Analytics and trading signals for beginners. How to trade GBP/USD on January 14? Analysis of Wednesday. Getting ready for

Trading 13 Jan 2021 Commentaire »

Hourly chart of the GBP/USD pair

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The GBP/USD pair continued to move up until the morning on Wednesday, February 13. Thus, novice traders could formally keep long positions opened on the signal that the quotes have firmly settled above the descending channel. The MACD indicator subsequently turned down, and did so before the price fell, since it had nowhere to go, however, novice traders could also earn around 50 points on this signal. Since the downward trend was cancelled, then we should expect a new buy signal, which was not created during the day. Thus, at the moment, a new upward trend has been created, but the situation for the pound is twofold. The pound/dollar pair may fall by another 150 points the next day, or it may test the 1.3702 level once again. Thus, beginners are advised to track buy signals today and tomorrow, but only strong ones and maintain them very carefully in order to avoid changing the direction of movement and getting unnecessary losses.

Fundamentally, nothing interesting for the British pound on Wednesday. The US inflation report drew the most attention, but it did not have much impact on the pair's movement. On the whole, neither the pound nor the dollar unambiguously supports the fundamental background. Both currencies are equally likely to strengthen in the coming days. There might be a lot of news these days, it will be mixed (political, economic, reports, speeches). Thus, it is impossible to make an unambiguous conclusion as to which of them will affect the pair's movement and which one will not.

Federal Reserve Chairman Jerome Powell will deliver a speech on Thursday, January 14. Not only will he talk about monetary policy and the economy, but he might also mention topics like cryptocurrencies, for example. In general, everything will depend on what exactly Powell says. Although there is reason to believe that his speech might be interesting, after all it is his first one for 2021.

Possible scenarios for January 14:

1) Buy orders became relevant again, since the pair's quotes left the descending channel. Thus, you can now consider long positions, but after a downward correction cycle, the indicator discharges to zero and a new buy signal appears. Aim for the resistance level of 1.3718 (to be specified Thursday morning).

2) Sell positions have lost their relevance. Now you need to wait for a new downward trend or the end of the current upward trend, in order to consider trading bearish again. The situation is unlikely to change until Thursday morning.

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

Poland Holds Rate Unchanged

Trading 13 Jan 2021 Commentaire »

Poland's central bank left its key interest rate unchanged on Wednesday, and said the scale of the possible economic recovery this year, after the coronavirus pandemic, remains uncertain.

The Monetary Policy Council left the reference rate unchanged at 0.10 percent, the National Bank of Poland said. That was in line with economists' expectations.

The bank said it will continue to purchase government securities and government-guaranteed debt securities on the secondary market, the timing and scale which will depend on the market conditions.

The NBP also said it will offer bill discount credit aimed at refinancing loans granted to enterprises by banks.

"The further course of the pandemic and its impact on the economic situation in Poland and abroad remain the main sources of uncertainty for the economic outlook in Poland," the bank said.

Growth in economic activity may be limited by the heightened uncertainty and the weaker sentiment of economic agents than before the pandemic that will lead to a significant slowdown in investment growth, the bank added.

The lack of a visible and more durable zloty exchange rate adjustment to the global pandemic shock and to the monetary policy easing introduced by NBP is also expected to slow the economic recovery.


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

*Poland Central Bank Leaves Key Interest Rate Unchanged At 0.10% As Expected

Trading 13 Jan 2021 Commentaire »

Poland Central Bank Leaves Key Interest Rate Unchanged At 0.10% As Expected


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

Dollar Mixed Following U.S. Inflation Data

Trading 13 Jan 2021 Commentaire »

The U.S. dollar showed mixed trading against its major counterparts in the European session on Wednesday, after a report showed that the nation's consumer prices increased in line with economist estimates in December.

Data from the Labor Department showed that the consumer price index rose by 0.4 percent in December after edging up by 0.2 percent in November. The price growth matched expectations.

The Labor Department said the advance by the consumer price index was driven by an 8.4 percent jump in gasoline prices, which accounted for more than 60 percent of the overall increase.

Excluding food and energy prices, the core consumer price index inched up by 0.1 percent in December after rising by 0.2 percent in November. The uptick in core prices also matched economist estimates.

