Analytics and trading signals for beginners. How to trade EUR/USD on October 21? Getting ready for Wednesday session

Trading 20 Oct 2020 Commentaire »

Hourly chart of the EUR/USD pair

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The EUR/USD pair, without a proper correction in terms of size, went back to moving up on Tuesday, October 20, and it was quite strong. In the morning, we advised you to consider options for opening new long positions if the MACD indicator discharges to zero and the price corrects sufficiently. However, the MACD did not discharge to the zero level and, as a result, was late with producing a new buy signal. Thus, formally, this signal could be processed, however, when it appeared, the price had already passed about half way up. Thus, novice traders could earn a maximum of 25 points of profit on this trade. Also, a new upward trend line appeared today, which now supports bull traders. Unfortunately, it has a large tinted angle, so it cannot be considered strong. Nevertheless, getting the pair to settle below it can be considered the first signal to change the trend back to a downward trend. Take note that trades are still held between the levels of $1.17-1.19, that is, in a horizontal channel.

No macroeconomic publications in either the European Union or the United States on Tuesday. Therefore, novice traders had nothing to pay attention to during the trading day. You can, of course, pay attention to the coronavirus epidemic that is now developing in Europe, however, firstly, COVID-19 also persists in the United States, and the infection rates are high there, and secondly, traders do not significantly react to epidemiological news right now. As well as news of an economic nature. Thus, technical factors remain the most important now.

The calendar of macroeconomic events in the United States is empty again on Wednesday, and we can expect European Central Bank President Christine Lagarde to deliver another speech in the European Union. Since she has appeared more often in recent weeks than the news is shown on TV, we do not expect to receive new and important information. Moreover, Lagarde's latest statement that the EU economy will lose from 8% to 12% in 2020 was ignored. Her words about the fact that the second wave of coronavirus in Europe may again have a negative impact on the economy, was also ignored. The euro rose in price quietly on these reports. Thus, we do not believe that fundamental factors will be able to affect the movement of the EUR/USD pair tomorrow. Based on this, we advise you to be aware of everything that happens in the world, but pay more attention to the technique.

Possible scenarios for October 21:

1) Buy positions on the EUR/USD pair remain relevant at the moment, since the downward trend line has been crossed, and now there is also an ascending line. Novice traders are advised to wait for a new round of downward correction, discharge of the MACD indicator and a new buy signal in order to open new long positions with targets at 1.1846 and 1.1899. Also, if one of the traders has opened longs, then they can keep them open until the MACD indicator turns down. Most likely, a new buy signal will not be generated before tomorrow morning.

2) You are advised to return to taking sell positions on the currency pair, but first the price should settle below the rising trend line. In this case, the price could fall with targets located above the level of 1.1696, from which the price has repeatedly rebounded off and which also is the lower border of the horizontal channel.

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 (14,22,3) 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

Hungary Holds Rate Steady For Third Time

Trading 20 Oct 2020 Commentaire »

Hungary's central bank left its key interest rate unchanged for a third policy session in a row and said it expects the economic recovery to take more time due to the second wave of coronavirus infections. The Monetary Council left the base rate unchanged at 0.60 percent, the Magyar Nemzeti Bank said in a statement on Tuesday. The decision was in line with economists' expectations. The previous change in the base rate was a 15 basis point reduction in July. The deposit rate was kept at -0.05 percent and the lending rate at 1.85 percent. "If warranted by a change in the outlook for inflation, the MNB will be ready to use the appropriate instruments," the bank said in a statement.

The central bank expects GDP to decline by between 5.1 percent and 6.8 percent this year and forecast growth between 4.4 percent and 6.8 percent in 2021. The bank sees economic performance recovering to its pre-crisis level by the turn of 2022.


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

Pound Declines As BoE Vlieghe Backs Further Stimulus

Trading 20 Oct 2020 Commentaire »

The pound weakened against its major counterparts in the New York session on Tuesday, after a Bank of England policymaker supported considering negative rates as the recent rise in Covid-19 cases could dent the economic recovery from the pandemic.

In an online speech, Gertjan Vlieghe said that additional monetary stimulus may be needed as the outbreak poses downside risks to the economy.

It appears that the downside risks to the economic outlook are starting to materialize, he said. "The outlook for monetary policy is skewed towards adding further stimulus."

Since the negative interest rate has not been tried in the UK, there is uncertainty about its effectiveness, and the monetary policy committee is not at a point yet when it can reach a conclusion on this issue, the banker said.

According to Vlieghe, the risk that negative rates end up being counterproductive to the aims of monetary policy is low.

Although additional asset purchases remain an available policy tool, the effects of quantitative easing are state-dependent, and that a key channel through which QE works is by affecting expected future real interest rates, which are already very low, Vlieghe noted.

Worries about U.S. stimulus package remained, as the lawmakers struggled to reach an agreement before today's deadline.

U.S. House of Representatives Speaker Nancy Pelosi said that the two sides "continued to narrow their differences."

The pound hit 1.1722 against the franc, its lowest level since September 23. If the pound slides further, it may find support around the 1.15 mark.

Data from the Federal Customs Administration showed that Swiss exports grew at a faster rate in the third quarter.

Exports rose by a real 9.9 percent sequentially in the third quarter, after a 12.2 percent decrease in the second quarter.

