b/ moving higher to 1.7327, we continue to look for a deeper decline in wave c/ of ii/, closer to the 38.2% corrective target at 1.7067 and maybe even closer to the low of red wave iv at the 50% corrective target at 1.6971 before wave ii/ is complete and wave iii/ higher towards 1.8638 takes over. Longer term we continue to look for this rally to continue higher towards our long-term target at 1.9831.R3: 1.7379R2: 1.7320R1: 1.7299Pivot: 1.7238S1: 1.7200S2; 1.7181S3: 1.7139Trading...

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Despite wave b/ moving higher to 1.7327, we continue to look for a deeper decline in wave c/ of ii/, closer to the 38.2% corrective target at 1.7067 and maybe even closer to the low of red wave iv at the 50% corrective target at 1.6971 before wave ii/ is complete and wave iii/ higher towards 1.8638 takes over.

Longer term we continue to look for this rally to continue higher towards our long-term target at 1.9831.

R3: 1.7379

R2: 1.7320

R1: 1.7299

Pivot: 1.7238

S1: 1.7200

S2; 1.7181

S3: 1.7139

Trading recommendation:

We will use the ongoing correction in wave ii/ to buy EUR. If the structure looks complete near 1.7067 we will buy there, otherwise we will buy near 1.6971 if possible.

Forex analysis 17 Jul 2018, 01:17 UTC+00
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Weekly review of the GBP/USD from July 16, 2018
Donald Trump had plenty of fun in the European expanses, especially having distinguished himself in the UK, and this...
Politics periodically takes over and becomes the main driving force in the market. Although politics is nothing more than the continuation of the economy, and everything should be the other way around. However, oddly enough, the market reaction to political events over the past week is fully consistent with the general tendency to strengthen the dollar. So there was no contradiction between economics and politics. The first event was the resignation of two ministers in the UK. The ministers...

Politics periodically takes over and becomes the main driving force in the market. Although politics is nothing more than the continuation of the economy, and everything should be the other way around. However, oddly enough, the market reaction to political events over the past week is fully consistent with the general tendency to strengthen the dollar. So there was no contradiction between economics and politics.

The first event was the resignation of two ministers in the UK. The ministers for Brexit and foreign affairs resigned. They explained their decision by disagreeing with the desire of Theresa May to sign a soft exit from the European Union, implying the preservation of existing trade agreements. In their opinion, it is contrary to the will of the people expressed during the referendum. Thus, there was a threat of a development of political crisis, and on the horizon loomed the specter of early parliamentary elections. And this is just nine months before the final withdrawal of the UK from the European Union. Naturally, such tricks do not add confidence in the future, which immediately affected not only the pound, but also the single European currency. The issue concerns both sides of the negotiation process.

Investors did not have time to take a breather and rejoice at the fact that early elections in the UK are not expected, as Donald Trump arrived in Europe, who immediately began to behave like an elephant in a China shop. His first destination was Brussels, where he took part in the summit of the heads of state of NATO. Even during the election campaign, Donald Trump was much indignant about the fact that NATO allies were not too quick to deal with their own defense, which forces the US to spend too much money on military spending. Including to ensure the security of Europe. Immediately after winning the presidential election, he immediately began to fulfill one of his campaign promises and began to demand from allies to increase military spending to a minimum of 2.0% of GDP set by NATO rules. Long breaking, and without much enthusiasm, the European allies agreed to increase defense spending to the set minimum, though not immediately, but by 2025. Apparently, Donald Trump took time to realize the fact that even if he will be re-elected for a second term, by the date indicated by the Europeans, he will in any case leave the White House with things. So, as he arrived in Brussels, Donald Trump demanded from the European allies for NATO to immediately increase military spending to 2.0% of GDP. From this pressure, many of the European leaders, apparently, began to quickly change diapers, and investors continued to sell the single European currency. The fact is that European countries cannot increase defence spending. More precisely, they can, but only by increasing taxes, which are already one and a half times higher than in the US, increasing government borrowing, of which they already have so much that they do not know what to do with all this, or by cutting social spending, which they already finance at the expense of debts. Thus, the only thing the Europeans can do is cut it alive, that is, to reduce social spending. Naturally, the voters will not understand them, and very soon there will be other politicians in Europe, but the current ones do not really want to part with their warm places. For them, such a reversal would be political suicide. Well, the funny thing is that this step will destroy the European social paradise.

