Forex analysis review |
- Hot forecast and trading signals for the GBP/USD pair on July 23. COT report. London's optimism lies outside of this three-dimensional
- Hot forecast and trading signals for the EUR/USD pair on July 23. COT report. Four types of crises finish the US dollar.
- GBPAUD broke below ascending trendline support! Further drop expected!
- Analysis and trading signals for beginners. How to trade the GBP/USD pair on July 23? Plan for opening and closing deals
- Analysis and trading signals for beginners. How to trade the EUR/USD pair on July 23? Plan for opening and closing deals
- Overview of the GBP/USD pair. July 23. There will be no deal, according to British media. Washington is once again aggravating
- Overview of the EUR/USD pair. July 23. Trump resumed "coronavirus" briefings. In Portland, mass clashes are taking place
- USDCAD breaking below downside confirmation, possible drop!
- EUR/USD. Infusion remains bullish, but the 16th figure is still too tough
- Comprehensive analysis of movement options for #USDX vs EUR/USD & GBP/USD & USD/JPY (H4) on July 23, 2020
- Silver and gold rises amid global pandemic
- July 22, 2020 : EUR/USD Daily Technical Review and Trade Recommendations.
- Evening Review: US orders coronavirus vaccine worth $2 billion
- July 22, 2020 : EUR/USD Intraday technical analysis and trade recommendations.
- July 22, 2020 : GBP/USD Intraday technical analysis and trade recommendations.
- EURUSD tests major long-term trend line resistance
- Gold price justifies at least short-term pull back
- Short-term Ichimoku cloud indicator analysis of EURUSD for July 22, 2020
- Oil prices fall again
- Three main reasons that put pressure on US dollar
- Global stock markets plunged into chaos
- Dollar struggles to fight decline
- Evening review on EURUSD for July 22, 2020
- GBP/USD and USD/CAD. Investors have faint hope for trade deal between UK and EU. Amid escalating jitters, US orders China
- Prospects for the weakening dollar
| Posted: 22 Jul 2020 07:54 PM PDT GBP/USD 1H The GBP/USD pair corrected to the 1.2636-1.2660 area on Wednesday and once again rebounded from it, but this time from above. Thus, the upward movement resumed, and the initiative remained in the hands of buyers. As a result, the pair returned to the resistance level of 1.2755 by the end of the trading day. A new price rebound from this target can provoke a new round of corrective movement. In addition, an upward trend line has formed, which supports bull traders. And at the same time it will allow you to determine when the bears will come into play (consolidating the price below the trend line). So far, we are considering the option of maintaining the upward trend. GBP/USD 15M The lower linear regression channel turned down on the 15-minute timeframe, signaling a possible trend reversal. However, there is still no confirmation on this chart, or on the higher one. The latest Commitment of traders (COT) report showed that professional traders (non-commercial category) continued to open Buy-positions, but not as zealously as before. In total, only 2,800 contracts were opened. However, the opposing category of commercial traders (those who enter the foreign exchange market in order to purchase currency for their commercial activities) closed both Buy and Sell contracts during the same reporting week. The British currency continued to rise in price during the July 15 to 21 period. This means that the new COT report may show that the bullish sentiment is strengthening among traders. The pound sterling began to rise in price even more after July 21, so we expect to see an increase in the net position in the next reports. If this does not happen, then we will assume that large traders are preparing for the trend to change into a downward trend. The fundamental background for the GBP/USD pair remains positive at this time. Positive for the British pound. Only thanks to events and crises in the United States. And only until traders remember that the situation in the UK is no better (economically). The well-known British edition The Daily Telegraph published an article yesterday expressing fears that an agreement between London and Brussels would never be reached. And this threatens the British pound and the entire economy with a new fall. It is easy to guess that from January 1, 2021, almost all British businesses that have at least some business ties with European businesses will work with complications. This applies not only to trade, in which duties will rise, various quotas and World Trade Organization norms will begin to operate. This applies to both supply chains and vital categories of goods that may be in short supply in Britain. You should also keep in mind that more than 50% of British exports went specifically to Europe. According to the latest information, London wants to conclude a trade deal with Washington. US Secretary of State Mike Pompeo and British Prime Minister Boris Johnson even met in Downing Street. However, just how quickly a trade agreement can be concluded was demonstrated to the whole world by London, whose prime minister has been reiterating that it is possible to reach an agreement with Brussels in a few months. As you can see, it didn't work out for several months. And in the case of the United States, it is even more difficult, since in a few months it will no longer be US President Donald Trump to lead the country. There are two main options for the development of events on July 23: 1) The outlook for the bulls continues to be very positive. Buyers have returned to the important level 1.2755. Thus, you are advised to stay with pound purchases while aiming for 1.2812 and 1.2846, if traders manage to confidently overcome the current target of 1.2755, from which the rebound occurred last time. Potential Take Profit in this case will amount to another 40 to 80 points. 2) Sellers are advised to start considering the possibilities of opening short positions with the targets of the Senkou Span B line (1.2565) and the support level of 1.2474, but for this they need to wait until the Kijun-sen line (1.2638) and the upward trend line have been overcome. Potential Take Profit ranges from 60 to 150 points. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 22 Jul 2020 07:41 PM PDT EUR/USD 1H The EUR/USD pair continued a rather strong upward movement on the hourly timeframe on July 22. Now it is already well above the ascending channel, in which the pair has been strictly moving in the middle for a long time. However, the bulls have recently felt the surge of strength and the weakness of the bears, which, in principle, are simply absent from the market at this time. From time to time, the pair is corrected, but no more. Thus, the upward movement may continue with the final target for the week - 1.1631. As for the possible prospects of sellers, they need to wait, at least, to consolidate below the critical line. But even in this case, the price will remain within the upward channel, which means that it will be difficult for the bears to count on forming a downward trend. EUR/USD 15M Both linear regression channels are directed upward on the 15 minute timeframe, signaling an upward trend in the short term and no signs of an emerging trend change. The latest Commitments of traders (COT) report clearly showed that the bullish sentiment of the market remains. Professional market players continue to actively buy the European currency. That is, we can conclude that the aggregate demand for the euro is growing, while the demand for the US dollar is decreasing. Since it is obvious that the trend is precisely formed by large traders, especially those who enter the market with the aim of making a profit (non-commercial category), their mood is an extremely important factor for ordinary traders. So, given that the euro has continued to rise this week, the next COT report, due out on Friday, will seek to answer the question of whether the bullish pressure on the pair has increased further? If so, then we can expect the upward movement to continue in the medium term. The fundamental backdrop for the EUR/USD pair was controversial on Wednesday. As we have said many times, now there are a huge number of different factors that can hypothetically influence the movement of the pair and the mood of traders. These are four types of crises (epidemiological, social, economic, political), and the constant wars of US President Donald Trump with the Democrats, and China. This is also positive news from the EU, since the EU summit ended with the approval of the budget for the next seven years and the approval of the recovery fund. Although we believe that the news from Europe did not have a special impact on the euro/dollar pair. However, in general, we have a persistent negative background from the US, and generally neutral from Europe. In such conditions, it is not surprising that the euro is growing. The US government is doing nothing at this time to resolve at least one of the crises the country is in. Moreover, Trump says that the coronavirus situation could get worse, albeit much worse? Following these words, the number of investors willing to buy the dollar diminished even more. In general, now the US dollar can count on a purely technical correction against the euro. And a new long-term upward trend for the euro. Based on the above, we have two trading ideas for July 23: 1) Buyers definitely continue to dominate the market, and the upward movement has intensified. Buy orders remain relevant with the target at the resistance level of 1.1631. Thus, either you should stay with purchases and a Stop Loss below Kijun-sen or at the discretion of traders, open new longs with the last goal at the signal of some fast indicator, such as Heiken Ashi. The potential Take Profit in this case is up to 60 points. 2) The bears are just resting and waiting for buyers to give them a chance to seize the initiative in the market. Sellers are still not strong enough to form a new downward trend. Thus, all that remains is to wait for the price to consolidate at least below the Kijun-sen line. In this case, you can try to sell the pair with the aim of the lower line of the ascending channel. More serious prospects will open below the rising channel. In this case, the potential Take Profit is up to 60 points. The material has been provided by InstaForex Company - www.instaforex.com |
| GBPAUD broke below ascending trendline support! Further drop expected! Posted: 22 Jul 2020 07:06 PM PDT
