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Dollar fails Powell’s test, China and Trump keep tensionsFor the whole last week we were waiting for a symposium in Jackson Hole to be held (The Economic Symposium, held in Jackson Hole, Wyoming, is attended by central bankers, finance ministers, academics, and financial market participants from around the world. ). Fed Chairman Jerome Powell's speech on Friday was the main event. The markets were waiting for the “official” confirmation of monetary easing by the Fed, the ECB and other central banks. Attention focused on a speech by U.S. Federal Reserve chief Jerome Powell for news on whether it will cut interest rates for a second time this year to boost the world's largest economy. But at the same time, he did not specify a time limit. China intends to raise tariffs on US imported goods total $ 75 billion the decision was made in response to the USA. Besides, the import tax on American cars and auto parts will be increased. Trump, of course, reacted extremely nervously to such actions by China, promising to take retaliatory measures. China has a deserved reputation for intellectual property theft. On Friday, Trump estimated China robs the US of “hundreds of billions” a year in ideas. So there is a reason to believe that a very hot and hectic week awaits us. In this light, buying safe-haven assets seems like a good trading idea. But once again we note that the choice of the entry point is extremely important. The upcoming week promises to be calm. Attention should be paid only on the US GDP. Otherwise, the attention will be focused on the confrontation between the USA and China, as well as the Fed. Our trading preferences this week: selling the dollar, finding points for buying gold and the Japanese yen, buying the British pound and selling the Russian ruble. Also, oil sales seem appropriate.
FX:XAUUSDLong
by Trade24Fx
Euro suffers, pound is growing, & dollar waits for PowellPowell speaks in Jackson Hole that is what everybody is waiting for. Fed minutes from the meeting also showed the lack of unity among the Fed members. That might lead to the fact that the rate can be either lowered in September or left unchanged. That is complete uncertainty. That is why Powell's comments are that important. Markets still believe in the rates cut, and afraid to sell the dollar without any existing facts. So Powell’s “pigeon” comments are capable of setting off dollar selling in the foreign exchange market. Therefore we recommend the short dollar. However - if Powell does not give any clear comments, markets may perceive this as the Fed’s unwillingness to cut the rates in September, which could lead to a wave of dollar purchase Statistics on business activity in the Eurozone and the United States came out. As for the data from Europe on the one hand, the Eurozone Composite PMI was better than expected above 50, as was the PMI in the services sector. On the other hand, data from Germany showed a sharp deterioration in the situation, and at the highest pace over the past 6 years: respondents are expecting production to decline in the foreseeable future. The United States also upset. PMI indices came out much worse than expected, and the manufacturing index generally came out below 50, which indicates a reduction in business activity in the United States. The publication of the last ECB meeting minutes showed that Central Bank officials at their meeting on July 25 discussed the benefits of combining two measures to lower interest rates and bond purchases. Recall that the ECB left its policy unchanged last month, but made it clear that it was preparing to reduce its already negative rate and resume buying bonds in September. So, the euro does not look like the best thing to buy. We recall our recommendation to sell the euro against the pound. Moreover, Johnson is stepping up towards agreeing with the EU. Even though Europe in every possible way welcomes his efforts: in particular, Merkel believes that a new deal with Great Britain is possible before the end of October. In general, the Big Seven Conference may be a kind of breakthrough in the stalemate with Brexit. We have strengthened our desire to buy the pound, especially at extremely attractive current prices.
Long
by Trade24Fx
An important movement on Eur/UsdThe FOCM will begin Wednesday evening to make the market and investors understand the next moves for the short and medium term and the ECB will follow the next day. It is very likely that the euro will come out even more devalued at the end of these two days. As the European Central Bank will almost certainly show a weak economic and political scenario in the eurozone. Talking about new money injections and further postponements of a rate hike; while the FED should ensure another rate cut within the year, but then continue with its restrictive economic policy. Because an important movement on Eur/Usd we open another long position from here to close by Wednesday evening to then close all the bullish positions and reposition ourselves short. The target is the 1.119 resistance.
Long
by BFCMInvest
EURUSD Short Crucial Week FED minutes/ Jackson HoleEURUSD has been dropping since our last analysis on the 12.08 and we are at a crucial stage if we can break the $1.10959 support level we expect further downside. However, this is a very a important stage for the currency pair as FED Minutes on Wednesday and Chairman Powell's comments at Jackson Hole will likely lead to significant volatility and price action. This is particularly the case if the FED changes it's rhetoric on further interest rate cuts in the near term and indicates there will be further rate cuts.
