May 28, 2020 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 28 mai 2020 Commentaire »

analytics5ecfdb02624cb.jpg

On March 20, the EURUSD pair has expressed remarkable bullish recovery around the newly-established bottom around 1.0650.

Bullish engulfing H4 candlesticks as well as the recently-demonstrated ascending bottoms indicated a high probability bullish pullback at least towards 1.0980 and 1.1075 (Fibo Level 50%).

Shortly After, a bearish Head & Shoulders pattern was demonstrated around the price zone between (1.1075-1.1150).

That's why, Further bearish decline was demonstrated towards 1.0800 where the nearest demand level to be considered was located near the backside of the broken channel (1.0800-1.0750).

Evident signs of Bullish rejection have been manifested around the price zone of (1.0800-1.0750) leading to the recent bullish spikes up to 1.0990.

On May 1, Lack of bullish momentum around 1.1000 lead to another bearish decline towards the depicted price zone around 1.0800.

However, the price zone of (1.0815 - 1.0775) has been standing as a prominent Demand Zone providing quite good bullish support for the pair so far.

Moreover, a recent ascending bottom has been established around 1.0870 which enhances the bullish side of the market in the short-term.

Short-term technical bullish outlook remains valid as long as bullish persistence is maintained above the recently-established ascending bottom around 1.0850-1.0870.

Currently, the recent bullish breakout above 1.1000 should be maintained to enhance further bullish advancement towards 1.1075 and 1.1175.

On the other hand, any bearish breakdown below 1.0930 should be marked as an early Exit signal for all short-term BUY trades.

Trade recommendations :

Intraday traders are advised to wait for bearish pullback towards 1.1000 as a valid BUY signal.

T/P levels to be located around 1.1075 then 1.1175 if sufficient bullish momentum is maintained while S/L to be located below 1.0900.

The material has been provided by InstaForex Company - www.instaforex.com

Stocks report on Asia, Europe, and the USA

Trading 28 mai 2020 Commentaire »

analytics5ecfa85a8dc46.jpg

Today's trading on stock exchanges in the Asia-Pacific region takes place with multidirectional dynamics. Tensions are rising with the worsening conflict between the US and China, which is in fact, the only factor that exerts really strong pressure on the market.

China's Shanghai Composite Index started a new session with a 0.27% decline, while Hong Kong's Hang Seng Index fell by 1.34%.

However, particularly serious upheavals occurred in the pharmaceutical companies sector. So, CSPC Pharmaceutical Group Ltd. and Sino Biopharmaceutical Ltd. lost 10.6% and 5.6% this morning.

Tencent Holdings reduced the value of its securities by 2.3%. Technologies Holdings Inc. also lost 7.2%. Smaller losses were noted at China Mobile with a -0.7%, and HSBC Bank with -1.2%.

Another expected decline was recorded in the oil and gas industry. Securities CNOOC and PetroChina decreased by 2% and 1.1%, respectively.

Among the positive, it is worth noting the 1.99% increase in Japan's Nikkei 225 Index. The leaders among the Japanese companies were Dentsu Group Inc., an advertising corporation that recorded growth of as much as 14%, as well as automakers Mazda Motor and Nissan Motor, whose rise was at 8% and 6.2%, respectively. In general, corporate news from Japan is very good as there is much more growth than a fall.

South Korea's Kospi index has risen slightly today by 0.06%. The main news that investors paid attention to was the decision of the country's Central Bank regarding a further reduction in the base interest rate by another 25 points, which sends it to a minimum value of 0.5%. Recall that this year is the second correction in a row. Nevertheless, this is a necessary measure, since the general forecast for the Korean economy for the current year is subject to revision with quite significant reductions. So, it is already becoming clear that the country's GDP will fall by at least 0.2%. It is worth recalling that at the beginning of the year, forecasts were optimistic and growth of more than 1% was expected.

Securities Value Samsung Electronics Co. became higher by 0.4%. But LG Electronics shares, by contrast, lose 2.5%. Hyundai Motor and Kia Motor fell by 0.7% and 0.5%, respectively.

