USD/CAD. Bank of Canada December meeting: Preview

Trading 08 Déc 2020 Commentaire »

The Bank of Canada's final meeting for 2020 will take place tomorrow. At the December meeting, as a rule, members of the central bank sum up the results of the outgoing year and discuss further prospects for monetary policy. According to the results of tomorrow's meeting, it will become clear whether the Canadian dollar will continue to fall or head for a correction against the greenback.

Almost all fundamental factors suggest that the central bank will leave all monetary policy parameters unchanged. That is, it will keep the key rate at 0.25%, and the size of the weekly asset purchase program at the level of 4 billion. Moreover, judging by the dynamics of key macroeconomic indicators, the central bank can voice optimistic rhetoric, thereby supporting the loonie's position. But there is one but: the central bank does not need a national currency that is too expensive, so it will not artificially inflate its value with hawkish rhetoric. The Canadian dollar has grown against the US dollar by nearly 600 points since the last meeting (which took place in October). This fact is likely to be the subject of criticism from its members, as the expensive national currency slows down inflationary processes and negatively affects the export sector.

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On the other hand, the Canadian dollar has been strengthening quite reasonably throughout this time, so the central bank is unlikely to be able to reverse the USD/CAD trend, even if it criticizes the overvalued rate of the loonie. The Canadian currency has key macroeconomic reports, the growth of the oil market and the coronavirus vaccine, which is already at the certification stage.

But first a few words about macroeconomic reports. According to the latest data, the Canadian economy grew by 40% in the third quarter after a 38% decline in the second quarter. This is the strongest growth rate in the entire history of observations. Earlier, retail sales and inflation showed positive dynamics. The overall consumer price index increased by 0.7% (year-on-year), contrary to forecasts for growth of 0.2%. Core inflation, excluding food and energy prices, remained at one percent year-on-year.

We should also focus on the indicators of the Canadian labor market, which were published last Friday. The fact is that all the components of the release were in the green zone, which means that it is much better than the forecast values. In particular, the unemployment rate fell to 8.5%, contrary to forecasts of growth to 9%. A downward trend is observed here for the sixth consecutive month. In addition, the growth rate in the number of employees jumped to 62,000. Analysts expected that this would be much lower, at the level of 22,000. And what is especially important: the increase in the indicator in November was due to the increase in full employment. While part-time employment showed a negative trend. It is known that full-time positions imply higher salaries and social security, having a beneficial effect on consumer activity of Canadians and, ultimately, on inflationary growth in the country. It is also worth noting that the total length of working hours increased by 1.2% – this indicator has been steadily growing for six months.

Thus, the Bank of Canada has every reason to maintain a wait-and-see position. Also, the head of the central bank can evaluate the latest achievements of the country's economy, thereby supporting the loonie. The main intrigue of tomorrow's meeting concerns the prospects for QE. Not so long ago, the Bank of Canada reduced the size of asset purchases, buying bonds by 4 billion Canadian dollars a week. According to some analysts, the central bank will report on the future prospects of the incentive program at its December meeting – whether the current volume of QE will be maintained or the central bank will conduct another calibration.

From the technical point of view, the USD/CAD pair shows a pronounced bearish trend, which is confirmed by the main trend indicators – Bollinger Bands and Ichimoku. The latter has formed one of its strongest bearish signals, the Parade of Lines – on D1, all the indicator lines are above the price chart, thereby demonstrating pressure on the pair. To determine the main goal of the downward movement, let's switch to the monthly timeframe (MN chart): here we focus on the lower line of the Bollinger Bands, which coincides with the lower border of the Kumo cloud and corresponds to the 1.2710 mark.

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

Bitcoin whales prepare for new heights

Trading 08 Déc 2020 Commentaire »

The current correction made it possible to enter the crypto market with a discount of 15%-35%, depending on the trading instrument.

Most crypto-currencies, including Bitcoin, have already played out the correction and are preparing for new achievements.

