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ECB - Could the Euro's dive continue?By Andria Pichidi - July 23, 2019 All eyes will be on the ECB on Thursday with Draghi and Co set to confirm that the central bank is heading for additional easing measures as global growth slows down while global trade tensions escalate. First quarter Eurozone GDP numbers came in stronger than expected, but were boosted by special factors including stock building ahead of the original Brexit deadline, as well as the later timing of Easter this year. Data since then suggests a marked slowdown in the second quarter and forward looking surveys leave the balance of risks firmly tilted to the downside. The above along with geopolitical trade tensions and ongoing Brexit uncertainty are weighing on confidence and adding to pressure on the ECB to ease policy again. Some council members would likely want the central bank to cut rates now and this clearly is a “live” meeting with a non-negligible risk that the central bank lowers rates by 10 bp. However, if the ECB moves ahead of the Fed, the impact of the dovish signal would likely evaporate quickly if the central bank doesn’t follow up the Fed’s likely move at the end of July with yet another cut. Against that background we see a somewhat greater chance, however, that the central bank will wait for September for the great reveal of a package of measures, that will likely include a rate cut as well as a mechanism to limit the impact of the negative deposit rate. This could involve setting an additional reserve “allowance” above the required reserves. Source stories this month also suggested that the central bank is considering moving to a symmetrical inflation target rather than the current “upper limit”, which if set at 2% would create more room for temporary inflation overshoots over time, but mainly have a signaling effect at the current juncture. In practice this may not change much as inflation has already been allowed to rise above the medium term limit but it will send a message that many believe will help to anchor inflation expectations. Officials are also looking into ways to expand the room for QE purchases and how to limit the impact of further cuts in the deposit rate, which already stands at -0.40%. Unless things change decisively the central bank is expected to cut rates by 10 bp at the September meeting and a tiering of the deposit rate, where at least part of banks’ deposit with the ECB get preferential treatment and won’t face even higher “penalties” seems also under discussion, even if ECB studies suggest that the impact of negative rates on bank profits has been limited so far. What about EURO? Away from the economic side of things, EURUSD established a bearish outlook after coming off from a bullish June, and as it headed today a southwards move below the key Support level at 1.1180 (June 18 low and Neckline of Head and Shoulders formation pattern). Hence, as market has retained a more circumspect view of Fed easing potential and as ECB is heading in the direction of the stimulus spigot, the move below 1.1180 today considered to be crucial, as it confirms the bearish view from technical perspective as well rather only from fundamental. The breakout of bearish head and shoulders neckline for the first time, turns our attention towards second quarter of 2019 low area, at 1.1115-1.1135 area, with short term Support at 1.1159 (June’s low) and Resistance at 1.1210-1.1220. Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Short
by HotForex
1
Preparing for ECB and UK Prime MinisterTrump said Thursday that a U.S. Navy ship had destroyed an Iranian drone in a “defensive action,” escalating already high tensions in the Gulf region. On the next day, Iran dismissed the report. So, investors’ reaction was expressed by rescuing in safe heaven assets and it is understandable. Later, the gold price was correlated with a decrease in the gold price. By the way, on Friday we recommended to sell gold, so those of our readers who followed our recommendation had to earn good money. We have already recommended selling the oil (see our previous reviews) so, those of our readers had a chance to earn good money by selling oil (one of our main trading recommendation). So this week we continue to look for the opportunity to sell the asset, but be careful it is all about the unstable situation. There was a lot of talk about a possible dollar intervention last week. It hadn't got to that part yet but the risk should be disregarded. The easiest and risk-free option to trade in such case is a short dollar. Moreover, at the end of the week, we are waiting for the outcome on US GDP. So this week we will continue to look for points to open short positions on the dollar. Primarily against the Japanese yen and the British pound. This week (on July 24th ) a new prime minister should appear in the UK. Odds are about 100% that Boris Johnson is going to be. In this regard, attention to Brexit among participants of the foreign exchange market is increased sharply, which means pound volatility will increase significantly. Our midterm position - short-pound. But let us warn you, some days it is quite possible the pound could be sold out quite tough. Nevertheless, we do not doubt the final outlook for its growth. We will buy a pound not only against the dollar but also against the euro. And against the euro, this can be done in double volumes. EURGBP has climbed very high, and its decline seems to us the most likely scenario. The reason for its sales may be the outcome of the ECB meeting, which will be announced this week on Thursday. If the Central Bank gives us a hint to easing monetary policy, sales in EURGBP cannot be avoided. So we took a medium-term short position in EURGBP and look forward to a jackpot.