Satisfied with the scent of a childish surprise in Brussels, Donald trump went to London. After a meeting with Theresa May, it occurred to someone that Trump should be given the microphone, and the US president immediately shared his thoughts about what would be better if the British prime minister was Boris Johnson, who recently resigned as foreign minister. It sounded so that it is categorically unclear whether he expressed his private opinion or the position of the White House. In any case, investors are again worried about the political crisis in the UK, which may result in early elections. Naturally, in anticipation of the issuance of the divorce between Britain and Europe, this adds only acute sensations.

As mentioned earlier, political equilibrium fully fits into the economic logic of the further strengthening of the dollar. After the controversial data on the labor market, data came out for open vacancies, the number of which decreased from 6,840 thousand to 6,638 thousand. For a short time this added concern, but the data on applications for unemployment benefits, which fell by 21 thousand, somewhat reduced jitters. In particular, the number of initial applications for unemployment benefits decreased from 232 thousand to 214 thousand, and repeated from 1,742 thousand to 1,739 thousand. Most of all, investors were pleased with the data on inflation, which further encouraged market participants. Thus, the growth rate of producer prices accelerated from 3.1% to 3.4%. In turn, the final data on inflation confirmed its growth from 2.8% to 2.9%. So market participants can still hope that by the end of the year the Fed will raise the refinancing rate not once, but twice.

If you look at the British data, the pound clearly had reasons for the decline. The fact is that the growth rate of industrial production has slowed from 1.6% to 0.8%, so there is no reason for joy.

Perhaps the main event of the week is the meeting between Vladimir Putin and Donald Trump, which will be held on Monday in Helsinki. Given that Donald Trump had much fun speaking in Europe, as well as his desire to oust European and Chinese manufacturers from the American market, he can present another surprise. It is possible that the meeting will be followed by not the most joyful statements about Europe, which will negatively affect the mood of investors.

But even without a political show, we will have a very busy week. Thus, in the US, a sharp slowdown in the growth rate of retail sales from 5.9% to 3.7% is expected, which will make everyone remember the growth of inflation, which is ahead of wage growth. But almost immediately after that, the dollar will be given a chance to improve its position somewhat due to data on industrial production, the growth rate of which can accelerate from 3.5% to 3.9%. So Donald Trump can once again shout that he is fulfilling his election promise to return the production to the United States. In addition, the total number of applications for unemployment benefits should be reduced by 3 thousand. Although this is not enough, this should be due to repeated applications, the number of which can be reduced from 1,739 thousand to 1,730 thousand. The number of initial applications for unemployment benefits, as is expected to increase from 214 thousand to 220 thousand data on repeated applications for unemployment benefits are more important, as they give an understanding of long-term unemployment. Also, although the number of construction projects starts may decrease by 4.0%, the number of construction permits issued should increase by 6.0%. In general, the data are expected to be multidirectional, and it is quite difficult to draw a certain conclusion.

Fortunately, there are quite a lot of statistics in the UK that can help market participants determine their preferences. Everything will start with the data on the labor market, which are expected to be quite alarming. The fact is that with the stability of the unemployment rate, as well as the growth rate of average wages, including bonuses, the number of applications for unemployment benefits is projected to increase by 2.3 thousand, as well as the slowdown in the growth rate of average wages without bonuses from 2.8% to 2.7%. This is a clear deterioration of the situation in the labour market. Moreover, inflation should accelerate from 2.4% to 2.6%, and against the background of a slowdown in average wage growth, this looks extremely alarming. Although the growth of inflation will be perceived positively, as investors will have more reasons to hope for an increase in the refinancing rate of the Bank of England. Also, there will be data on retail sales, the growth rate of which should remain unchanged. As a result, inflation is expected to rise and wage growth to slow down. In general, the picture is neutral, as after the negative data, a positive one is expected.

In other words, if you look at the forecasts for macroeconomic indicators, you should expect the consolidation of the pound at the mark of 1.3250. However, Donald Trump can again surprise, and then the pound will drop to 1.3150.

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Forex analysis 16 Jul 2018, 21:33 UTC+00
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Technical analysis on Gold for July 17, 2018
The Gold price remains near its 2018 lows. The trend remains bearish and there is no sign of a bullish reversal yet....
The Gold price remains near its 2018 lows. The trend remains bearish and there is no sign of a bullish reversal yet. The Gold price is oversold at current levels and we should focus on bullish trades than bearish ones.Green rectangles - support levelRed rectangles - resistance levelsBlue lines - pitchfork channelRed line - short-term resistanceShort-term resistance is at $1,244-45. A break above this level justifies a move higher towards the 38% Fibonacci retracement at $1,247. A break above...

