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Daily Market Analysis From Forexmart.eu


Andrea FXMart
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American stock indices rise 0.2-0.8%, Nasdaq hits new record

Speaking to the US Congress on Tuesday, Powell reiterated his view that the acceleration in inflation in the country is likely to be temporary, noting that the US Central Bank will continue to support the economy. The U.S. economy is showing steady improvement, according to his speech at the House of Representatives Coronavirus Subcommittee.

US employment growth will pick up in the coming months and inflationary pressures will ease as the US economy continues to recover from the effects of the COVID-19 pandemic, Powell said. The lending programs adopted by the Federal Reserve at the height of the crisis have freed up more than $ 2 trillion in funding that helped cut job losses in companies, nonprofits and local governments, he said.

Powell's comments, released Monday night, eased financial markets' fears about the Fed's imminent withdrawal of stimulus measures due to uncontrolled inflation in the United States, said Edward Moya, senior market analyst at Oanda.

Meanwhile, New York Federal Reserve Bank (FRB) chief John Williams said on Monday that he is not ready for the Fed to ditch the support it provides to the economy amid uncertainty over the pace of recovery from the pandemic.

John Williams said the economy is recovering at a fast pace and the medium-term outlook looks very good. However, the data and conditions have not improved enough for the FOMC to abandon a monetary policy that actively supports the economic recovery.

US existing home sales declined 0.9% in May to 5.8 million homes on an annualized basis, the National Association of Realtors said in a report on Tuesday. Thus, the decline was recorded for the fourth month in a row. As a result, the indicator dropped to an eleven-month low - from June 2020. Meanwhile, compared to May last year, resales jumped by 44.6%, which is primarily due to the low comparison base due to the outbreak of the COVID-19 pandemic at this time last year.

The Dow Jones Industrial Average rose by 68.61 points (0.2%) to close the market and amounted to 33945.58 points. A day earlier, the indicator showed the maximum rise in percentage terms since the beginning of March.

Standard & Poor's 500 rose by 21.65 points (0.51%) - to 4246.44 points.

The Nasdaq Composite added 111.79 points (0.79%) to 14253.27 points, which is a new record for the close.

The leaders of growth in trading on Tuesday were the shares of large technology companies. Netflix Inc. rose 2.4%, Amazon.com Inc. - by 1.5%, Apple Inc. rose 1.3%, Microsoft Corp. - by 1.1%, Facebook Inc. - on 2%.

Alphabet Inc., the parent company of Google, gained 0.4%, despite the fact that the European Commission launched a formal antitrust investigation against the American Google, in which it intends to assess the facts of abuse by the company of its leading position in the online advertising market.

Stock quotes of the American GameStop Corp. jumped by 10%. The owner of a chain of video games and consumer electronics stores raised about $ 1.126 billion by placing 5 million shares at market price. The proceeds from the sale are planned to be used for general corporate needs, as well as investments in growth initiatives and strengthening the company's balance sheet.

Market value of Blackstone Group Inc. increased by 0.1%. The American investment fund buys for $ 6 billion Home Partners of America, which specializes in the provision of single-family homes for rent.

Sanderson Farms Inc. added 10.3% in price. The American poultry producer is considering selling the business amid growing demand for chicken products, The Wall Street Journal reported, citing knowledgeable sources.

Capitalization of Exxon Mobil Corp. increased by 1.9%. According to Bloomberg, citing sources, the company will reduce the number of employees in its American offices by 5-10% per year over the next 3-5 years, using a performance assessment system to identify low-productivity employees.

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Analysis of transactions in the EUR / USD pair

Three buy signals appeared in the market on Wednesday, but all of them had to be ignored because they came when the MACD line was at the overbought area. There were no other signals for the rest of the day.

Trading recommendations for June 24

Euro rallied on Wednesday amid good reports from the Eurozone and weak data from United States. And today, this buying pressure may continue, especially if IFO releases strong assessments in Germany's economy. Otherwise, euro will post a decline.

Then, in the afternoon, data on US jobless claims may bring demand back to dollar, which will accordingly lead to a drop in EUR / USD.

For long positions:

Open a long position when euro reaches 1.1940 (green line on the chart), and then take profit around the level of 1.1991. Strong reports from Germany may set off a rally. But before buying, make sure that the MACD line is above zero, or is starting to rise from it.

For short positions:

Open a short position when euro reaches 1.1916 (red line on the chart), and then take profit at the level of 1.1856. Pressure could return at any moment as the pair is currently overbought. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.

Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.

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Stock Asia is trading in positive territory

According to IG Singapore-based market strategist Yeap Joon Rong, a breakthrough in infrastructure spending talks overnight lifted spirits as spending has historically been a positive factor for the markets. Areas that depend on economic recovery will show strengthening.

The Japanese Nikkei 225 index by 8:23 GMT + 2 increased by 0.7%.

Among the leaders in the growth of quotations are the shares of the automobile company Mazda Motor Corp. (+ 8.7%), electronics manufacturer Panasonic Corp. (T: 6752) (+ 4.8%), steel makers Kobe Steel (+ 4.5%) and Nippon Steel Corp. (+ 4%), producing perfumery Shiseido Co. (+ 4.2%).

The price of securities of the chip maker Advantest Corp. is also rising. (+ 1.5%), investment and technology SoftBank Group (T: 9984) (+ 1%), consumer electronics manufacturer Sony (+ 1.4%) and automaker Toyota Motor (+ 0.1%).

Panasonic, which makes lithium batteries for electric vehicle maker Tesla, sold its entire stake in the American company last fiscal year, which ended in March, the Nikkei reported Friday. According to him, the amount received could be about $ 3.88 billion.

