EUR/USD. Dollar and NonFarm: Test for the upward trend’s stability

Trading 03 Déc 2020 Commentaire »

The euro-dollar pair is breaking records: day after day, EUR/USD buyers are updating price highs not only of the current year, but also of the previous year. Traders were last seen above 1.2100 almost three years ago. The long-term growth trend then peaked in February 2018 when the pair's bulls emerged at 1.2555. It is noteworthy that the pair grew for three months, but after reaching the ceiling for several months it almost decreased.

But back to the events of the day. If you look at the MN timeframe (monthly chart), you will see that the pair has been steadily growing over the past month and is rising just as confidently in early December. Buyers of EUR/USD were able to change the echelon by exchanging the price range of 1.1650-1.1830 for the 1.1900-1.2200 range. Moreover, the upper bar of the current range is conditional, since no one can say with certainty at what price point the pair will turn down.

Actually, this is the main strain in the current situation. No one doubts that the price will reach its peak and reverse 180 degrees. The only question is when it will happen. When the pair demonstrates a wave-like growth, the situation can be predicted using the support levels: if the bears cannot overcome them, then the upward trend is still in force, and longs are still relevant. But at the moment, the EUR/USD pair is rapidly growing, and secondly, it impulsively breaks through all the strongest resistance levels. It is difficult to say at what price point this flight will stop.

In such cases, it is necessary to take a wait-and-see attitude, despite the existing temptation to open long positions. After all, there is a very real risk that long deals will be made at peak prices, that is, on the eve of a trend reversal.

Tomorrow's NonFarm will be a kind of marker for determining the viability of the upward trend. The main locomotive of EUR/USD growth is the US dollar, which is falling across the market amid general optimism about the COVID-19 vaccine and a slowdown in the growth of the number of infected people in Europe. If the greenback ignores strong numbers on the labor market (or the release itself disappoints investors) tomorrow, then the pair will have another reason to test new price heights (i.e. 1.2200).

According to analysts, the unemployment rate will drop to 6.8% in November, and the number of people employed in the non-agricultural sector will grow by almost 500,000. These are quite optimistic estimates. But taking into account the updated monetary strategy of the Federal Reserve, traders will have to pay attention to salaries. But there can be unpleasant surprises. According to preliminary forecasts, salary indicators will show a decline - both in annual and monthly terms (0.00% m/m and 4.2% y/y, respectively).

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It is worth recalling here that the data on spending and income of Americans that was published last week had gone into the red zone. Thus, the level of personal consumer income fell to the level of -0.7% with the forecast of a decline to zero. This is the weakest result since August this year. The same dynamics was demonstrated by the level of expenses (Personal Spending), having decreased to the level of 0.5%, from the previous value of 1.2%. The Core PCE Price Index slipped to zero on a monthly basis (the worst result since April) and slowed to 1.4% - in annual terms. If tomorrow's salaries are also disappointing, the dollar could be hit by a sell-off again.

Thus, there is no need to rush with longs until tomorrow's release. At the moment, the upward momentum has died away again and bulls of the EUR/USD pair retreated from the price high of 1.2175. Despite the strength of the upward movement, buyers did not dare to storm the 22nd figure. This fact is an additional argument in favor of a wait-and-see attitude.

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Analytics and trading signals for beginners. How to trade EUR/USD on December 4? Analysis of Thursday deals. Getting ready

Trading 03 Déc 2020 Commentaire »

Hourly chart of the EUR/USD pair

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The EUR/USD pair moved up all day without any hint of a correction on Thursday. We have formed a new trend line so that novice traders can clearly see the current trend. However, it is not recommended to use this trend line in trading. The slope is too high, so any correction or pullback will cause the price to settle below it. This will mean that the trend has changed to a downward trend, which in fact will not be the case. The illustration also shows two other trend lines (indicated by a dotted line), below which the price also fell, but each time the upward trend resumed. Thus, the current upward movement is strong and it can be worked out, since there is actually a trend. However, it is very difficult for novice traders to work it out, because the MACD indicator does not even have time to discharge to the zero level. Hence, there are strong delays in producing new buy signals. Therefore, novice traders need to decide for themselves whether they are ready to take high risks when opening any positions.

The European Union and America published indexes of business activity in the service sectors. However, given the fact that the euro kept on rising almost and continued to do so at night, the statistics probably did not matter to market participants. However, business activity in Europe remained low and it was high in the United States. The rest of the reports were even less relevant to the markets. More global themes for the euro and dollar are now available, but it seems that traders are ignoring them too. At least, there are still no visible reasons for the euro's growth. And it could be any hypothesis as to why this happens. The fact remains: the euro has grown by 15 cents against the dollar over the past nine months

A rather important package of macroeconomic statistics will be published in America on Friday. Market participants will find out if unemployment continued to fall in November and how things are with the most important indicator of the state of the labor market, NonFarm Payrolls. In normal times, the latter indicator would have generated a strong market reaction almost unambiguously. But now... The "Friday factor" may also work tomorrow. After a fairly strong upward movement, market participants may want to take some of the profits and the pair may retreat. Nevertheless, you should not overlook the NonFarm Payrolls report. It can cause a reaction for the EUR/USD pair.

Possible scenarios for December 4:

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

Treasury Reveals Details Of Long-Term Securities Auctions

Trading 03 Déc 2020 Commentaire »

The Treasury Department on Thursday announced the details of this month's auctions of three-year and ten-year notes and thirty-year bonds.

