Forex analysis review
Forex analysis review |
| Posted: 04 Jun 2021 10:47 PM PDT GBP/USD - 24H.
The GBP/USD currency pair as a whole declined over the past week by 20 points. Thus, the pair remains inside the side channel. Now its borders have slightly expanded to 1.4080-1.4230. However, this does not change the essence of the matter. The British pound, having reached its 3-year highs, has been treading water for the third week in a row. If the European currency showed a movement this week, which at least can be called a "pullback," then the pound sterling again strenuously pretends that it is being corrected. It just stands still, and traders can resume buying it at any time. We remind you that the global fundamental background of the pound sterling is even better than that of the euro currency. Because the pound also has a "speculative" factor that does not allow it to decline much. At the moment, after three weeks of standing in one place, the pair's quotes could not even fall to the critical line. Thus, if for the euro/dollar there is no reason to expect the end of the fall of the US currency, then for the pound/dollar, these reasons are even less. We believe that the upward movement will continue in almost any case. Despite the usual fundamental background, which in the UK remains not the best. Despite the macroeconomic statistics, which are frankly worse in the UK. Despite the geopolitical problems that the UK has already faced and will still face, and which the United States does not have. Despite the negative consequences of Brexit, which will affect the economy for several more years. It will be possible to expect a certain drop in the pair's quotes no earlier than the price-fixing below the critical line, which is an almost impossible task with the current strength and desire of the bears. COT report.
During the last reporting week (May 25-31), the GBP/USD pair increased by 55 points. However, in general, no one doubts the direction of the current trend - upward. It was all the more surprising to watch the latest COT report, which showed that professional traders opened 0.5 thousand contracts for buying and 6.5 contracts for selling over the same period. The net position of the "Non-commercial" group decreased by 6 thousand, which is a decent value for the pound. Thus, the picture is as follows. The pound continues to grow and can not even really adjust. At the same time, the size of the net position of large players practically does not change. Since the beginning of March, changes in the net position are insignificant, as shown by both the first and second indicators. And in any case, these changes do not reflect what is happening in the market. Moreover, the pound continues to show growth, simply not commensurate with the "bullish" mood of non-profit traders. And in general, any group of traders and all together. Thus, we continue to talk about such a global factor as the infusion of trillions of dollars into the American economy, which is the main reason for strengthening the British currency. By the way, look at the previous section of the trend between October 2020 and March 2021. The pound rose by 1,400 points, while the net positions of commercial and non-commercial groups of traders remained virtually unchanged. That is, the major players did not increase purchases at this time. At the same time, the pound showed an increase of 1,400 points, almost without a single pullback. As they say, the presence of third-party factors on the face. During the current week, there were very few macroeconomic publications in the UK. There were several reports on business activity, which caused a very modest reaction. Also, almost every day, the Chairman of the Bank of England, Andrew Bailey, spoke. However, he did not tell the markets anything worthwhile. Everyone was waiting for him to confirm the words of Gertjan Vliege about a possible increase in the key rate at the beginning of next year. And in general, information about a possible tightening of monetary policy. But Bailey was talking about the climate, about cryptocurrencies, anything but the economy and monetary policy. Thus, the pound/dollar pair was mainly affected during the week by the same statistics from overseas as the euro/dollar pair. The pound sterling also fell on Thursday on the ADP report, and on Friday - went up on the Nonfarm Payrolls report. There is simply nothing more to note in fundamental and macroeconomic terms. In any case, the pound does not need the support of macroeconomic statistics from overseas or the foundation from the UK right now. Even if the Bank of England raises the key rate by a couple of percent tomorrow, what will it change for the pound if it is already growing recklessly? Trading plan for the week of June 7-11: 1) The pound/dollar pair continues to be in an upward trend, which resumed almost three months ago. Thus, buy orders on the 24-hour timeframe remain relevant, despite the current flat, and the nearest targets are the previous local high of 1.4240 and the resistance level of 1.4361. Given that global factors are now supporting the pound, it is unlikely that the pair will fall in the near future. In any case, until the price is fixed below the critical line, there is no point in talking about a downward movement. 2) Sellers still do not have enough strength to start forming a downward trend. They do not have enough strength even for a tangible correction. Thus, if the price is fixed below the critical line, we can only talk about some downward movement. 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 |
| Posted: 04 Jun 2021 09:45 PM PDT EUR/USD - 24H.