Bitcoin – 17.0% correction, 22.5% recovery%

Ethereum – 23.2% correction, 32.5% recovery

Litecoin – 31.0% correction, 44.0% recovery

Yearn. Finance – 38.5% correction, 74.0% recovery

The correction for Bitcoin, which appeared on the market near the historical maximum, made it possible for the market giants to remove the cream from their large wallets, which has not moved for several years. Access to such impressive volumes was released by BTC, which was used by institutional investors, absorbing the sale of Bitcoin whales on the approaches of the quote to $20,000.

MicroStrategy, listed on the NASDAQ exchange, acquired an additional 2,574 BTC ($50 million) at the time of the correction, strengthening its position in the crypto industry. At the moment, the organization owns a total of 40,824 BTC. After that, it is said that MicroStrategy has the intention to raise $400 million for additional investment in Bitcoin.

The head of the company, Michael Saylor, said in an interview with Bloomberg that investing in cryptocurrencies was one of the surest decisions. MicroStrategy earned nine times more on investments in Bitcoin compared to 2019.

In turn, the management company, Grayscale Investments, acquired another 7188 BTC in its Bitcoin trust in just one day. The most striking phenomenon is that they purchased 55,015 BTC in November, which is almost twice the amount of mining during this period (27,881 BTC).

Such impressive figures indicate that institutional investors are firmly engaged in the crypto market. This not only gives an impetus to the development of the crypto environment but also serves regulations and increases confidence in new types of exchange instruments.

PayPal, which recently opened access to cryptocurrencies for its millions of customers, conducted a survey on whether users of their network are ready to pay for purchases and services with bitcoin. The results of the survey are striking: 65% of customers of the payment company said that they are ready to make payments in cryptocurrency. Let me remind you that PayPal allows you to pay with cryptocurrency in 28 million retail outlets.

The news from the Swiss stock exchange (SIX), which plans to give banks full access to digital assets, deserves a special mention today. Banks and their clients will be able to take advantage of trading, smart order routing, settlement, and storage of cryptocurrencies. Aside from this, there will also be access to secondary markets through the so-called institutional gateway of digital assets.

Once again, we confirm the antifragility status of the crypto industry.

"Everything that doesn't kill us makes us stronger" is a well-deserved slogan of cryptocurrencies and the entire industry as a whole.

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Trading prospects

The Bitcoin quote recently updated the historical maximum of 2017 which was $19,891. Now, the new maximum is $19,916 (Coinbase). In fact, market participants are faced with an area of psychological value of $20,000, which deters buyers from the subsequent upward move.

I assume that this psychological level will not last for long. The market is still on a bullish wave. Trading volumes are replenished by both institutional investors and young blood, which as a result will lead to an update of the current maximum and a breakdown of the psychological level of $20,000. There is a chance of a breakdown until the end of 2020.

The most noteworthy point is the high level of HYIP, where global media publish news about Bitcoin on a daily basis, which positively affects the flow of cash injections into the crypto market.

The prospect of growth is quite wide, Many write them to be at 25,000, 30,000 and even 100,000 Dollars for one Bitcoin.

Do not forget to skim the cream from your profitable positions from time to time and to regroup the trading forces of the deposit during corrections.

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General background of the crypto market

Analyzing the total market capitalization of the crypto industry, you can see that the total market has gained more than $50 billion in weight since our last article. At the moment it is at $553 billion.

The absolute maximum of the crypto market from January 2018 is still not broken. Our goal is not $831 billion anymore but $1 trillion.

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The index of emotions (fear and euphoria) of the crypto market is still at the level of FOMO* (lost profit Syndrome*) which is 95 points. This means that the market is very active and the quote is conducive to growth.

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Indicator analysis

Analyzing different sectors of timeframes (TF), it is clear that four-hour period is in the stage of rollback/stagnation. The daily and weekly periods follow the uptrend, signaling a purchase.

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

Without a single dynamic: US stock exchanges closed in different directions and the Dow Jones said goodbye to the recent

Trading 08 Déc 2020 Commentaire »

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At the close of trading on Monday, the US Dow Jones Industrial Average fell back from a record high reached last week. The reason for all this is the concern of investors amid the growing incidence of coronavirus infection in the United States.

So, at the end of the trading session, the industrial Dow Jones fell by 0.5% to 30069.79 points, the broad market index S&P 500 lost 0.2% and stopped at 3691.96 points, and the technological Nasdaq Composite increased by 0.4% to 12519.95 points.

