Hello, dear friends!
The US dollar starts the week is a positive way. Bad statistics on the EU, China and the UK as well as Trump - Xi recent meeting have contributed to the situation. Today the dollar is growing against major currencies.
The dollar is getting strengthened due to several main reasons:
- Following the meeting with Xi Jinping, the American president has stated that the US would hold off on implementing further tariffs. China, for its part, agreed to increase imports of U.S. agricultural products. Tensions drop in regards to the trade war caused a fall in demand for safe haven currencies. This became the reason for the dollar growth against the Swiss franc and Japanese yen;
- Germany has reported an increase in the number of unemployed and a decrease in production activity. Thus, the euro is losing ground;
- Decline in production activity index has affected the pound.
The dollar remains mighty so far. However, there were no significant agreements reached at Trump - Xi meeting, so the situation may change during the week.
The most important news of Monday has already been published. An additional one worth mentioning is business activity index in the US manufacturing sector. These statistics are released at 19:00 CET.
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GBPUSD - waiting for the downward movement to continue
At the very beginning of the week, imbalance at 1.2686 was broken out by a sharp movement, which was a signal in favor of short positions. As soon as retest of the broken out level takes place, one can open deals.
Short positions are opened from the level 1.2686 with targets at 1.2632 and 1.2524. Stop for the deal is located at the mark 1.2740.
AUDUSD - sell signal may be generated
Rather aggressive global imbalance was formed at the mark 0.7007. It has already been broken through downwards with a sharp movement. As soon as retest takes place, one can open deals for sale.
In case this scenario is executed, take profits should be located at 0.6976 and 0.6914, protective stop should be placed above the recent maximum - at the level 0.7038.
Expecting the pound to grow relative to the Swiss franc
Global imbalance at 1.2377 was formed last Friday. It was broken through upwards on the same day, and there was an unsuccessful attempt to perform its retest. We expect the level to be tested from above at the beginning of the week; in case this condition is fulfilled, one can open deals to buy.
If the forecast is executed, fixing profit will take place at 1.2421, and the remaining 50% of the value will be closed when reaching the level 1.2509. Stop is located at 1.2333.
GBPJPY - the downward movement is expected to continue
Reversal pattern for this pair was formed today. Global imbalance at 137.16 was broken through downwards; to perform sales we are waiting for its retest from below to take place. The week has opened with the GAP, which has already been covered, so the likelihood of upward correction and testing of resistance increases.
When imbalance works out, stop should be located at 137.82, and two take profits - at 136.49 and 135.16. Unlike previous signals, there's a conservative entry point here, so one can work with the standard value.
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