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Morning market overview

Morning market overview

Good day to all!

Today, at 14: 45 Moscow time, the decision on the ECB rate will be announced, and at 15: 30 a press conference of Draghi, the head of the ECB, will begin. The main question is whether the rate will be lowered and whether a new QE will be launched in Russia Eurozone. Whatever decision the ECB makes, one thing is clear, the currency market will not be boring.

Today is the day when it is very difficult to make forecasts and the probability that they will turn out to be correct is low. It's morning, and trading won't open for another two hours, and all the important events will happen with the opening of the American markets. However, we will try to give our own view of today's events.

Currencies-Euro-dollar the decline continues, and the movement vector is still directed downward. After the ECB rate decision and Draghi's press conference, market volatility will increase strongly. At the current zero bids, with the ECB's bloated balance sheet, weak economic indicators and low inflation, the ECB is trying to restart the Eurozone economy. They treat an old disease with the same medicine, just increasing the dose, and the patient gets worse and worse . The end result of this policy is obvious. It will be heavy crisis.

It's only a matter of time before it happens. Today, the trading range is 1.109-1.18, but in reality, the range of price fluctuations can be much larger.

The dollar-ruble – So far, nothing new is happening, regardless of the tax rate the period, export sales and a positive external background, the ruble is trying to weaken. Judging by the current OFZ yields, we should expect the CBR rate to drop to 7% by the end of the year, and possibly even lower. The ECB's decision will have a strong impact on the dollar-ruble exchange rate.in case of a decline in the EURUSD pair, the ruble will come under pressure. On today, the trading range of 62.9 - 63.60 is likely. We are inclined to increase this currency pair.

The S&P500 Index – "It is possible that today prices will try to approach the upper limit of the trading range around 3020 again , in this case, we will use this growth to resume short positions through U500 futures " - this is the forecast we gave yesterday in the review.

Since the morning, futures are trading at historical highs, and the growth potential remains. We expect the range of 2986-3028 for today, but we will use the further growth of the indices to build up short positions.

RTS and MICEX – "Today, it is more logical to expect the growth of the indices up. In the case of growth, we will look for the moment and levels for opening short positions, especially in the MICEX " - this is the development of events in the Forex market our stock market we were expecting yesterday. We were very much hoping to open additional short positions with the growth of the indices. It didn't work out, and we had to settle for those positions that we already had, short positions on the RTS. Key support levels are based on RTS 133600 and MICEX futures 269600, and the resistance of RTS 135500 and MICEX 273800. Our stock market Outlook remains negative.

OIL – "Today, we expect a range of 62.8-65.2.While it is worth playing from the long side, I use price dips to open long positions positions'. We think that after the release of oil data today, it will be possible to catch the maximum prices of the day and possibly reverse the position in short " - this is the forecast we gave yesterday morning for oil. In reality, the oscillation range was 62.6-64.65. After the release of official data on oil reserves and the level of oil production, which showed a decrease in reserves by 10.8 million barrels and a decrease in production levels by 0.7 million barrels, respectively, oil tried to grow, but then sharply declined in price. There are several reasons for this. The consequences of the hurricane affected production more, it fell for two weeks by 1 million, more than we did supposed. But this is a temporary event, and the level of oil production will increase next week. The decline in crude oil reserves is explained by a decrease in production, due to the hurricane. The plants are working, and the raw materials are coming from back-up storage facilities. So the reduction in crude oil reserves is also not a fundamental factor and had an impact on prices minor. The market was expecting such data, and here the old saying worked: «Buy on rumor – sell on fact."

Last but not least, the news of possible joint development of oil fields by Saudi ARABIA and Kuwait sent prices down by 2%. On today, we expect a range of 62.2-64.3 , it is likely that oil prices will first try to test the upper limit of the daily range. Themselves without positions.

Precious metals-we Continue to expect a decline in prices, especially towards the end of the month. For today, the trading range for gold 1410-1431 and silver 16.38 -16.71. Metals are overbought, and they should see a decline in prices, especially given the strength of the dollar.

The second day we repeat this, we ourselves increased the shorts in silver. Today they will definitely be strong movements in metals .

Debt market – Stock markets rose yesterday. But today, the yield on us bonds 10Y (ten-year paper) is 2.048%, and on 3M (three-month bonds) 2.09%, Inversion in yields between 3M and 10Y resumed again, after a two-day break. We think that in the end, this should negatively affect the stock market in the United States.

https://www.fxstreet.com/news/oil-technical-analysis-wti-drops-to-2-day-lows-as-kuwait-and-saudi-arabia-plan-to-resume-production-201907241933

https://www.vestifinance.ru/articles/122464

https://www.zerohedge.com/news/2019-07-24/16-trillion-fund-spots-new-ticking-time-bomb-market

https://bcs-express.ru/novosti-i-analitika/zasedanie-etsb-snizhenie-protsentnykh-stavok-mozhet-byt-ne-za-gorami

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