Forex analysis review
Forex analysis review |
- Forecast and trading signals for GBP/USD for August 24. Detailed analysis of the pair's movement and trade deals. Bears have
- Forecast and trading signals for EUR/USD for August 24. Detailed analysis of the pair's movement and trade deals. Euro continues
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- August 23, 2021 : GBP/USD Intraday technical analysis and significant key-levels.
- August 23, 2021 : EUR/USD Intraday technical analysis and trading plan.
- August 23, 2021 : EUR/USD daily technical review and trading opportunities.
- Analysis of GBP/USD on August 23. British pound rose despite weak reports
- Wave analysis of EUR/USD for August 23. Markets start buying euro
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| Posted: 23 Aug 2021 07:34 PM PDT GBP/USD 5M
The GBP/USD pair moved very actively on August 23. Especially for Monday. If we compare the movement of the euro/dollar and pound/dollar pairs, then the second one showed a much stronger movement than could be expected. And the macroeconomic background was the same for both pairs again. Both in the UK, and in the European Union, and in the US, business activity indices turned out to be worse than forecast values, nevertheless, this did not prevent the pound from growing by more than 100 points yesterday. Traders with signals were a little unlucky. You could earn much more than you eventually managed to earn with such a strong movement. However, only one trading signal was formed on Monday. Moreover, it was formed already in the middle of the entire upward movement. It should be noted that the pair moved up in the Asian trading session, and in the European and US ones. Therefore, when a buy signal was formed (almost at the beginning of the US one), most of the movement was already left behind. However, this did not stop traders from making money. The pair overcame the 1.3677 extremum level, and the price subsequently reached the extremum level of 1.3725. Accordingly, a long position should have been opened near the first level, and closed near the second. Therefore, you could earn around 30-35 points on the buy signal. Not very much, but it is still profitable anyway. The numbers "1" and "2" in the chart indicate the times of publication of British and US reports. As you can see, traders did not react to these. And in any case, after the reports were released in Britain, the pound clearly could not rise in price. Thus, most likely, the markets simply ignored all the reports of the day, trading on a pure technique. Overview of the EUR/USD pair. 24 August. The Jackson Hall symposium could decide the fate of the pair in the coming weeks Overview of the GBP/USD pair. 24 August. The British pound is set to rise. Only the Jackson Hall symposium can prevent this GBP/USD 1H
The pound/dollar pair has settled above the downward trend channel on the hourly timeframe, so the trend, like the euro/dollar pair, has now changed to an upward trend. As we have said more than once, we are waiting for the resumption of upward trends for both major currency pairs. From our point of view, the US dollar has risen enough in the last couple of months and now it's time to move up. So far, the price has been able to overcome only the critical Kijun-sen line, so in the near future it will strive for the resistance area of 1.3785-1.3794, as well as the Senkou Span B line. We continue to draw traders' attention to the most important levels and recommend trading from them: 1.3590, 1.3677, 1.3725, 1.3785 - 1.3794. Senkou Span B (1.3833) and Kijun-sen (1.3707) lines can also be sources of signals. It is recommended to set the Stop Loss level at breakeven when the price passes 20 points in the right direction. The Ichimoku indicator lines can move during the day, which should be taken into account when looking for trading signals. There are no reports or other events scheduled for Tuesday 24 August in the UK and the United States. However, as shown on Monday, traders are inclined to actively buy the pound at this time, so the upward movement (and quite strong at that) can continue without macroeconomics or foundation. We also recommend that you familiarize yourself with the forecast and trading signals for the EUR/USD pair. COT report
The GBP/USD pair did not lose or gain a single point during the last reporting week (August 10-16). Moreover, if you look at the chart above, you can clearly see that there is no downward trend at this time. There is a correction, and the correction ends sooner or later. According to the latest Commitment of Traders (COT) reports, the major players were not very active, but still reduced their net position (green line of the first indicator). And commercial traders, on the contrary, increased it. This suggests that the upward trend is coming to an end, but at the same time, the data of the COT reports for the pound is very inaccurate, since at the time when the pound grew by those 2,800 points, which we have already mentioned, professional traders did not always increase long positions. It was on the basis of this fact that we concluded that the factor of the Federal Reserve's infusion of trillions of dollars into the US economy has a greater influence on the British currency exchange rate, which inflates the money supply and provokes inflation. Moreover, in the last few weeks, the group of non-commercial traders has been increasing buy contracts/longs (the green line rises, the second indicator rises). Thus, the bullish sentiment among the major players is strengthening again. Consequently, the pound may start to rise in price again. Changes were minimal during the reporting week. In total, professional traders have closed 2,700 buy contracts and less than 500 sell contracts. Thus, the net position decreased by 2,500. However, such changes are insignificant for the British currency. In general, now between the purchases and sales of the pound at "non-commercial" is almost complete equilibrium. 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 |
| Posted: 23 Aug 2021 07:33 PM PDT EUR/USD 5M
The EUR/USD pair traded weakly during the first trading day of the week, as it usually does lately. Monday's volatility was 50 points, which is more than 30 or 40 points, but still very small. Even macroeconomic reports from overseas and from the EU did not help that day. Business activity indices in various areas are not important indicators, but they can tell us what to expect from a particular economy in the near future. If we talk about the European Union, business activity declined in August, but still remained at fairly high levels. It's the same in the United States. Business activity indices declined, but still remained quite high. At least the current values of these reports do not allow us to conclude that the economies have begun to slow down. Now for the trading signals and how you should have traded on Monday. Unfortunately, the movement was far from ideal. If on Friday the price moved in one direction for most of the day and without corrections and therefore managed to work out this movement with a profit, then on Monday the pair was constantly correcting within the day. As a result, all trading signals were generated near the critical line. The very first sell signal turned out to be very imprecise and indistinct. Nevertheless, it could be worked out, but the price could not go down after its formation and 10 points, returned to the Kijun-sen line and bounced again. The pair managed to overcome this line only on the third attempt, which was a signal to cancel the short position. We received 10 points worth of loss. But all subsequent signals should not have been processed any more, since at that moment already two signals from the critical line turned out to be false. Overview of the EUR/USD pair. 24 August. The Jackson Hall symposium could decide the fate of the pair in the coming weeks Overview of the GBP/USD pair. 24 August. The British pound is set to rise. Only the Jackson Hall symposium can prevent this EUR/USD 1H
