People said their sentence: Dilma's out

For the impeachment of Dilma Rousseff have voted more than 60 senators, against - only 20. Dilma Rousseff in a speech before the senators called the incident a coup and vowed to continue the fight - both for the return of her good name and reputation, and political struggle.
I feel sorry for this decision.
For me, as Bulgarian and a woman, this is crusual.
I don't really know if she reached the honey jar, but for me she lead the 9-th economy of the world pretty successful.
Some passion, some temper - what's wrong with that?

Sorry, really sorry.

The USD/JPY reached 3 weeks maximum against the background of official comments about the Fed rate

The dollar rose to a peak of three weeks against the yen on Monday, as comments by the US Federal Reserve strengthened expectations of interest rate rise in the near term.
The yield on US government bonds rose to the highest levels since June, and interest rate futures indicated that the probability of a rate hike in September exceeded 30 percent, compared with 18 percent before the speech of Fed Chairman Janet Yellen and her deputy Stanley Fischer, showed FedWatch data from CME Group.
The dollar on Monday rose by 0.5 percent against the yen to 102.39 yen, the highest level since 9 August. By 12.00 GMT the dollar strengthened by 0.42 percent to 102.25 yen.
The dollar index against a basket of major currencies grew by 0.19 percent to 95.752. Euro fell by 0.24 percent to $1.1168.
Speaking at the three-day symposium of central bankers in Wyoming, Yellen said, that the probability of a Fed rate to be increased in recent months due to improved labor market indicators and expectations of moderate economic growth has rose.
Yellen did not specify when the US Central Bank may raise rates again, but her deputy, Stanley Fischer, said, that the Fed chairman speach on Friday met the expectations of the likely increase in interest rates this year.

The Fed governor: The chance of a rate hike has increased in recent months

The probability of increasing Fed's rates enlarged in recent months due to improved labor market indicators and expectations of moderate economic growth, said the head of the Federal Reserve Janet Yellen on Friday.
Yellen did not specify when the US Central Bank is about to increase the rate, but her comments reinforced the likelihood, that such a move is possible later in 2016. Fed meetings regardless monetary policy, are scheduled for September, November and December.
Speaking at the three-day conference of representatives of the world's central bankers in Jackson Hole, Wyoming, Yellen said, that the US economy is close to the statutory targets of maximum employment and price stability.
"In light of the steady strong performance of the labor market and our forecasts of economic activity and inflation, I believe that the probability of increasing the federal funds rate has increased in recent months," - said Yellen in her speech.
The Fed chief said, that the regulator still believes, that the rate increase should be "gradual".

RBC Capital Markets is waiting for the fall of the Canadian dollar

Currency strategists at RBC Capital Markets said, that USD/CAD has found support above 1.2900 in response to the widespread strengthening of the dollar and the decline of crude oil prices, after data showed an unexpected increase in inventories of raw materials.
Currently, the support is located at 1.2896 and 1.2859, while resistance is at 1.2997 and 1.3084, say analysts from the bank.

I retain my bearish outlook for CAD, but will wait for the technical catalysts for opening positions in the USD/CAD. Traders working in the long term, could play through the purchase of options.

Societe Generale: There is no doubt about the decline of the pound

The adjustment upward in the pair GBP/USD is due to a reduction in the number of short positions, which nearing its end, say analysts from Societe Generale. Moreover, they say, that the Monetary Policy Committee of the Bank of England is on the edge of monetary stimulus.

Analysts do not believe, that they have reason to change the long-term goals, which include entry in the range 1:20 to 1:25. At current levels they believe, that short positions are attractive in the pair GBP/USD.

Societe Generale supports opening short position in sterling.

German Ifo business climate fell unexpectedly in August

German business confidence registered an unexpected deterioration in August, falling to a four-month bottom, showed data today.
In the report, the German research Ifo institute said, that the business climate fell to a seasonally adjusted 106.2 points this month from 108.3 in July, which did not match the forecasts for an increase to 108.5 points.
The index of current conditions fell to 112.8 points in August from 114.8 points a month earlier, which was revised from 114.7 points. Analysts had expected the index to 114.9 points.
The index of business expectations, which measures attitudes towards business prospects over the next six months deteriorated to 100.1 points this month from 102.1 in July, compared with forecasts for 102.5 points.
The monthly index is based on a survey of about 7,000 German companies in manufacturing, construction, wholesale and retail.

Priceless tools - SmartForecast from ActivTrades

The leading independent broker ActivTrades is proud to present you their advanced technical analysis tool - SmartForecast, available for MetaTrader 4.

