Euro moves slowly. What's next?

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The city sleeps. The mob awakens. While the markets slumber, awaiting the July U.S. inflation data, EUR/USD bulls decided to launch an attack, buoyed by updated Bloomberg forecasts on deposit rates. Experts believe the European Central Bank will cut rates quarterly, with borrowing costs expected to reach 2.25% by December 2025. The futures market anticipates a more aggressive adjustment to the federal funds rate, and the differing pace of monetary policy creates a tailwind for the euro.

ECB Deposit Rate Forecasts

The ECB's slow pace underpins Bank of America's bullish outlook for EUR/USD. The company notes that core inflation in the Eurozone remains high at 2.9%, with service prices stuck above 4%, allowing ECB President Christine Lagarde and her colleagues to be patient with easing monetary policy. Against the backdrop of a slowing U.S. economy, this situation pushes the euro higher against the American dollar.

ING expects to see EUR/USD at 1.10 in the near future as the global risk appetite gradually recovers, supporting the euro. Meanwhile, the narrowing yield differential between U.S. and German bonds indicates that the main currency pair is still undervalued.

EUR/USD bulls are not at all deterred by the reduced probability of a 50 basis point rate cut by the Federal Reserve in September to less than 50% or Bloomberg experts' pessimism regarding the German economy. They have downwardly revised their GDP growth forecasts for Germany for 2024 and 2025 to 0.1% and 1.1%, respectively.

Dynamics of Germany's GDP and Growth Forecasts

News of the German economy's struggle has been coming for a long time. The slowdown in the Chinese economy negatively impacts it—Germany's major trading partner—and the growing risks of Donald Trump's return to the White House with his protectionist policies and the potential revival of trade wars. For Brussels and Berlin, this would be a real shock.

In my opinion, the release of the U.S. inflation data for July will be a defining moment for EUR/USD. Until then, any attempts by the pair to break out of the 1.088–1.094 consolidation range may seem like child's play. Even if support or resistance levels are breached, it is unlikely that the main currency pair will establish a trend without these crucial CPI figures. The Fed's policy is heavily dependent on this data, and investors have no choice but to be on high alert for these figures.

Technically, on the daily chart, EUR/USD consolidates within the Adam and Eve pattern. The pair is trading close to its fair value. A successful breach of resistance at 1.094 or support at 1.088 is needed to determine the direction of its further movement. In the first case, it makes sense to consider a buying strategy; in the second, it makes sense to sell the euro against the U.S. dollar.

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

Technical Analysis of Daily Price Movement of USD/IDR Exotic Currency Pairs , Monday August 12, 2024.

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Technical Analysis of Daily Price Movement of USD/IDR Exotic Currency Pairs , Monday August 12, 2024.


It seems that the USD currency




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It seems that the USD currency is still weakening against the Garuda currency where in the daily chart the price movement is seen moving in a downward channel and the price movement is below the EMA 20 & EMA 50 so that in the next few days as long as there is no significant strengthening correction that breaks above the level of 16095.00 then USD / IDR has the potential to continue its weakening to the level of 15868.99 and




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Forecast for EUR/USD on August 12, 2024

On the weekly chart, the price consolidated above the MACD indicator line. The probability of a retest of the target level of 1.1010 or reaching 1.1043 has slightly increased. At the same time, we observe the formation of a very extended wedge on the Marlin oscillator.

Long wedges rarely precede strong, sustained movements; however, the price is clearly on the brink of significant changes that could take it out of the prolonged range of 1.0636-1.1010. If the price breaks below this range, the target levels are 1.0369 and 1.0173.

On the daily chart, the price struggles with the support at 1.0905, aided by divergence with the Marlin oscillator. Therefore, a weekly close in the form of a Doji could also be a false signal. A daily close below the 1.0905 level would indicate the development of the main bearish scenario. After all, the opening of a new weekly candle occurred below the MACD line.

On the 4-hour chart, the price is currently moving above the balance indicator line (red moving average). If the price consolidation above 1.0905 continues, the balance line will be above the price. The signal line of the Marlin oscillator is moving sideways in negative (descending) territory, which increases the likelihood of the price dropping below support in this time frame. Moving below the MACD line (1.0877) would confirm the price's intention to reach the 1.0788 target.

