EUR/USD: waiting for money from investing in Euros abroadThe European currency is retreating from the recent highs reached at the end of December 2023, and is currently testing the level of 1.1075 for a possible breakdown downwards. Market participants are preparing for the publication of July inflation data, which will take place today and will become an important guideline for the European Central Bank (ECB) in making monetary policy decisions.Analysts predict that on a monthly basis, the consumer price index will decrease from 0.2% to 0.0%, and on an annual basis it will grow from 2.5% to 2.6%. The base monthly indicator may fall from 0.4% to -0.2%, and the annual indicator may remain at 2.9%. If these forecasts are confirmed, it will indicate a decrease in inflationary pressure in the European economy, which may strengthen market expectations regarding a possible reduction in interest rates in September. Currently, investors expect at least two rate adjustments before the end of the year. Today, data on industrial inflation in Germany were also published: in July, the index increased by 0.2% compared to the previous month, but the annual rate slowed by 0.8%, which, however, turned out to be better than the previous indicator of -1.6%.In the morning at 20:00 (GMT+2), American investors are watching how registration takes place on the site, and how the date is set above 5.50%. Investors will look for signals in the document about a possible easing of monetary policy at the September meeting. However, the annual Economic Symposium in Jackson Hole will be of key importance for the dynamics of the dollar, where leading economists, including Fed Chairman Jerome Powell, are expected to speak, which is likely to touch on the topic of adjusting interest rates and the impact of prolonged hawkish policies on the economy. Recall that in early August, data on the US labor market raised fears of a recession, which led to expectations of a 50 basis point rate cut in September, but then the situation stabilized, and now investors estimate the probability of such a step at 30.0%.Resistance levels: 1.1100, 1.1150, 1.1200, 1.1243.Support levels: 1.1047, 1.1000, 1.0964, 1.0930.GBP/USD: in November, UBS expects a 25 bps rate cut in Britain.The pound sterling shows mixed dynamics in the pound/dollar pair, consolidating near the recently reached local highs since July 18. Market activity remains low, as investors are cautious, avoiding opening new positions before the publication of the minutes of the July meeting of the US Federal Reserve on monetary policy and speeches by representatives of world central banks at the annual Economic Symposium in Jackson Hole. The market is trying to estimate the probability of a 50 basis point interest rate cut in September, but as sentiment improves and fears of a recession decrease, this scenario becomes less likely.On Friday the head of the Bank of England, Andrew Bailey, is expected to speak, during which he can clarify plans for further easing of monetary policy. UBS analysts at AG Group note that the latest UK inflation data indicate a gradual decline towards the 2.0% target, which significantly increases the likelihood of a 25 basis point rate cut in November and a possible acceleration of this process in 2025. In July, the consumer price index decreased from 0.1% to -0.2% on a monthly basis, and increased from 2.0% to 2.2% on an annual basis, which turned out to be lower than the projected 2.3%. The base index also decreased from 0.2% to 0.1% on a monthly basis and from 3.5% to 3.3% on an annual basis. However, the unemployment rate in June adjusted from 4.4% to 4.2%, and employment increased by 135.0 thousand against the forecast of 14.5 thousand, which indicates a significant excess of inflation targets.Resistance levels: 1.3000, 1.3050, 1.3100, 1.3150.Support levels: 1.2948, 1.2900, 1.2860, 1.2817.USD/CHF: growth for the second time was 6.4%The pair/demonstrates a corrective movement of the USD/CHF pair, holding near 0.8620 during the morning session, as the Swiss franc continues to strengthen against the background of positive macroeconomic data.According to a report by the Swiss Federal Statistical Office, in the second quarter of 2024, the secondary sector of the economy showed growth of 6.4% year-on-year, and turnover increased by 4.7%, reaching the highest level since 2021. Industrial production also showed strong growth: in April by 8.0%, in May by 8.6%, and in June by 5.6%, which led to an overall increase of 7.3% over the quarter. Positive dynamics is also observed in the construction sector, where turnover increased by 1.6%, with the highest growth rates in civil engineering (+13.1%). These data indicate a possible further strengthening of the Swiss franc, as business activity in these industries is likely to recover.Support levels: 0.8580, 0.8430.Resistance levels: 0.8670, 0.8790.NZD/USD: RBNZ is ready for a long-term reduction in monetary ratesIn the Asian session, the New Zealand dollar continues its steady growth, which began at the end of last week, and is approaching the 0.6120 mark, striving to overcome this level and update local highs from July 12. At this time, market participants are being cautious, refraining from active actions on the US currency, waiting for the publication of the minutes of the July meeting of the US Federal Reserve on monetary policy and speeches by leading representatives of central banks at the annual Economic Symposium in Jackson Hole, which starts on Thursday, August 22. Investors hope to receive new guidance on a possible interest rate cut in September, although the exact extent of the reduction — by a quarter or half a percent — remains in doubt.At the same time, the New Zealand dollar continues to receive support thanks to statements by the head of the Reserve Bank of New Zealand, Adrian Orr, who expressed his willingness to continue the policy of easing monetary incentives. At the last meeting, the regulator lowered the interest rate by 25 basis points, for the first time since March 2020, noting positive trends in reducing inflation to the target range of 1.0–3.0%. Inflation is expected to fall to 3.85% by the end of 2025 from the current 5.25%. At the same time, Reuters reported that most astronomers expect long-range communication with the station by 50 basis points at the end of the year. Support for this trend was also confirmed by the latest statistics, which recorded a steady increase in inflation: The producer purchase price index rose by 1.4% in the second quarter, exceeding analysts' expectations, which had forecast growth of only 0.5%. Local pressure on the New Zealand dollar was exerted by data on foreign trade: exports in July fell to 6.15 billion New Zealand dollars, while imports increased to 7.11 billion, which led to a trade deficit of 963.0 million New Zealand dollars, although a surplus of 331.0 million was expected.Resistance levels: 0.6130, 0.6153, 0.6175, 0.6200.Support levels: 0.6100, 0.6085, 0.6068, ...
