Forex analysis review
Forex analysis review |
- Analytics and trading signals for beginners. How to trade EUR/USD on June 21. Analysis of Friday. Getting ready for Monday
- JPM stock price ends week at lowest level.
- GS stock price closes at lowest point of the week.
- Bitcoin bulls unable to hold above $40,000.
- XRP/USD challenges major support area.
- EURJPY breaks out of bullish channel after huge upward move that started almost a year ago.
- EUR/USD. Weekly preview: ECB officials' speeches, side reports and PCE Price Index
- Trading plan for the GBP/USD pair for the week of June 21-25. COT (Commitments of Traders) report.
- Trading plan for the EUR/USD pair for the week of June 21-25. COT (Commitments of Traders) report.
| Posted: 20 Jun 2021 01:58 PM PDT Analysis of previous deals: 30M chart of the EUR/USD pair
The EUR/USD pair continued to move down on Friday, however, volatility has already decreased compared to Wednesday and Thursday. Nevertheless, it was still high (for the EUR/USD pair), as it reached 79 points. Quotes bounced from the level of 1.1924 twice during the day, which is the corrected level of 1.1915. Simply put, on Friday, the level was 1.1915, not 1.1924. However, in any case, we only consider signals from the MACD indicator on the 30-minute timeframe, which are formed in a clear trend movement. There is a trend now, but it is so strange and unstable that we still do not recommend trading using the MACD indicator. At this time, despite the strong movement, it is impossible to form either a trend line or a channel, and the movement is practically recoilless, so the MACD indicator will not generate strong signals anyway. In addition, the reasons for such a strong growth of the US dollar raise questions. Recall that the downward movement began after the Federal Reserve meeting on Wednesday, although the US central bank did not take any serious decisions and did not make such serious statements that the dollar rose by 250 points in 2.5 days. 5M chart of the EUR/USD pair
Last Friday's technical picture on the 5-minute timeframe looks far from ideal. Several different signals were formed during the day, but not all of them were accurate and correct. It all started with a sell signal forming near the level of 1.1915, which occurred right when the European session opened. This signal turned out to be false, as prices failed to reach the target level of 1.1878 and returned to their original positions during the day. But at the same time, there was no clear consolidation above the level of 1.1915. However, this is not important, since a short position was closed by Stop Loss at breakeven (the price went down 15 points after the position was opened). Further, the price spent several hours near the 1.1915 level and finally settled below it. It was a sell signal, but it was extremely fuzzy and could not be worked out, even though this time the level of 1.1878 was reached. However, novice traders still had the right to open short positions. In this case, they could have earned around 27 points. Further, a rebound followed from the level of 1.1878, which could be regarded as a buy signal, and it also turned out to be false: the quotes crossed the level of 1.1878 within an hour. Therefore, there was a loss of 14 points. After a breakthrough of the 1.1878 level from top to bottom, it was also possible to open a short position, but it was also closed by Stop Loss at breakeven, and the price did not reach the next target level. Thus, in the best case, novice traders could earn about 10-15 points on Friday, in the worst case, they could get a loss of 14 points. Trading tips for Monday: A strong downward movement continues on the 30-minute timeframe, without a trend line or channel. Thus, on this timeframe, we continue to expect the formation of a clear trend and do not recommend using the MACD indicator to search for signals. In the 5-minute timeframe, it is recommended to trade from the levels 1.1786, 1.1836, 1.1878, 1.1924 and 1.1943. Take Profit, as before, is set at a distance of 30-40 points. Stop Loss - to breakeven when the price passes in the right direction by 15-20 points. At the 5M TF, the target can be the nearest level if it is not too close or too far away. If located - then you should act according to the situation. No important macroeconomic events scheduled either in the European Union or in the United States on this day. Nevertheless,European Central Bank President Christine Lagarde will deliver a speech in Europe, which may have a certain impact on the foreign exchange market. 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. 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 |
| JPM stock price ends week at lowest level. Posted: 20 Jun 2021 10:01 AM PDT In our previous analysis on the JPM stock price when price was trading around $160, we warned that the weekly bearish divergence signals combined with the short-term trend reversal could lead to a bigger decline. Price ended the week at its lowest level of $147.