The upward movement is also clearly visible on the hourly timeframe after the quotes have left the downward channel. Thus, at this time, the trend is characterized as an upward trend, and the price has overcome the Kijun-sen and Senkou Span B lines, therefore, the prospects for the euro/dollar pair's further growth are significantly improving. Recall that we have long been waiting for the pair to rise, but the pair has been correcting against the global upward trend on the 24-hour timeframe for more than six months. Perhaps, a new approach to the level of 1.2240 is being made. However, the markets may well resume buying the dollar, if the US central bank or Fed Chairman Jerome Powell personally makes it clear to the markets that they are ready to start curtailing stimulus in the near future. From our point of view, this factor has already been worked out with interest, but the markets may think otherwise. On Tuesday, we continue to recommend considering trading from important levels and lines. The nearest important levels at this time are 1.1704, 1.1744, 1.1805, 1.1852, as well as the Senkou Span B (1.1735) and Kijun-sen (1.1724) lines. The Ichimoku indicator lines can change their position 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 in the United States and the European Union are completely empty on August 24. Thus, volatility is unlikely to rise on Tuesday. But traders will have a good opportunity to continue pulling the pair away from the 17th level, which we see as critical for maintaining the prospects for an upward trend. We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair. COT report
The EUR/USD pair increased by 40 points during the last reporting week (August 10-16). Since the European currency has generally been falling in recent weeks, it is not surprising that the Commitment of Traders (COT) report showed that the bullish sentiment has weakened among professional traders. This is clearly seen on the first indicator, which has been showing a weakening of bullish sentiment since February. The green and red lines are narrowing, indicating the end of the upward trend. However, the upward trend itself 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 start increasing. This means that the bullish mood among the major players is strengthening again, so it is possible that a new upward trend will start in the near future. The second indicator also signals an increase in the net position. It clearly shows that the volume has grown, and accordingly the likelihood of a new appreciation of the euro is increasing. Professional traders opened 21,600 buy contracts (longs) and closed 4,400 sell contracts (shorts) during the reporting week. Thus, the net position grew by 26,000 at once, which is a lot even for the euro currency. However, as we can see, in the next few days the euro resumed its decline, so the new COT report may already show a decrease in the net position. In any case, as the bullish sentiment persists, as the total number of open contracts for buying from non-commercial exceeds the total number of contracts for selling. Therefore, we continue to expect the upward trend to resume. 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 |
| Posted: 23 Aug 2021 02:41 PM PDT
Fears for the fate of the global economy, as well as expectations of the imminent start of curtailing monetary stimulus from the Federal Reserve, have been pushing the protective greenback up over the past week. The minutes published last Wednesday from the July FOMC meeting revealed a wide range of opinions among the Fed's leaders regarding the start date and the pace of a gradual decline in bond purchases, but showed that most of them are ready to start reducing QE this year. This led to another decrease in risk sentiment in the markets, a pullback of US stock indices from record highs, a fall of the EUR/USD pair by 130 points and an even greater strengthening of the safe dollar. Over the past week, the greenback has gained almost 1.1% in weight, rising above 93.73 points. On Friday, the USD reached levels not seen since November 4, 2020, but then it slightly adjusted. Apparently, market participants decided to lock in profits on the eve of the annual Fed symposium, which will be held on August 26-28. In addition, the ardor of dollar bulls was cooled by the comments of the President of the Federal Reserve Bank of Dallas, Robert Kaplan, who on Friday said that he could reconsider his call to start curtailing the QE program in October if the epidemiological situation in the United States worsens due to the spread of the COVID-19 "Delta"strain. Hopes that the US central bank will maintain a stimulating policy for longer if the more contagious version of the coronavirus hinders economic progress allowed key US stock indexes to finish trading on Friday with a confident rise, although they fell by an average of 0.7–1.1% at the end of the week. Against this background, the EUR/USD pair managed to partially recoup its losses. Starting on Monday from the level of 1.1795, it found a local low in the area of 1.1665 and ended the last five days around 1.1695. At the beginning of this week, the risk appetite in the markets increased slightly due to positive news from China, where the spread of the COVID-19 delta variant was brought under control. This contributes to the weakening of demand for safe haven currencies, including the dollar. Rumors that the Fed will not reduce the purchase of assets also put pressure on the US currency. The USD index traded near 93.00 points on Monday, losing almost 0.5% against its main competitors and reversing some of its recent gains. The initial support is located at 92.45 (the low of mid-August), followed by 92.40 (the 50-day moving average) and 91.78 (the low of the end of July). On the other hand, a break above the recent peaks around 93.73 will open the door to the round level of 94.00, and then to 94.30 (the November 2020 high). The main US stock indicators on Monday continue to recover after the sell-off of last week, rejoicing at the prospects that the Fed will postpone the reduction of the bond purchase scheme. However, the reason why the Fed may refuse to reduce the printing of dollars is far from joyful. We are talking about the rapid spread of the delta variant of COVID-19 in the United States. The number of new cases of the virus per day in the country is approaching 150,000, which is ten times more than at the beginning of June.
For the dollar to continue to weaken, it is enough for delta to disrupt the plans of the US central bank to reduce QE, but not undermine the recovery of the national economy. On Thursday, August 26, the second assessment of the dynamics of US GDP in the second quarter will be published, and a week later, on September 3, data on the country's labor market for August will be released. If there are signs that the US economy is slowing down, the Fed is unlikely to rush to tighten monetary policy. According to forecasts, in the second quarter, US GDP expanded by 6.7% on an annualized basis. The first estimate reflected an increase of 6.5%. In the first quarter, the indicator rose by 6.3%. Some investors believe that the Fed will make a mistake if it starts to reduce its support for the economy at a time when its growth is beginning to lose momentum, and the delta strain threatens to curtail the reopening of enterprises across the country. Goldman Sachs lowered its estimate of economic growth in the United States in the third quarter from 9% to 5.5% due to the impact of the Delta coronavirus strain. "It seems that the delta variant of COVID-19 had a slightly greater than expected impact on economic growth and inflation in the country due to the impact on consumer spending and production. Expenses for food, travel and some other services are likely to decrease in August, although we expect that this decline will be modest and short-lived," the bank's strategists noted. At the same time, they raised their forecast for US GDP for the fourth quarter to 6.5% from 5.5%, based on the assumption that fears about viruses will decrease, the recovery of the service sector will resume, and stocks will be replenished. Currently, evidence of a slowdown in the US economy is evident everywhere: from a decrease in passenger traffic at airports to a drop in restaurant reservations in online services. It is still unclear how these factors will affect the rhetoric of Fed Chairman Jerome Powell in such a rapidly changing environment. Earlier, he mostly downplayed the negative consequences of the new wave of COVID-19. On Friday, the head of the US central bank will speak at the annual symposium of the Federal Reserve, which this year will be held online instead of the usual place in Jackson Hole, Wyoming. From the tone of the speeches of Powell. The short-term dynamics of the USD will depend on Powell. If the Fed chairman reports that a premature curtailment of asset purchases will hit the national economy, market participants may see this as a signal that the regulator will implement monetary stimulus measures for a longer period than expected. An additional printing of dollars will mean a weakening of the US currency. If, however, Powell will more clearly indicate the possible timing of the beginning of the curtailment of QE, this will support the greenback.
