Forecast for USD/JPY on July 19, 2024

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USD/JPY

Yesterday, the USD/JPY pair pierced the support at 155.75 with the lower shadow of the daily candle and rose above the 156.79 level, pausing at the balance indicator line. The pair gained 116 pips.

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As long as the price remains above the support level of 156.79, the yen is likely to move sideways. This is because reaching any significant target of corrective growth is not easier than reaching the trend target in the medium-term—the key corrective target is quite high, at the MACD line around the 159.60 mark. The nearest resistance is the May 29 peak at 157.72.

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A triple convergence has formed on the 4-hour chart. Since the oscillator's signal line recently entered the bullish territory, the effect of the convergence continues. If external circumstances favor the dollar in the Japanese market, the price can overcome 157.72 and move towards the MACD line around 158.48.

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Trading plan for EUR/USD on July 19. Simple tips for beginners

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Analyzing Thursday's trades:

EUR/USD on 1H chart

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EUR/USD started a miniscule phase of the bearish correction on Thursday. There was at least one important event on Thursday – the European Central Bank meeting. In addition, ECB President Christine Lagarde delivered a speech, but the market did not receive any significant information, as we had warned beforehand. The fact is, no one expected the ECB to lower rates in July. This means that there should have been no changes in the monetary policy. The same applied to Christine Lagarde's speech. If policy is unchanged, there is essentially nothing to comment on. Lagarde merely reiterated that the ECB does not have a clear plan for lowering the key rate, so none of her colleagues will make any forecasts regarding the timing of the future rate cut.

However, the market clearly understands that the current inflation figures allow the ECB to lower rates once every two meetings. Therefore, the base scenario remains a rate cut in September. Volatility was extremely low on Thursday, which is no longer surprising. The pair may exit the ascending channel, so the euro may fall somewhat.

EUR/USD on 5M chart

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Two sell signals were formed on the 5-minute timeframe. The price bounced off the 1.0940 level twice during the day, so novice traders could open short positions. However, as usual, the price failed to reach the nearest target level of 1.0896. Therefore, it is still too early to draw conclusions about the end of the upward trend.

Trading tips on Friday:

On the hourly chart, EUR/USD continues its local upward trend. Sometimes the market has a reason to buy the pair, and when it does not, it just invents its own reasons. The single currency is firmly rising almost every day. The current movement seems illogical, but from a technical perspective, everything is consistent.

On Friday, novice traders can trade from the level of 1.0888-1.0896 area. There will be no important events again today, so strong movements are not expected.

The key levels on the 5M chart are 1.0483, 1.0526, 1.0568, 1.0611, 1.0678, 1.0726-1.0733, 1.0797-1.0804, 1.0838-1.0856, 1.0888-1.0896, 1.0940, 1.0971-1.0981. Today, there are no important events or reports scheduled in either the Eurozone or the US. Therefore, we are likely to see sluggish movements and low volatility once again.

Basic trading rules:

1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.

2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.

3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.

4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, after which all open trades should be manually closed.

5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trendline or trend channel.

6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.

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 represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.

The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.

Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.

Beginners should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.

The material has been provided by InstaForex Company - www.instaforex.com #

Outlook for EUR/USD on July 18. Lower Eurozone inflation can't stop the euro's rise

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Analysis of EUR/USD 5M

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EUR/USD resumed its upward movement on Wednesday, failing to start a normal downward correction. The euro had no grounds to rise on Wednesday, but, as we have repeatedly mentioned, it is absolutely irrelevant for the market now. Yesterday, the second estimate of the EU Consumer Price Index for June was published, which was no different from the first one. Obviously, this report should not have provoked any reaction at all. And if it should have, the euro should not have risen again. Inflation in June slowed down to 2.5%. And the closer it is to 2%, the higher the probability that we will see two more rate cuts from the European Central Bank this year. Meanwhile, the Federal Reserve has not sent any signals for a rate cut, but the market is still confident that it will happen soon. It is probably selling the U.S. dollar for this reason.

From a technical perspective, everything is very simple and clear. The upward trend on the hourly timeframe has remained intact for several weeks and during all this time the price has not even tried to consolidate below the trend line. Therefore, the price is progressively moving upward. Recall that the 24-hour timeframe shows that the price is trading between 1.0650 and 1.1000 in 2024. Therefore, we believe that the closer the level of 1.1000, the higher the probability of a bearish reversal.

