EUR/USD. When the risk is justified: buyers of the pair storming the 23rd figure

Trading 30 Déc 2020 Commentaire »

Trading on the eve of a long New Year's weekend is a risk. This period is characterized by impulsive and poorly predictable price movements amid low liquidity and profit taking. This applies to absolutely all currency pairs, not to mention the most popular ones - dollar ones. Many traders and market makers today or tomorrow will close the month, quarter and year, which is why corrective pullbacks are possible. Therefore, short-term trading is not worth considering now. If we talk about medium and long term prospects, the situation here is somewhat different. The general trend, due to the weakening of the dollar, is likely to continue at the beginning of next year (according to some forecasts, the greenback will lose ground throughout the entire 2021). Therefore, trading strategies based on the game against the dollar will be relevant in January as well.

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Take note that the US dollar index has been gradually decreasing since the beginning of November, reflecting the skepticism of traders towards the greenback. If two months ago the index was at the level of 94 points, then at the moment it has dropped below the 90th mark. And although the downward trend was accompanied by upward pullbacks, the overall trend is visible to the naked eye. This situation made it possible for buyers of the euro-dollar pair to strengthen by more than 700 points. Since November, the EUR/USD bulls have managed to climb from 1.1595 to today's high of 1.2310. And apparently, traders will not limit themselves to conquering the 23rd figure: the main target for growth is the 1.2415 level - this is the price high of April 2018. In the next few weeks, this price target will become a kind of beacon for the pair's buyers.

The locomotive of EUR/USD growth is the dollar, which is weakening throughout the market. The euro's positions do not appear so confident, but at the same time it does not pull the price to the bottom, like an anchor. Thanks to this combination, we are witnessing a fairly stable upward trend.

Why is the dollar getting cheaper? Because traders have lost interest in protective instruments, which include the US currency. The market is dominated by general optimism, due to which the main favorites of the foreign exchange market are risky/commodity currencies. Market optimism, in turn, is driven by several factors. First, the US economy received $900 billion in additional aid. Negotiations between Democrats, Republicans and representatives of the White House have been going on for six months - from the end of May. And the compromise bill has only been approved now, which includes one-time subsidies to Americans, additional unemployment benefits, support for certain industries, and so on. In addition, the new package provides for the allocation of nearly $300 billion for the Paycheck Protection Program. This program is designed to help businesses maintain jobs at a time when the economic pressure of the pandemic could lead to additional layoffs. After the bill was passed, the US stock market rallied, reflecting the general optimistic sentiment of investors.

The so-called coronavirus factor has been some sort of ally for the dollar for a long time now. The panic of traders created excitement around the greenback, which was used by the market as the main protective tool. However, at the moment the situation is mirrored. After Europe and the United States approved the first vaccines against COVID, the notorious coronavirus factor has ceased to provoke spikes in anti-risk sentiment. Even the recently discovered new strain, which turned out to be more infectious, did not allow the dollar bulls to fully manifest their character.

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The fact is that vaccination against coronavirus has already started in 22 countries around the world. In particular, to date, 2,230,000 doses of vaccines have already been introduced in the United States. In West Virginia, Alaska, North and South Dakota, vaccination rates have reached almost two percent. Similar dynamics is observed in other large states. In particular, a million doses of the vaccine have already been introduced in China, more than 600,000 in the UK, and more than 400,000 in Israel and Russia. Europe has just started vaccination (since December 27), so the results here are much more modest. In other words, the financial world at the end of the outgoing 2020 saw the light at the end of the tunnel, which allows us to meet the new, 2021 year with optimism.

All this speaks about the persisting potential of the EUR/USD pair's growth and about the inability of the bears to reverse the trend - at least in the medium term. From a technical point of view, long positions on the pair are also a priority. The price is on the upper line of the Bollinger Bands indicator on the daily chart, as well as above all of the Ichimoku indicator lines (including the Kumo cloud). You can consider longs on the pair - with the first intermediate target of 1.2310 (2.5-year high, which was updated today). If buyers overcome this target and settle above it, the next stop will be the 1.2350 level.

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

*U.S. Crude Oil Inventories Decrease By 6.1 Million Barrels In Week Ended 12/25

Trading 30 Déc 2020 Commentaire »

U.S. Crude Oil Inventories Decrease By 6.1 Million Barrels In Week Ended 12/25


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

Chicago Business Barometer Unexpectedly Indicates Faster Growth

Trading 30 Déc 2020 Commentaire »

A report released by MNI Indicators on Wednesday showed an unexpected acceleration in the pace of growth in Chicago-area business activity in the month of December.

MNI Indicators said its Chicago business barometer rose to 59.5 in December from 58.2 in November, with a reading above 50 indicating growth. Economists had expected the barometer to dip to 57.0.

The unexpected uptick by the headline index was partly due to a notable increase by the employment index, which reached a one-year high but continued to indicate a contraction.

The production index also inched up by 1.1 points as business activity picked up, while easing demand led to a 2-point drop by the new orders index.

On the inflation front, the prices paid index climbed 2.2 points to its highest level since September of 2018, with firms reporting higher prices for metals.

When asked about their planned business activity forecast for 2021, 44.9 percent of respondents said they see growth below 5 percent, while 42.9 percent expect growth to be between 5 and 10 percent.

A majority of respondents said they do not yet know if they will adjust their 2021 budget as coronavirus vaccines roll out over the next few months.