Recent comments from Federal Reserve officials diminished worries about the tapering on purchases of government and mortgage-backed securities.

On Tuesday, St. Louis President James Bullard and Boston Fed chief Eric Rosengren said that the central bank is in no rush to start winding down its bond-buying programme in the wake of the economic fallout from the virus.

In another development, the House of Representatives will vote on an article of impeachment against President Donald Trump over his role in the deadly riot on January 6.

If the House were to vote in favor of the impeachment article, it will trigger a trial in the Senate.

But a two-thirds majority would be needed for a conviction of Trump, inferring that at least 17 Republicans would have to vote for impeachment.

The greenback fell during the Asian session, weighed by a drop in the U.S. Treasury yields following a bond auction on Tuesday.

The greenback appreciated to 1.2155 against the euro, after a 2-day drop to 1.2223 at 2:30 am ET. The pair was worth 1.2206 when it closed deals on Tuesday. The greenback is likely to find resistance around the 1.19 level.

Data from Destatis showed that German wholesale prices declined at the slowest pace in ten months in December.

Wholesale prices fell 1.2 percent on a yearly basis in December, following a 1.7 percent drop a month ago. This was the slowest fall in prices since February.

The greenback remained higher at 0.8881 against the franc, following a 2-day low of 0.8850 seen at 2:30 am ET. At yesterday's trading close, the pair was quoted at 0.8861. Should the dollar continues its rise, 0.90 is possibly seen as its next resistance level.

The greenback was steady against the yen, after having risen to 104.00, from a 6-day low of 103.52 set in the Asian session. The pair had closed Tuesday's deals at 103.75. On the upside, 105.00 is likely seen as its next resistance level.

Data from the Bank of Japan showed that Japan's money supply grew at a slightly faster pace in December.

The monetary aggregate M2 rose at a slightly faster pace of 9.2 percent annually after climbing 9.1 percent in November. At the same time, the annual growth in M3 held steady at 7.6 percent.

The dollar eased to 1.3693 against the pound, not far from a 9-day low of 1.3701 hit at 4:30 am ET. The greenback is seen finding support around the 1.42 mark.

U.S. monthly budget statement for December and Fed Beige book report are scheduled for release in the New York session.


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

U.S. Consumer Prices Rise In Line With Estimates In December

Trading 13 Jan 2021 Commentaire »

Reflecting a spike in gasoline prices, the Labor Department released a report on Wednesday showing U.S. consumer prices increased in line with economist estimates in the month of December.

The report said the consumer price index rose by 0.4 percent in December after edging up by 0.2 percent in November. The price growth matched expectations.

The Labor Department said the advance by the consumer price index was driven by an 8.4 percent jump in gasoline prices, which accounted for more than 60 percent of the overall increase.

The other components of the energy index were mixed, resulting in an increase of 4.0 percent for the month.

Food prices also rose by 0.4 percent in December, as both the food at home and the food away from home indexes increased by 0.4 percent.

Excluding food and energy prices, the core consumer price index inched up by 0.1 percent in December after rising by 0.2 percent in November. The uptick in core prices also matched economist estimates.

The modest increase in core prices reflected higher prices for apparel, motor vehicle insurance, new vehicles, personal care, and household furnishings and operations.

Meanwhile, the Labor Department said prices for used cars and trucks, recreation, and medical care were among those to decline over the month.

The report said consumer prices in December were up by 1.4 percent compared to the same month a year ago, reflecting an acceleration from the 1.2 percent growth seen in November.

The annual rate of growth by core consumer prices in December was unchanged from the previous month at 1.6 percent.

"The benign core inflation readings support our call that the Fed does not lift the policy rate from the effective lower bound until 2024 and begin QE tapering until 2023," said Kathy Bostjancic, Chief U.S. Financial Economist at Oxford Economics.

Bostjancic added, "Although additional fiscal stimulus could bring the tightening forward by a year."

On Friday, the Labor Department is scheduled to release a separate report on producer price inflation in the month of December.

Producer prices are expected to increase by 0.3 percent in December after inching up by 0.1 percent in November, while core producer prices are expected to rise by 0.2 percent after edging up by 0.1 percent.