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Review of GBP/USD on August 12; Two inflationary events could support the pound

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The GBP/USD pair also showed no desire to move on Friday. The price corrected to the moving average, where the trading week ended. It is worth noting that the British pound has been falling for three and a half weeks straight, which is rare for it. Moreover, it fell almost continuously against the dollar last week while many other currencies rose, which is unusual. However, considering the overall fundamental backdrop in 2024 and the general technical picture, nothing is surprising




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Review of EUR/USD on August 12; Will U.S. inflation bring the dollar closer to a new decline?

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Review of EUR/USD on August 12; Will U.S. inflation bring the dollar closer to a new decline?


The EUR/USD pair showed no interesting




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The EUR/USD pair showed no interesting movements or desire to trade on Friday. The daily volatility was 23 pips, which says a lot. In general, the pair stayed in one place all day. However, it remained above the moving average line in the 4-hour time frame, so the upward trend is intact. Recall that the latest dollar slump followed weak unemployment and Non-Farm Payroll reports in the U.S. At the same time, the quotes have stayed on the horizontal channel




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Trading plan for GBP/USD on August 12. Simple tips for beginners

Analyzing Friday's trades:



GBP/USD on 1H chart



The GBP/USD pair also showed no desire for active movement on Thursday. There were no macroeconomic or fundamental backgrounds that day, and after the rise on Thursday, the pair was near the upper line of the descending channel. Thus, the downward trend is still intact, and a rebound from the top of the channel could trigger a new round of decline for the British currency.

It's worth remembering that globally, the pound sterling should continue to decline as it has risen too strongly over the last 9-10 months, given the fundamental background. In most cases, it had no real reason to grow, but the market has been preemptively working on the Federal Reserve's rate cuts from the beginning of the year, which have yet to start. The market constantly invents new reasons to sell the US dollar, which have nothing to do with reality. Therefore, the growth of the British currency may resume, but it would require at least a consolidation above the channel.

GBP/USD on 5M chart



In the 5-minute time frame on Friday, three trading signals were formed near 1.2748. All three were false signals, as the pair showed a volatility of 50 pips and remained flat all day. After each signal, the price failed to move in the intended direction even by 20 pips. Once again, novice traders could see that signals will not bring profit without movements.

Trading tips on Monday:



GBP/USD has a good chance of sustaining the downtrend, but it is currently going through a correction in the hourly time frame. The British pound is still overbought, while the dollar is undervalued. The Bank of England has started lowering its borrowing costs, which may continue to put pressure on the pound. The correction might be more substantial than it is now, which would inevitably lead to the price consolidating above the descending channel.

On Monday, beginners can trade from 1.2748. However, the fundamentals and macroeconomics will be absent on Monday, so there is a high probability of sustaining the flat phase.

The key levels to consider on the 5M timeframe are 1.2547, 1.2605-1.2633, 1.2684-1.2693, 1.2748, 1.2791-1.2798, 1.2848-1.2860, 1.2913, 1.2980-1.2993, 1.3043, 1.3102-1.3107, 1.3145. On Monday, no significant events are planned in the UK and the US, so volatility may remain low unless something important happens over the weekend. Recently, such significant events have been frequent.

Basic rules of a trading system:



1) The strength of a signal is determined by the time it took for the signal to form (bounce or level breakthrough). The shorter the time required, the stronger the signal.

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

3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, it's better to stop trading at the first signs of a flat market.

4) Trades should be opened between the start of the European session and mid-way through the U.S. session. All trades must be closed manually after this period.

5) In the hourly time frame, 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 are too close to each other (from 5 to 20 pips), they should be considered as a support or resistance zone.

7) After moving 15 pips in the intended direction, the Stop Loss should be set to break-even.

What's on the charts:



Support and Resistance price levels: targets when opening long or short positions. You can place Take Profit levels near them.

Red lines represent channels or trend lines that depict the current trend and indicate the preferred 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 source of signals.

Important 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 effective money management, is key to long-term success in trading.Pentru mai multe detalii, va invitam sa vizitati stirea originala.