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

U.S. Pending Home Sales Drop For Third Straight Month In November

Trading 30 Déc 2020 Commentaire »

Reflecting a shortage of inventory and fast-rising home prices, the National Association of Realtors released a report on Wednesday showing a continued decrease in U.S. pending home sales in the month of November.

NAR said its pending home sales index slid 2.6 percent to 125.7 in November after falling by 0.9 percent to 129.1 in October. Economists had expected pending home sales to come in unchanged.

Pending home sales declined for the third straight month but were still up by 16.4 percent compared to the same month a year ago.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

"It is important to keep in mind that the current sales and prices are far stronger than a year ago," said NAR chief economist Lawrence Yun.

He added, "The market is incredibly swift this winter with the listed homes going under contract on average at less than a month due to a backlog of buyers wanting to take advantage of record-low mortgage rates."

Yun offered a favorable outlook for the housing market in 2021, forecasting a 10 percent jump in existing home sales and a 20 percent spike in new home sales.

The continued pullback in pending home sales in November reflected decreases in all four regions of the country, with pending sales in the West plunging by 4.7 percent.

Pending home sales in the Northeast and Midwest also tumbled by 3.3 percent and 3.1 percent, respectively, while pending sales in the South fell by 1.1 percent.


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*U.S. Pending Home Sales Slide 2.6% In November

Trading 30 Déc 2020 Commentaire »

U.S. Pending Home Sales Slide 2.6% In November


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

*Chicago Business Barometer Rises To 59.5 In December

Trading 30 Déc 2020 Commentaire »

Chicago Business Barometer Rises To 59.5 In December


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

Pound Climbs Amid AstraZeneca's Vaccine Approval; Parliamentary Vote Due

Trading 30 Déc 2020 Commentaire »

The pound drifted higher against its major counterparts during the European session on Wednesday, as the authorization of AstraZeneca's COVID-19 vaccine for emergency use in the U.K. raised hopes for a return to normalcy.

The UK Medicines and Healthcare products Regulatory Agency has approved AstraZeneca's COVID-19 vaccine for emergency supply in the UK, with the first doses being released today. The vaccinations may begin early in the New Year.

The U.K. Parliament will vote on the trade deal agreed with the European Union on Christmas Eve.

PM Johnson has urged MPs to back the post-Brexit trade deal, which would help preserve the U.K.'s tariff- and quota-free access to the EU.

The deal is expected to be passed by both houses of the Parliament without any hurdles.

On the stimulus front, U.S. lawmakers continue to split over increased direct payments as proposed by President Donald Trump.

Senate Majority Leader Mitch McConnell on Tuesday blocked Democrats' attempt to pass a bill granting $2000 in direct payments from $600 to most Americans.

Data from the Nationwide Building Society showed that UK house prices grew at the fastest pace in six years in December as the property market remained resilient despite the pandemic.

House prices climbed 7.3 percent year-on-year in December, following November's 6.5 percent increase. Prices were expected to rise 6.7 percent.

The pound was higher versus the euro, at a 2-day high of 0.9013. At Tuesday's close, the pair was valued at 0.9066. The pound is likely to face resistance around the 0.88 region, if it gains again.

The pound firmed to a 6-day high of 1.3615 against the greenback from Tuesday's close of 1.3499. The pound may challenge resistance around the 1.43 mark.

The pound was up against the yen, at a 2-day high of 140.42. The pair had finished Tuesday's deals at 139.81. Should the currency strengthens further, it is likely to test resistance around the 142.00 region.

After falling to 1.1921 at 5:00 pm ET, the pound moved up to a 2-day high of 1.2047 against the franc. The pound is seen finding resistance around the 1.22 mark.

An indicator of future turning points in the Swiss economy improved in December, but continued to signal subdued activity into next year in the backdrop of the coronavirus pandemic, according to a survey data by the KOF Swiss Economic Institute.

The KOF Economic Barometer rose to 104.3 from 103.7 in November. Economists had forecast a score of 100.5.

Looking ahead, U.S. pending home sales will be published in the New York session.


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*U.S. Goods Trade Deficit Widens To $84.8 Billion In November

Trading 30 Déc 2020 Commentaire »

U.S. Goods Trade Deficit Widens To $84.8 Billion In November


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Switzerland Economic Activity Stabilizes In December

Trading 30 Déc 2020 Commentaire »

An indicator of future turning points in the Swiss economy improved in December, but continued to signal subdued activity into next year in the backdrop of the coronavirus pandemic, survey data from the KOF Swiss Economic Institute showed on Wednesday.

The KOF Economic Barometer rose to 104.3 from 103.7 in November. Economists had forecast a score of 100.5.

"The sharp declines that the barometer underwent in early 2020 have been offset by a rapid recovery during the summer," the KOF said.

"However, the prospects for the Swiss economy remain subdued at the beginning of 2021 due to the ongoing pandemic," the think tank added.

In December, the modest improvement was led by several indicators from the manufacturing sector and private consumption. Indicators for the financial and insurance service sector also contributed.

Negative impulses came from indicators for foreign demand.


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December 30, 2020 : EUR/USD daily technical review and trade recommendations.

Trading 30 Déc 2020 Commentaire »

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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.Bearish closure below the mentioned price zone of 1.2200 - 1.2170 was needed to turn the intermediate outlook for the pair into bearish and enhance a quick bearish decline towards 1.2040 then 1.1920.However, the EUR/USD pair has failed to pursue towards lower price levels. Instead, the pair is currently spiking above the depicted Weekly HIGH around 1.2270.Trade Recommendations :-Conservative traders are advised to look for SELL Positions around higher price levels near 1.2270-1.2290. 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