Analytics and trading signals for beginners. How to trade GBP/USD on December 2? Analysis of Tuesday deals. Getting ready

Trading 01 Déc 2020 Commentaire »

Hourly chart of the GBP/USD pair

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The GBP/USD pair's movement on Tuesday was even more upbeat and unpredictable than the EUR/USD pair. The pair's quotes have been trading inside the channel for more than a week with borders near the levels of 1.3292 and 1.3397. After rebounding off the upper limit of this band, the price fell 60-70 points, afterwards a new round of upward movement abruptly began and exceeded the horizontal channel by 40 points. But this was not enough to gain a foothold above the channel and at the time of this writing, the quotes remain inside it. Naturally, it was impossible to predict such movements during the day. Trading within such a narrow horizontal channel is generally not recommended. The euro/dollar pair's quotes were in a two-hundred-point channel for four months, within which there were excellent short-term trends, which could be traded. The pound is stuck in a much narrower range, within which trends cannot be found. Therefore, we advise you to wait until the pair leaves the horizontal channel, and only then should you consider the possibility of opening new positions.

Fundamentals for the pound/dollar pair were strong on Tuesday. Manufacturing PMIs in the UK and US were unlikely to be the reason for the pound's strong gains in the afternoon. The speech of Bank of England Governor Andrew Bailey had absolutely nothing to do with it, since the euro and the pound were simultaneously rising in price, which means that it was about synchronous sales of the dollar or purchases of the euro and the pound. Federal Reserve Chairman Jerome Powell delivered a speech, but it took place when both pairs had already gone up 60-80 points. Maybe the markets played out Powell's speech in advance? No, because Powell did not mention anything important, and the text of his speech was known even days earlier. Powell reiterated that the coming months will be difficult for the American economy due to the pandemic and also despite the invention of two vaccines. He said the same thing several times already. Thus, none of Tuesday's events can be linked to what is happening on the market.

No major events scheduled for tomorrow in the UK, so focus will be on the US. However, this is only according to the calendar. In fact, traders ignore macroeconomic reports now, and Powell's second speech in Congress will be identical to the first, so he will probably not say anything new. But we might receive news from the UK regarding the trade talks with the European Union. Traders have been waiting for this news for several weeks, but they still have not received any. But sooner or later they will appear?

Possible scenarios for December 2:

1) Traders failed to overcome the 1.3397 level, and so the pair has just been trading in a horizontal channel for a week. Therefore, long deals are irrelevant now. You have to wait for a new upward trend or until the 1.3397 level has been overcome in order to be able to expect the return of the upward trend, and then you can aim for 1.3416 and 1.3447.

2) Short deals, from our point of view, are more convenient now, and for a number of reasons. However, since the price is inside a horizontal channel, in order to open short positions, novice traders are advised to wait until the price settles below its lower border of 1.3292 and only after that should they consider the possibility of opening short positions with targets at support levels of 1.3256 and 1.3207.

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 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

Analytics and trading signals for beginners. How to trade EUR/USD on December 2? Analysis of Tuesday deals. Getting ready

Trading 01 Déc 2020 Commentaire »

Hourly chart of the EUR/USD pair

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The EUR/USD pair could resume its downward movement on Tuesday after a slight pullback to the upside. It would be logical and this is exactly what we expected. However, instead, the euro/dollar pair soared again and this time, it increased by another 80 points. We noted two rising trend lines at once on the chart, below which the pair's quotes were fixed at different times. And each time after that, the upward movement resumed. This suggests that there is no logic in the pair's movement right now. The market is not in a state of shock, not in a state of panic, instead it is in an excited state, when one currency is growing almost uncontrollably and without reason. This phenomenon is called a "bubble". Classic speculators of the currency market "inflate" by maintaining artificial demand for one of the currencies, in our case, the euro. The euro is rising and can grow for a very long time, contradicting absolutely all the laws of logic and fundamental analysis. But at one point, the bubble will burst and then the euro will fall. It is up to novice traders to decide whether or not they would to try to trade in the upward movement. We believe that beginners should be more conscious and understand why a particular trade is open.

