uptrend

Market picture The announcement of the debt ceiling deal triggered a natural spike in interest in Bitcoin on the expectation of increased retail interest in risk assets as institutional investors in Europe and America head off for a long weekend. Bitcoin traded as high as $28.4K at the start of Monday's Asian session but fell back to $27.8K by the beginning of European trading. Meanwhile, the top cryptocurrency has been rising daily since the 25th, pushing back from support at $25.8K, near the 200-week moving average. This move looks like an exit for speculators. However, the market's attention may shift to more market-heavy issues, such as slowing economic growth and high-interest rates. The bulls are now trying to get Bitcoin back above its 50-day moving average, which would signal a return to a medium-term uptrend.   The ability to close above $28.15 at the end of the day could attract more buyers to Bitcoin, while staying lower would be a reason to sell on the upside.   News background Commodity Futures Trading Commission (CFTC) commissioner Christy Goldsmith Romero said she is ready to regulate the crypto industry with the US Securities and Exchange Commission (SEC). Users of cryptocurrency exchange Tornado Cash have sued the US Treasury Department for imposing sanctions on the service, claiming that banning open-source software violates the US Constitution.ECB board member Fabio Panetta assured that the regulator would not have access to the personal data of digital euro holders (CBDC). He noted the need to balance ensuring privacy and combating money laundering and terrorist financing. High profitability enables stablecoin issuer Tether to venture into new business areas, according to the company's CTO Paolo Ardoino. Tether made a net profit of $1.48 billion in the first quarter, double that of the previous period.

On Thursday, the GBP/USD pair grew "out of nowhere" again. And it was an impressive one at that. Take note that there was no significant news from the UK this week. If, for example, the Bank of England had made hawkish statements, the movement would have been understandable.   However, all the data that influenced the market came from overseas, and many of them favored the dollar. The situation with the euro is slightly different, which explains its growth. After all, yesterday and the daybefore that, several important reports were released in the EU, two speeches by European Central Bank President Christine Lagarde took place, and the ECB minutes were published. But it is very difficult to say why the pound is rising again.       However, we did experience a good intraday trending movement yesterday, which made the trading signals strong and profitable. Initially, the pair consolidated below the range of 1.2429-1.2445 and managed to move down by about 20 pips, allowing for setting a stop loss at breakeven and leaving the trade without losses when the pair consolidated above the mentioned range. Based on the buy signal, long positions should have been opened, and the price subsequently surpassed the nearest target level of 1.2520.   The trade should have been manually closed in the evening, resulting in a profit of about 75 pips, which is quite good. But let's reiterate: it is convenient to trade when there is a strong and trend-driven movement. It is necessary to avoid flat markets.     According to the latest report, non-commercial traders closed 8,100 long positions and 7,100 short ones. The net position dropped by 1,000 but remained bullish. Over the past 9-10 months, the net position has been on the rise despite bearish sentiment. The pound is bullish against the greenback in the medium term, but there have been hardly any reasons for that. We assume that a prolonged bear run has begun. COT reports suggest a bullish continuation. However, we can hardly explain why the uptrend should go on.   Both major pairs are in correlation now. At the same time, the positive net position on EUR/USD shows the end of the uptrend. Meanwhile, the net position on GBP/USD is neutral. The pound has gained about 2,300 pips. Therefore, a bearish correction is now needed. Otherwise, a bullish continuation would make no sense even despite the lack of support from fundamental factors. Overall, non-commercial traders hold 57,600 sell positions and 69,200 long ones. We do not see the pair extending growth in the long term.     In the 1-hour time frame, the pair has started an upward movement, surpassing all the lines of the Ichimoku indicator. The pound doesn't exactly have grounds to buy the pound, which remains heavily overbought. However, take note that the market has the right to trade regardless of the fundamental and macroeconomic backdrop. The only thing I can say is that the movement doesn't correspond to the nature of the reports and news.   On June 2, trading levels are seen at 1.2269, 1.2349, 1.2429-1.2445, 1.2520, 1.2589, 1.2666, 1.2762. Senkou Span B (1.2550) and Kijun-sen (1.2375) lines may also generate signals when the price either breaks or bounces off them. A Stop Loss should be placed at the breakeven point when the price goes 20 pips in the right direction. Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals.   There are also support and resistance which can be used for locking in profits. Today, the event calendar is empty in the UK.   On the other hand, the United States will release its highly anticipated Nonfarm Payrolls and unemployment reports. We have no doubt that the market will react to them, and the reaction could be practically anything - it is currently impossible to predict the values of the reports. Indicators on charts:   Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. The Kijun-sen and Senkou Span B lines are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.  

Yesterday, several entry signals were made. Let's look at the 5-minute chart to get a picture of what happened. I considered entering the market from the level of 1.2414. A fall and a false breakout generated a buy signal. The price rose by more than 50 pips. In the American session, the pair dropped after the publication of US labor market data, but the bulls still protected 1.2449. After another buy signal, the pair advanced by 65 pips. Short positions at 1.251 brought no desired result.     When to open long positions on GBP/USD In the UK, the manufacturing PMI kept contracting in May although at a slower pace than in April. The pair barely reacted to those results. At the same time, the ISM manufacturing PMI in the US triggered a mass sell-off of the greenback and boosted the pound. Today, GBP/USD will still be in demand. In the American session, data on the US labor market will be in focus. Therefore, buying at current highs will hardly be a good idea. Rather, positions should be opened when a bearish correction occurs.   If the bulls protect 1.2475 support and a false breakout follows, a buy signal will be generated with the target at 1.2543 resistance. An additional buy signal targeting 1.2576 will come after a breakout and consolidation above the mark on disappointing macro data in the US. The most distant target stands at 1.2607 where I will lock in profit. If the price goes toward 1.2506 and there is no bullish activity there, pressure on the pound will increase, and the bears will get a chance to stop yesterday's growth. In such a case, a sell signal will come after protecting 1.2475 and a false breakout. I will buy GBP/USD on a bounce from 1.2449, allowing a correction of 30-35 pips intraday.   When to open short positions on GBP/USD: After triggering a row of bearish Stop Losses yesterday, the bulls will likely build a new uptrend today. That is why bearish activity may only increase near 1.2543 resistance and after a false consolidation above this range. This will generate a sell signal and trigger a small correction to 1.2506 support. A breakout and an upside retest of this range will occur only if US macro data comes upbeat. GBP/USD will face pressure, producing a sell signal targeting 1.2475. The most distant target is still seen at a low of 1.2449 where I will lock in profits.   If GBP/USD goes up and there is no activity at 1.2543, the bull market will continue. I will open short positions after a test of 1.2576 resistance. A false breakout will create a sell entry point. If there is no bearish activity there either, I will sell GBP/USD on a bounce from a high of 1.2607, allowing a bearish correction of 30-35 pips intraday.     Commitments of Traders: The COT report for May 23 shows a decrease in both long and short positions. Last week, the pound was bearish. However, with a drop in both longs and shorts, a shift in trading powers seems minimal. Traders had to close positions fearing the US debt ceiling deal would not be reached. Moreover, recession risks were still weighing on them. They were also concerned about the Bank of England's monetary policy stance. The regulator said it might pause tightening although inflationary pressures in the UK were still high. According to the latest COT report, short non-commercial positions dropped by 7,181 to 57,614, and long non-commercial positions decreased by 8,185 to 69,203. The non-commercial net position fell to 11,059 from 12,593 a week earlier. The weekly price dropped to 1.2425 from 1.2495.       Indicators' signals: Moving averages: Trading is carried out above the 30-day and 50-day moving averages, which indicates a bullish continuation.     Note: The period and prices of moving averages are considered by the author on the H1 (1-hour) chart and differ from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands Support stands at 1.2475, in line with the lower band. Indicators: Moving average (MA) determines the current trend by smoothing volatility and noise. Period 50. Colored yellow on the chart. Moving average (MA) determines the current trend by smoothing volatility and noise. Period 30. Colored green on the chart. Moving Average Convergence/Divergence (MACD). Fast EMA 12. Slow EMA 26. SMA 9. Bollinger Bands. Period 20 Non-commercial traders are speculators such as individual traders, hedge funds, and large institutions who use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions are the total long position of non-commercial traders. Non-commercial short positions are the total short position of non-commercial traders. Total non-commercial net position is the difference between the short and long positions of non-commercial traders.  

Both instruments continue to decline steadily even with the news background, which is not always "strong". Over the weekend, however, there was quite expected news from the U.S. Congress about the national debt limit.   US Treasury Secretary Janet Yellen reaffirmed June 1 as the "hard deadline" for the US to raise the debt ceiling or risk defaulting on its obligations. Since no one in the market doubted that the Democrats and Republicans would eventually find common ground, the decision and its announcement were just already expected.   US President Joe Biden's press office reported that the White House and House Republicans have striked an agreement, meaning an official bill will be passed by June 1 that would raise the debt ceiling by another $2 trillion. Problem solved, and the week could start volatile for the markets.       There is nothing scheduled for Monday. Nevertheless, many instruments can show good activity as they haven't had the opportunity to react to the news of raising the debt limit over the weekend. Since this decision is positive for the US economy, it is reasonable to expect an increase in demand for the US currency. However, some analysts believe that the recent appreciation of the US dollar was driven by rising risk aversion sentiment.   Despite the default risk that threatened the US and the dollar, many investors may have used it as a "safe haven." Personally, I don't believe in such an assumption, but I can't speak for every individual. I expect active movements on Monday, but it doesn't make sense to guess the direction. In any case, regardless of the direction of both instruments, we can assume that this movement will not disrupt the overall wave pattern. If the euro and the pound rise on Monday-Tuesday, it can be considered as a corrective wave within a downtrend.   In the opposite case, the main wave will continue to form. We have much more important news and reports, such as the US labor market or inflation in the European Union. The wave pattern is highly important for the market right now, as instruments can move in a certain direction based solely on it. The topic regarding central bank rates is currently losing some of its appeal.   Last week, there were many speeches by European Central Bank and Federal Reserve members, but we did not receive any clarity on the topic. I believe that there is a consensus on this issue, and the new speeches did not change it.     Based on the analysis conducted, I conclude that the uptrend phase has ended. Therefore, I would recommend selling at this point, as the instrument has enough room to fall. I believe that targets around 1.0500-1.0600 are quite realistic. These are the targets I suggest for selling the instrument.   The wave pattern of the GBP/USD pair has long indicated the formation of a new downtrend wave. Wave b could be very deep, as all waves have recently been equal. A successful attempt to break through 1.2445, which equates to 100.0% Fibonacci, indicates that the market is ready to sell. I recommend selling the pound with targets around 23 and 22 figures. But most likely, the decline will be stronger.    

