Currency Pairs Market Analysis

[Solid ECN]

GBPUSD - consolidating at record lows

The British pound shows near-zero dynamics, testing 1.1820 for a breakdown, returning to active decline after an unsuccessful attempt at corrective growth, which was supported by optimistic macroeconomic statistics from the UK. On Wednesday, data on the dynamics of GDP and industrial production for May were released. The British economy strengthened by 0.5% after declining by 0.3% a month earlier, although analysts had expected zero dynamics. Industrial Production for the same period increased by 0.9% after falling by 0.1% in the previous month, with forecasts suggesting zero growth, and in annual terms, the figure corrected from 1.6% to 1.4%, while analysts assumed a sharp decline of 0.5%.

Resistance levels: 1.1854, 1.1933, 1.2, 1.2074 | Support levels: 1.18, 1.1758, 1.17, 1.16​

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[Solid ECN]

NZDUSD technical analysis

H4
On the four-hour chart of the asset, at the level of 0.6107, there is a formation of a Hammer candlestick pattern, which signals a possible change in the trend to an upward one, as well as a "bullish" Engulfing pattern at the level of 0.6174, which means a reversal of quotes at the bottom. In the current situation, the priority scenario is an increase from the level of 0.6246 to the zone of 0.6559−0.6869. An alternative scenario is possible if the buyers fail to hold the key support level of 0.6107, then the price may drop even lower to the range of 0.5929–0.5755.

D1
On the daily chart, a Falling Wedge price pattern is observed, and at the moment, an upward exit from the "bearish" trend channel is being implemented. A positive signal for the asset is the appearance of a Hammer reversal pattern at the support level of 0.6107, which can act as a catalyst for the uptrend from the level of 0.6246 up to the level of 0.6869. If the price consolidates below the level of 0.6107, the trading instrument may show a decrease to the zone of 0.5929−0.5755.

Support levels: 0.6107, 0.5929, 0.5755 | Resistance levels: 0.6246, 0.6559, 0.6869​

 

[Solid ECN]

Silver - H4
On the four-hour chart of the asset at the level of 18.22, there is a formation of a Long-Legged Doji candlestick analysis pattern, signaling uncertainty in the market or a possible reversal, which is also confirmed by the formation of the Morning Star pattern, after which the trading instrument showed a price recovery to the level of 19.07. At the moment, the quotes are moving in the sideways range of 18.62–19.07, where the Hammer and Bullish Belt Hold patterns have already appeared. Their combination signals that the asset has probably reached a low and is reversing. At the moment, the uptrend to the resistance level of 19.50 is seen as a priority, consolidation above which will allow the "bulls" to head to the zone of 20.95–24.19. An alternative scenario may be realized if the price breaks the key support level at 18.22, then the decline may intensify up to the level of 14.77.

D1
On the daily chart, there is the formation of a Falling Wedge price pattern, which may end at the support level of 18.22, and a Hammer, the appearance of which indicates that the price has reached the bottom. In the current situation, the scenario with an upward movement from the level of 18.22 is seen as a priority. Overcoming the upper border of the Falling Wedge and consolidation of the quotes above 19.50 will mean a final upward reversal and will allow the "bulls" to restore their positions in the range of 20.95–24.19.

Support levels: 18.22, 16.74, 14.77 | Resistance levels: 19.50, 20.95, 24.19

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[Solid ECN]

USDCAD - Technical analysis

H4
On the four-hour chart of the asset, at the level of 1.2971, there is a formation of the Three Black Crows candlestick analysis pattern, which signals the continuation of the negative dynamics of the quotations of the trading instrument, and at the level of 1.2921, the Tweezer Top pattern has been fixed, indicating another local resistance for buyers. In the current situation, a scenario with a downward movement to the support level of 1.2814 is more likely, overcoming which will allow the "bears" to continue the decline to the area of 1.2626−1.2458. An alternative scenario is possible if buyers manage to hold positions at 1.2814 and reverse the situation in their favor, and then the asset will be able to recover in the range of 1.2971–1.3243.