This indicator combines chart retracements and market trend analysis, providing your trade with a simple overview of markets.
The SmartForecast's interface is user friendly and provides the most important functionality for each trader - Market Strength, Daily Market Trend; Avarage, Support and Resistance lines. SmartForecast gives you the best trading scenarios in both long and short terms.

For more information and to request, please follow this link.

Peru has become a rising star in the emerging markets

Brazil and Argentina came in the highlights among other emerging markets in recent months due to the political changes conducive to investors, but the neighbors gradually are overshadowed by inconspicuous Peru.
Peruvian index S&P Lima General is ahead of all global emerging markets in terms of the local currency in 2016, jumping up by 58 percent and leaving far behind Argentina's Merval, with its 33-percent growth and Brazil's Bovespa, which rose by 37 percent over the same period.
Taking into account currency adjustments, Peru - the second largest market after Brazil, which could greatly benefit from the large growth of the national currency, according to MSCI rating.
Stable economic growth in the last few years Peru is obliged to its new president Pedro Pablo Kuczynski, a former World Bank official and banker from Wall Street.
Even before the victory in close competition for the presidential elections in June, Kuczynski revived the hopes of investors, providing infrastructure investment plan, help for small businesses and employment programs. Lima General Index soared 8 percent, when Kuczynski finished second in the primaries in April, and the candidate of the left wing Veronica Mendoza dropped out of the race.
Kuczynski, who only for a few weeks occupies the presidency, on Thursday again called for tax cuts, saying that his plan will boost revenue to the treasury due to the expansion of the tax base.
"Peru is in the best shape for the last 50-60 years", - said Javier Kreyksell, portfolio manager in Epiphany Funds.
He believes, that Kuczynski will hold a number of important changes in the country, among them - increasing foreign investments and support for the most important Peruvian mining and banking sectors. Kreyksell expects, that the newly elected president will increase the pension funds, which should support savings, strengthen the financial system and ensure pensioners wealth.

Euro will not go much higher - technical view

The dollar index, reaching down to the support of 94 p., and pushing away from it, still looks like a correction after a sharp peak and like a closing of the weekly short positions.
EUR/USD moved from 1.1360 - weekly maximums.
However, it serves as a correction because the pair has not reached the significant resistance. Now the pair is in the middle of the trading range 1,1220-1,1420. And technically the uptrend may reach the upper limit. This zone, approximately at 1.1425, may stand as a very strong obstacle for a growth. In this level stands the price reversal down, caused by the referendum in the UK, and here is the pulse point of the downward trend. Therefore, it makes sense to consider selling with target 1,1225-1,12 when reaching the zone.
Conversely, in the case of approaching the support of 1,1225, EUR/USD may turn up from the broken trend line. Only consolidation below this boundary will provide the technical possibility of a further weakening of the pair to 1.1130.
Obviously, the closest strong driver may be a performance of Janet Yellens at the Fed conference in Jackson Hole on 26 August. Prior to this, the most probable is the side, range of movement of the pair.
In general, I keep my "bearish" view on future prospects for the euro. Therefore, deals from these levels are preferred.

Euro will not go much higher - fundamental view

Data on inflation in the eurozone in July came out relatively negative. Although CPI remained unchanged on yearly basis (0.9%) monthly CPI has deteriorated (minus 0.6%). ECB meeting did not bring any sugnifficant talk - the regulator took a pause to determine the future prospects after the adoption of ultrasoft measures.
All this with the lack of surprises had little impact on the European currency. Like before, the main drivers for any movement are the news from the US. In this sense, I can say, that the euro goes "down the river" in line with the general trends of the last days. But by itself the weakness of the European economy makes it unlikely, that the growth of the euro above the peak of 1.1425 would continue, even with significant weakening of the dollar.

Do not believe the noice around the US dollar

Fed's communication strategy suffers from a reputation problem. This week it has been an officials hawkish Fed statement, but the US dollar and, more importantly, the yield curve of US bonds, have failed to reflect the likelihood of a September rate hike. Markets assessed the probability of a rate hike by 20% in September, and in December - by 45%. Of course, markets do not trust the wording of the Fed (they do not have the reasons, given earlier statements). The head of the FED Bank of New York Dudley said, that the US economy remains healthy and it is supported by the labor market and wage growth. He mentioned, that the markets are underestimating the likelihood of the Fed to tighten monetary policy. The head of the Federal Reserve Bank of Dallas Kaplan suggested, that the Fed is still possible to raise rates. These statements seem to set the stage for the future statements of Fed's Chairman Yellen in Jackson Hole, signaling the impending rate increase.
The sudden change in expectations would surely catch the markets by surprise, quickly raising the yield curve of US bonds and giving upward momentum for the dollar. However, I believe that analysts, who are calling for a rate hike, do not take into account the global context and overestimate small by historical standards, improvements in the US economy. Thus, the current economic momentum in the US, seem to stable only in comparison with the extremely ambiguous world data. In addition, increasing rates now in low and falling profitability in the global markets will lead to exceeding the targets, set by the tightening of monetary policy, since capital will rush in US assets.
I remain skeptical about the dollar rally and consider the prevailing bullish momentum better like closing long positions in illiquid markets (their importance is exaggerated), than like a change of moods.

