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XAU/USD: Short Review and Forecast
The market has been extremely volatile the last few months. Investors are waiting for the results of the FED meeting. The GOLD has good chances to increase in price if the FED doesn't change the rate.

The Gold has been extremely volatile for the last few months. On the H4 chart we can see a large number of different micro trends that continually replace each other every month. This has created uncertainty on the market. Volatility is higher than ever: in just three months, the price varied in the range of 1216-1294 dollars. Overall, the trend looks flat, but with a huge range.


This week, the price achieved a monthly maximum, but decreased a bit because investors are awaiting the results from the Federal Reserve meeting held today. The Fed meeting will show if the interest rate is going to be increased or not. Investors suppose that interest rates are unlikely to be increased before December. Inflation in the United States was lower than expected for the fourth month in a row. Other economic indicators also do not impress the market. The Gold also has been rising in price due to the failure of the health care reform and the weakening of the USD.

Given that the Federal Reserve rate hike is unlikely in the near future, we expect a further increasing of Gold value, after the price correction. This also confirmed by the Stochastic oscillator, which indicates that the current rates are in the oversold zone. A further increase of the Gold's value will lead to the formation of a steady uptrend. Therefore, the deals to BUY can be considered as the most effective.

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How Healthcare Failed the Dollar

Amid the ruins of the Republicans' attempts to repeal and replace Obamacare, the USD is the true victim.

While we have been focusing on other regions in our most recent articles, one detail often popped up in our analysis: the fact that the American dollar has weakened. Why did that happen? That’s what we’ll try to find out today.

Now, if you take a look back to 2015 and 2016, you’d see the dollar overtaking most major currencies, making consistent gains as the US economy was doing splendidly. The USD experienced volatility around the 2016 Presidential elections, but after Trump’s win investors decided to back him up in hopes that his protectionist policies and focus on infrastructure would boost the economy. As a result, the dollar ended 2016 at record highs and at the turn of 2017 people were already talking of possible parity with the euro, with various temporal prognoses, most commonly by the year’s end.

However, we are now seven months into 2017 and six months into Trump’s presidency, and things are not looking good. Trump has failed repeatedly to find support for his policy-making, and save for his promise to revive the coal industry, he hasn’t achieved much from what was on his campaign’s agenda. Investors have been continuously changing their expectations of his presidency with every passing day, and have little to no confidence in him right now, since polls are showing massive losses in Trump’s popularity among American citizens. This led to a lack of confidence in the American dollar too; the USD has suffered losses, while safe-haven trading instruments such as gold have regained some of their popularity in recent times.

The most recent political fiasco of Trump’s administration is undoubtedly the failed healthcare reform. Republicans have been attempting to get rid of the Affordable Care Act (commonly known as Obamacare) even before it was enacted years ago. Now that they finally have the upper hand in the Senate, it is astonishing just how poorly this was handled. Republicans kept details about their reform secret; the President expressed support for the bill without having seen it, and later switched his position, calling it “mean.” After a series of failed votes (including from Republican senators), the massively unpopular bill failed. It was then replaced with a plan to simply repeal Obamacare and return things to the way they were. In light of this, however, an estimate of 15 million people would have been left without insurance next year, and even more in the future. Last night even the vote to repeal Obamacare failed.

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CL/WTI: Short Review & Middle Term Forecast

After the depressed period we have an upward trend again and preconditions for further growth, given the long-term perspectives for increasing demand.

Between May and the end of June the market was depressed. Oil fell in price from $51 to $42. It seemed that the falling of oil prices is unstoppable. The oversupply of crude oil, the increase of oil extraction volumes even amid OPEC countries and the growth of oil reserves in the United States created a desperate situation, whereby market participants were unable to control the market and achieve a balance between demand and supply.

However, in July oil began to recover due to the reduction of oil stocks in the United States and the reduction of drilling activity. In addition, the oil recovered in price amid the long-term forecasts which show perspectives for growth in the demand for oil, although some analysts disagree with that. Nevertheless, given the recent data such as the index of business activity in China from Caixin, which marks the increasing of business activity, there are good preconditions for an increasing demand for raw materials in China. The decreasing in oil reserves in the United States will ease the pressure on the oil market for the next few months.

CL/WTI, H4
In the near future the market will focus on the upcoming OPEC meeting, which will take place on August 7-8. The volatility over the past few months has remained very high, but it's decreasing. We can expect for sure a continuation of the rates in the frames of the current uptrend. After the price correction, prices may recover to the level of 50-51 dollars. The Stochastic oscillator also indicates a good time to open the deals to BUY on the trend.

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British Struggles

The fallout from Brexit is a deteriorating economic climate in the UK, and the British pound shows it.

Despite the unexpected strength of economic growth in Europe, the struggles of the United Kingdom continue. After the devastating losses incurred immediately before and after the Brexit referendum vote last summer and the disastrous elections results earlier this year, Britain and its currency still find themselves in a tight spot.

Yesterday we heard from the Bank of England, who this time announced that they are taking a more pessimistic prognosis of the UK’s economy and downgraded their forecasts for economic growth for 2017 and 2018 for the second time this summer. As a result, the British pound sterling suffered losses versus the American dollar of almost 1%.