The pound fell to near a 2-week low of 0.9148 against the euro, after rising to 0.9080 in early deals. The pound is seen locating support around the 0.94 level.

Data from Destatis showed that German producer prices continued to decline in September.

Producer prices were down 1 percent year-on-year, slower than the 1.2 percent decrease seen in August. Prices have decreased for the eighth consecutive month.

The pound reached as low as 1.2911 against the greenback, down from a high of 1.2979 seen at 5:00 am ET. On the downside, 1.28 is likely seen as its next support level.

In contrast, the pound was up against the yen, at 137.03. The next possible resistance for the currency is seen around the 138.00 level.


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

BoE's Vlieghe Sees Need For More Stimulus As Pandemic Poses Downside Risks

Trading 20 Oct 2020 Commentaire »

Bank of England policymaker Gertjan Vlieghe said additional monetary stimulus is needed as the coronavirus pandemic poses downside risks to the economy.

It appears that the downside risks to the economic outlook are starting to materialize, he said in a speech on Tuesday. "The outlook for monetary policy is skewed towards adding further stimulus."

He observed that the speed of the recovery is likely to be slower while the virus prevalence remains a concern, with risks of a higher and/or more prolonged trajectory of job losses.

Since the negative interest rate has not been tried in the UK, there is uncertainty about its effectiveness, and the monetary policy committee is not at a point yet when it can reach a conclusion on this issue, the banker said.

According to Vlieghe, the risk that negative rates end up being counterproductive to the aims of monetary policy is low.

Although additional asset purchases remain an available policy tool, the effects of quantitative easing are state-dependent, and that a key channel through which QE works is by affecting expected future real interest rates, which are already very low, Vlieghe noted.

The economy is going through a process of unprecedented reallocation across sectors. The scale and persistence of the reallocation associated with both the pandemic and with Brexit, is likely to weigh on employment and investment.

The risks to the economic outlook are skewed towards a longer period of labour market slack with weak inflationary pressure.


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

*Hungary's Central Bank Holds Key Rate At 0.60% As Expected

Trading 20 Oct 2020 Commentaire »

Hungary's Central Bank Holds Key Rate At 0.60% As Expected


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

Dollar Little Changed Following U.S. Housing Starts Data

Trading 20 Oct 2020 Commentaire »

After the release of U.S. housing starts and building permits for September at 8.30 am ET Tuesday, the greenback changed little against its major counterparts. The greenback was trading at 1.2915 against the pound, 1.1811 against the euro, 0.9080 against the franc and 105.74 against the yen around 8:33 am ET.


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

Dollar Mixed Ahead Of U.S. Housing Starts Data

Trading 20 Oct 2020 Commentaire »

The U.S. housing starts and building permits for September will be published at 8.30 am ET Tuesday. Ahead of the data, the greenback traded mixed against its major counterparts. While it rose against the yen and the pound, it held steady against the euro and the franc.

The greenback was worth 1.2919 against the pound, 1.1808 against the euro, 0.9083 against the franc and 105.69 against the yen at 8:25 am ET.


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

Croatia Jobless Rate Falls In September

Trading 20 Oct 2020 Commentaire »

Croatia's unemployment rate fell in September from the previous month, figures from the Croatian Bureau of Statistics showed on Tuesday.

The registered unemployment rate decreased to 8.8 percent in September from 9.0 percent in August.

The number of unemployed persons decreased 2.6 percent to 147,434 in September from 151,368 in the previous month.

At the same time, employment fell moderately to 1.528 million persons in September from 1.534 million in the preceding month, data showed.

In the period from January to September, as compared to the same period of the previous year, the total number of persons in employment decreased by 1.9 percent.


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

Luxembourg Jobless Rate Lowest In 6 Months

Trading 20 Oct 2020 Commentaire »

Luxembourg's unemployment rate fell for a fifth straight month in September to the lowest in six months, figures from the statistical office STATEC showed on Tuesday.

The jobless rate fell to a seasonally adjusted 6.3 percent in September from 6.4 percent in August. The rate was the lowest since March, when it was 6.1 percent.

In the same month last year, the unemployment rate was 5.3 percent.

The number of unemployed persons decreased to a seasonally adjusted 18,781 in September from 18,959 in the previous month. In the corresponding period of last year, the number of unemployed persons was 15,375.


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

October 20, 2020 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 20 Oct 2020 Commentaire »

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In July, the EURUSD pair has failed to maintain bearish momentum strong enough to move below 1.1150 (consolidation range lower zone).

Instead, bullish breakout above 1.1380-1.1400 has lead to a quick bullish spike directly towards 1.1750 which failed to offer sufficient bearish pressure.

Bullish persistence above 1.1700-1.1760 favored further bullish advancement towards 1.1975 where some considerable bearish rejection has been demonstrated.

The price zone around 1.1975-1.2000 ( upper limit of the technical channel ) constituted a SOLID SUPPLY-Zone which offered bearish pressure.

Moreover, Intraday traders should have noticed the recent bearish closure below 1.1700 - 1.1750 as an indicator for possible bearish continuation towards 1.1624.

However, the pair has failed to maintain enough bearish momentum below 1.1750. Instead, another bullish breakout is being demonstrated towards 1.1840.

As mentioned in previous articles, the price zone of 1.1850 - 1.1870 stands as a solid SUPPLY Zone providing considerable bearish pressure if the current bullish pullback pursues towards it.

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