USDX: Dollar can breathe before falling below 90 points

Trading 29 Déc 2020 Commentaire »

analytics5feb58881c787.jpg

The forecasts do not bode well for the dollar next year. And as it got closer, traders almost doubled their rates against the US currency. According to the CFTC, the volume of net short positions of non-commercial traders in the dollar index futures has jumped to its highest levels in the last nine years.

The weakening trend in the US dollar against major world currencies will continue due to a number of factors. According to currency strategists, the Federal Reserve's monetary policy will contribute to such dynamics. Therefore, "institutional investors will have an increased need to search for more risky investments, including in other currencies," experts write.

There are also opposite points of view. Perhaps the new American leader Joe Biden will not interfere in the activities of the central bank, as his predecessor did. Trump, as everyone remembers, put pressure on the Fed to ease monetary policy and lower the dollar.

"Trump needed a weak dollar, zero rates and unlimited quantitative easing to win the trade wars, which, judging by the dynamics of the trade balance, in the end, could not succeed," analysts write.

Meanwhile, the new head of the Treasury, Janet Yellen, is expected to contribute in every possible way to market exchange rates, free from outside interference. This is unlikely to help the dollar, at least in the first half of the coming year. The fact that Washington will focus on a strong dollar has not yet been confirmed.

Thus, the trend will remain downward. More aggressive moves by the Fed contribute to this. In addition, these very steps may be revised upward after the adoption of a new stimulus package by Congress.

The strengthening of the dollar next year should not be ruled out. Naturally, we are talking about corrective growth during a period of short-term pessimistic sentiments in global markets. Unless a new catastrophe occurs in the form of the coronavirus or other shocks that could break the current upward trend in the stock market, the US dollar will mostly trade in the red.

Analysts do not exclude a correction in the US currency at the very beginning of the year. What do we see now?

The dollar index is still at its lows in 2.5 years, but has not managed to gain a foothold below 90 points. This is the so-called milestone, from which the lion's share of investment bank analysts predicted a protracted drop in the greenback for the whole of 2021. Today, after another attack by sellers, the dollar index went below 90. It will not be easy to go beyond this turning point.

p5g7ztmoOm18H6C6D1xhEf1Lzbrb-Spu8C8AOMEu

The greenback is at a crossroads, its further dynamics will depend on how quickly after the coronavirus crisis the economies of European and Asian countries will recover in comparison with the United States.

If America lags behind the rest of the world, investing in stocks outside the US will become more attractive than in the outgoing year. The prospect of further weakening of the dollar against a basket of competitors will remain.

As for the correction that some market players expect from the dollar at the beginning of the year, it is associated with a shortage of cash. There is almost no free money left on the market, more than 96% of all funds have already been invested in securities. This means that in January a partial return of investors in the dollar is possible. The drama certainly won't happen. The most that we will see is a correction phase similar to the one that took place after the dollar index fell in June and September. That is, about 3% for the dollar index. Thus, in January volatility may surge in favor of the dollar. One has only to take into account that it will be short-lived, on average up to three weeks, analysts predict.

In this scenario, the EUR/USD pair will decline from the current 1.22 to 1.18.

analytics5feb58b64c05d.jpg

In general, the European economy will recover as the pandemic recedes and the lockdowns weaken. This will be facilitated, among other things, by the stimulating policy from the ECB.

"Taking into account the fact that the real interest rate in the euro area is above zero, while in the US it is below zero, the euro will maintain its advantage over the dollar in 2021 by this criterion," analysts write.

The high demand for risk will also play a role. During such periods, the single currency tends to strengthen against the dollar. EUR/USD in the new year may update its high since February 2018, surpassing the 1.25 level.

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

Analytics and trading signals for beginners. How to trade GBP/USD on December 30? Analysis of Tuesday. Getting ready for

Trading 29 Déc 2020 Commentaire »

Hourly chart of the GBP/USD pair

analytics5feb706c6d5e9.jpg

The GBP/USD pair began to correct and spent the whole day doing it. Since the upward trend for the pair has already reversed, we advised you to consider opening short positions. Since there was no sell signal during the day, you should not have opened positions today. At least following our recommendations. In general, after breaking the rising trend line, the downward trend persists, so you need to wait for a new sell signal from the MACD, especially since this indicator has already been sufficiently discharged (above the zero level). As for long positions on the British pound, a new upward trend is unlikely to form in the near future, therefore you should not consider them yet.