By 8:28 GMT + 2, China's Shanghai Composite Index rose 1%, while Hong Kong's Hang Seng Index added 1.1%.

In particular, a significant increase in the course of trading on the Hong Kong Stock Exchange is shown by the quotations of securities of the Internet company Meituan (+ 4.3%), brewery Budweiser Brewing Co. APAC Ltd. (+ 3.9%), Hong Kong Exchanges & Clearing Ltd. (+ 3%).

In addition, shares of online retailer Alibaba Group (+ 2.2%), Internet giant Tencent Holdings (+ 1.9%), oil companies CNOOC (+ 2.2%) and PetroChina (+ 1.85%) are gaining in price. ...

At the same time, the cost of the car manufacturer Geely Automobile Holdings Ltd. (-0.8%), pharmaceutical Sino Biopharmaceutical Ltd. (-0.9%) and sporting goods manufacturer Anta Sports Products (-0.9%).

The South Korean Kospi Index rose 0.5% by 8:22 GMT + 2. South Korea's manufacturing business confidence index reached 98 points in June, up from 96 points a month earlier. This is the highest level since April 2011. In the non-manufacturing area, the indicator remained at 81 points.

The market value of one of the world's largest chip manufacturers, Samsung Electronics Co. rose 0.25%, while the market value of automaker Hyundai Motor fell 0.2%.

Australian S & P / ASX 200 added 0.5% by 8:23 GMT + 2.

Capitalization of the world's largest mining companies BHP and Rio Tinto (LON: RIO) rose 0.7% and 0.6%, respectively.

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Magnetic Pound: GBP attracts investors. Forecast grid

Recently, the British currency has attracted active interest from most investors. Experts believe that the reasons for this popularity are fatigue from the excessive volatility of the dollar and the relatively stable geopolitical situation in the UK.

Despite the active build-up of long positions in USD, the dollar cannot boast of stability. This is hindered by conflicting US macroeconomic data released last week. According to analysts, the dollar will receive an additional growth impulse if market players increase the number of long positions in USD. Against this background, the GBP looks advantageous, since it is now in the focus of investors' attention.

The growing interest in the British currency is due to the expectation of successful results of mass vaccinations in the UK. According to experts, the current situation with the spread of COVID-19 and its new strain remains tense. According to Prime Minister Boris Johnson, in the near future, the British authorities will determine the scope of the fourth stage to ease restrictions. Last week, Sajid Javid, UK Minister of Health, noted that coronavirus restrictions would be lifted no earlier than July 19.

In this situation, the British currency has lost some of its positions. Last Friday, July 2, the pound gained 0.5%. At the end of the second quarter of 2021, the pound remained in positive territory, having increased by 0.37%.

Throughout the past week, the pound has tried to maintain the positions it has gained. Last Friday, July 2, a strong support level near 1.3760 was formed in the GBP/USD pair. According to experts, bearish sentiments will continue in the tandem in the medium term. However, the bulls are determined and are not going to give up their positions. At the end of last week, they dominated the market, but now the situation may change.

At the start of trading on Monday, July 5, the GBP/USD pair was trading at 1.3821. However, on the approaches to the strong resistance level of 1.3852, the growth of the British currency slowed down. Later, experts recorded the beginning of the consolidation of the GBP/USD pair. At the moment, analysts consider it expedient to buy sterling. In the event of a breakdown of the powerful resistance level 1.3852, you can count on breaking the barriers 1.3925 and 1.3980.

Experts are optimistic about the short-term and medium-term prospects of the pound sterling. Currency strategists at Bank of America Global Research believe that the pound will maintain a positive trend until the end of 2021. The bank expects further cyclical growth of the British pound until the end of 2022. The GBP will be supported by such factors as strong economic growth in the country, the "hawkish" attitude of the Bank of England, as well as excess global liquidity and low currency conditions.

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Above $1,800: Gold rises in price for sixth session in a row

On Tuesday morning, the price of gold bars was able to finally break through the psychological mark of $1,800. At the time of writing, the noble asset rose 1.07%, or $19. Its price was $1,802.3.

Silver also showed a confident positive trend. The asset rose by 0.88%, jumping to the level of $26,735.

According to analysts, the main catalyst for the growth of the precious metals market is the weakening dollar. On Tuesday, the US currency continues to lose its superiority against its competitors.

Gold has been growing for the sixth consecutive session, drawing strength from other sources as well. The decline in 10-year US bonds and the difficult epidemiological situation in the world give a good boost to the yellow asset.

The new strain of the delta coronavirus increases the risk of a slowdown in economic activity in a number of Asian countries, which strengthens the position of gold as the main safe haven asset.

In addition, the precious metal received significant support last week from the US labor market. The sudden increase in unemployment prompted investors to think that perhaps the US Federal Reserve will not rush to change the current course of monetary policy, keeping interest rates at the current level.

If this scenario is confirmed, bad days will come for the US currency again, unlike gold, for which such a development of events will be an excellent springboard for growth.

Meanwhile, some analysts associate the current dynamics of the precious metal with a technical correction. The yellow asset is recovering losses after a sharp collapse last month. However, if significant negative factors appear, its price may decline again.

Now, investors are waiting for the release of the minutes of the US Federal Reserve meeting. Tomorrow's comments about inflation and interest rates may turn gold around, as it was last month. Back in June, the regulator predicted the probability of a rate hike in 2 years.

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Protective Assets: Gold or Cryptocurrency?

Goldman Sachs experts are confident that in the future Ethereum will be able to take the place of bitcoin as a means of saving. According to the bank, Ether has more potential than bitcoin, due to the extensive ecosystem and more diverse options for the practical application of this cryptocurrency.

