AUDUSD could pull back all the way to 0.6750 over the next couple of weeks

Trading 08 oct 2020 Commentaire »

AUDUSD has stopped its upward trend that began back in March from 0.55 to 0.74. Price has many chances of a pull back at least towards the 38% Fibonacci retracement area around 0.6750. Short-term trend is bearish.

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Blue line- resistance trend line

Green rectangle -first pull back target

AUDUSD is making lower lows and lower highs, that is why short-term trend remains bearish. Our pull back target is between 0.67-0.6850. Resistance is found at 0.7235. As long as price is below this level, then the chances for a pull back are higher.

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Technical analysis of EURUSD

Trading 08 oct 2020 Commentaire »

EURUSD continues to trade above the key short-term trend line support. Today price pulled back towards the trend line support but did not break it. Respecting the support is key for the short-term trend.

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Red rectangle -resistance area

Blue line -support trend line

EURUSD continues to make higher lows as price touches the support trend line and bounces off of it. Support is at 1.1733 low and as long as price is above, we expect bulls to try to recapture 1.18. If price fails to hold above the trend line and breaks the support, then we expect price to move towards 1.17 at first and 1.1645 next.

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Gold could pull back towards $1,850-20 area

Trading 08 oct 2020 Commentaire »

Gold price is still below key short-term resistance at $1,900. Bulls tried to push above $1,920 but were not strong enough. This weakness and inability to break above resistance gives us a trade setup if certain conditions are met.

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Red line -resistance trend line

Green rectangle - support

Gold price has support at $1,878-84 area. A break below this level is expected to bring more sellers and price to be pressured for a move lower. As long as price is below $1,910 and if price breaks below $1,878, then we will be expecting Gold price to fall towards 1st target of $1,850 and second target $1,820.

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GBP/USD. Friday is an important day for the pound

Trading 08 oct 2020 Commentaire »

The pound-dollar pair, like almost all dollar pairs, is traded in a flat, in a fairly narrow price range. The US dollar index is showing weak fluctuations, reflecting a passive state, while the British currency is in anticipation of tomorrow's informational impulses. Firstly, important macroeconomic data will be released on Friday: we will find out the latest data on UK GDP growth, key indicators in the field of manufacturing and production. Secondly, the next round of talks between representatives of London and Brussels will end tomorrow. Plus, you need to take into account the so-called "Friday factor", when traders take profits without risking leaving open positions for the weekend. All this suggests that the last trading day of the week will be marked by increased volatility for the GBP/USD pair.

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According to preliminary estimates, macroeconomic reports will put pressure on the pound, as they reflect a slowdown in the recovery process. Thus, the volume of the country's GDP should increase by 4.6% (on a monthly basis) in August. At the same time, this indicator came out at the level of 6.6% in July, and at the level of 8.7% in June. If this indicator comes out at the predicted level, traders are likely to ignore it, but the pound will be under pressure if it is in the red zone. The situation is similar with other economic indicators. For example, the volume of industrial production showed growth in May and June, but then the growth rate began to noticeably decline. For comparison: if at the end of spring this indicator came out at the level of 9.3%, then tomorrow it is expected to be at around 2.6% (in monthly terms). The volume of production in the industry should also show weak growth, rising by only 3.2% (for example, in June it was at 11%).

In other words, all of the above economic indicators will reflect the situation that developed in the UK in August. Let me remind you that the coronavirus began to increase again during that period. They started talking about the return of restrictive measures in early August, and after a week and a half they turned from words to deeds. An outbreak of the infection occurred in a meat processing factory, which is located just a hundred kilometers from the British capital. Authorities were forced to extend the partial quarantines in Leicester and Manchester. Later, an increase in the incidence was noted in other cities of Great Britain, after which quarantine measures were tightened throughout the country. This state of affairs, of course, will be reflected in the August macroeconomic reporting figures.

But here it is worth warning that it is extremely risky to make trading decisions on the GBP/USD pair only on the basis of published releases. The pound's reaction can be deceiving. As mentioned above, the next stage of negotiations between representatives of London and Brussels will end tomorrow. The parties have been discussing the terms of a future trade deal for several months, and according to some reports, they have already reached the home stretch. The topic of Brexit is an unconditional and indisputable priority for the pound - in this case, all other fundamental factors fade into the background. And the GBP/USD pair is no exception: neither the US Nonfarm Payroll report nor other key releases can surpass the significance of Brexit. Such is the specificity of currency pairs with the participation of the British currency.

Therefore, macroeconomic reports should be taken into account tomorrow, but it is advisable to make trade decisions on the pair only after the final statements of the heads of the negotiating delegations (as a rule, they communicate with the press after the completion of the next stage of the negotiation process). These are not final talks - the dialogue will resume in Brussels on Monday. But if the parties announce preliminary optimistic estimates regarding future prospects, then the pound will rapidly gain momentum - regardless of whether macroeconomic indicators will be in the green or red zone tomorrow.

