EUR/USD. Nice try, but no: bears failed to develop downward momentum

Trading 24 Fév 2021 Commentaire »

The euro-dollar pair has shown a correction today, following a three-day almost recoilless growth. The upward momentum faded away yesterday, as soon as the price reached 1.2180. Apparently, traders were not certain whether the pair would overcome this resistance level and settled in the area of the 22nd figure. Such doubts led to massive profit taking and short positions in hopes of a correction. The result was not long in coming: the pair did correct, but at the same time it remained within the 21st figure. However, the bears also failed to develop the downward momentum, since EUR/USD buyers were active near the support level of 1.2100 (the middle Bollinger Bands line, which coincides with the Tenkan-sen line), as if reminding us that the upward trend is still still valid.

It is noteworthy that as such there was no reason for the pair's correction today - the dollar sharply strengthened its positions throughout the market against the background of a sharp rise in the yield of 10-year Treasuries. The indicator reached 1.425% at the beginning of the US session - the last time the yield on these bonds was at this level was a year ago, in February 2020. That, in fact, is all - there were no other weighty arguments for the revaluation of the greenback. Therefore, as soon as the level of profitability began to decline, the dollar followed it, returning the gained points.

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Several conclusions can be drawn when taking such price fluctuations into account. First, it is necessary to take note of the support level at 1.2100. You should keep this in mind when you open short positions on corrective declines of EUR/USD. Secondly, take note of the temporary "ceiling" of the established price range - the 1.2180 mark (the upper limit of the Kumo cloud, coinciding with the upper line of the Bollinger Bands on D1). Traders tried to overcome this target six times (!) over the course of two days– but failed each time. This suggests that there is a resistance level here, which does not allow buyers of EUR/USD to approach the boundaries of the 22nd figure. As a result, we have a relatively wide 80-point price range of 1.2100-1.2180, within which the pair has been drifting for two days, waiting for the next information impulse.

In general, the general fundamental background for the EUR/USD pair allows us to count on a succeeding price growth. Corrective downward pullbacks are technically unavoidable and even necessary in order to develop a growth trend. Price declines can be used as a reason to open long positions, indicating the nearest resistance levels as a target. At the moment, this level is the 1.2180 target, as traders have already been able to verify how stable it is.

Federal Reserve Chairman Jerome Powell put pressure during his two-day Congressional speech, but did not help the EUR/USD bulls win the 22nd figure. As part of yesterday's speech, he acknowledged that the US economy is at the very beginning of a "rehabilitation path", and it will take a long time to recover to the target levels for inflation and employment. At the same time, he admitted that the Fed can use all available levers of influence, using "the entire arsenal of monetary policy tools."

In today's speech, Powell became concerned about the dynamics of the main macroeconomic indicators. In particular, he said that the labor market is experiencing a "significant drawdown", and inflation is showing sluggish and uncertain growth. According to him, it will take more than three years to consolidate inflation expectations around the target two percent ("or slightly higher").

In other words, Powell voiced a very clear message that the current parameters of monetary policy can be changed only in the direction of easing. By the way, Lael Brainard (a member of the board of governors) also spoke today, who also voiced rather dovish comments, pessimistically assessing the prospects for rising inflation and employment indicators. According to her, the real unemployment rate in the United States currently stands at about 10% (which is much higher than the official figure of 6.3%), while the employment situation is "a key priority in determining monetary policy." As for inflation, Brainard echoed Powell's thesis almost word for word, noting that the economy is "still too far" from the inflation target. Such gloomy conclusions from the representatives of the US central bank naturally put pressure on the greenback.

And the European currency received support from macroeconomic statistics again. A report on the growth of Germany's GDP in the fourth quarter. The final estimate was better than the initial one: in quarterly terms, the indicator was at 0.3% (instead of 0.1%), in annual terms – at -2.7% (the first estimate -2.9%). This release adds to the original puzzle, indicating the recovery of the European economy. Let me remind you that before that, the IFO, ZEW and PMI indices were released in the green zone.

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Thus, seeing as how dollar bulls failed to take their revenge, you can consider long positions on the EUR/USD pair - either from the current positions, or with the next corrective pullback. As mentioned above, the first target for the growth movement is the 1.2180 mark – this is the upper boundary of the Kumo cloud, which coincides with the upper line of the Bollinger Bands on D1. Overcoming this target will allow EUR/USD buyers to win the 22nd figure.

