Where will the EUR/USD swing take this week?

Trading 18 Fév 2021 Commentaire »

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After reaching weekly highs around 91 points, the greenback is experiencing downward pressure again.

The strong US retail sales data only provided temporary support for the USD.

Investors remain concerned about the sustainability of the U.S. economic recovery.

In January, retail sales in the United States increased by 5.3% on a monthly basis, more than four times the preliminary estimate of 1.2%.

The increase in the indicator was primarily due to a seasonal correction. In addition, the indicator was positively affected by consumer checks allocated by Congress as part of the previous stimulus package.

Given the exceptionally nominal growth in non-agricultural employment and the slowdown in wage growth, there is every reason to expect a decline in consumer spending in February, as the dynamics of the previous month were fueled by direct payments.

The USD index fell by more than 0.25% on Thursday, to 90.57 points, after rising by 0.4% on Tuesday.

The fervor of dollar bulls cooled the minutes of the Federal Reserve's January meeting, which showed that the central bank is more optimistic about the economic prospects of the United States than before, but is indifferent to talk about rising inflation in the country and is unlikely to raise interest rates or reduce the volume of bond purchases in the foreseeable future.

The USD index needs to return above 91 points in order to extend the recent growth. If this works out, then the next important goal is the current year's high at 91.6 points. This resistance area is reinforced by the 100-day moving average around 91.5 points.

After an unsuccessful attempt to go beyond the consolidation channel on Tuesday, the EUR/USD pair fell by 0.5% the day before. However, it was then able to bounce back from local lows near 1.2020 and recovered to 1.2080.

The pair was trading under the influence of the dollar dynamics on Thursday, as the eurozone did not release any important reports.

The United States published a weekly report on applications for unemployment benefits in the country, which turned out to be worse than forecasts. January data on the US housing market reflected a drop in the number of construction starts. All this increased the pressure on the dollar.

Data on business activity in the EU and the US will be released on Friday, which may put an end to the tug of war between the bulls and bears for EUR/USD this week.

The European purchasing managers' index is expected to rise from 47.8 points in January to 48.1 points in February, while its US counterpart will fall to 56.6 points from 58.7 points recorded a month earlier.

The nearest strong resistance for EUR/USD is located at 1.2100 and further at 1.2150 and 1.2070. Once this level is surpassed, the pair will aim for 1.2200.

In the event of a drawdown under the psychologically important mark of 1.2000, the decline may accelerate in the direction of 1.1950. From here, the pair will open the way to 1.1900 and 1.1870.

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

Treasury Reveals Details Of 2-Year, 5-Year And 7-Year Note Auctions

Trading 18 Fév 2021 Commentaire »

The Treasury Department on Thursday announced the details of this month's auction of two-year, five-year, and seven-year notes.

The Treasury revealed it plans to sell $60 billion worth of two-year notes, $61 billion worth of five-year notes and $62 billion worth of seven-year notes.

The results of the two-year note auction will be announced next Tuesday, the results of the five-year note auction will be announced next Wednesday and the results of the seven-year note auction will be announced next Thursday.

Last month, the Treasury also sold $60 billion worth of two-year notes, $61 billion worth of five-year notes and $62 billion worth of seven-year notes.

The two-year note auction attracted above average demand, while the five-year and seven-year note auctions both attracted below average demand.


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ECB Policymakers Still See Need For Ample Stimulus: Minutes

Trading 18 Fév 2021 Commentaire »

European Central Bank policymakers continued to assess that there was a case for maintaining ample stimulus and stressed that measures that were put in place in December should be given time to take full effect, the minutes of the latest policy meeting showed Thursday.

"Members agreed that ample monetary stimulus remained essential to preserve favorable financing conditions over the pandemic period," the minutes of the meeting, which the ECB calls 'account', said.

During the January 20-21 meeting, an argument was put forward that monetary policy should keep a steady hand. Rate-setters also agreed that that there was no room for complacency though there were signs of recovery gaining speed on roll-out of vaccinations against the coronavirus pandemic. That said, it was argued that the fast rebound in growth foreseen in the December staff projections might be too optimistic, with Eurozone growth in the second quarter of 2021 possibly at risk from extended lockdowns.