At the same time, neither bitcoin nor ether can yet overtake gold, which remains the leader among all defensive assets. Since cryptocurrencies, unlike gold, are too volatile, which is incompatible with the concept of a safe haven asset. However, experts clarify that gold can be viewed as a defense against inflation, and cryptocurrency – against inflationary risks.

Moreover, the very competition between cryptocurrencies also prevents them from squeezing gold in the status of a defensive asset. And this is not the whole list of «disadvantages» of digital assets. For example, analysts at the Bank of Singapore consider volatility, low confidence and lack of regulation to be the main obstacles to the spread of digital assets as a means of saving. However, if these problems are solved, bitcoin and ether may well replace gold.

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Forecast for USD/JPY on July 8, 2021

USD/JPY

Yesterday, the yen traded in a 40-point range and closed the day at the opening level below the MACD indicator line. The Marlin oscillator strengthens the urge to leave its own channel downward.

What is noteworthy: the dollar index rose by 0.19% yesterday, stock indices also rose in general (Dow Jones 0.30%), with the exception of second-tier stocks (Russell 2000 -0.70%). The Russell 2000 index is often a leading direction indicator for major indices. And in today's Asian session, the Japanese Nikkei 225 index is already decreasing by -0.57%. It is possible that investors' expectation of a fall in the stock market worries them a lot, this decline has been talked about more and more recently. But be that as it may, the surpassing yesterday's low of 110.41 opens the way to the first target at 109.80. This is the main scenario.

On the four-hour chart, the price is holding back before hitting the 110.41 signal level. The price is below the balance and MACD indicator lines. Marlin is in the downward trend area. We are waiting for the attack in order for the price to go down.

The alternative scenario is difficult. To do this, it needs to go above the MACD line on both charts. On the H4 it is 111.02.

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Pound - "Vaccine Champion": Prospects and Hopes for GBP

The British currency remains relatively stable, trying to keep the gained positions and build up new ones. In the medium and long-term planning horizons, experts expect the pound to rise, despite its limited growth potential.

Currently, the British currency has sunk slightly against the background of disappointing macro statistics. The GBP sales started after the publication of reports on UK GDP (0.8% with an expected 2%) and low industrial production (0.8% with a forecast of 1.5%). On the morning of Friday, July 9, the GBP/USD pair was trading near 1.3775, but later lost some of its gains.

According to analysts, sterling is stuck among local lows, near the powerful support level of 1.3754. Experts believe that in the event of a breakdown of the strong resistance level of 1.3794, bullish sentiment will increase in tandem. While maintaining the moderate dynamics of the GBP/USD pair, it will remain within the range of 1.3754-1.3794. This assumption is partially realized, giving the pound hope in the medium term. However, by now the GBP/USD pair has fallen to 1.3763, leaving no attempts to rise.

The British currency's hopes are supported by currency strategists Credit Suisse, who expect the GBP/USD pair to recover to 1.3940, and then to the round level of 1.4000. The bank emphasizes that in the near future, it is possible to form a peak in the area of 1.4000, the breakthrough of which will lead to an enhanced recovery of the pound.

Positive sentiment regarding the prospects for sterling is supported by analysts at Credit Agricole CIB Research. The bank supports the "bearish" trend of the British currency, which will continue in the coming weeks. "The GBP has gone from an investment vehicle for generating 'Covid-19 vaccine alpha' in the FX markets to a hedge against the resurgence of the pandemic in recent weeks. The rapid fall from grace of the hitherto G10 FX 'vaccine champion' warrants a cautious stance on the currency in the near term," Credit Agricole CIB Research emphasizes.

The popularity of the British currency is promoted by positive changes in the country's economy. The UK is on the way to an economic recovery, the signs of which are a shortage of labor and rising wages. It should be noted that the salary increase is the fastest since 2014. The continuation of the existing trend will force the Bank of England to curtail the monetary stimulus program, which will lead to the strengthening of the GBP.

Earlier, at the end of 2020, the UK showed the worst economic result among developed countries, but now much has changed. At the moment, England is among the top 5 most vaccinated countries (67% of the vaccinated population). Success in immunization allowed the British authorities to declare the complete lifting of restrictions in a week and a half, on July 19.

With regard to the target inflation rate of 2%, the Bank of England maintains the same position, the regulator believes that finding the indicator within 2% is quite natural. An increase in this indicator will require the regulator to curtail the monetary stimulus program. If the Bank of England does this before the Federal Reserve, the pound will receive an impetus for further strengthening in the medium term.

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Analysts predict an imminent collapse of bitcoin to $10,000

Experts of the cryptocurrency market say that the current position of bitcoin is difficult to call stable, and soon BTC risks falling back to the level of $ 10,000 at all. Today, investors do not have a single reason to buy the first cryptocurrency or keep it in the portfolio.

In their disappointing scenarios, analysts rely on historical data, when during the past falls, the value of BTC sank by 80%.

Experts confidently call the current position of the main digital coin a collapse. Traditionally, this term is used to describe the fall of the cryptocurrency by 70-80%, which corresponds to the price range of $ 10,000-15,000.

Recall that in recent months, the first digital currency has already fallen from a record $ 60,000 to $ 33,500. The main downward factor for bitcoin was pressure from Chinese regulators.

Known for his indifferent attitude to the cryptocurrency market, Elon Musk criticized the blockchains of the main digital coin and Ethereum for the low transaction speed and high costs. At the same time, the founder of Tesla warmly supported Dogecoin and called it one of the most actively used digital currencies in the world.

In general, analysts call the current situation of the cryptocurrency market today "the summer calm before the storm". The current dynamics of the bitcoin price with significantly reduced trading volumes are traditionally considered a dangerous signal. When the market is affected by an insignificant number of open positions – any minor incident can lead to a grandiose sale.

