Forex analysis review
Forex analysis review |
- Analytics and trading signals for beginners. How to trade EUR/USD on August 23 Analysis of Friday. Getting ready for Monday
- Trading plan for the GBP/USD pair for the week of August 23-27. New COT (Commitments of Traders) report. The pound is in
- Trading plan for the EUR/USD pair for the week of August 23-27. New COT (Commitments of Traders) report. The markets continue
| Posted: 22 Aug 2021 02:38 PM PDT Analysis of previous deals: 30M chart of the EUR/USD pair
The EUR/USD pair continued to trade very sluggishly on Friday. Although, relative to the last trading days, volatility of 40 points is already the norm. Recall that in the past few weeks, the volatility of the trading instrument has dramatically decreased. If the pair usually passed 60-80 points a day, now, in most cases, 30-50. Naturally, trading does not become easier in such conditions. On the contrary, the number of trading signals has greatly decreased. Moreover, the trends have been very weak lately. For example, on Friday, the price broke the downward trend line that had formed two days earlier. However, at the same time, the pair was unable to overcome the nearest resistance level of 1.1706. Thus, on Friday, novice traders had two signals at once on the 30-minute timeframe. One to sell, when the downward trend line was still relevant, and the second to buy, when the trend line was broken. It was not possible to earn money either on the first signal or on the second. In the first case, the pair went down 17 points, which was enough to set the Stop Loss level to breakeven, at which the deal was eventually closed. In the second case, the trade should not have been opened at all, since the signal was formed late in the evening before the market closed. It should also be noted that no important macroeconomic reports were released on Friday in either the EU or the US. 5M chart of the EUR/USD pair
The picture of the pair's movements on the 5-minute timeframe last Friday looks much more attractive. Although the level of volatility was weak, the price still moved smoothly without sharp reversals and changes in the direction of movement. In the first half of the day there was a decrease, in the second - an increase. It was in the second half of the day, at the very beginning of the US trading session, that the only signal of the day was formed on this timeframe. The price just perfectly reached the level of 1.1666, which is the previous trading day's low, and bounced off it. Thus, novice traders had to open long positions here. Subsequently, the price went up 30 points, which is enough to trigger the minimum Take Profit, and also reached the level of 1.1704, around which it was also possible to take profit. Thus, in any case, it was possible to earn about 30 points of profit. Trading tips for Monday: The EUR/USD pair has settled above the downward trend line on the 30-minute timeframe, so buy signals should be considered. However, at the same time, the pair failed to settle above the level of 1.1704, so further upward movement is also questionable. The pair may go flat for several days. Therefore, we recommend trading up if the price settles above the level of 1.1704. On the 5-minute timeframe, it is recommended to trade from the levels 1.1666, 1.1704, 1.1730, 1.1756. 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. On Monday, the European Union and the United States will publish indexes of business activity in the areas of manufacturing and services. Under certain circumstances, they can cause a mild reaction from the market, but the chances for this are few. 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 |
| Posted: 22 Aug 2021 08:57 AM PDT GBP/USD - 24H.
The GBP/USD currency pair has fallen by 257 points this week. Thus, its downward movement can be called strong, unlike the EUR/USD pair. At the moment, the downward trend continues, although a couple of weeks ago, everything looked as if a new upward trend had begun, which we have already talked about many times. However, the pound unexpectedly resumed its decline for many and is currently one step away from updating its six-month lows. Recall that in the long term, the global upward trend remains. And even the entire decline, which began on June 1, does not break this trend yet and does not cancel it. The entire downward movement is still just a round of correction against the upward trend, the total length of which is 2,800 points. Meanwhile, the length of the last round of correction is only 640 points. It is not even 23.6%, according to Fibonacci. Thus, in the long term, we still expect the resumption of the upward trend. However, we would like to clarify that such a weak correction can provoke more powerful sales of the British currency. Still, if you look at the weekly or monthly timeframe, you can hardly expect that the upward movement will last for several years in a row, even without corrections. We expected that the Fed's monetary policy would continue to put pressure on the US currency. However, in practice, it turns out that the Fed may begin to curtail the quantitative stimulus program in the coming months, which leads to new purchases by the US currency markets. Thus, the general conclusion on the technical picture is as follows: we continue to wait for the resumption of the upward trend. However, the downward trend remains, so we should trade down. COT report.
