GBP/USD. Fight continues: Brexit negotiations keep the pound in good shape

Trading 14 Déc 2020 Commentaire »

The pound-dollar pair continues to show increased volatility: if the price flew within the 150-point range in early December, then recently, the price band has expanded to 300 points.

So, last Friday, traders recorded a low at 1.3134, and today it has marked a high at 1.3445. However, such a storm of volatility is useless for both bulls and bears of GBP/USD. It is equally risky to open short or long now, as the mood of investors is changing at a kaleidoscopic speed. Official statements are intertwined with numerous rumors that flood the press. It is noteworthy that traders react to official and unofficial messages in almost the same way. Therefore, it is unpredictable. at the start of trading on monday, GBP/USD recorded a 150-point growth gap, which, however, was almost completely closed during the Asian session. The pair fell into the framework of the 32nd figure in the European session, but after a few hours it found itself in the area of the 34th price level. But even at this height, buyers of GBP/USD could not resist: traders wandered in 100-point steps throughout the day, but by and large they stood still. Neither bulls or bears can turn the tide in their favor against the backdrop of a contradictory fundamental picture.

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Let me remind you that following a face-to-face meeting between Boris Johnson and Ursula von der Leyen, a decision was made to continue the negotiation process. The deadline was set for December 13 (last Sunday), but on Friday it was clear that the negotiators would not be able to reach the finish line by the deadline. Two scenarios were discussed in the press: either the parties put the final point in the negotiations, or the negotiators will take more time. The second option was implemented: the heads of the negotiating groups stated that they need to "go another mile".

But the initial optimism over the prolongation of the negotiation process quickly enough came to naught. The fact is that Downing street voiced quite pessimistic rhetoric about the prospects for further negotiations. According to a spokesman for British Prime Minister Boris Johnson, concluding a trade deal "is an unlikely option", due to the remaining "significant gaps".

No sooner did the GBP/USD bears win back the pessimism of the British government, as the influential Financial Times became the focus of attention. Referring to their sources, FT journalists said that the deal, firstly, will be concluded at the last moment, and secondly - actually on the terms of the Europeans. According to insider information, the European Union will make some last-minute concessions to London, but the British will have to agree to the key demand of Brussels, which is that the country will not be able to violate EU rules on competition in the market.

According to the sources, the British will eventually be forced to give in due to the "asymmetry of influence" between the two sides. In dry terms, this means that Britain will send just over 40% of its exports to the EU, while the key countries of the eurozone send only 5-6% of their exports to Britain. In addition, according to insiders, Brussels intends to demonstrate to supporters of Italexit, Grexit and other Eurosceptics that leaving the EU is a politically failed and economically unprofitable idea. Therefore, the leaders of the EU avoid the phrase "mutually beneficial result" when it comes to negotiations with the UK. According to sources familiar with the negotiations, the Europeans made it clear to their British counterparts that on a global scale, the UK is only one of many markets for the EU. While London is more interested in access to the single market, especially in light of Joe Biden's victory in the US elections.

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This news report from the Financial Times provoked a growth momentum for the GBP/USD pair, although insiders voiced generally obvious things. In contrast to the FT report, Barnier's comments emerged, who said that the fishing issue is still not resolved and is the most difficult in the negotiation process. In addition, according to the Sunday Times, UK supermarkets have begun stocking up on food in droves, preparing for a hard scenario. According to journalists, similar recommendations were made to retailers from Downing Street. Allegedly, government officials "insistently demanded" from suppliers to create stocks for six weeks and provide conditions for their storage.

Such a contradictory fundamental background does not allow GBP/USD traders to determine the price movement vector. The pair visited the area of the 32nd figure and the 34th figure today. As a result, the pound settled in the middle of the 33rd price level in anticipation of more news from the fields of the negotiation process. As you can see, price fluctuations of GBP/USD are unpredictable - the pair can turn 180 degrees in an instant. Therefore, trading the pound is now extremely risky and impractical. It is unknown exactly how long the current round of negotiations will last. What the negotiators will come to is also unknown. Obviously, the parties must come to some kind of decision before the end of the week. Further - the pre-Christmas and pre-New Year period. Therefore, a bomb of information can explode at any moment, having a strong impact on the British currency.