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Trading recommendation for EUR/USD on July 13, 2021

Looking at the EUR/USD trading chart, one can see the amplitude price movement within the resistance area of 1.1880/1.1895, as if there is a cumulative effect in the market before a new round of acceleration.

Sell signal
Traders will consider this if the price is kept below the level of 1.1835, which will open the way to the support level of 1.1800.

Buy signal
Traders will consider this if the resistance area of 1.1880/1.1895 is broken, which will lead to further formation of a correction. In this case, there is no need to rush. We consider buying positions above the level of 1.1900, with a prospect of 1.1950-1.2000.

* The resistance level is the so-called price level, from which the quote can slow down or stop the upward movement. The principle of constructing this level is to reduce the price stop points on the history of the chart, where the price reversal in the market has already occurred earlier.

* The accumulation process is a price fluctuation in a closed amplitude, where at the moment of a breakdown of a particular stagnation border, a local acceleration in the direction of breakdown often occurs.

Trading recommendation for GBP/USD on July 13, 2021

As for the trading chart of the GBP/USD, it shows the price movement within the deviation of the level of 1.3900, where market participants still view it as resistance.

Sell signal
They have been considered by traders since yesterday, where sell positions may have already been opened. If no deals have been opened, it is advised to wait for the price to hold below the level of 1.3835. The prospective target is 1.3785-1.3750.

Buy signal
It is considered by traders as a prolongation of the existing correction, but entering the market will be possible after the price holds above the level of 1.3950, with a prospective target of 1.4000.

What is reflected in the trading charts?

A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each individual candle in detail, you will see its characteristics of a relative time period: the opening price, the closing price, the maximum and minimum prices.

Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market.

Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future.

The up/down arrows are the reference points of the possible price direction in the future.

Things to remember:
Golden Rule: It is necessary to figure out what you are dealing with before starting to trade with real money. Learning to trade is so important for a novice trader since the market will exist tomorrow, next week, next year, and the next decade.

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Forecast for EUR/USD on July 14, 2021

The euro fell by 83 points on Tuesday, which created some ambiguity in the technical interpretation of this movement.

The high rate of decline, due to which the Marlin oscillator slowed down with a decline, on the one hand, forms a double convergence on the daily chart, on the other hand, the signal line of the oscillator has approached the lower border of its own channel and is preparing to overcome it.

Here, theoretically, convergence may develop, for which the price needs to reach the March low of 1.1705, but the oscillator may continue to develop in the global descending channel, and then the price may reach the target level of 1.1465 and even 1.1300. But we consider this scenario as the main one. Thus, yesterday's low at 1.1772 is a signal level - price drift below it opens the target at 1.1705. Further movement to 1.1640 is possible.

No peculiarities observed on the four-hour chart, there are no reversal signals, the price is below the balance and MACD lines, and Marlin develops a decline. We are waiting for the price at the nearest target level of 1.1705.

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Analysis of transactions in the EUR / USD pair

A signal to buy appeared in the market on Wednesday, but it had to be ignored because it came when the MACD line was at the overbought area. And even if bearish traders set up short positions, EUR / USD did not go down, causing losses to investors.

Trading recommendations for July 15

Despite the disappointing report on industrial production, euro continued to rise on Wednesday, as traders were skeptical about the latest statements of Fed Chairman Jerome Powell. In his speech, Powell hinted that the central bank will continue to adhere to a super-soft policy, which resulted in the weakening of the US dollar.

Today, Italy will publish a report on CPI, but it is unlikely to affect the market very much. But the labor market data from US will be a driver for dollar growth, especially if the figure turns out much better than expected. There will also be another speech from Fed Chairman Jerome Powell, but it may not add a significant effect on the market.

For short positions:
Open a short position when euro reaches 1.1819 (red line on the chart), and then take profit at the level of 1.1773. A decline will occur if Italy releases a weak inflation data, and if US publishes a strong labor market report. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.

It is also possible to sell at 1.1838 and 1.1876, but the MACD indicator should be in the overbought area, as such would trigger a market reversal to 1.1819.

Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.

Analysis of transactions in the GBP / USD pair

Several market signals appeared on Wednesday, but only one was successful. In fact, the first one, which was to buy, had to be ignored because it came when the MACD line was way above zero. Fortunately by afternoon, a signal to sell was formed, and it coincided with the MACD line being in the overbought area. Such led to a significant drop in GBP / USD.

Trading recommendations for July 15

Pound rose on Wednesday, thanks to better-than-expected data on UK inflation. And if the employment report today indicates another good performance, GBP / USD will surely continue its growth in the market. But in the afternoon, price may pull back slightly, if US releases a similar strong report on its labor market. There will also be another speech from Fed Chairman Jerome Powell, but it may not significantly affect the market.

For long positions:
Open a long position when pound reaches 1.3847 (green line on the chart), and then take profit at the level of 1.3890 (thicker green line on the chart). Demand will increase if UK releases strong growth in the labor market. But before buying, make sure that the MACD line is above zero, or is starting to rise from it.

It is also possible to buy at 1.3825 and 1.3780, but the MACD indicator should be in the oversold area, as such would trigger a market reversal to 1.3847.

For short positions:
Open a short position when pound reaches 1.3825 (red line on the chart), and then take profit at the level of 1.3780. A decline may occur if UK releases weak data on employment. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.

It is also possible to sell at 1.3847 and 1.3890, but the MACD indicator should be in the overbought area, as such would trigger a market reversal to 1.3825.

Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.