Trading Recommendation Entry: 1.78812 Reason for Entry: 50% Fibonacci retracement Take Profit: 1.76956 Reason for Take Profit: Recent graphical swing low Stop Loss: 1.79299 Reason for Stop Loss: 61.8% Fibonacci retracement, Ascending trendline resistance, moving average resistance The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 22 Jul 2020 06:56 PM PDT Hourly chart of the GBP/USD pair The situation with the GBP/USD pair got a little confusing on the third trading day of the week. There are too many factors that should be considered in order to successfully predict long-term movement. The key event of the past day was an article by the British publication The Daily Telegraph, in which the author, referring to a high-ranking official in the British government, wrote that with a high degree of probability, London and Brussels will not reach an agreement on Brexit. This means that trade between the UK and the European Union after the transition period will be carried out according to the rules of the World Trade Organization. Why is it so important to the pound sterling? The British economy has suffered several major blows in recent years. Leaving the EU after a 47-year stay is not an easy matter. We will have to break the ties that have developed over the years and decades, break the contracts between European and British companies. All this significantly worsened the prospects of the British economy even at the preliminary stage, which lasted for a total of three years. All this time, Britain continued to pay contributions to the EU treasury and tried to find a way to leave the EU as gently as possible so that the economic consequences would not be devastating to its own economy. As we can see now, it didn't work out. In addition, the British economy was hit by the coronavirus crisis, which rode like a roller throughout Great Britain. And if Britain loses its free trade deal with the EU from January 1 2021, this promises further losses and losses to its economy. And the weaker the economy, the weaker the national currency. British Prime Minister Boris Johnson will strive to conclude trade agreements with both the EU and the US, but so far all these are just talks and plans. We remind you that it can take several years to negotiate a trade agreement. Thus, this is not a near-term perspective. Technical analysis enables the British currency to strengthen. If the price overcomes the 1.2734 level, it will be able to continue its upward movement. Moreover, now there is an upward trend line (the line that supports the growth of the pair, on the chart - red). The trend will change if the price consolidates below it for an hour. Based on technical constructions, there are two possible scenarios for the development of events: 1) If the current intermediate target of 1.2734 is overcome, then we will have the right to expect a continuation of the upward movement to the 1.2812 level, which is the June 10 high. Stop Loss level can be placed 30 points below the current price. We place the Take Profit order just below the level of 1.2812. 2) But sales, from our point of view, are now risky to consider. We believe that it is possible to sell the pound/dollar pair after consolidating below the trend line. In this case, you are advised to consider the levels 1.2623 and 1.2519 as targets for the downward movement. Important speeches and reports (always contained in the news calendar) can greatly affect the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement. Beginners in the forex market should remember that every trade cannot 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 |
| Posted: 22 Jul 2020 06:44 PM PDT Hourly chart of the EUR/USD pair The EUR/USD pair continues to amaze with its movements. Yesterday we said that a fall could begin from the area of 1.1570, where the upper line of the narrowing channel passes. However, the price did not even stop near this line and, in fact, deprived traders of the signal. Such a strong upward trend must be justified in terms of news or fundamental events. There may be several hypotheses, but each does not bring us closer to answering the question, what to expect from the pair in the future? For example, what are the chances of continuing the upward movement after it has already gone up at least 800 points, if we take the last low as a starting point? All this time, the pair has corrected by only 250 points, and in recent days it has been growing with terrible force. Compare, as always necessary, the economies of the European Union (the issuer of the euro) and the United States (the issuer of the dollar). The situation in the European Union is calm. There are almost no economic news and reports. At the beginning of the week, leaders have decided to form a 750 billion euro recovery fund at the EU summit, which is certainly good news. But now everything is bad in America. The country is in the same economic crisis as the EU. However, the prospects for the US economy are now much more vague, and the timing of its recovery raises many questions. The fact is that the coronavirus epidemic continues to rage in the United States. We would like to write "which the authorities cannot stop," but the White House is not particularly keen on stopping it. US President Donald Trump compares COVID-2019 with a runny nose, and the very next day he urges everyone to wear masks and "expects the situation to worsen." But at the same time, a new quarantine is not introduced in the United States. This significantly reduces the demand for the US dollar in the foreign exchange market. Nevertheless, technical analysis gives traders the opportunity to make new sales, although it is somewhat dangerous. There was no clear and distinct rebound from the rising channel line. Thus, we cannot make an unambiguous conclusion about the pair's readiness to fall. An update of the local high (1.1601) can provoke a new upward movement. The following scenarios are possible on July 23: 1) Buying the euro is still relevant, but we believe that opening them near the upper channel line is risky, especially after a long upward trend. We recommend traders to re-consider buying the euro if the upper channel line is broken once more and the 1.1601 high is updated. You are advised to set the target based on volatility, that is, at a distance of 50-60 points. 2) You can try to sell the currency pair with a distant target of 1.1371. This goal is quite achievable and means a possible fall to the lower channel line. The Stop Loss level can be set above the level of 1.1601 to protect yourself from possible losses if the upward trend continues. Intermediate Take Profit can be placed every 50-60 points. Important speeches and reports (always contained in the news calendar) can greatly affect the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement. Beginners in the forex market should remember that every trade cannot 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 |
| Posted: 22 Jul 2020 06:42 PM PDT 4-hour timeframe
Technical details: Higher linear regression channel: direction - upward. Lower linear regression channel: direction - upward. Moving average (20; smoothed) - upward. CCI: 106.9405 Well, the British pound was in absolute panic yesterday. The pound often reacts to various kinds of rumors and expectations, but yesterday it first fell down by 100 points, and then went up by about the same amount. Why is it even difficult to understand what it was? The reaction of traders to any important and significant event? Or is it just a banal, but sharp, technical correction against the upward trend? Recall that no macroeconomic data from overseas was received this week. Thus, traders, in fact, can only react to "coronavirus" data from overseas. Of course, it is impossible not to mention the themes of mass rallies and protests in America, as well as the deep political crisis. In fact, now half of the country has turned against Donald Trump. And along with half of America and half of the world, the coalition is led by China outside the US and Democrats inside the US. All this news, and most importantly, traders' fears for the US economic prospects, have been pushing the pound up for several weeks. However, yesterday the well-known British publication The Daily Telegraph published an article stating that an agreement with the European Union will probably not be concluded. The publication reported that the deadline, which was set by Boris Johnson himself, remains only a few days, and the parties have not managed to move forward in resolving key, controversial issues. The publication also writes that a "basic agreement" with Brussels can still be reached if the Europeans make certain concessions. However, "the UK government already expects that it will conduct trade with the European Union on the terms of the World Trade Organization," according to The Daily Telegraph. However, the British publication did not report anything new. We have been writing for several months that the probability of reaching an agreement between the British and the Europeans does not exceed 5%. Michel Barnier, the head of the EU negotiating team, has said several times that London is in no hurry to negotiate, although it has set a deadline for them until the end of July. Thus, the British are not particularly eager to reach an agreement, and there are at least four disputed issues. So, what are the chances that the parties will be able to reach an understanding in a maximum of one or two months? Therefore, from our point of view, the value of The Daily Telegraph's information can only be in the fact that this information is obtained from government circles. If even the British authorities are not particularly hiding that there will be no deal with the EU, then we really need to prepare for a "hard" Brexit. Presumably on this information, the pound plowed down 100 points. But very quickly came to its senses, as traders remembered that this is the option of ending the Kingdom's stay in the alliance and is expected from the moment when Boris Johnson became Prime Minister. At the same time, the conflict between the United States and China continues to develop. No, it's not burning. Rather, the picture looks like a smoldering fire, from which at any moment dry grass can burst into flames, if the wind blows harder than usual and in the wrong direction. On July 22, it was announced that the White House had ordered the closure of the Chinese Consulate in Houston, Texas. According to Chinese diplomats, "this is an unheard-of escalation". Beijing also said that it will respond to these actions of the American side. In addition, representatives of China believe that "this is a political provocation and it will definitely worsen relations between the countries." As for