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

Analytics and trading signals for beginners. How to trade GBP/USD on December 15? Analysis of Monday deals. Getting ready

Trading 14 Déc 2020 Commentaire »

Hourly chart of the GBP/USD pair

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The GBP/USD pair opened Monday with a gap of 150 points to the upside, which immediately confused all the cards for traders. The gap does not happen often in the foreign exchange market, but it does happen. Given this situation, the downward trend line was immediately broken, so novice traders could look for an opportunity to open long positions with targets at 1.3317 and 1.3388, as we suggested in the previous review. Unfortunately, this happened at night, and it was also necessary to open long positions. If traders waited until morning and were considering options for opening long deals, then it would be much better. In any case, even if traders had opened long deals at the very moment when trading had opened, then it would have been at a minimum profit around the 1.3388 level. Further, a downward reversal occurred with a signal from MACD near the upper border of the downward channel. Therefore, novice traders could already open deals here for a decline. In the long term, the price may reach the lower border of the channel, but the upward signal from MACD can be used to leave the market.

Negotiations on the Brexit trade deal is still the main topic for the pound. However, there is simply no fundamentally new information on this topic now. The only thing that both parties were able to agree on was to continue negotiations, although there was no visible progress, and there is still none. However, nothing else is left. There is no sense in ending the negotiations as long as there is at least a faint hope of concluding an agreement. It looks like London and Brussels will try to conclude a trade deal for at least another two weeks.

The UK will release quite important reports on Tuesday: the unemployment rate, applications for unemployment benefits and wages. Unfortunately, most likely, these reports will be ignored, however, they should not be overlooked. More likely, from a technical point of view, we still have a downward movement now, so we are waiting for weaker data than experts predict, so the US dollar will receive support for the market. On the whole, the so-called "high-volatility swing" is still present for the pound/dollar pair. That is, the price jumps up and down to very high values. For example, the last round of the upward movement was 300 points and took exactly one day in time. At the same time, the rising movement may resume, especially if the MACD indicator produces a strong buy signal.

Possible scenarios for December 15:

1) A new short-term downward trend has formed with a descending channel. However, after a fairly strong rise in quotes, the MACD indicator was discharged to the zero level, so there may be another upward spurt. We believe that it is advisable to buy the pair using the MACD signal, aim for 1.3419 and 1.3513.

2) Selling, from our point of view, is more appropriate now, since there is a downward channel, from the upper border of which a rebound has already been made. Thus, the price rebounding from its upper border could be used to sell the pair. For new short positions, you need to wait for a new sell signal from MACD. Aim for support levels 1.3229 and 1.3133.

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 15? Analysis of Monday deals. Getting ready

Trading 14 Déc 2020 Commentaire »

Hourly chart of the EUR/USD pair

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The EUR/USD pair initially tried to resume its upward movement on Monday, although it has been more sideways in the last eleven days, but this time it failed to surpass the 1.2177 level, from which it had already rebounded off, and began a downward movement, which also ended very quickly, near the new upward trend line. And so today the euro/dollar pair was trading in different directions and could neither resume its upward movement, nor start moving downward, nor leave the horizontal channel for the entire day. Therefore, trading the pair is now quite difficult, especially for novice traders. In the last review, we advised you to open long positions only if the 1.2159-1.2177 area has been overcome, which did not happen on Monday. We advised you to consider short positions if a new sell signal from MACD is generated. However, the pair had already gone down by around 50 points once this new signal had appeared, and so novice traders could have entered during the very end of the movement, so it was not worth opening short deals. Especially now, when the downward trend line has already been formed.

The European Union only released one report, the industrial production data, which turned out to be slightly better than traders expected. Therefore, the morning upward movement and the evening downward movement can hardly be associated with macroeconomic data or any news. Especially considering the fact that market participants continue to ignore most of the news and reports. Thus, we continue to believe that a purely speculative growth remains for the pair, which is not substantiated either by fundamental events or by anything else. Nevertheless, the upward trend is generally preserved.

