Analytics and trading signals for beginners. How to trade GBP/USD on December 10? Analysis of Wednesday deals. Getting ready

Trading 09 Déc 2020 Commentaire »

Hourly chart of the GBP/USD pair

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The GBP/USD pair made a new upward spurt on Wednesday, but then it ended up with a new round of downward movement. In general, the pound/dollar pair is still moving erratically (price movement with frequent reversals and without a definite trend). However, there is a silver lining. Thanks to this week's movements, a new upward trend line has appeared, which supports bull traders. Despite the fact that this trend is short-term, the price is currently near the trend line. Therefore, a rebound from this line and being able to overcome it can be used as a buy or sell signal. We advise traders to monitor this signal in the coming hours. In general, the pair keeps moving erratically, which is extremely difficult to predict. In principle, this is visible in any of the pound/dollar pair's charts. The bears still lack the strength to start a new downward trend, although the fundamental background speaks in favor of the pound's fall.

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 although we have not received new information in recent days or even weeks, the markets continue to closely monitor this topic and are terribly nervous. It is clear why. After all, the future of the British economy depends on the trade deal. Although the question in this case is: will the British economy contract strongly or not very much in 2021? One way or another, but traders do not want to take into account the fact that the chances of reaching a deal are minimal. Michel Barnier announced this publicly yesterday, and we tend to believe his opinion. Today Ursula von der Leyen (head of the European Commission) and Boris Johnson (Prime Minister of Great Britain) will hold personal talks in Brussels to try to break the deadlock. But to be honest, the chances of a positive outcome are very small. Thus, we continue to expect a new downward trend for the pound.

The UK will release October GDP and Industrial Production reports on Thursday. The outlook is relatively neutral and we believe that traders will not pay enough attention to these reports. They are more likely to react to the US inflation report. The consumer price index has recently begun to slow down and may reach only 1.1% y/y in November. However, inflation excluding food and energy products may grow and reach 1.8% y/y. Therefore, we believe that if the overall slowdown on the two indicators can be avoided, then the US dollar will not be under pressure because of this report. And, of course, we continue to await the results of the negotiations in Brussels.

Possible scenarios for December 10:

1) A new short-term upward trend with a trendline has appeared. Therefore, if a rebound occurs from this line, we advise you to open buy orders while aiming for 1.3449 and 1.3505. However, in general, the pair is still moving erratically, so the upward movement can be very short.

2) Selling, from our point of view, is not advisable right now, since an upward trend line is present. If the pair's quotes settle below it, then we recommend opening short positions while aiming for the support levels of 1.3297 and 1.3241.

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 10? Analysis of Wednesday deals. Getting ready

Trading 09 Déc 2020 Commentaire »

Hourly chart of the EUR/USD pair

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The EUR/USD pair initially tried to move up, and then it fell and started a downward movement. The trend line had to be rebuilt, since the last price peak was perfect for this. The trend line currently passes through three peaks and is considered stronger than before. A sell signal from MACD was also generated today. This indicator was previously discharged to the zero level and even slightly higher, so the signal turned out to be quite strong. Thus, novice traders had to re-evaluate the current picture in the morning and open new short positions. At the moment, the profit is around 60 points. Even if novice traders opened long positions on the pair as it settled above the previous trend line, they could receive minimal losses on this deal. Considering the fact that it did so at night, it is unlikely that any of the novice traders rejected this false signal. In any case, the profit on the short trade exceeded the loss on the long trade.

No macroeconomic report or event from the EU and the US on Wednesday. However, as we can see now, the pair was still quite actively being traded today. The downward movement has resumed, although it still falls under the definition of a correction against the previous upward movement. We believe that the euro began to fall today because traders do not expect positive news from tomorrow's ECB meeting and, moreover, the EU summit.