According to the baseline scenario of the Commonwealth Bank of Australia, the Fed will announce the beginning of the curtailment of monetary stimulus in September, if the data on the number of jobs in the US non-agricultural sector published at the beginning of next month turns out to be strong. The dollar, as a traditionally reliable asset, has growth potential due to an increase in cases of infection with the Delta strain in a number of countries around the world and increased fears for the global economy, CBA analysts believe. The reluctance to take risks is designed to support the US currency, say strategists at MUFG Bank. "While the Fed's cautious stance should reduce the degree of dollar gains, it is necessary to make some adjustments to our forecasts for USD at the end of the year to reflect a smaller drop in the dollar, given the increased risks of COVID-19," they said. Even if the Fed makes a more "soft" statement, delaying the taping will not necessarily hurt the US currency exchange rate, analysts at National Australia Bank believe. "This can also easily play into the hands of the dollar, as it will be regarded negatively for risky assets, which will increase the demand for a protective greenback," they said. "We think that the Fed's rhetoric may seem somewhat hawkish at the annual symposium this week. Therefore, the stability of the dollar may remain," Citigroup analysts said. "We expect that the central bank will announce a reduction in QE next month. Although risky currencies are now recovering a little, but this rebound is unlikely to be significant," they added. Taking advantage of the weakening of the dollar on a broad front, the EUR/USD pair regained the level of 1.1700, continuing on Monday the recovery that began on Friday from the lowest levels in 9.5 months. However, soon it may remember that the foreign exchange market is not a one-way street. On Thursday, the ECB will publish the minutes from the July meeting, at which it made updated forecasts of interest rates and unveiled a new monetary policy strategy aimed at maintaining inflation. The document will be carefully studied for how the central bank's plans may change in the future after the end of the asset purchase program in March next year. "The EUR/USD pair bounced from 1.1660 last week. The rebound may continue in the direction of the multi-month descending trend line at 1.1810. This is an obstacle the pair must overcome in order to move further. The next potential support levels are at 1.1640 and 1.1610," Societe Generale strategists noted. "On Thursday, the ECB will publish the minutes from the July meeting. In addition, a number of representatives of the regulator will speak this week, including Francois Villeroy de Galo, who may repeat that it is too early to discuss reducing the purchases of PEPP bonds. This will be a test for the stability of the corrective jump of EUR/USD," they added. The material has been provided by InstaForex Company - www.instaforex.com |
| August 23, 2021 : GBP/USD Intraday technical analysis and significant key-levels. Posted: 23 Aug 2021 10:11 AM PDT
On the other hand , the GBPUSD pair has been contained above the demand level of (1.3660) a few times while Bearish breakout below 1.3600 was needed to enhance further bearish decline. Recently, Failure to maintain bearish pressure below 1.3670 (100% Fibonacci Level) has enhanced another bullish movement for retesting of the price level of 1.3880. Further bullish advancement was to be expected towards 1.4025. On the other hand, the nearest SUPPLY level is located around 1.4025 where bearish rejection and a valid SELL Entry should be anticipated. That's why, the pair remained trapped between the mentioned key-levels (1.3800 and 1.4025) until recent bearish breakout occurred earlier last week. Bearish breakout below 1.3800 enabled more bearish decline towards 1.3670 while the price level of 1.3520 is expected to be reached if sufficient bearish pressure is maintained. While on the other hand, bullish breakout above 1.3800 will probably initiate another bullish movement towards 1.3880 and 1.4100. The material has been provided by InstaForex Company - www.instaforex.com |
| August 23, 2021 : EUR/USD Intraday technical analysis and trading plan. Posted: 23 Aug 2021 10:09 AM PDT
Initial bearish targets were located around 1.1940 then 1.1800 which offered some bullish rejection for sometime before another bearish movement could take place towards 1.1770 and 1.1700. So, the EURUSD pair has been moving downwards within the depicted bearish channel while the price level of 1.1780 stood as a prominent demand level that prevented further bearish decline. The bullish pressure that originated around 1.1780 failed to push higher than the price level of 1.1900. That's why, another bearish pullback towards 1.1700 was being executed. Bullish signs were expected around the current price levels of 1.1700-1.1730 as it corresponded to the backside of the broken channel. Bullish breakout above 1.1830 was needed to enhance the bullish side of the market and enable further bullish advancement towards 1.1900 and 1.1970. Any upcoming bullish pullback towards 1.1985 should be considered for bearish rejection and a valid SELL Entry. On the other hand, bearish breakout below 1.1700 will probably enable further bearish decline towards 1.1650 and 1.1600. The material has been provided by InstaForex Company - www.instaforex.com |
| August 23, 2021 : EUR/USD daily technical review and trading opportunities. Posted: 23 Aug 2021 10:07 AM PDT
Recently, Persistence below the depicted price zone of 1.1990 indicated further downside movement towards 1.1840 and 1.1780 where a sideway consolidation range was established. During last week, the EURUSD pair has been trapped within a narrow consolidation range between the price levels of 1.1780 and 1.1840. A bullish breakout was executed above 1.1840 shortly after. Temporary Upside pullback was expected towards 1.1990. However, re-closure below the price level of 1.1840 has initiated another downside movement towards 1.1780 which failed to hold prices two weeks ago. On the other hand, intraday traders were advised to wait for another candlestick closure above 1.1780 for another ascending swing to be initiated. Candlestick closure above 1.1780 was achieved earlier Today. Initial targets are expected to pursue towards 1.1840 and 1.1910. The material has been provided by InstaForex Company - www.instaforex.com |
| Analysis of GBP/USD on August 23. British pound rose despite weak reports Posted: 23 Aug 2021 09:32 AM PDT
The current wave pattern of the GBP/USD pair still looks quite complete. Despite the fact that the proposed wave b turned out to be too deep, it still does not violate the current wave pattern. Therefore, this wave may already be completed, and if this is true, the price will continue to rise with targets located between the high of wave a of the current upward trend section and the 0.0% Fibonacci level, where the construction of the previous upward trend section was completed, within the framework of wave C. In this case, the markets can still build a three-wave upward structure, although there is no question of an impulse structure now. It will be possible to talk about the impulsed five-wave section of the trend no earlier than a successful attempt to break through the level of 1.4239. However, a successful attempt to break through the lows of waves b and e will indicate that the markets will continue to put pressure on the instrument, which may result in the continuation of decline, and the entire wave pattern will require adjustments and additions. On Monday, the indicated instrument increased by 100 basis points, and this is a very impressive movement. The quotes moving away from the reached lows turn out to be strong, which improves the mood of buyers and shows that the markets are not ready for sales below the 36th figure. However, the news background was extremely weak for the pound. The PMI in the manufacturing sector declined from 60.4 to 60.1 points, and in the services sector from 59.6 and 55.5 points. At the same time, the composite index also fell from 59.2 to 55.3 points. So, it is good that the US statistics on business activity supported the pound after lunch. The index for the manufacturing sector plummeted from 63.4 to 61.2 points, and for the services sector - from 59.9 to 55.2 points. The composite also did so from 59.9 to 55.4. Therefore, the increase of the instrument in the afternoon was already more logical. However, it seems that the markets did not pay any attention to the news background at all today. They had a very clear wave marking, which assumed just an increase in quotes. The US currency has not been able to make a successful attempt to break through the 36 figure and there are few reasons for this now. Perhaps, something will change by the end of the week, when the symposium in Jackson Hole begins, but it's still very early to talk about it now since Jerome Powell's speech is scheduled on Friday. The wave pattern is now more or less clear. An upward wave is still expected to be formed, so it is currently suggested to consider buying the instrument for each upward MACD signal with targets located around the level of 1.4000. The instrument has supposedly completed the construction of the downward wave b and is ready to increase.