The euro exchange rate remained a worry for policymakers, the minutes showed. "Concerns were voiced...over developments in the exchange rate that might have negative implications for euro area financial conditions and, ultimately, consequences for the inflation outlook," the minutes said. The view that nominal yields were not an appropriate benchmark for assessing whether financing conditions remained favourable was reconfirmed. Nominal yields could rise because of a better economic outlook and higher inflation expectations, the bank noted. Further, members agreed that not every increase in nominal yields should be interpreted as an unwarranted tightening of financing conditions and trigger a corresponding policy response.

"What mattered from a monetary policy perspective was the evolution of real rates, which had declined to record low levels in recent weeks," the minutes said.


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Analytics and trading signals for beginners. How to trade GBP/USD on February 19. Analysis of trade on Thursday. Getting

Trading 18 Fév 2021 Commentaire »

1-hour chart for GBP/USD

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On Thursday, GBP/USD sharply resumed an upward move which rests on nothing. In fact, we have already got used to such erratic and illogic moves of the pound sterling which has been advancing steadily for no reason. In fundamental articles, I highlighted the fact that such a steady rally looks like a rally of bitcoin or oil prices. I mean, there are cases when an asset (or a currency) sets about a dazzling bullish run for a long time without any reason. Let me stress there are no visible reasons behind such growth, but traders can do nothing about it. This kind of movement is termed speculative. In essence, traders buy robustly an asset (or a currency) aiming to earn on a price difference. In simple words, they want to buy at lows and sell at highs. There is a multitude of such traders. More and more market participants are watching this unreasonable growth and are eager to join the market. They actually enter the market, thus boosting demand for the sterling, so that its value gets inflated. This is what exactly is happening to the pound sterling.

To sum up, GBP/USD has already formed the third upward trendline which could end up like the two previous ones. Today, the sterling was trading higher for the whole day. Now we should wait for a retracement downwards and a new buy signal. So, let's hope that the price will not break again the trendline to cancel it and resume the upward move later.

On Thursday, the UK did not release any macroeconomic reports. There was no news on the political front as well. Lately, GDP data and the CPI were rather strong. So, they contributed to the bullish move of the sterling. At the same time, we should confess that the British pound would have appreciated without such reports. The focal point in the UK is new mutant strains of the coronavirus which have been detected in the country. At least two such strains have been found out in the Kingdom. They are more contagious and perilous than the original COVID-19. Nevertheless, the sterling has been immune to such news.

On Friday, February 19, the UK is due to publish retail sales data as well as the services and manufacturing PMIs. Retail sales are expected to contract in January. Business activity in the service sector is likely to remain soft last month, though the PMI could have climbed to 42.3. Thus, the time will be ripe for a downward correction of GBP/USD tomorrow, albeit this correction will be short-lived.

The following scenarios are possible on February 19

1)Buy orders have resurfaced again because a new upward trendline has been formed. Hence, beginners are recommended to wait for a downward correction and a new buy signal which looks like an upward reversal of MACD indicator or a price bounce off a new trendline. The targets are resistance levels of 1.3900 and 1.3941.

2)Sell orders are the wrong idea again. To consider short positions on GBP/USD, we should wait until the price surpasses the upward trendline. If this happens tomorrow, the sterling will hardly tumble in response. At present, the price and the trendline are separated by nearly 100 pips.

What's on the chart:

Support and Resistance levels are the levels that are targets when opening buy or sell orders. Take Profit levels can be placed near them.

Red lines are channels or trend lines that display the current trend and show which direction it is preferable to trade now.

Up / down arrows show whether the pair should be traded up or down when reaching or overcoming particular obstacles.

MACD indicator is both a histogram and a signal line. When they are crossed, this signals a market entry. It is recommended for use in combination with trend patterns (channels, trend lines).

Important speeches and reports in the economic calendar can greatly influence the movement of the currency pair. Therefore, during their release, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.

Beginners in the forex market should remember that every trade cannot 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

Eurozone Consumer Confidence Improves In February

Trading 18 Fév 2021 Commentaire »

Eurozone consumer confidence improved slightly in February, after easing in the previous month, preliminary figures from the European Commission showed on Thursday. The flash consumer confidence index climbed to -14.8 from -15.5 in January. Economists had expected a score of -15. The corresponding indicator for EU rose to -15.7 from -16.5 in the previous month. The indicator continued to remain well below its long-term average of ?11.1 for the euro area and ?10.6 for EU. The final figure for February consumer confidence is set to be released along with the monthly economic sentiment survey on February 25.