On Friday, the GBP/USD pair fell after strong US data. The first half of the day saw a similar flat movement as the euro, while the second half witnessed a decline. However, the GBP/USD pair maintains an uptrend, with the price still above the Ichimoku indicator lines. Therefore, it could trade higher this week, despite the complete absence of fundamental and macroeconomic reasons for such a move. We still believe that both the pound and the euro should be falling. It is possible that they corrected last week so that it can continue moving downward.       The trading signals for the pound were almost identical to those for the euro. During the European trading session, the price rebounded from the level of 1.2520 but failed to move in the right direction even by 20 pips. It was advisable to close the long position before the release of US data. Later, two sell signals formed near the same level, which traders could use to open a short position. Long positions were not recommended at that time as the reports clearly favored the dollar. Subsequently, the price dropped to the level of 1.2445, where the shorts should have been closed. The profit from them amounted to around 60 pips.     According to the latest report, non-commercial traders opened 1,100 long positions and closed 500 short ones. The net position increased by 600 and remained bullish. Over the past 9-10 months, the net position has been on the rise despite bearish sentiment. The pound is bullish against the greenback in the medium term, but there have been hardly any reasons for that. We assume that a prolonged bear run has begun. COT reports suggest a bullish continuation. However, we can hardly explain why the uptrend should go on.   Both major pairs are in correlation now. At the same time, the positive net position on EUR/USD shows the end of the uptrend. Meanwhile, the net position on GBP/USD is neutral. The pound has gained about 2,300 pips. Therefore, a bearish correction is now needed. Otherwise, a bullish continuation would make no sense even despite the lack of support from fundamental factors. Overall, non-commercial traders hold 57,000 sell positions and 70,300 long ones. We do not see the pair extending growth in the long term.     In the 1-hour time frame, the pair has started an upward movement, and even after Friday's decline, it remains above the Ichimoku indicator lines. The pound doesn't exactly have grounds to buy the pound, which remains heavily overbought. However, take note that the market has the right to trade regardless of the fundamental and macroeconomic backdrop.   For now, let's consider that we have seen a strong correction last week and expect a revival of the downward movement. On June 5, trading levels are seen at 1.2269, 1.2349, 1.2429-1.2445, 1.2520, 1.2589, 1.2666, 1.2762. The Senkou Span B line (1.2408) and the Kijun-sen line (1.2434) lines may also generate signals when the price either breaks or bounces off them.   A Stop Loss should be placed at the breakeven point when the price goes 20 pips in the right direction. Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance which can be used for locking in profits.   Today, both the UK and the US will release their respective Services PMIs for May. The UK data can influence traders' sentiment, as well as the US ISM data. Of course, it would be nice for the values of these data to deviate from the forecast, and the stronger the deviation, the stronger the market reaction may be.   Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. The Kijun-sen and Senkou Span B lines are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.  

The EUR/USD pair sharply fell on Friday. Volatility was high, but the day can be roughly divided into two parts: before Nonfarm Payrolls (NFP) and after. Prior to the release of US data, the market was relatively flat. This is not surprising as there were no significant events or reports in the first half of the day.     After the release of the NFP data, the pair sharply fell, which was logical, as the data exceeded expectations. Moreover, it exceeded forecasts twice as much, which speaks for itself: the US labor market is in excellent condition, despite the high interest rates set by the Federal Reserve.     The increase in the unemployment rate by 0.3% was no longer of particular importance. Trading signals were not the best due to the morning flat. During the European trading session, the pair rebounded from the level of 1.0762 thrice and failed to move up even by 10 pips each time.     After the release of the NFP data, the pair initially started to decline, then returned to the level of 1.0762, and then it fell again. Since the NFP data was very strong, it was reasonable to consider only trades that anticipated the dollar's growth, in other words, selling opportunities.     The last sell signal resulted in a profit of about 40 pips. The morning trade (which was only one) could have been closed at breakeven due to the same flat market conditions.   The COT report for May 30 was delivered on Friday. Over the past nine months, COT data has been in line with developments in the market. The net position (second indicator on the chart) has been on the rise since September 2022. The euro started to show strength approximately at the same time. Currently, the net non-commercial position is bullish and keeps growing further. Likewise, the euro is bullish.   Notably, we may assume by the extremely bullish net position that the uptrend may soon stop. The first indicator shows that, and the red and green lines are far away from each other, which is usually a sign that the end of the trend might be nearing.   The euro attempted to go down several months ago, but those were just minor pullbacks. In the reporting week, long positions of non-commercial traders decreased by 8,200 and short positions fell by 200. The net position dropped by 8,000. The number of long positions exceeds that of short ones by 165,000, a rather big gap. A correction or a new downtrend has started. So, it is clear that the pair will be bearish even without COT reports.     In the 1-hour time frame, the pair surpassed the descending trendline again, clearly indicating its intention to form an uptrend. This should be a correction, and afterwards the downward movement should resume. From a fundamental perspective, there are still no grounds for the pair to rise, but technically it may correct this week.   However, the price is below the Ichimoku indicator lines again, so it may fall again. On June 5, trading levels are seen at 1.0537, 1.0581, 1.0658-1.0669, 1.0762, 1.0806, 1.0868, 1.0943, 1.1092, as well as the Senkou Span B line (1.0785) and the Kijun-sen line (1.0708). Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. Signals could be made when the price either breaks or bounces from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction.   In case of a false breakout, it could save you from possible losses. Today, both the EU and the US will release their respective Services PMIs for May. You should pay attention to the US ISM services, since it is more important than "ordinary" business activity indexes. Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals. Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe.   They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.    

Black line- support trend line The USDCHF pair has been in a strong uptrend since May 3rd 2023, forming higher highs and higher lows on the 4 hour chart. The pair has also been respecting the rising trend line that connects the swing lows of the uptrend. The RSI indicator has been mostly above the 50 level, indicating bullish momentum. The pair has recently tested the 0.9146 resistance level, which coincides with the 61.8% Fibonacci retracement level of the previous downtrend from 0.9336 to 0.8818.     Today price is under pressure after making a lower high at 0.9118. If the pair breaks below the support trend line at 0.904, it may signal a reversal of the uptrend and a possible retest of the lower Fibonacci retracement levels of 0.916 and 0.8940. The RSI may also fall below the 50 level, indicating bearish momentum. Traders need to be cautious as the trading week started with a higher high than Friday's high and price is now into negative territory suggesting a possible reversal is close.  

Black line- support trend line The USDCHF pair has been in a strong uptrend since May 3rd 2023, forming higher highs and higher lows on the 4 hour chart. The pair has also been respecting the rising trend line that connects the swing lows of the uptrend. The RSI indicator has been mostly above the 50 level, indicating bullish momentum. The pair has recently tested the 0.9146 resistance level, which coincides with the 61.8% Fibonacci retracement level of the previous downtrend from 0.9336 to 0.8818.     Today price is under pressure after making a lower high at 0.9118. If the pair breaks below the support trend line at 0.904, it may signal a reversal of the uptrend and a possible retest of the lower Fibonacci retracement levels of 0.916 and 0.8940. The RSI may also fall below the 50 level, indicating bearish momentum. Traders need to be cautious as the trading week started with a higher high than Friday's high and price is now into negative territory suggesting a possible reversal is close.  

GBP/USD also traded lower on Tuesday, and if you look at the events calendar you would see that the pair had no reason to fall. However, as we have mentioned before, just because the events calendar is empty, it does not mean that the pair will simply stay still. The pound's decline was and remains the most likely scenario, so a 50-60 point decline is not out of the ordinary.   The only report of the day, the UK Construction PMI, turned out to be slightly better than forecasts but, as we can see, had no impact on the pair's movement. On the technical side, however, the pair performed quite well, staying precisely between the Senkou Span B and the Kijun-sen lines. The signals for the pound were almost identical to the signals for the euro, with the only difference being that at the beginning of the European trading session, the pair managed to form a false buy signal by consolidating above a critical line.   This signal resulted in a small loss, but was followed by a good sell signal near the same Kijun-sen line, after which the pair fell to the Senkou Span B line. It was appropriate to close shorts near this line so you could gain around 35 pips of profit. Bouncing off the lower boundary of the Ichimoku cloud was also a good signal, and a long position allowed traders to gain about 20 pips. Thus, despite the initial losing trade, the day ended with a profit. Due to the low volatility, the profit was also relatively small.     COT report: According to the latest report, non-commercial traders opened 1,100 long positions and closed 500 short ones. The net position increased by 600 and remained bullish. Over the past 9-10 months, the net position has been on the rise despite bearish sentiment. The pound is bullish against the greenback in the medium term, but there have been hardly any reasons for that. We assume that a prolonged bear run has begun. COT reports suggest a bullish continuation. However, we can hardly explain why the uptrend should go on.   Both major pairs are in correlation now. At the same time, the positive net position on EUR/USD shows the end of the uptrend. Meanwhile, the net position on GBP/USD is neutral. The pound has gained about 2,300 pips. Therefore, a bearish correction is now needed. Otherwise, a bullish continuation would make no sense even despite the lack of support from fundamental factors. Overall, non-commercial traders hold 57,000 sell positions and 70,300 long ones. We do not see the pair extending growth in the long term. x

GBP/USD edged down on Monday. This is a classic depiction of how the pound is currently being traded. When it rises, the movement is sharp, but when it falls, it only edges down. It can rise even without macroeconomic or fundamental reasons, but it is reluctant to fall, even when there are corresponding causes.     For example, yesterday there was an excellent opportunity for a correction based on pure technicals. The pair could have fallen simply because it was overbought. However, instead of a significant correction, we saw the pair reverse its course by just 30 pips amidst a low-volume trading day. Throughout the day, neither the UK nor the US had any important events or reports. Speaking of trading signals, there was nothing notable about it. The pair did not even come close to any significant levels or lines.   This is probably a good thing because weak movements bordering on a flat can lead to false signals. Traders have been fortunate with the euro, but there simply hasn't been any signal for the pound. COT report: According to the latest report, non-commercial traders closed 5,200 long positions and 4,500 short ones. The net position dropped by 700 but remained bullish. Over the past 9-10 months, the net position has been on the rise despite bearish sentiment. In fact, sentiment is now bullish, but it is a pure formality. The pound is bullish against the greenback in the medium term, but there have been hardly any reasons for that. We assume that a prolonged bear run may soon begin even though COT reports suggest a bullish continuation. However, we can hardly explain why the uptrend should go on.   The pound has gained about 2,300 pips. Therefore, a bearish correction is now needed. Otherwise, a bullish continuation would make no sense even despite the lack of support from fundamental factors. Overall, non-commercial traders hold 52,500 sell positions and 65,000 long ones. We do not see the pair extending growth in the long term. 1H chart of GBP/USD In the 1-hour chart, GBP/USD maintains a bullish bias.   The ascending trend line serves as a buy signal but I believe that further growth of the British currency is groundless. The pound sterling has been climbing for too long and downward corrections are short-lived. Judging by the technical indicators, we have an uptrend. Yet, it is hard to find the reasons which may push it higher. However, it is naturally not advisable to sell the pair without proper signals. The market can sustain the trend even without a "fundamental" basis.   On June 20, trading levels are seen at 1.2349, 1.2429-1.2445, 1.2520, 1.2589, 1.2666, 1.2762, 1.2863, 1.2981-1.2987. The Senkou Span B (1.2494) and Kijun-sen (1.2724) may also generate signals when the price either breaks or bounces off them. A Stop Loss should be placed at the breakeven point when the price goes 20 pips in the right direction. Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance which can be used for locking in profits.   There are no significant events lined up in the UK, and only a few secondary events in the US. We believe that volatility may edge up today, as the Bank of England's meeting and the UK inflation report will be published later this week. The market may start to anticipate and react to this data in advance.  