Blue lines- Fibonacci retracements JPM stock price has a second consecutive down week. Combined with the weekly bearish divergence by the RSI, our expectations see price reaching at least the 38% Fibonacci retracement around $133. This is the first important Fibonacci support level on a weekly basis. Breaking below $133 will open the way for a move towards $110-$112 but it is too early to talk about such a decline. Currently we remain neutral if not bearish JPM, waiting to see price near the 38% Fibonacci retracement. The material has been provided by InstaForex Company - www.instaforex.com |
| GS stock price closes at lowest point of the week. Posted: 20 Jun 2021 09:55 AM PDT Last week we noted that the GS stock price was showing early signs of a trend reversal as price was turning lower from weekly highs and the RSI was showing bearish divergence signals. GS stock price closed at its lowest point of the week and has potential to move even lower. We remain bearish GS stock price.
Blue lines - Fibonacci retracements GS stock price ended the week at $348 and the RSI closed below the 70 level after providing another bearish divergence. Our first target as we mentioned before is at the $312 level where we find the 38% Fibonacci retracement level. This is the first important Fibonacci support. Breaking below it, will open the way for a deeper decline towards $260. Short-term trend is bearish as price is reversing and started making lower lows and lower highs in lower time frames. The material has been provided by InstaForex Company - www.instaforex.com |
| Bitcoin bulls unable to hold above $40,000. Posted: 20 Jun 2021 09:48 AM PDT Despite breaking above the $40,000 price level, Bitcoin bulls were not strong enough to keep prices above that level. Initially breaking above $40,000 was a bullish sign making us expect a move towards $42-45,000 was coming, however bulls were not strong enough. Has price given us a false breakout signal?
Bitcoin since the low at $29,700 is mostly moving sideways between $41,000 and $30,000. The consolidation has lasted almost a month and it is very risky to predict the direction we will see after it exits the trading range. When market price forms such trading ranges I prefer to go long near the lower end of the trading range and go short near the upper boundary of the range. In case I'm wrong and price exits the range, my loss would be minimal as my position would be opened near my stop loss level. Usually when price consolidates like this after a strong downtrend, the break out of the trading range usually is to the downside. That is why I give more chances to the bearish scenario of a downward break out.
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| XRP/USD challenges major support area. Posted: 20 Jun 2021 09:39 AM PDT XRP/USD is trading below $0.80 as expected, since bulls were not strong enough to push price above $0.90-$1.06. XRP/USD is now challenging the support area of $0.65-$0.75 which was previous major resistance. This back test of the break out area is a major event for XRP/USD.
Green rectangle- major support Red line -major trend line support Not long ago, the $0.65-$0.75 area was huge resistance. Back in April of 2021 this resistance was broken and it was big news back then for XRP/USD. Price climbed to $1.97 but is pulling back since then. Price is making lower highs and lower lows. First it was the lower high of $1.76, then $1.70 and recently $1.06. Bulls have not shown any sign of strength but only short-lived bounces. Of course that is not enough for the up trend to resume. Bears remain in control of the trend and if price breaks below $0.60 I would not be surprised to see XRP/USD as low as $0.40 again. The material has been provided by InstaForex Company - www.instaforex.com |
| EURJPY breaks out of bullish channel after huge upward move that started almost a year ago. Posted: 20 Jun 2021 09:33 AM PDT EURJPY has been in a clear well defined upward sloping channel since October 2020 and the 122 price level. Since the price has been making higher highs and higher lows inside a bullish channel but only recently we saw this channel being broken. This is an important event as it could be the start of a bigger reversal.
Blue lines - Fibonacci retracement levels EURJPY has broken below the bullish channel. Usually when price breaks out of multi month channels, price pulls back at least towards the 38% Fibonacci retracement of the latest start of the trend. The start of this trend started back in October of 2020 when price was reversing to the upside from the 122 price level. The 38% Fibonacci retracement 129.30 area and we expect price to at least test this short-term Fibonacci support level. Price is vulnerable to a bigger decline, however a back test of the broken channel from below around 132 is also justified before moving towards the Fibonacci support levels. The material has been provided by InstaForex Company - www.instaforex.com |
| EUR/USD. Weekly preview: ECB officials' speeches, side reports and PCE Price Index Posted: 20 Jun 2021 07:44 AM PDT Last week, the US currency became the favorite of the foreign exchange market. The dollar index soared from 90.66 to a local peak of 92.33. The indicator updated the two-month high, reflecting the increased interest of traders in the currency. The stars turned out well for the EUR/USD bears: the hawkish results of the June Federal Reserve meeting coincided with the dovish rhetoric of the European Central Bank's representatives. This uncorrelation increased the pressure on the pair, after which the bears updated the 2.5-month price low. At the same time, the bears could/did not manage to surpass the support level of 1.1850 (the upper limit of the Kumo cloud on the weekly chart), closing the trading week at 1.1862. And further prospects for the development of the downward trend will depend on how stable the 1.1850 target is – if the bears do not overcome it "in a rush", traders will massively close short positions, extinguishing the downward momentum. Next, the pair will either drift into a prolonged flat, or demonstrate a correction, the scale of which will depend on the tone of the rhetoric of the ECB representatives and macroeconomic reports.
