Gold Edges Up Amid Risk-off Mood

Trading 18 Jan 2021 Commentaire »

Gold edged up slightly in thin trading on Monday, with U.S. equity and bond markets shut Monday for the Martin Luther King Jr. holiday. Risk-off sentiment prevailed as weak U.S. retail sales data as well as growing coronavirus infections around the world sparked worries about a slow recovery from the pandemic. Spot gold edged up 0.2 percent to $1,832.60 an ounce, while U.S. gold futures were marginally higher at $1,830.70. The total number of global coronavirus cases topped 95 million, while the death toll surpassed 2 million. China reported more than 100 new Covid-19 cases for the sixth consecutive day, while the number of hospitalized Covid-19 patients with serious symptoms in Japan topped 970, marking a record high since the onset of the pandemic in the country. Portugal imposed a new nationwide lockdown while the U.K. government announced that it will close all travel corridors from today in order to restrict the spread of new coronavirus variant cases. New coronavirus infections have been decreasing in Germany but the country's health minister said that more needed to be done to bring it permanently under control. Chancellor Angela Merkel and Germany's 16 state premiers will discuss what to do next on Tuesday. According to a report from the Wall Street Journal, U.S. President-elect Joe Biden's pick for Treasury Secretary, Janet Yellen, is expected to rule out seeking a weaker dollar when she testifies on Capitol Hill Tuesday. Yellen's confirmation hearing as Treasury Secretary is scheduled for Jan. 19 in front of the Senate Finance Committee, the day before President-elect Joe Biden is sworn into office.


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Europe and Asian stocks sank with the exception of China which recorded economic growth

Trading 18 Jan 2021 Commentaire »

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The stock markets of the Asia-Pacific region traded in a negative trend on Monday morning, with the exceptions of China and Hong Kong, which reported growth amid recent positive economic statistics. China's GDP increased by 2.3% at the end of last year.

Nevertheless, the overall GDP growth rate in China was the smallest in the last forty years. However, this did not negate the fact that the state was almost the only one who was able to avoid a global fall amid the crisis associated with the coronavirus pandemic. For the most part, the economies of the countries experienced a decline last year, which they hope to compensate for in the coming year.

According to preliminary data from analysts, Chinese GDP was expected to grow by about 2.2%, but in reality, the data turned out to be even slightly better, which could not go unnoticed in the markets. Investors were extremely encouraged by this fact, which was immediately reflected in the stock indicators, which went up.

Particular growth was recorded in the last quarter of last year when the Chinese economy showed an immediate 6.5% growth, which is comparable to the pre-crisis indicators, when the monthly growth averaged 6.8%.

Although, some indicators still slowed down their increase. This may indicate a general decline in business activity in December last year, but it is too early to judge this: we need to wait for official statistics.

In the meantime, market participants continue to wonder whether the new American leader will be able to advance his decision on a serious increase in the financial assistance package for the economy of the United States of America. According to the latest data, only Democrats are on the side of the expanded funding program and their advantage in the Senate is minimal. This means that the chances of final ratification of the stimulus package are very small, although it still remains.

Japan's Nikkei 225 index fell 1% in the morning. According to statistics, the total volume of industrial production in the territory of the state for the last month of autumn last year was 0.5% less compared to the previous indicator. Such a drop is observed for the first time in the last six months and causes some concern among investors. Recall that in October, on the contrary, there was a significant jump by 4% at once.

China's Shanghai Composite Index rose 1.01%. The Hong Kong Hang Seng Index supported the positive trend and climbed 0.61%.

South Korea's KOSPI index dropped significantly by 2.01%.

Australia's S&P/ASX 200 Index fell 0.78%.

European stock exchanges also recorded negative this morning. Major stock indexes are losing their earned positions. The main reason for what is happening is the difficult epidemiological situation in most countries of the region. New strains of coronavirus infection, the extension of quarantine measures, problems with vaccinations, and the supply of drugs leave market participants almost no hope that the pandemic will be defeated in the near future.

The UK government, in particular, has decided to introduce mandatory quarantine for those arriving on the territory of the state. The period of self-isolation, in this case, is ten calendar days, after the expiration of which it is necessary to pass an analysis for COVID-19. The Austrian authorities are once again postponing the release date from the lockdown so that there is no sharp jump in the incidence in the country.

