Forecast and trading signals for GBP/USD on November 23. COT report. Analysis of Friday. Recommendations for Monday

Trading 22 Nov 2020 Commentaire »

GBP/USD 1H

The GBP/USD pair continued a very weak upward movement on November 20 and by the end of the day, it had reached the resistance level of 1.3298 for the third time. The price could not overcome this level, so we are once again expecting, at least, a round of downward correction. In general, the technical picture for the pound/dollar pair is extremely confusing now. There are many technical factors that say the opposite. For example, the price settled below the upward trend line, but it went up and also failed to break through 1.3298 three times. Each rebound from the 1.3298 level leads to a smaller downward pullback than the previous one, which is an indirect sign that this level will not resist the onslaught of traders. Therefore, we would say that the technical picture still inclines us to the fact that the upward movement will continue. And then it contradicts the fundamental background, which has long been evidence that the pound should start falling.

GBP/USD 15M

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Both linear regression channels are directed to the upside on the 15-minute timeframe, so there are no signs of ending the upward trend at this time. However, the pair cannot overcome the 1.3298 level in any way. The bulls' further prospects will depend on overcoming or not overcoming this level.

COT report

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The GBP/USD pair rose by 25 points in the last reporting week (November 10-16), although the volatility was quite high during this time period. However, the Commitment of Traders (COT) report has not provided us with any important information that could help in forecasting and trading for several weeks now. 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 the absence of 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. Therefore, it doesn't even make any special sense to calculate the change in the net position or the amount by which the attitude of professional traders has changed. A little more than 1000 contracts per week is very little. Therefore, in essence, there are no changes. What do we end up with? There are no changes, and the general picture of things does not make it possible to predict any definite development of the situation. So now it is better to pay more attention to technique and foundation.

The fundamentals for the British pound have not changed at all over the past week. As before, traders did not receive any important and significant news on the topic of trade negotiations. Although the European Commission recently made a statement that in the past few days, "there has been progress, after several weeks of virtually ineffectual results." This was stated by Ursula von der Leyen, but it is absolutely unclear whether this progress will allow the deal to be agreed upon in the end. Von der Leyen herself said that she could not name an approximate date when the deal could be fully agreed. At the same time, some publications report that there is still no mutual understanding on a number of basic issues, and these are all the same issues of fair competition and state support, fishing and a judicial issue. Therefore, it is not clear whether the parties were able to find a common language on the most important issues. London and Brussels could agree on 95% of all issues, but if these three key issues are not resolved, then there will be no deal.

The European Union and the United States will publish business activity indices in the services and manufacturing sectors on Monday, November 23. Business activity in the EU service sector should be reduced to 42.5 points. Take note that any reading below 50 is negative. If business activity falls, then this is definitely a bad call for the economy. It is quite possible that the British economy will begin to contract again due to the repeated lockdown in Great Britain. And this is an additional factor for the pound's decline. Thus, the pound continues to collect factors that should send it down by 300-500 points, but it continues to rise against the US dollar.

We have two trading ideas for November 23:

1) Buyers for the pound/dollar pair continue to hold the initiative in their hands. So we advise you to continue buying the pair while aiming for the resistance level of 1.3409 if the bulls manage to overcome the resistance level of 1.3298. Take Profit in this case will be up to 80 points.

2) Sellers are still out of work, nevertheless, they can join the game if the buyers fail to go beyond. If the price settles below the Kijun-Sen line, it will be possible to sell the pound/dollar pair while aiming for the support area of 1.3160 -1.3184 and the Senkou Span B line (1.3112). Take Profit in this case can range from 40 to 110 points.

Forecast and trading signals for EUR/USD

Explanations for illustrations:

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.

Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one.

Support and resistance areas are areas from which the price has repeatedly rebounded off.

Yellow lines are trend lines, trend channels and any other technical patterns.

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

Indicator 2 on the COT charts is the size of the net position for the "non-commercial" group.

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

Forecast and trading signals for EUR/USD on November 23. COT report. Analysis of Friday. Recommendations for Monday

Trading 22 Nov 2020 Commentaire »

EUR/USD 1H

The EUR/USD pair continued its horizontal movement on the hourly timeframe on November 20, which was observed in the last few days. Clearly moving sideways under the resistance area of 1.1886-1.1912. Take note that the entirety of last week was extremely boring despite the fact that there was news, and that there were also quite important reports and events. Nevertheless, market participants took a week off and practically did not trade. Volatility was no more than 50 points every day. Well, the technical picture has practically not changed during this time. The price tried not to overcome the 1.1886-1.1912 area three times, trying to gain a foothold within it, but all three attempts ended in failure. Therefore, the pair did not move up, and it did not fall either, and it was just not possible to get out of the 1.1700-1.1900 horizontal channel, in which the quotes have been in for three months. Traders can only wait in this situation. Wait for news, events, an increase in market activity, and just wait until the end of the, intra-week flat.

EUR/USD 15M

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The lower linear regression channel turned to the downside on the 15-minute timeframe. However, the key role for the EUR/USD pair is now played by the 1.1886-1.1912 area, which buyers cannot overcome in any way. The euro's future prospects depend on overcoming it or not overcoming it.

