Wave Analysis by InstaForex

Mr. Trump Against All



Mr. Trump is against everyone.
In recent weeks:

Trump with a scandal held a meeting with the "Big Seven", refusing to sign under a general statement. His statements to the head of Canada were in fact insults. The meeting of the "Seven" was a series of attacks by Trump on the Allies - Europe (especially Germany), Canada.

Trump took part in the NATO meeting, where he struck everyone with the demand to immediately increase defense spending of the participating countries to 4% - despite the fact that the goal of 2% is quite difficult to achieve. Trump again attacked Germany and Merkel - for low defense spending.

Trump visited Britain and criticized Prime Minister May's plan for a "soft Brexit" plan, on which the May government's survival depends.

Trump makes it clear that he considers the EU to be a harmful, unnecessary structure. He offers France to leave the EU.

Trump is attacking China, raising the stakes in the trade war - on Friday he promised to extend new duties on almost all the goods coming to the US from China - to an amount of $500 billion. This will undoubtedly have a noticeable impact on inflation in the US, businesses related to the United States - not to mention the retaliatory measures on the part of China. A very likely consequence will be a sharp cooling down of China-US political relations - these relations have been very friendly since 1978 (!)

In general, it is the US-China trade war that Trump is unleashing right before our eyes - that is the biggest risk for the world economy, and more than the economy.

Trump is attacking the EU on trade issues - demanding to introduce duties on cars from the EU is a blow to Germany. Paradoxically,
Trump is counting on Europe's support in the trade war against China.

Earlier, Trump withdrew from the "nuclear deal" with Iran - while Europe for the continuation of relations with Iran.

Trump attacked his own special services, saying that he did not trust their investigations into Russia's interference in US elections. Then he refuted his words. And then he said he didn't trust them again.

Finally, Trump attacked the Fed, condemning the decision to raise rates. He accused the US central bank that raising the Fed's rate hinders economic growth in the US and strengthens the dollar, which makes US debt (more than $20 trillion) more expensive and helps US competitors - China and Europe - in trade, increasing the US trade deficit.

Trump made this statement on Thursday, and despite criticism that Trump attacks the independence of the US Central Bank, and his statement that he respects the Fed's independence and personally Powell, the head of the Fed, - on Friday Trump reiterated his criticism.

Perhaps the only person Trump talked about sympathetically in recent weeks is Russian President Putin. Trump, after a meeting in Helsinki with Putin, soon invited the Russian president to the United States for a visit. This, of course, only added fuel to the fire of Trump's criticism.

Trump announced that China and the ECB specifically pursue a policy of undervaluing their currencies against the dollar, thereby damaging the US in trade. The market started talking about "currency wars".

This is it. The only thing that can be said: "The more fronts on which the commander is at war, the less chance he has to win."

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Analysis are provided byInstaForex.

The euro is stable ahead of the ECB meeting

Eurozone
The key event in the eurozone this week is the ECB meeting on Thursday, July 26. This meeting is considered to be a passing one, the likelihood of any changes is minimal, but surprises are still possible, and they will primarily concern the wording regarding the timing of maintaining current rates.

The ECB directly links the first increase to achieving a consistently high inflation rate, and at the moment this parameter is rather negative – growth is primarily due to rising prices for petroleum products, the root value is about 1%, which is too low to begin the cycle of tightening. At the same time, maintaining a dovish rhetoric is increasingly difficult, as with each new meeting, the spread of returns between dollar and euro assets is increasing, the spread of yields between assets in dollars and euros is growing, and delaying the process can accelerate the migration of capitals from the eurozone.

There is another factor that may push Draghi to take a more hawkish position. The inversion of the yield curve in the United States is approaching, the dynamics are obvious. Three times in recent decades, the inversion preceded a new recession, and if the current trend continues, the new inversion will come in half a year, and there before the recession at hand.

[IMG]https://forex-images.ifxdb.com/userfiles/20180724/analytics5b570f0734ba8.png[IMG]

Accordingly, the ECB is in an ambiguous position – it can begin a cycle of tightening just as a new recession is indicated. This paradoxical conclusion from the current situation does not allow the ECB to publicly announce the expected steps, because they can be canceled at any time.

Thus, there are two scenarios for the euro, and both of them are bad, and there is a badly hidden split in the bank's management regarding the future actions of the regulator. Accordingly, the focus is shifted to the press conference of Draghi following the meeting, which may lead to the growth of the euro, since Draghi is unlikely to avoid adding hawkish notes to his position.

Since the ECB meeting is not expected to publish important macroeconomic data (the release of the PMI Markit report is unlikely to be able to take markets out of balance on Wednesday), EUR/USD trading will most likely take place in a range close to current levels. After the meeting, it is possible to consolidate the euro above 1.1790 and try to test 1.1853, but it is unlikely that it will be successful, the dollar in the main currency pair remains favorable.