The upward part of the trend, which started to form a few months ago, took a quite vague form and has already been done. The new part of the trend may acquire an impulsive form, whose first wave acquired an extended form and exceeded the peaks of waves b and d. The chances of another strong growth in quotes are rising. If the information background does not interfere, then the quotes will continue to increase in the near future. The material has been provided by InstaForex Company - www.instaforex.com |
| Wave analysis of EUR/USD for August 23. Markets start buying euro Posted: 23 Aug 2021 09:10 AM PDT
The wave counting of the 4-hour chart for the Euro/Dollar instrument remains unchanged for the time being. The instrument gained about 65 basis points, on Friday and Monday, which gives reason to expect the completion of the construction of a downward trend section. The wave counting of the proposed wave e looks quite convincing now and can start building not only a new upward wave, but also a new upward trend section. A successful attempt to break through the 100.0% Fibonacci level indirectly indicates the readiness of the markets to buy the instrument. I am not considering the option of complicating the current wave count yet. Still, you need to give the current option a chance to be realized, which involves building an upward set of waves. Let me also remind you that for more than six months, the pair has been building only corrective structures, which is clearly visible in the picture of the higher scale (below). Thus, at this time, I expect the construction of another three-wave corrective structure. The news background for the Euro/Dollar instrument was quite weak on Monday. In the European Union, the index of business activity in the manufacturing sector (a decrease from 62.8 to 61.5 points), the index of business activity in the services sector (a decrease from 59.8 to 59.7 points), as well as the composite PMI (a decrease from 60.2 to 59.5 points) were released. Business activity indices for Germany were also released, where all three indicators decreased compared to previous values. Thus, all six indices that could have an impact on the mood of the markets today turned out to be not in favor of the euro currency. Nevertheless, the demand for the euro is increasing today, which gives additional hope that the markets are already tired of selling the instrument and are now ready to buy it, which corresponds to the current count. If this is true, then now is a very good time to buy, since the instrument is at the very beginning of building a new upward trend section. The news background will be absent tomorrow, so the markets can safely continue to buy the instrument. I am not considering alternative options right now, since the wave counting looks quite convincing. However, you should never lose sight of other options. The markets will likely find new reasons for selling the instrument. Or Jerome Powell or the Fed will give them at the end of this week. Based on the analysis, I conclude that the construction of the downward section could have ended around the level of 1.1704, which is equal to 100.0% according to Fibonacci. Wave e has received a pronounced five-wave internal structure, so now I expect the beginning of building an upward set of waves or complicating the current trend section. The markets are still holding the instrument above the 17th figure, so I advise you to buy euros for each MACD signal "up" in order to build a new upward set. A successful attempt to break through the 100.0% Fibonacci level will indicate that the instrument is not ready for further increase.
The wave counting of the higher scale looks quite convincing. We see three three-wave sections of the trend, which are approximately the same in size. However, the last section of the trend quite unexpectedly took a more complex form, but it still ended (presumably) in the same place as the previous three-wave section. The material has been provided by InstaForex Company - www.instaforex.com |
| EUR/USD: US dollar tries to be first Posted: 23 Aug 2021 09:03 AM PDT
The US dollar is taking confident steps towards the new week holding its conquered positions. Experts note that the greenback received solid ground while expecting the Fed's Chair Jerome Powell speech scheduled for Friday, August 27, at Jackson Hole. According to analysts, Jerome Powell's speech will define the US dollar further trend. In early summer, the Fed Chairman noted that the subject of reducing the volume of the quantitative easing program (QE) remained a burning issue for the regulator. At the same time, he refrained from commenting on the Fed's further plans for tightening its monetary policy (MP). The Fed officials are expected to gradually steer toward the easing program termination. Experts believe that this is likely to happen at the economic policy symposium at Jackson Hole or at the FOMC meeting on September 22. The Fed's intention to reverse its easy policy was a dominant topic. For example, Robert Kaplan, president of the Dallas Fed, said that the Fed would refuse to cut its asset-buying program if the negative impact of the delta variant on the US economy intensifies. Experts assume this scenario due to the new strain of coronavirus invading the US raises doubts about the necessity of winding down the QE program. The Fed may postpone the program tapering, which will increase the volatility of the US dollar. In this situation, the greenback experiences some turbulence but remains firm keeping up with the euro. On Monday, August 23, the safe-haven currency logged its highest level in nine months. It caused a sharp decline in the US dollar counterparts amid the delta variant impact on the economy. Primarily the Australian dollar and New Zealand dollar suffered the most. The greenback receives support from market expectations about the upcoming QE program tapering. However, the US dollar may lose its dominating position at any time. Currently, the USD strengthening is not sustainable and the exchange rate is making a difference. On Monday morning, August 23, the EUR/USD was trading near 1.1719, trying to break out of that range.
