Forex analysis review
Forex analysis review |
- Forecast for USD/JPY on January 25, 2021
- Analytics and trading signals for beginners. How to trade GBP/USD on January 25? Analysis of Friday. Getting ready for Monday
- Analytics and trading signals for beginners. How to trade EUR/USD on January 25? Analysis of Friday. Getting ready for Monday
- Trading plan for the GBP/USD pair for the week of January 25-29. New COT (Commitments of Traders) report. The pound is quietly
- Trading plan for the EUR/USD pair for the week of January 25-29. New COT (Commitments of Traders) report.
| Forecast for USD/JPY on January 25, 2021 Posted: 24 Jan 2021 07:18 PM PST USD/JPY The potential to reverse has materialized for the USD/JPY pair last Friday. The daily chart shows that the price rose from the support of the MACD line, while the Marlin oscillator turned to the upside from the border of the negative area. The nearest target of the pair is 104.18, along the price channel line. Getting the pair to settle above it opens a higher target at 105.44, also along the embedded price channel line of the higher (monthly) timeframe.
The four-hour chart shows that the price is consolidating slightly ahead of Friday's high (103.90) and ahead of the MACD line. Surpassing this resistance (103.90) will provide the currency pair with the chance to advance further. The convergence of price and the Marlin oscillator continues to develop and is helping this offensive.
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| Posted: 24 Jan 2021 02:04 PM PST Hourly chart of the GBP/USD pair
The GBP/USD pair quite unexpectedly began to correct on Friday, January 22, although after surpassing the 1.3700 level it would be more logical to see the upward movement continue. However, market participants felt the need to slightly retreat. As a result, the correction could already be completed. Last Friday, the MACD indicator initially fell rather far, below the zero level, and then formed a buy signal (circled in the chart). Thus, novice traders could open long positions as early as Friday. Of course, I was a little embarrassed by the fact that the trading week was ending, but the risk was justified. When transferring deals to a new week, it is better to simply always set the Stop Loss level so that you do not get losses when opening with a gap on Monday. Also, beginners could work out a buy signal from January 20, which could get about 45 points of profit. Recall that all this time the pound/dollar pair is in an upward trend after the price settled above the downward channel. We also built an upward trend line, which shows the current trend even more eloquently. The UK December retail sales report was released on Friday. Taking into account fuel sales, the growth was 0.3% m/m, excluding 0.4% m/m. The forecasts were almost three times higher. Business activity indices were also published, which were also worse than predicted values, while the service sector in January fell from 45.2 to 38.8. As we mentioned in the article on the euro/dollar, there is nothing surprising about this. In the European Union, business activity in the service sector dropped to 45 with one lockdown in winter, meanwhile, there were two lockdowns in the UK, so the service sector suffered even more. Considering the fact that the macroeconomic reports from the United States were quite good, it was absolutely logical for the pound to fall on Friday. We can only hope that this was a reaction from the markets, and not just a coincidence. No macroeconomic reports from the UK and the US on Monday. No other event scheduled either. Therefore, most likely, we will have a boring Monday. At the same time, traders will again seek to bring the pair back to the 1.3745 high. As we have noted long ago, traders do not need a foundation now to actively trade or continue buying the pound. Recall that from a fundamental point of view, the British currency continues to grow absolutely groundless. Possible scenarios on January 25: 1) Long positions remain relevant since the price left the downward trend channel and an upward trend line was formed. Novice traders should already be in long positions, aiming for 1.3766. If the MACD indicator turns down on Monday, then close the longs and wait for a new signal. Either the MACD indicator turns up, or the price rebounds from the trend line. 2) It is not recommended to consider short positions now, since there is an upward trend. Thus, you should only open short positions when the price has settled below the trend line. The targets in this case can be located around 1.3540 and 1.3500. On the chart: Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now. Up/down arrows show where you should sell or buy after reaching or breaking through particular levels. The MACD indicator consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines). Important announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 24 Jan 2021 02:04 PM PST Hourly chart of the EUR/USD pair