In the coming week, the main news for the pair will mainly come from Europe. For example, the EUR/USD economic calendar is nearly empty on Monday: only the speech of the head of the ECB, Christine Lagarde, which will take place at the start of the US session, is of interest. She will announce the report to the members of the European Parliament's Committee on Economic and Monetary Affairs. Since the topic of the report is directly related to monetary policy, the market will show special interest in it. Let me remind you that last Thursday, ECB Chief Economist Philip Lane put significant pressure on the euro. He said that in his opinion, "it is still premature to talk about ending emergency bond purchases." Lane also said that the discussion of this issue will take place at the central bank's September meeting. At the same time, he was skeptical about the likelihood of curtailing QE this year. In the context of this rhetoric, Lagarde's position may provoke increased volatility in the pair. As you know, Lagarde belongs to the dovish wing of the ECB, so her speech may put additional pressure on the EUR/USD. On Tuesday, June 22, traders will focus on the rhetoric of the ECB representatives – in the afternoon, members of the Executive Board of the ECB Philip Lane and Isabel Schnabel will speak. We can assume that they will also put pressure on the single currency. Philip Lane has already voiced his position, and is unlikely to change it, while Schnabel just the week before last said that "Europe has passed a turning point, but still needs the support of the ECB." I believe that next Tuesday she will repeat this thesis. In the United States, secondary statistics will be published on this day – the Fed-Richmond Manufacturing Index and the volume of home sales in the secondary market. On Wednesday, June 23, the main stream of macroeconomic reports will come from Europe. Preliminary estimates of the PMI indices of Germany, France, Italy and the entire eurozone – in the manufacturing sector and in the services sector - will be published during the European session. According to analysts, almost all components of the release will show a slowdown, reflecting the decline in the optimistic mood of entrepreneurs regarding the prospects for the recovery of the European economy. If the indicators come out in the red zone, not reaching the forecast values, the euro will be under pressure again. The index of business activity in the US manufacturing sector will be published during the US session on Wednesday. Negative dynamics are also expected here. But given the hawkish expectations of investors, the market can ignore this fact. On Thursday, June 23, the IFO indices will be published during the European session. Let me remind you that in May, the German indicator of economic expectations exceeded the 100-point mark for the first time since February 2018. The indicator of business environment conditions similarly pleased EUR/USD bulls, being at the level of 92 points (the best result since April 2019). In June, the indicators may support the euro again – according to preliminary forecasts, both components of the release will come out above the hundredth mark. In addition, the weekly growth rate of initial applications for unemployment benefits will be published in America on this day as well. The indicator has consistently declined for five consecutive weeks, but last week showed a slight increase. However, according to forecasts, this week the indicator will continue its downward trend, providing background support for the greenback. Also, the final estimate of US GDP growth in the first quarter will be published on Thursday, but if the figures coincide with previous estimates (which is most likely), then traders will ignore this release. But on Friday, June 25, traders of the EUR/USD pair will react to the main index of personal consumption expenditures (Core PCE Price Index), which measures the core level of spending and indirectly affects the dynamics of inflation in the United States. It is believed that this indicator is monitored by the members of the central bank "especially, carefully". According to forecasts, the index will show a strong result - in monthly terms, it will rise to 0.8% (a multi-month high), in annual terms - it will jump to 3.4% (a multi-year high). This release may have a significant impact on the greenback's position, especially after the resonant inflationary release, which reflected a jump in the consumer price index. In general, the future prospects of the EUR/USD pair largely depend on the rhetoric of the ECB representatives. Following the results of the June meeting, the Fed tightened its rhetoric, providing significant support to the dollar. And although the US central bank maintained the status quo and did not even discuss the issue of curtailing QE, the hawkish notes of the accompanying statement allowed dollar bulls to organize a large-scale rally. The spot forecast, which allows for a double rate hike in 2023, overshadowed all other fundamental factors. At the same time, most representatives of the ECB continue to voice dovish rhetoric. If the ECB members (especially Lagarde) do not tighten their rhetoric in the coming week (which is unlikely), the EUR/USD pair will not only surpass the support level of 1.1850 (the upper limit of the Kumo cloud on the weekly chart), but also test the main price barrier of 1.1770 (the lower line of the Bollinger Bands indicator on the same timeframe). But it is advisable to go into short positions only when the bears manage to settle below the 1.1850 mark, since traders can "feel" the price low in this area. The material has been provided by InstaForex Company - www.instaforex.com |
| Trading plan for the GBP/USD pair for the week of June 21-25. COT (Commitments of Traders) report. Posted: 20 Jun 2021 05:08 AM PDT GBP/USD – 24H.