EUR/USD: ECB rate cut is forecast by a quarter of a percentThe EUR/USD pair is trading near the 1.1015 mark, being close to the local lows recorded on August 16. Market activity remains low as investors await the decision of the European Central Bank (ECB), which will be announced today at 14:15 (GMT+2). It is expected that the regulator will reduce the main interest rate by 25 basis points — from 4.25% to 4.00%, and the deposit rate — from 3.75% to 3.50%. However, inflationary risks remain significant. Recent data on the growth of the eurozone's gross domestic product (GDP) for the quarter were revised from 0.3% to 0.2%, which, along with a deterioration in business sentiment, raises concerns about economic growth in the region. Although the market is not considering the possibility of reducing rates by 50 basis points, the situation may change depending on incoming data. It is likely that Christine Lagarde, the head of the ECB, will maintain a rhetoric focused on flexibility and analysis of economic indicators at each meeting. Investors will closely monitor the comments of other ECB representatives in order to adjust their expectations regarding the regulator's further steps by the end of the year.In parallel, inflation data from the United States, published on Wednesday, showed a sharp slowdown in annual dynamics to 2.5% in August, which is lower than the forecast of 2.6%. Monthly inflation was 0.2%, as expected. The core consumer price index (excluding food and energy) remained at 3.2% year-on-year and rose slightly from 0.2% to 0.3% over the month. These data did not change market expectations regarding a possible rate cut by the US Federal Reserve by 25 basis points in September.Resistance levels: 1.1050, 1.1100, 1.1150, 1.1200.Support levels: 1.1000, 1.0964, 1.0930, 1.0900.GBP/USD: UK GDP for July remained unchangedThe GBP/USD pair is reducing positions from annual highs against the background of the strengthening of the US dollar and is currently trading at 1.3044.Economic data from the UK for July turned out to be weaker than expected, which did not allow the pound to move to an upward trend. Gross domestic product (GDP) in monthly terms remained at the same level, while experts predicted growth of 0.2%. On an annualized basis, GDP increased from 0.7% to 1.2%, but this turned out to be lower than the projected 1.4%. The weakening of the economy is due to a drop in industrial production: in July, its volumes decreased by 0.8% on a monthly basis and by 1.2% on an annual basis. The National Institute of Economics and Social Research (NIESR) has revised its forecast for GDP growth in August from 0.5% to 0.3% in quarterly terms. Against this background, investors' attention is also focused on employment indicators. In July, the number of employed increased from 97.0 thousand to 265.0 thousand, and the number of applications for unemployment benefits in August decreased to 23.7 thousand, with expectations of 95.5 thousand. The unemployment rate fell from 4.2% to 4.1%, and average wages slowed to 4.0% against forecasts of 4.1%. These indicators may allow the Bank of England to continue easing monetary policy. It is expected that at the meeting on September 19, the regulator may reduce the interest rate by 25 basis points.Resistance levels: 1.3080, 1.3260.Support levels: 1.3000, 1.2850.USD/JPY: exchange rate is falling under the influence of Naoki Tamura's speechThe USD/JPY pair rose to the level of 142.98, which was facilitated by statements by Naoki Tamura, a member of the Board of the Bank of Japan.On Thursday, Tamura, answering questions about a possible increase in interest rates by the end of the year or in the first quarter of next year, noted that the timing will depend on current economic and inflationary conditions. Unlike the United States and Europe, where changes in rates occur more quickly, Japan is likely to act more restrained. According to him, the country's economy is developing in accordance with forecasts made in July, but excessive attention to market stability may limit the freedom of action of the Bank of Japan in conducting an adequate monetary policy in the face of changing price dynamics. Tamura also stressed that undesirable volatility can complicate the management of the economy, so it is important to act gradually to avoid sharp fluctuations in the markets. In the long term, the regulator should follow fundamental economic indicators, carefully raising rates and assessing the impact of each step. Against the background of these statements, the USD/JPY pair reached new heights, exceeding Wednesday's maximum at 142.55 and rising to 143.04.Resistance levels: 144.10, 147.00, 149.25.Support levels: 140.80, 137.63, 134.00.Silver market analysisThe XAG/USD pair continues to move within the corrective trend, trading at around 28.73. At the same time, the dynamics of silver is significantly inferior to gold, which remains at a level close to historical highs, demonstrating a more stable position in the precious metals market.The demand for silver futures is noticeably decreasing: the average daily trading volume for the current week fell from 67.2 thousand to 51.4 thousand contracts. Option activity also remains at a minimum level — only 9,699 contracts were concluded the day before, which is one of the lowest figures since the beginning of summer. Such a drop in activity indicates that investors do not expect significant movements in the price of silver in the short term and prefer to refrain from transactions with this asset, waiting for clearer signals from the market. As a result, silver is now less attractive compared to gold and foreign exchange assets, and significant changes in the dynamics of quotations should not be expected in the near future.Resistance levels: 29.10, 30.10.Support levels: 28.40, ...
