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Rates
EUR / USD
1.12275
USD / JPY
107.572
GBP / USD
1.24587
USD / CHF
0.9459
USD / CAD
1.35924
EUR / JPY
120.777
AUD / USD
0.69150

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MikhailLF

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EUR/USD

Today, during the Asian session, the EUR/USD pair shows ambiguous trading dynamics, trying to consolidate above the psychological level of 1.1000, where the instrument managed to rise for the first time in three months. The course is supported by the EU proposal to create a restoration fund in the amount of 750B euros, which Germany and France had previously actively called for. It is anticipated that the most affected countries of the bloc will be financed from this fund, which certainly cannot do without additional support, given the current difficult situation. However, there are enough opponents of this idea, so for now there are only general concepts of the fund. On Thursday, investors are focused on the publication of statistics on consumer inflation in Germany, as well as a block of May data on business sentiment in the EU.

GBP/USD

Today, during the Asian session, the GBP/USD pair is consolidating after yesterday's decline, which was formed under the influence of growing rumors about the Bank of England's negative interest rates. Also, investors are concerned about the lack of progress in the UK-EU negotiations on Brexit. Yesterday, it became known that the British side still opposes the extension of the transaction deadline, which practically leaves no chance for a positive outcome of the negotiations, given the existing differences. The current negotiation deadline expires in December 2020, and if no agreement is reached by this time, the UK may leave the EU without a deal.

AUD/USD

Today, during the Asian session, the AUD/USD pair is moderately falling, continuing the development of the “bearish” impulse formed yesterday. Now, the instrument has lost about 0.17% and is actively testing the level of 0.6600 for the breakdown. The optimism of the markets regarding the gradual lifting of quarantine restrictions changes to alarming sentiments regarding the prospects for a global economic recovery. Investors are also concerned about the sharp increase in tension in US-China relations, which threatens to nullify the preliminary results achieved in the framework of trade negotiations. Today’s speech by the head of the RBA, Philip Lowe, had virtually no effect on the position of the Australian currency. Lowe's speech was of a generalizing informational character and did not pursue any specific goals. The official only noted that the March support package has the expected effect and helps “it is helping build the necessary bridge to the recovery.”

USD/JPY

Today, during the Asian session, the pair USD/JPY is growing moderately, continuing to develop flat dynamics in the short term. The market situation does not change much, so investors are in no hurry to open any positions. US macroeconomic statistics are gradually improving, which moderately supports the dollar. So, yesterday, the index of business activity in the manufacturing sector of the Federal Reserve Bank of Richmond for May rose from –53 to –27 points with a forecast of growth of only –47 points. The mortgage lending index for the week of May 22 from the Mortgage Lending Association (MBA) grew by 2.7% MoM after a decrease of 2.6% MoM during the previous period. On Thursday, US investors expect the publication of the final annual data on the dynamics of US Q1 GDP, as well as statistics on Durable Goods Order. Key data from Japan, April statistics on industrial production and retail sales, will be released on Friday

XAU/USD

Today, during the Asian session, gold prices are rising moderately, recovering from the “bearish” beginning of the current week. Demand for the instrument is supported by continuing uncertainty in the market, which is pushing investors to buy shelter assets. Also, the price is strengthening amid expectations of new stimulus measures by the leading Central Banks of the world, including the introduction of negative interest rates, which traders have been actively talking about lately. Finally, investors are noticeably concerned about the growing tension between the US and China, which is likely to prevent the parties from continuing negotiations within a trade deal, the first stage of which was signed at the beginning of this year.
 
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MikhailLF

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Brent Crude Oil: oil is trading sideways

Current trend

For more than a week, oil prices have been trading in an extremely narrow range of 34.20–36.20, and even unexpected data on energy reserves could not make it to leave this channel.

First of all, the slowdown was caused by ambiguous data on the reserves of "black gold" from the API and EIA institutes. The weekly reserves, according to API data, were 8.700 million, which is significantly higher than –4.800 million last week. On Wednesday, the EIA published corresponding data, which also reflected a significant increase to 7.928 million against analysts' forecasts of –1.944 million. Only the excess oil reserves in Cushing’s storage decreased, whose dynamics was –3.395 million against the forecasted decrease of –4.261 million.