The EUR/USD currency pair has been in a downward correction for most of the past week. However, we cannot call the general movement down by 140 points (from the last local maximum) globally (on a 24-hour timeframe). It is just another "rollback." The euro/dollar pair quotes fell to the critical line, which was located very close. Thus, we have witnessed a small pullback, after which all signs of an upward trend remain. It should be noted that over the past few weeks, the pair has been moving in a mode that is very similar to the flat, but it is not. The trades are held in a minimal range. However, there are no clear boundaries of the side channel. All these movements occur near the 3-year highs of the pair, so we remain with our previous opinion: the upward trend in global terms remains, and the depreciation of the US dollar will continue in 2021. In favor of this, the same factors speak as before. Nothing has changed. Trillions of dollars continue to pour into the American economy, inflating its money supply and increasing the supply of dollars in the markets. In addition, judging by the latest COT reports, the major players realized their secondary role in forming the course and followed the trend, as their net position increases every week. In addition, we have already said that in 2017, the global downward trend presumably ended. Thus, we see the formation of an upward trend that can last for another 5-6 years freely, and the quotes of the euro can rise by another 10-20 cents. In general, at this time, we do not see any reason to assume that the process of the fall of the US currency is complete. We have also said many times that macroeconomic statistics have almost no effect on the pair globally. COT report.
During the last reporting week (May 25-31), the EUR/USD pair fell by 25 points. The new COT report, which was released yesterday, showed that professional traders continue to increase their buying positions in the European currency. This time, they opened only 751 new buy contracts, but at the same time, closed 3.9 thousand sell contracts. Thus, the net position for this group of traders increased again by 4.6 thousand. The "bullish" mood of professional traders is becoming stronger, which is seen in the second indicator in the illustration above, which shows the changes in the net position for the "Non-commercial" group. We see that since mid-April, this indicator has constantly been growing, increasing the likelihood of further strengthening of the European currency. We have already said that the actions of the Fed and the US Congress now overlap the actions of players in the foreign exchange market. It is because professional traders make trades in both directions. The Fed and the US authorities are constantly pouring hundreds of billions of dollars into the economy. Therefore, the dollar is declining, despite the actions of the foreign exchange market participants themselves. It seems that in recent months, players have realized what they will have to work on within 2021 and stood "on the trend," not wanting to compete with the Fed. As a result, in early April, judging by the first indicator, a new round of the upward trend began. The current trading week was just crazy in macroeconomic terms. A huge number of different statistics were published, and traders finally worked out most of it. For the first time, probably in the last year and a half. Of course, not all reports are lucky. For example, the level of inflation in the European Union did not impress traders at all. The players also passed business activity indices for the Eurozone. On Thursday, the ADP report, which has been strenuously ignored by the markets over the past year, without causing any reaction, showed that the number of employees in the private sector changed by 1 million in May instead of the forecast of +645 thousand. On such data, the US dollar increased, giving traders hope to complete the next round of strengthening the European currency. The ISM services PMI also supported demand for the dollar on Thursday. On Friday, however, traders became hostage to their inflated expectations. They decided that if the ADP report showed an increase of 1 million, then Nonfarm Payrolls will also grow by 1 million. In reality, Nonfarm was slightly weaker than the forecast of +645 thousand. Thus, the increase was still quite good, especially against the background of a decrease in the unemployment rate from 6.1% to 5.8%. But the markets were offended by such statistics and began to get rid of the US currency again. Trading plan for the week of June 7-11: 1) On the 24-hour timeframe, the trend continues upward, as the price is held above the critical line. Thus, long positions also remain relevant. We believe that the nearest target at this time remains a 3-year high of 1.2349. The price has slightly slowed down its upward movement in recent weeks. However, it still maintains an upward trend, and the US dollar is not being helped by either statistics or Jerome Powell's speeches. 2) The downward trend is still not relevant. The US currency has support only in the form of macroeconomic factors. Despite the high rate of recovery of the US economy, this factor still has no beneficial effect on the dollar exchange rate. Thus, it will be possible to talk about possible stronger growth of the US dollar than 140 points if the price is fixed at least below the Kijun-sen line. In this case, the downward movement may continue with the target of 1.2062. 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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