U.S. Dollar Drifts Higher On Global Growth Concerns

Trading 24 sept 2020 Commentaire »

The U.S. dollar was higher against its major counterparts in the European session on Thursday, as Fed officials' called for more fiscal stimulus and a rise in coronavirus cases triggered worries about the pace of the global economic recovery.

Speculation is rife that the U.S. Congress would not agree extra fiscal stimulus to counter the ongoing Covid-19 crisis in the run up to the November election.

Fed Chair Jerome Powell noted that the economy had a long way to go before recovery and further fiscal support is required to limit damage caused by the coronavirus pandemic.

Fed Vice Chair Richard Clarida said that the economy was still in a deep hole and policymakers "are not even going to begin thinking" about raising interest rates for now.

Investors await testimony from Powell before the Senate Banking Committee in Washington at 10:00 am ET.

Meanwhile, the House approved a stopgap federal funding bill on Wednesday night to keep the federal government operating through December 11.

Recovering from its early lows of 1.3372 against the loonie, 0.7081 against the aussie and 0.6557 versus the kiwi, the greenback spiked up to a 1-1/2-month high of 1.3415, more than 2-month high of 0.7021 and a 5-week high of 0.6512, respectively. The greenback is likely to challenge resistance around 1.37 against the loonie, 0.68 against the aussie and 0.63 versus the kiwi.

The greenback firmed to 2-month peaks of 0.9269 against the franc and 1.1627 versus the euro, off its early lows of 0.9216 and 1.1680, respectively. The greenback is seen finding resistance around 0.94 against the franc and 1.14 versus the euro. The greenback hit a 9-day high of 105.53 against the yen, coming off from a low of 105.21 set at 3:45 am ET. On the upside, 108.00 is possibly seen as its next resistance level.

In contrast, the U.S. currency fell to a 2-day low of 1.2781 against the pound, compared to Wednesday's closing value of 1.2723. The greenback is poised to find support around the 1.31 level.

U.S. new home sales for August will be featured shortly.

Federal Reserve Chair Jerome Powell will testify on the CARES Act before the Senate Banking Committee in Washington DC at 10:00 am ET.


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*U.S. New Home Sales Jump 4.8% In August

Trading 24 sept 2020 Commentaire »

U.S. New Home Sales Jump 4.8% In August


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Turkey Central Bank Hikes Rates Unexpectedly

Trading 24 sept 2020 Commentaire »

Turkey's central bank lifted its interest rates unexpectedly by 200 basis points in an attempt to curb the weakness in the lira exchange rate.

The Monetary Policy Committee of the Central Bank of the Republic of Turkey, led by Governor Murat Uysal, decided to lift the policy rate, which is the one-week repo auction rate, to 10.25 percent from 8.25 percent.

This was the first hike in two years. The bank had reduced the rate four times this year by a cumulative 375 basis points.

"As a result of fast economic recovery with strong credit momentum, and financial market developments inflation followed a higher-than-envisaged path," the bank said.

Policymakers said the tightening measures taken since August should be reinforced to contain inflation expectations and risks to the inflation outlook. The committee assessed that the rate increase is needed to restore the disinflation process and support price stability.

The move gives the central bank more room to tighten monetary conditions through its interest rate 'corridor' and the average cost of central bank liquidity provision is likely to climb to around 12 percent by year-end from the current 10.7 percent, Jason Tuvey, an economist at Capital Economics, said.

The real test, of course, is whether the central bank backs up today's decision with further steps to improve its policymaking credibility, the economist observed. Additional tightening at the next few meetings, with a pledge to stick to a single policy rate and a commitment to keep real interest rates positive for a prolonged period, would be ideal.


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Analytics and trading signals for beginners. How to trade EUR/USD on September 25. Analysis of Thursday deals. Getting ready

Trading 24 sept 2020 Commentaire »

EUR/USD hourly chart

On Thursday, September 24, EUR/USD was mainly trading in line with our morning analysis. In the morning article, we recommended that novice traders should consider buying the euro only if the price settles above the descending channel. However, this did not happen during the day. We also recommended selling the pair regardless of the MACD indicator signals with the targets at the support levels of 1.1634 and 1.1608. The price tested the first target, holding for about 6 hours in this area, but failed to break through it. Thus, you could close short positions near this level which could have brought a profit of about 20 pips. Not much, but today's volatility was rather low. At the moment, the pair is trying to exit the descending channel through its upper boundary. If it manages to do so, then in the short term, the uptrend may start. In this case, long positions will become relevant for some time. However, this uptrend may be short-lived.

