Analytics and trading signals for beginners. How to trade EUR/USD on October 14? Getting ready for Wednesday session

Trading 13 oct 2020 Commentaire »

Hourly chart of the EUR/USD pair

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The EUR/USD pair continued the corrective movement on Tuesday, October 13, which gained strength by the end of the trading day, and the pair's quotes left the ascending channel. Therefore, today's trend for the pair has changed from an upward to a downward one, at least this is the conclusion that can be drawn at this time. As for today's deals, there is absolutely nothing to analyze, since the MACD did not generate a buy signal. We do not recommend selling the pair in case the upward trend continues. Thus, novice traders were deprived of the opportunity to open long positions and received neither profit nor loss at the end of the day. Unfortunately, signals are not generated every day, this is the foreign exchange market. To minimize losses and maximize profits, you need to strictly adhere to a trading strategy. If it does not provide signals, then you should not enter the market. What's next? Now we expect a downward movement in the coming days and even weeks. Tomorrow, quotes may pull back to the upside, after which it will be possible to search for entry points to open short positions in the EUR/USD pair.

Take note that today's macroeconomic reports have absolutely nothing to do with the currency pair's movement. Quotes only started to drop (dollar growth) a few hours ago, when the most important inflation report of the day was published in America. However, the main indicator was fully in line with forecasts and reached 1.4% y/y. The consumer price index, excluding food and energy products, reached 1.7%, that is, it did not change compared to August. Thus, we cannot call this data overly positive. Therefore, they could not provoke the rise in the US dollar. In the same way, the data from the EU could not provoke the fall of the European currency. Yes, the European reports turned out to be weaker than the forecasted values, but they were not important and meaningful. We can hardly assume that traders reacted to the EU economic sentiment report by selling off the euro.The same goes for the Business Sentiment Index and inflation in Germany. Thus, we can conclude that economic activity and investor sentiment in the European Union is beginning to deteriorate, but so far this does not mean anything serious.

European Central Bank President Christine Lagarde is set to deliver her next speech in the European Union on Wednesday, October 14 and, perhaps, this is all the news for the day. No reports for today according to the calendar of events. Thus, market participants will still have to primarily pay attention to technical factors and to the fundamental background, which cannot be predicted in advance. For example, news from the White House or the US Congress or the Federal Reserve will still have a high value for the dollar. However, no one knows in advance what Donald Trump or Steven Mnuchin or Jerome Powell will say this time. Thus, you need to be on the move to react to potentially important news.

Possible scenarios for October 14:

1) Buy positions on the EUR/USD pair have ceased to be relevant at the moment, as the pair has left the ascending channel and will now form a new downward trend. Thus, in order to be able to consider new long positions on the pair, you should wait until new technical patterns appear, such as trend lines or channels, which would support the upward movement.

2) Sell positions have become relevant at the moment. However, following the results of the last few days, the EUR/USD pair dropped by 100 points in total. Therefore, it would be logical to assume that an upward correction will begin now. In any case, the MACD indicator needs to discharge after a strong fall to zero. Therefore, we advise you to wait for the pair's correction, after which it will be possible to look for new sell signals.

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

IMF Says Global Economic Contraction To Be Less Severe Than Feared Earlier

Trading 13 oct 2020 Commentaire »

Global economy is set to contract less severely than feared initially, due to better-than-expected outcomes in the main economies in the second quarter despite the lockdowns to battle the coronavirus pandemic, but the outlook remains clouded with uncertainty, especially for the emerging markets, the International Monetary Fund said Tuesday.

In its latest World Economic Outlook, the lender forecast 4.4 percent contraction for the world economy this year, which was less severe than the 5.2 percent decline seen in June.

"This upgrade owes to somewhat less dire outcomes in the second quarter, as well as signs of a stronger recovery in the third quarter, offset partly by downgrades in some emerging and developing economies," IMF Chief Economist Gita Gopinath said.

The global economy is expected to rebound with 5.2 percent growth next year, which was less than the 5.4 percent expansion seen earlier.

Economic output is forecast to be below 2019 levels even next year in both advanced economies and emerging markets. However in China, output is expected to exceed its last year's level.

Advanced economies are expected to shrink 5.8 percent this year, which is much less than the June prediction of 8.1 percent contraction. They are forecast to grow 3.9 percent next year.

Emerging market and developing countries, excluding China, are expected to have a contraction of 5.7 percent versus 5 percent seen in June. They are expected to grow 5 percent next year.

China is expected to register growth of 1.9 percent this year, which is better than the 1 percent expansion forecast in June. Next year, growth is expected to zoom to 8.2 percent.