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In the previous month, stock markets confidently showed more and more new records on the background of hopes for stabilization of the global economy in connection with the development of vaccines against Covid-19. However, in December, there's an uncontrolled increase in the number of infections and its impact on the economic recovery significantly reduced investor optimism. It became known that last weekend, a new quarantine restriction was introduced in California aimed at combating the spread of coronavirus infection. Such drastic measures were the result of a record number of people hospitalized with Covid-19 the day before.

Meanwhile, experts are talking about the fact that even the most effective vaccine will not have a significant impact on the current third wave of coronavirus, and the short-term growth prospects of the American economy are serious concerns.

Another reason of concern for the analysts was the information published last Friday about the decline in job growth in America. According to data, it slowed down and reduced its turnover against the background of new quarantine restrictions for businesses in November.

According to investors, the unstable situation in the country may push Congress to adopt a new package of state support measures for the economy. A group of representatives of the Democratic and Republican parties is trying to reach a compromise on the issue of aid measures that could support businesses and Americans until the end of the first quarter of 2021.

In the meantime, let's go back to the more pressing figures and analyze how the news of the previous week affected the results of Monday's trading session.

Among the Dow Jones components, Boeing Co. shares were among the leaders of growth, which increased by 2.91% to close at 239.48 points. Apple Inc. shares went up by 1.37%, ending the session at 123.92 points. Nike Inc. securities increased by 1.02%, showing 138.59 points.

The list of falling shares was headed by Intel Corporation, the price of which fell by 4.02%, closing the session at 49.90 points. Dow Inc. shares went up by 3.38% to report 53.19 points, while Chevron Corp lost 3.04% to end trading at 90.44 points.

Most of the S&P 500 sectors were down on Monday, with only the technology, utilities and communications sub-indexes registering slight gains. Among the favorites were MarketAxess Holdings Inc., which rose 5.49% to 568.75 points, and L Brands Inc., which gained 4.76% and showed 40.07 points. American Airlines Group shares went up by 4.63% to 17.16 points.

The list of outsiders was led by shares of Acronis Corp, which fell in value by 7.80 to 28.49 points. The CenturyLink Inc. securities went down to 5.26% and closed the session at 10.01 points. TechnipFMC PLC quotes lost 4.87% and showed 9.77 points.

The leaders of growth in the NASDAQ Composite were shares of Obalon Therapeutics Inc., which rose by 130.84% to 2,470 points, Greenland Acquisition Corp, which gained 54.68% and closed at 8.59 points, and Oncternal Therapeutics Inc., which rose by 50.75% to 4.01 points.

The list of falls was led by Scpharmaceuticals Inc, which lost 34.38% in value and closed at 5.74 points, as well as shares of Globus Maritime Ltd, which lost 29.96% and ended the session at 7.3050 points. Quotes Curis Inc. fell by 27.66 percent to 1,360 points.

On the New York stock exchange, the number of securities that lost in price (1,850) exceeded the number that rose in price (1,243), and the quotes of 81 shares remained unchanged. On the NASDAQ stock exchange, 1,637 companies' securities fell in value, rose at 1,345 and retained their previous closing figures at 79.

The Pan-European Stoxx Europe 600 lost 0.3%. Negotiations between the European Union and the UK over a trade agreement have entered the final phase. Meanwhile, market participants do not rule out that the parties will not be able to agree on trade issues.

On Friday, the yield on 10-year US government bonds fell to 0.928% from 0.967%.

The Cboe Volatility Index, which is based on S&P 500 options trading indicators increased by 4.52% to 21.73 points.

Gold futures for February delivery gained 1.24% to close at $ 1,862. 77 a Troy ounce. Prices for January WTI crude futures fell 1.28% to $ 45.67 per barrel. Brent crude futures for February delivery were down 1.14% at $ 48.69 a barrel.

The main pair of the Forex market EUR / USD lost 0.05% and showed 1.2114 points, while the USD / JPY quotes fell by 0.10% to 104.03 points. Futures on the US dollar index have grown 0.17% to 90,847 points.