Review of GBP/USD on August 12; Two inflationary events could support the pound

#

The GBP/USD pair also showed no desire to move on Friday. The price corrected to the moving average, where the trading week ended. It is worth noting that the British pound has been falling for three and a half weeks straight, which is rare for it. Moreover, it fell almost continuously against the dollar last week while many other currencies rose, which is unusual. However, considering the overall fundamental backdrop in 2024 and the general technical picture, nothing is surprising about the British currency's decline. While the market has been waiting (for seven months) for the Federal Reserve to "lower the key rate at the next meeting," the Bank of England has already begun easing its monetary policy, immediately following the European Central Bank. Thus, the U.S. dollar currently has an advantage over the euro and the pound. Unfortunately, the market only focuses on weak U.S. data and the upcoming Fed rate cut. Everything else is of little interest.

This week, there will be several important events in the UK. Specifically, reports on unemployment, wages, jobless claims, inflation, second-quarter GDP, industrial production, and retail sales can be highlighted. Of course, the key report will be on inflation, which, along with the U.S. inflation report, could determine the pair's direction for the next few weeks. If UK inflation increases to 2.3% or higher (as experts predict), the BoE might take a pause at the next meeting. If U.S. inflation falls to 2.9%, we believe this will not be enough for the Fed to begin rate cuts in September. However, the market will start to believe even more in a September easing. Combined, these two reports could provoke a sharp decline in the U.S. dollar.

We will highlight the UK GDP among other reports, though with some reservations. All other reports may trigger intraday market reactions, which are unlikely to affect the overall market sentiment. Therefore, everything will depend on the two inflation reports.

The technical picture currently allows for both a correction and a continuation of the downward movement, so in the early days of the new week, it's helpful to focus on the price's position relative to the moving average. A firm hold above this line might indicate that the pound is ready to correct after three weeks of decline. A drop below the moving average would signal the market's readiness to continue selling. However, it should be noted that the British and U.S. inflation data could dramatically change market sentiment.

The average volatility of GBP/USD over the last five trading days is 84 pips. This is considered an average value for the pair. Therefore, on Monday, August 12, we expect movement within the range limited by 1.2670 and 1.2838. The higher linear regression channel is directed upwards, indicating that the uptrend remains intact. The CCI indicator has formed an oversold condition and a bullish divergence. A correction has already begun and may continue this week.

Nearest Support Levels:

• S1 – 1.2726
• S2 – 1.2695
• S3 – 1.2665

Nearest Resistance Levels:

• R1 – 1.2756
• R2 – 1.2787
• R3 – 1.2817

Trading Recommendations:

The GBP/USD pair remains below the moving average line and has a good chance of sustaining its bearish momentum. Short positions remain valid with initial targets at 1.2665 and 1.2634. We are not considering long positions at this time, as we believe that the market has already processed all the bullish factors for the British currency (which are not much) multiple times. The pound may continue to correct this week, as warned by the CCI indicator, but whether or not the correction will occur is up to the traders to decide. The pound will have a good chance to show growth after the U.S. and the UK inflation reports.

Explanations for Illustrations:

Linear Regression Channels: help determine the current trend. If both are directed in the same direction, it means the trend is strong.

Moving Average Line (settings 20,0, smoothed): determines the short-term trend and the direction in which trading should be conducted.

Murray Levels: target levels for movements and corrections.

Volatility Levels (red lines): the probable price channel in which the pair will spend the next 24 hours, based on current volatility indicators.

CCI Indicator: Entering the oversold area (below 250) or the overbought area (above +250) means a trend reversal is approaching.

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

Review of EUR/USD on August 12; Will U.S. inflation bring the dollar closer to a new decline?

#

The EUR/USD pair showed no interesting movements or desire to trade on Friday. The daily volatility was 23 pips, which says a lot. In general, the pair stayed in one place all day. However, it remained above the moving average line in the 4-hour time frame, so the upward trend is intact. Recall that the latest dollar slump followed weak unemployment and Non-Farm Payroll reports in the U.S. At the same time, the quotes have stayed on the horizontal channel of 1.0600-1.1000, where they have been for seven months. Thus, the main question for the new week will be whether the dollar can sustain its expected growth within the horizontal channel with a target of 1.0600.

To answer this question, we should first consider the macroeconomic background. There will be several reports in the European Union that might attract traders' attention. If we exclude all secondary data (such as ZEW indices), only the GDP for the second quarter and industrial production remain. However, even these reports cannot be called "significant." The GDP report will be released in its second estimate, which is the least important of the three. Therefore, no significant market reaction is expected. In addition, compared to the first estimate, the forecast for the indicator has not changed. The European economy may grow by 0.3%, which is very modest. However, the market is not concerned with the pace of growth in the European economy right now. Only with the American economy, only with the American economy!