EUR/USD: positive changes in the European economyThe EUR/USD pair continues to decline, trading near the level of 1.1055, remaining well below the annual highs.The euro is supported by stable macroeconomic statistics: Italy's gross domestic product (GDP) increased by 0.2% in the second quarter compared to the previous month, meeting expectations, and increased from 0.7% to 0.9% in annual terms. In addition, the index of business activity in the Italian manufacturing sector increased from 47.4 to 49.4 points. In Germany and France, there is an improvement in similar indicators: in Germany, the index rose from 42.1 to 42.4 points, and in France — from 42.1 to 43.9 points. Although the values remain below the 50.0 level, this may indicate the beginning of economic recovery in the EU.The US dollar, which strengthened after reaching a one-year low, is trading at 101.20 in the USDX index. On Monday, in connection with the celebration of Labor Day, the American stock exchanges were closed, so investors' attention turned to the upcoming business activity data. It is expected that in August the index in the manufacturing sector will decrease from 49.6 to 48.0 points, and a similar indicator from the Institute of Supply Management (ISM) may increase from 46.8 to 47.5 points. Data on the price index of personal consumption expenditures, published on Friday, did not show the expected growth in July from 2.5% to 2.6%, which increased the likelihood of a Fed interest rate cut by 50 basis points in September. About 33% of analysts consider this a likely scenario, while more than 60% expect a decrease of 25 basis points.Resistance levels: 1.1084, 1.1190.Support levels: 1.1040, 1.0940.GBP/USD: UK manufacturing hits two-year highThe GBP/USD pair is showing negative dynamics, trading near the 1.3120 mark with a possible breakdown downwards. The pound sterling is declining again after an uncertain attempt at corrective growth, which took place the day before, when the American stock exchanges were closed due to the celebration of Labor Day.Economic statistics published in the UK on Monday failed to significantly support the pound. The S&P Global UK index rose from 52.1 to 52.5 points, reaching its highest since June 2022, which was in line with experts' forecasts. There is a positive trend in the manufacturing industry: pressure on prices, both for businesses and for customers, is easing, which is due to a slowdown in the growth of costs for imported resources, which previously grew for eight months due to supply problems and increased logistics costs. Today, the pound is receiving some support thanks to retail sales data from the British Consortium of Retailers (BRC), which showed an increase in a comparable indicator from 0.3% to 0.8% in August.The focus of American investors' attention today is on statistics on business activity in the manufacturing sector, which will be published at 16:00 (GMT+2). The ISM index is expected to rise from 46.8 to 47.5 points in August, while the S&P Global index is likely to remain at 48.0 points. At the end of the week, data on private sector employment from ADP will be published, as well as final information from the US Department of Labor, which may adjust expectations regarding a possible interest rate cut at the September Fed meeting. Currently, only about 30% of analysts suggest that the rate may be reduced by 50 basis points at once.Resistance levels: 1.3150, 1.3188, 1.3250, 1.3300.Support levels: 1.3100, 1.3050, 1.3000, 1.2948.AUD/CHF: Australian GDP data may put pressure on the pairThe AUD/CHF pair is trading with downward dynamics at the level of 0.6405 at the auction on September 3, showing a decrease of 0.42% compared to the previous trading session. Sellers are holding control despite the minor correction attempts seen last week.The economic situation in Australia remains difficult. According to data published the day before, retail sales in July 2024 did not change compared to June, remaining at 0.0%, which is lower than forecasts of 0.3%. This adds pressure on the Reserve Bank of Australia (RBA), which has already warned about the possible retention of the current level of interest rates to combat inflation. The inflation rate in the country remains above the target range of the RBA (2.0-3.0%) and is 5.2% in annual terms for July 2024. The services sector, according to the business activity index (PMI), also slowed to 50.2 points, which is lower than the forecast of 51.0 points. Australia's GDP data for the second quarter will be published tomorrow at 04:30 (GMT+2): the figure is expected to be 1.8% year-on-year, which is 0.3% lower compared to the previous quarter, which may also put pressure on the Australian dollar.The Swiss economy is showing signs of resilience amid low inflation and stable growth. The head of the Swiss National Bank (NBS) noted that inflation in the country is at 1.5% in annual terms, which is below expectations, and the Central Bank is ready to continue the policy of tight interest rates. Today, data on the business activity index (PMI) in the manufacturing sector was published, which decreased from 47.3 to 46.0 points, indicating a slowdown in economic growth. However, low inflation and positive data on the unemployment rate, which remained at 2.0% in August, continue to support the Swiss franc.Resistance levels: 0.6450, 0.6500.Support levels: 0.6400, 0.6350.Silver market analysisAs of September 3, 2024, the XAG/USD (silver) pair shows a moderate decline, trading around the level of 23.50 USD per ounce, which is 0.45% less than the closing level of the previous trading session.Macroeconomic statistics from the United States, published the day before, put pressure on silver quotes. The manufacturing activity index (PMI) from the Institute of Supply Management (ISM) in August showed an increase from 46.8 to 47.5 points, which turned out to be higher than analysts' expectations, which assumed a value around 47.0 points. Data on the consumer price index (CPI) for August were also published: the indicator rose to 3.2% in annual terms, which is slightly higher than the July value of 3.0%. Market expectations regarding a possible increase in the US Federal Reserve interest rate in September remain uncertain, but the probability of a 25 basis point increase has increased to 35.0%.In turn, the situation is also affected by the growth in demand for the US dollar, which strengthened to 101.20 in the USDX index, putting additional pressure on the price of silver. The recovery of industrial activity in China, which was reflected in the growth of the index of business activity in the services sector to 53.3 points, also supports the stabilization of the value of industrial metals, including silver, but the impact of these factors remains limited at the moment. US private sector employment data from ADP is expected tomorrow, as well as the publication of final GDP data for the second quarter. Forecasts indicate a possible increase from 2.4% to 2.5% in annual terms, which may increase pressure on silver in the short term if the data turn out to be higher than expected.Resistance levels: 23.80, 24.20.Support levels: 23.20, ...
