Trading plan for the GBP/USD pair for the week of November 23-27. New COT (Commitments of Traders) report. Negotiations on

Trading 21 Nov 2020 Commentaire »

GBP/USD - 24H.

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The GBP/USD currency pair has grown by about 80 points over the past week and thus returned to the 76.4% Fibonacci level. Earlier, we talked about the 61.8% Fibonacci level, from which the pair's quotes bounced at one time, now we are talking about the 76.4% level, from which there was also one rebound. However, despite two rebounds from two important Fibonacci levels, the pound/dollar pair did not start a downward movement, which would be logical from a fundamental point of view. However, we will talk about the foundation below. So far, we have another test of the level of 1.3300, above which the pair's quotes again failed to leave. Thus, the upward trend on the 24-hour timeframe remains, as it is indicated by both the Ichimoku indicator and the Bollinger bands, but we recommend that you trade based on the 76.4% Fibonacci level in the long term. Overcoming this level will show that market participants are ready to continue buying the British currency, although, from our point of view, there is still no reason for this. However, as we said earlier, any fundamental theory must be supported by technical analysis, which is currently not the case.

The COT report.

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During the last reporting week (November 10-16), the GBP/USD pair increased by 25 points, although the volatility was quite high during this period. However, the COT report has not given us any important information that could help in forecasting and trading for a week in a row. Recall that the red and green lines must move away from each other or sharply change the direction of their movement so that we can conclude that one trend ends and another begins. In recent months, both lines regularly change their direction, which indicates that there are no signals based on COT reports. What can we say about the most important group of "Non-commercial" traders? This group opened 533 contracts to buy the pound and 616 contracts to sell during the reporting week. Thus, it does not even make much sense to calculate the change in the net position or the amount by which the mood of professional traders has changed. A little more than 1,000 contracts per week are very small. So, there are no changes. What do we end up with? There are no changes, and the overall picture of things does not make it possible to predict any specific development of the situation. Thus, it is better now to pay more attention to the "technique" and "foundation".

The fundamental background for the GBP/USD pair last week was very contradictory. In this article, we will not consider the fundamental background in America, only from the UK. And for Foggy Albion, we can say the following. First, the "coronavirus" in Britain is also raging and is also not perceived by traders as a factor that deserves to be worked out. Second, the most important topic for the British pound is Brexit and trade negotiations with the European Union. And it is this topic that has not given any food for thought to traders over the past week. Let's start with the fact that negotiations on a trade deal should have been completed already 5 times. They were supposed to end by October 15, then by November 15, and then by the EU summit on November 18. As a result, on Thursday, one of the participants in the negotiation process fell ill with "coronavirus" and the negotiations were interrupted altogether. And since then, no official information has been received. But throughout the week, all kinds of media, publications, newspapers, and magazines repeatedly stated their expectations regarding the completion of negotiations. And all this information was only confusing since it is not official. Some wrote that "the deal is about to be concluded", the second - about a complete failure in the negotiations. And the pound seems to have the most confidence that a deal will be done. The most interesting thing is that if it is signed, the pound may not rise in price on this news. Since it has been growing for several weeks solely on expectations of the conclusion of this agreement. But if there is no deal, the pound may well fall by 300-500 points in the medium term, because this will mean new problems for the British economy, of which there are already plenty

Trading plan for the week of November 23-27:

1) Customers retain some chances for the formation of the upward trend. Most of all, the fundamental background continues to confuse, which does not support the British pound. Nevertheless, long positions remain relevant with the targets of the resistance levels of 1.3336 and 1.3496, but we believe we need to wait for a confident overcoming of the level of 76.4%-1.3300 to resume trading on the increase.

2) Sellers now remain quite weak. We can even conclude that neither bulls nor bears are now eager to trade the pound sterling. The COT report shows minimal changes and minimal activity of major players from time to time. Sellers need to return the pair below the Ichimoku cloud to expect a downward trend to form again in the long term. We are still inclined to believe that the fall in the pound will resume and will be quite strong. But this hypothesis, like any other, needs technical confirmation.

