Analytics and trading signals for beginners. How to trade GBP/USD on December 22? Analysis of Monday deals. Getting ready

Trading 21 Déc 2020 Commentaire »

Hourly chart of the GBP/USD pair

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The GBP/USD pair also initially fell and then rose at the beginning of the new working week. The difference with the EUR/USD pair lies in volatility. Traditionally, the pound/dollar pair is much more volatile, so the pound initially fell by 330 points, and then rose by 310. Such volatility is very dangerous for all traders, especially for beginners. If you do not set Stop Loss in such conditions, you can go bankrupt very quickly. Thus, we constantly advise you to first of all trade in a calm market, and open deals only when the signals are strong and there is a clear trend. Unfortunately, this cannot be said at the moment. In the morning review, we did not recommend trading upward, and we recommended closing sales if the MACD indicator turns up. And so, up to the moment when the MACD turned up, novice traders could get several tens of points of profit. In the current circumstances, we would recommend looking for new sell signals, as it is difficult to imagine, on the basis of which the pound can continue rising, which started in the afternoon.

The pound fell quite naturally in the morning and night. However, it sharply began to grow in the afternoon, which raises big questions. However, this is exactly how the pound has been traded in recent months - with big questions about justification. Therefore, novice traders can themselves conclude how pleasant the market is right now. Trade negotiations had once again ended in nothing and no progress had been made. And this factor was also supposed to put pressure on the pound. But it is an open question as to why the pound grew in the afternoon.

The markets will focus on news of a new strain of coronavirus, and possibly new information on the progress of negotiations between London and Brussels on a trade deal. The closer the date of December 31, when the transition period will be officially completed, the closer is the denouement of this whole epic. The only question is, what will it be? The pound may continue to trade in a highly volatile mode. Also, do not forget that Christmas and New Year holidays are approaching. Sometimes there is a drop in volatility during these periods, and sometimes, on the contrary, its growth. Therefore, this is another factor that can influence the pair's movement and confuse the technical picture.

Possible scenarios for December 22:

1) The upward trend is temporarily canceled since the price has settled below the upward trend line. So now, in order for novice traders to consider trading up again, they need to wait for the downward trend to end or a new upward trend to appear. Until then, it is not recommended to buy the pound.

2) Selling, from our point of view, is now advisable, since the price has settled below the trend line. So now you can open short positions while aiming for support levels of 1.3409, 1.3346 and 1.3300. To do this, you need to wait for a new sell signal from MACD.

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 22? Analysis of Monday deals. Getting ready

Trading 21 Déc 2020 Commentaire »

Hourly chart of the EUR/USD pair

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The EUR/USD pair was very volatile on Monday. We did not expect such activity from traders, since there should have been no news. However, quotes started to sharply fal, which was caused by the news of a new strain of coronavirus, which is 70% more infectious than the usual COVID-19. In such a situation, the US dollar could rise in price as a reserve currency (about the same thing happened in March), or it could be due to the fact that the markets simply began to panic. In the second case, one cannot say what exactly caused the dollar's strengthening, especially since the pair's quotes also began to significantly rise in the afternoon. As a result, the price initially fell by 100 points, and then increased by the same amount. It was, of course, very difficult to practice these movements, especially for beginners. However, we have said more than once that 2020 is not the best year for trading in the foreign exchange market. There have been too many events this year that have caused absolutely crazy trading. At the moment, one cannot even say what is the trend for the euro/dollar pair. On the one hand, the upward movement was brought back, on the other, the quotes were leaving the rising channel. Thus, according to the technical analysis, it is now possible to conclude that a new downward trend is forming, but fuzzy and implicit. We expect the pair to fall on Tuesday, and the MACD indicator managed to discharge to the zero level. Therefore, we are waiting for a new sell signal.

No macroeconomic report from the European Union or the United States on Monday. The entire fundamental background came down to the news about a new strain of coronavirus in the UK. Traders had nothing to pay attention to. And the news about the new virus cannot be interpreted unambiguously. There is no such pattern: the deterioration of the epidemiological situation in the world = the growth of the dollar (or the growth of the euro). So tomorrow, for example, the markets may continue to be in a highly agitated state.

A seemingly very important report on GDP for the third quarter is set to be released in the US on Tuesday. However, this is already its third assessment, and market participants perfectly understand what value to expect. Therefore, we believe that news about a new strain of coronavirus, if any, will be more important. New bursts of excessive market activity are not excluded.

Possible scenarios for December 22:

1) Long positions have lost their relevance at the moment, as the quotes were leaving the rising channel. Thus, we would not recommend opening new long positions right now, no matter how attractive they may seem. Instead, you need to wait for a new upward trend in order to consider long deals.

