Analysis of currency and stock markets 18.09.2019

EURUSD Technical Analysis

The pair remains in a wide range of 1.0995–1.1195 in anticipation of the Fed’s final interest rates decision and the ECB’s economic stimulus measures due from October 1st. If the Fed decides to cut rates by 0.5% at once, which is possible, the pair will grow sharply. At the same time, a decrease by 0.25% will lead to its local decline, since this scenario of the Fed's actions has already been taken into account in the quotes.

The price is above the middle Bollinger band, below SMA 5, but above SMA 14. RSI is above the level of 50% and indicates slower growth of the price. Stoch reverse in the overbought zone.

Trade recommendations:

If the Fed reduces interest rates by 0.25%, sell the pair with a possible target of 1.0925 after the pair overcomes the level of 1.0995. Buy if the rates are reduced by 0.5% with a likely price increase to 1.1160.

EUR Analysis

The single currency of the European Union fluctuated in a narrow range tilted to decline during the Asian session to witness the rebound for the second session in four sessions from its highest since August 27 against the US dollar on the eve of developments and economic data expected on Wednesday by the euro zone economies and the economy American largest economy in the world.

At 05:51 AM GMT the EURUSD rose 0.08% to 1.1010 levels from the opening at 1.1001, after the pair reached a session high of 1.1014, while a low of 1.0998.

Markets in the Eurozone economies as a whole are looking to reveal the final annual CPI reading, which may reflect a stable growth of 1.0%, little changed from the initial reading for August and the previous reading for July, as the reading may show. The core annual index of the same index stabilized growth at 0.9% also unchanged from the previous initial reading and the previous annual reading for the month of July.

This comes before we see the third largest economy of the euro zone Italy, the release of the trade balance, which may show the shrinking of the surplus to 4.80 billion euros from 5.73 billion euros in July, otherwise, we followed on Tuesday the departure of former Italian Prime Minister Matteo Renzi Of the Democratic Party, raising concerns about further political instability in Italy.

Yesterday, the European Parliament also announced that Christine Lagarde was elected ECB Governor by 394 votes to Lagarde against 206 votes. Lagarde is expected to take over the ECB from early November for a period of eight Years after the current governor of the European Central Bank, Mario Draghi, whose term expires at the end of October.

On the other hand, investors are awaiting the US economy to release the housing market data with the release of both the Housing Starts Index and the Building Permits for the month of August. Construction permits are expected to decline 1.3% to 1.31 million versus a rise of 8.4% at 1.32 million. In July, housing starts may show a rise of 5.0% to 1.25 million versus a decline of 4.0% at 1.19 million.

This comes in conjunction with the FOMC meeting in Washington, which is expected to cut interest rates on federal funds by 25 basis points for the second meeting in a row to between 1.75% and 2.00% and is expected to be revealed after the expiration Committee members for growth, inflation and unemployment rates as well as the future of interest rates for the next three years.

Federal Reserve Governor Jerome Powell arrived at the press conference half an hour after the FOMC meeting on the Fed's policy-makers' meeting, which has recently been widely criticized by US President Donald Trump, demanding the Fed and Powell cut back. Interest rates "zero or less".

Technical analysis:

EUR / USD continues to fluctuate at the resistance of the descending channel and remains below it, as SMA 50 meets this resistance to add more strength to it, while Stochastic continues to provide overbought signals.

Therefore, these factors encourage us to continue to favor the bearishness over the coming sessions, with the next main target at 1.0857, while the breach of 1.1080 represents the impulse key to test 1.1180 before any new attempt to decline.

Expected trading range for today is between 1.0950 support and 1.1140 resistance.

Expected trend for today: Bearish.

Gold Analysis

Gold futures fluctuated in a narrow, bullish range during the Asian session, ignoring the positive stability of the US dollar index according to the inverse relationship between them on the eve of developments and economic data expected on Wednesday by the US economy, the largest economy in the world, which includes the proceedings of the Federal Open Market Committee and Conference Fed Press Governor Jerome Powell.

Gold futures for December delivery rose 0.07% to trade at $ 1501.09 an ounce compared with the opening at 1501.46 an ounce, while the US dollar index rose 0.09% to 98.29 compared to the opening at 98.21.

Investors are currently awaiting the US economy to release the housing market data with the release of the Housing Starts and Building Permits for August. Construction permits are expected to fall 1.3% to 1.31 million versus a rise of 8.4% at 1.32 million in July. Construction starts may show a rise of 5.0% to 1.25 million versus a decline of 4.0% at 1.19 million.