Fundamentally, there is still absolutely nothing to say now. The UK and the European Union have both agreed on a trade deal, but now there is little to do - it needs to be ratified by both parliaments. The British Parliament will meet to decide this issue on Wednesday, the European Parliament - in February-March next year. However, in fact the deal has already been approved and is unlikely to be rejected by any parliament. Thus, they are just formalities, and the solution is unlikely to affect the pound/dollar pair. We do not expect any important news in the last two days of the outgoing year. The main thing is to end the year without unnecessary losses in the final days.

No important macroeconomic reports or other events scheduled for Wednesday, December 30. Thus, there won't be a fundamental background, but this does not mean that the pound/dollar pair will be immobilized. As we could see, the trades were quite active in recent days.

Possible scenarios on December 30:

1) Buy orders have lost their relevance, since the price settled below the trend line. And so, the bulls have released the initiative and now we need to wait for a new upward trend in order to be able to trade up. Such a trend is unlikely to appear the next day.

2) Sell positions are more relevant now. The pair corrected and is now preparing for a new round of downward movement. Thus, novice traders can only wait for a new sell signal from MACD and open new short positions while aiming for the support level of 1.3392.

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

Analysis and trading signals for beginners. How to trade EUR/USD on December 30. Analysis of Tuesday trades. Getting ready

Trading 29 Déc 2020 Commentaire »

EUR/USD hourly chart

analytics5feb650ee325e.jpg

On Tuesday, the EUR/USD pair resumed its upward movement and tested the first key target level of 1.2250. A downward correction started just a few hours ago. Before that, the pair had been developing a steady uptrend. Last night, the MACD indicator formed a new buy signal. Those traders who managed to enter the market using this signal should have gained a profit of about 25 pips, even though there was a pullback to the downside. Those who joined the trend in the morning could have also earned some pips if they had closed their trades near the resistance level of 1.2250. The ascending trendline still confirms the uptrend. So now we should wait until the downward correction is completed and a new buy signal from the MACD indicator is formed, or until the price rebounds from the trendline. If the quotes settle below the trendline, we can start selling the pair, but it is still a long way to go. In general, the euro/dollar pair is trading quietly around 2.5-year highs ahead of the new year.

On December 29, no important economic reports were released. This means that beginners had to trade using only technical signals, which could be quite a successful strategy. However, in the course of the New York session, the pair faced a sharp fall by 30 pips. On the other hand, there was no important news during the day, so markets had no drivers to react to.

On Wednesday, the EU and the US do not expect any major macroeconomic news. So, the fundamental picture will stay mostly unchanged during the day. Traders will again have to rely on technical analysis as long as the trend persists. Currently, the pair is trading in an upward trend.

Possible scenarios for December 30

1) Long positions on the pair remain relevant at the moment since the price has passed the descending trendline, while the uptrend is still in place. Now we should again wait until the MACD indicator reaches a zero level and forms a new buy signal. After that, we can consider opening new long positions with the targets at 1.2270 and 1.2284. Also, a price rebound from a trendline can be used as a buy signal.

2) Trading short does not seem appropriate now. You can consider placing new sell orders only when the price settles below the ascending trendline. In this case, you can open short positions with the targets at 1.2167 and 1.2152.

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 trendlines 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, and 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 patterns (channels and trendlines).

Important announcements and economic reports that you can always find on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exit the market in order to avoid sharp price fluctuations.

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

Dollar Little Changed After S&P/Case-Shiller Home Price Index

Trading 29 Déc 2020 Commentaire »

The U.S. S&P/Case-Shiller home price index for October has been released at 9:00 am ET Tuesday. Following the data, the greenback changed little against its major counterparts.

The greenback was trading at 103.67 against the yen, 1.2255 against the euro, 1.3503 against the pound and 0.8856 against the franc around 9:02 am ET.


