Forex analysis review |
- Hot forecast and trading signals for the GBP/USD pair on June 22. COT report. Bears continue to lead the market. Almost no
- Hot forecast and trading signals for the EUR/USD pair on June 22. COT report. Sellers need to overcome the 1.1150-1.1170
- Overview of the GBP/USD pair. June 22. In focus: US GDP for the first quarter and orders for durable goods. In the UK, the
- Overview of the EUR/USD pair. June 22. Boring week. All attention will again be focused in the US. The euro currency may
| Posted: 21 Jun 2020 05:33 PM PDT GBP/USD 1H The pound/dollar continues its downward movement as if nothing had happened. Quotes of the pair continue to move strictly inside the descending channel, closer to its bottom line. The bears crossed the support area of 1.2402-1.2422 with relative ease last Friday, so the upward correction did not start, and buyers did not get a chance to take the pair to the upper line of the channel. Thus, in general, the British currency continues a more logical, from our point of view, decline after two weeks of growth. We expect a decrease to the support level of 1.2268 in the next day or two. This level can hold back the gusts of bears for a while and allow the pair to adjust slightly. Although usually, when the pound begins to fall, it is a long and powerful process. In general, buyers now continue to relax and wait for their chances, which will appear no earlier than the release of the pound/dollar pair from the downward channel. GBP/USD 15M Both linear regression channels are still directed downward on the 15-minute timeframe, so the pair continues to show its willingness to continue moving down and the absence of signs of a correction. COT Report The latest COT report, which covers the dates June 10-16, shows that during this period of time, professional market players were busy closing sales contracts. In other words, the picture during the reporting week was exactly the same as for the euro. Neither the pound or the euro grew in demand during the indicated period, due to which these currencies became more expensive. On the contrary, demand for the dollar decreased, traders closed sell contracts, which led to the growth of European currencies. This is precisely what we told traders to focus their attention on earlier, since there were simply no special reasons to buy the euro and the pound in recent weeks. Nevertheless, both currencies went up very vigorously, and now, as they say, repay debts. It is also worth noting that speculators also closed purchase contracts, hedgers closed both types of contracts during the reporting week, and in general, the pound lost around 32,000 more contracts. Thus, banks, large companies, investment funds and others were engaged in the closing of, rather than the opening of, contracts during the reporting week. Based on this, we believe that the US dollar has excellent chances for further growth. The fundamental background for the GBP/USD pair continues to be more negative. Brexit and the agreement between Brussels and London regarding the continued coexistence of the bloc and the United Kingdom, when the "transition period" will end, remains the number one topic for the British currency. There is no positive news on this topic. Moreover, we don't even receive any ordinary macroeconomic statistics from the UK. There are no important and interesting messages from Prime Minister Boris Johnson or even the UK Parliament. The United States continues to practically provide the entire fundamental background, however, there is no news on the most interesting topics, such as the China-US confrontation or the Hong Kong issue. Thus, we do not see any reason as to why the British pound can grow this week. It is clear that the dollar will not go up forever just because there is a lull in the UK news. But it would be logical to return to the area from which the not quite justified growth began. Thus, another 150 to 200 points down the pair is almost obliged to go. Well, future prospects will depend on the willingness of traders to invest in the dollar, despite all the problems that the United States have faced in recent weeks and months. There are two main scenarios as of June 22: 1) The initiative for the pound/dollar pair remains completely in the hands of sellers, since the upward trend line has been overcome. Therefore, short positions with the objectives of the support level of 1.2268, the area of 1.2194-1.2214 and the level of 1.2062, as the support area of 1.2400-1.2420 have also been overcome, are still relevant. Potential Take Profit in this case is from 65 to 275 points. 2) Sellers continue to dominate the market and leave no chance for the bulls. Thus, you are advised to consider purchase orders again but not before you consolidate the quotes of the pair above the downward channel. In this case, the bulls will be able to count on further growth with the goals of the Senkou Span B line and the resistance level of 1.2740. However, in the coming days such a development is not expected. Potential Take Profit in this case is up to 260 points. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 21 Jun 2020 05:32 PM PDT EUR/USD 1H The EUR/USD pair continued to move down on the hourly timeframe on June 19 and reached the support level of 1.1171 at both the end of the trading day and week. The euro/dollar continues to move strictly in the middle of the downward channel, not approaching its upper or lower line. At the same time, the upward trend line remains relevant, to which very little remains for traders. Sellers continue to put pressure on the European currency after two weeks of rest. Thus, the first trend line acts as an important line for bears (there is also a second one, much lower). If traders manage to overcome this line, then the chances of continuing the downward movement will significantly increase. Otherwise, we will expect correction first, and then price taking above the downward channel. EUR/USD 15M Both linear regression channels are still directed downward on the 15-minute timeframe, clearly signaling a downward trend in the shortest term. There are currently no signs of a possible turn up. COT Report The euro/dollar pair steadily rose until June 16 (the deadline, data for which is included in the latest COT report) and it only began a correction in the last two days. According to the COT report, professional traders were busy during the entire reporting week not with opening purchase contracts, which could be assumed based on the direction the pair was moving, but with closing sale contracts. Professional traders closed almost 20,000 sell contracts in just five days and opened 1,300 long euro contracts at the same time. Thus, the continued strengthening of the European currency was absolutely logical at that time. But, we emphasize that major market players are not buying the euro for the second week in a row, and therefore do not believe in the prospects of this currency. The euro grew for two weeks almost at the mere closure of contracts for sale by large speculators, which caused a skew of supply and demand for the euro. Accordingly, we believe that this week the dollar will continue to rise in price, and the new COT report will show a decrease in the net position in the euro. The general fundamental background for the EUR/USD pair remains neutral, from our point of view. Over the course of two days off, of course, there were no important events in either the US or the EU. The general fundamental background remains quite controversial. If we take into account only economic factors, then both countries and both currencies remain approximately in the same position, since the crisis does not spare anyone. Political upheavals in the United States and the actions of Donald Trump are of great importance to what is called "the future", but in the short term they do not affect the market. You can take note of the speech of ECB Vice President Luis de Guindos on the first trading day of the week. However, we do not expect any important information from him, and there are no other planned events. Thus, an upward correction is possible. In general, we continue to believe that the bulls are saturated with the pair's purchases, all the more so, as the COT report shows, if they bought the euro, then obviously large market participants are not moving it. Even market participants who hedged their risks didn't very eagerly buy the euro in the reporting week. Thus, we cannot ascertain the growth in demand for the euro. Based on the foregoing, we have two trading ideas for June 22: 1) The bulls continue to remain in the shade, so the EUR/USD pair may continue the downward movement. However, in the current conditions, it is imperative for the bears to overcome the upward trend line, then short positions can be continued to maintain support levels of 1.1088 and 1.0962 ( all targets will be specified today). Potential Take Profit after overcoming the trend line is from 50 to 180 points. 2) We recommend considering the option to resume the growth of the EUR/USD pair only when the bulls manage to gain a foothold above the descending channel, and at the same time the Senkou Span B and Kijun-sen lines, together with the resistance area 1.1326-1.1341. In this case, we advise you to buy with targets at resistance levels of 1.1380 and 1.1506 (these goals will also be specified). Potential Take Profit in this case is from 30 to 160 points. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 21 Jun 2020 05:13 PM PDT 4-hour timeframe
Technical details: Higher linear regression channel: direction - upward. Lower linear regression channel: direction - upward. Moving average (20; smoothed) - down. CCI: -167.9343 The British pound has also been trading lower over the past week, but unlike the euro, it has fallen much more. However, we have repeatedly said that if the euro currency had at least some grounds for growth, the pound did not have any. We have already listed the reasons hundreds of times, and they remain unchanged. Thus, the current fall in the British currency does not cause any surprise. The only question is, to what levels are traders now ready to sell the pound? At the moment, it looks as if the pound/dollar pair is aiming for the level of 1.2080, which is the latest local low. However, we'll see. As in the case of the euro currency, we recommend paying more attention to the technical picture and not trying to catch the pair's reversals using fundamental analysis and macroeconomic events. Nothing interesting has happened in the UK in recent days. Everything is quiet and calm, and the whole country seems to be waiting for the next stage of Brexit negotiations, which should this time be personally conducted by Boris Johnson with Ursula von der Leyen and other leaders of the European Union. However, so far Johnson has not flown to Brussels and it is unclear when he is going to do so. Earlier it was reported that the British Prime Minister is preparing to visit the legal capital of the EU in the second half of June. Well, all the economic news in the Foggy Albion is now the same as in the rest of the world. The economy continues to shrink, macroeconomic indicators continue to fall, the "coronavirus" seems to have been stopped, but new cases of the disease are still recorded, just in smaller volumes than before. While the UK is "sleeping", the United States is burning with "news fire". On June 20, US President Donald Trump officially held his first campaign rally in Tulsa (Oklahoma). According to media reports, this rally was attended by a much smaller number of people than the organizers expected. Moreover, health