Nordea Bank economists believe that in the near future the greenback will continue to strengthen, and in the long term the EUR/USD pair will be able to reach 1.1000. According to Nordea Bank specialists, not only does the rollback of the QE program belong to drivers for the EUR/USD pair, but also the further monetary policy of the European Central Bank. Nordea Bank economists expect a relatively positive reaction from the ECB in case of EUR/USD decline. "Would the ECB be annoyed with a lower EUR/USD reading? Not at all since a lower reading would be helpful in bringing EUR inflation to 2% or above as wished for. This leaves a decent scope for a move lower in EUR/USD, also as positioning is not yet USD heavy," Nordea Bank stated. Nordea Bank believes that the relative inflation outlook is largely favorable to the USD against the EUR. According to experts, this situation indicates a gradual discrepancy in the strategies of the Fed and the ECB. "We expect the first hike from the Fed in September 2022, followed by another three hikes in 2023. Against the modest Euro-area inflation outlook, we do not see any ECB rate hikes even in our extended forecast horizon until the end of 2023," Nordea Bank economists said. The tense situation with a new variant of coronavirus still acts as a decider when it comes to the EUR/USD pair trend. Investors are trying to escape from risks, so they buy the safe-haven currency. These are the key tendencies according to OANDA experts. The market cannot ignore the problems associated with the delta variant and the unsuccessful attempts to return the economy to normal state. This is especially relevant for the US. OANDA specialists underline that it is not a good story for the developing world either. The material has been provided by InstaForex Company - www.instaforex.com |
| EUR/USD. Kaplan's rhetoric, COVID anti-records, and PMIs Posted: 23 Aug 2021 08:50 AM PDT The PMI indices published today left a double impression: some components of the release exceeded forecasts, being in the "green zone", while others disappointed investors, not reaching the forecast values. Such a contradictory result still allowed EUR/USD buyers to develop an upward trend, but the upward corrective impulse faded in the area of the resistance level of 1.1730 (Tenkan-sen line on the D1 timeframe). The greenback's positions, in turn, weakened somewhat throughout the market on the eve of the economic symposium in Jackson Hole, which starts this Thursday. Traders were concerned about the comments of Fed representative Robert Kaplan – a consistent "hawk" - who on Friday voiced very "dovish" theses. He reported on the continuing risks in the context of the spread of a new strain of coronavirus. The Dallas Federal Reserve president warned that the regulator may reconsider the need for an early curtailment of the stimulus program, "if the virus continues to attack, harming the economy."
Such a remark quite justifiably worried investors, since over the past month the number of cases of coronavirus in the United States has increased several times. According to the total number of cases over the past week, the country has returned to the sad indicators of last year. Five American states broke anti-records for the number of new cases of infection over the past weekend. The number of infected children is also growing: the number of hospitalized minors has reached a new peak in recent days. This is one side of the coronavirus crisis. The other side of the coin is expressed in the reaction of the authorities to the current situation. Commenting on the surge in morbidity, US President Joe Biden on Friday noted that the majority of hospitalizations and deaths are accounted for by those who have not yet been vaccinated. At the same time, he noted that the pace of vaccination against COVID-19 is accelerating in the United States. In other words, the White House again repeated the thesis that a "pandemic of the unvaccinated" has begun in the country. They are not talking about tightening quarantine restrictions yet – instead, representatives of the health department have called for vaccination against coronavirus. People are being asked to get vaccinated urgently due to the spread of a new strain of COVID-19. The representative of the White House (coordinator for the fight against coronavirus), also reported that unvaccinated people represent "almost all cases of hospitalization and death". Figuratively speaking, the United States shifted responsibility for the consequences of the new COVID wave to unvaccinated citizens, while no one seriously allows a repeat of the events of last year, when the country's economy was actually frozen. Therefore, the increase in the incidence of coronavirus in the United States is poorly reflected in the positions of the greenback: EUR/USD traders view the current situation "in their own way"- through the prism of possible lockdowns. By the way, today it became known that the Chinese authorities were able to contain a new wave of the spread of coronavirus: yesterday, no new cases of coronavirus infection were detected in this huge country. This fact reduced the anti-risk sentiment in the market. All this suggests that in Jackson Hole, the pendulum may swing both in the direction of an early curtailment of QE, and in the direction of a wait-and-see position. Jerome Powell, as you know, is not a "hawk" – but at the same time, many of his colleagues are openly lobbying for the idea of an early start to reduce incentives. Strong nonfarm payrolls report, as well as high values of inflation indicators (despite the first signs of a slowdown in CPI growth), allow the head of the Federal Reserve to allow the option of curtailing QE this year. This is the "hawkish maximum" that Powell is capable of. But it will be quite enough for dollar bulls to organize another rally. Returning to the prospects for the euro, it should be noted that the problem of the spread of the delta strain is also relevant for the European Union. The European Center for Disease Prevention and Control in its consolidated report recently warned that experts expect the epidemic situation to continue to worsen in many EU countries due to the spread of the Indian strain. According to experts, by the beginning of September, the "delta variant" of the COVID-19 will account for about 90% of cases of infection circulating in the European Union. The PMI indices published today only confirmed investors' concern about this fact. The German PMI in the manufacturing sector fell to 62 points (from the previous 66-point value). A similar dynamics was demonstrated by the general European indicator in this area. For the sake of fairness, it should be noted that the business activity index in the US manufacturing sector (Manufacturing PMI) also came out in the "red zone" today: instead of the projected growth to the level of 62.5 points, it came out at the level of 61.2 points (in July, the indicator reached almost 65-point value).
However, the published macroeconomic statistics have only a background effect on the EUR/USD pair. Traders are approaching the local resistance level (1.1730), but they do not dare to consolidate higher in order to identify themselves at the borders of the 18th figure in the future. While the dollar is under pressure from the cautious rhetoric of Robert Kaplan, the European currency is not able to "intercept the banner", since it is also under an array of fundamental problems (the spread of the delta strain, the" dovish " rhetoric of ECB representatives, contradictory macroeconomic reports, etc.). Therefore, traders are forced to "hover" in the flat, within the 17th figure. This trend is likely to continue until Jerome Powell's speech at the symposium (August 27). If buyers still overcome the intermediate resistance level of 1.1730 on the wave of weakening of the greenback, it will be possible to consider the option of longs with a target of 1.1790 – this is the main price barrier, which corresponds to the average line of the Bollinger Bands indicator, coinciding with the Kijun-sen line on the D1 timeframe. The material has been provided by InstaForex Company - www.instaforex.com |
| Bitcoin hovering near $50,000, what's next? Posted: 23 Aug 2021 08:48 AM PDT Bitcoin is rather predictable when it comes to technical analysis and usually meets traders' expectations. The level of 48,178.13, that the price broke through on Friday, has been serving as support for three days in a row. Moreover, BTC/USD has reached the psychological level of $50,000 per token. And this is good news for those who are waiting for bitcoin to develop further bullish momentum and return to all-time highs. According to on-chain analysts, almost 90% of all bitcoin holders in the market are trading in the positive territory. And a rise in the price of the main cryptocurrency prompts the development of the digital coin. Network data shows that about 70% of bitcoin addresses gained profit in June. Today this number has grown, and the average market entry is currently $45,000. In the meantime, Santiment data shows that bitcoin price closely correlates with the development activity on Github. Now development activity of the main cryptocurrency is returning to its May values. At the same time, the price is approaching an all-time high of $65,000. But the market seems to be a little overheated now. Does this mean that we should expect a downward correction? From the technical viewpoint, the price has precisely tested the indicated levels which means that the local support at $48,178.13 is quite strong. Yet, the nearest technical resistance is found around $52,000 per coin. It is also likely that consolidation will take place within this channel. This is exactly what happened in the previous sideways channel. This means that BTC/USD can pull back from the reached level of $50,000. A deeper correction is possible if the price breaks through the 48,178.13 level. Then a return to the sideways channel of 44807.24 - 48178.13 is very likely although a negative news background is required for this. In the meantime, the fundamental background looks quite favorable. The good news today came from PayPal which announced its plans to expand its cryptocurrency services outside of the US. The payment system will allow UK citizens to buy cryptocurrency from their accounts. At the same time, crypto experts see the new victory of bitcoin as a reason to remind the market about its far-reaching goals. McGlone announced that the main cryptocurrency, along with gold and long-term bonds, will show significant growth and become the market leader in the second quarter of 2021. This week, market participants are waiting for the Jackson Hole Economic Symposium. The dollar's reaction to the Fed's stance on the monetary policy could affect BTC/USD as well. Although the market can be unpredictable sometimes, the technical picture provides a clear scenario, albeit with a slight fluctuation between the levels.