Support and resistance

The price continues to form a global upward correction and is consolidating between the levels of the basic and initial Fibonacci corrections. Technical indicators keep the global buy signal: the range of the Alligator indicator’s EMA fluctuations is still wide, and the histogram of the AO oscillator is in the positive zone.

Resistance levels: 38.70, 44.70.
Support levels: 31.70, 23.90.
 

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Morning Market Review

EUR/USD

EUR is trading up against USD during the morning trading session. EUR continues a fairly confident "bullish" trend, which was formed last week and is being traded near the local highs of last Friday (highs since March 27). Investors buy EUR under their own momentum, expecting a further improvement in the epidemiological situation that will allow the global economy to begin the recovery process. Today, investors are focused on Markit macroeconomic statistics on business activity in the manufacturing sector of the eurozone. Similar data from ISM will be published in the US.

GBP/USD

GBP is strengthening against USD during today's Asian session, updating local highs since May 11. The instrument is trying to consolidate above 1.2400, receiving support from the correctional sentiment in USD. Additional pressure on USD was exerted by Friday's macroeconomic statistics from the US, as well as a press conference by Donald Trump, which marked the intensification of the US confrontation with China. Chicago PMI in May fell from 35.4 to 32.3 points with a positive outlook on the growth rate to 40 points. Michigan Consumer Sentiment Index for the same period fell from 73.7 to 72.3 points, which also turned out to be worse than market expectations of 74 points. During his speech, Donald Trump announced the cessation of the WHO funding, once again accusing China of hiding information about the dangers of coronavirus.

AUD/USD

AUD shows strong growth during today's Asian session, updating highs since February 17. The instrument adds about 1% and is trying to consolidate above 0.6740. The main source of growth for the pair is the correctional sentiment in USD. At the same time, quite optimistic macroeconomic statistics from Australia and China entered the market on Monday. AiG Manufacturing index went up from 35.8 to 41.6 points in May. Commonwealth Bank Manufacturing PMI fell from 44.1 to 44 points over the same period, which also turned out to be significantly better than expectations of decline to 42.8 points. Chinese data showed the steady growth of Caixin Manufacturing PMI. In May, the index consolidated at 50.7 points, rising from the previous 49.4 points (the forecast implied an increase to 49.6 points).

USD/JPY

USD is going down against JPY during today's Asian session, testing 107.50 for a breakdown. USD is correcting downwards at the beginning of the week across the entire spectrum of the market, reacting to the publication of not-so-confident macroeconomic statistics from the USA last Friday. In addition, the further lifting of quarantine restrictions has a positive effect on the prospects for the restoration of the global economy. At the same time, it is worth noting the extremely unsuccessful report from Japan on the dynamics of industrial production and retail sales for April, which still does not allow JPY to demonstrate more confident growth. Japanese statistics at the beginning of the week was largely neutral. Jibun Bank Manufacturing PMI in May remained at the same level of 38.4 points. At the same time, Capital Spending for Q1 2020 unexpectedly increased by 4.3% QoQ after a decrease of 3.5% QoQ over the past period. Analysts had expected negative dynamics to remain at –4.2% QoQ.

XAU/USD

Gold prices are rising during today's Asian session, continuing the development of a "bullish" impulse that formed in the middle of the last trading week, when the instrument managed to retreat from its local lows from May 11. The development of the uptrend in gold proceeds against the background of the growth of correctional sentiment in USD, as well as due to a further escalation of tension between the US and China. Last Friday, Donald Trump again made charges against China, which also served as a formal reason for the termination of funding for the WHO. The speech of the Fed Chairman Jerome Powell, who shared his concerns about the second wave of the epidemic, but emphasized the regulator’s readiness for new tests added negative sentiment to the market.
 

