EUR/USD: greenback returns to basics, euro expands horizons

Trading 09 Fév 2021 Commentaire »

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The sharp rebound of the greenback from multi-year lows in tandem with the US stock market has given rise to speculation that the greenback is turning from a defensive asset into a risky one.

Traders ignored the bad news on the dollar and bought it on the good ones, betting on the faster spread of COVID-19 vaccines in the United States compared to other countries, as well as on the accelerated adoption of a package of assistance to the US economy affected by the pandemic.

However, the correlation between the US stock market and the dollar quickly changed its sign from + to -, and the former continued to grow, while the latter turned in the direction of weakening.

The decline in the USD resumed last Friday against the background of increased risk appetite and proved to be stable after the release of disappointing data on the US labor market.

US stock indexes updated record highs at the beginning of this week, and the yield of treasuries retreated from peak levels, which put pressure on the dollar and allowed the EUR/USD pair to once again target the level above 1.2100.

The USD rate fell to the lowest values for the week – around 90.5 points.

Investors are waiting for the approval of a large-scale program to stimulate the US economy.

Some analysts say that huge budget spending in the US, combined with the Federal Reserve's continued ultra-loose monetary policy, will pull down the greenback in the long run.

"We believe that the effect of the huge stimulus will soon fade, exacerbating the growth of the US current account deficit, which will put pressure on the dollar," strategists at Commonwealth Bank of Australia said.

According to them, the belated vaccination program against COVID-19 implemented in Europe will limit the growth of the euro in the foreseeable future, but the EU will be able to catch up by the summer, after which the exchange rate of the single currency against the US dollar will rise to $1.2800.

On Monday, the EUR/USD pair bounced off the 100-day moving average, despite a weak report on industrial production in Germany. On Tuesday, the pair reached the highest levels since the beginning of February in the area of 1.2112.

The US Senate will begin the second impeachment trial of Donald Trump, the trial of which can be a positive factor for the euro, as it will distract investors' attention from the problems of the eurozone, including those related to mass vaccination against coronavirus in the EU. The stalling of the vaccination campaign has already had a negative impact on business sentiment in the region. This month, the Sentix index of investor confidence in the euro zone economy fell into negative territory, reaching -0.2 points against January's 1.3 points.

In the event of a decline in the yield of US government bonds, we can see the development of the growth of EUR/USD against the background of a weakening dollar.

In addition, the dynamics of the main pair will be determined by such factors as demand for risk, news about the next package of assistance to the US economy, as well as comments from the Fed and ECB leaders, who will speak later this week.

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EUR/USD. 1.2100 – 1.2150 – 1.2200: targets are clear, objectives are defined

Trading 09 Fév 2021 Commentaire »

The euro-dollar pair easily overcame the passing resistance level of 1.2060 (the Tenkan-sen line on the daily chart) and is currently testing the mark of 1.2100 (the middle line of the Bollinger Bands indicator on the same timeframe). This price barrier is more significant in the context of developing the growth trend, so it is not so easy to cope with it. Nevertheless, the current fundamental picture suggests that the EUR/USD bulls will still enter the area of the 21st figure, opening the following targets (resistance levels)-1.2150 (the Kijun-sen line on D1) and 1.2200 (the upper line of the Bollinger Bands, coinciding with the upper border of the Kumo cloud on the same timeframe).

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Looking ahead, take note that the growth of EUR/USD is primarily due to the weakening of the US currency. The US dollar index loses its positions for the third consecutive day, after the disappointing results from the Nonfarm payrolls reports and the approval of a budget resolution in Congress. The demand for protective instruments significantly fell, afterwards the dollar was hit by a wave of sales. The euro, in turn, does not also feel quite confident (look at the dynamics of such cross-pairs as EUR/CHF or EUR/JPY) - the continuing intrigue regarding the resolution of the political crisis in Italy does not allow the euro to spread its wings. Therefore, at the moment, the driver of the EUR/USD growth is the dollar, which remained on the sidelines, having played its role during the political uncertainty and increased turbulence in the stock market. Figuratively speaking, now the dollar bulls are left "in a broken trough", one on one with the Federal Reserve, which is not going to tighten ultra-soft monetary policy, even despite the introduction of new fiscal incentives.

Disappointing data on the growth of the US labor market only added fuel to the fire – January indicators came out in the red zone, and December data were revised downwards. Tomorrow, a webinar will be held in the United States with the participation of the Fed chairman, who is expected to comment on this release in the context of the prospects for monetary policy (the topic of the meeting is devoted to the state of the labor market in the United States). It is likely that Fed Chairman Jerome Powell will not only criticize the dynamics of key indicators, but also announce a further expansion of incentives. Earlier, he did not rule out such a scenario when the labor market slows down. It is noteworthy that just a week and a half after these words were published disastrous Nonfarm. In part, the EUR/USD pair is also growing in connection with Powell's speech – many traders follow the postulate buy on rumors....