On Thursday, there were no important economic releases in the EU, while in the US, the data on initial jobless claims was issued. It turned out that the total number of second-time claims for unemployment benefits dropped once again in comparison with the previous report. Yet, the difference was minor. It seems that officially the unemployment rate in the US continues to decline. In the meantime, during their testimonies in the US Congress, Jerome Powell and Steven Mnuchin did not announce anything that could surprise traders today. Or at least this information has not yet been disclosed. In general, the market volatility today was rather low, with only 54 pips difference between the day's high and low. This means that traders did not have any strong signals to react to.

On Friday, September 25, no important macroeconomic events are scheduled for release in the European Union. In the US, traders expect an important report on durable goods orders. This category of goods is distinguished by its high cost. Therefore, this data is crucial for many other macroeconomic indicators and, in particular, for the GDP. According to experts' forecasts, changes in four indicators of durable goods orders are unlikely to be significant compared to July report. The indicators are likely to show a maximum of 1.5% increase. Thus, the US dollar will most likely stay weak amid these reports. We believe that there is a high chance of an upward correction on the last trading day of the week.

Possible scenarios for September 25

1) We still do not recommend buying the pair at this time, since there has been no signal confirming the trend. However, in the near future the price may settle above the descending channel. This will indicate the start of the bullish trend. For long positions, the first targets should be placed at the levels of 1.1702 and 1.1744. However, traders should decide whether they are ready to open long positions in the evening, since it will be quite difficult to monitor the deals during night time. In the current situation, we would take a risk with long positions.

2) Short positions on the pair were relevant throughout the day. However, the price may exit the descending channel in the near future. If this happens, then short positions will no longer be relevant, at least on Friday. To open sell deals on the pair, you need to wait until the current channel is changed or until a new technical pattern is formed to support the downtrend.

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 trendlines 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 (10, 20, and 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 patterns (channels and trendlines).

Important announcements and economic reports that you can always find on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exit the market in order to avoid sharp price fluctuations.

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

Daily Video Analysis: NZDCHF High Probability Setup

Trading 24 sept 2020 Commentaire »

Today we take a look at NZDCHF. Combining advanced technical analysis methods such as Fibonacci confluence, correlation, market structure, oscillators and demand/supply zones, we identify high probability trading setups.

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September 24, 2020 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 24 sept 2020 Commentaire »

Intermediate-term technical outlook for the GBP/USD pair has remained bullish since bullish persistence was achieved above 1.2780 (Depicted Key-Level) on the H4 Charts.

On the other hand, the GBPUSD pair looked overbought after such a quick bullish movement while approaching the price level of 1.3475.

That's why, short-term bearish reversal was expected especially after bearish persistence was achieved below the key-level level of 1.3300.

A quick bearish decline took place towards 1.2900 then 1.2825 where some bullish recovery was recently expressed.

The price zone of 1.3130-1.3150 (the backside of the broken trend) remains an Intraday Key-Zone to offer bearish pressure if retested again.

However, the GBPUSD pair has shown lack of sufficient bullish momentum to pursue above the price level of 1.3000.

This enabled further bearish decline towards 1.2800 then 1.1700 where another episode of bullish recovery may be executed.

Initial bullish breakout above 1.2800 is currently needed to allow bullish pullback to pursue towards 1.3100. Otherwise, further bearish decline would be expected towards the price level of 1.2600.

Trade recommendations :

Conservative traders are advised to wait for bullish pullback towards 1.3130-1.3150 (the backside of the broken trend) as a valid SELL Entry.

Initial T/p level is to be located around 1.3050 and 1.2900 if sufficient bearish pressure is maintained.

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Pound to decline if failed to overcome strategically important level

Trading 24 sept 2020 Commentaire »

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According to most analysts, the pound sterling is in close proximity to a strategically and psychologically important value, overcoming which in the literal sense may be vital for it. The pound's growth prospects depend directly on how quickly and how confidently it rises above the $1.27 mark.

To date, the pound has stopped showing excessive volatility and has almost recovered from the negative that happened to it earlier. However, there is no particular desire for the currency to grow either. This may be due to the fundamental news, which has not been very positive recently. There are many factors that alarm market participants and limit their actions. The most serious pressure is exerted by the data on the growing cases of the COVID-19 patients around the globe which forces the introduction of regular quarantine restrictive measures. This negative is reinforced by the unimpressive statistics on economic recovery in various regions of the world, which are gradually published in the press.