Short
by Trade24Fx
Why I am going short on EURAUDEURAUD has reached to one of its strongest resistance zone. In the past few years price fell down sharply after reaching this point in several occasions. Now again market is in this area. If you look at the oscillators like RSI, MACD, Stochastic on the chart to measure the energy of the market, you see divergences and RSI overbought which all means market doesn't have enough energy to break this resistance zone. Based on price action and the Japaneese Candle Stick patterns we can easily see a few small candles has been shaped on that area which is showing buyers are not very strong to push the price higher. The last candle for yesterday is a kind of high test bar which has a long leg on its top and then a long red body indicated the pressure from sellers. As you see this candle went below the low's of its previous candle which is another selling signal. Based on Elliot Waves we had an ABC correction when priced came down from this zone last time ( From Jan 2019 to mid Apr). After than a new set of 5 waves completed. If you test the idea with Fibonacci it confirms the 5 impulse waves are counted correctly. From the fundamental analysis point of view, Mario Draghi said ECB could cut interest rates again or provide further asset purchases if inflation doesn't reach its target. He admits the only option to increase the rate is when inflation goes much higher than the target. So this sounds like a sell signal or at least not supporting a bullish rally for EUR anymore. These are just a couple of signals we have to go short on EURAUD. The other possible scenario is EUR breaking this area upward which means our forecast failed, we change the position direction and get ready for a long position then, but we don't want to put much emphasis on this scenario as it is not really high probability.
Short
by hugh_me
EURCHF Likely To Fall Further After Support & Trendline Break!Oh make no mistake, technically most of the EUR related are starting to show a strong bearish pattern . EURUSD could tumble to 1.09000 level in the coming months even on the back of a weaker USD!. The above link is shows the analysis behind the EURNZD which has a potential to drop . However since many central banks are shifting towards easing, typically in this scenario fundamentally makes the SAFEHAVEN FX currencies perform the best. CHF being one of the SAFEHAVEN alongside the JPY in my view would be best performers against the EUR in the coming months! Have a look at the main chart weekly TF chart of the EURCHF. The horizontal lines are concrete support and resistance taken from the monthly TF. At the moment i am awaiting the monthly candle to close beneath the orange support located at 1.11000 level for added confluence. Furthermore, we have a long term trendline which has been violated on a weekly TF, for added confirmation that is why its advisable to wait for the monthly candle to close below orange line. This would confirm the broken support turned resistance and channel has been officially broken! The next support lies at 1.06000 level, where the price could potentially head towards. This seems like a big PIP move but if you look at the fundamental factors, we are seeing the ECB shifting their monetary policy to accommodate the changes which would likely result in EURO depreciation over long term. I am seeing the monthly would close comfortably beneath the support by the end of this month and then its advisable to execute the trade SHORT with the target of 1.06000 and RR of 1:1. This just represent my analysis on this pair and i feel this a high probability trade setup in play. shall there be any trade entries i would post them in a new post.