As for the situation in the Asia-Pacific markets, Hong Kong's Hang Seng lost 1.2% in the previous day's trading session. Analysts attribute this reaction of the index to the message published the day before. So, it became known that the United States is preparing sanctions against Chinese officials related to the removal of some Hong Kong opposition lawmakers.

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

Oil prices are declining amid the heightening pandemic and new lockdowns

Trading 08 Déc 2020 Commentaire »

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On Tuesday, global oil prices steadily decline amid the concerns of investors about the short-term prospects for demand for raw materials during the COVID-19 pandemic.

As a result, the price of February futures for the North Sea Brent blend fell by 0.84% to $48.38 per barrel. These contracts fell by 0.9% to $48.79 per barrel at the close of the session on Monday.

The price of January WTI oil futures fell by 0.74% to $ 45.42 dollars per barrel. On Monday, futures fell 1.1% to $ 45.76 a barrel.

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At the same time, the price of black gold this week continues to move away from the maximum indicators reached for many months before. News about effective vaccines, which seriously supported the demand for risky assets in November, is subsiding more and more every day, replaced by fear of the deteriorating epidemiological situation in the world.

The coronavirus statistics from the United States, where the daily increase in infected people has broken the 100,000 mark, is particularly frightening. Last Friday, the highest number of cases of infection since the beginning of the pandemic was reported – almost 228,000 were detected per day, and last weekend the figure reached 225,000 new cases. Alarming statistics have forced the authorities of individual states to introduce even stricter quarantine restrictions. Ergo, additional isolation in Los Angeles and San Diego was declared mandatory.

In addition, American infectious diseases experts fear that the spread of COVID-19 in the United States after the Christmas holidays may become even more widespread than after the Thanksgiving holiday. And this is despite the fact that the number of infected people in the country has increased significantly in the week after the celebration of the national American holiday!

The situation with the pandemic in Europe, unfortunately, can hardly be called more rosy. The re-introduction of travel restrictions in many European countries clouds the forecast for a recovery in fuel demand and has a very negative impact on market sentiment.

Meanwhile, Iran is preparing to launch full production and export of black gold within three months if US sanctions are eased. Many experts are surprised that in its plans, Iran does not consider the already existing serious pressure on the market due to a significant excess of supply.

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

Analytics and trading signals for beginners. How to trade GBP/USD on December 9? Analysis of Tuesday deals. Getting ready

Trading 08 Déc 2020 Commentaire »

Hourly chart of the GBP/USD pair

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The GBP/USD pair fell by 200 points, afterwards it quickly grew by 180 points. Thus, the nature of the pair's movement remains unchanged. It is very difficult, especially for novice traders, and is something that is between a flat and high-volatility movements when the pair is thrown from side to side. In fact, there is no trend right now (this is clearly seen from the chart). The pair is trading quite volatile, but in different directions. Moreover, after several attempts to continue the long-term upward trend, the pair's quotes returned to the 1.3292-1.3395 channel, already familiar to novice traders, in which the price had already spent a lot of time earlier. The pair's quotes rebounded off the borders of this channel by at least four times. It is strong and important. We suggest that you start trading from this channel in the coming days. Getting the price to settle above or below it can provoke a new round of upward or downward movement. At the same time, you should remember that when it moves erratically, the price changes its direction too often, which complicates the trading process.

Everything still revolves around Brexit and negotiations on a trade deal between the UK and the EU when it comes to the British pound. And we also found out that talks will resume. And that's it. No more information available. It is unclear how long this will last as both sides continue to state that "the next couple of days should be final." And how the parties want to have time to ratify the agreement on time is also generally unclear. It seems that the markets are tired of being optimistic and so the pound is slowly turning down. At the same time, it still cannot fall below the 1.3292 level. No other important information on Tuesday..

No major events or reports scheduled in the UK and the US on Wednesday. However, as shown on Monday, traders don't really need them now. Markets calmed down a bit on Tuesday, volatility slightly decreased, and the price was generally trapped in a horizontal channel. However, anything can happen in this situation. Especially if the markets finally receive official information on the progress of negotiations between London and Brussels.

Possible scenarios for December 9:

1) No particular trend at the moment, like any trend lines and channels. Therefore, although there is no trend now, there is no classic flat either. We advise you to wait a few days for a more convenient and better technical picture. Or, trade for an increase in small lots when the price settles above the 1.3395 level while aiming for the resistance level of 1.3469.