There were several macroeconomic publications in the European Union and America on Tuesday, December 1, as well as speeches by Christine Lagarde and Jerome Powell. On the one hand, it seems to be clear why the volatility was high today. However, inflation in the European Union has slowed even more and is now -0.3% y/y, the index of business activity in the manufacturing sector remained almost unchanged in November. Thus, the euro's growth could not have been triggered by these reports. And it gets even more interesting. The US ISM manufacturing PMI slightly declined, but remained at a much higher level than the European one. Again, this report could not provoke a fall in the dollar. And Lagarde and Powell had not even started speaking when the euro grew. Moreover, Lagarde has been speaking almost every day and does not tell the markets anything new, and Powell's speech was published in the public domain yesterday.

A ather important ADP report on changes in the number of employees in the US private sector will be published on Wednesday. This report used to be important and had triggered a reaction from the markets in normal times, but not in 2020, when the pair moves for only one known reason, and traders ignore most of the fundamental and macroeconomic background. Therefore, the euro/dollar pair will most likely move by its own rules tomorrow.

Possible scenarios for December 2:

1) Long positions remain relevant at the moment, but only because the upward trend is still present, which is clearly visible. However, it is extremely difficult to work out this trend now, since there is neither a trend line nor a channel to support it. Formally, you need to wait for a new round of correction and the MACD indicator to discharge to the zero level, and then look for new buy signals.

2) Trading down is not recommended at this time. Although the price crossed the ascending trend lines twice, the upward movement resumed and is still present. So far there is no reason to sell the euro, although the current levels may seem very attractive for selling.

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

South Africa Manufacturing Expansion Slows Sharply

Trading 01 Déc 2020 Commentaire »

South Africa's manufacturing sector grew at a sharply slower pace in November, survey data showed Tuesday. The Absa Purchasing Managers' Index, or PMI, fell to 52.6 from 60.9 in October. A reading above 50 suggests growth in the sector. The PMI is compiled by the Bureau for Economic Research and sponsored by the banking group Absa. The index is based on the widely used and highly regarded Purchasing Managers Index produced by the Institute for Supply Management (ISM) in the USA.

"While still signalling an improvement in business conditions, the drop suggests that the manufacturing sector's recovery is starting to lose momentum," the BER said.


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

U.S. Construction Spending Jumps More Than Expected In October

Trading 01 Déc 2020 Commentaire »

A report released by the Commerce Department on Tuesday showed construction spending in the U.S. increased by more than expected in the month of October.

The Commerce Department said construction spending jumped by 1.3 percent to an annual rate of $1.439 trillion in October after falling by 0.5 percent to a revised rate of $1.420 trillion in September.

Economists had expected construction spending to climb by 0.8 percent compared to the 0.3 percent uptick originally reported for the previous month.

The bigger than expected increase in construction spending came as spending on private construction surged up by 1.4 percent to an annual rate of $1.094 trillion.

Spending on residential construction spiked by 2.9 percent to a rate of $637.1 billion, more than offsetting a 0.7 percent drop in spending on non-residential construction to a rate of $456.6 billion.

The report also said spending on private construction climbed by 1.0 percent to an annual rate of $344.8 billion. Spending on educational and highway construction both increased.


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

U.S. Manufacturing Index Drops More Than Expected In November

Trading 01 Déc 2020 Commentaire »

Manufacturing activity in the U.S. continued to expand in the month of November, according to a report released by the Institute for Supply Management on Tuesday, although the pace of growth slowed by more than expected.

The ISM said its manufacturing PMI dropped to 57.5 in November from 59.3 in October, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to dip to 58.0.

"Survey Committee members reported that their companies and suppliers continue to operate in reconfigured factories," said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.

"But absenteeism, short-term shutdowns to sanitize facilities and difficulties in returning and hiring workers are causing strains that will likely limit future manufacturing growth potential," he added. "Panel sentiment, however, is optimistic."