This comes in conjunction with the FOMC meeting in Washington, which is expected to cut interest rates on federal funds by 25 basis points for the second meeting in a row to between 1.75% and 2.00% and is expected to be revealed after the expiration Committee members for growth, inflation and unemployment rates as well as the future of interest rates for the next three years.

Federal Reserve Governor Jerome Powell arrived at the press conference half an hour after the FOMC meeting on the Fed's policy-makers' meeting, which has recently been widely criticized by US President Donald Trump, demanding the Fed and Powell cut back. Interest rates "zero or less".

Otherwise, markets are looking ahead to the BOJ meeting and the upcoming press conference of Governor Kuroda in Tokyo, amid expectations that if the Fed cut interest rates, about one week after the ECB cut its deposit rate to negative -0.50% With the announcement of the repurchase of the asset purchase program, this could pressure the Bank of Japan to expand stimulus.

In view of the development of trade talks, we followed last Monday, US President Donald Trump said that his country has reached preliminary trade agreements with Japan, and markets are looking forward to launch a new round of trade talks between America and China at the level of deputy officials in Washington tomorrow in preparation for the upcoming high-level talks between the parties With the beginning of next month which aims to resolve the trade disputes between the two largest economies in the world.

On the other hand, we also followed Monday's remarks by US President Trump, which expressed that Iran appears to be behind the attacks on Saudi Arabia, despite the Houthis in Yemen recently claimed responsibility for those attacks, which disrupted about 5% of global oil supplies Trump's recent remarks stressed that he did not want to go to war to reflect a tone less intense than his initial reaction.

Gold futures benefited earlier this week from the recent geopolitical strikes from last weekend's drone attacks on oil production facilities in Saudi Arabia, the world's largest oil exporter, OPEC and the world's third-largest producer. Oil and OPEC's largest, carried out by the Houthis in Yemen.

It is noteworthy that US President Trump said last Sunday that America is "closed and loaded depending on the investigation" that Iran launched an attack on Saudi oil facilities, and US Secretary of Energy Rick Perry yesterday that Iran attacked the Saudi oil facilities and should be held responsible for those attacks, Earlier this week, investors turned liquidity into safe havens, led by gold.

Technical analysis:

Gold is hovering around SMA 50, and remains stable above the main rising trend line, to keep the bullish scenario intact for the coming period, and needs a positive catalyst to support the chances of resuming the upside bias, whose next key targets are at 1524.00 then 1555.00.

Stability above 1485.00 is important to achieve the suggested targets as a breach will pressure the price to start a bearish correction over the intraday basis.

Expected trading range for today is between 1485.00 support and 1525.00 resistance.

Expected trend for today: Bullish.

JPY Analysis

The US dollar fluctuated in a narrow bullish range during the Asian session to witness the bounce for the 13th session in 18 sessions from the lowest since November 9, 2016, indicating its stability near the highest since early August, when it tested the highest since late May against the Japanese yen following the developments and economic data followed by the Japanese economy and on the eve of developments and economic data expected Tuesday by the US economy, the largest economy in the world.

At 06:27 am GMT, the US dollar against the Japanese yen rose 0.06% to 108.19 levels compared to the opening levels at 108.12, after the pair reached its highest level in seven weeks at 108.37, while the lowest level during the session trading at 108.02.

On the other hand, the Japanese Trade Balance report showed that the deficit narrowed to 136 billion yen from 251 billion yen in July, contrary to expectations for a widening deficit to 365 billion yen, while the seasonally adjusted reading of the index showed a widening The deficit hit 131 billion yen from 127 billion yen in July, beating expectations for a widening deficit of 148 billion yen.

On the other hand, investors are awaiting the US economy to release housing market data with the release of both the Housing Starts and Building Permits for August. Construction permits are expected to fall 1.3% to 1.31 million versus an increase of 8.4% at 1.32. In July, the start-up may show a rise of 5.0% to about 1.25 million versus a decline of 4.0% at 1.19 million.

This comes in conjunction with the FOMC meeting in Washington, which is expected to cut interest rates on federal funds by 25 basis points for the second meeting in a row to between 1.75% and 2.00% and is expected to be revealed after the expiration Committee members for growth, inflation and unemployment rates as well as the future of interest rates for the next three years.

Federal Reserve Governor Jerome Powell arrived at the press conference half an hour after the FOMC meeting on the Fed's policy-makers' meeting, which has recently been widely criticized by US President Donald Trump, demanding the Fed and Powell cut back. Interest rates "zero or less".