D1
On the daily chart, there is a Three Mountain Tops candlestick analysis pattern with the appearance of formed Tops, which, in turn, emphasizes the overbought asset and the fact that above these levels the "bulls" meet strong resistance. The sellers' activity confirms the appearance of the Hanging Man reversal pattern at the level of 1.2971. A further decline in quotations to the area of 1.2814 is expected, after which the "bears" will be able to continue moving upwards to the level of 1.2458.

Support levels: 1.2814, 1.2626, 1.2458 | Resistance levels: 1.2971, 1.3177, 1.3443

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GBPUSD - UK inflation reaches new highs

According to the June report, consumer prices rose by 0.8% compared to the previous month, and the annual rate rose to 9.4%, which was an absolute record among the world's leading economies. In turn, the Producer Price Index in just a month increased by 1.8%, and the annual value was 24.0% compared to 22.4%, shown in May. It is already becoming clear that any measures taken by the Bank of England are not able to contain the negative dynamics and, most likely, by the end of the year inflation will indeed exceed the 10.0% barrier, as some experts have previously anticipated. Investors were also disappointed with the report on the dynamics of changes in DCLG House Price Index, where now the annual value is 12.8%, which was not the case in the entire history of observations.

GBPUSD is trading within the global downtrend channel, reversing towards growth. Technical indicators hold a sell signal, but do not exclude an upward correction: the range of the Alligator indicator EMAs fluctuations started to narrow down and the histogram of the AO oscillator forms ascending bars.

Support levels: 1.1815, 1.154 | Resistance levels: 1.2150, 1.2627
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[Neology]

I think you must buy US dollars for trading and you can sell POUND. Overall the market is very choppy nowadays because of volatility.

 

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USDCHF - trading instrument is preparing to continue to decline​

However, there are no prerequisites for the strengthening of the franc at the moment either. Instead, the economic situation in Switzerland is rapidly deteriorating, and in the near future the country may face an acute energy crisis. At least, this is what Michael Frank, director of the VSE association of Swiss electricity companies, said. According to him, power outages were caused by a reduction in gas supplies from Russia and the shutdown of nuclear power plants in France for maintenance. The only way to stabilize the situation, Frank sees a phased reduction in resource consumption, which, in particular, includes limiting the illuminating of shop windows and streets, and if this is not enough, then turning off individual regions for four hours in turn. The Swiss authorities predict an increase in the negative dynamics of electricity prices. According to the head of the government’s advisory commission for electricity, Elcom, Urs Meister, ordinary citizens' electricity bills could grow by an average of 20% next year. This conclusion comes from a survey of suppliers who intend to raise prices by 47% amid rising coal prices, likely problems with exports from neighboring countries and global supply uncertainty.

On the global chart of the asset, the price is correcting within the lateral channel, preparing to continue the local decline. Technical indicators have almost reversed and issued a sell signal: fast EMAs on the Alligator indicator came close to the signal line, and the AO oscillator histogram has already moved into the sell zone, continuing to form descending bars.

Support levels: 0.9652, 0.953 | Resistance levels: 0.9739, 1​

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[Solid ECN]

EURUSD - the ECB raised its base rate for the first time since 2011

Euro quotes reacted ambiguously to the decision of the European Central Bank (ECB) to tighten monetary policy at a more aggressive pace. The result of the meeting of the regulator, which took place the day before, was an increase in all three key indicators by 50 basis points at once for the first time after an 11-year break. Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 0.50%, 0.75% and 0.00% respectively, with effect from 27 July 2022. In addition, the ECB noted the expediency of continuing the "hawkish" course. In particular, the Asset Purchase Programme (APP) and the Pandemic Emergency Purchase Programme (PEPP) will continue, and the launch of Transmission Protection Instrument (TPI) will be announced, which will minimize discrepancies in borrowing costs for euro area countries. As a result, it is obvious that the ECB considers the current time to be suitable for a more serious increase in rates and hopes in this way to significantly reduce the rapid inflation by autumn, bringing it to the target of 2.0% in 2023.

