USDCAD breaks out of a downward sloping wedge pattern

Trading 18 Jan 2021 Commentaire »

USDCAD is trading at 1.2760. Price has broken the upper wedge boundary at 1.2730. It is important for bulls to stay above this break out level and continue making higher highs and higher lows. If this break out is confirmed, then we might see a big upward move in USDCAD towards 1.30-1.33.

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Red lines - bullish wedge pattern

Blue line- Bullish RSI divergence

USDCAD is moving higher. Last time we analyzed USDCAD we mentioned this bullish wedge pattern and the bullish RSI divergence. All signs were there for a move higher. Bears were warned. Price can now continue much higher towards 1.30-1.33. Bulls need to hold price above 1.2730-1.2750 on a weekly basis otherwise this would not be a real break out. Back testing the upper wedge boundary is usually seen after breakouts. So a pull back to back test 1.2720-1.2730 is very possible the next couple of days.

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EUR/USD: dollar risks further decline if global recovery accelerates

Trading 18 Jan 2021 Commentaire »

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This month, the USD exchange rate reached an almost three-year low, but since then the greenback has strengthened by more than 1%, which has given rise to talk about a reversal of the long-term downward trend of the US currency.

"The market is now in a state of anticipation, reflecting on whether higher yields on US government bonds can support the dollar or whether it will continue to decline," said strategists at Bank of Singapore.

"We think that the balance of risks is still shifted in favor of a reflationary environment and therefore risk sentiment should remain positive and we should see further weakening of the US currency," they added.

The Goldman Sachs specialists still adhere to the bearish outlook for the USD, expecting it to weaken in 2021 across the entire spectrum of the market.

"We continue to believe that the combination of an overvalued dollar, low nominal and real rates in the US, and a rapid global economic recovery will put pressure on the US currency throughout this year," they said.

According to the bank's forecast, the EUR/USD pair will be trading at 1.2500 in March, near 1.2700 in June, and around 1.2800 in December.

Towards the end of last week, the main currency pair renewed this year's lows below 1.2100.

The main factor of pressure on it was risk aversion, which played into the hands of a safe greenback.

The disappointing US statistics released on Friday increased the concerns of market participants about the country's economic prospects.

In December, retail sales in the United States fell 0.7% on a monthly basis. At the same time, the data for November was revised downward, showing a decline of 1.4% instead of 1.1%, as previously reported.

The deteriorating situation with the pandemic and the extension of quarantine restrictions in some countries, as well as the persistence of the risks of their tightening, raise concerns among investors about the global economic recovery.

However, the United States and the global economy have a resource for optimism that could improve market sentiment and negatively impact the defensive dollar.

Joe Biden will take over the White House on Wednesday. He is going to promote a $1.9 trillion stimulus plan and also wants to vaccinate 100 million Americans during his first 100 days in office. According to Anthony Fauci, a leading U.S. epidemiologist, this is an achievable goal.

Another source of optimism for dollar bears is the Fed. The head of the US Central Bank Jerome Powell last week confirmed the regulator's commitment to super-soft monetary policy. The Fed does not expect interest rates to rise before 2023.

As US exchanges are closed on Monday for Martin Luther King Day, and Joe Biden is due to take office on Wednesday, the major pair is trading in a narrow range (1.2055-1.2085).

On Friday, the EUR/USD pair made a net breakdown of the key support at 1.2130. This could be a sign that the pair has already formed a short-term top. A breakdown of the 1.2055-1.2060 area will confirm the bearish sentiment of the pair and aim it at the psychologically important mark of 1.2000, a breakout of which will lay the foundation for further decline.

Attempts to recover EUR/USD may face resistance near 1.2100. The subsequent growth and breakdown of the former support around 1.2130 may trigger a short squeeze and send the pair to 1.2170-1.2175. Further strong resistance is at 1.2200 and 1.2210.

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January 18, 2021 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 18 Jan 2021 Commentaire »

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The EURUSD pair was trapped below the previous key-level (1.2000) until bullish breakout occured to the upside recently in December.

Further quick bullish advancement was expressed towards 1.2150 just as expected after failing to find sufficient bearish pressure at retesting of the backside of the broken channel around 1.1970-1.2000 which corresponds roughly to Fibonacci Level of 0%.

Recently, the 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.

Currently, Bearish closure and persistence below 1.2160 then 1.2000 is needed to abort the ongoing bullish momentum to pursue bearish movement at least towards 1.1860 and 1.1770.

This would confirm the ongoing bearish Head and Shoulders Pattern by breaking below the pattern neckline around 1.2160.