The future dynamics of the pound sterling will depend if it manages to overcome the $1.27 mark. This moment will be an important point for making forecasts for further changes in the GBP/USD currency pair. Analysts suggest recalling the situation that happened in February this year when the sterling was able to successfully cope with the bearish trend, which allowed it to rush up to the level of $1.32 per pound.

Nevertheless, now is a slightly different time, financial risks have become much greater, and pessimism about the global economic recovery does not leave investors. There is particular tension in the run-up to the US presidential election. However, if the pound still loses its position and closes below the level of $1.2624, the fall will inevitably continue further. The next mark will be $1.2480 which will act as the support of the pound sterling. From here, the pound may decline to the level of $1.2250 and even lower.

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September 24, 2020 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 24 sept 2020 Commentaire »

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The EURUSD pair has failed to maintain enough bearish momentum below 1.1150 (consolidation range lower zone) to enhance further bearish decline.

Instead, bullish breakout above 1.1380-1.1400 has lead to a quick bullish spike directly towards 1.1700 which failed to offer sufficient bearish pressure.

Bullish persistence above 1.1700-1.1760 favored further bullish advancement towards 1.1975 where some considerable bearish rejection has been demonstrated.

The price zone around 1.1975-1.2000 ( upper limit of the technical channel ) stood as a strong SUPPLY-Zone to offer bearish reversal.

Conservative traders should be considering the recent bearish closure below 1.1700 - 1.1750 as this enhances further bearish decline initially towards 1.1645 then 1.1600 if sufficient bearish pressure is maintained

Trade recommendations :

Conservative traders should have considered the recent bearish breakout below 1.1750 as a signal for a valid SELL Entry.

T/P levels to be located around 1.1645, 1.1600 and 1.1500 while S/L to be placed above 1.1800 to minimize the associated risk.

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September 24, 2020 : EUR/USD daily technical review and trade recommendations.

Trading 24 sept 2020 Commentaire »

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The EUR/USD pair has been moving sideways within the depicted expanding channel since August 3.

Previously, a temporary resistance level was formed around 1.1900 which prevented further upside movement for and forced the pair to have a downside pause for sometime.

On August 31, the EURUSD pair achieved another breakout above the previously mentioned resistance zone.

Significant SELLING pressure was applied around 1.2000 where the upper limit of the movement pattern came to meet the pair.

Recently, the EUR/USD pair has demonstrated a quick bearish decline towards 1.1800. More downside movement was expected towards the lower limit of the movement pattern around 1.1770-1.1750 which has been providing Support for the EUR/USD pair until earlier Today.

Earlier This week, a breakout to the downside was executed below the price level of 1.1750 (KeyZone). Hence intraday technical outlook has turned into bearish.

Intraday traders should be waiting for any pullback to the upside towards the depicted key-zone (1.1750-1.1770) for a valid SELL Entry.

On the other hand, a breakout above 1.1820 (Exit Level) will probably enable further upside movement towards 1.1860-1.1900.

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Norges Bank Retains Interest Rate At Zero Percent

Trading 24 sept 2020 Commentaire »

Norway's central bank kept its key interest rate unchanged at zero, as widely expected, on Thursday.

The Monetary Policy and Financial Stability Committee unanimously decided to retain the policy rate at zero percent, Norges Bank said in a statement.

In May, the interest rate was reduced from 0.25 percent after a cumulative 125 basis points reduction in two extraordinary sessions in March from 1.50 percent.

"The sharp economic downturn and considerable uncertainty surrounding the outlook suggest keeping the policy rate on hold until there are clear signs that economic conditions are normalising", Governor ?ystein Olsen, said.

The bank repeated that the interest rate will remain at the current level over the next couple of years, followed by a gradual rise as activity approaches a more normal level.

Policymakers observed that the increase in the coronavirus infection rates may put a brake on the upswing in economic activity in the coming period. It will take time for output and employment to return to pre-pandemic levels, the committee noted.

Underlying inflation remained above the target, but the krone appreciation since March and prospects for low wage growth suggest that it will moderate, the bank said.

The central bank is likely to raise the countercyclical capital buffer before it touches interest rates, possibly as soon as early next year, David Oxley, an economist at Capital Economics, said.


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