As expected, the market continues to move sideways. Technically, the pound has dipped, but the scale of the movement is so insignificant that it can be categorized as symbolic. The stagnation is mainly due to the empty economic calendar and the lack of any significant news capable of influencing market participants' sentiment.   It is difficult to say anything about today's news because we don't know what can happen. However, as I mentioned, the economic calendar remains empty. It seems that today we will continue to witness a purely symbolic weakening of the pound. The GBP/USD pair has slowed down its upward cycle around the 1.2850 level, which points to the decline in the volume of long positions. This has led to a pullback, which, considering the overbought status of the British currency, is considered a justified move in the market.   On the four-hour chart, the RSI has left the overbought territory when the pair reversed its course, which could serve as a stage for force realignment. On the same chart, the Alligator's MAs are headed upwards, which reflects the upward cycle. Outlook: The pullback is still relevant, but it does not disrupt the rhythmic component of the uptrend.   If this persists, the price could move towards the 1.2700 level. Regarding the bullish scenario, we will receive a technical signal for the continuation of the medium-term trend once the price stays above the 1.2850 level. In terms of the complex indicator analysis, we see that in the short-term and intraday periods, technical indicators suggest a pullback. In the mid-term period, indicators are reflecting an uptrend.  

GBP/USD extended its downward movement on Tuesday, but in general, it remains stable. After a three-day correction, the pair barely managed to test the critical line without surpassing it. Thus, the uptrend persists ahead of an important inflation report in the UK, the Bank of England's meeting, and two speeches by Jerome Powell in the US Congress.   It is evident that these events will impact market sentiment, but it is currently impossible to determine how exactly. We need to be prepared for any developments. We believe that in the medium term, the pound should fall rather than rise, but the market currently holds a different opinion. We do not see any signs of the upward trend coming to an end. There were several trading signals on Tuesday. Initially, the pair bounced off the level of 1.2762, providing a buy signal. Following this signal, the price moved up by about 26 pips, which was enough to set the stop-loss at breakeven. Subsequently, there was a consolidation below the level of 1.2762, after which the pair dropped to the critical line but failed to surpass it. Consequently, it was advisable to close the short position at that point. The profit amounted to approximately 20 pips. The last buy signal formed quite late, but it could have been attempted. It resulted in an additional profit of 10-20 pips. Since the volatility was relatively low, such a level of profit was acceptable.   COT report: According to the latest report, non-commercial traders closed 5,200 long positions and 4,500 short ones. The net position dropped by 700 but remained bullish. Over the past 9-10 months, the net position has been on the rise despite bearish sentiment. In fact, sentiment is now bullish, but it is a pure formality. The pound is bullish against the greenback in the medium term, but there have been hardly any reasons for that. We assume that a prolonged bear run may soon begin even though COT reports suggest a bullish continuation. However, we can hardly explain why the uptrend should go on. The pound has gained about 2,300 pips. Therefore, a bearish correction is now needed.   Otherwise, a bullish continuation would make no sense even despite the lack of support from fundamental factors. Overall, non-commercial traders hold 52,500 sell positions and 65,000 long ones. We do not see the pair extending growth in the long term. 1H chart of GBP/USD In the 1-hour chart, GBP/USD maintains a bullish bias, although it is correcting at the moment. The ascending trend line serves as a buy signal but I believe that further growth of the British currency is groundless. The pound sterling has been climbing for too long and downward corrections are short-lived (like in the last three days). Judging by the technical indicators, we have an uptrend. It is not advisable to sell the pair without proper signals. The market can sustain the trend even without a "fundamental" basis. On June 21, trading levels are seen at 1.2349, 1.2429-1.2445, 1.2520, 1.2589, 1.2666, 1.2762, 1.2863, 1.2981-1.2987. The Senkou Span B (1.2532) and Kijun-sen (1.2739) may also generate signals when the price either breaks or bounces off them. A Stop Loss should be placed at the breakeven point when the price goes 20 pips in the right direction. Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance which can be used for locking in profits. On Wednesday, the UK has the most important inflation report, and in the US - Federal Reserve Chairman Jerome Powell's first address to the Congress. Thus, it could be an interesting and volatile day. We think that the fall is more likely, but the pair also maintains a bullish bias and the market can start buying the pound again on any background.  

The EUR/USD pair has been going through low volatility and volume. The chart above may suggest that the pair moved quite actively, but in reality, there was only a 53-pip range between the day's high and low. Thus, we have witnessed the third consecutive boring and uninteresting day. Yesterday's only notable report was the number of approved construction permits in the United States. The report turned out slightly better than expected, which helped strengthen the dollar to some extent. But what kind of reaction are we talking about?   A mere 20 pips, which is not interesting at all and does not affect the current technical picture. The pair continues to correct sluggishly downward against an empty calendar. Yesterday, one signal was even formed. During the European trading session, the pair rebounded from the level of 1.0943 and then moved down by the aforementioned 50 pips. However, the price could not reach the target level by the end of the day, and no further signals were formed. Therefore, it was advisable to manually close the sell trade anywhere closer to the evening. It was possible to earn around 30 pips from it, which is not bad considering the current volatility. COT report: On Friday, a new COT report for June 6 was released. In the last 9 months, COT reports have fully corresponded to what is happening on the market. The chart above clearly shows that the net position of big traders (the second indicator) began to grow again in September 2022.   At the same time, the euro resumed an upward movement. The net position of non-commercial traders is bullish. The euro is trading at its highs against the US dollar. I have already mentioned that a fairly high value of the "net position" indicates the end of the uptrend. The first indicator also signals such a possibility as the red and green lines are very far from each other. It often occurs before the end of the trend. The euro tried to start falling a few months ago but there was only a pullback. During the last reporting week, the number of long positions of the "Non-commercial" group of traders decreased by 5,700 and the number of short positions rose by 1,500. The number of long positions is higher than the number of short ones. This is a very large gap. The number of long positions is 59,000 higher than short ones.     The difference is more than three times. The correction has begun. Yet, it may not be a correction but the start of a new downtrend. At this time, it is clear that the pair is likely to resume a downward movement without COT reports. 1H chart of EUR/USD In the 1-hour chart, the pair is trying to start an uptrend but there are no drivers for growth. Last week, there were many events that bolstered its rise. However, in the medium term, there are still no reasons to go long. Technical indicators signal an uptrend.   It would be better not to sell the pair now. We need to wait at least for consolidation below the trend line and the target level. On June 21, trading levels are seen at 1.0581, 1.0658-1.0669, 1.0762, 1.0806, 1.0868, 1.0943, 1.1092, 1.1137, as well as the Senkou Span B line (1.0766) and the Kijun-sen line (1.0889) lines. Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels.   Signals could be made when the price either breaks or bounces from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. Several ECB and Fed officials are scheduled to deliver speeches today. However, traders are likely to ignore their statements. Federal Reserve Chairman Jerome Powell will deliver an important speech in Congress. The main focus is on that.  

As the financial markets closely monitor the movements of US 10-year bond yields, investors are eager to gain insights into the future outlook and forecasts from industry experts. In this article, we turn to Althea Spinozzi, Senior Fixed Income Strategist at Saxo Bank, to provide her analysis and predictions regarding the trajectory of US 10-year bond yields. Over the past several months, these bond yields have shown a period of consolidation following a robust two-year uptrend. With this stabilization, the question arises: What can we expect next? Spinozzi's expertise in fixed income instruments offers valuable insights into the current market situation and sheds light on the potential future developments in long-term yield rates. Spinozzi suggests that there may still be limited upside for long-term yields in the US during the summer, contingent upon the Federal Reserve's decisions to hike interest rates while economic growth remains robust. However, she finds it challenging to envision 10-year yields surging to the 4% mark. As the number of rate hikes increases, the probability of the long end of the yield curve starting to decline rises, making a soft landing scenario less likely. FXMAG.COM: For several months, US 10-year bond yields have been consolidating after a 2-year robust uptrend, what's next?   Althea Spinozzi, Senior Fixed Income Strategist: I believe that there is still some limited upside for long term yields in the US during summer only if the Federal Reserve hikes rates while growth remains robust. However, I find it hard to envision ten-year yields to soar to 4%. The more hikes, the higher the probability for the long part of the yield curve to start to fall as a soft landing it ruled out. Also, we have to take into account that the Federal Reserve has not started to actively sell bonds under its balance sheet. We expect discussions surrounding disinvestments in the balance sheet to pick up after summer, as the Fed tries to underpin long term yields in order to avoid a further inversion of the yield curve. The ultimate goal is to continue to tighten the economy, and in order to do that, the fed will need to talk hawkish to support the front part of the yield curve and to begin with an active Quantitative tightening. Overall, in the next few weeks up to the Fed's July meeting we expect ten-year yields  to trade rangebound between a wide range of 3.64% and 3.90%. After summer the path for yields is less certain as it depends on monetary policies and economic activity.

Technical Market Outlook: The GBP/USD pair has hit the technical support located at the level of 1.2698 and the bulls keeps trying to bounce higher to resume the up trend. The local low was made a few pips lower at 1.2684 and will act as the intraday technical support. The 50 MA will provide the dynamic resistance for bulls around the level of 1.2766 when the up trend is resumed.   The weak and negative momentum on the H4 time frame chart support short-term bearish outlook for GBP, but the bulls keep trying to move up. The pull-back might evolve into a full-blown correction if the level of 1.2684 is broken.