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| Ethereum testing major Fibonacci retracement resistance level. Posted: 23 Aug 2021 08:22 AM PDT Ethereum recently made a pull back towards $2,944 from $3,334. This pull back was expected and justified. We were expecting a deeper pull back towards $2,700, nevertheless price reversed to the upside at $2,900 and today made a new higher high at $3,380.
Blue lines - Fibonacci retracements Ethereum price is at an important Fibonacci retracement level. The 61.8% Fibonacci level is the most probable level for trend reversals. Price is testing the 61.8% level once again. The area around $3,400 is important resistance. Despite the new higher high in price today, the RSI did not follow and provided us with a lower high and a bearish divergence. This is an important warning for traders to be cautious.
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| USDCAD bulls were warned since last week about a coming reversal in trend. Posted: 23 Aug 2021 08:14 AM PDT Despite price reaching new higher highs above 1.29, price formation last Friday was bearish as we mentioned in our analysis because of the reversal candlestick pattern. Price today remains under pressure and price is falling more than 100 pips lower.
USDCAD is trading below 1.27. Price is making a pull back after the topping candlestick pattern last Friday. Support by the upward sloping trend line is found at 1.2585 and I believe it is very likely to see price test this support level this week. It is important for bulls to defend this level in order to continue their upward move above 1.29. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 23 Aug 2021 08:10 AM PDT EURUSD was forming last week a bullish RSI divergence. As we mentioned in our analysis, price justified a strong bounce towards 1.1750-1.18 as a back test of the major resistance neckline of the Head and shoulders pattern. Today the week starts exactly as we expected, with a strong EURUSD moving higher.
Blue lines - Fibonacci retracements Green line- major neckline resistance (previous support) EURUSD is moving higher for the second session in a row. The RSI has already warned us of a coming bounce as it did not follow price to lower lows. The bullish divergence was an important warning given to traders last week. This week starts with price above 1.17 and if this upward move continues, we should expect at least a move towards 1.1770 and the green neckline. Next resistance level is at 1.18 and if broken we should then move towards the 38% Fibonacci retracement near 1.19. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 23 Aug 2021 08:08 AM PDT
Support and Resistance Levels for August 23 - 24, 2021 Resistance (3) 56,548 Resistance (2) 53,119 Resistance (1) 50,731 ---------------------------- Support (1) 49,113 Support (2) 48,551 Support (3) 47,731 *********************************************************** Trading tip for BITCOIN August 23 - 24, 2021 Sell below the psychological level of $50,000 (4/8) with take profit at 46,500 (50%) and 42,500 (SMA 21), stop loss above $ 51,000. Sell below $ 51,650 (61.8%) with take profit at $ 46,500 (50%) and $ 42,500 (SMA 21), stop loss above $ 52,500. The material has been provided by InstaForex Company - www.instaforex.com |
| Gold breaks bullish flag to the upside. Posted: 23 Aug 2021 08:05 AM PDT In our last analysis on Gold we noted a bullish pattern formation. Price was forming a bullish flag pattern and today price is breaking out of this pattern. Such a break out gives us a target for Gold at $1,850.
Black lines - flag Blue line- expected path Gold price has broken above the short-term resistance of $1,790-95 and is now trading at $1,803. Gold price is making higher highs. Support is at $1,775 and as long as price is above this level we remain bullish targeting $1,850. Next resistance is at $1,810 and next at $1,835. The material has been provided by InstaForex Company - www.instaforex.com |
| Trading Signal for USD/JPY for August 23 - 24, 2021: Sell below 110.15 Posted: 23 Aug 2021 07:49 AM PDT You can get more details of the analysis description here.
Support and Resistance Levels for August 23 - 24, 2021 Resistance (3) 110.81 Resistance (2) 110.28 Resistance (1) 110.22 ---------------------------- Support (1) 109.90 Support (2) 109.69 Support (3) 109.42 *********************************************************** Trading tip for USD/JPY for August 23 - 24, 2021 Sell below 110.15 (2/8) with take profit at 109.80 (SMA 21), stop loss above 110.40. Buy if the pair rebounds at 109.76 (1/8) with take profit at 110.15 (4/8) and stop loss below 109.31. The material has been provided by InstaForex Company - www.instaforex.com |
| Trading Signal for Crude Oil for August 23 - 24, 2021: Buy above 64.06 Posted: 23 Aug 2021 07:39 AM PDT You can get more details of the analysis description here.
Support and Resistance Levels for August 23 - 24, 2021 Resistance (3) 66.00 Resistance (2) 65.50 Resistance (1) 64.76 ---------------------------- Support (1) 63.92 Support (2) 63.33 Support (3) 62.59 *********************************************************** Trading tip for Crude Oil for August 23 - 24, 2021 Buy above 64.06 (SMA 21), with take profit at 65.62 (2/8), stop loss below 63.50. Buy if the price breaks 65.62 (2/8), with take profit at 68.75 (4/8), stop loss below 65.00. Sell if the price pulls back to 65.62 (2/8), with take profit at 62.50 (0/8), stop loss above 67.00. The material has been provided by InstaForex Company - www.instaforex.com |
| Trading plan for US Dollar Index for August 23, 2021 Posted: 23 Aug 2021 07:19 AM PDT
Technical outlook: The US Dollar Index pushed higher around 93.72 levels on Friday before finding resistance. The index has reversed since then and carved an intraday low at 93.10 during this hour of writing. The index seems to have carved a meaningful bullish boundary between 89.50 and 93.72 levels in the past several weeks, which could be retraced. The fibonacci 0.618 retracement of above rally is passing through 91.15 levels and high probability remains a drop the indice to reach there in the next few trading sessions. The entire corrective drop is expected to unfold into 3 waves and form an Up Gartley before turning bullish again. The index is seen t be trading around 93.15 levels at this point in writing and expected to stay below 93.72 going further. Immediate resistance is fixed at 93.72 mark, while support comes in around 92.50, followed by 91.80 levels respectively. US Dollar Index is seen to be dragging lower towards 92.20 in the first wave, which is fibonacci 0.382 retracement of the above rally. Watch for for a drop until that point before producing a pullback. Trading plan: Potential short against 93.72, targeting 92.00 and 91.00 Good luck! The material has been provided by InstaForex Company - www.instaforex.com |
| Oil gains after worst losing streak since October Posted: 23 Aug 2021 07:10 AM PDT On Monday, global oil prices recovered from a seven-day decline. The positive dynamics can be attributed to gains of global stock markets following last week's sell-off. At the same time, the growth of commodity prices is constrained by investors' concerns about oil demand and a stronger US dollar.