The American economy is growing, and it appears it is not about to enter a recession. At least the same second quarter shows a growth of 2.8%. The market, which has been waiting for the Federal Reserve to lower the key rate for seven months, subconsciously understands that high economic growth gives the Fed additional time. In other words, there is no need to rush with monetary policy easing if the economy is doing well. The economy is doing well if you disregard the non-farm payrolls and unemployment rate. But ultimately, which data is more important? Labor market data or overall economic data?

But help for the dollar bears might come from the old, reliable, much-loved report on U.S. inflation. We have highlighted it separately because, in recent months, even a minimal slowdown in the indicator has triggered a collapse in the U.S. currency. This time, official forecasts predict a minor slowdown in core and underlying inflation by 0.1% in July. Imagine what might happen if inflation slows by 0.2% to 2.8%! For the first time in several years, it could drop below 3%. The probability of a monetary policy easing in September would immediately soar to 100%, and with it, the U.S. dollar would plummet (only to the bottom). Therefore, the inflation report is the most dangerous factor for the greenback, not the European GDP or industrial production data. Inflation could once again throw the market off course. However, in any case, it is unlikely that we should expect a new upward or downward trend until the pair exits the horizontal channel.

The average volatility of EUR/USD over the past five trading days as of August 12 is 59 pips, which is considered average. We expect the pair to move between the levels of 1.0857 and 1.0975 on Monday. The higher linear regression channel is directed upwards, but the global downtrend remains intact. The CCI indicator entered the overbought area for the second time, again warning of a potential shift to a downtrend.

Nearest Support Levels:

• S1 – 1.0864
• S2 – 1.0803
• S3 – 1.0742

Nearest Resistance Levels:

• R1 – 1.0925
• R2 – 1.0986
• R3 – 1.1047

Trading Recommendations:

The EUR/USD pair maintains a global downward trend and in the 4-hour time frame, it started a bearish correction, which could mark the start of a new wave of the downtrend. In previous reviews, we mentioned that we are only expecting declines from the euro. We do not believe the euro can start a new global trend amid the European Central Bank's monetary policy easing, so the pair will likely fluctuate between 1.0600 and 1.1000 for some time. For now, it appears as though the price has bounced off the upper boundary of the horizontal channel and is heading towards the lower boundary.

Explanations for Illustrations:

Linear Regression Channels: help determine the current trend. If both are directed in the same direction, it means the trend is strong.

Moving Average Line (settings 20,0, smoothed): determines the short-term trend and the direction in which trading should be conducted.

Murray Levels: target levels for movements and corrections.

Volatility Levels (red lines): the probable price channel in which the pair will spend the next 24 hours, based on current volatility indicators.

CCI Indicator: Entering the oversold area (below 250) or the overbought area (above +250) means a trend reversal is approaching.

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

Trading plan for GBP/USD on August 12. Simple tips for beginners

#

Analyzing Friday's trades:

GBP/USD on 1H chart

The GBP/USD pair also showed no desire for active movement on Thursday. There were no macroeconomic or fundamental backgrounds that day, and after the rise on Thursday, the pair was near the upper line of the descending channel. Thus, the downward trend is still intact, and a rebound from the top of the channel could trigger a new round of decline for the British currency.

It's worth remembering that globally, the pound sterling should continue to decline as it has risen too strongly over the last 9-10 months, given the fundamental background. In most cases, it had no real reason to grow, but the market has been preemptively working on the Federal Reserve's rate cuts from the beginning of the year, which have yet to start. The market constantly invents new reasons to sell the US dollar, which have nothing to do with reality. Therefore, the growth of the British currency may resume, but it would require at least a consolidation above the channel.

GBP/USD on 5M chart

In the 5-minute time frame on Friday, three trading signals were formed near 1.2748. All three were false signals, as the pair showed a volatility of 50 pips and remained flat all day. After each signal, the price failed to move in the intended direction even by 20 pips. Once again, novice traders could see that signals will not bring profit without movements.