Explanation of the illustrations:

Price levels of support and resistance (resistance/support) – target levels when opening purchases or sales. You can place Take Profit levels near them.

Ichimoku indicators, Bollinger bands, MACD.

Support and resistance areas – areas that the price has repeatedly bounced from before.

Indicator 1 on the COT charts – shows the net position size of each category of traders.

Indicator 2 on the COT charts – the net position size for the "Non-commercial" group.

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

Trading plan for the EUR/USD pair for the week of November 23-27. New COT (Commitments of Traders) report. The flat persists

Trading 21 Nov 2020 Commentaire »

EUR/USD - 24H.

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Over the past week, the EUR/USD pair has grown by 15 points. Moreover, it was not a movement from the category of 200 points up to 185 points down. No, the volatility of the euro/dollar pair was minimal throughout the week, 40-50 points daily. Thus, there were no changes in the technical picture. The pair remains inside the side channel of 1.1700-1.1900 and nothing has changed for three months, if not more. Several times during this time, the price still left the channel, but for an extremely short time. Thus, the trading strategy remains the same. Traders can either trade between the borders of the channel, or wait for the completion of this outright flat and only then resume trading. In general, the Ichimoku indicator continues to generate false signals, since it always does so in the flat. Well, the Bollinger bands continue to be directed sideways.

The COT report.

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During the last reporting week (November 10-16), the EUR/USD pair increased by 40 points. As you can see, the price changes are still minimal. There were some bursts of activity during the US presidential election, however, they ended very quickly and now the pair is not just continuing to trade in a side channel, but also with minimal volatility. Thus, we expect COT reports to explain the current situation. Unfortunately, COT reports have been showing that non-profit traders are reducing their net position for 8-10 weeks. This means that their mood becomes more bearish. The green and red lines of the first indicator show the net positions of commercial and non-commercial traders, and when they move far away from each other, this is considered a strong signal for a trend change. However, the lines have moved away and now they have been moving towards each other for two months. And the downward trend doesn't start yet. During the reporting week, the group of traders "Non-commercial", which is the most important and significant, opened 2 thousand contracts for the purchase and 1.5 thousand contracts for the sale of the euro currency. Thus, there is simply no change in the mood of this group of traders. We are much less interested in other groups of traders. In general, we have a somewhat paradoxical situation when professional traders have been reducing the number of purchases of the euro currency and increasing sales for more than two months, but the euro has not fallen. However, based on the reported data, we still believe that the peak of the entire upward trend was formed near the level of 1.2000, and sooner or later the downward movement will resume.

What can we say about the fundamental background of the past trading week? It was strong enough. There are still a lot of topics that could potentially interest investors, however, it is still unclear what exactly market participants are paying attention to? "Coronavirus" has been raging in the United States and the EU. The US election is over, however, Donald Trump continues to try through the courts to challenge the results of the voting. In the European Union, Poland and Hungary have blocked the seven-year budget and fund economic recovery after the pandemic. This is a summary of the news. "Coronavirus" has long been not perceived by market participants as an important factor for a particular currency. Indeed, it is better to wait for specific changes in the economy itself and rely on them when making trade decisions. However, all macroeconomic statistics continue to be ignored. Moreover, statistics are beginning to deteriorate again in both America and the European Union. For example, inflation in the EU remains negative, while in the US it slows down. The new "lockdown" in Europe is almost guaranteed to affect the European economy and its GDP. There is no lockdown in the United States, however, many states are also tightening quarantine measures. Plus, there is a "Trump factor" in America, which has been thinking only about re-election for months instead of running the country. In general, there are a lot of news and important topics, however, traders are waiting for something more important. Otherwise, nothing can explain the three-month flat for the euro/dollar pair.

