Selling or buying euros?

Trading 18 Jan 2021 Commentaire »

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The European currency is not going through its best days. It moved away from recent highs above 1.23 against the dollar. The euro continued to decline on Monday, feeling pressure from both the dollar and the difficult situation with the coronavirus. Despite the fact that there are quite tough lockdowns in Germany, the country's statistical agencies continue to publish alarming figures and report a record number of deaths.

German Chancellor Angela Merkel has once again called for all necessary measures to counter the spread of a new strain of coronavirus. As the country is expected to tighten quarantine measures, the risks of further contraction of economic growth in the euro area in the first quarter are increasing.

The EUR/USD pair may strengthen the downward correction if the spread of the vaccine in the eurozone continues to disappoint, analysts say. Failure to scale up vaccination will certainly weaken the euro's position. However, the decline should be short-lived and moderate.

It was a typical Monday for the EUR/USD pair, since the US is celebrating a national holiday and trading is not carried out. Traders of the main pair will be interested in Tuesday. Janet Yellen is expected to speak, and on Wednesday, Joe Biden will officially take office as President of the United States.

The balance of power can change. The current situation speaks in favor of EUR/USD sellers. The dollar was actively rising on Monday, but its growth is extremely illogical. Friday's statistics turned out to be much worse than the forecast, while the dollar chose to ignore the pessimistic report. Washington continues to prepare for the inauguration of the president, unprecedented security measures are unfolding on the streets. Donald Trump announced that he will not attend the inauguration.

Analysts at Bank of America, assessing current and future events, expect the euro to fall to 1.20. They also called it a good opportunity to open long positions.

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The technical picture suggests otherwise. The euro showed a steady decline against the dollar. Moreover, the fall in the exchange rate occurred on a large volume. This suggests that large players are interested in short positions. It is also worth paying attention to the new resistance level, which is the range of 1.2108-1.2115, where a large volume is concentrated.

Given these factors, the downward trend in the euro may continue.

As for the pound, the bets of large speculators on its growth against the US currency reached record levels since March. At the same time, the GBP/USD pair itself is currently much higher than pre-crisis levels. The optimism of the players is due to the fact that the UK is quickly vaccinating the population, and the rather exhausted topic of Brexit has left the agenda.

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Analytics and trading signals for beginners. How to trade GBP/USD on January 19? Analysis of Monday. Getting ready for Tuesday

Trading 18 Jan 2021 Commentaire »

Hourly chart of the GBP/USD pair

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The GBP/USD pair continued to move down on Monday, January 18, which eventually made it possible to form a new downward channel. Thus, we now have a downtrend at our disposal again, therefore you are advised to trade for a fall. If the current trend continues for at least a couple of days, then at least a pair of sell signals will be created. At the moment, the price bounced off the lower border of this channel and began to correct, which is very helpful. Thus, a rebound from the upper border of the channel can provoke a resumption of downward movement. But the rebound must be clear and accurate. The same applies to a possible sell signal from the MACD indicator. At the moment, it has almost discharged to the zero level, which means that in the near future it may create a new sell signal. Of course, it will be difficult to track this signal at night, but this is the foreign exchange market. It is open around the clock and signals are generated around the clock. A new upward trend may appear if the pair settles above the downward trend channel.

In the previous review for the pound, we suggested considering trading down, but strong signals were not created today. The MACD indicator turned up twice, but did so at the lowest possible positions, which already indicated a downward trend.

Fundamentally, nothing changes for the British pound. Topic of the news remains the same. Nothing at all from the UK, except for news regarding the epidemic, quarantine and vaccination. The pound/dollar pair continues to ignore the fundamental background when it is there, or trade according to its own rules when it is not there. At least traders have a descending channel at their disposal. In general, now is not the best time to work with the pair.

Nothing interesting in America or the EU on Tuesday, January 18. Therefore, we advise you to focus on the technical picture and track new signals. Trying to analyze the fundamental background doesn't make much sense right now. First you need to wait for the markets to start reacting to it again.