The GBP/USD currency pair has lost 300 points over the past week. Although before that, for a month or so, it was in a 120-point side channel between the levels of 1.4100-1.4220. Thus, at the moment, a new round of downward correction has begun in the global plan. It is a correction because even after such a strong fall this week, nothing has changed in global terms. The overall upward trend, which began a year and a half ago, has already reached 2,800 points, and the maximum correction within it is 800 points. The last round of the downward movement is currently 460 points, and so far, the price is not even near its previous local low (near the level of 1.3665). Thus, the downward movement may continue in the coming weeks. However, as in the euro/dollar pair case, we do not yet see the pair much below its previous local low. However, at the same time, it is foolish to deny that the downward movement has begun and is a trend on the lower timeframes. And it would help if you only traded according to the trend. Therefore, it is recommended to trade down on the 4-hour and lower timeframes. In the 24-hour timeframe, although the quotes were fixed below the critical line and the Senkou Span B line, it is still unlikely that the downward trend has started now. There is simply no reason to do so at this time. There have been no global changes in the "foundation" or "macroeconomics during the past week." Therefore, the current movement may become another round of correction before a new strong growth of the pair. COT report.
During the last reporting week (June 8–14), the GBP/USD pair fell by 70 points. However, the new COT report was not released on Friday. Thus, no special conclusions can be drawn on the current mood of the major players yet. We need to wait for the release of a new report. However, it will not give a complete picture of the situation since the last three trading days will not be included. But it was during these three days that the pound lost about 300 points, so we can assume that professional traders closed long positions and opened short ones. Consequently, the mood of traders could change and become less "bullish." However, all this will become known when the new COT report is published. So far, we can say that nothing much has changed in recent weeks with the mood of the "Non-commercial" group, which is the most important of all. It is not surprising since the pair stood almost in one place for a whole month. We believe that global fundamentals will continue to harm the US dollar. However, this does not mean that the pound cannot fall in the short and medium-term. As for the indicators, they also did not show any changes in recent weeks. In the first indicator, the green and red lines (the net positions of the "Non-commercial" and "Commercial" groups of traders) continue to move sideways. In the second indicator, the histogram is approximately at the same level in recent weeks, which indicates that there are no changes in the mood of professional players. There are several interesting events in the UK during the current week. However, most of them were ignored by traders. For example, on Tuesday, quite important indicators of unemployment and wages were released, and on Wednesday - the consumer price index for May. However, during the publication of strong statistics on Tuesday, the British pound quotes declined, so it is not necessary to talk about the markets' reaction to the reports. On Wednesday, on the contrary, the British pound grew on the increased inflation in Britain. And these movements continued to be quite weak until the Fed began to sum up its meeting, which happened late on Wednesday. It was from that moment that the pound/dollar pair lost about 300 points. Also, this week, there were two more speeches by Andrew Bailey, which again did not give any new and important information to traders. And on Friday, retail sales data for May were released, which turned out to be much worse than forecasts, which only increased the pressure on the pound. However, it would have continued to fall on Friday and without these statistics, as the euro fell. Thus, the only event to which there was a reaction was the Fed meeting, during which no important decisions were made. All the fundamental global factors remained unchanged, so we expect that the current downward movement will be no more than a correction, but in global terms. On the lower timeframes, these are strong trends. Trading plan for the week of June 21-25: 1) The pound/dollar pair has started a powerful downward movement, which is now unknown how long it will continue. On the higher timeframe, we believe that this will be a correction, but in any case, the upward trend and trading for an increase are not relevant right now. On lower timeframes, it is recommended to trade down and not try to catch an upward turn. As in the euro case, we believe that the pair may fall to its previous local low. 2) The sellers finally became active and started active actions. True, it is still completely unclear how long the bears' fuse will last, but as long as the trend persists (on lower timeframes), it is necessary to trade down. We believe that the downward movement may end between the levels of 1.3600–1.3665. The potential for a drop of 200 points is still there. Explanation of 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 |
| Trading plan for the EUR/USD pair for the week of June 21-25. COT (Commitments of Traders) report. Posted: 20 Jun 2021 05:08 AM PDT EUR/USD – 24H.