India is set to witness the worst contraction this year, shrinking 10.3 percent due to a collapse in consumption and investment. The forecast was sharply revised from a 4.5 percent decline seen in June. The economy is expected to rebound with 8.8 percent growth next year.

The outlook for the US and the euro area for this year was revised up, but the projections for next year were downgraded. The US economy is forecast to shrink 4.3 percent this year and grow 3.1 percent next year.

Eurozone is expected to contract 8.3 percent and expand 5.2 percent next year.

The UK economy is projected to shrink 9.8 percent this year, which is better than the June prediction. However, the outlook for next year was lowered to 5.9 percent.

"There remains tremendous uncertainty around the outlook with both downside and upside risks," Gopinath said, citing a resurgence in the coronavirus infections that is leading to the re-institution of localized lockdowns.

"If this worsens and prospects for treatments and vaccines deteriorate, the toll on economic activity would be severe, and likely amplified by severe financial market turmoil," she warned.

The IMF also cautioned about the harm that growing restrictions on trade and investment and rising geopolitical uncertainty could cause to the recovery.

Gopinath expressed hope that faster and more widespread availability of tests, treatments, vaccines, and additional policy stimulus can significantly improve outcomes.

She expects the crisis to leave scars well into the medium term as labor markets take time to heal, investment is held back by uncertainty and balance sheet problems, and lost schooling impairs human capital.

Consequently, the IMF expects global growth to cool to about 3.9 percent beyond 2021.

The lender estimates the cumulative loss in output relative to the pre-pandemic projected path to grow from $11 trillion over 2020-21 to $28 trillion over 2020-25, representing a severe setback to the improvement in average living standards across all country groups.

The IMF said there is a lot to be done to ensure a sustained recovery and sought significant innovation on the policy front, at both the national and international levels to recover from the crisis.


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Dollar Strengthens Amid Rising Coronavirus Cases, Vaccine Trial Halt

Trading 13 oct 2020 Commentaire »

The U.S. dollar was higher against its major counterparts in the European session on Tuesday, as a second wave of coronavirus cases in Europe and a pause in vaccine trial by Johnson and Johnson dampened sentiment.

Italy is considering a ban on private parties in response to a recent spike in new coronavirus cases, while French authorities are expected to impose new lockdowns in a bid to contain another surge in the virus cases.

The Czech Republic announced that it would close bars and shift most schools to distance learning.

Johnson & Johnson said it had temporarily halted its Covid-19 vaccine trial due to an unexplained illness in a participant.

Data from the Labor Department showed that U.S. consumer inflation improved modestly in September.

The consumer price index rose by 0.2 percent in September after climbing by 0.4 percent in August. The reading matched economist estimates.

Excluding food and energy prices, core consumer prices still edged up by 0.2 percent in September following the 0.4 percent growth seen in August. The uptick in core prices also matched estimates.

The currency firmed in the Asian session as Johnson & Johnson's move to pause its Covid-19 clinical trials prompted investors to seek the safe haven assets.

The greenback appreciated to 0.9118 against the franc, compared to 0.9089 hit late New York Monday. The greenback is seen finding resistance around the 0.94 mark.

The greenback hovered at a 4-day peak of 1.1778 against the euro, compared to Monday's closing value of 1.1810. Next key resistance for the greenback is likely seen around the 1.16 level.

Final data from Destatis showed that Germany's consumer prices declined in September, as initially estimated.

The consumer price index declined 0.2 percent yearly in September, after remining unchanged in August, as estimated earlier. Prices fell for the second time since the beginning of the year.

Extending early rally, the greenback hit a 4-day high of 1.2981 against the pound. The pair had finished yesterday's trading session at 1.3064. The greenback is likely to face resistance around the 1.25 region, if it gains again.

Data from the Office for National Statistics showed that the UK unemployment rate increased and employment declined in three months to August as the pandemic weighed on the labor market.

The ILO jobless rate rose by 0.4 percentage points from the preceding quarter to 4.5 percent in three months to August. The rate was above economists' forecast of 4.3 percent.

The greenback reached as high as 105.49 against the yen, up from yesterday's closing value of 105.33. Should the greenback strengthens further, it is likely to test resistance around the 108.00 region.

The greenback rebounded to 0.7170 against the aussie and 0.6642 against the kiwi, heading towards 4-day peaks of 0.7165 and 0.6629, respectively seen in the previous session. The greenback is poised to challenge resistance around 0.70 against the aussie and 0.645 against the kiwi.

Having dropped to 1.3099 at 8:30 am ET, the greenback turned higher against the loonie with the pair trading at 1.3140. The USD/CAD pair had registered a 4-day high of 1.3145 in the Asian session. Further uptrend may take the greenback to a resistance around the 1.33 area.