Current impulsive up move of CHF/JPY has cleared above major resistances of 157.98 & 158.45. Short-term momentum remains bullish. 159.90 is the key short-term support to watch.   The CHF/JPY cross has continued to its relentless rally as it broke above key resistance levels; 157.98 (the high obtained right during the EUR/CHF unpegged shock in January 2015) and 158.45 (Oct 1979 major swing high).   Broke above Oct 1979 major swing high of 158.45     Fig 1: CHF/JPY long-term secular trend as of 27 Jun 2023 (Source: TradingView, click to enlarge chart) The next key medium-tern resistance zone stands at 163.20/166.70 defined by a cluster of Fibonacci extension levels (see 3-month chart). The key medium-term support rests at 146.60 defined by the 200-day moving average and the former swing highs of July/October 2022.   The short-term uptrend remains intact     Fig 2: CHF/JPY minor short-term trend as of 27 Jun 2023 (Source: TradingView, click to enlarge chart) The price actions of CHF/JPY have continued to evolve within a minor ascending channel in place since the 13 June 2023 low of 153.37 and traded above the upward-sloping 5-day moving average (see 1-hour chart). The hourly RSI has just staged a bullish breakout which indicates that short-term momentum remains positive. Watch the 159.90 key short-term pivotal support with the next resistances coming in at 162.00 (psychological level) and 163.20 (the intersection between the upper boundaries of both the medium-term and minor ascending channels). However, a break below 159.90 negates the bullish tone to expose the next minor supports at 158.70 and 157.20.

Litecoin ended its sell-off and now is trading at 84.27 far above yesterday's low of 81.77. Bitcoin's current growth helped the altcoin to rebound as well. It has increased by 3.23% from yesterday's low to 84.41 today's high. Despite the current rebound, LTC/USD is still down by 1.86% in the last 24 hours and by 3.19% in the last 7 days. The buyers are still in the game but a larger growth is still far from being confirmed. LTC/USD Uptrend Intact!   As you can see on the H4 chart, the rate dropped within a down channel. This could represent a bullish formation. The altcoin turned to the upside again after retesting the uptrend line. The false breakdowns announced that the sell-off could be over. The weekly pivot point of 85.93 and the downtrend line represent upside obstacles and immediate targets.   LTC/USD Outlook! A valid breakout above the downtrend line may announce a larger growth and is seen as a buying opportunity.    

The market hardly reacts to final data on PMIs as they mostly coincide with preliminary estimates. Any significant trading movements usually occur during the release of the preliminary estimates. By the time the final data is published, the market has already taken these indicators into account. Furthermore, the preliminary estimates are released simultaneously for all indexes, while the final data is released at different times.   For example, today, only the manufacturing PMIs are slated for release, which have the lowest value among all business activity indexes. In other words, even if today's data differs from the preliminary estimates, which is possible, the market response will be relatively moderate, and so we shouldn't expect any significant movements. The preliminary estimate of the UK manufacturing PMI already revealed a decline from 47.1 points to 46.2 points.   The US PMI also fell from 48.4 points to 46.3 points. Therefore, the preliminary estimate already indicated a noticeable decline in the state of the industry. The GBP/USD pair has slowed down its downward cycle around the 1.2600 level, where a reversal occurred amid the weakening of the dollar positions.       As a result, the price returned above the 1.2700 level. On the four-hour chart, the RSI indicated the possibility of a price reversal when reaching oversold territory. On the same time frame, the Alligator's MAs reversed, indicating a slowdown in the downward cycle. Outlook In order to raise the volume of long positions, the quote needs to stay above the 1.2750 level. In this case, there may be a subsequent stage of recovery in the value of the British pound relative to the recent corrective move.   As for a subsequent downward move, falling below the 1.0650 level could easily reignite short positions. This will result in updating the local low of the corrective cycle. The complex indicator analysis unveiled that in the short-term period, technical indicators are pointing to a bearish bias from the 1.2700 level. In the intraday period, there is a primary signal of the end of the corrective phase. In the mid-term, the indicators are pointing to an uptrend.  

On Friday, the GBP/USD pair did not even try to extend its downward movement. Take note that there was an ascending trend line during the entire bearish correction period (already two weeks), and the British currency does not seem like it is going to fall anytime soon.   At the same time, a new descending trend line has formed on the hourly chart, causing the pair to be trapped between two trend lines. On Friday, the UK released its GDP report. If it did provoke a market reaction, it was minimal, as its value for the first quarter fully coincided with the forecasts. There were no significant reports in the US, and secondary data such as personal income and spending, as well as the Personal Consumption Expenditures Price Index with the Consumer Sentiment Index, were unlikely to add pressure on the dollar. Especially considering that the USD has started falling in the morning. Therefore, we tend to believe that the nature of the movements were more technical. It was almost impossible to predict the upward reversal in the morning. On the hourly chart, a new support area was formed at 1.2598-1.2605, from which the pair rebounded. Currently, it is located between the Senkou Span B and Kijun-sen lines, and has also tested the trend line. There's a high probability of a rebound and a new downtrend, but the movement is currently volatile. The only signal was formed at the beginning of the US session when the price broke through the Ichimoku indicator lines and the level of 1.2693. It was not the best signal, and traders could only gain 10 pips. But it's better than false signals or losses.     COT report: According to the latest report, non-commercial traders opened 2,800 long positions and closed 2,500 short ones. The net position increased by 5,300 in just a week and continues to grow. Over the past 9-10 months, the net position has been on the rise. We are approaching a point where the net position has grown too much to expect further growth. We assume that a prolonged bear run may soon begin, even though COT reports suggest a bullish continuation. It is becoming increasingly difficult to believe in it with each passing day. We can hardly explain why the uptrend should go on. However, there are currently no technical sell signals. The pound has gained about 2,500 pips. Therefore, a bearish correction is now needed. Otherwise, a bullish continuation would make no sense. Overall, non-commercial traders hold 52,300 sell positions and 104,400 long ones. Such a gap suggests the end of the uptrend. We do not see the pair extending growth in the long term.     1H chart of GBP/USD In the 1-hour chart, GBP/USD maintains a bullish bias, although it is correcting at the moment. The ascending trend line serves as a buy signal. However, we still believe that the British currency is overvalued and should fall in the medium term. The fundamental backdrop for the pound is getting weaker. The dollar also lacks a fundamental advantage but has already lost 2,500 pips over the past 10 months and requires a correction. On July 3, trading levels are seen at 1.2349, 1.2429-1.2445, 1.2520, 1.2598-1.2605, 1.2693, 1.2762, 1.2863, 1.2981-1.2987. The Senkou Span B (1.2737) and Kijun-sen (1.2674) may also generate signals when the price either breaks or bounces off them. A Stop Loss should be placed at the breakeven point when the price goes 20 pips in the right direction. Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance which can be used for locking in profits. On Monday, manufacturing PMIs are scheduled for release in both the UK and the US. All the reports, except for the US ISM, will be released in the second estimate, which is unlikely to surprise traders. However, the ISM index may show an unexpected value and, accordingly, stir some market reaction.   Indicators on charts: Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals.   The Kijun-sen and Senkou Span B lines are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines. Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals. Yellow lines are trend lines, trend channels, and other technical patterns. Indicator 1 on the COT chart is the size of the net position of each trader category. Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.  

The latest research shows that almost all countries are intensifying work on the creation of central bank digital currency (CBDC) systems, and some of them are close to completing this work. According to a report by the Atlantic Council think tank, based in Washington, 130 countries, which together generate 98% of the world's GDP, are exploring the possibility of introducing it. This is a huge increase compared to May 2020, when only 35 countries were considering implementing a CBDC.   The report shows that a record number of 64 countries are already at an advanced stage of exploring the CBDC system. They have implemented initial development, are conducting pilot tests or are even in the commissioning phase. Among them are 19 out of 20 G20 countries. Interestingly, the US seems to be the exception to this rule, with retail CBDC adoption progressing. This one seems to be stuck there at a dead end right now.     Technical Market Outlook: The bulls are clearly in control of the ETH market and they resumed the up trend again and made the last high at the level of $1,974. The market is approaching the key technical support located at the level of $1,930, so in a case of a bounce from this level the next target for bulls is seen at the level of $2,020. The momentum turned into positive on the RSI (14) indicator, so the short-term outlook for ETH remains bullish, however the market conditions on the lower time frames are now extremely overbought. The short-term technical support is seen at the level of $1,777.  

Deflationary spiral risk has negated confidence in China equities. US dollar has continued to hold steady against the yuan despite a broad-based sell-off against other major currencies ex-post US non-farm payrolls. The key intermediate support to watch on the USD/CNH will be at 7.2160. Weak China inflation data offset positive China Big Tech news flow The dreaded fear of a deflationary spiral in China has reached “code red” where the latest consumer inflation rate for June has flattened to 0% year-on-year from a gain of 0.2% year-on-year in May and came in below expectations of an increase of 0.2%. This latest reading in CPI is the weakest rate since February 2021. In addition, producers’ prices (factory gate prices) continued to deteriorate further into contraction mode; it dropped -5.4% year-on-year, faster than a 4.6% fall in May, and worse than expectations of a -5.0% decline. Overall, it has marked the ninth consecutive month of producer deflation and its steepest fall since December 2015. Time is running out for Chinese policymakers to negate the steepening rout in the internal demand environment that can potentially lead to further loss in consumer and business confidence if the deflationary spiral starts to be persistent. It may lead to a liquidity trap scenario in China where monetary policy tools will be less effective to stimulate real economic growth. The forward pricing mechanisms of the stock market seem to have started to take into account some aspects of the negative feedback loop triggered by the liquidity trap scenario, earlier intraday gains of between 1% to 3.2% seen in today’s Asian session on the Hang Seng indices as well as China’s benchmark CSI 300 driven by China Big Tech equities as Chinese regulators have signalled on last Friday after the close of the Asian session to end a two-year plus of crackdown on the technology sector have been reduced by slightly more than half, CSI 300 (0.5%), Hang Seng Index (0.8%), Hang Seng TECH Index (1.25%), and Hang Seng China Enterprises Index (0.7%) at this time of the writing.     China’s yuan remained soft despite the broader USD sell-off       Fig 1:  US dollar rolling 1-month performance as  of 10 Jul 2023 (Source: TradingView, click to enlarge chart) The US dollar sold off last Friday, 7 July reinforced by technical factors after the US Dollar Index cracked below its 50-day moving average that had been acting as a prior minor support since 28 June 2023, also ex-post US non-farm payrolls for June that came in below expectations (209K added vs. 225K consensus). Based on the rolling one-month performances as of today, the USD is weakest against the EUR (-1.89%), GBP (1.81%), and CHF (-1.35%) while holding steady against the offshore yuan, CNH (+1.44%). In addition, the US Treasury 2-year yield premium over an average of key developed nations’ 2-year sovereign yields (Germany, UK, Japan, Canada, Switzerland, Australia, China) has narrowed as well.     USD/CNH short and medium-term uptrend phases remain intact     Fig 2:  USD/CNH short & medium-term trends as of 10 Jul 2023 (Source: TradingView, click to enlarge chart) Since the start of its upside acceleration on 4 May 2023, the USD/CNH has managed to evolve above its 20-day moving average and today’s price action has managed to stage a rebound after a retest on it. If the 20-day moving average now acting as a key intermediate support at 7.2160 is not broken down, the USD/CNH is likely to remain in its short-term bullish trend trajectory which in turn may see further potential weakness in the CSI 300 and Hang Seng indices. The only catalyst for a potential revival of bullish animal spirits in China equities is a clear signal from China’s State Council on the implementation of new fiscal stimulus measures in terms of scope and timing.  