Thus, at the moment of preparing this material, Brent crude oil futures for November delivery increased by 3.1% to settle at $66.76 per barrel, and October delivery - by 3.18% to $67.25 per barrel. WTI crude oil futures for September delivery added 3.04% to reach $64.03 per barrel.
At the same time, the previous trading week has been the longest losing streak since October 2020. Over the past seven days, Brent crude has sunk more than 8%, and WTI has lost about 9% amid market participants' concerns about demand in the face of the rapid spread of COVID-19. Downbeat coronavirus statistics from the United States, China, and some states of Southeast Asia had a severe impact on the quotes. Investors were worried about the prospects of another tightening of lockdown measures and a possible slowdown of global economic recovery. In addition, the previous week was marked by huge seff-offs in the stock markets. Thus, Asian stocks fell by 5.8%, European - by 1-4%, and US - by 0.5-1%. However, on Monday, the indices changed their direction: the Asia-Pacific markets increased by 2.3%, and the European stock exchanges added almost 1%. According to experts, this is a sign of a correction in the commodity market. At the same time, market sentiment for the current week will most likely remain bearish amid concerns about a decrease in global fuel demand. Besides, oil prices are weighed down by a stronger US dollar. Thus, on Monday, the American currency is trading near nine-month highs against a basket of major currencies. The US Federal Reserve's symposium scheduled for August 26-27 is currently in the focus of oil market participants. The day before, the regulator announced that it was preparing to start reducing the volume of asset purchases. Therefore, the further dynamics of the oil market will depend on the outcome of the Fed's meeting. Commodity market analysts expect that in the short term, Brent oil quotes will be able to consolidate above $65 per barrel. However, if the Fed meeting turns out to be negative for investors, the price may fall to $62-63 per barrel. The material has been provided by InstaForex Company - www.instaforex.com |
| USD/JPY Price Analysis on August 23 Posted: 23 Aug 2021 07:06 AM PDT
The USD/JPY pair passed the supporting trendline of the ascending channel pattern which guided the rate since August 15. However, the 100-hour simple moving average almost immediately provided the pair with additional support. Afterwards, the rate returned to trading in the borders of the channel. On Monday morning, the USD/JPY currency exchange rate was testing the resistance at the 110.00 level. In the case that the price manages to surge, it could reach the resistance of the weekly R1 simple pivot point at 110.32. On the other hand, a decline would most likely find support in the 55 and 200-hour simple moving averages and the lower trendline of the ascending channel pattern in the 109.80/109.90 zone. The material has been provided by InstaForex Company - www.instaforex.com |
| GBP/USD Hot Forecast on August 23 Posted: 23 Aug 2021 07:05 AM PDT
GBP/USD has bounced off its lows, buoyed by an improving market mood. Investors expect the Fed to refrain from withdrawing support. Elevated UK Covid-19 cases are somewhat weighing on the sterling. Markit's preliminary UK Services PMI has badly disappointed investors with 55 points. The decline of the GBP/USD pair continued after reaching the 1.3600 level. By the middle of Monday's European trading hours, the currency exchange rate had recovered to the 1.3660 level. In addition, analysts have spotted a new downward channel pattern on the pair's hourly candle chart. If the rate passes the resistance of the descending channel pattern, GBP/USD could aim at the resistance of the weekly simple pivot point at 1.3704 and the 100-hour simple moving average near 1.3700. Meanwhile, a resumed decline within the borders of the descending channel pattern could once again look for support near the 1.3600 mark before reaching the weekly S1 simple pivot point at 1.3529 The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 23 Aug 2021 06:55 AM PDT To open long positions on GBP/USD, you need: In my morning forecast, I paid attention to the level of 1.3639 and recommended opening long positions from it, provided that a false breakdown is formed. Let's look at the 5-minute chart and analyze the entry point. At the first attempt of the bears to push through the area of 1.3639, the market stopped. And although the data on activity in the UK was not so good, the pressure on the pound did not return, which instilled confidence in buyers and led to the formation of a good entry point into long positions in the continuation of the upward correction. At the time of writing, the pair has already gone up about 60 points, and there are no signs of a correction yet. Important data on activity in the US economy will be released this afternoon. If the indicators turn out to be worse than economists' forecasts, the demand for the British pound may only increase. Therefore, the primary task of the bulls remains to protect the support of 1.3672. In the case of a decline in GBP/USD, a false breakdown will form a buy signal in the expectation of continuing the upward correction with an exit to a maximum of 1.3720, breaking above which will not be so easy. A breakout and a test of 1.3720 from top to bottom will form an additional signal to buy the pound, which will open up the opportunity to update the area of 1.3755, where I recommend fixing the profits. The longer-range target remains the maximum of 1.3782. If the pressure on the pound returns and the bulls do not show anything in the support area of 1.3672 – the optimal scenario will be purchases from the new low of 1.3634, which was formed today in the first half of the day. You can buy GBP/USD immediately for a rebound in the area of 1.3603 with the aim of an upward correction of 15-20 points within the day.
To open short positions on GBP/USD, you need: The initial task of the bears is now to protect the resistance of 1.3720, which is now targeted by the buyers of the pound. The optimal scenario for opening short positions will be the formation of a false breakdown at this level, along with an excellent report on activity in the US services sector and the manufacturing sector. Good data can strengthen the pace of economic recovery and favorably affect the American labor market. In this case, the goal will be to break through the support of 1.3672, which the bears missed today. A breakdown of this area can return serious pressure on the pair. The test of 1.3672 from the bottom up forms an additional entry point into short positions and will push GBP/USD even lower - to 1.3634, where the moving averages are playing on the side of the bulls. A longer-term target will be the monthly minimum of 1.3603. In the absence of active sellers around 1.3720, I advise you to postpone sales until the next major resistance of 1.3755. I recommend opening short positions from there only if a false breakdown is formed. You can sell GBP/USD immediately on a rebound from the local maximum in the area of 1.3782, counting on a downward correction of 25-30 points within the day.
