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Midway through the Week and No Surprises

Olymp Trade

Fundamentals

Germany’s GDP came out yesterday. The data matched the forecast of 0.6%. An hour and a half after this number was published, Germany’s PMI came out. The number, at 59.4, was better than the expected 58. You’ll recall that, after the tensions over the French election eased, traders were able to take a deep breath. Some of the risks surrounding the common European currency were eliminated. But now comes Germany, with its elections this September. The left, represented by Dietmar Barsch and Sahra Wagenknecht, is, naturally, a threat to a unified Europe. Note, however, that we think their chances of winning are low. Experts favor Germany's current chancellor, Angela Merkel.
Of interest among fundamental news today will obviously be the Bank of Canada’s decision on the basic interest rate (the information will be published at 2:00 pm GMT). No surprises are anticipated here  the rate is expected to stay at 0.5%.
Traders will also be tuning in at 12:45 pm GMT to hear remarks by Mario Draghi.
The minutes of the Federal Reserve System meeting will be published at 6:00 pm GMT.

Stocks

Autozone's report yesterday was not a strong one. Its EPS was $11.44. The company’s income was also worse than predicted - US$ 2.62 billion against the forecast of US$ 2.7 billion. On this report, the company's shares opened with a gigantic gap of almost 6000 points.
Today’s corporate news will include HP’s report for the first quarter of this year. A slight improvement in EPS to $0.39 is predicted. It goes without saying that Russian investors will be watching for PJSC Sberbank’s report.
The Dow Jones Industrial Average continued its ascent yesterday. Volumes are shrinking, which implies that the index is gradually approaching the resistance line. A pattern resembling a bearish pennant is forming. So we might soon see a local reversal in the basic US index.
The Russian stock market continues to sag. Technically, the support for the MICEX Index is at 1920, where a 38.2% Fibo correction is located. In the short and mid terms, the trend is clearly bearish, so short positions are to be preferred.

Currency Market

On the weekly charts the EUR/NZD pair is near the resistance of 1.6125, where there is a 38.2% Fibo correction. If the bulls can manage to organize a breakthrough, there may be movement toward the next resistance at 1.6620. A regular flag pattern has formed on the daily charts and may end with the euro heading upward. The target on the daily charts is the upper Bollinger band at 1.6185. An aggressive scenario involves the possibility of trading on the rise already, in expectation of a confirmation of the graphic pattern. Conservative traders will likely prefer to wait for the signal to be confirmed before they make a decision.
The CAD/JPY pair broke through the middle Bollinger band and continued to move up. The target might be 83, which is a 78.6%. Fibo correction compared to the previous descending wave. Elliott’s wave analysis points to a classic correction wave. If that is the case, a descending C wave may await us.

Nikolay Dudchenko, Olymp Trade analyst

Olymp Trade Review

Source: https://olymptrade.com
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