british pound

The situation of currency pairs is affected by macroeconomic and political events. In the Asian market, developments in China, which has recently been struggling with an increase in coronavirus infections, are of particular importance. December is particularly important because the last decisions regarding interest rates will be made this year, which will affect the forex market.

 

  • Decreased winter fears may support the euro.
  • The looming recession in the UK is starting to take its toll on the pound.
  • The Aussie awaiting RBA decision
  • Positive Japan services PMI

 

EUR/USD

The EUR/USD pair is at its highest level in months. The upward trend in recent weeks has been strong. ING FX experts remain bearish on the euro/dollar exchange rate until the end of the year, but there are experts who believe that the exchange rate will continue its upward move.

It is worth paying attention to the readings of PMI indices for services that will be released today from many countries and the

The Pound: will the bears win the market without news?

The Pound: will the bears win the market without news?

Alex Kuptsikevich Alex Kuptsikevich 08.12.2021 09:27
The pound was down against the dollar on Tuesday. However, the very nature of the movements, as in the case of the euro rate, was far from ideal and straightforward. The mixed dynamics is clearly visible on the 30-minute timeframe, where the rate consolidated above a strong downtrend line with four pivots. The chart first crossed this line and then decided to resume the downward movement. It was as if the obvious buy signal turned out to be false, and it was possible to exit from it by the downward reversal of the MACD indicator. In general, it turns out that the downward trend of the pound has continued, but at the same time, the annual lows set on November 30th have not been updated so far. It should also be noted that during Tuesday, neither the UK nor the US saw a single important event or publication of economic data. They will not be there today either. Despite this, the volatility increased yesterday, and today, during the session, more calm movements are expected. On the 30-minute timeframe, the pound continues to have a downward trend. Earlier today, the downtrend line was broken, so both the continuation of the fall and a rematch, in which traders will try to return the rate above it, is possible. In general, the worsening epidemiological situation and the introduction of quarantine by the authorities of European countries make investors expect a drop in activity and sentiment by the end of the week.
Pairs With Dollar (USD) And Pound (GBP) To Be Shaken Shortly!? Let’s Follow EURUSD, USDCAD And GBPUSD!

Pairs With Dollar (USD) And Pound (GBP) To Be Shaken Shortly!? Let’s Follow EURUSD, USDCAD And GBPUSD!

Mikołaj Marcinowski Mikołaj Marcinowski 12.04.2022 12:40
Today US Core CPI and EIA Short-Term Energy Outlook are released, tomorrow it’s time to print UK CPI and the US PPI and crude oil inventories. What’s more, tomorrow’s afternoon Bank of Canada interest rate decision is released as well and many investors and economists await these announcement. It’s a very, very hot week as one day before holiday for many countries ECB interest rate decision goes public. It’s going to be a really tempting end of the working week! Firstly, let’s see how has EUR/USD fluctuated recently USD keeps going, yields are rising and the ECB decision is crucial considering next moves of the pair, as we have to wait longer for the next Fed’s announcement till the middle of May. EURUSD Chart USDCAD – Bank of Canada to raise the interest rate? As Investing.com predicts a rate hike, tightening of BoC’s monetary policy could help the Canadian dollar even if it’s quite strong right now even gaining in a long term. Monthly chart shows a noticeable strengthening of 1%. However, mentioned gain is a reduced value as a few days ago USD/CAD has been trading almost 3% lower. USDCAD Chart GBPUSD – A Storm Incoming? Daily chart shows a real volatility! GBP has strengthened and weakened few times already and the moves have become more dynamic recently as you see on the right hand side. The US CPI is released today and UK CPI and the US PPI go public on Wednesday so expect high volatility to persist and investors to change their minds really rapidly. GBPUSD Chart Data/Source: Investing.com, TradingView.com Charts: TradingView.com
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Japanese Yen (JPY) Weakens Against The Dollar, USD/CAD Stable And The Inevitable Strengthening Of The USD, IMF/World Bank Events

Rebecca Duthie Rebecca Duthie 19.04.2022 09:50
Summary: Analysis of; EUR/USD, EUR/GBP, USD/CAD, USD/JPY. Japanese Yen weakens as Bank of Japan fights against increasing Treasury Yields. USD Strengthening as the Fed remains hawkish. The EUR and GBP future prices awaiting the IMF and World Bank Events later this week. EUR/USD, Strengthening USD putting pressure on the EUR. EUR/USD market sentiment is currently reflected as bearish for this currency pair as the graph shows the declining price over the past week. In the past weeks, the Euro has been underperforming as a result of the Russia-Ukraine war causing fears of Eurozone stagflation. The ECB is stuck at the moment with increasing inflation and slow growth, the likelihood of the ECB’s capacity to match the aggressiveness of the Fed is low. Perhaps toward the end of the week we will see the EURO bounce against the USD inlight of the talks at the IMF/World bank events. EUR/USD Price Chart Read next: (UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun   The Value EUR/GBP Awaits Changes in Light of Major Appointments This Week The Euro seems to be strengthening against the GBP after it depreciated late last week. Since the market opened this morning, the investor sentiment for this currency pair has become bullish. There is suspicion that the sharp fall in the value of the EUR/GBP last Thursday may have come out of China in an attempt to stop any more strengthening in the Renminbi. The future value of this currency pair is important to watch in the coming days, with major appointments on talks about finances coming up, especially both the ECB and BoE governors talks at the IMF/World Bank events later this week. EUR/GBP Price Chart USD/CAD Currency Pair holding Stable amidst Current Market conditions The USD/CAD currency pair price is remaining relatively stable given the current risk-averse market sentiment. The USD/CAD currency pair is considered to be volatile, both the CAD and USD reacts quickly to the release of economic data and current market conditions. Despite investors being risk averse, the market sentiment seems to be bullish for the USD inlight of the Fed's hawkish attitude, growing concerns on inflation increases and US rising benchmark yields all leading to a strengthening USD. USD strengthening against the Japanese Yen The USD strengthened against the Yen this past week as a result of the increasing US Treasury yields and the expectation of positive economic data. The price of this currency pair reached the highest since March 2002. The Bank of Japan has been working hard to keep the Treasury yield below 0.25%, the opposite approach the Fed has taken in the fight against inflation, causing the yen to weaken. The Japanese finance minister raises concerns on the damaging effect the weakening yen could have on the weakening economy For you: Forex Rates: British Pound (GBP) Strengthening? Weak (EUR) Euro? GBP, NZD And AUD Supported By Monetary Policy?   USD/JPY Price Chart Sources: Finance.yahoo.com, Teletrade.eu.
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Euro To US Dollar (EUR To USD): That's An Amazing USD Performance, Will USDCAD (Canadian Dollar) Stay Close? USDJPY (Japanese Yen) Beats Records!

Jason Sen Jason Sen 20.04.2022 10:39
EURUSD retests 37 YEAR TREND LINE SUPPORT AT 1.0760/20. Longs need stops below 1.0670. Obviously there is nothing more important than this level this week. Longs at 1.0760/20 initially target 1.0820/50. Above here is more positive targeting 1.0900/20 then 1.0960/70. USDCAD strong resistance at 1.2650/70. Shorts need stops above 1.2690. A break higher is a medium term buy signal. Related article: Monetary Policy Drives EUR/USD, The Future of the EUR/GBP Awaits the Bank Of England's Speech - Good Morning Forex| FXMAG.COM Very minor support at 1.2610/1.2590 & again at 1.2525/05 today. If we continue lower look for 1.2480/70. We have another buying opportunity at 1.2440/10. Longs need stops below 1.2370. A break lower is an important medium term sell signal. USDJPY beat 14 year trend line resistance at 127.10/50 & rocketed another 200 pips!! The pair has 13 blue bodied daily & 7 weekly candles in a row. So sell signal yet despite severely overbought conditions. Above 129.50 look for 129.90/95 then 130.25/35, perhaps as far as 130.75/85. First support at 128.45/25. Further losses can target 127.80/70. Unlikely but if we continue lower look for strong support at 127.10/126.90. Read next: Gold Price Falls, Volatility in Wheat Futures and The Price Of Palladium| FXMAG.COM EURJPY higher as expected reaching 139.67 & no sell signal yet as we become overbought. Further gains can target 139.95/99 then 140.40/50 & 140.85/95. GBP To USD GBPUSD retests last week's low at 1.2990/70 after the bullish engulfing candle so now we just have to see if we get a double bottom buy signal or if the pair break lower for a sell signal. So far the bulls are winning as we bounce from 1.2977. A break below 1.2955 should be a medium term sell signal. Our longs target 1.3060/70 & 1.3100/10, perhaps as far as first resistance at 1.3150/70. Please email me if you need this report updated or Whatsapp: +66971910019 – To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk
Tempting FX Pair - GBP To USD! Analysis And Tips For British Pound To US Dollar

Monetary Policy Drives EUR/USD, The Future of the EUR/GBP Awaits the Bank Of England's Speech - Good Morning Forex

Rebecca Duthie Rebecca Duthie 20.04.2022 10:17
Summary: EUR/USD and Monetary Policy. Bank Of England's Speech on Thursday effect on the GBP related currency pairs. AUD/CHF as a reflection of investor risk sentiment. Related article: Japanese Yen (JPY) Weakens Against The Dollar, USD/CAD Stable And The Inevitable Strengthening Of The USD, IMF/World Bank Events Monetary Policy driving the EUR/USD price action. Since the market opened this morning, the EUR has strengthened against the USD and the market sentiment is bullish, the rise in price is small but significant given the current economic conditions. With the differing monetary policy of the European Central Bank (ECB) and the US Federal Reserve (Fed) the EUR/USD currency pair price is low. In the coming weeks it is likely to see the dollar strengthening thanks to the expectations of the Fed to tighten monetary policy. Whereas, there is no certainty on when the ECB will begin rising interest rates. EUR/USD Price Chart Value of the GBP Awaits BOEs Speech Since the market opened this morning the price of the currency pair has increased, however, market sentiment for the EUR/GBP has changed from bullish yesterday to a mixed today. The strengthening EUR against GBP comes in light of the Bank of Englands (BOE) announcements tomorrow regarding the future monetary policy of the country, investors are expecting more hawkish actions. EUR/GBP Price Chart  Read next: Altcoins' Rally: Solana (SOL) Soars Even More, DOT and SHIBA INU Do The Same! | FXMAG.COM AUD/CHF Since the market opened this morning, the value of the AUD/CHF has increased, and has a bullish market sentiment. This currency pair can be used as a good reflection of risk sentiment, this is because the AUD is risk-on and the Swiss Franc is considered as a safe-haven currency. AUD/CHF Price Chart GBP loses some ground on the JPY The price of the GBP/JPY currency pair has (in general) been on the rise as a result of the rapidly depreciating value of the Yen. However, since the market opened this morning the price has decreased despite the bullish market sentiment, possibly due to the uncertainty regarding the future of the GBP and the upcoming BOE’s announcements. GBP/JPY Price Chart Sources: Finance.yahoo.com, teletrade.eu, dailyfx.com
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(USD) Dollar Index - Fed Floors It! Hawkish Rhetoric And Interest Rate Hike? British Pound In Crisis? GBP/USD Affected By Weak Retail Sales Data!

Conotoxia Comments Conotoxia Comments 22.04.2022 12:02
The Dollar Index appears to have risen on Friday to its highest level since July 2020 as expectations rise for a rapid tightening of monetary policy in the US both this spring and summer. Learn more on Conotoxia.com Speaking Thursday at a panel organized by the IMF, the Fed chairman said the central bank is committed to raising interest rates quickly to bring inflation down Investors may have heard hawkish comments from Federal Reserve Chairman Jerome Powell yesterday, who suggested more aggressive rate hikes in the future. Speaking Thursday at a panel organized by the IMF, the Fed chairman said the central bank is committed to raising interest rates quickly to bring inflation down, and added that a 50 basis point rate hike is still on the table for May. Powell pointed out that aside from damaging inflation, the U.S. economy is very strong and the labor market is in good shape. The dollar index seems to have gained for the third week in a row. Powell's speech was followed by opinions from various institutions on how further monetary policy in the US may shape up. Among them, Nomura points to the possibility of hikes of as much as 75 basis points both in June and July. This seems to be one of the bigger predictions for Fed action. Read Next: How To Hedge Against Inflation? Crypto? Is Bitcoin (BTC) The Answer?| FXMAG.COM UK consumer morale was the weakest since 2008 In addition to the strength of the US dollar, today on the currency market we may also observe the relative weakness of the British pound. Macroeconomic data from the UK may have contributed to the GBP depreciation. Retail sales in the UK fell by 1.4 percent in March 2022, which seems to be much worse than market forecasts of a 0.3 percent decline. The data suggests that consumers may be spending less due to rising prices. Additionally, UK consumer morale was the weakest since 2008. The GfK consumer confidence index in the UK fell to -38 points in April 2022, the lowest level since July 2008. As a consequence of the above events, the GBP/USD pair price could fall by almost 1% today, to the lowest level since the end of 2020. Yesterday the pair was quoted at the area of 1.3030, and fall today to the region of 1.2900. The market can still wait for the speeches of Bank of England Governor Andrew Bailey later today. Read Next: Record-Breaking US Dollar To Japanese Yen (USD/JPY): Turbo-accelerated Dollar Index (DXY) Makes Not So Strony JPY Plunge Against The Greenback | FXMAG.COM Since the beginning of the year, the yen seems to have lost about 10 percent against the US dollar Among the world's major currencies, it is also impossible not to pay attention to the recent weakness of the Japanese yen, which is trying to stabilize under the level of 130.00 on the USD/JPY pair. The talks between the Japanese and American sides on taking joint steps to slow down such rapid changes in the exchange rate could help in this process. A meeting was to be held between the Japanese Finance Minister and the US Treasury Secretary on this matter. Since the beginning of the year, the yen seems to have lost about 10 percent against the US dollar. Read Next: Fed Vs. ECB! Market Shocker Is Here! EUR/USD Plunged! (EUR) Shows Its Strength Amid ECB Rhetoric| FXMAG.COM Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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What Moves Forex Rates? Strong US Dollar Affects British Pound (GBP), Japanese Yen (JPY) And CNH

Alex Kuptsikevich Alex Kuptsikevich 22.04.2022 13:32
The world's major currencies continue to surrender to the dollar one after another. Since the start of March, the yen has lost 11.5% and fallen to a 20-year low. But just as we saw the third world economy currency stabilise, the currency of the second one went on the move. Chinese currency had previously successfully resisted the strengthening of the USD since the middle of last year, but The dollar has added over 2% to the renminbi since the start of the week, the most significant move since 2015. It is also noteworthy that the Chinese currency had previously successfully resisted the strengthening of the USD since the middle of last year, but in an abrupt move, entered the area of the extremes of the last 12 months. Read next (FxPro): Still Going Up The Price Of Crude Oil (WTI/BRENT) When Energy Stocks Will Start To Soar? | FXMAG.COM We see an equally impressive attack on the Pound. The GBPUSD broke the support at 1.3000 on Friday, and it is already losing more than 1% so far today. USDCHF reached its highest point since June 2020, exceeding 0.9550. Read next (FxPro): Want To Exchange 100 GBP To USD? GBP/USD Below 1.3000! (GBP) British Pound Weakens! GBP To USD - 17-Months-Low! | FXMAG.COM The New Zealand and Australian dollars have been declining steadily since early April, despite hawkish action and comments from respective central banks. Moreover, the export-oriented economies of these countries should benefit from the emerging commodity prices. EURUSD is trading below 1.0800, near 2020 reversal levels and maintaining a very moderate trading range The USDCAD went back to month highs in less than two days, reversing Wednesday's sharp rally and earlier gains from hawkish comments by the Bank of Canada. EURUSD is trading below 1.0800, near 2020 reversal levels and maintaining a very moderate trading range. However, the swing in GBPUSD today and USDCNH throughout the week and the USDJPY drama since early March suggests that EURUSD could be the next victim of dollar bulls.
The EUR/JPY Pair Continue To Look For More Downside Pressure

(EUR/USD) Wall Street Tanks, Allowing the Euro To Slightly Recover, (EUR/GBP) Goldman Sachs Betting Against GBP, JPY Gets The Better Of The US Dollar And EUR - Good Morning Forex!

Rebecca Duthie Rebecca Duthie 10.05.2022 11:58
Summary: Euro gained slightly against the USD after the poor performance of the US markets on Monday. Goldman Sachs placing their confidence in the value of the EURO. JPY gains slightly against the EUR and USD on Tuesday. Read next: (EUR/USD) US Dollar Continues To Trump the EUR, (EUR/GBP)(GBP/JPY) Pound Sterling Unlikely To Recover Anytime Soon.  EUR gains some ground against the USD. Markets turned around on Monday with the EUR/USD currency pair with market sentiment showing bullish signals. The Euro is gaining value despite the surging US Dollar, at the end of the trading day on Monday Wall Street has tanked with the Nasdaq down 4.29%. As investors turn away from risky assets such as forex, and move to safer investments such as treasuries, the value of the US Dollar is facing potential pressure. Investors are concerned around the Feds shrinking balance sheet as liquidity dries up. EUR/USD Price Chart Pound Sterling losing value against the Euro. On Tuesday, Goldman Sachs bet the EUR will continue to gain against the GBP, as the market for the EUR/GBP currency pair continues to reflect a bullish sentiment. The European Central Bank (ECB) seems intent on raising interest rates by the summer, showing a more hawkish attitude than the Bank of England (BoE) who believe that inflation will return to normal levels on its own. This BoE attitude is causing investors to lose confidence in the Pound Sterling and causing its value to decrease. EUR/GBP Price Chart JPY receives momentary relief from the USD Although the JPY has gained on the US Dollar on Tuesday, the USD/JPY currency pair is reflecting a bullish market sentiment. The strengthening against the USD comes after the carnage the US markets saw on Monday. Whether or not this strengthening will continue is unlikely as the Bank of Japan (BoJ) continues their monetary easing in their attempt to boost the economy. USD/JPY Price Chart JPY markets best performer on Monday The EUR is losing ground to the JPY during the trading day on Tuesday, the EUR/JPY currency pair is reflecting a mixed market sentiment. As risk averse investors fled to safety assets given the US markets performance, the Japanese Yen was the forex markets top performer on Monday, which gave it the chance to strengthen against the EUR and the USD. EUR/JPY Price Chart Read next: (EUR/USD) All Eyes On The US Bureau Of Labour Statistics’ Results Due On Friday, (EUR/GBP) Bleak Economic Outlook For the UK Sends GBP Spiralling - Good Morning Forex!  Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com
Chinese Stocks Rallied On Easing Covid Measures | US Dollar (USD) Gained

FX Update: Bond rally supercharges JPY comeback rally. | Saxo Bank

John Hardy John Hardy 12.05.2022 16:01
Summary:  An extension of the rout in risky assets has continued to drive the US dollar higher against the smaller currencies and most G10 currencies as well, but the Japanese yen has not only taken on a new shine, but is even sharply stronger against the strong US dollar as global bonds have suddenly rediscovered their safe haven appeal. Elsewhere, HKD is worth watching as the HKMA intervened for the first time of this cycle to maintain the top of the USDHKD band. FX Trading focus: JPY woke up and smelled the coffee. Watching HKD as USD presses upper level of USDHKD band. The JPY upside potential has been more fully realized since yesterday on the heavy weight of falling yields in global sovereign bond, which are finally serving their function as a go-to safe haven in an environment of generally risk deleveraging. The JPY is even handily outpacing the ongoing strength in the US dollar as the yield focus dominates. And the technical damage in JPY crosses is spreading: NZDJPY and GBPJPY, the latter our focus yesterday, are already trading back into old ranges that preceded the JPY sell-off sparked by the commodity rally in the wake after Russia invaded Ukraine. Now watching AUDJPY and EURJPY for whether the feat is repeated there (key levels around 86.00 and 134.00, respectively), and CNHJPY has come down hard, with more to come. More thoughts on the most important USDJPY pair below in the chart discussion. The JPY can continue higher, but the price is far “fairer” now relative to long term bond yields. Yields must extend lower still, possibly with a helping hand from crude oi and LNG prices for a full reversal of the JPY sell-off since late February.  Chart: USDJPYYesterday, our focus in JPY crosses was on GBPJPY, which took out the 160.00 and 158.00 area supports yesterday. Today we have a look at the big one: USDJPY and what levels might trigger a more notably slide. Arguably, the first of these has already been under strain today in the 128.50 area. Regardless, the direction of the US 10-year benchmark yield is the key coincident indicator, with global energy prices a secondary indicator. The next support area below is the 127.03 pivot low followed perhaps by the 125.00 area, which was a stopping point on the way up. Source: Saxo Group Sterling suffered a sell-off to new lows in the wake of the Q1 GDP data, which showed a +8.7% growth rate, slightly below expectations, but a -0.1% month-on-month figure for March, with weak production figures to boot. The March Trade Balance data was also out and showed a toe-curling negative £23.8B trade balance, a staggering figure. Still, after a run to fresh lows against the G3 currencies, the EURGBP rally reversed rather sharply, in part as EURUSD tipped over to new lows after a couple of weeks of defending the 1.0500 support area. All traders should monitor the crypto situation as a possible aggravator of additional volatility risk across markets. The TerraUSD “stable coin” broke its parity level with the US dollar earlier this week and traded as much as 70% below par. Then yesterday, a key Bitcoin support level at 30,000 broke, possibly inspiring the instability of the Tether stable coin, which is a commonly used as a kind of parking space between going in and out of crypto trades and in and out of the crypo market itself. The Tether coin traded as much as 5% below par against the US dollar this morning before the whole crypto-complex recovered. More directly pertinent to FX, we have to watch the Hong Kong dollar (HKD), as the USD strength has taken the USDHKD exchange rate to the upper limit of its band at 7.85 and has seen the Hong Kong Monetary Authority out intervening for the first time of this cycle overnight. The HKMA will also need to copy Fed policy to avoid the worst of pressure on the HKD, even with Hong Kong’s economy in a funk. The HKD band is one of those legacy set-ups that makes little sense here almost forty years after its creation, but Hong Kong remains a key gateway into and out of the mainland Chinese economy, and China probably doesn’t want to add HKD instability to its long list of challenges. Note the Chinese demand concerns continuing to weigh on the copper price, which has punched to the lowest reaches of the range since early 2021. This in turn weighs on the Aussie, which itself has punched to new lows for the cycle. The CAD has gotten off easy so far by comparison, perhaps as oil prices remain in the higher range here – but after breaking above resistance, if USDCAD loses its tethering to the 1.3000 area it is in danger of a sharp extension higher. Table: FX Board of G10 and CNH trend evolution and strength.We have noted the euro resilience of late, but signs of this crumbling today as EURUSD, EURCHF and especially EURJPY come under pressure. But the development of note here is the strong revival of the JPY momentum and outright positive trend measurement in recent days. Elsewhere, CAD looks too strong with this backdrop, although there is quite a race to the bottom of late among the weakest horses in G10 FX. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Note EURJPY and CADJPY trying to join other JPY crosses in flipping to the negative side after the sharp JPY rally today. All G10 currency pairs save for a few GBP pairs (due to Brexit-related events) are in the highest 10% of their ATRs of the last 1000 trading days, as shown in the dark orange shading for the ATR readings. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1230 – US Apr. PPI 1230 – US Weekly Initial Jobless Claims 1800 – US 30-year T-Bond auction 1800 – Mexico Overnight Rate Announcement
Austrailan CPI Report Gives The RBA Room To Remain Dovish

Can British Pound To US Dollar (GBP/USD) Reach 2-year-low? NZD/USD Doesn't Seem To Be Improving And US 100 Sends A Small Recovery Signal

Jing Ren Jing Ren 13.05.2022 07:46
GBPUSD to reach 2-year lows The pound remained under pressure after a slowdown in the UK’s GDP growth in Q1. A break below the lower range (1.2260) of a brief consolidation signalled a bearish continuation. Sterling is heading towards its two-year low at 1.2100. Short-covering could be expected and in conjunction with dip-buying could drive the price up momentarily. 1.2400 is the first resistance and the bulls need to lift the recent high at 1.2640 before they could regain control. Otherwise, the psychological level of 1.2000 would be the next stop. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM NZDUSD grinds lower The New Zealand dollar tumbles as traders continue to pile into safe haven assets. The sell-off accelerated after the pair sank below June 2020’s lows near 0.6400. Downbeat sentiment may attract more trend followers after a faded rebound. 0.6100 near a two-year low would be the next target. 0.6370 is a fresh resistance and the bears may sell into strength at the next bounce. The support-turned-resistance at 0.6450 sits next to the 20-day moving average and is a major level to clear before a reversal could materialise. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM US 100 may see limited bounce The Nasdaq 100 struggles to find bottom as investors continue to flee risk assets. The index sees no sign of stabilisation yet as it approaches 11500. The price action has been capped by a falling trend line from last April. An oversold RSI may prompt sellers to take profit and possibly trigger a mean reversion trade to the upper band (13000) of the line. A break above 12400 may attract enough buying interest to make this happen, but the rebound could be limited unless the bulls succeed in pushing higher. Read next: Binance Academy: Crypto Fear And Greed Index Explained| FXMAG.COM
Decline In Market Volumes Will Lead To A Strong Increase In Volatility

(GBP/USD) British Pound Dips On Soft GDP (Gross Domestic Product) | Oanda

Kenny Fisher Kenny Fisher 12.05.2022 21:09
The pound continues to lose ground and is trading at its lowest level since May 2020. GBP/USD fell below the 1.22 level earlier and hasn’t had a daily winning session since May 4th. Negative growth raises alarm bells The UK economy is struggling, a grim fact which was brought home by the Q1 GDP report earlier today. On a quarterly basis, GDP came in at 0.8%, down from 1.3% in Q4 of 2020 and shy of the 1.0% estimate. Even worse, the economy contracted in March by 0.1%, after a 0.1% gain in February. This missed the forecast of 0.0%. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM The BoE has raised rates to 1.0%, a 13-year high, but it’s clear that the BoE has fallen behind the inflation curve and is playing catch-up The negative growth reading was a result of the crushing inflation that has gripped the UK. CPI hit 7% in March and the markets are braced for a reading of around 9% from week’s April CPI release. The cost of living crisis has dampened consumer spending, a key reason for the negative reading for March GDP. The BoE has raised rates to 1.0%, a 13-year high, but it’s clear that the BoE has fallen behind the inflation curve and is playing catch-up. At last week’s policy meeting, the central bank warned that inflation could top 10% and there was the danger of a recession. The pound tumbled over 2% in response, even though the BoE increased rates by 0.25%. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM The grim economic outlook does not bode well for the pound, which has tumbled 7.1% since May 1st The BoE finds itself between a rock and a hard place. It needs to raise rates in order to curb soaring inflation, but weak growth means that the higher rates could tip the economy into recession. The grim economic outlook does not bode well for the pound, which has tumbled 7.1% since May 1st. Read next: (BTC) Bitcoin’s Price Tanks Along With Equities. U.S. Stock Market Awaits CPI Report, Poor Performance From The FTSE 100. US inflation eases, a bit US inflation weakened in April, but not as much as the markets had expected. CPI dropped from 8.5% to 8.3%, higher than the consensus of 8.1%. This slowdown was not enough for the markets to price in “peak-US inflation”, and the dollar managed to hold its own against the major currencies. There had been talk of an “inflation peak”, but the inflation data indicates that even if inflation is falling, the pace could be much slower than the markets would like. GBP/USD Technical GBP has breached support at 1.2199 for the first time since May 2020. Below, there is support at 1.2056 GBP/USD faces resistance at 1.2272 and 1.2418 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Crypto Crash Shocked Many, The Most Sensational Bit Was The Terra (LUNA) Plunge. Is (USD) US Dollar's Rally About To End? BP Has Decreased Slightly, So Does GBP/USD. This Week Has Been Full Of Events | Swissquote

Crypto Crash Shocked Many, The Most Sensational Bit Was The Terra (LUNA) Plunge. Is (USD) US Dollar's Rally About To End? BP Has Decreased Slightly, So Does GBP/USD. This Week Has Been Full Of Events | Swissquote

Swissquote Bank Swissquote Bank 13.05.2022 10:35
The dust seems to be settling in cryptocurrencies. Terra and Luna are now worth almost nothing but Bitcoin returned past the $30K, which is a sign that the confidence in the broader sector may have not been damaged as much as we first feared. European stocks opened in the green and US futures are pointing to the upside, yet volatility remains high, warnings that the wind could change direction rapidly, and the high volatility environment is more favourable for further losses than sustainable gains. European gas futures gained another 13% yesterday, and the pressure on energy prices remain clearly tilted to the upside   On the geopolitical front, the Europeans are going around their own sanctions against Russia by opening accounts with Gazprom bank to pay the Russian gas in exchange of rubles (!!), but the latest news suggest that Russia is now cutting the German gas as a retaliation to its sanctions. Of course, the Europeans have been quite bad in this poker game - they showed too openly how scared they were to lose the Russian gas that now, Russia is gaining the upper hand. European gas futures gained another 13% yesterday, and the pressure on energy prices remain clearly tilted to the upside. Saudi Aramco has surpassed Apple in terms of market capitalization this week, to become the world’s most valuable company, and the US dollar index extended gains to a fresh 20-year high. Everyone is now wondering when the dollar rally will end! Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM   Watch the full episode to find out more! 0:00 Intro 0:32 The dust settles in cryptocurrencies 2:22 Market update 3:13 Energy remains upbeat... 4:21 ... and Aramco is now the world's biggest compagny 5:00 High vol hints at further headache 6:34 Meme pop up 7:28 Dollar extends gains, raising bets that it's soon time for correction! Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
Economic Calendar For July 21st. EUR/USD And GBP/USD - Trading Ideas

(GBP) British pound’s woes continue | Oanda

Kenny Fisher Kenny Fisher 13.05.2022 15:29
The British pound can’t seem to find its footing. GBP/USD hasn’t had a daily winning session since May 4th and closed on Thursday below the 1.22 line, for the first time since May 2020. In the European session, the pound is trading quietly at the 1.22 line. Recession fears, negative growth weighing on sterling The UK treated the markets to a data dump on Thursday, but the news was not positive. UK growth for Q2 showed a 0.8% gain, down sharply from 1.3% in Q4 of 2020 and missing the 1.0% estimate. In March, the economy contracted by 0.1%, compared to a 0.1% gain in February and shy of the estimate of 0.0%. Investors never like to hear the phrase ‘negative growth’ and the March GDP report pushed the pound lower on Thursday.  There was more bad news as Industrial Production, Manufacturing Production and Business Investment all slowed down and posted negative readings. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM The UK continues to grapple with spiralling inflation, and the BoE has warned that things could get even worse. CPI hit 7%  The BoE has raised rates to 1.0%, a 13-year high, but it will take time for higher interest rates to take a bite out of inflation. At last week’s policy meeting, the central bank warned that inflation could top 10% and there was the danger of a recession. The pound tumbled over 2% in response and has fallen another 125 points since then. Risk is tilted to the downside for the pound, which has tumbled about 7% since the beginning of April. Fed’s Powell confirmed by Senate Fed Chair Powell was overwhelmingly nominated for a second term on Thursday by the US Senate. Powell appears committed to delivering 0.50% rate hikes at the next two meetings, although there has been talk of a super-size 0.75% hike in order to curb soaring inflation. US inflation finally slowed in April, but the reading of 8.3% (8.5% prior) was hardly what the markets were looking for, and talk of an “inflation peak” proved to be premature. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM GBP/USD Technical 1.2199 remains under pressure in support. Below, there is support at 1.2056 GBP/USD faces resistance at 1.2272 and 1.2418 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The Euro Will Strengthen, But Questions Remain About What To Do Next

British Pound (GBP) yawns after Bailey (BoE) warnings | Oanda

Kenny Fisher Kenny Fisher 16.05.2022 23:11
The British pound is trading quietly on Monday, as the currency markets have started the week with a whimper. BoE’s Bailey says dark times ahead BoE Governor Bailey testified before lawmakers earlier today, and his message was a grim one. The BoE has predicted that soaring inflation could top 10%, and Bailey today admitted that “this is a bad situation to be in”.  Bailey said that the Ukraine war could cause a further energy shock and that his concern about the surge in food prices was “apocalyptic”. Bailey gets full credit for not sugar-coating what is a difficult economic situation, but his candidness will not help support the struggling pound, which hasn’t posted a winning week since mid-April. I appreciate Bailey’s honesty, but the BoE has run into a credibility problem with its rate policy in recent months, and it’s questionable whether his message that dark times lie ahead is the way to restore confidence in the central bank. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM The economic picture in the US is brighter, but the Fed’s aggressive policy will lead to a slowdown in growth. The big question is can Fed Chair Powell guide the economy to a soft landing and avoid a recession. On Sunday, Goldman Sachs lowered its forecast for US growth to 2.4% in 2022 and 1.6% in 2023, down from 2.6% and 2.2%, respectively. Federal Reserve officials last week reiterated their intention to deliver 0.50% rate increases at the June and July meetings, which will help limit US dollar gains. At the same time, any US data that is worse than expected could lead to calls for a hike of 0.75%, which would be bullish for the US dollar. GBP/USD Technical 1.2199 remains under pressure in support. Below, there is support at 1.2056 GBP/USD faces resistance at 1.2272 and 1.2418   Read next: (TRX) TRON USD Decentralised Blockchain Platform That Focuses On Entertainment And Content Sharing. Altcoins: A Deep Look Into The TRON Network | FXMAG.COM This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Week Ahead – Rate hikes keep coming - 12.08.2022

British pound soars on strong jobs data | Oanda

Kenny Fisher Kenny Fisher 17.05.2022 21:47
The British pound continues to rally on Tuesday. GBP/USD is trading at 1.2463 in the European session, up 1.15% on the day. UK employment numbers sparkle The tight UK labor market is getting even tighter, as reflected in the March employment report. The unemployment rate fell to 3.7% (3.8% prior), below the 3.8% forecast and its lowest level since 1974. Employment change jumped by 83 thousand, smashing the estimate of 5 thousand. Wage growth in Q1 was up 7%, but without bonuses, the gain was only 4.2%. This means that inflation is far outstripping wage growth and exacerbating the cost of living crisis for UK households. The UK continues to grapple with a severe shortage of workers, as Covid resulted in some 500 thousand workers leaving their jobs, and many continental European workers left the UK after Brexit. For the first time on record, there are more job vacancies than unemployed persons in the UK. This economic landscape leaves the Bank of England stuck between a rock and a hard place. The central bank must raise rates to contain soaring inflation, but this could tip the economy into a recession if the BoE is unable to guide it to a ‘soft landing’. Governor Bailey didn’t pull any punches on Monday in his testimony before lawmakers, saying that he was extremely concerned about inflation. We’ll get a look at UK inflation on Wednesday, with the markets bracing for a reading of 9.1% in April. I expect the inflation report to be a market-mover for the pound – a stronger than expected release will likely send the pound higher, while a weak release would put strong pressure on the currency. Today’s employment report has raised expectations that the BoE will have to remain aggressive with its rate cycle, which has pushed UK yields and the British pound sharply higher. If the US/UK rate differential continues to narrow, the pound should be able to make up ground against the dollar. . GBP/USD Technical 1.2275 is providing support. Below, there is support at 1.2143 GBP/USD has broken above resistance at 1.2393. Above, there is resistance at 1.2525 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The EUR/USD And The GBP/USD: The Most Important Details For Beginners

How Are USD (US Dollar), (Canadian Dollar) CAD, (Euro) EUR, (British Pound) GBP Doing? | FX Daily: Hold your horses | ING Economics

ING Economics ING Economics 18.05.2022 08:58
The rebound in global equities is fuelling a widespread recovery in G10 pro-cyclical FX against the USD. Still, yesterday's remarks by Jay Powell were a reminder of the very hawkish Fed policy. Ultimately, rate and growth differentials should curb the dollar's weakness against most peers - except for the CAD where today's CPI should endorse more hikes Learn on ING Economics USD: Don't forget the rate and growth factor The rebound in global equities has continued to fuel a recovery in pro-cyclical currencies, and a correction in the safe-haven US dollar and Japanese yen. Overnight, Asian equities were mixed, and the CSI300 failed to follow yesterday’s jump in US-traded Chinese tech stocks following some unusually supportive comments for China’s tech companies from one of Beijing’s top officials, which fuelled speculation of some easing in the current crackdown. Stock index futures suggest a flat open in major Western equity markets today. Clearly, the monetary policy story is playing a secondary role in the market narrative at the moment, but yesterday’s comments by Fed Chair Powell were quite relevant from a signalling perspective, as he firmly reiterated the Fed’s determination to bring inflation sustainably lower, even by hiking beyond the neutral rate if necessary. While the dollar momentum is set to remain weak as long as global assets stay in recovery mode, the notion of aggressive Fed tightening continues to argue against a sustained bearish dollar trend. Incidentally, this week’s moves have likely placed the dollar in a less overbought condition. With this in mind, DXY should find increasing support below the 103.00 area. The US economic calendar includes some housing data today, and Patrick Harker is the only Fed speaker scheduled for remarks. EUR: Upside room starting to shrink EUR/USD has risen in line with other pro-cyclical pairs this week, breaking back above the 1.0500 level and now being at a safe distance from the key 2017-low support of 1.0340, which if breached would probably pave the way for a move towards parity. Today, the eurozone calendar is not busy and only includes the final print of April’s CPI numbers. We’ll also hear from European Central Bank hawk Madis Muller today, although the recent re-pricing higher in ECB rate expectations (markets now fully price in a deposit rate at 1.0% in December) means that the bar for any hawkish surprise is set very high. Our view on the limited downside risk for the dollar beyond the very short term obviously implies that the room for appreciation in EUR/USD should also start to shrink soon. We also believe that markets are pricing in too much tightening by the ECB – though not by the Fed – and expect the theme of growth divergence (exacerbated by the EU-Russia standoff on commodities) to become more relevant into the summer. With this in mind, we suspect that any further rally in EUR/USD may start to lose steam around the 1.0650-1.0700 area, with risks of a return below 1.0500 in the near term being quite material. GBP: Inflation rises, but double digits aren't assured This morning’s inflation report in the UK was broadly in line with consensus expectations, as headline CPI rose to 9.0% (largely due to the increase in the electricity price cap) with the core rate rising to 6.2% year-on-year in April. This means inflation is largely where the Bank of England expects it to be. Still, the BoE projections embed a move to double-digit inflation by the end of the year, a prospect that we are still not convinced will materialise. There are no BoE speakers today. The oversold pound has faced a strong rebound this week, recouping some of its recent sharp losses as global risk appetite improved. While the good GBP momentum may continue as equities find some stability in the coming days, the pound still faces two major downside risks in the coming months: a) a further dovish repricing of BoE rate expectations (the implied rate for end-2022 is still 2.0%); b) Brexit-related risk, as the unilateral suspension by the UK of parts of the Northern Ireland agreement would likely trigger a trade war with the EU. We think cable will mostly trade below the 1.2500 mark during the summer. CAD: Inflation data unlikely to affect BoC policy expectations Inflation data will be released in Canada today, and the market is expecting some signs that the headline rate has peaked (at 6.7% YoY), which would imply a monthly increase of 0.5% in April. Core measures may however continue to inch marginally higher. Barring major surprises in the data today, we suspect that the impact on the Bank of Canada's rate expectations and on the Canadian dollar will be limited. The BoC remains on track to deliver 50bp of rate increases in tandem with the Fed, being able to count on a tight labour market, growing workforce and positive commodity story. In our view, the BoC will ultimately have to deliver more monetary tightening than the Fed in the next year. USD/CAD has broken below 1.2800 and should continue to weaken if we see further signs of stability in global sentiment today. Crucially, the rate and growth differential that may curb EUR/USD don't apply to CAD vs USD given a hawkish BoC and strong growth in Canada, which means that a rally in the loonie should prove more sustainable than the EUR/USD one. We continue to target sub-1.25 levels in USD/CAD by the second half of the year. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Thursday's Bank's of England decision may be record-breaking!

GBP/USD - British Pound Finally Shows Its Potential, But US Dollar Can Be Supported By Fed Shortly. USD/JPY Is Likely To Become A "Boring" Battle, Gold Price (XAUUSD) Looks Like It Can't Get Any Higher | Orbex

Jing Ren Jing Ren 18.05.2022 09:33
GBPUSD tests daily resistance The pound surged after the UK saw a jump in average earnings over the past three months. Solid bullish momentum above 1.2400 has prompted sellers to cover their positions, exacerbating volatility in the process. The daily resistance at 1.2640 coincides with the 30-day moving average and is an important supply zone. Its breach could pave the way for a bullish reversal in the weeks to come. In the meantime, an overbought RSI may cause a pullback as intraday buyers take profit. 1.2310 is the closest support. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM USDJPY enters narrowing consolidation The yen recouped some losses after Japan’s GDP growth beat expectations in Q1. The US dollar is taking a breather after a prolonged rally. The latest retreat has found support at 127.50 over the 30-day moving average. Medium-term sentiment would stay upbeat as long as the price remains above this demand zone. 130.80 from a previously faded rebound is a key resistance and a bullish breakout could resume the rally towards 133.00. 128.70 is the immediate support for the current consolidation. Follow us on Google News! XAUUSD tests critical floor Gold inched higher as the US dollar index pulled back from a two-decade high. The price action has stabilised near January’s lows at 1790. A bullish RSI divergence indicates a loss of bearish momentum in this critical demand area, triggering a buy-the-dip behaviour. Sellers’ profit-taking could drive the precious metal higher. A bounce above 1858 may trigger an even broader short-covering. On the downside, a fall below 1790 would send the price into bearish territory with December’s lows (1750) as the next stop. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM
Record-breaking but near-peak inflation in Britain

Record-breaking but near-peak inflation in Britain

Alex Kuptsikevich Alex Kuptsikevich 19.05.2022 08:40
UK consumer prices rose by 2.5% in April, the second-biggest monthly gain in the indicator’s history since 1988. Annual inflation jumped from 7% to 9%, unseen in the indicator’s history. Metals, meanwhile, have withdrawn from the highs The longer-established retail price index last saw a high annual growth rate (11.1% y/y in April) in 1982, while such a big monthly jump (3.4% m/m) was last observed in 1980. However, despite the horror that these figures represent, there are still indications that the UK’s peak annual rate of inflation will be much lower than in the 1980s (22%) or 1970s (27%). While Output Producer Prices are showing an acceleration in the annual growth rate, rising to 14%, Input PPI has slowed from 19.2% to 18.6%. Although remaining volatile in recent weeks, oil and gas have regularly retreated from highs, limiting upward pressure on prices. Metals, meanwhile, have withdrawn from the highs. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM Early hints that UK inflation may be slowing in the coming months may allow the Bank of England to raise the rate by 25 points At the same time, there are growing questions about final global demand, which will constrain producers in shifting costs to consumers. Early hints that UK inflation may be slowing in the coming months may allow the Bank of England to raise the rate by 25 points at its next meeting in mid-June and not copy the Fed’s 50-point move. This is moderately negative news for the British currency, which started to retreat from the $1.25 area on the data after a 2.9% rally from last Friday’s lows. Short-term traders should pay particular attention to the 1.2350 area. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM Already, a dip lower this week would suggest that the brief period of recharging dollar bulls has ended. In this case, GBPUSD could quickly fall below 1.2000, making the 1.1500 area a potential ultimate target for this attack Follow FXMAG.COM on Google News
The Euro To The US dollar Pair May Move Upward

FX Daily: Dollar rally pauses for breath | ING Economics

ING Economics ING Economics 20.05.2022 10:57
Some support measures for the Chinese economy and some stability in the Chinese renminbi have helped usher in a period of consolidation in FX markets. This may well last into next week, although we would consider this a pause not a reversal in the dollar's bull trend. The stronger dollar is also exporting Fed hikes around the world Not until the Fed pours cold water on tightening expectations should the dollar build a top USD: Some consolidation is in order The dollar is now about 2% off its highs seen late last week. Driving that move has probably been some position liquidation and a preference for currencies like the Japanese yen (JPY) and the Swiss franc (CHF) during turbulent times in global equity markets. In fact, yesterday's FX activity looked like the big sell-off in EUR/CHF on Swiss National Bank (SNB) comments which triggered downside stops in USD/CHF and prompted a slightly broader dollar adjustment. Also helping this period of consolidation has been this week's stability in the Chinese renminbi (CNY). The overnight 15bp cut in the 5-year Loan Prime Rate – aimed at supporting the property sector – has instilled a little more confidence in Chinese assets markets. However, we cannot see USD/CNY heading straight back to 6.50. Instead, a 6.65-6.80 trading range may be developing after the recent CNY devaluation.  However, the emerging market environment still looks challenged given that the stronger dollar is effectively exporting tighter Fed policy around the world. Yesterday we saw rate hikes in Egypt, South Africa, and the Philippines. After devaluing the Egyptian pound by 15% in March, authorities there are very much struggling with the external environment. This has seen Egypt's 5-year Sovereign Credit Default swap rise to news highs of 940bp and is a reminder of the challenge North Africa faces from surging food prices. For today, the data calendar is relatively quiet and there may be some interest in what G7 finance ministers and central bank governors have to say after their meeting in Bonn. Reports suggest Japan would like some tweaks to the final G7 communique, but we very much doubt there will be any change in the core FX language that FX rates be market-determined and that excessive volatility and disorderly moves be avoided. DXY could correct a little lower to 102.30, but we see this as bull market consolidation, rather than top-building activity. Not until the Fed pours cold water on tightening expectations should the dollar build a top. And yesterday Fed hawk, Esther George, said that even this 'rough week' in equity markets would not blow the Fed off course.  EUR: ECB hawks in control Minutes of the April ECB meeting released yesterday show that the hawks are calling the shots. The market now prices a 31/32bp ECB rate hike at the 21 July ECB meeting – pricing which has plenty of scope to bounce between +25bp and +50bp over the next two months. This could drag EUR/USD back to the 1.0650/70 area over the coming days – helped by brief periods of calm in the external environment – but as above we would see this as a bear market bounce. Our core EUR/USD view for 2H22 is one of heightened volatility and probably EUR/USD getting close to parity in 3Q22 when expectations of the Fed tightening cycle could be at their zenith. Read next: Altcoins: What Is PancakeSwap (CAKE)? A Deeper Look Into The PancakeSwap Platform| FXMAG.COM GBP: April retail sales provide a reprieve UK retail sales have come in a little better than expected and break/suspend the narrative that the cost of living squeeze is large enough to derail the Bank of England tightening cycle. We would not get carried away with the sterling recovery, however. Sterling is showing a high correlation with risk assets – trading as a growth currency – and the outlook for risk assets will remain challenging for the next three to six months probably. Here's what our credit strategy team thinks of the European outlook.  Cable may struggle to breach the 1.2500/2550 area and 1.20 levels are very possible over the coming months. New-found hawkishness at the ECB means that EUR/GBP may struggle to sustain a move below 0.8450 before returning to 0.8600. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM CHF: SNB policy makes the case for EUR/CHF sub 1.00 next year As we discuss in an article released yesterday, it looks like the SNB is targeting a stable real exchange rate to fight inflation. Given that Switzerland's inflation is roughly 4% lower than key trading partners, a stable real exchange rate means that the nominal exchange rate needs to be 4% stronger. This will be an added factor supporting the CHF over the coming months and may start to generate interest in trades positioning for a lower GBP/CHF. 1.2080 is a big support level but 1.1860 looks like the near-term target. Read this article on THINK TagsGBP FX Daily ECB CHF Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Investors' Concerns About The Coming Recession In The UK, Will GBP/USD Pair Reach Its Lowest Level In History?

British Pound (GBP) yawns on mixed retail sales | Oanda

Kenny Fisher Kenny Fisher 20.05.2022 12:03
The British pound is drifting on Friday, after showing unusually strong volatility this week. The pound rebounded on Thursday, racking up gains of 1.06% and briefly breaking above the symbolic 1.25 line. UK retail sales showed a strong gain in April, with a gain of 1.4% MoM. This followed a decline of 1.2% in March. However, on a yearly basis, sales volumes were 4.9% lower, as the broader picture looks grim. The monthly gain for March may have been a blip, as consumers were hit with higher household energy costs as well as an increase in taxes. Add into the mix inflation at 9.0% and possibly heading into double-digits, and it’s difficult to envision retail sales moving higher. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM Consumer confidence hits record low The GfK consumer confidence index remains deep in negative territory. The index dropped to -40 in May, down from -38 in April. How pessimistic are consumers about the economy? The previous record of -39 was set in July 2008, at the height of the global financial crisis.  Consumer confidence is considered an early, reliable signal of economic activity, and these massively poor numbers could well indicate that the UK economy is falling into recession. A GfK note summed up the grim situation, saying that the BoE is pessimistic about inflation, consumer confidence is gloomy, and there aren’t any reasons for optimism anytime soon. This certainly does not bode well for the British pound, which has plunged over 7% since the start of the year. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM The BoE finds itself playing catch-up with the inflation curve. There have been voices calling for more aggressive rate hikes than the 25-bps increments we’ve seen over the past three meetings, especially with inflation hitting 9%. The central bank has a daunting challenge, as it must raise rates to curb inflation but also needs to be mindful that the economy is still recovering from Covid and could tip into a recession due to high interest rates. GBP/USD Technical 1.2393 has switched back to support. Below, there is support at 1.2275 There is resistance at 1.2525 and 1.2643   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Austrailan CPI Report Gives The RBA Room To Remain Dovish

Will Pound (GBP) Strengthen? Ebury Weekly Analysis: British Pound (GBP) | Ebury

Matthew Ryan Matthew Ryan 23.05.2022 15:16
Last week saw some strange market action. Financial headlines were dominated by the relentless sell-off in world equity markets that left the S&P 500 index flirting with the semi-official bear market line of 20% below its record high. Among G10 currencies, the Swiss franc notched a rare win as the flight to safety bid combined with a hawkish central bank to send it soaring by over 2% against the US dollar. More surprising was the general weakness in the US dollar, which failed to benefit from its safe-haven role. In fact, the winners of the week were Latin American currencies, which is particularly impressive in the current risk averse environment. As long standing LatAm bulls, we are not complaining, however.  Learn more on Ebury This week the focus will be on any spillovers from the volatility in stock markets to the FX market, on one hand, and the PMIs of business activity on the other. The Eurozone and UK indices are all expected to print well above 55.nWe think that these levels belie the fears of recession that appear to be gripping asset markets. It is difficult to reconcile still massively negative real rates, huge government deficits and economies at full employment with any sustained economic pullback. Figure 1: G10 FX Performance Tracker [base: USD] (1 week) Source: Refinitiv Datastream Date: 23/05/2022 British Pound (GBP) Data out of the UK continued to suggest a dichotomy between sentiment and reality. Consumer sentiment was dismal, but jobs data came out very strong, as did retail sales. Inflation in April was sky high, as expected. Sterling bounced back in line with the general dollar selloff and managed some gains against the euro as well. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM We think there is little to suggest a recession is likely, and this week’s PMI data should be further evidence. It seems that the Bank of England’s apparent willingness to tolerate inflation due to the risks to growth is misplaced. In the short-term, Bank of England dovishness may weigh on the pound, but after the recent sell-off we think that the currency is quite cheap and offers a solid opportunity over the longer term. Figure 2: UK Inflation Rate (2017 – 2022) Source: Refinitiv Datastream Date: 23/05/2022
Week Ahead:  US Dollar Falls As Growth Fears Rise on Fed Hawkishness

Week Ahead: US Dollar Falls As Growth Fears Rise on Fed Hawkishness

OneRoyal Market Updates OneRoyal Market Updates 23.05.2022 08:24
Weekly Recap The main story this week was the reversal lower in the US Dollar. The Dollar Index closed out its first losing week since the final week of March as recession fears took hold. The reversal was seemingly fuelled by comments from Fed chairman Powell midweek suggesting a more aggressive course of action from the Fed. Powell warned that the central bank is prepared to raise rates above the neutral level, if necessary, to bring inflation down and will not stop until inflation is back at target. With inflation still at elevated levels and with interest rates higher and expected to rise materially in coming months, traders are concerned over the impact on growth. These fears were well reflected this week in the sharp reversal lower in USD. UK inflation was seen hitting 40-year highs last month at 9%, putting BOE rate hike expectations back into focus. The SNB was seen making a U-turn on monetary policy with SNB chairman Jordan warning that the SNB is ready to act on inflation, which is travelling well above the SNB’s target. The release of the ECB meeting minutes this week highlighted the hawkish shift taking place among members, with the market now increasingly pricing in a July rate hike. It was a volatile week for equities with the FTSE ending the week roughly flat (as of writing) after plenty of two-way action. The ASX200, the DAX and the Nikkei ended the week higher while the S&P and the Nasdaq were firmly in the red as Fed rate-hike expectations overtook USD weakness. It was a better week for precious metals with both gold and silver rallying on USD weakness. Oil prices were unable to capitalise on USD weakness, however, as focus remains on the ongoing EU negotiations regarding potential sanctions on Russian oil. While many EU leaders are pushing for an EU-wide ban on Russian oil by year end, the chances of achieving this look unlikely given fierce opposition from Hungary and Greece among others. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Coming Up Next Week US, Eurozone, UK PMIs Traders will get the latest insight into the performance of the factory and non-factory sectors in the US, eurozone and UK. With inflation surging in all three economies and with supply-chain issues remaining a real problem there is a very real threat that these readings highlight weakness. Given the recessionary concerns which have taken centre stage recently, if these readings underperform asset markets are likely to come under pressure over the week. RBNZ Rate decision The RBNZ meeting this week is expected to see the bank hike rates by a further .5%. 20 out of 21 economists polled by Reuters are calling for such a move. Given these hawkish expectations, if the bank hikes by less than .5% NZD will likely come under heavy selling pressure. If a .5% hike is announced, the focus will then be on forward guidance with NZD likely to rally if the RBNZ points to further hikes incoming. FOMC Meeting Minutes The May FOMC minutes this week are expected to highlight the uptick in Fed hawkishness recently. There’s potentially some reduced impact in the wake of recent comments from Fed’s Powell suggesting that the Fed has turned more aggressively hawkish since that meeting. Nonetheless, the details are likely to be firmly hawkish and market volatility can be expected in response to them. Forex Heat Map Coming up This Week Technical Analysis Our favourite chart this week is GBPCHF GBPCHF has been moving lower in a well-defined channel over the correction from 2021 highs. Recently price has been underpinned by support along the 1.2114 level. This has been a major support area since late last year. If price can breach below this level on a weekly closing basis, this would suggest a continuation of the downtrend towards the next big support at the 1.1687 level. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM Economic Calendar – High Impact Another busy data week coming up, key highlights include: US, eurozone and UK PMI readings on Tuesday, US GDP on Thursday and US trade data on Friday. See the calendar below for full schedule.
A Strong Bearish Signal For The Equity Markets And A Significant Support Factor For Dollar (USD)

(USD) US Dollar’s Orderly Retreat Continues | Having A Look At EUR/USD, GBP/USD And AUD/USD | Oanda

Jeffrey Halley Jeffrey Halley 25.05.2022 14:09
Recession jitters send US dollar lower The US dollar eased once again overnight, as US recession fears continue to lead to a repricing lower of Fed tightening expectations. With quantitative tightening starting next week and no signs of inflation falling, that may be more hope than reality. Nevertheless, one must respect the momentum in the short term, and the US dollar bull market correction still looks to have legs in it. ​ The dollar index fell by 0.32% to 101.77 overnight, but Asia is doing its usual countertrend moves today, pushing the dollar index back up to 101.95. The multi-year breakout line is at 102.40 today, forming initial resistance, while 101.50 and 101.00 loom as immediate supports. EUR/USD continued edging higher overnight, rising 0.42% to 1.0735 before falling by 0.28% to 1.0705 in Asia. Momentum already appears to be waning for EUR/USD, but I do not rule out at least a test of 1.0750 and 1.0825, the multi-decade breakout line. A weekly close above the latter is needed to suggest a medium-term low is in place. GBP/USD fell overnight, crushed by EUR/GBP buying, poor data and tax and political risk. It finished 0.42% lower at 1.2535 where it remains in Asia today. Sterling faces political risks, outlined above, today, and these will limit gains. It now has support at 1.2470, with a double top now at 1.2600. Even if the US dollar sell-off continues, sterling will remain euro’s poor cousin. AUD/USD remains steady at 0.7100 today, having probed the downside overnight Lower US yields saw USD/JPY fall 0.85% to 126.85 overnight where it remains in Asia, just below support, now resistance, at 127.00. A deeper selloff, potentially targeting the 125.00 support area, remains entirely possible given the market is still clearly very long USD/JPY. Once again, at those levels though, given the trajectory of US and Japan interest rates, being short becomes a dangerous game. AUD/USD remains steady at 0.7100 today, having probed the downside overnight. AUD/NZD buying is capping gains for now. A hawkish RBNZ today has sent the Kiwi dollar flying, NZD/USD jumping 0.65% to 0.6500. The rally is already showing signs of fatigue and a weekly close above 0.6550 is required to signal a potential medium-term low. Support is distant at 0.6420. Asian FX continued gaining against the US dollar overnight, but a stronger greenback in Asian time has erased those gains. A neutral USD/CNY fixing by the PBOC has given Asian markets little to go on today, with USD/CNY, USD/CNH and USD/THB rising by around 0.30%, while USD/KRW has risen by 0.10%. An impending Bank of Korea hike on Friday should limit the won’s weakness. The Malaysian ringgit looks like the most vulnerable regional currency right now, USD/MYR trading near 4.4000 today. With policy tightening gaining momentum among other Asian central banks, today’s benign inflation data reinforced that outlook. USD/MYR could potentially test 4.4500 by early next week. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News
Bank Of England Is Expected To Choose Between 50 and 75bp, Ethereum Arouses More And More Discussions As Merge Is Around The Bend

What's The Future Of British Pound (GBP)? Stocks: Snap Has Fallen! How Far Will New Zealand Dollar Go!? | Least worst choices | Oanda

Jeffrey Halley Jeffrey Halley 25.05.2022 11:05
RBNZ hikes by 50-bps The Reserve Bank of New Zealand has raised policy rates by 0.50% to 2.0% this morning, with Governor Orr setting a hawkish tone in the press conference afterwards. In the statement itself, the RBNZ’s “least worst choices” policy seemed to imply that although external risks remained, the domestic economy was strong and could tolerate tighter monetary conditions. Mr Orr seemed to be saying much the same, suggesting that terminal rates could go above 3.0% and would get there sooner, rather than later. We’ll see just how strong the New Zealand economy is in due course, but a hawkish RBNZ has seen the New Zealand dollar rally by 0.70% to 0.6505 today, making it the biggest currency gainer in Asia today. Elsewhere, Singapore’s GDP growth came in tight on expectations, rising by 3.70% YoY for Q1. With inflation data yesterday also less worse than expected, expectations for another unscheduled tightening by the Monetary Authority of Singapore have receded for now. That may bring some relief to the Malaysian ringgit, which has fallen to 3.20 against the Singapore dollar. Snap Has Fallen In Malaysia itself, Inflation data for April continues to remain benign as domestic demand stays subdued. Inflation YoY rose by just 2.30% and will leave Bank Negara, like Bank Indonesia yesterday, in no hurry to tighten monetary policy. Ominously though, the Malaysian ringgit has shown no strength versus the US dollar. USD/MYR remains at recent highs at 4.4000 even as the greenback is experiencing an extended bull market correction versus the G-10 and EMFX elsewhere. If the US dollar turns higher once again, and the MYR resumes its sell-off, Bank Negara’s hand might be forced. Overnight, the recession word weighed on stock markets once again. European PMI data was a mixed bag. Manufacturing PMIs held steady, while Services PMIs fell as consumer demand takes a hit from the rise in the cost of living. That wasn’t enough to stop the euro rally, powered by suddenly hawkish ECB heavyweights. Bank of England, has already signalled a white flag on bringing down inflation The picture was rather grimmer in the United Kingdom where the most honest central bank in the world, the Bank of England, has already signalled a white flag on bringing down inflation and pencilled in a recession next year. UK Manufacturing PMI held steady at 54.6, but Services PMIs plummeted to 51.8. The UK is facing a winter of discontent as the cost of living soars, with the railways RMT union voting to strike over pay negotiations. Expect more of this going forward. Additionally, the Chancellor is apparently preparing to widen the scope of the windfall tax on energy companies, probably to help pay for his cost of living mini-budget. UK stock markets didn’t like that. Finally, the “party gate” report on those lockdown wine frenzies in the No 10 garden is due for release today, potentially putting more pressure on PM Johnson’s leadership. ​ Little surprise that the sterling slumped versus the euro and the US dollar overnight. In the United States, the recession world hit particularly hard after the Snap Inc. induced meltdown by Nasdaq stocks overnight. US New Home Sales plummeted to 591,000 in April, while Richmond Fed Manufacturing slumped to -9 in May. The S&P Global Services Flash PMI for May fell to 53.5, with Flash Manufacturing easing to 57.5. It was the new home sales that really frightened the street, though, as house building, and its ancillary services and suppliers are a good chunk of US domestic GDP. Soaring mortgage interest rates and petrol prices appear to be doing a lot of the Fed’s work for it before it even gets started. Read next: (TRX) TRON USD Decentralised Blockchain Platform That Focuses On Entertainment And Content Sharing. Altcoins: A Deep Look Into The TRON Network | FXMAG.COM If there is one takeout from all of this for me, it is that rising inflation and borrowing rates are already crimping the demand side of the equation. Unfortunately, we are seeing very little sign of price pressures reducing due to a combination of factors, all of which have been thrashed to death here and in research everywhere. The uncomfortable reality is that central banks are going to be forced to continue the tightening path, even as growth slows around the world, because inflation has proven sticky and not transitory. That is the least worst choice central banks need to make in a stagflationary environment. I am asked every day if we have seen the low in the equity market sell-off. Hopefully, I have answered the question. US President Joe Biden’s trip around Asia continues Finally, US President Joe Biden’s trip around Asia continues. Unfortunately, with its emphasis on containing China and hawking a trade agreement empty of potential access to the US domestic market (Congress needs to approve that), the trip is not going to make much headway in re-establishing US leadership in the region. Asia really needs to see the colour of America’s money. Furthermore, the reliability of the US as a partner has taken a further hit today, with White House officials explicitly refusing to rule out the possibility that the US could enact crude oil export restrictions to help cap energy prices domestically. The US doesn’t have a crude oil problem, it has a refining and transportation problem, but let’s not let facts get in the way. I have warned about food nationalism previously, but if President Biden prioritises November’s mid-term elections over the economic war with Russia, and supporting Europe, it really is every man for himself globally. I can’t see that being positive for equities anywhere, or European asset markets full stop, or for Ukraine. Only the Kremlin is likely to be popping champagne as the US does Russia’s divide and conquer for them. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News
Video: A Wide Range Of Forex Pairs AUD/USD, USD/JPY, EUR/JPY, EUR/USD And GBP/USD Analysed By Jason Sen (DayTradeIdeas)

Video: A Wide Range Of Forex Pairs AUD/USD, USD/JPY, EUR/JPY, EUR/USD And GBP/USD Analysed By Jason Sen (DayTradeIdeas)

Jason Sen Jason Sen 30.05.2022 07:45
AUDUSD finally tests very strong resistance at 7135/55. Shorts need stops above 7175. A break higher this week is a buy signal targeting 7230/50. Shorts need stops above 7275. Shorts at 7135/55 target 7090 then 7060/50. Further losses test support at 7020/10. Longs need stops below 7000. USDJPY shorts at resistance is at 127.50/70 need stops above 127.80. A break higher is a buy signal targeting 128.20/30, perhaps as far as strong resistance at 128.70/90. Holding resistance is at 127.50/70 targets 127.20/00. A break below 126.80 targets 126.30/20 & eventually 125.80. EURJPY holding strong resistance at 136.50/70 (perfectly on Thursday & Friday) targets 135.60/50 for profit taking on shorts. Further losses target 135.35/25. If we continue lower look for 134.65/55 then strong support at 134.20/00 for profit taking on any shorts. We should have strong resistance again at 136.50/70. Shorts need stops above 136.95. A break higher targets 137.20/30 then 138.00/20. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM EURUSD longs at support at 1.0670/50 start to work on the bounce towards strong resistance at 1.0800/20 for profit taking. Shorts need stops above 1.0835. Support again at 1.0670/55. Longs need stops below 1.0640. Strong support at 1.0600/1.0590. GBPUSD made a high for the day 6 pips above strong resistance at 1.2640/60. Shorts need stops above 1.2680. A break higher this week is a buy signal initially targeting 1.2725/45. Shorts at 1.2640/60 target 1.2590, perhaps as far as 1.2555/45 for profit taking. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk Follow FXMAG.COM on Google News
Oil Bulls In Charge Before OPEC Meeting | Equities Posted Timid Gains