Last Friday, the GBP/USD pair tested the 1.2850 support level, which corresponds to the upper line of the Bollinger Bands indicator on the daily chart. From a formal point of view, the pound has renewed its multi-month price peak (the last time the pair was at this level was in April), but in reality, the situation doesn't look so rosy for buyers. Over the past three weeks, the pound has repeatedly approached the 1.2850 target, but each time it stopped just a few steps away from this price barrier.   Take a look at the weekly and daily GBP/USD charts: since mid-June, the pair has shown wave-like dynamics, as it repeatedly tries to overcome the stubborn resistance level. By the way, the last attempt also ended in failure.   At the start of the new trading week, sellers took the initiative again, pulling the price into the 27th figure range. A news catalyst is needed The pound needs a strong news catalyst to break through the defense (1.2850), approach the boundaries of the 29th figure, and in the future claim the heights of the 30th price level. Undoubtedly, such a scenario is possible in the case of a massive weakening of the greenback, but as practice shows, even in this case, the pound should play not the role of the follower, but the leader.   As already mentioned above, the GBP/USD pair has been moving in an uptrend since mid-June. Initially, support for the pound came from data on rising inflation in the UK. It turned out that the core consumer price index, excluding food and energy prices, jumped to 7.1% in May, while most analysts predicted it would fall to 6.7%. The indicator renewed a multi-year record - this is the strongest pace of growth of the indicator since 1992. Within the current year, the indicator demonstrates an uptrend for the second month in a row. This fact strengthened the pound's position, but its main "ally" turned out to be the Bank of England, which unexpectedly raised the interest rate by 50 basis points a few days after the release (the base forecast assumed a 25-point hike). Moreover, in its accompanying statement, the central bank did not soften its wording and hinted at further tightening of monetary policy.   The central bank, in particular, indicated that it will continue to "carefully monitor signs of inflationary pressure in the economy, including the labor market situation and wage dynamics, as well as inflation in the services sector." At the same time, the Bank warned that if signs of more persistent pressure are recorded in the future, a further increase in the interest rate will be needed. The events of the past month allowed buyers to cover almost a 500-point path: at the beginning of June, the price fluctuated at the base of the 24th figure, while on the wave of the upward momentum it grew to the middle of the 28th figure. But the 1.2850 target became a local price ceiling for the bulls.   In order to build an upward move, you need to experience a kind of deja vu: further inflation growth (this time in June) + hawkish results of the next BoE meeting. However, to successfully transfer to the price echelon 1.2850 - 1.3000, it is enough to fulfill only the first point of the "plan" (provided that the dollar index remains in its previous positions and does not strengthen after the release of US inflation data).   Important reports ahead The consumer price index in the UK for June will be published next week - July 19th. This will be key in the run-up to the next - August - BoE meeting. But in addition to the inflation report, one should also pay attention to another report - in the field of the UK labor market. It will be published on Tuesday. If the main components turn out to be in the green zone (especially the pro-inflation indicator), the pound will receive a kind of "advance assistance", which will be greatly enhanced in case of a strong inflation report. In other words, if both releases (labor market + inflation) are in the green zone, the probability of a rate hike in August will significantly increase, and this fact will support the British currency.   According to preliminary forecasts, the unemployment rate will remain at the same level (3.8%), the number of employed will increase by 20,000 (after falling by 13,000 in the previous month), and the wage component will show contradictory dynamics: with the payment of bonuses, the indicator will rise to 6.8%, without bonuses - it will decrease slightly, to 7.1%. Overall, if you trust the forecast estimates, Tuesday's reports can support the British currency.   If the indicators turn out to be in the green (especially the wage component of the report), buyers may again test the resistance level of 1.2850, which turned out to be a "tough nut to crack". But even in this case, the pound is unlikely to settle above this target and settle within the 29th figure. In my opinion, such a scenario is possible in case of an acceleration in the growth rate of the UK CPI and/or a large-scale weakening of the US currency. From a technical point of view, on the daily chart, the price is between the middle and upper lines of the Bollinger Bands, which speaks of the bullish bias.   On the daily and weekly charts, the Ichimoku indicator formed a bullish "Parade of Lines" signal, when the price is above all lines of the indicator, including above the Kumo cloud. This signal also indicates bullish sentiments. The nearest target is the aforementioned mark of 1.2850 (the upper line of the Bollinger Bands on D1). The next level of resistance (and, accordingly, the next target) is the 1.2950 mark - this is also the upper line of the Bollinger Bands indicator, but already on the weekly chart.

Analyzing Monday's trades: GBP/USD on 30M chart     The GBP/USD pair managed to both rise and fall on Monday. The pound sterling corrected against Friday's decline, but in the second half of the day, it traded higher again, which corresponds to the current trend. There were no important economic reports in the UK or in the US.   Three representatives of the FOMC spoke in the US, and Bank of England Governor Andrew Bailey is usually speaking in the UK around this time. For obvious reasons, Bailey's speech could not have any influence on the pair's movements during the day. And the FOMC members' speeches took place in the evening, so they also could not have provoked either the morning fall or the afternoon rise.   However, volatility was over 100 points, which is quite a lot for a Monday. The uptrend persists, and we have to point out that the growth is groundless, but there's nothing we can do if the market wishes to buy the pair, regardless of the fundamental background.   GBP/USD on 5M chart   Several entry points materialized on the 5M chart. First, the pair bounced twice from the level of 1.2801 (buy signals duplicated each other), but it only rose by 13 pips. It was impractical to work out these signals, as there was a high probability of a flat on Monday, and the Stop Loss on the deal should have been set below the level of 1.2779. When a sell signal was formed in the form of overcoming the area of 1.2779-1.2801, it was already clear that there would be no flat, so the deal could be worked out, but it did not bring profit, it closed at a break-even stop loss. The next buy signal could have been executed, and it would have brought a profit of 30 pips. In general, the pair changed its direction of movement several times on Monday, which is always bad for intraday trading.   Trading tips on Tuesday: As seen on the 30M chart, the GBP/USD pair continues to form a new uptrend. The pound can still rise even on those days when there is no fundamental background. Therefore, purely technically, GBP may extend its upward movement, but fundamental factors are still very doubtful. The key levels on the 5M chart are 1.2538, 1.2597-1.2605, 1.2653, 1.2688, 1.2748, 1.2779-1.2801, 1.2848-1.2860, 1.2913, 1.2981-1.2993. When the price moves 20 pips in the right direction after opening a trade, a stop loss can be set at breakeven. On Tuesday, the UK will release reports on jobless claims, unemployment, and wages. In the US, Federal Reserve official James Bullard will speak. Basic trading rules: 1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a break). The shorter this period, the stronger the signal.     2) If two or more trades were opened at some level following false signals, i.e. those signals that did not lead the price to Take Profit level or the nearest target levels, then any consequent signals near this level should be ignored.     3) During the flat trend, any currency pair may form a lot of false signals or do not produce any signals at all. In any case, the flat trend is not the best condition for trading.     4) Trades are opened in the time period between the beginning of the European session and until the middle of the American one when all deals should be closed manually.     5) We can pay attention to the MACD signals in the 30M time frame only if there is good volatility and a definite trend confirmed by a trend line or a trend channel.     6) If two key levels are too close to each other (about 5-15 pips), then this is a support or resistance area.    

Despite the fact that industrial production fell by 2.2% in the euro area, while in the previous month it grew by 0.2%, the euro still rose for another day. And this raises many questions since the euro did not have any reason to rise on Thursday. t was actually the opposite. Apparently, this is not just due to momentum or speculation. It seems that the latest US inflation report convinced many investors of the possibility that the interest rate level of the European Central Bank will be higher in the near future than that of the Federal Reserve. So there is a kind of global reassessment of positions. It doesn't make any sense to discuss the realistic possibility of such a scenario.   All answers will be given after the upcoming meetings of both central banks. For now we can take note of the fact that the dollar is extremely oversold. Therefore, a rebound is simply inevitable. The question is when exactly that will happen.   Clearly, economic data failed to do the job. Although it may be because it hasn't been long since the US inflation report was published. Maybe the market simply ignored yesterday's data. Today, the macroeconomic calendar is absolutely empty, and this is quite suitable for a rebound. But do not forget about the trend, which may persist and continue to push the euro upwards. Moreover, if the reassessment of expectations regarding the disparity of interest rates really is the main driving force, then there's a high degree of probability that we will see an extension of the euro's uptrend.   The EUR/USD pair strengthened in value almost by 300 points since the beginning of the trading week. Such an intense price change over a short period of time indicates that the euro is extremely overbought. On the four-hour chart, the RSI shows a strong signal of the euro's overbought conditions. The indicator moves at the values of 2017, which points to aggressive long positions. On the same time frame, the Alligator's MAs are headed upwards, which corresponds to an uptrend.   Outlook In this situation, a pullback would be the next logical step, however, speculative frenzy could well ignore signals from technical analysis. In this case, this will fuel the momentum of the uptrend, adding to the euro's overbought conditions. The complex indicator analysis unveiled that in the short-term, medium-term and intraday periods, indicators are pointing to an uptrend.    

Analyzing Friday's trades: EUR/USD on 30M chart   The EUR/USD pair took a breather and traded flat on Friday. Let's refresh our memory a bit: the pair has been rising all week, in most cases without any apparent reasons, and on Friday, it failed to show even a bit of a correction! That's all you need to know about the current movement. The demand for the euro is as strong as it is unfounded. Throughout the week, the market desperately reacted to the inflation report. At least, that's the only assumption we can make because there were no other important events or reports. Moreover, the reaction to the US inflation began as early as Monday (two days before its release), and it continued on Thursday (one day after the release). Even the FOMC meetings had a much weaker impact. Nevertheless, the uptrend persists, supported by the trend line. Therefore, it would be wise not to consider short positions in the medium term until the price firmly breaks below this line (with the exception of intraday trading with strong signals).   EUR/USD on 5M chart   Several entry signals materialized on the 5-minute chart, which is completely normal for a flat market. Throughout the day, the price crossed the distant level of 1.1228 five or six times. Naturally, in a flat market, all trading signals turned out to be false. Beginners could only execute the first two signals. In the first case, the price moved in the right direction for about 15 pips, which was enough to set a stop loss at breakeven, but not in the second case. Thus, the day turned out to be not the most successful, but what could one expect when volatility was only 40 pips and there were no important reports or events?   Trading tips on Monday:   On the 30M chart, the pair continues to form an uptrend. On Friday, there was an excellent opportunity for a slight correction with an empty event calendar, but the market did not take advantage of it. Therefore, the euro may extend its upward movement for the rest of the week. The key levels on the 5M chart are 1.0871, 1.0901, 1.0932, 1.0971-1.0977, 1.1038, 1.1091, 1.1132, 1.1184, 1.1279-1.1292, 1.1330, 1.1367. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. On Monday, there are no important reports or events lined up in the US or the euro area, so we can see any type of movement. It is highly likely to be a flat, but we may well see both an increase and a correction.   Basic trading rules: 1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a break). The shorter this period, the stronger the signal. 2) If two or more trades were opened at some level following false signals, i.e. those signals that did not lead the price to Take Profit level or the nearest target levels, then any consequent signals near this level should be ignored. 3) During the flat trend, any currency pair may form a lot of false signals or do not produce any signals at all. In any case, the flat trend is not the best condition for trading. 4) Trades are opened in the time period between the beginning of the European session and until the middle of the American one when all deals should be closed manually. 5) We can pay attention to the MACD signals in the 30M time frame only if there is good volatility and a definite trend confirmed by a trend line or a trend channel. 6) If two key levels are too close to each other (about 5-15 pips), then this is a support or resistance area.   How to read charts: Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them. Red lines are channels or trend lines that display the current trend and show which direction is better to trade. MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross. This indicator is better to be used in combination with trend channels or trend lines. Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair. Therefore, during such events, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement. Beginners should remember that every trade cannot be profitable. The development of a reliable strategy and money management are the key to success in trading over a long period of time.      