Australia's S & P / ASX 200 Index rose by 1.51%. Here, the value of securities of the world's largest mining companies BHP and Rio Tinto increased by more than 2%. In addition, shares of National Australia Bank rose to 4.5%, Commonwealth Bank of Australia to 2%, and Westpac Banking rose to 4.6%.

The new series of conflicts between the US and China today has exerted the most significant pressure on the Asian stock market. According to the official authorities of America, Hong Kong can no longer be autonomous, as the Chinese government rigidly imposes its laws. In this regard, it can no longer count on from the United States. It becomes clear that the words of President Donald Trump that new sanctions measures will be taken against China in the near future are beginning to be implemented.

Meanwhile, the European stock market is positive today. Thursday session opened with a plus and became the fourth in a row with positive dynamics. The daily news about the restoration of the work of an increasing number of companies in the EU helped build on the positive. All this only once again pushes the leadership towards the early implementation of a large-scale plan to stimulate the economy, which should provide even more significant support. The conflict between Washington and Beijing, thus, is almost leveled here.

The overall European STOXX 600 index rose 1% in the morning. The leading positions were taken by the travel, leisure and tourism sectors, as well as telecommunication companies and car manufacturers.

In general, the STOXX 600 index was able to achieve an increase of 30% compared to the same period last year, and, according to analysts, this is not the limit.

Recall that recently, the European Commission proposed to allocate 1.85 trillion euros in order to maintain and restore the economy of the region.

Securities of Airbus and Safran from France rose in value by 2% and 3.2%. The reason was the news that Boeing Co. ready to start production of passenger aircraft in the United States of America again.

The shares of another aviation company, SAS, on the contrary, fell in price by 8.2%. The fall is due to negative statistics reflecting the organization's grand losses recorded in the second quarter of this year.

In the US, an increase was observed mainly on the basis of the trading session on Wednesday. So, the S&P 500 index closed in positive territory above the level of 3,000 points, which was the first such growth in the last five months. The main support for the index was provided by the banking sector, where there was an average rise of more than 10%.

Stock markets continue to be optimistic about economic growth. The restrictions associated with the coronavirus pandemic are gradually being removed, which means that the increase will continue. Most experts are sure that this rise is far from the last, however, no one is safe from some falls either. At least there are some factors that indicate a rollback will be inevitable.

The material has been provided by InstaForex Company - www.instaforex.com

EURUSD: China is threatening retaliatory US sanctions. Sentiment in the Eurozone economy is improving, allowing the euro

Trading 28 mai 2020 Commentaire »

While buyers of risky assets are trying to enlist the support of new major players, the Chinese authorities responded aggressively to yesterday's statement by US Secretary of State Mike Pompeo.

analytics5ecfc10419763.jpg

Let me remind you that we are talking about sanctions and Hong Kong's autonomy. Secretary of State Mike Pompeo has already said that any Chinese decision that affects the autonomy and freedoms of Hong Kong will lead to a review of Washington's relations with China. Anti-government protests and demonstrations have already taken place in Hong Kong, which was dispersed by police officers. More than 180 people were detained. The main protest of people was related to the project on national security, which is being considered in the Chinese Parliament. Already today, the office of the Chinese Foreign Ministry has spread information that if sanctions are applied against China or officials, the US will receive an indispensable rebuff and decisive countermeasures. Also, the Foreign Ministry reminded that they would not allow US interference in the affairs of Hong Kong, which is part of China, therefore all issues related to it are related to the internal affairs of the PRC.

Meanwhile, the reports that were published today on the economy of the Eurozone once again reminded traders of what difficult times are waiting for the bloc. The European Commission report said that a number of companies in the manufacturing sector of the Eurozone in May this year were slightly less pessimistic about their own prospects, although the main problems associated with the coronavirus and paralysis of the economy remained. Negative sentiment in the service sector has only increased.