EUR/USD: ECB for gradual adjustment of rates in the eurozoneThe EUR/USD pair shows a moderate decline, holding near the 1.1150 mark: market activity remains low, which limits the potential of the euro to update record highs.Macroeconomic statistics published the day before in the EU did not have a significant impact on the dynamics of the pair: the revised estimate of German GDP for the second quarter showed an increase of 0.3% in annual terms, but a decrease of 0.1% in the quarter. These data may become an additional argument for the European Central Bank (ECB) in favor of maintaining a "dovish" policy. At the same time, the revision of German GDP excluding seasonal fluctuations from -0.1% to 0.0% did not lead to significant changes in the market. Traders also drew attention to the deterioration in consumer confidence: the September index from Gfk Group fell from -18.6 to -22.0 points, despite expectations of -17.5 points. On Thursday, the final inflation data for August in Germany will be presented, where it is expected to slow from 2.3% to 2.1% in annual terms and from 0.3% to 0.1% on a monthly basis.At the same time, the head of the Croatian People's Bank, Boris Vujicic, said that inflation is developing in accordance with forecasts, which makes it possible to gradually reduce the cost of borrowing, although risks remain, since inflation in the service sector continues to hold at 4.0%, and wage growth in the eurozone in the second quarter decreased to 3.6% from 4.7%. Olli Rehn, a member of the ECB's Governing Council, supported this position, pointing out that the process of stabilizing price growth has been underway since the autumn of 2022, and decisions will be made based on the latest macroeconomic data.Resistance levels: 1.1200, 1.1243, 1.1300, 1.1350.Support levels: 1.1150, 1.1100, 1.1047, 1.1000.GBP/USD: British households are ramping up spendingThe GBP/USD currency pair has rolled back from the March 2022 highs reached a day earlier, and is now experiencing pressure from the 1.3240 level for a possible decline.The market reaction to the UK consumer spending data played a key role in this move. The report showed that the average weekly household spending reached 567.7 pounds, which is 7.0% higher than last year. A noticeable reduction in spending occurred in the food and non-alcoholic beverage categories, with a return to 2020 spending levels in key categories, while spending in cafes and restaurants continued to decline, reaching a 2020 low. Average wages decreased by 3.0%, reflecting a deterioration in purchasing power.At an economic symposium in Jackson Hole, the head of the Bank of England, Andrew Bailey, said that despite the slowdown in inflation, the final victory over it has not yet been achieved. The consumer price index fell from a 41-year high of 11.1% in October 2022 to 2.0% in May and June. It is expected that statistics on the dynamics of lending in July will be published on Friday, it is expected to accelerate from 1.162 billion pounds to 1.3 billion pounds, which may support the exchange rate of the national currency.Resistance levels: 1.3280, 1.3470.Support levels: 1.3180, 1.3000.NZD/USD: ANZ points to the role of the RBNZ in the downturn in the real estate marketThe NZD/USD currency pair showed a moderate decline, hovering around the 1.1150 level, ahead of the expected rate cut by the US Federal Reserve. Fed Chairman Jerome Powell last week at an Economic symposium in Jackson Hole confirmed plans to adjust monetary policy, although he did not specify the specific parameters of possible changes before the end of the year.On the other hand, the latest economic data from New Zealand showed a 1.2% decline in retail sales in the second quarter after a 0.4% increase in the previous period, which puts pressure on the New Zealand dollar. Data on consumer confidence and building permits are also expected to be published, which may provide additional information on the state of the economy. In the United States, key inflation indicators are to be released, which may influence the Fed's further actions.ANZ experts emphasize the weakness of the New Zealand real estate market and the inconsistency of economic indicators, which may affect the decisions of the Reserve Bank of New Zealand on monetary policy in the face of uncertainty in key economic sectors. These factors, coupled with international economic trends and political decisions, shape the dynamics of NZD/USD in financial markets.Resistance levels: 0.6254, 0.6300, 0.6330, 0.6368.Support levels: 0.6221, 0.6200, 0.6177, 0.6153.Silver market analysisAs of August 28, 2024, the price of silver is hovering around the level of $29.68 per ounce, which is 1.40% lower compared to the previous trading session. This decrease is due to market volatility and the influence of macroeconomic factors, including weak economic data from China and Europe.The economic situation in China continues to put pressure on silver prices. The second quarter of 2024 showed weak GDP growth in China, which caused unexpected steps by the People's Bank of China to reduce interest rates. This step is aimed at supporting the economy, but weak data on manufacturing activity and declining domestic demand continue to negatively affect demand for silver, especially in the industrial sector, which depends on the metal for electronics and renewable energy production.In addition, there is a slowdown in economic activity in Europe. Weak manufacturing activity (PMI) indicators in the eurozone continue to put pressure on silver, which in turn supports expectations for a rate cut by the European Central Bank before the end of the year. It also affects the mood of investors who are cautious amid uncertainty in the global economy.Resistance levels: $30.00, $31.00.Support levels: $28.50, ...
Trading idea for GBP/USD on August 28, 2024In Asian trading on Wednesday, GBP/USD weakened, retreating from a recent multi-year high to the level of 1.3230, but retained the potential for further growth in the coming days.Support for the pound is associated with the global weakening of the dollar, which intensified after the speech of Fed Chairman Jerome Powell at the economic symposium in Jackson Hole. Powell hinted at an imminent easing of monetary policy, and the market now expects interest rate cuts to begin as early as September. However, questions remain about the scale of the first decline. Most experts predict an expansion of 25 basis points, although a more significant step is possible — 50 bps if the US employment report shows a further deterioration in the labor market. Mary Daly, head of the San Francisco Fed, also confirmed that the moment for rate easing has come, but stressed the importance of a cautious approach. This mood of loosening monetary policy continues to put pressure on the dollar and support the pound.Andrew Bailey, the head of the Bank of England, speaking at the same forum, said that the fight against inflation is not yet complete, despite its decline from a 41-year peak of 11.1% in October 2022 to 2.2% in July this year. Given the improvement in the economic situation compared to forecasts, the regulator is revising expectations regarding the second wave of inflation. In August, the Bank of England cut the interest rate from 5.25% to 5%, and many analysts believe that the next steps may be postponed until the end of the year. If the pause in the rate cut is confirmed, this will create additional conditions for the growth of the pound.We suggest including a GBP/USD order in the trader's trading plan:Buy Stop 1.3260target 1.3400stop loss ...