Short
by FX618Analysis
Ascending Channel+H&S Pattern In Favor Of EURNZD Bears! Have a look at the main weekly TF chart of EURNZD pair. From here its clearly visible that the price is confined in an ascending channel which has been held on numerous occasions. However at the moment the price seems to be too aggressive to the downside and has potentially violated the channel pending today's weekly candle close! The four horizontal red lines represent solid support and resistance levels taken from the monthly TF. Just below the trendline there lies a psychological 1.65000 support level , which in this case is a must to be broken level in order to confirm a bearish outlook. For this level to be broken i would personally prefer the monthly candle to close below 1.65000 level . Furthermore, there is an almost complete H & S pattern on the chart , which would be complete when the trendline/channel breaks together with the 1.65000 level. In this case the potential 1.65000 turned resistance would also act as the neckline of the H & S . So to put all this together in favor of the bears there 3 concrete confluence factors to take this pair towards the next support that is present at 1.58000! Fundamentally the Euro is weak at the moment and is predicted to get weak in the coming months, whereas the NZD shows a mixed outlook. So putting all this together the probability of this pair breaking down is HIGH. Shall there be any updates regarding the trade entries i will post them in a new post. This just represents my outlook on this current pair
Short
by FX618Analysis
A Weaker EURO Could Send FIBER Towards 1.09000 Level !Have a look at the main weekly TF chart which shows the price of EURUSD confined in a long term held and respected wedge ! The blue horizontal lines are the nearby support and resistance levels taken from the monthly TF . Several months ago this pair formed a bearish H & S pattern on the weekly chart which was broken as the price started to accelerate downwards partly due the FED being hawkish as they raised the Interest rates this making the USD more stronger against the basket of major currencies. When the price broke the neckline of the pattern where also the main support now turned resistance was present (1.14500) , the price should technically HIT 1.09000 where the next concrete support is present. However many months have passed by the price is typically rangebound with 1.145000 level now turned into a concrete resistance. At the moment most of the major central banks have started to ease their monetary policy, most notably the FED as a 25BP rate cut is already priced into the market which would likely take place at the end of this month. With the trade war effects already visible across the world it has certainly sent fears of an impending US recession as the yield curve stays inverted. Therefore the markets are largely expecting the FED to ease further in 2020 too. So all this theoretically should make the EURUSD spike higher but practically there has been little impact from the BULLS. While other currencies such as the SAFE HAVEN pairs (USDCHF, USDJPY) have all taken the HIT and talk about GOLD which has broken multi year records. THEREFORE THE MAIN QUESTION REMAINS: WHY IS THE EURUSD SO RESISTANT AND STRUGGLING TO CLIMB FURTHER BEYOND THE PSYCHOLOGICAL LEVEL OF 1.15? The answer to this question is not so complicated but the consequences are certainly bad for the EURUSD! First of all USD is still the world's reserve currency and the demand for it wont fade that easily. To add to this for many, the USD is a SAFEHAVEN compared to the EUR. Furthermore, if the FED eases their monetary policy their interest rate differentials will still be higher compared to the EUR which inturn would make the demand for the greenback stronger. Thirdly, the EUROZONE economy is not doing so well for the past months as most of the fundamental data as below the expectations As the ECB president mario draghi term comes to an end, the new to be appointed former president of the IMF could change the course of this pair in the coming year. But as for now i feel this pair would likely HIT 1.0900 which is a concrete support and after that it might rise further depending on the economic and monetary outlook in the EUROZONE and The U.S.