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Analytics and trading signals for beginners. How to trade EUR/USD on February 25? Analysis of Wednesday. Getting ready for

Trading 24 Fév 2021 Commentaire »

Hourly chart of the EUR/USD pair

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The EUR/USD pair initially corrected on Wednesday, and by the end of the trading day, it decided to resume its upward movement. Thus, although the price surpassed the first trend line, the upward trend is still preserved, which means that the European currency has excellent chances for proceeding with the upward movement. The outlook for the dollar is still extremely dim, as traders still refuse to actively buy this currency, seeing no reason or justification. This year, the US dollar managed to rise by 350 points and it seems to be the high for the current environment. The fundamental background has not changed in recent weeks, so what could be the reasons to expect the trend to change dramatically in the near future? Rather, everything looks like a one and a half month correction, and now a long-term upward trend can and should resume. In our last review, we advised you to consider bullish trading based on buy signals from the MACD indicator. Since the writing of the last article, two of them have been formed. Each did not lead to the expected growth and the most that traders could earn on them would be 10-15 points of profit. Thanks for that too. It is the same with the signal to break the upward trend line. In this case, we recommended selling while aiming for 1.2109. The price perfectly reached this level, which could bring another 23 points of profit to traders. In general, all three signals turned out to be profitable, but it did make much money.

No important macroeconomic or fundamental event in the European Union. Meanwhile, Federal Reserve Chairman Jerome Powell's second speech to the US Congress took place in America. The text of his speech did not differ from yesterday's. And since there was no reaction to this speech yesterday, there was no response to today either. Thus, the decline in the pair's quotes, which changed towards the evening with an upward movement, is most likely of a technical nature.

All the most interesting news and publications will be in America. The most important report of the day is the fourth quarter GDP report in the second estimate. The figure is expected to be +4.1% in annual terms. Also, data on durable goods orders will be published, which promise to increase compared to the previous period. The number of applications for unemployment benefits, according to analysts, should decrease. Thus, in general, the entire package of reports promises to be positive for the dollar. But won't traders ignore it?

Possible scenarios on February 25:

1) Long positions are still relevant now, as the second trend line continues to be at the disposal of traders. In the next few hours, a buy signal from the MACD indicator (it is below the zero level) may form with resistance levels 1.2174 and 1.2200 as targets. Also, a price rebound from the trend line can be considered a buy signal.

2) Trading bearish is currently irrelevant, since the price continues to be above the trend lines. On the other hand, traders managed to overcome the first trend line, therefore, the downward movement may continue. You can open short positions with 1.2110 and 1.2084 as targets in case a new sell signal from MACD appears (it must first be discharged to the zero 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 (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 in the Forex market should remember that every trade cannot be profitable. Developing a clear strategy and money management are the keys to success in trading over a long period of time.

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

*U.S. Crude Oil Inventories Rise By 1.3 Million Barrels In Week Ended 2/19

Trading 24 Fév 2021 Commentaire »

U.S. Crude Oil Inventories Rise By 1.3 Million Barrels In Week Ended 2/19


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U.S. New Home Sales Spike Much More Than Expected In January

Trading 24 Fév 2021 Commentaire »

Data released by the Commerce Department on Wednesday showed a much bigger than expected jump in new home sales in the U.S. in the month of January.

The Commerce Department said new home sales spiked by 4.3 percent to an annual rate of 923,000 in January after soaring by 5.5 percent to a revised rate of 885,000 in December.

Economists had expected new home sales to surge up by 1.5 percent to a rate of 855,000 from the 842,000 originally reported for the previous month.

New home sales in the Midwest helped lead the higher in January, skyrocketing by 12.6 percent to an annual rate of 107,000.

The report said new home sales in the West also shot up by 6.8 percent to a rate of 307,000, while new home sales in the South jumped by 3.0 percent to a rate of 549,000.

On the other hand, the Commerce Department said new home sales in the Northeast plunged by 13.9 percent to a rate of 31,000.

The median sales price of new homes sold in January was $346,400, down 1.9 percent from $353,100 in December but up 5.3 percent from $328,900 in the same month a year ago.

The report showed the estimate of new houses for sale at the end of January was 307,000, representing 4.0 months of supply at the current sales rate.

A separate report released by the National Association of Realtors last Friday showed another unexpected increase in U.S. existing home sales in the month of January.

NAR said existing home sales rose by 0.6 percent to an annual rate of 6.69 million in January after climbing by 0.9 percent to a revised rate of 6.65 million in December.

The continued growth came as surprise to economists, who had expected existing home sales to tumble by 2.2 percent to a rate of 6.61 million from the 6.76 million originally reported for the previous month.


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

*U.S. New Home Sales Spike 4.3% In January

Trading 24 Fév 2021 Commentaire »

U.S. New Home Sales Spike 4.3% In January


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February 24, 2021 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 24 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 which failed to offer sufficient bullish pressure.

The price zone around 1.2000 provided temporary bullish SUPPORT for the EURUSD. However, lack of bullish momentum was recently demonstrated. That's why, we were waiting for a bearish continuation Pattern.

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

That's why, the recent bullish spike has pursued towards 1.2150 - 1.2175 (backside of the broken channel limit) where bearish rejection and a valid SELL Entry are anticipated.

Initial Bearish target would be located around 1.2020 while S/L should be placed above 1.2200.

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

February 24, 2021 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 24 Fév 2021 Commentaire »

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Recently, the GBPUSD pair looked overbought while consolidating sideways around the price-levels of 1.3700.