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EUR/USD

Today, during the Asian session, the EUR/USD pair shows ambiguous trading dynamics, consolidating near local highs of March 17, renewed yesterday. EU macroeconomic statistics published at the beginning of the week was ambiguous but EUR grew against the background of USD poor positions. Thus, Markit Manufacturing PMI of France for May increased from 40.3 to 40.6 points, which was better than the neutral forecast. The corresponding indicator in Germany fell slightly from 36.8 to 36.6 points. The EU index corrected from 39.5 to 39.4 points. American data on business activity showed growth but could not reach the expected values. The ISM manufacturing sector index rose from 41.5 to 43.1 points with a forecast of an increase to 43.6 points.

GBP/USD

Today, during the Asian session, the GBP/USD pair tends to a “bearish” correction, retreating from 1.2500, which was achieved for the first time since the beginning of May. USD purchasing activity gradually recovers amid the publication of positive macroeconomic statistics. Also, market sentiment improved slightly after a press conference by US President Donald Trump last Friday. Despite the same rhetoric and a tendency to blame China, Trump decided not to break the previously signed trade agreement, which gives hope for the continuation of the negotiation process. On Tuesday, investors are focused on the block of macroeconomic statistics from the UK on the Nationwide housing price index for May, as well as on the volume of consumer lending for April.

AUD/USD

Today, during the Asian session, the AUD/USD pair is growing moderately, renewing the highs of the end of January 2020. Yesterday, the Australian dollar showed the best recent growth due to a decrease in the US currency across the entire spectrum of the market. Additional support for the instrument was provided by data on business activity from Australia and China, which are steadily recovering from the crisis. On Tuesday, strong statistics support AUD, too, but buying activity declined amid the publication of an RBA decision on the interest rate. However, the market did not expect any surprises, because earlier, the head of the regulator noted that the current monetary policy is fully consistent with the current economic situation in the country and in the world. As predicted, the RBA kept the interest rate at 0.25%.

USD/JPY

Today, during the Asian session, the USD/JPY pair is growing slightly, continuing the solid flat trend formed in the short term. Yesterday, JPY was supported by the publication of positive macroeconomic data from Japan; however, today, purchasing activity in the dollar is gradually recovering. In general, the demand for shelter assets remains high, as the global economic recovery process and the gradual abandonment of restrictive measures in connection with the coronavirus epidemic are overshadowed by a sharp increase in tension between the US and China. Also, an internal political struggle is growing in the United States related to citizens' protests in response to the police murder of George Floyd in Minneapolis and the upcoming presidential election.

XAU/USD

Today, during the Asian session, gold prices are consolidating, trading near local highs of May 21. The instrument is supported by the market tension caused by the growing controversy between the US and China and a marked slowdown in the global economy due to the coronavirus epidemic. Also, investors do not exclude the appearance of new support measures from the leading world securities, up to the introduction of negative rates, which will increase the attractiveness of gold.
 

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EUR/USD: the pair is actively growing

Current trend

The EUR/USD pair continues to grow amid positive data from European countries, mostly affected by COVID-19.

This week’s EU macroeconomic statistics are considered by investors as extremely positive. Thus, Manufacturing PMI in Germany for May amounted to 36.6 points, which is slightly lower than expectations at 36.8 points. Manufacturing PMI in Spain is at 38.2 points, which is better than the forecast of 38.0 points, while in Italy Manufacturing PMI reached 45.4 points, which is significantly higher than expectations at 37.1 points. Also, the rate of change in the number of unemployed in Spain fell to 26.6K from 282.9K a month earlier.

The index showing the ratio of the US dollar to a basket of major currencies continues to fall and is almost reaching the levels of February, trading at 97.300.

Support and resistance

After breaking the local resistance of the sideways channel, the price is actively growing, which is confirmed by technical indicators. The range of EMA fluctuations of the indicator Alligator continues to expand upward, and the histogram of the AO oscillator is in the positive zone, which indicates a high probability of the continuation of the current trend.

Resistance levels: 1.1240, 1.1450.
Support levels: 1.1150, 1.0980.
 