2) Trading down looks more appropriate right now. The pair still went up a fairly decent distance and the MACD indicator is near the zero level. Thus, if a sell signal from MACD is generated, we recommend selling the pair while aiming for support levels 1.2205 and 1.2185. Target levels will be updated in the morning. Take note that trading is more risky now than during normal times.

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

Eurozone Consumer Confidence Improves More Than Expected

Trading 21 Déc 2020 Commentaire »

Euro area consumer confidence rose more than expected in December after weakening in the previous two months, preliminary data from the European Commission showed on Monday.

The flash consumer confidence index climbed to -13.9 from -17.6 in November. Economists had forecast a score of -16.8.

The Eurozone indicator is now back at its September level of -13.9.

The data was collected during December 1-20.

The corresponding index for the EU rose to -15.3 this month from -18.7 in November.

The final consumer confidence reading is set to be released along with the monthly economic sentiment survey data on January 7.


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

*Eurozone December Consumer Confidence Flash -13.9 Vs. -17.6 In November, Consensus -16.8

Trading 21 Déc 2020 Commentaire »

Eurozone December Consumer Confidence Flash -13.9 Vs. -17.6 In November, Consensus -16.8


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

Hungary Current Account Swings To Surplus In Q3

Trading 21 Déc 2020 Commentaire »

Hungary's current account logged a larger than expected surplus in the third quarter after a deficit in the previous three months, data from the Magyar Nemzeti Bank showed on Monday.

The current account showed an unadjusted surplus of EUR 0.752 billion versus a EUR 0.698 billion deficit in the second quarter. Economists had expected a surplus of EUR 0.125 billion.

The unadjusted capital account balance was EUR 0.931 billion.

The seasonally adjusted current account surplus was EUR 0.301 billion and the capital account balance was EUR 1.012 billion.

The seasonally adjusted net lending, which is the combined surplus on its current and capital accounts, was EUR 1.491 billion or 4.3 percent of quarterly GDP, the bank said.

The country's net foreign debt, excluding FDI debt instruments, decreased by EUR 0.8 billion from the previous quarter to EUR 10.2 billion at the end of September. That was equivalent to 7.4 percent of GDP in the last four quarters.


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

U.S. Dollar Higher On New Virus Strain Concerns

Trading 21 Déc 2020 Commentaire »

The U.S. dollar appreciated against its major counterparts in the European session on Monday, as concerns over border closures and tighter restrictions in the U.K. to contain the spread of a new strain of the coronavirus made investors cautious.

The British government on Saturday imposed tighter restrictions on south-east England, including London, amid virus crisis.

Fears intensified after Netherlands and Australia detected the emergence of the new variant found in the UK.

Canada joined Europe and Turkey to suspend flights from the U.K.

U.K. health officials said that the new Covid mutation is 70 percent more transmissible than other strains.

On the stimulus front, U.S. congressional leaders reached a deal on $900 billion coronavirus aid package.

Lawmakers will vote on the relief and funding bill today.

The greenback spiked up to 5-day highs of 103.89 against the yen and 1.2129 against the euro, after falling to 103.25 and 1.2235, respectively in early deals. The greenback is seen challenging resistance around 105.00 against the yen and 1.18 against the euro.

Reversing from its early low of 0.8840 against the franc and a 5-day low of 1.3441 against the pound, the greenback climbed to a 2-week high of 0.8919 and a 10-day high of 1.3188, respectively. The greenback may find resistance around 0.92 against the franc and 1.28 against the pound.

The greenback moved up to near a 3-week high of 1.2957 against the loonie, 10-day high of 0.7462 versus the aussie and near a 4-week high of 0.7002 against the kiwi, up from its early lows of 1.2784, 0.7606 and 0.7124, respectively. Next key resistance for the dollar is seen around 1.32 against the loonie, 0.73 versus the aussie and 0.68 against the kiwi.

Looking ahead, Canada new housing price index for November is due in the New York session.

Eurozone flash consumer sentiment index for December is set for release at 10:00 am ET.


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

Lithuania Current Account Surplus Rises In Q3

Trading 21 Déc 2020 Commentaire »

Lithuania's current account surplus grew in the third quarter, after declining in the previous three months, data from the Bank of Lithuania showed on Monday. The current account surplus increased to 7.8 percent of gross domestic product from an upwardly revised 6.6 percent in the second quarter. In the first quarter, the ratio was 8.1 percent. The current account was in a surplus for a second consecutive year, the bank said. In value, the current account surplus grew to EUR 1.024 billion from EUR 0.757 billion in the previous three months. The accumulation of the current account surplus was determined by the increase in the surplus of income and secondary income balances and the change of the foreign trade balance from deficit to surplus, the bank said.