explanations, Washington did not provide any official information about why it decided to close the Consulate. However, US State Department spokeswoman Morgan Ortagus said that "the Chinese Consulate General in Houston is being closed in order to protect American intellectual property and personal information of the American population". As expected, China immediately rejected any accusations from the American side and rejected suggestions by some media that the Consulate was on fire because its employees burned secret documents. Washington gave Beijing 72 hours to close. What will happen next, you do not need to guess for a long time. Now, most likely, there will be the closure of some American Consulate in China, which will be followed by the same angry speech of the Americans, blaming all the troubles on Beijing. The point is different. It seems that the world's two largest economies are finally on the warpath. In this situation, we can only hope that the next US President will not be Donald Trump, who is used to solving all issues from a position of force, threats and pressure. These methods work with weak opponents, and even then not always. Speaking of China, the whole world saw that the United States itself suffered from the trade standoff, and China also managed to respond to America with a "coronavirus". Joe Biden is not a panacea for resolving the issue with Beijing, but he clearly will not support further deterioration of relations with China. In the UK, no important macroeconomic reports or events were scheduled for July 22. The same picture awaits traders today, July 23. Accordingly, market participants can only consider news that does not appear in the calendar. This category includes all speeches by Donald Trump, Boris Johnson, Michel Barnier, David Frost, central bankers and Finance Ministers of both countries. Any information about the escalation of the conflict with Beijing, the "coronavirus" in the United States and mass riots in American cities will also be interesting. From a technical point of view, the quotes of the pound/dollar pair continue to be located above the moving average line, and both channels of linear regression continue to be directed upwards. Thus, each new turn of the Heiken Ashi indicator upward can be used to open new long positions. The fundamental background, as we can see, does not support the US currency at all, and the macroeconomic background is simply absent now. Several more or less important reports will be published on Friday, but, as we can see, traders do not particularly need them in order to conduct active trading of the pair. In this light, we will be more interested in the new COT report on Friday, which will show how the mood of traders has changed over the past days.
The average volatility of the GBP/USD pair continues to remain stable and is currently 106 points per day. For the pound/dollar pair, this value is "high". On Thursday, July 23, thus, we expect movement within the channel, limited by the levels of 1.2625 and 1.2837. Turning the Heiken Ashi indicator downward will indicate a new round of downward correction. Nearest support levels: S1 – 1.2695 S2 – 1.2634 S3 – 1.2573 Nearest resistance levels: R1 – 1.2756 R2 – 1.2817 Trading recommendations: The GBP/USD pair also resumed its upward movement on the 4-hour timeframe. Thus, the flat is canceled, and the market is dominated by buyers. Thus, it is recommended to trade for an increase with the goals of 1.2756, 1.2817 and 1.2837 (the level of volatility )before the Heiken Ashi indicator turns down. Short positions can be considered after fixing the price below the moving average with the goals of 1.2573 and 1.2512. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 22 Jul 2020 06:42 PM PDT 4-hour timeframe
Technical details: Higher linear regression channel: direction - upward. Lower linear regression channel: direction - upward. Moving average (20; smoothed) - upward. CCI: 167.5141 Well, the epic with the approval of the budget for 2021-2027 and the fund for recovery after the pandemic is over. Now you can forget about it and watch the macroeconomic indicators, which must now start to improve and in light of the fact that a pandemic in Europe retreated and in the background of the fact that the European economy will be given financial assistance, for which the EU will have to pay for almost 40 years. Meanwhile, something very strange and frightening is happening in the currency market right now. The European currency has again jumped up today despite the fact that no interesting reports and news were received today by traders from the EU. We can assume that important information came from overseas. Across the ocean, everything is as before. However, something provoked new purchases of the European currency and at the same time sales of the British pound. As we have already found out, there was no news from Europe today. Therefore, the reasons should still be sought in the United States. And the first thing that catches your eye is a new speech by the head of the White House, Donald Trump, who decided to resume daily briefings on the "coronavirus". He did it in a way that it would have been better not to have done. The American President continues to make absolutely contradictory statements. For example, today the US leader said that "the situation with the pandemic in America will probably get worse than it is now before it improves". That is, the US President finally realized that the "coronavirus" is not a runny nose or flu. After a series of comments and statements that would have made all the doctors in the world laugh if the situation with the epidemic was not so terrible, Trump is finally showing that he is serious about the virus. And even recommended that all Americans wear masks, despite the fact that previously demonstratively refused to wear this means of protection and did not make any statements that this should be done by the population. However, when the number of cases in America came to 4 million, Trump finally realized that it is necessary to somehow stop the spread of the "Chinese infection". However, Trump himself does not believe that the country needs a new "lockdown". Also, Trump does not believe that it is necessary to tighten the quarantine measures. The US President believes that the economy should recover, not idle. Therefore, health with health, life with life, and everyone should go to work and work so that the American President has an increased chance of being re-elected in November. However, the US leader immediately came under another round of criticism. This time, House Speaker Nancy Pelosi, who is openly feuding with Trump, said that "the president finally admitted his mistakes with words about the need to wear medical masks". Pelosi also called the "coronavirus" the "Trump virus", openly hinting that it is because of the president's inaction that the country has faced such a huge number of diseases and deaths. Meanwhile, in the US, a serious confrontation is unfolding between the population and Donald Trump, as well as between the authorities of many American states and cities and Donald Trump. Recall that protests and rallies continue in the United States against the background of a racist scandal that took place two months ago. Just yesterday, we said that Trump sent paramilitary units to Portland, Oregon to quell rallies and riots. Trump also complained that the Democrats will ruin the country if Joe Biden comes to power. As an example, he cited the city of Portland, "where rallies have been going on for 50 days, however, the authorities do nothing to suppress them". Now it is reported that in the city of Portland in early July, people arrived in camouflage uniforms without any identification marks. It turned out that these detachments are part of a division of the Ministry of Internal Security, which was created recently. These people have "police" written on their uniforms, however, they are not really police. After several skirmishes between the demonstrators and the military, fierce fighting between them began. As a result, the authorities of the state of Oregon and congressional leaders demanded that Donald Trump withdraw paramilitary units from the state and the city, accusing them of further inciting conflicts. The mayor of Portland, Ted Wheeler, says that before the appearance of the military in the city, all rallies and protests were very peaceful and calm, which is not prohibited by US laws. Skirmishes and mass carnage began to occur exactly when unidentified military forces appeared in the city. However, acting US Secretary of Homeland Security Chad Wolf believes that "these are not peaceful protests, but the protesters want to cause damage to the federal courthouse and law enforcement officers". According to him, the protesters caused damage to the infrastructure of the city, and "the authorities of the city of Portland are absolutely inactive, do not try to stop the crowd, which is armed with bats, firecrackers, pipes, bottles of flammable mixtures and other dangerous things". It is also reported that protests are continuing at this time in 140 American cities. Thus, the United States is now in absolute anarchy, which is absolutely unknown how to end. Well, Trump's position continues to deteriorate in the run-up to the election. Joe Biden, as we have repeatedly said, does not even need to do anything to get ahead of Trump by at least 10%. On Wednesday, July 22, the European Union again did not have any macroeconomic publications. Thus, we believe that the reasons for this particular movement of the euro/dollar pair are the same. The social crisis in the United States, the economic crisis in the United States, the political crisis and epidemiological crisis. There is nothing more to say. The country is gripped by protests, the number of infections is approaching 4 million, the president does not rule the country, but fights against all his opponents, who are ready to do anything to make sure that the next president is not Trump. These are the current realities of America. As of Thursday, July 23, only an absolutely secondary report on applications for unemployment benefits will be published in the United States, and there will be no publications at all in the European Union. However, the fundamental background that continues to come from overseas is now enough for the euro currency to continue to grow steadily, and the dollar to fall steadily. From a technical point of view, the upward trend persists, as evidenced by both channels of linear regression. And it is still unclear how the US currency can change the current trend.