The general index of large enterprises in the European region STOXX Europe 600 fell 0.14% in the morning, which sent it to the level of 407.28 points.

The UK FTSE 100 Index declined 0.11%. The German DAX Index fell 0.07%. France's CAC 40 Index sank 0.25%. Spain's IBEX 35 Index was 0.3% down. The Italian FTSE MIB index was the only one with positive dynamics: it increased by 0.15%.

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EUR/USD analysis for January 18 2021 – Bullish divergece on the 4H time-frame and potential reversion to the mean towards

Trading 18 Jan 2021 Commentaire »
  • Prior was 264.0K
  • Starts down 12.6%
  • Single-detached homes -6.1%
  • Multiple starts -15%

A 12.6% drop sounds bad but starts are volatile and December in Canada is a tough month to seasonally adjust for, because so much of construction is shut down.

Further Development

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Analyzing the current trading chart of EUR/USD, I found that sellers got exhausted on the way down at the price of 1,2060.

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.

EUR is slightly negative for the day but with no strong momentum.

Key Levels:

Resistance: 1,2115

Support level: 1,2060

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Trading Signal for EUR/USD for January 18 – 19, 2021: Bearish Pressure

Trading 18 Jan 2021 Commentaire »

The EUR / USD pair continues to be bearish, in the 4-hour chart we can see a bearish pressure line, now the 200 EMA, and the 21 SMA, are located above the price, thus supporting the bearish outlook.

The EUR / USD pair, is located below the 3/8 of murray, which has now become a strong resistance, the level of 1.2085 will be the barrier to overcome and recover the bullish fierceness, if not, below 1.2060 , we could see a drop to 1,2005.

The yellow zone will be the guideline to analyze a possible trading entry, if the pair is trading above 1.2085, we can buy with targets at the 21 SMA, if it is trading below 1.2060, we can sell with targets at 1.2005.

The eagle indicator is entering an oversold zone, for which we must be careful, as there is likely to be a technical rebound in the next few hours.

Support And Resistance Levels For January 18-19, 2021

Resistance (1) 1.2123

Resistance (2) 1.2150

Resistance (3) 1.2191

Support (1) 1.2043

Support (2) 1.2016

Support (3) 1.1957

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

Buy above 3/8 murray at 1.2085, with take profit at 1.2133 and 1.2185, stop loss below 1.2050.

Sell if pullback to 1.2135 ( SMA 21) with take profit at 1.2085 (3/8) , Stop loss above 1.2175 (EMA 200).

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Oil Prices Fall On Demand Concerns

Trading 18 Jan 2021 Commentaire »

Oil prices edged lower on Monday as climbing coronavirus cases and tighter restrictions in Europe and China fueled worries over a slower recovery in fuel demand.

Encouraging GDP and industrial production data from China helped to limit the downside to some extent.

Brent crude for March delivery eased 0.2 percent to $54.98 a barrel, after having fallen 2.3 percent on Friday. Similarly, U.S. oil futures were down 0.1 percent at $52.36 after falling more than 2 percent in the previous session.

The total number of global coronavirus cases topped 95 million, while the death toll surpassed 2 million.

China reported more than 100 new Covid-19 cases for the sixth consecutive day, while the number of hospitalized Covid-19 patients with serious symptoms in Japan topped 970, marking a record high since the onset of the pandemic in the country.

Portugal imposed a new nationwide lockdown while the U.K. government announced that it will close all travel corridors from today in order to restrict the spread of new coronavirus variant cases.

New coronavirus infections have been decreasing in Germany but the country's health minister said that more needed to be done to bring it permanently under control.

Chancellor Angela Merkel and Germany's 16 state premiers will discuss what to do next on Tuesday.


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*Pound Dips To 6-day Low Of 1.2061 Against Franc

Trading 18 Jan 2021 Commentaire »

Pound Dips To 6-day Low Of 1.2061 Against Franc


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*Pound Weakens To 6-day Low Of 1.3524 Against Dollar

Trading 18 Jan 2021 Commentaire »

Pound Weakens To 6-day Low Of 1.3524 Against Dollar


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Italy's Inflation Remains Negative For Eighth Straight Month

Trading 18 Jan 2021 Commentaire »

Italy's consumer prices declined for the eighth consecutive month in December, final data from the statistical office Istat showed on Monday.