Trading plan for the week of November 23-27:

1) The pair's quotes continue to trade in the side channel. The resumption of the upward trend can be discussed no earlier than overcoming the previous local maximum near the level of 1.2000 or at least overcoming the upper line of the side channel of 1.1900. Until then, it is recommended to continue trading inside the side channel using lower timeframes.

2) To be able to sell the EUR/USD pair, you need to at least wait for the price to consolidate below the Kijun-sen and Senkou Span B lines. However, even in this case, the potential for a downward movement is limited to the 1.1700 level or the lower Bollinger band. On lower timeframes, you can look for short-term trends, but keep in mind that in the most long-term plan, it is the flat that remains.

Explanation of the illustrations:

Price levels of support and resistance (resistance/support) – target levels when opening purchases or sales. You can place Take Profit levels near them.

Ichimoku indicators, Bollinger bands, MACD.

Support and resistance areas – areas that the price has repeatedly bounced from before.

Indicator 1 on the COT charts – shows the net position size of each category of traders.

Indicator 2 on the COT charts – the net position size for the "Non-commercial" group.

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

Dollar Stays Mostly Firm Against Peers

Trading 21 Nov 2020 Commentaire »

The U.S. dollar was fairly stronger against most of its peers on Friday as continued surge in coronavirus cases across the world helped keep its safe-haven appeal intact.

After recent encouraging news from Moderna and Pfizer, there are more positive updates on the vaccine front, with AstraZeneca and Oxford University announcing that their potential Covid-19 vaccine produced a strong immune response in older adults. Researchers expect to release late-stage trial results by Christmas.

The dollar index recovered after a somewhat sluggish display and hit a high of 92.43 around early afternoon, and was last seen at 92.36, up 0.07% from previous close.

Against the Euro, the dollar firmed up to $1.1860, recovering from $1.1892.

The Pound Sterling was stronger against the greenback, fetching $1.3291 a sterling, about 0.2% more than its previous close.

The Yen was slightly weaker at 103.84 a dollar, losing ground from 103.71 a dollar.

The Loonie was at 1.3093 a unit of greenback, falling from 1.3073. Data from Statistics Canada showed retails sales in the country rose 1.1% in September following an upwardly revised 0.5% increase in August. It was the fifth successive monthly rise in retail trade.

The data also said retail sales increased 4.6% in September 2020 over the same month in the previous year.

The Swiss franc was flat at 0.9110 a dollar.

Against the Aussie, the dollar was weaker by about 0.22% with the AUD-USD pair at 0.7304, as against Thursday's close of 0.7288, with strong Australian retail sales data supporting the Australian currency.

Data from the Australian Bureau of Statistics showed that the total value of retail sales in Australia climbed a seasonally adjusted 1.6 percent on month in October - coming in at A$29.618 billion.


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

Treasuries Edge Higher Amid Concerns About Near-Term Economic Outlook

Trading 21 Nov 2020 Commentaire »

Treasuries fluctuated in morning trading after an early advance but moved back to the upside over the course of the afternoon.

Bond prices moved roughly sideways going into the close, hovering near their best levels of the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 2.5 basis points to 0.829 percent.

Treasuries benefited from the appeal as a safe haven amid concerns about the near-term economic outlook amid a continued spike in new coronavirus cases in the U.S.

The latest data from John Hopkins University showed nearly 188,000 new coronavirus cases on Thursday, while the daily death toll topped 2,000 for the first time.

The continued surge in new cases, hospitalizations and deaths in the U.S. has raised concerns new restrictions and lockdowns will dampen the economy recovery.

While there continues to be upbeat news on the vaccine front, traders seem worried about an economic downturn the months leading up to the widespread distribution of a vaccine.

Adding to the economic uncertainty, Treasury Secretary Steven Mnuchin announced a decision to allow five of the Federal Reserve's nine emergency lending programs to expire at the end of the year.

The Fed responded to the decision in a rare public statement, saying it would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for the still-strained and vulnerable economy.