No important data scheduled in the European Union on Tuesday, while a report on industrial production will be released in the US, which is also unlikely to cause at least some reaction. Since traders have a trend line that they can use, they should trade from it. And there will practically be no fundamental background on Tuesday, unless something extraordinary happens. Novice traders can only prepare for the Federal Reserve meeting this Wednesday.

Possible scenarios for December 15:

1) Long positions are not relevant at the moment, since we have not surpassed the 1.2159-1.2177 area. Therefore, you need to wait until the specified area has been overcome and afterwards, you can finally open buy orders while aiming for 1.2184 and 1.2206 and slightly higher, by 20 points. You also need to be prepared for the fact that the upward movement can end near this area.

2) Trading for a fall looks more appropriate, however, a strong bullish sentiment is still present in the market, and now there is also an upward trend line. Therefore, we recommend waiting for the price to settle below the trend line and then you can open short positions while aiming for 1.2092 and 1.2070.

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

ECB's Panetta Says Bank Ready To Add More Stimulus When Needed

Trading 14 Déc 2020 Commentaire »

The European Central Bank is ready to boost its pandemic bond buying, if needed, to support the single currency economy amid risks, including the adverse effect from a strong euro on inflation, ECB Executive Board member Fabio Panetta said Monday. Last Thursday, the ECB unveiled a slew of stimulus to support the economy amid the coronavirus crisis, the main measures being an increase in the provision for asset purchases under the pandemic emergency purchase programme, or PEPP, and more favorable conditions for targeted loans to banks to boost lending to the real economy.

The bank increased the size of asset purchases under PEPP by EUR 500 billion to a total of EUR 1,850 billion. The purchase horizon was extended to at least the end of March 2022.

"The PEPP envelope can be further expanded and extended, if warranted by the inflation outlook," Panetta said in a speech at an investment forum in Rome. "And we stand ready to adjust all our instruments if downside risks to the outlook materialize, including those stemming from exchange rate dynamics."

The ECB Staff projected annual inflation at 0.2 percent for this year, 1.0 percent in 2021, 1.1 percent in 2022 and 1.4 percent in 2023.

An appreciation of the euro could significantly affect euro area inflation, the policymaker added.

"There should be no doubt here: the ECB will not accept inflation settling at levels that are inconsistent with its aim," Panetta said.

ECB President Chrisinte Lagarde's said last week that the PEPP envelope need not be used in full if favorable financing conditions can be sustained with existing measures.

She also said that the downside risks to the euro area growth outlook have become less pronounced. The ECB can guarantee its commitment to support the recovery: the stabilization effort should therefore continue until the economy is on a solid, durable recovery path, Panetta said.

The ECB expects GDP to decline by 2.2 percent in the fourth quarter of 2020 and to rebound only marginally in the first quarter of 2021.

The latest ECB Staff macroeconomic projections foresee annual real GDP growth at -7.3 percent this year, 3.9 percent in 2021, 4.2 percent in 2022 and 2.1 percent in 2023.


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

India's Consumer Price Inflation Slows More Than Expected

Trading 14 Déc 2020 Commentaire »

India's consumer price inflation slowed more than expected in November, data from the National Statistical Office showed Tuesday.

Inflation slowed to 6.93 percent in November from 7.61 percent in October. The rate was forecast to moderate to 7.1 percent.

Likewise, food price inflation eased to 9.43 percent from 11 percent a month ago.

On a monthly basis, consumer prices gained 0.32 percent and the consumer food price index climbed 0.24 percent in November.

The central bank forecast 6.8 percent consumer price inflation in the December quarter of 2020 and 5.8 percent in the next quarter.

Data released earlier in the day showed that wholesale price inflation rose to 1.55 percent year-on-year in November from 1.48 percent in October.


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

December 14, 2020 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 14 Déc 2020 Commentaire »

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The recent bullish breakout above 1.3000 has enabled further bullish advancement towards 1.3250-1.3270 where the upper limit of the new movement channel came to meet the GBP/USD pair.

Later on, further bullish advancement was expressed towards 1.3380-1.3400 where the pair looked overbought.