As mentioned above, tomorrow, the European Union will sum up the results of the ECB meeting. The central bank will announce its decision on interest rates, but none of the market participants expects it to change. The ECB has not changed their stance in 2020. However, it is quite possible that the central bank will announce an increase in the economic stimulus program. In this case, we are talking about the PEPP program - a program to counter the economic consequences of the pandemic. The expansion of this program will mean that the central bank will buy more securities from the open market and pour cash into the economy, stimulating it to grow. Such actions of the central bank are considered dovish (aimed at supporting the economy), therefore, the euro is falling at this time and may continue to do so tomorrow. In addition, a press conference will be held by the ECB and the EU summit will also begin tomorrow, at which the issue of blocking the budget for seven years and the recovery fund by Poland and Hungary will be decided. A conflict is brewing in the EUon and this summit will be called upon to resolve it.

Possible scenarios for December 10:

1) Long positions are not 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 1.2149 and 1.2164.

2) It would be more appropriate to trade on Thursday. You can continue to open short positions until the MACD indicator reverses upwards, but this can happen at night. Novice traders themselves must decide whether to close their short deals now or wait for maximum profit. You are advised to open new sell orders after an upward correction and a new MACD sell signal.

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

EUR/USD. Thursday is the most important day of the week

Trading 09 Déc 2020 Commentaire »

Traders of the EUR / USD pair have two main topics on their agenda: the December ECB meeting and the US inflation. Even though the general tone of trading is more globally questions such as (coronavirus, vaccination, political bidding in the US Congress), they will move away from the shadow over the next day (approximately until the end of Thursday), serving only as an indicator of risk / anti-risk sentiment among traders. In the medium term, all the attention of market participants will be focused on the two listed fundamental factors.

So, the Central event of tomorrow will be the December meeting of the European Central Bank. Members of the regulator will hold their last meeting this year and according to the established tradition, it will determine the future prospects of monetary policy while commenting on the results of the outgoing year. Looking ahead, it is worth noting that it will be difficult for the ECB to reverse the EUR / USD trend, since many "dovish" decisions are already taken into account in current prices. And if Christine Lagarde does not go beyond the predicted scenarios, the Euro's reaction will be short-term. It is for this reason that it is not necessary to open trading positions for the pair immediately after the press conference of the head of the Central Bank, and even more so - immediately after the publication of the final communique of the December meeting. The initial market reaction may differ dramatically from the final one, so there is a risk of false price movements.

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It is also worth remembering that since the last ECB meeting, the European currency has strengthened against the dollar by more than 500 points. At the end of October, the EUR / USD pair was in the area of 1.1650 and at the moment it is trading within the 21st figure. This is despite the fact that the Euro zone economy is in a state of deflation and the latest inflation figures came out worse than forecast values. At the same time, export competitiveness is declining. Therefore, there is no doubt that the inflated exchange rate of the European currency will be the subject of criticism from Lagarde and the rest of the ECB members. But will they be able to reverse the EUR / USD trend with just verbal interventions? In my opinion, members of the Central Bank will only be able to achieve a short-term "lowering" effect when they explicitly announce currency intervention. The fact is that the growth of EUR / USD is mainly due to the weakness of the dollar, so ECB members are likely to be powerless before the strength of the upward trend. Of course, we can assume that Lagarde will decide to take extraordinary measures - for example, in a hypothetical context, he can allow an interest rate cut but this scenario is too unlikely.

On the contrary, the expansion of the ECB's stimulus program is widely expected. Most likely, the regulator will increase the PEPP program by 500 billion euros tomorrow (the current level is 1.35 trillion euros), and probably extend the emergency bond purchase program immediately for a year until mid 2022. According to ECB's Chief Economist Philip Lane last week , the combination of PEPP and TLTRO programs "is very effective in a pandemic environment." At the same time, he recalled that the regulator has other tools but by judging the previous comments of his colleagues, the Central Bank will prefer to focus on the calibration of these programs at the December meeting. The market reaction in this case will depend on the combination of "expectation / reality". If the above scenario is implemented at the December meeting,

Another argument in favor of further growth of the Euro is related to the prospects for the adoption of the EU budget. Today it became known that Poland and Hungary agreed to abandon their intention to veto the budget process. So far, this information is exaggerated on the market in the form of rumors, but these rumors are relayed by very reputable publications. According to them, the controversial provision on the rule of law mechanism (which caused all the fuss) will still remain, but at the summit, the leaders will adopt the so-called "methodological recommendations" on this mechanism, which will take into account the comments of Poland and Hungary. The recommendations, in particular, will prescribe a step-by-step scheme for applying the rule of law mechanism, with all the conditions and time frames.