And yet, despite the fairly strong growth, buyers of the pair can not overcome the resistance level of 1.2100. From a technical point of view, this is due to being overbought – over the past three trading days, the price has increased from 1.1960 to today's high of 1.2116. Buyers were unable to gain a foothold in the area of the 21st figure, and, obviously, began to take profits.

From the point of view of the foundation, the EUR/USD pair was under pressure from several fundamental factors. First, the euro reacted to the German macroeconomic reports. It became known that the positive balance of Germany's foreign trade balance fell to 14,800,000 euros in December compared to 16,700,000 euros in November. At the same time, the overall forecast for December was at the level of 16.1 billion. In addition, last year, German exports fell by 9.3% (to 1 trillion 204 billion euros), and imports – by 7.1% (to 1 trillion 025 billion). These are the weakest numbers since 2009, when the financial world was experiencing a crisis that began with the bankruptcy of Lehman Brothers. On the one hand, these figures should not be surprising, given the coronavirus pandemic. On the other hand, the statement of fact itself was negatively perceived by investors.

Secondly, the euro is under background pressure from Italian events. Let me remind you that the former head of the ECB Mario Draghi is now trying to form a "government of technocrats", which will avoid early parliamentary elections. The first round of negotiations was quite successful: Draghi enlisted the support of many political forces in Italy. But it is still impossible to say that the political crisis in the country has been successfully resolved. Draghi is holding additional talks with representatives of major parties (in particular, "Forward, Italy", "League", "5 Star Movement") and trade unions. It is expected that political consultations will be held until tomorrow, after which it will become clear whether Draghi will become a technical prime minister before the end of the legislature (i.e. until 2023) or whether the president will announce early elections.

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Thus, buyers of EUR/USD reached the resistance level of 1.2100 against the background of the weakening dollar. But, to overcome this target, and (especially) to settle in the area of the 21st figure, the pair's bulls need additional information. Tomorrow, in this context, may be decisive: the euro will react to the news flow from Italy, and the US dollar - to the inflation report and the rhetoric of Powell. According to preliminary forecasts, the overall score will not be in favor of the US currency. In particular, many European political analysts are confident that Draghi will still form and head the Cabinet of Ministers. This fact will give confidence to buyers of the EUR/USD pair. But Powell is unlikely to announce hawkish rhetoric, given the recent Nonfarm report. If, on top of everything else, US inflation turns out to be disappointing, then the dollar will probably hit another wave of sales.

From a technical point of view, it is advisable to open longs after overcoming the middle line of the Bollinger Bands indicator on the daily chart, that is, after breaking through the resistance level of 1.2100. In this case, we can talk about reaching the 1.2150 mark (the Kijun-sen line on D1), and the 1.2200 mark (the upper line of the Bollinger Bands, which coincides with the upper border of the Kumo cloud on the same timeframe).

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Analytics and trading signals for beginners. How to trade GBP/USD on February 10? Analysis of Tuesday. Getting ready for

Trading 09 Fév 2021 Commentaire »

Hourly chart of the GBP/USD pair

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The GBP/USD pair managed to overcome the level of 1.3744 on Tuesday, from which it rebounded six times. However, the seventh attempt to overcome it was successful and the upward movement resumed. At the end of the day, the pound/dollar pair has reached two resistance levels and has stopped just above 1.3791, coming close to the 38th figure. The MACD indicator has long turned down, although the price continues to move up. This indicates another uncorrelation between the indicator and the price. At the moment, an upward trend is being identified for the pair, since the 1.3744 level did not resist the onslaught of buyers. During the day, novice traders could open long positions upon a signal to surpass this level, as we recommended in the last review. You were advised to keep long positions open until the MACD indicator turns down. Thus, beginners could earn around 20 points of profit today. Further upward movement is not obvious. Since last Thursday, the price has been constantly moving upward without forming any corrections (except for a small pullback). Thus, it is possible that by tomorrow the pair will fall by 100 points. The upward trend line clearly shows the current trend for the pair.

No news in the UK on Tuesday. Thus, the markets were trading based solely on technical factors and the general fundamental background, which is still not in favor of the dollar due to one single factor - a stimulus package that is about to be approved by the US Congress. If this happens, then another $2 trillion will flow into the American economy, which, for obvious reasons, may put pressure on the dollar rate. There are no other reasons for the dollar's fall right now. The pound is rising simply because the dollar is getting cheaper. Meanwhile, the economic situation remains very disappointing in the UK.

