Forex analysis review
Forex analysis review |
- Forecast for EUR/USD on July 12, 2021
- Forecast for GBP/USD on July 12, 2021
- Forecast for AUD/USD on July 12, 2021
- Forecast for USD/JPY on July 12, 2021
- Forecast and trading signals for EUR/USD on July 12. Analysis of the previous review and the pair's trajectory on Monday
- Overview of the GBP/USD pair. July 12. The crazy rally of the pound and its future prospects.
- Overview of the EUR/USD pair. July 12. Inflation week.
- Analytics and trading signals for beginners. How to trade EUR/USD on July 12. Analysis of Friday. Getting ready for Monday
| Forecast for EUR/USD on July 12, 2021 Posted: 11 Jul 2021 08:53 PM PDT EUR/USD Last Friday, the euro grew on strong recovery growth in equity markets, that is, on rising risk appetite - the S&P 500 gained 1.13% and set a new all-time record.
But this is a correlation-corrective growth, its limit is seen at the target level of 1.1975 (high on June 25). The end of the correction can occur when the signal line of the Marlin oscillator touches the border of the growth area and reverses from it (red arrow), in this case the price will turn down before reaching its target level at 1.1975, approximately from the area of 1.1930. We can only talk about an upward reversal for the euro in the medium-term when the price rises above the MACD indicator line, beyond 1.2025.
Last Friday, the price moved up from the support of the MACD line on the four-hour chart. Such a rebound may still support the growth within the main downward movement. The Marlin oscillator is growing without signs of a reversal. We are waiting for a signal for the reversal by today and tomorrow. The material has been provided by InstaForex Company - www.instaforex.com |
| Forecast for GBP/USD on July 12, 2021 Posted: 11 Jul 2021 08:45 PM PDT GBP/USD Last Friday, the pound showed an outstanding growth by 115 points. This morning, the price approached the target level of 1.3918 (high on April 6) and at the same time the Marlin oscillator approached the zero line - to the border of the growth area.
Exit of the price above the level, respectively, and the exit of Marlin into the growth zone, will provide an aggregate signal to continue the correction to the next target level of 1.4004, approximately in the area of the MACD line. But we cannot say that this option is the main one. The current situation on the daily chart is neutral.
According to the indicators, there is still a potential for growth on the four-hour scale. This circumstance may result in forming a false price exit above the level of 1.3918. That is, after the price rises above 1.3918 and even after the price settles above it on the H4 scale, a downward reversal may follow. We are waiting for either an unambiguous price reversal to the downside, or the pound to settle above 1.3918 on the daily chart. The material has been provided by InstaForex Company - www.instaforex.com |
| Forecast for AUD/USD on July 12, 2021 Posted: 11 Jul 2021 08:38 PM PDT AUD/USD The Australian dollar formed a 59-point white candlestick on Friday, covering the previous day's decline. This is a sign of a likely high correction, but it also has signs of limitation and weakness.
These features include: the wedge-shaped structure of the Marlin oscillator on the daily chart - more often the signal line exit from such formations in the direction of the main trend, in our case to the downside, this is also a strong resistance of the embedded price channel line around the 0.7524 mark, as well as the proximity of the signal line oscillator to the border of the growth area. A downward reversal may occur from this border, from the zero line. In this case, the wedge will transform into a regular channel with parallel borders, and the price will exactly reach the line of the price channel at 0.7524. Consolidating above 0.7524 opens the target at 0.7618. The market will need at least one and a half days for such a consolidation.
The price went above the MACD indicator line, while Marlin moved into the growth area on the four-hour chart. Further upward movement will indicate an attempt to attack 0.7524. Consolidating below the MACD line (0.7472) will be the first sign of a return to the target level of 0.7410 that was reached on Friday, as well as an attempt to surpass it. The material has been provided by InstaForex Company - www.instaforex.com |
| Forecast for USD/JPY on July 12, 2021 Posted: 11 Jul 2021 08:37 PM PDT USD/JPY Last Friday, the USD/JPY pair correctively rose after it reached the target level. This rise was preceded by a five-day decline. On the daily chart, the Marlin oscillator has slowed down and is ready to resume falling in case the price weakens.
The dollar, of course, still has room for growth. The main resistance on the daily chart is the embedded price channel line and the MACD indicator line (110.70). A reversal into a new wave of decline may occur before these lines are reached.