On the other hand, Conservative traders should look for price action around the price zone around 1.2000-1.1975. This price zone stands as a Demand Zone which can offer bullish SUPPORT for the EURUSD.

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January 18, 2021 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 18 Jan 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 temporary 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 GB/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 being expressed to test the previous WEEKLY High around 1.3700 and probably towards 1.3770 where bearish rejection and a possible SELL Entry are suggested.

Intermediate-term outlook can turn into bearish if only the EUR/USD pair could break below and maintain movement below 1.3400. If so, a quick bearish decline initially towards 1.3200-1.3150.

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January 18, 2021 : EUR/USD daily technical review and trade recommendations.

Trading 18 Jan 2021 Commentaire »

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By the end of November, Signs of BUYING Pressure have been initiated around the depicted price zone of 1.1800-1.1840.

Shortly after, the EUR/USD pair has demonstrated a quick upside movement.The pair has targeted the price levels around 1.1990 initially which exerted considerable bearish pressure bringing the pair back towards 1.1920 which constituted a temporary KEY-Zone for the EUR/USD pair.

That's why, another episode of upside movement was expressed towards 1.2160 where a false breakout above the price level of 1.2200 was regarded as a considerable bearish reversal signal.

Three weeks ago, a short-term reversal pattern has been demonstrated around 1.2265. 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 bearish 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 then 1.2150 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 should enhance further downside decline towards 1.2080 and probably 1.2040.

On the other hand, any upside pullback towards 1.2170 should be considered for SELLING the EURUSD pair again

Trade Recommendations :-

SELL Positions that were suggested around the price levels of 1.2300 are already running in profits.

Stop Loss should be lowered to 1.2200 to secure more profits while Next Target level should be projected towards 1.2040.

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

What factors are greater: in favor of the growth of the dollar or in favor of its decline

Trading 18 Jan 2021 Commentaire »

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The main topics of the foreign exchange market concern the US dollar. Washington's political and economic positions are driving the USD into a devaluation trap, but there are nuances. The day before, Joe Biden announced stimulus measures. Formally, the markets should be happy with this development. However, this time the rapid growth occurred not on the stock markets, but in the yields of treasuries. In other words, markets are asking who will pay for a holiday of economic stimulus.

Scenarios for the dollar are difficult to determine because of the Fed's persistent silence on the possible expansion of the quantitative program. Obviously, current purchases are not enough to finance future fiscal measures.

The dollar has grown, but will inevitably return to the path of weakness if the US regulator talks about increasing quantitative incentives. In this regard, the probability of a weak dollar in 2021 is higher than the probability of its strength, analysts say.

Markets focus on the inauguration of the US President on January 20. Janet Yellen is expected to reaffirm the strong dollar policy at her confirmation hearing on Tuesday. Washington appears to be returning to its traditional stance after Donald Trump challenged the strength of the dollar during his presidency, claiming it gives other countries a competitive edge.

"The value of the dollar and other currencies must be determined by the markets. Markets adjust to changes in economic performance and generally contribute to the adjustment of the global economy," the American media write. They expect a statement of this nature from Yellen.

Traders have heavily shorted the US dollar. The value of the speculative position has reached its highest level in 10 years. This happened, among other things, in anticipation of a further increase in the US trade and budget deficit under the new administration.

The investment community is now reconsidering its attitude towards the dollar. Today, the USD index has strengthened its recovery dynamics. The dollar is likely tuning into a more substantial pullback after last year's drawdown. Trading around the 90.8 mark, the dollar index is in close proximity to the resistance area of 91. A more complete upward correction can quickly take the dollar to 91.3, and then to the round mark of 92

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The current growth of the dollar has given rise to talk about a reversal of the long-term downward trend, but not everyone believes it yet. For example, Goldman Sachs and Bank of America respondents continue to bet on a further decline in the dollar.

"During this year, the dollar will continue to fall in price. At the same time, currencies tied to the dynamics of the global economy, especially the currencies of developing countries and the Australian dollar, will rise in price," JPMorgan representatives said.

Before Yellen's speech, speculators raised rates on the dollar's decline to a record high since April 2018.

In favor of dollar growth

The political upheaval over the change of power in Washington is an important component of market sentiment. However, there is another important component that is becoming difficult for investors to overlook. We are talking about negative news on the spread of coronavirus, its new strains, vaccine shortage and serious side effects of the drug.

By the end of last year, when Pfizer announced a drug against the virus, risky assets were rallying as markets hoped that the pandemic could be dramatically improved by a vaccine by spring or summer. Now it becomes obvious that they miscalculated, such optimism was unjustified, and a record short position was accumulated against the dollar.