Possible scenarios for January 19:

1) Buy orders are no longer relevant again, as a new downward channel has been formed. Thus, in order to be able to trade bullish, you are advised to wait until the quotes settle above this channel. The nearest targets (to be specified Tuesday morning) are resistance levels of 1.3663 and 1.3700.

2) You are advised to consider sell positions again. In the next few hours, a new sell signal may appear, which can be worked out with targets at the support levels of 1.3537 and 1.3491. But in general, it is still worth remembering that in the long term, the pound/dollar pair will continue to move erratically. Therefore, the pair can now easily return to the 1.3700 level.

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 19? Analysis of Monday. Getting ready for Tuesday

Trading 18 Jan 2021 Commentaire »

Hourly chart of the EUR/USD pair

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The EUR/USD pair as a whole continued its downward movement on Monday and by the end of the day, it began some sort of upward correction. However, a 25-point pullback to the upside is not a correction. It's not even a pullback. However, the MACD indicator began to rise long before this "no pullback". The fact is that the indicator simply has nowhere to go and it began to discharge without a corresponding upward price movement. We warned about this in the morning. Thus, since the downward trend is now maintained, you should trade exclusively for a decline. However, not a single sell signal was generated during the day. Recall that the MACD indicator must discharge as close to the zero level as possible in order to be able to create a strong sell signal. Thus, novice traders can only wait for this discharge and only after that can they wait for a new signal. Also in the morning article, we talked about rebounding from the upper line of the downward trend channel as a sell signal. However, the EUR/USD pair did not even try to start moving towards this border during the day.

No important report from Europe and America on Monday, January 18. As in recent days, the entire fundamental background is now associated with the political crisis in America, the upcoming inauguration of Joe Biden, as well as the impeachment of Donald Trump. But all this news, although interesting, does not have any impact on the pair's movement. And there are no macroeconomic data now. No other fundamental topics. Therefore, you have to be content with what you have. It is good that the pair is now trading relatively calmly, without sharp jerks and frequent changes in direction. Although there are no signals yet, nevertheless it is better than false signals and losses.

No important event in the EU and the US on Tuesday. However, this is the last day before Biden's inauguration and Trump's departure. The closer January 20 is, the stronger the tension in America. Thus, theoretically, the dollar can also get nervous in the next two or three days, but the probability of this is not high. Most likely, the trades will continue to take place in a calm direction.

Possible scenarios on January 19:

1) Long positions are still irrelevant at the moment, since the downward trend remains in force. Those who wish to buy the euro/dollar pair should wait until the quotes have finally settled above the descending channel. In this case, you can consider long positions with targets at the support levels of 1.2194 and 1.2226.

2) Trading for a fall is more relevant now, but novice traders need to wait for a new sell signal. You are advised to open new short positions with targets at support levels 1.2048 and 1.2016. However, the MACD indicator must be discharged to the zero level, afterwards it can finally create a new strong signal. Also, a rebound from the upper border of a new descending channel can be considered as 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 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

Bundesbank Warns Of Noticeable Setback If Covid-19 Does Not Subside, Lockdown Extended

Trading 18 Jan 2021 Commentaire »

The German economic recovery will face significant setback if the rate of coronavirus infections fails to ease and the lockdown restrictions are subsequently extended, the Bundesbank said in its latest monthly report released on Monday.

The economic recovery in the biggest euro area economy slowed down in the final three months of 2020 amid a resurgence in the Covid-19 infections. The government restored lockdown restrictions to battle the pandemic.

Bundesbank assessed that there was no major setback as economic activity continued to recover. Industry, construction and retail sales continued to recover until November.

"This would have counterbalanced the losses that are likely to have arisen as a result of the closings of the stationary retail trade ordered in December," the bank said.

Business confidence continued to improve in December, suggesting that the restrictions that were extended and tightened at the beginning of the new year will not set the economic recovery too far back.