The EUR/USD pair strictly moved up last Thursday and Friday, very weakly and along the upper border of the rising channel. The price failed to overcome this line, which would mean the strengthening of the upward trend. But at the same time, it did not start a very logical pullback down to the lower border of the rising channel. Since all this time, in fact, there was an upward movement, there was no correction, then the MACD indicator did not discharge properly in order to form new and strong signals. Thus, there were simply no new signals on Thursday and Friday, therefore, novice traders should not have opened long positions. Short positions are also out of the question. One of the main tenets of successful forex trading is "trade with the trend". Thus, corrections are used in order to open positions on them along the trend, and not in order to trade against the trend. Therefore, sell orders should not have been opened at all. The European Union published business activity indices in the services and manufacturing sectors. As expected, the service sector remained below the 50.0 level, which means it contracted. As expected, the manufacturing sector remained above the 50.0 level, which means its growth. However, it was not a secret for anyone that the service sector is the one that suffers the most from lockdowns and quarantines. Thus, the service sector fell when the lockdown was introduced. The more the GDP of a country (or bloc) depends on the service sector, the more the overall economy will fall. Thus, the European economy will fall in the fourth quarter. Similar indexes of business activity in the US were also in line with forecasts. In the manufacturing sector, business activity rose to 59.1, and in the service sector - to 57.5. The US economy showed that it is doing well with these reports and will continue to recover in the fourth quarter. However, all these data, albeit quite interesting, did not support the dollar, which continued to fall in the last two trading days. A new speech from European Central Bank President Christine Lagarde on Monday, November 25. It is unlikely that she will communicate anything important to the markets, but still you should not miss her speech. Online, of course, it will not be broadcasted, so novice traders should just clearly know what time Lagarde will speak and trade more cautiously at this time, realizing that increased volatility or sharp reversals are possible. Possible scenarios on January 25: 1) Long positions remain relevant, since the price continues to be within the rising channel. However, novice traders are advised to wait for a new buy signal from the MACD indicator, which should be discharged beforehand. It does it already, but the price won't fall. In any case, we are waiting for a correction. When the signal appears, you are advised to trade upward while aiming for resistance levels 1.2192 and 1.2217. 2) Trading for a fall is currently irrelevant. Now, to resume trading down, the new upward trend must be unequivocally reversed. To do this, the rising channel needs to be canceled, that is, the price has settled below it. So far, this development of events is not expected. On the chart: Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now. Up/down arrows show where you should sell or buy after reaching or breaking through particular levels. The MACD indicator (14,22,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines). Important announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 24 Jan 2021 07:55 AM PST GBP/USD - 24H. The GBP/USD currency pair continued its upward movement during the current week, as did the EUR/USD pair. But if the euro currency had previously adjusted at least a little, then there was no question of a correction for the pound sterling. The British currency just keeps rising and that's it. From time to time, of course, there are pullbacks, however, there has not been a strong correction for a long time. Even the "high-volatility swing" mode has recently changed to a stable and confident upward movement. All this only suggests that market participants still regard the pound as an attractive currency for investment, and the dollar is not. In past fundamental reviews, we have already published several different hypotheses of a strong fall in the dollar over the past year. There are absolutely no fundamental reasons for this. Therefore, since the current trend is not built on a "foundation", then all the more attention should be paid to technical factors. And technical factors do not even allow the idea that the upward trend may end in the near future. What can prevent it from continuing if its nature is not fundamental? It turns out that the pound will become more expensive as long as it is bought, and the dollar is sold. And no one knows how long it will last. COT report. During the last reporting week (January 12-18), the GBP/USD pair increased by 70 points. It seems to be a little, but the growth is stable. But the latest COT report is again disappointing. Recall that over the past two to three months, the absolute majority of reports indicated minimal changes. In most cases, professional traders sought to close contracts for the pound, with both buying and selling. Only the penultimate report showed that the number of purchase contracts increased immediately by 10,460, which is a lot. The latest report showed that non-profit traders have returned to their favorite activity – a sluggish reduction in the number of contracts. 