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Investors abandon weakening USD

According to data from July 13, the inflation rate in the United States reached 5.4%, a reading last seen in the 2008 crisis. However, the Fed stubbornly insists that such a high indicator will not last long. The time will come and they will no longer need to print money in such big volumes. Besides, interest rates will be raised sooner or later. According to most analysts, the first hike of the key rate may take place in December next year. However, it is quite difficult to make long-term forecasts as everything may change, especially since tightening monetary policy is not such an easy task. The same situation occurred in 2008 when the world economy was in the stage of recession, although not as significant as today. Back then, the Fed raised the interest rates only six years later. This is why economies believe that the tightening of the monetary policy will take place in 2023, that is, only three years after the start of easing it.

Although the US economy is recovering the losses incurred during the quarantine restrictions and the market is obviously reviving, the economy is still too weak. It is reflected in both the US currency and on the yield of government bonds. It would be extremely naive to hope that big changes could occur in the coming months. Imported goods in the United States rose by 11.3%, which is why prices for consumer goods are also likely to grow. Interestingly, there are rumors that the real inflation rate in the country is several times higher than the official figures.

The US currency declines not only due to a shaky economy but also because of an excess of money in the financial system. The money-printing press simply devalues it. Traders are not ready to invest in bonds that are not able to cover even half of inflation. Bearish sentiment is also swept across the bond market. As with the US dollar, the government bonds are now unpopular due to the fact that they continue to be issued in an unlimited amount.

In the light of such events, demand for riskier assets is buoyant as traders simply do not have other options for investing. In search of profitable investments, many have now turned to the stock market, so we can expect new peaks from the main indices. According to the most modest estimates, stocks may jump by 12-15% in the coming months. Apparently, the biggest gainers are still the technological and biotechnological sectors, as well as the real estate sector. Venture capital investments have also reached unprecedented amount. Experts are quite curious to see how central banks will stop this wave without collapsing the markets at the same time.

Against the background of rising prices, gold, which has always been an asset that protects traders from inflation, is rapidly recovering. As for oil, it is also steadily rising in value. As the US economy is getting back to normal, demand for commodities increases as well. Yet, the US dollar is gradually sliding down.

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Analysis of transactions in the EUR / USD pair

Several market signals appeared on Friday. The first one, which was to sell, came at the time that the MACD line was going down from zero. However, it did not manage to produce a large downward movement, so the deal ended with a loss. All other signals appeared when the indicator was in the overbought or oversold area, so it was necessary to open positions in the opposite direction.

Trading recommendations for July 19

Data released last Friday did not affect the markets very much. In fact, even though the US released a strong retail sales report, euro did not succumb to a bear market.

Today, trading should be quite calm, as there are no important statistics to be released. Upcoming statements from the Bundesbank, as well as housing data from the United States are unlikely to shake EUR / USD. Most likely, the pair will just remain in a horizontal channel.

For long positions:

Open a long position when euro reaches 1.1815 (green line on the chart), and then take profit at the level of 1.1849 (thicker green line on the chart). Demand will increase if the European Central Bank announces that it would reconsider winding down measures to support the economy. But before buying, make sure that the MACD line is above zero, or is starting to rise from it.

It is also possible to buy at 1.1799 and 1.1773, but the MACD indicator should be in the oversold area, as such would trigger a market reversal to 1.1815.

For short positions:

Open a short position when euro reaches 1.1799 (red line on the chart), and then take profit at the level of 1.1773. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.

It is also possible to sell at 1.1815 and 1.1849, but the MACD indicator should be in the overbought area, as such would trigger a market reversal to 1.1799.

Analysis of transactions in the GBP / USD pair

Several market signals appeared on Friday, but not all of them were as profitable as expected. The first one, which was to sell, managed to push GBP / USD down by 25 pips, but failed to bring the price to the target level of 1.3780. A similar story happened in the afternoon, but it was only on the third attempt that pound managed to hit 1.3780. All in all, the downward movement was around 40 pips. Then, at 1.3842 a signal to buy appeared, but it did not bring much profit.

Trading recommendations for July 19

Upcoming statements from the Bank of England could shake the markets today. In fact, just last week, several members changed their position, saying that the central bank now needs to reconsider scaling back support measures for the economy. If similar statements are announced today, pound will rise very sharply. Then, in the afternoon, there will be a report on the US housing sector, but it is unlikely to affect the market very much.

For long positions:

Open a long position when pound reaches 1.3769 (green line on the chart), and then take profit at the level of 1.3837 (thicker green line on the chart). But before buying, make sure that the MACD line is above zero, or is starting to rise from it.

It is also possible to buy at 1.3694, but the MACD indicator should be in the oversold area, as such would trigger a market reversal to 1.3769.

For short positions:

Open a short position when pound reaches 1.3743 (red line on the chart), and then take profit at the level of 1.3694. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.

It is also possible to sell at 1.3837 and 1.3769, but the MACD indicator should be in the overbought area, as such would trigger a market reversal to 1.3743.

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Simplified wave analysis and forecast for USD/JPY and USD/CAD on July 20

USD/JPY

Analysis:
Analysis of the chart structure of the main pair of the Japanese yen shows that a hidden downward correction ended in the dominant wave of the bullish trend on July 8. The subsequent ascending wave structure has a reversal potential. The middle part (B) is nearing completion.

Forecast:
Today, the pair's price fluctuations are expected in the range between the opposite zones. In the first half of the day, pressure on the support zone is likely. By the end of the day, you can expect a change in the vector and a price rise to the resistance area.

Potential reversal zones
Resistance:
- 109.70/110.00
Support:
- 109.00/108.70

Recommendations:
Trading on the yen market today is possible only within the framework of individual trading sessions in a fractional lot. Purchases from the support zone are more promising.