Despite the lifting of some restrictions that were imposed due to the coronavirus pandemic, the Eurozone industry confidence index rose slightly in May this year to -27.5 points against -32.5 points in April and was forecast at -27.0 points. As for the service sector, the situation has only worsened. There, the confidence index in May collapsed immediately to -43.6 points against -38.6 points in May. If we take the consumer confidence indicator separately, it has increased slightly, although it remained at a rather pessimistic level. According to data, the consumer confidence index in the Eurozone in May this year was -18.8 points, fully coinciding with the forecasts of economists, against -22.0 points in April.

analytics5ecfd9139323d.jpg

Overall, the indicator of sentiment in the Eurozone economy rose to 67.5 points in May after a sharp decline to 64.9 points in April. The mood improved particularly quickly in Germany and Spain, while in France the indicator fell to a new record low.

The German inflation report, although preliminary, did not greatly please market participants, as well as economists who are afraid of increasing deflationary pressure during the coronavirus pandemic. According to the statistics agency, the preliminary consumer price index (CPI) in Germany in May fell by -0.1%, while it grew by only 0.6% year-on-year, which, as you can understand, is far from the target level of the European Central Bank in the region of 2.0%. The data completely coincided with the expectations of economists. The EU-harmonized German consumer price index remained unchanged in May and rose only 0.5% per annum, with a forecast reduction of -0.2% compared to April.

analytics5ecfd924f019f.jpg

A sharp slowdown in demand due to the pandemic, a shrinking labor market, and low economic activity, along with a collapse in energy prices, were the main problems that caused inflation to show a decline.

Today's report on retail sales in Spain did not scare traders much. According to the data, against the background of strict quarantine measures in April this year compared to March, sales decreased by 20.4% after a decrease of 15.5% in March.

As for the technical picture of the EURUSD pair, it has not changed much compared to the morning forecast. Bulls are still trying to break above the resistance of 1.1030, as only a break in this range will lead to a larger increase in risk assets with the possibility of updating the highs in the area of 1.1090 and 1.1140. Let me remind you that buyers of risky assets actively returned to the game yesterday after the news that the European Commission agreed to provide non-refundable loans to EU countries in need of assistance in the amount of 500 billion euros. We are talking about so-called grants, for which funds will be allocated. Another 250 billion will be issued under credit lines. You can read more about this in my morning forecast. If the pressure on the euro returns, then large support levels will be seen in the area of 1.0960 and 1.0870.

The material has been provided by InstaForex Company - www.instaforex.com

Gold bulls recapture $1,700 but face important resistance ahead.

Trading 28 mai 2020 Commentaire »

Gold bulls recapture $1,700 but face important resistance ahead. Price has resistance now at $1,725 where we find the upper boundary of the downward sloping channel. Gold bulls have made a comeback after breaking below $1,700 and it is important for them to hold price above it.

analytics5ecfbaee1fb51.jpg

Red lines - bearish channel

Green line -target

Gold price is bouncing off $1,693. Recapturing $1,700 was an important bullish sign that bears did not want to see. Price should now continue higher and break the resistance at $1,725. If price continues to make higher highs and higher lows, I expect Gold price to reach $1,780 next. The weekly bearish divergence remains and we should not ignore it.

The material has been provided by InstaForex Company - www.instaforex.com

Short-term technical analysis of EURUSD for May 28, 2020

Trading 28 mai 2020 Commentaire »

EURUSD is pushing once again above the key short-term horizontal resistance of 1.10-1.1020. Price is now trading at 1.1036 and a daily close above the resistance would be a bullish sign. However the RSI in the 4 hour chart warns bulls to be cautious.

analytics5ecfb97aea116.jpg

Black lines - bearish divergence

Green rectangle- horizontal support

Red line - long-term resistance

EURUSD is moving above the green resistance area where it got rejected yesterday. Price is making higher highs but in the 4 hour chart the RSI does not make new highs. The RSI is making lower highs providing us with a bearish divergence signal. This is an important warning not to be ignored. Support is now at 1.10 and inability to hold above it will be a bearish sign. If the RSI breaks above the black downward sloping resistance trend line then we will have another bullish sign. This could lead to a move towards 1.11. We need to keep a close eye on price action.