The Bank of England’s stance is likely rooted in the disappointing wages. Since the pound slumped, goods imported to the United Kingdom naturally cost more for Brits, essentially driving their purchasing power lower. The BoE expects this problem to worsen in the future and is somewhat apprehensive regarding wage growth.

Bank of England governor Mark Carney expressed a concern for businesses who find it additionally difficult to invest amid the political struggle inside of the United Kingdom and the problematic negotiations with the European Union regarding Brexit.

The United Kingdom is currently lagging behind its European counterparts, and Carney expects an even slower economic growth. Needless to say, the bank chose not to increase interest rates yet, in hopes of stimulating the economy.

Despite the political discord within the United Kingdom due to Theresa May’s party failing to achieve a definitive majority in the preliminary parliamentary elections she called and the lack of strong British leadership that resulted from that, the UK has proceeded with the EU negotiations. However, even though negotiators have met several times now, not much has been decided, especially since the EU is putting pressure on the UK to meet its critical demands regarding immigration and payment.

Overall, the situation seems really unclear right now. British politicians are not helping much, as they provide contradictory statements from time to time, indicating the British government is not on the same page. The British pound has already dropped 13% since the Brexit vote, and due to the lack of proper leadership and the absence of clarity regarding the negotiations with the European Union we expect the GBP to continue its decrease versus major currencies.

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EUR/JPY Technical Outlook & Daily Chart

The EUR/JPY pair recorded its highest level in 17 months and we expect new highs.

The EUR/JPY currency pair rose last week to gain more than 130 pips and break the key resistance level at 130.64. Then, the currency pair doped on Friday after the US jobs report which showed an increase of 27 000 compared to 209k in July, so now the pair has returned back to trade above the resistance level again.

The EUR/JPY pair has been trading inside a price channel since last April and after it broke July’s high to record the highest level in 17 months it is expected the pair will make new highs this month. The EUR/JPY is still trading above the moving average which is a support level for the prices and the MACD indicator supports our positive vision too.

The Next Few Days

From this simple analysis of the pair we can buy it at the current level 130.73 and keep our first target at 132.12, which is 161.8% from the short correction wave last month; we should place our second target at 134.14 and keep our stop-loss level once the pair breaks the channel down because it will change the trend if it did. If the pair breaks the support level 128.64 down we have to sell the pair and keep the take profit level at 125.50.

This week the market is poor in terms of hot economic news from the European Union or Japan. On Friday Japanese banks will be closed for Mountain Day.

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GBP/USD Technical Analysis & Daily Chart

After a series of sideways movements, we believe the GBP/USD would finally rebound from the support and turn bullish.

Today for our analysis we would look into the GBP/USD currency pair, which was moving sideways for some time but started going down after the American market open.

At this point the GBP/USD is headed for a steady decrease and would soon touch an area when we can start buying it safely. Of course, we should pay attention to key levels and use the support at 1.3006, which coincides with several Fibonacci factors, as guidance for our buy positions. For the upper limit of the reverse movement after touching the support, we need to focus on the resistance level at 1.3109.

In terms of technical indicators, we can very clearly see that the Stochastic one is playing with the support at 7.5%, which indicates that we would see a bullish turn soon, so we are expecting the price to rebound from the support up to the resistance we just mentioned above.

The most important thing about this pair today is that the level of 1.30 is a sort of a pivot point: if the pair drops below it, we should expect that the bears will dominate the market. However, as long as the GBP/USD rates remain above it, we can rely on the pair rebounding from the support and climbing up.

To sum up, we should place buy orders with a target of 1.3006 (our support level) and a take profit at 1.3109 (the resistance level). Just to be safe, we should also indicate our stop-loss at 1.2954.

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NZD/USD: Fundamental Review & Forecast


The support line is moving down and the upward trend is weakening while the market is waiting for the RBNZ decision about the rate change and monetary policy.

Since May the rates of the NZD/USD had been in the frames of an upward trend which is based on the weakened U.S. dollar. Now the market is almost frozen while waiting for the RBNZ's interest rate decision and the monetary policy report of the Central Bank.


In the beginning of the month the NZD rate reached the level of May 2015, but then began decreasing to more reasonable levels because the value of the NZD seems overrated, given the worsening economic situation in the country and unconvincing economic statistics.

Overall, we can definitely say there is a lack of incentives for the NZD to strengthen. In addition, the RBNZ has repeatedly stated that they're not interested in a strong currency rate. Investors are confident that the RBNZ will leave interest rates unchanged. Therefore, the probability of a further decreasing of the NZD is very high. The only thing we can expect that can help the NZD to remain at the same high level would be a significant easing in the monetary policy of the RBNZ. We can even expect some price hikes during the period of news from the RBNZ tonight.

This is a rare case when we have to ignore all oscillators (Stochastic, MACD, RSI), which unanimously indicate a signal about the oversold zone and a good moment for the deals to BUY. Because of the given the fundamental factors, there is a high probability for a further decreasing of the NZD/USD rate to the level of 0.72 USD. The support line has already started to shift down, so the deals to SELL seem much more effective. Nevertheless, it is too early to speak about the trend reversal, but it's safe to talk about the weakening of the current uptrend.