Trading tips on Monday:

GBP/USD has a good chance of sustaining the downtrend, but it is currently going through a correction in the hourly time frame. The British pound is still overbought, while the dollar is undervalued. The Bank of England has started lowering its borrowing costs, which may continue to put pressure on the pound. The correction might be more substantial than it is now, which would inevitably lead to the price consolidating above the descending channel.

On Monday, beginners can trade from 1.2748. However, the fundamentals and macroeconomics will be absent on Monday, so there is a high probability of sustaining the flat phase.

The key levels to consider on the 5M timeframe are 1.2547, 1.2605-1.2633, 1.2684-1.2693, 1.2748, 1.2791-1.2798, 1.2848-1.2860, 1.2913, 1.2980-1.2993, 1.3043, 1.3102-1.3107, 1.3145. On Monday, no significant events are planned in the UK and the US, so volatility may remain low unless something important happens over the weekend. Recently, such significant events have been frequent.

Basic rules of a trading system:

1) The strength of a signal is determined by the time it took for the signal to form (bounce or level breakthrough). The shorter the time required, the stronger the signal.

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

3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, it's better to stop trading at the first signs of a flat market.

4) Trades should be opened between the start of the European session and mid-way through the U.S. session. All trades must be closed manually after this period.

5) In the hourly time frame, 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 are too close to each other (from 5 to 20 pips), they should be considered as a support or resistance zone.

7) After moving 15 pips in the intended direction, the Stop Loss should be set to break-even.

What's on the charts:

Support and Resistance price levels: targets when opening long or short positions. You can place Take Profit levels near them.

Red lines represent channels or trend lines that depict the current trend and indicate the preferred 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 source of signals.

Important 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 effective money management, is key to long-term success in trading.

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

Trading plan for EUR/USD on August 12. Simple tips for beginners

#

Analyzing Friday's trades:

EUR/USD on 1H chart

EUR/USD showed no interest in significant movement on Friday. As we feared, the market quickly calmed down after the spike in volatility at the end of last week and the beginning of this week, and volatility indicators returned to low values. Therefore, on Friday, we again observed movements of just 23 pips. There is nothing special to analyze from Friday. In the morning, the second estimate of July inflation was published in Germany, which was identical to the first and had no impact on the pair's movement. The surge in the euro was based on the market's inflated expectations for a Federal Reserve rate cut, which may not happen in reality.

The pair remains within the horizontal channel on the daily time frame – 1.0600-1.1000. Therefore, if the price does not leave this range, we believe a drop toward 1.0600 is much more likely.

EUR/USD on 5M chart

In the 5-minute time frame on Friday, no trading signals were formed, and the pair moved strictly sideways with low volatility. Thus, there were no opportunities for beginners to enter the market.

Trading tips on Monday:

EUR/USD broke the short-term downward trend in the hourly time frame but couldn't rise above the 1.10 level. We believe the euro has fully factored in all the bullish factors, so we do not expect the upward movement to continue. The pair remains flat in the 1.06-1.10 range in the 24-hour time frame. There are currently no reasons to leave this range. We still expect the euro to fall, as the European Central Bank has begun easing monetary policy while the Federal Reserve has not.

On Monday, novice traders can remain in long positions after the price rebounds from the 1.0888-1.0896 area. Since volatility has dropped to low levels again, executing any signal may take several days.

The key levels to consider on the 5M time frame are 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, 1.1011, 1.1043, 1.1091. No significant events are scheduled for Monday in the Eurozone or the US. Therefore, movements are likely to be very weak again.

Basic rules of the trading system:

1) The strength of a signal is determined by the time it took for the signal to form (bounce or level breakthrough). The shorter the time required, the stronger the signal.

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

3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, it's better to stop trading at the first signs of a flat market.

4) Trades should be opened between the start of the European session and mid-way through the U.S. session. All trades must be closed manually after this period.

5) In the hourly time frame, 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 are too close to each other (from 5 to 20 pips), they should be considered as a support or resistance zone.

7) After moving 15 pips in the intended direction, the Stop Loss should be set to break-even.

What's on the charts:

Support and Resistance price levels: targets when opening long or short positions. You can place Take Profit levels near them.

Red lines represent channels or trend lines that depict the current trend and indicate the preferred 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 source of signals.

Important 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 effective money management, is key to long-term success in trading.

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