The ECB is playing with fire

According to a research by Standard & Poor`s, about 500 million people in the world live in conditions of negative interest rates set by central banks. At the same time there is a threat of feedback loop: negative rates encourage excessive risk appetite, which is to meet from regulators require new measures of quantitative easing. This policy can be justified only in one case: if it leads to an acceleration of inflation and GDP. It is, though, not happening.
Curiously, the study of Standard & Poor`s was published on the same day as the July ECB meeting protocol in which the central bank left the door to expand stimulus package open. In their view, the sluggish dynamics of wages, low inflation expectations, Brexit and the deterioration of the health of banking institutions threaten to slowdown in GDP and consumer prices. It is possible, that in September, the regulator will have to scale up or renew the terms of QE, and possibly, to lower the rates.

Pound aims south

In several polls about GBP/USD, the experts were of the view, that during August the pair will re-test the 1.2700-1.2800 area. Apparently, after hearing this forecast, the couple all week persistently sought to down, but so far it managed only to fall to the level of 1.2900.
Speaking about the future of the pair GBP/USD, 100% of indicators look to the south. According experts forecasts and graphical analysis, the pair will not be able in the near future to overcome the 1.2810-1.2850 support and bouncing from it, will go up - to the 1.3200-1.3250 area. It should be clarified that about 70% of the experts believe, that in the medium term, under bearish pressure, the pair will move to the south and will try to test the support at 1.2700, and in case of breakdown, it will go down further - to the level of 1.2500.

EUR/USD is rising on the positive data on GDP growth in the eurozone

On Friday, the euro was higher against the US dollar after the release of eurozone economic growth data in line with expectations, as well as with the report on industrial production, which exceeded forecasts.
During the European morning trade, EUR/USD reached 1.1159, the session high; the pair subsequently consolidated at 1.1150, rising by 0.12%.
The pair was likely to have a support at 1.1066, the low of August 9 and resistance at 1.1194, the high of Thursday.
Eurostat reported, that the eurozone GDP increased by a seasonally adjusted 0.3%, coinciding with the rate of increase in the previous quarter and the consensus forecasts.
In annual basis, GDP growth is by 1.6% in the second quarter, coinciding with the rate of increase of the first three months of the current year and the forecasts.
Eurozone data were published after Germany, the leading economy in the region, surprised the market participants with its performance of economic growth - 0.4% instead of the expected 0.2%.
A separate report showed, that the industrial production in the eurozone rose by 0.6% in June, beating forecasts for increase of 0.5%, after falling by 1.2% the previous month.

Unexpected growth of kiwi after interest rates cut

This week, the New Zealand dollar rose to its highest level in the past year against the decision of the Central Bank of New Zealand to cut rates by 25 bp to 2%.
On Friday there was a speech of the Reserve Bank of New Zealand Graeme Wheeler. On the meeting were reported some results of the measures and some forecastsfor GDP growth and inflation. It has been said, that a further reduction in the main refinancing rate in the area of ​​25-50 basis points is unlikely and will not achieve the desired effect, as the dynamics of economic growth is consistent with the forecasts. Regarding the inflation rate some anxiety remains, but with future reduction of the exchange rate, the inflation will reach the level of 2% in medium term. This statement has been welcomed by major market participants and led to purchases of NZD. It is possible, that the pair will continue to grow up to 0.7343, and in case of a break, to go to the level of 0.7400.

The dollar fell after weak economic data from the US

The dollar fell on Friday after US data unexpectedly indicated that retail sales in the US have not changed in July, while the producer prices fell, triggering fears about economic growth in the third quarter.
Economists forecasts for retail sales were for growth by 0.4 percent. The decline in producer prices was the first since March and the strongest since September 2015.
"Retail sales data in the US is particularly strong pushing down the dollar", - said Nick Bennenbrek from Wells Fargo Securities in New York.
Dollar slowed down by 0.46 percent on Friday night to a basket of major currencies, falling to 95.254, at least one week. The dollar also lost 0.9 percent against the yen to 101.00 and 0.6 percent against the euro, to $ 1.1201.
A week ago, the US currency has demonstrated rally after data, which pointed stronger job growth in July than forecasts, reinforcing expectations, that the Fed will raise rates this year.
However, this week, the dollar lost its advantage, as investors hardly expect a rate hike in September, and the December's meeting of the regulator is still far.
The Australian dollar rose by 0.3 percent to $ 0.7714 after falling to $ 0.7671. The New Zealand dollar gained 0,5 percent to $ 0.7249, before falling to $ 0.7186.

