Analytics and trading signals for beginners. How to trade GBP/USD on January 6? Analysis of Tuesday. Getting ready for Wednesday

Trading 05 Jan 2021 Commentaire »

Hourly chart of the GBP/USD pair

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The GBP/USD pair began a new round of upward movement on Tuesday, January 5. We would like to remind you that earlier, like the euro, the pound settled below the trend line, so the trend for the pair changed to a downward one. However, a strong sell signal from MACD was not created. We advised you to consider trading down. The signal from the indicator was created, but it was below the zero level, that is, the MACD did not have time to discharge. This signal was weak and should not be used to open short positions. No other signals were created during the day. Since the price has not yet surpassed the 2.5-year highs, which are located at 1.3703, the downward trend is formally preserved. Thus, we still advise you to consider sell orders. At the moment, the MACD indicator has been discharged enough. Another thing is that the signal can appear at night. In this case, it will be quite problematic to work it out. Also, the price may rise to the 1.3703 level, then the chances for bringing back the upward trend will significantly increase.

Fundamentally, things remain bad for the pound. A third lockdown was announced in Great Britain and, of course, it will affect the British economy. Thus, we expect the GDP to fall. On the other hand, this does not matter for the pound. The British currency both rose in price and continues to increase in price, not paying attention to the fundamental background or macroeconomic reports. Market participants continue to sell off the dollar, although there is simply no visible and compelling reason for this. Nevertheless, this is the reality now and novice traders should understand it.

The UK PMI is scheduled to be published on Wednesday, and the US Federal Reserve Minutes will be published in the evening. As a rule, no fundamentally new information is contained in the minutes. Most likely, it will be the same this time. Both events are unlikely to provoke any market reaction. Thus, technical factors and signals will be prioritized.

Possible scenarios for January 6:

1) Buy orders have lost their relevance, since the pair's quotes have settled below the upward trend line. Thus, in order to be able to consider long positions, you should wait for a new upward trend or the end of the downward trend. This scenario is not expected until Wednesday morning.

2) Selling is relevant now as traders have broken the upward trend line. Thus, at this time you are advised to monitor a new sell signal from MACD. The indicator is already sufficiently discharged and is able to generate a strong signal. The main thing is that, as usual, the upward movement does not resume. In this case, the sell signal may be false. Aim for the support level of 1.3503.

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 January 6? Analysis of Tuesday. Getting ready for Wednesday

Trading 05 Jan 2021 Commentaire »

Hourly chart of the EUR/USD pair

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The EUR/USD pair was moving up on Tuesday, and it rose to the 1.2309 level, which is the peak for the last 2.5 years. Thus, with a high degree of probability, the EUR/USD pair will reach this level again. If the quote rebounds from it again, then a new round of the downward movement may begin. If it surpasses the level, the upward trend will resume. Let us remind you that earlier, the pair's quotes settled below the rising trend line, which, according to all the canons of technical analysis, means that the trend has changed to the opposite. But in practice, we see a different picture. The pair's quotes have the highest chances for a new round of upward movement. Thus, until the quote surpasses the 1.2309 level, there are still chances for a new round of downward movement, which can even be worked out, but in general, the chances of a new downward trend are quite low right now. In our morning review, we advised you to sell the pair on a new sell signal from MACD. Such a signal was generated, but it turned out to be false, so novice traders could lose about 15 points. It is okay, it happens. Now you need to wait for new signals and strictly adhere to the trading strategy.

No important macroeconomic reports were released in the EU and the US on Tuesday. At least not a single one that would affect the movement of the euro/dollar pair. The ISM PMI in the US manufacturing sector exceeded the forecasted values, but did you see the dollar increase by at least a couple of dozen points today? The dollar rose by 20 points at the very beginning of the US trading session, but can such a movement be called growth at all? No other important reports and news today.