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*U.S. Crude Oil Inventories Decrease By 7.3 Million Barrels In Week Ended 2/12

Trading 18 Fév 2021 Commentaire »

U.S. Crude Oil Inventories Decrease By 7.3 Million Barrels In Week Ended 2/12


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

Analytics and trading signals for beginners. How to trade EUR/USD on February 19. Analysis of trade on Thursday. Getting

Trading 18 Fév 2021 Commentaire »

1-hour chart for EUR/USD.

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On Thursday, EUR/USD began a stage of an upward correction following yesterday's drop of 140 pips. Such developments are quite predictable because a correction is needed after such a steep fall. Thus, the overall trend remains bearish as earlier the price fixed below the upward trendline. Hence, forex beginners are still recommended to search for buying opportunities of EUR/USD tomorrow.

Speaking about trade on Thursday, the pair has not generated any signal today. I didn't recommend beginners to trade the pair upwards because the overall trend is bearish. MACD indicator has just discharged to zero and will try to form a buy signal in the nearest hours. This could happen even at night. Forex operates nonstop 24 hours a day. The market doesn't close at night and doesn't wait until traders relax and regain energy for the next day. In the near time, a downward trendline could be shaped, so it will be easier to plan trading with it.

On Thursday, February 18, the economic calendar was empty with macroeconomic data. The only report of some importance was a weekly update on unemployment claims in the US. The data was rather neutral. Anyway, this report has never been a market catalyst. It goes without saying that EUR/USD was trading depending entirely on technical factors. The US dollar is still keeping afloat, albeit it has not moved far away from 2.5-year lows. To sum up, we cannot confirm the beginning of a long-term downtrend. Importantly, as I mentioned in my fundamental articles, if the US Congress passes a new stimulus bill worth $1.9 trillion, this could be a serious bearish factor for the US currency.

On Friday, investors will get to know a series of PMIs for the service and manufacturing sectors. The market attaches importance to the services PMI as the index has got stuck below the threshold level of 50.0 points for a few recent months. Any reading above 50 means expansion and any score below means contraction. In other words, if the services PMI stays again way under 50, the euro will have no fundamental reasons to gain ground tomorrow. Let me remind you that the market takes little notice of economic data over the recent year. All in all, traders give priority to technical indicators.

The following scenarios are possible on February 19

1)Long positions are not considered anymore as the price fixed below the upward trendline. Thus, beginners are not recommended to trade the pair upwards. Moreover, tomorrow the price will hardly develop a new uptrend. The odds are that we won't have to plan any long positions on Friday.

2)Currently, the preferable trading strategy is to trade EUR/USD downwards. At the moment of writing this article, the price is still making a correction. In the nearest hours, we can expect MACD to generate a sell signal. If the sell signal actually appears, traders will be able to sell the pair with downward targets 40-50 pips away from the market entry point.

What's on the chart:

Support and Resistance levels are the levels that are targets when opening buy or sell orders. Take Profit levels can be placed near them.

Red lines are channels or trend lines that display the current trend and show which direction it is preferable to trade now.

Up / down arrows show whether the pair should be traded up or down when reaching or overcoming particular obstacles.

MACD indicator (14,22,3) is represented by a histogram and a signal line. When they are crossed, this signals a market entry. It is recommended for use in combination with trend patterns (channels, trend lines).

Important speeches and reports in the economic calendar can greatly influence the movement of the currency pair. Therefore, during their release, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.

Beginners in the forex market should remember that every trade cannot 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

Euro Higher After ECB Minutes

Trading 18 Fév 2021 Commentaire »

The euro was higher against its major counterparts in the European session on Thursday, after the European Central Bank's minutes from the latest meeting showed that the Governing Council is prepared to adjust all of its instruments, including the deposit facility rate, to ensure that inflation moved toward its target in a sustained manner.

Members broadly agreed that there was no room for complacency and that the Governing Council had to continue to stand ready and use all of its instruments, if required, to ensure a robust convergence of inflation towards its goal, the minutes from the bank's January 20-21 meeting showed.

Regarding the latest exchange rate developments, policymakers acknowledged that the recent persistent trend appreciation of the euro had reversed since the start of 2021.