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EUR/USD

Today, during the Asian session, the EUR/USD pair is slightly correcting, retreating from 3-month highs, renewed yesterday. The appearance of a “bearish” dynamics is facilitated by technical factors since investors are interested in the closing of the profitable long positions. The macroeconomic background remains the same. European data released on Wednesday were ambiguous. Germany reported an increase in unemployment for May from 5.8% to 6.3%, which was by 0.1% worse than market expectations. The total number of unemployed for June increased by 238K, exceeding forecasts of 200K. At the same time, European statistics pleased investors with a moderate increase in business activity indices, which respond positively to the gradual lifting of quarantine restrictions. Markit Composite PMI in Germany rose from 31.4 to 32.3 points for May, which was better than the neutral forecast.

GBP/USD

Today, during the Asian session, the GBP/USD pair is falling, retreating from the highs of April 30, renewed on Wednesday, amid the correctional growth of the US currency, which has been actively falling for about two weeks. On Wednesday, USD is moderately supported by American macroeconomic statistics. Thus, ADP Nonfarm Payrolls reflected a decrease of 2.760 million jobs, which was significantly lower than the expected decrease of 9,000 million. At the same time, the data indicated a moderate increase in business activity. ISM Service PMI for May rose from 41.8 to 45.4 points against the forecast of an increase to only 44 points.

AUD/USD

Today, during the Asian session, the AUD/USD pair shows ambiguous dynamics, deviating from local highs from the beginning of the year, renewed yesterday. The Australian dollar could not consolidate above the level of 0.7000, however, a certain "bullish" potential remains. Correctional growth of the US currency against almost the entire market led to a decrease in the quotes for the instrument but the demand for shelter assets remains at the same level. Today’s macroeconomic statistics from Australia were slightly better than the forecasts but could not significantly support the instrument. Thus, retail sales for April fell by 17.7% MoM after falling by 17.9% MoM last month. The trade balance for the same period corrected from 10.602B to 8.800B Australian dollars, which was better than market expectations of 7.500B.

USD/JPY

Today, during the Asian session, the USD/JPY pair is growing moderately, renewing local highs of April 8. Now, the instrument has added about 0.15% and is trying to consolidate above 109.00. The upward trend is due to the correctional growth of the American currency across the entire spectrum of the market after the publication of positive macroeconomic statistics on US employment. Yesterday’s ADP report gives hope that Friday's data on the labor market for May will be more optimistic. Today, USD is additionally supported by disturbing news regarding the coronavirus epidemic in Iran. Yesterday, official Tehran reported a record increase in incidence over the past two months, although more than seven weeks have passed since the weakening of quarantine restrictions.

XAU/USD

Today, during the Asian session, gold prices are growing slightly, consolidating near the level of 1700.00 after an active decline yesterday. The upward dynamics is due to a shift in the focus of investors' attention to new alarming signals about the danger of the second wave of coronavirus. Also, technical factors also played a role since today, many instruments are correcting during the morning trading session. Finally, the market expects the emergence of new stimulus measures by the world Central Banks. On Thursday, the ECB will publish the decision on the interest rate, which is now at the zero level. However, investors are more actively monitoring the creation of a fund for the restoration of the European economy, which will amount to 750B euros.
 

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Brent Crude Oil: oil prices are growing

Current trend

The price range is rapidly expanding from above, signaling in favor of the further development of the “bullish” trend in the short term. The instrument is supported by the OPEC+ decision made on Saturday to extend the current agreement to reduce oil production by almost 10M barrels per day until the end of July. The previous agreement called for a reduction in production from July to the end of 2020 by 8M barrels per day. Additional support for quotes is provided by the gradual recovery of the global economy, which provokes a noticeable increase in demand for oil and petroleum products.

A report released on Friday by Baker Hughes on the number of active oil platforms reflected another decrease in the number of active rigs in the US from 222 to 206 units.