2) Sell positions, from our point of view, are also not convenient. There is neither a downward trend nor a signal about the end of an upward trend, and market participants are not particularly interested in the fundamental background. However, if the pair's quotes still settle below the 1.3292 level, then you can try to open short positions with targets in the range of 1.3257-1.3200 and keep them open until the MACD indicator turns up.

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 9? Analysis of Tuesday deals. Getting ready

Trading 08 Déc 2020 Commentaire »

Hourly chart of the EUR/USD pair

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On Tuesday, the EUR/USD pair tried with all its might to continue the downward movement it started. Yesterday evening we suggested that you should either wait for a sell signal from the MACD near the zero level, or immediately open short positions, but with a Stop Loss above 1.2162. In the first case, the signal never appeared, in the second, traders could get 10-15 points of profit, since the quotes were in a very narrow price range for most of the day. However, a new downward trend line has also appeared today, which is now showing a downward trend. The general downward movement is extremely weak and does not pretend to be more than a correction. Therefore, if sellers do not find grounds for more active trading in the coming days, then we expect the upward trend to resume and the downward trend line to be broken. As you can see, sellers have absolutely no strength now.

The EU published its third quarter GDP in its third estimate. Despite the fact that it was expected to remain unchanged compared to the second estimate, the value of GDP deteriorated to +12.5% q/q. Therefore, the markets had excellent grounds for selling the euro. But instead, as usual, they ignored the reports and continued indistinct trading all day. Naturally, with such an attitude, the report on economic sentiment from the ZEW institute did not matter at all. We did not receive any more important information today. However, this is clearly visible from the nature of the pair's movement during the day.

No macroeconomic report from the EU and the US on Wednesday. But we are gradually approaching the European Central Bank meeting and the EU summit, where the fate of the budget allocation for 2021-2027 will be decided, as well as the allocation of the 750 billion euro recovery fund. We wrote about these events yesterday. Despite the fact that we do not expect any positive (hawkish) information either from the first event, or from the second, the euro can still rise in price, since markets are still ignoring both macroeconomic and fundamental background. The euro's recent growth still best fits the meaning of the word speculative.

Possible scenarios for December 9:

1) Long positions are no longer relevant at the moment, since there is a weak downward trend supported by the trend line. Thus, for long deals on the pair, it is necessary for you to wait until the price settles above the trend line and in this case to trade upward while aiming for 1.2157 and 1.2205.

2) Trading down on Tuesday-Wednesday would be more appropriate. We believe that the EUR/USD pair can make a new downward spurt. Thus, taking into account the rebound from the trend line, we advise you to open short positions while aiming for 1.2070 and 1.2031. However, at the same time, we warn novice traders that the likelihood that the euro would fall today or tomorrow is not that high. Therefore, in this case, it is better to set a Stop Loss above the trend line.

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

Swiss Franc Climbs Against Most Majors

Trading 08 Déc 2020 Commentaire »

The Swiss franc gained ground against its most major counterparts in the European session on Tuesday.

The franc spiked up to a fresh 4-week high of 1.0770 against the euro. This followed a low of 1.0799 seen at 1:30 am ET.

Against the yen and the dollar, the franc ticked up to 0.8887 and 117.11, off its early lows of 116.65 and 0.8914, respectively.

The franc is seen finding resistance around 1.04 against the euro, 118.5 against the yen and 0.86 against the dollar.


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

*U.S. Labor Productivity Jumps 4.6% In Q3, Unit Labor Costs Plunge 6.6%

Trading 08 Déc 2020 Commentaire »

U.S. Labor Productivity Jumps 4.6% In Q3, Unit Labor Costs Plunge 6.6%


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

*Swiss Franc Hits Fresh 4-week High Of 1.0770 Against Euro

Trading 08 Déc 2020 Commentaire »

Swiss Franc Hits Fresh 4-week High Of 1.0770 Against Euro


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

*Swiss Franc Gains To 117.11 Against Yen

Trading 08 Déc 2020 Commentaire »

Swiss Franc Gains To 117.11 Against Yen


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