The pair formed a buy signal on Tuesday evening, when the price breached the level of 1.0889. We said that with the current volatility it might take a few days for the price to reach the target level. On Wednesday, the euro reached the level of 1.0935, overcame it and then the price managed to consolidate below this mark. Therefore, it was possible to leave long positions on the last signal. Traders could gain 25 pips. Volatility remains generally very low.

COT report:

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The latest COT report is dated July 9. The net position of non-commercial traders has remained bullish for a long time. The bears' attempt to gain dominance failed miserably. The net position of non-commercial traders (red line) has been declining in recent months, while that of commercial traders (blue line) has been growing. Currently, they are approximately equal, indicating the bears' new attempt to seize the initiative.

We don't see any fundamental factors that can support the euro's strength, while technical analysis also suggests that the price is in the consolidation zone – in a triangle. Now the pair's movement will depend on which border the price leaves.

Currently, the red and blue lines are approaching each other, which indicates a build-up in short positions on the euro. During the last reporting week, the number of long positions for the non-commercial group decreased by 1,500, while the number of short positions decreased by 11,600. As a result, the net position increased by 13,100. According to the COT reports, the euro still has significant potential for a decline.

Analysis of EUR/USD 1H

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On the 1-hour chart, EUR/USD continues to form a new uptrend. We currently have an ascending trend line, above which the upward trend remains intact. All the economic reports from the past two weeks had a devastating impact on the dollar, so there is no sign of a decline. Meanwhile, the global downtrend persists on the 24-hour timeframe, which means that the pair could still fall back to the 1.06 level.

On July 18, we highlight the following levels for trading: 1.0530, 1.0581, 1.0658-1.0669, 1.0757, 1.0797, 1.0843, 1.0889, 1.0935, 1.1006, 1.1092, as well as the Senkou Span B (1.0805) and Kijun-sen (1.0906) lines. The Ichimoku indicator lines can move during the day, so this should be taken into account when identifying trading signals. Don't forget to set a Stop Loss to breakeven if the price has moved in the intended direction by 15 pips. This will protect you against potential losses if the signal turns out to be false.

On Thursday, the results of the ECB meeting will be announced, but there is no intrigue here. Rates are expected to remain unchanged. ECB President Christine Lagarde's speech carries more significance as she could hint at what traders can expect at the next meeting in September. The US docket only features a standard report on claims for unemployment benefits.

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;

The material has been provided by InstaForex Company - www.instaforex.com #

Technical Analysis of Intraday Price Movement of AUD/JPY Cross Currency Pairs, Tuesday July 17, 2024.

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Even though on the 4-hour chart the AUD/JPY cross currency pair appears to be under pressure from Sellers, this is confirmed by the position of its price movement which is below the EMA 20 & EMA 50, but with the appearance of a Failing Wedge pattern and price deviations that form a Lower Low while the Awesome indicator The Oscillator forms a Higher Low, so in the near future AUD/JPY has the potential to be corrected stronger, where the level of 107.03 will be tested. If it is successfully broken, the next level to be aimed at is 107.81 and if the momentum and volatility are supportive then the level of 109.32 will be the next target to be aimed at, however All of these strengthening correction scenarios will become invalid and will automatically cancel if AUD/JPY continues to weaken down until it broken below the 105.88 level.

(Disclaimer)

The material has been provided by InstaForex Company - www.instaforex.com #

Hot forecast for EUR/USD on July 17, 2024

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The dollar was steady despite relatively good data on retail sales. In fact, their growth rate in the United States slowed from 2.6% to 2.3%. The thing is that the growth rate was expected to slow down from 2.3% to 2.1%. So in theory, the dollar should have strengthened somewhat. However, the general sentiment on the dollar is quite negative, as investors expect the Federal Reserve to start lowering its interest rate soon. Thus, the retail sales data simply supported the dollar, preventing it from falling further.

Apparently, today we expect a repeat of yesterday's scenario. Sentiments about the Fed's monetary policy still weighs on the dollar. It will be supported by the industrial production data, whose growth rate in the United States should accelerate from 0.1% to 0.4%. But the eurozone inflation data as a whole can not be considered, as the final data are published, designed only to confirm the preliminary estimates, the market has already taken into account.