Support and resistance

Bollinger Bands in D1 chart show active growth. The price range is expanding; however, it fails to catch the development of "bullish" sentiments. MACD indicator is growing preserving a stable buy signal (located above the signal line). Stochastic reversed in a horizontal plane near the level of “100”, which signals the risks of an overbought instrument in the ultra-short term.

Existing long positions should be kept in the short and/or ultra-short term until the signals from technical indicators clear up.

Resistance levels: 43.05, 45.00, 46.49.
Support levels: 41.50, 40.00, 38.50, 36.59.
 

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WTI Crude Oil: oil is traded lower

Current trend

WTI crude oil prices are corrected downwards after an increase the day before caused by OPEC+ decision to extend production quotas.

The current quotas for the reduction of oil production at the level of 9.7M barrels per day were extended until the end of July. OPEC+ participants felt that ongoing measures are yielding the expected results and that this agreement should be continued. However, Saudi Arabia said that the state-owned company Saudi Aramco, starting in July, will raise prices for all brands of oil for most regions of the world. The largest increase is expected for Asia, where prices may rise by 5.6-7.3 dollars per barrel. This way, Saudi Arabia partially compensates for the March price decline.

Support and resistance

The asset continues global correctional growth and last week the price overcame the Fibonacci retracement level of 50.0%. Despite the fact that the global trend indicator Alligator retains an active buy signal, the probability of a downward correction is quite high. This is indicated by the readings of the AO oscillator, on which a descending bar has formed.

Resistance levels: 42.40, 64.00.
Support levels: 35.60, 28.80.
 

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Morning Market Review

EUR/USD

EUR shows insignificant growth against USD during today's Asian session, continuing the development of yet another "bullish" impulse formed yesterday. The instrument tests the level of 1.1350 for a breakout and returns to the previous three-month local highs, updated on June 5. Some support to EUR is provided by yesterday's macroeconomic statistics from the eurozone. According to updated data, eurozone GDP in Q1 2020 fell by 3.6% QoQ after the previous estimate of –3.8% QoQ. In annual terms, the eurozone economy lost 3.1% YoY, which is also slightly better than previous data of –3.2% YoY. Employment Change in Q1 2020 accelerated from +0.3% YoY to +0.4% YoY. USD remains under pressure amid expectations of the publication of the Fed two-day meeting minutes, scheduled for today. In addition, on Wednesday, investors expect the release of May statistics on consumer inflation in the USA.

GBP/USD

GBP shows a slight increase against USD during today's morning trading, updating its highs since March 12. The day before, the instrument showed a tendency to a downward correction, which was due to the restoration of USD and the growth of anxiety about the prospects for trade negotiations between the EU and the UK. By the close of Tuesday's session, the pair managed to win back all its losses and even to go out into the green zone, which allowed it to maintain a nine-day upward rally. Today, investors are focused on the release of the Fed meeting minutes. Given the strong report on the labor market that the US economy showed at the end of last week, the regulator will take a wait-and-see attitude and confine itself to the usual statements about the need to "keep abreast."

AUD/USD

AUD is showing moderate growth against USD during today's Asian session, recovering after a corrective decline the day before. The instrument adds about 0.50% and is actively testing the level of 0.7000 for a breakout. AUD is supported by rather weak positions in USD, which is again retreating across the entire spectrum of the market after an unsuccessful growth attempt on Tuesday. In turn, macroeconomic statistics from Australia and China hinder the more active growth of the instrument. Home Loans in Australia in April fell by 4.4% after a decrease of 0.1% in March. Analysts had expected zero dynamics. Chinese data reflected a sharp decline in consumer inflation in May. Consumer price index slowed down from 3.3% YoY to 2.4% YoY, which turned out to be worse than the forecast of 2.7% YoY.

USD/JPY

USD is falling against JPY during today's morning session, continuing to develop a confident downtrend from the beginning of the week. The instrument is trading near 107.50, while at the end of trading last week the pair was approaching 110.00. Curiously, JPY continues to ignore weak macroeconomic statistics released in Japan. Data released on Wednesday indicated a 17.7% YoY decrease in Machinery Orders in April after a 0.7% YoY decrease in March. Analysts had expected a drop of 14%. In monthly terms, the indicator collapsed by 12% MoM after a decrease of 0.4% MoM over the past period.