Crude Oil Is Said To Shape Euro To US Dollar (EUR/USD). Forex Cable (GBP/USD) May Be Supported By BoE Sooner Than Later. (USD/JPY) - Can Japanese Yen Rise? | Oanda

Jeffrey Halley Jeffrey Halley 30.05.2022 13:22
Still improving risk sentiment sends US dollar lower The US dollar declined once again on Friday as improving risk sentiment continues to unwind the 2022 US dollar rally. That has spilt over into Asian markets today, with regional currencies booking some decent gains versus the greenback this morning. On Friday, the dollar index edged 0.12% lower to 101.64, losing another 0.13% to 101.50 in Asia. Support remains at 101.00, with resistance at 102.50. EUR/USD EUR/USD held steady on Friday, closing almost unchanged at 1.0735, with US dollar weakness being reflected in EMFX and the commonwealth currencies. It has gained 0.20% to 1.0755 in Asia, but overall, seems locked in a 1.0700 to 1.0800 range. Oil’s rally may temper single currency gains, with the multi-decade breakout line, today at 1.0830, still a formidable barrier. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM GBP/USD GBP/USD closed 0.20% higher at 1.2630 on Friday, adding another 0.14% to 1.2640 in Asia. GBP/USD looks set to trade in a noisy 1.2600 to 1.2700 range as the week gets underway. The government’s cost of living package may prompt faster BOE tightening, supporting the downside, while the economic slowdown continues to slow upside progress. USD/JPY USD/JPY is trading sideways, ranging each side of 127.00 as US yields trade in narrow ranges. That is likely to continue with US bond markets closed today. The chart suggests USD/JPY has further downside potential that could target 125.00. Only a move through trendline resistance at 127.80 changes the picture. AUD/USD & NZD/USD AUD/USD and NZD/USD continue to be driven entirely by swings in global risk sentiment. Another strong performance by Wall Street on Friday maintained that upward momentum and both AUD and NZD were prime beneficiaries. AUD/USD rallied by 0.85% to 0.7160, adding another 0.20% to 0.7175 today. It has resistance at 0.7260, and support at 0.7100. NZD/USD rose by 0.86% to 0.6536 on Friday, rising another 0.17% to 0.6547 today. Resistance nearby at 0.6570 opens a larger rally to 0.6650, with support at 0.6475. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM Asian FX rode improving investor risk sentiment higher on Friday, moves reflected throughout the EM space. Gains were led by the Chinese yuan, Korean won, and New Taiwan dollar, all gaining around 0.70%, while even the beleaguered Malaysian ringgit out in a good show, USD/MYR falling to 4.3770. Both the Indonesian rupiah and the Malaysian ringgit should find further strength on higher oil prices, even though it increases their domestic subsidy bills. Oil’s strength is likely the reason the Indian rupee has remained unchanged from Friday through today. CNY, KRW and NTD are rallying strongly today, likely boosted by China’s reopening hopes. USD/CNY, USD/KRW, and USD/NTD have fallen by around 0.80% today. However, if oil prices continue to rise this week, the rally in energy-importing Asian currencies may run out of steam. Follow FXMAG.COM on Google News This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The Euro Will Strengthen, But Questions Remain About What To Do Next

Supporting EUR, USD And Others - What Is Interest Rate? What Is A Negative Interest Rate | Binance Academy

Binance Academy Binance Academy 01.06.2022 16:55
TL;DR It doesn’t make much sense to lend money for free. If Alice wants to borrow $10,000 from Bob, Bob will need a financial incentive to loan it to her. That incentive comes in the form of interest – a kind of fee that gets added on top of the amount Alice borrows. Interest rates profoundly impact the broader economy, as raising or lowering them greatly affects people’s behavior. Broadly speaking: Higher interest rates make it attractive to save money because banks pay you more for storing your money with them. It’s less attractive to borrow money because you need to pay higher amounts on the credit you take out. Lower interest rates make it attractive to borrow and spend money – your money doesn’t make much by sitting idle. What’s more, you don’t need to pay huge amounts on top of what you borrow. Learn more on Binance.com Introduction As we’ve seen in How Does the Economy Work?, credit plays a vital role in the global economy. In essence, it’s a lubricant for financial transactions – individuals can leverage capital that they don’t have available and repay it at a later date. Businesses can use credit to purchase resources, use those resources to turn a profit, then pay the lender. A consumer can take out a loan to purchase goods, then return the loan in smaller increments over time. Of course, there needs to be a financial incentive for a lender to offer credit in the first place. Often, they’ll charge interest. In this article, we’ll take a dive into interest rates and how they work.   What is an interest rate? Interest is a payment owed to a lender by a borrower. If Alice borrows money from Bob, Bob might say you can have this $10,000, but it comes with 5% interest. What that means is that Alice will need to pay back the original $10,000 (the principal) plus 5% of that sum by the end of the period. Her total repayment to Bob is, therefore, $10,500. So, an interest rate is a percentage of interest owed per period. If it’s 5% per year, then Alice would owe $10,500 in the first year. From there, you might have: a simple interest rate – subsequent years incur 5% of the principal or  a compounded interest rate – 5% of the $10,500 in the first year, then 5% of $10,500 + $525 = $11,025 in the second year, and so on.   Why are interest rates important? Unless you transact exclusively in cryptocurrencies, cash, and gold coins, interest rates affect you, like most others. Even if you somehow found a way to pay for everything in Dogecoin, you’d still feel their effects because of their significance within the economy. Take a commercial bank – their whole business model (fractional reserve banking) revolves around borrowing and lending money. When you deposit money, you’re acting as a lender. You receive interest from the bank because they lend your funds to other people. In contrast, when you borrow money, you pay interest to the bank. Commercial banks don’t have much flexibility when it comes to setting the interest rates – that’s up to entities called central banks. Think of the US Federal Reserve, the People’s Bank of China, or the Bank of England. Their job is to tinker with the economy to keep it healthy. One function they perform to these ends is raising or lowering interest rates. Think about it: if interest rates are high, then you’ll receive more interest for loaning your money. On the flip side, it’ll be more expensive for you to borrow, since you’ll owe more. Conversely, it isn’t very profitable to lend when interest rates are low, but it becomes attractive to borrow. Ultimately, these measures control the behavior of consumers. Lowering interest rates is generally done to stimulate spending in times when it has slowed, as it encourages individuals and businesses to borrow. Then, with more credit available, they’ll hopefully go and spend it. Lowering interest rates might be a good short-term move to rejuvenate the economy, but it also causes inflation. There’s more credit available, but the amount of resources remains the same. In other words, the demand for goods increases, but the supply doesn’t. Naturally, prices begin to rise until an equilibrium is reached. At that point, high interest rates can serve as a countermeasure. Setting them high cuts the amount of circulating credit, since everyone begins to repay their debts. Because banks offer generous rates at this stage, individuals will instead save their money to earn interest. With less demand for goods, inflation decreases – but economic growth slows.   ➟ Looking to get started with cryptocurrency? Buy Bitcoin on Binance!   What is a negative interest rate? Often, economists and pundits speak of negative interest rates. As you can imagine, these are sub-zero rates that require you to pay to lend money – or even to store it at a bank. By extension, it makes it costly for banks to lend. Indeed, it even makes it costly to save. This may seem like an insane concept. After all, the lender is the one assuming the risk that the borrower may not repay the loan. Why should they pay?  This is perhaps why negative interest rates are something of a last resort to fix struggling economies. The idea comes from a fear that individuals may prefer to hold onto their money during an economic downturn, preferring to wait until it recovers to engage in any economic activity.  When rates are negative, this behavior doesn’t make sense – borrowing and spending appear to be the most sensible choices. This is why negative interest rates are considered to be a valid measure by some, under extraordinary economic conditions.   Closing thoughts On the surface, interest rates appear to be a relatively straightforward concept to grasp.  Nevertheless, they’re an integral part of modern economies – as we’ve seen, adjusting them can fundamentally alter the behavior of individuals and businesses. This is why central banks take such a proactive role in using them to keep nations’ economies on track. Do you have more questions about interest rates and the economy? Check out our Q&A platform, Ask Academy, where the Binance community will answer your questions.
FX Talking - Summer of discontent keeps dollar in demand | EUR/USD | USD/JPY | GBP/USD | ING Economics

FX Talking - Summer of discontent keeps dollar in demand | EUR/USD | USD/JPY | GBP/USD | ING Economics

ING Economics ING Economics 14.06.2022 10:04
The global economy can now be characterised as one in which many central bankers are poised to hike rates more forcefully, even as growth prospects are being revised lower. Investors are now having to ask which economies can best withstand these tighter monetary conditions and which currency to back? During this summer of discontent the answer to these questions largely remains the US economy and the dollar. Unlike the supply-driven inflation suffered in Europe, price rises in the US are far more a function of demand-side factors and suggest stagflation is less of a likelihood in the US than in Europe. And with no end in sight to tight energy markets, the US remains better positioned here too. We expect the Fed to deliver at least another 175bp of hikes this year as the Fed drives real US interest rates into restrictive territory. This is not good news for global growth – but that is the point, the Fed needs to slow demand. Flatter yield curves consistent with the latter stages of the US business cycle are normally good news for the dollar. In all this means that the dollar should stay bid this summer (1.00/1.02 is possible in EUR/USD), while USD/JPY in the 135/140 region looks ready to trigger Japanese intervention. GBP/USD can move to the low 1.20s as the BoE cycle is repriced lower and the CHF should start to outperform in Europe as the SNB guides it higher. CEE FX has become more mixed. We still favour the PLN, but HUF and now CZK look more vulnerable. This will be a fragile environment for most EMFX – especially those most exposed to China. Here USD/CNY can still push higher taking most of $/Asia with it. Developed markets EUR/USD A long, hot summer for the euro Current spot: 1.0476 Both the Fed and the ECB are in hawkish mode – both battling inflation near 8%. Both are probably happy with stronger currencies. The difference is the stagflationary shock from the war in Ukraine which makes the ECB unlikely to deliver on the 150bp of tightening priced in. There is also the issue of growth differentials and what they mean for international equity flows. These could start generating some euro under-performance. EUR/USD looks biased towards the lower end of a 1.02-1.08 range this summer. It looks far too early to pick the top in the Fed cycle. Higher US real rates also spell trouble for risk assets, including EM in general. This will also lend further support to the dollar USD/JPY Official concern and stretched valuations may help JPY Current spot: 134.43 The combination of aggressive Fed tightening (we look for at least another 175bp of Fed rate hikes this year), high energy prices and BoJ dovishness has sent USD/JPY to 135. Japanese officials are now officially unhappy with the rapid pace of JPY weakness. Sensible arguments go that the BoJ cannot intervene to sell $/JPY since: a) markets are not disorderly and b) BoJ is still printing money with QQE. Yet intervention is political & one never knows whether deals get cut behind the scenes We cannot rule out USD/JPY marching towards 140 given that this is a fundamentally driven, but intervention signals are flashing amber/red. Traded USD/JPY volatility can rise further. GBP/USD Bank of England tightening expectations are extreme Current spot: 134.43 GBP/USD looks as though it can trade back down to the 1.21/22 levels – largely on the back of dollar strength. But certainly an Unexploded Bomb (UXB) for sterling is the incredibly aggressive 175bp of tightening priced into the BoE cycle for year-end. This seems very extreme given that not all the MPC were on board with May’s 25bp hike. The 16 June BoE meeting is an event risk. UK growth will struggle in 2Q, although there is increasing speculation over tax cuts coming through this Autumn – in a bid to shore up Conservative support ahead of a possible ‘23 election. We doubt a Tory leadership change or Brexit tension has too much impact on sterling – a lot of bad news is already priced. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more This article is a part of the report by ING: Source
There Was Justification For The Pound (GBP) To Increase This Week

How Much Is 1 EUR To USD? FX: Bristish Pound To US Dollar. Tips for beginner traders in EUR/USD and GBP/USD on June 15, 2022 | InstaForex

InstaForex Analysis InstaForex Analysis 15.06.2022 11:13
Relevance up to 09:00 2022-06-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Details of the economic calendar from June 14 Data on the UK labor market came out worse than expected. The unemployment rate increased from 3.7% to 3.8%, while the forecast assumed a decline to 3.6%. Employment in the country rose by 177,000, while jobless claims fell less than expected. In general terms, the indicators for the UK labor market are not the best. Analysis of trading charts from June 14 The EURUSD currency pair has slowed down its downward movement in the area of 1.0400. This move has led to variable turmoil, with the downside sentiment remaining among market participants. On the trading chart of the daily period, there is a gradual recovery of the downward trend relative to the recent correction. The GBPUSD currency pair has accelerated the decline after the prolongation of the medium-term downward trend. The increase in the volume of short positions led to the weakening of the pound sterling towards the psychologically important level of 1.2000. The scale of decline for three trading days amounted to about 550 points.     Economic calendar for June 15 The results of the Fed meeting are at the center of everyone's attention, where, due to a sharp increase in the inflation rate, experts are revising forecasts for the interest rate hike. Based on the last meeting, the regulator planned to continue hanging the rate by 50 basis points. The market, in turn, is concerned about rising inflation and lays down a rate increase of 75 basis points at once, which has already affected the US dollar exchange rate. Time targeting Results of the Fed meeting - 18:00 UTC Fed press conference - 18:30 UTC Trading plan for EUR/USD on June 15 Price stagnation within 1.0400/1.0500 keeps speculators on itself for a while. It can be assumed that the current stop plays the role of the accumulation of trading forces in the forthcoming acceleration in the market. Based on the above range, the best trading tactic is the outgoing momentum method, which will indicate the subsequent price move. We concretize the above into trading signals: Buy positions on the currency pair are taken into account after holding the price above the value of 1.0500 in a four-hour period. Sell positions should be considered after holding the price below 1.0400 in a four-hour period.     Trading plan for GBP/USD on June 15 The area of psychological level 1.1950/1.2000/1.2050 puts pressure on sellers. This led to a reduction in the volume of short positions and, as a result, a local pullback. Taking into account the oversold status of the pound sterling, we can assume further formation of a correction if the price holds above 1.2050 in a four-hour period. At the same time, the high interest of traders in speculative positions allows blocking the technical signal about the pound being oversold. In this case, holding the price below the value of 1.1950 in a four-hour period will lead to the subsequent inertial movement. 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 candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and 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. Read more: https://www.instaforex.eu/forex_analysis/313480
The GBP/USD Pair Was Trading Calmly But The Volatility Still Remained Very High

FX: GBP/USD - British Pound jumps ahead of Fed, BOE meetings

Kenny Fisher Kenny Fisher 15.06.2022 19:03
The British pound is in positive territory on Wednesday. This follows an abysmal 5-day slide which saw the pound fall as much as 600 points. In the North American session, GBP/USD is trading at 1.2060, up 0.53% on the day. FOMC expected to deliver 75-bp salvo All eyes are on the Federal Reserve, with the FOMC rate decision later today. The Fed is clearly under pressure as inflation surges with no peak in sight – CPI accelerated to 8.6% in April, up from 8.3% in March. This was the highest inflation rate since 1981. The Fed’s aggressive stance may shift into overdrive, with a 75-bp hike priced in by the markets at almost 100%. Just a few days ago, the most likely scenario was a 50-bps increase, but hawkish winds are blowing, and a 75-bp move will likely elicit a sharp response from the financial markets. Investors will also be closely monitoring the rate statement and Fed Chair Powell’s press conference. I would not be surprised to see the US dollar cash in with strong gains following today’s meeting. The Fed finds itself in a tough spot as it struggles to combat inflationary pressures, which are now more than four times higher than the Fed’s inflation target of 2 per cent. The price for the Fed’s aggressive rate-hike cycle could well be a recession, but Fed policy makers clearly prefer a (hopefully) short recession rather than inflation expectations becoming unanchored. The big question is will the Fed manage to guide the US economy to a soft landing as it continues to aggressively raise rates. BoE expected to hike by 25bp After the Fed is done, attention will shift to the Bank of England, which holds its policy meeting on Thursday. The likely scenario is that the cautious BoE will raise rates by a modest 25 bps, but we could see a larger hike if the Fed is overly hawkish at its meeting. With unemployment in the UK at a low level of 3.7%, the BoE has room to be more aggressive with its monetary policy. As for the British pound, a 0.25% hike won’t be of much help. If the BoE surprises with a larger rate increase, the pound would likely respond with gains. . GBP/USD Technical GBP/USD faces resistance at 1.2108 and 1.2215 There is support at 1.1916. This is followed by 1.1772, a major support level. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
FX: Credible UK Budget Will Deliver Substantial Fiscal Tightening

GBP/USD Intraday technical analysis and significant key-levels - 15.06.2022

InstaForex Analysis InstaForex Analysis 15.06.2022 22:26
Relevance up to 20:00 2022-06-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   The short-term outlook turned bearish when the market went below 1.3600. This enhanced the bearish side of the market initially towards 1.3360 then 1.3200 which initiated a temporary bullish movement towards 1.3600 for a final re-test. The price level of 1.3600 corresponding to the upper limit of the ongoing bearish channel initiated an aggressive bearish movement towards 1.2980 - 1.3000. The price level of 1.3000 stood a transient Support where a short-term consolidation movement existed. This happened just before two successive bearish dips could take place towards 1.2550 and 1.2160. Considerable bullish rejection was expressed around 1.2200. However, the pair failed to persist above 1.2550. This was needed to abolish the short-term bullish scenario for sometime. Instead, a quick bullish movement was executed towards 1.2650 where extensive bearish rejection existed. The GBP/USD pair remained under bearish pressure to challenge the new low around 1.2150 again which was recently bypassed. Price action around the current price levels of 1.2000 should be watched for a possible intraday BUY entry. Otherwise, further bearish continuation may pursue towards 1.1750 if sufficient bearish momentum is maintained Read more: https://www.instaforex.eu/forex_analysis/280271
British Pound (GBP) Touched The Below-1.05 Levels!

1 GBP Price To Increase!? Is British Pound Going To Rally!? How Has USDCHF Changed After SNB Meeting? | Saxo Bank

John Hardy John Hardy 17.06.2022 14:47
Summary:  The Bank of Japan continues to swim against the stream of global central bank tightening as it maintained course overnight with its policy mix of negative yields and yield-curve-control, triggering a wave of fresh JPY weakening that was only moderated slightly by a sharp drop in US treasury yields. Elsewhere, the Swiss franc remains firm after the SNB-inspired spike and sterling is taking a stand after the Bank of England meeting yesterday. FX Trading focus: BoJ not for turning, GBP takes a stand. USD status check. The Bank of Japan refused to budge overnight, standing pat on its policy of yield-curve-control and announcing daily operations in the bond market to defend the policy, with no guidance suggesting a change of course, though a brief comment on foreign exchange was inserted into the policy statement: Concerning risks to the outlook, there remain extremely high uncertainties for Japan's economy, including the course of COVID-19 at home and abroad and its impact, developments in the situation surrounding Ukraine, and developments in commodity prices and overseas economies. In this situation, it is necessary to pay due attention to developments in financial and foreign exchange markets and their impact on Japan's economic activity and prices. That suggests that there is some level of JPY weakness at which the Bank of Japan may be forced to revisit its policy commitments, but that we aren’t there yet. Two key points to make in the wake of this announcement: first, additional JPY weakness from here is likely only a function of global yields continuing to trend higher, something we did not at all see yesterday as a weak batch of US data drove a strong rally in US treasuries and punched the US 10-year benchmark yield back toward the pivotal 3.20% area. Second is the CNHJPY rate, which has traded north of 20.00 in the wake of this BoJ meeting and whether China is set to make another move to prevent further JPY weakness relative to the renminbi after it appeared that the threat of the 20.00 level prompted China to weaken CNH sharply relative to the US dollar after a long period of stagnant USDCNH price action just at the point when CNHJPY hit 20.00 back in April. Elsewhere, we continue to digest the repercussions of the Swiss National Bank 0-basis point rate hike, which continues to reverberate. While the Bank of Japan pulls in the opposite direction as a country that is willing to risk further deterioration in the real value of its currency, the SNB has done the opposite with this move, allowing itself to front-run the ECB and establishing the franc’s purchasing power as a key consideration and going a long way to buying real yield credibility. Looking ahead, the concern will likely arise as the cycle plays out that the Fed simply can’t raise rates sufficiently drive solidly positive US real yields. USDCHF has suffered a complete derailing of the former up-trend as discussed in the chart below and when looking at the USD versus European currencies, at least, from SEK and GBP to CHF and EUR, we could suddenly be at a turning point here. Where is that turning point “confirmed”? We are already there in USDCHF, but a broader, at least tactical turn lower in the USD would require a pull higher and close above 1.0600 in EURUSD and perhaps 1.2500 in GBPUSD (the day after I thought GBPUSD might be in danger of a meltdown below 1.2000 on the small BoE hike…). Until then, the USD sell-off may be a one-off result of titanic USDCHF flows on the SNB decision. Chart: USDCHFThe bulls found their case broken all in one go in the wake of the SNB meeting, as USDCHF has been crushed seemingly irrevocably lower, suddenly creating a double-top formation. But the huge brushback may not yet lead significantly lower unless the USD is capitulating elsewhere (levels for other major USD pairs noted above) and the full break down here requires a capitulation down through the 0.9545 low and the old range highs below 0.9475. Source: Saxo Group Sterling rallied hard yesterday in the wake of the Bank of England meeting yesterday, with UK rates and the currency focusing more on the hawkish guidance the meeting produced rather than due to the small 25-basis point hike. The bank said it would react “forcefully” if inflation doesn’t develop as hoped (which will take some doing – the Bank of England expecting the CPI to hit north of 11.0% before falling back after October) which suggests the willingness to hike by 50 basis points even if the economic outlook is not promising. The price action post-BoE took GBPUSD well away from the cycle lows of 1.2000 posted earlier this week, trading as high as 1.2406 late yesterday, just above a major local 61.8% Fibonacci retracement of the recent sell-off at 1.2387 and far above the prior low-water mark from May of 1.2156. As noted above, a full reversal in GBPUSD requires another rally surge through 1.2500, while the bears will only feel comfortable here again if the price action punches back down through 1.2200. Elsewhere, sterling hopefuls should have a look at EURGBP, where the latest leg higher above 0.8600 has been sharply reversed, carving out a more well-defined reversal. Watching the 0.8500 area for whether we follow through lower and back into the range extending below 0.8300 again there. Table: FX Board of G10 and CNH trend evolution and strength. The JPY is reversing sharply back lower after last night’s BoJ – note the huge new momentum in CHF, while sterling is trying to shift out of negative territory in broad terms. CAD looks very heavy. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Interesting to note sterling pushing back and trying to flip to a positive trend against not only JPY, but also AUD and CAD here. Elsewhere, watching 1.3000 on the USDCAD and noting AUDCAD rolling over – is CAD in for a broader drubbing? Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1200 – Poland May Core CPI 1230 – Canada May Teranet/National Bank Home Price Index 1245 – US Fed Chair Powell to make opening remarks at a conference 1315 – US May Industrial Production / Capacity Utilization 1430 – UK Bank of England Chief Economist Pill to speak Source: FX Update: BoJ not for turning. GBP takes a stand. | Saxo Group (home.saxo)
Podcast: The Situation In Ukraine Helps The European Market, The Yena's Situation

Have Tech Stocks Plunged!? FX: So Bank Of Japan Seems To Delay Supporting JPY, British Pound (GBP) Rallied| Stock Markets: S&P 500 Lost 3.2%

Saxo Bank Saxo Bank 17.06.2022 12:40
Summary:  The Bank of Japan continues to swim against the stream as it insisted on maintaining its yield-curve-control and negative policy rate at the meeting overnight, with daily operations to defend the yield cap on Japanese government bonds. Elsewhere, US equity markets continued to new lows even as US treasuries found strong support as a batch of weak US data points raises concerns on the US economic outlook.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) The Nasdaq 100 and S&P 500 futures fully reversed and more the FOMC pump with S&P 500 futures closing at the 3,671 level yesterday down 3.2%, while technology stocks fell even more. The current drawdown is now the second deepest at the same time into the drawdown compared to previous historical drawdowns underscoring the seriousness of the current market regime. Initial jobless claims weakened yesterday, and the Philly Fed survey showed significant downward pressure on new orders hitting levels typical of recessions. The fear of recession could short-term keep a lid on interest rates and thus ironically support equities and maybe cause a mild rebound over the coming weeks. The VIX forward curve remains well behaved suggesting no panic yet in US equities. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) The indices were up more than 1% despite ugly selloffs in overseas markets overnight. The fall in property prices in the top 70 cities slowed to -0.2% m/m vs April -0.3%.  Property prices in Tier-1 cities rose 0.4% m/m and the declines in Tier-2 and lower-tier cities moderated. On the other hand, JD.COM’s (09618) JD Retail CEO told Bloomberg that recovery in consumption in China had been slow from the reopening of cities, such as Shanghai. The Company was expecting that it would take a long time for household consumption to recover as the economy and household income had been severely hit over this wave of lockdown. EURGBP and GBPUSD Sterling rallied hard yesterday in the wake of the Bank of England meeting yesterday on the guidance the meeting produced rather than due to the smaller 25-basis point hike. its reversal yesterday took GBPUSD well away from the cycle lows of 1.2000 posted earlier this week, trading as high as 1.2406 late yesterday, just above a major local 61.8% Fibonacci retracement of the recent sell-off at 1.2387 and far above the prior low-water mark from May of 1.2156. A full reversal in GBPUSD requires another rally surge through 1.2500. Elsewhere, sterling hopefuls should have a look at EURGBP, where the latest leg higher above 0.8600 has been sharply reversed, suggesting a more well-defined reversal. Watching the 0.8500 area for whether we follow through lower and back into the range extending below 0.8300 again. USDJPY and JPY pairs With the Bank of Japan voting 8-1 to maintain course and the 0.25% cap on 10-year JGB yields, the JPY weakened sharply after a bout of speculation this week that Governor Kuroda and company might relent on its policy and bring a sharp resetting of the JPY higher. In the background, ironically, a powerful rally in global bonds yesterday was a JPY-supportive development that has eased the JPY-negative impact of the overnight BoJ decision. The BoJ statement did say that the Bank needs to pay attention to the FX level, from which one might infer that there is a JPY weakness level that the BoJ would find unacceptable and could prompt a change of course in the future. From here, the only route to a higher JPY is via a new drop in bond yields and shift away from CB tightening elsewhere or if the Bank of Japan is seen as giving up on its policy at a later date, possibly on coming inflation releases and risks of a weaker JPY raising the cost of living to an unacceptable degree. Crude oil (OILUKAUG22 & OILUSJUL22) Crude oil is heading for its first weekly decline in six with global growth concerns and prolonged lockdowns in China being the main catalyst. On top of that the short-term technical outlook has weakened following several failed attempts to break higher, but given the tight supply outlook, highlighted by the IEA earlier in the week. Support in Brent is likely to emerge already between $116 and $113.25. NY Harbor Diesel (HOc1) and gasoil (GASOILUKJUL22) both trades higher on the week, a reflection of the tightness that despite growth concerns, is likely to keep the energy sector supported.  Gold (XAUUSD)  Gold remains rangebound following a two-day rally that was supported by US growth concerns and a continued rout in cryptos and global stock markets. Together with another dose of weak U.S. data (see below) they helped send US treasury yields and the dollar lower on Thursday, thereby easing some of the recent pressure on bullion.  Total holdings in bullion-backed ETFs have declined by less than 0.25% this past week, a strong sign that investors look to gold for protection against the rout in global markets, together with increased focus on the need to hedge against the risk of stagflation.  On a relative basis gold’s year-to-date outperformance against the S&P 500 has reached 24%, long-end bonds 26% and 75% against blockchain (BKCH:arcx). US Treasuries (TLT, IEF) US treasuries rallied hard yesterday amidst ugly sentiment in the equity market and on a set of weak US data points pointing to a decelerating housing sector (more below), with weekly jobless claims remaining near the highs of the last few months. The US 10-year treasury yield has declined back to the pivotal area around 3.20%, which was the cycle high before the latest surge toward 3.50%. An extension of the rally that takes yields significantly back below that 3.20% mark would suggest that we have reached a cycle peak for now and further consolidation is set to follow, perhaps on concerns for an incoming recession. What is going on? Bank of Japan defies the global tightening wave The Bank of Japan maintained the negative 0.10% policy rate today, confirming that it won't join the Federal Reserve and other major global central banks in tightening monetary policy. The Japanese central bank will keep its target for the 10-year Japanese government-bond yield at+0.25% and announced daily operations to ensure the cap on yields is maintained. While the central bank said we will take additional easing measures without hesitation if needed, there was a rare reference to the yen weakness. Swiss National Bank surprises with 50 basis point hike yesterday The Swiss National Bank, according to surveys, was not expected to hike rates yesterday, though a rapidly growing minority of observers were looking for a rate rise. The hike of 50 basis points brought the policy rate to –0.25% and makes it clear that the SNB is happy to separate itself from ECB policy and allow the CHF to strengthen as one of the tools to combat rising inflation risks in the country. EURCHF sold off below 1.0200 after trading above 1.0400 ahead of the decision. USDCHF slid to lows of 0.9632 from above parity the day before the decision. The Bank of England hikes 25 basis points, sharpens forward guidance language The majority of observers were looking for the 25-basis point move from the BoE, with some residual uncertainty on whether the bank might hike by more due to the large Fed rate hike this week and the weakness in sterling. Three MPC members of the nine voting wanted a 50-bp hike. At the same time, the BoE predicted that CPI would peak slightly above 11% in October, said that it would respond “forcefully” on any signs of worsening inflation, language that kept the short end of the UK yield curve pinned near the cycle highs. China centric commodities remain under pressure China centric commodities such as iron ore SCON2), coal and copper (COPPERUSSEP22) remain under pressure after China advised its covid restrictions probably won’t ease until next year. In addition, the recent spate of weaker than expected economic US data combined with central banks stepping up their fight to combat inflation have raised concerns about the outlook for global growth in general. US economic indicators weaken US building permits and housing starts eased in May to 1.695mn and 1.549mn respectively while the initial jobless claims were at 229k versus 217k expected. Further, Philadelphia Fed manufacturing survey printed a negative figure of -3.3 for June, the first such contraction since May 2020. More so, the future activity index was contractionary for the first time since the GFC. Adobe shares slip 5% in extended trading on revenue outlook miss As we highlighted on our podcast yesterday Adobe’s earnings were a test of business investment in marketing and content activities. While the business remains sticky the company put out a revenue outlook at $17.7bn vs est. $17.9bn due some demand weakness, Russia impact and USD headwinds.   What are we watching next? US recession concerns rising The mix of data this week generally raises concerns that the US economy is decelerating, but the evidence is patchy and will need confirmation for this to become a a more entrenched theme. At the same time, equity traders have to figure out whether they should celebrate weak data as something that will eventually lead US yields lower and see the pace of Fed tightening eventually reversing or fret weak data because of the implications for corporate profits. The next US data points of interesting include the preliminary Services and Manufacturing PMI surveys for June next week. Fed blackout period ending The Fed speakers will be back in action as the blackout period ends. Chair Powell is speaking later today at the inaugural conference on the International Roles of the US Dollar. Other Fed speakers are due as well including Esther George who voted for a 50bps rate hike this week. Earnings Watch Next week’s earnings calendar is light but there are three important earnings releases to watch and those are Lennar, FedEx, and Accenture that all will give insights into the US housing market, logistics, and recruitment dynamics. Monday: Kanzhun Tuesday: Lennar Thursday: FedEx, Accenture, Darden Restaurants, FactSet Friday: Carnival, China Gas, CarMax Economic calendar highlights for today (times GMT) 0900 – Eurozone May Final CPI 1200 – Poland May Core CPI 1230 – Canada May Teranet/National Bank Home Price Index 1245 – US Fed Chair Powell to make opening remarks at a conference 1315 – US May Industrial Production / Capacity Utilization 1430 – UK Bank of England Chief Economist Pill to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – June 17, 2022 | Saxo Group (home.saxo)
Ed Moya talks US data, Forex, cryptocurrency and more - December 1st

How Is GBP/USD Doing? British pound pares post-BoE gains | Oanda

Kenny Fisher Kenny Fisher 17.06.2022 15:40
Pound jumps after BoE rate hike The pound had a wild day on Thursday, trading in a 350-point range. Sterling traded in a 300-point range overnight, with markets not quite sure to make of the BoE’s 0.25% rate increase. In the end, the pound received a thumbs-up and posted a gain of 1.45%.  The rate hike, which was the fifth in a row, was indeed modest, but investors liked that the BoE signalled that more rate hikes were on the way. As well, the MPC’s split 6-3 decision (3 members voted for a 0.50% hike) no doubt sent a signal that the BoE could provide a hawkish pivot if inflation does not peak. The BoE has warned of a recession and has forecast that inflation will top 11%, making it difficult to feel reassured by the central bank, but it appears that with the MPC unanimously voting to raise rates at the meeting, investors had something to feel positive about. The US dollar has shown that it can recover quickly and the risk for the pound remains tilted to the downside, with dark clouds hovering above the UK economy. GDP fell by 0.3% in April after a 0.1% decline in March, the first back-to-back contractions since March 2020, at the start of the Covid pandemic. The OECD has forecast that the UK economy will grow by 3.6% this year, but will stagnate in 2023, which would make it the worst-performing G-7 economy in 2023. In a week of dramatic central bank decisions, the Federal Reserve won the highlight of the week. The Fed delivered a 0.75% salvo, the first since 1994, bringing rates to a target range of 1.50-1.75%. The Fed downgraded its US growth forecasts for 2022 and 2023, but insisted that there would be no recession. Some analysts would beg to disagree, but the financial markets were relieved, as Fed Chair Powell said he didn’t expect 0.75% rate hikes to become common. The move is a clear signal that the Fed plans to use all available tools to wrestle down inflation, which has hit a 40-year high. . GBP/USD Technical GBP/USD has support at 1.2215 and 1.2016 There is resistance at 1.2407 and 1.2514     This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. British pound pares post-BoE gains - MarketPulseMarketPulse
Investors' Concerns About The Coming Recession In The UK, Will GBP/USD Pair Reach Its Lowest Level In History?

FX Cable (GBPUSD): Technical analysis of GBP/USD for June 17, 2022 | InstaForex

InstaForex Analysis InstaForex Analysis 17.06.2022 16:14
Relevance up to 15:00 2022-06-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The GBP/USD pair is at an all-time low against the dollar around the spot of 1.1933. The GBP/USD pair is inside in downward channel. Closing below the major resistance (1.2342 - 61.8% of Fibonacci) could assure that GBP/USD will move lower towards cooling new lows. The GBP/USD pair is continuing dropping by market cap at 3% in a day, 16.33% in a week, and 61.09% in a month, and is trading at 1.2230 after it reached 1.2186 earlier. The GBP/USD pair has been set below the strong resistance 1.2342, which coincides with the 61.8% Fibonacci retracement level. This resistance has been rejected three times confirming the veracity of an downtrend. RSI (14) sees major descending resistance line acting as resistance to push price down from here (1.2342). Equally important, the RSI and the moving average (100) are still calling for an downtrend. Therefore, the market indicates a bullish opportunity at the level of 1.2264 in the H1 chart. Also, if the trend is buoyant, then the currency pair strength will be defined as following: GBP is in an uptrend and USD is in a downtrend. The market is likely to show signs of a bearish trend around the spot of 1.2342 and/or 1.2264. Sell orders are recommended below the area of 1.2264 with the first target at the price of 1.2186; and continue towards 1.2089 in order to test the last bearish wave. The descending movement is likely to begin from the level 1.2264 with 1.2186 and 1.2089 seen as targets. Amid the previous events, the pair is still in a downtrend, because the GBP/USD pair is trading in a bearish trend from the new resistance line of 1.2264 towards the major support level at 1.2089 in order to test it. If the pair succeeds to pass through the level of 1.2089, the market will indicate a bearish opportunity below the level of 1.2089. On the other hand, if the GBP/USD fails to break through the support price of 1.2089 today, the market will rise further to 1.2342 in coming hours. Read more: https://www.instaforex.eu/forex_analysis/280655 Read more: https://www.instaforex.eu/forex_analysis/280655
FX: Credible UK Budget Will Deliver Substantial Fiscal Tightening

FX: Will (GBP) British Pound Strengthen For Good!? GBP/USD Intraday technical analysis and significant key-levels | InstaForex

InstaForex Analysis InstaForex Analysis 17.06.2022 22:54
Relevance up to 22:00 2022-06-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   The short-term outlook turned bearish when the market went below 1.3600. This enhanced the bearish side of the market initially towards 1.3360 then 1.3200 which initiated a temporary bullish movement towards 1.3600 for a final re-test. The price level of 1.3600 corresponding to the upper limit of the ongoing bearish channel initiated an aggressive bearish movement towards 1.2980 - 1.3000. The price level of 1.3000 stood a transient Support where a short-term consolidation movement existed. This happened just before two successive bearish dips could take place towards 1.2550 and 1.2160. Considerable bullish rejection was expressed around 1.2200. However, the pair failed to persist above 1.2550. This was needed to abolish the short-term bullish scenario for sometime. Instead, a quick bullish movement was executed towards 1.2650 where extensive bearish rejection existed. The GBP/USD pair remained under bearish pressure to challenge the new low around 1.2150 again which was temporarily bypassed before Immediate bullish rejection could brin the pair back above 1.2150 again. Bullish persistence above 1.2300 will probably enable further bullish continuation towards 1.2650 where further decisions can be taken. On the other hand, another bearish visit may be expected to challenge 1.1950 again if sufficient bearish momentum is expressed.   Read more: https://www.instaforex.eu/forex_analysis/280669
The GBP/USD Pair Was Trading Calmly But The Volatility Still Remained Very High

Pound steady after rough week | Oanda

Kenny Fisher Kenny Fisher 20.06.2022 16:47
The British pound is slightly higher at the start of the week, and I expect a quiet session, with US markets closed for a holiday. British pound under pressure There was plenty of volatility from GBP/USD last week, as the currency started the week with gains, only to reverse directions and end the week in the red, the third losing week in a row. Perhaps the biggest red flag from the pound’s slide was the break below the symbolic 1.20 level last week, for the first time since 2020. The pound has been hammered in 2022, plunging as much as 1500 points. The BoE rate hike of 0.25% on Thursday failed to impress the markets, with GBP/USD sliding 1.37% in the Thursday session. Three of the nine MPC members voted for a 0.50% increase, and it appears that the 0.25% was too feeble a move by the BoE, even though the benchmark rate is now at its highest level since 2009. The markets have priced in a 60% chance of a 0.50% rise at the next meeting in August, and there will be strong pressure for the BoE to deliver a 0.50% salvo unless inflation unexpectedly begins to ease. The UK releases May CPI on Wednesday, with an estimate of 9.1%, up slightly from the April reading of 9.0%. The dark clouds hovering above the UK economy are not good news for the struggling pound. GDP fell by 0.3% in April after a 0.1% decline in March, the first back-to-back contractions since March 2020, at the start of the Covid pandemic. J.P. Morgan said on Friday that the likelihood of a recession in the UK has increased over the next year or two, warning that a recession in the US would spill over to the UK. . GBP/USD Technical GBP/USD has support at 1.2187 and 1.1969 There is resistance at 1.2441 and 1.2659   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound steady after rough week - MarketPulseMarketPulse
The GBP/USD Pair Was Trading Calmly But The Volatility Still Remained Very High

FX: What Is Cable? British Pound To US Dollar (GBPUSD). Technical Analysis of GBP/USD for June 21, 2022

InstaForex Analysis InstaForex Analysis 21.06.2022 10:20
Relevance up to 09:00 2022-06-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The GBP/USD pair has been seen steadily moving towards the technical resistance located at the level of 1.2468, just where the main channel lower line is located. The bulls are temporary in change of the market, the momentum is strong and positive, so after the pull-back to the nearest technical support is done, the price keeps bouncing up. The nearest technical support is seen at the level of 1.2281 and 1.2207. Nevertheless, the supply zone located between the levels of 1.2618 - 1.2697 is still the main obstacle for bulls that needs to be broken if the rally is expected to be continued.     Weekly Pivot Points: WR3 - 1.2922 WR2 - 1.2665 WR1 - 1.2442 Weekly Pivot - 1.2193 WS1 - 1.1971 WS2 - 1.1712 WS3 - 1.1494 Trading Outlook: The price broke below the level of 1.3000 quite long time ago, so the bears enforced and confirmed their control over the market in the long term. The Cable is way below 100 and 200 WMA , so the bearish domination is clear and there is no indication of trend termination or reversal. The bulls are now trying to start the corrective cycle after a big Pin Bar candlestick pattern was made last week. The next long term target for bears is seen at the level of 1.1989. Please remember: trend is your friend.   Read more: https://www.instaforex.eu/forex_analysis/281021
The GBP/USD Pair Was Trading Calmly But The Volatility Still Remained Very High

FX Cable Chart (GBP/USD) May Surprise You! Let's Have A Look How British Pound Is Doing Against US Dollar Ahead Of UK Inflation Rate| Oanda

Kenny Fisher Kenny Fisher 21.06.2022 22:23
The pound is having a quiet week, after some sharp swings last week. Monday was a holiday in the US, and it was a quiet session for the US dollar. The currency markets are calm today as well, with the exception of the sinking Japanese yen. British pound eyes CPI Last week was the turn of the central banks to perform on stage, with the Fed, BoE and SNB all raising rates. All three central banks are keeping a close eye on rising inflation and tightening policy in order to wrestle down inflation. The BoE has been accused of raising a white flag with regard to inflation, and last week’s tepid rate hike of 0.25% won’t silence the critics. The UK releases the May inflation report on Wednesday, with headline CPI expected to nudge higher to 9.1%, up from 9.0% in April. The BoE estimates that inflation will peak above 11%, sometime later this year. With the BoE grimly predicting that inflation will hit double-digits, the cost of living crisis, which is already bad, is poised to get even worse. This has led to inflation expectations continuing to accelerate, and the UK rail strike, the biggest in 30 years, is a reflection of workers taking extreme action in the face of rising inflation. Consumer confidence is down, and a drop and consumer spending would be disastrous for an economy that may be headed for a recession. In the US, Fed Chair Powell will testify on Capitol Hill on Wednesday and Thursday, and the ratings should be high, following the Fed’s largest rate hike since 1994. Fed members Barkin and Mester will speak later today, and the markets will be listening, looking for insights regarding upcoming rate hikes. . GBP/USD Technical GBP/USD is testing resistance at 1.2292. Above, we have resistance at 1.2441  There is support at 1.2187 and 1.1969 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. British pound calm ahead of inflation - MarketPulseMarketPulse
The GBP/USD Pair Was Trading Calmly But The Volatility Still Remained Very High

FX Cable: Technical Analysis of GBP/USD for June 22, 2022 | InstaForex

InstaForex Analysis InstaForex Analysis 22.06.2022 08:55
Relevance up to 07:00 2022-06-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The GBP/USD pair has been seen steadily moving towards the technical resistance located at the level of 1.2468, just where the main channel lower line is located. The bulls managed to hit the level of 1.2323 and then the Bearish Engulfing candlestick pattern occurred and soon after that the price fell out of the acceleration channel. The nearest technical support is seen at the level of 1.2207 and 1.2165. Nevertheless, the supply zone located between the levels of 1.2618 - 1.2697 is still the main obstacle for bulls that needs to be broken if the rally is expected to be continued.     Weekly Pivot Points: WR3 - 1.2922 WR2 - 1.2665 WR1 - 1.2442 Weekly Pivot - 1.2193 WS1 - 1.1971 WS2 - 1.1712 WS3 - 1.1494 Trading Outlook: The price broke below the level of 1.3000 quite long time ago, so the bears enforced and confirmed their control over the market in the long term. The Cable is way below 100 and 200 WMA , so the bearish domination is clear and there is no indication of trend termination or reversal. The bulls are now trying to start the corrective cycle after a big Pin Bar candlestick pattern was made last week. The next long term target for bears is seen at the level of 1.1989. Please remember: trend is your friend.   Read more: https://www.instaforex.eu/forex_analysis/281201
The GBP/USD Pair Was Trading Calmly But The Volatility Still Remained Very High

GBP/USD: Pound Remains Under Pressure After Inflation Report

InstaForex Analysis InstaForex Analysis 22.06.2022 15:58
Relevance up to 06:00 2022-06-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The pound-dollar pair is declining amid the release of data on inflation growth in the UK. The inflation report itself turned out to be very contradictory, but the downward momentum of GBP/USD is due to the general strengthening of the US currency. Demand for the dollar is growing ahead of the speech of Fed Chairman Jerome Powell in the US Congress. Powell will announce the semi-annual report and answer questions from congressmen. This is an important event that, as a rule, has a significant impact on the mood of the market. Moreover, at the moment there is a certain intrigue regarding Powell's rhetoric. According to some experts, he will admit the probability of a 75-point rate hike not only at the July meeting, but will not rule out such a scenario in the context of the September meeting.     But back to British inflation. Today's release really turned out to be controversial—the published figures can be interpreted both in favor of the pound and against it. On the one hand, the overall consumer price index rose again year-on-year, this time to 9.1%. The indicator has been showing consistent growth over the past 8 months. A similar dynamic was demonstrated by another indicator—the producer price index, which growth may be an early indication of increased inflationary pressure. Growth of up to 2.1% (in monthly terms) was recorded, with a growth forecast of up to 1.9%. In annual terms, the indicator also came out in the "green zone," rising to 22.1%. The producer price index added to the positive picture, also being above the forecast values. On the other hand, core inflation disappointed. And this factor, by and large, leveled the achievements of the other components of the release. The core consumer price index has shown positive dynamics over the past 7 months, but in May it still slowed down its growth, contrary to the opposite forecasts of most analysts. The indicator came out at around 5.9% with a forecast of growth to 6.0%. In the previous month, the indicator peaked at 6.2%. After the publication of the inflation report, the market was again cautiously talking about the fact that the Bank of England might revise its policy regarding the pace of interest rate hikes. To be more precise, the regulator can maintain the pace that was indicated at the end of the June meeting. Note that significant disagreements arose at the June meeting of the Central Bank's Monetary Policy Committee. Three members of the BoE—Michael Saunders, Catherine Mann, and Jonathan Haskel - voted to raise the rate by 50 basis points. But they remained in the minority, as the other six of their Committee colleagues insisted on a 25-point increase. If the pace of core inflation slows further, the 50-point boosters will remain in the minority (if not reconsidered at all).         This factor did not allow GBP/USD buyers to develop corrective growth: the mark of 1.2300 (Kijun-sen line on the daily chart) remained unconquered. Traders have been trying to overcome this target for the past two days, but in vain. Moreover, today the bears of the pair once again seized the initiative and tested the area of the 21st figure. In general, if we disregard intraday price fluctuations, we can conclude that the GBP/USD pair is stuck in flat ahead of Powell's speech in Congress. Last week, the pound fell to 1.1933, after which GBP/USD sellers took profits and provoked an upward pullback. The upward corrective trend also quickly choked—as mentioned above, buyers were unable to conquer the area of the 23rd figure. As a result, the price got stuck in the range of 1.2160–1.2290, waiting for the next information impulse. It is obvious that Powell will set the tone for trading today. It is likely that he will voice a hawkish position, declaring the need to tighten monetary policy at an aggressive pace. Yesterday, Richmond Fed President Thomas Barkin made it clear that many members of the Fed support the idea of a 75-point rate hike following the results of the July meeting. Note that earlier Powell announced that in July the Fed would increase the rate by either 50 or 75 basis points. It is likely that today the head of the Fed will make it clear to congressmen that the regulator is ready to raise the rate by 75-point steps, not only in July but also in September. Such a message will significantly strengthen the position of the US currency, including in pair with the pound. Thus, in my opinion, before Powell's speech, the GBP/USD pair will be trading in the range of 1.2160–1.2290. Further prospects will depend on the rhetoric of the head of the Fed: if he supports the greenback, the pair may go to the base of the 21st figure. Otherwise, buyers will overcome the resistance level of 1.2300 (Kijun-sen line on D1) and try to approach the next price barrier 1.2380 (middle Bollinger Bands line on the same timeframe).   Read more: https://www.instaforex.eu/forex_analysis/314199
Investors' Concerns About The Coming Recession In The UK, Will GBP/USD Pair Reach Its Lowest Level In History?

1 GBP To USD Indicator analysis: Daily review of GBP/USD on June 27, 2022

InstaForex Analysis InstaForex Analysis 27.06.2022 10:58
Relevance up to 09:00 2022-06-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis (Fig. 1). The pound-dollar pair may move upward from 1.2269 (close of Friday's daily candle) to the target of 1.2385, the 61.8% retracement level (red dotted line). Upon reaching this level, the price may continue to move upward to the upper fractal 1.2404 (yellow dotted line). From this level, a downward pullback is possible.     Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – up; Fibonacci levels – up; Volumes – up; Candlestick analysis – up; Trend analysis – up; Bollinger bands – up; Weekly chart – up. General conclusion: Today the price may move upward from 1.2269 (close of Friday's daily candle) to the target of 1.2385, the 61.8% retracement level (red dotted line). Upon reaching this level, the price may continue to move upward to the upper fractal 1.2404 (yellow dotted line). From this level, a downward pullback is possible. Alternative scenario: from the level of 1.2269 (close of Friday's daily candle), the price may start moving down with the target of 1.2213, the historical support level (blue dotted line). Upon reaching this level, an upward movement is possible with the target of 1.2299, the 50.0% retracement level (red dotted line).   Read more: https://www.instaforex.eu/forex_analysis/314567
Rates Spark: Following the US data cues

FX: GBP/USD: plan for the US session on June 27 (analysis of morning deals). The sellers of the pound are back in business.

InstaForex Analysis InstaForex Analysis 27.06.2022 13:20
Relevance up to 12:00 2022-06-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. In my morning forecast, I paid attention to the 1.2317 level and recommended making decisions from it. Let's look at the 5-minute chart and figure out what happened there. Growth and another unsuccessful attempt to get above 1.2317 by analogy with Friday's attempt to break out of the side channel – all this led to a sell signal for the pound. At the time of writing, the pair has gone down more than 40 points and the pressure on the trading instrument remains. From a technical point of view, nothing has changed, nor has the strategy itself changed. And what were the entry points for the euro?     To open long positions on GBP/USD, you need: The lack of statistics on the pound allowed buyers to make another attempt to break 1.2317, but it was not possible to gain a foothold above this level. During the American session, data on the volume of sales of long-term goods were released today, which may increase pressure on the pound - if the indicators turn out to be much better than economists' forecasts. If the reports coincide with the forecasts, most likely the pair will continue trading in the side channel with the prospect of re-updating the resistance at 1.2317. In case of a return of pressure on the pound after the data, the bulls will try to protect 1.2241. Only the formation of a false breakdown there will give a signal to open new long positions in the expectation of growth to the nearest level of 1.2317. In the morning forecast, I said that this level is critically important for bulls since by returning it under control, it will be possible to count on the resumption of the bull market formed on June 14. A breakout and a top-down test of 1.2317 will give a buy signal based on the 1.2400 update. A similar breakthrough at this level will lead to another entry point into long positions with the prospect of reaching 1.2452, where I recommend fixing the profits. A more distant target will be the 1.2484 area. If GBP/USD falls and there are no buyers at 1.2241 in the afternoon, the pressure on the pair will increase. In this scenario, I advise you to open new long positions only on a false breakout from the lower border of the side channel 1.2171. You can buy GBP/USD immediately for a rebound from 1.2102, or even lower – around 1.2030 with the aim of correction of 30-35 points within a day. To open short positions on GBP/USD, you need: The bears did everything possible to return to the market and defended 1.2317. Most likely, the emphasis will now be placed on 1.2241 and on fixing below this range. In the case of weak data on the index of pending sales in the real estate market and the volume of orders for durable goods in the United States, it will be possible to observe another upward jerk of the pound. Therefore, only the formation of a false breakdown at 1.2317 will lead to the formation of another sell signal with the prospect of a return to 1.2241. Its breakthrough will lead to a sell-off and a return of GBP/USD to the area of the lower border of the side channel. However, only a consolidation below 1.2241 and a reverse test from the bottom up will give an entry point into short positions. A more distant target will be the 1.2102 area, the test of which will testify to the defeat of buyers. With the option of GBP/USD growth and the absence of bears at 1.2317, we will only have to count on the nearest resistance of 1.2400. A false breakout at this level will give a good entry point into short positions in the expectation of at least some downward correction. If there is no activity at 1.2400, another upward jerk may occur against the background of the demolition of stop orders of speculative sellers. In this case, I advise you to postpone short positions to 1.2452. But even there, I advise selling the pound only in case of a false breakdown, since going beyond this range will increase demand for GBP/USD. Short positions can be viewed immediately for a rebound from 1.2484, or even higher – from 1.2516, counting on the pair's rebound down by 30-35 points inside the day.     The COT report (Commitment of Traders) for June 14 recorded a reduction in both long and short positions, which led to a slight decrease in the negative delta. After the meeting of the Bank of England, at which it was announced that it would adhere to the previous plan to raise interest rates and combat high inflation, the pound strengthened its position, which will affect future COT reports. For sure, the big players are taking advantage of the moment and buying back the much cheaper pound, despite all the negative that is happening with the UK economy now. However, one should not rely too much on the pair's recovery in the near future, since the policy of the Federal Reserve System will seriously help the US dollar in the fight against risky assets. The COT report indicates that long non-commercial positions decreased by 5,275 to the level of 29,343, while short non-commercial positions decreased by 10,489 to the level of 94,939. This led to a decrease in the negative value of the non-commercial net position from the level of -70,810 to the level of -65,596. The weekly closing price decreased to 1.1991 against 1.2587.     Signals of indicators: Moving averages Trading is conducted around 30 and 50 daily moving averages, which indicates market uncertainty. Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1. Bollinger Bands In the case of growth, the average border of the indicator around 1.2310 will act as resistance. In the case of a decline, the lower limit of the indicator in the 1.2240 area will act as support. Description of indicators Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow. Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green. MACD indicator (Moving Average Convergence / Divergence - moving average convergence/divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-profit speculative traders, such as individual traders, hedge funds, and large institutions use the futures market for speculative purposes and to meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between the short and long positions of non-commercial traders.   Read more: https://www.instaforex.eu/forex_analysis/314610
How Much Could UK Data Assist GBP Battling With USD And Euro? Were Stocks Supported?

How Much Could UK Data Assist GBP Battling With USD And Euro? Were Stocks Supported?

Alex Kuptsikevich Alex Kuptsikevich 13.07.2022 10:43
A new package of UK macro statistics showed some recovery and exceeded expectations, supporting pound buying, although it did not help the stock market. The monthly economic growth is estimated at 0.5% in May after a decline of 0.2% in April and +0.1% in March. And this is significantly better than the 0.1% expected. Manufacturing showed an impressive jump, adding 1.4% for May - the best growth in 14 months.The service sector grew by 0.4% m/m, contrary to expectations of a 0.1% increase. Equally surprising was the construction sector, where workloads grew by 1.5% mom and 4.8% YoY, coming out of the lockdown pit, renewed historical highs. The foreign trade deficit of 21.4B was higher than the expected 19.8B, but this widening came at the expense of faster growth in imports, although exports also added impressively. The UK’s trade deficit was 24% of trade turnover. These are historically high figures but a marked improvement on the record 30% in January. Much of the credit for the recovery can be attributed to a weaker pound, which has boosted export competitiveness and increased construction activity. The latter can be attributed to the tailwinds from historically low-interest rates, while there are questions about whether the housing boom will continue. A positive batch of data will likely provide the pound only a temporary respite in its decline against the dollar and spur gains against the euro. The EURGBP pair seems to have completed its corrective rebound after a long decline between September 2020 and March 2022. By the end of the year, the pair may fall to the last six years area near 0.8250. In the event of further problems in the Eurozone, the EURGBP could lose support and move towards 0.75, which has not been since the Brexit referendum
Investors' Concerns About The Coming Recession In The UK, Will GBP/USD Pair Reach Its Lowest Level In History?

FX: GBP/USD (British Pound To US Dollar) - Possible Scenarios

InstaForex Analysis InstaForex Analysis 14.07.2022 10:57
Relevance up to 07:00 2022-07-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis (Fig. 1). The price may move downward from the level of 1.1885 (close of yesterday's daily candle) to the target of 1.1806, the lower fractal (red dotted line). When testing this level, the price may continue to move downward with the target at 1.1778, the support level of the downward channel (bold red line). Upon reaching this level, the price may move up.     Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – down; Fibonacci levels – down; Volumes – down; Candlestick analysis – down; Trend analysis – down; Bollinger bands – down; Weekly chart – down. General conclusion: Today the price may move downward from the level of 1.1885 (close of yesterday's daily candle) to the target of 1.1806, the lower fractal (red dotted line). When testing this level, the price may continue to move downward with the target at 1.1778, the support level of the downward channel (bold red line). Upon reaching this level, the price may move up. Alternative scenario: from the level of 1.1885 (close of yesterday's daily candle), the price may move down with the target of 1.1806, the lower fractal (red dotted line). When testing this level, an upward pullback is possible with the target of 1.18820, the 14.6% retracement level (red dotted line). Upon reaching this level, the price may move up.   Read more: https://www.instaforex.eu/forex_analysis/316135
Analysis Of Cable Market (GBP/USD) By Laurie Bailey

What Helps GBP (British Pound)? Canadian Dollar (CAD) Influenced By Interest Rate Hike | Orbex

Jing Ren Jing Ren 14.07.2022 11:06
GBPUSD sees limited bounce The pound finds support from better-than-expected GDP growth in May. The pair is having a hard time holding onto its rally attempts. Bearish sentiment means that rebounds have rather been opportunities for trend followers to sell into strength. The RSI’s double bottom in the oversold area caught some buyers’ attention. But strong selling could be expected between the psychological level of 1.2000 and 1.2050. 1.1810 is a fresh support and its breach could trigger a new round of liquidation towards 1.1600. USDCAD hits resistance The Canadian dollar soared after the Bank of Canada surprised the market with a 1% hike. The greenback consolidated its gains after it broke above June’s peak at 1.3070. 1.2940 at the base of a previous bullish breakout has offered some support, though its retest is a sign of hesitation. 1.3050 is the last hurdle ahead and a bullish breakout may attract momentum buyers and resume the uptrend. On the downside, a fall below 1.2940 may cast doubt on the bulls’ commitment and deepen the correction to 1.2840. XAUUSD attempts to rebound Gold recouped some losses after the US dollar bulls took profit following inflation data in June. The price action has struggled to stay above September 2021’s lows at 1723. A bullish RSI divergence showed a slowdown in the sell-off. A rally above 1750 would act as confirmation and prompt sellers to cover their bets, paving the way for an extended recovery. Then 1805 along the 30-day moving average could be within reach. A drop below 1710 may attract more bears and send the metal to August 2021’s lows near 1682.
Thursday's Bank's of England decision may be record-breaking!

FX: Can We Expect A Decrease Of GBP/USD? What Are The Tips For British Pound To US Dollar?

InstaForex Analysis InstaForex Analysis 14.07.2022 12:53
Relevance up to 09:00 2022-07-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Analysis of transactions in the GBP / USD pair GBP/USD tested 1.1891 on Wednesday. At that time, the MACD line was just starting to move below zero, so selling was quite appropriate. However, the decrease was limited because after moving down by just 10 pips, the pair reversed and went to 1.1940. Sometime later, the pair tested 1.1891, also at a time when the MACD had just started to move below zero. This signal was more successful as it led to more than 50 pips price decrease.     UK's data on industrial production, GDP and trade balance helped pound rise yesterday morning, albeit not as much as some would like. Then, in the afternoon, it fell because traders focused more on the June CPI data in the US, which jumped to 9.1%, raising demand for the dollar ahead of further policy decisions by the Fed. There are no reports that could support pound today, so expect GBP/USD to decline even more. In the afternoon, the US will release a report on producer prices, which is expected to show a slight slowdown amid declining energy costs. Following that are weekly jobless claims data, as well as a speech from Fed member Christopher Waller. For long positions: Buy pound when the quote reaches 1.1875 (green line on the chart) and take profit at the price of 1.1950 (thicker green line on the chart). Although there is little chance for a rally today, traders can still take long positions when the MACD line is above zero or is starting to rise from it. It is also possible to buy at 1.1842, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1875 and 1.1950. For short positions: Sell pound when the quote reaches 1.1824 (red line on the chart) and take profit at the price of 1.1774. Pressure will return if latest data indicate growing inflationary pressure in the US. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.1875, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1824 and 1.1774.     What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. 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 decision based on the current market situation is an inherently losing strategy for an intraday trader.   Read more: https://www.instaforex.eu/forex_analysis/316157
Bank Of England Is Expected To Choose Between 50 and 75bp, Ethereum Arouses More And More Discussions As Merge Is Around The Bend

Is FX Market Turbulent!? Let's Look At Headline-Topping EUR/USD, GBP/USD, USD/JPY And Other Pairs

Jeffrey Halley Jeffrey Halley 14.07.2022 13:35
US dollar in choppy waters Currency markets had another choppy overnight session, which ultimately ended up sideways again, despite US inflation unexpectedly rising. EUR/USD traded to parity but managed to finish higher at 1.0040, a pattern repeated across most major currencies. With the US dollar looking overbought on short-term indicators as well, I suspect that the odds of a US dollar correction lower have risen sharply, especially as Asian central banks and others have rushed to tighten monetary policy this week. I could see the correction persisting in some shape or form until the FOMC meeting later this month. The dollar index traded in a 100-point 107.50 to 108.50 range overnight but ultimately finished just 0.13% lower at 108.02. It has risen by 0.23% to 108.27 in Asia, led by a much weaker Japanese yen. Resistance is at 108.50 and 110.00. Support is at 107.50 and then the 1.0585 breakout point, followed by 1.0500. ​ The relative strength index indicator (RSI) is overbought, signalling a potential correction lower by the US dollar. EUR/USD traded through 1.0000 to 0.9998 overnight, but held this level once again, and rose back to finish the day 0.21% higher at 1.0058. In Asia, it has eased to 1.0035. A clean break of 1.0000 is likely to trigger a sharp move lower as stop-losses and algos kick in, but it is significant that it has held this level for two days in a row, although its rallies have been limited. ​ The oversold RSI and underwhelming post-inflation performance by the US dollar suggests the euro could be tracing out a low for now and a correction back towards 1.0200 is possible. EUR/USD has support at 1.0000 and then 9900/25. It has resistance at 1.1020, the overnight high, and then 1.0200. GBP/USD traded as high as 1.1965 overnight before closing unchanged at 1.1890. It has fallen to 1.1870 in Asia but looks to be trying to trace out a temporary low at 1.1800, which is initial support. Resistance is at 1.1965 and then 1.2060 and 1.2200. USD/JPY continued rallying overnight as US short-dated yields rose, finishing 0.41% higher at 137.45. In Asia, USD/JPY has continued rallying quite aggressively, rising 0.44% to 138.05. With a procession of central banks capitulating and hiking rates aggressively in the past 24 hours, Japan’s super-easy policy leaves it an outlier and that seems to be weighing on the yen. ​ USD/JPY’s next resistance is at 140.00, with support at 136.00, 134.25 and 132.00. I expect the “watching markets closely” noise to increase from Tokyo today and being long above 138.00 could be a dangerous trade in the shorter term. AUD/USD was unchanged at 0.6755 overnight, quite the surprise, given the US inflation data and another reason to think a greenback correction lower is imminent. ​ In Asia, super-strong employment data had lifted rate hike expectations and pushed AUD/USD 0.30% higher to 0.6775. It also looks like some decent AUD/JPY buying is going through. It has resistance at 0.6800 and 0.6850, with support between 0.6700 and 0.6730. NZD/USD is unchanged at 0.6130 again today, suggesting increased downside risks post the RBNZ yesterday. AUD/NZD buying post the Australian data is also capping NZD/USD gains. Asian currencies ranged overnight once again and have edged lower in Asia as some US dollar strength had returned. Overall, though, the response by Asian FX has been relatively muted post the US data and the moves seen by the MAS and BSP this morning. That said, USD/MYR continues to creep closer to 4.4500, USD/IDR to 15,000.00 and USD/INR and USD/KRW remain close to recent highs. The SGD and PHP have outperformed today as both central banks sprung unscheduled monetary tightening on markets. With South Korea, Singapore and the Philippines tightening this week, the pressure will be increasing on other regional currencies to follow suit as Asian central banks break ranks on inflation. Most notably, the INR, IDR and MYR look the most vulnerable and the recent slump in commodity prices will be another headwind for Indonesia and Malaysia. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. US dollar consolidates - MarketPulseMarketPulse
Investors' Concerns About The Coming Recession In The UK, Will GBP/USD Pair Reach Its Lowest Level In History?