Although members noted that the nominal effective exchange rate was at a historically high level and had a negative impact on inflation, they also observed that the impact of exchange rate movements on inflation might be overestimated in standard models.

The risks surrounding the euro area growth outlook remained tilted to the downside, with the ongoing pandemic and its implications on economic and financial conditions acting as sources of downside risk, the minutes showed.

ECB policymakers emphasized that the recalibration of instruments decided on in December remained appropriate and well-balanced, whereas all instruments needed to remain on the table, with due consideration of benefits and possible unintended side effects, it added.

The euro showed mixed trading against its major opponents in the Asian session. While it rose against the franc, it held steady against the greenback and the pound. Versus the yen, it fell.

The euro hovered at a 9-day high of 1.0831 against the franc. At Wednesday's close, the pair was worth 1.0812. The euro is seen locating resistance around the 1.10 mark.

Data from the Federal Customs Administration showed that Switzerland's exports grew in January after falling in the previous month.

Exports gained by a real 5.7 percent month-on-month in January, while imports rose 1.4 percent.

The euro approached 1.2090 against the greenback, up from Wednesday's closing value of 1.2034. The euro may test resistance around the 1.22 region, if it gains again.

The European currency reached as high as 127.73 against the yen, following a low of 127.33 seen in the Asian session. The pair had closed Wednesday's deals at 127.37. Should the euro strengthens further, 128.5 is found as its resistance level.

The euro edged higher to 1.5549 against the aussie and 1.5336 against the loonie, off its early more than a 2-year low of 1.5506 and a new 4-week low of 1.5280, respectively. The euro was valued at 1.5288 against the loonie and 1.5518 against the aussie at yesterday's close. The next likely resistance for the euro is seen around 1.58 against the aussie and 1.55 against the loonie.

The single currency turned higher against the kiwi, with the pair trading at 1.6782. This followed a 2-day low of 1.6727 hit at 5:00 pm ET. At yesterday's trading close, the pair was quoted at 1.6743. The euro is poised to challenge resistance around the 1.72 mark.

In contrast, the euro dropped to 0.8659 against the pound, its lowest level in a year. The euro-pound pair had ended yesterday's trading session at 0.8678. The euro is likely to target support around the 0.84 mark.

Eurozone flash consumer sentiment index for February is set for release at 10:00 am ET.


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

*Eurozone Feb Flash Consumer Confidence -14.8 Vs. -15.5 In Jan, Consensus -15.0

Trading 18 Fév 2021 Commentaire »

Eurozone Feb Flash Consumer Confidence -14.8 Vs. -15.5 In Jan, Consensus -15.0


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

Philly Fed Index Indicates Modestly Slower Growth In February

Trading 18 Fév 2021 Commentaire »

Philadelphia-area manufacturing activity saw continued growth in the month of February, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday, although the pace of growth slowed from the previous month.

The Philly Fed said its diffusion index for current activity dipped to 23.1 in February from 26.5 in January, but a positive reading still indicates growth in regional manufacturing activity. Economists had expected the index to drop to 20.0.

The decrease by the headline index was partly due to a slowdown in the pace of growth in new orders, as the new orders index slumped to 23.4 in February from 30.0 in January.

The shipments index also edged down to 21.5 in February from 22.7 in January, indicating a modest slowdown in the pace of growth.

On the other hand, the report said the number of employees index climbed to 25.3 in February from 22.5 in January, suggesting faster job growth.

The prices paid index also jumped to 54.4 in February from 45.4 in January, while the prices received index plunged to 16.7 from 36.6.

Looking ahead, the Philly Fed said most future indexes moderated this month but continue to indicate that firms expect growth over the next six months.

The diffusion index for future general activity tumbled to 39.5 in February after jumping to 52.8 in the previous month.

"Overall, we expect healthy goods demand, inventory restocking, rebounding business investment and another round of pandemic relief to keep manufacturing activity well-supported in 2021," Oren Klachkin, Lead U.S. Economist at Oxford Economics.

On Tuesday, the New York Fed released a separate report showing New York manufacturing activity grew at its fastest pace in months in February.

The New York Fed said its general business conditions index jumped to 12.1 in February from 3.5 in January, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to rise to 6.0.

With the much bigger than expected increase, the general business conditions index reached its highest level since hitting 17.0 last September.


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