Analytics and trading signals for beginners. How to trade GBP/USD on December 17? Analysis of Wednesday deals. Getting ready

Trading 16 Déc 2020 Commentaire »

Hourly chart of the GBP/USD pair

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While the EUR/USD currency pair moved from side to side before the results of the Federal Reserve meeting were announced, following them, the GBP/USD pair stuck to its routine. Since the quotes still got out of the downward channel, the trend changed to an upward one. In our previous article on the pound (the day before yesterday), we advised you to buy on a signal from the MACD. This signal could bring about 80 points of profit to novice traders (opening on December 15 at 13-14 hours). Further, despite forming a new upward trend line, the MACD indicator no longer produced strong buy signals, although the upward movement continued. The upward trend line supports those who are trading up now, and the volatility of the pair was quite low today (about 120 points), although it is better to say that there were no sharp movements, and the volatility was still sufficient. So now novice traders can track new buy signals from the MACD indicator. And this indicator has almost discharged to the zero level, which means that in the near future it may produce a buy signal. Also, another signal is when the price rebounds from the rising trend line.

The British pound continues to rise no matter what. Everyone is so tired of the topic of negotiations on a trade deal between the UK and the European Union that they don't even want to think about it. All the same, there has been no progress. And the pound is still growing, despite all the negativity on this topic. A rather important inflation report was also published in the UK today, showing a decline to 0.3% y/y in November. This is certainly very bad for the British economy, but the pound doesn't care. It grew in the morning when this report came out. The UK Services PMI slightly rose from November, but still remained below 50.0. US retail sales fell by 1.1% in November, which is much worse than expected, and PMIs in the services and manufacturing sectors were neutral. But the dollar was still appreciating in the afternoon.

The Bank of England will hold its final meeting for the year on Thursday, which promises to be completely passable. Markets do not expect the UK central bank to cut its key rate. Most likely, it will save this powerful tool for stimulating monetary policy for the most extreme case. Also, no one expects that the asset buyback program will be expanded (also an incentive step), as it was increased at the last meeting. In general, novice traders should pay more attention now to technical analysis, since the entire foundation is now being ignored.

Possible scenarios for December 17:

1) A new upward trend with a trend line has appeared. So now novice traders are advised to wait for a new buy signal from the MACD with the targets at 1.3587 and 1.3709. A rebound from the trend line can also be regarded as a buy signal.

2) Selling, from our point of view, is not advisable right now, since there is an upward trend line. Therefore, sellers need to wait until they manage to surpass this line and only after that should they start trading down while aiming for 1.3337 and 1.3215 (they can be corrected after the signal is generated).

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 17? Analysis of Wednesday deals. Getting ready

Trading 16 Déc 2020 Commentaire »

Hourly chart of the EUR/USD pair

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The EUR/USD pair continued to move so that no one wanted to trade it on Wednesday. The results of the Federal Reserve meeting will be announced today, so the markets were in a very agitated state throughout the day. During the day there were also macroeconomic data, which will be discussed a little below. In the meantime, we should note that the euro/dollar pair soared up by 60 points at approximately 10 am, which is quite a lot at the current level of volatility. And that was the end of the upward movement. That is, novice traders had no opportunity to win back this movement, and when the candlestick closed, it was too late to open long positions. After that, the quotes began to decline and finally dropped to the lower border of the new rising channel, which was formed to replace the ascending trend line, which the price has overcome. Thus, the upward trend is formally maintained, so it is recommended to consider bull trading. But at the same time it is better to wait for the morning and assess the situation in a new way, when all the results of the Fed meeting will be announced.

The European Union published business activity indices in the services and manufacturing sectors. It turned out that the business activity in the service sector began to recover in December after a disastrous November (the second lockdown in Europe) and reached 47.3 (value for October 41.9). Business activity also increased in the manufacturing sector. However, the problem is that these reports were published following the euro's growth in the morning. Therefore, it is impossible to connect these two events, which means that the markets continue to ignore macroeconomic statistics. Macroeconomic reports in the US were weaker than traders expected, which did not prevent the dollar from appreciating in the afternoon. So yes, traders ignored macroeconomics again.

From the aforementioned, it follows that the EUR/USD pair continues to trade in an inconvenient manner, constantly generating false signals, which is usually extremely rare. So now is not the best time to trade. Therefore, novice traders are advised to track the clearest and strongest signals. The European Union will release a report on inflation on Thursday, and in America - a report on the number of applications for unemployment benefits. However, there is no doubt that these data will not cause any market reaction.

Possible scenarios for December 17:

1) Long positions are currently relevant again, since the pair surpassed the 1.2159-1.2177 area. There is a rising channel now. Thus, in the current situation, it is necessary to wait for a new buy signal from the MACD, and preferably a strong one. That is, the MACD will discharge as close to the zero level as possible and turn up there, while the price should remain within the channel. The targets are 1.2194 and 1.2219.