Free Webinar Special: "Brazil What's happening?"

The leading independent broker ActivTrades is inviting you to their free online Webinar Special: "Brazil What's happening?".

The webinar will be held on August 11, 7pm-8pm.

The professional trader Paul Wallace will discuss with us how the sports event of the year - Rio 2016 will affect Brazil economy and what opportunities brings the event for the market.

For more information and to register, please  follow this link.

The Bank of England brang the pound to life

On Thursday, on the foreign exchange market in the spotlight is the British pound. Today, after at their meeting, the Bank of England lowered the interest rate from 0.5% to 0.25%. This is the lowest value of the index over the past 320 years. Also, the central bank increased its asset purchase from 375 billion pounds to 435 billion pounds.
The bank's actions were expected. Mark Carney in his speeches after Brexit warned currency market players that the regulator will carry ultrasoft policy and it is likely to decrease the rate.
This decision was dictated by a desire to support the UK economy, improve goods turnover and increase the volume of industrial production. Not the least role in the decision of the Bank of England played the results of the referendum on exit of the UK from the EU structure. After the UK will be out of the EU, its economy may experience a certain drawdown, but this aspect should be soften.
The pair GBP/USD in the coming days will aim for 1,289, thus, the pound's downward trend will be confirmed in both medium and long term.

Scotiabank: The yen continues to grow

On Tuesday, the yen rose against all major currencies, despite the long-awaited publication of the plan for fiscal stimulus in the country. This behavior of the Japanese currency comes in response to a statement by the Japanese government yesterday and the decision of the Bank of Japan last Friday, indicating a high probability for further growth of the yen, reported analysts.

According to their short-term technical indicators USD/JPY draws bearish picture. The couple aims to test the zone around 100.45 yen.

Citi: The price of the pound would fall before the meeting of the Bank of England, and after it

According to the forecasts of economists of the bank, on Thursday the Bank of England will lower its key interest rate to 0.25% and will resume its program of buying assets in which over the next four months in the financial system will be infused £75 billion.

Acoording to analysts, forecasts for the economy and inflation of the country will likely to be reduced.

Market expectations for expansion of incentives were formed during the week, so for the Bank of England will be difficult to maintain the status quo, which is negative for the pound, say analysts.

The bank remains bearish about sterling and believes, that the decline in interest rates and the resumption of quantitative easing program would become a longterm signal.

Given the above, analysts of the bank see major prerequisites for decline in the pound before the meeting of the Bank of England and after it.

Some thoughts regarding GBP/USD for the next week

What happened the previous week?

The forces of bulls and bears were still nearly equal, and for the second consecutive week the pair moved in the channel 1.3070-1.3290 with Pivot Point 1.3200. It was expected, that the market will be dominated by the bearish tone, but the news from the US again played a role, which led the pair to a little raise and movement from the lower to the upper half of the side of the corridor.

What to expect from the next week?

Brexit situation remains ambiguous. Looking at the D1, it is logical to conclude, that the GBP/USD pair will continue to move in a horizontal channel 1.3050-1.3335 with Pivot Point 1.3200. But it does not exclude the possibility, that the pair will try to test for the second time in July lows at 1.2800 zone. To affect the formation of a new trend can not only NFP data and the ECB meeting on Wednesday, but also series of important news from the Bank of England, which are expected on Thursday, August 4.

Some thoughts regarding EUR/USD for the next week

What happened the previous week?

A suggestion for the pair assumed lateral movement with the support of 1.0955 and the Pivot Point 1.1000. It was also anticipated, that this trend would eventually changed by the US Federal Reserve interest rate decision and relevant comments on Wednesday night. The miracle has not happened, to the disappointment of investors, the interest rate remained unchanged at 0.5%, the rhetoric remained uncertain, bringing the dollar fell against the euro by about 200 points.

What to expect from the next week?

H1 and 90% of the indicators on H4 and D1 are inclined to believe, that the pair will continue to grow and will try to gain a foothold in the zone 1.1250-1.1300. From the other side, the pair is now at the upper boundary of the corridor 1.0955-1.1190, bouncing from which it could start its movement to the south. At the same time, we must remember, that on Friday, August 5th, we'll see the data on NFP - the most important indicator for the state of the US economy, which usually lead to a spike in the dollar. According to some forecasts, the NFP this month could fall from 287k to 175k. So, if these forecasts come true, by the end of the week we'll see pretty good movements of EUR/USD upwards.