The US economy grew surprisingly weak in the second quarter

The US economy grew surprisingly weak in the second quarter after anemic growth at the beginning of the year. The cause were weak business investment, which largely offset fairly solid increase in consumer spending. This shows a preliminary assessment.
Gross Domestic Product of the US, which is the most common measure of the production of goods and services, increased in the second quarter by 1.2% with an average forecast of accelerating growth to 2.6 percent. Meanwhile, the final data for GDP growth in the first quarter fell to 0.8% from 1.1%.
Consumer spending, a key engine of the economy, rose in the second quarter by 4.2% following weak growth of 1.6% at the beginning of the year. It should be kept in mind, that the domestic consumption forms more than two-thirds of the growth of the world's leading economy. Although expectations were for an even better growth of 4.4%, the increase in consumer spending of 4.2% was the best since the end of 2014, the cost of purchases of goods increased by 6.8%, while those for services - by 3%.
On the other side are business investments, which shrank in the second quarter by 2.2% after falling by 3.4% at the beginning of the year.
Meanwhile, exports in the second quarter rose by 1.4% while imports fell by 0.4%, which means that international trade has added 0.23% to the growth of the US economy.

The hope for the growth of the dollar has faded after FOMC

The last FOMC statement was not able to maintain the upward trend of the dollar, sending it in the opposite direction. On Friday on the Asian session will be held even more important (and expected) meeting of the Bank of Japan, which may well surprise the markets, which do not know what to expect from him.
The market has decided that the slight increase in "degrees" in the last accompanying statement of the Federal Open Market Committee is not sufficient to support the growth of the dollar. Bulls on the dollar decided it had enough, and have closed long positions in USD and the break of 1.1000 in EUR/USD was short-lived.
It is easier to squeeze water from a stone, than achieve by the Fed raising expectations. But the dollar is not that important event, but rather just a factor that threatens him sluggish consolidation until the end of the summer, of course, if the Bank of Japan did not delight us with something new.
As a result of a reversal USD came under pressure again, although yesterday's dynamics could signal a possible continuation of the summer blues in August. Recently it is written a lot about the importance of growth in USD Libor - is an important factor, but so far it had no effect on the dynamics of the dollar.

Why are everybody is waiting for the meeting of the Bank of Japan?

USD/JPY is now a fairly complex market. Tomorrow's meeting of the Bank of Japan's is getting nerves of traders heated up much stronger than yesterday's meeting of the Federal Reserve. Market participants are in doubt - bet on increasing of monetary stimulus, or mentally prepared for the fact that on Friday the Bank of Japan would not live up to expectations?
The fact that on Wednesday the Japanese prime minister Shinzo Abe announced a solid amount of fiscal stimulus measures package of 28 trillion yen increases the pressure on the Bank of Japan in terms of action. Earlier, the head of the Central Bank Kuroda emphasized that fiscal and monetary easing are effective when used together. Apparently, the Japanese government wants from the formally independent central bank further policy easing. According to one point of view, for the Bank of Japan it is strategically important to act now, because with conscientious actions with the government the effect of the measures will be higher. According to Bloomberg, 80% expect the Bank of Japan will increase incentive program this week.
From another point of view, the measures taken by the Japanese government as well as the fact that the USD/JPY is trading at 105.00, and not at a critical level at 100.00, on the contrary, mean that the Bank of Japan decides to reserve monetary stimulus for "rainy days". Huge amounts of money, which the Japanese regulator has poured into the financial system of the country, could not help inflation. The more money "prints" the Japanese Central Bank, the harder it becomes to manage the situation. The lack of action by the regulator will cause the resumption of downtrend of USD/JPY, and bears rush to new lows. The Bank of Japan, of course, is aware of the pressure under which it is located and the potential consequences of inaction - that's why the majority of analysts believe that the amount of monetary stimulus will still be increased tomorrow.

Another day has gone, pound calm as never before

It's time to recharge, I understand it.

But, pound so calm?

Walking around with sunflower slippers?

Maybe I should too...

For me, as a trader, another day has gone.

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Euro will move from the death point next week

Friday's trading session was annoyingly calm.

On the currency market were not observed any movements.

The euro was traded for three consecutive days in the flat, playing with my nerves with the level of 1.10. The recent meeting of the ECB has not helped the pair to determine its direction, because it did not bring any concreteness for the current situation. Only one thing is clear - additional incentives are not excluded, but the regulator does not intend to hurry.

Next week, the main event will be the meeting of the Federal Reserve on Wednesday, July 27. It is possible that up to this event, the main currency pair will continue to consolidate, and the decision of the US regulator will be the long-awaited catalyst that will bring back EUR/USD to life. Some sugnifficant actions by the central bank are not expected, but the rhetoric, as in the case of the ECB, will attract the attention of market participants. Players will catch hints for the timing of the next rate hike.