USD/CAD

Analysis:
The direction of the short-term trends of the Canadian dollar since the spring of last year is set by the descending wave algorithm. Since March 18, the price has formed a correction in the form of a stretched plane. The quotes have reached the boundaries of a powerful reversal zone of the higher timeframe. However, there are no signals of an early reversal on the chart.

Potential reversal zones
Resistance:
- 1.2820/1.2850
Support:
- 1.2730/1.2700

Recommendations:
In the coming day, the upward course of the price movement is expected to continue. A short-term decline to the settlement support is not excluded at the European session. Then you can count on the formation of a reversal and a change in the short-term trend.

Forecast:
There are no conditions for selling the Canadian dollar on the market today. Short-term sales with a reduced lot are possible from the support zone.

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A small pullback should not be misleading, sell-off of risks will continue. Overview of USD, CAD, JPY

The markets slightly recovered after a sharp decline on Monday, but there are no special reasons for a positive return.

News regarding the coronavirus is disappointing. According to the head of the US Centers for Disease Control (CDC), 83% of new cases in the US are associated with the Delta strain, compared with 50% a week earlier, and if the trend towards a worsening of the situation continues, another package of restrictive measures may be required. These fears increase the flight from risk.

The tension was supported by the Bank of Australia. The minutes of the RBA published yesterday noted that the economic results are still far from meeting the Bank's inflation and employment target, and therefore, the arguments in favor of maintaining the procurement program at the level of $ 5 billion per week remain. Moreover, the RBA provoked the situation through the media, suggesting that if the current restrictions in Sydney and the Victoria District last until August, the Bank will have arguments in favor of canceling the July decision to reduce the volume of purchases. This decision is also in favor of an increase in demand for protective assets.

It can be assumed that the demand for protective assets will dominate in the coming days again, and the US dollar will continue to rise against commodity currencies.

USD/CAD

After the Bank of Canada's meeting last week, where it left monetary policy unchanged (a decline in purchases from $ 3 billion to $ 2 billion per week was expected and confirmed), no significant macroeconomic events occurred. The rate hike is expected in the second half of 2022, which is around the same time as the forecast for the Fed rate. There was no harsh reaction to the improvement in the economic situation, which somewhat disappointed the bulls. It seems that BoC will adhere to cautious positions and does not intend to be the first to make poorly calculated steps.

The net long position on CAD fell by 1.2 billion during the reporting week. This is quite a deep adjustment. And although the advantage remains for the Canadian dollar (+2.1 billion), the trend is clearly not in its favor. The estimated price rises.

The Canadian dollar passed the resistance level of 1.2626 almost without stopping, not giving any reason to wait for a decline. Thus, the movement to the next target of 1.3010/20 is justified. The need for a correction may interfere since the spot price has gone significantly higher than the calculated one, but it is logical to use any decline for purchases.

USD/JPY

The nationwide core consumer price index rose by 0.2% y/y in June. This is the second month above zero and the growth slightly exceeded the forecast. For Japan, which has been suffering from deflation for several decades, even such minimal growth is already positive.

However, it is clearly too early to be optimistic. On August 20, data for the base year 2020 will be published. There will be new significant factors, which will reduce the inflation index by 0.2% according to the calculations of Mizuho Bank; hence, a slight downward shift is expected. This means that the Bank of Japan's plans to disperse inflation to 2% remains a dream.

The seemingly positive dynamics in the corporate prices and import prices, which showed +2.3% in June – the maximum since 1981, will not help either. The reason here is almost exclusively in the growth of oil prices, and since the growth of consumer incomes remains consistently low, there is no need to wait for inflation growth.

In other words, there are no signs that the Bank of Japan can follow other central banks to consider measures to exit from the super-soft policy.

Japanese yen's net short position declined by 1.456 billion. The demand increased amid a flight from risk. The estimated price is confidently turning down after a long period of stagnation.

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July 22 economic calendar:

Today, the results of the planned meeting of the European Central Bank (ECB) will be released, where market participants are anticipating new information on the prospects for EU's monetary policy.

It is clear that there will be no fundamental changes, so most traders are not waiting for the results of the meeting, but for the press conference of the ECB President Christine Lagarde, where the ECB's plans for the future can be announced, as was recently done by the Federal Reserve System (FRS).

In this case, it is worth carefully monitoring the information from the meeting, as well as from the press conference, since a speculative jump will be set in the market depending on it.

So, if the ECB leaves everything as it is (unchanged), then the US dollar can get support again. But if the head of the ECB repeats the path of the Fed and announces an early increase in the refinancing rate, then the euro will go into a growth phase.

ECB meeting results - 11:45 00 Universal time

ECB President press conference - 12:30 Universal time

During the US trading session, America will release its weekly data on applications for unemployment benefits, where they are predicted to reduce their volume.

Volume of initial applications for benefits may fall from 360 thousand to 350 thousand.
Volume of repeated applications for benefits may fall from 3,241 thousand to 3,100 thousand.

Weekly data on applications for unemployment benefits - 12:30 Universal time.

In simple terms, a decline in the number of applications for benefits can lead to a strengthening of the national currency – USD.

Trading recommendation for EUR/USD on July 22, 2021

Looking at the EUR/USD trading chart, one can see price fluctuations along the level of 1.1800, where the accumulation process of trading forces is already taking place. The existing amplitude may well expand by 25-30 points, which will eventually lead to a new round of acceleration.

To put it simply, traders are waiting for the ECB meeting and press conference, which can be followed by speculative hype in the market.

Sell positions:

Traders consider this if the price is kept below the level of 1.1750, in the direction of 1.1700.