"However, if the infection rate does not subside significantly and the current restrictions on economic activity last longer or are further tightened, a noticeable setback could nonetheless occur," the Bundesbank warned.

Official data showed that Germany's GDP decreased 5 percent in 2020, almost reaching the level of 2009, when economic output fell by 5.7 percent as a result of the global financial and economic crisis.

The bank expects the rate of inflation to be clearly positive again in January due to the introduction of CO2 emission certificates for the consumption of petroleum products and gas as well as the expiry of the reduction in VAT rates.


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Bulgaria's Inflation At 4-Year Low

Trading 18 Jan 2021 Commentaire »

Bulgaria's consumer price inflation slowed to a four-year low in December, the National Statistical Institute reported Monday.

Consumer prices edged up 0.1 percent annually, following a 0.4 percent rise in November. A similar slower rate was last seen in December 2016.

On a monthly basis, consumer prices advanced 0.5 percent, but faster than the 0.1 percent gain posted in November.

The harmonized index of consumer prices climbed 0.5 percent on month but remained flat on a yearly basis in December.

In the whole year of 2020, consumer price inflation was 1.7 percent.


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U.S. Dollar Advances Amid Risk Aversion

Trading 18 Jan 2021 Commentaire »

The U.S. dollar firmed against its major counterparts in European trading on Monday, as a rapid surge in coronavirus cases triggered worries about the pace of global economic recovery.

Friday's weak U.S. retail sales data suggested that a flare-up in coronavirus infection has curbed the consumer spending in the world's largest economy.

Janet Yellen will appear before the Senate Finance Committee on Tuesday for her confirmation hearing as Treasury Secretary.

Yellen is expected to affirm that the value of the U.S. currency should be determined by markets.

The Wall Street Journal reported that Yellen is unlikely to affirm the stance of a weaker exchange rate, unlike her predecessor Steven Mnuchin.

U.S.-China tension prevailed as the Trump administration notified several Huawei suppliers that it's revoking their licenses to work with the Chinese firm.

U.S. markets remained closed on account of the Martin Luther King Jr. holiday.

The greenback jumped to 0.8926 against the franc, its biggest level since December 7. The dollar is poised to find resistance around the 0.92 level.

The greenback appreciated to a 6-day high of 1.3520 against the pound and a 1-1/2-month high of 1.2056 against the euro, from Friday's closing values of 1.3576 and 1.2075, respectively. The greenback is likely to challenge resistance around 1.34 against the pound and 1.18 against the euro.

The greenback spiked up to near a 2-week high of 0.7659 against the aussie, near 3-week high of 0.7096 against the kiwi and a 1-week high of 1.2799 against the loonie, compared to last week's closing values of 0.7702, 0.7125 and 1.2737, respectively. On the upside, 0.75, 0.68 and 1.299 are likely seen as its next resistance levels against the aussie, the kiwi and the loonie, respectively.

The greenback recovered slightly to 103.84 against the yen, from an Asian session's low of 103.69. This may be compared a 4-day high of 103.93 set at 7:00 pm ET. If the greenback rises further, it may find resistance around the 106.00 level.

Looking ahead, at 8:15 am ET, Canada housing starts for December are scheduled for release.


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*Bulgaria Dec HICP Flat On Year

Trading 18 Jan 2021 Commentaire »

Bulgaria Dec HICP Flat On Year


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*Bulgaria Dec HICP Rises 0.5% On Month

Trading 18 Jan 2021 Commentaire »

Bulgaria Dec HICP Rises 0.5% On Month


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*Bulgaria Dec Inflation 0.1% Vs. 0.4% In November

Trading 18 Jan 2021 Commentaire »

Bulgaria Dec Inflation 0.1% Vs. 0.4% In November


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*Bulgaria Dec CPI Up 0.5% On Month Vs. +0.1% In November

Trading 18 Jan 2021 Commentaire »

Bulgaria Dec CPI Up 0.5% On Month Vs. +0.1% In November


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