The volatility of the euro/dollar currency pair as of July 23 is 82 pips and is still characterized as "average". Thus, we expect the pair to move today between the levels of 1.1487 and 1.1651. The reversal of the Heiken Ashi indicator downwards signals a turn of a downward correction within the framework of an upward trend. Nearest support levels: S1 – 1.1475 S2 – 1.1353 S3 – 1.1230 Nearest resistance levels: R1 – 1.1597 R2 – 1.1719 R3 – 1.1841 Trading recommendations: The EUR/USD pair continues its sharply increased upward movement. Thus, it is now recommended to stay in purchases of the euro currency with the goals of 1.1651 and 1.1719, until the Heiken Ashi indicator turns downward. It is recommended to open sell orders no earlier than the pair is fixed below the moving average line with the first targets of 1.1353 and 1.1230. The material has been provided by InstaForex Company - www.instaforex.com |
| USDCAD breaking below downside confirmation, possible drop! Posted: 22 Jul 2020 06:38 PM PDT
Trading Recommendation Entry: 1.3416 Reason for Entry: The 1.272 fib extension Take Profit :1.3363 Reason for Take Profit: The 1.618 fib extension Stop Loss:1.3461 Reason for Stop loss: Horizontal swing high The material has been provided by InstaForex Company - www.instaforex.com |
| EUR/USD. Infusion remains bullish, but the 16th figure is still too tough Posted: 22 Jul 2020 01:12 PM PDT The euro-dollar pair conquers new price heights. Today traders were able to refresh the one and a half year high by testing the 16th figure. On the one hand, such price dynamics were predictable, given the positive results of the EU summit. On the other hand, impulsive growth to 22-month highs is alarming: now no one can say with certainty at what price level this impulse will fade away. Nevertheless, certain conclusions can be drawn from the current situation. First, let's analyze the dynamics of the EUR/USD pair over the past month, that is, since June 21. To do this, go to the weekly chart (W1). As you can see, the pair has been demonstrating a pronounced upward trend over the past four weeks. At the same time, we see deep price pullbacks along with stable growth: the pair grows to a certain point, then pulls back and goes up again with renewed vigor. The wave-like dynamics change from week to week: if an almost 100-point pullback was recorded at the end of June, then last week the gap between the weekly high and the Friday closing level was only 15 points. This week, the EUR/USD pair went up almost without swinging, having renewed multi-month highs. The fundamental background, which we will talk about below, allows buyers of the pair to show character: the euro is in demand, while the dollar index continues to fall. The indicator dipped to 4-month lows, reflecting weak demand across the market. The greenback is losing its positions in almost all dollar pairs, and the euro-dollar pair is no exception. But here it should be emphasized that the assault on the 16th piece ended in failure. The 1.1600 resistance level was a tough nut to crack. Apparently, many traders take profits and/or open sell positions in this price area, thereby putting pressure on the pair. Therefore, buying the pair looks risky at the moment. We could observe a similar situation yesterday: the pair did not overcome the level of 1.1500 on the first try. Purchases also looked risky at the border of the 15th figure, as the risk of a downward correction increased with the deterioration of the upward momentum. But as soon as the bulls crossed the 1.1510 mark, the upward movement gained momentum again, as traders believed in further price growth and began to open long positions. In other words, while EUR/USD traders are besieging the 16th figure, it is better to wait with purchases. This is a psychologically important mark, overcoming it will allow us to speak of approaching two-year highs: in this case, the strongest resistance level is 1.1730 - this is the lower border of the Kumo cloud of the Ichimoku indicator on the monthly chart (the highest timeframe is MN). In general, the fundamental background contributes to the pair's growth. While the European currency enjoys the support of Brussels, the dollar is under the yoke of its own problems, which are primarily associated with the spread of the coronavirus. The United States still ranks first among all countries in the world in terms of the number of coronavirus infections and deaths. While the daily incidence in the world is gradually decreasing, this figure has begun to rise again in the United States. Earlier this week, the dollar tried to regain its position amid a sharp decline in the incidence - 45,000 infections were registered on Sunday, while the daily level did not fall below 60,000 last week. But such a decline was due to the "weekend effect": the daily growth was above the 60,000 mark during the first few days of the week. Florida has become a new epicenter for the spread of the epidemic in the country, while the number of cases is doubling every four days in Miami, in particular. At the same time, US President Donald Trump, who previously linked the increase in the number of infected with the increase in the number of tests performed, unexpectedly urged Americans to "prepare for the worst times." According to him, the situation with COVID-19 in the country will initially "worsen significantly before it starts to improve." Such pessimism of the head of the White House has increased the concern of traders about the prospects for the American economy. In addition, the debate over a new package of assistance to the US economy continues in Washington: Republicans are drafting their one trillion dollar bill, while Democrats are pushing for their own law, which provides for the allocation of three trillion dollars. Uncertainty on this issue puts background pressure on the US currency. Thus, at the moment it is better to take a wait-and-see attitude on the EUR/USD pair. Longs look risky - at least until buyers consolidate within the 16th figure. As soon as this happens (and the likelihood of this scenario being realized is quite high), you can consider buying at short distances - you can select the 1.1650 mark as the first target. The closest support level is 1.1470 (the middle line of the Bollinger Bands indicator on the H4 timeframe) - here you can place a stop loss. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 22 Jul 2020 09:30 AM PDT Minute operational scale (H4 time frame) Where do we stop the growth of the main currency instruments against the dollar? Options for the development of the movement #USDX vs EUR/USD & GBP/USD & USD/JPY (H4) from July 23, 2020. ____________________ US dollar index The development of the movement of the dollar index #USDX from July 23, 2020 will be due to the development and direction of the breakdown of the range:
In the breakdown of the resistance level of 95.00 on the starting line SSL of the Minute operational scale fork, the movement of the dollar index can be continued to the boundaries of the channel 1/2 Median Line Minuette (95.17 - 95.27 - 95.37) in case of breakdown which the upward movement #USDX will be continued to the zone equilibrium (95.52 - 95.66 - 95.82) of the Minuette operational scale fork with the prospect of achieving the ultimate line FSL Minuette (96.30). If the support level of 94.90 is broken on the control line LTL of the Minuette operational scale fork, the downward movement #USDX may continue to the borders of the channel 1/2 Median Line (94.35 - 94.00 - 93.65) of the Minute operational scale fork. The layout of the #USDX movement options from July 20, 2020 is shown on the animated chart.