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EUR/USD is moving around the resistance level of 1.0900, which indicates that the bullish sentiment is still in force.

On the 4-hour chart, the RSI technical indicator is hovering in the upper area of 50/70, which suggests that the euro may rise further.

On the same chart, the Alligator's MAs are headed upwards, which reflects the quote's movement.

Outlook

Based on the absence of a full-scale correction, we can conclude that there's a high volume of long positions on the euro. Rising above the level of 1.0900 may lead to a new round of growth, where buyers will face the psychological level of 1.1000. As an alternative scenario, traders are considering movement along the level of 1.0900.

The complex indicator analysis unveiled that in the short-term and intraday periods, indicators are providing an upward signal.

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Technical Analysis of Intraday Price Movement of Gold Commodity Asset, Tuesday July 16, 2024.

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If we look at the 4 hour chart of the Gold commodity asset, you can see that the price is moving harmoniously within the Bullish Pitchfork channel which is going upwards, which shows that Gold is in a strengthening condition, coupled with the position of the EMA 20 which is above the EMA 50 and the movement of Gold prices is also is above it, then it is confirmed that the strengthening that is taking place in this Gold commodity asset so that in the near future Gold will have the potential to go to the level of 2439.27 as the main target and 2450.06 as the second target, but with the appearance of deviations between the Gold price movement which forms Higher - High while the Stochastic indicator On the contrary, the Oscillator forms a Higher Low, giving an indication that in the near future Gold has the potential to be corrected to weaken to the level of the bullish Fair Value Gap in the range of 2400.81, but as long as the weakening correction does not exceed below the level of 2377.71, the strengthening scenario that will occur in the Gold commodity asset is still keep running and going safely.

(Disclaimer)

The material has been provided by InstaForex Company - www.instaforex.com #

Forecast for EUR/USD on July 16, 2024

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EUR/USD

Yesterday, the euro failed to consolidate above the target level of 1.0905, closing the day down by 12 pips. The divergence with the Marlin oscillator increased a bit. At least, we can expect a correction, and in the main scenario, we are waiting for a trend reversal into a medium-term decline, below 1.0595.

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The first target is the support level of 1.0788, which the MACD line is approaching. A complex divergence has formed on the 4-hour chart. It seems to help the price overcome the support of the MACD line at 1.0866.

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Today, the U.S. retail sales report for June will be released, which is expected to contract by 0.2%. But last week the CPI dropped 0.1% from May, so if the retail sales increases by even 0.1%, it will mean that there is no recession when accounting for inflation, and this will be a positive signal for the dollar.

The material has been provided by InstaForex Company - www.instaforex.com #

Forecast for AUD/USD on July 16, 2024

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AUD/USD

We believe that a divergence has formed on the day chart, as the price pushes through the support level at 0.6751. The new target is 0.6690. The MACD line has already reached the level of 0.6627, and the second key target could be found somewhere around this area. Once the price overcomes this mark, the aussie can move towards 0.6444 (February low).

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On the 4-hour chart, the price has already overcome the support of the MACD line and is now pushing through the support level at 0.6751. The Marlin oscillator was involved in pushing through the support on Monday, so now we see qualitative changes.

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Yesterday, oil and copper prices started to get cheaper. China's third plenum meeting on reforms in tech, fiscal and tax systems, has warranted investor interest. Against this background, iron ore and other commodities are declining. So, we are waiting for the price to reach 0.6690.

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Euro unfazed by gunfire

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The assassination attempt on Donald Trump unsettled the EUR/USD bulls, but it didn't deter them from their plans to push north. The currency pair is rising due to expectations of the imminent start of the Federal Reserve's rate cut cycle amid the slowdown of the American economy. If retail sales disappoint following the labor market and inflation data, the euro could jump above $1.1. Moreover, it appears that the European Central Bank does not plan to give a signal about its next rate cut.

Bloomberg experts believe that the ECB will not change the deposit rate from its current level of 3.75% in July, but will lower it in September and December. In a year, borrowing costs are expected to fall to 2.5%. The futures market is more cautious, expecting only one rate cut with a small chance of a second step by the ECB. Opinions differ, as do the positions of the Governing Council members.