Technical Analysis - Forex: GBP To USD - 25/07-30/07

InstaForex Analysis InstaForex Analysis 25.07.2022 12:05
Relevance up to 09:00 2022-07-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis GBP/USD will continue rising this week, starting from 1.2003 (the closing of the last weekly candle) to the resistance line at 1.2105 (white thick line). After that it will move to the 23.6% retracement level at 1.2226 (red dotted line), then go to the 38.2% retracement level at 1.2517 (red dotted line). Price is likely to decrease after these movements.     Fig. 1 (weekly chart) Comprehensive analysis: Indicator analysis - uptrend Fibonacci levels - uptrend Volumes - uptrend Candlestick analysis - uptrend Trend analysis - uptrend Bollinger bands - uptrend Monthly chart - uptrend All this points to an upward movement in GBP/USD. Conclusion: The pair will have an upward trend, with no first lower shadow on the weekly white candle (Monday - up) and no second upper shadow (Friday - up). During the week, pound will increase from 1.2003 (the closing of the last weekly candle) to the resistance line at 1.2105 (white thick line), move to the 23.6% retracement level at 1.2226 (red dotted line), then go to the 38.2% retracement level at 1.2517 (red dotted line). Price is likely to decrease after these movements. Alternatively, the quote could climb from 1.1863 (closing of the last weekly candle) to the resistance line at 1.2105 (white thick line), then move down to the 161.8% retracement level at 1.1837 (dashed blue line). Upon reaching it, pound will go up to the 14.6% retracement level at 1.2049 (red dotted line).   Read more: https://www.instaforex.eu/forex_analysis/317042
Markets Are Digesting Hawkish Signal Which Is Able To Boost US Dollar (USD)

Forex Market Means Volatility! British Pound To US Dollar - Possible Scenarios For EUR/USD - 05/08/22

InstaForex Analysis InstaForex Analysis 05.08.2022 12:07
Relevance up to 03:00 2022-08-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis (Fig. 1). The pound-dollar pair may move downward from the level of 1.2156 (close of yesterday's daily candle) to the target of 1.2088, the 38.2% retracement level (blue dotted line). After testing this level, the price may move upward with the target of 1.2196, the 76.4% retracement level (red dotted line). Upon reaching this level, continued upward movement is possible.     Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – down; Fibonacci levels – down; Volumes – down; Candlestick analysis – down; Trend analysis – up; Bollinger bands – up; Weekly chart – up. General conclusion: Today, the price may move downward from the level of 1.2156 (close of yesterday's daily candle) to the target of 1.2088, the 38.2% retracement level (blue dotted line). After testing this level, the price may move upward with the target of 1.2196, the 76.4% retracement level (red dotted line). Upon reaching this level, continued upward movement is possible. Alternative scenario: from the level of 1.2156 (close of yesterday's daily candle), the price may move down with the target of 1.2027, the 50% retracement level (blue dotted line), then an upward movement is possible to 1.2196, the 76.4% retracement level (red dotted line). After testing this level, the price may continue to move up.   Read more: https://www.instaforex.eu/forex_analysis/318127
Forex: So Could US Dollar (USD) And EUR/USD Become More Resistant To Data?

Forex Pairs: EUR/USD, AUD/USD, GBP/USD And Asian Currencies Commented By Jeffrey Halley (Oanda)

Jeffrey Halley Jeffrey Halley 05.08.2022 13:44
US dollar has had an uneven sell-off overnight The US dollar fell overnight, led by losses against the euro for unknown reasons, with the Japanese yen also gaining as US yields slid slightly. Sterling and the Australasians hardly moved, while Asian currencies remain stubbornly anchored near to recent lows.   The dollar index fell 0.59% lower at 105.75 overnight, retracing slightly higher by 0.11% to 105.87 in Asia. The dollar index breakout lower at 106.45 has continued to cap rallies this week on a closing basis, suggesting downside risks are still the path of least resistance. Beyond that, 106.75 is the next resistance. Support is at 105.65, and then the more important 1.0500 level. Failure signals a deeper move lower to 1.0350 and, potentially, the 102.50 longer-term breakout.   EUR/USD rallied by 0.76% overnight to 1.0245, easing slightly to 1.0235 in Asian trading. Given stubbornly high European gas prices and the recessionary risks from its Eastern border, the single currencies environment remains challenging, even if 0.9950 is now looking like a medium-term low. EUR/USD had solid resistance nearby at 1.0250 and then 1.0300. A close above 1.0300 this even would signal further gains to 1.0500, however. Meanwhile, EUR/USD has support at 1.0150 and then a series of daily lows between 1.0100 and 1.0125.   GBP/USD traded in a choppy 150+ point Bank of England range overnight but ultimately finished nearly unchanged at 1.2160. In Asia, it has edged lower to 1.2145. When your central bank has forecast a recession and inflation rising to 13.0% but has only hiked rates to 1.75%, it is reasonable to assume they are behind the curve. That stagflationary reality could be limiting sterling’s gains. Support is at 1.2065, the overnight low, with resistance at 1.2215, the overnight high, followed by 1.2300.   Four days in Bali saw me miss the long-awaited capitulation sell-off by USD/JPY as the US/Japan rate differential narrowed. Much will depend on the US Non-Farm Payroll data this evening and the reaction by US bonds. The sell-off this week went further than I expected but held the 100-day moving average (DMA), which today is at 130.70. Resistance is clearly denoted at 134.65 now. Expect plenty of noise in between.   AUD/USD rose 0.25% to 0.6965 overnight, and NZD/USD rose by 0.40% to 0.6295. Both are almost unchanged in Asia as risk sentiment holds up into the Asian session. The technical picture for both remains constructive as both currencies staged upside breakouts higher a fortnight ago. They remain well above their breakout lines at 0.6790 and 0.6145, and a daily close above either 0.7050 or 0.6350 signals the next stage of the recovery rally.   Asian currencies were steady overnight, booking an uneven session of mixed gains against the greenback. In Asia, surging inflation numbers from the Philippines and Thailand have sparked 0.75% rallies by THB and PHP to 35.620 and 55.17 as markets price in faster monetary tightening. That has had a knock-on impact across the Asian FX space, with the Korean won gaining 0.40% to 1297.20. The Indonesian rupiah and Malaysian ringgit remain near recent lows, however, as both central banks remain very reluctant rate hikers. With inflation rising in Asia, lifting rate hike expectations, Asian currencies could finally be starting also to gain some benefits from recent US dollar strength elsewhere. USD/INR has eased to 89.976 today. With the RBI rate decision this afternoon, I expect volatility ahead. Further INR strength from here probably relies on the RBI statement being hawkish; otherwise, I suspect INR weakness will resume. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. US dollar retreat continues - MarketPulseMarketPulse
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Forex: How Did US Dollar Reacted To NFP? | GBP/USD Chart

Kenny Fisher Kenny Fisher 05.08.2022 22:11
The British pound is falling sharply in the North American session, after a massively strong US nonfarm payment release. GBP/USD is trading at 1.2040, down 0.98% on the day. US Nonfarm Payrolls smashes higher It wasn’t so long ago that US nonfarm payrolls was one of the most anticipated events on the economic calendar and often had a significant impact on the movement of the US dollar. That has changed in the new economic landscape of red-hot inflation and central banks raising interest rates practically every month. The markets seem more absorbed with new inflation records and the threat of recession, which may make for more catchy headlines than labor market statistics. Today, however, NFP demonstrated its ability to be a market-mover. The July gain of 528 thousand crushed the estimate of 250 thousand and follows the June release of 372 thousand. The US dollar has responded with strong gains against the majors, as a strong labour market will enable the Fed to remain hawkish with its rate moves. BoE delivers with a 50bp hike The BoE was widely expected to raise rates by 50bp, and the central bank did exactly that. The MPC vote was 8-1 in favour, with one member voting for a 25bp hike. This split shows that Governor Bailey appears to have the MPC members in line, which should bolster Governor Bailey’s credibility. With inflation hitting 9.4% in June and no sign of a peak, the BoE has been accused of raising a white flag with regard to inflation. The 50bp increase, the biggest in 30 years, is an important step in fighting inflation, which has hit 9.4% and shows no signs of peaking. Even with this hike, the Bank Rate is at 1.75%, well behind the Federal Reserve, the central banks of Canada and New Zealand and others. The BoE’s rate increase was accompanied by a stark warning of a prolonged recession, and the pound responded with losses. The pound managed to recover these losses but it is clear that the currency isn’t getting any support from the BoE’s rate moves, with such a huge gap between inflation levels and current rates. Investors were also less than impressed as the BoE said that it might ease up on raising rates in the coming months. Governor Bailey has said he would be forceful in combating inflation, but the message that the central bank doesn’t plan to be forceful with its forward guidance is weighing on the pound. . GBP/USD Technical GBP/USD is testing resistance at 1.2128. Next, there is resistance at 1.2295  There is support at 1.2010 and 1.1876 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP/USD slides as Nonfarm Payrolls surges - MarketPulseMarketPulse
The GBP/USD Pair Was Trading Calmly But The Volatility Still Remained Very High

UK: Recession In The End Of 2022? Scary Projections Of Bank Of England!

Saxo Bank Saxo Bank 08.08.2022 09:36
Summary:  In today’s ‘Macro Chartmania’, we give an update on the British economy. A few months ago, we warned the UK economy is one of the developed countries most likely to enter into a recession. There is no debate about it anymore. Last week, the Bank of England updated its macroeconomic forecasts for the years until 2025. These are frightening. The United Kingdom is projected to enter into a recession in Q4 2022. This could last five quarters and cause GDP to fall about 2.1 % - as deep as the recession of the early 1990s. But this is not the worst. Very often, the economy rebounds quite sharply after a recession. This is unlikely to happen this time. The slump will last. The BoE sees GDP still 1.75 % below today’s levels in mid-2025. Click here to download this week's full edition of Macro Chartmania composed of more than 100 charts to track the latest macroeconomic and market developments. All the data are collected from Macrobond and updated each week. The United Kingdom is more and more looking like an emerging market country: Political instability (the new Prime Minister will be announced on 5 September after Boris Johnson’s resignation), trade disruptions (due to Brexit and Covid-related bottlenecks), energy crisis (the risk of a blackout this winter is real) and high inflation (the Bank of England forecasts that UK CPI will peak at 13 % in October but this is certainly a bit optimistic) are all hurting the UK economy. The only major difference : there is no currency crisis. The sterling pound exchange rate is rather stable. It only dropped 0.70 % against the euro and 1.50 % against the U.S. dollar over the past week. Our bet : after surviving Brexit uncertainty, we don’t see what could push the sterling pound into a free fall. All the leading indicators point in the same direction : The worst is yet to come for the British economy. There is a consensus among economists about that very fact. The OECD’s leading indicator for the United Kingdom, which is supposed to anticipate reversals in the economy six to nine months in advance, fell to 98.6 in June. The annual rate was 7.3 % in June 2021 (partially reflecting the post-lockdown rebound). It now stands at minus 2.9 %. The change is impressive over a year. This is not only linked to Covid data noise. This is a clear sign that a recession is coming. In addition, new car registrations, which are often considered as a leading indicator of the overall UK economy, continue to drop. This also reflects the deep collapse in consumer confidence (see chart below). In July 2021, after the peak of the pandemic, new car registrations stood at 1,835,000. They now stand at 1,528,000, a sharp drop of 14%. This is the lowest level since the end of the 1970s. The recession will be long and deep. There won’t be an easy escape. This is the most worrying, in our view. The Bank of England assesses the slump will last with GDP still 1.75 % below today’s levels in mid-2025. What Brexit has not done by itself, Brexit coupled with Covid and high inflation have succeeded in doing. The UK economy is crushed. The window for further rate hikes is closing :   Last week, the Bank of England hiked interest rates by 50 basis points, from 1.25 % to 1.75 %. We think the Bank of England’s next rate hike in September (probably of 50 basis points) could be the last. Outside of the jobs markets, there are signs that some of the key inflation drivers may be starting to ease. In addition, the prospect of a long recession (five negative quarters of GDP starting in Q4 2022 all the way through to Q4 2023) will certainly push the Bank of England into a wait-and-see position. On the topic of balance sheet reduction, we don’t expect any changes in the medium-term. Gilt sales will begin shortly after the September meeting. They will amount to £10bn per quarter the first year (this amount will be revised each year). We think the Bank of England has a rather traditional approach to deal with the current macroeconomic situation. Domestic demand must be slowed down by pushing GDP below its potential level, thus increasing unemployment and lowering inflation. A key rate of 2.25 % could already have a noticeable positive impact on the overall inflation dynamics, in our view. However, this is too early to know whether the current tightening cycle will definitely be over in September. The inflation dynamics have been a bit unpredictable in recent months. This is the least we can say. The social contract is broken : Imagine the graduate entering the workforce in 2009/10, who will have been told this was a once-in-a-lifetime crash. They are now in their early 30s and having yet another once-in-a-lifetime economic crisis. They faced an economy of suppressed wages, no housing prospects, two years of socializing lost to lockdown, obscene energy bills and rent and now a lengthy recession. This will lead to more poverty and despair. The Bank of England is now forecasting that real household post-tax disposable income will fall by 3.7 % over this year and next. This would be easily the weakest two years on record since 1963. The lowest income is hit the hardest. The International Monetary Fund found the poorest households in the United Kingdom are amongst the hardest hit by the cost of living in Europe. They found that living costs for the poorest 20 % of households are set to rise by about twice as much as those for the wealthiest, for instance. If this situation would happen in France, there would be a street revolution. Remember the Yellow Vest Movement in 2018. But this is the United Kingdom. It will unlikely lead to any major political shift. There will be more social distress, wealth inequality and poverty all around, however. The sixth largest economy in the world will look even more like an emerging market country, unfortunately.     Source: Chart of Week Emerging market Britain | Saxo Group (home.saxo)
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Turbulent Time For GBP (British Pound)! What's Possibly Ahead Of US Dollar (USD)?

ING Economics ING Economics 08.08.2022 10:19
The dollar starts the new week on the firm side after some impressive US July jobs figures on Friday. US money markets now price around 125bp of further Fed tightening and then a softer Fed profile from next summer onwards - pretty much now in line with our house view. Firm US July CPI data this week can see the dollar continue to trade near its highs Source: Shutterstock USD: Dollar to hold near highs, but interest in carry could emerge An unequivocally strong US July jobs report released on Friday has gone a little way to assuaging recession fears and given credence to last week's pushback from the Fed that it was nowhere near done in terms of tightening. Pricing in the US money markets now sees a further 125bp of Fed hikes this year (we see hikes of 50bp, 50bp, and 25bp in September, November and December). And those money markets price in around 50bp of cuts from summer '23 onwards. Current pricing is consistent with our house view and perhaps could usher in a period of calm for Fed pricing and the dollar. That pricing looks unlikely to be altered much this week with a strong US July CPI, where the core rate should stay near 6% year-on-year and keep the Fed concerned. There should also be focus this week on the Senate's approval of what is now called the Inflation Reduction Act - legislation focused on bringing down prescription drug prices and targeting spending on the climate emergency. At $437bn it is a far cry from the $1-1.5trn initial plans for the Build Back Better legislation and thus seems unlikely to be read as any kind of major fiscal stimulus. It will be interesting to see, however, whether new taxation on stock buybacks next year triggers a rush of stock buybacks this year - potentially supporting US equities (and probably the dollar) into year-end. Expect DXY to hold near its recent highs of 107. But if the dollar is not going anywhere in a hurry, there could be renewed interest in the carry trade. Of the available carry, we think the near 10% levels offered through the 3-month Mexican peso implied yields look attractive. Here Banxico does a good job of keeping USD/MXN stable and is expected to hike rates 75bp to 8.50% this Thursday. Chris Turner We see the dollar holding near its highs after Friday's strong jobs reporthttps://t.co/WwxUhzptEZ — ING Economics (@ING_Economics) August 8, 2022   EUR: Italy's ratings outlook change won't help the euro On Friday evening, the ratings agency Moodys shifted its rating outlook on Italy's sovereign debt from stable to negative. Given that Moodys' Italian rating is just one notch above junk - that has raised some eyebrows and no doubt will call the European Central Bank into further supportive action, be it through the more aggressive re-investment of the Pandemic Emergency Purchase Programme or potentially even using its new support instrument - the Transmission Protection Instrument (TPI). None of this will help the beleaguered euro, where the ECB's trade-weighted measure remains glued to the lows of the year. Indeed, if quiet summer markets prompt renewed interest in the carry trade, the euro will probably be one of the preferred funding currencies.  EUR/USD was understandably hit by Friday's strong US jobs release data and looks like it can stay offered in a 1.0100-1.0300 trading range. Elsewhere, EUR/CHF will be monitoring the performance of Italian bonds today and can probably edge back towards the lower end of a 0.97-0.98 range - a move that will not be unwelcome to the newly hawkish Swiss National Bank. Chris Turner GBP: Week culminates in a 2Q GDP contraction Following last week's pretty bleak Bank of England meeting, the focus this week will be Friday's release of 2Q22 UK GDP data. The market is expecting a 0.2% quarter-on-quarter contraction, we are looking for -0.1% QoQ.  A contraction is widely priced because of the extra bank holiday in June, but weaker activity will highlight the BoE's call of the UK entering a recession in 4Q22 and contracting 2% over the five subsequent quarters. Sterling probably has not sold off more since investors do not quite know what to do with a reserve currency that will be backed by rates at 2.25% if we are correct with our BoE call for the September meeting. Given that the euro should remain soft, we are sticking with our original call from last Thursday that EUR/GBP may struggle to break above the 0.8450 area this week. Chris Turner CEE: Inflation strikes back, again A heavy calendar in the Central and Eastern Europe region is again led by inflation numbers. On Monday, we will see data from the labour market, foreign trade and industrial production in the Czech Republic. The monthly numbers show a slowdown in the economy, but we have also seen some positive surprises that reduce the risk of a technical recession in the second half of the year. Inflation in Hungary will be published on Tuesday. Peter Virovacz expects a further increase from 11.7% to 13.3% year-on-year, slightly above market expectations, also supported by tax changes. In the Czech Republic, inflation will be published on Wednesday. Again, we expect a new record at 18.5% YoY, well above market expectations, mainly due to the announced energy price hikes. On Thursday, we will see inflation in Romania. Valentin Tataru forecasts a drop in YoY terms from 15.1% to 14.6%, which would mark the first decline from the peak. On Friday, the current account in Poland and the Czech Republic will be published, we will see the final estimate of Polish inflation and the Czech National Bank will publish minutes. In the FX market, on the floating side of the CEE region, the Polish zloty and Hungarian forint have strengthened significantly in the past week and, as we mentioned on Wednesday, it is a bit too much for our liking. In both countries, market interest rate expectations have since fallen further, driving rate differentials to their lowest levels since mid-June in Hungary, and April in Poland. Moreover, Friday's US jobs report supported the dollar, which is also not playing into the region's hands. Thus, in our view, the only thing that saved the zloty and forint from losses at the end of last week was the positive market sentiment and risk-on mode. However, we expect both currencies to be weaker this week. We see the forint as more vulnerable, with our target at 399 EUR/HUF and the zloty at 4.75 EUR/PLN for the days ahead. The koruna is still liquidating short positions after Thursday's CNB meeting which made it clear that the end of FX intervention is not on the table. However, we expect the koruna to return to 24.60 EUR/CZK soon. The Romanian leu remained untouched after Friday's central bank meeting and is still enjoying its trip to stronger levels around 4.925 EUR/RON - a move that we think is temporary. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
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Look At This! FX: British Pound (GBP): Analysis Of GBP/USD - 08/08/22

InstaForex Analysis InstaForex Analysis 08.08.2022 15:07
Relevance up to 13:00 2022-08-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Good afternoon, dear traders! On the 1H chart, the GBP/USD pair declined to the 1.1933 level last Friday. A little later on Friday, the pair was trying to recover to the Fibonacci correction level of 523.6% - 1.2146. On Monday, the price lost steam. It is likely to resume a downward movement. I have determined a new downtrend corridor, which indicates the bearish sentiment. If the pair consolidates above it, it may rise to 1.2315. However, taking into account the economic reports of recent weeks, I believe that the bearish sentiment could persist for a long time. The fact is that traders have already priced in the sixth rate increase by the BoE. The pound sterling has been rapidly growing for several weeks. Many analysts attributed this rally to the upcoming rate hike by 0.50%. Follow us on Feedly However, the Fed also raised the benchmark rate by 0.75% a couple of weeks ago. Next month, it may hike it by 0.75% again for the third time in a row. Recently, some Fed officials have backed an increase in the key rate to 4% or even higher. Notably, at the beginning of the year, policymakers talked about the need to raise the interest rate to 3-3.25%. Thus, there could be more rate hikes in the near future. Inflation remains high despite aggressive tightening. The Fed has to wait until this indicator starts declining. Only after that, traders could expect rate cuts. As for now, the Fed is likely to maintain its hawkish stance. The US dollar has an excellent opportunity to advance versus the euro and the pound sterling. Last Friday, US economic reports turned out to be quite strong, which was bullish for the US dollar. Expectations of more rate hikes may also boost the greenback.     On the 4H chart, the pair performed a rebound from the Fibonacci correction level of 127.2% - 1.2250. It fell to 1.1980. If the price bounced off this level, it may grow to 1.2250. If it tumbles below 1.1980, it will open the way to the next Fibonacci level of 161.8% - 1.1709. There are no divergences in any indicators today. Commitments of Traders (COT):     The mood of the "Non-commercial" category of traders over the past week has become a little more bearish. The number of Long contracts decreased by 5,301 and the number of Short contracts dropped by 2,882. Thus, the general mood of traders remained bearish. The number of Short contracts still exceeds the number of Long ones by several times. Large retail traders continue to sell the pound sterling and their sentiment has not changed lately. The pound sterling has been growing for several weeks. However, COT reports show that it may resume its decline. Besides, an increase in long positions is rather modest to count on an uptrend. Economic calendar for US and UK: On Monday, the economic calendar for the UK and the US do not contain market-driving events. Thus, fundamental factors will not affect market sentiment. Outlook for GBP/USD and trading recommendations: I recommended opening short if the price drops below the upward corridor on the 1H chart with the prospect of a drop to 1.1933. It was also possible to sell the pound sterling after a pullback from the 1.2250 level on the 4H chart. It is better to open long positions if the price consolidates above the upward corridor on the 1H with the target level of 1.2315.   Read more: https://www.instaforex.eu/forex_analysis/318334
The OECD Warns That The Fight Against Inflation Will Take Time | Credit Suisse May Lose $1.6bn In Q4

GBP/USD Could Be Turned Upside Down Shortly As The Pair Is Ahead Of UK GDP Release

Kenny Fisher Kenny Fisher 09.08.2022 15:02
The British pound has posted slight gains today. GBP/USD is trading in the European session at 1.2106, up 0.21% on the day. The economic calendar has been light so far this week. On Capitol Hill, the Biden Administration racked up a badly-needed victory ahead of the mid-terms, passing a domestic spending bill which covers climate change, health costs, and corporate taxes. The bill has the interesting name of the Inflation Reduction Act. It would be great if that meant that US inflation, which hit 9.1% in June, must lower itself or else be in breach of the law, but I doubt that US lawmakers have such capabilities. We could see a reduction in inflation as soon as Wednesday, with the release of July’s inflation report. Headline CPI is expected to fall to 8.7%, down from 9.1%, while core CPI is forecast to rise to 6.1%, up from 5.9%. If the headline reading is higher than expected, it will put pressure on the Fed to raise rates by 0.75% in September and the dollar should respond with gains. Conversely, a soft reading from the headline or core releases would ease the pressure on the Fed and could send the dollar lower. BRC sends grim warning despite stronger retail sales In the UK, BRC Retail Sales rebounded with a gain of 1.6% YoY in July, after a 1.3% in June. The BRC noted that despite the positive release, retailers are struggling with falling sales volumes, as inflation has hit 9.1% and is expected to hit double-digits. The BRC added that consumer confidence remains weak and the rise in energy bills in October will worsen the cost of living crisis. The UK releases GDP for Q2 on Friday, and the markets are braced for a downturn. GDP is expected to slow to 2.8% YoY, down from 8.7% in Q1. On a quarterly basis, GDP is projected at -0.2%, following a 0.8% gain in Q1. If GDP is weaker than expected, a fall in the pound is a strong possibility. GBP/USD Technical GBP/USD is testing resistance at 1.2123. Next, there is resistance at 1.2241  There is support at 1.2061 and 1.1951 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound edges higher, markets eye US inflation - MarketPulseMarketPulse
Thursday's Bank's of England decision may be record-breaking!

GBP: Potential 2023 Rate Cut Affects British Pound, But Politics Is The Shaping Factors As Well

InstaForex Analysis InstaForex Analysis 10.08.2022 13:09
Relevance up to 09:00 2022-08-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results.   The British currency remains relatively calm this week, expecting, along with the US, a report on the consumer price index in America. An additional factor of pressure for the pound was the thunderclouds on the political horizon of the UK, due to the election of the prime minister. Markets are focused on the election race in the UK, the favorite of which is Liz Truss, the foreign secretary. She claims the place of Boris Johnson, who was forced by the Conservative Party to resign as prime minister and its leader. The important points of the election program of Truss were the rejection of family benefits and tax cuts for citizens. In addition, the Minister of Foreign Affairs proposed to limit the influence of the Bank of England on the country's economy. Many analysts assess the current political situation in the UK as a crisis, which is exacerbated by economic turmoil. Recall that last week, the BoE raised interest rates by 50%, but this had little effect on inflation in the country. It should be noted that the central bank began the fight against inflation in December 2021 and since then has systematically raised rates at each of the subsequent six meetings. As a result, by the beginning of the summer, inflation in the UK amounted to 9.4%. According to the BoE's forecasts, it will peak in October, soaring to 13.3%. Against this background, by the end of 2022, the UK economy will enter a recession that will last five quarters. However, many experts disagree with this view. Currency strategists at Oxford Economics assess the risks of a recession as small, despite the current instability. According to economists, in 2023 the key rate cut by the BoE is more likely. At the same time, the central bank's actions aimed at reducing rates are slowing down economic activity in the UK. Against this backdrop, the GBP is under tremendous pressure, risking to collapse, currency strategists at Societe Generale believe. At the end of July, the British currency showed growth, waiting for the Federal Reserve to abandon the overly aggressive tightening of the monetary policy. However, this did not happen. On the contrary, the US central bank is quite resolute, and it is supported by the hawkish mood of US officials. Against this background, the pound's recovery was interrupted, releasing the latter into free swimming on the waves of the financial market. The pound has slipped 10% against the dollar since the beginning of this year, placing it in the top three worst currencies among the G-10. The reason is the low pace of rate hikes by the BoE compared to the Fed's anticipatory actions. According to analysts at Societe Generale, in the near future, the pound will fall to its lowest level since the collapse at the beginning of the COVID-19 pandemic. Additional pressure on the pound is created by the BoE's recent announcement about a possible recession and growing expectations of another rise in interest rates in the US (by 75 bps). In such a situation, the pound may sink to 1.2000 and below. If the bearish trend for the pound continues, the GBP/USD pair will fall to 1.1400-1.2000, according to Societe Generale. The pair was close to 1.2100 on Tuesday, August 9 and even peaked at 1.2130, but failed to consolidate on these positions. The GBP/USD pair was trading in the range of 1.2069-1.2070 on Wednesday morning, August 10. At the same time, the greenback showed mixed dynamics, as market participants expect July reports on the US consumer price index.     According to updated forecasts for the British currency, in the short term it will maintain support against the US. However, the high likelihood of interest rate cuts by the BoE in 2023 is putting downward pressure on the pound. At the same time, according to analysts at Oxford Economics, in the near future the central bank will raise interest rates amid galloping inflation, thereby contributing to the pound's growth. However, in the long term, the BoE may revise the current monetary strategy, according to Oxford Economics. UK GDP data for the second quarter of 2022 will be released this Friday, August 12. According to preliminary estimates, this indicator is expected to slow down to 2.8% in annual terms. Against this background, pessimism dominates the markets. In addition, on a quarterly basis, GDP is projected at -0.2%. Earlier, an increase of 0.8% was recorded in the first quarter of 2022. If the current GDP turns out to be weaker than expected, then the pound's decline is inevitable. The pound may be supported by the dollar's retreat across the entire spectrum of the market. In such a situation, the pound is able to stay afloat. According to preliminary forecasts, in the third quarter of 2022, the GBP/USD pair will remain close to 1.2000 and may reach 1.2200, and by the first quarter of 2023 it will rise to 1.2300.   Read more: https://www.instaforex.eu/forex_analysis/318536
Podcast: The Weak Equity Market, Focus On Copper, The Euro Situation

What Can We Expect From GBP/USD? | The US Inflation Print Surprised, Could Fed Slowdown?

InstaForex Analysis InstaForex Analysis 11.08.2022 09:27
Relevance up to 19:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. According to the most optimistic forecasts, inflation in the United States should have decreased from 9.1% to 8.7%. Whereas the main forecast was based on its stability. But in fact, everything turned out to be completely different, as inflation slowed to 8.5%, which was a complete surprise, which eventually led to a sharp weakening of the dollar. And the reason is incredibly simple - since inflation is slowing down much faster than expected, the Federal Reserve may well reduce the pace of interest rate hikes. The main idea now is that in September the refinancing rate will be increased by only 50 basis points, and not 75 as previously expected. Inflation (United States):     The producer price index will be published today in the United States, which should not only confirm yesterday's inflation data, but also point to its further decline. The index may drop from 11.3% to 10.9%. Given that we are talking about a leading indicator for inflation, this will further convince the market that the US central bank will not raise interest rates so actively. Producer Price Index (United States):     However, everything related to interest rates is nothing but speculation and assumptions. And it is far from a fact that the latest inflation data will seriously affect something. Almost immediately after the publication of inflation data, Neil Kashkari, head of the Federal Reserve Bank of Minneapolis, commented on this issue. And according to him, the slowdown in inflation does not change anything. And as soon as the market comprehends his words, the dollar will begin to strengthen again. The British currency jumped in value by about 180 points against the US dollar in a speculative rally. As a result, the quote returned to the region of the local high of the current corrective move. The technical instrument RSI H1 and H4, due to a speculative jump, turned out to be within the overbought zone, which indicated an overheating of long positions. At this time, the RSI D1 indicator crossed the middle line 50 from the bottom up, which again indicated a signal about a change in trading interests. The MA moving lines on the Alligator H4 indicator have changed direction from the bottom up, which is in line with the recent price momentum. Alligator D1 has intersections between the MA lines, this signal indicates a slowdown in the downtrend. On the trading chart of the daily period, there is a corrective move in the structure of the downward trend. There is no signal of a change in the medium-term trend.     Expectations and prospects The price area 1.2250/1.2300 became resistance on the way of speculators, where there was a reduction in the volume of long positions. Due to the local overbought of the pound sterling in the short term, a rollback occurred on the market. In this situation, the level of 1.2155 can serve as a variable support, where the quote may come during a rollback. The upward scenario will be considered by traders after the regrouping of trading forces, in the form of a rollback. The primary signal to buy the pound may occur if the price returns above 1.2250. Complex indicator analysis in the short-term and intraday periods has a sell signal due to the rollback stage. Indicators in the medium term have a variable signal, due to a slowdown in the downtrend.   Read more: https://www.instaforex.eu/forex_analysis/318647
US Dollar (USD) Decreased After Core Inflation Release

US Dollar (USD) Decreased After Core Inflation Release

Jing Ren Jing Ren 11.08.2022 08:25
GBPUSD tests resistance The US dollar tumbled after a slowdown in core inflation in July. A bullish MA cross on the daily chart suggests an improvement in sentiment but the pound needs to consolidate its gains so a rebound could have solid foundations. The pair previously met stiff selling pressure at the daily resistance 1.2300. A bullish breakout would be a decisive moment as it would trigger a runaway rally to May’s high at 1.2660. 1.2130 at the base of the breakout is a key support and the psychological level of 1.2000 a critical floor. AUDUSD breaks higher The Australian dollar surged as the US counterpart’s weakness drove traders into riskier assets. After a brief pullback the pair bounced off the demand zone around 0.6870 right over the bullish MA cross on the daily chart. A break above the daily resistance at 0.7050 indicates the bulls’ willingness in pushing higher. 0.7130 is the next hurdle as the RSI went overbought. Its breach could pave the way for a rally to June’s high at 0.7270. The psychological level of 0.7000 is the first support and 0.6870 critical to keep the recovery intact. USOIL still under pressure WTI crude struggles as US output hits its highest level since April 2020. The price has been falling along the 20-day moving average, putting it at the risk of a bearish reversal. Short-term price action found some relief at 87.50 but the bears could be waiting to sell into strength. 94.00 has turned into a resistance after it failed to stop the bleeding. Selling could be expected from those looking to join the downtrend. 82.00 would be the target in case of a bearish breakout. The bulls need to clear 98.20 before they could attract attention.
Analysis Of Cable Market (GBP/USD) By Laurie Bailey

British Pound Was Supported By The US CPI, If GDP Disappoints GBP May Lose

Kenny Fisher Kenny Fisher 11.08.2022 22:15
The British pound is trading quietly today, after posting sharp gains on Wednesday. In the North American session, GBP/USD is trading at 1.2220, up 0.02% on the day. US inflation falls, dollar takes a tumble US inflation surprised on Wednesday, as both the CPI and the core CPI readings were lower than expected. Headline CPI dropped sharply to 8.5%, down from 9.1% in June and below the estimate of 8.7%. Core CPI remained steady at 5.9%, below the forecast of 6.1%. After months of inflation climbing higher, there was palpable relief in the markets as the headline reading finally broke the upward trend. The US dollar was roughed up, dropping sharply against the major currencies. GBP/USD rose an impressive 1.19% yesterday. The Federal Reserve is breathing easier as inflation has finally slowed, and it is more likely now than 24 hours ago that the Fed will ease up on rate hikes and deliver a 0.50% increase in September rather than a 0.75% hike. Nevertheless, it would be premature to declare that the inflation dragon has been slayed and the Fed will soon pivot with regard to rate policy. The inflation rate of 8.5%, although lower than last month, is still close to a four-decade high. Inflation fell chiefly due to a drop in gas prices, but with the volatility we are seeing in the oil markets, gasoline could quickly change directions. Perhaps most importantly, inflation remains broad-based; the core reading, which excludes food and energy costs, remained steady at 5.9%. Fed members left no doubt that despite the positive CPI report, more tightening was on the way. Minneapolis Fed President Kashkari said that the Fed was “far, far away from declaring victory” over inflation, and Chicago Fed President Evans said that inflation remained “unacceptably” high. With the Fed looking to increase the benchmark rate to 4% or higher by the end of 2023, there is plenty of shelf life remaining in the Fed’s rate-tightening cycle. In the UK, the week wraps up with Friday’s GDP report for Q2. The markets are bracing for a soft release – GDP is expected to slow to 2.8% YoY, down from 8.7% in Q1. On a quarterly basis, GDP is projected at -0.2%, following a 0.8% gain in Q1. The pound received a huge lift on Wednesday courtesy of US inflation. If GDP is weaker than expected, the pound will likely lose ground. GBP/USD Technical GBP/USD continues to test resistance at 1.2241. Next, there is resistance at 1.2361  There is support at 1.2123 and 1.2061 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound steady ahead of UK GDP - MarketPulseMarketPulse
Stock Markets Opened The Week Lower | Apple Seeing Losses

US Jobless Claims: Even More Than The Previous Year. PBOC Hopes CPI To Stay At 3%

Saxo Strategy Team Saxo Strategy Team 12.08.2022 09:03
Summary:  Another downside surprise in US inflation in the wake of lower energy prices lifted the equity markets initially overnight. However, sustained hawkishness from Fed speakers brought the yields higher, weighing on equities which closed nearly flat in the US. Crude oil prices made a strong recovery with the IEA boosting the global growth forecast for this year. EURUSD stayed above 1.0300 and will be eying the University of Michigan report today along with UK’s Q2 GDP. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  After rising well over 1% in early trading amid the weaker-than-expected PPI prints, U.S. equities wiped out gains and closed lower, S&P 500 -0.07%, Nasdaq 100 -0.65%. Energy stocks were biggest gainers, benefiting from a 2.6% rally in the price of WTI crude, Devon Energy (DVN:xnys) +7.3%, Marathon Oil (MRO:xnys) +7%, Schlumberger (SLB:xnys) +5.7%.  Consumer discretionary and technology were the biggest decliners on Thursday. Chinese ADRs gained, Nasdaq Golden Dragon Index climbed 2.6%.  U.S. treasuries bear steepened In spite of weaker-than-expected PPI data, U.S. long-end treasury yields soared, 10-year yields +10bps to 2.99%, 30-year yields +14bps to 3.17%. The rise in long-end yields were initially driven by large blocks of selling in the T-bond and Ultra-long contracts and exacerbated in the afternoon after a poor 30-year auction. The yield of 2-year treasury notes was unchanged and the 2-10-year yield curve steepened 10bps to minus 23bps.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland Chinese equities surged, Hang Seng Index +2.4%, CSI300 Index +2.0%. Northbound inflows into A shares jumped to a 2-month high of USD1.9 billion. In anticipation of a 15% rise in the average selling price of Apple’s iPhone 14 as conjectured by analysts, iPhone parts supplier stocks soared in both Hong Kong and mainland exchanges, Q Technology (01478:xhkg) +17.7%, Sunny Optical (02382:xhkg) +9%, Cowell E (01415:xhkg) +4%, Lingyi iTech (002600:xsec) +10%. China internet names rebounded, Alibaba (09988:xhkg) +4.3%, Tencent (00700:xhkg) +2.7%, Meituan (03690:xhkkg) +4.0%, Baidu (09888:xhkg) +5.2%. Power tool and floor care manufacturer, Techtronic Industries (00669:xhkg) soared nearly 11% after reporting  a 10% year-on-year growth in both revenues and net profits in 1H22. The company rolled out a new generation of drill drivers that have embedded with machine learning algorithm. After collapsing 16% in share price yesterday, Longfor (00960) managed to stabilize and recover 5.7% following the company’s refutation of market speculation that it had failed to repay commercial papers due. EURUSD re-tested resistance levels EURUSD reclaimed the key 1.0300 on Thursday amid a softer dollar, and printed highs of 1.0364. While weaker-than-expected inflation prints in the US this week have curtailed dollar strength, it is hard for EURUSD to sustain gains amid the energy crisis and European recession concerns. A break below 1.0250 would be needed for EURUSD to reverse the trend, however. AUDUSD, likewise, trades above 0.7100 amid the risk on tone, but a turn lower in equities could reverse the trend. GBPUSD has been more range-bound around 1.2200 ahead of the Q2 GDP data scheduled to be released today, and EURGBP may be ready to break above 0.8470 resistance if the numbers come out weaker-than-expected. Crude oil prices (CLU2 & LCOV2) Crude oil prices gained further on Thursday amid signs of softer inflation, weaker dollar and improving demand. The International Energy Agency (IEA) lifted its consumption estimate by 380 kb/d, saying soaring gas prices amid strong demand for electricity is driving utilities to switch to oil. This could be aided by lower gasoline prices, which have dented demand during the US driving season. Prices fell below USD4/gallon for the first time since March. Meanwhile, OPEC may struggle to raise output in coming months due to limited spare capacity. WTI futures touched $94/barrel while Brent futures rose towards the 100-mark.   What to consider? Another downside surprise in US inflation US July PPI dipped into negative territory to come in at -0.5% MoM, much cooler than 1% last month or the +0.2% expected. But on a YoY basis, PPI remains up a shocking 9.8%. Core PPI rose 0.4% MoM, which means on a YoY basis core producer prices are up 7.6% (lower than June's +8.2% but still near record highs). Goods PPI fell 1.8%, dominated by a 9.0% drop in energy. Meanwhile, services PPI was up 0.1% in July. Despite the slowdown in both PPI and CPI this week, PPI is still 1.3% points above CPI, suggesting margin pressures and a possible earnings recession. Fed’s Daly said she will be open to a 75bps rate hike at the September meeting. US jobless claims rise, University of Michigan ahead US initial jobless claims 262K vs 265K estimate, notably higher than the 248k the prior week and the highest since November 2021. The 4-week moving average of initial jobless claims increased to 252K vs 247.5K last week, but still below 350k levels that can cause an alarm. The modest pickup in claims suggests that turnover at weaker firms is increasing. Key data to watch today is the preliminary University of Michigan survey for August, where expectations are for a modest improvement given lower gasoline prices. China’s central bank expects CPI to hover around 3% In its 2nd quarter monetary policy report released on Wednesday, the People’s Bank of China (PBOC) expects the CPI being at around 3% for the full year of 2022 and at times exceeding 3%.  The release of pend-up demand from pandemic restrictions, the upturn of the hog-cycle, and imported inflation, in particular energy, are expected to drive consumer price inflation higher for the rest of the year in China but overall within the range acceptable by the central bank.  The PBOC expects the recent downtrend of the PPI to continue and the gap between the CPI and PPI growth rates to narrow. The PBOC reiterates that it will avoid excessive money printing to spur growth so as to safeguard against inflation.  China’s President Xi is said to be visiting Saudi Arabia next week The Guardian reports that President Xi Jinping is expected to visit Saudi Arabia on an invitation extended from Riyadh in March.  China has been eager to secure its oil supply and explore the possibility of getting its sellers to accept the renminbi to settle oil trade.   While relying on the United States for security in a volatile region and supplies of weapons, Saudi Arabia with Prince Mohammed being in charge is looking for leverage in the kingdom’s relationship with the United States.  UK Q2 GDP likely to show a contraction The Q2 GDP in the UK is likely to show a contraction after April was down 0.2% and May up 0.5%. June GDP is likely to have seen a larger contraction given less working days in the month, as well as constrained household spending as inflation surged to a fresh record high. While there may be a growth recovery in the near-term, the Bank of England clearly outlined a recession scenario from Q4 2022 and that would last for five quarters. Our Macro Strategist Chris Dembik has painted a rather pessimistic picture of the UK economy.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 12, 2022
Daniel Kostecki talks situation on cryptocurrency market

AUDUSD Is Sliding Down. AUDJPY Aims High!? GBPAUD Finally Have A Chance!

Kim Cramer Larsson Kim Cramer Larsson 12.08.2022 08:47
AUDUSD AUDUSD confirmed short-term uptrend yesterday breaking above 0.7069. RSI back above 60 indicating AUDUSD is likely to move higher towards resistance at 0.7283. AUDUSD could move higher from there after a likely correction. If closing above 0.76 AUDUSD could move toward peak at around 0.7660.To neutralise that scenario AUDUSD must move back below 0.7069. To reverse it AUDUSD must collapse to below 0.6865. Source: Saxo Group Weekly chart shows AUDUSD trading in a wide falling channel. A test of upper falling trendline is not unlikely, given that the above bullish scenario plays out. Source: Saxo Group AUDJPY AUDJPY is slowly crawling higher after the spike down below key support last week. AUDJPY is back above all Simple Moving averages and RSI is still showing positive sentiment indicating a test of the slightly falling upper trendline is likely. If AUDJPY breaks above the trendline and above resistance at 95.75 the pairs is likely to take out the peak in June at around 96.90. Source: Saxo Group GBPAUD GBPAUD is testing support at 1.7173 and seems likely to break bearish out of the range it has been trading in past 6 months. If AUDGBP closes below 1.7173 the pair is set for lower levels Source: Saxo Group Weekly chart shows that 01.7173 is a key support level rejecting GBPAUD several times. If GBPAUD finally breaks below the support a medium- to long-term move towards 1.60 area is in the cards.IF it fails to close below 1.7173 GBPAUD could resume its rangebound behaviour Source: Saxo Group Source: Technical Update - AUD pairs on the move testing or breaking resistance levels. AUDUSD , AUDJPY & GBPAUD
Thursday's Bank's of England decision may be record-breaking!

We're Going To Verify Bank's Of England Expectations. What Do We Expect From UK GDP Data?

Jing Ren Jing Ren 12.08.2022 10:05
After their last meeting, the BOE warned that 5 quarters of negative growth were coming. The consensus of expectations shows that there could be starting with data reports from tomorrow. There is an avalanche of data before the market opens, as is customary for the UK, but naturally GDP is likely to be the main focus, particularly given the context. The battle for leadership of the Tory party also continues, with whomever winning the vote in September becoming Prime Minister. The leader in the race so far, Liz Truss, has spoken repeatedly about intervening in the BOE to broaden its mandate. Many question whether this will hurt the bank's credibility. More importantly, a change in the mandate in the middle of an inflationary spiral could make things more difficult. On the other hand, one of the measures that Truss is proposing includes offering a rate outlook forecast, similar to the Fed's dot-plot matrix, which could help reassure markets. It's all about the trends Since many attributes are slowing economic growth, tightening monetary policy to fight inflation, how the BOE could react will also factor into the market's reaction to the data. If GDP is growing, then the BOE has more room to keep hiking. If GDP is starting to contract, then the presumption is that inflation will start to turn around, and the BOE will be less likely to tighten. In this context, the BOE's projection that inflation will peak at 13 sometime later in the year implies that policy will likely remain tight, even if there is a technical move to negative growth. Technical here usually means a couple of decimal points in the red, which, while not good, isn't the same as a full-blown recession such as 2020 or 2008. What to look out for There are three bits of data coming out, with different levels of importance to the market. In general, the "faster" the data, the more the market cares about it. By "faster" that means the most recent, shortest interval. So, in order of importance, we will likely have June, quarterly and annual GDP change figures. June monthly GDP is expected to show -1.3% growth compared to 0.5% prior. Monthly GDP is a lot more volatile thus it's easier to dismiss a large move. But for markets already sensitive to bad news, this could be interpreted as an acceleration to the downside in the near term. The other market moving points Quarterly GDP is likely to get the most attention, as it's expected to show -0.2% growth, compared to +0.8% in the prior quarter. If the forecast is met, that could be the first of negative growth of two needed to technically talk about a recession. But it's such a low margin, that a beat of just two decimals could have an important psychological impact on the markets as well. Annual GDP is projected to show 1.3% growth compared to 3.5% prior. While this on the surface appears to be a strong deceleration, this probably has more to do with comparables. Last year's spring was much better for the economy than the winter, which is why there is a bigger difference between Q1 and Q2. It's not as indicative of the move over the first half of this year, as of what happened last year.
GBP Performance Ahead Of UK GDP Release. US Dollar (USD) Is Supported By Pricing In Future Fed Decisions

GBP Performance Ahead Of UK GDP Release. US Dollar (USD) Is Supported By Pricing In Future Fed Decisions

Jing Ren Jing Ren 12.08.2022 09:41
USDJPY struggles for bids The US dollar consolidates as traders reassess future rate hike moves by the Fed. A bearish RSI divergence and MA cross on the daily chart suggest the start of a correction. A short-lived rebound came to a halt in the supply zone around 135.40 which coincides with the 20-day moving average. A follow-up break below 133.00 indicates that the path of least resistance could be down. 130.50 at the origin of a bullish breakout in June is a critical floor, its breach may extend losses to last May’s lows next to 126.90. EURGBP tests resistance Sterling treads water as the market expects a contraction in the UK’s Q2 GDP. The latest rebound came under pressure near the support-turned-resistance at 0.8470 which sits on the 30-day moving average. A bounce off 0.8410 showed solid interest in keeping the single currency afloat. A close above 0.8470 would send the pair to 0.8520 where a breakout could prompt more sellers to cover their bets, laying the groundwork for a rally to June’ highs next to 0.8580. 0.8410 is the first support in case of hesitation. SPX 500 pulls lower The S&P 500 falls back over concerns that inflation is yet to peak. Divergence between the 20 and 30-day moving averages indicates an acceleration to the upside. The current recovery may have gained traction after a break above June’s peak at 4200. Along with medium-term bears rushing to avoid a squeeze, momentum buying may continue to support the index. May’s high at 4300 would be the next target. An overbought RSI may cause a limited pullback, If this occurs, 4150 is a new support level.
The EUR/USD Pair Showed Local Speculative Interest In Short Positions Yesterday

Forex Market May Surprise Us Today! EUR/GBP May Rally, What GBP/USD Traders Have To Do To Make The Pair Increase?

InstaForex Analysis InstaForex Analysis 12.08.2022 12:17
Relevance up to 09:00 2022-08-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Although the US inflation data has been very encouraging lately, Fed officials said the central bank is unlikely to change its stance on interest rates this year and the next. Minneapolis Fed President Neil Kashkari noted that the benchmark rate could reach 3.9% by the end of this year and rise to 4.4% by the end of 2023.   Chicago Fed President Charles Evans had the same view, mentioning that although inflation eased, it is still unacceptably high. He said they will ensure that inflation returns to 2%. At the moment, inflation has fallen below estimates, prompting investors to lower bets that the Fed will go for another three-quarters of a percentage point rate hike in September. But San Francisco Fed President Mary Daly said in a recent speech that it is too early to declare victory in the central bank's fight against inflation, so it is likely that the Fed will still implement another 75 basis point hike in the next policy meeting.     In another note, the US released the latest data on jobless claims, which showed an increase for the second week in a row. It remained at the highest level since November, indicating continued moderation in the labor market, which is what the Federal Reserve is trying to achieve. Initial jobless claims rose by 14,000 to 262,000, slightly lower than the expected 265,000. The reason why jobless claims is on the rise is the layoffs and suspended hiring in companies, especially in the technology sector. Demand for new workers is also declining as the Federal Reserve raises interest rates. The four-week moving average, smoothing out the fluctuations, rose to 252,000. Another important report was the US producer price data, which unexpectedly fell in July due to lower energy prices. It dipped 0.5% from the previous month, but rose 9.8% from last year. There was also data on producer prices, which rose 0.2% from June and 7.6% from a year earlier. The numbers suggest that inflationary pressures are beginning to ease, which could eventually lead to a slowdown in consumer price growth.     In terms of the forex market, EUR/USD is trading above 1.0300 and has good chances for further growth. Consolidating beyond 1.0320 will give buyers an excellent chance to return to 1.0370, then go to 1.0430 and 1.0500. But if pressure returns around 1.0270, the pair could fall to 1.0230 and 1.0200. In GBP/USD, buyers need to stay above 1.2180 because only that can push the quote to 1.2220, 1.2260 and 1.2345. If pressure return around 1.280, the pair will fall to 1.2130 and 1.2100.   Read more: https://www.instaforex.eu/forex_analysis/318788
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

Yesterday GBP/USD Went Up Because Of Weaker US Dollar. Today Pound Has Been Hit By GDP

Kenny Fisher Kenny Fisher 12.08.2022 14:02
The British pound is in negative territory today, after a contraction in UK GDP. In the European session, GBP/USD is trading at 1.2126, down 0.61% on the day. British economy declines in Q2 The British pound posted dazzling gains on Wednesday, surging 1.19%. The impressive climb was, however, a case of US dollar weakness, rather than any newfound strength in the pound. Inflation in the US was unexpectedly weaker than forecast, which raised market hopes that the Fed will ease policy. This led to the US dollar being less attractive and the currency took a nasty spill against all the majors. Sterling hasn’t fared as well after the UK posted the second-quarter GDP report. The economy fell in July by -0.1% QoQ, following a 0.8% gain in June (-0.2% exp). On an annualized basis, GDP growth slowed to 2.9%, within expectations but sharply down from 8.7% in Q1. The outlook does not look good as we head towards winter, with UK households about to be hit with sharp increases in energy prices. Consumers are already struggling with a nasty cost of living crisis, and as they tighten the purse strings, the spectre of a recession will become that much more likely. Another key indicator, Manufacturing Production, came in at -1.6% MoM, down from a 1.7% gain in May (-1.8% exp). This was the fourth decline in five months, pointing to a worrying downtrend in manufacturing. The week wraps up with UoM Consumer Sentiment, a key confidence indicator. With the cost of living crisis in the US, it’s no surprise that the index has tumbled – falling from 65.7 in March to just 51.5 in June. This points to weak expansion, just above the neutral 50.0 line. The July forecast calls for a slight improvement to 52.5 points. GBP/USD Technical GBP/USD continues to test resistance at 1.2241. Next, there is resistance at 1.2361  There is support at 1.2123 and 1.2061 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP/USD slips on GDP, US confidence data next - MarketPulseMarketPulse
Japanese industrial production plunged 1.6%! ING expects Q3 GDP (Q/Q) rise will decrease to 0.5%

Japanese Yen (JPY) Rise. Energy Prices Are Finally Falling!?

John Hardy John Hardy 16.08.2022 10:05
Summary:  Weak data out of China overnight, together with a surprise rate cut from the PBOC and collapsing energy prices later on Monday saw the Japanese yen surging higher across the board. Indeed, the two key factors behind its descent to multi-decade lows earlier this year, rising yields and surging energy prices, have eased considerably since mid-June with only modest reaction from the yen thus far. Is that about to change? FX Trading focus: JPY finding sudden support on new disinflation narrative Weaker than expected Chinese data overnight brought a surprise rate cut from the Chinese central bank and seems to have sparked a broadening sell-off in commodities, which was boosted later by a crude oil drop of some five dollars per barrel on the news that Iran will decide by midnight tonight on whether to accept a new draft on the nuclear deal forward by the Euro zone. In response, the Chinese yuan has weakened toward the highs for the cycle in USDCNH, trading 6.78+ as of this writing and  (there was a spike high to 6.381 back in May but the exchange rate has been capped by 6.80 since then), but the Japanese yen is stealing the volatility and strength crown, surging sharply across the board and following up on the move lower inspired by the soft US CPI data point. US long yields easing considerably lower after an odd spike last Thursday are a further wind at the JPY’s back here. In the bigger picture, it has been rather remarkable that the firm retreat in global long-date yields since the mid-June peak and the oil price backing down a full 25% and more from the cycle highs didn’t do more to support the yen from the yield-spread angle (Bank of Japan’s YCC policy less toxic as yields fall) and from the current account angle for Japan. Interestingly, while the JPY has surged and taken USDJPY down several notches, the US dollar is rather firm elsewhere, with the focus more on selling pro-cyclical and commodity currencies on the possible implication that China may be content to export deflation by weakening its currency now that commodity prices have come down rather than on selling the US dollar due to any marking down of Fed expectations. Still, while the USD may remain a safe haven should JPY volatility be set to run amok across markets, the focus is far more on the latter as long as USDJPY is falling Chart: EURJPY As the JPY surges here, EURJPY is falling sharply again, largely tracking the trajectory of longer European sovereign yields, which never really rose much from their recent lows from a couple of weeks back, making it tough to understand the solid rally back above 138.00 of late. After peaking above 1.90% briefly in June, the German 10-year Bund, for example, is trading about 100 basis points lower and is not far from the cycle low daily close at 77 basis points. The EURJPY chart features a rather significant pivot area at 133.50, a prior major high back in late 2021 and the recent low and 200-day moving average back at the beginning of the month. After a brief JPY volatility scare in late July and into early August that faded, are we set for a second and bigger round here that takes USDJPY down through 130.00 and EURJPY likewise? A more significant rally in long US treasuries might be required to bring about a real JPY rampage. Source: Saxo Group The focus on weak Chinese data and key commodity prices like copper suddenly losing altitude after their recent rally has the Aussie shifting to the defensive just after it was showing strength late last week in sympathy with strong risk sentiment and those higher commodity prices. Is the AUDUSD break above 0.7000-25 set for a high octane reversal here? AUDJPY is worth a look as well after it managed to surge all the way back toward the top of the range before. The idea that a weak Chine might export deflation from here might be unsettling for Aussie bulls. The US macro data focus for the week is on today’s NAHB homebuilder’s survey, which plunged to a low since 2015 in June (not including the chaotic early 2020 pandemic breakout months), the July Housing Starts and Building Permits and then the July Retail Sales and FOMC minutes on Wednesday. With a massive relief in gasoline prices from the July spike high, it will be interesting to see whether the August US data picks up again on the services side. The preliminary August University of Michigan sentiment survey release on Friday showed expectations rising sharply by over 7 points from the lowest since-1980 lows of June, while the Present Situation measure dropped a few points back toward the cycle (and record) lows from May. Table: FX Board of G10 and CNH trend evolution and strength. The JPY is the real story today, but as our trending measures employ some averaging/smoothing, the move will need to stick what it has achieved today to show more. Watch out for a big shift in the commodity currencies in coming days as well if today’s move is the start of something. Elsewhere, the JPY comeback is merely taking CHF from strength to strength, although even the might franc has dropped against the JPY today. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs. Big momentum shift afoot today and watching whether this holds and the JPY pairs and pairs like AUDUSD and USDCAD to see if we are witnessing a major momentum shift in themes here. Also note NOK pairs like USDNOK and EURNOK here. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1400 – US Aug. NAHB Housing Market Index 0130 – Australia RBA Meeting Minutes Source: FX Update: JPY jumps on deflating energy prices, fresh retreat in yields.
Plenty Of Things To Discuss In The Market Insights Podcast By Oanda

Watch Out Forex Traders! EUR/USD May See Parity, US Dollar Stays Strong Amid Energy Market Realities, Canadian Dollar May Be Affected By CPI Release

ING Economics ING Economics 16.08.2022 11:17
The rise in gas prices around the world and how policymakers handle them is very much back in focus as terms of trade indices for the big importers hit new lows. Combining this theme with both the weakness in the Chinese renminbi and what should be a positive set of US events over the next 48 hours favours continued dollar strength Germany continues to suffer both with low water levels on the Rhine and now a gas levy for German consumers USD: All systems are go We see three factors that can keep the dollar strong near term and probably send it a little stronger. The first is the ongoing energy shock primarily being felt through natural gas prices. These prices continue to rise as importers compete for cargoes ahead of the northern hemisphere winter and the very uncertain supply situation. In financial markets, the cost of higher gas prices is born out in terms of trade indices. Energy importers such as Europe and large parts of Asia are seeing their terms of trade indices (export versus import prices) continuing to dive. These effectively represent a large negative income shock. The energy independence of the US leaves the dollar relatively insulated on this score. The second factor is the one we highlighted yesterday – the uncertainty as to whether the People's Bank of China (PBoC) will engineer another mini-devaluation in the renminbi as it searches for growth. The PBoC overnight fixed USD/CNY in line with model-based estimates. This is being read rather equivocally by markets as the PBoC is not actively encouraging speculation of a weaker renminbi, nor delivering a stern warning against yesterday's renminbi sell-off. USD/CNH is now trading through 6.80 and a move through 6.82/84 will certainly raise speculation of something larger afoot akin to the April/May 6% renminbi devaluation. That period saw the DXY dollar index up around 6% too. The final factor is the US economy and the Fed story. Today sees the release of July industrial production and tomorrow the release of retail sales. Our team sees better figures for both – largely helped by lower gasoline prices. The figures should temporarily allay US recession fears and prepare the markets for what could be a hawkish set of FOMC minutes tomorrow night. We agree with Padhraic Garvey's opinion piece that the Fed probably wants tighter financial conditions now – which implicitly include a firmer dollar. In all, we continue to prefer north American currencies, where last week we picked out the Mexican peso for some carry. The Canadian dollar also should remain supported on dips and today sees some July CPI data. This can shed light on whether the Bank of Canada hikes 50bp or 75bp on 7 September (59bp currently priced). Of the three, we would probably prefer slightly overweight US dollar positions since the risk environment could easily deteriorate again. 106.95/107.00 looks like the near-term target for DXY. In addition, please find the August edition of FX talking here and also some thoughts on where ESG issues interact with the FX market.  Chris Turner EUR: Grim As Carsten Brzeski noted yesterday, Germany continues to suffer both with low water levels on the Rhine and now a gas levy for German consumers. The gas levy could keep German inflation higher for longer and cause more headaches for the European Central Bank (ECB). The trade-weighted euro is a whisker away from the lows of the year and a slightly stronger dollar over the next 48 hours could easily see EUR/USD retesting parity. 1.0200 should now prove short-term resistance. In terms of data today, look out for German and eurozone investor expectations for August. These should remain near the lows despite a decent last month for European equities. Chris Turner GBP: You are not alone News that Germany will impose a gas levy – confirming that the government cannot fully shield households from the spike in gas prices – leaves the UK less of an outlier in Europe. This will be one of the factors helping to limit EUR/GBP gains and could actually favour a drift back to the 0.8390/8400 area. Today's July UK employment data is somewhat of a mixed bag for sterling. This showed a slight slowing in hiring but strong average earnings – the latter pointing to hoarding of staff. We think the data supports a 50bp Bank of England hike on 15 September (45bp currently priced). In all, EUR/GBP can soften a little, but a stronger dollar means that Cable can go sub 1.20 again. Chris Turner   CEE: Another painful day under the reign of the US dollar The strong US dollar quickly took back almost all of the CEE region's recent currency gains. However, the invisible hand of the market intervened in a different order than we had anticipated yesterday. While the Polish zloty lost the least and narrowly avoided 4.700 EUR/PLN, the Hungarian forint came under heavy sell-off, hit by the rating outlook downgrade from S&P. And the koruna returned halfway to CNB's intervention levels. In all three cases, we can expect more losses today, in our view. The regional calendar is almost empty and global conditions for CEE currencies have deteriorated again, led by a stronger US dollar. We continue to believe the zloty should head above 4.700 EUR/PLN, while the forint has lost too much in our view. It can be expected to remain out of the market's favour for some time due to the rating decision, but market conditions remain most favourable for the forint. This is the only currency in the region that can rely on a rising interest rate differential. Once the jitters over the rating outlook change subside, the forint could return to 396 EUR/HUF. Frantisek Taborsky Read this article on THINK TagsFX Daily Dollar CEE region Bank of England Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The UK Markets Remain Volatile, Possible Contraction Of The Eurozone Economy

British Pound (GBP) And Australian Dollar (AUD) May Fluctuate Shortly! Bank Of England And RBA Are Expected To Hike Rates!