COT report

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The EUR/USD pair increased by 40 points in the last reporting week (November 10-16). As you can see, price changes are still minimal. There were certain bursts of activity during the US presidential elections, but they ended very quickly and now the pair is just trading in a horizontal channel, with minimal volatility. Therefore, we expect clarification of the current situation from the Commitment of Traders (COT) reports. Unfortunately, COT reports for the last 8-10 weeks now show that non-commercial traders are reducing their net position. This means that their sentiment is becoming more bearish. The green and red lines of the first indicator show the net positions of commercial and non-commercial traders, and when they are far from each other, this is considered a strong signal for a trend change. However, the lines have moved away and they have been moving towards each other for two months now. There is no downward trend. The "non-commercial" group of traders, which is the most important and significant, opened 2,000 Buy-contracts (longs) and 1,500 Sell-contracts (shorts) for the euro during the reporting week. Therefore, 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, as professional traders have been reducing the number of purchases of the euro currency and increasing sales for more than two months, but the euro does not fall. Nevertheless, based on the data of the report, we still believe that the peak of the entire upward trend was near the 1.2000 level and sooner or later the downward movement will start.

No macroeconomic reports from the European Union and the United States last Friday. The markets are frankly tired of all the political circus in America thanks to Donald Trump, and traders are no longer interested in the coronavirus pandemic as they were back in the spring. However, take note that the markets are not paying too much attention to macroeconomic statistics at this time. In general, we can say that the general fundamental background has the greatest influence now. However, it consists of such a large number of factors and topics (at this time) that it is impossible to interpret and characterize it unambiguously. Moreover, in the long term, the pair has been flat for three months, in the medium term - for a week. What kind of influence can we talk about at all? Naturally, European Central Bank President Christine Lagarde's speech from last Friday did not change anything either.

The European Union and the United States will publish business activity indices in the services and manufacturing sectors on Monday, November 23. As well as composite indices. Analysts expect business activity in the EU service sector to seriously deteriorate, which is not at all surprising given the lockdown introduced in many European countries. On the other hand, there is no strict nationwide quarantine in the United States, so the service sector should be fine. Therefore, in theory, the US dollar may have an advantage on Monday, but only minimal, since traders are now paying little attention to macroeconomic statistics in general, and business activity indices are far from the most important statistics.

We have two trading ideas for November 23:

1) Buyers continue to keep the pair above the Kijun-sen line (1.1853), but are not yet able to overcome the resistance area of 1.1886-1.1912. Therefore, you are advised to open long positions while aiming for the resistance level of 1.2007 if this area is overcome by the bulls. Take Profit in this case will be up to 70 points.

2) Bears are still in the shadow of bulls. Thus, to be able to open sell orders while aiming for the support level of 1.1747, the price must settle below the Kijun-sen (1.1853) and Senkou Span B (1.1833) lines. Take Profit in this case can be up to 70 points.

Forecast and trading signals for GBP/USD

Explanations for illustrations:

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.

Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one.

Support and resistance areas are areas from which the price has repeatedly rebounded off.

Yellow lines are trend lines, trend channels and any other technical patterns.

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

Indicator 2 on the COT charts is the size of the net position for the "non-commercial" group.

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

Analytics and trading signals for beginners. How to trade the GBP/USD currency pair on November 23? Preparation for trading

Trading 22 Nov 2020 Commentaire »

The hourly chart of the GBP/USD pair.

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For the GBP/USD currency pair, trading during the last trading day and the entire week as a whole raised a lot of questions. In the illustration, novice traders can see two upward trend lines, below which the price was fixed at different points in time. However, neither after the first nor after the second case did a downward trend begins, which would be as logical as possible in the current technical picture. However, both times the upward movement resumed instead. Also, the price twice worked out the level of 1.3313 (marked with a horizontal segment) and both times bounced off it, but it also did not start a downward trend. However, this level now gives us a good reference point. If the price manages to overcome the level of 1.3313, the movement of the pound / dollar pair up is likely to continue. If traders do not manage to overcome this level, it is only a matter of time before the downtrend begins. We also pay attention to the fact that the fundamental background also does not contribute to the upward movement. And we have listed only the most obvious factors that are clear to novice traders. There are other points that also speak not in favor of the rise in the price of the British currency.

Let's start with our fundamental part of the review, which we will say about the weak volatility of the pair on Friday. And also about the continuing upward movement during the day. Only one more or less important report was published on Friday – on retail sales in the UK. Both indicators (including fuel and excluding fuel) exceeded the forecast values and could provide small support to the pound. However, in general, we can say that the markets are now paying minimal attention to macroeconomic statistics. They also refuse to take into account the fact that there is still no Brexit trade deal between the UK and the European Union. There is no official information that would indicate that the agreement can be signed in the near future. There are only various rumors, expectations, forecasts, and "insider information" from various sources. However, this is an absolutely normal situation for both traders and the pound. Market participants like to "play ahead", that is, try to predict what the pair's exchange rate will be in the future and make money on it. Therefore, the growth of the pound can now be explained only by the belief of the majority of participants that the deal will still be signed. The pound in the last four years also likes to get more expensive on rumors and expectations. However, we still recommend that beginners try to work out reliable information. For example, if it becomes known that London and Brussels have not come to an agreement, the pound will almost definitely fall down by 300-500 points.