Buy positions:

Traders consider this if the price is kept above the level of 1.1830, in the direction of 1.1900.

Trading recommendation for GBP/USD on July 22, 2021

As for the trading chart of the GBP/USD, it can be seen that the correction is still relevant in the market, but the resistance area of 1.3750/1.3800 is standing in the way of buyers, which can negatively affect the volume of long positions.

To simply put it, the correction course can go to a slowdown and completion.

Sell positions:

They are considered by traders if a price rebound occurs from the resistance area of 1.3750/1.3800, which will eventually lead to the continuation of a decline in the direction of the pivot point of 1.3571.

Buy positions:

Traders are still in the area of the 1.3650 level and profit-taking is currently taking place. The entry into the deal was taken into account in the previous analytical review.

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Trading recommendation for EUR/USD on July 23, 2021

Looking at the EUR/USD trading chart, one can see that the quote follows the area of this week's local base, where the volume of short positions was reduced again.

In this situation, it is worth adhering to the borders of the previously specified amplitude of 1.1750/1.1830, where the most significant price changes will occur after the price has been held outside a particular border in the H4 interval.

Sell position:

Traders will consider this if the price is kept below the level of 1.1750, in the direction of 1.1700.

Buy position:

Traders will consider this if the price is kept above the level of 1.1830, in the direction of 1.1900.

Trading recommendation for GBP/USD on July 23, 2021

As for the trading chart of the GBP/USD, it can be seen that the price area of 1.3750/1.3800 still acts as a resistance in the market, leaving a chance for a change in trading interest. The strongest sell signal will come from the market after the price is kept below the level of1.3725; or else, there will be a prolonged stagnation.

Sell position:

Traders will consider this if the price is kept below the level of 1.3725, which will open the way towards the coordinates 1.3700, 1.3640, and 1.3570.

Buy position:

Traders considered this in the middle of the week, which made it possible to earn a profit on the correctional course. At the moment, traders have already taken profit and are considering sell positions, but their opinion may change if the price is kept above the level of 1.3800 in the H4 timeframe.

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Hot forecast for GBP/USD on July 26, 2021

The trading week commences quite calmly and quietly, since the macroeconomic calendar is almost empty. Only during the US trading session will data on sales of new homes in the United States be published, which may contribute to the strengthening of the dollar. This is because these same sales is likely to increase by 1.4%, which is quite a lot.

During the technical correction from the variable support point of 1.3570, the GBP/USD currency pair reached the price range of 1.3750/1.3800, where there was a reduction in the volume of long positions, which led to stagnation.

Please note that the quote in the process of slowing down formed an amplitude in the range of 1.3720/1.3785, which confirms the theory of interaction of trading forces, relative to the range of 1.3750/1.3800.

The market dynamics has signs of slowing down, but due to the existing amplitude, an accumulation process may occur, which in turn will lead to a natural acceleration.

In the current location of the price, the same amplitude course of the price is observed within the area of interaction of trading forces.

Considering the trading chart relative to the daily period, a consistent process of changing the trading interest is visible, from an ascending direction to a descending one.

In this situation, it can be assumed that the 1.3750/1.3800 area will continue to put pressure on buyers, but entering the market on a downward trajectory will be considered by traders after holding the price lower than 1.3725 for a four-hour period. Otherwise, the accumulation process will be delayed within the specified limits.

From the point of view of complex indicator analysis, it can be seen that technical instruments in the minute and hour periods have a variable signal, while the daily period continues to signal a sale.

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Trading recommendations for starters of EUR/USD and GBP/USD on July 27, 2021

Analysis of trading charts from July 26:

The EUR/USD pair managed to show an upward interest, but it was limited by the range of 1.1750/1.1830 previously set in the market.

To simply put it, the quote still follows the sideways amplitude.

Trading expectations from July 26 considered the strategy of breaking through one or another border of the side range (1.1750/1.1830), but the signal was not confirmed, and the quote is still moving in the established range.

The GBP/USD pair still managed to resume the upward movement after 30 hours hovering around the interaction area of trade forces of 1.3750/1.3800, keeping the quote above the level of 1.3800.

Considering the upward movement from the pivot point of 1.3570, market participants retraced the pound sterling by almost 100% relative to the decline from July 16-20.

Trading expectations from July 26 considered both a rebound and a breakdown relative to the area of 1.3750/1.3800, thereby giving the opportunity to stay in sync with the market.

Trading recommendation for EUR/USD on July 27, 2021

Looking at the EUR/USD trading chart, one can see that the quote has been within the lateral range of 1.1750/1.1830 for more than 150 hours, which focuses a lot of attention from speculators.

In this case, market participants are focused on the outgoing impulse relative to one or another border of the established range, which will indicate the next price movement in the market.

Expectations and prospects:

Traders consider this if the price is kept below the level of 1.1750 in the direction of 1.1700.

Traders consider this if the price is kept above the level of 1.1830 in the direction of 1.1900.

Trading recommendation for GBP/USD on July 27, 2021

As for the trading chart of the GBP/USD, it can be seen that there is a slight stagnation within the area of 1.3800/1.3845, which indicates that buyers are hesitant to take further actions. The reduction in the volume of long positions may be a local manifestation in the market due to the recent acceleration.

To confirm buyers' intentions, the price needs to hold above the level of 1.3850, which will open the way towards 1.3900.

If the upward interest is limited, and the quote manages to return below the level of 1.3780, an increase in the volume of short positions is not excluded, and this will cast doubt on the next growth.

• Short positions or Short means sell positions.
• Long positions or Long means buy positions.

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European stock markets closed lower

The British FTSE 100 fell 0.42%, the German DAX dropped 0.64%, and the French CAC 40 fell 0.71%. Italy's FTSE MIB and Spain's IBEX 35 lost 0.83% and 0.87%, respectively.

