Hello, dear friends!
The dollar continues losing ground at the middle of the week. Against the background of an expected interest rates reduction 7-weeks lows have been reached relative to major currencies. Other central banks behave in a similar way making their choice in favor of dovish policy.
On Tuesday Jerome Powell has stated that the Fed is ready to "act properly" in order to protect the American economy. Earlier, James Bullard, the head of St. Louis Fed, said directly that the rate could be cut soon.
Actually, these are the United States to blame for the current situation. The world economy growth perspectives are endangered due to the trade war initiated by the US and their inability to come to a compromise with China.
Against this background even in the absence of significant news on the EU and the UK the euro and the pound are growing in pair with the American.
When trading on Wednesday consider the following:
- 17:15 - change in the number of workers employed in non-farm sector in the US (ADP);
- 19:00 - business activity index in non- manufacturing sector in the United States.
In the second half of the day a few comments from the Fed members are expected. If they turn to be related to the rate change a further weakening of the dollar is quite possible.
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EURCAD - opening deals to sell from the level of 1,5100
Supporting segment 1.5084-1,5094 was formed on May 23. On June 3-4 reversal construction with a total minimum at 1.5100 was received - this is a global imbalance.
It has already been broken through downwards; one needs to wait for its testing to take place, which will be a signal to enter the market. Place stop at 1.5146, the first target is 1.5054, and the remaining 50% of the volume will be covered when the level of 1.4962 is reached.
EURJPY - expecting for growth from imbalance level to take place
For this pair global imbalance at 126.10 is in focus. Reversal W-pattern has been formed, its total maximum was broken through upwards, but it's retest hasn't taken place so far. EURJPY dropping to the level of 126.10 is expected; here deals to buy should be opened.
Place stop below the Low of the pattern at the level of 120.74. Profit will be fixed when the levels of 121.47 and 122.21 are reached. Supporting segment has already been tested, so the deal will take place at an increased risk.
Wheat - only sales option is considered
Here multiple testing of resistance zone is observed, which somewhat reduces the signal value. We are interested in testing the lower border of the zone 507.75-512.52 at the moment. As soon as retest takes place, we'll open short positions.
Place stop no lower than 529.36, profit will be fixed in parts - at 485.91 and 442.47. Both chart analysis and seasonal factor are in favor of short positions, so the probability of achieving both take profits is rather high.
Buying natural gas upon consolidation above 2.418
Significant supporting segment might be observed on the chart. The risk increases, but we don't stop trading; we are reducing the working lot instead.
Global imbalance is being formed at the level of 2.418, its importance has already been proved. For deals to buy, we are waiting for resistance to be broken through upwards, and its retest accompanied by price rounding to take place.
For this setup the targets are located at 2,472 and 2,578. Stop for the deal - below the nearest Low, at 2.365.
Copper - signal to buy is received
Here supporting segment is located at 2.6532-2.6580. It was broken through at the end of May; reversal pattern was received at the beginning of June. Its maximum is located at 2.6450 - this level is a global imbalance level.
Later its retest from above took place; at that point one should have opened deals for buying with the targets at 2.6839 and 2.7611. Stop for the deal should be placed at 2.6068.
The signal is not perfect - global imbalance isn't located within the supporting segment. Such situations are also taken into work, just the working lot should be reduced.
Entry points are provided for H1, the targets are impressive, so their working out might take more than a day. Don't rush to close a deal, if the chart has entered a positive zone. Try to wait for the target levels to be achieved.
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