On the four-hour scale chart, the first resistance and the target of the correction is the nearest local extremum at 110.40. Above it is the MACD line, and in approximately the same area where it is located on the daily scale - 110.70. This circumstance also indicates the correction limit. Rising above the level, and settling above it, breaks the main scenario of a medium-term decline. Moving below the target level of 109.80 (high on May 13) will trigger a move towards the target level of 109.20 (low on June 8). The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 11 Jul 2021 07:51 PM PDT EUR/USD 5M
The EUR/USD pair continued its upward movement last Friday, which had begun a day earlier. Thus, over the past two trading days, the European currency has seriously strengthened its positions against the dollar, and the trend has changed to an upward trend on two timeframes. Perhaps the plan and forecast that we talked about in recent months has now begun to be implemented. Recall that, from our point of view, the dollar will continue to decline in the long term, and its last round of growth was no more than a round of correction on the 24-hour timeframe. Last Friday, there was nothing important that can be singled out from the macroeconomic reports for the euro/dollar pair. On this day, only the speech of the head of the European Central Bank President Christine Lagarde and the report of the ECB from the meeting on monetary policy were planned. Neither the first nor the second event had any expected impact on the market. Thus, traders had to rely on technique during the day. However, it was not difficult, since the pair only formed two signals that were not the most accurate, both near the critical line of the Kijun-sen and the extreme level of 1.1837. At first, the quotes bounced off these obstacles from below, forming a sell signal, and then overcame them, forming a buy signal. It is easy to guess that the first signal turned out to be false and according to it traders got a loss of about 15 points, but the second deal turned out to be profitable. On it, traders managed to earn approximately 25-30 points. The long position had to be manually closed at the end of the working day, as none of the target levels had been reached. Thus, it was a small profit, but we still managed to obtain it. Although with such low volatility as on Friday, it was very difficult to get this profit either. Overview of the EUR/USD pair. July, 12. Inflationary week. The dollar is tired of growing, which the European currencies can use. Overview of the GBP/USD pair. July, 12. Crazy pound or the bears couldn't stand it and gave up. EUR/USD 1H
The recently formed downward trend line has already been canceled on the hourly timeframe, as the price surpassed it on Friday. Thus, the downward trend is canceled, as we have already mentioned above. In the near future, the price may try to overcome the Senkou Span B line, and if it succeeds, then the chances of continuing to move up will increase even more. On Monday, we still recommend trading from important levels and lines. The nearest important levels at this time are 1.1807, 1.1881, 1.1922, as well as the Senkou Span B (1.1890) and Kijun-sen (1.1835) lines. The Ichimoku indicator lines can move during the day, which should be taken into account when looking for trading signals. Signals can be rebounds or breakthroughs of these levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price moves 15 points in the right direction. This will protect you against possible losses if the signal turns out to be false. The calendars of macroeconomic events are completely empty in the European Union and the United States on Monday. Therefore, traders will have absolutely nothing to react to during the day. We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair. COT report
The EUR/USD pair fell by 100 points during the last reporting week (June 29-July 5). Thus, one could expect to see a new weakening of the bullish sentiment of professional players in the Commitment of Traders (COT) report. This is exactly what we saw in the latest report that was released on Friday. The number of buy contracts (longs) for the reporting week increased by 4,000, and the number of sell contracts (shorts) - by 16.5 thousand. Thus, the net position of the "non-commercial" group of traders decreased by 12.5 thousand. Therefore, at the moment we can say that market participants continue to get rid of long positions and build up shorts. Therefore, it is possible to predict a further fall in the European currency. But not everything is so simple. We have already said that the movements of the pair over the past few months look just like a correction against the global upward trend. In addition, the US government and the Federal Reserve continue to inject hundreds of billions of dollars into the US economy, inflating the money supply and stimulating inflation. Therefore, big players can get rid of euro positions, but at the same time the dollar supply in the markets will grow, which may lead to the opposite effect. A situation may arise in which the net position of professional players on the euro will decline, while the euro currency will grow. Actually, in October-November-December 2020, this is exactly what happened. The green line of the first indicator (net position of the non-commercial group) was decreasing, while the euro was growing. Thus, we recommend that traders pay more attention to technical analysis. Explanations for 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. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group. The material has been provided by InstaForex Company - www.instaforex.com |