professionals warned the American President of the danger of such a step, which did not stop Trump from holding a mass gathering of people to increase his popularity. In a typical style, Trump called people who participate in rallies (related to the death of George Floyd) "bad people who destroy history and beautiful monuments (meaning the destruction of some monuments by protesters)". Interestingly, on the eve of this event, 352 new cases of "coronavirus" were registered in Tulsa, and the gathering of a large number of people can lead to a new outbreak. Later it became known that 6 employees of the Trump election committee were infected with the virus, and at the entrance to the rally itself, all citizens were given a paper to sign, in which they refused to sue the American leader if they became infected. It should also be noted that most of the audience of Trump's speech was without medical masks, as, in fact, the president himself. The essence of the speech of the US leader did not cause any questions and it was quite possible not to go to the rally at all since Trump broadcasts the same thing from TV screens every day. As usual, the head of the White House attacked Joe Biden, the Democrats, the "enemy media" and called on all his supporters to fight back against the enemies. The rally ended with the following statement from Trump: "I did a phenomenal job. I saved hundreds of thousands of lives!" For the pound/dollar currency pair, this week will also not be too interesting, although we should note a few events. No publications are scheduled for Monday in either the United States or the UK. On Tuesday, the UK will release business activity indices in the services and manufacturing sectors, which, like the European ones, may be significantly higher than the values of the previous month, but still below the level of 50.0. Similar indices will be published overseas. Wednesday is a day off in the United States and Britain, according to the calendar of macroeconomic events. On Thursday, a fairly large amount of information will be received from overseas, among which we highlight the report on orders for durable goods, which in the last two months showed the strongest reductions, but in May will begin to increase (according to forecasts). Also on this day, the US GDP for the first quarter, which is projected at -5%, will be known, as well as the next report on applications for unemployment benefits, which has already ceased to worry market participants. By the way, traders are also ready for -5% of GDP for a long time, so the main thing for the US currency is that the real value is not worse than minus 5%. On the last trading day of the week in America, reports are scheduled on changes in the volume of personal income and spending of the American population, which have recently been "jumping" up and down and also do not cause much interest among market participants. As you might guess, there are no scheduled reports or events in Albion this week. Thus, we expect at least some correction of the pair in the new week. Since last Tuesday, the pound has lost more than 300 points and there has been no hint of a correction. However, at the same time, traders can continue to sell off the pound, since before that it showed almost the same non-recoilless growth for more than two weeks in a row. We expect to see the exchange rate in the area of $ 1.20 - $ 1.22 this week.
The average volatility of the pound/dollar pair continues to remain stable and is currently 129 points per day. For the pound/dollar pair, this indicator is "high". On Monday, June 22, thus, we expect movement within the channel, limited by the levels of 1.2215 and 1.2473. A reversal of the Heiken Ashi indicator upward will indicate a possible round of corrective movement. Nearest support levels: S1 – 1.2329 S2 – 1.2268 S3 – 1.2207 Nearest resistance levels: R1 – 1.2390 R2 – 1.2451 R3 – 1.2512 Trading recommendations: The GBP/USD pair continues its downward movement on the 4-hour timeframe. Thus, today it is recommended to continue trading the pound/dollar pair for a decrease with the goals of 1.2268 and 1.2215. It is recommended to buy the pound/dollar pair not earlier than fixing quotes above the moving average with the first goals of 1.2573 and 1.2634. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 21 Jun 2020 05:13 PM PDT 4-hour timeframe
Technical details: Higher linear regression channel: direction - upward. Lower linear regression channel: direction - upward. Moving average (20; smoothed) - down. CCI: -154.1407 The downward movement continued for the euro/dollar pair over the past week. Thus, the trend at the moment is already downward and there are no prerequisites for its change to an upward one. We still believe that the euro currency has completely exhausted its growth potential soon, although many factors can hypothetically allow the euro to rush up again. The fact is that now the markets have calmed down after the March and April panic, however, the general situation in the world and separately in the US and the European Union does not allow traders to trade in the usual way. First, the whole world is simply in crisis right now. And when there is a crisis in the yard, there is no question of any measured trade. Many major market players are trying to hedge their risks against possible future shocks, many market participants are trying to think far ahead because now the whole world knows how dangerous the "coronavirus" is and what consequences it can have for the economy. Thus, traders simply cannot trade following macroeconomic statistics, as was previously the case. And the statistics themselves are now a failure in the European Union, in the UK, and the US. What should traders do if on Monday there is a failed package of statistics in the US, and on Tuesday there