ECB Deposit Rate Forecasts

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Belgian Pierre Wunsch, Irish Gabriel Makhlouf, and Slovak Peter Kazimir said that the ECB would only lower the rate once in 2024, with a second cut necessary only if inflation quickly moves toward the 2% target. Greek Yannis Stournaras would like to see two steps, while Portuguese Mario Centeno wants several. Other ECB representatives were more vague in their comments. Klaas Knot from the Netherlands agreed with the market pricing of 1-2 rate cuts, while German Joachim Nagel said that the Bank would not act on autopilot after starting the cycle in June.

While the centrists of the Governing Council point to a strong labor market, wage growth at 5%, and services inflation at around 4% to justify a cautious approach to monetary expansion, the "doves" cite the slowdown in economic growth in the eurozone. According to Bloomberg experts, one risk factor for the currency bloc is the potential victory of Donald Trump in the US presidential elections in November. His pro-inflationary policies could accelerate prices not only in North America but also in Europe.

Risks to the European Economy

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The assassination attempt on the Republican caused EUR/USD to pause. However, the bears did not celebrate. The temptation to sell the US dollar is too great, given the increased probability of a federal funds rate cut in September from 73% to 95%. Most likely, the Fed will prepare the markets for such a step, and the dovish rhetoric of FOMC officials is a strong argument in favor of buying the main currency pair.

Technically, the EUR/USD continues to rise on the daily chart. As long as the euro quotes are above the trend line and the pivot level of $1.0865, the strategy of forming long positions should be adhered to. The realization of the 1-2-3 reversal pattern could take the main currency pair to 1.0945, 1.0970, and 1.1015.

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Trading plan for EUR/USD on July 15. Simple tips for beginners

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Analyzing Friday's trades:

EUR/USD on 1H chart

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EUR/USD traded positively on Friday. The euro started to surge in the morning and it had no relation to the economic reports published later. The U.S. released the first notable reports in the second half of the day. As we can see, the market is still willing to buy the single currency for no reason. To be more precise, the market is ready to sell the dollar at any time.

To be fair, it is vital to mention that in the past two weeks, the macroeconomic background has not supported the dollar at all. However, this does not change the fact that the market itself is eager to sell the dollar and continues to ignore other fundamental factors that should also influence the pair's movement. From a technical standpoint, there are no questions about the pair's growth. An ascending channel has formed, within which the pair is holding. Therefore, we shouldn't expect the euro to fall until the price consolidates below this channel.

EUR/USD on 5M chart

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On the 5-minute timeframe, there was only one buy signal, which was hardly precise. The price consolidated above the 1.0888-1.0896 area, but the point was that the market was willing to buy the pair even without this signal. Nevertheless, novice traders could have opened long positions, especially since the U.S. Producer Price Index did not support the dollar (although it should have), and the Consumer Sentiment Index happily provoked a new decline.

Trading tips on Monday:

On the hourly chart, EUR/USD is unable to break through the 1.0678 level, and the recent economic reports had a devastating effect on the dollar. Therefore, it was logical for the euro to rise. Despite this movement, the overall (downward) trend has not changed, but the euro has been frequently trading with strong bullish corrections over the past 7-8 months. Formally, the euro is in a downward trend, as seen on the higher time frames, but the process of the pair's decline in the medium-term has been extremely slow.

On Monday, novice traders can stay in long positions based on the signal of overcoming the 1.0888-1.0896 area. Overall, until the price consolidates below the channel, it would be wise to consider buying on pullbacks.

The key levels on the 5M chart are 1.0483, 1.0526, 1.0568, 1.0611, 1.0678, 1.0726-1.0733, 1.0797-1.0804, 1.0838-1.0856, 1.0888-1.0896, 1.0940, 1.0971-1.0981. On Monday, the Eurozone industrial production report will be published, and Federal Reserve Chair Jerome Powell will speak.

Basic trading rules:

1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.

2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.

3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.

4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, after which all open trades should be manually closed.

5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trendline or trend channel.

6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.

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 represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.

The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.

Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.

Beginners should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.

The material has been provided by InstaForex Company - www.instaforex.com #