| Overview of the GBP/USD pair. July 12. The crazy rally of the pound and its future prospects. Posted: 11 Jul 2021 06:54 PM PDT 4-hour timeframe
Technical details: Higher linear regression channel: direction - downward. Lower linear regression channel: direction - downward. Moving average (20; smoothed) - downward. CCI: 162.0534 The British pound was trading uncontrollably on Friday. And that's an understatement. The quotes of the British currency began to grow in the morning and this growth continued throughout the day. Even late in the evening, when volatility traditionally falls before the market closes, purchases of the British pound continue. The European currency also rose in price on Friday, but it was trading very calmly. But what was the reason for the 150 points of growth of the British currency? It should be noted right away that we considered the option of resuming the upward movement on the 4-hour timeframe a long time ago. In recent months, we have repeatedly warned traders that global fundamental factors remain on the side of the British currency, not the American one. In favor of continuing the fall of the pair, only the technical factor of a possible another round of correction on the 24-hour timeframe spoke, within which we expected the quotes to fall to the area of 1.3600-1.3666. However, it is quite possible that this round of corrective movement ended earlier. At least, since the quotes were fixed above the moving average on Friday, this means that in the short term the trend has changed to an upward one. Thus, this week, we can expect the continuation of the upward movement, especially since the macroeconomic background will be quite weak. Now let's look at the possible reasons for such a strong growth of the pair on Friday. It should be noted at once that the growth began almost from the very beginning of the European trading session and persisted almost all day. What could have provoked such a sharp and strong upward movement? In the morning, data on GDP and industrial production for May were published in the UK. To complete the picture, we will say that secondary reports on construction volumes, the balance of visible trade, and the index of activity in the service sector were also published. And all the reports turned out to be failures. The most disappointing was GDP, which according to forecasts should have been 1.5% in monthly terms, but in practice, it added only 0.8%. Industrial production also failed badly. Thus, the fall of the British is what we should have seen on Friday. And if we add here 36 thousand new cases of the "coronavirus" on the same Friday and the very much reduced chances of lifting the quarantine on July 19 and at least talk in the Bank of England about curtailing the quantitative stimulus program, then Friday's movement looks very strange. However, we saw an increase of 140 points after the publication of the failure statistics. Perhaps such a strong growth of the pair was associated with American statistics? It is unlikely since the statistics themselves were not published in the States on Friday. Andrew Bailey's speech, which began much later than the beginning of the growth of the British currency, could also hardly have such a strong impact on the markets since the head of BA simply did not say anything important. Thus, the reasons should be sought only in the technical plane or among global factors. What could have happened? We have already said many times that we expect the US currency to resume falling. We believe that the factor of pumping money into the US economy will continue to negatively affect the dollar exchange rate until all the stimulus programs from the US government and the Fed are completed. And since the Fed is just going to start discussing in the near future the possibility of curtailing the QE program, it is unlikely that we should expect this condition to be fulfilled in the near future. But it should also be understood that if such a global and important factor takes place in the market, it still does not mean that the pair will constantly move in the same direction even without pullbacks. And in global terms (on a 24-hour timeframe), corrections can take quite a long time, which we have observed for the pound in recent months. Thus, we believe that the most banal thing that has happened on Friday. Most of the bears began to simply close short positions on the pound, not believing that the dollar can continue strengthening. Earlier, we said that the pullback of both the euro and the pound from their year highs and 3-year highs may be a banal acceleration before a new powerful upward movement, within which 3-year highs will be updated. Therefore, perhaps now the movement that we have warned about in recent months has just begun. Now it remains only to understand whether this is the case. But in any case, in the 4-hour timeframe, the trend has changed to an upward one, therefore, we should now consider trading for an increase. Next week, from the really important reports, we can highlight the reports on inflation in the US and the UK, as well as the unemployment rate and applications for unemployment benefits in Britain and retail sales in the US. It should be remembered that in case of a coincidence of the actual and forecast values for any report, the reaction of traders may not follow at all. It should also be remembered that any of these reports can simply be ignored by the markets. Simply because now many reports are ignored. And on Friday, a strong upward movement also began, so traders (if they intend to continue pushing the pound up) may not pay any attention at all to the statistics for the new week. In general, we believe that more attention should be paid to technical analysis, and the macroeconomic background should be taken into account.