EUR/USD: the pair reached December 2023 heights after the Fed statementDuring the Asian session, the EUR/USD pair shows an unstable movement, fluctuating near the level of 1.1180.US Federal Reserve Chairman Jerome Powell said it was time to start lowering the benchmark interest rate, which has reached its highest level in the last 20 years. Despite the lack of precise figures for a possible decline, he noted that inflation is weakening and stressed the importance of monitoring the situation on the labor market. As a result, traders have revised their forecasts and expect a 25 basis point rate cut in September. According to the CME FedWatch Tool, the rate may be reduced by 100 basis points in 2024.The euro's growth is also supported by macroeconomic indicators. In August, the index of business activity in the service sector rose to 53.3 points, which is higher than both the previous value of 51.9 points and the forecast of 51.7 points. In the manufacturing sector, the index was 45.6 points, which almost coincided with the forecast of 45.7 points and did not affect the optimism of market participants. The ECB minutes of August 22 confirm the commitment to maintain a strict monetary policy until the inflation target of 2.0% is reached.Resistance levels: 1.1256, 1.1382, 1.1475.Support levels: 1.1160, 1.1103, 1.1010.GBP/USD: the Bank of England adjusts forecasts for a repeat increase in inflationThe GBP/USD pair is rolling back from the recently reached record highs, approaching the level of 1.3200, amid attempts by traders to determine the further direction of movement of quotations.The main attention of market participants is focused on the speeches of the heads of the US Federal Reserve and the Bank of England at the Economic Symposium in Jackson Hole, which started on Friday, August 23. Jerome Powell expressed a "dovish" mood, noting the need to lower interest rates to avoid excessive cooling of the labor market. At the same time, he did not give clear instructions on the extent of future changes, although experts' expectations included the possibility of reducing the rate by 50 basis points in September. Andrew Bailey, head of the Bank of England, stressed that inflation in the UK has slowed significantly, falling from 11.1% in October 2022 to 2.0% in May and June 2024. Despite this, inflation risks remain, and forecasts for a possible second wave of price increases are being considered.On Friday, the market will pay attention to July data on consumer lending in the UK and the index of personal consumption expenditures in the United States. Forecasts for the latter assume that the base value will remain at 0.2% on a monthly basis and increase by 2.6% year-on-year. In the UK, Nationwide's house price index is also expected to decline from 0.3% to 0.2%, reflecting the impact of tight monetary policy on the real estate market. Traders also evaluate data on the GfK consumer confidence index, which in August reached -13.0 points, the highest in almost three years, despite forecasts of -12.0 points, which indicates the restoration of the financial situation of the British and an improvement in their perception of the economic situation.Resistance levels: 1.3250, 1.3300, 1.3375, 1.3435.Support levels: 1.3188, 1.3150, 1.3100, 1.3050.USD/JPY: the Fed is considering the start of interest rate cutsAgainst the background of the depreciation of the US dollar, the USD/JPY pair is adjusted downwards, trading around 144.00.On Friday, the chairman of the Bank of Japan, Kazuo Ueda, speaking in parliament, reaffirmed his commitment to tightening monetary policy, declaring his readiness to raise interest rates when inflation reaches the target level of 2.0%. Ueda noted that the situation in financial markets may affect the timing of rate decisions, despite criticism of the regulator for a sharp tightening that put pressure on the country's stock market. Meanwhile, recent macroeconomic data indicate the need for these measures: the consumer price index in July was 2.8%, higher than the projected 2.7%, and the base index rose from 2.6% to 2.7%. At the same time, the index of leading indicators increased from 108.6 to 109.0 points in June, while the index of matching indicators decreased from 113.7 to 113.2 points.The US dollar continues its downward movement, holding near the important level of 100.00 in the USDX index, after the statement by Fed Chairman Jerome Powell at the Economic Symposium in Jackson Hole. For the first time in a long time, Powell hinted at a possible reduction in interest rates in September, stressing that the regulator is confident that inflation will slow down to the target 2.0%. According to him, the Fed's attention is now focused on achieving goals for the labor market and the real estate sector. Experts believe that the scale of the rate cut will depend on the severity of the problems in the labor market caused by rising unemployment.Resistance levels: 145.20, 149.30.Support levels: 143.20, 140.20.Gold analysisAs of August 26, 2024, the price of gold is about $2,080 per ounce, which is 0.5% lower compared to the previous trading session. Gold is showing a correction after reaching maximum values against the background of the strengthening of the US dollar and expectations for a reduction in interest rates by the US Federal Reserve (Fed).The economic situation in the United States continues to put pressure on the gold market. The Fed is expected to cut interest rates by 0.75% by the end of 2024, which will reduce the attractiveness of the dollar and probably support gold prices in the long term. This year, the Fed's rate may reach 4.6%, which causes an increase in demand for gold as a safe asset. In 2025, with a further reduction in rates to 3.5-4%, gold may strengthen its position as a hedging asset against the background of continuing economic uncertainty.The geopolitical situation also has a significant impact on the gold market. Increasing conflicts, including the ongoing standoff between Russia and Ukraine and instability in the Middle East, are contributing to the rise in gold prices. Investors continue to view gold as a safe haven in the face of global instability. Additionally, the ongoing attempts by the BRICS countries to reduce dependence on the US dollar may put additional pressure on the dollar exchange rate, which will also support the quotes of the precious metal.Resistance levels: $2,100, $2,120.Support levels: $2,050, ...
GBP/USD is rolling back down from the recent peaks reached at the end of last week, and at the moment it is testing the 1.3200 support, trying to break it down. At the same time, market participants have not yet decided on the further directions of the exchange rate movement and expect new drivers to appearThe key events for investors remain the speeches of the heads of the US Federal Reserve and the Bank of England at the Economic Symposium in Jackson Hole, which started on August 23. Jerome Powell made dovish statements, noting that it was time to lower interest rates to avoid excessive cooling of the labor market. He also stressed that inflation of 2% is only a matter of time. Nevertheless, the head of the Fed did not disclose specific data on the possible extent of rate cuts, which disappointed analysts who expected a 50 basis point rate cut in September. In turn, the head of the Bank of England, Andrew Bailey, said that the final victory over inflation has not yet been achieved, although its pace has slowed significantly: The indicator decreased from 11.1% in October 2022 to 2% in May and June. The British authorities are revising forecasts for a possible second wave of inflation, as the real economic situation turned out to be better than expected. Recall that in August the rate was reduced from 5.25% to 5%, and experts expect this level to remain in September, with a possible continuation of the "dovish" rate in November.On Friday, markets will focus on July data on consumer lending in the UK and the index of personal consumption expenditures in the United States. Forecasts show that core inflation will remain at 0.2% in July with a possible annual increase of 2.6%. In the UK, the Nationwide Building Society house price index, which tracks changes in the value of real estate purchased through mortgages, is expected to drop from 0.3% to 0.2% in August, reflecting the impact of prolonged hawkish policies on the real estate market. In addition, investors drew attention to data on the GfK consumer confidence index, which in August reached -13.0 points, the highest in the last three years, despite expectations around -12.0 p. Experts believe that the improvement in the financial situation of the British contributes to a more optimistic outlook on the economy.On the daily GBP/USD chart, the indicators show steady growth. The Bollinger bands are expanding, confirming the bullish trend. The MACD indicator continues to grow, signaling purchases. The stochastic oscillator has reached peak values in the overbought area.It is recommended to open sales with a confident breakdown of the 1.3188 support. The target is the 1.3050 mark. We will set the stop loss at 1.3250.In case of an upward breakdown of the 1.3250 mark, we will receive a signal to form long positions with a target at 1.3375. In this case, we will place the stop loss at ...