Sideway movement with slight bullish tendency was recently demonstrated while approaching these price levels around 1.3700-1.3750.

Thats's why,Bearish pullback was recently expressed. However, the GBP/USD pair has failed to maintain sufficient bearish momentum.

Instead, Another temporary bullish movement was expressed above the previous WEEKLY High (1.3700).

Further upside movement was expected towards the upper limit of the current movement channel around 1.4100-1.14150 where bearish rejection and a possible SELL Entry are expected to be present especially with the current ovberbuying status of the pair.

Short-term outlook can turn into bearish if only the GBP/USD pair could break below and maintain movement below 1.3900 which corresponds to a recent prominent KeyZone.

If so, a quick bearish decline towards 1.3400 would be expected.

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

February 24, 2021 : EUR/USD daily technical review and trade recommendations.

Trading 24 Fév 2021 Commentaire »

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The previous episode of upside movement was expressed above the depicted uptrend line (in blue) towards 1.2250 then 1.2350 before the current downside reversal was initiated.

Bearish closure below the mentioned price zone around 1.2250 enabled a quick downside 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.

Further buying pressure was applied on the pair. Hence, the current upside movement has extended towards the depicted resistance level near 1.2175 where significant Selling Pressure is being applied on the EURUSD Pair.

Trade Recommendations:

Conservative traders were advised to SELL the EUR/USD pair anywhere around the depicted Resistance Level (1.2170).

Stop Loss should be placed above 1.2200, while T/P levels to be located around 1.1990 and 1.1950.

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

EUR/USD: Unwavering Powell and the unsinkable dollar

Trading 24 Fév 2021 Commentaire »

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This week's top newsmaker is Federal Reserve Chairman Jerome Powell.

On Tuesday, the head of the US central bank made it clear that in the foreseeable future, the regulator is not going to raise interest rates or curtail the asset purchase program.

He also noted the lack of significant progress in achieving the goals of the central bank.

Powell dismissed concerns that Washington's fiscal largesse would cause US inflation to accelerate. According to him, any increase in consumer prices in the country in the coming months is unlikely to be strong or permanent.

As for the central bank's other mandate (full employment), the Fed chairman stressed that ten million Americans are still out of work.

Powell's dovish comments, as it seemed, should have plunged the USD. However, after touching six-week lows (around 89.9 points), the greenback was able to recover to 90.3 points.

Experts still disagree on the future prospects of the US currency.

Some believe that the faster pace of vaccination in the United States will make it possible for the national economy to recover faster than other leading economies, which in turn will support the dollar.

Others argue that the United States, facing the greatest losses from the coronavirus than any other country in the world, will take longer to get in shape. In the long run, this will require more monetary easing by the Fed and erode the value of the USD.

Keeping the Fed's policy unchanged promises to push up treasury yields in the coming months, putting pressure on risky assets and lending a helping hand to the greenback.

Despite Powell's rather "soft" comments, the euro failed to gain much against the US dollar. First of all, this is due to recent statements by European Central Bank President Christine Lagarde, who said that the regulator is very closely monitoring the growth of European government bond yields. Investors fear that the central bank may take steps to lower the single currency and bond rates.

In addition, the pace of deployment of the vaccination campaign against COVID-19 in Europe still lags behind the United States, and AstraZeneca has dealt another blow here. The British-Swedish company said that it will deliver only 90 million doses of the vaccine to the EU in Q2 – half of the previously estimated volume. This is the second such delay in the delivery of vaccines to the region. Earlier, similar statements were made by Pfizer and Moderna.

The EUR/USD pair rose to almost 1.2180 on Wednesday, amid the release of positive reports from Germany, but then it pulled back.

According to data from Destatis, in October-December, German GDP grew by 0.3% q/q, rather than 0.1% as previously reported.

Market participants seem to be more interested in the situation that will develop in the spring than in the winter indicators.

The EUR/USD pair is still falling in front of the 1.2170-1.2180 area, which is a strong resistance. The pair should form a short-term low above 1.2190 to move to annual highs in the 1.2345-1.2355 region.

Meanwhile, 1.2090 should contain the fall. Its breakdown will result in retesting levels 1.2050 and 1.2020.

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

Short-term technical analysis on Gold.

Trading 24 Fév 2021 Commentaire »

Gold is trading again below $1,800. Price made a low today at $1,783, but there are still hopes for bulls to see a move towards $1,838. Gold price so far has made a higher low at $1,783. If price breaks above the resistance trend line at $1,810 then we should expect a sharp move to $1,840.

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Blue line - resistance trend line

Green line - horizontal support

Red lines - Fibonacci extension targets

Gold price is making lower lows and lower highs if you see the bigger picture from last August. However in the intra day chart we might be seeing the start of a trend reversal. Maybe the double bottom will not break and price bounce from current levels. To support this scenario bulls need to break above $1,810. First target is at $1,838-40. Inability to break above $1,810 will increase chances of breaking below the double bottom. A break below $1,783 will be a weakness sign.

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