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

U.S. Consumer Prices Rise 0.4% In December

Trading 13 Jan 2021 Commentaire »

Reflecting a spike in gasoline prices, the Labor Department released a report on Wednesday showing U.S. consumer prices increased in line with economist estimates in the month of December.

The report said the consumer price index rose by 0.4 percent in December after edging up by 0.2 percent in November. The price growth matched expectations.

The Labor Department said the advance by the consumer price index was driven by an 8.4 percent jump in gasoline prices, which accounted for more than 60 percent of the overall increase.

Excluding food and energy prices, the core consumer price index inched up by 0.1 percent in December after rising by 0.2 percent in November. The uptick in core prices also matched economist estimates.


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

Dollar Slightly Down Following U.S. CPI

Trading 13 Jan 2021 Commentaire »

After the release of U.S. consumer inflation for December at 8:30 am ET Wednesday, the greenback fell slightly against its major rivals.

The greenback was trading at 1.2173 against the euro, 103.86 against the yen, 0.8880 against the franc and 1.3693 against the pound around 8:33 am ET.


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

*U.S. Consumer Prices Rise 0.4% In December, Core Prices Inch Up 0.1%

Trading 13 Jan 2021 Commentaire »

U.S. Consumer Prices Rise 0.4% In December, Core Prices Inch Up 0.1%


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

Dollar Steady Ahead Of U.S. CPI

Trading 13 Jan 2021 Commentaire »

At 8:30 am ET Wednesday, U.S. consumer inflation for December is due. Ahead of the data, the greenback held steady against its major rivals.

The greenback was worth 1.2168 against the euro, 103.90 against the yen, 0.8883 against the franc and 1.3679 against the pound at 8:25 am ET.


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

Analysis and trading signals for beginners. How to trade EUR/USD on January 14. Analysis of Wednesday trades. Getting ready

Trading 13 Jan 2021 Commentaire »

EUR/USD hourly chart

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On Wednesday, the EUR/USD pair turned to the downside and started a new round of a downtrend. Unfortunately, the price has consolidated above the descending channel that we advised you to use as a buy signal. This buy signal was a weak one, as the MACD indicator was already at its maximum values when the signal was being formed. It is ok if novice traders opened long positions following this signal because in a couple of hours the MACD indicator turned to the downside, thus signaling the end of the uptrend. As a result, beginners were able to close buy orders with zero profit or with a loss of just 1-2 pips. When the MACD indicator was about to reverse, the price had already reached a new high. Therefore, it was possible to rebuild the descending channel and rebound from its upper boundary. However, the signal was mixed, so beginners could refrain from opening short positions during the day. At the moment, the EUR/USD pair is moving downwards, but no new sell signals have been formed yet.

On Wednesday, January 13, the inflation rate data was released in the US. It turned out to be much better than expected. However, at the time of its publication, the EUR/USD pair had already fallen by almost 60 pips. So, the report could not be the only reason to trigger the dollar's growth, although it could have provided some support. The speech of ECB head Christine Lagarde also had no effect on market participants, although her rhetoric was very optimistic. It could be that traders either did not believe Lagarde, or downplayed the importance of her speech. Notably, the European currency began to fall at the time of speaking and extended its losses throughout the day.

On Thursday, January 14, the United States will publish the data on initial jobless claims. It is viewed as a minor report amid current circumstances. Markets will react to this data only if the figures will differ greatly from the projected ones. In the afternoon, Fed's Chair Jerome Powell will give a speech which is a highly anticipated event. Of course, everything will depend on whether Powell will discuss the economic issues and monetary policy. Anyway, this event is worth paying attention to.

Possible scenarios for January 14

1) Long positions are still not relevant at the moment, as the downtrend remains in place. Those who plan to buy EUR/USD should wait for the quotes to consolidate above the descending channel. In this case, it will be possible to consider opening long positions with the targets at the support levels of 1.2232 and 1.2257.

2) Trading short seems a better idea now. However, a new round of a downward movement has already started, so you need to wait for a new sell signal. Thus, we recommend opening new short positions with the targets located at the support levels of 1.2131 and 1.2111 which will be specified in the morning. You can open new short positions only after a new MACD sell signal is generated. Before that, the MACD indicator should reach a zero level. A rebound from the upper boundary of a new descending channel can also be considered a sell signal.

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