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Let me remind you that the fishing issue is currently the most controversial issue of all the remaining ones. London considers the EU's demands to provide access for European fishermen to British fishing areas as unacceptable, calling this incompatible with the UK's status as an independent coastal state. In turn, Brussels insists on the opposite. At the moment, this is the key stumbling block. If the parties even hint at any progress in this matter, then the pound will not only break through the 30th figure against the dollar, but will settle higher in this price area.

And vice versa - if the negotiators disappoint investors with the lack of progress, the GBP/USD pair will move at least to the support level of 1.2850 (the middle line of the Bollinger Bands coinciding with the lower border of the Kumo cloud on the daily chart). In my opinion, the pair will retain its upside potential in any case, so long positions are still a priority, with the first target at 1.3010 (the upper Bollinger Bands line coinciding with the Kijun-sen line). Even if the negotiators do not please traders with optimistic theses tomorrow, the market will still be hoping for a compromise early, especially in light of the next round of negotiations, which will begin next week.

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Analytics and trading signals for beginners. How to trade EUR/USD on October 9? Getting ready for Friday session

Trading 08 oct 2020 Commentaire »

Hourly chart of the EUR/USD pair

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The EUR/USD pair completed a round of the upward correction on Thursday, October 8, having failed to overcome the previous local high of 1.1782. Thus, novice traders could open short positions while aiming for 1.1731 and 1.1700, placing the Stop Loss level above 1.1782. Another thing is that the pair went down 40 points for the entire trading day. Volatility is decreasing more and more every day and it is no more than 60 points at the moment. Thus, according to today's results, even the first target was not reached (before it, the quotes were literally two points short). Novice traders may have closed trades near this level, seeing that the price is very reluctant to fall during the day. Those who did not have time can still do it now in manual mode or set Stop Loss to breakeven, so as not to lose anything in any case. In general, the current trend remains minimally downtrend, since the price still settled below the upward trend line. Unfortunately, the current general mood of the market is such that it does not imply strong movements.

There is also nothing to take note of today in terms of macroeconomic news. Not a single important report or speech. Only news of a political nature from the United States, which, as we all see, does not have any momentary impact on the pair. That is, in the long term, all this data is likely to affect the pair's movement, but it doesn't right now. All this week's economic news was of little importance. The speeches by European Central Bank President Christine Lagarde and Federal Reserve Chairman Jerome Powell did not provide any fundamentally new information to traders. As for the prospects for the euro and the US dollar, they remain absolutely incomprehensible and will remain so, at least until the presidential elections in the United States. After that, perhaps the tension will subside with traders, and they begin to feel more free and uninhibited.

Not a single report or other important event scheduled for the European Union or the United States on Friday, October 9. Therefore, only important and unforeseen news can influence the pair's movement. If this will not happen tomorrow, then we still recommend novice traders to rely on technical analysis when making trading decisions.

Possible scenarios for October 9:

1) Buy positions on the EUR/USD pair are currently not relevant since the price settled below the upward trend line, and since the price did not go beyond the 1.1782 level. Now, in order to consider them again, you need to wait for a new upward trend or some strong buy signals, such as a rebound from the 1.1696 level. Novice traders are advised to consider new long positions only in this case.

2) Selling, after the trend changed to a downward trend, became relevant, however, the pair is very reluctant to move down. The MACD indicator has not yet turned up, which would indicate a new round of upward correction and since it is still nighttime, novice traders are recommended either to move the Stop Loss order on short positions to breakeven, or to close orders and wait for a new round of upward correction and a new downward reversal MACD indicator. Intermediate targets for the downside movement may change, but overall we expect the quote to fall towards 1.1696.

On the chart:

Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now.

Up/down arrows show where you should sell or buy after reaching or breaking through particular levels.

The MACD indicator (10,20,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).

Important announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal.

Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.

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

ECB Minutes: Policymakers Saw Need For 'Free Hand' In Monetary Policy Amid High Uncertainty

Trading 08 oct 2020 Commentaire »

European Central Bank policymakers saw the need for latitude in monetary policy to tackle the difficult economic situation as the outlook remains highly uncertain in the absence of a permanent cure for the coronavirus and political factors such as Brexit transition and US presidential election, minutes of the September policy meeting showed on Thursday.

"In the prevailing environment of high uncertainty, keeping a steady hand with respect to monetary policy was seen as most appropriate," the minutes, which the ECB calls "account", of the September 9-10 Governing Council meeting showed.

"At the same time, the case was made for keeping a "free hand" in view of the elevated uncertainty, underpinning the need to carefully assess all incoming information, including the euro exchange rate, and to maintain flexibility in taking appropriate policy action if and when needed."

Rate-setters stressed that the Covid-19 pandemic situation, the ongoing Brexit deal negotiations, US presidential election and fiscal policy decisions of euro area member countries must be closely monitored.

The ECB hopes to reduce the pace of monthly asset purchases under its Pandemic Emergency Purchase Programme,or PEPP, as the tensions in financial markets subside, to allow to build buffers against future crises.