On Wednesday, January 6, you can pay attention to the EU's index of business activity in the services sector, meanwhile, in the US, look into the minutes of the last Federal Reserve meeting, which will be published late in the evening. However, both events have a rather formal character and there is a 90% probability that they will not provoke any reaction. From the PMI, we can only understand how bad things are in the EU services sector after a month of quarantine. The worse things are, the more chances for the economy to contract in the fourth quarter. However, the euro does not really need support now. Its growth is likely to continue no matter what.

Possible scenarios on January 6:

1) Long positions are not relevant at the moment, since quotes have settled below the trend line, and the previous local highs have not yet been updated. Thus, in order to be able to re-consider buying the pair, you need to wait for a new upward trend or until the quote settles above the 1.2309 level following the results of the next hourly candle. In this case, you are advised to trade bullish with targets at the resistance levels of 1.2342 and 1.2374.

2) Trading for a fall still looks more appropriate. You are advised to open new short positions while aiming for 1.2263 and 1.2216 on a new sell signal from MACD (if the price remains below 1.2309) or in case of a rebound from 1.2309. Formally, a downward trend has been created, but in fact the price is only 10 points from the 2.5-year highs. Therefore, the probability of bringing back the upward trend is very high.

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

U.S. Manufacturing Index Unexpectedly Climbs To Two-Year High In December

Trading 05 Jan 2021 Commentaire »

A report released by the Institute for Supply Management on Tuesday showed an unexpected acceleration in the pace of growth in U.S. manufacturing activity in the month of December.

The ISM said its manufacturing PMI climbed to 60.7 in December after dipping to 57.5 in November, with a reading above 50 indicating growth. Economists had expected the index to edge down to 56.6.

With the unexpected increase, the manufacturing index reached its highest level since hitting 61.3 in August of 2018.

"Manufacturing performed well for the seventh straight month, with demand, consumption and inputs registering strong growth compared to November," said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.

However, he added, "Labor market difficulties at panelists' companies and their suppliers will continue to restrict the manufacturing economy expansion until the coronavirus (COVID-19) crisis ends."

The unexpected increase by the headline index came as the new orders index rose to 67.9 in December from 65.1 in November, while the production index jumped to 64.8 from 60.8.

The employment index also climbed to 51.5 in December from 48.4 in November, indicating a return to job growth in the manufacturing sector.

At the same time, the report showed the supplier deliveries index surged up to 67.6 in December from 61.7 in November, suggesting deliveries slowed at a faster rate.

"The Supplier Deliveries Index reflects the difficulties suppliers continue to experience due to COVID-19 impacts," said Fiore.

On the inflation front, the prices index spiked to 77.6 in December from 65.4 in November, reaching its highest level since May of 2018.

"Manufacturing fared fairly well in 2020 but, looking ahead, the recovery's evolving dynamics will cause factory activity to grow more slowly in 2021," said Oren Klachkin, Lead U.S. Economist at Oxford Economics.

He added, "Factories will face headwinds from the virus' recent resurgence, slower economic recovery, and ongoing supply chain disruptions and shortages."

The ISM is scheduled to release a separate report on Thursday on activity in the service sector in the month of December. The services PMI is expected to slip to 54.5 in December from 55.9 in November.


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

*ISM U.S. Manufacturing PMI Climbs To 60.7 In December

Trading 05 Jan 2021 Commentaire »

ISM U.S. Manufacturing PMI Climbs To 60.7 In December


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

*Canadian Industrial Product Price Index Fell 0.6% In November

Trading 05 Jan 2021 Commentaire »

Canadian Industrial Product Price Index Fell 0.6% In November


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

Canadian Dollar Advances On Rising Oil Prices

Trading 05 Jan 2021 Commentaire »

The Canadian dollar climbed against its most major counterparts in the European session on Tuesday, amid higher oil prices following a media report that the OPEC is mulling output reduction in February.

Reuters reported that OPEC and its allies are considering a 0.5 million bpd cut in February, citing bearish risks and tepid demand due to the virus crisis.