The material has been provided by InstaForex Company - www.instaforex.com

Evening review on EURUSD for May 28, 2020

Trading 28 mai 2020 Commentaire »

analytics5ecfb2186ed48.jpg

The most anticipated report came out. According to the weekly US employment report, the number of new applications for benefits already rose to 2.1 million. But at the same time, the number of those receiving benefits for more than a week has decreased significantly, from 25 million a week earlier to 21 million. This is a signal that the economic decline may have reached the bottom.

EURUSD:

You may hold purchases from 1.0855. Wait for a break above 1.1020 and movement at 1.1100.

In case of a downward sell, you may consider selling from 1.0870.

The material has been provided by InstaForex Company - www.instaforex.com

GBP/USD: plan for the American session on May 28 (analysis of morning deals). The pound remains in the side channel.

Trading 28 mai 2020 Commentaire »

To open long positions on GBPUSD, you need:

Sellers coped with the morning task, as did buyers, which kept the pair in the side channel. If you look at the 5-minute chart, you will see how the repeated resistance test of 1.2280 led to a rapid decline in the GBP/USD, which I drew attention to in my morning forecast. A similar pattern occurred in the support area of 1.2233, where a repeated test led to the formation of a buy signal, which continues to operate now. For the formation of upward momentum, the bulls in the second half of the day need a breakout and consolidation above the resistance of 1.2280, as only this will keep the hope of a recovery of the pound in the short term. The nearest target of the bulls will be this week's maximum of 1.2348, where I recommend fixing the profits. In the scenario of a decline in the pound under the support of 1.2233, and this will happen if there is good data on the state of the US economy in the 1st quarter, it is best to postpone long positions to the test of the minimum of 1.2162, from where you can open long positions immediately for a rebound in the expectation of correction of 30-40 points by the end of the day.

analytics5ecfb03062940.jpg

To open short positions on GBPUSD, you need:

The sellers' task for the second half of the day remained unchanged. Only the return of support to 1.2233 will be a signal to open short positions, which will allow you to quickly push GBP/USD to the area of lows 1.162 and 1.2122, where I recommend fixing the profits. Given that no important fundamental statistics for the UK are published today, traders will be waiting for reports on US GDP and the labor market, which will be released later in the afternoon. If the bulls again attempt to increase the pair above the resistance of 1.2280, then only another false breakout formation at this level will be a signal to sell GBP/USD. But it is best to open short positions immediately for a rebound at this week's maximum of 1.2345, or even higher, from the level of 1.2425 with the aim of a small downward correction at the end of the day of 30-40 points.

analytics5ecfb0538290b.jpg

Signals of indicators:

Moving averages

Trading is conducted in the area of 30 and 50 daily averages, which indicates an active confrontation between buyers and sellers.

Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger Bands

A break in the lower border of the indicator around 1.2233 will increase the pressure on the pair, while a rise above 1.2280 will lead to a larger upward trend.

Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD: plan for the American session on May 28 (analysis of morning deals). The bulls persistently do not want to give

Trading 28 mai 2020 Commentaire »

To open long positions on EURUSD, you need:

A weak report on German inflation, which slowed in may this year, put pressure on the euro in the first half of the day and did not allow buyers to get above the resistance of 1.1030, from which I recommended opening short positions in my morning review. If you look at the 5-minute chart, you will see how the test of 1.1030 led to a rapid movement of EUR/USD down to the support area of 1.0994, from which buyers began to act more actively. The formation of a false breakout at this level was a signal to open long positions in the euro. At the moment, as long as trading is above 1.0994, the demand for the euro will continue, which may lead to a repeated update of the maximum of 1.1030. Optimism among traders increased after yesterday's proposal by the European Commission to allocate an additional 750 billion euros to save the European Union's economies. A break in the range of 1.1030 will take place only after weak data on US GDP, which will open a direct road to the highs of 1.1063 and 1.1093, where I recommend fixing the profits. If the US GDP data for the 1st quarter of this year will be able to surprise with something good, then it is best to consider new long positions after updating the minimum of 1.0957 or buy EUR/USD immediately on the rebound from the larger support of 1.0917 with the aim of correcting 25-30 points by the end of the day.

