Short-term Ichimoku cloud indicator analysis of EURUSD

Trading 23 mar 2020 Commentaire »

EURUSD bounced today towards 1.0830 but bulls were not strong enough to push price above the kijun-sen resistance. Trend remains bearish despite price moving above the tenkan-sen indicator.

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EURUSD remains in a bearish trend. Price is struggling to stay above the tenkan-sen (red line indicator). Short-term resistance is at the kijun-sen (green line indicator) at 1.0840. Bulls need to break above this level in order to push price towards the Kumo which is the major short-term resistance at 1.11. As long as price is below the Kumo trend is bearish. So far we have no reversal signal. At 1.0830-1.0840 we have a double top. Breaking above this level we will also get a technical bullish signal. Support is at 1.0665.

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Short-term Ichimoku cloud indicator analysis of Gold

Trading 23 mar 2020 Commentaire »

Gold price has managed to push inside important short-term resistance area and Ichimoku cloud terms we have our first weak buy signal and the change of short-term trend to neutral. Gold price is bouncing as we expected from our last analysis and has so far reached our target of $1,550.

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The tenkan-sen (red line indicator) has crossed above the kijun-sen (yellow line indicator). This is our first bullish signal. A weak one as price is below the Kumo, but still a bullish one. Price has also entered inside the Kumo (cloud) area turning short-term trend (4 hour chart) to neutral. Resistance is at $1,580 and a break above it will turn trend to bullish. Support is at $1,529-20 area. The previous resistance is now support. Bulls do not want to see price below that level.

On a daily basis trend is also neutral as price is inside the Daily Kumo. The daily chart agrees with the resistance levels of the 4 hour chart, so it is important to see a daily close above $1,570-80 in order to hope for a bigger move higher.

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Dollar Falls As Fed Expands QE Program

Trading 23 mar 2020 Commentaire »

The U.S. dollar dropped against its major trading partners in the European session on Monday, after the Federal Reserve pledged to purchase an unlimited amount of Treasurys and mortgage-backed securities to support the economy from impact of the coronavirus pandemic. Citing the tremendous hardship being caused by the outbreak, the Fed said it is committed to using its full range of tools to support households, businesses, and the U.S. economy.

The central bank said it will buy bonds "in the amounts needed to support smooth market functioning and effective transmission of monetary policy."

The Fed had previously announced it would purchase at least $500 billion of Treasury securities and at least $200 billion of mortgage-backed securities. The US central bank also announced three new credit facilities and an upcoming Main Street lending program that would provide up to $300 billion in funds.

The currency has already been under pressure as U.S. massive stimulus plan was deadlocked in the Senate.

Senate Democrats late Sunday blocked the passage of a third economic stimulus package to combat the impact of coronavirus.

Voting largely along party lines, the Senators voted 47 to 47 on the procedural motion, falling short of the 60 votes needed to advance the bill.

The greenback was trading at 0.9806 against the franc, down from a high of 0.9900 set at 6:30 am ET. The greenback may locate support around the 0.97 level.

The greenback declined to 1.0806 against the euro from Friday's closing value of 1.0698. The greenback is poised to challenge support around the 1.10 level.

The greenback pulled back to 1.1675 against the pound, from a high of 1.1506 seen at 7:30 am ET. The greenback is seen finding support around the 1.22 mark.

Survey results from IHS Markit showed that UK households' perception about financial well being deteriorated in March to its lowest level since mid-2019.

The household finance index fell sharply to 42.5 in March from 47.6 in February. This was the lowest since May 2019, contrasting with February's survey high.

The greenback eased to 0.5845 against the aussie, 1.4336 against the loonie and 0.5738 against the kiwi, from its early highs of 0.5700 and 1.4491 and a 4-day high of 0.5586, respectively. If the greenback falls further, it is likely to test support around 0.64 against the aussie, 1.33 against the loonie and 0.68 against the kiwi.

The greenback fell back to 109.82 against the yen, from a high of 111.25 hit at 6:30 pm ET. Further decline in the currency is likely to see support around the 108.00 level.

Looking ahead, Eurozone flash consumer sentiment index for March is set for release at 11:00 am ET.


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Fed Reveals New Measures To Support Economy, Including Unlimited Bond Purchases

Trading 23 mar 2020 Commentaire »

Citing the tremendous hardship being caused by the coronavirus pandemic, the Federal Reserve on Monday announced extensive new measures to support the economy.

The Fed said it is committed to using its full range of tools to support households, businesses, and the U.S. economy overall in this challenging time.

The measures announced today include an unlimited expansion of the Fed's asset purchases, with the central bank saying it will purchase Treasuries and mortgage-backed securities "in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy."

The Fed had previously announced it would purchase at least $500 billion of Treasury securities and at least $200 billion of mortgage-backed securities.

The central bank also announced the establishment of a new program that will provide up to $300 billion in new financing in an effort to support the flow of credit to employers, consumers, and businesses.

The Treasury Department will provide $30 billion in equity to these facilities using the Exchange Stabilization Fund.

The Fed will also establish two facilities to support credit to large employers, with the central bank to purchase corporate bonds issued by investment grade U.S. companies.