Short
by FX618Analysis
1
Short trend continuation on Eur/JpyIs it possible to see a price compression on EurJpy. In fact the price is moving within the channel between the static support identified by 61.8% of the Fibonacci retracement (placed at 120.05) and between the static resistance identified by 50% of the Fibonacci retracement. Technically, so far, this pair is set downwards. This on short/medium term time frames. With the violation of the EMA 20 daily periods, the price appears to be destined to reach the support area. The one just mentioned. An intermediate target is the support of minor importance located at 120.85. On both daily, weekly and monthly time frames, there was a cross-over of the main EMAs (or 200 perodi with 20). This means that sales on the European currency have not ended. Investors are preferring to move capital to the Japanese currency. This decline is also fundamentally justified. This because although the ultra-expansive monetary policy of the BOJ is already known and has not been changed for a long time. The ECB, according to Draghi's words and the macroeconomic data of the Eurozone, will also tend to be in the coming months more expansive than she already is. Causing a devaluation of the euro. Our target is near the price of 120
by BFCMInvest
EUR/JPY hammer on a dynamic and static support levelAs we can see from the chart above, the cross is right on a short-term dynamic support (trendline), which has been touched with a very sharp move. Moreover, this dynamic support coincides with a static support level (around 121.22), adding confluence to the analysis. However, before entering the trade, I'm waiting for a confirmation, which I expect to appear on lower time-frames. Nonetheless, uncertainty remains high in the markets, as Christine Lagarde takes the place of Mario Draghi as head of the ECB, because of her background as a lawyer and not as an economist, but this is not her first expirience in the field of economics. In fact, she has previously served as Managing Director and Chairman of the Internetional Monetary Fund since 2011. However, she won't take charge before November, 1st. Therefore, if I were to open a long position on this cross, I would either close it before the 25th of July (ECB interest rates decision), or move the stop loss (more on these details in a minute) to break even; while data on inflation in the Euro zone are to be released on Wednesday (Previous: 1.2% - Forecast: 1.2%). Moving to more technical stuff, if confirmation was to be seen, I would open a long position with a target 123.35, and a stop loss of 120.83, with a Risk/Reward of 1:5.3. But there's another level of concern a bit under the target, the resistance zone of 122.4, which should be taken into account in case of a rally.
Long
by UnknownUnicorn3701608
GBP/USD: Hot or Not ?GBP/USD: hot or not ? The trend remains downward in the short/very short term. After breaking down the static support at 1.264 identified by 23.6% of the Fibonacci retracement, the next target targeted on this currency pair is the support area at 1.25. Reachable today as analysts expect a recovery of the intraday US dollar ahead of the publication of positive nonfarm payrolls. So technically, the price should go to test the support in the 1.25 area by todays closing and, should it be violated to the downside. It could mark a new period minimum in this 2019 going beyond the 1,237. Basically this hypothesis is the most likely in the short term as the strong uncertainty around Great Britain due to Brexit. A rebound at the moment is not expected. Except for even more expansive scenarios of monetary policy from the Fed. To summarize GBP/USD: hot or not ? Maybe not. We recommend a short entry on this pair. The first target is in area of 1.25. The second target is in the intermediate area at 1,244. So the final one is at 1.237.
Short
by BFCMInvest
1
ECB signals, US threats, Roubini ’s predictions, and ruble limitDespite the extremely weak statistics from the Eurozone published on Monday and rather depressing data on producer prices, published on Tuesday, the euro tone was relatively good in the foreign exchange market yesterday. The reason was the information that the ECB is not ready to resort to additional monetary incentives. Therefore you should not expect to ease monetary policy. Despite the record series of the US economic growth, a lot of experts continue to fear for the global economy a bright future in general and the United States in particular. So Nouriel Roubini in a recent interview noted that we might be headed for another recession. The world central banks have essentially exhausted their limit of instruments (it is simply impossible to easy monetary policy for many countries), and, at the same time, the debts of countries are increasing, which is a serious threat. The trade war is a trigger for recessionary processes says, Roubini. The US seems to be interested in Europe, again. The United States, in an ongoing dispute over subsidizing the aviation industry (the European Union illegally subsidized Airbus Corp), is considering imposing tariffs on an additional 89 items with an annual trade volume of $ 4 billion, including cheese, pasta, whiskey, metals, and chemical products. In this light, a sharp increase in gold is