analytics5ecfaf941c96a.jpg

To open short positions on EURUSD, you need:

From a technical point of view, nothing has changed. Traders only need good news on the next help plan, and whether it will be accepted or not is very important for the continuation of the bull market. All attention today in the second half of the day is shifted to the return and consolidation of the pair below the support of 1.0994, the first test of which has already taken place today in the European session. Only this will reduce the ardor of buyers and lead to a return of EUR/USD to the low of 1.0952, and then to the test of larger support of 1.0917, where I recommend fixing the profits. If the demand for the euro persists after the US GDP report, it is best to consider short positions only on the formation of a false breakout in the resistance area of 1.1030 or sell the euro immediately on a rebound from the maximum of 1.1063 with the aim of correcting by 20-30 points to the close of the day.

analytics5ecfafbd0ea4e.jpg

Signals of indicators:

Moving averages

Trading is conducted above the 30 and 50 daily moving averages, which indicates the continuation of the bull market.

Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger Bands

A break in the lower border of the indicator around 1.0994 will lead to increased pressure on the European currency. Breaking the upper limit of the indicator in the area of 1.1030 will lead to further growth of the euro.

Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
The material has been provided by InstaForex Company - www.instaforex.com

Trading recommendations for EUR/USD on May 28, 2020

Trading 28 mai 2020 Commentaire »

From the point of view of complex analysis, we can see the consolidation of quotes outside the flat pattern.

For the first time in eight weeks, quotes managed to consolidate above 1.1000, the upper border of the flat, instantly raising the possibilities of a breakout, as well as trend change in the market.

The movement that occurred yesterday was quite surprising, since on April 24, the quotes went below 1.0775, the lower border of the flat. Although such a movement happened according to market trends, the borders of the flat resisted, keeping the quotes inside the channel.

Perhaps, market speculation, as well as misunderstanding in the situation, caused the impressive movement in the market. News, which we will talk about later, can locally give enthusiasm to market participants, but the situation will remain the same relative to the trend and the cycles.

Analyzing the past trading day in detail, we can see that the dynamics of the entire day was kept within one candle for 12 hours. After that, quotes jumped up and down, but were united by the psychological level of 1.1000, which ended the trading day.

In terms of volatility, the stable dynamics are encouraging, with the daily average value once again passing 86 points. This indicates that volatility in the EUR / USD pair continues to accelerate, overtaking the GBP / USD pair, which has long been famous for high volatility.

[The analysis and comparison of the dynamics of the EUR / USD and GBP / USD pairs were conducted for 6 trading days]

As discussed in the previous review, traders focused on working the quotes within the flat pattern, but did not exclude local operations.

Meanwhile, analyzing the daily chart, we can see that the bearish mood persists, with the sideways channel still intact, and quotes within the control zones.

The news published yesterday did not contain any important statistics for Europe and the United States. Thus, traders focused on external backgrounds, which managed to locally stir up the market.

The main catalyst yesterday was the proposal of the European Commission to allocate € 750 billion for economic recovery. Of this amount, 500 billion will be grants, and 250 billion will be loans. Such news gave optimism to the euro, but after a while, everyone remembered the previous plan to save the European Union, which failed due to dissatisfaction with most EU countries. In addition, the current plan is complicated, with many countries not agreeing with the distribution. Thus, the approval of the package may be delayed.

ECB Head Christine Lagarde also made a statement yesterday, to which she forecast that the eurozone economy will shrink by 8-12% this year, twice as much as during the financial crisis last 2008-2009.

For economic news today, the second estimate of the US 1st quarter GDP will be published, the contents of which may reveal an economic downturn of about -4.8%. The weekly report on US unemployment will also come out, with repeated applications forecast to put a new record of about 26,180,000, and initial applications at about 2,120,000.

analytics5ecf88fb625eb.jpg

Further development

Analyzing the current trading chart, we can see fluctuations within the psychological level of 1.1000, the amplitude of which is approximately 40 points. Market participants have been focusing on the upper border of the flat, trying to trigger a breakout to return the quotes to its previous levels.