Signs of bearish Price action have been demonstrated around the price levels of (1.3380-1.3400) for the past few weeks.

Initial bearish target was reached around 1.3300. However, the pair has failed to pursue towards lower targets.

Instead, another bullish spike was expressed towards 1.3480-1.3500 where the upper limit of the depicted movement channel provided significant bearish pressure on the pair.

Recently, the GBPUSD pair looks overbought again around the price levels of 1.3400.

Hence, intermediate-term outlook remains bearish as long as the pair manages to persist below 1.3400 which constitutes a significant Key-Level to offer SELL Entries. Initial bearish target located around 1.3000.

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

December 14, 2020 : EUR/USD daily technical review and trade recommendations.

Trading 14 Déc 2020 Commentaire »

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After the demonstrated sideway movement took place in November, evident signs of BUYING Pressure has originated around the depicted price zone of 1.1800-1.1840.

Shortly after, the EUR/USD pair has demonstrated a significant upside movement after the recent 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 1.1990 which exerted considerable bearish pressure bringing the pair back towards 1.1920 which constituted a temporary KEY-Zone for the EUR/USD pair.

That's why, another episode of upside movement was expressed towards 1.2160 where a false breakout to the upside was regarded as a 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 around the price level of 1.2150-1.2170. Exit level should be placed above 1.2177.

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

UK House Prices To Rise 4% In 2021: Rightmove

Trading 14 Déc 2020 Commentaire »

UK house prices are forecast to log robust growth next year as there is strong evidence that people will continue to have their reprioritised housing needs high on their life agendas, property website Rightmove said Monday.

House prices are forecast to climb 4 percent in 2021.

In December, house prices increased 6.6 percent annually, faster than the 6.3 percent rise registered in November.

However, on a monthly basis, house prices dropped 0.6 percent after easing 0.5 percent in November.

With the expectation of a return to more normality in the second half of 2021 and a likely 'fresh start' mentality for some, there are sound reasons for continued positive market sentiment that will outweigh the economic, political, and health challenges ahead, Tim Bannister, Rightmove's Director of Property Data, said.


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

EUR/USD Hot Forecast for 14 December

Trading 14 Déc 2020 Commentaire »

EUR/USD TECHNICAL HIGHLIGHTS:

  • The EUR/USD forex market on the daily chart has rallied for 2 months
  • Consolidation pattern set up to lead to another run
  • The 1.2500-area may be where it ends up relatively soon

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The euro currency has fallen against the US dollar after bulls failed to break above the current monthly high, around the 1.2170 area. Failure to overcome the 1.2070 area in the near-term could result in a correction back towards the consolidation range between 1.2170-1.2070.

Euro/dollar rebound near the uptrend support line on last Thursday and is benefiting from upside momentum on the four-hour chart. Moreover, the Relative Strength Index is around 50, outside overbought conditions.

Resistance awaits at monthly high 1.2170 region (2020 peak) , followed by 1.2200 and 1.2250, lines that played a role back in 2018. Looking to the left on the charts, the next big level of resistance isn't until the February 2018 high around 1.2500. Next support awaits at 1.2070, which was a cushion on Thursday . It is followed by 1.990, which a swing high resistance during November.

To flip the currently bullish bias, an aggressive thrust lower is needed, and one that pushes price below the breakout point of 1.2070. The EURUSD pair is clearly bearish while trading below the 1.2070 level and only bullish while trading above the key resistance is found at the 1.2170.

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

EURUSD once again unable to stay above 1.2135.

Trading 14 Déc 2020 Commentaire »

EURUSD bulls made another run today towards 1.2175 but sellers stepped in again and price is turning lower. In the past six out of 7 sessions when price moved above 1.2140, sellers stepped in and pushed price lower.

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Green rectangle- support

Yellow rectangle - selling pressures

As can be seen in the Daily chart above, bulls find important selling pressures inside the area of the yellow rectangle. This is a sign that bulls are not strong enough to recapture 1.2150 and move towards 1.22. Trend remains bullish but this is a worrying sign that traders should not ignore. If price continues lower and breaks below 1.21, we should not be surprised if we see EURUSD move closer to the green rectangle area at 1.1960.

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