quite understandable. Meanwhile, the majority of respondents believe that the ruble has reached its ceiling and it’s simply no way to grow to, Bloomberg's latest monthly survey found. In the future, the decline of the Russian currency is inevitable. Moreover, the state itself is interested in a weak ruble. Recall that the existing budget rule is aimed at artificially creating an imbalance in the foreign exchange market in favor of the dollar and against the ruble. For instance, since the fiscal rule has been imposed, the ruble fell against the dollar by almost 5%, but at the same time, oil prices rose by 17%. That is, the ruble becomes cheaper even if oil prices rise. Well, if they start to fall, it will just be cheaper as well but faster. In this light, it is useful to recall our constant recommendation to sell the Russian ruble on its any growth. In terms of macroeconomic statistics, yesterday was relatively calm in terms of macroeconomic statistics. The index of business activity in the construction sector showed its lowest figures since 2009 (43.1, with forecast of 49.3). Data on employment in the US from ADP is what we are interested in today. Recall that last time they signaled about future problems in the data from the NFP. So we closely monitor the indicator and prepare to sell the dollar in case of its failure. In addition, we are waiting for data on business activity and the trade balance in the United States. Our trading recommendations for today: we are looking for points for sales of the dollar and the Russian ruble, as well as AUDUSD. We sell oil. We can not but note that gold current price is extremely attractive for sales, but do not forget to be careful.
OANDA:XAUUSDShort
by Trade24Fx
1
EURUSD Still ShortOn our analysis as at the 21.06 we indicated that we were still short EURUSD after the relatively Dovish FOMC meeting and had increased our short position. However, the currency pair rose towards 1.14 before dropping sharply Monday below 1.13 on the back of weaker than expected EU PMI data and stronger than expected US ISM data. Additionally, the US is threatening tariffs on EU goods which has prevented EURUSD rebounding on the back of indications today that the ECB will be more patient in future rate cuts and additional QE than had been expected. We therefore maintain our short position and will look to take profit if the currency pair drops below 1.12.
Short
by KQMarkets
Descending triangle on eur/usd Good evening all, It's been a quiet week for the eur/usd with no noticeable movements and events, markets are braced for the G20 meetings on Friday and Saturday and whether this whole trade issue between US and China can finally break down. US GDP came in close to expectations and European cpi is expected to have stabilized. Technically, the pair is still looking bullish-neutral trading above its main moving averages. However, on the hourly chart a descending triangle is forming which usually is a continuation of a downtrend but can sometimes be found as a top , suggesting that the pair may struggle to continue rising and therefore start declining. It is important to wait for a confirmed breakout before placing any sell position since some patterns fail. First support is somewhere near 1.134 ( 200D SMA and 23.6% fibo). First resistance near 1.139 followed by 1.142. Trade safe
by RamziAbouAbdallah-CMT
Is Eur/Usd like a bouncing ball ?Is Eur/Usd like a bouncing ball ? Yes it is. The price returned above the EMA 200 daily. This only after a year and a month that continued to travel under it. At this time, however, the very short/short term scenario seems to have changed. With the break and the closure above the daily EMA200, it is very likely that this uptrend continues up to (at least) 50% of the Fibonacci retracement. Around 1.144,  this area has been tested but it will be necessary to wait for the retest to proceed. In fact, an upward breach in this point will also make investors give up their short positions in favor of long ones. Those will be maintained until the next resistance zone set at around 1.16 (where the EMA200 weekly periods passes). A rejection will make investors increase the short positions of their portfolios. For now the fundamental scenario is quite uncertain: on one hand there is the ECB which will continue to devalue the euro as the Eurozone is not yet ready increase the interest rate, but it needs further money injection to stabilize. On the other hand, the Fed also seems to have revised its monetary policy. By now the rate cut by a quarter of a percentage point is practically certain in July. In fact the market is already discounting it with this "collapse" of the euro. According to some analysts this have raised the probability that in 2019 there may be another 2 rates change, one in September and one at the end of the year. This has strongly destabilized the American currency, which in the last few weeks has lost ground against all the other majors. Trading ideas To conclude Eur/Usd like a bouncing ball and for this reason we recommend opening a long position with a target of 1.144. A trade that partially compensates the other open days ago in the opposite direction. For now, we keep the short trade in the portfolio and add a very short period trade to the target of 1,144.