Short
by KQMarkets
Forex Markets Wobble on Italy CrisisThe forex markets waggled after Italy Deputy Prime Minister Matteo Salvini called for a snap election. Salvini urged the prime minister to reconvene parliament to back his claim that the coalition government is no longer solid. The EURUSD pair clocked in some losses after the news broke out. Additionally, stocks and bond markets in the EU zone reacted more furiously. Traders sold off Italian assets swiftly. Italy’s political tensions resulted to wider yield spread between German and Italian bonds. This isn’t welcome news for the common currency, which has already been suffering pressure. Meanwhile, traders are also becoming increasingly dovish. They are betting that the European Central Bank could implement a more aggressive September rate cut, increasing dovish expectations. As of writing, there is a 27% probability of a 20-basis-point cut in ECB’s deposit facility rate. That’s way higher than the previous 12% probability. Snap Elections, Forex Markets to Recover? Salvini’s call for snap election is quite obviously a move to solidify his power. He heads the right-wing popular Lega party. According to Salvini, the failure of the Five Star Movement’s attempt to derail plans for a high-speed rail link was evidence the coalition couldn’t govern. He said Italian needed “certainty,” with a government that “does things, not a ‘Mr. No.’” Salvini is enjoying massive support from opinion polls, being a populist and mainly because of his stance against illegal immigration. The forex markets will probably get over the fiasco speedily, with the euro likely getting back some of its losses. The euro zone also absorbed the French industrial production data for June. The data could be consistent with the dismal pattern in Germany. The dollar index that gauges the buck’s strength against the other currencies barely moved. US President Donald Trump once again lashed out on Twitter against the Federal Reserve. However, it didn’t have much effect on the markets, which recovered quite easily and with barely an inconvenience.
by Financebroker
EURUSD - Short Post FED 1.09 next targetWe have been short EURUSD for a while and yesterday's FED meeting where Powell announced a 25bps rate cut but indicated there would be no further cuts led to EURUSD dropping from 1.116 to 1.104. This is because the EU is looking to cut rates and embark on quantitative easing due to the weakness in the Eurozone economy. Therefore we are holding our short position and now expect the currency pair to hit levels not seen since 2017 below 1.05 in the coming months. However, we will start taking profit from 1.09 as we await further developments in particular US data releases starting with ISM manufacturing today and non farm payrolls tomorrow.
Short
by KQMarkets
The Fed, the Banks of Japan and EnglandAt the last meeting, the Governing Council of the European Central Bank (ECB) decided that the interest rate remain unchanged. Also, Mario Draghi said that officials had not discussed the rate cut. Accordingly, the euro has a good chance this week to rebound from the medium-term range lowest level. In this regard, our position on the euro - we buy primarily against the dollar. Boris Johnson Became U.K. Prime Minister, Replacing Theresa May. Markets are frankly afraid of Johnson because of his aggressive position on Brexit. As a result, the pound is under strong downward pressure. But again, it is so far underwater right now given that there are no real reasons for this - market expectations are based on fears and rumours, not facts. We believe that common sense will eventually win and bet on the pound growth. Therefore, we recommend its purchase. The data on the US GDP for the second quarter will be published today. GDP probably expanded 1.8% in the second quarter, down from 3.1%. If the growth is 2.2-2.5%, then the dollar, perhaps, is not in danger until Wednesday. But if 1.8%, it cannot avoid sales. This will be the main event not only of the week but of the summer. Wednesday may well lay the foundation for a dollar downtrend in upcoming months or even years. We are still waiting for the Central Banks of Japan and England meetings, as well as the Eurozone GDP outcome and the US labor market data to come out. In general, it will not be boring. Our trading recommendations for the week are as follows. We will continue to look for opportunities for selling the dollar across the entire spectrum of the foreign exchange market, buying the pound against the dollar as well as against the euro, selling oil and the Russian ruble, and also buying the Japanese yen against the dollar. As for gold, in the oversold we buy and in the overbought area we sell gold.