Currently, there are signs of a reduction in such positions. The euro is also a factor in the recovery of the dollar. The comments of the head of the ECB that the regulator is closely monitoring the euro exchange rate, somewhat spooked buyers. While the political aggravation in Italy played on the side of the "bears" of the EUR/USD pair. The Government of the country will have to survive an important vote in parliament

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Over the past week, the main currency market tandem lost about 2%. The fall is likely to continue. The euro is trading at 1.207, returning to last December's lows. The next area of support is 1.195, a former strong resistance.

Considering all of the above factors, the dollar's strengthening may continue, at least this week.

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

UK House Prices Fall At Faster Pace In January: Rightmove

Trading 18 Jan 2021 Commentaire »

UK house prices declined at a faster pace in January before the stamp duty holiday ends, the property website Rightmove said Monday.

As new sellers still hope to tempt buyers and squeeze in a sale before the stamp duty holiday ends, house prices dropped 0.9 percent on month in January, after easing 0.6 percent in December.

On a yearly basis, growth in house prices halved to 3.3 percent from 6.6 percent in December.

According to Rightmove, it takes 126 days from the time an offer is accepted until legal completion. This suggests that new buyers in the market should not be factoring in any stamp duty savings, unless they are first-time buyers.

"While the tax savings were an added incentive, movers' desire for more inside and outside space seems to be continuing, and this new lockdown could be a spur to act in 2021 for those who can and who did not do so in 2020," Tim Bannister, Rightmove's Director of Property Data. Data showed that visits to Rightmove were up by 33 percent, the number of buyers contacting agents was up by 12 percent and the number of sales agreed grew 9 percent for January so far compared to the prior year.

Despite temporary market closures in 2020, people's housing needs meant the number of sales agreed was up by 10 percent for the whole year versus 2019, the agency added.


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BTC analysis for January 18,.2021 – Watch for the breakout of sideways base to confirm further direction

Trading 18 Jan 2021 Commentaire »

analytics60059c4eed493.jpgFurther Development

Analyzing the current trading chart of BTC, I found that there is the basing process and that market is in sideways mode.

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Trading Signal for GBP/USD for January 18 – 19, 2021: Buy above 1.3549

Trading 18 Jan 2021 Commentaire »

The GBP / USD pair is trading below the 7/8 Murray, and below the 200 EMA and 21 SMA, showing strong bearish pressure.

The pair has bounced around the 1.3521 zone, if it breaks the 7/8 murray zone which is located at 1.3549, we can buy with targets at the 200 EMA, and the top of the bearish channel at 1.3615.

The GBP / USD pair, has a downward pressure, forming a wedge pattern, if it breaks above 1.3549, we could expect a recovery of the British pound, on the contrary we can expect a fall to the support of 6/8 of murray at 1.3427.

The eagle indicator is entering the oversold zone on 1 hour charts, it is likely that there will be a technical rebound at least to the 200 EMA, for a bearish continuation.

Our recommendation is to sell below the 200 EMA, and buy only if the 1.3549 level breaks in 4-hour charts, below 1.3549, the downward pressure could intensify.

Support And Resistance Levels For January 18-19, 2021

Resistance (1) 1.3580

Resistance (2) 1.3616

Resistance (3) 1.3662

Support (1) 1.3488

Support (2) 1.3451

Support (3) 1.3411

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Trading tip for GBP/USD for January 18-19, 2021

Buy above 1.3549 (7/8 murray), with take profit 1.3605, stop loss below 1.3515.

Sell if pullback 1.3605 (EMA 200) with take profit at 1.3549 and 1.3427, stop loss above 1.3640.

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

Analysis of Gold for January 18,.2021 – Potential reversion to the mean towards $1.863

Trading 18 Jan 2021 Commentaire »

S stock and bond markets are closed today so trading will be lighter, especially once London clocks off.

Expect continuing US political headlines as Biden nears inauguration on Wednesday. Tomorrow, eyes will be on Trump as he's expected to issue up to 100 Presidential pardons.

Canadian markets are open though and digesting reports that Biden will cancel the Presidential permit for Keystone XL on his first day in office. That's not a surprise but the loonie is the laggard today because of it.

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Further Development

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Analyzing the current trading chart of Gold, I found that sellers got exhausted on the way down at the price of $1,800.

1-Day relative strength performance Finviz

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Based on the graph above I found that on the top of the list we got Lean Hogs and Feeder Cattle today and on the bottom Natural Gas and Lumber.

Gold is one of the relative strength leaders today, which is positive for further rally....

Key Levels:

Resistances: 1,863, $1,922 and $1,957.

Support level: $1,800

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