Bank of England Governor Andrew Bailey will hold another speech in the UK on Wednesday, and the inflation report will be published in the US. Both events, in certain situations, may not affect the pair's movement in any way (and, most likely, they will), and in certain situations, they may affect the dollar and the pound. If Bailey says something important about the British economy or monetary policy, then the markets cannot ignore it. If US inflation surprises the markets (it will be very different from the forecasted values), it could also affect the US currency rate. But technical factors will continue to be in the first place.

Possible scenarios on February 10:

1) You are advised to consider long positions again, since traders managed to overcome the 1.3744 level, and an upward trend line was formed. So now beginners need to wait for the price to rebound from the trend line or the MACD indicator to discharge to the zero level and form a new buy signal. Targets will be around the 1.3833 level and 20 points higher.

2) Short positions are not relevant at the moment, since an upward trend has formed. However, if the price settles below the trend line, then the downward movement may continue by several hundred points. Therefore, in this case, you are advised to open short positions with targets at the support levels of 1.3722 and 1.3695.

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 February 10? Analysis of Tuesday. Getting ready for

Trading 09 Fév 2021 Commentaire »

Hourly chart of the EUR/USD pair

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The EUR/USD pair continued its upward movement, having previously overcome the 1.2059 level, from which it had repeatedly rebounded earlier. Thus, the upward trend has continued, but there is no way now to form a trend line or channel. More precisely, there is a possibility, but this line or channel will be weak, since the price has never really corrected during the entire period of the upward movement (since last Friday). Thus, any more or less significant correction will result in the price settling below the trend line or channel, which will be a false signal to the end of the upward trend. As for trading over the past day, in the last article we advised you to open long positions either by the MACD signal, which should have been discharged to zero beforehand, or by surpassing the 1.2059 level. As a result, a second signal was formed. We advised you to keep long positions open until the MACD turns to the downside. Thus, novice traders could earn about 20 points based on our recommendations. Not much, but still. We advised you to refrain from opening short positions during the past day.

The macroeconomic background was not that weak, it was simply absent. Nothing interesting happened during the day, either in America or in the European Union. The fact that the euro continued to grow can only be explained by global fundamental reasons. We analyze them in detail in the articles on fundamental analysis. Beginners, however, should clearly know one thing: at the moment, the foundation is such that the dollar may fall by several hundred points. Not quickly, not immediately, but in the long term - this is absolutely possible.

Tomorrow there will be speeches by Christine Lagarde and Jerome Powell, the presidents of the European Central Bank and the Federal Reserve. There are few chances that they will tell the markets anything important, nevertheless, you should at least know the exact time of their speeches, since volatility surges and sharp price reversals are possible at this time. However, we believe that tomorrow will do without it. The same goes for the potentially very important US inflation report for January. The market reaction may follow, but only if there is a strong difference between the predicted value and the actual

Possible scenarios on February 10:

1) Long positions are currently relevant, since the trend after breaking the trend lines is growth. So now novice traders are advised to wait for a new round of correction and discharge of the MACD indicator to the zero level, afterwards we wait for a new buy signal to form and buy the pair while aiming for resistance levels 1.2091 and 1.2117. You can also open long positions in case the price rebounds from the 1.2059 level from above and keep them open until the MACD indicator turns down.

2) Trading for a fall has ceased to be relevant at the moment. So now novice traders need to wait for a new downward trend and after that you can consider options for trading bearish. Such a scenario is not expected in the near future, since a trend line or channel is missing right now.

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.

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

Norway Consumer Confidence Improves In Q1

Trading 09 Fév 2021 Commentaire »

Norwegian consumer confidence improved in the first quarter of this year as households started expecting an end to the coronavirus pandemic with the start of vaccinations, results of a survey by Finance Norway showed Tuesday. The expectations barometer climbed to -5.1 from -9.2 in the fourth quarter of 2020. "The barometer now indicates that most households are confident in their own finances and have both funds and a desire for increased consumption when large parts of the population have been vaccinated," Finance Norway CEO Idar Kreutzer said.

"This will help lift activity in the Norwegian economy."


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

USD : Le dollar repart à la baisse avant Powell et l’inflation

Trading 09 Fév 2021 Commentaire »
La journée sera chargée demain pour le billet vert avec l’intervention de Powell et les chiffres de l’inflation mais les conditions à la base de la faiblesse du dollar ne devraient pas être perturbées

Technical analysis of AUD/USD for February 09, 2021

Trading 09 Fév 2021 Commentaire »

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Forex Analysis & Reviews :

  • Pair : AUD/USD
  • Pivot : 0.7663
  • Signal :

Buy orders are recommended above the spot of 0.7565 with the first target at the level of 0.7663; and continue towards the targets of 0.7723, then reach the top point at 0.7821. However, if the AUD/USD pair fails to break through the resistance level of 0.7663 today, the market will decline further to 0.7520.