____________________ Euro vs US dollar The development of the movement of the single European currency EUR/USD from July 23, 2020 will also be determined by the development and direction of the breakdown of the range:
If the support level of 1.1565 breaks through on the initial line of the SSL fork of the Minute operational scale fork, the downward movement of the single European currency will be directed towards the goals: initial SSL line (1.1490) of the Minuette operational scale fork; ultimate Shiff Line Minuette (1.1390); with the prospect of reaching the equilibrium zone (1.1360 - 1.1300 - 1.1240) a fork of the operating scale Minute. At the breakdown of ISL38. 2 Minuette-resistance level 1.1590-the development of the EUR/USD movement may continue in the equilibrium zone (1.1590 - 1.1630 - 1.1670) forks operating scale Minuette and channel 1/2 Median Line (1.1670 - 1.1705 - 1.1755) of the Minute operational scale fork. The EUR/USD movement options from July 23, 2020 are shown on the animated chart.
____________________ Great Britain pound vs US dollar The movement of Her Majesty's currency GBP/USD from July 23, 2020 will be due to the development of the border levels of the 1/2 Median Line channel (1.2665 - 1.2695 - 1.2720) of the Minuette operational scale fork - the markup of the movement inside this channel is shown on the animated chart. A breakdown of the support level of 1.2665 at the lower border of the channel 1/2 Median Line Minuette will make it relevant to continue the movement of GBP/USD in the equilibrium zone (1.2665 - 1.2630 - 1.2600) of the Minuette operational scale fork, with the prospect of reaching the initial SSL line (1.2511) after the breakout of ISL61.8 Minuette (1.2600) and the local minimum 1.2478. A breakout of the 1.2720 resistance level at the upper border of the 1/2 Median Line channel on the Minuette operational scale will direct the movement of Her Majesty's currency to the following levels:
We look at the options for the movement of GBP/USD from July 23, 2020 on the animated chart.
____________________ US dollar vs Japanese yen And the movement of the currency of the "Land of the Rising Sun" USD/JPY from July 23, 2020 will depend on the development and direction of the breakdown of the range :
If the resistance level of 107.30 is broken on the initial line of the SSL of the Minuette operational scale forks, the upward movement of USD/JPY will be directed to the targets:
In the breakdown of support level of 107.00 for the pair of "Land of the Rising Sun" will continue in the channel borders 1/2 Median Line (107.00 - 106.85 - 106.70) and equilibrium zone (106.70 - 106.55 - 106.35) of the Minuette operational scale fork with the prospect of achieving the ultimate line FSL Minuette (105.75) and the upper border of the channel 1/2 Median Line (105.55) of the Minuette operational scale fork. The marking of USD/JPY movement options since July 23, 2020 is shown on the animated chart.
____________________ The review is compiled without taking into account the news background, the opening of trading sessions of the main financial centers and is not a guide to action (placing "sell" or "buy" orders). Formula for calculating the dollar index: USDX = 50.14348112 * USDEUR0.576 * USDJPY0.136 * USDGBP0.119 * USDCAD0.091 * USDSEK0.042 * USDCHF0. 036. where the power coefficients correspond to the weights of currencies in the basket: Euro - 57.6 %; Yen - 13.6 %; Pound sterling - 11.9 %; Canadian dollar - 9.1 %; Swedish Krona - 4.2 %; Swiss franc-3.6 %. The first coefficient in the formula brings the index value to 100 on the starting date-March 1973, when the main currencies began to be freely quoted relative to each other. The material has been provided by InstaForex Company - www.instaforex.com |
| Silver and gold rises amid global pandemic Posted: 22 Jul 2020 08:43 AM PDT
The gold market was moved on Wednesday thus continued to rise. The price of precious metals is growing during the Asian trading session. Precious metal futures for August delivery on the New York trading floor gained 0.76%, which allowed it to reach the level of 1,857.90 dollars per troy ounce. At the same time, the support level turned out to be around $ 1,795.20 per troy ounce, while the resistance moved to the level of $ 1,866.75 per troy ounce. Gold quotes were able to quickly reach its first target of $ 1,827 per troy ounce. It should be noted that this strategic level was designated literally last week. However, the growth did not end there, but only intensified and is gaining momentum, which pushes the price higher and higher. Most analysts believe that the rally will not end soon, and during it, more than one value record will be broken. The reason for such an unrestrained positive was the hopes of investors that stimulus measures in many countries of the world, including the United States of America, would not only continue to the extent that they already have but will also significantly expand. At least, there is already an active discussion of the bill on a new portion of financial support for the US economy. However, the authorities still cannot decide on the final volume of future incentives. One way or another, this uncertainty is putting serious pressure on the greenback, which is beginning to change the vector of its movement in a negative direction. The traditional fall of the dollar is a good support for the precious metals market. This is what we are seeing at the present time. Another negative moment for the greenback is the news about the preparation of a vaccine against coronavirus infection, which is entering the home stretch. The imminent appearance of a drug capable of containing the pandemic will weaken the dollar even more, which plays into the hands of gold, the price of which is moving in the opposite direction. Equity markets were also cheered by the news of the COVID-19 vaccine, which pushed the major indices up well. This is evidence of the growing interest in risky assets, which, in theory, should put pressure on the gold market. However, this may not happen since the precious metals market is a very convenient way to protect against inflation, the level of which is growing every day. Thus, it turns out that now is one of the most favorable moments when it is worth moving on to buying gold and other precious metals. Silver also continues to show explosive growth rates. Over the past four months, this metal has become more expensive by as much as 80%. At the same time, analysts say that this is far from the limit of the rise in its value, so we can say that new records will be broken. Until the last moment, the gold overshadowed the silver but the time has come when it gradually comes out of the shadows. At the beginning of this week, silver was finally able to cope with the extremely important mark of $ 20 per troy ounce which continues to gain momentum at present. Such significant successes of silver did not go unnoticed in the market. Investors were immediately inspired by this situation since the precious metal had not had such indicators for almost four years. Now, the main task of silver is to firmly gain a foothold at the current level in order to maintain the emerging trend and move on to storm the next strategic mark of $ 21.15 per troy ounce. The growth rate of silver futures is very intense. On Monday, at the closing of trading, there was an immediate rise of 2.2%, and its cost was already $ 20.192 per troy ounce. It should be noted that during the trading day the precious metal rose to the level of $ 20.297 per troy ounce. At the opening of trading on Tuesday this week, the price of silver futures was able to reach a high level of $ 20.688 per troy ounce, which, in fact, was a demonstration of the metal's growth by 77% compared to March this year. Recall that this spring its value tested the minimum level around $ 11.645 per troy ounce. Even gold, which still remains the more popular among metals, failed to achieve such results: its rise was only 25%. However, the potential of silver is very high, as almost all experts agree on this. After breaking through the strategic value of $ 20 per troy ounce, further rapid growth is only a matter of time. However, it is still worth taking some caution, since the political, economic, and epidemiological situation in the world remains tense. To gain stability, the precious metal needs to rise to the level of $ 35.5 per troy ounce, but an increase of more than 84% from current prices still seems too unrealistic. However, this did not prevent silver from showing an additional 6% increase this morning at the opening of trading, which moved it to the area of $ 21.4 per troy ounce. Later, its value soared by 5.35% and reached $ 22,710 per troy ounce. Copper futures for September delivery continued the positive trend and gained 0.37%. As a result, it cost about $ 2.9733 per pound. The material has been provided by InstaForex Company - www.instaforex.com |