The Gold price remains near its 2018 lows. The trend remains bearish and there is no sign of a bullish reversal yet. The Gold price is oversold at current levels and we should focus on bullish trades than bearish ones.

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Green rectangles - support level

Red rectangles - resistance levels

Blue lines - pitchfork channel

Red line - short-term resistance

Short-term resistance is at $1,244-45. A break above this level justifies a move higher towards the 38% Fibonacci retracement at $1,247. A break above this Fibonacci resistance could push price towards the upper pitchfork boundary and 61.8% Fibonacci retracement level at $1,254. The short-term and medium-term trend could change only on a break above this level. Support is found at $1,235 and next at $1,231.

Forex analysis 17 Jul 2018, 05:11 UTC+00
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Elliott wave analysis of EUR/JPY for July 17, 2018
EUR/JPY is now testing the 161.8% extension target for red wave iii and a correction should be expected anytime...
EUR/JPY is now testing the 161.8% extension target for red wave iii and a correction should be expected anytime towards 130.87 and maybe even closer to 130.59 in red wave iv, before red wave v will be ready to take over, for a continuation higher towards 133.49 and the ideal target for black wave iii/ at 137.68. Our preferred long-term count shows that a huge [B] wave triangle completed with the test of 124.59 and wave [C] to above 169.97 now is developing. As we still are in the very early...

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EUR/JPY is now testing the 161.8% extension target for red wave iii and a correction should be expected anytime towards 130.87 and maybe even closer to 130.59 in red wave iv, before red wave v will be ready to take over, for a continuation higher towards 133.49 and the ideal target for black wave iii/ at 137.68.

Our preferred long-term count shows that a huge [B] wave triangle completed with the test of 124.59 and wave [C] to above 169.97 now is developing. As we still are in the very early stages of this [C] wave higher, the waves will be less clear, but as wave [C] builds it will become easier to extract the larger waves.

R3: 132.54

R2: 132.11

R1: 131.63

Pivot: 131.41

S1: 131.24

S2: 131.08

S3: 130.87

Trading recommendation:

We will use the coming correction in red wave iv to buy EUR. Ideally as close to 130.10 as possible.

Forex analysis 17 Jul 2018, 01:06 UTC+00
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The EUR/USD analysis for July 17, 2018
Broken supply trendline in the background. My advice is to watch for potential buying opportunities. The upward...
Recently, EUR/USD has been trading upwards. The price tested the level of 1.1737. According to the H1 time - frame, I found a breakout of the supply trendline in the background, which is a sign that selling looks risky. I also found potential completion of the downwrad corrective phase (abc), which is another sign of strength. My advice is to watch for potential buying opportunities. The upward target is set at the price of 1.1790. Resistance levels: R1: 1.1730 R2: 1.1750 R3: 1.1780 Support...

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Recently, EUR/USD has been trading upwards. The price tested the level of 1.1737. According to the H1 time - frame, I found a breakout of the supply trendline in the background, which is a sign that selling looks risky. I also found potential completion of the downwrad corrective phase (abc), which is another sign of strength. My advice is to watch for potential buying opportunities. The upward target is set at the price of 1.1790.

Resistance levels: R1: 1.1730 R2: 1.1750 R3: 1.1780 Support levels: S1: 1.1680 S2: 1.1655 S3: 1.1632

Trading recommendations for today: watch for potential buying opportunities.

Forex analysis 17 Jul 2018, 06:14 UTC+00
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Technical analysis: Intraday level for USD/JPY, July 17, 2018
In Asia, Japan today will not release any Economic Data.
In Asia, Japan today will not release any Economic Data, but the US will release some Economic Data such as TIC Long-Term Purchases, NAHB Housing Market Index, Industrial Production m/m, and Capacity Utilization Rate. So, there is a probability the USD/JPY will move with a low to medium volatility during this day.TODAY'S TECHNICAL LEVEL:Resistance. 3: 113.08.Resistance. 2: 112.85.Resistance. 1: 112.64.Support. 1: 112.36.Support. 2: 112.14.Support. 3: 111.92.Disclaimer: Trading Forex (foreign...