Long
by Trade24Fx
Prepare for US GDP, ECB results and Fear IndexAt yesterdays' meeting, the Governing Council of the European Central Bank (ECB) decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively. Nevertheless, the comments from the Central Bank turned out to be very dovish, opening the way to further monetary easing in September. For the euro, of course, this is not a positive sign. However, we do not throw the euro under a bus yet, because next week’s meeting of the Federal Reserve will likely mark the beginning of a prolonged period of lower interest rates, in our opinion, this event is more important than words about future easing (in the battle of facts with expectations, we will give preference to facts). Also, the euro is supported by the head of the European Central Bank, Mario Draghi, who said that officials had not discussed the rate cut. Our position is unchanged - we buy EURUSD with current price with stops lower than 1.11. The data on the US GDP for the second quarter will be published today. GDP probably expanded 1.8% in the second quarter, down from 3.1%. If the growth is 2.2-2.5%, then the dollar, perhaps, is not in danger until Wednesday. But if 1.8%, it cannot avoid sales. So, dollar current price seems to us extremely attractive for its sales. Meanwhile, the VIX Index ( it is also known by other names like "Fear Gauge" or "Fear Index) dropped to Multi-Year Lows. That is, traders and investors have calmed down. That calls into the question the safe-haven assets growth demand and explains yesterday's weakness of the yen and gold. Given then the level of volatility in gold has increased, we prefer to trade with the Japanese yen. Its purchase against the dollar is still relevant for us. Our trading recommendations for today: We will continue to look for opportunities for selling the dollar across the foreign exchange market entire spectrum, buying the pound against the dollar as well as against the euro, selling oil and the Russian ruble, and also buying the Japanese yen against the dollar. As for gold, in the oversold we buy and in the overbought area we sell gold.
Long
by Trade24Fx
Main Eur/Usd Analysis The price touched the support area set at 1.112 with a post-conference Draghi spike. Causing the stop loss closing on our trade. After it return immediately to the closing level of yesterday's session . Technically, this pair is in a stalemate taking the last six months as a time reference. In fact, the trend has no longer taken a specific direction, continuing to move between the support at 1,112 and the resistance at 1,144. If a time frame of a year and a half is taken into consideration the direction of EURUSD tends to fall. And now we do not see changes of scenery. For the next year and a half we expect the main trend to be maintained and that as final target the area 1.08/1.06 can be reached. This with minor cycles which could also lead to significant bounces. A new cycle should start with the next FED meeting at the end of July. Despite the spike a few hours ago that caused a false break in the support area, we expect a drop in the US currency for the rest of the summer. The objective is the upward break in the resistance zone at 1,144. The maximum extension of this first mini-cycle could be around 1,158. This level is identified by the EMA200 weekly which acts as a dynamic resistance of extreme importance for the short term. Fundamental Analysis At a fundamental level, the scenario that is taking shape is the following. Draghi stated that expectations on future rates are not the best. In fact, it expects that rates could remain unchanged (or even cut) for at least another year. In addition we could see a second edition of quantitative easing. The government bond purchase program, is being studied in Frankfurt. These statements, once implemented, will negatively weigh for the Euro, which will devalue against the other majors. So for the next year and a half, as we said, we expect a continuation of the main trend on this pair. On the other hand, however, on the Fed side, the devaluation of its currency should, make EURUSD carry out this bullish mini-cycle. The market and investors expect at least two cuts of a quarter of a point by the end of the year. To summarize We expect a climb in the very short/short term. Eur/Usd is ready for the bounce and we recommend repositioning long with the final target of the 1,158 (intermediate targets 1,132; 1,144). Stop at 1.103
Long
by BFCMInvest
Dax daily: 26 Jul 2019 Yesterday's session started by the gap closure, just as we pinpointed. The resistance at 12 576 was retested twice and then the price action was dominated by fundamentals. The ECB President Mario Draghi hinted a possible rate cut into negative values to tackle Eurozone's economic stagnation. This scepticism influenced the German stock index DAX as well and we saw this reflected by a prudent downfall by more than 250 points. The session was closed at 12 344. Important zones Resistance: 12 437, 12 470 Support: 12 338 Statistics for today Detailed statistics in the Statistical Application The statistical probability of closing the gap is only 38% Macroeconomic releases 14:30 CEST - USA - Advance GDP q/q Today's session hypothesis Yesterday's volatile activity has dramatically reduced our estimations and today's hypothesis. The moves were caused by fundamental news. The statistical application signifies the gap closure probability of only 38%, yet the price around 12 338 became a balanced consensus for market participants. That's one reason this zone could be retested today as well. Besides, we have enough room for the long correction all the way towards 12 437.
EUREX:FDAX1!
by FTMO
Pound losses set for recoveryFollowing ECB's decision to keep rates on hold and President Draghi's comments aimed at giving confidence to the Eurozone, the common currency saw a sharp rise. However the pair price has now reached a point of saturation near 0.8955 which was previously a support level. The pound, although under Brexit-related pressures, is likely to push the price down to 0.8940. That level can be followed by 0.8920. In the case of further rise though, 0.8970 close to the lower band of the ascending channel will provide resistance.
