Analytics and trading signals for beginners. How to trade EUR/USD on November 12? Getting ready for Thursday session

Trading 11 Nov 2020 Commentaire »

Hourly chart of the EUR/USD pair

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The EUR/USD pair moved down on Wednesday, as we predicted in recent days. The MACD indicator discharged as expected and generated a full and strong sell signal (circled in red in the chart). After this signal, the euro/dollar pair began a new round of decline and reached the first and second support levels of 1.1782 and 1.1749. The price rebounding from the second target caused quotes to stop dropping and so a correction began, which was also shown by the MACD indicator, moving up. Thus, novice traders could earn 25 to 55 points of profit during the day. As we expected, the pair is currently tending to the lower border of the horizontal channel at 1.1700-1.1900, which we have mentioned more than a dozen times. We consider the 1.1696 level as the ultimate goal of the entire movement. Unfortunately, there is still no way to form a downward trend line or channel that makes trading the pair much easier. Therefore, novice traders still need to track the MACD indicator readings. We expect a new round of correction, afterwards we will wait for a new sell signal and a new round of downward movement.

European Central Bank President Christine Lagarde delivered a speech, but she only casually touched upon the topic of monetary policy and the problems of the EU economy. Lagarde said that the ECB will continue to buy bonds and cheap loans from eurozone banks to continue to stimulate the economy and fill the banking system with liquidity. This confirms the ECB's intentions to further stimulate the economy of the European Union. And given the new lockdown in Europe, the economy may start to slow down at the end of 2020 and it will need new incentives. No important reports from America today.

Several events are planned for Thursday, to which novice traders can turn their attention. First, the US will publish inflation for October, which is expected to remain unchanged at 1.3% to 1.4% y/y. If the actual value coincides with the forecast, then it is unlikely that this report will be followed by a reaction from traders. Secondly, Lagarde will deliver a speech in the European Union. If it again does not touch upon the topic of monetary policy and economics, then traders will not need to calculate a non-serious market reaction.

Possible scenarios for November 12:

1) Buy positions on the EUR/USD pair are irrelevant at this time, since the upward trend has not been determined. We do expect to see a downward movement towards the 1.1696 level. Therefore, you can only buy the euro/dollar pair if the downward trend has clearly ended, which we do not see in the near future, or in case we overcome the 1.1903 level.

2) Trading for a fall is more relevant at this time, since the price rebounded from 1.1903. So now novice traders are advised to wait until a new round of upward correction has been completed and after that - for a new sell signal from the MACD indicator, which can be worked out with targets at 1.1749 and 1.1719. Unfortunately, there is still no downward trend line or channel, which complicates the process of working out an assumed downward trend.

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

ECB's Lagarde Says Asset Purchases, Longterm Loans Main Tools, Warns Against Vaccine Optimism

Trading 11 Nov 2020 Commentaire »

Policymakers are set to favor asset purchases and longer term loans at cheaper rates to support the euro area economy during the crisis caused by the coronavirus, or Covid-19, pandemic, European Central Bank President Christine Lagarde hinted on Wednesday, after she clearly signaled late last month that the bank is set to unveil fresh monetary stimulus in December.

She also cautioned against high optimism regarding a vaccine against the coronavirus.

"While all options are on the table, the PEPP and TLTROs have proven their effectiveness in the current environment and can be dynamically adjusted to react to how the pandemic evolves," Lagarde said in an introductory speech at ECB's forum on central banking.

"They are therefore likely to remain the main tools for adjusting our monetary policy."

The ECB's annual event is usually held in the Portuguese town Sintra, while this year it is being held virtually due to the pandemic.

The pandemic emergency purchase programme, or PEPP, was first launched in March with a size of EUR 750 billion, which was increased in June to EUR 1.350 trillion. Asset purchases under this scheme are set to run at least until June 2021.

The targeted longer-term refinancing operations, or TLTROs, were first deployed in June 2014. The third round was TLTRO III was announced in March 2019 and its terms were eased in March this year as the pandemic broke out in Europe.

On Monday, pharmaceutical company Pfizer and a German biotech firm BioNTech announced that the vaccine they have developed is over 90 percent successful in preventing the disease.