These factors offset the rise in the primary income balance deficit, the bank added.

In the third quarter of 2019, the current account surplus was EUR 0.398 billion or 3.1 percent of GDP.


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

NZDUSD vulnerable to a pull back towards 0.69

Trading 21 Déc 2020 Commentaire »

NZDUSD is turning lower today. Dollar strength is pushing the pair lower. With the RSI having already provided a bearish divergence and breaking below 70, the chances for a pull back towards 0.69 and the 38% Fibonacci retracement have risen.

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Red lines - bearish divergence

Black lines - Fibonacci retracement levels

Our target is the 38% Fibonacci level. Price is vulnerable to a move towards that level. NZDUSD made a low today around 0.70. A daily close below this level will confirm that we are moving lower towards 0.69. Holding above today's low could provide a new higher high towards 0.72, but I believe this is the least probable scenario. Either way it is very risky to remain bullish at current levels as the upside potential is limited.

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

EURUSD respects bullish channel despite sharp pull back

Trading 21 Déc 2020 Commentaire »

EURUSD starts the week in negative territory relative to the close on Friday. However price was much lower earlier today as price fell towards 1.2129. Price is now back above 1.22 and this short lived pull back could be a bullish sign, showing bulls supporting the trend when price weakens.

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Green lines - bullish channel

EURUSD has pulled back towards the lower channel boundary respecting 1.21 support. This pull back was expected as we explained in our analysis posted back on December 17th. In order for price to continue higher we needed a pull back. Today's low is important support. For price to continue higher towards 1.24 we need to respect 1.2129. Failure to hold above today's low we should be prepared for a move towards 1.2050 at least.

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

Virus tests risk sentiment for strength, forcing EUR/USD pair to doubt whether it is moving in the right direction

Trading 21 Déc 2020 Commentaire »

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Greenback retreated from two and a half year lows on Friday as some investors decided to adjust their positions at the end of the year.

The USD index climbed above 90.2 points after falling on Thursday to its lowest level since April 2018 around 89.7 points.

On Monday, the greenback continued its attack on the positions of its main competitors.

"Investors have been selling the dollar lately on the back of increased risk sentiment, and this was partly due to expectations of fiscal stimulus in the US," said Sumitomo Mitsui Trust Bank.

"Now that the deal is practically agreed upon, we see the classic buy-by-rumor, sell-by-fact case, and the dollar shorts are closing," they added.

Senate Majority Leader Mitch McConnell said Sunday that Democrats and Republicans have reached a $900 billion cross-party deal. The bill now needs to pass the House and Senate vote.

At the same time, market participants continue to monitor the development of the situation with the spread of coronavirus in the world.

Investors turned their attention to the defensive greenback on Monday amid reports that a new mutation in the coronavirus has been discovered in the UK, which officials say is 70% more infectious.

The WHO said that the mutated COVID-19 was also detected in Denmark, the Netherlands, and Australia.

Fears that the United Kingdom and the European Union will not be able to conclude an agreement regulating their future relationship before the expiration of the post-Brexit transition period on January 31, 2020, also contributed to the diminishing risk appetite.

"The news of lockdowns and the uncertainty surrounding the London-Brussels trade deal are making the market nervous. Sentiment could change quickly if a last-minute Brexit agreement is reached. We continue to think the fishing deal is unlikely to fail due to fisheries," said strategists at National Australia Bank.

"The overall positive attitude to risk from vaccines and incentives, plus the fact that fiscal stimulus should be funded by significant US borrowing, continues to paint a picture of dollar weakness in 2021," they added.

Therefore, experts associate the current recovery of the greenback with a technical correction and recommend using it for more profitable sales.

The main currency pair added about 140 points last week, completing it near the 1.2255 mark.

On Monday, the EUR/USD pair rolled back to local minimums around 1.2135, but then recovered quite quickly, once again rising above the level of 1.2200.

Concerns about Brexit, as well as reports that eurozone countries are expanding or imposing stricter restrictions related to COVID-19, put pressure on the single currency.

At the same time, news on vaccines against coronavirus remains a positive factor for the euro. Vaccinations have already started in the US and UK. At the same time, the European regulator intends to hold a meeting on December 21 to issue a permit for the sale in the EU of a vaccine developed by pharmaceutical companies Pfizer and BioNTech.

"The 38.2% retracement from the 2008-2017 bearish move is the next target for the EUR/USD bulls. This level coincides with the 2018 high near 1.2500 and is a strong resistance. Considering that the previous two growth attempts this year gave way to pullbacks, we can expect another correction in the coming weeks. Buying on the decline should limit the fall at 1.2000 / 1.1900," Rabobank said.

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