The EUR/USD currency pair has fallen by more than 250 points over the past week. Considering that the movement with minimal volatility and in a limited range was observed earlier in the month, we can conclude that the markets lost their nerves. The US currency rose again on rumors and expectations, and it is quite a typical situation for the foreign exchange market. The pound has repeatedly shown similar movements over the past four years. Therefore, we can not say that the dollar strengthened out of the blue for no reason at all. Nevertheless, it was with the Fed meeting that the collapse in quotes began, although no specific decisions were made. Yes, the outlook for the economy has improved. There have been hints of a curtailment of the quantitative stimulus program, and the chances of a rate hike in 2022 have increased. But these are all matters of the future. At this time, everything remains the same. At the moment, the quotes are fixed below the 61.8% Fibonacci level. Therefore, the fall may continue next week with the targets of 1.1779 and 1.1703 (the previous local low). However, we still believe that the strengthening of the US dollar is not long-term. The global underlying causes haven't changed in any way recently. The global technical picture has not changed either. Moreover, if the global downward trend ended in 2017, then for another 3-4 years at least, the dollar will tend to fall. And given the amount of money poured into the US economy by the Fed and the US government, this scenario has an even better chance of its successful implementation. Thus, we do not see the pair much below the 17th level yet. COT report.
During the last reporting week (June 8 – 14), the EUR/USD pair fell by 70 points. The latest COT report again showed a slight weakening of the "bullish" mood among major players. However, these minimal changes in recent reports do not affect the overall picture of the situation. For example, the first indicator in the illustration above indicates a bullish trend and that non-commercial traders continue to increase buy orders in the medium term. Of course, the last three trading days were not included in the last COT report, so it is better to conclude the following report. However, based on the information that is already available to us, we can not conclude that professional traders have started to look in the direction of selling the euro currency. In addition, it should be noted that the new COT report was not released on Friday. Therefore, it should be expected a little later. It may show a severe weakening of the "bullish" mood, but so far, there is no such information. Accordingly, you need to wait for the new COT report and see what information will be contained. So far, we note that the total number of open buy contracts for non-commercial traders exceeds the total number of sell contracts by two times. The green and red lines of the first indicator move away from each other, and the histogram of the second indicator increases. All this indicates the preservation of the "bullish" mood. The current trading week was just crazy. After a month of traders not knowing what to do, the event that finally moved the price from the dead-end happened. Moreover, as we said above, it cannot be said that the Fed made important decisions. The reaction was as if the Fed had already raised the rate, with it immediately by 0.5%. So we tend to think that the markets were waiting for some push. And this push was precisely the Fed meeting. And there were no more interesting events during this week in the United States and the European Union. We could also mention the report on inflation in the EU, but this was the final assessment of the indicator. Thus, traders already knew what to expect, so they were not impressed with the same data published a couple of weeks ago. In general, if you do not take the completely crazy reaction to the Fed meeting, the markets continue to react very selectively to any macroeconomic statistics. Thus, first of all, we need to wait for the end of the collapse of the pair and at least a correction. And then make new conclusions. Trading plan for the week of June 21-25: 1) In the 24-hour timeframe, the trend has changed dramatically over the past week. We now have a strong downward movement. However, it can hardly be called a trend since it is very short-term. However, the drop in quotes may continue up to the 17th level. We recommend that you trade such movements on lower timeframes, where you can track any changes more quickly. The movement is strong and fast, so you need to react to any changes as soon as possible. 2) The upward movement is still canceled, although the fundamental global factors for the pair remained the same as they were. However, the price is fixed below the Kijun-sen and Senkou Span B lines, so it does not make sense to consider buy orders now. Therefore, now for the possibility of opening long positions, you should wait for signals to change the trend to an upward trend. We believe this could happen between the levels of 1.1600 and 1.1700. Explanation of 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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