XAU/USD

Gold prices show a slight increase during today's Asian trading, consolidating after a noticeable rise the day before, which was triggered by another surge in investor interest in safe assets. Yesterday, a two-day Fed meeting started, the minutes of which will be published tonight. Despite the fact that no significant changes in the monetary policy vector are expected, investors prefer to exercise extra caution, given the magnitude of the economic turmoil in the global economy due to the coronavirus epidemic.
 

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Morning Market Review

EUR/USD

Today, during the Asian session, the EUR/USD pair is significantly falling, retreating from the three-month highs, renewed yesterday. Now, the instrument has lost about 0.36% and is actively testing the level of 1.1330 for a breakdown. The weakening of the euro is largely due to technical factors. The two-day meeting of the Fed, which ended on Wednesday, helped to partially relieve tension in the market, and now investors are actively closing long profitable positions. Meanwhile, the published protocols practically did not contain anything new. The regulator complained about the significant negative consequences of the coronavirus and said that it expects the US economy to decline by 6.5% this year. The unemployment rate for the year will exceed 9%. The Fed is currently refusing the idea of negative interest rates. It is assumed that rates will remain at near-zero levels at least until the beginning of 2023.

GBP/USD

Today, during the Asian session, the GBP/USD pair is steadily declining, correcting after ten upward trading sessions, which allowed the pound to renew its local maximums of March 12. The reason for the weakening of the instrument was the correctional growth of the US dollar, which was released from pressure for some time. Published yesterday, the minutes of the two-day meeting of the US Federal Reserve did not bring any surprises, and the negative forecasts of the US regulator regarding the pace of the slowdown in the US economy contributed to an increase in demand for shelter assets. Today, traders are focused on a block of US data on the dynamics of industrial inflation. Also, on Thursday, Initial and Continuous Jobless Claims will be released. It is expected that the number of initial applications for the week of June 5 will decrease from the previous 1.877 million to 1.550 million.

AUD/USD

Today, during the Asian session, the AUD/USD pair is falling, correcting from the local maximums of July 2019. The instrument falls amid large-scale growth of the American currency along the whole market after the publication of the minutes of the two-day Fed meeting. As expected, the US regulator did not change the parameters of monetary policy but disappointed the markets with extremely negative forecasts for the US economy for the current year. The Fed expects that US GDP will decline by 6.5% in 2020, while the current economic crisis will affect almost all areas of the economy. The forecast will be relevant if the second wave of the epidemic does not happen, which cannot be ruled out. On Thursday, Australian data negatively affected the instrument. The indicator of expectations for consumer price inflation in June fell from 3.4% to 3.3%, while the forecast assumed its growth to 4.2%.

USD/JPY

Today, during the Asian session, the USD/JPY pair reversed upwards due to a surge in investor interest in safe assets. Also, the instrument was affected by the technical factors as the dollar was heavily oversold against many currencies on the market. Wednesday’s US macroeconomic statistics were negative. Thus, the consumer price index for May slowed down from +0.3% YoY to +0.1% YoY, which was worse than market expectations of +0.2% YoY. CPI excluding food and energy decreased by 0.1% MoM for the same period, slightly improving from the previous decline of 0.4% MoM, and slowed down from +1.4% YoY to +1.2% YoY with a forecast of +1.3% YoY.

XAU/USD

Today, during the Asian session, gold prices are falling, retreating from local highs of June 2, which the instrument renewed due to a confident “bullish” rally at the beginning of the trading week. In the first half of the week, experts linked the growth of the precious metal with new support measures from the Fed; however, the published protocols disappointed the market. The regulator only promised to continue buying up bonds but no long-term plan to support the economy was presented. As for the rates, they remained unchanged at the level of 0.25%, and the Fed predicts their preservation at current values at least until the beginning of 2023.
 
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