Consumer prices decreased 0.2 percent annually, the same rate of decline as seen in November. But the December rate was revised from -0.1 percent.

Month-on-month, consumer prices advanced 0.2 percent, in contrast to the 0.1 percent drop seen in November. According to preliminary estimate, prices were up 0.3 percent.

Confirming the preliminary estimate, the harmonized index of consumer prices dropped 0.3 percent annually, unchanged from the November rate and in line with initial estimate. On month, the HICP climbed 0.2 percent after staying unchanged in the prior month.

Excluding energy and fresh food, core inflation accelerated to 0.6 percent from 0.4 percent in November.

In 2020, average consumer prices logged a decrease of 0.2 percent, in contrast to a 0.6 percent rise in 2019, while core inflation held steady at 0.5 percent.


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*Pound Falls To 5-day Low Of 0.8925 Against Euro

Trading 18 Jan 2021 Commentaire »

Pound Falls To 5-day Low Of 0.8925 Against Euro


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Analysis and forecast for EUR/USD on January 18, 2021

Trading 18 Jan 2021 Commentaire »

At the auction on January 11-15, the main currency pair of the Forex market turned in a southerly direction and declined, closing the weekly trading at 1.2079. The US dollar was supported last week by rising US bond yields, the announcement by President-elect Joe Biden of a $ 1.9 trillion fiscal stimulus plan, tighter blockages against the spread of the COVID-19 pandemic in several countries, and slower-than-expected universal vaccination of the population against coronavirus. Against this background, the risk appetite of investors has somewhat weakened, and they preferred safe assets, one of which is the US dollar. It should also be emphasized that a very significant role in the strengthening of the US currency was played by the technical picture, in which many major currency pairs showed reversal signals in favor of strengthening the dollar.

Weekly

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As noted a week earlier, the strong bearish reversal pattern of the "Tombstone" candle analysis simply could not go unnoticed by market participants and should have led to a reversal of the main currency pair to decline, which eventually happened. The movement of the euro/dollar down, as a result of which such important and significant levels for the market as 1.2200, 1.2150, and 1.2100 were passed, was stopped only by the red line of the Tenkan Ichimoku indicator. Once again, I would like to note that, depending on the situation, the Tenkan and Kijun lines of this indicator act as strong supports or resistances. That is why in almost every review I mention these lines and draw the attention of readers to them. At the same time, since this topic has already been discussed, I note that the Tenkan and Kijun lines, as well as both boundaries of the Ichimoku indicator cloud, have the greatest strength on the weekly and daily charts. But on H4, for example, there are quite a lot of false positives, so I installed the Ichimoku indicator on my charts only on the "day" and "week". This question seems to have been sorted out, and I think that the idea is clear. Now about the prospects of the EUR/USD price movement concerning the weekly timeframe. I believe that there are quite good chances to continue the downward trend. However, to do this, the bears on the instrument will have to overcome the red Tenkan line, and then lower the price below the strong and significant levels of 1.2030 and 1.2000. The first level is very strong technically, and the second is one of the most important psychological levels. For the bulls to regain control of the pair, they need a true breakdown of the resistance level of 1.2350 and the closing of weekly trading above this mark. I believe that this task is very difficult and hardly feasible. Given the current technical picture on the weekly chart, the development of the reversal candle model "Tombstone" is likely to continue, which means that the euro/dollar will continue to move in a southerly direction.

Daily

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Despite the rather ambiguous and mixed Friday statistics from the United States, in particular weak retail sales, this did not prevent the US currency from showing a significant strengthening against the euro. What we see on the daily chart is exactly how the signals break down, in this case, the bears have absorbed the potential reversal highlighted candle from January 14. This factor of breaking the reversal model can signal neither a correction, but a change in the trend, as it demonstrates the strength of bearish sentiment for EUR/USD. If these assumptions are correct, and looking at the daily and weekly charts, there is almost no doubt about this, then the main trading idea for EUR/USD should be considered sales, which are better to open after corrective pullbacks to broken levels and at more attractive prices. I recommend that you take a closer look at the opening of transactions for the sale of euro/dollar after corrective pullbacks to the price area of 1.2100-1.2110 and from the price zone of 1.2140-1.2150. That's all for now. In tomorrow's article, we will look at lower timeframes, and if necessary, we will make adjustments to today's trading recommendations for EUR/USD.

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