| July 22, 2020 : EUR/USD Daily Technical Review and Trade Recommendations. Posted: 22 Jul 2020 08:20 AM PDT
The EURUSD pair has been moving-up since the pair has initiated the depicted uptrend line on May 25. On June 11, a major resistance level was formed around 1.1400 which prevented further upside movement and forced the pair to have a downside pause towards the uptrend line. Since last week, the uptrend seems to show signs of weakness while moving above the mentioned resistance level (1.1400). A couple of contradictory Fundamental data from the U.S. have caused some hesitation manifested in the depicted ascending wedge-pattern during last week's consolidation. However, this week a few negative fundamental data from the U.S. have caused the EUR/USD to achieve another breakout to the upside. Estimated target for the pair is located around 1.1650 which constitutes a prominent resistance level to be watched for a valid SELL Position. The material has been provided by InstaForex Company - www.instaforex.com |
| Evening Review: US orders coronavirus vaccine worth $2 billion Posted: 22 Jul 2020 08:19 AM PDT
The US has placed an order of 100 million doses of COVID vaccine worth $ 1.95 billion from Pfizer and BionTech, and the order could be increased to 600 million doses. EURUSD: The trend is valid. You may keep purchasing from 1.1340 - stop and a downward reversal from 1.1370. You may take profit from 1.1680 if such a price is given. In case of a decrease to 1.1480, you may add your purchases. The material has been provided by InstaForex Company - www.instaforex.com |
| July 22, 2020 : EUR/USD Intraday technical analysis and trade recommendations. Posted: 22 Jul 2020 08:00 AM PDT
On March 20, the EURUSD pair has expressed remarkable bullish recovery around the established bottom around 1.0650. Shortly after, a sideway consolidation range was established in the price range extending between 1.0770 - 1.1000. On May 14, evident signs of Bullish rejection as well as a recent ascending bottom have been manifested around the price zone of (1.0815 - 1.0775), which enhances the bullish side of the market in the short-term. Bullish breakout above 1.1000 has enhanced further bullish advancement towards 1.1150 then 1.1380 where another sideway consolidation range was established. Hence, Bearish persistence below 1.1150 (consolidation range lower limit) was needed to enhance further bearish decline. However, the EURUSD pair has failed to maintain enough bearish momentum to do so. Instead, the current bullish breakout above 1.1380-1.1400 has lead to a quick bullish spike directly towards 1.1520 (Fibonacci Expansion 78.6% level) which failed to offer sufficient bearish pressure. That's why, further bullish advancement is expected to pursue towards 1.1690 (Fibonacci Expansion 100% level). Trade recommendations : Conservative traders should for the current bullish movement to pursue towards the price zone around 1.1690 for any signs of bearish rejection.T/P levels to be located around 1.1530 and 1.1450 while S/L to be placed above 1.1750 to minimize the associated risk. The material has been provided by InstaForex Company - www.instaforex.com |
| July 22, 2020 : GBP/USD Intraday technical analysis and trade recommendations. Posted: 22 Jul 2020 07:23 AM PDT
In April 2020, the GBPUSD pair has been moving sideways within the depicted consolidation range extending between the price levels of 1.2265 and 1.2600. On May 15, transient bearish breakout below 1.2265 (Consolidation Range Lower Limit) was demonstrated in the period between May 13 - May 26, denoting some sort of weakness from the current bullish trend. However, immediate bullish rebound has been expressed around the price level of 1.2080 bringing the GBPUSD back above the depicted price zone of 1.2520-1.2600 which failed to offer sufficient bearish rejection. Further bullish advancement was expressed towards 1.2780 (Previous Key-Level) where signs of bearish rejection were expressed. Short-term bearish pullback was expressed, initial bearish targets were located around 1.2600 and 1.2520. Recent bearish persistence below 1.2500 ( neckline of the reversal pattern ) paused the bullish outlook for sometime & enabled further bearish decline towards 1.2265. However, significant bullish rejection was originated around 1.2265 bringing the GBP/USD pair back towards 1.2780 where a bearish Head & Shoulders pattern (with potential bearish target around 1.2265) was recently demonstrated. This indicates a high probability of bearish reversal provided that early bearish breakout is achieved below 1.2600. Trade recommendations : Intraday traders can consider any bullish pullback towards the depicted Supply Level (1.2780) for a valid SELL Entry. Stop Loss should be tight, it can be placed above 1.2850 while initial T/P level to be located around 1.2600, 1.2520 & 1.2400. The material has been provided by InstaForex Company - www.instaforex.com |
| EURUSD tests major long-term trend line resistance Posted: 22 Jul 2020 06:30 AM PDT EURUSD has made new higher highs today recapturing the 1.15 level. However bulls need to be very cautious as price has reached important long-term resistance levels. This resistance is shown clearly by the long-term downward sloping trend line.
The EURUSD has reached the green trend line resistance that comes from the 2008 highs. This resistance trend line should not be ignored. The 1.16 level is very important resistance. A rejection here could bring EURUSD back to 1.13 if not lower. It is time now for bulls to be cautious as the risk reward ratio favors bears. Resistance is very close while support on a weekly basis is found at 1.12. Time to take profits if long, and turn neutral to wait and see what happens at the weekly resistance. The material has been provided by InstaForex Company - www.instaforex.com |
| Gold price justifies at least short-term pull back Posted: 22 Jul 2020 06:26 AM PDT Gold price remains in a bullish trend. Price made new 2020 highs as expected since price continues to make higher highs and higher lows. Support remains intact and price has now reached the upper channel boundary and resistance area. It is time to be cautious.
green rectangle - support zone Gold price is expected to make a pull back. The RSI is at overbought levels. Price has reached channel resistance. At $1,800 we noted we prefer to be bullish. Now I prefer to take partial profits and or turn neutral. A pull back towards $1,830-40 is justified. Price remains inside the bullish channel while there is no bearish divergence.
Despite the new 2020 high in Gold, the weekly chart provides us with a bearish RSI divergence. The new high is not confirmed by the RSI. This supports my view that we should be neutral or at least take partial profits if long. A pull back or a consolidation period is expected over the coming weeks. The material has been provided by InstaForex Company - www.instaforex.com |
| Short-term Ichimoku cloud indicator analysis of EURUSD for July 22, 2020 Posted: 22 Jul 2020 06:20 AM PDT EURUSD remains in a bullish trend. In our last Ichimoku cloud analysis we noted the new bullish signal by the crossing of the tenkan-sen above the kijun-sen. At that time we had 1.15-1.1550 as our next target. This target area has been reached. Time for bulls to be cautious and protect gains.