Craig Erlam Craig Erlam 16.08.2022 13:17
European stock markets are a little positive on Tuesday following another mixed session in Asia while US futures are pointing marginally lower ahead of the open on Wall Street. It seems investors are gaining confidence amid a recovery in stock markets in recent weeks rather than feeling anxious about its sustainability against a worrying economic backdrop. I wonder how long that can last even if US inflation shows further signs of pulling back from the peak. Recessions around the world are coming and inflation is not falling fast enough. ​ Hard to see the positives in the UK data It’s no secret that the UK is facing a period of stagflation and recession and today’s jobs report highlighted just how grim the situation is becoming. Despite wages rising by 5.1% including bonuses in June, real wages when adjusted for inflation fell at their fastest pace on record while job vacancies fell for the first time in a couple of years. While the situation isn’t exactly dire yet, the path of travel is clear and the energy price cap increase in a couple of months is going to deliver another economic shock to the system. The jobs report today was oddly horrible in two ways. Falling real wages will make life much harder for many but headline wage growth (not adjusted for inflation) will force the BoE to continue hiking aggressively in order to prevent a wage-price spiral. Unemployment still remains extremely low but the BoE believes it will rise quite sharply over the next couple of years. The competitive nature of the labour market over the last couple of years may slow the process but for how long will depend on the severity of the downturn. I’m not sure the retail sales and inflation data over the next couple of days will make for easy reading either. Indian inflation eases but another 50 basis point hike is still possible Indian inflation fell a little faster than expected last month with a deceleration in food prices contributing to the decline. Other factors could continue to support a drop in inflation in the coming months such as declining oil prices and above-average inventories of finished goods. That said, there also remain significant upside risks into year-end and so the RBI will likely continue raising rates next month, it’s just a question of how aggressive it will be. The consensus appears to be 25 basis points but 50 will no doubt be on the table. RBA is not on a pre-set path The RBA minutes didn’t really contain any surprises, with the central bank reiterating its data-dependent stance, insisting that it is not on a pre-set path. Another 50 basis point hike is likely at the next meeting after similar moves at each of the last three meetings. With inflation expected to peak later this year, the central bank may consider moderating its hikes although that ultimately depends on how the data performs in the interim. Has rally run its course? Bitcoin is a little flat today after another failed run at $25,000 at the start of the week. It briefly broke above here but as has been the case for many days now, there was no momentum behind the rally so it quickly crumbled. Perhaps this is a sign that the two-month rally has run its course, at which point it’s just a question of whether we’re facing a correction or a test of the lows. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Too much optimism? - MarketPulseMarketPulse
A Strong Bearish Signal For The Equity Markets And A Significant Support Factor For Dollar (USD)

Dollar (USD) Comes Back? Latin America's Currencies Perfomance

Marc Chandler Marc Chandler 16.08.2022 10:58
The bullish dollar narrative was fairly straightforward  Yes, the US main challengers, China and Russia, have been hobbled in different ways by self-inflicted injuries. Still, the driver of the dollar was the expected aggressive tightening by the Federal Reserve. The market accepted that after being a bit slower than ideal (though faster and before many other large central banks), the Fed would move forcefully against inflation, even if it diminished the chances of an economic soft-landing.   However, now the market seems to have a different reaction function  The euro was impressively resilient after the job growth of more than twice expectations. However, the softer than expected US CPI sent the dollar broadly lower, inflicting some apparent technical damage to the charts.  We are reluctant to chase the dollar lower and impressed in a week that the US reported a decline in CPI and PPI that the 10-year bond yield closed a few basis points higher and the first back-to-back weekly increase in two months Technically, it seems that the dollar's pullback, nearly a month-old, move is getting maybe getting stretched. We will try to identify levels that could confirm another leg lower and what would suggest the US dollar may snap back.   Dollar Index:   After reaching almost 107.00 after the stronger than expected jobs data, the Dollar Index fell to almost 104.65 in response to the softer than expected CPI. It was the lowest level since the end of June. The MACD is still falling but oversold. The Slow Stochastic looks poised to turn lower from the middle of the range. Nevertheless, we like it higher in the coming days. We target 106.30 and then 107.00. A move above 107.50 could signal a return to the highs near 109.30 from mid-July. That said, a close below 105.00 would boost the risk of another leg lower.  Euro:  The euro rallied strongly after the softer US CPI, but a key trendline drawn off the February, March, and June highs begins the new week near $1.0375 remains unchallenged. Although the momentum indicators allow for additional gains, we look for the euro to push lower in the coming days. Only a move above the trendline would give it new life. We think the greater likelihood is for the single currency to initially ease toward $1.0180-$1.0200. It may take a break of $1.01 to signal a return to the 20-year low set in mid-July near $0.9950. The US two-year premium over Germany narrowed every day last week for a cumulative 11 bp to near 2.66%. Italy's premium over Germany was trimmed by six basis points. It was the third week of convergence, but at 0.75%, it is still nearly twice what it was in June. Japanese Yen:  The greenback was pushed away from JPY135 by the decline in US rates after the CPI figures. It was sold to about JPY131.75, holding above the month's low set on August 2 near JPY130.40. However, US rates closed firmer on the week despite three softer-than-expected price reports (CPI, PPI, and import/export prices). As a result, the greenback looks poised to test the JPY135.00-50 ceiling. A move above JPY136 would target the JPY137.50 area. We have emphasized the strong correlation between changes in the exchange rate and the US 10-year yield. That correlation is off its highs though still above 0.50, while the correlation with the US two-year yield has risen toward 0.65, the highest in five months.  British Pound:   Sterling rose to $1.2275 in the broad US dollar sell-off in the middle of last week. It stalled in front of the high set on August 2, a little shy of $1.23. This sets up a potential double top formation with a neckline at $1.20. A break would re-target the two-year low set in July near $1.1760. The MACD is set to turn down. The Slow Stochastic is going sideways in the middle of the range after pulling back earlier this month. Sentiment seems poor, and in the week ahead, the UK is expected to report some easing in the labor market, accelerating consumer prices, and another decline in retail sales. Canadian Dollar:   The US dollar fell to near a two-month low last week slightly below CAD1.2730, and slipped through the 200-day moving average on an intraday basis for the first time since June 9. The test of the (61.8%) retracement of this year's rally (early April low ~CAD1.2400 and the mid-July high ~CAD1.3225) found near CAD1.2715 was successful. The US dollar recovered ahead of the weekend back to the CAD1.2800 area. Although the momentum indicators give room for further US dollar losses, we suspect a near-term low is in place and look for an upside correction toward CAD1.2850-CAD1.2900. The Canadian dollar remains sensitive to the immediate risk environment reflected in the change in the S&P 500. The correlation over the past 30 sessions is a little better than 0.60. The correlation reached a two-year high in June near 0.80. The exchange rate's correlation (30 sessions) with oil prices (WTI) set this year's high in early August near 0.60. It is now slightly below 0.50.  Australian Dollar:   Although our bias is for the US dollar to correct higher, the Aussie does not line up quite as well. It broke above the high set at the start of the month near $0.7050 and has held above it. However, its surge stalled slightly above $0.7135, and it consolidated in a narrow range around $0.7100 ahead of the weekend. The momentum indicators are constructive. The main hurdle is the 200-day moving average near $0.7150 and the (50%) retracement of this year's decline (~$0.7660 in early April and ~$6680 in mid-July) found near $0.7170. A break of this area could see a return to the June high by $0.7285.   Mexican Peso:   Latin American currencies had a good week, except for the Argentine peso, which fell by more than 1%, for the dubious honor of being the poorest performer in the emerging markets. Led by Chile (+3.9%) and the Colombian peso (3.8%), Latam currencies accounted for half of the top five performers last week. The peso's 2.7% gain was its best in five months, and the dollar was sold a little through MXN19.85, its lowest level since late June when it reached almost MXN19.82.There seems little to prevent a move toward MXN19.50. Any worries that AMLO's appointments to the central bank would block aggressive tightening of monetary policy must have evaporated as Banxico demonstrated a resolve to hike rates and shadow the US.  Chinese Yuan:   The yuan took a step lower from mid-April until mid-May. Since then, it has been trading within the range more or less seen in the second half of May. That dollar range is roughly CNY6.650 to CNY6.77. For the past month, the dollar has traded between CNY6.72 and CNY6.78, fraying the upper end of the broader range after the greenback surged broadly after the US employment data. Policymakers have signaled concern about inflation and its reluctance to ease monetary policy. It would seem the domestic policy efforts might favor a firm yuan.     Disclaimer   Source: Is the Dollar's Month-Long Pullback Over?
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

Pound recovers losses after jobs report

Kenny Fisher Kenny Fisher 16.08.2022 22:55
The British pound remains under pressure. In the North American session, GBP/USD is trading at 1.2055, unchanged the day. The pound fell as low as 1.2007 in the Asian session, just above the symbolic 1.20 line. UK wage growth remains high The economic outlook in the UK is grim and today’s employment report didn’t bring any cheer. Unemployment claims continue to fall and the labour market remains strong, but wage growth indicates trouble. Wages dropped to 5.1% in June, down from 6.4% in May. However, real wages (adjusted for inflation) actually fell by 3% in Q2 on an annualized basis, a new record. The cost of living is thus increasing at an even faster rate and is far outpacing wage growth. The headline wage growth reading of 5.1%, which is not adjusted for inflation, may have fallen, but still remains high and will likely force the BoE to continue hiking aggressively. The BoE has forecast that inflation will hit a staggering 13% this year, and the last thing it needs to contend with is a wage-price spiral, which could entrench inflation. The markets won’t have much time to dwell on the employment numbers, with the inflation report being released on Wednesday. Headline CPI is expected to accelerate to 9.8% in July, up from 9.4% in June. If inflation pushes higher than the estimate, it could be a nasty day for the pound. The Federal Reserve continues to send out the message that its rate hikes are far from over as the battle against inflation will continue for some time yet. The markets expect the Fed to raise rates to a peak in a range of 3.50% – 3.75%, well above the current benchmark rate of 2.50%. Despite this hawkish stance, the financial markets don’t seem to be listening. US equity markets have been rising, while the US dollar, which should be benefitting from a hawkish Fed, is struggling. The lower-than-expected July inflation report of 8.5% raised risk sentiment and sent the dollar tumbling. If inflation resumes its upward trend in August, risk appetite could evaporate and the dollar might have the last laugh. . GBP/USD Technical  GBP/USD is testing support at 1.2030. Below, there is support at 1.1925 There is resistance at 1.2153 and 1.2258   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound recovers losses after jobs report - MarketPulseMarketPulse
Technical analysis recommendations on EUR/USD and GBP/USD for August 19, 2022

Aussie stabilizes after slide

Kenny Fisher Kenny Fisher 16.08.2022 22:57
The Australian dollar is steady today, after a massive 1.40% decline on Monday. In the North American session, AUD/USD is trading at 0.7015, down 0.10% on the day. Aussie volatility continues For those looking for volatility, the Australian dollar should fit the bill. AUD/USD jumped 150 points last Wednesday and briefly pushed above the 0.7100 level for the first time since June 10th. The pair reversed sharply on Monday, falling 100 points. With Australia releasing wage growth on Wednesday and employment data on Thursday, we could see further volatility from the Aussie. Wage growth for Q2 YoY is expected to rise to 2.7%, up from 2.4% prior. There were no surprises from the RBA minutes, with the RBA repeating that its stance would be data-dependent and that there was no pre-set path for rate increases. The RBA has delivered three consecutive hikes of 50 basis points, bringing the cash rate to 1.85%. The markets are expecting another 50bp hike at the September meeting and have priced in a rate peak of 3.25% before the end of the year, which could mean rate hikes at the remaining four meetings in 2022. The RBA is in an aggressive mode due to red-hot inflation, which hit 6.1% in Q2, its highest level since 2001. The labour market remains strong, but the cost of living crisis and rising mortgage rates continue to hammer Australian households. Will domestic demand, a key driver of the economy, hold up? The RBA minutes noted that “the behaviour of household spending continued to present a key source of uncertainty for the outlook.” If domestic demand does not weaken, the RBA will be in a position to continue raising rates, and RBA officials will be closely monitoring household spending and confidence indicators. The Federal Reserve continues to send out a hawkish message that the battle against inflation is far from over and the rate hikes will continue. The markets expect the Fed to raise rates to a peak in a range of 3.50% – 3.75%, well above the current benchmark rate of 2.50%. Despite this consistent message from the Feds, the financial markets don’t seem to be listening. The lower-than-expected July inflation report of 8.5% raised risk sentiment and sent the dollar tumbling. If inflation resumes its upward trend in August, risk appetite could evaporate and the US dollar could bounce back. . AUD/USD Technical There is resistance at 0.7053, followed by a monthly resistance line at 0.7122 AUD/USD has support at 0.6968 and 0.6902 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Aussie stabilizes after slide - MarketPulseMarketPulse
The Price Of Cable Market (GBP/USD) Is Able To Reach The First Target Level

FX: GBP/USD - British Pound (GBP) To US Dollar (USD) - Forecast - 17/08/22

InstaForex Analysis InstaForex Analysis 17.08.2022 10:25
Relevance up to 04:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The pound slowed down corrective growth at the target level of 1.2100. If the price does not settle above it, then we are waiting for a reversal with the development of support for the MACD line of the daily scale in the area of 1.1965. Further, the 1.1800 target may open.     A large layer of inflation indicators for July will be released in the UK today. The core CPI is expected to rise from 5.8% y/y to 5.9% y/y, while the overall CPI could rise from 9.4% y/y to 9.8% y/y. Only a slight weakening is expected in producer prices - their selling prices may show an increase of 16.2% y/y against 16.5% y/y a month earlier. Thus, the option with the pound's growth is possible, we will consider its details on the four-hour chart.     Growth is limited by the MACD indicator line on the H4 chart, approximately at the level of 1.2170. At the current moment, the signal line of the Marlin Oscillator is turning down from the border with the territory of the growing trend. Therefore, consolidating under 1.2100 will resume the price decline in its main direction. First target at 1.1965.   Read more: https://www.instaforex.eu/forex_analysis/319100
According to ING, US Producer Price Index may mean that inflation could decrease earlier

GBP/USD - Selling And Buying - Possible Scenarios - 17/08/22

InstaForex Analysis InstaForex Analysis 17.08.2022 13:07
Relevance up to 08:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Analysts of positions and tips for trading GBP The first test of 1.2032 occurred at a time when the MACD had just started to move down from the zero level. It gave a good entry point for short positions. Unfortunately, a sell signal did not last long. After dropping by 15 pips, the pressure on the pound sterling decreased. Closer to the middle of the day, a similar sell signal appeared, which also led to a downward movement of about 15 pips. The pound/dollar pair rose sharply in the afternoon. The test of 1.2090, where I advised selling immediately for a rebound, gave a sell signal. However, the signal did not bring the expected result.     The pound sterling declined slightly in the first half of the day following labor market data. However, the pair avoided a new big sell-off thanks to a sharp increase in average weekly earnings. After the release of the US housing market report, the pound/dollar pair asserted strength, signaling a trend reversal. Today, in the morning, the UK Consumer Price Index and the UK Retail Price Index will be in the spotlight. If these indicators climb higher, which is likely, the pound sterling will face strong bearish pressure. It will limit the upward potential of the pair. In this case, I would advise you to act according to scenario No. 2 for opening short positions. In the afternoon, there will be more crucial economic reports, namely US retail sales data. If the reading drops, it is likely to undermine a rally of the US dollar in the short term. A negative figure will indicate an impending recession. The publication of the FOMC meeting minutes will shed light on the Fed's future plans for monetary policy in the autumn. If there are hints at less aggressive rate hikes, it could fuel demand for risky assets. Fed official Michelle Bowman will deliver a speech today, however, traders are likely to ignore it. Buy signal Scenario No.1: it is recommended to open long positions on the pound sterling today if the price reaches 1.2125 (green line on the chart) with the prospect of a rise to 1.2176 (thicker green line on the chart). At the 1.2176 level, I recommend closing all long positions and opening short ones, keeping in mind a correction of 30-35 pips from the given level. The par may advance significantly only if UK inflation data is positive. Important! Before opening long positions, make sure that the MACD indicator is above the zero level and it has just started to rise from it. Scenario No.2: it is also possible to buy the pound sterling today if the price approaches 1.2096. At this moment, the MACD indicator should be in the oversold area, which will limit the downward potential. It may also trigger an upward reversal of the market. The pair is expected to lift up to the opposite levels of 1.2125 and 1.2176. Sell signal Scenario No.1: it is recommended to open short positions if the pair hits 1.2096 (the red line on the chart). It could lead to a rapid decline in the pair. The bears should focus on the 1.2051 level. At this level, it is better to close all short positions and open long ones, keeping in mind a correction of 20-25 pips from the given level. The pressure on the pound sterling may return if the UK CPI index rises. Important! Before opening short positions, make sure that the MACD indicator is below the zero level and it has just started to decline from it. Scenario No.2: it is also possible to sell the pound sterling today if the price drops to 1.2125. At that moment, the MACD indicator should be in the overbought area, which will limit the upward potential of the pair. It may also trigger a downward reversal. The pair is projected to edge lower to the opposite levels of 1.2096 and 1.2051.     What is on the chart: The thin green line is the entry point where you can buy the trading instrument. The thick green line is the estimated price where you can place a Take profit order or lock in profits manually as the price is unlikely to rise above this level. The thin red line is the entry point where you can sell the trading instrument. The thick red line is the estimated price where you can place a Take profit order or lock in profits manually as the price is unlikely to decline below this level. The MACD indicator. When entering the market, it is important to pay attention to overbought and oversold zones. Important. Novice traders need to make very careful decisions when entering the market. Before the release of important fundamental reports, it is better to stay out of the market. It will help you avoid losses due to sharp price fluctuations. If you decide to trade during the news release, always place Stop loss orders to minimize losses. Without placing Stop loss orders, you can lose the entire deposit very quickly, especially if you do not use money management but trade in large volumes. Remember that for successful trading it is necessary to have a clear trading plan, following the example of the one I presented above. Relying on spontaneous decisions based on the current market situation is a losing strategy of an intraday trader.   Read more: https://www.instaforex.eu/forex_analysis/319128
The Uptrend Of The Cable Market (GBP/USD) Is Officially Canceled

Forex: British Pound To US Dollar (GBP/USD) - Hot Forecast - 17/08/22

InstaForex Analysis InstaForex Analysis 17.08.2022 13:29
Relevance up to 19:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. It was expected that the growth rate of industrial production in the United States will slow down from 4.2% to 4.0%, which should have been the reason for a slight rebound. In principle, everything happened just like that, and the pound strengthened its positions a bit. Only now the data turned out to be slightly worse than forecasts. Previous results were revised down to 4.0%. And the growth rates themselves slowed down to 3.9%. Industrial production (United States):     Today, the pound will continue to grow, already due to data on inflation in the UK, which should accelerate from 9.4% to 9.9%. Such a strong rise in inflation will convince market participants that the Bank of England will not only continue to raise interest rates, but will do so more actively. This alone is enough for the steady growth of the British currency. Inflation (UK):     At the same time, the pound's growth will obviously be of a protracted nature, as it will be supported by data on retail sales in the United States. And their growth rates should slow down from 8.4% to 8.1%. So we are talking about a decrease in consumer activity, which is the main locomotive of the American economy. Retail Sales (United States):     The GBPUSD currency pair rebounded from the psychological level of 1.2000 with surgical precision. As a result, there was an increase in the volume of long positions, which caused the pound to strengthen by about 100 points. The technical instrument RSI H4 crossed the 50 middle line upwards at the time of the rollback, which indicates a slowdown in the downward cycle from the resistance level of 1.2300. Alligator H4 has an intersection between the green and red MA moving lines. In this case, this crossover corresponds to a slowdown in the downward cycle. While Alligator D1 has a lot of crossovers, which indicates a slowdown in the medium-term downward trend.     Expectations and prospects The rollback stage may well slow down the move around 1.2120/1.2150. In this case, there will be a gradual increase in the volume of short positions, returning the quote to the psychological level of 1.2000. The scenario of prolongation of the current rollback will be considered if the price stays above the value of 1.2160 in a four-hour period. Comprehensive indicator analysis in the short-term and intraday periods has a buy signal due to the rollback stage. Indicators in the medium term have a variable signal, due to a slowdown in the downward trend.   Read more: https://www.instaforex.eu/forex_analysis/319112
The Technical Factors Speak In Favor Of The Pound's (GBP) Growth

GBP May Skyrocket In Autumn! September's Bank's Of England Decision - ING Economics Forecasts 50bp Rate Hike

ING Economics ING Economics 17.08.2022 14:33
Eyewatering increases in household energy bills between now and next April mean inflation is likely to head above 12% from October. But core inflation might have peaked - or is close to peaking - now that goods price pressures are easing. We expect another 50bp rate hike from the Bank of England in September   UK inflation has gone above 10% for the first time since 1980, and indeed both headline and core CPI measures came in above expectations. A lot of that surprise can be traced back to a huge 2.2% month-on-month increase in food prices (in the case of headline CPI) and a sizable increase in various housing costs (in the case of core). Next month, headline inflation looks set to dip back below 10% on a near-7% fall in average petrol/diesel prices, which came too late to affect the July figures. But as everyone knows, that’s only a temporary reprieve with a 75% increase in the household energy cap on its way in October. While it’s not totally clear yet how the Office for National Statistics will treat the government’s £400 discount for household bills, this increase in electricity/gas costs looks set to take inflation above 12% later this year. UK inflation set to head above 12% Source: Macrobond, ING   Plugging the latest wholesale gas and electricity costs into the regulator’s spreadsheet, we estimate that the average household bill will have risen from roughly £2000 currently, to £3500 in October, before heading to roughly £4500 in January and above £5000 in April next year. That latter figure is £1000 higher than it was when we ran these figures at the end of July and reflects a further abrupt rise in gas prices over recent weeks. Those sequential increases mean that inflation is likely to hover around (or a bit above) 12% from October through to about February. Thereafter the energy impact will gradually dissipate and in fact, by 2024, inflation is likely to be a bit below the Bank of England’s 2% target – assuming that energy prices do indeed begin to gradually edge lower from mid-2023. What matters more for policymakers are signs of persistence in the inflation numbers. And once food and energy costs are stripped out, core inflation looks like it might have peaked – or is close. Goods price pressures look set to ease over coming months now that commodity costs have fallen and the insatiable demand for ‘stuff’ seen through the pandemic has faded, and retailers are reporting they have more inventory. Used car prices, which were one of the most extreme examples of pandemic-related goods inflation, have fallen 7% since January. What matters more for policymakers are signs of persistence in the inflation numbers Instead, it is wage pressures that will heavily influence the Bank of England’s decision-making over coming months. As we discussed yesterday, wages (at least in nominal terms) have decent momentum right now, but there’s a lot of uncertainty over how far labour demand is falling, and how much labour supply is improving. In the near term, skill shortages remain a big issue for companies For now, we expect another 50bp rate hike in September. We wouldn’t rule out another hike in November, though this heavily depends on the fiscal response from the new prime minister in September. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Cable Market May Continue To Trade In A Very Volatile Manner

British Pound (GBP) To US Dollar (USD) - Is FX Cable Dominated By Bears? 1 GBP To USD - Technical Analysis | 18/08/22

InstaForex Analysis InstaForex Analysis 18.08.2022 11:53
Relevance up to 10:00 2022-08-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The GBP/USD pair is still under the bearish pressure and recently fell to two week's low at the level of 1.1994 (at the time of writing the analysis). Any sustained violation of the level of 1.2003 will likely result in another down wave towards the level of 1.1933 and below. The momentum is weak and negative already at the H4 time frame chart, so the bearish dominance is obvious. Please keep an eye on the trend line breakout/bounce (thick orange line on the chart) as the price action around the line will give us more clues regarding the down move strength. The larger time frame trend (daily and weekly) remains down until further notice.     Weekly Pivot Points: WR3 - 1.2206 WR2 - 1.2156 WR1 - 1.2141 Weekly Pivot - 1.2123 WS1 - 1.2099 WS2 - 1.2082 WS3 - 1.2040 Trading Outlook: The Cable is way below 100 and 200 DMA , so the bearish domination is clear and there is no indication of down trend termination or reversal. The bulls are now trying to start the corrective cycle after a big Bullish Engulfing candlestick pattern was made on the weekly time frame chart, however there is no visible progress here yet. The next long term target for bears is seen at the level of 1.1410. Please remember: trend is your friend.   Read more: https://www.instaforex.eu/forex_analysis/289042
The Technical Factors Speak In Favor Of The Pound's (GBP) Growth

Forex: GBP/USD (British Pound To US Dollar) - Friday May Be A Turbulent Day For This Pair!

Kenny Fisher Kenny Fisher 18.08.2022 20:24
The British pound continues to lose ground and has fallen below the 1.20 line for the first time since July 26th. GBP/USD is trading at 1.1996 in the North American session, down 0.47%. Pound eyes UK retail sales It has been a busy economic calendar in the UK this week. Retail sales will wrap things up on Friday, with the markets bracing for more bad news from the consumer spending front. Retail Sales fell 5.8% YoY in June, and the forecast for July stands at -3.3%. A continuing decline in consumer spending shouldn’t be a surprise, given the grim economic picture. Headline inflation rose to 10.1% YoY in July, up from 9.4% in June and above the forecast of 9.8%. The BoE has been raising interest rates in an effort to curb inflation, but don’t hold your breath. The central bank has warned that it doesn’t expect inflation to peak before it hits a staggering 13% in October. As well, real wages fell 3% in Q2, making it even harder for workers to keep up with the cost-of-living crisis, and the energy price cap will increase substantially in October. The British consumer is trying to ease the pain by cutting back on spending, but this will hurt the economy and could cause the economy to tip into a recession even faster. The FOMC minutes on Wednesday didn’t contain anything unexpected. The minutes reiterated that monetary tightening would continue until inflation eased significantly. Meeting participants noted that the pace of rate hikes would ease once inflation cooled down. They also said that inflation is not showing signs of peaking. The markets do not appear to have absorbed this hawkish message, with the surprise drop in US inflation resulting in the markets expecting a U-turn in Fed policy. This has led to gains in the equity markets and a downward trend for the US dollar. . GBP/USD Technical  GBP/USD is testing support at 1.2030. Below, there is support at 1.1925 There is resistance at 1.2153 and 1.2258 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. British dips below 1.20, retail sales next - MarketPulseMarketPulse
The Bank Of England (BoE) Chasing The Inflation. Forex: GBPUSD, CNHJPY, EURUSD And Others

The Bank Of England (BoE) Chasing The Inflation. Forex: GBPUSD, CNHJPY, EURUSD And Others

John Hardy John Hardy 19.08.2022 13:41
Summary:  The USD is breaking higher still, with important levels falling versus the Euro and yen yesterday. But the pain in sterling is most intense as presaged by the lack of a response to surging UK rates. Can the Bank of England do anything but continue to chase inflation from behind, caught between the Scylla of inflation and the Charybdis of a vicious recession? Also, USDCNH lurks at the top of the range ahead of another PBOC rate announcement on Monday. FX Trading focus: USD wrecking ball swinging again. UK faced with classic ugly choice between taking the pain via inflation or a severe recession The US dollar strength has picked up further after yesterday saw the breakdown in EURUSD below 1.0100 and a shot through 135.50 in USDJPY as longer US yields pushed to local highs. GBPUSD has been a bigger move on sterling weakness as discussed below.  A bit of resilient US data (especially the lower jobless claims than expected and a sharp revision lower of the prior week’s data taking the momentum out of the rising trend) has helped support the USD higher as longer US yields rose a bit further, taking the 10-year US treasury yield benchmark to new local highs, although we really need to see 3.00% achieved there after a few recent teases higher with no follow through higher. Looking forward to next week, the market will have to mull whether it has been too aggressive in pricing the Fed to pivot policy next year on disinflation and an easy-landing for the economy. The steady drumbeat of Fed pushback against the market’s complacency, together with a few of the recent data points (ISM Services, nonfarm payrolls, yesterday’s claims, etc.) has seen some of the conviction easing. But the key test will come next Friday, when Fed Chair Powell is set to speak on the same day we get the July PCE inflation data. Keep USDCNH on the radar through the end of today on the risk of an upside break above the range and Monday as the PBOC is set for a rate announcement (consensus expectations or another 10 bps of easing).   Chart: GBPUSD Lots at stake for sterling as discussed below, as it is a bit scary to see a currency weaken sharply despite a massive ratcheting higher in rate expectations from the central bank. The fall of 1.2000 has set in motion a focus on the 1.1760 cycle low, with an aggravated USD rise here and tightening of global financial conditions possibly quickly bringing the spike low toward 1.1500 from the early 2020 pandemic outbreak panic into focus. It is worth noting that the lowest monthly closing level for GBPUSD since the mid-1980’s is 1.2156. Without something dramatic to push back against USD strength next week from Jackson Hole, it is hard to see how this month may set the new low water mark for monthly closes. Source: Saxo Group GBPUSD slipped below 1.1900 this morning after breaking below the psychologically important 1.2000 level yesterday. As noted in the prior update, it’s remarkable to see the marked weakness in sterling despite the marking taking UK short rates sharply higher – with 2-year UK swaps over 100 basis points higher from the lows early this month. The Bank of England has expressed a determination to get ahead of the inflation spike and the market has priced in a bit more than a 50-basis-points-per-meeting pace for the three remaining BoE meetings of 2022. But is that sufficient given the UK’s structural short-comings and external deficits? Currency weakness risks adding further to spike in inflation this year. The BoE can take a couple of approaches in response: continue with the 50 bps hikes while bemoaning the backdrop and trotting out the expectation that eventually, economic weakness and easing commodity prices will feed through to drop inflation back into the range. Or, the BoE can actually get serious and super-size hikes even beyond the acceleration the market has priced, at the risk of bringing forward and increasing the severity of the coming recession. Until this week, the BoE’s anticipated tightening trajectory had prevented an aggravated weakness in sterling in broader terms, but the currency’s weakness despite a massive mark-up of BoE expectations has ratcheted the pressure on sterling and the BoE’s response to an entirely new level. Turkey shocked with a fresh rate cut yesterday of 100 basis points to take the policy rate to 13.00%. This with year-on-year inflation in Turkey at 79.6% and PPI at 144.6%, and housing measured at 160.6%. The move took USDTRY above 18.00, though it was a modest move relative to the size of the surprise. Turkish central bank chief Kavcioglu said that the bank would also look to “further strengthen macroprudential policy” by addressing the yawning difference between the policy rate and the rate commercial banks are charging for loans (more than double the official policy rate), as the push is to continue a credit-stimulated approach, inflation-be-darned.   Table: FX Board of G10 and CNH trend evolution and strength Note: a new color scheme for the FX Board! Besides changing the green for positive readings to a more pleasant blue, I have altered the settings such that trend readings don’t receive a more intense red or blue coloring until they have reached more significant levels – starting at an absolute value of 4 or higher. So far, most of the drama in sterling is the lack of a response to shifts in the UK yield curve, the broad negative momentum has only shifted a bit here, but watching for the risk of more. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs AUDNZD is crossing back higher, AUDCAD back lower, so NZDCAD….yep. Note the CNHJPY – if CNH is to make more waves, need to see more CNH weakness in an isolated sense, not just v. a strong USD. And speaking of a strong USD, the last holdouts in reversing, USDNOK and USDCHF, are on the cusp of a reversal. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1230 – Canada Jun. Retail Sales 1300 – US Fed’s Barkin (Non-voter) to speak   Source: FX Update: USD surging again, GBP spinning into abyss
OANDA Senior Market Analyst Craig Erlam Talks Recent Important Market Events

Forex: GBP/USD - Technical Analysis - British Pound To US Dollar

InstaForex Analysis InstaForex Analysis 19.08.2022 13:44
Relevance up to 12:00 2022-08-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Overview : GBP/USD : The bias remains bearish in the nearest term testing 1.1800 or lower. Immediate support is seen around 1.1800. A clear break below that area could lead price to the neutral zone in the nearest term. Price will test 1.1800, because in general, we remain bearish on August 19h, 2022. The GBP/USD pair continues moving downwards from the level of 1.1921 this morning. Today, the first resistance level is currently seen at 1.1921, the price is moving in a bearish channel now. The market moved from its top at 1.2056 and continued to drop towards the top of 1.2056. Today, on the one-hour chart, the current fall will remain within a framework of correction. If the trend breaks the double bottom level of 1.1850, the pair is likely to move downwards continuing the development of a bearish trend to the level of 1.1800 in order to test the weekly support 1. So, the support stands at the level of 1.1850, while daily resistance is found at 1.1921. Therefore, the market is likely to show signs of a bearish trend around the spot of 1.1921. However, if the pair fails to pass through the level of 1.1921 (first resistance), the market will indicate a bearish opportunity below the strong resistance level of 1.1921 (the level of 1.1921 coincides with tha ratio of 00% Fibonacci retracement, bottom price, last bearish wave). Since there is nothing new in this market, it is not bullish yet. Sell deals are recommended below the level of 1.1921 with the first target at 1.1800 and continue towards 1.1750 so as to test the second support at the same time frame. According to the previous events the price is expected to remain between 1.1921 and 1.1750 levels. Sell-deals are recommended below the price of 1.1921 with the first target seen at 1.1850. The movement is likely to resume to the point 1.1800. The descending movement is likely to begin from the level 1.1850 with 1.1800 and 1.1750 seen as new targets in coing hours. This would suggest a bearish market because the RSI indicator is still in a negative area and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 1.1750 in order to test the second support (1.1750). On the other hand, if the GBP/USD pair fails to break through the weekly pivot point level of 1.2056 today, the market will move upwards continuing the development of the bullish trend to the level 1.2275 (double top) for next month.   Read more: https://www.instaforex.eu/forex_analysis/289242
Latam FX Outlook 2023: Brazil's Local Currency Bonds Can Be Very Attractive

Mexican Gold - Peso Is Climbing High. Russia Is Building Nuclear Plant In Turkey!?

Marc Chandler Marc Chandler 19.08.2022 14:26
Overview:  The dollar is on fire. It is rising against all the major currencies and cutting through key technical levels like a hot knife in butter. The Canadian dollar is the strongest of the majors this week, which often outperforms on the crosses in a strong US dollar environment. It is off 1.5% this week. The New Zealand dollar, where the RBNZ hiked rates this week by 50 bp, is off the most with a 3.5% drop. Emerging market currencies are mostly lower on the day and week as well. The JP Morgan Emerging Market Currency Index is off for the fifth consecutive session, and ahead of the Latam open, it is off 2.1% this week. Asia Pacific equities were mostly lower, and Europe’s is off around 0.4%. It was flat for the week coming into today. US futures are lower, and the S&P and NASDAQ look poised to snap its four-week advance. Gold, which began the week near $1800 is testing support near $1750 now. Next support is seen around $1744.50. October WTI is consolidating in the upper end of yesterday’s range, which briefly poked above $91. Initial support is pegged near $88. US natgas is softer for the third successive session, but near $9.04 is up about 3.2% for the week. Europe’s benchmark is up 1.7% and brings this week’s gain to almost 20%. Demand concerns weigh on iron ore. It was off marginally today, its fifth loss in six sessions. It tumbled 8.8% this week after a 1.15% gain last week. Copper is up fractionally after rising 1.3% yesterday. September wheat is trying to stabilize. It fell more than 4% yesterday, its fifth loss in a row. It is off around 8.5% this week. Asia Pacific Japan's July CPI continued to rise  Th headline now stands at 2.6%, up from 2.4% in June, up from 0.8% at the start of the year and -0.3% a year ago. The core measure that excludes fresh food accelerated from 2.2% to 2.4%. It is the fourth consecutive month above the 2% target. Excluding both fresh food and energy, Japan's inflation is less than half the headline rate at 1.2%. It was at -0.7% at the end of last year and did not turn positive until April. The BOJ's next meeting is September 22, and despite the uptick in inflation, Governor Kuroda is unlikely to be impressed. Without wage growth, he argues, inflation will prove transitory. With global bond yields rising again, the 10-year, the market may be gearing up to re-challenge the BOJ's 0.25% cap. The yield is finishing the week near 0.20%, its highest since late July. Separately, we note that after divesting foreign bonds in recent months, Japanese investors have returned to the buy side. They have bought foreign bonds for the past four weeks, according to Ministry of Finance data. Last week's JPY1.15 trillion purchases (~$8.5 bln) were the most since last September.  China surprised the markets to begin the week with a 10 bp reduction in the benchmark 1-year medium-term lending facility rate  It now stands at 2.75%. It was the first cut since January, which itself was the first reduction since April 2020. Before markets open Monday, China is expected to announce a 10 bp decline in the 1- and 5-year loan prime rates. That would bring them to 3.60% and 4.35%, respectively. These rates are seen closer to market rates, but the large banks that contribute the quotes are state-owned. There is some speculation that a larger cut in the 5-year rate. The one-year rate was cut in January, but the 5-year rate was cut by 15 bp in May. The dollar is rising against the yen for the fourth consecutive session  It has now surpassed the JPY137.00 area that marks the (61.8%) retracement of the decline from the 24-year high set-in mid-July near JPY139.40. There may be some resistance in the JPY137.00-25 area, but a retest on the previous high looks likely in the period ahead. The Australian dollar is off for the fifth consecutive session and this week's loss of 3% offset last week's gain of as similar magnitude and, if sustained, would be the largest weekly decline since September 2020. The Aussie began the week near $0.7125 and recorded a low today slightly below $0.6890. The $0.6855-70 area is seen as the next that may offer technical support. The PBOC set the dollar's reference rate at CNY6.8065 (median in Bloomberg's survey was CNY6.9856). The fix was the lowest for the yuan (strongest for the dollar) since September 2020. Yesterday's high was almost CNY6.7960 and today's low was a little above CNY6.8030. To put the price action in perspective, note that the dollar is approaching the (61.8%) retracement of the yuan's rise from mid-2020 (~CNY7.1780) to this year's low set in March (~CNY6.3065). The retracement is found around CNY6.8250. Europe UK retail sales surprised to the upside but are offering sterling little support  Retail sales including gasoline rose by 0.3% in July. It is the second gain of the year and the most since last October. Excluding auto fuel, retail sales rose by 0.4%, following a 0.2% gain in June. It is the first back-to-back gain since March and April 2021. Sales online surged 4.8% as discounts and promotions drew demand, and internet retailers accounted for 26.3% of all retail sales. Separately, consumer confidence, measured by GfK, slipped lower (-44 from -41), a new record low. Sterling is lower for the third consecutive session and six of the past seven sessions. The swaps market continues to price in a 50 bp rate hike next month and about a 1-in-5 chance of a 75 bp move. Nearly every press report discussing next month's Italian elections cited the fascist roots of the Brothers of Italy, which looks likely to lead the next government  Meloni, who heads up the Brothers of Italy and has outmaneuvered many of her rivals, and may be Italy's next prime minister, plays the roots down. She compares the Brothers of Italy to the Tory Party in the UK, the Likud in Israel, and the Republican Party in the US. The party has evolved, and the center-right alliance she leads no longer wants to leave the EU, it is pro-NATO, and condemns Russia's invasion of Ukraine. The center-right alliance may come close to having a sufficient majority in both chambers to make possible constitutional reform. High on that agenda appears to transform the presidency into a directly elected office. The Italian presidency has limited power under the current configuration, but it has been an important stabilizing factor in crisis. Ironically, the president, picked by parliament, stepped in during the European debt crisis and gave Monti the opportunity to form a technocrat government after Berlusconi was forced to resign in 2011. Fast-forward a decade, a government led by the Conte and the Five Star Movement collapsed and a different Italian president gave Draghi a chance to put together a government. It almost last a year-and-half. Its collapse set the stage for next month's election. The center-left is in disarray and its inability to forge a broad coalition greases the path for Meloni and Co. Italy's 10-year premium over German is at 2.25%, a new high for the month. Last month, it peaked near 2.40%. The two-year premium is wider for the sixth consecutive session. It is near 0.93%, more than twice what it was before the Draghi government collapsed. Some critics argue against the social sciences being science because of the difficulty in conducting experiments  Still an experiment is unfolding front of us. What happens when a central bank completely loses its independence and follows dubious economic logic?  With inflation at more than two decades highs and the currency near record lows, Turkey's central bank surprised everyone by cutting its benchmark rate 100 bp to 13% yesterday. Governor Kavcioglu hinted this was a one-off as it was preempting a possible slowdown in manufacturing. Even though President Erdogan promised in June rates would fall, some observers link the rate cut to the increase in reserves (~$15 bln) recently from Russia, who is building a nuclear plant in Turkey. The decline in oil prices may also help ease pressure on Turkey's inflation and trade deficit. The lira fell to new record-lows against the dollar. The lira is off about 7.5% this quarter and about 26.4% year-to-date. Significant technical damage has been inflicted on the euro and sterling  The euro was sold through the (61.8%) retracement objective of the runup since the mid-July two-decade low near $0.9950. That retracement area (~$1.0110) now offers resistance, and the single currency has not been above $1.01 today. We had suspected the upside correction was over, but the pace of the euro's retreat surprises. There is little from a technical perspective preventing a test on the previous lows. Yesterday, sterling took out the neckline of a potential double top we have been monitoring at $1.20. It is being sold in the European morning and has clipped the $1.1870 area. The low set-in mid-July was near $1.1760, and this is the next obvious target and roughly corresponds to the measuring objective of the double top.  America With no dissents at the Fed to last month's 75 bp hike, one might be forgiven for thinking that there are no more doves  Yet, as we argued even before Minneapolis Fed President Kashkari, once regarded as a leading dove, admitted that his dot in June was the most aggressive at 3.90% for year-end, hawk and dove are more meaningful within a context. Kashkari may be more an activist that either a hawk or dove. Daly, the San Francisco Fed President does not vote this year, suggested that a Fed funds target "a little" over 3% this year would be appropriate. She said she favored a 50 bp or a 75 bp move. The current target range is 2.25%-2.50%. and the median dot in June saw a 3.25%-3.50% year-end target. St. Louis Fed President Bullard says he favors another 75 bp hike next month. No surprise there. George, the Kansas, Fed President, dissented against the 75 bp hike in June seemingly because of the messaging around it, but it's tough to call her vote for a 50 bp hike dovish. She voted for the 75 bp move in July. She recognizes the need for additional hikes, and the issue is about the pace. George did not rule out a 75 bp hike while cautioning that policy operates on a lag. Barkin, the Richmond Fed President, also does not vote this year. He is the only scheduled Fed speaker today.  The odds of a 75 bp in September is virtually unchanged from the end of last week around a 50/50 proposition.  The October Fed funds implies a 2.945% average effective Fed funds rate. The actual effective rate has been rocksteady this month at 2.33%. So, the October contract is pricing in 61 bp, which is the 50 bp (done deal) and 11 of the next 25 bp or 44% chance of a 75 hike instead of a half-point move. Next week's Jackson Hole conference will give Fed officials, and especially Chair Powell an opportunity to push back against the premature easing of financial conditions  The better-than-expected Philadelphia Fed survey helps neutralize the dismal Empire State manufacturing survey. The median from Bloomberg's survey looked for improvement to -5 from -12.3. Instead, it was reported at 6.2. Orders jumped almost 20 points to -5.1 and the improvement in delivery times points to the continued normalization of supply chains. Disappointingly, however, the measure of six-month expectations remained negative for the third consecutive month. Still, the plans for hiring and capex improved and the news on prices were encouraging. Prices paid fell to their lowest since the end of 2020 (energy?) and prices received were the lowest since February 2021. The Fed also asked about the CPI outlook. The median sees it at 6% next year down from 6.5% in May. The projected rate over the next 10-years slipped to 3%. Canada and Mexico report June retail sales today  Lift by rising prices, Canada's retail sales have posted an average monthly gain this year of 1.5%. However, after a dramatic 2.2% increase in May, Canadian retail sales are expected (median in Bloomberg' survey) to rise by a modest 0.4%. Excluding autos, retail sales may have held up better. Economists look for a 0.9% increase after a 1.9% rise in May. Through the first five months of the year, Mexico's retail sales have risen by a little more than 0.5% a month. They have risen by a 5.2% year-over-year. Economists expected retail sales to have slowed to a crawl in June and see the year-over-year pace easing to 5.0%. The greenback rose the CAD1.2935 area that had capped it in the first half of the week. It settled near CAD1.2950 yesterday and is pushing closer to CAD 1.2980 now. Above here, immediate potential extends toward CAD1.3035. The US dollar is gaining for the third consecutive session against the Canadian dollar, the longest advancing streak in a couple of months. Support is seen in the CAD1.2940-50 area. The Mexican peso is on its backfoot, and is falling for the fourth session, which ended a six-day rally. The dollar has met out first target near MXN20.20 and is approaching the 20-day moving average (~MXN20.2375). Above there, the next technical target is MXN20.32. The broader dollar gains suggest it may rise above the 200-day moving average against the Brazilian real (~BRL5.2040) and the (38.2%) of the slide since the late July high (~BRL5.5140) that is found near BRL5.2185.    Disclaimer   Source: The Dollar is on Fire
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

FTSE on verge of crash as institutional interest in UK equities fades

InstaForex Analysis InstaForex Analysis 19.08.2022 17:43
Relevance up to 15:00 2022-08-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   The UK is now facing multiple problems: the cost-of-living crisis, political chaos, and labor strikes. Now, the country's blue-chip index and the only bright spot in the economy, the FTSE 100, is under threat as well. The index gained about 1.6% since the beginning of 2022, beating a 13% drop for the Euro Stoxx 50 thanks to its big exposure to value segments such as energy, miners, and banks. These segments of the economy have advanced as the economy began to broadly move away from growth. The FTSE 100 is also under threat from dimming prospects for commodities. The index rose by about 7% from its mid-July low, compared to gains of about 9% for the Euro Stoxx 50, 16% for the S&P 500 and 20% for the Nasdaq 100.     "We are beginning to see institutional interest in UK equities fade," said Daniel Gerard, senior multi asset strategist at State Street Global Markets. Gerard stated that the outlook for energy would likely fall, and that the tailwinds from rates to currency weakness from the first half of 2022 were unlikely to propel the index further. The latest survey of fund managers by Bank of America Corp. shows a similar trend. Even though the UK stock market is the market of choice for European investors, allocation to British stocks among global fund managers dropped to a net 15% underweight in August from 4% in July. For comparison, investors in the eurozone are a net 34% underweight. At the same time, fund managers have a net 10% overweight for US stocks. Even though the index is still considered to be "attractively valued" Alan Dobbie, co-manager of the Rathbone Income Fund, said he sees a "clear market consensus expecting central banks to be forced into a pivot away from their aggressive tightening programmes." As a result, investors could shift to more longer-duration growth sectors such as technology. The FTSE 100 has very few such companies.   On the other hand, the UK market still enjoys support from several positive fundamental factors: market participants get more than two-thirds of sales from outside the UK. This shields them from the country's economic and political headwinds. "Companies that are not exposed to the domestic UK economy – that have global presence – are good places to hide out from the storm," Swetha Ramachandran, an equities investment manager at GAM, said. The UK's domestic stocks remain under pressure, however. The FTSE 250, the UK's midcap stocks index, could lose 14% in 2022. The weaker pound has added to surging costs, while spiraling inflation has fueled concerns that consumers will limit spending. "While so far earnings have held up better than expected, the market is concerned this will get a lot worse," Tineke Frikkee, head of UK research at Waverton Investment Management, noted.   Read more: https://www.instaforex.eu/forex_analysis/319431
Technical analysis recommendations on EUR/USD and GBP/USD for August 19, 2022

Technical analysis recommendations on EUR/USD and GBP/USD for August 19, 2022

InstaForex Analysis InstaForex Analysis 19.08.2022 17:51
Relevance up to 12:00 2022-08-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. EUR/USD     Higher timeframes After two days of deceleration and uncertainty, bears again showed activity and continued to decline, closing the previous day below the golden cross on the daily chart (1.0111). The current task is to eliminate the daily cross, then the bears' attention will be to overcome the important historical support of 1.0000 and restore the downward trend of most higher timeframes (0.9952 minimum extreme). If bullish sentiment returns to the market, the next important resistances have accumulated now in the area of 1.0188 - 1.0219 (daily cross).     H4 – H1 The main advantage on the lower timeframes now belongs to the bears. However, there has been a slight corrective deceleration in recent hours. The main reference points for the development of an upward correction today are the key levels, located at 1.0120 (central pivot point of the day) and 1.0172 (weekly long-term trend). If the decline continues, classical pivot points (1.0046 – 1.0007 – 0.9933) can provide support. In addition, the target for the breakout of the H4 cloud (1.0055 – 1.0020) also belongs to intraday targets. *** GBP/USD     Higher timeframes Sellers yesterday managed to cope with the supports that held back the development of the movement 1.2000 (psychological level) - 1.2026 (daily medium-term trend) - 1.2046 (weekly short-term trend) and closed the day much lower. The current benchmark in this direction is the minimum extremum (1.1759), its update will allow restoring the downward trend of the higher timeframes.     H4 – H1 On lower timeframes, we observe the development of a downward trend. The first support for classic pivot points (1.1873) is currently being tested. The next supports are at 1.1819 (S2) and 1.1716 (S3). The key levels are now acting as resistance, therefore, in the event of a correction, they will meet bulls at the levels of 1.1976 (the central pivot point) – 1.2052 (weekly long-term trend). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Read more: https://www.instaforex.eu/forex_analysis/319405
Technical Outlook Of The EUR/USD Pair By Oscar Ton

Everyone Is Dissapointed In Euro (EUR). Japanese Officials Have To Face Discontests From Yields Rise

Marc Chandler Marc Chandler 21.08.2022 23:14
For many, this will be the last week of the summer. However, in an unusual twist of the calendar, the US August employment report will be released on September 2, the end of the following week, rather than after the US Labor Day holiday (September 5).   The main economic report of the week ahead will be the preliminary estimate of the August PMI  The policy implications are not as obvious as they may seem. For example, in July, the eurozone composite PMI slipped below the 50 boom/bust level for the first time since February 2021. It was the third consecutive decline. Bloomberg's monthly survey of economists picked up a cut in Q3 GDP forecasts to 0.1% from 0.2% and a contraction of 0.2% in Q4 (previously 0.2% growth). Over the past week, the swaps market has moved from around 80% sure of a 50 bp hike next month to a nearly 20% chance it will lift the deposit rate by 75 bp.  The UK's composite PMI fell in three of the four months through July  However, at 52.1, it remains above the boom/bust level, though it is the weakest since February 2021. The Bank of England's latest forecasts are more pessimistic than the market. It projects the economy will contract by 1.5% next year and another 0.3% in 2024. It has CPI peaking later this year at around 13% before falling to 5.5% in 2023 and 1.5% in 2024. Market expectations have turned more hawkish for the BOE too. A week ago, the swap market was pricing in a nearly 90% chance of another 50 bp hike. After the CPI jump reported in the middle of last week, the market fully priced in the 50 bp move and a nearly 30% chance of a 75 bp hike.   Japanese officials have successfully turned back market pressure that had driven the benchmark three-month implied volatility to 14% in mid-June, more than twice as high as it was at the start of the year  It slipped below 10% in recent days. The BOJ was forced to vigorously defend its 0.25% cap on the 10-year bond. It has spent the better part of the past three weeks below 0.20%. The BOJ has not had to spend a single yen on its defense since the end of June. However, with the jump in global yields (US 10-year yield rose 20 bp last week, the German Bund 33 bp, and the 10-year UK Gilt nearly 40 bp) and the weakness of the yen, the BOJ is likely to be challenged again.   The economy remains challenging  The composite PMI fell to 50.2 in July from 53.2 in June. It is the weakest reading since February. It has averaged 50.4 through July this year. The average for the first seven months last year was 49.0. The government is working on some support measures aimed at extending the efforts to cushion the blow of higher energy and food prices. Japan's Q2 GDP deflator was minus 0.4%, which was half of the median forecast in Bloomberg's survey, but it shows the tough bind of policy. Consider that the July CPI rose to 2.6%, and the core measure, which the BOJ targets, excludes fresh food, rose to 2.4% from 2.2%. The target is 2%, and it was the third month above it. Tokyo will report its August CPI figures at the end of the week.   Australia's flash PMI may be more influential as the futures market is nearly evenly split between a 25 bp hike and a 50 bp move at the September 6 central bank meeting  The minutes from the RBA's meeting earlier this month underscored its data dependency. However, this is about the pace of the move. The target rate is currently at 1.85%, and the futures market is near 3.15% for the end of the year, well beyond the 2.5% that the central bank sees as neutral. The weakness of China's economy may dent the positive terms-of-trade shock. The Melbourne Institute measure of consumer inflation expectations fell in August for the second month but at 5.9%, is still too high.  Through the statistical quirkiness of GDP-math, the US economy contracted in the first two quarters of the year  A larger trade deficit did not help, but the real problem was inventories. In fairness, more of the nominal growth resulted from higher prices than economists expected rather than underlying activity. Still, it does appear that the US economy is expanding this quarter, and the high-frequency data will help investors and economists assess the magnitude. While surveys are helpful, the upcoming real sector data include durable goods orders (and shipments, which feed into GDP models), July personal income and consumption figures, the July goods trade balance, and wholesale and retail inventories.   Consumption still drives more than 2/3 of the economy, and like retail sales, personal consumption expenditures are reported in nominal terms, which means that they are inflated by rising prices  However, the PCE deflator is expected to slow dramatically. After jumping 1% in June, the headline deflator is expected to increase by 0.1%. This will allow the year-over-year rate to slow slightly (~6.5% from 6.8%). The core deflator is forecast (median, Bloomberg's survey) to rise by 0.4%, which given the base effect, could see the smallest of declines in the year-over-year rate that stood at 4.8% in June. Given the Fed's revealed preferences when it cited the CPI rise in the decision in June to hike by 75 bp instead of 50 bp, the CPI has stolen the PCE deflator's thunder, even though the Fed targets the PCE deflator. Real consumption was flat in Q2, and Q3 is likely to have begun on firmer footing.   The softer than expected CPI, PPI, and import/export prices spurred the market into downgrading the chances of a 75 bp hike by the Fed next month  After the stronger than expected jobs growth, the Fed funds futures priced in a little better than a 75% chance of a 75 bp hike. It has been mostly hovering in the 40%-45% range most of last week but finished near 55%. It is becoming a habit for the market to read the Fed dovishly even though it is engaged in a more aggressive course than the markets anticipated. This market bias warns of the risk of a market reversal after Powell speaks on August 26.   At the end of last year, the Fed funds futures anticipated a target rate of about 0.80% at the end of this year. Now it says 3.50%. The pace of quantitative tightening is more than expected and will double starting next month. There is also the tightening provided by the dollar's appreciation. For example, at the end of 2021, the median forecast in Bloomberg's survey saw the euro finishing this year at $1.15. Now the median sees the euro at $1.04 at the end of December. And even this may prove too high.    The FOMC minutes from last month's meeting recognized two risks. The first was that the Fed would tighten too much. Monetary policy impacts with a lag, which also acknowledges that soft-landing is difficult to achieve. The market initially focused on this risk as is its wont. However, the Fed also recognized the risk of inflation becoming entrenched and characterized this risk as "significant." The Jackson Hole confab (August 25-27) will allow the Fed to help steer investors and businesses between Scylla and Charybdis.  Critics jumped all over Fed Chair Powell's claim that the Fed funds target is now in the area the officials regard as neutral. This was not a forecast by the Chair, but merely a description of the long-term target rate understood as neither stimulating nor restricting the economy. In June, all but three Fed officials saw the long-term rate between 2.25% and 2.50%. To put that in perspective, recall that in December 2019, the median view of the long-term target was 2.50%. Eleven of the 18 Fed officials put their "dot" between 2.25% and 2.50%. The FOMC minutes were clear that a restrictive stance is necessary, and the Fed clearly signaled additional rate hikes are required. The discussions at Jackson Hole may clarify what the neutral rate means.  Barring a significant downside surprise, we expect the Fed will deliver its third consecutive 75 bp increase next month. The strength and breadth of the jobs growth while price pressures remain too high and financial conditions have eased encourages the Fed to move as fast as the market allows. However, before it meets, several important high-frequency data points will be revealed, including a few employment measures, the August nonfarm payroll report, and CPI.   The market is also having second thoughts about a rate cut next year  At the end of July, the implied yield of the December 2023 Fed funds futures was 50 bp below the implied yield of the December 2022 contract. It settled last week at near an 8 bp discount. This reflects a growing belief that the Fed will hike rates in Q1 23. The March 2023 contract's implied yield has risen from less than five basis points more than the December 2022 contract to more than  20 bp above it at the end of last week.   Let's turn to the individual currency pairs, put last week's price action into the larger context, and assess the dollar's technical condition  We correctly anticipated the end of the dollar's pullback that began in mid-July, but the power for the bounce surprises. Key technical levels have been surpassed, warning that the greenback will likely retest the July highs.   Dollar Index: DXY surged by more than 2.3% last week, its biggest weekly advance since March 2020. The momentum indicators are constructive and not over-extended. However, it closed well above the upper Bollinger Band (two standard deviations above the 20-day moving average), found near 107.70. Little stands in the way of a test on the mid-July high set around 109.30. Above there, the 110-111.30 area beckons. While the 107.50 area may offer some support now, a stronger floor may be found closer to 107.00.   Euro:  The euro was turned back from the $1.0365-70 area on August 10-11 and put in a low near $1.0030 ahead of the weekend. The five-day moving average slipped below the 20-day moving average for the first time in around 3.5 weeks. The MACD is trending lower, while the Slow Stochastic did not confirm the recent high, leaving a bearish divergence in its wake. The only caution comes from the euro's push through the lower Bollinger Band (~$1.0070). Initially, parity may hold, but the risk is a retest on the mid-July $0.9950 low. A convincing break could target the $0.96-$0.97 area. As the euro has retreated, the US two-year premium over Germany has trended lower. It has fallen more than 30 bp since peaking on August 5. We find that the rate differential often peaks before the dollar.   Japanese Yen: The dollar will begin the new week with a four-day advance against the yen in tow. It has surpassed the (61.8%) retracement objective of the pullback since the mid-July high (~JPY139.40) found near JPY136.00. The momentum indicators are constructive, and the five-day moving average has crossed above the 20-day for the first time since late July. It tested the lower band of the next resistance bans seen in the JPY137.25-50 area at the end of last week. But it appears poised to re-challenge the highs. As volatility increases and yields rise, Japanese officials return to their first line of defense: verbal intervention.  British Pound: Sterling took out the neckline of a possible double top we have been monitoring that came in at $1.20. It projects toward the two-year lows set in mid-July near $1.1760, dipping below $1.18 ahead of the weekend. As one would expect, the momentum indicators are headed lower, and the five-day moving average has fallen below the 20-day moving average for the first time in four weeks. It has closed below its lower Bollinger Band (~$1.1910) in the last two sessions. A convincing break of the $1.1760 low clears the way to the March 2020 low, about 3.5-cents lower. Initial resistance is now seen around $1.1860 and, if paid, could signal scope for another 3/4 to a full-cent squeeze.  Canadian Dollar:  The Canadian dollar was no match for the greenback, which moved above CAD1.30 ahead of the weekend for the first time in a month. The momentum indicators suggest the US dollar has more scope to advance, and the next target is the CAD1.3035 area. Above there, the CAD1.3100-35 band is next. The high since November 2020 was recorded in the middle of July around CAD1.3225. After whipsawing in Q1, the five- and 20-day moving averages have caught the big moves. The shorter average crossed above the longer moving average last week for the first time since July 21. Initial support will likely be encountered near CAD1.2935.   Australian Dollar:  The Aussie was sold every day last week. It is the first time in a year, and its 3.4% drop is the largest since September 2020.   The rally from the mid-July low (~$0.6680) to the recent high (~$0.7135) looks corrective in nature. Before the weekend, it tested the rally's (61.8%) retracement objective. The momentum indicators are falling, and the Slow Stochastic did not confirm this month's high, creating a bearish divergence. A break of the $0.6850-60 area may signal follow-through selling into the $0.6790-$0.6800 band, but a retest on the July low is looking increasingly likely. Initial resistance is now seen near $0.6920.   Mexican Peso:  The peso's four-day slide ended a six-day run. The peso lost about 1.6% last week, slightly better than the 2.25% slide of the JP Morgan Emerging Market Currency Index. This month, the US dollar peaked around MXN20.8335 and proceeded to fall and forged a base near MXN19.81. It has met the (38.2%) retracement objective around MXN20.20 before the weekend. The next (50%) retracement is near MXN20.3230. The 200-day moving average is closer to MXN20.41. The dollar is probing the 20-day moving average seen a little below MXN20.24. The momentum indicators have only just turned up for the greenback. We suspect there may be potential to around MXN20.50 in the coming days.   Chinese Yuan:  The yuan was tagged with more than a 1% loss against the dollar last week, its biggest decline in three months. A combination of poor Chinese data, its small rate cut, and a resurgent US dollar spurred the exchange rate adjustment. At the end of July, China's 10-year yield was about 11 bp on top of the US. However, it switched to a discount after the US jobs data (August 5), and the discount grew every day last week, reaching 35 bp, the most since late June. After gapping higher before the weekend, the greenback reached nearly CNY6.8190, its highest level since September 2020. The next target is around CNY6.85, but given the divergence of policy, a move back toward CNY7.00, last seen in July 2020, maybe a reasonable medium-term target. The PBOC's dollar fix ahead of the weekend showed no protest of the weaker exchange rate.     Disclaimer   Source: Flash PMI, Jackson Hole, and the Price Action
Forex: EUR/USD And GBP/USD - US Dollar (USD) Shows Its Teeth

Forex: EUR/USD And GBP/USD - US Dollar (USD) Shows Its Teeth

InstaForex Analysis InstaForex Analysis 22.08.2022 13:42
Relevance up to 11:00 2022-08-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The general atmosphere of global uncertainty, as a rule, contributes to the dollar's growth as the most liquid of safe havens. Today, the US currency index rose to 108.40, demonstrating a confident upward trend. Last week, it jumped 2.3%, showing the best performance since April 2020. The dollar's growth is due to the strengthening of hawkish sentiment in the markets after a number of speeches by Federal Reserve members on Friday. Among the most convincing at the moment is the statement of the president of the St. Louis Federal Reserve, James Bullard. He said he was considering supporting a third consecutive 75 basis point rate hike in September, and added that he was not ready to say that the economy had experienced the worst spike in inflation. The head of the Federal Reserve Bank of Richmond, Thomas Barkin, made a similar position, the emphasis was also placed on accelerated rate hikes. Market players are also waiting for Fed Chairman Jerome Powell to make a hawkish statement in the coming days, in line with recent comments by other central bank officials supporting the dollar. This week, the index may rise above 110.00 if the August preliminary PMIs for the major economies show a further slowdown in economic growth or a reduction in activity. In general, the new week is quite rich in macroeconomic events, so the end of the month and the summer period may be quite volatile. The focus of the traders is the Jackson Hole Symposium. This will be the main event of the week.     The euro briefly crossed the key parity level of $1 again, as the recession in Germany becomes more and more obvious. Natural gas prices are approaching 300 euros per megawatt hour after Gazprom announced the closure of the Nord Stream gas pipeline to Germany for three days of maintenance. In addition, the business activity index is expected to show in August that manufacturing activity in Europe's largest economy contracted at the fastest pace since May 2020, and the services sector contracted the most in 18 months. More optimistic traders believe that the report on the European Central Bank monetary policy meeting on Thursday will sound tough, which may save the euro from a more significant collapse. In July, the ECB surprised the markets and raised interest rates by 50 basis points, as inflation in the bloc continues to exceed record levels. However, Commerzbank believes that the ECB's rhetoric, no matter what it is, will not matter now. Actions are important, not conversations. The interest rate policy should show at least some signs of reducing the lag behind the Fed. Only in this case, the euro will feel some support. The EUR/USD pair is expected to be particularly susceptible to a revision of the Fed's baseline expectations, as the ECB has taken the second strongest possible dovish position among G10 central banks after the Bank of Japan.     EUR/USD, as well as GBP/USD, continue to remain under pressure from the pressing dollar. The euro cannot recover after a sharp drop last week and is trading below the 1.0050 mark. The GBP/USD pair continues to remain under pressure near 1.1800. In the short term, EUR/USD and GBP/USD quotes are likely to stabilize around 1.0000 and 1.1800, respectively. Given the dynamics and the situation inside Europe and in the world, the euro risks breaking down the level of 1.0000. Bears will aim for a further decline in the exchange rate to 0.9950. However, for such a scenario, stability below the 1.0105 level is important. If it is broken up, the pair will take a course for recovery. Support is located at 1.0000, 0.9980, 0.9945. Resistance is at 1.0070, 1.0115, 1.0140. The pound now remains without any internal support. It failed to take advantage of better-than-expected UK economic data and a sharp rise in market expectations for Bank of England interest rates last week.Stronger wage growth, the annual consumer price index, which exceeded 10% on Wednesday, and impressive retail sales data all contributed to the increase in rates. The pound's inability to get at least some support from this movement speaks volumes, more precisely about its weakness. The forecast for GBP/USD does not look favorable, the pair may fall in the near future beyond expectations. The quote risks falling to 1.1500.     Until Powell's speech at the symposium, which will take place on Friday, the markets will be in limbo. Uncertainty is on the side of dollar bulls. A number of US economic indicators will help determine market appetite, each of which is important in its own way. These include the second estimate of GDP for the last quarter and the July value of the preferred US inflation indicator from the Fed. The underlying PCE price index will be carefully studied by investors in search of anything confirming the signs of moderate inflationary pressure recently noted in official figures. Due to the fact that financial markets lowered earlier expectations of a Fed interest rate hike in September to 0.50%, the pound/dollar exchange rate will be at risk this week due to everything that pushes market prices back in favor of a greater tightening by 0.75%.   Read more: https://www.instaforex.eu/forex_analysis/319542
Euro (EUR) And British Pound (GBP) Losing The Race Against U.S. Dollar (USD)! 1 Year Statistics

Euro (EUR) And British Pound (GBP) Losing The Race Against U.S. Dollar (USD)! 1 Year Statistics

Conotoxia Comments Conotoxia Comments 22.08.2022 16:44
The recent behavior of the euro and the British pound and their potential weakness against the rest of the world's major currencies is beginning to bring concerns about a sustained deterioration in the prospects for these currencies. As Bloomberg commentators note, the behavior of the pound and the euro are worrisome. We have recently seen large shifts in the euro and pound's short-term market interest rates against the U.S. dollar, with a simultaneous weakening of the GBP/USD and EUR/USD exchange rates. Last week was the worst week for the pound in nearly two years, and at the same time, the yield on the UK's 2-year bond rose by 50 basis points. Typically, the opposite happens in developed markets. Expectations of a central bank rate hike and thus an increase in short-term market yields generally strengthen the currency. The collapse in the correlation between the exchange rate and interest rates is usually associated with emerging markets, which may have lost the battle for the credibility of keeping inflation within the inflation target. The energy dependence of the UK and Europe as a whole means that their balance sheets could deteriorate in the near future, while energy commodity inflation shows no signs of abating. Rate hikes in such a situation may not stem the tide of depreciation of the aforementioned currencies, Bloomberg reports. Thus, it seems that the winter months for the EUR and GBP may be a kind of test of the credibility of the economies in the eyes of investors. Their abandonment of investments in the EUR and GBP despite rising interest rates could be potentially worrying. Moreover, it could change the entire scene of the foreign exchange market. In the dollar index, the euro has a weighting of more than 57 percent, while the pound has a weighting of more than 11 percent. Together, these two currencies alone have a weighting of almost 70 percent. Since the beginning of the year, the euro against the U.S. dollar has lost almost 12 percent, and the British pound almost 13 percent. In contrast, since August 2021, the euro has lost almost 15 percent to the dollar, and the British pound less than 14 percent. Of the major currencies, only the Japanese yen has fared worse and has weakened by almost 20 percent against the U.S. dollar over the year. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: Pound and euro similar to currencies of emerging markets?
Shocking Forex Forecast! Check How EUR/USD, USD/JPY And GBP/USD May Develop In The Neatr Future!

