LiteForex Analitics

[Mikhail Kurakin]

Morning Market Review

EUR/USD

EUR shows ambiguous dynamics against USD during today's Asian session, holding at its lows since April 5. The day before, EUR showed steady growth, but then fell just as quickly, which was caused by the publication of the minutes of the meeting of the European Central Bank (ECB) on the interest rate. As expected, the regulator kept the parameters of the monetary policy unchanged, but provided updated recommendations, according to which the recovery of the region's economy may require "constant and strong" support. Earlier, the European Central Bank announced a new monetary policy strategy and adjusted the inflation target. The latter, however, does not show any stable uptrend, and therefore there is no hope for a reduction in the quantitative easing program in the near future. Additional pressure on EUR was put by data on the level of consumer confidence in the eurozone, which in July fell from –3.3 to –4.4 points, while analysts had expected a moderate rise in the indicator to –2.5 points. Today, investors are focused on statistics on business activity in the manufacturing and services sectors in the eurozone for July.

GBP/USD

GBP is trading downwards against USD, correcting after strong gains over the past two sessions that pushed the instrument to local highs since July 16. The reason for the further development of "bullish" trend yesterday was the weak position of USD, which reacted to the publication of macroeconomic statistics from the USA. Initial Jobless Claims for the week ending July 16 unexpectedly increased from 368K to 419K, which turned out to be worse than market expectations at 350K. Continuing Jobless Claims fell from 3.265M to 3.236M, but fell short of the expected 3.1M. Correctional sentiment reigns in the market today as investors rush to lock in long profits ahead of the weekend. Slight support for GBP is provided by data on Gfk Consumer Confidence. In July, the indicator continued to grow and strengthened from –9 to –7 points, which turned out to be slightly better than the market forecasts at the level of –8 points.

AUD/USD

AUD shows ambiguous dynamics of trading against USD during the Asian session, consolidating near the local highs and the level of 0.7400. The instrument is supported by the weak positions of USD, which is under pressure from the disappointing macroeconomic statistics from the US on jobless claims. At the same time, the further growth of the pair is hindered by the data from Australia, released today. Commonwealth Bank Services PMI in July fell sharply from 56.8 to 44.2 points, which turned out to be worse than the forecasts. Commonwealth Bank Manufacturing PMI also fell from 58.6 to 56.8 points. In turn, the Composite PMI in July fell from 56.7 to 45.2 points.

USD/JPY

USD shows slight gains against JPY in Asian trading, recovering from a slight decline the day before. Yesterday, USD recorded a decline against most of its competitors, responding to the publication of unexpectedly weak macroeconomic statistics from the US on the dynamics of initial jobless claims. However, USD's decline against JPY turned out to be very limited, as investors preferred to return to more risky assets for a while. In addition, there was a day off in Japan yesterday due to the Health and Sports Day. Today, investors are focused on statistics on business activity in the manufacturing and services sectors in the US from Markit. Analysts' forecasts suggest a slight increase in indicators, which is unlikely to provide significant support to USD.

XAU/USD

Gold prices are declining during today's Asian session, developing flat dynamics in the short term. The day before, the instrument renewed its local lows since July 12, responding to the growth of stock indices and a moderate increase in USD rate. However, with the opening of the US trading session, the "bulls" managed to fully recoup, entering the green zone after the publication of disappointing macroeconomic statistics on jobless claims in the USA. Meanwhile, concerns about a new wave of the COVID-19 pandemic continue to provide moderate support for gold, as a number of countries are seeing a sharp increase in the number of infections.

 

[Mikhail Kurakin]

GBP/USD: wave analysis

The pair may grow.

On the daily chart, the first wave of the higher level (1) formed, and a correction formed as the wave (2). Now, the wave C of (2) has developed, and the formation of the wave (3) is starting. If the assumption is correct, the pair will grow to the levels of 1.4246–1.4400. In this scenario, critical stop loss level is 1.3578.

 

[Mikhail Kurakin]

Bank of America Corp.: wave analysis

The price may fall.

On the daily chart, the fifth wave of the higher level 5 forms, within which the wave (3) of 5 developed. Now, a local correction has started to form as the fourth wave (4) of 5, within which the wave A of (4) has formed. If the assumption is correct, after the end of the wave B of (4), the price will fall to the levels of 35.62–33.26. In this scenario, critical stop loss level is 43.53.

 

[Mikhail Kurakin]

AUD/USD: wave analysis

The pair may fall.

On the daily chart, the first wave of the higher level (1) of C developed, and a downward correction forms as the wave (2) of C. Now, the wave A of (2) is forming, within which the third wave of the lower level iii of A has developed, and a local correction has started to forming as the wave iv of A. If the assumption is correct, after the end of the correction, the pair will fall to the levels of 0.7036–0.6742. In this scenario, critical stop loss level is 0.7616.