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| Posted: 22 Jul 2020 06:12 AM PDT
Edward Moya, senior market analyst at OANDA, said that the rally in the fuel prices ended due to a sharp rise in oil reserves and a worsening epidemiological situation in the country. Analysts had predicted that the US oil reserves would fall by 2.1 million barrels. However, according to the American Petroleum Institute, US oil reserves rose by 7.5 million barrels to 531 million in a week. In Japan, the world's fourth largest oil consumer, the economic situation is also difficult due to the influence of the coronavirus. The manufacturing activity of the country continues to drop. Hopes for a quick global recovery are becoming increasingly illusory. Brent crude dropped by 0.45% to $44.12 per barrel. At the same time, WTI futures declined by 0.55% to trade at $41.69 per barrel. US President Donald Trump said that positive changes in the country would not happen soon. The situation with the coronavirus is only getting worse, that is why the President urged Americans to wear masks. For the first time Trump recognized how alarming the situation in the country is. Since the beginning of the epidemic in the United States, almost 4 million people have been infected with the virus. About 142,000 people died. More than 1,000 people die from COVID-19 in the United States every day. The material has been provided by InstaForex Company - www.instaforex.com |
| Three main reasons that put pressure on US dollar Posted: 22 Jul 2020 06:08 AM PDT
Sharp declines in interest rates, a flood of liquidity from the Federal Reserve System to cushion the economic impact of the COVID-19 indicate a drop in the US dollar in the future. Gloomy future The future of the US dollar looks bleak. The daily rise in the number of people suffered from coronavirus, tensions with China, as well as the abandonment of the US currency by investors put the US dollar at risk. Experts suggest that the greenbacks will fall in the near future. Since the beginning of July, the US dollar has lost 0.7% against a basket of other currencies. At the moment, it is more than 6% below the peak reached at the end of March. The US dollar is weakening because the United States faces more serious risks than other major economies. Unlike the US, Europe's economy is gradually resuming its work. What is more, the euro's prospects has been boosted by the development of an European Recovery Fund. At the same time, the Chinese yuan is gaining momentum. The United States removed some restrictions on movement and, as a result, economic indicators recovered. Nevertheless in the country was fixed maximum one-day rise in the number of COVID-19 cases since the beginning of the pandemic. This, in turn, will lead to further restrictive measures and less robust economic performance. Political risks Moreover, Congress must prolong the emergency unemployment benefits program by the end of the month. Otherwise, the November US presidential elections could negatively affect the country's economy. Donald Trump's rating is significantly below Joe Biden due to the riots and widespread complaints about the measures taken to combat the coronavirus. It seems that democrat Joe Biden will remove Trump from the pedestal. George Saravelos argues that the Democrats' victory in the presidential election would negatively impact the US dollar. Moreover, the demand for greenbucks as a safe-haven asset is weakening. FRS fault Olivia Frizer, head of international marketing research at BNP Paribas, says the US dollar has lost its popularity among investors. Previously, in order to buy american assets, investors took out loans in low-benefit currencies such as the yen and the euro. Now everything has changed. This will lead to the growth of the european and chinese currency. Now, FRS negotiations about the control of the revenue curve, which includes the central bank setting limits for Treasury incomes and market intervention to contain those restrictions, have also made it clear to investors that rates are unlikely to grow anytime soon. Keith Jax, head of monetary strategies at Societe Generale, is confident that actions of FRS have led to the weakening of the US dollar. The material has been provided by InstaForex Company - www.instaforex.com |
| Global stock markets plunged into chaos Posted: 22 Jul 2020 05:11 AM PDT Today, there is no general dynamics on the stock markets of the Asia-Pacific region. Indices showed mixed reaction to the news and were moving in opposite directions. Some indices rapidly fell against the background of a surge in the number of people infected with the coronavirus. Thus, Australia's main stock index plunged by more than 1% and it may drop even deeper. Signals that the coronavirus pandemic may return were ignored by markets for a long period of time. However, now, the situation has become much worse. It forced market participants to react. The crisis is growing every day, and we should not wait until the situation gets better. Moreover, according to the US government, the bottom has not been reached yet. At the moment, the most alarming epidemiological situation is observed in the United States. There, a daily increase in the number of virus cases is breaking all records. However, the Australian authorities have also reported on a significant increase in the number of infected people on their territory, in particular in the largest city of the state – Melbourne. At the beginning of July, such states as Victoria and Melbourne again introduced the self-isolation regime, but almost in vain. The number of confirmed cases is still rapidly growing. Investors' sentiment is also negatively affected by disagreements concerning the US stimulus measures. The two parties are arguing and cannot agree on the amount of the financial support that is urgently needed to revive the country's economy after the crisis associated with the coronavirus pandemic and to combat the spread of COVID-19. According to the latest data, the Republican party put forward a proposal for $1 trillion aid, which the Democrats considered to be too small. They, in turn, intend to promote their own bill, developed and submitted to the government in May this year. It contains the stimulus package worth $3.4 trillion. Uncertainty on stock markets will continue rising until both parties come to an agreement. However, it seems that this dispute will not be resolved quickly. Meanwhile, the European leaders managed to reach a deal on the issue of the Economic Recovery Fund. It was hotly discussed for a long period of time. The EU leaders decided to allocate 750 billion euros. In addition, the EU budget for the next seven years was finally adopted, although there also were quite a lot of disagreements about it. Thus, amid the news, Japan's Nikkei 225 index showed a 0.5% decline. China's Shanghai Composite index, on the contrary, went up by more than 0.7%. The Hong Kong Hang Seng index fell by 0.4%. South Korea's Kospi index remained unchanged. Australia's S&P/ASX 200 index suffered a setback and declined sharply by 1.4%. Analysts suppose that it will continue falling. The US stock indices also showed mixed dynamic. Thus, the Dow Jones and S&P500 indicators significantly advanced, while their counterpart Nasdaq Composite marked a negative correction. The Dow Jones Industrial Average increased by 0.6%, or 159.53 points, which allowed it to hit the level of 26,840.4 points. The Standard & Poor's 500 index moved up by 0.17%, or 5.46 points to the level of 3,257.3 points. The Nasdaq Composite index dropped by 0.81%, or 86.73 points, which sent it to the area of 10,680.36 points. Securities of companies from the energy and finance sectors were in the greatest demand among market participants. Statistical data on activity of most companies is extremely disappointing. The crisis has seriously affected their performance. However, the preliminary forecasts were much worse than the final figures, which slightly encouraged investors. Now, investors are focused on the stimulus measures that Washington has promised to take by the end of this month. Despite uncertainty in this issue, there are positive factors such as early release of a vaccine against the coronavirus infection, which keeps the market from a further fall. Moreover, the business activity in June, reached a new record level. The rise was mainly caused by the lifting of restrictive measures. But today it is clear that these measures will be reimposed. European stock markets began the day in a quite bad mood. This will definitely affect the indicators in the near future. Weak quarterly reports on the European companies became the main reason for the negative trend. Germany's DAX index opened with a rise of 0.5%. France's CAC 40 index increased by 1%. The UK FTSE index was up by 0.6%. The material has been provided by InstaForex Company - www.instaforex.com |
| Dollar struggles to fight decline Posted: 22 Jul 2020 05:07 AM PDT
The greenback shows solid stability against the euro and the yen on Wednesday. The price of the euro ranges around 1.1527 dollars per euro, which is similar to Tuesday's level at the end of the trading day. The price of the euro against the yen also remained practically unchanged, its dynamics are insignificant: from yesterday's 123.12 yen per euro, it moved to the level of 123.15 yen per euro. The greenback was around 106.83 yen per dollar, compared on Tuesday's rate at around 106.80 yen per dollar. The ICE Dollar Index, which reflects the dynamics of the change in the price of the greenback against a basket of six major world currencies, also remains unchanged. Meanwhile, the WSJ Dollar Index, which demonstrates the dynamics of the dollar against a basket of sixteen major world currencies slightly moved down to 0.05%. Foreign exchange market participants are increasing their appetites for risky sectors, which is immediately reflected in the US dollar as the demand for which begins to creep down. The reason for the return to the risk zone is the future stimulus that the government of the United States of America is preparing to take. However, not everyone is in a hurry to take the risk, since there are no clear-cut agreements between the authorities on the total amount of incentives so far. The US Republican Party talks about more restrained amounts and proposes a package of measures in the amount of $ 1 trillion. The Democrats, however, are on a more expanded program, which they put forward for consideration back in May this year. It indicates the amount of 3.4 trillion dollars. The state authorities agree that a package of $ 1 trillion is clearly not enough to support the economy in the proper volume, but they have not yet been able to agree on another specific amount. In addition, market participants slowed down a little and reduced their investments in the dollar against the background of news of the agreements adopted during the EU summit. On Tuesday, it became known that the European leaders were able to find a common language on the most acute and important issues in the region. Thus, the seven-year budget of the region was adopted, amounting to 1.074 trillion euros. In addition, the decision was finally made to create a fund to support the economies of the EU countries from the consequences of the crisis associated with the coronavirus pandemic. The size of the latter is 750 billion euros. In general, the positive in Europe put pressure on the greenback, limiting its growth. The pound sterling, on the other hand, is not changing too much. In relation to the dollar, its value moved from the level of $ 1.2731 per pound sterling to the level of $ 1.2718 per pound sterling. In relation to the euro, the pound sterling has slightly depreciated and began to cost 1.1030 euros per pound sterling, while on Tuesday, its rate was 1.1045 euros per pound sterling. Meanwhile, the aussie is growing against the greenback, rising around 0.25%, and the price moved to the level of $ 0.7146 per aussie against the previous day's position of $ 0.7128 per aussie. The material has been provided by InstaForex Company - www.instaforex.com |
| Evening review on EURUSD for July 22, 2020 Posted: 22 Jul 2020 05:07 AM PDT
The euro confirms the trend, and dynamics based on the H4 chart provokes traders to take profit then restart from the rollback. This is a possible option. However, the monthly chart suggests that it is just the beginning.