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

*S&P CoreLogic Case-Shiller 20-City Home Price Index Up 7.9% YoY In October

Trading 29 Déc 2020 Commentaire »

S&P CoreLogic Case-Shiller 20-City Home Price Index Up 7.9% YoY In October


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

Dollar Mixed Ahead Of S&P/Case-Shiller Home Price Index

Trading 29 Déc 2020 Commentaire »

The U.S. S&P Case-Shiller home price index for October is due at 9:00 am ET Tuesday. Ahead of the data, the greenback traded mixed against its major counterparts. While it fell against the euro and the franc, it held steady against the pound. Against the yen, it advanced.

The greenback was worth 103.69 against the yen, 1.2251 against the euro, 1.3497 against the pound and 0.8856 against the franc as of 8:55 am ET.


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

December 29, 2020 : EUR/USD daily technical review and trade recommendations.

Trading 29 Déc 2020 Commentaire »

analytics5feb593ab329d.jpg

By the end of November, Signs of BUYING Pressure have been initiated around the depicted price zone of 1.1800-1.1840.Shortly after, the EUR/USD pair has demonstrated a quick upside movement.The pair has targeted the price levels around 1.1990 initially 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 above the price level of 1.2200 was regarded as a considerable bearish reversal signal.Two weeks ago, a short-term reversal pattern has been demonstrated around 1.2265. Intraday downside retracement to the downside was expected to occur. However, the EUR/USD pair has failed to pursue towards lower price levels.On the other hand, Bearish closure below the mentioned price zone of 1.2200 - 1.2170 is needed to turn the intermediate outlook for the pair into bearish and enhance a quick bearish decline towards 1.2040 then 1.1920.Trade Recommendations :-Conservative traders are advised to look for SELL Positions around higher price levels near 1.2250-1.2270. Exit level should be placed above 1.2300. Target levels should be located around 1.2200, 1.2170 then 1.2120.

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

December 29, 2020 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 29 Déc 2020 Commentaire »

analytics5feb58549c2ca.jpgThe EURUSD pair was trapped below the previous key-level (1.2000) until bullish breakout occured to the upside recently in December.Further quick bullish advancement was expressed towards 1.2150 just as expected after failing to find sufficient bearish pressure at retesting of the backside of the broken channel around 1.1970-1.2000 which corresponds roughly to Fibonacci Level of 0%.Recently, the pair looked overbought while approaching the price levels of 1.2250 (138% Fibonacci Level).That's why, conservative traders were advised to look either for SELL Positions or low risk BUY trades around lower price levels.Bearish closure and persistence below 1.2160 then 1.2000 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 would remain bullish at least towards 1.2330 where 150% Fibonacci Level is located.The price zone around 1.2000-1.1975 remains a Demand Zone to offer bullish SUPPORT for the EURUSD pair if any bearish pullback occurs.

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

December 29, 2020 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 29 Déc 2020 Commentaire »

analytics5feb580603e67.jpg

In December, the price levels of (1.3380-1.3400) have prevented further bullish movement for the past few weeks.Bearish target was targeted around 1.3300. However, the pair has failed to pursue towards lower targets.Instead, a bullish spike was expressed towards 1.3480-1.3500 where the upper limit of the depicted movement channel has previously provided temporary bearish pressure on the pair.Shortly after, another bullish spike has recently been demonstrated towards 1.3600 where the upper limit applied considerable bearish rejection again.Recently, the GBPUSD pair looked overbought while consolidating above the key-level of 1.3400.As expected, bearish reversal was recently initiated around 1.3600. A quick bearish decline was demonstrated towards 1.3200.Intermediate-term outlook could turn into bearish if only the EUR/USD pair maintains movement below 1.3400.However, the pair has failed to maintain bearish decline below 1.3200.Instead, bullish persistence above 1.3400 invalidates the bearish scenario for the short-term.Another temporary bullish movement may be expressed towards 1.3700 (the channel's upper limit) where bearish rejection should be anticipated.

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

*Brazil Oct Jobless Rate 14.3%, Consensus 14.7%

Trading 29 Déc 2020 Commentaire »

Brazil Oct Jobless Rate 14.3%, Consensus 14.7%


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