Good afternoon, dear friends!
On Wednesday, our attention was still focused on the US dollar. Consumer price index dipped 0.1 percent, which is likely to lead to rate cut by Fed in July. There was no considerable drop of the American currency, the probability of rate cut is initially included into the current rate.
The next Fed meeting takes place in a week, but it's expected that the rate will be maintained at the current level. Yet, there's a 83.2% probability that the rate cut will take place in July.
There's a number of signals in favor of such a scenario. Among them are the statements by the head of the US Fed, and annual inflation rate of 1.8% for the 12 months ended May 2019 compared to 2.0% previously, as published on June 12, 2019. Growth pace is slowing down, and it seems that the recent criticism of the Fed activities by Trump was well founded.
News to pay attention to on Thursday:
- 17:30 - initial and repeated unemployment benefits claims in the United States. Data on import and export prices;
- 17:30 - statistics on housing prices in Canada.
No significant news is expected; if there are no force majeure situations, impulse movements are not supposed to take place during the day.
NZDJPY - growth is expected, conditions for purchasing are fulfilled
Reversal pattern with imbalance at 71.35 was formed at the daily minimum. This level has already been broken through upwards and tested. While the chart hasn't moved far away from the imbalance, one can open deals to buy.
Stop is located at 71.15, based on its value both take profits location is determined. They are located at 71,56 and 71,97. After first take profit works out for the second half of the volume, move stop to breakeven.
NZDCHF - aggressive purchasing is possible
The situation is similar to NZDJPY. We've got a reversal pattern with maximum at 0.6535 (global imbalance), as soon as its retest from above takes place, one can open purchase deals. There’s no support segment, so the signal has a potential risk.
Place stop for this deal at 0,6506, take profits – at the marks of 0,6565 and 0,6625.
EURCAD - signal to buy is expected
Signal for opening long positions will be received only after retest of global imbalance at 1.5017 will take place. Such an attempt has already been made, but the chart didn't manage to reach the level (2.2 pips left in 4-digit quotes).The distance is rather small, but this situation doesn't meet Horizon X strategy rules, which means that it’s too early to enter the market.
Buying is performed from the level of 1.5017 with 2 targets placed at the levels of 1.5057 and 1.5137. Stop should be located no higher than 1.4978.
The entry point is very aggressive, the model was formed with a GAP; global imbalance has been tested several times. Here, it’s recommended to reduce the volume by 3-4 times.
EURNZD - waiting for the entry point for sales
Here we are interested in the level of 1.7195. At the time the review was being prepared this global imbalance had already been broken through downwards; retest has taken place on the next candle, and the chart is moving in a profitable direction. When re-approaching the mark of 1.7195, open deals for sale.
Fix profit for short positions at 1.7131 and 1.7003. Stop-loss is located beyond the reversal pattern maximum at 1,7259.
This construction contains a supporting segment, which was formed on May 23. Since the global imbalance is located within the segment, we can work with a regular lot size.
- NZDCHF, GBPCAD – no signal;
- CHFJPY, AUDCHF, EURGBP – first take profit was reached.
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