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In Asia, Japan today will not release any Economic Data, but the US will release some Economic Data such as TIC Long-Term Purchases, NAHB Housing Market Index, Industrial Production m/m, and Capacity Utilization Rate. So, there is a probability the USD/JPY will move with a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Resistance. 3: 113.08.

Resistance. 2: 112.85.

Resistance. 1: 112.64.

Support. 1: 112.36.

Support. 2: 112.14.

Support. 3: 111.92.

Disclaimer: Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all Traders or Investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Forex analysis 17 Jul 2018, 02:50 UTC+00
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BITCOIN Analysis for July 16, 2018
After certain indecision and volatility, Bitcoin has managed to gain momentum and break above $6,500 again. The...
Bitcoin has been quite indecisive below $6,500 price area earlier which is being taken out with a daily candle currently. After the recent hack attack which injected insecurity among market participants, the price has been quite volatile which even made the price reside below $6,500 area for a certain period. Though there have been certain rumors about a ban on crypto trade in some countries, speculators assume the overall Crypto market to gain its pace by the end of July that could push BTC...

Bitcoin has been quite indecisive below $6,500 price area earlier which is being taken out with a daily candle currently. After the recent hack attack which injected insecurity among market participants, the price has been quite volatile which even made the price reside below $6,500 area for a certain period. Though there have been certain rumors about a ban on crypto trade in some countries, speculators assume the overall Crypto market to gain its pace by the end of July that could push BTC price much higher in the coming days. At present, the price is heading towards the Kumo Cloud which may act as strong resistance. However, if price manages to remain above $6,000-6,500 area with a daily close in the coming days, the bullish pressure is likely to push the price higher towards $8,000 in the future without much bearish intervention in the process.

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Forex analysis 16 Jul 2018, 13:44 UTC+00
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Ichimoku cloud indicator analysis on EUR/USD for July 17, 2018
EUR/USD is showing short-term strength signs. After the daily bullish hammer reversal pattern we noted regarding...
EUR/USD is showing short-term strength signs. After the daily bullish hammer reversal pattern we noted regarding Friday's candlestick, EUR/USD continues higher into resistance area.Red lines - triangle patternBlue line - supportThe EUR/USD is challenging Daily cloud resistance. If price manages to remain inside the cloud and break above the upper triangle resistance at 1.1770 we should expect the price to move towards the upper cloud boundary near 1.1960. A rejection at the 1.1730-1.1760 area...

EUR/USD is showing short-term strength signs. After the daily bullish hammer reversal pattern we noted regarding Friday's candlestick, EUR/USD continues higher into resistance area.

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Red lines - triangle pattern

Blue line - support

The EUR/USD is challenging Daily cloud resistance. If price manages to remain inside the cloud and break above the upper triangle resistance at 1.1770 we should expect the price to move towards the upper cloud boundary near 1.1960. A rejection at the 1.1730-1.1760 area will open the way for a test of the lower triangle boundary at 1.1620-1.1630. Shorter-term support is found at 1.1660-1.1670. While short-term resistance is at 1.1740. A break below 1.1620 will open the way for a break of the 1.15 support and a move towards 1.12.

Forex analysis 17 Jul 2018, 05:16 UTC+00
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Technical analysis: Intraday Level For EUR/USD, July 17, 2018
When the European market opens, there's no Economic Data will be released.
When the European market opens, there's no Economic Data will be released from the Euro Zone, but The US will release the Economic Data such as TIC Long-Term Purchases, NAHB Housing Market Index, Industrial Production m/m, and Capacity Utilization Rate, so, amid the reports, EUR/USD will move in a low to medium volatility during this day.TODAY'S TECHNICAL LEVEL:Breakout BUY Level: 1.1767.Strong Resistance:1.1760.Original Resistance: 1.1749.Inner Sell Area: 1.1738.Target Inner Area:...

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When the European market opens, there's no Economic Data will be released from the Euro Zone, but The US will release the Economic Data such as TIC Long-Term Purchases, NAHB Housing Market Index, Industrial Production m/m, and Capacity Utilization Rate, so, amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Breakout BUY Level: 1.1767.

Strong Resistance:1.1760.

Original Resistance: 1.1749.

Inner Sell Area: 1.1738.

Target Inner Area: 1.1710.

Inner Buy Area: 1.1682.

Original Support: 1.1671.

Strong Support: 1.1660.

Breakout SELL Level: 1.1653.

Disclaimer: Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all Traders or Investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Forex analysis 17 Jul 2018, 02:52 UTC+00
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