During the last reporting week (August 10-16), the GBP/USD pair did not lose or gain a single point. Moreover, if you look at the illustration above, it is visible that there is no downward trend at this time. There is a correction, and the correction ends sooner or later. According to the latest COT reports, the major players were not too active but still reduced their net position (the green line of the first indicator). And commercial traders, on the contrary, increased it. It suggests that the upward trend is coming to an end. However, at the same time, the data from the COT reports on the pound is very inaccurate since, when the pound was growing by those 2800 points, which we have already mentioned, professional traders did not always increase longs. Based on this fact, we concluded that the Fed's injection of trillions of dollars into the US economy has a greater impact on the British currency exchange rate, which banally inflates the money supply and provokes an increase in inflation. Moreover, in the last few weeks, a group of "Non-commercial" traders has been increasing purchase contracts (the green line is growing, the second indicator is growing). Thus, there is again an increase in the "bullish" mood among the major players. Consequently, the pound may start to rise in price again. During the reporting week, the changes were minimal. In total, professional traders closed 2.7 thousand buy contracts and less than 0.5 thousand sell contracts. Thus, the net position decreased by 2.5 thousand. However, such changes are insignificant for the British currency. In general, now "Non-commercial" has almost a complete balance between purchases and sales of the pound. During the current week, there were a lot of interesting macroeconomic reports in the UK. Moreover, in the first half of the week, the reports were very strong. They could and should have provoked the growth of the British currency. For example, in the UK, the unemployment rate has decreased, and wages have also increased. However, the pound began its fall on Monday and continued it all week. It turns out that the markets did not pay attention to the reports in favor of the British currency. However, they were happy to work out reports that were not in favor of the pound. Once again, we draw your attention to the fact that the euro has lost less than 100 points this week, and the pound – 240. Thus, at this time, the market sentiment against the British currency is more important than macroeconomic statistics. Trading plan for the week of August 23-27: 1) The pound/dollar pair is again in a downward movement, which intensified last week. Since the price has now fallen below the critical line, it is simply impractical to consider purchases now. Therefore, to consider longs, you need to wait for a new price consolidation above the Kijun-sen line, after which the Senkou Span B line will be the first target. 2) Sellers have returned to the market and are putting pressure on the British currency again. At this time, the price has reached its previous local minimum, so a further decline is under great doubt – the price may rebound from this area. At the same time, since there is now a pronounced downward trend, trading should be conducted on a decline. Explanations to the illustrations: Price levels of support and resistance (resistance/support) – target levels when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators, Bollinger Bands, MACD. Support and resistance areas – areas from which the price has repeatedly bounced earlier. 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: 22 Aug 2021 07:46 AM PDT EUR/USD - 24H.
The EUR/USD currency pair has slid down by another 90 points during the current week. There are simply no buyers of the European currency on the market right now, so even when a pair is given a great chance to start forming an upward trend, it does not use it. Recall that we have long been waiting for the beginning of the formation of an upward trend on the 4-hour timeframe, which will be part of the global trend on the 24-hour one. However, in the last six months, the pair has not been able to break through its three-year highs in any way. In the previous two months, traders have been very sluggish but still selling off the pair, which leads to a strengthening of the US dollar. Currently, the quotes are located near the 17th level, which we identified as the target for the current decline. As you can see, the price could not go far below this level, but it also cannot start a new movement to the north. Among the important factors that can now influence the pair's exchange rate, we highlight the growing probability of curtailing the Fed's quantitative stimulus program in the near future. Or at least a clear answer from the Fed, when we should expect a decrease in the volume of money injection into the economy. We believe that this factor allows the dollar to strengthen in a situation when it should have started a new round of decline for a long time. However, the faith of the markets is not infinite. Next week, all attention will be focused on Jerome Powell, who will have to answer this question as part of the symposium at Jackson Hole. And already in September, a new meeting of the Fed will be held, from which many experts are waiting for a specific announcement about the curtailment of QE. If these two events come true, then the US dollar may add a little more. However, we remind you that the Fed continues to pour hundreds of billions of dollars into the economy, so the dollar remains at risk. COT report.
During the last reporting week (August 10-16), the EUR/USD pair increased by 40 points. Since, in general, the European currency has been falling in recent weeks, it is not surprising that COT reports show a weakening of the "bullish" mood among professional traders. It is visible on the first indicator, which shows a weakening of the "bullish" mood since February. The green and red lines are narrowing, which indicates the end of the upward trend. However, the upward trend cannot be considered complete yet, and the latest COT report allowed the green line (the net position of the "Non-commercial" group of traders) to increase. The bullish mood among the major players is strengthening again, so a new upward trend may begin in the near future. The second indicator also signals an increase in the net position. It clearly shows that the volume has increased, and the probability of a new strengthening of the euro increases accordingly. During the reporting week, professional traders opened 21.6 thousand buy contracts and closed 4.4 thousand sell contracts. Thus, the net position immediately increased by 26 thousand, which is a lot even for the euro. However, as we can see, the euro resumed its decline in the next few days, so the new COT report may already show a decrease in the net position. In any case, the "bullish" mood remains since the total number of open contracts for purchasing "Non-commercial" exceeds the total number of contracts for sale. Therefore, we continue to expect the resumption of the upward trend. The current trading week was very calm regarding movements, although there were plenty of macroeconomic statistics. However, in half of the cases, it simply did not impress (the forecast and the actual value coincided), and in the second half, it was ignored by traders. For example, an important report on retail sales in the United States was released on Tuesday, which turned out to be significantly worse than forecasts. However, it was on Tuesday that the dollar rose by 70 points. The market's reaction was not entirely clear on Wednesday when the Fed's minutes on the last meeting were published. These documents are very rarely reflected on the movement chart, but this time the markets first rushed to sell the dollar, and after 10 minutes, they were already actively buying it. However, the document itself again did not contain any fundamentally new information. On Thursday and Friday, everything was much easier since there were no interesting statistics and news at all. Trading plan for the week of August 23-27: 1) In the 24-hour timeframe, the trend remains downward, and traders have made a second unsuccessful attempt to overcome the level of 1.1700, so the downward movement can be completed. However, as long as the price is below the critical line, the downward trend remains relevant, and short positions should be preferred in trading. 2) The euro/dollar pair has crept up to the level of 1.1700 and can continue a sluggish decline with a favorable fundamental background for the dollar. We remind you that the volatility remains very weak. Since the bulls cannot seize the initiative in any way, we assume a decline in quotes in the near future up to the level of 1.1600. But, as we have already said, in any case, as long as the downward trend persists, you should trade down without trying to guess the upward reversal. Explanations to the illustrations: Price levels of support and resistance (resistance/support) – target levels when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators, Bollinger Bands, MACD. Support and resistance areas – areas from which the price has repeatedly bounced earlier. 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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