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

U.S. Consumer Price Growth Matches Estimates In September

Trading 13 oct 2020 Commentaire »

Consumer prices in the U.S. showed a modest increase in the month of September, according to a report released by the Labor Department on Tuesday, with the uptick in prices matching economist estimates.

The Labor Department said its consumer price index rose by 0.2 percent in September after climbing by 0.4 percent in August.

Prices for used cars and trucks spiked by 6.7 percent, accounting for most of the monthly increase by the headline index.

The report said energy prices increased by 0.8 percent amid a jump in prices for natural gas, while food prices came in unchanged.

Excluding food and energy prices, core consumer prices still edged up by 0.2 percent in September following the 0.4 percent growth seen in August. The uptick in core prices also matched estimates.

The modest increase in core prices reflected the soaring prices for used cars and trucks as well as higher prices for shelter, new vehicles, and recreation.

Meanwhile, decreases in prices for motor vehicle insurance, airline fares, and apparel helped to limit the upside for core prices.

Compared to the same month a year ago, consumer prices in September were up by 1.4 percent, slightly faster than the 1.3 percent growth seen in August.

Core consumer prices were up by 1.7 percent year-over-year in September, unchanged from the annual growth seen in the previous month.

"Base effects mean that core inflation on both the CPI and PCE measures is still likely to temporarily spike well above 2% early next year," said Andrew Hunter, Senior U.S. Economist at Capital Economics.

He added, "Overall, however, the September CPI figures suggest that some of the initial upward pressure on prices resulting from supply constraints is now starting to fade."

On Wednesday, the Labor Department is scheduled to release a separate report on producer prices in the month of September.

Producer prices are expected to edge up by 0.2 percent in September after rising by 0.3 percent, while core prices are also expected to tick up by 0.2 percent after climbing by 0.4 percent.


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

*IMF Sees World GDP -4.4% This Year, Up 5.2% In 2021

Trading 13 oct 2020 Commentaire »

IMF Sees World GDP -4.4% This Year, Up 5.2% In 2021


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

UK Take-Home Grocery Sales Climb Amid Rising Covid-19 Infection Rates: Kantar

Trading 13 oct 2020 Commentaire »

UK take-home grocery sales increased notably with shoppers moving more of their eating and drinking back into the home amid rising Covid-19 infection rates, data from the market researcher Kantar showed Tuesday.

Take-home grocery sales rose 9.4 percent during the twelve weeks to October 4. However, in the shorter term, sales increased by 10.6 percent over the latest four weeks, an acceleration from September.

The researcher said take home sales increased in response to rising Covid-19 infection rates, greater restrictions on opening hours in the hospitality sector and the end of the Government's Eat Out to Help Out scheme.

However, there is only limited evidence of consumers stockpiling goods at a national level in the past month, Kantar noted.


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

U.S. Consumer Prices Rise In Line With Estimates In September

Trading 13 oct 2020 Commentaire »

Consumer prices in the U.S. showed a modest increase in the month of September, according to a report released by the Labor Department on Tuesday, with the uptick in prices matching economist estimates.

The Labor Department said its consumer price index rose by 0.2 percent in September after climbing by 0.4 percent in August.

Prices for used cars and trucks spiked by 6.7 percent, accounting for most of the monthly increase by the headline index.

Excluding food and energy prices, core consumer prices still edged up by 0.2 percent in September following the 0.4 percent growth seen in August. The uptick in core prices also matched estimates.


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

Dollar Little Changed Following U.S. CPI

Trading 13 oct 2020 Commentaire »

After the release of U.S. consumer inflation for September at 8:30 am ET Tuesday, the greenback changed little against its major rivals.

The greenback was trading at 1.1796 against the euro, 105.47 against the yen, 0.9098 against the franc and 1.3024 against the pound around 8:33 am ET.


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

*U.S. Consumer Prices Edge Up 0.2% In September, Core Prices Rise 0.2%

Trading 13 oct 2020 Commentaire »

U.S. Consumer Prices Edge Up 0.2% In September, Core Prices Rise 0.2%


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

Dollar Mixed Ahead Of U.S. CPI

Trading 13 oct 2020 Commentaire »

At 8:30 am ET Tuesday, U.S. consumer inflation for September is due. Ahead of the data, the greenback traded mixed against its major rivals. While it rose against the yen and the pound, it held steady against the euro and the pound.

The greenback was worth 1.1794 against the euro, 105.49 against the yen, 0.9100 against the franc and 1.3026 against the pound as of 8:25 am ET.


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