2) Trading for a fall does not seem appropriate, since the price is located inside the rising channel. Thus, formally, one should wait for the price to settle below the channel and only after that should you consider the possibility of opening short positions while aiming for 1.2125 and 1.2100.

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

Ifo Slashes Germany's 2021 Growth Forecast

Trading 16 Déc 2020 Commentaire »

Germany's economy is set to recover at a slower pace than expected earlier, thanks to the resurgence in the coronavirus pandemic and the second lockdown to curb it, the think tank ifo institute said Wednesday.

In its winter forecast, the institute lowered the growth outlook for Germany for next year to 4.2 percent from 5.0 percent predicted in the autumn projections.

The biggest economy in the euro area is forecast to shrink 5.1 percent this year, which a tad smaller than the 5.2 percent contraction seen earlier.

Ifo raised the growth outlook for 2022 to 2.5 percent from 1.8 percent.

"Recent shutdowns in Germany and other countries are pushing the recovery back," ifo said.

"Production of goods and services won't reach pre-crisis levels until the end of 2021."


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

U.S. Business Inventories Climb More Than Expected In October

Trading 16 Déc 2020 Commentaire »

A report released by the Commerce Department on Wednesday showed business inventories in the U.S. increased by more than expected in the month of October.

The Commerce Department said business inventories climbed by 0.7 percent in October after rising by an upwardly revised 0.8 percent in September.

Economists had expected inventories to rise by 0.4 percent compared to the 0.7 percent increase originally reported for the previous month.

Wholesale and retail inventories jumped by 1.1 percent and 0.9 percent, respectively, while manufacturing inventories edged up by 0.2 percent.

The report said business sales also advanced by 0.9 percent in October, matching the upwardly revised increase seen in September.

Wholesale sales spiked by 1.8 percent and manufacturing sales surged up by 1.0 percent, while retail sales came in unchanged.

With sales rising by slightly more than inventories, the total business inventories/sales ratio edged down to 1.31 in October from 1.32 in September.


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

*U.S. Crude Oil Inventories Drop By 3.1 Million Barrels In Week Ended 12/11

Trading 16 Déc 2020 Commentaire »

U.S. Crude Oil Inventories Drop By 3.1 Million Barrels In Week Ended 12/11


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

U.S. Homebuilder Confidence Pulls Back More Than Expected In December

Trading 16 Déc 2020 Commentaire »

After reporting homebuilder confidence at a record high in the previous month, the National Association of Home Builders released a report on Wednesday showing confidence pulled back by more than expected in the month of December.

The report said the NAHB Housing Market Index slid to 86 in December after climbing to 90 in November. Economists had expected the index to dip to 88.

Despite the pullback, the NAHB noted the housing market index was still at the second-highest reading in the history of the series.

"Housing demand is strong entering 2021, however the coming year will see housing affordability challenges as inventory remains low and construction costs are rising," said NAHB Chairman Chuck Fowke.

He added, "Policymakers should take note to avoid increasing regulatory costs associated with land development and residential construction."

The bigger than expected decrease by the housing market index reflected decreases by all three of the component indices.

The index gauging current sales conditions dropped four points to 92, the component measuring sales expectations in the next six months fell four points to 85 and the gauge charting traffic of prospective buyers also decreased four points to 73.

NAHB Chief Economist Robert Dietz noted housing remains a bright spot for a recovering economy even as homebuilder confidence fell from historic levels.

"The issues that have limited housing supply in recent years, including land and material availability and a persistent skilled labor shortage, will continue to place upward pressure on construction costs," Dietz said.

He added, "As the economy improves with the deployment of a COVID-19 vaccine, interest rates will increase in 2021, further challenging housing affordability in the face of strong demand for single-family homes."

On Thursday, the Commerce Department is scheduled to release a separate report on new residential construction in the month of November.

Housing starts are expected to rise to an annual rate of 1.550 million in November from 1.530 million in October, while building permits are expected to inch up to 1.550 million from 1.545 million.


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

*U.S. Business Inventories Climb 0.7% In October

Trading 16 Déc 2020 Commentaire »

U.S. Business Inventories Climb 0.7% In October


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

*U.S. Housing Market Index Drops To 86 In December

Trading 16 Déc 2020 Commentaire »

U.S. Housing Market Index Drops To 86 In December


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

December 16, 2020 : EUR/USD daily technical review and trade recommendations.

Trading 16 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 - 1.2200 where a false breakout to the upside can be 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 1.2040 and 1.1920.

Trade Recommendations :-

Currently, Conservative traders should be looking only for SELL Positions after breakout below the price level of 1.2150-1.2170 occurs. Exit level should be placed above 1.2177.

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

December 16, 2020 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 16 Déc 2020 Commentaire »

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Recently, the EURUSD pair has failed to find sufficient bearish pressure at retesting of the backside of the broken channel around 1.1950-1.1970.

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

Currently, the pair looks overbought while expressing some sort of short-term reversal pattern. 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