Давление со стороны продавцов на доллар США сохранялось в понедельник утром, так как индекс USD упал до 102 пунктов, самого низкого уровня с начала января.Инвесторы будут внимательно следить за заявлениями представителей центрального банка, и в экономическом календаре не будет никаких важных данных. Склонность рынка к риску и падение доходности казначейских облигаций США в совокупности привели к снижению курса доллара-убежища в пятницу.Доллар США потерял позиции и не может восстановить свою силу, несмотря на более значительный, чем ожидалось, рост потребительских настроений в США, о котором сообщалось во второй половине дня.Пятую неделю подряд индекс доллара США завершил неделю ниже, чем начал, упав более чем на 0,5 процента в пятницу. Доллару США было непросто сохранить свои позиции в преддверии выходных из-за повышения склонности к риску и падения доходности казначейских облигаций США.Доходность 10-летних облигаций США остается отрицательной, ниже 3 процентов, в утренние часы в Европе в понедельник, а фьючерсы на американский фондовый индекс практически не изменились в течение дня.Желтый металл впервые преодолел отметку в 2500 долларов за унцию, и иена внезапно взлетела выше, оказав давление на Nikkei.На возможность смягчения в сентябре намекали члены Федеральной резервной системы Мэри Дейли и Остан Гулсби во время их отсутствия на выходных, и ожидается, что "голубиный" прогноз будет подкреплен протоколами заключительного заседания по вопросам политики на этой неделе. Инвесторы ожидают, что когда председатель ФРС Джером Пауэлл выступит в пятницу в Джексон-Хоул, он поднимет вопрос о необходимости сокращения.По словам экономиста Barclays Кристиана Келлера, опасения по поводу инфляции в США, которые доминировали в политических дебатах с тех пор, как цены начали стремительно расти во время пандемии, теперь в значительной степени исчезли, хотя, возможно, еще слишком рано объявлять о победе, и центральные банки, несомненно, поступят мудро, избегая этого в своей официальной риторике. Фьючерсы указывают на 25%-ную вероятность повышения на 50 базисных пунктов со значительным изменением в зависимости от результатов предстоящего отчета о заработной плате.Они полностью рассчитаны на повышение на четверть базисного пункта.Значительный пересмотр в сторону понижения - от 600 000 до миллиона позиций - можно увидеть в ежегодных обновлениях списка вакансий, которые запланированы на эту среду.Однако это, вероятно, преувеличило бы слабость рынка труда. В настоящее время ожидается, что экономика США выйдет из кризиса более мягкой. Фьючерсы на индекс Nasdaq выросли на 0,3%, а фьючерсы на индекс S&P 500 - на 0,2% из-за улучшения экономической ситуации на прошлой неделе. Позднее сегодня запланировано выступление Кристофера Уоллера, представителя Федеральной резервной системы, ответственного за политику. Поскольку Уоллер является одним из наиболее агрессивных регуляторов ФРС, отказ от ставок на снижение процентной ставки может укрепить доллар ...
The foreign exchange market is better known as Forex or FX. Trading in this market has become very popular in recent years. However, this is not the case - Forex trading raises a number of questions. For example: what is the foreign exchange market? Which currency pairs are best to trade? Is currency trading risky? Some of the answers to these questions will be found in this article.What is the Forex market?The foreign exchange market is also called the Forex market or the English foreign exchange market. It is simply a market where currencies are exchanged. According to the Bank for International Settlements (BIS), the foreign exchange market is the largest market in terms of total volume, with up to USD 5 trillion traded daily. It is not a physical place, but rather an electronic network where institutions or individuals trade with each other.The left-hand currency is called the base currency and the right-hand currency is called the quote currency. The second currency indicates the value relative to 1 unit of the base currency. For instance, the formula EUR/USD = 1.4000 implies that EUR/USD trades at 1.4000, i.e., 1 Euro has a value of $1.40. The first currency is always expressed in the second currency. USD/JPY at 110.50 means that one USD is worth JPY 110.50. EUR/USDWhat are the best currency pairs to trade?The best currency pairs to trade effectively depend on your trading style. If you have a short term strategy, for example, if you like to scalp, then the major currency pairs will be most profitable for you because of the low spreads.On the other hand, for a fundamental trader, smaller currency pairs will be of interest based on long-term analysis. The most profitable currency pairs may be those involving the Australian dollar, Japanese yen or Canadian dollar.The best forex currency pairs:EUR/USD: this pair has the lowest spread and is not very volatile.GBP/USD: this pair is interesting in terms of spreads and possible gaps, but it is quite volatile.USD/JPY: this pair has low spreads and offers some interesting possibilities. GBP/USDHow to get started trading currencies online?To start trading currencies online, follow these steps:- Choose a regulated and reputable broker- Choose a broker by the quality of execution of trading instructions- Decide on the trading style that suits you best (scalping, intraday trading, swing trading - you keep your position open for several days)- Determine the appropriate leverage effect in the stock market according to your strategy and experience.- Do not invest more than you can afford to lose.- Choose an intuitive, simple and secure trading platform such as MetaTrader 4.- Try all the above steps on a demo account, before trading live.Read more: Features of intraday trading on the Forex marketGoldIs online currency trading dangerous?Like any financial investment, currency trading online is subject to risks. However, there are different methods to control these risks:- Determine the price of the currency pair at which you want to close a position if developments are unfavourable (for example, if you buy and the price falls, or if you sell and the price rises),- Determine the size of the trade so that your potential loss should not exceed 2-3% of your capital per trade,- Estimate your risk/return ratio (loss/profit) before you open the trade. By default you should have a greater potential for profit than loss, e.g. risk 50 pips, but try to make a profit of e.g. 100 pips.For proper money management and risk reduction it is advisable to start trading on a demo account and try things out on the dirt first. Such an account will allow you to trade in real market conditions, but with fictitious capital, so that you have a complete understanding of the foreign exchange market without any risk.Read more: Forex broker: how to choose a good ...