by BFCMInvest
EURUSD Might Attempt An Up Move to 1.14! A LONG TRADE SETUPENTRY AT AROUND: 1.12600 LEVEL STOP LOSS: 1.12000 TAKE PROFIT: 1.14000 RR: 1:1 On technical perspective the triangle has broken out and the price has retraced for us to go LONG here. The triangle breakout confirms that EURUSD is starting to consolidate and aim towards the weekly 50 EMA. With all the rate cut news going on and the US economy slowing, it should help this PAIR reach the 1.14000 in the near future. shall there be any updates i will update them below. cheers
Long
by FX618Analysis
Fed & Dollar: Expectation and moves; Trump's tweets & EuroPresident Trump said Tuesday morning that Xi Jinping had agreed to meet with him at the Group of 20 summit next week. “We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting.” Trump wrote on Twitter. Markets are reacting to this tweet as a signal to relax. However, on our point of view withdrawal from safe-haven assets premature, the growth in demand for risky assets is a dubious idea. The thing is, the conflict parties need to be returned the the negotiation table. Also, Another news that triggered a surge in activity in the foreign exchange market was the statement by the head of the ECB, Mario Draghi, that the rate cut by the ECB is considered by the Central Bank as part of the tool for additional stimulation of the economy. Traders rushed to sell euros. We'll take it slow. Draghi voiced that have already been said by ECB's officials earlier. Well, interest rate management is the basic toolkit of the monetary policy of any Central Bank. So we do not share the enthusiasm of euro sellers and continue to recommend using such descents for its purchases. Well, the main event of the week will be the announcement of the decision of the Federal Open Market Committee on the parameters of monetary policy in the United States. Many people are waiting for lowering interest rates. But if you look at the likelihood of this event, then at the moment it is estimated at 22%, while 78% of traders believe that the rate will be left unchanged. But at the same time, the situation in July is radically different: only 15% believe that the rate will remain at the current level, and 85% think that the rate will be lowered (at least by 0.25% and 18% believe that the decline will generally be 0.5% ). The fact is that the current situation seems ambiguous, so we are supporting those ones who are supporting the lowering. On the one hand, the trade war is uncertainties and risks to the economy. But on the other hand, 10 years in a row, economic growth in the United States has actually shown that it is too early to panic. The data on NFP this month came out disastrous, but retail sales and industrial production in the United States showed good growth. That is, we have a certain balance in the pros and cons of the rate cut today. And this gives the most obvious reason for the US Central Bank to continue to withstand a pause. The question arises "what to do with the dollar ?". Here our position is unequivocal - sell. The chances that the Fed will give reasons for the revitalization of buyers are insignificant. Unless there will be an unequivocal statement about the inexpediency of lowering rates in principle. But the probability of this is extremely small. But the likelihood of the phrase that at the next meeting the rate may be lowered, on the contrary, seems to us quite possible. And this is a signal against the dollar. So, our trading preferences are unchanged: we will look for points for selling the US dollar primarily against the Japanese yen, as well as the euro and the pound, selling oil and the Russian ruble, as well as buying gold.
Short
by Trade24Fx
EURUSD still short On our analysis on the 04.06 we indicated that we were still short ahead of the ECB meeting but EURUSD went up after the ECB did not hint at any potential future rate cuts as anticipated by the market. However, at the ECB forum in Sintra, Mario Draghi indicated that interest rate cuts are a possibility which sent EURUSD tumbling below the 1.11926 Fibonacci level at which point we took some profit. We will now hold our short position and wait for the outcome of the FED rate decision and Powell's speech on Wednesday.
Short
by KQMarkets