In a recent interview with FXMAG.COM, we had the opportunity to speak with Michael Stark, an experienced analyst from Exness, about the current state and future prospects of the oil market. With oil prices experiencing notable fluctuations in recent times, the question on everyone's mind is how long can the oil price rise and what factors are likely to influence its trajectory. Stark begins by sharing his insights on the potential for an extended uptrend in oil prices, particularly with Brent crude. He highlights the importance of market sentiment and the avoidance of recession fears as key factors that could drive oil prices higher. Drawing attention to oil's unique characteristic of being able to trend for prolonged periods compared to other popular CFDs, Stark suggests that if the current uptrend is indeed a new main trend, it might carry on well into the fourth quarter.   FXMAG.COM:  How long can the oil price rise? Michael Stark:  It’d be quite possible to see an extended uptrend with Brent retesting $97 later this year if sentiment in markets remains generally positive and fears of recession don’t clearly return. Oil can often trend for quite a long time compared to other popular CFDs, so if this is indeed a new main uptrend it might continue into the fourth quarter. However, sentiment will almost certainly change to some degree when significant activity returns to markets in September. Negatives for crude fundamentally include weaker economic data from China in recent months combined with Russia’s avoidance of sanctions by exporting through Saudi Arabia, though the latter specifically and OPEC+ generally seem to be determined to keep prices high. Equally, January’s high around $88.40 might be an important resistance which could resist testing. The main goal as a trader of oil during seasonally low volume is usually to avoid entries at extremes while trying to use support, moving averages and others to determine when a retracement becomes short-term downtrend.  

Analyzing Tuesday's trades: GBP/USD on 30M chart   On Tuesday, GBP/USD went through low volatility and messy movements. In general, the pound's movements were the same as those of the EUR/USD pair. The market reaction to the reports was also similar, except that the European ZEW indexes were not related to the British pound. However, it had its own data in the form of reports on unemployment, wages, and unemployment benefit claims. In our opinion, the pound should have fallen not risen in response to the British reports in the first half of the day, as two of the three reports turned out to be worse than forecasts. Unemployment increased, and the number of benefit claims was higher than expected. However, the wage report, which showed a sharp growth rate, tipped the balance. As a result, the pair continued to correct after rebounding from the 1.2620 level, but before that, it was in a sideways channel for two weeks and simply returned to it. We don't expect the pound to start an uptrend. GBP/USD on 5M chart   Several trading signals were formed on the 5-minute chart. The pair spent the entire day between the levels of 1.2688 and 1.2748, regularly rebounding from them. Volatility was 78 points. There is no point in analyzing each individual signal, as they were almost identical. Beginners had to decide for themselves whether they wanted to scalp between levels, the distance between which is 30-35 points. As we can see, the price regularly bounced from these levels, which means that none of them was unnecessary. We witnessed such a movement on Tuesday. Since most of the signals turned out to be right, it was possible to earn a decent amount, but we do not see much sense in opening 10 trades with a potential profit of 10 points each.   Trading tips on Wednesday: On the 30-minute chart, the GBP/USD pair may be in a flat position. However, we insist that the pound fall, as we still believe it is overbought and unreasonably expensive. Not all of this week's reports may support the dollar, so we may see messy movements in the sideways channel. The key levels on the 5M chart are 1.2499, 1.2538, 1.2605-1.2620, 1.2653, 1.2688, 1.2715, 1.2748, 1.2787-1.2791, 1.2848-1.2860, 1.2913. Once the price moves 20 pips in the right direction after opening a trade, you can set the stop-loss at breakeven. On Wednesday, the UK is set to release an inflation report, and this is the main item for the day. If it turns out that inflation is rising or falling more slowly than expected, the pound may jump.   Basic trading rules: 1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a break). The shorter this period, the stronger the signal. 2) If two or more trades were opened at some level following false signals, i.e. those signals that did not lead the price to Take Profit level or the nearest target levels, then any consequent signals near this level should be ignored. 3) During the flat trend, any currency pair may form a lot of false signals or do not produce any signals at all. In any case, the flat trend is not the best condition for trading. 4) Trades are opened in the time period between the beginning of the European session and until the middle of the American one when all deals should be closed manually. 5) We can pay attention to the MACD signals in the 30M time frame only if there is good volatility and a definite trend confirmed by a trend line or a trend channel. 6) If two key levels are too close to each other (about 5-15 pips), then this is a support or resistance area.   How to read charts: Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them. Red lines are channels or trend lines that display the current trend and show which direction is better to trade. MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross. This indicator is better to be used in combination with trend channels or trend lines. Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair. Therefore, during such events, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement. Beginners should remember that every trade cannot be profitable. The development of a reliable strategy and money management are the key to success in trading over a long period of time.  

Analysis of GBP/USD 5M   On Friday, GBP/USD, unlike EUR/USD, snapped higher. Volatility was slightly higher than for the euro, but it doesn't matter, as the pair has been trading in a flat for several weeks. This is evident on all timeframes, so the macroeconomic and fundamental backdrop is currently taking a back seat. To be precise, there was no fundamental backdrop last week, and most reports did not support the British pound. Therefore, the pair could have extended the decline that began a month and a half ago, but the market clearly took a break, so we did not see any interesting movements. The UK released its retail sales report, which doesn't require much discussion. The pair dipped lower as sales undershot forecasts. In the second half of the day, the market received a technical signal to grow, so by the end of the day, the pound had offset all morning losses. As already mentioned, one trading signal was formed. At the beginning of the US session, the price rebounded from the area of 1.2693-1.2700, and the pair rose by 30 pips. Traders could earn these 30 pips since there were no more signals until the end of the day. Therefore, the deal had to be closed manually. At least, the loss on the EUR/USD pair was offset. COT report:     According to the latest report, the non-commercial group of traders opened 7,300 long positions and 3,300 short ones. Thus, the net position of non-commercial traders increased by 4,000 positions in a week. The net position has been steadily growing over the past 11 months as well as the pound sterling. Now, the net position has advanced markedly. This is why the pair will hardly maintain its bullish momentum. I believe that a long and protracted downward movement should begin. COT reports signal a slight growth of the British currency but it will not be able to rise in the long term.   There are no drivers for opening new long positions. Slowly, sell signals are emerging on the 4-hour and 24-hour charts. The British currency has already grown by a total of 2,800 pips, from its absolute lows reached last year, which is a significant increase. Without a downward correction, the continuation of the uptrend will be illogical. However, there has been no logic in the pair's movements for quite some time. The market perceives the fundamental background one-sidedly, ignoring any data in favor of the dollar. The Non-commercial group of traders has a total of 90,500 long positions and 39,500 short ones. I remain skeptical about the long-term growth of the pound sterling, and the market has recently begun to pay attention to short positions.   Analysis of GBP/USD 1H On the 1H chart, the pound/dollar pair continues to trade within a sideways channel. The channel has slightly expanded, so the flat hasn't ended. The lines of the Ichimoku indicator are currently weak, but from time to time they still work well with the market. Due to the flat, we have recorded the last values of the Senkou Span B and Kijun-sen lines. However, false and inaccurate signals can still form around them. The pair reached the upper band of the channel on Thursday, so now we can expect the pound to fall. On August 21, traders should pay attention to the following key levels: 1.2520, 1.2605-1.2620, 1.2693, 1.2786, 1.2863, 1.2981-1.2987, 1.3050. The Senkou Span B (1.2807) and Kijun-sen (1.2700) lines can also be sources of signals, e.g. rebounds and breakout of these levels and lines. It is recommended to set the Stop Loss orders at the breakeven level when the price moves in the right direction by 20 pips. The lines of the Ichimoku indicator can move during the day, which should be taken into account when determining trading signals. There are support and resistance levels that can be used to lock in profits. On Monday, no important events or reports lined up in the UK or the US. Thus, traders will have nothing to react to, so we will probably see weak and mixed up movements.   Description of the chart: Support and resistance levels are thick red lines near which the trend may end. They do not provide trading signals; The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, plotted to the 1H timeframe from the 4H one. They provide trading signals; Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals; Yellow lines are trend lines, trend channels, and any other technical patterns; Indicator 1 on the COT charts is the net position size for each category of traders; Indicator 2 on the COT charts is the net position size for the Non-commercial group. Read more: https://www.instaforex.eu/forex_analysis/352147 Read more: https://www.instaforex.eu/forex_analysis/352147 Read more: https://www.instaforex.eu/forex_analysis/352147 Read more: https://www.instaforex.eu/forex_analysis/352147  

The recent decline of -6.8% from its 10 August 2023 high has not damaged the medium-term uptrend phase of WTI oil. Today’s price actions have indicated a revival of a short-term uptrend phase. Watch the key short-term support at US$80.90. This is a follow-up analysis of our prior report, “WTI Oil Technical: Time for a potential short-term pullback” published on 15 August 2023. Click here for a recap. The price actions of West Texas Oil (a proxy of WTI crude oil futures) have indeed shaped the expected minor short-term pull-back and broke below US$79.80 per barrel minor support as it printed an intraday low of US$79.11 last Thursday, 17 August. All in all, it has recorded an accumulated decline of -6.8% from its 10 August 2023 high of US$84.92 but from a technical analysis perspective, the medium-term uptrend phase in place since 28 June 2023 low of US$66.95 remains intact.       Fig 1:  West Texas Oil medium-term trend as of 21 Aug 2023 (Source: TradingView, click to enlarge chart) Recent price actions of West Texas Oil have led to the emergence of an imminent “golden crossover” bullish condition seen in the 50-day and 200-day moving averages. In addition, the daily RSI oscillator has also just staged a rebound right at a key parallel support at the 50 level. These observations suggest that medium-term bullish momentum may have resurfaced which in turn increases the odds of the continuation of a potential impulsive up move sequence within its medium-term uptrend phase in place since the 28 June 2023 low.   Evolving into a minor short-term uptrend     Fig 2:  West Texas Oil minor short-term trend as of 21 Aug 2023 (Source: TradingView, click to enlarge chart)  Today’s price action has just surpassed the 20-day moving average which suggests the potential start of a minor short-term uptrend phase for West Texas Oil. Watch the US$80.90 key short-term pivotal support to see the next intermediate resistance coming in at US$83.00 before a retest on the 10 August 2023 swing high of US$84.90. However, a break below US$80.90 negates the bearish tone to expose the US$79.55/79.10 support.  