On November 23, the following scenarios are possible:

1) We recommend that novice traders consider buying the pair if they overcome a fairly important and strong level of 1.3313. and, of course, if they receive reliable information about the conclusion of a trade agreement(although there may be a situation when the pound becomes cheaper on this information, so do not forget about the Stop Loss levels and technical signals). The goal is 1.3377.

2) Sales, from our point of view, are now more appropriate, and for a large number of reasons. Both upward trend lines have been overcome, and two bounces have been made from the 1.3313 level. Thus, we would recommend selling the pair with targets of 1.3244 and 1.3211 on Monday using a new MACD signal for sale or an existing one. But also don't forget about the Stop Loss levels.

What's on the chart:

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

Red lines – channels or trend lines that display the current trend and indicate which direction is preferable to trade now.

Up/down arrows-show when you reach or overcome which obstacles you should trade up or down.

MACD indicator – a histogram and a signal line, the intersection of which is a signal to enter the market. It is recommended to use it in combination with trend lines(channels, trend lines).

Important speeches and reports (always included in the news calendar) can greatly influence the movement of the currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp reversal of the price against the previous movement.

Beginners in the Forex market should remember that every trade cannot be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time

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

Analytics and trading signals for beginners. How to trade the EUR/USD currency pair on November 23? Analysis of Friday’s

Trading 22 Nov 2020 Commentaire »

The hourly chart of the EUR/USD pair.

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The EUR/USD currency pair turned up quite unexpectedly on Friday and started a new round of correction against the beginning of the downward trend. Although the definitions of "trends" and "corrections" are now quite formal. The problem is that the euro/dollar pair continues to trade inside the side channel of 1.1700-1.1900. Thus, any trend is just a trend inside this side channel. Moreover, the trend is usually supported by a trend line or a trend channel. In our case, we often determine the trend by the price reversal near the upper or lower border of the channel. Thus, it is not surprising that from time to time there are such movements that are not quite logical, from the point of view of technical analysis. It is good that the MACD has smoothed out almost all corrections within the day. First, the indicator turned up, and since we recommended trading lower on Friday, novice traders did not lose anything, then down (marked with a circle) - and then traders could open short positions. However, the drop in quotes was short-lived and the maximum that traders could earn was 20 points. On the other hand, all last week the volatility was very low, and in such conditions, 20 points of profit are not bad.

During the last trading day of the week, ECB President Christine Lagarde made another speech in the European Union, which again did not tell the markets anything interesting or important. During the past week, the head of the ECB spoke almost every day, but none of her speeches provoked any reaction from the markets. Lagarde talked about the vaccine, the "coronavirus", the deteriorating prospects for the European economy, the digital euro, however, nothing that could be regarded as really important information. Thus, very low volatility is an eloquent reflection of traders' interest in Lagarde's speeches and any other macroeconomic events in the past week. There was something interesting, something didn't matter that it was ignored.

On Monday, the European Union is scheduled to publish business activity indices in the service and manufacturing sectors. Similar figures will be released in the US. Given the fact that lockdown was already introduced in many European countries in November, it is absolutely clear that business activity will fall. In the service sector - exactly, in the production sector - in doubt. Forecasts say exactly this. The service sector should fall very seriously to 42.5 points, while the production sector is likely to stay above 50.0. In America, the picture is the opposite. There is no lockdown, so there is no drop in business activity either. Thus, tomorrow the euro currency may be under restrained market pressure and resume falling.

On November 23, the following scenarios are possible:

1) Long positions are currently not relevant. It will now be possible to return to purchases of the Euro currency no earlier than the end of the current downward trend. In the current conditions, the only option is to overcome the level of 1.1903, which will mean the pair's exit from the side channel of 1.1700-1.1900. In this case, it is recommended to open long positions with targets of 1.1925 and 1.1966.

2) Trading on the downside is currently relevant, as the trend has changed to a downward one. The next round of upward correction has ended, so now novice traders can stay in the pair's sales with targets of 1.1832 and 1.1791. Given the minimal volatility, we do not expect strong movements on Monday. Reversal of the MACD indicator up-reduce sales orders.

What's on the chart:

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

Red lines – channels or trend lines that display the current trend and indicate which direction is preferable to trade now.

Up/down arrows- – show when you reach or overcome which obstacles you should trade up or down.

MACD indicator(14,22,3) – a histogram and a signal line, the intersection of which is a signal to enter the market. It is recommended to use it in combination with trend lines (channels, trend lines).

Important speeches and reports (always included in the news calendar) can greatly influence the movement of the currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp reversal of the price against the previous movement.

Beginners in the Forex market should remember that every trade cannot be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.

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