The fiscal crisis-era Term Asset-Backed Securities Loan Facility is also being reinstated to support the flow of credit to consumers and businesses.

Additionally, the Fed said it expects to announce the establishment of a Main Street Business Lending Program to support lending to eligible small-and-medium sized businesses, complementing efforts by the Small Business Administration.

"While great uncertainty remains, it has become clear that our economy will face severe disruptions," the Fed said in a statement. "Aggressive efforts must be taken across the public and private sectors to limit the losses to jobs and incomes and to promote a swift recovery once the disruptions abate."

Last week, the Fed took the unusual step of slashing interest rates by 100 basis points just days ahead of its scheduled monetary policy meeting.

The Fed lowered the target range for the federal funds rate to zero to 0.25 percent from 1 to 1.25 percent, noting the coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the U.S.

The central bank said it expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.

In addition to cutting rates, the Fed also announced a new quantitative easing program, revealing plans to increase its holdings of Treasury and mortgage-backed securities by at least $700 billion.


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*U.S. Dollar Drops To 1.0802 Versus Euro As Fed Unveils Unlimited QE Program

Trading 23 mar 2020 Commentaire »

U.S. Dollar Drops To 1.0802 Versus Euro As Fed Unveils Unlimited QE Program


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Philippine Central Bank To Provide Extra Lifeline To Government

Trading 23 mar 2020 Commentaire »

The Philippine central bank approved the purchase of PHP 300 billion government securities to provide extra lifeline to the national government.

The Monetary Board authorized the Bangko Sentral ng Pilipinas, or BSP, to purchase government securities from the Bureau of Treasury. The central bank will buy securities with a maximum repayment period of six months.

The fund raised through the agreement will be used to support the National Government's programs to counter the impact of coronavirus disease 2019.

"This arrangement is the most cost-effective way for us to provide an extra lifeline to the national government to support the programs to fight this pandemic," National Treasurer Rosalia de Leon, said.

BSP Governor Benjamin Diokno said, "We continue to support the government's initiatives and objectives during the enhanced community quarantine (ECQ)."

This additional amount is intended to provide support for those most affected by the ECQ, especially in Luzon, for the next 60-90 days, Diokno said.


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March 23, 2020 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 23 mar 2020 Commentaire »

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On December 30, a bearish ABC reversal pattern was initiated around 1.1235 which turned the technical outlook into bearish.

Since then, the EURUSD pair has trended-down within the depicted bearish channel until few weeks ago, when extensive bearish decline established a new low around 1.0790 where the EUR/USD pair looked OVERSOLD after such extensive bearish decline.

On February 20, recent signs of bullish recovery were demonstrated around 1.0790 leading to the recent steep bullish movement towards 1.1000 then 1.1175.

The price level of (1.1175) constituted a transient congestion-zone in confluence with the origin of the previously-mentioned ABC pattern.

Temporary consolidation range was demonstrated down to 1.1100-1.1095 where another bullish limb was quickly expressed targetting 1.1235, 1.1360 and finally 1.1480.

In other words, the price-Levels of 1.1235 (KeyZone) and 1.1360 were being breached to the upside until earlier last week when a (123) bearish reversal pattern was initiated around the price level of 1.1480.

This turned the short-term technical outlook for the EURUSD pair into bearish when bearish persistence below the Keyzone of 1.1235 was maintained on a daily basis.

For conservative traders, the previous bullish pullback towards 1.1235 was suggested to be considered for bearish rejection and a valid SELL entry.

On the other hand, the mentioned intermediate-term bearish Head & Shoulders pattern has achieved all of its projection target levels.

Currently, the EURUSD pair is re-testing the backside of the broken bearish channel where signs of bullish rejection should be anticipated.

The recent bullish engulfing H4 candlesticks as well as the manifested double-bottom reversal pattern (in progress) indicate a high probability bullish pullback at least towards 1.0880, 1.0980 and 1.1060 that should be watched by conservative traders.

That's why, Intraday traders should be looking for any upcoming bullish breakout above 1.0790 as this would probably enhance further bullish advancement towards 1.0980.

On the other hand, H4 candlestick bearish closure below 1.0650 invalidates the previous scenario and enables further bearish decline towards 1.0606 and probably 1.0580.

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Loonie Little Changed After Canada Wholesale Sales

Trading 23 mar 2020 Commentaire »

Canada wholesale sales for January has been released at 8:30 am ET Monday. The loonie changed little against its major counterparts after the data.

The loonie was trading at 1.4396 against the dollar, 76.51 against the yen, 1.5511 against the euro and 0.8366 against the aussie around 8:35 am ET.


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*Canadian Wholesale Sales Jump 1.8% In January

Trading 23 mar 2020 Commentaire »

Canadian Wholesale Sales Jump 1.8% In January


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Loonie Mixed Ahead Of Canada Wholesale Sales

Trading 23 mar 2020 Commentaire »

Canada wholesale sales for January are scheduled for release at 8:30 am ET Monday. The loonie traded mixed against its major counterparts before the data. While the loonie held steady against the aussie, it rose against the rest of major rivals.

The loonie was worth 1.4350 against the dollar, 76.65 against the yen, 1.5471 against the euro and 0.8354 against the aussie as of 8:25 am ET.


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