 

[Mikhail Kurakin]

WTI Crude Oil: oil prices are slightly strengthening

Current trend

Yesterday, prices for WTI Crude Oil rose slightly, and today, during the Asian session, they continue to develop upward dynamics, renewing local highs since July 14.

Yesterday, the data on the dynamics of stocks of oil and petroleum products in the USA provided moderate support to the quotes. However, more confident growth was hampered by the released minutes of the US Federal Reserve, which for some time contributed to the strengthening of the position of the American currency. The report of the US Department of Energy reflected a decrease in oil reserves in the United States for the week of July 23 by 4.089M barrels after an increase of 2.108M barrels over the previous period. Analysts had expected negative dynamics in reserves but hoped for only 2.928M barrels. Gasoline stocks fell by 2.25M barrels, while total US oil production fell by 200K barrels per day to 11.2M barrels per day.

Support and resistance

On the daily chart, Bollinger bands are showing sideways dynamics. The price range narrows slightly in response to the ambiguous nature of trades in recent weeks, but its width remains sufficient for the current price dynamics. The MACD indicator is growing, maintaining a poor buy signal (the histogram is above the signal line). Stochastic, having reached its maximum values, is trying to reverse into a downward plane, signaling in favor of the development of a corrective decline in the ultra-short term.

Resistance levels: 73.00, 74.00, 75.00, 75.68
Support levels: 71.80, 71.00, 70.00, 69.07.

 

[Mikhail Kurakin]

EUR/USD: data from the EU disappointed investors again

Current trend

Against the background of a significant decline in EU macroeconomic indicators, the EUR/USD pair corrects downwards, trading around 1.1720.

This week, the downtrend for the European currency continued due to the deterioration of macroeconomic indicators in the EU. Another piece of data for Germany was published yesterday. Thus, ZEW current economic conditions index with the forecast for August amounted to 29.3 points, which is lower than the forecasted 30.0 points. ZEW index of economic sentiment dropped by 22.9 points and amounted to 40.4 points, which is significantly worse than the 56.7 points expected by analysts.

The American currency index is in an uptrend and has already reached the level of 93.000, which has not been seen since the end of March. The reason for the positive dynamics was the approval by the US Senate of a new infrastructure bill, which involves the cost of financing roads, bridges, railroads, and electrical networks in the amount of $1.2T. It is part of the global plan of US President Joe Biden, finalized during the Senate vote.

Support and resistance

On the global chart, the price is forming a Head and shoulders pattern. Technical indicators reversed and issued a sell signal, confirming the implementation of the pattern: fast EMAs on the Alligator indicator are below the signal line, and the AO oscillator histogram crossed the zero line and continues to decline.

Resistance levels: 1.1767, 1.1888.
Support levels: 1.1702, 1.1600.

 

[Mikhail Kurakin]

American Express Co.: wave analysis

The price may fall.

On the daily chart, the fifth wave of the higher level (5) develops, within which the wave 3 of (5) formed. Now, a downward correction has started to develop as the fourth wave 4 of (5). If the assumption is correct, the price will fall to the levels of 157.42–144.15. In this scenario, critical stop loss level is 178.60.

 

[Mikhail Kurakin]

Intel Corp.: wave analysis

The price is in a correction and may grow.

On the daily chart, a downward correction of the higher level developed as the second wave (2), within which the wave C of (2) formed, and the development of the third wave (3) started. Now, the first entry wave of the lower level 1 of (3) has formed, and a downward correction is ending to develop as the wave 2 of (3), within which the wave c of 2 is ending. If the assumption is correct, after the end of the correction, the price will grow to the levels of 68.50–75.00. In this scenario, critical stop loss level is 48.50.

 

[Mikhail Kurakin]

Walt Disney Co.: wave analysis

The price may grow.

On the daily chart, a downward correction of the higher level developed as the fourth wave (4), and the fifth wave (5) develops, within which the development of the wave 5 of (5) develops. Now, the wave iii of 5 is forming, within which the wave (ii) of iii has developed, and the formation of the wave (iii) of iii has started. If the assumption is correct, the price will grow to the levels of 202.98–220.00. In this scenario, critical stop loss level is 170.56.

 

[Mikhail Kurakin]

Nvidia Corp.: wave analysis

The price may grow.

On the 15-minutes chart, the first upward wave of the higher level 1 develops, within which the wave iii of 1 formed, and a local correction ended as the wave iv of 1. Now, the fifth wave v of 1 is developing, within which the wave (ii) of v is developing. If the assumption is correct, the price will grow to the levels of 209.30–215.00. In this scenario, critical stop loss level is 194.03.

 

[Mikhail Kurakin]

Mastercard Inc.: wave analysis

The price may grow.