Overview :

  • The AUD/USD pair has faced strong support at the level of 0.7565 because resistance became support. So, the strong resistance has already faced at the level of 0.7565 and the pair is likely to try to approach it in order to test it again. The level of 0.7565 represents the last bearish wave (bottom) for that it is acting as minor support this week. Furthermore, the AUD/USD pair is continuing to trade in a bullish trend from the new support level of 0.7565. Currently, the price is in a bullish channel as long as the trend is still trading above the area of 0.7565 and 0.7600. According to the previous events, we expect the AUD/USD pair to move between 0.7565 and 0.7821. Also, it should be noticed that the double top is set at 0.7821. Additionally, the RSI is still signaling that the trend is upward as it remains strong above the moving average (100). This suggests the pair will probably go up in coming hours. Accordingly, the market is likely to show signs of a bullish trend. Therefore, strong support will be found at the level of 0.7565 providing a clear signal to buy with a target seen at 0.7663. If the trend breaks the minor resistance at 0.7663, the pair will move upwards continuing the bullish trend development to the level 0.7723 in order to test the daily resistance 2. The AUD/USD pair is showing signs of strength following a breakout of the highest level of 0.7723. On the H4 chart. the level of 0.7625 coincides with 23.6% of Fibonacci, which is expected to act as minor support today. Since the trend is above the 23.6%Fibonacci level, the market is still in an uptrend. But, major support is seen at the level of 23.6%. Again the trend is still showing strength above the moving average (100). Thus, the market is indicating a bullish opportunity above the above-mentioned support levels, for that the bullish outlook remains the same as long as the 100 EMA is headed to the upside.
The material has been provided by InstaForex Company - www.instaforex.com

February 9, 2021 : EUR/USD daily technical review and trade recommendations.

Trading 09 Fév 2021 Commentaire »

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Few weeks ago, another episode of upside movement was expressed above the depicted uptrend line (in blue) towards 1.2250 then 1.2350 where a false breakout above the price level of 1.2200 was regarded as a bearish downside reversal signal.

Shortly after, a short-term reversal pattern has been demonstrated around these price levels. 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 downside rejection was initiated around 1.2350.

Bearish closure below the mentioned price zone of 1.2250 - 1.2200 enabled a quick bearish decline towards 1.2170 which corresponded to a previous congestion zone as well as a prominent key-zone.

Persistence below the price level of 1.2170 has turned the intermediate outlook for the pair into bearish and enhanced further downside decline was demonstrated towards 1.2080, 1.1990 and 1.1950.

However, Recent Buying Pressure existed around 1.1950, leading to the current quick upside spike above 1.1990 again.

This indicates lack of sufficient downside pressure for the pair. Hence, the current upside movement may extend towards 1.2130 before considering to SELL the EURUSD pair again.

Trade Recommendations:

Conservative traders should be waiting for the current upside movement to pursue towards the depicted Fibonacci Levels around 1.2130-1.2150 for a valid SELL Entry.

S/L should be placed above 1.2170while Initial T/P levels to be located around 1.1990 and 1.1950.

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

February 9, 2021 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 09 Fév 2021 Commentaire »

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Recently, the EURUSD 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 around the previous price levels at 1.2330 (150% Fibonacci Level) in the previous article.

Recently, Bearish closure and persistence below 1.2160 was needed to abort the ongoing bullish momentum. This allowed the recent bearish movement to pursue towards 1.2050 where the depicted key-zone is located.

However, Intraday traders should were advised to look for short-term BUY Trade around the price zone of 1.2000.

This price zone provided temporary bullish SUPPORT for the EURUSD. However, lack of sufficient bullish momentum was recently demonstrated.

Early Exit was suggested for the previous BUY Position while waiting for a possible bearish continuation Pattern.

Bearish breakout below 1.2000 enhanced temporary bearish movement towards 1.1960 where significant bullish rejection was expressed.

That's why, the current bullish spike may pursue 1.2130-1.2150 (backside of the broken trend line) where bearish rejection and a valid SELL Entry should be anticipated.

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

February 9, 2021 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 09 Fév 2021 Commentaire »

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In December, the price levels of (1.3380-1.3400) have prevented further bullish movement for a few weeks.

Bearish target was projected towards 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 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.

However, the GBP/USD pair has failed to maintain bearish decline below 1.3200 in the previous attempt. Instead, bullish persistence above 1.3400 invalidated the bearish scenario for the short-term.

Another temporary bullish movement was expressed to test the previous WEEKLY High around 1.3700 which is failing to provide sufficient bearish pressure.

That's why, Further upside movement may be expected towards the upper limit of the current movement channel around 1.3900 where bearish rejection and a possible SELL Entry are suggested.

Short-term outlook can turn into bearish if only the GBP/USD pair could break below and maintain movement below 1.3550. If so, a quick bearish decline initially towards 1.3400 would be expected.

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