The average volatility of the GBP/USD pair is currently 94 points per day. For the pound/dollar pair, this value is "average". On Monday, July 12, we expect movement inside the channel, limited by the levels of 1.3689 and 1.3863. The upward reversal of the Heiken Ashi indicator signals a round of downward correction. Nearest support levels: S1 – 1.3885 S2 – 1.3855 S3 – 1.3824 Nearest resistance levels: R1 – 1.3916 R2 – 1.3947 R3 – 1.3977 Trading recommendations: The GBP/USD pair on the 4-hour timeframe abruptly began an upward movement, which may become a new upward trend. Thus, today it is recommended to stay in buy orders with targets of 1.3947 and 1.3997 until the Heiken Ashi indicator turns down. Sell orders should now be opened if the price is fixed below the moving average line with targets of 1.3763 and 1.3733, and keep them open until the Heiken Ashi turns up. The material has been provided by InstaForex Company - www.instaforex.com |
| Overview of the EUR/USD pair. July 12. Inflation week. Posted: 11 Jul 2021 06:54 PM PDT 4-hour timeframe
Technical details: Higher linear regression channel: direction - downward. Lower linear regression channel: direction - downward. Moving average (20; smoothed) - sideways. CCI: 112.3572 On Friday, July 9, the EUR/USD currency pair continued to trade in the usual mode. However, it managed to overcome the moving average line by the end of the day, which changed the current trend to an upward one. Recall that our main scenario for the development of the event until Friday was the option with a decline in quotes to the level of 1.1700 as part of a new round of corrective movement on the 24-hour timeframe, after which - the resumption of the global upward trend above the 23rd level. However, the last two days of last week showed that the price may not reach the level of 1.1700. At least, at the moment, when the price is fixed above the moving average, it is already worth considering an option with a further move to the north. And it is worth returning to the option with a possible fall to the level of 1.1700 if the price returns to the area below the moving average line. We would like to remind you that in the medium and long term, in any case, we expect a resumption of the upward trend, as we still believe that global fundamental factors are working against the US currency. It's just that the pair cannot constantly move in one direction. Sometimes corrections are needed. And if we are talking about global trends, then corrections can take several months. Now we are talking about such a correction and it can already be completed. Consequently, we continue to expect a resumption of the fall of the US dollar, as inflation in the United States continues to increase and significantly exceeds the European one. The US authorities and the Fed continue to pour huge amounts of money into the American economy, inflating the money supply. Of course, there is an opinion that the US currency will continue to rise slightly in the coming months based on the factor of higher growth rates of the US economy. But we believe that this will not happen, since the US GDP has been growing faster than the European one for several quarters, and the US dollar continues to be under pressure from the markets. What does the new week have in store for traders and what movements should we expect? It should be noted right away that macroeconomic statistics continue to be ignored by the markets in most cases. Reports are processed selectively and not always logically. Fundamental information from the ECB and the Fed, as well as personally from Christine Lagarde and Jerome Powell, does not always arouse any interest among traders at all. However, we have already said repeatedly that the heads of central banks cannot constantly surprise and provide new important information. In principle, the positions of the ECB and the Fed are quite clear. The Fed is going to start discussing the curtailment of the quantitative stimulus program in the near future, and next year it may start raising rates. The ECB continues to stimulate the economy with PEPP and QE programs, but at the same time it cannot please the markets with high recovery rates, and the latest statements of Christine Lagarde were more "dovish" than "hawkish". The European Union is not even thinking about ending incentives or raising rates yet. Thus, the ECB is likely to start tightening monetary policy at least a year later than the Fed. Even the inflation figures show that the European economy is suffering more than it is recovering. Barely reaching the level of 2%, the indicator immediately began to roll back down. And, from our point of view, it may already decline in the next months, because all the heads of the Central Bank synchronously stated that the jump in inflation would be temporary, and there has been an increase in inflation everywhere in the last few months because these months had a very low "base" in 2020. Thus, the change of the ECB's inflation target from "slightly less than 2%" to "stable 2%" does not look very serious now. For most of the last decade, the European Union has not been able to achieve a stable 2% inflation. And weak inflation slows down economic growth. So it turns out that no matter how you look at it, the European Union still lags behind the United States in economic terms. But the US currency does not receive any special dividends from this. In the new week, all the attention of traders will be focused on the inflation reports that will be published in the EU, the US, and the UK. It is expected that both in the US and the European Union, the consumer price index will slow down slightly by the end of June. In America – up to 4.9% y/y, and in the EU - up to 1.9% y/y. Thus, if these forecasts are confirmed, it is unlikely that traders will react to these data. However, there may be surprises. For example, if inflation continues to accelerate in the United States, and the European Union, for example, it will suddenly collapse down. Recall that the growth of inflation for the economy is generally considered a negative factor. Roughly speaking, inflation devalues money, so an increase in inflation should negatively affect the exchange rate. However, in our case, the reaction of traders to these reports can be almost any. Everything will depend on how much the actual value will not correspond to the forecast value and how market participants themselves interpret this data. Recall that a couple of weeks ago, a strong Nonfarm Payrolls report provoked the fall of the dollar. Also, a report on industrial production in the EU, the producer price index in the United States, applications for unemployment benefits in the United States, industrial production in the United States, and retail trade in the United States will be published next week. We believe that only the latest retail sales report on Friday can attract attention. The rest - if they cause any reaction from traders, it will be no more than 15-20 points, which will be poorly noticeable even on a 5-minute timeframe. In general, the most interesting question of the new week will be "have the bears had enough of the pair's sales?". We believe that there may well be another round of downward movement. However, on the hourly timeframe, the quotes of the euro/dollar pair overcame the descending trend line, and on the 4-hour timeframe – the moving. Therefore, there is a high probability that the upward movement will continue this week. As for volatility, it will likely remain weak. Thus, if the pair set a course for the 23rd level, then overcoming this distance may take a month and a half of time.