The emotional mood of market participants, such as high coefficient of speculative operations, can set off acceleration on volatility.

The fluctuation of quotes within 1.0990 / 1.1040 will continue for quite a long time, so consider local positions on the breakout of established boundaries. Although there is not enough evidence or signals for a trend change, bearish mood remains on the trading charts.

Based on the above information, we formulated these trading recommendations:

- Open sell positions below 1.0985, towards 1.0950 --- 1.0900 ---- 1.0885.

- Open buy positions above 1.1045, towards 1.1080.

analytics5ecf8912656a8.jpg

Indicator analysis

Analyzing the different sector of time frames (TF), we can see that the indicators of hourly and daily periods signal an upward mood, due to the concentration of quotes within 1.100, the upper border of the flat.

analytics5ecfabc889873.jpg

Volatility per week / Measurement of volatility: Month; Quarter year

The measurement of volatility reflects the average daily fluctuation calculated by Month / Quarter / Year.

(May 28 was built, taking into account the time of publication of the article)

Volatility is currently 44 points, which is 48% lower than the average daily value. Thus, we can assume that the exit of quotes from the accumulation will lead to another surge in activity, thereby holding the acceleration status.

analytics5ecfabedd7819.jpg

Key levels

Resistance zones: 1,1000 ***; 1.1080 **; 1,1180; 1.1300; 1.1440; 1.1550; 1.1650 *; 1.1720 **; 1.1850 **; 1,2100

Support areas: 1.0850 **; 1.0775 *; 1.0650 (1.0636); 1,0500 ***; 1.0350 **; 1,0000 ***.

* Periodic level

** Range Level

*** Psychological level

The material has been provided by InstaForex Company - www.instaforex.com

Gold leads precious metal growth in 2020

Trading 28 mai 2020 Commentaire »

analytics5ecfa2d3500cc.jpg

The gold, being the No. 1 asset among other precious metals, firmly holds leadership positions. Experts predict it will grow to $ 1800 per ounce and higher in the coming months.

The COVID-19 pandemic provoked an increase in interest in the main precious metal and a subsequent increase in its price, analysts are sure. Bloomberg experts consider gold to be the most profitable exchange asset, emphasizing that since January of this year, its quotes have risen in price by 15%. To date, the precious metal has added $ 250, rising to $ 1,725 per ounce. On Thursday, May 28, gold is trading near $ 1722– $ 1723 per ounce.

Experts pay attention to the suspension of the gold rally, which was fixed during the pandemic. Analysts at Deutsche Bank do not expect too much growth in the price of precious metals but believe that periodic bouts of gold weakness do not indicate dangerous trends. The bank believes that buying a yellow metal during a pandemic is a very profitable acquisition, and those investors who invest in a key precious metal act for the future, with the expectation of an upward trend.

Experts agree that in times of crisis gold is the most reliable protective asset from an investment point of view. In conditions of economic downturns, the popularity of yellow metal is growing exponentially, and its rate is becoming a "gold mine" for investors in every sense of the word.

The growing demand for the main precious metal contributes to the favorable forecasts of analysts. Leading experts at major investment banks, such as Goldman Sachs and Bank of America, unanimously foreshadow the rise in gold prices to $ 2,000– $ 3,000 per ounce. According to analysts, a significant appreciation of gold will occur in the next two years. According to the forecast of Deutsche Bank, in the fourth quarter of 2020, the bank's strategists expect the precious metal price to rise to $ 1800 per troy ounce.

analytics5ecfd27a73c46.jpg

According to experts, in the short and medium-term, gold will start a price run to set a new record. In the long run, the yellow metal can exceed the level of 2011, when it reached an impressive $ 1921 per ounce. Analysts recommend that investors allocate 10% of their investment portfolio to a key precious metal in order to minimize risks and balance profitability.

The material has been provided by InstaForex Company - www.instaforex.com