Short
by LimitMarkets
Johnson and Pound, ECB and Euro, US and ChinaBoris Johnson becomes the UK's new prime minister and, made his first statement. Despite the apocalyptic forecasts, we could observe a pound growth on Wednesday. Once again, chances that Johnson will have enough support to implement the no-deal Brexit are extremely low. An agreement with the EU or a general referendum is more likely to happen. In any case, until October 31, it’s not necessary to expect “exit without a deal”. And this means that buying pounds with current prices is a safe enough trading strategy, that could provide more than a solid income with minimal risks. So our recommendation is unchanged - we are looking for points for pound purchases across the foreign exchange market entire spectrum. Speaking of the euro. Perhaps, he is today the “prospective candidate” for sales against the pound, as well as it is quite possible to buy it against the dollar. Markets cautious with that fact that today the ECB may start to reverse the easing of policy, therefore the euro is trading at the very bottom of the medium-term range. We do not think that it would happen. The ECB is quite a conservative Central Bank. It would rather wait for the Fed to lower the rate, obtain additional economic data, update its economic forecasts, and just after that n begin to act at the beginning of September may be, but not now. So its purchases against the dollar seem like a good trading idea. We are actively buying EURUSD - the risk/reward balance is too enticing: with stops 40-50 points with a potential profit 200 points. Stops must be put up necessarily, because the Eurozone economy is in a bad form, and theoretically could provoke the ECB to act. Yesterday's data on the EU economic loco - in Germany came out weak. The PMI index in the production sector was only 43.1 (with the forecast was 45.2). the minimum level over the last 7 years (!). The PMI index in the Eurozone manufacturing sector also came out below 50 and again worse than forecasts. Unexpectedly the data on new homes sales in the USA came out quite positive( which grew by 7.0% to 646,000 (expected + 5.1%)). However, we will not revise our position on the dollar and continue to look for points for its sales. Meanwhile, the US and China are trying to get on well. On Monday, the US delegation is going to China to find a compromise. There is still no progress in the negotiation process, the IMF lowered forecasts for the growth of the world economy, again. Forecasts in connection with the slow-down in growth of the world economy. was reduced by 0.1% to 3.2% and 3.5% for 2910 and 2020. So, purchases of the Japanese yen continue to be relevant. Our trading recommendations for today: we will continue to look for opportunities for selling the dollar across the entire spectrum of the foreign exchange market, buying the pound against the dollar as well as against the euro, selling oil and the Russian ruble, and also buying the Japanese yen against the dollar. As for gold, buy it from oversold and sell in the overbought zone.
Long
by Trade24Fx
EURUSD near multi-month lows ahead of ECBThe US dollar strengthened against the euro this week as markets assess the likelihood of an ECB rate cut. We've already locked some profits of the earlier bull-move in our Trading Club and closed the remaining position until the dust in the market settles. Bear in mind that, although the Fed took a dovish stance, there is an important difference between the position of the Fed and the ECB. While the Fed wants to cut rates to move the US dollar lower, the US economy is still pretty strong unlike the European economy, particularly Germany. The EURUSD pair triggered a H&S pattern that projects a profit target around the 1.10 level, and the pair is already near multi-month and multi-year lows. A dovish ECB may send the pair below 1.11 and trigger a cluster of stop orders, in which case the 1.10 level will act as a magnet. Like our analysis? Please hit the "LIKE" button to support us. Thanks!
by MujkanovicFX
ECB PreviewEURGBP, Daily The risk of a surprise from the ECB has risen after yesterday’s round of weak PMI numbers,¹ which not only highlighted that the German manufacturing sector is sliding deeper into recession, but also that the fallout from global trade tensions and rising risks of a no-deal Brexit scenario is not limited to Germany. Today’s Ifo reading is unlikely to be much better and the doves at the ECB will likely push for a quick move. There ARE good reasons for Draghi to wait until September, when not only the next round of forecasts will be due, but also the outlook on the Brexit front should have become a bit clearer. Most importantly perhaps, the Fed cutting rates as expected next week would likely see markets expecting another follow up move from the ECB, although the doves countering that and easing measures from both the Eurozone and the US ahead of the summer lull in August should help market sentiment to stabilise. Ultimately a 10 bp cut from the ECB will not make much of a difference in real terms and the main merit for many will lie in the signalling effect. With that in mind Draghi will have to deliver a very dovish presser today to keep investors happy and a cut without a signal that there is more to come could have a more negative impact on markets than a very clear signal that the ECB is readying a comprehensive set of measures for September. However, Draghi & Co. have been bold before, so it would be unwise to rule anything out. The Euro continues to trade softer ahead of the Rate Announcement at 11:45 GMT and the Press conference 45 minutes later. Even EURGBP broke below the key 20-day moving average yesterday, to end 52 consecutive trading days above this important baseline. We will be LIVE on our main Facebook page from 11:30 GMT for analysis of the key event
Short
by HotForex
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