2 thousand buy contracts and 3.1 thousand sell contracts were closed. Thus, the net position for the "Non-commercial" group of traders has become more "bullish". However, the indicators show a very different picture. If the figures of the COT report could tell traders about the continuation of the upward trend (which it is), then the indicators show that the mood of non-commercial traders changes about once a month. The green line of the indicator (the net position of the "Non-commercial" group) constantly changes the direction of movement and intersects with the red line (the net position of the "Commercial" group), which means that there is no trend. However, there is a trend, and the changes displayed by the COT report are minimal and do not allow us to draw any long-term conclusions. Talking about the fundamental background, especially for the pound/dollar pair, sometimes makes no sense at all. News, events, and reports are all available, however, all these important data do not have any influence on the movement of the pair. Thus, 90% of fundamental events and macroeconomic reports can be viewed out of pure sporting interest or just to keep abreast of what is happening. The last most important events concerned the speeches of several top officials of the UK and US economies. We wrote about Janet Yellen's speech in an article on the euro/dollar. Andrew Bailey also made it clear to the markets that the Bank of England is not going to introduce negative rates in the near future, but he also did not make any optimistic statements. The head of the Bank of England tried to instill optimism in the markets. After all, the pound continues to grow in any case. However, Andrew Bailey promised that the economy is waiting for a rapid recovery and in general "everything will be fine". Even regarding the UK's GDP for the fourth quarter, Bailey said that "it will not change at best compared to the third". However, the macroeconomic indicators continue to signal that if the British economy starts to recover, it will not be in the near future. The second and third "lockdowns" caused damage to the economy, although not as huge as the first. Now, we can say that the world has already learned to live with the pandemic, so the impact on the economy from a full quarantine is less than last spring. Nevertheless, the British economy is shrinking and will continue to shrink, and the American economy continues to recover. Trading plan for the week of January 24-29: 1) The price keeps the upward trend without any problems. Thus, in the 24-hour timeframe, the target for an upward movement remains at the level of 1.3851. We recommend that you continue to trade for an increase on the higher timeframe as long as the price is above the critical line, and do not try to guess the moment when the upward trend ends. On the lower timeframes, respectively, upward trends are also more important. 2) Sellers are still quite weak. The week before last, the bears tried to seize the initiative, but it ended with only a minimal pullback. Thus, for the possibility of opening short positions, it is now recommended to wait again for the price to consolidate below the critical line. If this condition is met, a downward trend may form on the 4-hour timeframe. The price broke through the important level of 1.3700 this week, which significantly increased the likelihood of further movement to the north. Explanation of the illustrations: Price levels of support and resistance (resistance/support) – target levels when opening purchases or sales. You can place Take Profit levels near them. Ichimoku indicators, Bollinger Bands, MACD. Support and resistance areas – areas from which the price has repeatedly bounced before. Indicator 1 on the COT charts – the net position size of each category of traders. Indicator 2 on the COT charts – the net position size for the "Non-commercial" group. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 24 Jan 2021 04:44 AM PST EUR/USD - 24H. During the past week, the EUR/USD pair turned up and began a new round of upward movement. So far, in global terms (on a 24-hour timeframe), this move doesn't look convincing. That is, the pair's quotes remain below the critical line, thus, the prospects for an upward movement are questionable. At the same time, a strong upward trend persists. This is very eloquently signaled by the Ichimoku indicator. The price has so far managed to overcome the Kijun-sen line with difficulty and could not even work out the upper line of the Ichimoku cloud. From a purely technical point of view, everything looks like a banal pullback down, after which the upward trend will resume. Thus, the bears need to strengthen their positions over the next week and not give the initiative back to the bulls. It is difficult to say whether they will succeed or not. During the last correction period, which