Thus, Thursday's European events are unlikely to "drown" the Euro. The market is ready to implement the ECB's "dovish" scenario, while the European regulator is too slow for unpredictable decisions. Therefore, the expansion of QE, soft rhetoric, and criticism of the overvalued EUR / USD exchange rate - all these factors are more or less taken into account in prices.

But dollar bulls can become victims of inflated expectations. At the start of the US session on Thursday, data on the growth of inflation in the US will be published. According to most experts, the main indicators will show positive dynamics. According to forecasts, the overall consumer price index on a monthly basis in November should reach 0.1% (after falling to zero), and in annual terms - increase to 1.3%. Core inflation should show similar dynamics: 0.2% on a monthly basis and growth to 1.6% on an annual basis. Such expectations are associated, in particular, with good "salary" indicators, which were published last Friday. For example, the average monthly hourly wage was expected to fall to zero in November, while traders saw an increase of up to 0.4%. In annual terms, the index remained in October at the level of (4.4%).

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As you can see, the forecasts for the growth of US inflation are optimistic. But if they are not met, the dollar will be under significant pressure including due to inflated expectations of most investors.

It is necessary to make trading decisions on the EUR / USD pair based on the results of tomorrow. For me, neither the ECB nor US inflation will be able to reverse the trend by 180 degrees, which means that any large-scale corrective drawdowns should be used as a reason to open long positions. The first goal is 1.2150 (today's high), the main goal is 1.2200. The relevance of the upward trend scenario will be lost only if the pair fixes below the 1.1950 mark (the middle line of the Bollinger Bands on D1), diving to the base of the 19th figure or lower.

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

*China Nov Bank New Lending CNY 1.43 Trillion Vs. CNY 689.8 Bln In Oct; Consensus CNY 1.40 Trillion

Trading 09 Déc 2020 Commentaire »

China Nov Bank New Lending CNY 1.43 Trillion Vs. CNY 689.8 Bln In Oct; Consensus CNY 1.40 Trillion


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

*Bank Of Canada Maintains Target For Overnight Rate At The Effective Lower Bound Of 0.25%

Trading 09 Déc 2020 Commentaire »

Bank Of Canada Maintains Target For Overnight Rate At The Effective Lower Bound Of 0.25%


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

EURUSD appraoches short-term support

Trading 09 Déc 2020 Commentaire »

EURUSD has broken below 1.21 as we warned traders. EURUSD was vulnerable to a move lower and this is exactly what is happening now. Price is approaching important short-term support. Daily trend in Ichimoku cloiud terms remains bullish.

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EURUSD is above the Daily Kumo. Price is pulling back towards the tenkan-sen (red line indicator). This is support at 1.2040. Breaking below this level will open the way for a move towards 1.19. Currently I do not expect price to fall below 1.2040.

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In the 4 hour chart EURUSD is approaching the Kumo (cloud) support. Staying above the Kumo and specifically above the lower cloud boundary (1.20) is key for bulls. Inability to hold above 1.20 will bring more pressure on EURUSD. Bouncing off cloud support would be a bullish sign. Resistance is found at 1.2110-1.2125. Recapturing this level will be a sign that bulls are back in full control of the trend.The material has been provided by InstaForex Company - www.instaforex.com

Gold bulls unable to hold above $1,850.

Trading 09 Déc 2020 Commentaire »

Gold price is trading around the major resistance area of $1,850-60. This was once key support and it is key resistance now. Price briefly broke above the resistance area today but price is under pressure once again.