In the foreign exchange market, the GBP/USD quote (the British pound against the United States dollar) is among the four most liquid instruments.Traders call the pair the word "cable". This jargon seemed to have arisen in the interval when the values of quotations were sent from the Old World to the New through a special wired highway passing through the bottom of the ocean.GBP/USD forecast (online) for todayIn one day, the pair passes from 150 to 200 points, therefore it is considered very mobile, it should be traded with all caution and foresight. The forecast for GBP/USD is based on 20 indicators and shows a fairly accurate picture.General characteristics of GBP USDThe total share of the pair's trading turnover in the foreign exchange market is about 14%.The quote demonstrates how much American dollars should be paid to buy one pound sterling.The GBP/USD exchange rate is characterized by sharp, emotional movements. Volatility is significantly higher than other pairs, for example, twice ahead of the swings of EUR/USD. When calculating the stop-loss level, it is necessary to take into account this feature of the quotation and focus on the furthest highs and lows that are only possible in the considered interval of the price chart.Factors of influence on GBP USD and what the exchange rate depends onThe forecast for GBP/USD should be checked with your own analysis, and in order to conduct it yourself, you need to know the factors influencing the currency pair.The decisions of the Monetary Policy Committee of the Bank of England (an analogue of our Central Bank) have an important impact on the GBPUSD rate. It is this state body that regulates the establishment of official interest rates. The committee consists of 9 people who represent both employees of the Bank of England, including its chairman, and independent experts.Meetings and publication of their results take place monthly. The decision is published on the second day after the start of the work of the ministers. This happens at 16:00 Moscow time. Directly voting on decisions and official resolutions are made on the second day. In two weeks, a detailed countdown of the meeting is provided, including the points of view of the majority and minority of the voters.The quarterly "Inflation Report" and the "Quarterly Bulletin" can be distinguished from official documents.The first document describes in detail the possibilities of economic growth and the target inflation rate in the next 2 years. The second report includes the results of the current monetary policy and the prospects for the development of the UK economic system.Changes in the rates of the US Federal Reserve and the UK Monetary Policy Committee are reflected accordingly in the quotations of national currencies. Investors who have started working with this pair should be advised to enter the position in small lots and closely monitor the volume of transactions taking place. The price does not hold the overcome levels well, so GBP/USD very often rolls back, even after overcoming strong resistance lines. This feature is largely due to the fact that GBP/USD is noticeably suffering from low liquidity.The correlation of GBP/USD with another currency quote – EUR/USD is always noticeable. This connection is very logical, because the euro also stands on the side of the Europeans, sharing all the main news affecting the currency quotes of the EU member states.Read more: How much can you really earn on the Forex marketHow best to trade on the GBP USD currency pairThe GBP/USD currency pair has a ticker identical to its name. Most forex brokers have this tool in their arsenal, so there should not be any problems with finding this tool.The minimum lot, according to interbank standards, is 100,000 GBP. Naturally, the broker makes it possible to work with fractional parts.The spread is approximately 0.00005 - 0.00015.The trading session with this instrument coincides with EUR/USD, which allows you to work seamlessly with quotes.Given the dynamics of the pair and its predisposition to long trends, Moving Average indicators should be used in combination with power indicators, among which the most relevant are RSI and MACD. The Ichimoku indicator works successfully to determine the price levels of support and resistance on a currency pair. Also, as a more functional alternative to the RSI indicator, you can use Stochastic, which determines the oversold and overbought levels in the foreign exchange market.A sign of professional trading is a combination of technical and fundamental analysis data to open a position. This is also true for the GBP/USD pair.One of the interesting ways to make money on a currency pair is trading digital options. This is a very simple tool based literally on two buttons - UP and DOWN.Read more: Key participants of the forex marketFeatures of the currency pairEngland officially has a market economy with limited state control. The economy of the United Kingdom is the largest in the world and ranks sixth. In Europe, in terms of economic indicators, the UK is overtaken only by Germany. The Government includes the Treasury, which is headed by the Chancellor, who is responsible for the creation and implementation of economic and social policy by the British government.The Bank of England acts as the central bank of the island kingdom and is responsible for the issue of pounds sterling. Any news concerning these organizations can significantly change the dynamics of the GBP/USD exchange rate.The pound is the 3rd largest reserve currency in the international economy, after the euro and the dollar. Since 1997, the Monetary Policy Committee has been responsible for publishing the key interest rate at the required level. In fact, the responsible person is the Chancellor of the committee.GBPUSD is a complex currency pair that is very closely interrelated with EUR/USD. At the same time, it lacks such high liquidity, the lack of which translates into increased volatility. Nevertheless, working with GBP/USD is a great chance to increase or strengthen the position already opened on EURUSD. Technical analysis shows relative efficiency. Unjustified price breakouts in any direction will force the trader to adjust his strategy all the time, and will not allow him to earn on one trading idea for a long time.Read more: What time is better to trade ...