lasted for 4 months, the pair managed to go from a high to a low of 400 points. At the beginning of the new year, the quotes went down 300 points. Thus, in the current realities of the depreciation of the US currency, this is quite enough to start a new round of upward movement. COT report. During the last reporting week (January 12-18), the EUR/USD pair fell by 80 points. As we have already written above, the pair has started to adjust globally, however, the upward trend is not canceled. The latest COT reports show just that. The previous COT report showed a sharp increase in the net positions of the "Non-commercial" group, the latest COT report also showed that non-commercial traders are increasing their purchase contracts. If the net position increased a week earlier due to a reduction in the number of sales contracts, now the Non-commercial group has opened new 8.2 thousand purchase contracts and only 1.4 thousand sales contracts. Thus, the net position increased again by almost 7 thousand contracts. This means that the mood of the most important group of traders continues to become more "bullish". This is also evidenced by the indicators. The first indicator again shows that the red and green lines are moving away from each other, which indicates the continuation of the trend (in our case, the upward one). The second indicator shows the net position of non-commercial traders, but on the chart. That is, we can see firsthand how their mood becomes more "bullish". From all of the above, we can conclude that the upward trend is highly likely to continue. A couple of months ago, we made the opposite conclusion, however, the bears were so weak that they could not start a new trend. This week, there were few really important events for the foreign exchange market. There were many high-profile events. For example, the inauguration of Joe Biden, which was held without excesses, rallies, and riots. The new US president immediately began to cancel some of the decisions and decrees of Donald Trump, showing that he radically disagreed with his policies. This means that the course of America will remain the same, but the direction of movement may change quite strongly. Also this week, the ECB held a meeting, at which no important decisions were made. Thus, the most important thing was the press conference with Christine Lagarde and not the results of the meeting. However, Lagarde also did not tell the markets anything fundamentally new. As usual, it was about the high euro rate, low inflation, threats, and risks associated with the "coronavirus" pandemic. Also, this week, Janet Yellen, the former head of the Federal Reserve, and now the US Treasury Secretary, made a voluminous speech. The most important thesis voiced by Yellen was the rejection of attempts to influence the exchange rate of the US currency, as it was under Donald Trump. According to Yellen, her office will not interfere in the exchange rate of the dollar. In general, as we can see, there were many interesting events, but none of them had a special impact on the movement of the pair. For most of the week, the euro currency has been quietly growing, as it likes to do in the last 9-10 months. There is also nothing to highlight from the macroeconomic statistics. Inflation in the EU remained at a negative level. Business activity in the service sector remained below the level of 50.0. Nothing unexpected. Trading plan for the week of January 24-29: 1) The pair's quotes attempted to resume the upward trend over the past week. We believe that if the bulls manage to return the pair to the area above the critical line, then the upward movement will resume with the first target at the resistance level of 1.2376. An upward trend has already been formed on the hourly timeframe. At the 4-hour chart, you need to overcome the Senkou Span B line to continue moving north. In general, we would say that if we continue to ignore the fundamental background, which has not changed much in recent weeks, then the euro currency has an excellent chance of even greater growth. 2) The downward trend seems to have started, however, it didn't last very long. As long as the price is below the critical line, the downward movement can resume with the targets of the support level of 1.1992 and the Senkou Span B line. However, if the quotes go above Kijun-sen, then the upward trend is highly likely to resume. If there is a rebound from the Kijun-sen line, it will signal the opening of shorts, but extremely neat shorts. Explanation of the illustrations: Price levels of support and resistance (resistance/support) – target levels when opening purchases or sales. You can place Take Profit levels near them. Ichimoku indicators, Bollinger Bands, MACD. Support and resistance areas – areas from which the price has repeatedly bounced before. Indicator 1 on the COT charts – the net position size of each category of traders. Indicator 2 on the COT charts – the net position size for the "Non-commercial" group. The material has been provided by InstaForex Company - www.instaforex.com |
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