On the daily chart, the fifth wave of the higher level (5) develops, within which the wave 3 of (5) forms. Now, the first wave of the lower level i of 3 has formed, and a local correction is ending to develop as the wave ii of 3. If the assumption is correct, after the end of the correction, the price will grow to the levels of 450.00–500.00. In this scenario, critical stop loss level is 310.66.

 

[Mikhail Kurakin]

Amazon.com Inc.: wave analysis

The price may grow.

On the daily chart, the third upward wave of the higher level (3) develops, within which a correction developed as the fourth wave 4 of (3), and of the fifth wave 5 of (3) forms. Now, the third wave of the lower level iii of 5 has formed, and the correctional wave iv of 5 is ending. If the assumption is correct, the price will grow to the levels of 4000.00–4300.00. In this scenario, critical stop loss level is 3120.81.

 

[Mikhail Kurakin]

McDonald’s Corp.: wave analysis

The price may grow.

On the daily chart, the fifth wave of the higher level (5) develops, within which the wave 3 of (5) forms. Now, the third wave of the lower level iii of 3 is developing, within which the wave (ii) of iii has ended, and the formation of the wave (iii) of iii has started. If the assumption is correct, the price will grow to the levels of 260.00–275.00. In this scenario, critical stop loss level is 225.78.

 

[Mikhail Kurakin]

EUR/USD: wave analysis

TThe pair may fall.

On the daily chart, the first wave of the higher level 1 of (3) developed, and a downward correction forms as the second wave 2 of (3). Now, the wave c of 2 is developing, within which the fifth wave of the lower level (v) of c is forming. If the assumption is correct, the pair will fall to the levels of 1.1601–1.1480. In this scenario, critical stop loss level is 1.1908.

 

[Mikhail Kurakin]

PayPal Holdings Inc.: wave analysis

The price is in a correction, a fall is possible.

On the daily chart, the third wave of the higher level (3) developed, and a downward correction started to develop as the fourth wave (4). Now, the wave A of (4) is developing, within which the first entry wave of the lower level i of A has formed, and a local correction is developing as the wave ii of A. If the assumption is correct, after the end of the correction, the price will fall to the levels of 256.16–223.27. In this scenario, critical stop loss level is 310.18.

 

[Mikhail Kurakin]

IBM Corp.: wave analysis

The price is in a correction and may grow.

On the daily chart, a downward correction developed as the second wave of the higher level 2 of (1) of 5, and the third wave 3 of (1) of 5 develops. Now, the third wave of the lower level iii of 3 has formed, and a local correction is developing as the fourth wave iv of 3, within which the formation of the wave (c) of iv is ending. If the assumption is correct, after the end of the correction iv of 3 the price will grow to the levels of 155.00–160.00. In this scenario, critical stop loss level is 131.00.

 

[Mikhail Kurakin]

Boeing Co.: wave analysis

The price may grow.

On the daily chart, the first wave of the higher level (1) of C formed, a downward correction developed as the second wave (2) of C, and the third wave (3) of C develops. Now, the entry wave of the lower level 1 of (3) has formed, a local correction has developed as the wave 2 of (3), and the wave 3 of (3) is forming, within which the development of the wave iii of 3 has started. If the assumption is correct, the price will grow to the levels of 300.00–315.00. In this scenario, critical stop loss level is 204.28.

 

[Mikhail Kurakin]

XAU/USD: wave analysis

The pair may fall.

On the daily chart, the third wave of the higher level (3) formed, and a downward correction forms as the fourth wave (4). Now, the wave C of (4) is forming, within which the third wave of the lower level iii of 3 has formed, and the local correction iv of 3 has ended. If the assumption is correct, the pair will fall to the levels of 1623.35–1515.88. In this scenario, critical stop loss level is 1832.53.

 

[Mikhail Kurakin]

WTI Crude Oil: wave analysis

The price is in a correction, a fall is possible.

On the daily chart, a downward correction of the higher level developed as the wave B, and the upward wave C forms, within which the first wave 1 of (1) of C developed. Now, a downward correction is developing as the wave 2 of (1), within which the wave a of 2 has formed. If the assumption is correct, after the end of the local correction b of 2 the price will fall to the levels of 59.66–49.02. In this scenario, critical stop loss level is 77.00.

 

[Mikhail Kurakin]

Alphabet Inc.: wave analysis

The price may grow.

On the daily chart, the fifth upward wave of the higher level (5) develops, within which the third wave 3 of (5) formed, and the correctional wave 4 of (5) ended. Now, the fifth wave 5 of (5) is forming, within which the wave of the lower level iii of 5 is developing. If the assumption is correct, the price will grow to the levels of 3000.00–3200.00. In this scenario, critical stop loss level is 2671.75.