While Mnuchin has argued he is following the intent of Congress, Gregory Daco, Chief U.S. Economist at Capital Economics, suggested the Treasury Secretary is hoping lawmakers will consider reallocating the unused funds for new stimulus measures.

"However, with partisanship in Congress preventing the delivery of urgently needed fiscal aid, and low rates negating any imminent debt servicing concern, Mnuchin's justification appears poorly grounded," Daco said.

He added, "And, it may backfire by leaving the Fed as the only adult in the room to address a concerning economic situation in the final stages of 2020."

News on the coronavirus front may continue to be in the spotlight next week, although traders are also likely to keep an eye on reports on consumer confidence, durable goods orders, personal income and spending, and new home sales.

The minutes of the latest Federal Reserve meeting may also attract some attention along with the results of the Treasury Department's auctions of two-year, five-year and seven-year notes.


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

Crude Oil Futures Settle Notably Higher

Trading 21 Nov 2020 Commentaire »

Crude oil prices moved higher on Friday, lifted by optimism about Covid-19 vaccine, and a likely pick-up in energy demand once the vaccines get the nod for the drug regulators.

Oil was also supported by expectations that the Organization of the Petroleum Exporting Countries (OPEC) and it allies will eventually agree to defer relaxing output curbs so as to balance the oil market.

West Texas Intermediate Crude oil futures for December settled at $42.15 a barrel, gaining $0.41 or about 1%, on the expiration day. New front-month contract January WTI futures closed up by $0.52 or 1.2% at $42.42 a barrel.

Brent crude futures were up by about $0.60 or 1.3% at $44.80 a barrel.

OPEC and its allies are scheduled to meet on November 30 and December 1 to consider options to delay tapering their output cuts by around 2 million barrels per day.

Higher crude output from Libya raised concerns about likely excess supply in the market and limited oil's uptick.

Oil prices were also getting some support from signs of movement on a stimulus deal in Washington. U.S. Senate Majority Leader Mitch McConnell has reportedly agreed to resume negotiations with Democrats over a potential new Covid-19 relief bill.

A report from Baker Hughes that said the number of active U.S. rigs drilling for oil fell by 5 to 231 this week, dropping for the first time in nine weeks, supported oil prices. The total active U.S. rig count, which includes those drilling for natural gas, was also down by 2 to 310, according to the report from Baker Hughes.


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

Gold Futures Settle Higher For The Day, Shed 0.7% In Week

Trading 21 Nov 2020 Commentaire »

Gold prices climbed higher on Friday, despite uncertainty about a quick fiscal stimulus in the U.S. amid rising coronavirus cases across the U.S. and several countries across the world.

Gold prices advanced despite dollar's uptick. The dollar index, which slipped to 92.25 earlier in the day, rose to 92.43 about an hour past noon, and was last seen at 92.40, up 0.11% from previous close.

Gold futures for December ended up $10.90 or about 0.6% at $1,872.40 an ounce. Gold futures shed about 0.7% in the week.

Silver futures for December ended higher by $0.315 at $24.363 an ounce, while Copper futures for December settled at $3.2910 per pound, gaining $0.0890 for the day.

In stimulus news, the U.S. Treasury Department has asked the Federal Reserve to return unspent money allocated under the CARES Act to Congress, prompting criticism from the central bank and adding to market anxiety about broader economic growth.

The Fed responded to the decision in a rare public statement, saying it would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for the still-strained and vulnerable economy.

People familiar with the decision say that either Mnuchin or a new Treasury secretary from the Biden administration may decide to renew emergency loan programs.

On the vaccine front, data from AstraZeneca and Oxford University showed their potential Covid-19 vaccine produced a strong immune response in older adults. Researchers expect to release late-stage trial results by Christmas.

Treasury yields rose and the dollar edged higher after a rare show of discard between U.S. Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell over releasing funds to further shore up the economy.


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