New inflation methodology offers hope for BoE 1.28 could be major resistance point for GBPUSD A break of 1.26 could be bearish signal   Recent UK economic data has been a mixed bag, with wages rising at a much-accelerated rate but inflation decelerating as expected. While the Bank of England will be relieved at the latter, the former will remain a concern as wage growth even near those levels is not consistent with inflation returning sustainably to target over the medium term. The ONS released new figures overnight that appeared to suggest core inflation is not rising as fast as the CPI data suggests. The reportedly more sophisticated methodology concluded that core prices rose 6.8% last month, down from 7% the previous month and 7.3% the month before. The official reading for July was slightly higher at 6.9% but down from only 7.1% in May. So not only is the new methodology showing core inflation lower last month but the pace of decline is much faster. That will give the BoE hope that price pressures are easing and they’re expected to do so much more over the rest of the year.     GBPUSD Daily     It’s not clear whether this will prove to be a resumption of the uptrend or merely a bearish consolidation. It is currently nearing 1.28, the area around which it has previously run into resistance this month and around the 38.2% Fibonacci retracement level. Another rebound off here could be viewed as another bearish signal, which may suggest we’re currently seeing a bearish consolidation, while a move above could be more promising for the pound. If the pair does rebound lower then the area just above 1.26 will be key, given this is where it has recently seen strong support. It is also where the 55/89-day simple moving average band has continued to support the price in recent months.

GBP/USD Yesterday, the British pound declined strongly by more than a figure. The pair reached the support of lows on the 14th and 3rd of August, at 1.2614. By analogy with those days, the price can continue to rise to the nearest resistance level at 1.2814.     Consolidating above this level will open up the next target at 1.2880 – the 50.0% correction level. The Marlin oscillator continues to move towards the boundary of the uptrend territory. On the four-hour chart, the price reached the level of 1.2720 and the balance line. A consolidation above the MACD line took place.   The price is trying to consolidate above 1.2720, but it seemingly lacks support from the Marlin oscillator, which hasn't left the downtrend territory yet. If the price doesn't drop significantly in the next two candles, Marlin might cross the zero line and pull the price along. The MACD line (1.2690) acts as support.    

Global bond yields have noticeably fallen in the last 24 hours after softer-than-expected preliminary PMI data. A significant drop in activity has been noted in the eurozone's services sector, especially in Germany. This reduces the chances of the European Central Bank raising rates in September and weighs on the euro. On Thursday, the market will focus on the report on durable goods orders and the weekly unemployment benefits. USD/CAD Retail sales in Canada showed weak results, leading to a decline in yields of short-term Canadian government bonds and a decrease in the CAD exchange rate.       At the same time, the pace of growth in average wages remains high, as the labor market supply lags behind demand. To curb inflation, there needs to be a swift deceleration in wage growth, which is only possible in conditions of a saturated labor market or a general economic slowdown. Another route is an increase in productivity, which remains low with no signs of improvement yet. The net short position on CAD increased by CAD 799 million for the reporting week, reaching CAD -845 million. Positioning is bearish, and the price is moving upwards.   A week earlier, we assumed that the upward movement would progress, and the main target is the upper band of the channel at 1.3690/3720. This target remains relevant. The consolidation is due to technical reasons rather than fundamental ones, and after the consolidation or minor correction concludes, we expect to see further growth.   We perceive support in the middle of the channel at 1.3360/80, but a potential decline to this zone before turning upwards seems unlikely. USD/JPY The core inflation rate (excluding fuel and food prices) in July accelerated from 4.2% to 4.3%, indicating that the Bank of Japan's cautious policy hasn't yielded significant results yet. The BOJ is the only one among major central banks continuing an ultra-soft policy, based on the assumption that inflation largely has an imported nature and will decrease as soon as global energy prices stabilize and the previously disrupted supply chains of goods and raw materials are restored       Such an approach might be justified, but the growth in core inflation indicates that there's more to it, and the Bank needs to be very cautious in choosing its next steps. The Ministry of Finance plans to allocate 28,142.4 billion yen to service the national debt in the 24th fiscal year, which is 2,892.1 billion yen more than in the 23rd fiscal year. The rate used to calculate JGB bond servicing costs remained at 1.1% for seven years, from the 17th to the 23rd fiscal year. If the Bank of Japan begins to raise the accounting rate, the calculated rate for servicing will also be increased for the first time in 17 years. Currently, there are no problems in servicing the national debt, but by the end of the 22nd fiscal year, the outstanding volume of JGBs amounted to a staggering 1,027 trillion yen. If Japan's economy continues to grow, increasing tax revenues will allow the debt to be serviced without significantly increasing borrowing.   However, if the global economic crisis intensifies, an increase in the BOJ's rate will lead to a rapid increase in the government's debt servicing expenses. For now, we must assume that any hints at an interest rate hike will lead to the yen's growth, complicating the debt servicing situation due to a deteriorating trade balance and reduced budget revenues. The Japanese government fears this scenario, hence any comments on monetary policy will continue to be very cautious. In the current circumstances, the yen is more likely to depreciate than strengthen. The net short position on JPY was slightly adjusted by 300 million, to -6.952 billion, with positioning decidedly bearish. The price is above the long-term average, the trend remains bullish, but the chances of an extended consolidation or a shallow correction has increased.     We expect an uptrend from the USD/JPY, with the upper band of the channel at 147.80/148.10 as the target. The risk of a deeper correction to the middle of the channel at 142.50/80 has increased, but the long-term trend remains bullish, and there's no reason to anticipate a reversal at the moment.  

Last Friday’s price actions of spot Gold (XAU/USD) have managed to find support again at the 200-day moving average ahead of the US CPI data release & ECB monetary policy decision this week. The recent -5.15 % decline seen in Gold from its 20 July 2023 swing high of US$$1,987.53 has started to see some signs of short-term bullish reversal elements since 21 August 2023. The up-trending 10-year US Treasury real yield has also started to consolidate between 1.95% to 2.00% level which may negate the bearish tone on Gold at least in the short-term. US$1,910 support and US$1,932 resistance are the two key short-term technical levels to watch.   Since its 20 July 2023 swing high of US$1,987.53, spot Gold (XAU/USD) has declined by -5.15% to print a low of US$1,885 on 17 August 2023 in line with a rising longer-term 10-year US Treasury real yield which increased the opportunity costs of holding gold as it is a non-interest yielding asset.   Major uptrend remains intact Fig 1: Gold (XAU/USD) major trend as of 11 Sep 2023 (Source: TradingView, click to enlarge chart) Despite the underperformance of Gold seen in the past five weeks, its major uptrend phase in place since the 3 November 2022 low of US$1,616 remains intact as the -5.15% fall from the 20 July 2023 high of US$1,987.15 has managed to stall at the lower boundary of a major ascending channel from its 3 November 2022 major swing low and close to the 38.2% Fibonacci retracement of the prior major uptrend phase from 3 November 2022 low to 4 May 2023 high (see daily chair). Also, the up-trending 10-year US Treasury real yield (derived via the inflation-protected securities, TIPS of the same duration) has started to consolidate at the 1.95% to 2.00% level which may negate the bearish tone on Gold at this juncture.     Short-term momentum has tilted toward the bullish camp  

UK contracts faster than expected One-off factors largely behind the decline, BoE still expected to hike Major support being tested in cable The UK economy contracted faster than expected in July which is weighing on the pound this morning. GDP fell 0.5%, much faster than the 0.2% contraction that was expected, but as has been the case throughout this year, one-off factors played a big role. Strikes and the weather were largely blamed for the steep decline although some are clearly worried that overall momentum in the economy remains weak. I’m not sure the data will really sway the Bank of England at all next week. Not against the backdrop of such strong wage growth, as was reported yesterday. Markets are now pricing in a rate hike at around 75% which seems overly cautious to me but then, perhaps Bailey’s words last week are continuing to ring in the ears of traders. The Governor and his colleagues indicated the discussion will be more balanced than people seem to think which suggested a hold is very much on the table this month. That seems a little far-fetched at this stage and I think the words are probably intended for a little further down the line in November but then it wouldn’t be the first time the BoE has surprised us. That said, it also wouldn’t be the first time they’ve hinted at something and not followed through.   A pivotal level for cable? Cable has continued to drift lower after today’s GDP figures but there appears to be a little less vigor in the decline which may raise a few questions.     Is the decline of the last couple of months running on fumes? If so, are we going to see a correction or has this been a correction in the broader uptrend? The answer to the second question is that we’ll only know in time, should we see a big move higher from here. On the first question, there are signs that the sell-off is losing momentum. The drop today doesn’t appear to have been backed by moves lower on either the stochastic or the MACD. That in itself doesn’t mean the pair is about to reverse higher. But that it occurs around the 200/233-day simple moving average band and the 50/61.8 Fibonacci retracement zone – March lows to July highs – may suggest it could be early signs of struggles which could continue if tested again. A rotation off here would be interesting as it could signal that the sell-off since July has just been a bullish retracement. In that case, the 55/89-day SMA band above could be very interesting. A move below the 200/233-day SMA band and Fib levels could be a very bearish development, on the other hand, especially if back by momentum. And interesting one to watch over the coming days and weeks.  