In this aspect, it will be interesting to observe the evaluation of the current state of the US economy. It is possible that after the June employment report, the Fed will mark the stabilization of the labor market after the May decline. If the tone of the Central Bank will prevail positive notes, the pressure on the euro may increase. In the case of such a scenario, investors will rush to buy defense assets, such is the dollar. Thus, the single currency could come under a double pressure.

Fear vs. Greed: Pyramiding in action (Part 2)

A bit about Macro-psychology

Every trader knows, that it's better to trade with the trend. But the market is changing every second and the trend often looks different in different time frames. And exactly in the dynamics you can find the beauty of the trading.
Actually, there are so many instruments to measure the market's moods, that sometimes I start to doubt which drives whom - the instruments show the market movements, or the market is leaded by the instruments?
Otherwise, how would you explain me the existence of the concept of Support and Resistance?

By the way, if there weren't the things like Support and Resistance, the market would look like this:

(It's the same graph from the Part 1, but reversed in 90 degrees).

Read me soon for Part 3 :)

EUR/USD is flirting with 1.1000 in anticipation of the ECB meeting

EUR/USD has calmed down after the Brexit in anticipation of the meeting of the European Central Bank, scheduled for Thursday. In the background, waiting for the Fed's rate raising slowly climbing up, providing support for the dollar across the board.
EUR/USD is floating around the key level of 1.1000 before tomorrow's meeting of the Governing Board of the European Central Bank, which is unlikely to be able to support the euro; Meanwhile, the pound this morning, managed to overcome the important level of 1.3100.
The IMF warned on Tuesday that Brexit will lead to a slowdown in global economic growth of 0.1%, as well as greatly increase the economic and political uncertainty.
Yesterday an informal "voice" of the Federal Reserve, the author of articles in the Wall Street Journal, John Hilsenrath noted, that the Fed did not approve how low the market value the probability of a rate hike at the next meetings of the Federal Open Market Committee.
 The graph for EUR/USD continues to reflect the uncertainty, but I believe more probable movement will be due south, as the pair is now testing the key 1.1000 area. At a meeting of the monetary policy on Thursday, the ECB Governing Council is unlikely to report anything that can support the currency.

The dollar is surrounded, but not defeated

Last week the dollar fell against European opponents. The currencies were influenced by the general market sentiment, that has developed in favor of purchases of risky assets. Forgetting Brexit stock indexes plunged into euphoria. Only by the end of the week European markets went out of the race, being under the influence of the tragic events in Nice. However, as a rule, factors like these are played fairly quickly, after which investors are switching to the usual drivers.
A good recovery we have seen in the pair GBP/USD. Pound was supported by the resolving of the political situation in the country, where there was a change of the Prime Minister, although it was expected that this process will continue until the autumn. Meanwhile, the Bank of England "spared" the currency, hinting at easing during the next meeting. In addition, the recent collapse, the British currency has settled at attractive levels for purchases. These factors, coupled with the widespread demand for higher-yielding assets fueled interest in the pound, which rose from lows below 1.29 to the area of ​​1.33, recovering from losses from the previous week.

Friday's American statistics helped the dollar somewhat to rehabilitate. In June, retail sales reflected the significant growth - an indicator excluding autos jumped to 0.7% from 0.4%. Meanwhile, core inflation has reached the forecast level of +0.2%. In response to releases, the dollar added to the price. However, in fact, there is nothing enchanting in these figures. Retail sales increased mainly due to the downward revision of the May values, and the main CPI remained at 0.2% instead of the expected 0.3%. So that the current bullish momentum may soon exhaust itself. In addition, the Fed is now in the background, and the focus is on the central banks, which are expected to launch easing - the Bank of England and the Bank of Japan.
Next week there will be a meeting of the ECB. However, markets do not expect easing from the regulator in response to the risks that accompany Brexit. First, even the Bank of England refrained from adopting stimulus measures in the past week. Second, in the financial markets it is not panic observed, which would indicate major impact from Britain's exit. Finally, in March, the regulator introduced a wide range of measures, the effect of which has not yet manifested itself in full volume. Thus, I do not expect any serious pressure on the euro in the light of this event.

Fear vs. Greed: Pyramiding in action (Part 1)

To enter the market shorty from the bottom and to exit with a profit 20 minutes before weekly closing (200 pips higher) - is it possible?

Yes, it is.
You might ask how?

Every single moment the market is changing. It in fact is a violent mind battle between bulls and bears. The fat books say, that in the base of trading lay two major psychological factors - fear and greed.

Let me show you what happens in a market, where fear and greed don't exist:

(Somehow, it reminds me of flatline).

The chart shows the correlation between Euro and Bulgarian Lev (the currency of my country). The Bulgarian Lev is in currency board with euro since 1997. The board was taken to secure our currency and economy because of the hyperinflation that year.

Read me tomorrow for Part 2 :)