Although the macroeconomic calendar on Friday was almost empty, we observed a further gradual weakening of the single European currency. Although at first she even tried to recoup some of its losses from previous days. But all these attempts were completed as soon as the representatives of the Federal Reserve began to speak, who, as if by agreement, spoke about the same thing. But apart from Jerome Powell, there were two more representatives of the Fed, and from all of them they expected at least some hints of the possibility of lowering the refinancing rate. But their statements were no different from those statements that were made immediately following the results of the last meeting of the Federal Open Market Committee. That is, the rate increase should not be expected until 2022, but not a word about the reduction. And this can only be interpreted as if the Fed somehow softens the monetary policy, then it will do it only through quantitative easing. That is, no negative interest rates are expected in the United States. And frankly, this is a serious argument in favor of the dollar.
Nevertheless, in recent years, the dollar has strengthened quite well, and, according to the logic of things, it would be worth it to at least weaken a little. And the reason for this could be today's data on home sales in the secondary market of the United States. They are expected to decline by another 2.0%. At the same time, they also steadily declined in the last two months, and as much as 17.8% in the previous month. If you look at the absolute numbers, then sales should decrease from 4,33,000 to 4,200,000 It is no less interesting that just recently they predicted an increase of 1.6%. So the forecasts were revised in a negative direction. In any case, against the background of a local overbought dollar, a further decline in sales could be a sufficient reason for a slight correction. Let it be symbolic. However, do not forget that sales forecasts have just been revised literally, which means there is a possibility, albeit small, that the data will turn out to be somewhat different. If they show growth, the dollar may continue to strengthen. Although it will be extremely insignificant. Just because of the overbought dollar. But it is worth noting that the probability of this is extremely small. After all, the level of delays in mortgages in the United States has reached a record level, which was last seen in 2011. And it was then that the record high for delays was recorded. And it's clear that some sales growth looks fantastic against this background. So, most likely, the forecast will justify just the decline in sales.
Secondary Home Sales (United States):
From the point of view of technical analysis, we see a high speculative boom, during which the quote was able not only to form a corrective move, but to enter the phase of partial recovery, returning market participants to the level of 1.1180. It is worth noting that the recovery process relative to the inertia of May 15 is only 39%, which isn't really much, and the quote is still at a conditional peak.
In terms of a general review of the trading chart, the daily period, one can see similarities with the dynamics of fluctuations on March 10, where the area where trading forces interact at 1.1440/1.1500 put pressure on market participants.
It can be assumed that against the background of local oversold, an upward spiral may occur, which will lead to developing the level of 1.1180 as a variable support. This movement considers a temporary regrouping of trading forces in the direction of values 1.1240-1.1250.
An alternative scenario will emerge in the event of a slowdown relative to the existing values, where in case of price taking lower than 1.1165, the path to 1.1100-1.1080 will open.
We specify all of the above into trading signals:
- We consider buying positions higher than 1.1210, with the prospect of a move to 1.1240-1.1250.
- We consider selling positions lower than 1.1165, with the prospect of a move to 1.1100-1.1080.
From the point of view of a comprehensive indicator analysis, we see that the indicators of technical instruments relative to the hour and day periods signal a sale due to a rapid downward movement and price taking within the range of 1.1180. Minute intervals signal a variable upward interest due to the pullback process.