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EUR/USD Technical Overview & Daily Chart

After a strong bullish moment for the euro, the price movement has lulled, though we predict it would recover.

Today for our analysis we would look into the current state of the EUR/USD currency pair.

In recent weeks the euro has gradually strengthened against the weakened American dollar. This is largely due to good economic data from Europe, on the one hand, and political instability in the United States, on the other. However, this week we saw some short-term losses for the EUR; still, it didn’t drop too much and was able to find a stable support level above 1.17, which is not bad at all.

The Euro still has the potential to resume its growth to the level of 1.18 that is so coveted by investors, but this might take some time, so we need to be patient.

We currently have the deciding pivot point at 1.1724. If the EUR/USD drops below it, we should keep our eyes on the nearby support levels at 1.1712, 1.1704, and 1.1692. In case the price moves beyond the pivot point, we can use the nearby resistance levels at 1.1732, 1.1744, and 1.1752 as guidance.

As of the moment of this article’s publication the EUR/USD is trading near the pivot point at around 1.1726. The technical indicators are unanimous in recommending a strong sell.

We have some fundamental releases from both the European Union and the United States today. In Europe we expect data on the French industrial production, as well as the trade balance of Italy. From the US we are waiting for the balance of the federal budget, the core PPI, the reserves of natural gas, unemployment, and other economic data. Because of these releases some moderate volatility can be expected in the pair today.

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The US vs. North Korea

The markets are shaken amid the rising tensions between the United States and North Korea.

While this week has been more or less quiet in terms of actual economic events affecting the financial markets, it was quite the opposite in terms of politics: this week US President Donald Trump made several controversial comments that sparked a discussion on whether the United States would be going to war with North Korea.

Needless to say, such major fundamental events always have an effect on the markets. In this particular case it was Asian stocks (particularly in South Korea, which is dangerously close to a potential war zone) that dropped significantly – now they seem more insecure than ever, and investors are directing their attention to other safe-haven instruments such as gold, the Swiss franc, and the Japanese yen.

The currency of Korea, the won, also suffered losses against the dollar, dropping to its lowest this month as a result of the growing tensions in the region.

Australian markets are also somewhat affected, while the state of the markets in Japan is unclear since the country was celebrating a holiday and the market was not open. The American stock market also suffered amid the news, as did the stock markets in London, Paris, and Frankfurt.

So, what happened exactly?

North Korea, which has been more active in its testing of military weapons over the past few years, announced its intentions to fire missiles into Guam, which is officially a US-controlled territory. It is important to note that the Korean war never officially ended, so at least on paper relations between the United States and North Korea are not good.

In recent months tensions with North Korea came to light also because the communist state released a prisoner who was an American citizen, who reached the US in a terrible physical state. The young man showed signs of extensive brain damage; his condition was so bad that it completely baffled American doctors, and he soon died. This story rattled the West and caused people to speculate that North Korea is up to something.

Instead of addressing North Korea’s plans of attack through the accepted diplomatic channels, Trump took to Twitter to talk about retaliation, and then reaffirmed in an interview that he is ready to go to war if North Korea does attack any American territories.

This newly-added level of serious political insecurity rattled the global financial markets. The dollar marked new decreases against the yen. In addition, the yen is gaining on the USD due to issues with the American treasury and a possible default coming in the next two to three months.

Clearly this is a complex issue. So far neither country has attacked, but considering that President Trump and Supreme Leader Kim Jong-un have got to be the two most unpredictable leaders in the world right now, tensions are definitely growing steadily. Make sure you watch out for any related news and see how the markets are responding as more information is flowing in.

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GBP/AUD Technical Outlook & H4 Chart

The bears are back this week to make new lows.

After the GBP/AUD recorded its highest level this year at 1.7647 in May, it turned back to decline by more than 1350 pips and it’s trading now at 1.6480. Today the Australian Dollar rose in the beginning of the week because of the tension between North Korea and the United States, in addition to China's foreign ministry saying there is no future in a China-U.S. trade war and adding that issues of trade and North Korea are not connected. The ministry also said that China pays great attention to protecting its intellectual property rights and says the essence of U.S.-China trade is mutually beneficial and a win-win.

The GBP/AUD currency pair is trading inside a downside price channel which may lead the pair to new lows this week. The pair’s trading between support and resistance areas representative at the trend lines and it’s expected that the pair will break the downside trend line to decline further. The moving average is trading above the prices which supports the negative vision, while the Stochastic indicator hasn't shown us the sell signal yet.

The Next Few Days

After we learned the outlook for the pair is down, we can take sell positions at the resistance levels, which means we can take sell positions now at the current level 1.6480, sell again if it reaches 1.6560, and place a third sell position at 1.6640, keeping our target for all of them at 1.6310.

This week the market has some hot news from the UK like the Average Earnings Index and the retail sales. In addition, we expect the Monetary Policy Meeting Minutes for the Australian bank and the Unemployment Rate.