Despite the external pressure, EUR/USD is holding within the global downward channel and is now forming another wave of corrective growth. Technical indicators gave a signal for the beginning of the correction: fast EMAs on the Alligator indicator are actively approaching the signal line, and the AO oscillator histogram is forming upward bars.

Support levels: 1 , 0.9752 | Resistance levels: 1.0277, 1.0586
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EURTRY - The strengthening of the euro may be temporary​

Thus, the Central Bank of Turkey left the discount rate at 14.0% for the seventh month in a row, even despite the continuing increase in inflation in the country, which reached 78.62% and the change in the global trend towards tightening monetary parameters taken by the world financial institutions. At the same time, officials said that the price growth is caused by an increase in the cost of energy, geopolitical risks and non-economic reasons and hope for an improvement in the situation at the beginning of next year. The European Central Bank (ECB), on the contrary, began to take decisive steps in the fight against the unprecedented rise in consumer prices, which led to the strengthening of the position of the single currency. Officials raised rates for the first time in 11 years, and immediately by 50 basis points. The main interest rate is now 0.50%, the margin rate is 0.75%, and the deposit rate is 0.00%. ECB Head Christine Lagarde said that the adjustment of indicators is caused by the rapid pace of inflation, which affects more and more economic sectors, as well as forecasts of further preservation of indicators at high levels. The beginning of the rate hike cycle has strengthened the euro's position against its main competitors, but the positive dynamics may be short-lived, as the European economy continues to experience increased pressure from the Ukrainian crisis and interruptions in energy supplies.

The price is testing the 17.96, consolidation below which will allow quotes to continue moving to the levels of 17.5781 (the middle line of the Bollinger Bands) and 17.18. The key for the "bulls" is the mark of 18.3593, with a breakout of which growth will be able to resume to the area of 18.75, 19.14. Technical indicators do not give a single signal: the Bollinger Bands are reversing horizontally, the Stochastic is preparing to leave the overbought zone and form a sell signal, and the MACD histogram is increasing in the positive zone.

Resistance levels: 18.35, 18.75, 19.14 | Support levels: 17.96, 17.57, 17.18
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Solid ECN Market Analysis

USDCHF, H4
On the four-hour chart, the Three "bearish" steps downwards trend continuation pattern is formed, which signals increasing sales. However, the asset has also formed the Doji rickshaw model. This figure means that the forces of "bulls" and "bears" are equal at the moment, but its appearance in a local base can mean both a reversal of quotes up and a continuation of the downward movement. In the current situation, the decrease to the support level of 0.9538 seems more likely, which breakdown will allow sellers to move into the range of 0.9410–0.9167. An alternative option is possible after the price breaks the upper border of the trend channel and the resistance level of 0.9667 with the growth target at 0.9828–1.0032.

USDCHF, D1
On the daily chart, at 0.9828, Shooting star and Hanging man reversal patterns are forming, from where the asset rushed down. Also, a series of Three "bearish" steps candlestick analysis patterns have formed, which are models for the continuation of a downtrend. Probably, the asset is trying to test the key support level of 0.9538, and if the "bulls" fail to hold it, then the movement will continue to the area of 0.9410–0.9167.

Support levels: 0.9538, 0.941, 0.9167 | Resistance levels: 0.9667, 0.9828, 1.0032

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EURUSD - Growth is possible

On the daily chart, a downward correction of the higher level ended as the wave (B), within which the wave C of (B) formed. The upward wave (С) is forming now, within which the first entry wave of the lower level (i) of i of 1 of (C) is developing.

If the assumption is correct, the EURUSD pair will grow to the levels of 1.0612 – 1.0787. In this scenario, critical stop loss level is 0.9944.

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GBP USD - Growth is possible.