Shocking Forex Forecast! Check How EUR/USD, USD/JPY And GBP/USD May Develop In The Neatr Future!

ING Economics ING Economics 23.08.2022 11:37
The dollar has corrected around 3% from its highs seen last month. This has prompted a few questions about whether the dollar has peaked? Many trading partners would hope that to be the case, but the reality is that the Fed is likely to stay on track with its tightening. We think the dollar is more likely to retest its highs than correct much lower. Driving this view has been consistent rhetoric from the Fed that it will not be blown off target by some softer activity or price data. In fact, it now looks like US activity is accelerating again as lower gasoline prices leave more dollars in the pockets of US consumers. The 2023 US recession narrative looks a tough one to sell near term. And rising energy prices should continue to drive a wedge between the exporters of North America and the importers of Europe, meaning a much greater conviction of a recession in Europe. The ECB’s second 50bp rate hike on 8 September may well conclude its tightening cycle. Rate spreads and the energy income shock make it a very tough environment for the euro. EUR/USD should therefore drift near parity for much of 2H22. Elsewhere in Europe, the Swiss franc continues to be guided higher by the Swiss National Bank. Sterling remains vulnerable on recession fears. Beyond some substantial fiscal stimulus, sterling’s best hope is that the Bank of England delivers on most of the aggressive tightening currently priced into markets. Surging gas prices also spell trouble for the CEE4 currencies. The Polish zloty in particular looks unlikely to hold recent gains. Emerging market currencies have enjoyed a mini-renaissance over the last month. But a difficult external environment makes it hard to sustain those rallies until the dollar turns.     EUR/USD Late cycle economies will keep the dollar bid Current spot: 1.0241 • Defining business cycles has been a hazardous job over recent years, but it looks pretty clear that the US is a late-cycle economy with high inflation and low growth. This stage of the cycle is synonymous with inverted yield curves – which we have today. The dollar typically stays bid in this part of the cycle until convictions grow that the Fed will ease, and US 2-year yields start dropping. That is probably a story for 1Q23 and not today. • We look for another 125bp of Fed hikes this year and just 50bp from the ECB (in Sep.). Risks look skewed to even higher US rates. • With Europe entering recession on the back of a looming energy crisis this winter, EUR/USD can stay near the lows for 2H22. USD/JPY Staying supported Current spot: 133.44 • USD/JPY has found some good support under 132 and should stay reasonably supported for 2H22. Expect surveys of the Japanese buy-side in September to show greater allocations towards unhedged foreign bond purchases. US Treasury yields pay 250bp+ over JGBs and it is too expensive to hedge those US bond investments – now 3% p.a. through the 3m JPY forwards. • The Fed Jackson Hole of Aug 25-27th looks a dollar positive event risk. It is far too early for the Fed to signal the all-clear on inflation. The bigger risk is that 2023 Fed easing is priced out. • Like the euro, the yen is suffering from the negative terms of trade shock. These indices are at the worst levels of the year. GBP/USD Slip-sliding away Current spot: 1.2098 • GBP/USD remains vulnerable on the back of continuing dollar strength and the UK economy trapped by slowing growth and a hawkish Bank of England. The only good news we have seen for sterling recently is that the Bank of Israel plans to double the pound’s weighting in its FX reserve portfolio! • A tricky environment for risk assets in 2H22 – slowing growth, tighter monetary conditions – suggests the growth sensitive pound will struggle. • The only thing helping it should be the BoE remaining hawkish all year – lifting rates 50bp to 2.25% in September – and at least  making sterling an expensive sell. No reprieve for Cable this year. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Uptrend Of The Cable Market (GBP/USD) Is Officially Canceled

Living In The United Kingdom Is More And More Expensive Every Day

InstaForex Analysis InstaForex Analysis 23.08.2022 17:26
Company does not offer investment advice and the analysis performed does not guarantee results. Selling the pound continues. The GBP/USD pair has again fallen into a perfect storm and is sinking deeper to the bottom. Yesterday it set another and, it seems, not the last anti-record this week. The steep peak of the pound – what is the reason? A series of failures haunts the British currency. The pound did not have time to recover after a loud fall last week, when it lost almost 300 points against USD, as it was covered by a new wave of short positions. On Monday, the pound fell against the dollar to the lowest level since mid-July at 1.1785. And on Tuesday night, the pound reached a new 2.5-year low – the mark of 1.1758. Several factors contributed to the steep peak of the GBP/USD pair, including a large-scale rally of the dollar. However, the strongest pressure on the pound continues to be exerted by the worsening cost-of-living crisis in the UK. Consumer concerns about the further strengthening of inflation increased significantly after the statement of the consulting company Cornwall Insight, made on Monday. Analysts said that as early as this Friday, the British industry regulator Ofgem may announce an increase in energy prices. According to experts, since October, the average annual electricity bills on the peninsula will grow by more than 80% – up to 3,500 pounds ($4,128.6). In the face of this news, talk about a slowdown in economic growth in the UK has resumed again. Also, the degree of anxiety about the impending recession has increased due to another strike. This time, employees of the country's largest container port Felixstowe are demanding higher wages. According to economists, this 8-day strike could lead to trade disruption worth more than $800 million. Meanwhile, this is not the first large-scale protest in the United Kingdom this summer. Earlier, railway workers and bus drivers made demands for higher wages. It's only getting worse According to many analysts, by the end of this year and the beginning of next year, the cost of living crisis in the UK will worsen even more. This will be facilitated by further price increases in the country. Yesterday, the American bank Citi published an updated forecast for inflation in Britain, according to which, at the beginning of 2023, the indicator will exceed the Bank of England's target level by 10 times and reach a 47-year peak of 18%. High inflation will continue to require the BoE to take more decisive action on interest rates. However, the central bank is unlikely to go all-in, like the US Federal Reserve, given its gloomy forecast for economic growth. Recall that in August, the BoE raised the base interest rate by 50 bps, to 1.75%. This was the sixth increase since the end of 2021 and the largest in 27 years. Also at its last meeting, the BoE warned that the UK would enter a protracted recession by the end of this year. Such a scenario is likely to prevent British officials from taking a more hawkish course. Now the markets estimate the probability of a 75 bps rate hike by the BoE in September at only 13%. Most analysts expect that the indicator will be increased by 50 bps. As for the Fed, it is also preparing to raise rates next month. At the same time, it is possible that the United States may increase the indicator by 75 bps for the third time in a row. But even if the Fed slows down its pace of tightening, the difference in interest rates between the UK and the US will still remain quite large, which will contribute to further depreciation of the pound. By the way, this month the GBP/USD pair has already plunged by more than 3%. Now the British currency is one of the worst in the group of ten. What to expect from the pound this week? The S&P Global will publish preliminary data on the UK business activity index on Tuesday. It is expected that the composite indicator will decrease from 52.1 to 51.3, which will indicate a slowdown in the growth of business activity in the private sector. A reading below 50 may remind investors of the risk of the UK economy sliding into recession by the end of the year and put significant pressure on the pound. Also, the pound's short-term prospects are overshadowed by the upcoming Fed symposium in Jackson Hole. Fed Chairman Jerome Powell will deliver a speech on Friday, which is the second day of the meeting. The market expects to hear new comments on further interest rate hikes. Moreover, many traders hope that Powell will remain true to the current monetary rate. Source: Forex Analysis & Reviews: GBP/USD: the patient is more likely dead than alive  
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

Forex: GBP/USD Has Gone Up After The Release Of US New Home Sales

Kenny Fisher Kenny Fisher 23.08.2022 21:39
The British pound has jumped 0.82% today, as the currency has rebounded somewhat from its worst week of the year. GBP/USD plunged 2.53% last week, as the US dollar has found its mojo after weeks of beating a retreat. GBP/USD has climbed today after US New Home Sales dropped to 511 thousand in July, down from 585 thousand in August and well below expectations. UK manufacturing slides The UK Manufacturing PMI crashed into contraction territory in August. The index fell to 46.0, down from 52.1 in July and shy of the estimate of 51.1. The dismal reading is part of a pan-European downward trend in manufacturing, which has been made worse by the prolonged war in Ukraine. Output has been hampered by higher costs, a drop in demand and supply chain problems. CBI Manufacturing Output fell by 7% in the three months to August, according to the CBI, down from +6% in the three months to July. This was the first decline in output since February 2021. Manufacturers are also affected by rising energy bills and higher interest rates, and the situation is only expected to get worse. The energy cap will rise in October and the BoE will have to continue raising rates in order to defeat inflation. There was better news from Services PMI, which was almost unchanged at 52.5, pointing to weak expansion (52.6 prior). Still, it’s hard to see how the UK can avoid a recession with weak growth and spiralling inflation. Business optimism is dropping, and that will likely lead to a cutback in spending, hiring and investment, which won’t help the economy one bit. There is plenty of anticipation ahead of Jerome Powell’s speech at Jackson Hole on Friday, but investors shouldn’t overlook some key events prior to Powell’s speech. Durable goods orders will be published on Wednesday, with the headline reading expected to slow to 0.6% in July, down sharply from 2.0% in June. Thursday brings US GDP for Q2, which is expected to come in at -0.8% QoQ, after a 0.9% reading in the first quarter. With the Fed stating that US data will be critical in determining its rate policy, the dollar could show some movement after these releases, just as it fell sharply today after the soft New Home Sales reading. GBP/USD Technical  GBP/USD faces resistance at 1.1924 and 1.2005 There is support at 1.1699 and 1.1568 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. GBP/USD jumps on weak US housing data - MarketPulseMarketPulse
Investors' Concerns About The Coming Recession In The UK, Will GBP/USD Pair Reach Its Lowest Level In History?

Forex: British Pound (GBP) To US Dollar (USD) - Technical Analysis - 23/08/22

InstaForex Analysis InstaForex Analysis 23.08.2022 21:43
Relevance up to 20:00 2022-08-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.     Overview : The GBP/USD pair reverses from 1.1879 and drops to multi-day lows near 1.1817 - this price formed a bottom this morning in the hourly chart. Right now, the GBP/USD pair dropped further and bottomed at 1.1716. It then trimmed losses, rising to 1.1879. The move lower took place amid a stronger US dollar across the board. Probably, the main scenario is continued decline towards 1.1817 (sentiment level). The GBP/USD pair broke support at the level of 1.1817 which acts as a resistance now. According to the previous events, the GBP/USD pair is still moving between the levels of 1.1817 and 1.1716. Immediate support is seen around 1.1817. A clear break below that area could lead price to the neutral zone in the nearest term. Price will test 1.1716, because in general, we remain bearish on August 23th, 2022. Therefore, we expect a range of 101 pips in coming hours (before the end of session). The trend is still below the 100 EMA for that the bearish outlook remains the same as long as the 100 EMA is headed to the downside. Hence, the price spot of 1.1879 remains a significant resistance zone. Since the trend is below the 38.2% Fibonacci level (1.1879), the market is still in a downtrend. Today, on the one-hour chart, the current drop will remain within a framework of correction. If the pair fails to pass through the level of 1.1879 (major resistance), the market will indicate a bearish opportunity below the strong resistance level of 1.1879. Since there is nothing new in this market, it is not bullish yet. Overall, we still prefer the bearish scenario. Consequently, there is a possibility that the GBP/USD pair will move downside. The structure of a fall does not look corrective. In order to indicate a bearish opportunity below 1.1879, sell below 1.1879 with the first target at 1.1716. Besides, the weekly support 2 is seen at the level of 1.1650. The market will decline further to 1.1600. This would suggest a bearish market because the RSI indicator is still in a negative area and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 1.1600 in order to test the third support (1.1600) in coming days. However, traders should watch for any sign of a bullish rejection that occurs around 1.1979.   Read more: https://www.instaforex.eu/forex_analysis/289685
Short-term analysis - Euro to US dollar by InstaForex - 31/10/22

EUR/USD: PMI Data Made US Dollar (USD) To Decrease, GBP/USD And Nasdaq Shock

Jing Ren Jing Ren 24.08.2022 08:30
EURUSD sees limited bounce The US dollar retreated after PMI data showed a slowdown in business activity. However, the euro’s fall below parity and July’s low indicates that sellers are in control. As last month’s rally turned out to be a dead cat bounce, the path of least resistance would be down. After the RSI sank into oversold territory, 0.9900 from December 2002 saw some bargain hunting. Though the former demand zone around 1.0040 could be a tough level to crack. Renewed selling would send the single currency towards 0.9700. GBPUSD breaks daily support The pound bounces over upbeat services PMI. The pair had previously failed to clear the supply zone (1.2300) on the daily chart. The bears’ latest push below 1.1770 has invalidated the mid-July rebound. This is a confirmation that the downtrend could resume in the weeks to come, and the price action might be heading towards March 2020’s lows around 1.1400. 1.1720 is an intermediate support in case of a brief consolidation. Stiff selling pressure could be expected at the support-turned-resistance at 1.1950. NAS 100 struggles for bids The Nasdaq 100 feels the pressure from signs of a slowing US economy. A break below the psychological tag of 13000 has put the bulls under pressure. 12800 on the 30-day moving average is another test of buyers’ resolve in the short-term. 13080 has become a fresh supply area, and as the RSI recovers into the neutral area, renewed selling interest could cap a potential rebound. The bulls will need to reclaim 13400 before the index could secure a foothold again. Otherwise, it could be vulnerable to another round of sell-off.
The Cable Market May Continue To Trade In A Very Volatile Manner

Thursday's US Data May Let British Pound (GBP) Increase

Kenny Fisher Kenny Fisher 24.08.2022 14:17
The British pound has reversed directions today and is in negative territory. In the European session, GBP/USD is trading at 1.1778, down 0.44%. Weak US New Home Sales sends pound higher Tuesday was an interesting day for the pound. Despite weak manufacturing data out of the UK, GBP/USD gained close to 1% before paring some of these gains. The reason for the pound’s spike came from across the pond, as US New Home Sales for July was much weaker than expected, with a reading of 511 thousand. This was below the estimate of 575 thousand and the June reading of 585 thousand. The pound promptly jumped after this housing release, as soft data raised market hopes that the Federal Reserve would ease up on interest rates due to a cooling economy. We could see the pound react to upcoming key US releases – Durable Goods Orders today and Preliminary GDP on Thursday. If these readings are weaker than expected, I would not be surprised to see the pound gain ground. The UK Manufacturing PMI slid into contraction territory in August. The index fell to 46.0, down from 52.1 in July and below the estimate of 51.1. The dismal reading is part of a pan-European downward trend in manufacturing, which has been made worse by the prolonged war in Ukraine. Output has been hampered by higher costs, a drop in demand and supply chain problems. The week wraps up with Fed Chair Powell addressing the Jackson Hole Symposium. The Fed has been hammering out a hawkish message, saying it plans to continue raising rates, as the titanic battle against inflation is far from over. The markets haven’t listened all that carefully, ever since the drop in US inflation raised speculation that the Fed might make a U-turn and ease up on policy. It will be interesting to see how the markets react to what is expected to be a hawkish message from Powell. GBP/USD Technical  GBP/USD faces resistance at 1.1924 and 1.2005 There is support at 1.1699 and 1.1568 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound under pressure, US Durable Goods looms - MarketPulseMarketPulse
USD/JPY Reaching 130-135? It Seems It Maybe Not Impossible

Forex: British Pound (GBP) To US Dollar (USD) Chart Shows A Downtrend - GBP/USD - Technical Analysis - 24/08/22

InstaForex Analysis InstaForex Analysis 24.08.2022 14:44
Relevance up to 09:00 2022-08-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The GBP/USD pair had broken below the trend line support around the level of 1.1916 and made a new swing low at the level of 1.1716. The nearest technical resistance is seen at the level of 1.1890 and this level is the next target for bulls. Nevertheless, after the 163 pips bounce form the new swing low, the bulls up move was capped at 1.1876 (trend line resistance) and the market reversed down again. The larger time frame trend (daily and weekly) remains down until further notice.     Weekly Pivot Points: WR3 - 1.18835 WR2 - 1.18488 WR1 - 1.18267 Weekly Pivot - 1.18141 WS1 - 1.17920 WS2 - 1.17794 WS3 - 1.17447 Trading Outlook: The Cable is way below 100 and 200 DMA , so the bearish domination is clear and there is no indication of down trend termination or reversal. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame chart last week. The next long term target for bears is seen at the level of 1.1410. Please remember: trend is your friend.   Read more: https://www.instaforex.eu/forex_analysis/289753
The Uptrend Of The Cable Market (GBP/USD) Is Officially Canceled

Forex: GBP/USD Downgoing Trend. Is There A Chance?

InstaForex Analysis InstaForex Analysis 24.08.2022 15:05
Relevance up to 19:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Preliminary data on business activity indices in the UK, in principle, remained unnoticed, although in fact they turned out to be worse than forecasts that were not even comforting. Only the index of business activity in the service sector turned out well, which decreased from 52.6 points to 52.5 points, with a forecast of 51.8 points. The manufacturing index, instead of decreasing from 52.1 points to 51.3 points, literally collapsed to 46.0 points. As a result, the composite index of business activity decreased from 52.1 points to 50.9 points, although it was expected to decline only to 51.3 points. Composite PMI (UK): The market revived only on the release of similar data on the United States, which also turned out to be noticeably worse than forecasts. Only the manufacturing index turned out to be better than them, which fell from 52.2 points to 51.3 points, while it was expected to fall to 51.1 points. But the index of business activity in the service sector fell from 47.3 points to 44.1 points. But they were waiting for its growth to 48.0 points. Because there is nothing surprising in the fact that the composite business activity index, instead of rising from 47.7 points to 49.0 points, fell to 45.0 points. Composite PMI (United States): Such weak data made it possible for the pound to rise above the 1.1800 mark, where it continues to be in. Given that the macroeconomic calendar is almost empty today, most likely the market will stagnate in anticipation of tomorrow, when the conference starts in Jackson Hall. Where Federal Reserve Chairman Jerome Powell will give his speech, from whom they are waiting for signals about the adjustment of the policy of the US central bank. Moreover, in the direction of lowering the growth rates of interest rates. The GBPUSD currency pair, after a short stagnation within the support level of 1.1750, increased the volume of long positions. This resulted in forming a technical pullback in the market by about 120 points. Given the overheating of short positions in the pound for one and a half weeks, the current pullback is the least that could happen on the market. The technical instrument RSI H4 left the oversold zone at the time when the rollback is formed. The signal to buy was the critical oversold level of 17.65. The MA moving lines on the Alligator H4 indicator are still pointing down as the retracement is relatively small compared to the down cycle. Expectations and prospects Despite the scale of the pullback, the pound is still oversold. For this reason, keeping the price above 1.1880 may push bulls to form a full-size correction in the market. Also, in order to prolong the downward trend, the quote needs to stay below the level of 1.1750 in a four-hour period. Comprehensive indicator analysis in the short-term and intraday periods indicates a long position due to a rollback. In the medium term, the indicators are oriented to sell, due to updating the local low of the downward trend. Source: Forex Analysis & Reviews: Hot forecast for GBP/USD on 24/08/2022
Short-term analysis - Euro to US dollar by InstaForex - 31/10/22

EUR/USD Can Surprise Us Today! Forex Market Developments May Be Gripping! ECB Minutes Are Released This Afternoon!

ING Economics ING Economics 25.08.2022 09:52
The dollar is slightly softer today as the People's Bank of China (PBoC) seemed to issue a protest against recent renminbi weakness with a stronger fixing. Additional stimulus measures from China are also helping the commodity complex. Yet US yields remain at their highs and dollar dips should be limited before tomorrow's speech from Fed Chair Powell The People's Bank of China seems to have issued a protest against recent renminbi weakness with a stronger fixing USD: Watch out for initial claims and Fed speakers today The dollar is slightly softer today and risk sentiment is marginally better. Activities by Chinese authorities probably account for both of these developments but are not seen as game-changing. On the dollar side, the recent upside breakout in USD/CNY had hit emerging currencies and contributed to recent dollar strength. The fear was that the PBoC was going to allow another 6% fall in the renminbi, similar to April/May this year. However, for the first time in recent weeks, the PBoC has fixed the renminbi stronger than model-based estimates had suggested – fixing USD/CNY at 6.8536 versus 6.8635 from the models. The PBOC typically uses fixings to direct market sentiment and today's message seems to be that the renminbi might have fallen too far, too fast. Additionally, China has announced new fiscal stimulus measures (largely on the infrastructure side) worth around CNY1trn. Yet this is not particularly large and looks unlikely to turn around the sentiment on China which is currently weighed by its zero-Covid policy and unwinding the excesses of the property sector. News from China may be enough to slow dollar strength today but looks unlikely to reverse core trends of higher energy prices weighing on the importers in Europe and Asia, plus the Fed having unfinished business with inflation. On this latter subject, today sees a raft of Fed speakers before tomorrow's main event of the week – Fed Chair Jerome Powell's keynote speech on the economic outlook. What impact could he have on markets? Well, US yields have firmed back up this week and our colleagues in the rates strategy department have made the good point that market-based inflation expectations are rising even as rates are going higher – suggesting the Fed will be in no mood to soften its stance. The hawkish Fed should keep the dollar supported on dips. In addition to Fed speakers today, we should see a modest upward revision to US 2Q GDP data and the weekly initial claims data. Buy-side surveys have suggested that it would take initial jobless claims moving above 300k (now 250k) to spark a Fed pivot. Given heavy long dollar positioning, the FX market does seem very sensitive to any softer than expected US data, hence the need to watch initial claims today. What does this all mean for  DXY? 108.10/15 looks important intra-day support and should determine whether DXY needs a correction back to the 107.00 area. We remain bullish on the dollar on the back of the Fed and the energy story, but heavy positioning is probably the biggest risk to the dollar right now.  Chris Turner EUR: German IFO and ECB minutes in focus EUR/USD is enjoying the slightly softer dollar environment and re-challenging parity. 1.0015/20 looks key intra-day resistance. Above there, the risk is of a short squeeze all the way to 1.0135. Determining whether we get that short squeeze today will be the US data (above), the August German IFO, and the release of the minutes of the July ECB minutes in which it hiked 50bp. Typically the ECB minutes are not a market mover, but today could shed light on whether the central bank wanted to cram in some hikes while it could. The market currently prices 57bp hikes at the 8 September meeting and 125bp by year-end. Notably, yield spreads have been moving in favour of EUR/USD this week (as UK rates have dragged eurozone rates higher more quickly than those of the US). Conditions could be ripe for a short squeeze. But major challenges from the gas crisis and the Fed remaining hawkish suggest EUR/USD rallies may stall in the 1.01/1.02 area this month. Chris Turner GBP: Gas drags Bank of England pricing around Surging gas prices look to be dragging Bank of England (BoE) pricing around, where markets now price 170bp of BoE tightening by year-end. This gas story looks here to stay for the next few months, with one of the fresh risks being whether the US hurricane season disrupts US gas production and LNG exports. With the market long dollars, Cable is at risk of a short squeeze. We see 1.1880 as key intra-day resistance here above which we could be looking at a retest of 1.20. For EUR/GBP we would still favour the 0.8400 area as higher GBP rates force foreign holders of UK Gilts to lower rolling forward hedge ratios.  Chris Turner CEE: All eyes on the forint, again Regional currencies are showing the first signs of relief, but we think it is too early to announce the end of the sell-off. Although the Polish zloty has stabilised after a week of weakness and the forint has shown rapid appreciation, gas prices are testing new highs and Friday's Jackson Hole symposium may once again return support to the US dollar. For the Polish zloty, we see a sideways move at the moment and a wait-and-see approach for further global developments. Today, however, all attention will be back on the forint and the National Bank of Hungary (NBH). The central bank has its weekly meeting scheduled for today, but like last week, we expect the one-week deposit rate to remain unchanged. Yesterday's move has brought some calm to the FX market, plus the NBH is scheduled to hold a regular monetary policy meeting on Tuesday next week. Thus, in our view, the NBH is saving its ammunition for the full meeting and does not want to risk a shot without effect, taking a lesson from the July sell-off. On the other hand, the market may still have some expectations that we think will not be met today, which again might not bring good news for the forint. Elsewhere, we could see some positive headlines regarding the negotiations between the Hungarian government and the European Commission. However, only from the Hungarian side, which leaves us cautious about the further development of this story. So overall, a move back towards 415 EUR/HUF is not out of the question over the coming days and we will see what the NBH reaction will be next week. Still, the forint is the only currency in the region currently supported by a rising interest rate differential and we should see a HUF rally back below EUR/HUF 400 in the case of positive news from the European Commission. However, this is certainly not a matter for the next few days and the forint will still have a tough time. Frantisek Taborsky  Read this article on THINK TagsPeoples Bank of China Jerome Powell FX Daily FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
OANDA Senior Market Analyst Craig Erlam Talks Recent Important Market Events

British Pound To US Dollar May Catch You By Surprise! FX: GBP/USD - Long - When To Buy British Pound? Shorts - When To Sell GBP?

InstaForex Analysis InstaForex Analysis 25.08.2022 11:12
Analysis of transactions in the GBP / USD pair Pound tested 1.1821 at a time when the MACD was just starting to move above zero, which was a good signal to buy. However, the quote did not increase much, and after rising by just 10 pips, it returned to 1.1821, then completely collapsed to 1.1787. This level was tested, but the MACD line was far from zero, so the downside potential was limited.     The lack of statistics in the UK led to a decline in GBP/USD yesterday morning, but it was offset by weak data on the US economy released in the afternoon. It is likely that the bullish dynamics will remain today because even though there are no important reports scheduled to be released, the pair has recovered from the yearly lows. And even though retail sales data in the UK will not lead to a strong surge in volatility, US reports on GDP and jobless claims will set the direction of the market. But the start of the Jackson Hole symposium will be much more interesting as the meeting will certainly affect sentiment. For long positions: Buy pound when the quote reaches 1.1859 (green line on the chart) and take profit at the price of 1.1911 (thicker green line on the chart). Growth could occur, but only in the morning. Take note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.1824, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1859 and 1.1911. For short positions: Sell pound when the quote reaches 1.1824 (red line on the chart) and take profit at the price of 1.1784. Pressure could return at any moment, especially if the US reports better-than-expected economic data, and if the Fed remains hawkish on their monetary policy. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1859, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1824 and 1.1784.     What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. 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 decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 08:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/319861
The Uptrend Of The Cable Market (GBP/USD) Is Officially Canceled

Forex: (GBP/USD) British Pound To US Dollar - What Are The Possible Scenarios? - 25/08/22

InstaForex Analysis InstaForex Analysis 25.08.2022 11:23
Trend analysis (Fig. 1) GBP/USD will continue increasing on Thursday, starting from 1.1792 (closing of yesterday's daily candle) to 1.1894, which is the 23.6% retracement level (red dotted line). Quotes may rise to the historical resistance level of 1.1928 (blue dotted line) when testing this level, but then it will bounce down to lower price levels.     Fig. 1 (daily chart) Comprehensive analysis: Indicator analysis -uptrend Fibonacci levels - uptrend Volumes - uptrend Candlestick analysis - uptrend Trend analysis - uptrend Bollinger bands - uptrend Weekly chart - uptrend Conclusion: GBP/USD will rise from 1.1792 (closing of yesterday's daily candle) to the 23.6% retracement level at 1.1894 (red dotted line), go to the historical resistance level of 1.1928 (blue dotted line), then return to lower price levels. Alternatively, the pair could move from 1.1792 (closing of yesterday's daily candle) to the 23.6% retracement level at 1.1894 (red dotted line), then fall to the 85.4% retracement level at 1.1837 (dashed blue line). Quotes will resume increasing after these movements.   Relevance up to 09:00 2022-08-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/319871
The Cable Market May Continue To Trade In A Very Volatile Manner

Forex: GBP/USD Showing Impulse Moves While The Downward Cycle

InstaForex Analysis InstaForex Analysis 25.08.2022 15:47
Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The market is clearly frozen in anticipation of tomorrow's speech by Jerome Powell. Most likely, the head of the Federal Reserve will clarify the further pace of interest rate hikes. In terms of statistics, durable goods orders in the US did not make any impression as the volume remained unchanged. But the previous data was revised for the better, from 1.9% to 2.2%. Orders for durable goods (United States): Today's data on jobless claims is also unlikely to affect the market even though the number of initial applications is forecasted to increase by 17,000, which is a lot. This is because the estimate for repeated requests have been revised for the better, that is, a decline by 1,000 instead of a rise by 5,000. Continued claims (United States): Obviously, investors will not take risks, preferring to wait for Powell's speech tomorrow. EUR/USD formed a short-term flat within 0.9900/1.0000. A temporary slowdown can serve as a process of accumulation of trading forces in the upcoming acceleration in the market. GBP/USD rebounded from the support level of 1.1750. This reduced the volume of short positions, which slowed down the downward cycle. Most likely, the pair will continue to concentrate for some time within the base of the trend, then show impulse moves.   Source: Forex Analysis & Reviews: Trading tips for EUR/USD and GBP/USD on August 25
The Uptrend Of The Cable Market (GBP/USD) Is Officially Canceled

FX: British Pound (GBP) To US Dollar (USD) - Technical Analysis - 26/08/22

InstaForex Analysis InstaForex Analysis 26.08.2022 10:26
Technical Market Outlook: The GBP/USD pair has been seen testing the trend line resistance around the level of 1.1850 and so far no important breakout occurred. The nearest horizontal technical resistance is seen at the level of 1.1890 and this level is the next target for bulls. Nevertheless, after the 163 pips bounce form the new swing low, the bulls up move was capped at 1.1876 as the momentum move down below the level of fifty. The larger time frame trend (daily and weekly) remains down until further notice.     Weekly Pivot Points: WR3 - 1.18835 WR2 - 1.18488 WR1 - 1.18267 Weekly Pivot - 1.18141 WS1 - 1.17920 WS2 - 1.17794 WS3 - 1.17447 Trading Outlook: The Cable is way below 100 and 200 DMA , so the bearish domination is clear and there is no indication of down trend termination or reversal. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame chart last week. The next long term target for bears is seen at the level of 1.1410. Please remember: trend is your friend. Relevance up to 08:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/290113
Sebastian Seliga Comments On EUR/USD, Dollar Index, XAUUSD And S&P 500 - 29/08/22

Forex: GBP/USD. Dollar Will Get Stronger And Stronger

InstaForex Analysis InstaForex Analysis 26.08.2022 10:34
Relevance up to 07:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Yesterday there was one signal formed to enter the market. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 1.1849 level in my morning forecast and advised making decisions from it. An unsuccessful attempt by the bulls to continue the pair's growth in the first half of the day resulted in forming a false breakout in the area of 1.1849 and a signal to sell the pound. And although the pair fell by 25 points, I expected a stronger downward movement. The technical picture changed in the second half of the day, but it was not possible to receive signals to enter the market. When to go long on GBP/USD: Today, there is still no important fundamental statistics for the UK, so traders will wait for Federal Reserve Chairman Jerome Powell's speech and react to his statements - there is no other reason for a surge in volatility. Taking into account that trading is carried out in the area of moving averages, the best scenario would be long positions in the area of the nearest support at 1.1794, which will give a chance for a continuation of the upward correction with a return to 1.1835. A breakthrough and test from top to bottom of this range will testify to the continued growth of GBP/USD and create a buy signal with growth to a more distant level of 1.1872, a breakthrough of which will depend entirely on Powell's statements. The farthest target will be the area of 1.1921, where I recommend taking profits. If the GBP/USD falls and there are no bulls at 1.1794, the pressure on the pair will increase. A breakthrough of this range will allow the bears to break out of the triangle and continue the downward trend. In this case, I advise you to postpone long positions until the next support at 1.1756. You can buy there only on a false breakout. I recommend opening long positions on GBP/USD immediately for a rebound from 1.1718, or even lower - around 1.1684, counting on correcting 30-35 points within the day. When to go short on GBP/USD: Yesterday, the bears tried with all their might to keep the market under their control, and they succeeded. Good statistics for the US provided help. The lack of statistics on the UK today is unlikely to benefit anyone. I do not rule out a sharp movement from the pound up to the area of 1.1835 even before Powell's speech. The best scenario for selling the pound would be forming a false breakout at this level, which would allow us to return to the intermediate support at 1.1794. A breakdown and reverse test of this range will provide an entry point for selling with a fall to 1.1756 and will cross out all the bulls' efforts to build an upward correction of the pair. A more distant target will be the area of 1.1718, where I recommend taking profits. In case GBP/USD grows and there are no bears at 1.1835, the chances of a larger upside correction will seriously increase, and bulls will have an excellent opportunity to return to 1.1872. Only a false breakout there will provide an entry point into short positions based on the pair moving down. If there is no activity there, I advise you to sell GBP/USD immediately for a rebound from 1.1921, counting on the pair's rebound down by 30-35 points within the day. COT report: According to the Commitment of Traders (COT) report from August 16, both short positions and long positions increased, but these changes no longer reflect the real current picture. Serious pressure on the pair, which began in the middle of last week, continues now, and for sure those who want to buy the pound in the current difficult macroeconomic conditions will become less and less. Ahead of us is a meeting of American bankers in Jackson Hole, which may lead to even greater strengthening of the dollar against the pound. This will happen on the condition that Federal Reserve Chairman Jerome Powell announces the preservation of the committee's previous position regarding the active and tough increase in interest rates, counting on the further fight against inflation and bringing it back to normal. The latest COT report indicated that long non-commercial positions rose 1,865 to 44,084, while short non-commercial positions rose 506 to 77,193, further narrowing the negative non-commercial net position to -33,109 versus -34,468. The weekly closing price remained virtually unchanged at 1.2096 versus 1.2078. Indicator signals: Moving averages Trading is carried out in the area of 30 and 50-day moving averages, which indicates the sideways nature of the market before important events. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case the pair goes down, the lower border of the indicator around 1.1794 will act as support. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Source: Forex Analysis & Reviews: GBP/USD: plan for the European session on August 26. COT reports. The pound is preparing to break through the triangle
OANDA Senior Market Analyst Craig Erlam Talks Recent Important Market Events

Money Markets Are Expecting The Bank Of England To Rise Rates Next Month

InstaForex Analysis InstaForex Analysis 26.08.2022 10:54
Relevance up to 08:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The Jackson Hole Symposium is in full swing. Today, everyone is waiting for the speech of the head of the Federal Reserve. The further dynamics of dollar currency pairs, including the GBP/USD, depends on Fed Chairman Jerome Powell's comments The dollar is preparing to take off This week's highlight is the Fed Economic Forum at Jackson Hole. It should culminate in Powell's speech today. Markets are hoping that the head of the Fed will shed light on the central bank's future plans for interest rates. Signs of easing inflationary pressures in the US this month have sparked speculation that monetary tightening might slow down. However, a series of hawkish comments by Fed members last week and this week have left markets believing that the Fed will not loosen its grip on rising prices. Inflation in America is still at record highs. The annual rate was 8.5% in August, well above the Fed's target of 2%. Ahead of today's event, Fed fund futures traders estimate a 61% likelihood of a 75 bps rate hike in September. Expectations of a more hawkish tone from Powell provide significant support to the dollar. Over the week, the US currency index rose by 0.38%, and since the beginning of August its growth has amounted to 2.5%. One of the currencies that shows the worst dynamics in relation to the greenback continues to be the British pound. Due to the large difference in interest rates between the Bank of England and the Fed, the pound has fallen against the dollar by about 12% this year and risks falling even lower in the foreseeable future. If Powell signals a third consecutive 75 bps rate hike at Jackson Hole, the GBP/USD pair could head for another steep plunge. Recall that earlier this week, the pound hit its lowest level against the dollar since March 2020. The rate collapsed on the back of a decline in the PMI index for the manufacturing sector in the UK. This morning, the pound is still trading near a 2.5-year low, despite its strong rise the day before. The GBP/USD jumped 0.5% on Thursday to hit 1.1844. According to many analysts, yesterday's growth of the asset is nothing more than just a technical reset. In other words, we saw temporary relief as part of a long-term weakening trend. What will happen to the pound? Most forecasts for the pound are now negative. Experts believe that the GBP/USD pair will almost never react to the comments of the governor of the British central bank, which will be made during the forum. For now, money markets are expecting the BoE to be more likely to raise rates by 50bps next month. At the same time, the scenario, which includes a possible increase by 75 bps, is almost not considered. And yet, let's assume that a hawk suddenly wakes up in BoE Governor Andrew Bailey, especially since there are weighty prerequisites for this. Today, the British energy regulator is due to announce an increase in energy prices. According to forecasts, the cost will increase by 80% in autumn, which will further accelerate the already record high inflation in the country. To reduce inflationary pressure, hypothetically, the BoE could surprise everyone and go for a sharp increase in rates in September. However, we should not forget how this could turn out for the British economy, which is already on the verge of a recession. Growing fears of an economic slowdown are likely to outweigh the BoE's combative resolve on inflation. Therefore, analysts do not expect any miracles on the GBP/USD chart in the near future. The only scenario in which the pound can rise sharply against the dollar is the unexpected change of tone of the head of the Fed. If the Jackson Hole headliner throws a dovish surprise today, the dollar will weaken on all fronts, including against the pound. But do you yourself believe in such an outcome? Source: Forex Analysis & Reviews: GBP/USD: Headliner of the day - Jerome Powell
Forex: Possibility Of Sharp Jump In Many Trading Instruments

Forex: Possibility Of Sharp Jump In Many Trading Instruments

InstaForex Analysis InstaForex Analysis 26.08.2022 11:45
Relevance up to 08:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Euro and pound remains bearish ahead of Fed Chairman Jerome Powell's speech at the Jackson Hole symposium today. Most likely, investors are waiting for hints as to how and at what pace the US central bank is going to raise interest rates in the September monetary policy meeting. If Powell continues to be hawkish, dollar will strengthen further, while risky assets and the US stock market will fall down. But if he hints at a more restrained policy, risk appetite will surge and there will be a sharp jump in many trading instruments. In addition to Powell, the event will be attended by Fed Vice Chairman Lael Brainard and three other Governors: Lisa Cook, Philip Jefferson and Chris Waller, as well as all 12 regional Fed presidents. Some of them are planning to comment before the Fed chief, which could shed light on his final statement. The conference will also be attended by Bank of Japan Governor Haruhiko Kuroda and Bank of England Governor Andrew Bailey. European Central Bank President Christine Lagarde did not attend the meeting, but ECB executive board member Isabelle Schnabel did. A number of other ECB officials are also present, including the heads of the Bank of France and the Bundesbank, as well as policymakers from Africa, Latin America and elsewhere. In terms of the main points of the agenda, there will be four presentations on Friday and Saturday, and there will be discussions every day with the participation of the policymakers. Speakers will also cover topics such as maximum employment, potential output, fiscal constraints and central bank balance sheets. Talking about the forex market, the risk of a further decline in EUR/USD remains. Buyers need to cling to 1.0000 because without it, the pair will have a difficult time rising. Going beyond 1.0000 will open the path to 1.0030 and 1.0070, as well as to 1.0200. But if sellers were more active, the pair will fall to 0.9950, then to 0.9910, 0.9860 and 0.9820. In GBP/USD, buyers managed to push the quotes up, strengthening the chance of an upward correction. Staying above 1.1800 will open the path to 1.1840, 1.1880 and 1.1930, while falling below 1.1800 will push the quotes to 1.1750, 1.1720 and 1.1680. Source: Forex Analysis & Reviews: Euro and pound remains bearish ahead of Jerome Powell's speech at the Jackson Hole symposium  
The Uptrend Of The Cable Market (GBP/USD) Is Officially Canceled

Forex: GBP/USD Up And Down. Finally Something Changes!?

InstaForex Analysis InstaForex Analysis 26.08.2022 12:15
Relevance up to 09:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis (Fig. 1). The pound-dollar pair may move downward from the level of 1.1829 (close of yesterday's daily candle) to the target of 1.1759, the support level (thick white line). After testing this level, an upward movement is possible with the target of 1.1842, the 14.6% retracement level (red dotted line). Upon reaching this level, the price may continue to move upward with the target of 1.1893, the 23.6% retracement level (red dotted line). Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – down; Fibonacci levels – down; Volumes – down; Candlestick analysis – down; Trend analysis – up; Bollinger bands – up; Weekly chart – up. General conclusion: Today, the price may move downward from the level of 1.1829 (close of yesterday's daily candle) to the target of 1.1759, the support level (thick white line). After testing this level, an upward movement is possible with the target of 1.1842, the 14.6% retracement level (red dotted line). Upon reaching this level, the price may continue to move upward with the target of 1.1893, the 23.6% retracement level (red dotted line). Alternative scenario: from the level of 1.1829 (close of yesterday's daily candle), the price may move down to the lower fractal 1.1716 (daily candle from 08/23/2022), where an upward move is possible with the target of 1.1842, the 14.6% retracement level (red dotted line). After testing this level, the price may continue to move up.   Source: Forex Analysis & Reviews: Indicator analysis: Daily review of GBP/USD on August 26, 2022
Potentially Longer Lasting Inflation In The Europe May Cause British Pound (GBP) And Euro (EUR) Being Beaten By US Dollar (USD)

Potentially Longer Lasting Inflation In The Europe May Cause British Pound (GBP) And Euro (EUR) Being Beaten By US Dollar (USD)

Jing Ren Jing Ren 26.08.2022 09:43
As we all know, both the US and Europe (to include the UK along with the EU) are experiencing high inflation. However, how this impacts employees is very different. Employees constitute the bulk of consumers, and therefore drive the economy. The employment culture between these major economies has important implications of how the economy could react to inflation. That, combined with different monetary policy, could be a driving force of currency fluctuations. Last month, EU CPI rose above the US'. The UK's CPI pushed above the US' the month prior. With the Fed acting more aggressively to combat inflation than European central banks, this gap could widen. That could increase the difference in how labor practice and laws affect the economy and currencies. The main differences Generally, the US has "at will" employment, which is often understood that employees can be fired for any reason. But it also means that employees can be hired for any salary, and salary changes are much more flexible. In Europe, employees typically are hired for fixed contracts, often in the framework of collective negotiation. In the US it's rare to have inflation adjustment included in the contract, whereas in Europe (particularly in the periphery) it is almost standard practice. When the cost of living starts rising at an unprecedented rate, the reaction of the labor market is quite different. In the US, employees are more prone to change jobs, looking for better salaries. This has led the BLS to report the highest "churn" rate on record, with as many as 4.6M people changing jobs in a month. Despite this, however, average wages have been declining when adjusted for inflation. Employees who can change jobs are keeping up with inflation, those who cannot are seeing their income erode. Slow and deliberate vs fast and erratic With employees locked into collective contracts, discontent over lower wages translates instead towards industrial action. In recent months, there has been a spate of warnings or outright strikes. Most recently Lufthansa's pilots were unable to reach an agreement, and might go on strike at any time. SAS had to reschedule over 300K passengers because of strikes. One of the key sticking points of these discussions is the inclusion of automatic cost of living adjustments to wages. One of the phenomena most feared by central bankers is a price-wage spiral. That's when higher prices drive workers to demand higher pay, which increases costs to produce goods, causing higher prices, and workers demanding higher pay. An automatic inflation adjustment in labor contracts makes this price-wage spiral easier to develop, and increases the potential for runaway inflation. What does it mean for the future? The theoretical way to head off a wage-price spiral is to aggressively front load interest rates, to prevent inflation rising. However, European central banks have, relatively speaking, not done that. The Fed has acted a lot more aggressively. On the one hand, because of fixed contracts and collective bargaining, wages were likely to rise slower in Europe. On the other, those rises are likely to come along with strikes and be much broader than in the US, which increases inflationary pressure in the long term. Basically, inflation might be further entrenched in Europe than in the US, implying that in the long run, the dollar could outperform the pound and Euro.
Ed Moya (Oanda) Comments On FedEx, Oil, Gold And Crypto

Shocking Forecast! Bank Of England (BoE) Is Expected To Hike The Rate By Over 2%!

ING Economics ING Economics 26.08.2022 13:16
UK households may collectively need up to £65bn extra in government support to offset the forthcoming rise in energy bills this winter. That would reduce the risk of a deep recession but would lead to extra Bank of England rate hikes. Markets are right to be thinking about more tightening  even if investor expectations are wildly overestimating its scale Demands for more government help with energy bills are rising UK markets now expect Bank Rate to exceed 4% next year Even by the standards of 2022, it’s been a crazy week in sterling interest rate markets. Swap rates now suggest that the Bank of England will need to hike rates as high as 4.2% (from 1.75% currently). Not only that, it implies the Bank will need to take rates even higher than the US Federal Reserve; it's the first time investors have taken that view since early this year. This trend has undoubtedly been exaggerated by very poor liquidity which means it's hard to gauge exactly how realistic investors think a 4%+ Bank Rate really is. Nevertheless, we think some of this recent reappraisal can be traced back to the eyewatering surge in gas prices and increased focus on how the government may be forced to react. The chain of logic goes something like this: higher energy costs increase the chances of a big support package from the government. And given it will hit households hard right across the income spectrum, blanket support measures (in addition to targeted payments to those on low incomes) may well be required. That, coupled with possible tax cuts depending on which candidate becomes Prime Minister in September, would materially reduce the risk of a deep economic downturn. But the Bank of England would also view it as inflationary, and may well be forced to increase interest rates even further in the autumn. Markets expect the Bank of England to hike beyond 4% next year Source: Refinitiv, ING, Macrobond   We tend to agree with this assessment – even if the scale of the rate hikes required will probably fall well short of what markets expect. We think a 50bp hike in September, coupled with another 25-50bp in November looks more likely at this stage. Let's break it down in more detail: So far, the government has announced £37bn worth of support, through a combination of direct payments to low-income households, coupled with a £400 discount for all households on their energy bills from October. When that support was announced in late May, energy bills were expected to peak at a little under £3000 in the autumn. Using that figure, a quick back-of-the-envelope calculation suggests that households would have paid roughly £65bn in aggregate on their energy bills in the period between October 2022-October 2023. For context that compares to roughly £30bn in the fiscal year 2020-21, which came before energy prices began increasing. In other words, the support measures announced to date looked, at the time anyway, like they would go some way to offsetting the energy bill increases coming down the track. Gas prices have reached dizzying levels Source: Macrobond, ING Consumers may need up to £65bn extra in government support Fast forward a couple of months, and the picture looks much more extreme. The energy regulator Ofgem has announced the average household bill will surpass £3,500 from October, and further sharp rises look inevitable. Indeed, our own estimates based on gas and electricity futures contracts this week point to an average annual household energy bill of around £5,300 across that same 12-month period from October (peaking at roughly £6,500 on an annualised basis in the three-month period between April-June 2023). That takes our aggregate household cost estimate up to around £130bn – a £65bn increase on May's projection - and this estimate is rising on an almost daily basis. Admittedly that figure is a bit of a simplification – it relies on a number of assumptions, not least that those wholesale futures contracts provide an accurate gauge of where prices will land this winter. Many of those contracts are trading fairly illiquid right now. But it gives a sense of what the new Prime Minister will be faced with when they take office in early September. Roughly speaking, the average household would see need almost £2,700 extra, were the government to match the level of support offered in June. One option would be to increase the value of payments being given to those on income support/benefits, and that seems quite likely. But in practice, a much broader response will also be needed. We’ve run a rough calculation in the chart below, and what’s striking is that across large parts of the income distribution, households may have to devote more than 10% of their disposable incomes to energy bills on average (between Oct 2022 and 2023), even accounting for existing support available. Some of these households will be able to tap savings accrued during the pandemic. That 'excess savings' level still stands at roughly 8% of GDP.  But it's hard for the government to target support on this basis, and it may find that the most practical option would be to dramatically increase the £400 energy bill discount being offered to all households. Households in most income deciles will be spending more than 10% of disposable incomes on energy Government support based on estimates produced by the UK Treasury as part of the 26 May Cost of Living package. For simplicity, we've used 2020/21 equivalised disposable income data, which in practice will have increased. Assumes energy prices increase by same percentage for all income deciles. Disposable income = after income tax/national insurance etc (but before accounting for housing and other costs) Source: ING analysis of ONS Living Costs and Food Survey, Effects of Tax and Benefits, Ofgem, UK Treasury Extra government stimulus would likely prompt additional rate hikes Whatever happens, the Bank of England will be looking at all of this through the lens of inflation. Broad-based government support would considerably reduce the chances of a recession - or at least of a deep downturn - especially given it may also be coupled with a cut to national insurance (a form of income tax) if Foreign Secretary Liz Truss becomes Prime Minister in September. The assessment also depends on what support is offered to businesses, something we've not discussed here. But broadly speaking, we agree with markets that the Bank of England would view reduced recession odds as raising medium-term inflation forecasts, and thus would likely feel obliged to hike rates further. To be clear, all of this is guesswork at this stage. Neither candidate, Rishi Sunak nor Liz Truss, have said in detail yet what level of support they’d implement this autumn. It’s not clear whether we'll get an emergency budget before the Bank of England's meeting on 15 September, but assuming we don't, we expect the Bank to opt for another 50bp then. We’ve recently argued that the Bank is reaching the latter stages of its tightening cycle. The BoE’s own August forecasts suggest inflation will be below target in a couple of years' time, regardless of whether it increases interest rates further. Inflationary pressures associated with 'core' goods are easing, given lower commodity costs, higher inventory levels and reduced consumer demand - even if wage growth will keep pressure on services inflation. But the arrival of fresh government support would provide the BoE with further impetus to hike rates aggressively in the near term, and probably into late autumn. We expect the Bank Rate to peak at roughly 2.5-2.75% in November, albeit far less than current market pricing is suggesting. Gilts are skidding off-road The jump in energy futures, as well as the surprise UK inflation report, are still being digested by the gilt market. These have brought about a rise in BoE hike expectations, an aggressive flattening of the gilt curve, and a sharp underperformance of gilts relative to US and European peers. In light of greater hike expectations, curve inversion is no surprise, and indeed the US curve has been there recently too. Worse inflation dynamics, as well as more immediate recession fears, should lead to a further flattening of the gilt curve compared to its US counterpart. With US inflation expectations looking more under control than in Europe, the spread between US and UK rates seems more directional to short-term European energy developments. The spread to EUR rates on the other hand is harder to explain. The UK is by no means the only country contemplating shielding its consumers from higher energy bills. Indeed, the measures floated so far in the UK pale in comparison to some continental alternatives. Similarly, energy inflation is a problem faced by all European countries. In short, the spread that has opened between GBP and EUR short rates has to narrow, and we think it will most likely be with lower GBP rates. The underperformance of 2Y gilts relative to Germany is overdone Source: Refinitiv, ING   The magnitude of these moves raises financial stability questions. We’ll refrain from drawing broader conclusions about the effect on the valuation of other assets beyond bonds but will simply stress that manageable rates volatility tends to be a pre-condition in many investment decisions. Closer to home, the latest moves will dash hopes of a return to more functional gilt markets. Gilt liquidity conditions continue to deteriorate Source: Refinitiv, ING   Bid-ask spreads have been propelled to new wides, and implied volatility continues to climb. These developments cast a long shadow on the Bank of England's plan to sell gilts out of its Asset Purchase Facility portfolio, even in small sizes. We don't argue that the plan should be shelved but a clearer circuit-breaker, which helps avoid adding to market stress, would make sense in our view. One could of course argue that the current episode is a one-off and that the BoE plans the sale of only £10bn per quarter in the first year. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Forex: GBP/USD. The Support Has Been Rejected 3 Times. Uptrend!

Forex: GBP/USD. The Support Has Been Rejected 3 Times. Uptrend!

InstaForex Analysis InstaForex Analysis 26.08.2022 17:20
Relevance up to 16:00 2022-08-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Overview: The resistance of GBP/USD pair has broken; it turned to support around the price of 1.1817 last week. Thereby, forming a strong support at 1.1817. The direction of the GBP/USD pair into the close this week is likely to be determined by trader reaction to 1.1817 and 1.1979. The GBP/USD pair climbed above the level of 1.1817 before it started a downside correction. The GBP/USD pair set above strong support at the level of 1.1817, which coincides with the 23.6% Fibonacci retracement level. This support has been rejected for three times confirming uptrend veracity. Hence, major support is seen at the level of 1.1817 because the trend is still showing strength above it. The level of 1.1817 coincides with the golden ratio (23.6% of Fibonacci retracement) which is acting as major support today. Another thought; the Relative Strength Index (RSI) is considered overbought because it is above 70. At the same time, the RSI is still signaling an upward trend, as the trend is still showing strong above the moving average (100), this suggests the pair will probably go up in coming hours. Accordingly, the market will probably show the signs of a bullish trend. This suggests the pair will probably go up in coming hours. Accordingly, the market is likely to show signs of a bullish trend Read more: https://www.instaforex.eu/forex_analysis/277667 In other words, buy orders are recommended above 1.1817 level with their first target at the level of 1.1879. From this point, the pair is likely to begin an ascending movement to the point of 1.1929 and further to the level of 1.1979. The price of 1.1979 will act as a strong resistance and the double top has already set at the point of 1.2600. On the other hand, if a break happens at the support of 1.1716, then this scenario may become invalidated. Source: Forex Analysis & Reviews: Technical analysis of GBP/USD for August 26, 2022  
The Cable Market May Continue To Trade In A Very Volatile Manner

Forex: British Pound (GBP) To US Dollar (USD) - Technical Analysis - 29/08/22

InstaForex Analysis InstaForex Analysis 29.08.2022 10:29
Technical Market Outlook: The GBP/USD pair has broken below the technical support located at 1.1717 (the recent monthly low) and made a new, fresh low at the level of 1.1651. The nearest horizontal technical resistance is seen at the level of 1.1717 and 1.1760 and this level is the next target for bulls in a case of a bounce. The momentum remains weak and negative, however, there is a bullish divergence seen on the H4 time frame chart between the price action (last low) and momentum. The larger time frame trend (daily and weekly) remains down until further notice.     Weekly Pivot Points: WR3 - 1.18043 WR2 - 1.17392 WR1 - 1.17002 Weekly Pivot - 1.16741 WS1 - 1.16351 WS2 - 1.16090 WS3 - 1.15439 Trading Outlook: The Cable is way below 100 and 200 DMA , so the bearish domination is clear and there is no indication of down trend termination or reversal. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame chart last week. The next long term target for bears is seen at the level of 1.1410. Please remember: trend is your friend. Relevance up to 09:00 2022-08-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/290330
"A notable risk facing credit markets next year is the potential for the European Central Bank (ECB) to reduce the size of its balance sheet via the tapering of the asset purchase programme"

Forex: EUR/USD & GBP/USD - Technical Analysis - 29/08/22

InstaForex Analysis InstaForex Analysis 29.08.2022 13:33
EUR/USD     Higher time frames Last week, the pair hit a new extreme low (0.9952) and closed below the psychological level of 1.0000. If the downtrend goes on, the targets are seen at 0.9000 (psychological level) and 0.8225 (2000 extreme low). In this light, bulls will try to break through 1.0000. Ichimoku Kinko Hyo resistance is currently standing at 1.0052 – 1.0080 – 1.0135 – 1.0190 and 1.0182 (weekly short-term trend).     H4 – H1 The bullish zone is again lost. There is a strong bearish bias as trading is below the key levels of 0.9963 (weekly long-term trend) and 1.0000 (central Pivot level). A change in the balance of power will again shift if the price consolidates above these marks. Resistance is seen at 1.0054 – 1.0143 – 1.0197 (classic Pivot levels). Should bears remain strong, the quote may fall to 0.9911 – 0.9857 – 0.9768 (classic Pivot support). *** GBP/USD     Higher time frames Last week, the pair hit a new extreme low of 1.1759. This level has now turned into resistance and is seen as the nearest bullish target. Today, bears are ready to extend the downtrend, with the target at 1.1411 (2020 low).     H4 – H1 In lower time frames, there is still a strong bearish bias. The quote has tested 1.1678 support. The intraday targets stand at 1.1620 – 1.1509 (classic Pivot levels). The bullish intraday targets are seen at around 1.1789-88 (weekly long-term trend and central Pivot level). *** Indicators used in technical analysis: higher time frames: Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun H1: Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Relevance up to 12:00 2022-08-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320165
Forex: GBP/USD - New, Fresh Low. The Next Target For Bulls

Forex: GBP/USD - New, Fresh Low. The Next Target For Bulls

InstaForex Analysis InstaForex Analysis 30.08.2022 10:05
Relevance up to 07:00 2022-08-31 UTC+2 Technical Market Outlook: The GBP/USD pair has made a new, fresh low at the level of 1.1647 and then bounced towards the nearest technical resistance located at 1.1717. The local high was made at the level of 1.1743, but it is not enough to continue the rally. The next horizontal technical resistance is seen at the level of 1.1760 and this level is the next target for bulls in a case of a bounce extension. The momentum remains weak and negative, however, there is a bullish divergence seen on the H4 time frame chart between the price action (last low) and momentum. The larger time frame trend (daily and weekly) remains down until further notice. Weekly Pivot Points: WR3 - 1.18043 WR2 - 1.17392 WR1 - 1.17002 Weekly Pivot - 1.16741 WS1 - 1.16351 WS2 - 1.16090 WS3 - 1.15439 Trading Outlook: The Cable is way below 100 and 200 DMA , so the bearish domination is clear and there is no indication of down trend termination or reversal. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame chart last week. The next long term target for bears is seen at the level of 1.1410. Please remember: trend is your friend. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: Technical Analysis of GBP/USD for August 30, 2022
The Uptrend Of The Cable Market (GBP/USD) Is Officially Canceled

Forex: GBP/USD - UK M4 Money Supply And Mortgage Approvals Came In Better Than Expected!

InstaForex Analysis InstaForex Analysis 30.08.2022 16:48
Relevance up to 15:00 2022-08-31 UTC+2 The GBP/USD pair rebounded but the price action signaled exhausted buyers already. The price increased a little only because the Dollar Index was in a corrective phase in the short term. It was trading at 1.1704 at the time of writing and it seems under strong bearish pressure. Fundamentally, the UK M4 Money Supply and the Mortgage Approvals came in better than expected while the Net Lending to Individuals was reported at 6.5B below 6.6B expected. On the other hand, the US HPI and the S&P/CS Composite-20 HPI came in worse than expected. Later, the US CB Consumer Confidence is expected at 97.6 points while the JOLTS Job Openings could be reported at 10.37M. GBP/USD Flag Formation! Technically, the pair rebounded after its massive drop. The price action developed an up-channel pattern that could announce a downside continuation. Now, it is challenging the uptrend line and it could reach the 1.1685 static support as well. Staying above these downside obstacles may signal new bullish momentum. It remains to see how it will react after the US high-impact data. GBP/USD Forecast! A valid breakdown below the uptrend line and through the 1.1685 may signal a deeper drop. Dropping, closing, and stabilizing below the S1 (1.1670) could bring short opportunities. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Source: Forex Analysis & Reviews: GBP/USD: bearish pattern in play
OANDA Senior Market Analyst Craig Erlam Talks Recent Important Market Events

British Pound (GBP) Is Affected By The Prospect Of British Economy

Kenny Fisher Kenny Fisher 30.08.2022 21:43
Sterling falls to 2.5 year low The British pound is down sharply today as the downward trend continues. In the North American session, GBP/USD is trading at 1.1629, down 0.65%. We haven’t seen the pound at such low levels since March 2020. A gloomy outlook for the UK economy continues to weigh on the pound. The Bank of England has projected that inflation will hit 13%, and some forecasts expect inflation to rise even higher. On Monday, Goldman Sachs said it expected the UK to tip into a recession in the fourth quarter of 2022 and projected that the economy would decline by 0.6% in 2023. The US dollar flexed some muscles on Friday, after a hawkish speech from Fed Chair Powell at the Jackson Hill Symposium. Powell’s brief speech went straight to the point, stating that the Fed would continue raising rates until inflation was brought under control. Powell pointedly said that one or two weak inflation reports would not cause the Fed to pivot on its aggressive policy, a veiled reference to the market euphoria which followed after July’s inflation rate dropped unexpectedly, as speculation rose that the Fed would make a U-turn on policy. Powell’s speech removed any doubts about the Fed’s plans to continue raising rates, but the size of the increases will depend on key economic data, not just inflation. Overshadowed by Jackson Hole, US Personal Income and Spending data was weaker than expected. As well, the Core PCE index, the Fed’s preferred inflation indicator, fell to 6.3%, down from 6.8% and below the forecast of 7.4%. The US economy is showing signs of slowing down, and the markets will be keeping a close eye on Friday’s non-farm payroll report. If NFP is weaker than expected, we could see the likelihood for a 50 basis point increase. Currently, the markets have priced in a 66.5% likelihood of a 75bp hike, versus 33.5% for a 50bp increase, according to CME’s FedWatch. GBP/USD Technical  GBP/USD is testing support at 1.1672. Below, there is support at 1.1604 There is resistance at 1.1786 and 1.1854     This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. British pound can't find its footing - MarketPulseMarketPulse
The Uptrend Of The Cable Market (GBP/USD) Is Officially Canceled

Forex: GBP/USD - Two Scenarios That May Happen. Check It!