The volatility of the euro/dollar currency pair as of July 12 is 63 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1814 and 1.1940. A reversal of the Heiken Ashi indicator downwards signals a possible resumption of the downward movement. Nearest support levels: S1 – 1.1841 S2 – 1.1780 S3 – 1.1719 Nearest resistance levels: R1 – 1.1902 R2 – 1.1963 R3 – 1.2024 Trading recommendations: The EUR/USD pair has overcome the moving average and will try to continue its upward movement. Thus, today it is recommended to stay in long positions with targets of 1.1902 and 1.1940 until the Heiken Ashi indicator turns down. It is recommended to open sell orders now no earlier than fixing the price below the moving average line with targets of 1.1780 and 1.1719. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 11 Jul 2021 06:38 AM PDT Analysis of previous deals: 30M chart of the EUR/USD pair
The EUR/USD pair continued its upward movement on Friday, which had begun a day earlier. Despite the fact that the volatility turned out to be low (about 55 points), this was quite enough to overcome the downward trend line that had just formed. However, breaking the trend line is also a signal. It was possible to understand that the downward trend, which had lasted for 1.5 months, has finally ended with a high degree of probability. If so, then the upward movement can now also continue for a long period of time with peak targets around the level of 1.2300 or higher. A new upward trend line was immediately formed, so now it is already relevant and supports bull traders. In general, the movements on Friday were very calm, which is not surprising, since there were no important macroeconomic reports and fundamental events that day. One could highlight the speech of European Central Bank President Christine Lagarde, but that meeting was devoted to the fight against climate change, and issues on monetary policy and economics were practically not touched upon. 5M chart of the EUR/USD pair
Several trading signals were generated on the 5-minute timeframe last Friday, but most of them were very inaccurate, and the movements were rather chaotic. Five ovals show trading signals when the price either broke the next level, or bounced off it. When such ovals can be drawn near the level, it means that the signals are absolutely inaccurate. This means that the price was near the level for a long time, and the markets did not understand what to do near it. Thus, it is, of course, recommended to try to ignore such signals. For example, the first signal is on Friday, when the price has moved along the 1.1835 level for more than an hour. Formally, there was a rebound later, but, as we can see, the sell signal turned out to be false. This was followed by a more accurate buy signal, as the price settled above the level of 1.1835 and here it was already possible to open long positions. The price did not stay around the 1.1851 level either and surpassed it in 5 minutes, which is an excellent example of what a strong and clear signal looks like. One should already have taken profit around the level of 1.1868, but at the same time, there was no clear signal for a rebound from this level. As a result, the price surpassed this level, and the upward movement continued for another ten points. In general, for a long position, novice traders could earn from 27 points to 40 (maximum Take Profit). Trading tips for Monday: The downward trend has been canceled on the 30-minute timeframe, and an upward trend is now in effect. Thus, it is recommended to consider buy signals from the MACD indicator, from which we have not received any signals for a very long time. As there were no real trends in the market in the last month. However, the MACD indicator should be discharged to the zero level beforehand. On the 5-minute timeframe, it is recommended to trade from the levels 1.1825, 1.1851, 1.1895, 1.1912 and 1.1921. 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 publications or other events are scheduled for Monday, neither in the European Union nor in the United States. Thus, on Monday we purely trade on technique. 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 |
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