is an equally failed package in the EU? On each news package, sell off the currency in the issuing country of which the next collapse of macroeconomic indicators? Even now, when the outright decline in indicators seems to have been suspended, there is no talk of any stabilization or recovery. "Coronavirus" has not yet been defeated. It continues to spread rapidly in many countries around the world. Even in countries that seem to have successfully managed the epidemic, no one is immune from new waves. Thus, the general situation in the world simply does not allow you to trade calmly now. Second, many traders previously paid increased attention to the key rates and monetary policies of the countries whose currencies they traded. And the advantage was clear for the United States. A relatively high bid, relatively "hawkish" policy. However, now all the central banks of the world have lowered their rates almost to zero (and some even lower), so there is no advantage for the United States and the US dollar. Moreover, it is not clear what the real consequences of the "coronavirus crisis" will be for the European Union, for America and other countries. It is unclear how many more waves of the epidemic will be when a cure is found, when mass production of this medicine begins. In general, now there are a huge number of questions that no one can answer. As Jerome Powell correctly said, the economic recovery will depend directly on the results of the fight against COVID-2019. Third, the European Union and the United States now have a huge number of so-called internal problems, which are still unknown how governments will cope. In the European Union, the biggest headache now is the 750 billion euro recovery fund, which is being considered by the 27 member countries of the alliance. Although everything will depend on the "greedy four" - Denmark, the Netherlands, Sweden, and Austria. Recall that these countries are opposed to providing grants to all the most affected countries from the "coronavirus crisis". In the United States, a political crisis is thundering, and more and more ordinary Americans, politicians, party members, and just high-ranking officials are speaking out against Donald Trump. Trump himself continues to accuse everyone in a row of what, in theory, he should be responsible for. And all these six months before the presidential election. Moreover, we should not forget that the conflict between China and America has not gone away. The "cold war" still looms on the horizon, however, it is unclear who will continue it if Trump is not re-elected? Have you noticed how recently the American President stopped commenting on the "coronavirus", stopped blaming China for the spread of the epidemic, and no one has seen evidence of China's guilt? Well, in addition to the figure of Donald Trump, there is also an economic crisis in the United States and the epidemic itself, which was not localized. Add to this the large-scale rallies and protests that have been going on for three weeks, caused by the racist scandal, and we get a very interesting picture, which is also unclear how it will affect the American economy and the US dollar in the future. As a result of all the above, we continue to recommend that traders pay increased attention to technical factors that at this time best reflect what is happening in the market and forecast. However, we cannot completely ignore the macroeconomic statistics, so we will consider the most important and significant reports of the next week. On Monday, as is often the case, no important statistics will be published in either the US or the EU. There will only be a speech by ECB Vice-President Luis de Guindos, who from time to time makes really interesting statements. On Tuesday, business activity indices in the services, manufacturing and composite sectors in Germany, France, and the European Union will be released. All indices are expected to continue growing in June, however, they will all remain below the key level of 50.0, below which the industry itself is considered to be shrinking. Therefore, whatever the real values of business activity, we can only note a slowdown in the decline and not a recovery. No more news is planned for this week in the European Union. Thus, given the weak significance of the above reports (they are also just preliminary values), it is unlikely that market participants will pay any attention to them. As a result, the whole week for the European currency promises to be quite boring. The next round of talks on the recovery fund will not take place until next month, and there are no other hot topics in the EU right now. Accordingly, traders will again closely monitor information from overseas, most of which, although it is insanely interesting and important, still does not affect the market "right here and now".
The average volatility of the euro/dollar currency pair as of June 22 is 95 points. Thus, the value of the indicator is still characterized as "high", but in general, volatility is decreasing. We expect the pair to move between the levels of 1.1081 and 1.1271 today. A reversal of the Heiken Ashi indicator upwards will signal a new round of upward correction. Nearest support levels: S1 – 1.1108 S2 – 1.0986 S3 – 1.0864 Nearest resistance levels: R1 – 1.1230 R2 – 1.1353 R3 – 1.1475 Trading recommendations: The EUR/USD pair continues its downward movement. Thus, at this time, sell orders with the goals of 1.1108 and 1.1081 remain relevant until the Heiken Ashi indicator turns up, which will indicate a correction. It is recommended to return to buying the pair not before fixing the price above the moving average with the first goals of 1.1353 and 1.1475. The material has been provided by InstaForex Company - www.instaforex.com |
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