InstaForex Analysis InstaForex Analysis 31.08.2022 11:03
Relevance up to 08:00 UTC+2 Trend analysis (Fig. 1). The pound-dollar pair may move upward from 1.1651 (close of yesterday's daily candle) to 1.1718, the 14.6% retracement level (blue dotted line). When testing this level, continued upward movement is possible to the resistance level 1.1759 (thick white line). Upon reaching this level, the price may rise to 1.1778, the 23.6% retracement level (blue dotted line). Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – up; Fibonacci levels – up; Volumes – up; Candlestick analysis – up; Trend analysis – up; Weekly chart – up; Bollinger Bands – up. General conclusion: Today the price may move upward from 1.1651 (close of yesterday's daily candle) to 1.1718, the 14.6% retracement level (blue dotted line). When testing this level, continued upward movement is possible to the resistance level 1.1759 (thick white line). Upon reaching this level, the price may rise to 1.1778, the 23.6% retracement level (blue dotted line). Alternative scenario: from the level of 1.1651 (close of yesterday's daily candle), the price may move upward to 1.1718, the 14.6% retracement level (blue dotted line). In the case of testing this level, a downward movement is possible with the target of 1.1620, the lower fractal (blue dotted line).   Source: Forex Analysis & Reviews: Indicator analysis: Daily review of GBP/USD on August 31, 2022
The Technical Factors Speak In Favor Of The Pound's (GBP) Growth

Sterling Pound (GBP) Problems: Weak Macroeconomic Data, Rising Inflation And The Threat Of Recession

InstaForex Analysis InstaForex Analysis 31.08.2022 11:49
Relevance up to 08:00 UTC+2 The British currency's efforts to rise above the current barriers are most often unsuccessful. The pound, having made another attempt to grow, ran into obstacles in the form of weak macroeconomic data, rising inflation and the threat of recession. At the beginning of this week, the British currency collapsed to its lowest level since March 2020. The reason is increased concerns about the UK's economic prospects. Against this background, market participants massively sold the pound. In the future, the pound sank even more, especially against the euro. The catalyst for this decline was the energy crisis that engulfed European countries and became the "fuel" for the expectation of a recession in the UK. According to analysts, the gloomy outlook for the British economy pushed the pound into a downward spiral. Currency strategists at Goldman Sachs responded to this situation by providing another forecast. However, it did not please the markets, as it implied a deterioration in the medium and long-term economic prospects of the country. Recall that this year the pound has fallen by more than 13% against the dollar, and this is not the limit. According to calculations by Goldman Sachs, in the fourth quarter of 2022, the UK will be gripped by a recession. At the same time, analysts lowered the forecast of GDP growth for 2023 to -0.6%. In the current situation, inflation in the UK will grow and exceed 20% at the beginning of next year, experts emphasize. The implementation of such a scenario is possible with a further increase in gas prices in Europe. Goldman Sachs analysts note that core inflation in the UK will peak at 22.4% if the marginal price of gas soars by 80%. This indicator is several times higher than the previous forecast for inflation, which was 14.8%. Commerzbank economists agree with them, who believe that a prolonged increase in prices for blue fuel raises the risk of a recession. Against this background, it will be much larger and longer than previously expected. In such a situation, pressure is mounting on the Bank of England, so the central bank "needs to find a balance between fighting the recession and high inflation rates," Commerzbank emphasizes. Amid galloping inflation, the British currency has a constant tendency to weaken. The tense economic situation is a kind of "black hole" for the pound, which deprives it of the opportunity to fully grow. According to the currency strategists of UOB Group, in the next few weeks the GBP/USD pair may collapse to 1.1630, although it is trying hard to stay afloat. The pound remains under pressure, risking testing the March 2020 low near 1.1410. Currently, this threat has weakened a bit, as the pound has managed to slightly grow. The GBP/USD pair was trading at 1.1681 on the morning of Wednesday, August 31, trying to hold on to the positions won. The pound's efforts were relatively successful: the GBP returned to a downward trend much more often. According to economists, in early autumn, the BoE, following its American and European counterparts, will raise interest rates (by 50 bps, to 2.25%). At the same time, experts do not rule out an additional increase in rates (by 25 bps) at the central bank's next meetings. Against this background, the fragile balance of the pound raises concerns of market participants. A serious pressure on the GBP/USD pair is exerted by a reduction in the prospects for economic growth in the UK. The pound receives relative support when macroeconomic data from the United States deteriorates. However, now the markets are expecting positive statistics on the American economy, so the pound's chances to rise are small. Company does not offer investment advice and the analysis performed does not guarantee results. Source: Forex Analysis & Reviews: GBP/USD: The pound is not a flower, but is reaching for new heights. There is no way to make them grow: it withers halfway
S&P 500, Nasdaq, EUR/USD, Brent Crude Oil And Gold Trade Lower

FX: Australian Dollar (AUD) May Decrease, GPB/USD Seems To Feel Worse | Indices: S&P 500 Plunged, So Did Nasdaq

ING Economics ING Economics 01.09.2022 08:02
USD off to a strong start at the beginning of September Source: shutterstock Macro outlook Global markets: US equities continued their slow bleed on Wednesday, the S&P500 dropping another 0.78% and the NASDAQ going 0.56% lower. This wasn’t exactly a one-way street, with some periods of strength within the session, but the downtrend was never seriously threatened. Equity futures are poised for more weakness today too, which could set the scene for other asset markets today ahead of tomorrow’s payrolls release. 2Y US Treasury yields added another 5.1bp yesterday, which probably didn’t help the tone in equities, and 10Y yields put on another 9bp to reach 3.19%.  News from the Fed: Loretta Mester is reported as saying that she favours rates above 4% next year and no cut in rates in 2023. That probably helped keep Treasury yields rising across the curve. But despite the downbeat market sentiment and rising USD rates EURUSD managed to rise to 1.004, up from 1.001 this time yesterday. In contrast, the AUD is looking troubled again today following its sell-off yesterday and sits at 0.6835, and looks more likely to keep going down than head back up. Cable too looks in bad shape, dropping to 1.1599 and the JPY is hurtling upwards and at 139.29, the question is, do we hit 140 today? Asian FX saw some decent gains from the KRW yesterday, which pulled back to 1338. The INR is also still benefitting from rumours of the inclusion of government securities into global bond indices. Today, the USD looks rampant, however, and it may well be a different story. G-7 Macro: Yesterday’s ADP survey was published with a new methodology to make it more accurate (in line with payrolls) and it delivered a weakish looking 132,000 employment gain. It’s impossible to tell if this will be reflected in tomorrow’s jobs report, but it does seem to suggest that at least a slowdown from 528,000 jobs gain reported in July is on the cards. Manufacturing ISM data is the main release from the G-7 today. A slight decrease from last month’s 52.8 reading is the median expectation. The prices paid index is also expected to come down a bit more from last month’s reading of 60.0. There are also PMI releases in Europe and German retail sales to watch out for. India: Indian 2Q22 GDP wasn’t quite as punchy as had been expected, though the heavily base-affected release is a little tricky to interpret right now. A 13.5% YoY gain was a bit down on the 15.3% increase that had been expected, but probably still leaves India on track to achieve 7% growth this calendar year. Strong investment (+20.1%YoY) and private consumption (25.9%) underpinned the result. Though the boost from the re-opening of the economy will probably fade next quarter, and the economy will face stronger headwinds from falling external demand, higher inflation and rising domestic interest rates.  The fiscal deficit figures for July actually registered a small surplus, which is an improvement on last year’s equivalent fiscal balance and should keep India on track to meeting or even beating its 6.4% (GDP) deficit target. Australia: Private capital expenditure released at 0930 SGT provides the first insight into next week’s 2Q22 GDP figure. The median forecast is for a 1% gain. A further clue comes the day before the release when we get the net trade contribution component. We are tentatively looking for a robust 1% QoQ expansion of activity in 2Q22, which will add to the pressure on the Reserve Bank to keep leaning against inflation. Korea:  The trade deficit widened to a record USD -9.4 billion in August, almost double the USD 4.8 billion deficit recorded in July. Exports grew 6.6% YoY in August (vs a revised 9.2% in July and a market consensus of 5.6%). As early data suggested, semiconductor exports were quite weak with a -7.8% drop while petroleum/chemical and automobiles led the growth. Meanwhile, imports surged 28.2% YoY in August (vs 21.8% in July and market consensus of 23.7%) due to increases in energy, semiconductors, and chemicals. Separately, Korea’s manufacturing PMI fell to 47.6 in August from 49.8 in July. This is its lowest reading since July 2020. The output index fell to only 44.6, staying below 50 for the fourth month in a row. Combining this weak PMI data with the trade deficit data and yesterday’s weaker-than-expected industrial production outcomes, we are revising our growth forecast lower for the second half of the year and now expect a small contraction Indonesia:  August inflation is set for release today.  Both headline and core inflation have been on an uptrend this year with headline inflation now past the central bank’s target.  Headline inflation will likely settle close to 5%YoY while core inflation should exceed 3%.  Accelerating inflation and a planned subsidized fuel hike were enough to prod Bank Indonesia to finally hike rates at their last meeting and we believe that BI is not done for the year.  Faster inflation, especially after the fuel hike should keep BI on a hiking path.  What to look out for: Regional PMI manufacturing and US NFP South Korea GDP and trade (1 September) Regional PMI manufacturing (1 September) China Caixin PMI manufacturing (1 September) Indonesia CPI inflation (1 September) US initial jobless claims and ISM manufacturing (1 September) Fed's Bostic speaks (2 September)  South Korea CPI inflation (2 September) US non-farm payrolls and factory orders (2 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Uptrend Of The Cable Market (GBP/USD) Is Officially Canceled

GBP/USD Is Under Strong Bearish Pressure. Trading Suggestions: Sharp Break Above The Symmetrical Triangles Pattern

InstaForex Analysis InstaForex Analysis 01.09.2022 09:19
The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Early in the European session, the British Pound (GBP/USD) is trading at around 1.1574. We can see the formation of a symmetrical triangle on the 4-hour chart. If the pound manages to break above this pattern, we could expect a bullish acceleration towards the 21 SMA located at 1.1670. The British pound is under downward pressure due to the gloomy outlook for the British economy. Earlier this month, the Bank of England forecast that the British economy would enter a prolonged recession from the fourth quarter of 2022. This suggests that in the medium term the pound could reach the psychological level of 1.15 and even the low of 2020 at 1.1410. The GBP/USD pair is trading below the 21 SMA located at 1.1670 and below the 200 EMA located at 1.1957. Any technical bounce towards these levels will be seen as an opportunity to sell. On the 4-hour chart, we can see the formation of a downtrend channel since August 8. In case the downside pressure continues, a technical bounce around the bottom of the downtrend channel is expected around 1.1542. Technically, GBP/USD is under strong bearish pressure and is trading around -1/8 of Murray at 1.1598. This Murray level represents a technical reversal zone. In the event that the pound resumes its bullish cycle, we should expect it to trade above 1.1596 (-1/8 Murray), which could set the stage for a recovery in GBP and it could reach the top of the downtrend channel at around 1.1780. On the other hand, if the pound continues its downward acceleration, it is expected to fall towards the area of around 1.1542. There is daily support and it could even reach -2/8 of Murray located at 1.1475. Our trading plan for the next few hours suggests a sharp break above the symmetrical triangles pattern at around 1.1596 to buy with targets at 1.1670 and 1.1780.   Relevance up to 06:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/290925
The Uptrend Of The Cable Market (GBP/USD) Is Officially Canceled

Serious Pressure On The GBP/USD Pair. What Happens When The Pair Goes Down Or Up?

InstaForex Analysis InstaForex Analysis 01.09.2022 09:58
Only one signal to sell the pound was formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 1.1654 level in my morning forecast and advised making decisions on entering the market from it. A breakthrough and reverse test from the bottom up of this range gave a sell signal, which eventually resulted in a move down by more than 50 points. Before the test and false breakout of the level of 1.1654 in the afternoon, I lacked literally one point, so I couldn't get a point from there to open new short positions. When to go long on GBP/USD: Obviously, the pressure on the pound continues to increase, including due to the large spread in the interest rates of central banks. The cost of living crisis, high inflation and the British economy rapidly sliding into recession leave no chance for bulls on the pound. Against this background, it is time to talk about updating the low that was reached for the pair during the beginning of the coronavirus pandemic in 2020 - this is, for a minute, 1.1409. Today we expect the release of the index of business activity in the manufacturing sector in the UK for August this year. It is unlikely that it will be revised for the better, so there is no need to have much hope for the restoration of the pair. In case GBP/USD falls further, forming a false breakout in the area of the nearest support at 1.1540 will lead to the first signal to open long positions in anticipation of a correction to the area of 1.1595. A lot also depends on this level, since its breakthrough can pull stop orders from speculative bears. A test of 1.1595 from top to bottom will testify to a return of demand for the pound and creates a buy signal with growth to a more distant level of 1.1650, where moving averages are passing, playing on the bears' side. The farthest target will be the area of 1.1714, where I recommend taking profits. If the GBP/USD falls further, which is more likely, and there are no bulls at 1.1540, the pressure on the pair will increase. A breakthrough of this range will lead to the renewal of the next annual low. In this case, I advise you to postpone long positions until the next support at 1.1479, but you can act there only on a false breakout. I recommend opening long positions on GBP/USD immediately for a rebound from 1.1409, or even lower - around 1.1360, counting on correcting 30-35 points within the day. When to go short on GBP/USD: Bears continue to push the pound downward. The only problem for them now is the beginning of a new month, which may lead to a small upward correction in the pound, which many have been expecting for a long time. Therefore, selling on the breakdown of annual lows is a rather risky strategy. It is much better to act on the basis of an upward correction and weak fundamental statistics, which is expected today in the UK. In this case, you can put a short stop with a fairly extensive potential for the pound's decline. The optimal scenario for selling GBP/USD would be forming a false breakout at the level of 1.1595, which was formed at the end of yesterday. This will make it possible to achieve a new fall and renewal of annual lows around 1.1540. A breakdown and reverse test of this range will give a new entry point for selling with a fall to 1.1479, and the area of 1.1409 will be a further target, where I recommend taking profits. In case GBP/USD grows and there are no bears at 1.1595, there will be ghostly chances for an upward correction, and bulls will get an excellent opportunity to return to 1.1650, where the moving averages play on the bears' side. Only a false breakout there will provide an entry point into short positions based on the pair moving downward. If there is no activity there, I advise you to sell GBP/USD immediately for a rebound from 1.1714, counting on the pair's rebound down by 30-35 points within the day. COT report: The Commitment of Traders (COT) report for August 23 logged an increase in both short positions and long positions. And although the latter turned out to be a bit more, these changes did not affect the real current picture. Serious pressure on the pair remains, and recent statements by Federal Reserve Chairman Jerome Powell that the committee will continue to aggressively raise interest rates further have only increased pressure on the British pound, which has been experiencing quite a lot of problems lately. Expected high inflation and a looming cost-of-living crisis in the UK does not give traders room to take long positions, as a fairly large range of weak fundamentals is expected ahead, likely to push the pound even further below the levels at which it is currently trading. This week, it is important to pay attention to data on the US labor market, which, among other things, determine the Fed's decision on monetary policy. Continued resilience with low unemployment will lead to higher inflationary pressures going forward, forcing the Fed to further raise interest rates, putting pressure on risky assets, including the British pound. The latest COT report indicated that long non-commercial positions rose 14,699 to 58,783, while short non-commercial positions rose 9,556 to 86,749, leading to a slight rise in the negative non-commercial net position to -27 966 against - 33,109. The weekly closing price fell off from 1.1822 against 1.2096. Indicator signals: Trading is below the 30 and 50-day moving averages, which indicates further decline in the pair. Moving averages Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case the pair goes down, the lower border of the indicator around 1.1570 will act as support. In case of growth, the upper border of the indicator around 1.1650 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.     Relevance up to 08:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320520
British pound (GBP/USD). Sterling falls below 1.23

British pound (GBP/USD). Sterling falls below 1.23!

Kenny Fisher Kenny Fisher 06.05.2022 12:22
The British pound has stabilized on Friday, after sustaining huge losses a day earlier. GBP/USD is trading at 1.2342 in the European session, down 0.11%. Earlier, the currency fell to 1.2276, its lowest level since June 2020.   BoE warning chills the pound The BoE dutifully raised interest rates at its meeting on Thursday, but the market reception was a chilly one. GBP/USD plummeted a staggering 2.21% on the day. Investors gave a thumbs-down to the grim message from the central bank, as a fourth straight rate hike in as many meetings became an afterthought. The BoE’s growth forecast for 2022 remained at 3.75%, but it slashed the 2023 projection from 1.25% to -0.25%. At the same time, the central revised upwards its inflation forecast for Q4 to above 10%, up from 8% in an April forecast. The ‘double-whammy’ of higher rates and a deteriorating economic outlook sent the British pound reeling after the BoE meeting. The rate decision was a 6-3 vote, with all three dissenters voting in favor of a 0.50% rate hike. This surprised the markets, which had expected an 8-1 vote. There is a deep split in the MPC, with Governor Bailey acknowledging after the meeting that an uncertain economic outlook had led to a range of views in the MPC. Such a statement can hardly be expected to instill confidence in the markets. In its policy summary, the BoE signalled that more rate hikes are coming, and also dropped the word “modest” to describe upcoming rate hikes. Yet the markets were not impressed  – the 0.25% was modest, and with the BoE warning about 10% inflation, it’s clear that it will take quite some time before rate hikes do the job and wrestle down sizzling inflation. The US dollar initially lost ground after the Fed rate decision on Wednesday, as investors seized on Fed Chair Powell’s statement that the Fed was not considering a 0.75% rate hike. The greenback has since bounced back, as the markets digest that the Fed plans to be aggressive with further 0.50% hikes in its battle to bring down inflation.   GBP/USD Technical There is resistance at 1.2612 and 1.2719 GBP/USD tested support at 1.2272 in the Asian session. Below there is support at 1.2179           This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The Tightening Of Monetary Policy Will Continue For Some Time

Are You Starting Your Adventure With Forex? This Is What You Should Know About EUR/USD and GBP/USD Today

8 eightcap 8 eightcap 01.09.2022 11:24
Details of the economic calendar for August 31 Eurozone inflation hit a new record high of 9.1% in August. Eurostat reports that the main growth driver is high energy prices. The high level of inflation may again push the European Central Bank to further interest rate hikes. It is worth noting that for the past two days, most speakers from the ECB have been actively advocating the possibility of raising the ECB rate by 0.75% in September. In turn, German Chancellor Olaf Scholz says that citizens will feel a significant increase in electricity prices in September. In simple terms, inflation in the EU will continue to grow. During the American trading session, employment data in the United States was published. According to the ADP report, the number of jobs in the private sector in August increased by 132,000. Forecast expected an increase of 300,000. The divergence of expectations has served as a stimulus for the local sell-off of the US dollar. As a reminder, the ADP report is often viewed by traders as a leading indicator for the US Department of Labor report due on September 2nd. Category "Interesting moments" Bloomberg: Fed Chairman Jerome Powell has buried the concept of a "soft landing" of the US economy. Now the Fed's goal is to bring inflation down by slowing US economic growth below its potential level, which officials estimate at 1.8%. Analysis of trading charts from August 31 The EURUSD currency pair, despite local manifestations of activity caused by speculative interest, is still in close proximity to the parity level (1.0000). Price fluctuation within 150 points lasted for almost two weeks. This movement, in theory, can become a process of accumulation of trading forces. The GBP/USD currency pair gradually weakened, which resulted in a prolongation of the main downward trend. Details: Since August, the pound has lost 700 points (about 5.5%) of value, which is considered a strong price change, allowing short positions to overheat. Since the beginning of the medium-term trend, June 2021, the pound has lost 2,600 points in value (about 18.5%). Economic calendar for September 1 The final data on business activity indices in the manufacturing sector in Europe, the United Kingdom, and the United States are to be published today. If the indicators coincide with the preliminary estimate, the data will be ignored by market participants since they have already been priced in. The EU employment data will also be published, which may rise from 6.6% to 6.7%. This is already a negative factor for the euro if the forecast matches. During the American session, in addition to the manufacturing PMI data, weekly jobless claims in the United States will be published, where figures are assumed to rise. This is a negative factor for the US labor market, which may affect dollar positions. Statistics details: The volume of continuing claims for benefits may increase from 1.415 million to 1.438 million. The volume of initial claims for benefits may increase from 243,000 to 248,000. Time targeting: EU Manufacturing PMI – 08:00 UTC UK Manufacturing PMI – 08:30 UTC EU Unemployment – 09:00 UTC US Jobless Claims – 12:30 UTC US Manufacturing PMI – 14:00 UTC Trading plan for EUR/USD on September 1 A recent attempt to keep the price above 1.0050 proved unsuccessful. As a result, the quote again rolled back to the level of 1.0000. In this situation, do not rush, the tactics of work, as before, will be focused on the main move that will arise after the completion of the stage of accumulation of trading. We concretize the above: The upward scenario for the currency pair is taken into account after the price is held above the value of 1.0050. In order to filter out false touches, the quote needs to stay above the control value in the daily period. The downward scenario is considered in the market in the form of two steps. The local move will be considered by the trailers at the moment the price holds below 0.9970 in a four-hour period. In this case, there is a high probability of movement towards the value of 0.9900. The main move will be relevant after holding the price below 0.9890 in the daily period. This scenario will lead to a prolongation of the trend. Trading plan for GBP/USD on September 1 In this situation, market participants set their sights on the local low of 2020. There are about 150 points left to go, but given the growing oversold level of the pound sterling, a full-length technical correction is possible. The price area 1.1410/1.1525 can serve as a support on the way of sellers. What is shown 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 candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and 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.     Relevance up to 09:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320541
The Price Of Cable Market (GBP/USD) Is Able To Reach The First Target Level

GBP/USD: Sell Or Buy? Trading Suggestion

InstaForex Analysis InstaForex Analysis 01.09.2022 11:32
Analysis of transactions in the GBP / USD pair Pound tested 1.1669 when the MACD line was just starting to move below from zero, which was a good signal to sell. Resultantly, the quote fell by 40 pips, updating the yearly low. As for long positions around 1.1628, they did not bring much result because the pair traded downwards in the afternoon. Also, no other signals appeared for the rest of the day. Pound continues to update yearly lows, so there are not many people who want to buy it. Even weak employment data in the US non-farm sector did not lead to its sharp increase yesterday afternoon. A report on business activity in the UK manufacturing sector is coming today, but it is unlikely to trigger a sharp jerk in pound. The only thing that could stop the bear market temporarily is a strong oversold for all indicators. In the afternoon, the focus will shift to the data on US jobless claims, ISM manufacturing index and speech by FOMC member Raphael Bostic. For long positions: Buy pound when the quote reaches 1.1622 (green line on the chart) and take profit at the price of 1.1683 (thicker green line on the chart). Although there is little chance for a rally today, an upward correction could still happen. Take note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.1572, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1622 and 1.1683. For short positions: Sell pound when the quote reaches 1.1572 (red line on the chart) and take profit at the price of 1.1525. Pressure could return at any moment, especially after weak statistics in the UK. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1622, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1572 and 1.1525. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. 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 decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 09:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320534
Now The Price Of AUD/USD Pair Is Building Strength

Further Decline In Stock Market Indices. Probability To Raise The Discount Rate.

InstaForex Analysis InstaForex Analysis 01.09.2022 14:21
Last month was quite difficult for investors as they expected the Fed to tone down the rate increases, but the members insisted the opposite. It resulted to extremely high volatility, which led to a sharp decline in the stock indices of both Europe and the US. The situation in the forex market, meanwhile, was ambiguous because traders no longer believe that after a pause in raising interest rates in August, the Fed will lift them by 0.25% to 0.50% in September. Even so, the central bank continues to say that it will take advantage of the situation of the labor market and continued business activity in order to decisively suppress inflation. Cleveland Fed President Loretta Mester confirmed this by remarking that rates could hit 4% early next year. Most likely, the central bank will stop only when the economy deteriorates. There is a 73% probability of a 0.75% increase in the discount rate this month, and following Mester's estimate, the Fed will raise rates either by 0.25% or by 50% at the remaining 3 more monetary policy meetings. In terms of public debt, sell-offs will continue in the US, which will support dollar. Stock indices, meanwhile, will decline further, interspersed with local rebounds. Oil quotes, on the other hand, are unlikely to drop noticeably because demand remains quite large for the time being. The decline observed recently was only caused by the growth of dollar and start of recession in Europe, which forces EU countries to save on energy resources. The military conflict in Ukraine is a factor as well. As such, there is a huge chance that dollar will rise after a local rebound. It will continue to dominate markets, putting pressure on commodity assets. The upcoming report on US jobless claims and index of business activity in the manufacturing sector of Germany, the eurozone and the US will affect sentiment. Forecasts for today: AUD/USD The pair corrected to 0.6840. If selling pressure increases, the quote will fall to 0.6700. GBP/USD Although the pair is trading above 1.1570, quotes could decrease if macroeconomic statistics come out weaker than the forecasts.       Relevance up to 08:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320526
The UK Markets Remain Volatile, Possible Contraction Of The Eurozone Economy

FX: GBP/USD May Catch Us By Surprise Soon! Tomorrow's US NFP May Let Boost USD (US Dollar) Or Arouse Concerns Over Fed's Strategy

Kenny Fisher Kenny Fisher 01.09.2022 14:54
The British pound can’t buy a break and has fallen for a fifth straight day. GBP/USD is trading at 1.1586 in Europe, down 0.29%. UK Manufacturing PMI contracts The UK manufacturing sector has been struggling for quite some time and in August, manufacturing production declined. Manufacturing PMI fell to 47.3 in August, down from 52.1 in July. This marked the first contraction (a reading below 50.0) since May 2020, during the first Covid lockdown. The PMI decline reflected a range of problems, including supply chain disruptions, port congestion, and shortages of raw materials and workers. With inflation still on the rise and fears of a recession, the manufacturing sector faces plenty of headwinds and things could get worse before they improve. Market attention now shifts to one of the key events on the economic calendar, Friday’s US nonfarm payrolls. On Wednesday, the ADP Employment report showed a drop to 130 thousand new jobs in August, down from 270 thousand. The reading was well below the estimate of 288 thousand and the lowest level since August 2021. The ADP release is not considered a reliable gauge for nonfarm payrolls, but still garners close attention as it could point to a trend in job growth. Read next: The BTC/USD Pair Looks Like A Double Bottom Price. Iran's Ministry Of Industry, Mines And Trade Has Approved The Use Of Cryptocurrencies For Imports| FXMAG.COM August Nonfarm payrolls are also expected to drop, with a consensus of 300 thousand, following the massive 528 thousand gain in July. A reading of 300 thousand or higher would point to solid job growth and would likely give the US dollar a boost, as it would give the Federal Reserve a green light to continue with its aggressive rate-tightening cycle. Conversely, a weaker-than-expected reading would raise doubts about the Fed’s pledge to stay aggressive, which could lead to a rotation out of US dollars. GBP/USD Technical  GBP/USD is testing support at 1.1672. Below, there is support at 1.1604 There is resistance at 1.1786 and 1.1854 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Pound extends losses after weak Mfg. PMI - MarketPulseMarketPulse
The Uptrend Of The Cable Market (GBP/USD) Is Officially Canceled

How U.S. Unemployment Data Will Affect The Dollar And The GBP/USD Pair?

InstaForex Analysis InstaForex Analysis 02.09.2022 09:39
Yesterday, the British pound closed down 75 points. The lower shadow of the daily candle has broken through the target level of 1.1525. Consolidation below the level will open the next target – 1.1385. The Marlin Oscillator is close to the oversold zone, but still has room for decline. The price is consolidating above the support at 1.1525 on the four-hour chart, the decrease is taking place exactly, under the balance and MACD indicator lines. The Marlin Oscillator is declining in waves in downward trend territory. We are waiting for further development of the downward local trend. The US employment data for August is due out tonight, including nonfarm payrolls and the overall unemployment rate. The forecast for Nonfarm payrolls is 295-300,000, the unemployment rate is expected to remain unchanged at 3.5%. But the business media is raising fears about the data setback, as ADP Private Sector Employment Data came in at just 132,000 on Wednesday, versus an expectation of 300,000. And here we note two things: ADP Non-Farm Employment Change expectations were clearly too high, and , the second point is that ADP changed the data collection and analysis model in August, which led to a "weak" indicator. The most accurate predictive indicator of Nonfarm payrolls is still not ADP Non-Farm, but weekly claims for unemployment benefits - Unemployment Claims. And this indicator shows a decline from month to month; Thus, the sum of the latest applications for four weeks amounted to 987,000, and for the other previous four months in June and August - 1,011,000. At the same time, the employment index in the manufacturing sector (ISM Manufacturing PMI sub-index) showed an increase from 49.9 to 54, 2, and the ISM Manufacturing PMI itself for August remained at the previous 52.8 against expectations of a fall to 52.0. Thus, general market expectations for today's weak employment data in light of the looming global recession are likely to be disappointing. We are waiting for strong non-farms and the strengthening of the US dollar.       Relevance up to 05:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320621
The Cable Market May Continue To Trade In A Very Volatile Manner

Interesting The GBP/USD Pair's Movement

InstaForex Analysis InstaForex Analysis 02.09.2022 10:18
GBP/USD 5M The GBP/USD currency pair continued to fall on Thursday, as if there were no other options for movement in principle. However, nothing can be done about this behavior of the market. The descending trend line continues to be relevant, therefore, from a technical point of view, everything is logical: there is a trend, there is a movement corresponding to the trend. The price is already far beyond the latest high at 1.1649, below which is only 1.1411, which is a 37-year low. Therefore, there are very few levels at which one could trade now. The Ichimoku indicator lines are also very far from the price. There were no macroeconomic statistics in the UK not only on Thursday, but throughout the current week. It is hardly worth even paying attention to the index of business activity in the services sector in the second assessment for August. The US ISM Services PMI is more important, but yesterday it stood at 52.8, which is in line with the month of July. As a result, there was no reaction, and the pound has to go down about 100 points in order to update its lows for four decades. In regards to Thursday's trading signals, everything was just utterly impossible - not a single signal was formed. We have already said that there are no levels or lines in the area of the current location of the price, so the signals are simply not due to what to form. Unfortunately, a rather strong movement was missed yesterday. COT report: The latest Commitment of Traders (COT) report on the British pound turned out to be quite interesting. During the week, the non-commercial group opened 14,700 long positions and 9,500 short positions. Thus, the net position of non-commercial traders increased immediately by 5,200. Despite the growth of this indicator for several months now, the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). To be fair, in recent months the net position of the non-commercial group has been constantly growing, but the pound shows only a very weak tendency to rise. And even then, only from time to time. And now its fall has resumed altogether, so the bearish mood of major players may again begin to intensify in the near future. The non-commercial group now has a total of 86,000 short positions and 58,000 long positions open. The difference is no longer as daunting as it was a few months ago, but it's still there. The net position will have to show growth for a long time to at least equalize these figures. Moreover, COT reports are a reflection of the mood of major players, and their mood is influenced by the "foundation" and geopolitics. If they continue to be as disappointing as they are now, then the pound may still be on the "downward peak" for a long time. We should also remember that the demand for the pound is not the only thing that matters, but also the demand for the dollar, which seems to remain very strong. Therefore, even if the demand for the British currency grows, if the demand for the dollar grows at a higher rate, then the pound will not strengthen. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 2. The euro has nothing to hope for and nowhere to expect help. Overview of the GBP/USD pair. September 2. The pound continues to slide downhill. Forecast and trading signals for EUR/USD on September 2. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair maintains a downward trend on the hourly timeframe thanks to the trend line. The British currency continues to fall and may continue for some time, as the market seems to have forgotten that it can not only press the "sell" button. The market does not need any specific grounds for trading now, and the pound is updating its lows almost every day. We highlight the following important levels for September 2: 1.1411, 1.1649, 1.1874, 1.1974, 1.2007. The Senkou Span B (1.1928) and Kijun-sen (1.1699) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. No interesting events planned in the UK again on Friday. The most important NonFarm Payrolls report will be published in the US, which can provoke a very strong market reaction. Traders will direct their attention on it. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 02:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320613
The Price Of Cable Market (GBP/USD) Is Able To Reach The First Target Level

Will The GBP/USD Pair Indicate A Down Trend Or a Reversal Today?

InstaForex Analysis InstaForex Analysis 02.09.2022 10:53
Technical Market Outlook: The GBP/USD pair has made another fresh low at the level of 1.1498 and continues to move away from the trend line resistance. The nearest horizontal technical resistance is seen at the level of 1.1622 and this level is the next target for bulls in a case of a local pull-back. The next target for bears is located at the level of 1.1410 (2020 low). The momentum remains weak and negative on the H4 time frame chart, so the larger time frame trend (daily and weekly) remains down until further notice. Weekly Pivot Points: WR3 - 1.18043 WR2 - 1.17392 WR1 - 1.17002 Weekly Pivot - 1.16741 WS1 - 1.16351 WS2 - 1.16090 WS3 - 1.15439 Trading Outlook: The Cable is way below 100 and 200 DMA , so the bearish domination is clear and there is no indication of down trend termination or reversal. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame chart last week. The next long term target for bears is seen at the level of 1.1410. Please remember: trend is your friend.     Relevance up to 08:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291131
The GBP/USD Pair Will Reach The Lower Limit Of Consolidation

What To Expect From The GBP/USD In Short And Long Positions?

InstaForex Analysis InstaForex Analysis 02.09.2022 11:43
Several market entry signals were formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 1.1595 level in my morning forecast and advised making decisions on entering the market from it. A breakthrough and reverse test from the top down of this range gave a great buy signal, which, unfortunately, did not materialize due to rather weak statistics on activity in the UK manufacturing sector, which continued to decline in August this year. This was enough for the pound to fall to another annual low. In the afternoon, after the breakdown of the next support at 1.1540, a reverse test from the bottom up of this range took place with a sell signal, which resulted in the pound's decline by more than 40 points. When to go long on GBP/USD: Today there is nothing in the UK and it is obvious that the focus will be on data on the US labor market, which, with all the bears' hopes, can push the pound to rise by the end of the week, since whatever indicators come out, they are already taken into account in current quotes. Since the opening of the week, the pound has already lost more than 200 points, and it is unlikely that there will be those who want to continue selling the pair without a more or less upward correction. For this reason, I will bet on forming the lower boundary of the new rising channel around 1.1516 and on protecting this level after the release of US labor market reports. In case GBP/USD falls, forming a false breakout at 1.1516 will lead to the first signal to open long positions in anticipation of a correction to the 1.1562 area, where the moving averages pass, limiting the pair's upward potential. However, trading is now being carried out so close to this indicator, which indicates a clear lack of bearish desire to sell the pound further and an imminent correction. A lot depends on 1.1562, as its breakthrough may pull stop orders from speculative bears. A test of 1.1562 from top to bottom will testify to a return of demand for GBP/USD and creates a buy signal with growth to a more distant level of 1.1604. The farthest target will be the area of 1.1650, where I recommend taking profits. If the GBP/USD falls further and there are no bulls at 1.1516, the pressure on the pair will increase. A breakthrough of this range will lead to the renewal of the next annual low. In this case, I advise you to postpone long positions until the next support at 1.1473, but you can act there only on a false breakout. I recommend opening long positions on GBP/USD immediately for a rebound from 1.1409, or even lower - around 1.1360, counting on correcting 30-35 points within the day. When to go short on GBP/USD: Bears continue to push the pound down, making new daily lows every day, which indicates that they are still in control of the market. The only problem they may have now is the weak statistics on the US labor market, which, despite its strength, may begin to deflate after a series of fairly large interest rate hikes that took place this summer. Therefore, selling on the breakdown of annual lows is a rather risky strategy for today. It is much better to act based on an upward correction. The optimal scenario for selling GBP/USD would be forming a false breakout at the level of 1.1562, which was formed at the end of yesterday. This will make it possible to achieve a new fall and renewal of annual lows around 1.1516. A breakdown and reverse test of this range will give a new entry point for selling with a fall to 1.1473, and a longer target will be the area of 1.1409 – the low of 2020, when the coronavirus pandemic began, where I recommend taking profits. In case GBP/USD grows and there are no bears at 1.1562, there will be ghostly chances for an upward correction, and bulls will have an excellent opportunity to return to 1.1604, where the moving averages play on the bears' side. Only a false breakout there will provide an entry point into short positions based on the pair moving down. If there is no activity there, I advise you to sell GBP/USD immediately for a rebound from 1.1650, counting on the pair's rebound to the downside by 30-35 points within the day. COT report: The Commitment of Traders (COT) report for August 23 logged an increase in both short positions and long positions. And although the latter turned out to be a bit more, these changes did not affect the real current picture. Serious pressure on the pair remains, and recent statements by Federal Reserve Chairman Jerome Powell that the committee will continue to aggressively raise interest rates further have only increased pressure on the British pound, which has been experiencing quite a lot of problems lately. Expected high inflation and a looming cost-of-living crisis in the UK does not give traders room to take long positions, as a fairly large range of weak fundamentals is expected ahead, likely to push the pound even further below the levels at which it is currently trading. This week, it is important to pay attention to data on the US labor market, which, among other things, determine the Fed's decision on monetary policy. Continued resilience with low unemployment will lead to higher inflationary pressures going forward, forcing the Fed to further raise interest rates, putting pressure on risky assets, including the British pound. The latest COT report indicated that long non-commercial positions rose 14,699 to 58,783, while short non-commercial positions rose 9,556 to 86,749, leading to a slight rise in the negative non-commercial net position to -27,966 against - 33,109. The weekly closing price fell off from 1.1822 against 1.2096. Indicator signals: Trading is below the 30 and 50-day moving averages, which indicates the pair's succeeding decline. Moving averages Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case the pair falls, the lower border of the indicator around 1.1516 will act as support. In case of growth, the upper border of the indicator around 1.1562 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.       Relevance up to 08:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320639
The Euro To The US dollar Pair May Move Upward

The Dollar Is At Highs And The Euro Is Retreating

InstaForex Analysis InstaForex Analysis 02.09.2022 11:51
The US currency is closing the week strongly higher, having confirmed its leading position once again. Its European rival is rapidly losing ground. According to analysts, EUR/USD will be retesting the parity level from time to time, which is not good for the euro. The greenback, which has reached its peak in the past 20 years, started its rally late on Thursday, September 1. On the first day of autumn, the US dollar posted the third week of continuous gains. So, on Friday, it recorded the highest value in the past two decades trading against the euro and the yen. The US dollar hit 20-year highs following the release of the manufacturing index in the US. The data showed that the ISM Manufacturing PMI stayed at the same level of 52.8 in August. Some analysts expected a drop to 52 points. Yet, as the data shows, activity in the US manufacturing sector has notably increased. The indicator has been showing strength for a long time already. In this light, the European currency is noticeably retreating against its American counterpart. The euro opened this week below the parity level but managed to win back some losses later on. In the middle of the trading week, EUR/USD recovered to 1.0078 amid lower gas and oil prices and hawkish comments from the ECB. For your reference, the euro first tested the party level in early July and then slumped to the critical level of 0.9903. The situation only worsened as EUR was struggling to leave the parity level and withstand the downward pressure. On Friday morning, September 2, the EUR/USD pair was trading near 0.9970. There is a possibility that the pair may slightly advance to 0.9980. Its breakout will open the way for sellers towards the area of 0.9800–0.9820. Monetary policy tightening of the US Federal Reserve provides significant support to the greenback. The dollar is getting stronger as the Fed's September meeting is approaching. At the same time, the European currency is in a much less favorable position as it is pressured by a protracted energy crisis in Europe. Market participants expect the Fed to maintain its tight monetary policy as this measure is necessary to tackle accelerated inflation. The rate is projected to increase by 75 basis points to 3-3.25%. On Friday, the employment data in the US will be released. Estimates suggest that the unemployment rate in August stayed close to 3.5% recorded in July. The nonfarm payroll employment has increased by 300K. The Federal Reserve will consider this data to evaluate the state of the labor market and make a decision on the key rate. Experts assume that strong macroeconomic data will greenlight the rate hike through 2023. Markets are sure that the Fed will raise the rate for the third time in September by 75 basis points. For a different scenario, the Fed will need to see a deep decline in the labor market. Yet, there are currently no signs that it is cooling down. This summer, the US economy performed relatively well despite the threat of a recession. However, analysts at Danske Bank are skeptical about the current policy of the Fed. They point out that headline inflation in the country has reached its peak while the labor market and inflationary pressure remain strong. This makes it harder for the regulator to avoid recession as this is where the US economy is headed in 2023, Danske Bank concludes.     Relevance up to 08:00 2022-09-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/320649
The Technical Factors Speak In Favor Of The Pound's (GBP) Growth

The United States And The United Kingdom Are In Different Positions

InstaForex Analysis InstaForex Analysis 02.09.2022 13:15
Despite being oversold, GBP broke through 1.1530 on Thursday. The currency is likely to remain bearish although it is now retracing up. Meanwhile, USD could strengthen against the basket of major currencies should the jobs market report for August come in strong. Yesterday, GBP/USD fell below 1.1580, briefly touched 1.1499, rebounded, and consolidated at 1.1530. In the upcoming days, the pound is expected to fall below 1.1500 due to being oversold. Support is seen at 1.1460. The price is unlikely to show strong growth. However, should bulls gain control over the market and hit 1.1605, the pound could stabilize for a while. In the long term, GBP/USD is projected to remain bearish as well. A gloomy forecast has recently come from Capital Economics.In the coming months and next year, the pound is likely to hit its lowest level versus the greenback. Meanwhile, the euro is expected to show a modest fall. If the British economy contracts by 1% and inflation is at a record rate, the Bank of England will hardly provide any support, so the pound will probably extend the downtrend. We see GBP down by 5% by the end of 2022, experts at Capital Economics wrote. The current steep drop in the pound is due to the stronger US dollar. Still, there is also an internal factor, the sterling is weaker against other currencies, including the euro, being under pressure from sales. The United States and the United Kingdom are in completely different positions. The UK has already slipped into a recession, while the US has a chance to avoid it. The recent spike in UK wholesale gas prices indicates that the country is now dealing with a deep and prolonged recession. The greenback is also strong due to decreased risk appetite as investors fear a global economic downturn. It is commonly known that the greenback gains and the pound suffers losses during turmoil. The pound is acting more like a risk asset due to a massive current account deficit in the UK. The Bank of England's stance on interest rates is also weighing on the pound. The regulator can't afford to act even more aggressively. So, the pound is likely to lose even more. The Bank of England is planning a 50 basis-point rate hike, but markets hope for a bigger increase. They anticipate the Bank of England to be more decisive that any other central bank due to record inflation in the country. In order to raise interest rates by 180 basis points by the end of the year, the regulator should make at least one 75 basis-point move. However, there have been no signs of such a likelihood so far. In light of the continuing downtrend, the forex market seems to have long realized that the Bank of England will not live up to these expectations. According to Capital Economics, interest rates will be raised at a slower pace than investors hope. Meanwhile, the ECB's and the Fed's actions will satisfy market expectations. GBP/USD is seen falling to the all-time low of 1.0500 by the middle of 2023. EUR/USD could sink as low as 0.9000 by that time, Capital Economics said. Meanwhile, EUR/GBP could reach 1.1700.   Relevance up to 10:00 2022-09-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/320671
The Price Of Cable Market (GBP/USD) Is Able To Reach The First Target Level

The GBP/USD Pair Is Currently Bouncing Back?

InstaForex Analysis InstaForex Analysis 05.09.2022 08:50
Early in the European session, the British pound is trading at around 1.1474. It is bouncing after the sharp fall to the low of 23 March at 1.1457. According to the 1-hour chart, we can see that the British pound is trading at around (-1/8 Murray) and below 21 SMA (1.1525). In the chart, we can observe a GAP between the closing price on Friday and the opening price of this week. The British pound is expected to cover this GAP in the next few hours. So, GBP/USD could close at around 1.1510. In case the pound consolidates at around the psychological level of 1.1500, it could reach the 21 SMA located at 1.1525 and could even reach the top of the downtrend channel at around 1.1545. GBP/USD is currently bouncing back after reaching the low of 1.1457. It is likely to continue its rise in the next few hours only if it trades above -1/8 Murray. There is an expectation that the pound can cover the gap and reach 1.1676 (200 EMA). The growing likelihood that the Federal Reserve will continue to tighten its monetary policy makes investors consider the US dollar a safe haven. This is a factor that keeps the GBP/USD pair under strong downward pressure. Investors are pricing in a 0.75% interest rate hike at the next monetary policy meeting in September. This decision will be unveiled on September 21. Analysts expect the sterling to recover part of the losses of last week in the week ahead. The market sentiment report is showing that there are 81.95% of traders who are buying the pair. This is a positive sign for the pound as a technical rebound could occur in the next few hours and then the trading instrument will resume its main downtrend. In case the British pound trades above -1/8 Murray (1.1475) and the 21 SMA located at 1.1525, it could be a positive sign for the pound but we should expect a consolidation above 1.1550. On the other hand, if the British pound resumes its bearish cycle, we could expect a technical bounce around 1.1438 and 1.1417 (weekly support). Our trading plan for the next few hours is to wait for a rebound above 1.1475 to buy with targets at 1.1525 and 1.1676.     Relevance up to 05:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291327
The GBP/USD Pair Will Reach The Lower Limit Of Consolidation

The GBP/USD: Can We Expect A Further Decline In The Pair?

InstaForex Analysis InstaForex Analysis 05.09.2022 09:33
GBP/USD 5M The GBP/USD currency pair continued its downward movement on Friday as a whole. In the first half of the day, as well as for the euro, an upward correction was observed, and in the second, the fall resumed. The euro has been trading sideways for more than two weeks, while the pound has continued to fall almost precipitously all this time. At the moment, only 65 points remain to go to 37-year lows, and the quotes do not stop falling even at night. On Friday, as we have already said, there were grounds for a new growth of the US currency. The statistics from overseas may not be the best, but what's the difference if the pound continues to fall anyway? During the last week there were quite few reports, but traders still continued to sell the pair! And on Friday, it turns out that traders also had clear reasons for selling the pound. Thus, the lows for almost four decades will be updated this week, and it is rather difficult to even imagine how low the pound may eventually fall. In regards to Friday's trading signals, everything was as simple as possible, since there were none. Despite the fact that the movements were quite volatile, the price never approached any level or line, so no signals were formed. We have already said that the pound is now so low that there are simply no levels in this price area, and the Ichimoku indicator lines are located much above the price and simply do not keep up with it down. Therefore, over time, levels will appear, but so far they are not. COT report: The latest Commitment of Traders (COT) report on the British pound, released yesterday, turned out to be as neutral as possible. During the week, the non-commercial group closed 300 long positions and opened 900 short positions. Thus, the net position of non-commercial traders immediately increased by 1,200. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). Therefore, the growth of the British pound still cannot count. How can you count on it if the market sells the pound more than it buys? And now its fall has resumed altogether, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 87,000 shorts and 58,000 longs open. The difference is not as terrifying as it was a few months ago, but it is still noticeable. The net position will have to show growth for a long time to at least equalize these figures. Moreover, COT reports are a reflection of the mood of major players, and their mood is influenced by the "foundation" and geopolitics. If they remain as weak as they are now, then the pound may still be in a "downward peak" for some time. Also remember that it is not only the demand for the pound that matters, but also the demand for the dollar, which seems to remain very strong. Therefore, even if the demand for the British currency grows, if the demand for the dollar grows at a higher rate, then we will not see the strengthening of the pound. We recommend to familiarize yourself with: Forecast and trading signals for EUR/USD on September 5. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair maintains a downward trend on the hourly timeframe thanks to the trend line. The British currency continues to fall and may continue for some time, as the market seems to have forgotten that you can not only press the sell button. The market does not need any specific grounds for trading now, and the pound is updating its local lows almost every day. We highlight the following important levels on September 5: 1.1411, 1.1649, 1.1874, 1.1974, 1.2007. Senkou Span B (1.1698) and Kijun-sen (1.1609) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. The index of business activity in the services sector in the second assessment for August will be released on Monday in the UK - far from the most significant report in the current circumstances, when the pound is falling every day. Meanwhile, there is nothing interesting planned for today in the US. There will be nothing for traders to react during the day. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 05:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320758
The Tightening Of Monetary Policy Will Continue For Some Time

Signaling Overheated Bear Market And To Sell A Pound.

InstaForex Analysis InstaForex Analysis 05.09.2022 09:40
Today, markets will take notice of the services PMI data in Europe and the UK although the reports are expected to come in line with the forecast. Meanwhile, the US celebrates a public holiday today. The EU will release the data on retail sales. The indicator may slow down the pace of decline this time. This positive factor may act as support for the European currency. Its positive correlation with the pound sterling may strengthen the latter. After a short-term break, the GBP/USD pair resumed its decline. As a result, the price retested the low of the medium-term trend, missing just a few pips to reach the low of 2020. RSI on H4 and D1 is holding in the oversold zone, signaling the overheated bearish market. The moving averages of the Alligator Indicator on H4 and D1 are pointing down according to the main trend. Outlook: Despite an oversold status of the pound, the downward momentum still persists, and traders seem to ignore the overheated bear market. The low of 2020 at the level of 1.1410 still acts as support for sellers. In this situation, two scenarios are possible: In the first case, the price may rebound from the local low of 2020, thus giving rise to long positions. This, in turn, may slow down the decline of the pair but then a bounce may follow. In the second scenario, traders will simply ignore the technical signals of an oversold status of the pound. If so, consolidation below 1.1400 will extend the long-term downtrend. Comprehensive indicator analysis confirms the downward cycle in all the time periods. So, this is a signal to sell the pound. Read more: https://www.instaforex.eu/forex_analysis/320764 Relevance up to 07:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/320764
The Cable Market May Continue To Trade In A Very Volatile Manner

What To Expect From The GBP/USD Pair In Short Positions And Long Positions?

InstaForex Analysis InstaForex Analysis 05.09.2022 09:50
  Several market entry signals were formed last Friday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 1.1562 level in my morning forecast and advised making decisions on entering the market from it. Growth and forming a false breakout at 1.1562 - all this led to a sell signal, which to a large extent was not realized amid the lack of fundamental statistics on the UK. As a result, the movement amounted to about 15 points, after which the demand for the pound returned. A burst of volatility after a rather mixed report on the US labor market led the pound to move down to the 1.1535 area and a false breakout to form at this level. As a result, a buy signal was formed, and the upward movement was about 50 points. When to go long on GBP/USD: Today there are very important reports on activity in the UK services sector, which accounts for a significant part of the economy. A slowdown in this indicator will lead to a further decline in the pound and, most likely, to an update of the 2020 low, to which there is very little left. The deterioration of the economic and political situation in the UK continues to negatively affect the prospects for the pound, the pressure on which is increasing every day. In the event of a decline in GBP/USD after weak data on the PMI in the services sector and the UK composite PMI index, forming a false breakout at 1.1409 - the low of 2020, will lead to the first signal to open long positions in anticipation of a correction in the 1.1476 area. A breakthrough and test from top to bottom of this range may pull stop orders from speculative bears, which creates a buy signal with growth to a further level of 1.1528, where the moving averages play on the bears' side. The farthest target will be the area of 1.1583, where I recommend taking profits. If the GBP/USD falls further and there are no bulls at 1.1409, the pressure on the pair will increase. A breakthrough of this range will lead to the renewal of the next annual low. In this case, I advise you to postpone long positions until the next support at 1.1358, but you can act there only on a false breakout. I recommend opening long positions on GBP/USD immediately for a rebound from 1.1313, or even lower - around 1.1260, counting on correcting 30-35 points within the day. When to go short on GBP/USD: Bears continue to push the pound down, updating daily lows each time, which indicates that they are in control of the market. It is likely that today's statistics for the UK will help them get to the annual lows. Of course, it would not be a good idea to rush to sell on the breakdown of 1.1409. Where better to act, relying on an upward correction. The optimal scenario for opening short positions on GBP/USD would be forming a false breakout at the level of 1.1476, a breakthrough to which may occur in case we receive good results on the PMI index for the UK services sector, which was in a fairly good state back in July. This will make it possible to achieve a new fall and renewal of annual lows around 1.1409. Only a breakthrough and a reverse test of this range will provide a new entry point for selling with a fall to 1.1358, and the area of 1.1313 will be the next target, where I recommend taking profits. In case GBP/USD grows and there are no bears at 1.1476, there will be ghostly chances for an upward correction, and bulls will have an excellent opportunity to return to 1.1528, where the moving averages play on the bears' side. Only a false breakout there will provide an entry point into short positions based on the pair moving down. If there is no activity there, I advise you to sell GBP/USD immediately for a rebound from 1.1583, counting on the pair's rebound down by 30-35 points within the day. COT report: The Commitment of Traders (COT) report for August 23 logged an increase in both short positions and long positions. And although the latter turned out to be a bit more, these changes did not affect the real current picture. Serious pressure on the pair remains, and recent statements by Federal Reserve Chairman Jerome Powell that the committee will continue to aggressively raise interest rates further have only increased pressure on the British pound, which has been experiencing quite a lot of problems lately. Expected high inflation and a looming cost-of-living crisis in the UK does not give traders room to take long positions, as a fairly large range of weak fundamentals is expected ahead, likely to push the pound even further below the levels at which it is currently trading. This week, it is important to pay attention to data on the US labor market, which, among other things, determine the Fed's decision on monetary policy. Continued resilience with low unemployment will lead to higher inflationary pressures going forward, forcing the Fed to further raise interest rates, putting pressure on risky assets, including the British pound. The latest COT report indicated that long non-commercial positions rose 14,699 to 58,783, while short non-commercial positions rose 9,556 to 86,749, leading to a slight rise in the negative non-commercial net position to -27,966 against - 33,109. The weekly closing price fell off from 1.1822 against 1.2096. Indicator signals: Trading is below the 30 and 50-day moving averages, which indicates further decline in the pair. Moving averages Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case the pair falls, the lower border of the indicator around 1.1410 will act as support. In case of growth, the upper border of the indicator around 1.1585 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Relevance up to 08:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320769
Analysis Of Cable Market (GBP/USD) By Laurie Bailey

The GBP/USD: Pair Fresh Low And The Bearish Domination

InstaForex Analysis InstaForex Analysis 05.09.2022 09:59
Technical Market Outlook: The GBP/USD pair has made another fresh low at the level of 1.1442 (at the time of writing this analysis) and continues to approach the 3 years low located at 1.1410. This is the covid low made on March 2020 and 2020 low. The nearest horizontal technical resistance is seen at the level of 1.1622 and this level is the next target for bulls in a case of a local pull-back. The momentum remains weak and negative on the H4 time frame chart, so the larger time frame trend (daily and weekly) remains down until further notice. Please watch closely the market reaction for the level of 1.1410 breakout or bounce. Weekly Pivot Points: WR3 - 1.15513 WR2 - 1.15077 WR1 - 1.14791 Weekly Pivot - 1.14641 WS1 - 1.14355 WS2 - 1.14205 WS3 - 1.13769 Trading Outlook: The bearish domination is clear and there is no indication of down trend termination or reversal on the GBP/USD market. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame, so the downside move accelerated. The next long term target for bears is seen at the level of 1.1410 (2020 low). Please remember: trend is your friend.       Relevance up to 08:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291351
The Price Of Cable Market (GBP/USD) Is Able To Reach The First Target Level

How The Price Of GBP/USD Pair May Move Today?

InstaForex Analysis InstaForex Analysis 05.09.2022 11:19
Trend analysis (Fig. 1). The pound-dollar pair may move downward from the level of 1.1506 (close of Friday's daily candle) to the target at 1.1442, the support line of the descending channel (thick red line). After testing this level, an upward movement is possible with the target of 1.1565, the 13.6% retracement level (blue dotted line). Upon reaching this level, the price may continue to move up. Fig. 1 (daily chart). Comprehensive analysis: General conclusion: Today the price may move downward from the level of 1.1506 (close of Friday's daily candle) to the target at 1.1442, the support line of the descending channel (thick red line). After testing this level, an upward movement is possible with the target of 1.1565, the 13.6% retracement level (blue dotted line). Upon reaching this level, the price may continue to move up. Alternative scenario: from the level of 1.1506 (close of Friday's daily candle), the price may move downward with the target of 1.1421, the historical support level (blue dotted line). After testing this level, an upward movement is possible with the target of 1.1565, the 14.6% retracement level (blue dotted line).     Relevance up to 08:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320775
The EUR/USD And The GBP/USD: The Most Important Details For Beginners

The EUR/USD And The GBP/USD: The Most Important Details For Beginners

InstaForex Analysis InstaForex Analysis 05.09.2022 12:38
Details of the economic calendar for September 2 European Union Producer Price Index came out with a significant margin, rising from 36.0% to 37.9%. This news stimulated the euro to rise against the dollar. The main event of the past week was the United States Department of Labor report, which slightly surprised market participants. The unemployment rate was forecast to remain unchanged at 3.5%. However, unemployment in the US rose to 3.7%, which was a catalyst for a local sell-off of the dollar, yet this is a possible signal for the Fed to take some easing measures. There is one important remark in this reflection, the regulator is ready to turn a blind eye to many things in order to overcome rising inflation. Meanwhile, jobs created outside of agriculture came out in line with the consensus forecast, 315,000. The reaction of the US dollar took place within the framework of speculation. In the beginning there was a sale and then a buy-off. Analysis of trading charts from September 2 The EURUSD currency pair ended last week with an intense downward move. As a result, there was an inertial movement in the market for the US dollar, which returned the quote to the level of 0.9900. The GBPUSD currency pair resumed its decline after a short stop. This step led to a subsequent update of the low of the medium-term trend, where only a few points remained to pass before the bottom of 2020. Economic calendar for September 5 The new trading week starts with a holiday in the United States. The key player of the financial market will return on Tuesday. Trading volumes may decline at first. As for statistical data, the publication of the final indicators on the index of business activity in the services sector in Europe and the UK is expected. If the data coincide with the preliminary assessment of the reaction in the market, it is not worth waiting. At the same time, Eurozone retail sales data is to be published. Its rate of decline may slow down, which is a positive signal for the euro. Time targeting: USA - Labor Day (holiday) EU Services PMI – 08:00 UTC UK Services PMI – 08:30 UTC EU Retail sales volume – 09:00 UTC Trading plan for EUR/USD on September 5 With the opening of the European session, a local level of 0.9900 appeared. The sale of the euro was associated with a sharp jump in gas prices in Europe. At the opening of trading, prices jumped by 30%, to $2,800 per thousand cubic meters. The reason for the increase in the cost of gas lies in the message of Gazprom on Friday evening that the maintenance of the only working turbine of SP-1 revealed "gross violations" and the gas pipeline will not work without their elimination. In order to confirm the signal about the prolongation of the long-term downward trend for the euro, the quote must be kept below the level of 0.9900 steadily in the daily period. In this case, a path will open in the direction of 0.9850–0.9500. Otherwise, the amplitude 0.9900/1.0150 has every chance for further formation. Trading plan for GBP/USD on September 5 Despite the growing oversold level of the pound sterling, the market remains an inertial course, where speculators ignore the overheating of short positions in vain. The low of 2020 (1.1410) may play as support on the sellers' path. In this situation, traders will consider two possible options for price development: The first scenario comes from a rebound from the 2020 local low area. In this case, an increase in the volume of long positions is possible, which at the beginning will slow down the downward cycle, after which a rebound will occur. The second scenario considers the lack of reaction of traders to technical signals about the oversold pound and the support level. In this case, holding the price below 1.1400 in the daily period will lead to a prolongation of the long-term trend. What is shown 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 candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and 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.       Relevance up to 09:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320791
Macroeconomic And Fundamental Backgrounds Have Been Favorable For The Euro (EUR)

Bears Dominate The Euro To The US Dollar And The British Pound To US Dollar The Market

InstaForex Analysis InstaForex Analysis 05.09.2022 13:19
EUR/USD Higher timeframes Bears dominate the market at the opening of today's trading, updating the low of 0.9901. In the case of consolidation and restoration of the downward trend, the reference points for the decline can be considered the levels of 0.9000 (psychological level) and 0.8225 (minimum extremum of 2000). If the bears cannot hold below 0.9901 and return to the consolidation zone, then after gaining the boundaries of 0.9984 (daily short-term trend) and 1.0000 (psychological level), we can expect that bulls will try to go beyond the existing zone uncertainty and develop a full-fledged corrective movement. The targets of the further rise will be the elimination of the daily death cross (1.0066 - 1.0124 - 1.0181) and gaining support from the weekly short-term trend (1.0124). H4 – H1 Bears also hold the advantage on the lower timeframes as the market is currently operating below key levels. By now, the S2 support (0.9886) has been tested, the reference point is the S3 support (0.9830). Key levels today join forces in the area of 0.9993–77 (central pivot point + weekly long-term trend). Consolidation above will change the current balance of power, returning the advantage to the bulls. Upward targets within the day are now at 1.0012 - 1.0068 - 1.0103. *** GBP/USD Higher timeframes Bears started the new working week with a new low (1.1495) and a decline into the zone of attraction and influence of the historical support at 1.1411. The formed result of interaction with the level of 1.1411 will most likely determine the prospects for further developments in the current situation. H4 – H1 In the lower timeframes, the advantage is on the side of the bears. Two of the three supports of the classic pivot points (1.1471 – 1.1437) have been tested, leaving S3 (1.1378) in reserve for a decline. The nearest reference point for the current upward correction is the central pivot point (1.1530), then the intermediate resistance can be noted at 1.1564 (R1), but the key value belongs to the resistance of the weekly long-term trend (1.1607). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Relevance up to 11:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320814
The Technical Factors Speak In Favor Of The Pound's (GBP) Growth

Not Surprising That Investors Want To Get Rid Of British Assets

InstaForex Analysis InstaForex Analysis 05.09.2022 12:43
How quickly time passes! It would seem that investors have recently discussed the idea of parity between the euro and the US dollar. In early autumn, a new parity with the US currency is on the agenda. This time we are talking about the pound. The event is of great importance because, unlike EURUSD, the GBPUSD pair has never fallen below 1 in its 200-year history. It was only in 1985 that it was close to it, but the agreement in Plaza Accord reversed the processes taking place at that time on Forex. What will happen this time? Britain is the most telling example of a developed nation whose economy has slipped into stagflation. Consumer price growth is already measured in double digits, and according to the shocking forecasts of Goldman Sachs, it will reach 22% in 2023. In this scenario, the bank expects to see a 3.4% subsidence of the UK's GDP. Andrew Bailey and his colleagues also talk about a long recession for five quarters in a row. How could it be otherwise if the share of household energy expenditures increases from 12% of disposable income in 2021 to 41% in 2023. Against this background, it is not surprising that investors want to get rid of British assets as soon as possible. Bond sales are proceeding at an accelerated pace, and the rise in yields should theoretically become a crucial growth driver for sterling, especially in conditions of increasing expectations for the repo rate, which, according to the futures market, will jump to 3.25%, if not at the end of this year, then at the beginning of next year. Dynamics of GBPUSD and British bond yields Alas, the profitability growing by leaps and bounds does not help the pound. The reason for this is the increase in the double deficit—the current account and the budget, which does not allow the GBPUSD bulls to raise their heads. Indeed, the first indicator rose to a record 8.3% of GDP already in the first quarter against the backdrop of an increase in the cost of imports, primarily due to fuel. But in those days, gas prices were not so high. It's only the beginning. The intention of Liz Truss, the main favorite for the post of British Prime Minister, to reduce taxes is causing fear due to the widening budget deficit. Grandiose plans need to be funded by something. Most likely, London will be forced to issue more bonds, and problems with financial stability add a headache to the GBPUSD bulls. Truss could take a tougher stance on the Northern Ireland Protocol to the Brexit deal than her predecessor, raising the risk of a trade war with the EU. Not surprisingly, Scottish Prime Minister Nicola Sturgeon calls her victory in the struggle for the status of leader of the Conservative Party a disaster for the UK. No matter how the risks of a new referendum on the independence of this country grow. Technically, on the daily chart, GBPUSD quotes approached the previously designated target by 161.8% according to the AB=CD pattern by arm's length. It corresponds to the mark 1.14. As long as the pair is trading below the pivot point 1.158, we continue to adhere to the strategy of selling it on pullbacks.   Relevance up to 09:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320785
The Uptrend Of The Cable Market (GBP/USD) Is Officially Canceled

The Pound To The US Sollar Pair Maintains A Downward Trend

InstaForex Analysis InstaForex Analysis 06.09.2022 08:44
GBP/USD 5M The GBP/USD currency pair, simply and calmly, almost with an empty macroeconomic and fundamental background, updated its 2-year lows on Monday. An upward pullback followed in the afternoon, but it does not allow us to assume anything more than a pullback. The price continues to be below the descending trendline, so the downward trend continues. And it can persist for a long time, because the price is far from the trend line. A report on business activity in the service sector was just released in the UK, which did not interest the market at all due to the second assessment of this indicator. Recall that the first estimate is published first, which can impress traders, but the second rarely differs from the first. There was nothing else interesting on Monday, but even in such conditions the pound managed to approach its 37-year lows. We believe that these lows can be updated as early as this week. In regards to Monday's trading signals, everything was prosaic, since not a single one was formed. As we have already said, the pound is now so low that there are simply no levels to trade here. Of course, levels will appear over time, but so far there are none, and the Ichimoku indicator lines are located much higher than the price. In fact, now traders have only the level of 1.1411 at their disposal, to which the price is striving. COT reports: The latest Commitment of Traders (COT) report on the British pound, released yesterday, turned out to be as neutral as possible. During the week, the non-commercial group closed 300 long positions and opened 900 short positions. Thus, the net position of non-commercial traders immediately increased by 1,200. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). Therefore, the growth of the British pound still cannot count. How can you count on it if the market sells the pound more than it buys? And now its fall has resumed altogether, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 87,000 shorts and 58,000 longs open. The difference is not as terrifying as it was a few months ago, but it is still noticeable. The net position will have to show growth for a long time to at least equalize these figures. Moreover, COT reports are a reflection of the mood of major players, and their mood is influenced by the "foundation" and geopolitics. If they remain as weak as they are now, then the pound may still be in a "downward peak" for some time. Also remember that it is not only the demand for the pound that matters, but also the demand for the dollar, which seems to remain very strong. Therefore, even if the demand for the British currency grows, if the demand for the dollar grows at a higher rate, then we will not see the strengthening of the pound. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 6. The ECB meeting is the key event of the week. Overview of the GBP/USD pair. September 6. An almost empty week for the pound. What can stop it from falling against the dollar? Forecast and trading signals for EUR/USD on September 6. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair maintains a downward trend on the hourly timeframe thanks to the trend line. The British currency continues to fall and may continue for some time, as the market seems to have forgotten that you can not only sell, but also buy. But why buy if there is a strong downward trend? The market does not need any specific grounds for trading now, and the pound is updating its local lows almost every day. We highlight the following important levels for September 6: 1.1411, 1.1649, 1.1874. Senkou Span B (1.1698) and Kijun-sen (1.1601) lines can also be sources of signals. Signals can be "rebounds" and "breakthrough" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. On Tuesday, the UK will release the index of business activity in the construction sector in the second assessment for August, which is unlikely to be of interest to market participants. The US today will publish quite an important index of business activity in the services sector ISM. If its actual value differs from the forecast value (55-55.5), then the market reaction may follow. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 02:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320867
The Price Of Cable Market (GBP/USD) Is Able To Reach The First Target Level