Downtrends in EURUSD and GBPUSD are a bit stretched. Corrections from key supports could be seen before downtrends are likely to resume. EURGBP forming Descending triangle pattern. Break out direction is 50/50. Dollar Index still has room up to 105.80 but a short-term correction seems likely   EURUSD is trading in a falling channel pattern and seems to be finding support around the middle of the Consolidation area at 1.0685. RSI divergence is indicating downtrend exhaustion which could result in a correction. A correction that could take EURUSD 0.382 retracement at 1.0911. However, the 100 and 55 Moving Averages are declining just around that area adding to the overhead resistance limiting the rebound potential.EURUSD rebound could run out of steam at the 200 Moving Average and the upper falling trendline.A break below 1.0685 is likely to test the Consolidation area low at 1.0635 and a close below paves the road towards 1.05.    If EURUSD is closing a week below 1.0635 the medium-term uptrend has been reversed – see weekly chart.However, there is strong support around the 1.0635 level, the weekly 55 Moving Average is coming up adding to that support.If closing below 1.0635 there is room down to around 1.05     GBPUSD has found support at the 200 Moving Average and could bounce from here.  A test of the upper falling trend line could be seen. If GBPUSD is breaking above the trendline a bullish move to the 0.382 retracement at 1.27 is quite likely However, the upside potential seems fairly limited with the 55 Moving Average and 100 Moving Average coming down adding some resistanceRSI is in negative sentiment without divergence indicating lower GBPUSD levels are likely thus a correction I very likely to be short-lived and limited. If GBPUSD breaks below 1.2430 the sell-off is likely to push the pair down to support at around 1.23     EURGBP is testing the upper falling trendline in what could be a Descending triangle like pattern. Break out is needed for direction and break out direction is 50/50 up/down.If breaking out bullish there is upside potential to around 0.8750-0.88 but the price should at least move to the highest peak in the triangle i.e., at around 0.87.Some resistance at around 0.8668If breaking bearish out of the triangle there is downside potential to 0.8350     Dollar Index uptrend is weakening indicated by RSI divergence, RSI values have been declining as Dollar Index has moved higher.A correction could be seen possibly down to the 0.382 retracement and strong support at 102.87 before uptrend is likely to resume.If the Dollar Index is taking out last week’s peak at 105.13 a spike up to strong resistance at around 105.80 is a quite likely outcome  

WTI and Brent Crude oil correction less than anticipated. Uptrend seems to be resuming. Can it reach USD100/brl? Natural gas slowly crawling higher closing in on key resistnace levels. Carbon Emission continuing its decline WTI Crude oil correction seems to be over. It didn’t even reach the 0.382 retracement at 87.58 before buyers seem to regain control. WTI is likely to have another go at the strong resistance at around 93.74.If it closes above there is no strong resistance until around 104.80. Minor resistance at around 98.62. Daily RSI is showing positive sentiment and no divergence indicating that a new high above 93.74 is quite likely. IF WTI slides back below 88.20 it could be hit with a sell-off down to test the lower rising trendline,  but a move down to support at around 83.58 could also be seen           Brent Crude oil Shooting star top and reversal candle is still intact but if Brent is closing above 95.96 it will be cancelled.The correction seems to have been cut short and the uptrend seems to be resuming.A bullish move to the strong resistance around 98.57-99.56 is in the cards. A break above that resistance level could fuel another rally to 105.48 If buyers cannot push Brent above 95.96 followed by a slide below 91.80 a correction down to test the lower falling trendline is likely. Possibly even down to t88.19-87.31       Henry Hub gas has found a solid base around 2.48 and is once again close to be testing key strong resistance at around 3.00.A close above could initiate a rally higher towards 3.60-3.70 level. RSI is showing positive sentiment supporting th4e bullish scenario of higher Gas prices   Dutch TTF gas is in an uptrend testing August peak at around 44.80. It is not a strong resistance and if broken Dutch gas is likely to move higher to 50.30-54.45 Positive sentiment on the RSI is supporting the bullish gas scenario. For Dutch gas to reverse its uptrend a close below 30.50 is needed     Carbon Emissions contract is trading in a falling trend channel. The Futures contract is trading below all Moving Averages; 55, 100 and 200 and RSI is showing negative sentiment which underline the bearish picture. Emissions could drop to the support area at around 78-77. For Carbon Emissions to reverse to bullish trend a close above 90.45 is needed. A close above 86.15 could be first indication of that scenario to play out      

EUR/USD On Tuesday, the euro continued to face pressure from Monday, even slightly more so due to the decline in commodity prices (crude oil down 2.1%) and as U.S. Treasury yields fell. German industrial production dropped in September by 1.4% compared with the previous month (-3.86% YoY), which fueled concerns about a European recession. Now we are waiting to see if other news will support the euro's upward movement. However, we don't expect to receive any news today or tomorrow, unless Federal Reserve Chair Jerome Powell or John Williams suggests an the end to the rate hike cycle. On the other hand, a certain event that could exert pressure on the dollar would be the so-called U.S. "government shutdown", as the emergency 45-day funding measure is set to end on November 16. Congressional leaders struggle to reach an agreement over the 2024 budget year limit. Take note that market participants may already be preparing for this event.   On the daily chart, the lower shadow carefully tested the support of the MACD line. Now, the euro has established a consolidation range between yesterday's low and the Fibonacci level at 1.0665-1.0750. Settling below 1.0665 could lead to a decline towards the price channel line around the psychological level of 1.0500, while a move above 1.0750 opens the target range of 1.0834/57. The uptrend remains intact. On the 4-hour chart, the bullish momentum remains intact. After retreating, the price is now staying above the indicator lines, and the Marlin oscillator may form a bullish reversal from the neutral zero line.  

COT reports on the British pound show that the sentiment of commercial traders has been changing quite frequently in recent months. The red and green lines, representing the net positions of commercial and non-commercial traders, often intersect and, in most cases, are not far from the zero mark. According to the latest report on the British pound, the non-commercial group closed 10,000 buy contracts and 4,200 short ones. As a result, the net position of non-commercial traders decreased by 5,800 contracts in a week. Since bulls currently don't have the advantage, we believe that the pound will not be able to sustain the upward movement for long . The fundamental backdrop still does not provide a basis for long-term purchases on the pound.   The non-commercial group currently has a total of 58,800 buy contracts and 44,700 sell contracts. Since the COT reports cannot make an accurate forecast of the market's behavior right now, and the fundamentals are practically the same for both currencies, we can only assess the technical picture and economic reports. The technical analysis suggests that we can expect a strong decline, and the economic reports have also been significantly stronger in the United States for quite some time now.   On the 1H chart, GBP/USD is making every effort to correct lower, but the uptrend remains intact. We believe that the British pound doesn't have any good reason to strengthen in the long-term. Therefore, at the very least, we expect the pair to return to the level of 1.2513. However, there are currently no sell signals, so the uptrend is still intact. On Tuesday, there are few reasons for the pair to show volatile movements. We may see a flat phase, a downtrend, or an uptrend (intraday), so we need to purely rely on technical analysis. We expect the pound to consolidate below the trendline, and in that case, we can consider selling while aiming for the Senkou Span B line. A n upward movement is theoretically possible today, but we see no reason for it, so you shouldn't consider buying at the moment. As of January 2, we highlight the following important levels: 1.2215, 1.2269, 1.2349, 1.2429-1.2445, 1.2513, 1.2605-1.2620, 1.2726, 1.2786, 1.2863, 1.2981-1.2987. The Senkou Span B line (1.2646) and the Kijun-sen (1.2753) lines can also be sources of signals. Don't forget to set a breakeven Stop Loss to breakeven if the price has moved in the intended direction by 20 pips. The Ichimoku indicator lines may move during the day, so this should be taken into account when determining trading signals. Today, the UK and the US will release their second estimates of business activity indices in the manufacturing sector for December. These are not significant reports so it is unlikely for traders to react to them. Description of the chart: Support and resistance levels are thick red lines near which the trend may end. They do not provide trading signals; The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, plotted to the 1H timeframe from the 4H one. They provide trading signals; Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals; Yellow lines are trend lines, trend channels, and any other technical patterns; Indicator 1 on the COT charts is the net position size for each category of traders; Indicator 2 on the COT charts is the net position size for the Non-commercial group.  

EUR/USD In the final trading day of 2023, the euro fell by 25 pips on below-average volume, finding support at 1.1033. Since there was no significant profit-taking, we expect the uptrend to remain intact. A break above the level of 1.1076 opens up a substantial target like 1.1185, which is the November 2021 low and the March 2022 high. We could see bullish potential at 1.1280. The Marlin oscillator has also corrected lower, visually preparing for a reversal into a new upward wave.   All the price action and oscillator movements occur within an uptrend. It's worth noting that this progress is taking place within a medium-term green-colored ascending price channel. Even if there is a break below the 1.1033 support level, we will not hastily revise the main scenario.   On the 4-hour chart, the price is supported by the balance indicator line. The Marlin oscillator is in a bearish territory but may require a trigger to return to the bullish territory. Today's reports on the final estimates of the eurozone and U.S. industrial PMIs for December may serve as a catalyst. The forecasts remain unchanged (44.2 and 48.2, respectively), but tomorrow's Manufacturing ISM for December is projected to stand at 47.1, up from 46.7 in November. We can assume that today's final estimate of the Manufacturing PMI might surprise everyone and turn out to be better than expected. Such, albeit minor, optimism could sustain risk appetite and push stock markets and counter-dollar currencies into the green zone.

Understanding the terms like "uptrend," "bull market," and their significance is paramount for seasoned traders, but they might pose challenges for newcomers in the stock market. This article delves into the meanings and importance of these concepts when making investment decisions. Unveiling the Concept of Uptrend As discussed in our previous articles, a trend signifies the direction in which the price of a specific currency pair is moving. The ability to determine a trend is crucial in Forex trading. Adhering to the widely accepted principle, "the trend is your friend," aligning investments with the trend rather than against it is fundamental. Today, we'll focus on the rising trend. Bull Market – Definition and Characteristics: First and foremost, let's clarify that terms like "bull market," "uptrend," "rising trend," or "uptrend" all refer to the same market situation. If an upward trend persists over an extended period, it's referred to as a bull market. The graphical representation of an uptrend looks like this: Clearly, in an uptrend, each successive trough is higher than the previous one, along with each successive peak. This indicates that the price is consistently rising. It's crucial to remember that occasional price drops, known as corrections, may occur, but the overall upward trend is maintained. Following the basic trading principle for long-term investing, always act in line with the trend; during an uptrend, transactions should predominantly be buying. However, when the last trough is breached or no new peak is evident, it could signal the end of the uptrend. In such situations, refraining from investments and waiting for a clearer direction is advisable. Support and Resistance Lines: While discussing the uptrend, it's essential to mention support and resistance lines, critical moments in the cycle that can indicate significant changes in the trend. The resistance line marks the point where supply is stronger than demand, signifying the beginning of a price decline. Typically, the resistance line is determined by the previous peak (based on historical data). Overcoming levels of successive resistance peaks is necessary to sustain an uptrend. Conversely, if breaking the resistance line occurs after bouncing off the support line, a change in the current trend can be anticipated. The support line is the level where demand outweighs the force of supply. This halts the price decline, resulting in a resurgence of values. Usually, the depth of the previous price drop defines the support line. In summary, understanding uptrends, such as bull markets, involves recognizing the graphical representations, following the basic trading principle, and considering critical moments like support and resistance lines. This knowledge equips traders to navigate the complexities of rising markets more adeptly.