"While the latest news on a vaccine looks encouraging, we could still face recurring cycles of accelerating viral spread and tightening restrictions until widespread immunity is achieved," the ECB chief said. "So the recovery may not be linear, but rather unsteady, stop-start and contingent on the pace of vaccine roll-out."

Output in the services sector may struggle to fully recover, in the interim, Lagarde added. Lagarde drew attention to the strong resurgence of the coronavirus that has forced Germany and France, among others, to return to lockdowns.

The second wave of COVID-19 presents new challenges and risks, but the blueprint for managing it is the same, she said. "The ECB was there for the first wave and we will be there for the second wave," she said.


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

Gold price remains vulnerable to a multi week decline

Trading 11 Nov 2020 Commentaire »

Gold bulls were once again unable to hold price above $1,950-$1,900 zone. For the third consecutive month bulls are trading below $1,900 and the price action of the previous two months is not promising for bulls.

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August looks like it marked a top. We are not saying that the longer-term view for Gold is not bullish, but currently and for the next few weeks at least we expect Gold price to make a correction. We consider this correction as a buying opportunity and traders need to be patient for a good entry in long positions.

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With price again below the Ichimoku cloud, most technical indicators favor the bearish scenario for at least a correction towards $1,800-$1,750 area. Bulls will need to recapture $1,950 in order for us to change our view. Support at $1,850 recent low remains key for the short-term trend. Breaking it will push price towards $1,800.The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of EURUSD

Trading 11 Nov 2020 Commentaire »

EURUSD continues its move lower as expected since it topped and reversed on November 9th. Price initially reached the 38% Fibonacci retracement but as we explained in our analysis, a move towards the 61.8% was highly probable.

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Blue lines - Fibonacci retracements

EURUSD has so far reached the 50% retracement. Price is making lower lows and lower highs. Bulls need to see the formation of a higher low and to get more fuel in order to start next leg higher. Bulls need to defend the 61.8% level and break above 1.1840 short-term resistance. Bears on the other hand need to push price even lower towards and below 1.16 in order to hope for a bigger correction. Our preferred strategy as we explained in previous analysis is to wait for the formation of a higher low around the 61.8% Fibonacci retracement. Once we get a reversal signal we look to buy with the 1.16 level as stop.

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

Weekly analysis on the Dollar index

Trading 11 Nov 2020 Commentaire »

The Dollar index is hanging on by a thread. Price has broken below a key upward sloping trend line support. Price back tested this trend line from below and got rejected. Dollar Bulls seem to be in trouble.

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Blue line -trend line support (broken)

The 92-92.25 level is key support. Failure to hold above it could result into a sharp decline towards 89-90 and maybe lower. Bulls on the other hand need to recapture the 94.50 level in order to hope for another move higher towards 100. We remain bearish as long as price is below the double top formation at 102.30.

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

*ECB's Lagarde: PEPP & TLTROs Likely To Remain Main Tools For Adjusting Monetary Policy

Trading 11 Nov 2020 Commentaire »

ECB's Lagarde: PEPP & TLTROs Likely To Remain Main Tools For Adjusting Monetary Policy


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

*ECB's Lagarde: PEPP & TLTROs Can Be Dynamically Adjusted To React To How Pandemic Evolves

Trading 11 Nov 2020 Commentaire »

ECB's Lagarde: PEPP & TLTROs Can Be Dynamically Adjusted To React To How Pandemic Evolves


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

*ECB's Lagarde: PEPP & TLTROs Have Proven Their Effectiveness

Trading 11 Nov 2020 Commentaire »

ECB's Lagarde: PEPP & TLTROs Have Proven Their Effectiveness


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

*ECB's Lagarde: All Options Are On The Table

Trading 11 Nov 2020 Commentaire »

ECB's Lagarde: All Options Are On The Table


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

*Lagarde: Will Continue To Deliver Financing Conditions Needed To Protect Economy From Covid19 Impact

Trading 11 Nov 2020 Commentaire »

Lagarde: Will Continue To Deliver Financing Conditions Needed To Protect Economy From Covid19 Impact


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