In the September policy session, the central bank left its key interest rates and its PEPP unchanged, and reaffirmed its forward guidance.


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Euro Mixed After ECB Minutes

Trading 08 oct 2020 Commentaire »

The euro came in mixed against its key counterparts in the European session on Thursday, after minutes from the European Central Bank's recent meeting showed that policymakers agreed that a further appreciation of the euro constituted a risk to both growth and inflation.

Members assessed that the recent volatility in the exchange rate of the euro required careful monitoring with regard to its possible implications for the medium-term outlook for price stability, the minutes from September 9 and 10 meeting showed.

"There were key downside risks to the medium-term outlook for price stability, mainly related to the as yet uncertain economic and financial implications of the pandemic," the minutes said.

The Governing Council reiterated its readiness to adjust all of its instruments, as appropriate, to ensure that inflation moved towards its goal in a sustained manner.

"While the PEPP was currently seen as the primary instrument for providing additional monetary policy accommodation, it was noted that further cuts in policy rates and changes to the conditions of the TLTROs were also part of the toolkit for providing additional monetary policy accommodation, if necessary," the minutes added.

Data from Destatis showed that Germany's exports growth slowed in August, while growth in imports gained momentum.

Exports were up 2.4 percent in August from July, whereas imports accelerated to 5.8 percent from 1.1 percent.

The euro advanced in the Asian session, as risk sentiment improved on hopes of a partial U.S. fiscal stimulus aimed to help the airline industry and small businesses.

The euro climbed to a 1-week high of 1.0801 against the franc from Wednesday's closing value of 1.0786. The euro may test resistance around the 1.11 level.

Data from the State Secretariat for Economic Affairs showed that Switzerland's jobless rate dropped marginally in September.

The jobless rate fell to a seasonally adjusted 3.3 percent in September from 3.4 percent in August. Economists had expected a rate of 3.4 percent.

The euro rebounded to 0.9123 against the pound, from its prior 2-day low of 0.9070, and held steady afterwards. The euro-pound pair had finished yesterday's trading session at 0.9105. The euro is seen finding resistance around the 0.94 level.

The euro pulled back from its previous 2-day high of 1.1782 against the greenback and was trading at 1.1752. The pair had closed Wednesday's deals at 1.1760. On the downside, 1.16 is possibly seen as the next support level for the euro.

After gaining to 124.88 at 2:00 am ET, the euro turned lower against the yen and was steady in subsequent deals. The pair was trading at 124.58, near where it ended deals on Wednesday.

Data from the Ministry of Finance showed that Japan posted a current account surplus of 2,102.8 billion yen in August, down 1.5 percent on year.

That exceeded expectations for a surplus of 1,983.7 billion yen following the 1,468.3 billion yen surplus in July.


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U.S. Weekly Jobless Claims Edge Down To 840,000

Trading 08 oct 2020 Commentaire »

A report released by the Labor Department on Thursday showed a modest decrease in first-time claims for U.S. unemployment benefits in the week ended October 3rd.

The Labor Department said initial jobless claims edged down to 840,000, a decrease of 9,000 from the previous week's revised level of 849,000.

Economists had expected jobless claims to dip to 820,000 from the 837,000 originally reported for the previous week.

The report said the less volatile four-week moving average also fell to 857,000, a decrease of 13,250 from the previous week's revised average of 870,250.

Continuing claims, a reading on the number of people receiving ongoing unemployment assistance, also tumbled by 1.003 million to 10.976 million in the week ended September 26th.

The four-week moving average of continuing claims slumped to 12,112,250, a decrease of 642,000 from the previous week's revised average of 12,754,250.

"Failure to pass additional fiscal relief measures will lead to more new claims given the announcement of layoffs by many firms," said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics. "It also raises the risk that some individuals will lose benefits altogether at the start of 2021."

Last Friday, the Labor Department released a separate report showing job growth in the U.S. slowed by much more than expected in the month of September.

The Labor Department said non-farm payroll employment rose by 661,000 jobs in September after spiking by an upwardly revised 1.489 million jobs in August.

Economists had expected employment to increase by 850,000 jobs compared to the jump of 1.371 million jobs originally reported for the previous month.


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*Brazil August Retail Sales Up 3.4% M/M Vs. 5% In July, Consensus 3.1%

Trading 08 oct 2020 Commentaire »

Brazil August Retail Sales Up 3.4% M/M Vs. 5% In July, Consensus 3.1%


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France Economy Rebounds In Q3: Bank Of France

Trading 08 oct 2020 Commentaire »

The French economy rebounded in the third quarter after posting a record contraction due to the lockdown in the second quarter, a report from the Bank of France showed Thursday. According to central bank estimate, gross domestic product expanded 16 percent sequentially in the third quarter, following a sharp 13.8 percent decline in the second quarter. The estimate for the third quarter was left unrevised.

However, economic output was 5 percent below the pre-crisis level. The estimate suggested strong disparities at the sector level.

According to survey, business leaders expect industrial activity to remain relatively stable in October. Activities in services and construction are also expected to remain the same in October.


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