According to the general opinion, the origin and functioning of monetary systems are among the most difficult to understand issues of economic theory. In this situation, it is important at the initial stage to give clear and functional definitions of the basic concepts.Types of moneyMoney is considered to be assets that perform the functions of a means of circulation, account units and savings funds. Depending on the method of issue, three types of money can be distinguished:commodity moneycredit moneyfiat money.Commodity moneyCommodity money has been known since ancient times. Their value was determined by the value of the material from which they were made. Commodity money played an important role in metal monetary systems.Credit moneyCredit money (inside money) appeared with the emergence of the first banks. They were debt obligations of banks – banknotes or deposits. Their value was secured by the assets of the issuing bank. Credit money was important in countries where there was no state monopoly on the issue of money.According to the alternative history of money, the first money is often considered to be debts on commodity loans – they were used as a unit of account. After a while, the temples (as organizations that enjoyed unconditional trust) began to recognize these debts, and they became a means of circulation. Subsequently, with the emergence of large-scale production, for the organization and launch of which large-scale investments were required, money-debts turned into a full-fledged means of accumulation.Thus, according to representatives of the alternative concept, metal coins, traditionally considered "universal equivalent" and "real money", appeared later than debts and were derivatives in relation to them. An alternative history of money can provide another explanation for the development of the monetary sphere in the past, as well as its features in the present. According to this version, banks are not "money warehouses", but buyers of debts. Recognizing debts, modern banks, like temples in ancient times, turn them into money accepted by everyone. To do this, they do not need to accumulate goods (precious metals) or other types of means of payment.The basis of the value of a loan is the creditworthiness of its counterparty, that is, the confidence that the counterparty will repay its debt on time. This confidence was provided by organizations that, thanks to their reputation, massively accepted (bought) debts: in ancient times – temples, later – banks. The value of the accepted debts was ultimately given by the state:in the law, these funds were declared a national monetary unit, they were guaranteed state support;they were taken into account for the payment of taxes;citizens were obliged to repay their debts to each other with them.Fiat moneyFiat money or fiat currencies (outside money, from Lat. fiat - decree, instruction) were issued by the state in the form of treasury notes. Their value was based on trust in the state. With the emergence of the state monopoly on the issue of credit money created by banks, they were equalized in rights with fiat money. Therefore, all modern money can be considered fiat.Their value is based on trust in the monetary system as a whole. The state, represented by the central bank, not only issues cash, but also maintains confidence in non-cash money that banks create. In the future, we will use the term "fiat money" in relation to all modern money that is not provided with goods or other material values.Modern fiat money can be cash or non-cash. Cash and non-cash money can be exchanged in a ratio of 1:1. With the development of financial technologies, the popularity of cash is decreasing. The basis of the money supply in modern fiat money systems is non-cash money.From time to time, the attention of researchers and the general public is attracted by assets that can perform certain functions of money. Since the mid-2010s, cryptocurrencies issued by the private sector have been claiming this. Cryptocurrencies have separate properties of commodity and credit money.Digital currencies of central banks (central bank digital currencies) is one of the widely discussed projects in the field of monetary circulation in the early 2020s. If they fully perform the functions of money, by their nature they will belong to fiat money.Issue of fiat moneyIn metal monetary systems, the size of the issue is limited by bank reserves (liquid assets of banks). In fiat systems, such restrictions disappear. But it does not follow from this that the issue of fiat money is not limited by anything.Today, the credit activity of commercial banks is influenced by:interest rate policy of central banks;regulatory standards and measures aimed at achieving financial stability;strict limitations of modern banking risk management.Why did states switch to fiat moneyThe gold standard once played a certain positive role, contributing to the development of world trade and industry. At the same time, he had serious shortcomings:the flow of gold between countries, accelerated by higher rates, led to periodic crises;the more countries switched to the gold standard, the more gold was lacking;under the conditions of the gold standard, the central bank could not adequately perform the functions of a lender of last resort.The emergence of fiat money systems solved the problem of the lack of "money metal". But from the very beginning there were risks:for price stability - historically, the state has a reputation for "living beyond its means";for financial stability, fiat emission can lead to bubbles, and due to the growing interdependence of national economies, crises are becoming more "contagious".Maintaining financial stability for 2021 is still an unresolved ...
Scalping or scalping is a strategy that makes many demands on traders. Perhaps the most serious of them is to accept that everything you think you know about Forex trading will be wrong in this context.Forget about it. Scalping is an opportunity to quickly make money on price changes when transactions last 5-10 minutes.Avoid "political" currenciesDo you want to make money by trading a large amount of money in anticipation of some serious movement? No, scalping is earning money on small price movements. And, what is even more likely in relation to the Forex market, it is worth forgetting about searching for highly volatile pairs in the hope of getting a big profit. George Soros managed to do this in 1992, and you can try to repeat it on a smaller scale, but this will be an example of ordinary trading, not scalping.Successful scalping is based on the use of relatively insignificant price movements. And it depends on a good and thorough analysis of the relevant currencies.First, which currency pairs to choose for scalpingHighly "political" or inflation-prone currencies are not suitable in this context, because they are likely to be very volatile, and high volatility should be avoided.Read more: Volatility: types, how to track and how to useLanguage barriersIt is much better to find a currency pair that is relatively stable, so that its movement can be analyzed and predicted.The obvious candidate would be the EUR/USD exchange rate. This is the most popular currency pair in the world, for which the most transactions are made, and it has many functions that we need.But it has drawbacks.First, it may seem at first glance that these two currencies are, by and large, equivalent. Both are equally popular, issued by developed democratic states, controlled by independent central banks, but in fact they are not comparable.Read more: Causes of inflation and scientific approaches to their studyThe dollar is the currency of a successful political union, it is supported by the federal government and the national treasury, and the central bank, the Federal Reserve System, enjoys broad public support. The euro, the currency of 19 national states, is not supported by the federal government, is prone to crises, as can be seen from what happened to Greece after the 2008 financial crisis, and its management is often criticized.The second drawback is the complexity of the analysis of the European Central Bank, unlike the Fed. There are many, many variables; the position of individual members of the board of directors, the demands of the" southern", poorer countries, the position of the European Commission, which is responsible for economic affairs, and the wishes of Germany, a powerful economy of the European Union.This is compounded by various language barriers that need to be overcome when studying the statements of those who determine the behavior of the ECB.Finally, the ECB is much more autonomous than the Fed.Perhaps the USD/JPY pair may be a more suitable option? The Japanese currency, like the dollar, is the currency of a single state, and the two economies conduct extensive trade with each other. But the language barrier is even more pronounced, and the Bank of Japan is not independent, which means that it is potentially open to political interference.Read more: The European Central Bank (ECB)Communication across the AtlanticThe best candidate for scalping may be USD/GBP. The Fed and the Bank of England are independent but accountable central banks, there is no language barrier, and the legal systems of the two countries are very close.The recent dynamics of the pound against the dollar was quite high, which gives scalpers the opportunity for significant profits. The reasons for this movement include the signing of a trade agreement with the European Union and hopes for the recovery of the UK economy.To predict strong movements in the short term, traders need a thorough and constant analysis of the factors that affect the movement of currencies: economic expectations, fiscal policy and, of course, interest rates. Scalpers will be helped by the fact that both countries have the same attitude to economic management, giving priority to a strong private sector, competitive tax rates and high growth rates.Plus, the US and the UK have a long history of bilateral inter-Atlantic trade.Transactions with GBP/USD may lack the attractiveness of exotic currency pairs, but scalping is not an adventure in the Forex market, but a way to make a profit.Read more: Rich history of the Bank of ...