Britain
The pound is under pressure due to another political crisis that threatens to lead to the resignation of the May government, as well as due to weak economic data. At the same time, the Bank of England meeting is holding it back from falling, with a 70% probability that the key rate will be raised. The GBPUSD will continue to trade in a wide range of 1.3050 / 3190, the probability of an exit for which until the end of the week is low.

Oil
Oil prices again attempt to grow after Saudi Arabia has lowered its tone regarding output growth under pressure from a number of OPEC countries and the lack of real growth in demand. The threat of "excess" oil entering the market has decreased, which led to the stabilization of prices. Brent traded on Tuesday above $73 per barrel, by the end of the week can rise above 74. *The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Analysis are provided byInstaForex.

Elliott wave analysis of EUR/NZD for July 26, 2018

The ongoing correction in red wave ii keeps pushing lower, but it must not break below the start of red wave i at 1.7116 as a break below here, will confirm that black wave ii still is in motion and is headed for support at 1.7066. If, however, the low of red wave i at 1.7116 stays untouched, as we expected, for a break above the channel resistance near 1.7199, that will call for red wave iii towards 1.7510 on the way towards the first long-term target at 1.8381.
R3: 1.7305
R2: 1.7268
R1: 1.7199
Pivot: 1.7184
S1: 1.7165
S2: 1.7130
S3: 1.7116

Trading recommendation: We are long EUR from 1.7226 with our stop placed at 1.7110. If you are not long EUR yet, then buy a break above the channel-resistance at 1.7199 and use the same stop at 1.7110.

Analysis are provided byInstaForex.

Elliott wave analysis of EUR/NZD for July 27, 2018



EUR/NZD is a break above the descending channel resistance-line near 1.7173 indicating that red wave ii completed with the test of 1.7130 and red wave iii towards 1.7510 now is developing.

Short-term, we would like to see a break above resistance at 1.7207 too, as confirmation that red wave iii is in motion for the next impulsive rally.

Support is now seen at 1.7162 and again at 1.7130. Ideally the later will be able to protect the downside for the expected break above 1.7207.

R3: 1.7305
R2: 1.7268
R1: 1.7207
Pivot: 1.7184
S1: 1.7162 S2: 1.7130
S3: 1.7116

Trading recommendation:
We are long EUR from 1.7226 with our stop placed at 1.7110. If you are not long EUR yet, you should buy here at 1.7180 or upon a break above 1.7207 and use the same stop at 1.7110.

Analysis are provided byInstaForex.

Elliott wave analysis of EUR/NZD for July 30, 2018



We continue to expect support at 1.1716 will be able to protect the downside for a break above resistance at 1.7207 that confirms, that red wave ii has completed and that red wave iii towards 1.7510 and above is developing.

An unexpected break below support at 1.7116 will tell us that the correction in black wave ii/ still is in motion for a continuation closer to 1.7067 before a possible corrective low should be in place.

R3: 1.7268
R2: 1.7207
R1: 1.7163
Pivot: 1.7137
S1: 1.7116
S2: 1.7067
S3: 1.7033

Trading recommendation:
We are long EUR from 1.7226, with our stop placed at 1.7110. If you are not long EUR, the buy a break above 1.7207 and use the same stop at 1.7110.

Analysis are provided byInstaForex.

Technical analysis: Intraday Level For EUR/USD, July 31, 2018



When the European market opens, some Economic Data will be released such as Unemployment Rate, Italian Prelim CPI m/m, Prelim Flash GDP q/q, Core CPI Flash Estimate y/y, CPI Flash Estimate y/y, Italian Monthly Unemployment Rate, German Unemployment Change, Spanish Flash GDP q/q, French Prelim CPI m/m, and German Retail Sales m/m. The US will release the Economic Data too such as CB Consumer Confidence, Chicago PMI, S&P/CS Composite-20 HPI y/y, Personal Income m/m, Personal Spending m/m, Employment Cost Index q/q, and Core PCE Price Index m/m, so amid the reports, EUR/USD will move in a medium volatility during this day.

TODAY'S TECHNICAL LEVEL:
Breakout BUY Level: 1.1765.
Strong Resistance:1.1758.
Original Resistance: 1.1757.
Inner Sell Area: 1.1736.
Target Inner Area: 1.1708. Inner
Buy Area: 1.1680.
Original Support: 1.1669.
Strong Support: 1.1658.
Breakout SELL Level: 1.1651.

Analysis are provided byInstaForex.

Elliott wave analysis of EUR/NZD for August 1, 2018



EUR/NZD tried to break above short-term important resistance at 1.7205 but failed. We think it is just a matter of time before a new attempt to break above this resistance is seen. A firm break above resistance at 1.7205, will confirm that red wave ii has completed and that red wave iii towards 1.7510 and above is developing.

Short-term, support remains seen at 1.7134 and 1.7116. The later should continue to protect the downside for the expected break above 1.7205. An unexpected break below 1.7116, will indicate that black wave ii/ still is in motion for a spike lower to 1.7066 before turning higher in black wave iii/.