GBP/USD: The Next Currency Pair With Fresh Low Today

InstaForex Analysis InstaForex Analysis 06.09.2022 09:13
Technical Market Outlook: The GBP/USD pair has made another fresh low at the level of 1.1442 and continues to approach the 3 years low located at 1.1410 - the covid low made on March 2020. Currently, the bulls had managed to bounce 1.30% towards the nearest horizontal technical resistance seen at the level of 1.1622 and this level is the next target for bulls in a case of a local pull-back. The momentum is neutral on the H4 time frame chart, so the larger time frame trend (daily and weekly) remains down until further notice. Please watch closely the market reaction for the level of 1.1410 breakout or bounce. Weekly Pivot Points: WR3 - 1.15513 WR2 - 1.15077 WR1 - 1.14791 Weekly Pivot - 1.14641 WS1 - 1.14355 WS2 - 1.14205 WS3 - 1.13769 Trading Outlook: The bearish domination is clear and there is no indication of down trend termination or reversal on the GBP/USD market. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame, so the downside move accelerated. The next long term target for bears is seen at the level of 1.1410 (2020 low). Please remember: trend is your friend.   Relevance up to 08:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291526
The Technical Factors Speak In Favor Of The Pound's (GBP) Growth

The Pound To The US Dollar: A Chance For Bears To Further Pull Down The Pair

InstaForex Analysis InstaForex Analysis 06.09.2022 09:38
Several market entry signals were formed yesterday, but not all of them were profitable. Let's take a look at the 5-minute chart and figure out what happened. I paid attention to the 1.1476 level in my morning forecast and advised making decisions on entering the market from it. Growth and the forming a false breakout at 1.1476 there - all this led to a sell signal, which was not realized to the proper extent. A few more times the bears tried to keep the pair below this level, but in the end they accepted defeat, which led to the removal of stop orders and consolidating losses. A new signal to buy the pound was formed only in the afternoon, after a reverse test of 1.1487 from top to bottom, which eventually brought about 25 points of profit, which made it possible to cover past losses and earn some money. COT report: Before analyzing the technical picture of the pound, let's look at what happened in the futures market. An increase in short positions was recorded in the Commitment of Traders (COT) report for August 30, while long ones decreased. This once again confirms the fact that the British pound is in a major downward peak. Serious pressure on the pair will continue in the future, as the British economy is getting worse and worse, and GDP is shrinking quite quickly. The choice of a new prime minister of Great Britain will only provide temporary support to the pound, since, in fact, it does not change anything. In turn, the US economy continues to show strength, and recent data on the labor market once again convinced investors that the US central bank, led by Federal Reserve Chairman Jerome Powell, will continue to raise interest rates at an aggressive pace, which will only increase pressure on the British pound, which is experiencing quite a lot of problems lately. Expected high inflation and a looming cost-of-living crisis in the UK does not give traders room to take long positions, as a fairly large range of weak fundamentals is expected ahead, likely to push the pound even further below the levels at which it is currently trading. The latest COT report indicated that long non-commercial positions decreased by 306 to 58,477, while short non-commercial positions rose by 898 to 86,647, which led to a slight increase in the negative value of the non-commercial net position to -29,170 vs. -27,966. The weekly closing price collapsed from 1.1661 against 1.1822. When to go long on GBP/USD: Today we have almost no data on the UK, except for the report on the index of business activity in the construction sector from IHS Markit, which is unlikely to seriously affect the pound's volatility in the short term. Much will depend on the disposition of traders to risky assets after the announcement of the new prime minister of Great Britain, which became Foreign Minister Lisa Truss. In the near future, the reforms proposed by her may determine the further direction of the pair, since nothing good can be expected from the Bank of England. The defeat of Finance Minister Rishi Sunak speaks for itself. In case GBP/USD falls in the first half of the day after the reaction to the negative data on the UK, which is quite likely, the best scenario for buying will be a false breakout in the area of the nearest support at 1.1545, formed on the basis of yesterday. There are also moving averages, playing on the bulls' side. This will lead to a bounce up and a push to the 1.1613 area. We can only talk about the prerequisites for building a new upward correction for the pair after getting above this range. A breakdown of 1.1613, as well as a reverse downward test will open the way to 1.1685. A more distant target will be the area of 1.1754, where I recommend taking profits. If the GBP/USD falls and there are no bulls at 1.1545, the pressure on the pound will increase again, which will force the bulls to leave the market again, as the risk of further development of the bearish trend will become more real. If this happens, I recommend postponing long positions to 1.1494. I advise you to buy there only on a false breakout. You can open long positions on GBP/USD immediately for a rebound from 1.1446, or in the area of the low of 2020 at 1.1402, counting on correcting 30-35 points within the day. When to go short on GBP/USD: Protecting the nearest resistance at 1.1613 is almost the most important task for today. Strong fundamental reports will help. In case the pair rises, forming a false breakout at 1.1613 will return pressure on the pound and form a sell signal in order to develop a further bearish trend and decline to the nearest support at 1.1545. This event will also keep the pair in a short-term horizontal channel with a lower boundary near the annual low, which will limit the pair's upward potential. A breakthrough and reverse test from the bottom up at 1.1545 will provide an entry point for short positions with a fall to a low of 1.1494. A more distant target will be the area of 1.1446, where I recommend taking profits. In case GBP/USD grows and the bears are not active at 1.1613, the situation will completely get out of the bears' control, and bulls will have an excellent chance of returning to 1.1685. Only a false breakout around 1.1685 creates an entry point into short positions, counting on a new downward movement of the pair. If traders are not active there, there may be a surge up to a high of 1.1754. There, I advise you to sell GBP/USD immediately for a rebound, based on a rebound of the pair down by 30-35 points within the day. Indicator signals: Trading is carried out above 30 and 50 moving averages, which leaves a chance for bears to further pull down the pair. Moving averages Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands A breakthrough of the lower border of the indicator in the area of 1.1480 will increase pressure on the pair. If the pair grows, the upper border of the indicator around 1.1610 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Relevance up to 08:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320891
OANDA Senior Market Analyst Craig Erlam Talks Recent Important Market Events

Australian Dollar (AUD) And British Pound (GBP) Are Diversified Considering The Vulnerability To Monetary Policies. Energy: Liz Truss' Plan

ING Economics ING Economics 06.09.2022 09:47
Relative equity performance is becoming a bigger driver of FX moves, and the energy crisis in Europe does suggest EUR assets will struggle to regain the market's confidence. Elsewhere, the RBA 50bp hike is no game-changer for AUD, while the pound will keep being driven by new UK prime minister Liz Truss' policy proposals ahead of next week's BoE meeting The pound is being driven by new prime minister Liz Truss' political agenda   We have just published our monthly update of FX views and forecasts: “FX Talking: This is going to hurt” USD: Equity divergence matters US markets re-open after a long weekend today and futures currently point at a slightly positive open in the Dow Jones, despite yesterday’s slump in European equities. Diverging US-European equity performance is becoming a relevant theme for FX as a driver of USD strength: in our EUR/USD short-term fair value model, the relative equity performance factor has seen its beta grow steadily since the start of July. Indeed, the ongoing energy crisis does suggest that it will take time to restore trust in European assets. In the past three months, the Dow and S&P500 are both down -5%, while the DAX has lost 13% and Euro Stoxx 9%. Expect a pick-up in volatility today after yesterday’s rather muted trading. On the data side, markets will focus on the US ISM Service index, which is expected to have dropped after July’s modest rebound. This is probably the most important piece of data before the CPI report on 13 September, and with markets still torn about the possibility of a 75bp Fed hike in two weeks (65bp is priced in), asset classes should prove quite sensitive to the release. There are no scheduled Fed speakers today, but we’ll hear from a plethora of members tomorrow and from Fed Chair Jerome Powell on Thursday. Barring a major dovish repricing in Fed rate expectations, the strong dollar story should remain broadly untouched this week, as the energy supply crisis keeps markets away from most European currencies and may fuel safe-haven flows further. As we’ve highlighted in recent notes, the yen’s role as a safe haven has been eroded by Japan’s worsening trade position, and the USD/JPY rally may have further to go until Japanese authorities intervene. Elsewhere in the APAC region, AUD had a relatively contained reaction to the RBA’s 50bp rate hike. As highlighted in our meeting review, a switch to 25bp rate increases now looks possible given the high frequency of RBA meetings, although that may be read as a dovish signal by markets and force some dovish repricing along the AUD curve. This, however, is far from being the biggest concern for AUD, which is set to remain heavily impacted by a challenging external environment. We don’t expect any AUD/USD recovery to go much further than 0.70 before the end of the year. Francesco Pesole EUR: Shrinking undervaluation Germany’s decision to keep two power plants open over the winter is a clear signal that the country had not managed to secure enough energy reserves before last week’s Nord Stream shutdown. Talks among EU members this week are set to be quite crucial, as a bloc-wide cap on energy prices, a windfall tax on energy companies’ profits, and potential intra-EU emergency gas flows are set to be discussed. The energy crisis is set to keep EUR/USD capped for now, despite the short-term swap rate differential having continued to widen in favour of the euro and is at the highest in six months. In our short-term fair value model, the growing relevance of equity dynamics (which have moved against the euro) in determining EUR/USD swings now mean that the undervaluation has shrunk from the 5.5% peak two weeks ago to around 3.5% now despite the pair having fallen to 20-year lows. The 0.9900 support appears to be a rather fragile one and was briefly broken yesterday, we could see 0.9850 or 0.9800 as the next key levels, although the worsening macro picture in Europe means that a further drop to the 0.9600-0.9650 supports cannot be excluded. Francesco Pesole GBP: Truss announces massive plan to fix energy bills The pound rallied this morning on the back of some reports that the new UK Prime Minister Liz Truss has drafted a £130bn plan to fix energy bills. The news appears to partially ease the market’s concerns (that have weighed on GBP) that Truss’ promised tax cuts would ultimately worsen the inflation picture. The pound is set to face further volatility in the coming days as Truss’ policy plans are outlined in greater detail and the Bank of England meeting (15 September) draws nearer. If tax cuts would likely argue in favour of larger BoE tightening, caps on energy bills might both reduce the risk of recession and trim inflation expectations: it will be interesting to see how the BoE addresses these policies. Yesterday, we heard some hawkish comments by MPC member Caroline Mann, and markets are closing in on pricing a 75bp move next week. However, it looks like Truss’ political agenda is what is driving the pound at the moment, and BoE tightening expectations are playing a secondary role. EUR/GBP is testing the 0.8600 support and may keep retreating on the back of encouraging news on the policy side. Francesco Pesole CEE: FX follows gas prices Today, we will see the traditional data set of industrial production, construction and foreign trade in the Czech Republic. The main topic is of course automotive production, which is holding back the whole sector. Leading indicators suggest that the situation did not improve in July either and we should see a further slowdown. The markets are dealing with the new gas price hike and so far it seems that yesterday's jump has been fully reflected in FX across the region, resulting in the expected weakness. However, risks remain and the gas story will be the main focus today. We still believe that further upward movement in gas prices will mainly hit the Hungarian forint, which has been copying the gas price in recent days with an almost perfect correlation. However, we also believe that the EU money theme should return to the headlines in mid-September, which should unlock the hidden potential of the forint. Although the initial reaction from the European Commission may not be 100% positive, our baseline assumes an agreement is found and the RRF money is released. On the other hand, the situation is escalating in Poland, where the government is likely to raise this issue and the upcoming elections may trigger an open conflict with the EU, which in turn spoils the prospects for the Polish zloty which should stay around 4.75 EUR/PLN in the rest of the year. Frantisek Taborsky Read this article on THINK TagsSterling FX daily Dollar CEE region Bank of England Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Market Has Never Seized Chance To Halt The Rise In Demand For The Euro (EUR) And The Pound (GBP)

Massive Collapse In Both Pairs The EUR/USD And The GBP/USD

InstaForex Analysis InstaForex Analysis 06.09.2022 10:04
Although a lot of macroeconomic statistics were released yesterday, markets were unaffected as players focused more on Gazprom's decision to cut off gas supplies to Europe. According to the official statement, there was a breakdown, so there is a need for additional repairs. This threatens Europe with shutdowns of enterprises and massive power outages. Unsurprisingly, the incident caused a massive collapse in both EUR/USD and GBP/USD. The situation only stabilized after the release of retail sales data on Europe, which declined by -0.9%. For future price movements, much will depend both on the statements of officials and the press service of Gazprom. Nevertheless, euro has little chance of increasing, and there is certainly no hopes of rising above parity. On the contrary, some statements may even contribute to another decline below 0.99, followed by a rebound. Retail sales (Europe): EUR/USD failed to break through the lower boundary of the range 0.9900/1.0050. As a result, there was an increase in the volume of long positions, which led to a rebound in prices. It can be assumed that, despite the prevailing downward sentiment among speculators, the market is still developing within the base of the medium-term trend. The best action to this is to work a rebound or breakdown relative to the given boundaries. In case of a breakdown, wait for a strong signal in the daily (D1) timeframe. GBP/USD continued to fall and came close to the 2020 low, where a local reduction in the volume of short positions occurred, which eventually led to a rollback. To prolong the main trend, it is necessary to keep the price below 1.1410 in the four-hour timeframe.     Relevance up to 19:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320883
The Cable Market May Continue To Trade In A Very Volatile Manner

More Information About Liz Truss' Plan May Make Markets Become Calmer

ING Economics ING Economics 06.09.2022 11:00
European curves react to higher energy prices and to news of fiscal support in the same way, by bear-flattening. More yield upside is to be expected when more spending is announced but at least a lot of the bad news is out already for gas supply When fiscal gets involved Even if it doesn’t require further borrowing, rates markets immediately saw the hawkish implications to Germany’s third relief package. In keeping with ever rising European Central Bank (ECB) hike expectations, the prevailing view seems to be that any measure that limits growth downside would also free the central banks’ hand in tightening policy further. There are actually few on the record comments to that effect in the eurozone but, in a period of hyper sensitivity to inflation, we wouldn’t be surprised to see more yield upside as other governments unveil their own support packages. Remember that this cycle's high in 10Y Bund yields is only 20bp away around 1.77%. Details on Truss' fiscal plans could amount to a reduction of uncertainty for markets One potential exception to that rule may be the UK. The run-up to Liz Truss being announced as Prime Minister has been a very difficult period for gilts. We’ve written already of the deadly combination of fiscal spending, monetary tightening, and foreign outflows for sterling bonds. The lack of clarity about the extent, funding, and inflationary impact of fiscal support during the leadership campaign may have exacerbated the sell-off in gilts. Actual details on her fiscal plans are starting to emerge,with Bloomberg reporting a potential cost of £130bn over 18 months to cap energy bills at £2,000 per houshold. In time, this could amount to a reduction of uncertainty for markets, and could be greeted with more stable performance for gilts. 10Y gilts have lagged international peers during the leadership campaign Source: Refinitiv, ING Central banks waiting in the wings Of course, central banks have played a role in the market’s sensitivity to fiscal headlines. The Bank of England (BoE) for instance has explicitly said more fiscal spending may force it into more aggressive tightening… but it could also be responsible for a further reduction in market uncertainty soon. Our, admittedly optimistic, take is that in addition to more details about fiscal measures in the coming days, next week’s BoE meeting should also clarify its reaction. Paradoxically, the more hawkish the BoE, the more likely it is to regain a Fed-like degree of control on its domestic rate market. The more hawkish the BoE, the more likely it is to regain a Fed-like degree of control on its domestic rate market The market reaction to a full cut-off of Nord Stream gas flow from Russian is another place where central banks’ hand can be clearly seen. The ECB for instance has encouraged market participants to think that it will react to realised inflation, most of which is energy-driven, rather than rely on its forecast. Fears of second-round effects also participate in this overreliance on energy price developments in rates markets. Even if we do think this may be an overreaction, this reinforces our view that the EUR swap and German curves will invert this winter. The whole EUR swap curve will soon be inverted, and the German curve is set to follow suit Source: Refinitiv, ING Today's events and market view Germany is scheduled to sell inflation-linked bonds and Austria will carry out auctions in the 3Y and 10Y sectors, but this will be eclipsed by syndicated sales from France (new 20Y) and Italy (new 13Y green bond) ,which we expect the price today. The duration impact should be non-negligible in illiquid markets but we surmise that this has been largely played out in the run-up to the deals. We wouldn’t be surprised to see the curve flatten after pricing. The Italian sale comes in a context of a shrinking greenium across sovereign, sub-sovereign, supranational, and agency bond markets. Data is on the light side in Europe with mostly construction PMIs from Germany and the UK to look out for. US PMI and ISM services should gather more attention. In particular, a decline in the price components would be greeted as further evidence that the Fed is on its way to meeting its inflation target. An improvement in the growth-relevant indicators might overshadow this however, with markets currently minded to take a hawkish implication to most releases and events. Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The UK Markets Remain Volatile, Possible Contraction Of The Eurozone Economy

Would Liz Truss (UK Prime Minister-Elect) Freeze Energy Bills? Bitcoin Jumped Above $20K, But Seems Not To Feel Strong.

Craig Erlam Craig Erlam 06.09.2022 11:50
It’s been a mixed start to trade on Tuesday, similar to what we saw in Asia overnight, and as we await the return of the US after the long bank holiday weekend. Europe in particular was rattled on Monday by the Gazprom announcement that came after the close on Friday in relation to Nord Stream 1. The latest move in the apparent weaponisation of energy supplies has once more created huge uncertainty ahead of the winter. Conveniently the announcement came hours after the G7 agreed to a Russian price cap and as Europe was boasting about being ahead of schedule on filling gas stores. RBA signals more hikes ahead The Reserve Bank of Australia raised the cash target rate by 50 basis points to 2.35% on Tuesday, in line with expectations, as it continues to aggressively push back against soaring inflation. The central bank reiterated that it is not on a pre-set path but will continue hiking interest rates with markets of the belief that there’s still plenty more to come including another 50bps next month and 25 at each of the following three. Read next: Russia Suspends Flow Through The Nord Stream 1 Pipeline, Cotton Futures, Gold Prices Increase For The First Time In 3-weeks| FXMAG.COM Of course, forecasting even that far ahead has become far more challenging in such an uncertain global environment but it’s clear that central banks around the world still have a massive job on their hands and the coming months will be tough. That said, the RBA is of the belief that inflation will peak later this year before returning to 3% in 2024. PBOC desperate to support CNY The PBOC once again set a stronger yuan fix today as it continues to push back against its decline. Controlling the decline in the yuan has clearly become a huge priority, with the 2% cut in the FX reserve requirement ratio intended to support that initiative. Rather than stop a decline in the yuan, these efforts may simply slow it with a move above 7 against the dollar looking like a matter of when rather than if, given the relentless rally in the greenback. Hit the ground running Liz Truss will be sworn in as Prime Minister today and will have to hit the ground running as the UK prepares for a brutal winter. Reports claim the new PM intends to freeze energy bills this winter at a cost of up to £130 billion, a move that would certainly fall into the bold category. The question is what impact it will have on inflation and gas demand. This will be a core part of what will need to be a much greater package to shield the economy from the grim forecasts we’ve seen in recent weeks. Struggling for rally momentum Bitcoin pushed briefly back above $20,000 today but is struggling to build on that. Broadly speaking, it’s trading in a range between $19,500 and $20,500 as it has for a little over a week now but rallies do appear to be increasingly struggling which may be a slightly bearish signal. A break of $19,500 would confirm that although with trading currently so choppy, it’s tough to read too heavily into today’s moves so far. The broader market environment also remains quite risk averse which could work against cryptos. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Steady after a rocky start - MarketPulseMarketPulse
Decline In Market Volumes Will Lead To A Strong Increase In Volatility

The Gas Price Is Recovering And The Euro And British Pound Are Strengthening

InstaForex Analysis InstaForex Analysis 06.09.2022 11:48
Details of the economic calendar for September 5 Data on indices of business activity in the services sector in Europe and the UK were published, which came out worse than expected. Details of statistical indicators: Eurozone services PMI fell from 51.2 to 49.8 points against the expectation of 50.2 points. The composite index fell from 49.9 to 48.2 points. The euro was already heavily oversold at the time of the release of the data, so it was difficult to fall further. UK services PMI fell from 52.6 to 50.9 points, with forecast of a decline to 52.5 points. The composite index fell from 52.1 to 49.6 points. The pound sterling, like the euro, was oversold; there was no reaction to the statistics. Data on retail sales in the euro area were also published: its rate of decline slowed down from -3.2% to -0.9% YoY. Despite the fact that the data came out worse than expected (-0.7%), the euro ignored them. The reason for the lack of response to statistical indicators arose due to the commodity market. Yesterday, with the opening of trading, there was a sharp increase in the cost of gas in Europe, which jumped by 30% to $2,800 per thousand cubic meters. The reason for the increase in the cost of gas lies in the message of Gazprom on Friday evening that the maintenance of the only working turbine of SP-1 revealed "gross violations" and the gas pipeline will not work without their elimination. Speculators worked out this information flow in the form of a sell-off of the euro, where, through a positive correlation, it followed the euro and the pound sterling. As soon as the price of gas began to recover relative to the morning jump, the euro began to strengthen, followed by the pound. Analysis of trading charts from September 5 The EURUSD currency pair opened a new trading week with an intensive decline, during which the quote temporarily fell below 0.9900. The speculators failed to stay outside the control value, which resulted in a technical pullback. The GBPUSD currency pair, through a positive correlation with EURUSD, first rushed down, almost reaching the 2020 low, and then moved into the pullback stage. Economic calendar for September 6 The United States is coming off a three-day holiday today, and service sector PMI data will be released. In the UK, data on the index of business activity in the construction sector will be released, where they predict its decline. Not the best signal for the pound sterling, but it is worth considering that it is already oversold in the market. Time targeting: UK Construction PMI (Aug) – 08:30 UTC US Services PMI (Aug) – 13:45 UTC Trading plan for EUR/USD on September 6 Despite the speculative activity, the quote is still within the range of 0.9900/1.0050. Thus, traders are guided by the borders of the flat, working according to the method of breakdown or rebound from the given values. Trading plan for GBP/USD on September 6 With the pound losing more than 800 pips in value in three weeks, a pullback/correction was brewing in the market due to short overheating. In this situation, holding the price above 1.1620 will lead to the subsequent strengthening of the pound towards 1.1750. As for the prolongation of the downward trend, it is necessary to keep the price below the value of 1.1400 in the daily period. What is shown 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 candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and 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.     Relevance up to 09:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320915
The Price Of Cable Market (GBP/USD) Is Able To Reach The First Target Level

The GBP/USD Pair: The Price May Move Upward Or Move Downward?

InstaForex Analysis InstaForex Analysis 06.09.2022 12:11
Trend analysis (Fig. 1). The pound-dollar pair may move upward from the level of 1.1513 (close of yesterday's daily candle) to 1.1565, the 14.6% retracement level (blue dotted line). When testing this level, a continued upward movement is possible to 1.1643, the 23.6% retracement level (blue dotted line). From this level, a downward pullback is possible. Fig. 1 (daily chart). Comprehensive analysis: General conclusion: Today the price may move upward from 1.1513 (close of yesterday's daily candle) to 1.1565, the 14.6% retracement level (blue dotted line). When testing this level, a continued upward movement is possible to 1.1643, the 23.6% retracement level (blue dotted line). From this level, a downward pullback is possible. Alternative scenario: from the level of 1.1513 (close of yesterday's daily candle), the price may move upward to 1.1608, the 8-period EMA (thin blue line). When testing this level, a downward movement is possible to 1.1560, the 261.8% Fibonacci retracement level (red dotted line). Upon reaching this level, the price may resume moving upward with the target of 1.1643, the 23.6% retracement level (blue dotted line).       Relevance up to 10:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320929
Analysis Of Cable Market (GBP/USD) By Laurie Bailey

How Transactions In The GBP/USD Pair Look In Short And Long Position Today?

InstaForex Analysis InstaForex Analysis 06.09.2022 13:15
Analysis of transactions in the GBP / USD pair Pound tested 1.1484 when the MACD line was far from zero, which limited the upside potential of the pair. Sometime later, there was a test of the level again, but the MACD line was still at the area it was before so there was no large movement. No other signals appeared for the rest of the day. Pound did not move much yesterday despite the weak reports on the services and composite PMI in the UK. The reason was the manipulation of large players, which happened due to low volatility amid the holiday in the US. Today, a number of reports are scheduled to be published, such as the index of business activity in the UK construction sector. If the figure turn out to be better than expected, a slight increase in GBP/USD will be seen. In the afternoon, data on business activity in the services sector and PMI for the US will be released, which will hit the positions of dollar and may lead to a rise in risk appetite, provided that the numbers are lower than the forecasts. For this reason, expect further growth and upward correction in the pair. For long positions: Buy pound when the quote reaches 1.1597 (green line on the chart) and take profit at the price of 1.1657 (thicker green line on the chart). Growth will occur if activity in the construction sector exceeds expectations. Take note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.1559, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1597 and 1.1657. For short positions: Sell pound when the quote reaches 1.1559 (red line on the chart) and take profit at the price of 1.1515. Pressure will increase if the attempt to consolidate at daily highs fails. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1597, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1559 and 1.1515. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. 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 decision based on the current market situation is an inherently losing strategy for an intraday trader.       Relevance up to 09:00 2022-09-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320904
Oil Is An Indicator Of The Health Of The Global Economy

Liz Truss As The New Party Leader. OPEC+ And Production Cut

Saxo Bank Saxo Bank 06.09.2022 09:50
Summary:  While the US markets were closed overnight for Labor Day, the futures this morning in Asia are indicating some respite after weeks of red. The US dollar was also softer in early Asian hours, while the focus remains on the European energy crisis and the EU emergency meeting scheduled for Friday. A token cut by OPEC+ and diminishing hope of a revival of the Iran nuclear deal supported oil prices, although China’s tightening restrictions continue to pose demand concerns. Sterling made a sharp recovery after new UK PM Liz Truss announced plans to freeze energy bills, easing some short-term concerns. Consensus expects another 50 basis points rate hike from Reserve Bank of Australia today, and US ISM services will be on the radar later. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. stock markets were closed for Labor Day. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) The treasury market was closed for Labor Day. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng TECH Index (HSTECH.I) plunged 1.9% as a Bloomberg story, citing people familiar with the matter, said that the Biden administration is considering imposing restrictions on US investments in Chinese technology companies, Bilibili (09626:xhkg) -3.2%, JD.COM (09618:xhkg) -3.0%, Tencent (00700:xhkg) -2.9%, Alibaba (09988:xhkg) -2.4%. Hang Seng Index fell 1.2%. Chengdu, the largest city in western China, extended its pandemic control lockdown for another three days. The spread of Covid-19 cases and pandemic control measures fueled risk-off sentiment in the market.  Over the weekend, the U.S. Trade Representative said that it received requests from more than 350 American companies to plead for keeping the “Section 301” tariff on goods imported from China, and the Biden administration will remain in place during the review. BYD (01211:xhkg) fell 5.9%, as exchange filing showed that Berkshire Hathaway continued to off-load its stake in BYD.  Other car makers lost as well, Geely (00175) -7%, NIO -6,9, Li Auto 02.3(August).  Thermal coal prices surged in China, following the news that Russia’s Gazprom suspended the supply of natural gas to Germany on the Nord Stream pipeline.  Share prices of coal miners gained, Yancoal Australia (03668:xhkg) +6.6%, Yankuan (01171:xhkg) +12.2%, China Coal (01898:xhkg) +8.3%.  Caixin China Services PMI came in at 55.0, edging down slightly from 55.5 in July but above market expectations. CSI300 spent the day in range-bound trading.  GBPUSD falls to fresh lows, EUR in focus this week The USD lost some ground early in Asia on Tuesday with GBPUSD making the most gains to rise towards 1.1600 as the appointment of new Prime Minister and her plan to freeze energy bills spelled some short-term relief. EURUSD saw a brief drop to 20-year lows below 0.99 yesterday but rose back to 0.9960+ levels in early Asian trading. EURGBP seen sliding slower to 0.8600 but downside may be limited if ECB decides to go for a 75bps rate hike today. But the energy situation and the EU summit on Friday certainly garners more attention with some tough decision ahead. USDJPY retreated from Friday’s 24-year highs of 140.80 to 140.30-levels with Japan’s household spending underperforming expectations at 3.4% y/y vs. expectations of 4.6% y/y. Wage pressures, which remain a key focus for Bank of Japan, also eased with labor cash earnings up 1.8% y/y from last month’s 2.0% y/y. Crude oil prices (CLU2 & LCOV2) Crude oil prices rose on Monday as OPEC+ announced an output cut of 100k bpd in October (more details below). The intention appears to be to keep Brent prices capped at $100/barrels. WTI futures rose to $89/barrel while Brent was above $95/barrel. Price action was also supported by a diminishing hope of a revival of the Iran nuclear deal. US and Iranian positions have diverged in recent days, and it is now expected that the negotiations could stretch beyond the US midterm elections in November. Still, it is key to watch the demand concerns picking up as well, particularly as China lockdowns were extended and will likely remain strict ahead of the CCP meeting on October 16. What to consider? OPEC+ announced a production cut by 100k bpd A token cut by OPEC+ last night of 100k barrels per day just reverses the output increase agreed to last month. The decision was ‘symbolic’, with the new quotas taking effect for October. The amount is significantly small compared to a 100 million bpd market but it shows that OPEC+ wants to set a floor near $100/barrel in Brent. Saudi Arabian oil minister Prince Abdulaziz bin Salman had warned last week that a cut was a possibility given what he said was a disconnect between financial and physical oil markets. The RBA meets today, and is expected to raise rates to 2.35% regardless of the property market struggling Consensus expects the RBA to hike rates by 0.5% which will take Australia’s official interest rate to 2.35%. That will be the highest rate since 2015. However, interest rates futures are pricing in a smaller hike, of just 0.4%. The RBA will likely then proceed to rise rates over the rest of 2022 and then continue to rise rates into the 2023, in a bid to stave off inflation. The issue is, the RBA only has one tool to fight inflation, which is rising rates. But the property market is already struggling to absorb the 1.75% in hikes from May, with property prices falling at their quickest pace since the 80s and construction seeing its biggest decline since 2016. This has seen banks margins (profits) be squeezed, and they face a further squeeze. Why? Australia has one of the highest debt levels in the world (Debt to GPD is 126%). So if the RBA keeps rising rates to slow inflation, it could cause a credit issue and debt to income levels are at risk of hitting GFC highs. RBA outcomes for investors, traders and the macro landscape We highlighted sectors to watch and why yesterday in the Saxo Spotlight. That's worth a quick read. Today, we will be watching what the RBA estimates inflation to be, at the end of the year, remembering the RBA previously said it expects inflation to peak at under 8%. But consider, we traditionally see peak energy (coal) demand later this year, which is likely to support coal prices higher. As such, we think the RBA will rise its inflation target and may allude to commentary about keeping rates higher. For investors and traders, we will be watching energy stocks, which will likely get extra bids today and see momentum rise (not only because of the energy crisis in Europe), but also because Australian energy prices (coal) remains supported, with Australian energy reserves expected to also run out next year. For traders, the currency pair that we are watching is the AUDEUR for an extension to the upside, on the basis that Europe will need to increase energy imports and its balance of trade will likely continue to worsen, vs the Australian balance of trade, likely to hit another record high, with Australian LNG and coal exports to see a lift in demand.    PBOC cuts FX deposit reserve requirement ratio by 200 bps to restrain yuan weakness The PBoC announced that the central bank is cutting the reserve requirement ratio for foreign exchange deposits (the “FX RRR”) to 6% from 8%, effective September 15.  The cut is expected to release about USD19 billion (2% of the USD954 billion FX deposits outstanding) in FX liquidity for banks to make loans in foreign currencies.   The PBoC last cut the FX RRR to 8% from 9% on May 15, in an attempt to send a signal to the market to put a pause to the depreciation of the USDCNY which had weakened from 6.40 to 6.80 in one month (April 15 to May 13, 2022).  After the surge of the USDCNY from 6.75 to above 6.90 in about half a month since Aug 15, the PBoC apparently wants to send a signal again to the market to slow the speed of the renminbi depreciation against the U.S. dollar. Liz Truss won the contest to become the next UK Prime Minister In the UK, the Conservative party has voted for Liz Truss as the new party leader, making her the UK’s next Prime Minister. Her promises range from quick action on energy security to alleviating the cost-of-living crisis for the hardest hit by price rises, all while cutting corporate and other taxes. She has announced a GBP 130bn plan to freeze energy bills, a recipe for ballooning fiscal deficits, an issue that is already an ingredient in sterling’s steep fall this year, so an even steeper recession is in the wings. This could come either from a drop in real GDP due to soaring inflation aggravated by further sterling declines or as demand is crushed by a steep recession due to the need for the Bank of England to accelerate its pace of rate hikes or more likely a combination of the two. Longer term, investments in fracking shale gas and new North Sea exploration could pay dividends. Russia makes a clear case of weaponizing gas supplies While the Kremlin had earlier said that they were halting gas supplies on Nord Stream 1 for a technical fault, it has now clearly said that gas supplies to Europe via the Nord Stream 1 pipeline will not resume in full until the “collective west” lifts sanctions against Moscow over its invasion of Ukraine. Russia is still supplying gas to Europe via Soviet-era pipelines through Ukraine that have remained open despite the invasion, as well as the South Stream pipeline via Turkey. But supplies along the northern pipeline routes, including Nord Stream 1 and the pipelines through Ukraine, have fallen by more than 90% since September last year. Higher supplies from Norway, the UK, north Africa and increased imports of LNG have helped to an extent offset the loss of Russian supplies. Energy summit in EU on Friday EU leaders will meet this Friday to discuss a cap on energy prices across EU countries to limit the disruptions from soaring and illiquid pricing markets, although given limits on generation capacity, much of them due to Russia’s cutting off of gas supplies - possibly semi-permanently in the case of the Nord Stream 1 pipeline – some sort of rationing plan may be required. See our colleague Christopher Dembik’s piece on at the difficult choices Europe faces on this issue here. US ISM services PMI due today With the services sector of the US economy slowing, there are expectations of a slight retreat in August US ISM services, but it should still remain above the 50-mark which differentiates between expansion and contraction. The S&P services PMI for August had also shown a slight decline to 44.1, with the payroll data hinting at still-strong labor market conditions in the services economy.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-6-sept-2022-06092022
The USD/JPY Pair Reached The Top Of The Downtrend Channel

Geopolitical Situations And Macroeconomic Data Can Strongly Affect The Forex Market This Week

Saxo Bank Saxo Bank 06.09.2022 15:14
Summary:  The JPY is tumbling again even as yields trade relatively sideways and as the grinding disparity widens between the Bank of Japan’s yield caps and rising front-end policy rates and rate expectations elsewhere, most notably in Europe, where the ECB nonetheless needs to hike 100 basis points if it really wants to impress markets this Thursday. In the background, the US dollar is a bit sideways, while sterling has launched a relief rally on the arrival of Liz Truss as new UK Prime Minister. FX Trading focus: Market challenges BoJ again. ECB has to hike 100 to impress. A new runaway move lower in the JPY is the focus today even as yields at the longer end of the yield curve remain relatively anchored after a modest correction late last week. The focus may simply be on the widening divergence between policy rates ratcheting higher everywhere else while the Bank of Japan maintains that it will not budge any time soon. Some thoughts on EURJPY below, while USDJPY has cleared 141.00 and has not traded this high since a brief episode of a few months in 1998 during the Asian financial crisis. The Bank of Japan YCC policy is under duress and the pressure will ratchet that much higher if the US 10-year yield. Already with this latest move we should expect some stiffening verbal intervention that inevitably won’t last long. EURUSD teased back towards parity for whatever reason this morning, perhaps in hopes that the European energy cap plan will prove a boost, perhaps on hopes that the ECB is set to surprise to the upside at Thursday’s ECB meeting. It’s a long shot according to the odds, which strongly favour a 75 basis point move over a 50 basis point move, but if the ECB wants to play some real catchup and help stabilize the euro currency, it should hike rates 100 basis points and indicate a willingness to do so again. It is not helpful for Europe that the Kremlin has now explicitly made it clear that the failure to restart deliveries of gas through the Nord Stream I pipeline are a weaponization of gas flows aimed at EU sanctions. Everyone is becoming a natural gas expert now, with the gist that the EU can survive the winter with no Russian gas as long as demand drops around 20% and there are no further disruptions of other non-Russian supplies. The situation would have been far better had not French nuclear woes and a massive drought impacted hydroelectric production not created the perfect storm this winter for power prices. Chart: EURJPYEURJPY is an interesting to watch in addition to USDJPY as the pair has traded back to new highs despite Europe’s dire energy situation (to a significant degree, Japan is also beset with high energy costs, given its reliance on important LNG and oil). But the ECB policy rate anticipated through the December ECB meeting is some 70 basis points higher than it was in mid-August, while the Bank of Japan carries on its yield-curve control policy, helping to pump this cross back higher. Next key test is over the ECB meeting on Thursday and then whether US data this week and through Monday’s August CPI data point excites a further rise in US treasury yields.   Freshly minted UK Prime Minister Truss used her first day in office to launch a £130 billion package to cap energy bills at their current level in order to avoid the cost-of-living crisis for many had bills risen as scheduled to nearly double the current levels next month. The cost estimate is spread over 18 months and represents some 5% of UK GDP now, (likely considerably less next year, given the runaway nominal growth in the UK economy at present). Sterling has seen a solid relief rally on hopes for Trussonomics, which will include tax cuts and a possible threat to Bank of England independence. Longer term efforts to increase investment in new energy sources could pay long term dividends, but the UK and its currency can ill-afford aggravating already yawning deficits in the near term, and further Bank of England rate hikes will aggravate risks to growth/real estate while piling onto the stark mathematics of future deficits and sovereign cost-of-debt-service calculations. Still, it is a riveting effort to watch as Truss and her strong Conservative majority can show more dynamism and force in policy making than we are going to get in the near to medium term from the US or Europe. Australia’s RBA hiked 50 basis points as almost universally expected and claimed in its statement that it is on “no preset course”. The front-end of the Australian yield curve hardly budged on the news after some intraday volatility as the market expects higher odds that the RBA downshifts at tone of the coming two meetings to a 25-bp hike. RBA Governor Lowe is set to speak on Thursday, an event that could provide a stronger bias than the neutrality we saw last night. Note fairly strong new highs in USDCNH today above the cycle high and within reach of the psychological 7.00 level now (7.20 area nearly touched in 2019 and 2020 the cycle focus and the CNY hasn’t shown much independence of movement in the crosses.) Table: FX Board of G10 and CNH trend evolution and strength.Sterling trying to make a comeback in momentum terms, but is only about halfway to notable resistance in the key EURGBP and GBPUSD pairs. Elsewhere, not the recent CNH downside momentum and Aussie following suit to a degree, while the JPY takes the crown for most negatively trending currency in our universe. Table: FX Board Trend Scoreboard for individual pairs.The AUDNZD upside attempt is faltering – is it set to flip negative? Elsewhere, note GBPJPY and SEKJPY trying to set the direction back higher, a sign of the broadening downside pressure on the JPY. Upcoming Economic Calendar Highlights 1345 – US Aug. S&P Global Services PMI 1400 – US Aug. ISM Services 2105 – New Zealand RBNZ’s Silk to speak 0130 – Australia Q2 GDP     Source: https://www.home.saxo/content/articles/forex/fx-update-market-challenges-boj-ecb-set-to-hike-100-bps-06092022  
Europe Is Likely To Go Into The 2023/24 Winter With Tight Storage

Gas Skyrocketed! BP Stock Price Increased! Liz Truss Has A Lot Of Challenges Ahead

Swissquote Bank Swissquote Bank 06.09.2022 15:34
The European natural gas futures jumped 30% yesterday, the euro fell further against a broadly stronger US dollar, and crude oil climbed above the $90pb mark, as OPEC decided to cut production by 100’000 barrels per day, to the August levels, as they wanted to ‘stabilize’ oil prices after the longest price decline since the beginning of the pandemic. For now, the barrel of US crude couldn’t clear the $90 resistance, as the US-Iran nuclear deal is still a possibility to boost supply, and no one really knows what could happen in the complex politics of the oil market. Also, the recession worries weigh on the demand outlook. The New PM Of United Kingdom - Liz Truss In the UK, Liz Truss won the PM race. Cable first fell to a fresh low, on the back of a broadly stronger US dollar, but the pair rebounded. The Reserve Bank of Australia (RBA) raised its policy rate by 50bp as expected today. China boosted stimulus.  The US is back from Labor Day holiday. US futures are in the positive, but winds could rapidly change direction. Watch the full episode to find out more! 0:00 Intro 0:30 Crude oil gains after OPEC cuts output, but gains remain limited 2:21 France joins Germany and UK in backing windfall taxes on energy companies 3:56 Pound digests Liz Truss victory 6:32 RBA lifts rates by 50bp, as China boosts stimulus 7:31 Is Chinese property crisis a risk for global financial markets? 9:44 What to watch today? Ipek Ozkardeskaya   Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #OPEC #Europe #energy #crisis #crude #oil #USD #EUR #GBP #inflation #UK #PM #election #Liz #Truss #RBA #AUD #rate #hike #China #stimulus #property #crisis #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
OANDA Senior Market Analyst Craig Erlam Talks Recent Important Market Events

The GBP/USD Pair Is Under Strong Downward Pressure And Continues To Decline

InstaForex Analysis InstaForex Analysis 07.09.2022 09:08
Early in the European session, the British pound is trading at around 1.1461. GBP/USD is under strong downward pressure. It is likely that if the pair continues to decline, a technical bounce could occur around the bottom of the downtrend channel at 1.1385. The British pound is trading below the 21 SMA and below -1/8 Murray. As long as it continues to trade within the downtrend channel, GBP/USD is expected to continue its decline and could reach the extremely oversold zone around -2/8 Murray at 1.1230. One factor that keeps the pound weak is that investors are concerned about a possible recession in the UK economy. According to the daily chart, the GBP/USD pair is entering oversold levels. So, a technical bounce is likely in the coming hours if the pound manages to consolidate above -1/8 Murray located at 1.1474. On the other hand, a sharp break of the downtrend channel formed since the beginning of August could offer a sustained recovery for the pound and it could even reach the 0/8 Murray area at 1.1718 and could even reach the 200 EMA located at 1.1862. Conversely, should the pound break the downtrend channel at around 1.1385, it could accelerate its decline below towards the zone of -2/8 Murray at 1.1230. Our trading plan for the next few hours for GBP/USD is to wait for its consolidation at around 1.1384 to buy or wait for it to consolidate above 1.1474 (-1/8 Murray) and above the 21 SMA around 1.1526 to buy. Above these levels, we expect the British pound to reach the levels of 1.1605 and 1.1718.       Relevance up to 06:00 2022-09-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291710
The Cable Market May Continue To Trade In A Very Volatile Manner

The Growth Of The British Pound Still Can Not Count

InstaForex Analysis InstaForex Analysis 07.09.2022 09:15
GBP/USD 5M The GBP/USD currency pair resumed its downward movement on Tuesday. So far, the matter has not come to a new update of 2-year lows, but the price still remains in close proximity to them and from its 37-year lows. Since corrections must happen from time to time, we believe that this is exactly what has been observed in the last few days. The descending trend line eloquently indicates that the downward trend continues, so we have the right to expect a new fall in the British pound. However, the pound clearly does not need strong fundamental and macroeconomic reasons to continue to depreciate against the US currency. There were no important events on Tuesday, except for the ISM business activity index in the US. This report was published quite late, so the main drop was not related to it. No more interesting events in the UK this week. In regards to trading signals, things were poor, but effective. The price bounced off the critical line twice during the European trading session, forming two sell signals. After the first pair went down a little more than 30 points, after the second - 95. Since the nearest target level from below was located very far, it was not necessary to count on its development. This means that the second deal should have been closed manually in the late afternoon. It was possible to earn at least 60 points on it. The first short position was closed by Stop Loss at breakeven. COT report: The latest Commitment of Traders (COT) report on the British pound, released yesterday, turned out to be as neutral as possible. During the week, the non-commercial group closed 300 long positions and opened 900 short positions. Thus, the net position of non-commercial traders immediately increased by 1,200. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). Therefore, the growth of the British pound still cannot count. How can you count on it if the market sells the pound more than it buys? And now its fall has resumed altogether, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 87,000 shorts and 58,000 longs open. The difference is not as terrifying as it was a few months ago, but it is still noticeable. The net position will have to show growth for a long time to at least equalize these figures. Moreover, COT reports are a reflection of the mood of major players, and their mood is influenced by the "foundation" and geopolitics. If they remain as weak as they are now, then the pound may still be in a "downward peak" for some time. Also remember that it is not only the demand for the pound that matters, but also the demand for the dollar, which seems to remain very strong. Therefore, even if the demand for the British currency grows, if the demand for the dollar grows at a higher rate, then we will not see the strengthening of the pound. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 7. Energy crisis in the European Union. Is everything so bad? Overview of the GBP/USD pair. September 7. Liz Truss is the new British prime minister. What does this mean for the pound? Forecast and trading signals for EUR/USD on September 7. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair maintains a downward trend on the hourly timeframe. The British currency continues to fall in the medium term and so far there is no reason to believe that the pound's decline will end in the near future. If the euro has at least an ECB meeting that can support it this week, then the pound has nothing. We highlight the following important levels on September 7: 1.1411-1.1442, 1.1649, 1.1874. The Senkou Span B (1.1698) and Kijun-sen (1.1546) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. There are no major events scheduled for Wednesday in the UK and the US. Thus, the pair will have nothing to react to during the day, but now it does not need any events to move actively and in a trend. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.   Relevance up to 02:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320991
The Technical Factors Speak In Favor Of The Pound's (GBP) Growth

The US Economy Continues To Show Strength, British Pound Will Testing The 2020 Low?

InstaForex Analysis InstaForex Analysis 07.09.2022 09:30
Several market entry signals were formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 1.1613 level in my morning forecast and advised making decisions on entering the market from it. Before forming a false breakout at 1.1613, just a couple of points were missing. I was unable to enter the market for this reason. A similar situation occurred with the level of 1.1545, where I expected the pair to reverse and more active growth. Unfortunately, even before the test of this range, about 3-4 points were not enough, so I did not manage to buy the pound. The pressure on the pair returned in the afternoon after strong ISM reports, which led to a test and a false breakout in the 1.1497 area, where I advised buying the pound. As a result, the upward rebound amounted to more than 50 points. The bears managed to protect the resistance at 1.1549 closer to the middle of the US session, which led to a signal to sell further along the trend. As a result, the pound fell another 30 points. When to go long on GBP/USD: Today is quite an important day for the British pound, as there will be parliamentary hearings on the report of the Bank of England on monetary policy, as well as a speech by Bank of England Governor Andrew Bailey. It is clear that the central bank will have to further increase the pace of interest rate hikes, which will further complicate the situation in an economy that is struggling with an energy crisis, which translates into a crisis in the cost of living for the British. This can only increase the pressure on the pound, leading to new annual lows. In case GBP/USD falls and a negative reaction to Bailey's statements, forming a false breakout at 1.1459 will give the first signal to open long positions in anticipation of a correction to the 1.1509 area. A breakthrough and a downward test of this range may pull stop orders from speculative bears, which forms a buy signal with an increase to a more distant level of 1.1559, just below which the moving averages play on the bears' side. The farthest target will be the area of 1.1607, which we failed to cling to yesterday. I recommend taking profit there. If the GBP/USD falls further and there are no bulls at 1.1453, which is more likely, the pressure on the pair will increase. A breakthrough of this range will lead to the renewal of the next annual low. In this case, I advise you to postpone long positions until the next support at 1.1409 - a low of 2020, but you can act there only on a false breakout. I recommend opening long positions on GBP/USD immediately for a rebound from 1.1358, or even lower - around 1.1313, counting on correcting 30-35 points within the day. When to go short on GBP/USD: Having coped with a rather important task of protecting the 16th figure, bears continued to pull down the pound and achieved a return to annual lows. It is likely that Bailey's speech today will have a bad effect on the pound, as statements about raising interest rates during the economy sliding into recession will clearly discourage traders from buying the pound again. Of course, it is best to act based on an upward correction. The optimal scenario for opening short positions on GBP/USD would be forming a false breakout at the level of 1.1509, a breakthrough to which may occur during Bailey's speech. This will make it possible to achieve a new sell signal and a return to the area of 1.1453. Only a breakthrough and reverse test of this range would provide a new entry point for short positions with a fall towards the 2020 low at 1.1408. A more distant target will be the area of 1.1358, where I recommend taking profits. In case GBP/USD grows and the bears are not active at 1.1509, there will be a chance for an upward correction, and bulls will have the opportunity to return to 1.1559, where the moving averages play on the bears' side. Only a false breakout there will provide an entry point into short positions, counting on a new fall in the pair. If there is no activity there, I advise you to sell GBP/USD immediately for a rebound from 1.1607, counting on the pair's rebound down by 30-35 points within the day. COT report: An increase in short positions was logged in the Commitment of Traders (COT) report for August 30, while long ones decreased. This once again confirms the fact that the British pound is in a major downward peak. Serious pressure on the pair will continue in the future, as the British economy is getting worse and worse, and GDP is shrinking quite quickly. The choice of a new prime minister of Great Britain will only provide temporary support to the pound, since, in fact, it does not change anything. In turn, the US economy continues to show strength, and recent data on the labor market once again convinced investors that the US central bank, led by Federal Reserve Chairman Jerome Powell, will continue to raise interest rates at an aggressive pace, which will only increase pressure on the British pound, which is experiencing quite a lot of problems lately. Expected high inflation and a looming cost-of-living crisis in the UK does not give traders room to take long positions, as a fairly large range of weak fundamentals is expected ahead, likely to push the pound even further below the levels at which it is currently trading. The latest COT report indicated that long non-commercial positions decreased by 306 to 58,477, while short non-commercial positions rose by 898 to 86,647, which led to a slight increase in the negative value of the non-commercial net position to -29,170 vs. -27,966. The weekly closing price collapsed from 1.1661 against 1.1822. Indicator signals: Trading is below the 30 and 50-day moving averages, which indicates further decline in the pair. Moving averages Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case the pair goes down, the lower border of the indicator around 1.1453 will act as support. In case of growth, the upper border of the indicator around 1.1559 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.     Relevance up to 08:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321019
Analysis Of Cable Market (GBP/USD) By Laurie Bailey

The GBP/USD Pair: Next Currency Pair Is Keeping The Downward Trend

InstaForex Analysis InstaForex Analysis 07.09.2022 11:04
Trend analysis (Fig. 1). The pound-dollar pair may move downward from the level of 1.1516 (close of yesterday's daily candle) to the lower fractal 1.1432 (blue dotted line). When testing this level, an upward movement is possible to 1.1566, the 14.6% retracement level (blue dotted line). In the case of testing this level, the price may continue to move upward with the target of 1.1643, the 23.6% retracement level (blue dotted line). Fig. 1 (daily chart). Comprehensive analysis: General conclusion: Today the price may move downward from the level of 1.1516 (close of yesterday's daily candle) to the lower fractal 1.1432 (blue dotted line). When testing this level, an upward movement is possible to 1.1566, the 14.6% retracement level (blue dotted line). In the case of testing this level, the price may continue to move upward with the target of 1.1643, the 23.6% retracement level (blue dotted line). Alternative scenario: from the level of 1.1516 (close of yesterday's daily candle), the price may move downward to 1.1421, the historical support level (blue dotted line). In the case of testing this level, an upward movement is possible with the target of 1.1566, the 14.6% retracement level (blue dotted line).       Relevance up to 08:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321015
Decline In Market Volumes Will Lead To A Strong Increase In Volatility

The Energy Crisis In Europe Puts Pressure On The Markets

InstaForex Analysis InstaForex Analysis 07.09.2022 11:36
Details of the economic calendar for September 6 The further aggravation of the energy crisis in Europe puts pressure on the markets, which does not allow the euro to move into the stage of a full correction. German Chancellor Olaf Scholz said yesterday that the energy crisis will last for several more years. This statement caused the euro to accelerate its decline. Meanwhile, UK's construction Purchasing Managers' Index (PMI) was published, which rose to 49.2 instead of the expected decrease from 48.9 to 48.0. However, the market ignored the statistics. During the American trading session, the US services Purchasing Managers' Index (PMI) was published, which fell more than expected from 47.3 to 43.7. Again, there was no reaction to the statistical data. Analysis of trading charts from September 6 The EURUSD currency pair is stubbornly trying to prolong the downward trend, as indicated by a number of attempts by traders to stay below the 0.9900 level in the daily period. There is no clear signal of prolongation for the Tuesday period. The GBPUSD currency pair, after a short pullback, again rushed down towards the local low of 2020 (1.1410). This move indicates the continuing downside mood among traders in the market. It is worth noting that the pound sterling has a positive correlation with the euro. Thus, we observe identical cycles in the market. Economic calendar for September 7 Today, the publication of the third estimate of Eurozone GDP is expected, where there will be no reaction in the market if the data coincides with the previous two estimates. If there is a discrepancy in the statistical data, then a speculative activity may appear depending on the indicators. Time targeting: EU GDP – 09:00 UTC Trading plan for EUR/USD on September 7 Market participants still expect the price to hold below 0.9900 in the daily period. This move will indicate the possibility of further weakening of the euro towards 0.9500. It is worth considering that a variable level of 0.9850 stands in the way of the downward cycle. Thus, a confirming signal about the downward move will be received after its breakdown. The upward scenario considers the absence of holding the price beyond the control values. In this case, another rebound is possible, with the price returning above the parity level. Trading plan for GBP/USD on September 7 In order for a signal to prolong the long-term downward trend to appear, the quote needs to be firmly held below 1.1400 in the daily period. In the opposite case, it is impossible to exclude the scenario of a price rebound from the 2020 low area with a subsequent amplitude of 1.1450/1.1600. What is shown 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 candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and 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.   Relevance up to 10:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321035
A Strong Bearish Signal For The Equity Markets And A Significant Support Factor For Dollar (USD)

The EUR/USD Pair Is Trading Like In The Early 2000s. The ECB Meeting May Push The GBP/USD Pair?

InstaForex Analysis InstaForex Analysis 07.09.2022 12:17
Dollar continues to rise, thanks to higher yields of Treasuries ahead of the Fed's monetary policy meeting this September. Clearly, markets are driven by expectations of further rate hikes by world central banks, with the Fed having the full leadership. Most likely, it would implement a 0.75% increase, along with the ECB despite the start of recession in Europe. At the time of writing, EUR/USD is trading near the historical low of the early 2000s. It is logical to buy as soon as the price decreases; however, there are a lot of reasons that are holding back traders from such actions. One example is the situation of the eurozone economy, which is very deplorable amid the conflict in Ukraine. Crisis is already brewing, and there is a chance that full-scale unrest will start soon. But euro could rise a bit if the ECB raises rates by 0.75%. Then, it will move sideways ahead of the Fed meeting, nervously reacting to the decisions of the ECB and incoming economic data, as well as outlook for monetary policy. After the Fed meeting, euro will fall, which strengthens the idea to sell the pair rather than buy. Forecasts for today: EUR/USD The pair is consolidating slightly above 0.9900. There is a possibility of a rebound to 0.9975, but trading will most likely be conducted sideways. GBP/USD The pair is trading above 1.1450. Incoming economic statistics, as well as the ECB meeting, may push it to 1.1590.       Relevance up to 09:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321029
In Times Of Looming Energy Crisis Bank Of England And UK In General Have A Complicated Way Ahead

In Times Of Looming Energy Crisis Bank Of England And UK In General Have A Complicated Way Ahead

Jing Ren Jing Ren 07.09.2022 14:18
In general terms, the economic policy of the UK under the new government is expected to remain very similar. For example, the new Chancellor Kwasi Kwarteng might have had differences in public image with former chancellor Sunak, but in practice, agrees on most major issues. In fact, the argument between them was mostly along the lines of who was most in favor of the policies. That having been said, a change of the occupant of No. 10 is an opportunity to do a bit of a course correction. After all, the prior PM was quite unpopular, and the point of a changing leadership is to find a new direction. So, some changes are to be expected, particularly on the front that could be seen as garnering popular support. But, the question for traders is: How does this affect the markets? The most notable is in respect to dealing with the energy crisis, which took on increasing new dimensions over the summer. That was when Johnson was still in a caretaker role, and therefore wouldn't be announcing any major new policy. Though we should remember that the UK already had an energy emergency a year ago, with petrol stations running out of fuel in some places. While largely fueled by consumer panic, there was an underlying logistics issue. Now, there is a different problem. The new PM is proposing a program to spend as much as £200B in order to keep down energy prices for consumers and businesses. That amounts to a little over 7.4% of the UK's nominal GDP for last year (and could be even higher if the BOE's projections of a recession comes true). With multi-decade high inflation, increased spending (or, at least, the monetary expansion to support it) might have quite a few economists rather worried. In particular, some traders have been speculating that cable could fall down to parity, like the Euro already has. What about the nuts and bolts? Of course there have been other measures announced, such as rescinding the raise in National Insurance. However, since a little over a third of the UK's energy needs come from overseas, that is the issue most likely to impact forex markets. While in general, increasing spending based on debt tends to lead to higher inflation, exactly how the mechanism is implemented could have different kinds of effects. And, so far, the details have not been forthcoming, though more information is expected tomorrow. Getting a handle on the implications So far, the promise has been to cap household energy bills. There are a wide range of mechanisms to achieve that, and they all have different inflation implications. The basic issue is that capping energy prices would allow UK households to have more disposable income, at a time that the BOE is trying to tamp down demand with higher rates. It might mean the BOE takes a stronger position starting at the next meeting to head off inflation. If the price cap mechanism is achieved through some sort of direct subsidy to energy bills, that would imply higher domestic spending by the government. Which would increase inflationary pressure. However, if the price cap was more similar to Spain's, where the government would subsidize input costs for generators, then the inflationary effect might be less. However, if the BOE takes a stronger stance in raising rates, a stronger pound might additionally help offset the cost of energy and lower inflation. Another reason that BOE policy might look more like the US' than Europe's in the near term.
Macroeconomic And Fundamental Backgrounds Have Been Favorable For The Euro (EUR)

What Is Happening In The Euro To The US Dollar Pair

InstaForex Analysis InstaForex Analysis 08.09.2022 08:51
EUR/USD 5M The EUR/USD pair was once again trading near its 20-year lows on Wednesday. It seems that now everything depends on the US, the dollar and American traders, because even the trades for the umpteenth time in the US session are much more active than in the European one. It was in the second half of the day that the euro, unexpectedly for many, turned up and began an impressive growth. It was not triggered by any fundamental or macroeconomic event, because the only important event is the EU GDP report in the third estimate for the second quarter, which was published this morning. Nevertheless, such growth was to be expected, as we talked about in our last articles. The fact is that the euro is already very low and should correct at least a little from time to time. Such corrections are quite difficult to predict, since they are usually not associated with any events. Plus, today the European Central Bank will announce the results of the meeting, among which there will be a 0.5-0.75% rate hike with almost 100% probability, which, you see, is a hawkish decision. Thus, the euro really had reasons to grow yesterday. But everything was very unfortunate in regards to the trading signals due to the flat at the European trading session. For the umpteenth time, we are faced with a situation where, in general, the movement is not bad, but due to the small number of levels or due to strange movements, it is not possible to earn money. Four trading signals were formed near the level of 0.9900, three of which turned out to be false. Traders could work out only the first two and get a small loss on the first trade, since the price there did not move even 15 points in the right direction. Stop Loss was triggered at breakeven on the second long position. COT report: The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For most of 2022, they showed an openly bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group decreased by 8,500, and the number of shorts decreased by 5,000. Accordingly, the net position decreased by about 3,500 contracts. This is not much, but this is again an increase in the bearish mood among the major players. After several weeks of weak growth, the decline in this indicator resumed. From our point of view, this fact very eloquently indicates that at this time even commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 47,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new, even greater fall. The euro has not been able to show even a tangible correction over the past six months or a year, not to mention something more. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 8. The market is beginning to shift its focus away from geopolitics and fundamentals to other factors. Overview of the GBP/USD pair. September 8. Andrew Bailey pulled down the pound again. Forecast and trading signals for GBP/USD on September 8. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H The pair continues to trade on the hourly timeframe in a mode very similar to the "swing". The price has not dropped much in the last few days, so the lower border of the horizontal channel has simply shifted to the level of 0.9877. And now we have the 0.9877-1.0072 channel. The channel is almost 200 points wide, but the price is stubbornly trading inside it. We highlight the following levels for trading on Thursday - 0.9877, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (0.9996) and Kijun-sen (0 .9947). There is still no level below 0.9877, so there is simply nothing to trade there. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The ECB will announce the results of its meeting on September 8, and then for the first time in a long time, ECB President Christine Lagarde will make a speech. Federal Reserve Chairman Jerome Powell is speaking in the US today. Looks like we're in for a very interesting day... Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 06:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321116
The Uptrend Of The Cable Market (GBP/USD) Is Officially Canceled

What Kind Of Mood Is The GBP/USD Pair Today?