The COT reports (Commitment of Traders) for August 10 recorded a reduction in short positions and a sharp increase in long ones. All this is explained by the results of the meeting of the Bank of England, where representatives again started talking that in the near future, the attitude to monetary policy will change in the direction of tightening. Also, additional pressure on the pound was exerted by the report on inflation in the United States, which disappointed investors and coincided with economists' forecasts. It suggests that the Federal Reserve System will not rush to make changes in its monetary policy, especially against the appearance of another problem-disruptions with supply chains in the South Asian region. All this can seriously affect pricing and the economic recovery rates of several countries, including the UK. However, as before, I advise you to stick to the strategy of buying the pound with each significant decline, as the big players do. The COT report indicates that long non-commercial positions increased from 43,119 to the level of 44,750. In contrast, short non-commercial positions decreased from the level of 43,205 to the level of 37,680, indicating continued purchases from major players. As a result, the non-commercial net position returned to the positive side and amounted to 7070, against -86 a week earlier. The closing price of last week fell from the level of 1.3891 to 1.3846. Signals of indicators: Moving averages Trading is conducted above 30 and 50 daily averages, indicating an upward correction for the pair. Note: The author considers the period and prices of moving averages on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1. Bollinger Bands In the event of a decline in the pound in the second half of the day, the lower border of the indicator around 1.3603 will act as support. Description of indicators
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| EUR/USD: plan for the US session on August 23 (analysis of morning deals). Posted: 23 Aug 2021 06:55 AM PDT To open long positions on EURUSD, you need: The diverse data on activity in the manufacturing sector of the eurozone countries and unconvincing data on the growth of the service sector maintained a bullish market for the euro. However, if you look at the 5-minute chart, you will see that the pair did not reach any of the levels I indicated in the morning. In this regard, there were no signals for entering the market. Low volatility after the Asian gap may change in the second half of the day after similar data for the United States of America. From a technical point of view, nothing has changed. The initial task of the bulls is to protect the support of 1.1699. Only the formation of a false breakdown there, together with weak data on the activity of the American economy, form an excellent signal for opening long positions in the continuation of the upward correction of the pair. A more important task remains a breakthrough and a reverse test from the top down of the 1.1740 level, which the bulls are currently targeting. This scenario forms a signal to buy the euro with the expectation of recovery to 1.1769, where I recommend fixing the profit. A more distant target will be the 1.1799 area. If EUR/USD declines in the afternoon and there is no activity in the area of 1.1699, I advise you to postpone purchases and wait for the minimum update at 1.1666, which also acts as the lower limit of the current side channel. You can buy EUR/USD immediately for a rebound from the support of 1.1628, counting on an upward correction of 15-20 points within the day.
To open short positions on EURUSD, you need: Sellers can lose control of the market at any time. Thus, their initial task is to return 1.1699 under control. A breakout and a reverse test of this range will return the pressure on the pair and form a sell signal for the euro in the expectation of updating the minimum of last week - 1.1666. A more distant target will be the area of 1.1628. However, it is unlikely that we can count on such a powerful downward movement today. In the event of a further upward correction during the US session, a false breakdown at the level of 1.1740 forms the first signal to open short positions in the expectation of a return of the bear market. This level also acts as the upper limit of the current wider side channel. Thus, it will not be possible to pass above this level. In the scenario of EUR/USD growth and the absence of bear activity at the level of 1.1740, it is best to postpone sales until the test of a larger resistance of 1.1769. I advise you to sell the pair immediately for a rebound based on a downward correction of 15-20 points only from the maximum of 1.1799.
The COT report (Commitment of Traders) for August 10 showed a clear increase in traders' interest in the market, as both long and short positions increased. However, the latter turned out to be more, which led to a reduction in the positive delta. Last week, many traders focused on the consumer price index of the United States of America, which slowed down after record growth rates and coincided with economists' forecasts. It seriously affected the desire of traders to buy the US dollar in the expectation of imminent changes in the bank's monetary policy. Given such inflationary jumps, we can expect that the Federal Reserve System will slow down with changes in the bond purchase program, which many investors were counting on in September of this year. Accordingly, this will weaken the position of the US dollar. But do not think that against this background, the euro will go up sharply. The lack of guidance due to the new strain of Delta coronavirus and the incomprehensible reaction of the European economy will force the European Central Bank to continue to adhere to a wait-and-see position and maintain a stimulating policy at current levels. It will negatively affect the European currency. Therefore, the only thing left to do is to look at small spikes of volatility within the day – at least this market state will be until the autumn of this year. The COT report indicates that long non-commercial positions increased from the level of 199,067 to 212,809, while short non-commercial positions jumped from the level of 161,060 to the level of 178,952. At the end of the week, the total non-commercial net position decreased from the level of 38,007 to the level of 33,857. The weekly closing price also fell from 1.1874 to 1.1736. Signals of indicators: Moving averages Trading is conducted above 30 and 50 daily moving averages, which indicates the continuation of the upward correction for the pair. Note: The author considers the period and prices of moving averages on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1. Bollinger Bands In the case of a decline in the pair, the average border of the indicator in the area of 1.1715 will provide support. Description of indicators
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| Trading plan for Gold for August 23, 2021 Posted: 23 Aug 2021 06:45 AM PDT
Technical outlook: Gold has pushed higher towards $1,806 in this hour of trading and bulls might remain poised to push through $1,825/30 mark as well before finding resistance. Please note that the yellow metal has carved a meaningful bearish boundary between $1,916 and $1,677 levels, which is being retraced for now. The fibonacci 0.618 could provide strong resistance and a bearish turn warranted. Gold is seen to be trading around $1,803 levels at this point in writing and is expected to push higher towards $1,825 levels in the immediate future. Immediate resistance is seen around $1,831, while support is seen at $1,772 levels respectively. A bearish turn around $1,831 cannot be ruled out as the resistance trend line converges with fibonacci 0.618 there. On the flip side, if Gold manages to break above $1,831 and also its resistance trend line, the structure might turn bullish over the next few weeks and potential remains for a test of $1,916 highs as well. As of now, we shall keep short-term target around $1,831 and review the price action thereafter to decide on a further direction. Trade plan: Potential long with stop @ 1,770 and target @ 1,830 Good luck! The material has been provided by InstaForex Company - www.instaforex.com |
Since March, the GBPUSD pair has been moving sideways within a wide consolidation range extending between 1.3670 up to 1.4250 which acted as a prominent SUPPLY that prevented further bullish advancement.
Bearish persistence below the price zone of 1.2050-1.2000 allowed the current short-term downtrend to be established.
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