On the daily chart, the first wave of the higher level (1) formed, and a downward correction ended as the second wave (2). Now, the third upward wave (3) has started to develop, within which the first wave entry of the lower level (i) of i of 1 of (3) is developing.

If the assumption is correct, the GBPUSD pair will grow to the levels of 1.2674 – 1.315. In this scenario, critical stop loss level is 1.175.

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USDJPY - Growth is possible​

On the daily chart, the first wave of the higher level (1) develops, within which the wave 3 of (1) forms. Now, the third wave of the lower level iii of 3 is developing, within which the wave (v) of iii is forming.

If the assumption is correct, the USDJPY pair will grow to the levels of 142 – 145. In this scenario, critical stop loss level is 131.35.

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AUDUSD - Inflation in Australia may accelerate​

The AUDUSD pair started the week with an upward movement and is currently testing the level of 0.6958. However, consolidation above it seems less likely, as investors refrain from opening new trading positions, waiting for two key releases on Wednesday – the publication of inflation data in Australia and the decision of the US Federal Reserve on the interest rate.

Thus, Q2 CPI is likely to be poor: the indicator will consolidate around 6.1–6.3% YoY, which is twice the target of the Reserve Bank of Australia (2.0–3.0%) and thus will reach the high since 1990. Implementation of the forecast or its exceeding will confirm the fears of the head of the regulator, Philip Lowe, who recently stated that “psychological inflation” is forming in the country when consumers rush to spend available capital, expecting further price increases, which only exacerbates the negative dynamics, which, in turn, could push agency officials to accelerate the pace of interest rate adjustments to 75 basis percentage points, increasing the risks of the national economy going into recession.

The trading instrument is within the long-term downward channel, and now the price is testing 0.6958, consolidation above which will allow quotes to strengthen to the area of 0.708. Otherwise, the price decline will resume to 0.6835, 0.6713. Technical indicators do not give a single signal: Bollinger bands are horizontal, Stochastic is leaving the overbought zone, forming a sell signal, and the MACD histogram is preparing to move into the positive zone.

Resistance levels: 0.6958, 0.708 | Support levels: 0.6835, 0.6713, 0.6591​

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Silver Technical analysis​

H4
On the four-hour chart, there is a long-term consolidation of the asset in the range of 18.12–20, and at the moment, above 18.12, the quotes have formed a Morning star candlestick analysis model, which is a reversal formation at the bottom. Also, an Inverted hammer pattern has formed, the green color of which emphasizes the "bullish" strength. The combination of these figures indicates that the trading instrument has reached the bottom and a high probability of further recovery to the resistance level of 20.56, the breakout of which will increase the upward dynamics to the zone of 22.16−24.22. An alternative scenario is possible if the "bulls" fail to hold the key level of 18.12. The instrument may drop to the range of 16.57–14.6.

D1
On the daily chart, the falling Wedge price pattern is being completed. The fact that the asset has reached the bottom is also indicated by the appearance above the support level of 18.12 of a series of Hammer and Inverted hammer figures. Also, the confirmation of the increasing activity of buyers can serve as a model of a "bullish" Belt hold. In this situation, the probable scenario of the price movement seems to be the breakout of the upper border of the Wedge with further growth to the area of 20.56−24.22.

Support levels: 18.12, 16.57, 14.6 | Resistance levels: 20.56, 22.16, 24.22

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USDCAD - The instrument continues its downward correction​

Yesterday, traders only paid attention to the June data on wholesale sales, which increased by 0.5%, yielding analysts' forecasts of 2.0%. On Friday, Statistics Canada will publish May GDP data, which for the first time in the last nine months, may slow down to –0.2%. However, given the increase in April by 0.3%, there is no talk of a recession in the national economy since the quarterly value, in this case, will be adjusted to 0.1%.

On the weekly chart, the price is trading within a wide ascending channel with dynamic boundaries 1.26 – 1.32 and is falling towards the support line. Indicator Alligator's EMA oscillation range expands downwards, and the histogram of the AO oscillator forms new downwards bars, moving into the sell zone.