InstaForex Analysis InstaForex Analysis 08.09.2022 08:58
GBP/USD 5M The GBP/USD currency pair traditionally resumed its downward movement on Wednesday and this time reached the level of 1.1411 and even went below it by a few points. Thus, it can be officially declared that the lows for 37 years have been updated! In principle, we have repeatedly said that this will happen. Now we expect that this level will be overcome, and the pound will set more than one anti-record in 2022. Immediately after the update of the lows, a rather strong upward movement began, which is very difficult to link with macroeconomics or the foundation. If in the case of the euro it can be assumed that the growth is associated with today's European Central Bank meeting and a very likely increase in rates by 0.75%, then in the case of the pound, the growth could only be technical. After all, the pound has also been falling for a very long time and very strongly - corrections should occur from time to time. However, the euro and pound went up almost identically and at the same time, which leads us to assume the technical status of this correction. If so, then both major pairs may resume falling in the coming days. There is absolutely nothing to take note of regarding the previous day's important events. In regards to trading signals, the pound's situation was better than the euro's. In fact, only one signal to buy was formed in the area of 1.1411-1.1442. This area could also be considered as two separate levels, but when a signal was formed inside it, the price immediately turned out to be near another level, so it was better to consider them together. Thus, when the price settled above 1.1442, it was possible to open long positions. Subsequently, the pound rose almost to the critical line, but the deal should have been closed earlier, manually in the late afternoon. Profit amounted to about 50 points. COT report The latest Commitment of Traders (COT) report on the British pound turned out to be as neutral as possible. During the week, the non-commercial group closed 300 long positions and opened 900 short positions. Thus, the net position of non-commercial traders immediately increased by 1,200. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). Therefore, the growth of the British pound still cannot count. How can you count on it if the market sells the pound more than it buys? And now its fall has resumed altogether, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 87,000 shorts and 58,000 longs open. The difference is not as terrifying as it was a few months ago, but it is still noticeable. The net position will have to show growth for a long time to at least equalize these figures. Moreover, COT reports are a reflection of the mood of major players, and their mood is influenced by the "foundation" and geopolitics. If they remain as weak as they are now, then the pound may still be in a "downward peak" for some time. Also remember that it is not only the demand for the pound that matters, but also the demand for the dollar, which seems to remain very strong. Therefore, even if the demand for the British currency grows, if the demand for the dollar grows at a higher rate, then we will not see the strengthening of the pound. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 8. The market is beginning to shift its focus away from geopolitics and fundamentals to other factors. Overview of the GBP/USD pair. September 8. Andrew Bailey pulled down the pound again. Forecast and trading signals for EUR/USD on September 8. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair maintains a downward trend on the hourly timeframe. Despite the rather strong growth from the previous day, the hourly timeframe clearly shows that the price has only moved away from its 37-year lows by 130 points. We highlight the following important levels on September 8: 1.1411-1.1442, 1.1649, 1.1874. Senkou Span B (1.1698) and Kijun-sen (1.1504) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. There are no major events scheduled for Thursday in the UK, and Federal Reserve Chairman Jerome Powell, whom we haven't heard from in a while, will speak in the US. However, the market now clearly does not need important events and reports to trade actively. The downward trend continues, so after the completion of the current correction, the quotes will most likely resume falling without Powell's help. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.     Relevance up to 06:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321118
The Uptrend Of The Cable Market (GBP/USD) Is Officially Canceled

The Bearish Domination Is Clear In The GBP/USD Market

InstaForex Analysis InstaForex Analysis 08.09.2022 09:12
Technical Market Outlook: The GBP/USD pair has hit the level of 1.1410 which is the 7 years low for this pair and the Bullish Engulfing candlestick pattern was made at the H4 time frame chart. The momentum is negative again on the H4 time frame chart, so the larger time frame trend (daily and weekly) remains down until further notice. Please watch closely the further market reaction for the level of 1.1410, because a shallow 100 pips bounce does not terminate the down trend. The bulls need at least to test the level of 1.1717 in order to make a corrective cycle to the upside more probable. Weekly Pivot Points: WR3 - 1.15513 WR2 - 1.15077 WR1 - 1.14791 Weekly Pivot - 1.14641 WS1 - 1.14355 WS2 - 1.14205 WS3 - 1.13769 Trading Outlook: The bearish domination is clear and there is no indication of down trend termination or reversal on the GBP/USD market. The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame, so the downside move accelerated. The next long term target for bears is seen at the level of 1.1410 (2020 low). Please remember: trend is your friend.       Relevance up to 08:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291895
The Price Of Cable Market (GBP/USD) Is Able To Reach The First Target Level

GBP/USD Pair: What Can Traders Expect In Short And Long Positions?

InstaForex Analysis InstaForex Analysis 08.09.2022 10:01
Several market entry signals were formed yesterday. Let's take a look at the 5-minute chart and see what happened. I paid attention to the 1.1509 level in my morning forecast and advised making decisions on entering the market from it. As a result of the pair's growth at the beginning of the European session, a false breakout was formed at the level of 1.1509, which led to a good signal to sell the pound further along the trend. All this resulted in a decline of more than 100 points. The bulls regained the initiative in the afternoon and managed to climb the resistance at 1.1465. A reverse test of this level from the top down provided an excellent buy signal, which led to another 55-point rally for the pound. Selling at 1.1520 brought only about 20 points of profit. When to go long on GBP/USD: Today there is nothing interesting from fundamental statistics, therefore, for sure, traders will focus their attention on data on the eurozone and will monitor the reaction and attitude of investors towards risky assets after the increase in interest rates by the European Central Bank, which will partially affect the British pound. A strong rise in the euro may lead to a breakthrough of the nearest resistance at 1.1538 in the GBP/USD pair and to the continuation of an upward correction. In case GBP/USD falls in the first half of the day, forming a false breakout in the area of 1.1471, slightly above which the moving averages pass, will provide the first signal to open long positions in order to recover to the Asian high of 1.1538. A breakthrough and a downward test of this range may pull stop orders from speculative bears, which creates a buy signal with growth to a more distant level of 1.1607. The farthest target will be the area of 1.1685, where I recommend taking profits. In case the GBP/USD falls further and there are no bulls at 1.1471, the pair will be under pressure again. In this case, I advise you to postpone long positions until the next support at 1.1406 - this year's low, but you can act there only on a false breakout. I recommend opening long positions on GBP/USD immediately for a rebound from 1.1358, or even lower - around 1.1313, counting on correcting 30-35 points within the day. When to go short on GBP/USD: Yesterday, the bears reached the lows of 2020, from where, quite expectedly, there should have been a rebound to the upside, which I have repeatedly paid attention to in my reviews. Today, much depends on the level of 1.1538. Therefore, I advise you to focus on it in the morning. The optimal scenario for opening short positions on GBP/USD would be forming a false breakout at 1.1538, a breakthrough to which may occur at the beginning of the European session. This will make it possible to achieve a sell signal with the goal of returning to the 1.1471 area - an intermediate support level formed yesterday afternoon. Only a breakthrough and test of this range would provide a new entry point for short positions with a fall to this year's low at 1.1406. A more distant target will be the area of 1.1358, where I recommend taking profits. In case GBP/USD grows and the bears are not active at 1.1538, there will be chances for a continuation of the upward correction, and bulls will have the opportunity to return to the 16th figure. Only a false breakout there will provide an entry point into short positions with the goal of a new decline from the pair. If traders are not active there, I advise you to sell GBP/USD immediately for a rebound from 1.1685, counting on the pair's rebound down by 30-35 points within the day. COT report: An increase in short positions was logged in the Commitment of Traders (COT) report for August 30, while long ones decreased. This once again confirms the fact that the British pound is in a major downward peak. Serious pressure on the pair will continue in the future, as the British economy is getting worse and worse, and GDP is shrinking quite quickly. The choice of a new prime minister of Great Britain will only provide temporary support to the pound, since, in fact, it does not change anything. In turn, the US economy continues to show strength, and recent data on the labor market once again convinced investors that the US central bank, led by Federal Reserve Chairman Jerome Powell, will continue to raise interest rates at an aggressive pace, which will only increase pressure on the British pound, which is experiencing quite a lot of problems lately. Expected high inflation and a looming cost-of-living crisis in the UK does not give traders room to take long positions, as a fairly large range of weak fundamentals is expected ahead, likely to push the pound even further below the levels at which it is currently trading. The latest COT report indicated that long non-commercial positions decreased by 306 to 58,477, while short non-commercial positions rose by 898 to 86,647, which led to a slight increase in the negative value of the non-commercial net position to -29,170 vs. -27,966. The weekly closing price collapsed from 1.1661 against 1.1822. Indicator signals: Trading is conducted in the area of 30 and 50-day moving averages, which indicates market uncertainty with the further direction. Moving averages Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case the pair goes down, the lower border of the indicator around 1.1435 will act as support. In case of growth, the upper border of the indicator around 1.1570 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders. Relevance up to 09:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321134
The Market Has Never Seized Chance To Halt The Rise In Demand For The Euro (EUR) And The Pound (GBP)

The GBP/USD Pair Hit The 2020 Low. The Bullish Dynamics Will Extend Today For The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 08.09.2022 10:20
Euro came close to parity, but it had nothing to do with the GDP data of the Euro area for the second quarter, which was better than the previous one. According to reports, the growth rate slowed to only 4.1%, indicating that the region is still away from recession than previously thought. EUR/USD did not increase immediately after the release of the GDP data, but after a couple of hours, when confidence grew that the European Central Bank will raise interest rates by 75 basis points today. Most likely, this bullish dynamics will extend today as ahead is the board meeting of the Federal Open Market Committee, as well as a speech from ECB Chairman Christine Lagarde. If Lagarde hints at a further tightening of monetary policy, euro will continue to grow. If not, everything will return to normal, and euro will fall again below parity. GDP (Europe): All the attempts to keep EUR/USD below 0.9900 failed, so euro slipped back into parity. Most likely, speculation will take place in the market, which is why further growth in the pair is possible. But the overheating of long positions in the short term may ultimately lead to the exit of many players in the market. GBP/USD hit the 2020 low, but market participants failed to make it stay below. This is why the quote rolled back by 130 pips. In this situation, much will depend on speculators as they have a strong positive correlation between trading instruments.       Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321126
This week starts with news about China and COVID and will go on with Eurozone inflation data and other crucial events

The Euro Can Locally Receive Support In The Market From Buyers, The Pound Is Oversold

InstaForex Analysis InstaForex Analysis 08.09.2022 11:32
Details of the economic calendar for September 7 The European statistical agency Eurostat report on the third final estimate of GDP in the second quarter showed an increase of 4.1% in annual terms and 0.8%. The actual data came out better than the preliminary estimate, but this did not help the euro at the time of publication. Analysis of trading charts from September 7 The EURUSD currency pair tried to overcome the control value of 0.9900 for three days in a row, but the market participants failed to stay below it in the daily period. This resulted in a price rebound, which led to a reverse move towards the parity level. The GBPUSD currency pair did not just update the 2020 low (1.1410), the quote for a while turned out to be at the levels of 1985 . This historical event was instantly won back by speculators in the form of a technical pullback. As a result, the rate of the pound sterling returned above 1.1500. Economic calendar for September 8 The main event of Thursday, and the whole week, will be the meeting of the European Central Bank (ECB). Without any doubt, the market is waiting for the regulator to raise the interest rate from 0.50% to 1.25%. This event has already been taken into account in the market but will still attract the proper attention of speculators, because a change in the rate by 75 basis points at once is a historical event. Thus, the euro can locally receive support in the market from buyers. After that, all attention will be focused on the subsequent press conference, where specifics are expected from the head of the ECB, Christine Lagarde. The ECB's comments will indicate the subsequent price move in the market. Time targeting: Results of the ECB meeting – 12:15 UTC ECB press conference – 12:45 UTC ECB President Christine Lagarde speech – 14:15 UTC Trading plan for EUR/USD on September 8 Despite the possible overheating of long positions, in short-term time periods, speculators can still send the euro up due to the results of the ECB meeting. In this case, local price movement above 1.0050 is not excluded. In the work, it is worth considering that speculative hype is not the basis for a stable price movement. In the event of a minimal change in the mood of speculators, mass fixation of long positions is possible, which will lead to a reverse price move. Trading plan for GBP/USD on September 8 In this situation, there is still a signal that the pound is oversold, which, with rational technical analysis, could lead to the formation of a full-size correction. Everything would be exactly like this if there were no information and news flow, as well as other factors of pressure on the quote. Today there will be a lot of envy from the behavior of speculators in the euro market since, in this case, the European currency will be considered the leading one. Thus, synchronous price fluctuations will occur through a positive correlation between trading instruments. What is shown 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 candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and 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.   Relevance up to 10:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321156
The GBP/USD Pair Will Reach The Lower Limit Of Consolidation

The Pound Is Under Pressure, The Fed Actions Weaken The GBP/USD Pair?

InstaForex Analysis InstaForex Analysis 08.09.2022 12:59
Analysis of transactions in the GBP / USD pair Pound tested 1.1490 at a time when the MACD line was just starting to move below zero, which was a good signal to sell. That prompted a price decrease of around 60 pips, bringing the quote to 1.1427. Then, buyers became active in the market, so the pair rose by 20 pips. No other signals appeared for the rest of the day. Parliamentary hearings on the Bank of England's monetary policy and speech from Andrew Bailey increased pressure on pound as it became clear to traders that the pace of interest rate increases will not slow down even though the UK economy has been shrinking very much lately. As a result, pound hit new lows, which traders took advantage of to take profits. This led to dollar not growing in the afternoon despite the statements of FOMC members Loretta Mester and Lael Brainard There are no statistics scheduled to be released in the UK today, so markets will focus on the report on US jobless claims. Fed Chairman Jerome Powell will also speak, and it is likely that it will cause a decline in GBP/USD as he may hint at further aggressive actions by the Fed. Data on the volume of consumer lending will not affect the market in any way, especially after such statistics. For long positions: Buy pound when the quote reaches 1.1519 (green line on the chart) and take profit at the price of 1.1574 (thicker green line on the chart). Growth will occur if risk appetite recovers after the meeting of the European Central Bank. Take note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.1494, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1519 and 1.1574. For short positions: Sell pound when the quote reaches 1.1494 (red line on the chart) and take profit at the price of 1.1427. Pressure will return after a slight upward correction and failed attempt to consolidate above 1.1519. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1519, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1494 and 1.1427. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. 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 decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 09:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321144
The Uptrend Of The Cable Market (GBP/USD) Is Officially Canceled

The British Pound Started With Growth, How Will The GPD/USD Pair Look Like Today?

InstaForex Analysis InstaForex Analysis 09.09.2022 08:28
Yesterday, the pound closed down 30 points on the back of a weakening euro and the death of Queen Elizabeth II. But the central banks reacted extremely quickly and bought the market against the news. The volume of trading in the pound was the largest since July 14. Today, the pound started with growth, the price went above the resistance of 1.1525, on which it has been holding for the fourth day with strong fluctuations in both directions. The Marlin oscillator is growing on the daily scale, the price may reach the target level of 1.1600. But there is also a significant level slightly above it - 1.1650. This creates a danger that the price will quietly reach this level, and then consolidate above it and try to break through to 1.1815. But for now, we do not expect the pound to rise above 1.1600. Data on construction, trade balance and industrial production in the UK will be released on Monday, the forecasts for them are negative. The signal line of the Marlin Oscillator broke out of the triangle to the upside on the four-hour chart. The oscillator can now penetrate into the overbought zone, and this time the price will reach the nearest target level of 1.1600.   Relevance up to 04:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321228
The Cable Market May Continue To Trade In A Very Volatile Manner

The British Pound To The US Dollar Keep Bearish Mood?

InstaForex Analysis InstaForex Analysis 09.09.2022 08:51
GBP/USD 5M     The GBP/USD currency pair traditionally tried to resume the downward movement on Thursday, but this time it was not possible to update the 37-year lows. The volatility was quite high during the day - about 100 points - and the movements often replaced each other. Moreover, if the euro really had reason to change direction often (the European Central Bank meeting, Lagarde's speech), then the pound did not. However, it almost completely copied the euro's movements, as is often the case in recent months. It is worth noting that not only the ECB meeting took place yesterday, but also Federal Reserve Chairman Jerome Powell's speech in New York. Despite the fact that Powell did not report anything new to the markets, he nevertheless once again confirmed the immutability of the central bank's plans regarding monetary policy and the fight against inflation. Thus, the hawkish mood has been preserved, therefore, the US currency may continue to rise in price. It is firmly below the descending trend line, therefore, from a technical perspective, the downward trend continues. But there was a problem with trading signals. The critical Kijun-sen line was a kind of pivot for the pair's movements today, so the price worked it out seven or eight times during the day. Each time, accordingly, a signal was formed. However, let us recall that when all signals are formed near the same line or level, this is a sign of a flat. Not surprisingly, most of these signals were found to be false. Moreover, the only level that the price could really reach is the level of 1.1442. From above, the nearest level was very far away. The first sell signal was closed at a loss, and the second made it possible to win back this loss, but the deal had to be closed manually. As a result, the day ended in zero profit. COT report:     The latest Commitment of Traders (COT) report on the British pound turned out to be as neutral as possible. During the week, the non-commercial group closed 300 long positions and opened 900 short positions. Thus, the net position of non-commercial traders immediately increased by 1,200. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). Therefore, the growth of the British pound still cannot count. How can you count on it if the market sells the pound more than it buys? And now its fall has resumed altogether, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 87,000 shorts and 58,000 longs open. The difference is not as terrifying as it was a few months ago, but it is still noticeable. The net position will have to show growth for a long time to at least equalize these figures. Moreover, COT reports are a reflection of the mood of major players, and their mood is influenced by the "foundation" and geopolitics. If they remain as weak as they are now, then the pound may still be in a "downward peak" for some time. Also remember that it is not only the demand for the pound that matters, but also the demand for the dollar, which seems to remain very strong. Therefore, even if the demand for the British currency grows, if the demand for the dollar grows at a higher rate, then we will not see the strengthening of the pound. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 9. The ECB raised the rate by 0.75%, the euro continues to remain in a coma. Overview of the GBP/USD pair. September 9. The British pound is floating around 37-year lows. Forecast and trading signals for EUR/USD on September 9. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H     The pound/dollar pair maintains a downward trend on the hourly timeframe. Despite quite a growth yesterday and the day before that, it is clearly seen on the hourly timeframe that the price has only slightly moved away from its 37-year lows. Thus, the technical picture has not changed at all. We highlight the following important levels for September 9: 1.1411-1.1442, 1.1649, 1.1874. Senkou Span B (1.1669) and Kijun-sen (1.1504) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. There are no major events or reports planned in either the UK or the US on Friday. However, the pair may continue to trade volatilely because it doesn't need fundamentals or macroeconomics in recent weeks or even months to show strong moves. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321220
The GBP/USD Pair Was Trading Calmly But The Volatility Still Remained Very High

The Rally In Markets That Started Yesterday Is Likely To Continue Today

InstaForex Analysis InstaForex Analysis 09.09.2022 09:57
Markets closed higher on Thursday, thanks to the outcome of the ECB meeting and speeches of Christine Lagarde and Jerome Powell. Optimism clearly spilled over, so stocks and commodities rose up, while dollar fell down. But at first glance, markets semed to have acted illogically as euro and European stock indices declined. That was after the ECB raised the key interest rate by 0.75% to 1.25% and Lagarde said that the central bank gives priority to rate increases to fight inflation. Fortunately, sometime later, markets began to grow, with stocks rising over the closure of short positions. Regarding how far euro can rise against dollar, much will depend on the plans of the Fed over interest rates. If Powell informs of a slowdown in inflation after the monetary policy in September and hints that the central bank will weaken the pace of rate hikes, dollar will continue to decline, which will lead to the further increase of EUR/USD. This will also cause growth in stock indices, first in the US, then on other global trading floors. So far, the Fed is still firm in its hawkish position, but the rally in markets that started yesterday is likely to continue today. Forecasts for today: GBP/USD The pair is trading below 1.1600. Overcoming this mark on the wave of a continued market rally will push the quote to 1.1720. XAU/USD Spot gold is trading below the strong resistance level of 1722.00. A break of this level amid positive dynamics on markets, accompanied by the weakening of dollar, will lead to a price increase to 1733.00.   Relevance up to 07:00 2022-09-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321238
The Market Has Never Seized Chance To Halt The Rise In Demand For The Euro (EUR) And The Pound (GBP)

Will Currency Pairs (EUR/USD And GBP/USD) Continue Yesterday's Trends?

InstaForex Analysis InstaForex Analysis 09.09.2022 12:06
Details of the economic calendar for September 8 The European Central Bank (ECB) raised all three key interest rates by 75 basis points. The base interest rate on loans was raised to 1.25%, the rate on deposits to 0.75%, and the rate on margin loans to 1.5%. The main points of the ECB press release: - Over the next few meetings, the regulator is considering further rate hikes to protect against rising inflation. - The ECB will regularly review the course of its monetary policy in the course of incoming statistics. - Future ECB rate decisions will be data driven and follow the approach taken at each meeting. - ECB members have revised their inflation forecasts, which are expected to average 8.1% in 2022, 5.5% in 2023 and 2.3% in 2024. - The ECB expects GDP in the EU to grow by 3.1% in 2022, 0.9% in 2023 and 1.9% in 2024. Conclusion from the meeting: The regulator's decision to raise rates by 75 basis points was anticipated by the market. This event was already on everyone's lips. For this reason, there was no reaction, despite the historical scale of the hanging. The main theses of Christine Lagarde's press conference: - The regulator will continue to raise interest rates at upcoming meetings. - The energy crisis is intensifying the economic slowdown. - The weakness of global economic growth will slow down economic growth in the EU. - A weak euro is bad; it leads to an increase in inflation. - The decisions on the rate at the current meeting were made unanimously. - The subsequent rate increase will not necessarily be by 75 basis points. - The ECB is not at a neutral rate. - In order to reach a neutral level on the rate, additional increases will be required. - The unfavorable scenario considers a recession in 2023. - Now is not the time to stop reinvestment in the Asset Purchase Program (APP). - Rates are far from being necessary to reduce inflation, and even more rate hikes will be required than at the remaining two meetings this year. - To curb the growth of inflation, it is necessary to raise rates at more than two meetings, but less than five meetings Conclusion from the press conference: Christine Lagarde has repeatedly spoken out in favor of further tightening of monetary policy. There is no clear understanding of the neutral rate yet, but the intention to raise it at the remaining meetings this year and next year is clear. Lagarde also noted that the regulator does not like the weak euro table. Analysis of trading charts from September 8 The EURUSD currency pair spent the past day in speculation, where at first there was a downward trend, and then all the drawdowns in the euro were bought off. As a result, the day was closed at the parity level, from which all speculation began. The cause and effect of speculation is described above—this is an information and news flow. The GBPUSD currency pair, despite the speculative activity, repeats the price fluctuations of its counterpart in the EURUSD market. This is due to the positive correlation between trading instruments, where at this time, the euro is considered the leading currency. Economic calendar for September 9 Today the macroeconomic calendar is empty, important statistics for Europe, Great Britain and the United States are not expected. Investors and traders are likely to continue to focus on the information flow of such hot topics as the energy crisis in the EU, the ECB/Fed, inflation. Trading plan for EUR/USD on September 9 There was a rush on the market for long positions on the euro at the opening of Asian trading session. This led to an upward jump in the price, based on which the quote rose above the value of 1.0050. Stable price retention above the reference value (1.0050) in the daily period may indicate the formation of a full-size correction relative to the downward trend. Otherwise, it is impossible to exclude the scenario of a reverse move to the boundaries of the previous amplitude of 0.9900/1.0050. Trading plan for GBP/USD on September 9 In this situation, the price rebound from the local low of 2020 led to the strengthening of the British currency by about 180 points. To move into the stage of a full correction, the quote needs to stay above the value of 1.1620 for at least a four-hour period. Otherwise, the current ascending cycle may slow down, followed by a return to the support. What is shown 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 candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and 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.     Relevance up to 09:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321266
The Technical Factors Speak In Favor Of The Pound's (GBP) Growth

When Show Opportunities To Buy Or To Sell The GBP/USD Pair?

InstaForex Analysis InstaForex Analysis 09.09.2022 12:59
Analysis of transactions in the GBP / USD pair Pound tested 1.1494 at a time when the MACD line was just starting to move below zero, which was a good signal to sell. That prompted a price decrease of around 15 pips, after which pressure eased and brought the pair to 1.1519. But the MACD line was already far from zero, so the upside potential was limited. Traders relied on news from the eurozone when entering the market yesterday. However, it was only today that pound managed to get out of the sideways channel. A survey regarding the expected inflation in the UK will be coming today, but it is unlikely to affect the direction of GBP/USD. As such, the pair will maintain an upward corrective potential that may lead to a breakdown of 1.1612. In the afternoon, there are no important statistics in the US, except for changes in the volume of stocks in wholesale warehouses. There will be presentations from FOMC members Charles Evans, Christopher Waller and Esther George, but all of them are likely to talk about further increases in interest rates. For long positions: Buy pound when the quote reaches 1.1612 (green line on the chart) and take profit at the price of 1.1661 (thicker green line on the chart). Growth may continue today, during the Asian session. Take note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.1576, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1612 and 1.1661. For short positions: Sell pound when the quote reaches 1.1576 (red line on the chart) and take profit at the price of 1.1517. Pressure will return after a failed attempt to update the weekly high. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1612, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1576 and 1.1517. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. 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 decision based on the current market situation is an inherently losing strategy for an intraday trader.     Relevance up to 09:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321256
The USD/JPY Pair Will Become More Volatile In The Near Future

Geopolitical Events And Macro Data Strongly Affect Currency Pairs

Saxo Bank Saxo Bank 09.09.2022 13:58
Summary:  A sharp US dollar sell-off has developed, one that materialized suddenly overnight and was extended by comments from Bank of Japan Governor Kuroda that inspired a steep plunge in USDJPY after its recent aggravated extension higher. The ECB meeting yesterday brought more hawkish than expected guidance, theoretically helping the EURUSD back-up well above parity, though the timing of the bulk of the rally in Asian hours offers cause for head-scratching. FX Trading focus: What is the quality of this USD sell-off…and JPY rally? The USD move overnight looked suspicious as it came just after midnight GMT – perhaps led by a run on stop orders above yesterday’s post-ECB meeting high around 1.0030? Hmm – the move was broad-based, so not entirely convinced. China set its yuan reference rate sharply higher than expected about an hour later, and then the BoJ Kuroda comments discussed below came on board. The move in EURUSD happening in Asian hours rather in the context of the ECB meeting having already sharply boosted EU yields earlier in the day yesterday has me scratching my head and wondering at the quality of this USD move lower – and wanting to reserve judgment on what is going on here at least until the end of today’s/this week’s action and possibly until we see how the market treats the EU’s power price cap plan after the summit on the matter in Brussels today and then next Tuesday’s US August CPI release. It is no major surprise that some stern words from Bank of Japan Governor Kuroda were able to inspire a sharp consolidation lower in USDJPY after its wild extension higher recently that seemed a bit excessive relative to the support from coincident fundamental indicators like global long sovereign yields/spreads. After meeting Prime Minister Kishida overnight, Kuroda said that “sudden moves in foreign exchange rates increase uncertainty for firms and are undesirable.” And “ a two to three yen move against the dollar in a single day is very sudden.” A couple of figures on a comment are easy, more would require a more notable retreat in global yields and commodity prices and perhaps real intervention. By the way, an FT article with the provocative title “Can Japan feed itself” makes clear that food prices have been capped by the Japanese supermarket industry for some time now at the retail level and are set for a significant reset on October 1. This will mean a leap in the official CPI numbers from the month of October. At the same time, PM Kishida is readying a new raft of packages aimed at supporting lower income households cost-of-living challenges. There is a chicken and egg problem here with price controls and preventing cost-of-living increases on the one hand and the Bank of Japan theoretically waiting for the Godot of wages beginning to rise to signal that inflation is becoming more embedded. With cost-of-living support, the wage earner is less likely to demand a raise…. Something is going to have to give, but it’s hard to believe that a stern few phrases from Kuroda will do the trick, although this could be the beginning of a far more choppy JPY trajectory from here, as from these levels or lower in the JPY, the Ministry of Finance may be willing to throw billions of intervention into the mix in an attempt to halt further JPY declines. Chart: USDJPYBoJ comments overnight have triggered a significant slide in USDJPY, if one not yet as large as the two-day rallythat sent the pair soaring all the way to the cusp of 145.00 two days ago. A retreat and close anywhere close to 140.00 today would create an interesting shooting star formation for the weekly candlestick, although really the pair needs to wipe out a great proportion of the move from the pivot low in early August at 130.40 to suggest a more profound reversal is afoot here. Meanwhile, a close today in the 142-143 range suggests that little harm has been done, even tactically, to the USDJPY up-trend. The ECB meeting brought far firmer guidance from the central bank than expected, as German 2-year yields traded some 30 basis points higher today relative to the close the day before the meeting – to a new cycle high north of 1.40% before that move faded sharply today back toward 1.30%. The 75-basis point hike was the largest in the ECB’s history and is expected to be repeated at the late October meeting after the guidance that another move of that size can’t be ruled out in yesterday’s presser. But Europe needs sustained relief on the energy/power price front for a more sustainable rally. Curiously, the market waking up to EURUSD trading well north of parity this morning had nothing to do timing-wise with the ECB as it unfolded overnight. Yesterday, the market seemed unsure with what to do with the euro in the immediate aftermath of the decision and guidance. For EURUSD, a close above 1.0100, which was teased today, is needed to set the focus toward the next area into 1.0350, while a close back below parity today would suggest that the overnight pump was merely linked to poor liquidity, order flow and the Bank of Japan verbal intervention mentioned above. An election is set this weekend for Sweden, with the currency market not particularly holding its breath in anticipation. EURSEK has corrected sharply lower in fitting with the strong risk sentiment of the moment, but has a lot of work to do to set the focus back lower, at least a move below 10.50. As I am writing this, the Bank of England has announced that it is moving back its next meeting from next week to the following week, likely due to Queen Elizabeth’s death and the mourning period, but this will give the Bank the luxury of having a look at the FOMC meeting the day before and whether it needs to stiffen its message or even hike more than it anticipated if sterling is struggling to new lows going into the meeting. Table: FX Board of G10 and CNH trend evolution and strength.The USD momentum has shifted sharply lower over the last couple of days, but reserving judgment at least until the daily/weekly close today. Elsewhere, look at CHF continuing to power on despite the ECB hawkish guidance yesterday. Table: FX Board Trend Scoreboard for individual pairs.It’s looking like cross-over day again for EURCHF after the ECB failed to sustain the recent rally despite the mark-up of EU yields. USDCHF has also rolled over and is threatening a turn lower, although looking at the chart, there is a lot of choppy range to work with yet. Upcoming Economic Calendar Highlights 1230 – Canada Aug. Net Change in Employment / Unemployment Rate 1600 – US Fed’s Waller (Voter) to speak 1600 – US Fed’s George (Voter) to speak   Source: https://www.home.saxo/content/articles/forex/fx-update-usd-weakens-broadly-but-are-the-drivers-sustainable-09092022
The Uptrend Of The Cable Market (GBP/USD) Is Officially Canceled

The British Pound Strengthened Against The Dollar

InstaForex Analysis InstaForex Analysis 09.09.2022 14:44
While the UK is in national mourning over the death of Queen Elizabeth II, and market participants are assessing the statements of the new British Prime Minister Liz Truss regarding the future plans of the British government, the pound strengthened against the dollar while remaining vulnerable in the main cross pairs. Today, the GBP/USD pair rose to an intra-week high of 1.1647, mainly taking advantage of the weakening dollar. It, in turn, is declining against the background of growing demand for shares and other high-yield assets of the stock market. Investors were also generally positive about the ECB's decision yesterday to raise interest rates by 0.75% rather than 0.50%, as previously thought. In addition, the latest forecasts of economists regarding the rate of GDP growth in the Eurozone suggest that next year the European economy may avoid recession. "Economic growth rates are declining, but the ECB is not predicting a recession yet," economists say. The ECB's accompanying statement spoke of the readiness of its leaders to take further steps to tighten monetary policy. "Curbing the dynamic in inflation is ECB's only concern," said ECB Governing Council member Klaas Knot. One way or another, investors decided to fix part of long dollar positions at the end of the week, which also led to a decrease in its quotes. Now market participants will wait for the Fed meeting on September 20–21. US Federal Reserve Chairman Jerome Powell confirmed the readiness of the central bank to continue the policy of high interest rates until the situation with inflation completely stabilizes. The Fed's interest rate is assumed to rise again by 0.75%, which is a bullish factor for the dollar. In this regard, today market participants will pay attention to the speeches of the Fed representatives Charles Evans, Christopher Waller and Esther George, scheduled for the first half of today's US trading session. And yet, despite the correction, the dollar retains the potential for further growth. Last Wednesday, its DXY index hit a 20-year high at 110.78. A breakdown of this local resistance level will signal the resumption of the upward dynamics of DXY, and the level of 111.00 will be the nearest target. As for the pound, important macro statistics on it will be released early next week, and on Thursday (at 11:00 GMT), the Bank of England will announce its decision regarding monetary policy. Most likely, the interest rate will be raised again. As of this writing, the GBP/USD pair is trading near 1.1618, retreating from today's high of 1.1647. A breakdown of the support level at 1.1578 may be a signal to resume short positions.   Relevance up to 12:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/321286
The Price Of Cable Market (GBP/USD) Is Able To Reach The First Target Level

The GBP/USD Pair Is Trading Above The Support Level

InstaForex Analysis InstaForex Analysis 09.09.2022 14:49
The GBP/USD pair rose to an intra-week high of 1.1647, mainly taking advantage of the weakening dollar. As of this writing, the GBP/USD pair is trading near 1.1618, retreating from today's high of 1.1647. Taking into account the general downward trend of the pair, the breakdown of the important short-term support level 1.1578 (200 EMA on the 1-hour chart) may become a signal for the resumption of short positions. Thus, the current growth of GBP/USD may become a new opportunity for building up short positions. At the same time, GBP/USD is trading above the support level of 1.1578. In the alternative scenario, the probability of growth to the resistance levels of 1.1820 (200 EMA on the 4-hour chart), 1.1910 (50 EMA on the daily chart) cannot be dismissed. If dollar buyers fail to quickly take control of the situation and overcome the dollar weakening impulse that is dangerous for them, then a breakdown of the local resistance level of 1.1650 may provoke further growth of the GBP/USD, as we noted above, towards resistance levels of 1.1820, 1.1910. But for now, short positions remain preferable. Below the key resistance levels 1.2390 (144 EMA on the daily chart), 1.2570 (200 EMA on the daily chart), GBP/USD remains in the long-term bearish market zone. Support levels: 1.1600, 1.1578, 1.1500, 1.1410 Resistance levels: 1.1650, 1.1700, 1.1760, 1.1820, 1.1910, 1.2000, 1.2270, 1.2390, 1.2570 Trading Tips Sell Stop 1.1560. Stop-Loss 1.1660. Take-Profit 1.1500, 1.1410 Buy Stop 1.1660. Stop-Loss 1.1560. Take-Profit 1.1700, 1.1760, 1.1820, 1.1910, 1.2000, 1.2270, 1.2390, 1.2570   Relevance up to 12:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321293
The UK Markets Remain Volatile, Possible Contraction Of The Eurozone Economy

British Pound (GBP) And UK Economy: Next Week Is Full Of Vital Releases - Inflation, GDP And Labour Market Data

ING Economics ING Economics 09.09.2022 15:38
Next week's US inflation numbers will need to be quite surprising for the Fed to deviate from a 75bp hike at its September meeting. The Bank of England's scheduled meeting has been postponed, and instead the focus will be on several pieces of key UK data In this article US: Core inflation likely to rise to 6.1% UK: Bank of England to stick to 50bp rate hike despite energy package Source: Shutterstock Article updated on 9 September to reflect the postponement of the Bank of England's scheduled meeting US: Core inflation likely to rise to 6.1% We have the last full week of economic data ahead of the September Federal Open Market Committee (FOMC) meeting, but it will take some surprising numbers to make the Fed deviate from a third consecutive 75bp rate hike. After all, the economy is posting decent growth, creating jobs in significant numbers, and Fed Chair Jerome Powell is arguing that “we need to act now, forthrightly, strongly as we have been doing and we have to keep at it until the job is done”. The data includes CPI, which should show headline inflation being depressed by lower gasoline prices, but core inflation is likely to rise to 6.1% from 5.9%. Retail sales should post flat growth, but remember this is a nominal figure and those falling gasoline prices will be a major drag. Real consumption is likely to be up in the third quarter. We also expect manufacturing output to grow further. The deteriorating global outlook and weakening domestic housing market combined with the cumulative impact of policy tightening and the strong dollar means we think the Fed will moderate its hiking to 50bp in November and 25bp in December. Weaker wage pressure and more limited month-on-month increases in CPI thanks to lower import and other input costs would certainly help this argument. UK: Bank of England to stick to 50bp rate hike despite energy package The United Kingdom will observe a period of mourning following Queen Elizabeth II’s death on Thursday, and Parliament will be adjourned during this time. The Bank of England's scheduled meeting has also now been postponed to the following week, but the ONS has confirmed that several pieces of important data will still be released. Here's what we expect: July GDP (Monday): Expect a large bounce-back from June, where the addition of an extra bank holiday artificially distorted the monthly GDP numbers. Depending on the arrangements during the period of mourning, the addition of an extra bank holiday in September is possible, and this would factor into the GDP numbers for the current month. We’ll therefore have to wait until the fourth quarter to get a clearer idea of how the economy is faring in GDP terms, and we suspect there’s still a risk of a negative growth figure. However, the announcement of an energy price guarantee by the government considerably reduces the risk of a deep downturn, and potentially also a technical recession. Jobs (Tuesday): Hiring demand is falling, though recent data and surveys have suggested that the worker shortages plaguing the jobs market have only improved slightly over recent months. The announcement of an energy price cap for businesses should help limit what otherwise could have been a more immediate rise in redundancies as firms’ costs increased. We expect the unemployment rate to remain stable next week, but we’ll also be watching closely for signs of a more pronounced return of inactive workers to the jobs market. Inflation (Wednesday): A 6% fall in petrol/diesel prices through August will drag headline inflation slightly lower. That doesn’t mean we’re past the peak, though the introduction of the energy price cap means inflation is less likely to materially surpass 11% in the autumn. Without the cap, we’d forecast inflation would go to 16% or above in January. This is a double-edged sword for the BoE. On one hand, the reduced the peak in headline inflation should ease concerns about consumer inflation expectations becoming even less anchored. That points to another 50bp rate hike when the BoE meets later in September, despite the Fed and ECB going more aggressively. The BoE has shown in past meetings that it isn’t pressured to follow those other central banks, albeit the hawks will be worried about the recent slide in sterling. They will also argue that the government’s action increases the risk of inflation staying elevated in the medium-term, given the reduced risk of recession, Some members are therefore likely to vote for a 75bp hike at the next meeting. But ultimately with a lot already priced into markets for the BoE, policymakers will be wary about adding fuel to the fire. As we saw with the ECB on Thursday, the decision to go with a 75bp hike saw markets price that as the default move at the next meeting. Key events in developed markets next week Source: Refinitiv, ING This article is part of Our view on next week’s key events View 3 articles   TagsUS Bank of England   Read this article on ING Economics   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more    
The Technical Factors Speak In Favor Of The Pound's (GBP) Growth

The UK New Government Could Raise Inflation Expectations And Lead To A “Sterling Crisis”

Kenny Fisher Kenny Fisher 09.09.2022 15:47
GBP/USD has recorded sharp gains today. In the European session, GBP/USD is trading at 1.1608, up 0.92% on the day. Still, the pound remains vulnerable – on Wednesday, it fell to 1.1407, its lowest level since 1985. Looking ahead to next week, there is a data dump on Monday, with GDP and Manufacturing Production the key events. It’s a very light calendar today, with no UK data and only one minor US event. Even so, the British pound has jumped on the bandwagon as the US dollar is broadly lower. The US dollar has taken a break after some impressive gains, as the pound has fallen some 500 points in just three weeks. With the US economy in good shape while the UK struggles, GBP/USD could resume its downtrend shortly. In the UK, PMIs have been pointing to weak conditions across the economy. The August manufacturing and construction PMIs pointed to contraction, with readings below the neutral 50.0 line. The Services PMI managed to remain in expansion territory, but just barely, at 50.9. Inflation remains red hot, hitting 10.1% in July, which has caused a severe cost-of-living crisis. Incoming Prime Minister Truss has pledged to cap energy bills, at a cost of some 132 billion pounds, which will provide households with some badly-needed relief. Truss inherits a struggling economy and her initial policy moves will be closely watched. Deutsche Bank has warned that an “unfunded and untargeted fiscal expansion” by the new government could raise inflation expectations and lead to a “sterling crisis”. What’s next for the Federal Reserve? The next meeting is on September 21st, with the Fed looking to raise rates by either 50 or 75 basis points. Next week’s inflation report could be a major factor in the Fed’s decision. Fed Chair Powell and other members have stated that curbing inflation is “priority number one”, and if inflation falls, it will raise speculation that the Fed plans to ease up, which would weigh on the US dollar. In July, inflation unexpectedly fell, and market exuberance about a change in Fed policy sent the US dollar sharply lower, despite the Fed saying its stance had not changed. . GBP/USD Technical 1.1589 has switched to support. Below, there is support at 1.1417 There is resistance at 1.1682 and 1.1839 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

GBP: Bank's Of England Plans Underwhelms Traders. UK Has To Face Energy Crisis And More

Jing Ren Jing Ren 09.09.2022 15:12
Maximum effort Global super-sized hikes give dollar breathing room GBPUSD hits 30-month low as recession looms The pound suffers from a symptom of high inflation and high interest rates. Expectations of steep rate hikes by the BoE fails to impress traders who tend to shy away from risk assets. Britain is facing strong headwinds in the shape of recession, soaring government spending and an energy crisis. The market fears that a 50bp increase would dampen consumer and business confidence and put growth at risk, a hefty cost for taming inflation. Meanwhile, the US dollar is backed by a sound economy and its safe-haven appeal, meaning that cable could stay subdued. 1.1420 is a critical support from March 2020 and 1.2100 the first resistance. EURUSD steadies on hawkish ECB The euro reclaimed parity following hawkish comments from the ECB. The central bank lifted rates by a record 75 basis points. Speculations run that another super-sized 75bp could be on the table next month. Now that the Europeans are on the same page as their US counterpart, a halt to the widening rate gap could prevent further bleeding in the exchange rate. However, the downside risk remains as the bloc is heading into a tough winter with soaring energy bills and debt burdens. A correction in the greenback may struggle to trigger a sustained recovery. 1.0320 is the first resistance and 0.9800 a close support. USOIL falters over weak demand WTI falls as traders fear that a recession is right around the corner. Lacklustre August trade numbers from China suggest more headwinds for the global economy. Exports lost steam due to softening demand from the US and EU while local lockdowns and weak consumer sentiment weigh on imports. Slower growth in China, the second largest oil consumer, may keep the market on its toes. In the meantime, major central banks’ relentless push for tighter financial conditions to fight inflation could be the straw that broke the camel’s back, making recession a reality. The price could be capped at 97.00 and heading towards 75.00. NAS 100 slips over tighter monetary policy The Nasdaq 100 stalls as the prospect of a prolonged downturn weighs on risk assets. The Fed is expected to raise rates by another 75 basis points at its September meeting. With growing signs of an economic slowdown in Europe and China, investors are wondering whether central banks might push too hard and send the world’s economy overboard. The combination of a global downturn and a hawkish Fed may keep restraining anyone’s enthusiasm in growth-sensitive stocks. The downside risk would be a complete reversal of July’s rally below the critical floor at 11400, thus confirming a bearish market. 13160 a fresh resistance. Key data release (GMT time) Tuesday, 13 September 06:00 ILO Unemployment Rate Harmonized Index of Consumer Prices 12:30 Consumer Price Index Wednesday, 14 September 06:00 Consumer Price Index 22:45 Gross Domestic Product Thursday, 15 September 01:30 Unemployment Rate 11:00 BoE Interest Rate Decision 12:30 Retail Sales Friday, 16 September 14:00 Michigan Consumer Sentiment Index
Summary Of The Week On Financial Markets

Summary Of The Week On Financial Markets

Ed Moya Ed Moya 11.09.2022 09:18
This week suddenly ends on a positive note as the S&P 500 broad market index, which started to climb on Wednesday, has lead the major stock market indicator to 4032 points, the highest since August 30. This is very strange considering all the negative news that could have affected the stock market this week. The European Central Bank (ECB) raised all interest rates by 75 basis points. This is the second time in the history of the single currency that such a move has been performed. The Federal Reserve’s (Fed) Chairman Jerome Powell confirmed the central bank will continue to do everything needed to bring inflation down to the 2.0% target. This kind of rhetoric is also being echoes by ECB President Christine Lagarde who has assured markets that the Bank is likely to take further bold steps to raise interest rates over the coming months. The message from these two bank leaders may enforce stocks to continue to move down.  However, investors found a reason to pull on the breaks and stop markets from another sell-off. Chicago Fed Bank President Charles Evans supported investors by saying that the next inflation report next week may point to how much the Fed could raise its interest rates this month. "If I saw inflation maybe cooling a little bit that's not going to change the fact that I still think we are going to need to top out at something like 3.5% to 4%, it's just that maybe we don't have to do it that soon," Evans said. Some investors were flooded with euphoria after crude prices fell by 16% over the last two month. It is clear that inflation may slow down significantly in August and perhaps prompt a less-than-expected Fed interest rate move.  It sounds more like wishful thinking as inflation is considerably above the existing level of interest rates for the Fed to pull the breaks on, even if prices slowed down in August. However, many investors are seen to support the idea and hope for stocks to recover. Even though some investors are holding onto hope, we should not exclude the possibility that a downside path of stock indexes could be a bit bumpy. The technical picture for the S&P 500 index is still negative as it is moving within an aggressive downside formation after it failed to climb above 4020 points on Thursday. This has now become a strong resistance level that may send the index back to the downside targets at 3850-3950 points. More negative drivers may send the index further down to the extreme secondary targets at 3600-3700 points, and even further down to heartbreaking 3000-3100 points.  In recent weeks, short positions at 70% of the targeted volume were opened at the average price of 4285-4290 points. The rest of the 30% could be opened once strong reliable downside signals emerge. The final downside target in the long-term is located at 2100-2300 points that could be reached by the end of 2022. The oil market made a huge step to the downside towards $75-85 per barrel of the Brent crude benchmark. Crude prices dipped down amid new anti-covid measures in China, unwinding global recession fears and a sharp rise of oil inventories in the United States. Brent prices slipped down to $87-88 per barrel, the lowest since January 2022, and are likely to continue down to the extreme targets at $50-65 per barrel that could be hit by November. In the short-term crude prices are less predictable making any entry points unreliable at the moment.  Gold prices are on a downside slide and they may last until the end of October. The primary scenario suggests prices may reach $1350-1450 per ounce by November. So, it would be reasonable to open short or small-short positions considering the current price movement at $1730 per ounce. The Euro was cheered on by the ECB’s decision to sharpen its interest rates hike, changing its formation to the aggressive upside with a primary target at 1.02500-1.03500. A reasonable correction to 1.00500-1.00800 is needed to open long positions. Once this correction is made the EURUSD could be interesting for long trades. GBPUSD also changed its formation to the aggressive upside with a target at 1.18000-1.18500. The pair needs to step back to 1.15300-1.15800 to be interesting to open long positions.
The Cable Market May Continue To Trade In A Very Volatile Manner

How The British Pound To The US Dollar Started A New Week?

InstaForex Analysis InstaForex Analysis 12.09.2022 08:08
The pound gained 86 points on Friday. The upper shadow tested the level of 1.1648, the low of August 29th. Consolidation above the resistance will open the target range of 1.1755-1.1815, formed by the daily MACD indicator line and the target level of 1.1815. The downward movement will recover after the price settles under the support level of 1.1525 – the nearest target is 1.1385. The Marlin Oscillator is growing in the negative zone, so the current growth is considered in terms of a correction. Marlin can reach the zero line simultaneously with the price reaching the 1.1755-1.1815 range, where, if the pound does not turn around earlier, there is a high degree of probability that it will turn into a medium-term decline. The price is gathering strength under the resistance of 1.1648 on the four-hour chart, the Marlin Oscillator is preparing to continue the growth. If it does rise, then we are waiting for its continuation to the specified target range of 1.1755-1.1815. The decline is associated with additional difficulty in the form of the MACD line under the support of 1.1525 in the area of 1.1482, therefore, overcoming the price of only the support of 1.1525 may not be enough for full confidence in the development of the medium-term weakening of the British pound.         Relevance up to 04:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321368
The Technical Factors Speak In Favor Of The Pound's (GBP) Growth

The Pound/Dollar Pair Maintains A Downward Trend On The Hourly Timeframe

InstaForex Analysis InstaForex Analysis 12.09.2022 08:20
GBP/USD 5M The GBP/USD currency pair continued its corrective growth on Friday and managed to complete the downward trend line. Thus, a rebound from this line provoked a new round of decline, but so far the price remains in the immediate vicinity, so the upward movement may still continue with subsequent overcoming. If this happens, then the trend will temporarily change to an upward trend and the pound will have another opportunity to continue moving up. On Friday, there were no important macroeconomic statistics or fundamentals in either the US or the UK. All of Britain mourned the untimely death of Queen Elizabeth II. Important statistics will be published in this country only next week. Therefore, the pound uses this time to at least slightly move away from its 37-year lows. It turns out so far badly, but too little time has passed. In regards to Friday's trading signals, everything was both bad and excellent at the same time. Only one signal was formed, but it turned out to be very strong and profitable. The price rebounded from the level of 1.1649 with a minimal error and after that it fell by 83 points at the moment. Of course, it was not possible to close the deal at the highest profit - it also failed to reach the critical line. Therefore, it was necessary to close the short position manually in the late afternoon. Profit amounted to at least 50 points. COT report: The latest Commitment of Traders (COT) report on the British pound released yesterday, was very eloquent. During the week, the non-commercial group closed 5,700 long positions and opened 15,500 short positions. Thus, the net position of non-commercial traders immediately fell by 21,100, which is a lot for the pound. The net position indicator has been growing for several months, but the mood of the big players still remains pronounced bearish, which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And now it has begun a new fall, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its fall has resumed altogether, so the bearish mood of major players in the near future can only intensify. The non-commercial group now has a total of 103,000 shorts and 52,000 longs open. The difference is twofold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, COT reports are a reflection of the mood of major players, and their mood is influenced by the foundation and geopolitics. If they remain the same as they are now, then the pound may still be in a "downward peak" for some time. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 12. European inflation and the speeches of the ECB representatives. Overview of the GBP/USD pair. September 12. Inflation in the UK, inflation in the US... it's going to be an interesting week! Forecast and trading signals for EUR/USD on September 12. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair maintains a downward trend on the hourly timeframe. Despite quite a rise yesterday and the day before yesterday, it is clearly seen on the hourly timeframe that the price has slightly moved away from its 37-year lows and continues to be below the trend line. Thus, the technical picture has not changed yet. We highlight the following important levels on September 12: 1.1411-1.1442, 1.1649, 1.1874. Senkou Span B (1.1669) and Kijun-sen (1.1524) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. The UK will publish relatively important reports on GDP and industrial production on Monday. The second report is unlikely to cause a strong market reaction, but the first could theoretically do so. The problem is that this is a monthly GDP report, not a quarterly one. It is of much less interest to traders. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.       Relevance up to 02:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/321360
The Price Of Cable Market (GBP/USD) Is Able To Reach The First Target Level

The GBP/USD Pair: The Bulls Has Failed To Continue The Corrective Cycle

InstaForex Analysis InstaForex Analysis 12.09.2022 09:40
Technical Market Outlook: The GBP/USD pair has been seen continuing the bounce from the level of 1.1410 (7 years low) as the momentum is strong and positive on the H4 time frame chart. The US Dollar is in the pull-back mode, which helps the bulls to continue the up move. The local supply zone located between the levels of 1.1598 - 1.1622 had been broken, so the next target for bulls is seen at the level of 1.1717 and 1.1760. Those levels are just under the trend line resistance as well, so needs to be broken, because the larger time frame trend (daily and weekly) remains down until further notice. The levels of 1.1598 and 1.1622 will now act as the intraday technical support. Weekly Pivot Points: WR3 - 1.16716 WR2 - 1.16430 WR1 - 1.16286 Weekly Pivot - 1.16144 WS1 - 1.16000 WS2 - 1.15858 WS3 - 1.15572 Trading Outlook: The bulls has failed big time to continue the corrective cycle after a big Bearish Engulfing candlestick pattern was made on the weekly time frame. The bears tested the level of 1.1410 (2020 swing low) and now the market is in the pull back mode. In order to terminate the down trend, bulls need to break above the level of 1.2275 (swing high from August 10th).     Relevance up to 09:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292306
OANDA Senior Market Analyst Craig Erlam Talks Recent Important Market Events

UK GDP Grew Only 0.2%! British Pound May Expect A 50bp Rate Hike. Would Labor Market Get Better Thanks To The Energy Price Cap?

ING Economics ING Economics 12.09.2022 10:00
The absence of a post-bank holiday rebound means July's GDP grew by only 0.2%, and we should expect further volatility over the next few months. But big picture, the announcement of an energy price guarantee should materially reduce the depth of a downturn this winter, even if it doesn't totally rule out the risk of a technical recession UK growth should be volatile in the months ahead July's GDP figures are disappointing The UK economy expanded by 0.2% in July, which was less than might have been expected. June had featured an extra bank holiday in recognition of the Queen’s Jubilee, and that had triggered an artificial drop in activity in some key sectors – albeit less pronounced than during the equivalent holidays in 2002 and 2012. However, July’s figures are largely absent of the mechanical rebound one might have expected, not least because that's what we saw after those previous jubilee holidays. For instance, manufacturing output grew only 0.1% in July, having fallen by 1.6% in June. It was a similar story in wholesale/retail and construction. We’re reluctant to pin any particular economic narrative to that, and instead, we think we’ll need to take this and indeed the next few months’ figures with a slight pinch of salt. The extra bank holiday this month, which coincides with Queen Elizabeth II’s funeral on Monday, means we’re likely to see similar volatility in the data during September and October. That means we’ll most likely need to wait until later in the fourth quarter to get a clearer sense of where the economy is headed, at least looking through the lens of the GDP numbers. For now, it looks like third-quarter growth will be largely flat, and the fourth quarter slightly negative. Government energy price guarantee should reduce the depth of a downturn Bigger picture, the announcement of an energy price cap by the government last week should make a material difference to the outlook this winter. The average household will see their energy costs capped at £2500 for the next two years, which when you factor in some existing support, should mean bills stay roughly the same as they are now for the time being. Businesses will also receive similar support for an initial six-month period. While we’d caution about automatically assuming this means the economy avoids a technical recession, it should help limit the depth of any downturn over winter to a few tenths of a percent. We’re also hopeful that the announcement of business support can help insure against a material rise in unemployment. Hiring demand has been slowing, and the clear risk was that the sharp rise in energy bills would see redundancies (which are currently at their lows) begin to rise. Incidentally, with the GDP figures looking volatile, we suspect the Bank of England will put slightly more emphasis on other data, including tomorrow’s jobs figures. We expect a 50bp rate hike when the Bank meets next week, and we’re pencilling another such move in November. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Uptrend Of The Cable Market (GBP/USD) Is Officially Canceled

The GBP/USDr Pair Can Move Towards A Higher Level

InstaForex Analysis InstaForex Analysis 12.09.2022 10:16
Trend analysis (Fig. 1). The pound-dollar pair may move upward from the level of 1.1585 (close of Friday's daily candle) to the target of 1.1588, the 23.6% retracement level (yellow dotted line). After testing this level, continued upward movement is possible with the target of 1.1743, the 38.2% retracement level (blue dotted line). Upon reaching this level, the price may move up. Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – up; Fibonacci levels – up; Volumes – up; Candlestick analysis – up; Trend analysis – up; Bollinger bands – down; Weekly chart – up. General conclusion: Today the price may move upward from the level of 1.1585 (close of Friday's daily candle) to the target of 1.1588, the 23.6% retracement level (yellow dotted line). After testing this level, continued upward movement is possible with the target of 1.1743, the 38.2% retracement level (blue dotted line). Upon reaching this level, the price may move up. Alternative scenario: from the level of 1.1585 (close of Friday's daily candle), the price may move upward with the target of 1.1643, the 21-period EMA (thin black line). After testing this level, continued upward move is possible with the target of 1.1743, the 38.2% retracement level (blue dotted line).       Relevance up to 08:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321388
The Market Has Never Seized Chance To Halt The Rise In Demand For The Euro (EUR) And The Pound (GBP)

What Can Expect From The Major Currency Pairs, Will Be Bullish Or Bearish Trend? (EUR/USD & GBP/USD)

InstaForex Analysis InstaForex Analysis 12.09.2022 11:11
EUR/USD Higher timeframes The opening of the week took place with some upward gap. Bulls are not in a hurry to complete the corrective rise. Instead, there is hope for its development, as well as a change in daily preferences. To implement these tasks, bulls need to overcome the resistance of the weekly short-term trend (1.0116) and eliminate the daily death cross (1.0116 - 1.0176 - final levels). For bears, the 1.0000–0.9989 zone (psychological level + daily short-term trend) remains as support, while the minimum extremum (0.9864) and the downward trend recovery are still the targets. H4 – H1 As of writing, the main advantage on the lower timeframes is on the bulls' side. The reference points for the upward movement within the day today can be noted at 1.0128 (H4 target) and 1.0168 - 1.0224 (classic pivot points). The key levels of the lower timeframes are now supports, guarding bulls at 1.0050 (central pivot point of the day) and 0.9976 (weekly long-term trend). Consolidation below will change the current balance of power. *** GBP/USD Higher timeframes At the opening of the trading week, an ascending gap of several points is noticeable, as well as the desire of bulls to develop the current corrective movement, formed earlier after testing support at 1.1411 (minimum extremum of 2020). The bulls have already updated last week's high, we can note the resistance levels of the daily cross 1.1737 - 1.1840 - 1.1943 among the reference points, and the weekly short-term trend (1.1848) serves as support in this area. H4 – H1 Bulls currently have the advantage on the lower timeframes. They are now testing the strength of the upper boundary of the H4 cloud (1.1672). Upon breakdown, an upward target will be formed. In addition, the reference points for the rise within the day are now the resistance of the classic pivot points (1.1728 - 1.1810). The key levels form support and are currently located at 1.1575 (central pivot point) and 1.1537 (weekly long-term trend). A breakdown of 1.1575–37 and a reliable consolidation below will change the current balance of power, while the situation would be better to re-evaluate. *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)         Relevance up to 09:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321400
The Euro (EUR) Will Try To Break Through The Nearest Resistance

The EUR/USD And The GBP/USD Pairs Will Keep Upward Trend Today?

InstaForex Analysis InstaForex Analysis 12.09.2022 12:00
Details of the economic calendar for September 9 The week ended with an empty macroeconomic calendar. Important statistics in Europe, the United Kingdom, and the United States were not published. Despite the absence of statistical data on Friday, the market continued to show speculative activity. Probably, traders were playing back the decision of the ECB to tighten its own policy. Analysis of trading charts from September 9 The EUR/USD currency pair strengthened its position during the past week. As a result, the quote went above the two-week range of 0.9900/1.0050. The cause and effect of the upward cycle lies in the results of the ECB meeting, released last Thursday. The GBP/USD currency pair gained about 230 points (about 2%) in less than a week. The level of the local low of 2020 (1.1410) serves as a support in the corrective movement. Economic calendar for September 12 At the opening of the European session, data on UK industrial production was published, which slowed down from 2.4% to 1.1%. This is a negative factor for the country's economy, but based on the trading schedule and the market's reaction to statistical indicators, the pound sterling ignores them. Important statistics in Europe and the United States are not expected today. However, it is worth paying attention to the sppeches of the representatives of the ECB. Earlier, interesting statements were already received from representatives of the ECB, which indicate that the regulator should act tougher. Joachim Nagel (ECB): - Inflation in Europe could rise above 10% by December. - The ECB needs to act more aggressively if necessary. - A recession is possible in Europe. Klaas Knot (ECB): - The regulator needs to be more decisive if the situation requires it. - Some economists have already started talking about a 0.75% rate hike in October. Yannis Stournaras (ECB): The ECB has not yet raised the rate to a neutral level. We need to raise it to this level faster. The neutral rate level can be within 1.5%–2%. Trading plan for EUR/USD on September 12 Since the opening of the new trading week, an upward gap of about 60 points has appeared. This price gap brought the quote back to the highs of last week. With the opening of the European session, the upward cycle accelerated, which led to a move above the 1.0150 level. In this situation, a price impulse of more than 100 points in a short period of time can lead to overheating of long positions in short time periods. This may lead to a technical pullback. At the same time, stable price retention above the 1.0150 mark allows for the subsequent formation of a correction for dollar positions. Trading plan for GBP/USD on September 12 There is also an upward gap in the pound, which returned the quote to the high of last week. Subsequently, there was a prolongation of the correction course, where the cycles are similar to the movement of the EURUSD pair. Stable price retention above 1.1650 will eventually lead to an increase in the value of the pound to at least 1.1750. What is shown 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 candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and 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.           Relevance up to 10:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321417
The Price Of Cable Market (GBP/USD) Is Able To Reach The First Target Level

What Can Bring A Busy Economic Calendar For The British Pound?

InstaForex Analysis InstaForex Analysis 12.09.2022 12:32
He who laughs last, laughs best. The EU managed to prepare by reducing the share of Russian gas imports from 40% before the armed conflict in Ukraine to 9%. The storage facilities are more than 80% full, which makes it possible to survive the cold winter, and Brussels' plans to limit prices make gas futures quotes fall. This was a real breath of fresh air for European currencies. And the pound is no exception. For a long time, the sterling was in disgrace due to the energy crisis, the third prime minister in the last three years and double-digit inflation. In such a situation, investors treated the pound like flies to burnt toast. In fact, the British currency can be a jam for them. Instead of starting her job as head of government with a tax cut announced during the campaign, Liz Truss has prioritized curbing inflation and promised £150bn of fiscal stimulus to households to escape energy poverty, which is a game-changer. The government estimates that the aid package will cut the CPI by five percentage points. Research by Capital Economics shows that consumer prices will peak not in January, as previously expected, but in November. This peak will not be at 14.5% but at 11.5%, which is lower than the Bank of England's forecast of 13%. BoE Actual and Projected UK Inflation Trends However, any fiscal stimulus boosts GDP growth and drives up prices, so the £150bn package from Liz Truss is seen as pro-inflation. Yes, its impact will be manifested later, but the Bank of England must act now to prevent the growth of inflation expectations and fixing the CPI at an elevated level for a long time. As a result, Nomura expects the repo rate to soar to 3.75% in the coming months, NatWest Markets raised its forecast from 2.5% to 3.5%, and JP Morgan sees the 75 bps increase in borrowing costs in September is real. In fact, due to political uncertainty, Andrew Bailey and his colleagues have found themselves in an even worse position than they were. They need to assess the impact of fiscal stimulus from the new government, and the death of the UK's Queen came in handy. BoE announced the postponement of its meeting from September 15 to September 22, that is, it bought time. This week, the pound expects a busy economic calendar, including statistics on foreign trade, GDP, inflation, labor market and retail sales. However, the dynamics of GBPUSD will largely depend on gas prices in Europe and on the reaction of US stock indices to the release of data on the US CPI. Technically, on the GBPUSD daily chart, after the pair reached the previously designated target by 161.8% according to the AB=CD pattern, a natural rebound followed. Rebound from resistances at 1.175–1.177 and 1.182–1.184 should be used for selling.     Relevance up to 09:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321406
OANDA Senior Market Analyst Craig Erlam Talks Recent Important Market Events

It's Going To Be An Interesting Week For UK! ECB Members Are Set To Speak

Kamila Szypuła Kamila Szypuła 12.09.2022 12:20
At 8:00 CET, Great Britain published a macroeconomic information package. This is the first of many data they will provide us with this week. Moreover, today traders who observe the situation on the euro market are waiting for the speeches of the ECB members. Important information was not received today from overseas. The Great Britain’s indicators U.K. Construction Output is lower than expected. The current reading shows an increase from -1.4% to -0.8%. Growth was expected to be significantly higher. Construction Output was forecast at 0.5%. Source: investing.com The same indicator but YoY, also lower than expected. The current reading is at 4.3%. The index was forecast to reach 5.6%. The previous reading was at 4.1%. This insignificant increase in the index can be read as negative for the GBP as it was lower than expected. GDP and Industrial Production Gross domestic product also fell below expectations. The current reading shows that GDP is at 0.2%, it was expected to rise from -0.6% to 0.3%. Index Of Services remained at the expected level of -0.2%. Compared to the previous reading (-0.4%) this is an increase.The reading of changes in the total inflation-adjusted values of output produced by producers, mines and utilities was also lower than expected. The expectation that U.K. Industrial Production YoY fell from 2.4% to 1.9%, but the index fell lower than forecasted to 1.1%. This is a negative reading for the GBP. Industrial Production (MoM), although it increased from -0.9% to -0.3%, the reading is negative. It was announced that there will be an increase to the level of 0.4%. The change in the total inflation-adjusted value of output produced by manufacturers only increased to 0.1%. This increase was expected to be at the level of 0.4%. For the country it may be a positive reading, but for the pound it is not as it is lower than expected.   Source: investing.com   Only positive reading The UK today only recorded a positive result in the difference in value between imported and exported goods and services over the reported period. The trade balance in Great Britain reached the level of -19.36B, it was expected to reach the level of -22.30B. Compared to the previous periods, it can be said that in July Britain exported more than it imported. Since March, the UK has imported more, so this result may indicate little progress in the British economy. Source: investing.com Speaking of The Great Britain, we were awaiting UK indicators this week, which I have commented in my Saturday’s article. The speeches of the European Central Bank members Today we are still waiting for the speeches of the representatives of the European Central Bank. At 9:30 CET there will be a speech by the Vice-President, Luis de Guindos. His speeches often contain indications on the future possible direction of monetary policy. The next speech is at 14:00 CET. Isabel Schnabel, member of the Executive Council of the European Central Bank, also in her speeches, now to fill in on the future. India’s CPI The Indian Ministry of Statistics expects today's CPI reading to be at 6.90%. From the beginning of the year, the change in prices of goods and services from the consumer perspective has remained