R3: 1.7268
R2: 1.7207
R1: 1.7185
Pivot: 1.7165
S1: 1.7137
S2: 1.7116
S3: 1.7106

Trading recommendation:
We are long EUR from 1.7226 with our stop placed at 1.7110. If you are not long EUR yet, then buy a break above 1.7205 and use the same stop at 1.7110.

Analysis are provided byInstaForex.

Gold bets on August

July was the fourth consecutive month of gold closing in the red zone. The precious metal has not faced such a protracted peak since 2013. The US economy and the aggressive monetary tightening of the Fed, which gained under the influence of the fiscal stimulus, dealt a serious blow to the positions of the bulls in the XAU/USD. The futures market is almost 70% confident that the Federal reserve will raise rates twice before the end of the year amid a drop in unemployment to 4%, inflation to the target and an impressive +4.1% q/q of GDP for the second quarter.

Quarterly dynamics of gold



While Japanese investors kept the yield of 10-year US Treasury bonds below the psychologically important 3% mark, and the growth of US stock indices did not allow precious metals to play a role in escalating trade conflicts, a strong dollar left it no chance. Even the information from competent Reuters sources about Donald Trump's willingness to announce the expansion of import duties for China by $200 billion was perceived as a reason for selling the XAU/USD in the near future. The dollar, for investors, seems to be a more reliable safe-haven asset than gold.

What can the precious metal answer? First, the seasonal factor can play on its side. August is the second best month for gold after January. By the end of the last month of summer 2017, it has strengthened by more than 4%, and in 2016-2017, ETF reserves added about 4%. Second, speculative net longs have fallen to a record low since the date of the accounting in 2006. They are lower than at the end of 2015, when the Fed started the process of monetary policy normalization. Finally, third, the market has serious doubts about the ability of the US economy to maintain the pace taken in the second quarter. Let Donald Trump in this no doubt, but the logic says the opposite. The gradual fading of the effect of tax reform, tightening of the Fed's monetary policy, trade wars and the dollar's revaluation in April-July increase the risks of a slowdown in GDP in the third-fourth quarters.

Another thing is that the main competitor of the dollar in the face of the single European currency is not shining yet. In April-June, the divergence in economic growth of the US and the eurozone turned out to be the broadest one since 2014. This does not allow us to count on the ECB's departure from ultra-soft monetary policy and creates serious obstacles for the EUR/USD to move upwards.

In the short term, gold is likely to show increased sensitivity to the results of the FOMC meeting and the release of data on the US labor market. The Fed's "dovish rhetoric and sluggish wage growth will push futures prices in the direction of $1,250 per ounce. On the contrary, if the central bank prefers the "hawkish" hunt, and the statistics on wages will please the eye, the precious metal risks to continue the peak in the direction of $1200.

Technically, gold is trying to push off the convergence zone of $1207-1222 (targets for 200% and 88.6% by the AB=CD and "Shark" patterns). If the bulls manage to keep the quotes above the important support, the risks of a rollback to $1,243 and $1,272 will increase.

Gold, daily chart



Analysis are provided byInstaForex.

Technical analysis: Intraday Level For EUR/USD, Aug 03, 2018



When the European market opens, some Economic Data will be released such as Retail Sales m/m, Italian Retail Sales m/m, Italian Industrial Production m/m, Final Services PMI, German Final Services PMI, French Final Services PMI, Italian Services PMI, Spanish Services PMI, and French Gov Budget Balance. The US will release the Economic Data too, such as ISM Non-Manufacturing PMI, Trade Balance, Unemployment Rate, Non-Farm Employment Change, and Average Hourly Earnings m/m, so, amid the reports, EUR/USD will move in a medium to high volatility during this day.

TODAY'S TECHNICAL LEVEL:

Breakout BUY Level: 1.1642.

Strong Resistance:1.1635.

Original Resistance: 1.1624.

Inner Sell Area: 1.1613.

Target Inner Area: 1.1586.

Inner Buy Area: 1.1559.

Original Support: 1.1548.

Strong Support: 1.1537.

Breakout SELL Level: 1.1530.

Disclaimer: Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all Traders or Investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Elliott wave analysis of EUR/JPY for August 6, 2018



EUR/JPY has moved just below the lower boundary at 128.66 (the low has been seen at 158.49). This does fulfill all requirements for our slightly preferred scenario, meaning that a low should be in place for wave ii/ and a new impulsive rally in wave iii/ should be ready to develop. Wave iii/ will ideally make it to 135.74 and possibly even higher.

That said, we need to remember that prices need to prove themselves for a strong rally above 129.62. The possible alternate scenario still remains possible. Under this count, wave ii still is developing as an expanded flat correction. If this count is correct, then we should expect resistance near 129.62 will cap the upside for a final decline towards 126.01 to complete wave ii before wave iii will be ready to take over.

R3: 129.62
R2: 129.18
R1: 129.00
Pivot: 128.77
S1: 128.50
S2: 128.11
S3: 127.69

Trading recommendation:
Our stop at 128.50 was hit for a 45 pips loss. We will re-buy EUR here at 128.72 and place our stop at 128.45.

Analysis are provided byInstaForex.