Talks will resume at 1430 GMT, as OPEC+ could not reach an agreement on changes to February's oil output on Monday.

While Russia and Kazakhstan supported to lift production by 0.5 million bpd, Iraq, Nigeria and the United Arab Emirates wanted to keep output unchanged.

The report added that the OPEC+ joint ministerial committee "stressed that the reimplementation of COVID-19 containment measures across continents, including full lockdowns, are dampening the oil demand rebound in 2021".

The loonie rebounded to 0.9808 against the aussie, from a 4-day low of 0.9844 hit at 2:15 am ET. The loonie is likely to test resistance around the 0.96 region, if it gains again.

The loonie edged up to 1.2730 against the greenback, compared to Monday's close of 1.2772. The currency may face resistance around the 1.22 region.

The loonie gained to 1.5624 against the euro at 4:45 am ET and has stabilized since then. The next possible resistance for the loonie is seen around the 1.54 level.

Data from the Federal Labor Agency showed that German unemployment declined in December despite the government tightening the coronavirus containment measures.

The number of people out of work fell 37,000 from November, confounding expectations for an increase of 10,000. Unemployment had decreased by 40,000 in November.

In contrast, the loonie pulled back to 80.63 against the yen, from an early high of 80.92, and held steady thereafter. The loonie is poised to challenge support around the 78.00 mark.

Looking ahead, Canada industrial product price index for November and U.S. ISM manufacturing index for December are due in the New York session.


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

Pound is expected to collapse soon

Trading 05 Jan 2021 Commentaire »

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GBP / USD remains afloat in the market, but is trading below the price levels reached in the previous sessions. The new restrictive measures imposed by the UK government was the main reason for this, and the optimism brought by the Brexit trade deal did not help either.

As a result, today, GBP / USD was trading at 1.35, and there are severals factors that point to a possibility that the quote will drop to 1.34 in the coming sessions. There is even a high chance that it would collapse even deeper.

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Firstly, a decline is inevitable amid an economic lockdown, which the UK is currently facing because of the rapid and persistent spread of COVID-19. Many are even concerned that the UK health system would collapse in just three weeks.

These restrictive measures worsen investor sentiment, therefore, many project that the UK economy will shrink by about 10% soon.

Another factor is the uncertainty surrounding the UK's financial services sector, which accounts for about 7% of the country's economy. The new Brexit deal does not regulate relations in this direction, so many expect that the Bank of England will resort to softer policies in the future. In particular, they expect a drop in base interest rates, which increases pessimism around the British currency.

Therefore, yesterday, the GBP / USD pair traded in a bearish pattern, and in six hours, the quote dropped by more than 1.5%. The fall preceded Boris Johnson's announcement, but after the prime minister introduced a national lockdown, the pound began to recover in the charts.

However, many view this slight upward move as only temporary, and they expect the pound to continue declining soon. It seems that traders are no longer optimistic about the currency's outlook.

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

Evening review on EUR/USD for January 5, 2020

Trading 05 Jan 2021 Commentaire »

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EURUSD - The US ISM Industrial Index for December was released registering 60.7% which is significantly better than the forecast.

The oil turned sharply upward.

You may keep buying from 1.2190.

Turn down from 1.2210.

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

January 5, 2021 : EUR/USD daily technical review and trade recommendations.

Trading 05 Jan 2021 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.

However, the EUR/USD pair has failed to pursue towards lower price levels. Instead, the pair has spiked above the depicted Weekly HIGH around 1.2270 before the current bearish rejection was initiated around 1.2300.

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 can be looking look for SELL Positions anywhere around the price levels of 1.2300.

Stop Loss should be placed above 1.2350 while Target levels should be located around 1.2200, 1.2170 then 1.2120.

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

January 5, 2021 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 05 Jan 2021 Commentaire »

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The 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. This is where an Intraday SELL Entry may be offered.

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