The bigger than expected decrease by the headline index came as the new orders index slid to 65.1 in November from 67.9 in October and the production index fell to 60.8 from 63.0.

The employment index also tumbled to 48.4 in November from 53.2 in October, indicating a contraction in employment in the manufacturing sector following one month of growth.

On the inflation front, the report said the prices index edged down to 65.4 in November from 65.5 in October but still pointed to the sixth consecutive month of growth in raw materials.

The ISM is scheduled to release a separate report on activity in the service sector on Thursday. The services PMI is expected to slip to 56.0 in November from 56.6 in October.


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

*U.S. Construction Spending Jumps 1.3% In October

Trading 01 Déc 2020 Commentaire »

U.S. Construction Spending Jumps 1.3% In October


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*ISM U.S. Manufacturing Index Drops To 57.5 In November

Trading 01 Déc 2020 Commentaire »

ISM U.S. Manufacturing Index Drops To 57.5 In November


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

*Canadian Real Gross Domestic Product Grew 0.8% In September

Trading 01 Déc 2020 Commentaire »

Canadian Real Gross Domestic Product Grew 0.8% In September


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*Canadian Real Gross Domestic Product Grew 8.9% In The Third Quarter

Trading 01 Déc 2020 Commentaire »

Canadian Real Gross Domestic Product Grew 8.9% In The Third Quarter


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

OECD Trims Global Growth Projection; Calls For Policy Action

Trading 01 Déc 2020 Commentaire »

The Organisation for Economic Cooperation and Development downgraded global growth outlook for next year and called for determined policy action to achieve sustainable and inclusive growth.

The world economy is projected to shrink 4.2 percent this year before rebounding 4.2 percent in 2021, the Paris-based agency said in its economic outlook, released Tuesday.

The agency upgraded its 2020 outlook from -4.5 percent but lowered the projection for next year from 5 percent. The growth is seen at 3.7 percent in 2022.

According to latest estimate, global GDP is set to reach pre-pandemic levels by the end of 2021.

The prospect of a number of Covid-19 vaccines becoming widely available next year has raised hopes that recovery is in sight. But the path remains long and difficult, said OECD.

The recovery would be stronger if vaccines are rolled out fast, boosting confidence and lowering uncertainty, the agency said. At the same time, delays to vaccination deployment, difficulties controlling new virus outbreaks and failure to learn lessons from the first wave would weaken the outlook.

"Building back better requires leadership and action to build on the promises of vaccines, and to relaunch multilateral negotiations on trade, climate and digital standards to pave the way for a more sustainable growth and a society where opportunities are available for all," OECD Secretary-General Angel Gurr?a said.

The OECD observed that achieving a stronger, sustainable and inclusive global economy will require determined policy action now.

Activity in China is projected to return to its past trajectory, with growth of 8 percent in 2021 and 4.9 percent in 2022.

After shrinking 3.7 percent this year, the US economy is forecast to expand 3.2 percent in 2021 and 3.5 percent in 2022.

The OECD said growth is expected to pick up through 2021, reflecting an assumed additional fiscal package that will particularly support household incomes and consumption.

After experiencing one of the world's tightest lockdowns and recording the deepest GDP contraction among G20 economies in the second quarter of 2020, the Indian economy is recovering, the agency noted.

India is forecast to contract sharply by 9.9 percent in 2020 before rebounding 7.9 percent next year and 4.8 percent in 2022. Nonetheless, the GDP loss will be substantial.

Eurozone will grow about 3.25 percent in 2022 and 3.6 percent in 2021 after falling 7.5 percent in 2020. This will bring output back to its pre-pandemic levels only at the end of 2022, OECD said.

In order to avoid a premature tightening that could derail the recovery, national fiscal policies should also remain supportive over the coming two years.

Driven by a rebound of consumption, the UK economy will grow 4.2 percent in 2021 and 4.1 percent in 2022, the agency said. The GDP fall for 2020 was estimated at 11.2 percent.


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