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Blue rectangle - resistance area

Gold price has made an impressive reversal off the $1,763 low. Price has climbed steadily nearly $100 and reached major resistance area. Short-term support is found at $1,832 and next at $1,806. Bulls want to see price pull back to $1,800 and form a higher low. Best entry area for longs is around the 61.8% Fibonacci retracement. If bulls manage to hold Gold price above $1,800 on a weekly basis, we could see over the next couple of months Gold price reach new all time highs.

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

Bullish USDCHF at 0.89 for a move towards 0.90-0.9050

Trading 09 Déc 2020 Commentaire »

USDCHF is trading at 0.89. The RSI has not followed price into making new lows. I expect at least a short-term bounce in USDCHF towards 0.90-0.9050 area. That is why I prefer at current levels to go against the trend and turn bullish.

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Green line - resistance

Blue lines -bullish divergence

USDCHF is expected to bounce from current levels. I prefer to turn bullish with 0.8850 as stop for a move towards 0.90-0.9050. 0.8950 is the first obstacle that bulls need to overcome. Breaking above 0.8950 will increase chances for our bullish view for a move towards the green trend line resistance. Longer-term trend remains bearish as long as price is below 0.9050. This is a high risk trade idea as we go against the trend.

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

December 9, 2020 : EUR/USD daily technical review and trade recommendations.

Trading 09 Déc 2020 Commentaire »

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After such downside movement that took place in November, evident signs of bullish reversal were demonstrated around the depicted price levels of 1.1600.

Shortly after, the EUR/USD pair has demonstrated a significant BUYING Pattern after the recent upside breakout above the depicted price zone (1.1750-1.1780) was achieved.

As mentioned in the previous article, the pair has targeted the price levels around 1.1920 which exerted considerable bearish pressure bringing the pair back towards 1.1800 which constituted a prominent KEY-Zone for the EUR/USD pair.

Recently, the price zone around 1.1840 was mentioned as a prominent KeyZone to be watched for Price Action. Since then, this price zone has been acting as a prominent SUPPORT & the pair has been failing to breakthrough below it.

That's why, another upside movement was expressed towards 1.1950-1.1980 where the depicted trendline failed to offer sufficient resistance.

Further upside movement was demonstrated towards 1.2160 where a false breakout to the upside may be expressed as a possible bearish reversal signal.

Hence, Bearish closure below the mentioned price zone of 1.2100 is needed to turn the intermediate outlook for the pair into bearish and enhance a quick bearish decline towards 1.1920 and 1.1840.

Trade Recommendations :-

Currently, Conservative traders should be looking only for SELL Positions. Bearish Closure below 1.2100 should persist for confirmation. Exit level should be placed above 1.2160.

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

December 9, 2020 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 09 Déc 2020 Commentaire »

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Recently, the EURUSD pair has failed to maintain sufficient bearish momentum below 1.1625 (38% Fibonacci Level).

Hence, another bullish breakout was being demonstrated towards 1.1870 which corresponded to 76% Fibonacci Level.

As mentioned in previous articles, the price zone of 1.1870-1.1900 stood as a solid SUPPLY Zone corresponding to the backside of the broken channel.

Moreover, the recent bearish H4 candlestick closure below 1.1770 was mentioned in previous articles to indicate a valid short-term SELL Signal. All bearish targets were already reached at 1.1700 and 1.1630 where the recent bullish recovery was initiated.

However, The recent bullish pullback towards the price zone of 1.1950-1.1970 failed to find sufficient bearish rejection.

The EURUSD pair was trapped between below the previous key-level (1.1950) until bullish breakout occured to the upside. Further bullish advancement was expressed towards 1.2150 as expected.

Currently, bearish closure and persistence below 1.2050 then 1.1950 is needed to abort the ongoing bullish momentum to initiate a bearish movement at least towards 1.1860 and 1.1770.

Otherwise, the intermediate-outlook for the pair remains bullish.

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