Dassault Systemes shares gained 1.3%. The French software developer has improved its financial forecasts for 2021 amid growing software sales.

LVMH Moet Hennessy Louis Vuitton SA fell 0.6%. The world's largest luxury goods manufacturer increased revenues by 56% in the first half of the year, while net profit jumped 10 times.

Reckitt Benckiser Group Plc shares fell 8.4%. The British company, which produces and sells hundreds of household chemicals and medicines, received a pre-tax loss in the first half of this year and reduced its revenue.

Just Eat Takeaway.com gained 4.3%. A shareholder in Cat Rock Capital has called on the Dutch food delivery service to strike a merger deal with other major global players in the industry.

The leaders of growth among the components of the Stoxx Europe 600 index were securities of the British chemical company Croda International Plc, which jumped 5.6%. Meanwhile, the leaders of the fall were the shares of the Swiss-American manufacturer of computer peripherals Logitech International SA, which fell 9.9%.

Investors are awaiting the results of the meeting of the US Federal Reserve System (FRS), which will be summed up on Wednesday, as well as reports of large American companies, including Apple Inc., Alphabet Inc., Microsoft Corp. and Starbucks Inc.

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USD rises ahead of Fed's meeting

The US dollar fell slightly due to durable goods orders data. Shortly after, it was trying to strengthen against a basket of six major rivals. Today, the most anticipated event of the week will take place - the FOMC meeting. Yet, many experts think that Fed Chairman Jerome Powell is unlikely to announce certain changes to the monetary policy. So, his testimony will hardly surprise market participants. Moreover, the Fed will clarify its position in the Jackson Hole meeting which is scheduled for September. However, investors are still awaiting the current meeting with bated breath. The main question is how the market will react to the Fed's meeting.

Currently, China's stock market is in the spotlight. It has collapsed significantly due to the ongoing tightening of regulation on large IT companies. Sharp fluctuations in China's equity market may adversely affect stock markets in other countries.

Hence, demand for safe-haven currencies is rising after the fall in government bond yields. Treasuries are declining despite expectations of the reduction in the bond-buying program. Usually, this would lead to an increase in government bond yields.

The greenback seems to have resumed bullish momentum. It may soar to new highs amid turmoil in the market. Besides, the US currency may strengthen if the Federal Reserve hints about the probable reduction of the bond-buying program.

The yen rose moderately following a sell-off in China's stock market. The rebound of the Japanese stock market from the recent low was much more modest in comparison with other countries.

The US dollar index is growing moderately before the Fed's meeting. Maybe traders have already started factoring in Jerome Powell's hawkish remarks.

The EUR/USD pair, as the main barometer of risk sentiment in the market, opened the trading day with a decline. Yesterday, it remained almost unchanged. The pair may even climb to 1.1900 if the Fed's meeting outcome does not stir panic in the market.

If Powell does not provide new comments about the bond-buying program, the euro will continue to fluctuate between the levels of 1.1700 and 1.1800 with possible rebound to the 19th mark. Investors are certain that the Fed will not reveal anything new until the Jackson Hole meeting in autumn where it will discuss whether to raise the debt ceiling.

Experts believe that the euro will rally in the near future. For instance, economists at Commerzbank assume that the pair may return to the area of 1.1860-1.1930.

Strong resistance levels are located at 1.1884 and 1.2008. These level may halt the pair's growth. After breaking through 1.1750, the next target will be the area of 1.1704–1.1600.

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EUR/USD and GBP/USD: Trading recommendations for novice traders for July 30, 2021

Economic calendar for July 30

Today, in terms of the economic calendar, we have preliminary data on inflation in Europe, where it is predicted that consumer prices will rise from 1.9% to 2.0%.

Given the growth of the European currency over the past days, inflation indicators could have already been taken into account in the quotes.

Inflation in the EU - 09:00 UTC

We study and analyze

• The consumer price index is prepared by Eurostat, which determines the change in prices of a selected basket of goods and services for a given period. This indicator is considered a key indicator for assessing inflation. From the point of view of fundamental analysis, the rise in inflation is a positive signal for the national currency, but when consumer prices rise faster than forecasted, it is not considered the best signal.

Trading plan - EURO/DOLLAR for July 30

Analyzing the current Euro/Dollar trading chart, you can see that the resistance level at 1.1900 puts pressure on buyers, which leads to a slowdown and a rebound in the price.

In this situation, traders consider two possible scenarios of price development at once:

The first plot proceeds from the natural basis of the past, associated with the resistance level of 1.1900, which contributes to the increase in the volume of short positions.

In simple terms, traders are looking at a rebound from 1.1900 towards 1.1830.

The second plot assumes that the correction from the pivot point 1.1750 will remain relevant in the market and after a short stagnation along the 1.1900 level, it will still be broken by the price along an upward trajectory. For the trading scenario to coincide on the market, the quotes must hold higher than 1.1915 in a four-hour period, this will open the way in the direction of 1.1950-1.1975.

Trading Plan - Pound/Dollar for July 30

Analyzing the current Pound/Dollar trading chart, you can see that the area of the psychological level of 1.4000 acts as a resistance in the market, which leads to a slowdown and a rebound in the price. The logical basis of the past associated with this level can play into the hands of sellers, which will lead to an increase in the volume of short positions.

In simple terms, the rebound stage may well lead to a downward move towards the 1.3900 level.

An alternative scenario for the development of the market will be considered by traders if the price is kept above 1.4050 in the daily period. In this case, the chances of buyers will increase to return the quotes to the area of the local high of the medium-term upward trend.

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