The Treasury revealed it plans to sell $56 billion worth of three-year notes, $38 billion worth of ten-year notes and $24 billion worth of thirty-year bonds.

The results of three-year note auction will be announced next Tuesday, the results of the ten-year note auction will be announced next Wednesday and the results of the thirty-year bond auction will be announced next Thursday.

Last month, the Treasury sold $54 billion worth of three-year notes, $41 billion worth of ten-year notes and $27 billion worth of thirty-year bonds.

The three-year auction attracted average demand, while the ten-year note and thirty-year bond auctions attracted below average demand.


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U.S. Service Sector Growth Slows Modestly In November

Trading 03 Déc 2020 Commentaire »

A slight pullback in the rate of growth in U.S. service sector activity continued in the month of November, according to a report released by the Institute for Supply Management on Thursday.

The ISM said its services PMI edged down to 55.9 in November after dipping to 56.6 in October, although a reading above 50 still indicates growth. Economists had expected the index to slip to 56.0.

"Respondents' comments are mixed about business conditions and the economy," said Anthony Nieves, Chair of the ISM Services Business Survey Committee.

He added, "Most companies are cautious as they navigate operations amid the pandemic and the aftermath of the U.S. presidential election."

The modest decrease by the headline index came as the business activity index slid to 58.0 in November from 61.2 in October. The new orders index also fell to 57.2 from 58.8.

On the other hand, the ISM said the employment index rose to 51.5 in November from 50.1 in October, indicating the third consecutive month of job growth in the service sector.

The report said the prices index also climbed to 66.1 in November in 63.9 in October, suggesting a faster rate of price growth compared to the previous month.

"Looking ahead, we expect the services recovery to continue cooling in the months to come," Oren Klachkin, Lead U.S. Economist at Oxford Economics.

He added, "While the recent string of positive vaccine news is encouraging, services, particularly consumer-facing firms, will not be on a stable footing until broad swathes of the population are immunized and the health crisis is fully over."

The ISM released a separate report on Tuesday showing the pace of growth in U.S. manufacturing activity slowed by more than expected in the month of November.

The manufacturing PMI dropped to 57.5 in November from 59.3 in October, while economists had expected the index to dip to 58.0.


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*ISM U.S. Services PMI Edges Down To 55.9 In November

Trading 03 Déc 2020 Commentaire »

ISM U.S. Services PMI Edges Down To 55.9 In November


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

U.S. Jobless Claims Drop Much More Than Expected To 712,000

Trading 03 Déc 2020 Commentaire »

A report released by the Labor Department on Thursday showed a much bigger than expected decline in first-time claims for U.S. unemployment benefits in the week ended November 28th.

The Labor Department said initial jobless claims dropped to 712,000, a decrease of 75,000 from the previous week's revised level of 787,000.

Economists had expected jobless claims to edge down to 775,000 from the 778,000 originally reported for the previous month.

The report said the less volatile four-week moving average also slipped to 739,500, a decrease of 11,250 from the previous week's revised average of 750,750.

Continuing claims, a reading on the number of people receiving ongoing unemployment assistance, also tumbled by 569,000 to 5.520 million in the week ended November 21st.

The four-week moving average of continuing claims slid to 6,194,250, a decrease of 425,500 from the previous week's revised average of 6,619,750.

"Continuing claims for regular benefits extended their decline, but that good news is countered by a rising number of individuals who have exhausted those benefits, evidence of more persistent labor market scarring," said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.

On Friday, the Labor Department is scheduled to release a more closely watched report on the employment situation in the month of November.

Economists expect employment to increase by 481,000 jobs in November after jumping by 638,000 jobs in October. The unemployment rate is expected to edge down to 6.8 percent from 6.9 percent.


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Dollar Little Changed After U.S. Jobless Claims

Trading 03 Déc 2020 Commentaire »

The U.S. weekly jobless claims for the week ended November 28 have been published at 8:30 am ET Thursday. After the data, the greenback changed little against its major counterparts.

The greenback was trading at 104.08 against the yen, 0.8916 against the franc, 1.2145 against the euro and 1.3449 against the pound around 8:33 am ET.


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

U.S. Weekly Jobless Claims Drop Much More Than Expected

Trading 03 Déc 2020 Commentaire »

A report released by the Labor Department on Thursday showed a much bigger than expected decline in first-time claims for U.S. unemployment benefits in the week ended November 28th.

The Labor Department said initial jobless claims dropped to 712,000, a decrease of 75,000 from the previous week's revised level of 787,000.

Economists had expected jobless claims to edge down to 775,000 from the 778,000 originally reported for the previous month.

On Friday, the Labor Department is scheduled to release a more closely watched report on the employment situation in the month of November.


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

*U.S. Initial Jobless Claims Drop To 712,000 In Week Ended 11/28

Trading 03 Déc 2020 Commentaire »

U.S. Initial Jobless Claims Drop To 712,000 In Week Ended 11/28


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

Dollar Drops Ahead Of U.S. Jobless Claims

Trading 03 Déc 2020 Commentaire »

The U.S. weekly jobless claims for the week ended November 28 are due at 8:30 am ET Thursday. Ahead of the data, the greenback fell against its major counterparts.

The greenback was worth 104.05 against the yen, 0.8910 against the franc, 1.2154 against the euro and 1.3453 against the pound at 8:25 am ET.


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