Support levels: 1.2816, 1.2644 | Resistance levels: 1.2936, 1.3052
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AUDUSD, H4
On the four-hour chart, at 0.6860, there is the formation of the Three advancing white soldiers pattern, meaning buyers have seized the initiative and intend to restore positions. In turn, the appearance of the Three “bullish” steps pattern also signals the continuation of the upward dynamics, and the “bullish” Marubozu pattern indicates the predominance of “bullish” sentiment. In the current situation, the asset will most likely continue to recover to the resistance level of 0.7037, which will allow the quotes to head to the zone of 0.7191−0.7397. An alternative scenario is possible after the consolidation below the support level of 0.6860, and then the downward movement may intensify to 0.6437.

AUDUSD, D1
On the daily chart, a Falling wedge price pattern is being formed, from which the asset managed to break up, but its implementation has not yet been completed. The “bullish” mood for the instrument is also confirmed by a series of formed Three “bullish” steps figures, which serve as signals for the continuation of the uptrend. Most likely, the trading instrument will strengthen the upward dynamics to 0.7037, consolidation above which will become a catalyst for the movement of quotations to the area of 0.7191−0.7397.

Support levels: 0.686, 0.6686, 0.6437 | Resistance levels: 0.7037, 0.7191, 0.7397

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EURUSD - The decision of the US Federal Reserve disappointed investors

This week, within the framework of an extraordinary meeting, the energy ministers of the EU countries reached a compromise on the issue of reducing the consumption of "blue fuel" by 15% from the average level over the past five years. The emergency plan, developed in the event of a complete cessation of energy supplies from Russia, assumes a decrease in the volume of gas used in the upcoming winter heating season, starting from August this year to the end of March 2023. The driver for the decision was the reduction in the volume of fuel transported through the Nord Stream gas pipeline to 1/5 of the throughput capacity due to technical work carried out on the gas turbine engine. The market took this as a signal of an escalation of political tension between Russia and the European Union. Nevertheless, despite the decrease in the volume of supplies, the filling of gas storage facilities continues and, according to experts, may reach 80% by November 1. As for the state of the economies of the EU countries, the situation continues to deteriorate, and, as shown by the German consumer climate index for August, the decline in the indicator increased to –30.6 points, which is the absolute minimum in the history of observations.

The trading instrument moves within the global downward channel, rising towards the resistance line. Technical indicators hold a sell signal, which is weakening: fast EMAs on the Alligator indicator is approaching the signal line, and the AO oscillator histogram continues to form upward bars.

Support levels: 1.0112, 0.9952 | Resistance levels: 1.0259, 1.0494​

 

[Solid ECN]

GBPUSD - Trading within the global downward channel

At the end of last week, almost 80% of all train traffic in the country came to a halt, paralyzing the domestic supply chains of goods due to the strike of railway workers, caused by a sharp increase in prices for food and goods, which has been going on since the beginning of summer. Also, the British pound is negatively affected by macroeconomic statistics: the volume of mortgage lending in June fell to 5.27B pounds from 8.04B in May, while the volume of private net loans fell to 7.1B from 8.9B a month earlier. The reason for the negative dynamics of the indicator was the active increase in the interest rate, which prevents consumers from planning the cost of loans.

The trading instrument is moving within the global downward channel, approaching the resistance line. Technical indicators reversed and gave a stable buy signal: indicator Alligator’s EMA oscillation range expands upwards, and the histogram of the AO oscillator is forming rising bars in the buying zone.

Resistance levels: 1.2268, 1.2652 | Support levels: 1.2063, 1.1757​

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USDCAD - Growth in possible.

On the daily chart, the first wave of the higher level (1) of 5 forms, within which the wave 3 of (1) develops. Now, the third wave of the lower level iii of 3 is developing, within which the wave (iii) of iii is forming.

If the assumption is correct, the USDCAD pair will grow to the levels of 1.341 – 1.37. In this scenario, critical stop loss level is 1.2521.

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