Technical analysis:

USD / JPY continues to fluctuate at 108.30, noting that the Stochastic is beginning to cross positively on the four-hour time frame, awaiting the price to breach the mentioned level and open the way for our next positive target of 109.30.

Thereby, we will continue to favor the bullishness over intraday and short-term basis unless 107.70 is breached and remains intact with a daily closing below it.

Expected trading range for today is between 107.50 support and 109.00 resistance.

Expected trend for today: Bullish.

AUD Analysis

The Australian dollar fell during the Asian session to see its rebound to the fourth session from its highest since late July against the US dollar following the developments and economic data released by the Australian economy yesterday, which included the release of minutes of the Reserve Bank of Australia meeting held earlier this month and On the eve of economic developments and data expected on Wednesday by the US economy, the largest economy in the world.

At 03:03 AM GMT, the AUDUSD retreated 0.30% to 0.6844 levels, compared to the opening levels at 0.6864, after the pair reached its lowest level during the session at 0.6843, while the highest level at 0.6868.

Yesterday, we followed the release from the Reserve Bank of Australia (RBA) of the minutes of its September 3 meeting, during which the RBA monetary policy makers decided to hold short-term interest rates at their lowest ever level for the second consecutive meeting at 1.00%. It was expected by market analysts at the time.

On the other hand, investors are awaiting the US economy to release the housing market data with the release of both the Housing Starts Index and the Building Permits for the month of August. Construction permits are expected to decline 1.3% to 1.31 million versus a rise of 8.4% at 1.32 million. In July, housing starts may show a rise of 5.0% to 1.25 million versus a decline of 4.0% at 1.19 million.

This comes in conjunction with the FOMC meeting in Washington, which is expected to cut interest rates on federal funds by 25 basis points for the second meeting in a row to between 1.75% and 2.00% and is expected to be revealed after the expiration Committee members for growth, inflation and unemployment rates as well as the future of interest rates for the next three years.

Federal Reserve Governor Jerome Powell arrived at the press conference half an hour after the FOMC meeting on the Fed's policy-makers' meeting, which has recently been widely criticized by US President Donald Trump, demanding the Fed and Powell cut back. Interest rates "zero or less".

AUDUSD is showing a quiet negative move to gradually move away from the descending channel resistance, leaving the downside scenario likely over the coming sessions, with targets starting at 0.6795 and extending to 0.6670 after breaking the previous level.

Stability below 0.6870 is important for the continuation of the expected decline, as a breach will push the price to start a bullish correction in the intraday and short term.

Expected trading range for today is between 0.6760 support and 0.6885 resistance.

Expected trend for today: Bearish.

 AEROFLOT Stock Analysis 

Aeroflot fell below the support level after yesterday's trading opened on a bearish price gap below the 107.70 support level which is near the 50% Fibonacci retracement level.

At the end of last week's trading, the price reached the resistance level of 107.25 and bounced back.

The price is still moving below the 7-20-50 moving averages, which puts pressure on the price to fall further and test support 101.12.

Stochastic is in a downtrend to the oversold area, which increases pressure on the price and pushes it to retest 101.12 support.

Overall trend: Bearish.

Trading ideas for Jonson Jonson (NYSE)

The price pivot zone 129.30 hinders sellers. The formation of the 123 pattern, where segment 1 will break through the inclined channel of the descending structure, will give an opportunity for further growth.

Trading ideas:

Buy strictly on the formation of the ascending structure (pattern 123), where the first impulse breaks through the inclined channel of the descending structure.

Stop Loss mirrored the level of 129.30.

Target levels – 131.50; 136.00; 138.50.

NZDPY Analysis

Analysis based on round-number levels, price channels and modified Elliot Waves

The overall movement is upward. Price pivot zone 68.35 holds back sellers. The pair is trading between the moving averages 135 and 365 . Fractal Sstart formed above 135 EMA. A break of the Fractal Start will result in a N1 level upward pattern within the level N8 wave (C).

Trading recommendations:

Buy Above the round secondary level of 68.80.

Stop Loss - 68.35.

Target levels – 69.50; 70.38 (123.6%of wave F and H8).

Breaking through the level 68.41 means the cancellation of the trading plan.

Call Put levels 

When buying an option against the trend, it is necessary to confirm other technical analysis tools – the presence of divergence, reversal candlestick patterns. Buy against the trend strictly on the retest level! Buying an option before publishing important economic news is considered risky. The expiration time depends on the strength of the level and confirmation by additional tools of technical and fundamental analysis.