According to the monthly chart, the target is 1.1880 with a possible continuation towards higher levels. You may consider purchases from 1.1340. The weekly US employment report is expected today at 12:30 UTC. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 22 Jul 2020 04:54 AM PDT Judging by the escalating tensions between the US and China, everything is indicating disruption to the trade relations and non-commitment to the trade deal which was made in late 2019. Today media reported that Washington ordered China to close its consulate in Houston, Texas, in a move to ensure safety of the US intellectual property and personal data of Americans. In response, China's foreign office made harsh comments on this decision accusing the US in wrecking relations.
It could be a coincidence, but China's President Xi Jinping came up with some statements before that move. Speaking in front of foreign entrepreneurs, China's leader pledged to reinforce the domestic market avoiding any comments on further relations with the US. Xi Jinping added that he would ensure openness of the Chinese market to overseas investors. Besides, he pointed out that those companies which suffered the most from the pandemic need special attention. This approach will determine directly a pace of economic recovery this year. China is widely expected to make measures to enhance flexibility of fiscal and monetary policies. Remarkably, despite the pandemic-driven crisis, China's GDP grew 3.2% in Q2 from a year ago. At the same time, other countries are revising their relations with China that could close the doors for China to the established sales market. Moreover, the US is tightening its anti-China stance. No wonder, Xi Jinping is seeking other sales markets, thus opening extra advantages and inviting foreign investors to the large-scale domestic market. Such openness is likely to encourage robust and sustainable economic growth. USD/CAD Meanwhile, the Canadian dollar is extending strength amid a spike in retail sales and growing oil prices. According to the government data, retail sales surged 18.7% in May from April, amounting to CAD 41.70 billion. Retail sales sharply contracted during the shutdown, so most consumers were poised to slash their spending. However, lifting lockdown measures propelled robust consumer spending. Analysts had projected a bigger jump by 22% for May. Nevertheless, retails sales in Canada remain 20% lower than in February.
Easing a requirement for social distancing and lifting lockdown measures also enabled growth of new home prices. In the latest report, prices edged up 0.1% in June m/m. Besides, new home prices rose 1.3% y/y. From the technical viewpoint, USD/CAD is set to trade lower amid further weakness of the US dollar. A breakout of support at 1.3430 will trigger massive selling of the pair with downward targets at 1.3350 and 1.3270. The pair is likely to have problems with correction at near resistance of 1.3515 where there is the upper border of the downward channel. GBP/USD
The pound sterling fell sharply after today's article by The Daily Telegraph, in which the economists expressed concerns that the authorities of the UK and the EU would not be able to nail down a free trade agreement after the United Kingdom exits the EU. The main message is that from January 1, 2021, Britain will begin trade relations with the EU according to the rules of the World Trade Organization. Officials in high circles think the odds are rather high. According to well-formed sources, there is a slim chance that a deal will be actually concluded, but the likelihood remains. The next series of the talks is scheduled for the autumn. So, the EU authorities could make some concessions bearing in mind that both the UK and the US are in the doldrums. A great example is the recent EU summit when the EU leaders reached the last-minute agreement on the recovery fund and the EU budget. On the other hand, a failure to reach a deal will come as no surprise because British Prime Minister Boris Johnson dropped a hint long ago that he was ready for such a scenario. Now let's discuss the technical picture on GBP/USD. At the moment of writing this article, the pair was testing lows of July 21 despite a sharp growth yesterday. Then, the pair started a correctional climb which proves the bulls' interest in such low prices. A bounce to a high of 1.2725 will signal a further uptrend towards new highs at 1.2770 and 1.2810. In case GBP/USD retreats to lows of July 22, a breakout of support at 1.2645 is sure to push the price down to 1.2670 and 1.2510. The material has been provided by InstaForex Company - www.instaforex.com |
| Prospects for the weakening dollar Posted: 22 Jul 2020 04:36 AM PDT
The recent weakening of the dollar escalates speculations that it will continue to fall into the abyss. It is difficult to dispute such forecasts now, the greenback really has enough negative factors that can push it further down. From the maximum levels reached in March in the region of 103 points, the dollar index fell to 95 points. In terms of technical analysis, it may decline to last year's lows around 94.6. But is the dollar really so hopeless? In the short term, yes, but if you look into a more distant perspective, the picture will appear in a different light. A fall in the dollar is always accompanied by a rise in other currencies, whose export-oriented countries will sooner or later face this problem. The higher the exchange rate, the more difficult it will be for them to sell goods and, consequently, restore the economy. Time will come when governments and central banks of countries such as Canada, Great Britain, and Australia, will begin to unanimously oppose the strengthening of national currencies. The US struggle with the coronavirus pandemic won't last forever either. Sooner or later, perhaps in the near future, this factor will come to naught. Farms in the United States will begin to recover. It is worth noting that this sector is already taking a good hit, even better than in countries whose currencies are doing well now, showing growth against the dollar. There is another important point to keep in mind. The United States has a negative trade balance, imports are more than exports. In this regard, the American authorities are less interested in the weakness of their currency than their partners. In addition, treasury rates, even when they decline, remain higher than those of most major European or Asian peers. Do not discount the possible continuation of the US-China tariff wars and a second wave of the pandemic in countries that are successfully coping with the first. This can worsen risk appetite and increase demand for the US dollar, which will start growing again due to its protective functions. All this can limit the current decline in the dollar, especially since the dollar negative for the most part has already been worked out. Strong support levels for the USDX are in the 94.60-95.00 region. The fall may stop there, and the market will start pushing it towards the resistances of 97.50–98.00. USDX
Meanwhile, the current weakening of the dollar made such currencies as the euro and the Swiss franc more attractive in the eyes of traders. Against the franc, the dollar retreated to a 4-month low despite intervention by the Swiss National Bank last week. The NBS now prefers to stay on the sidelines, since the growth of the national currency is associated with the weakening of the dollar. The EUR / USD pair managed to exceed the peak values of March, reach 18-month highs at 1.1540 and move further. EUR / USD
EU leaders gave a go signal to the European bulls, and investors jumped at the idea. Major analytical companies are hastily rewriting forecasts. Now you can find a wide variety of numbers, depending on the mood and positioning of banks. Experts are serious and unanimous in predicting that the euro will grow. On average, the EUR / USD pair, judging by the forecasts of authoritative foreign experts, will gain a foothold in the next three months around the 1.1600 mark. Note that after the 2008 crisis, the dollar rose in price against the euro for 8 years, then in 2016 this trend stalled and turned into a sideways trend. The growth of the greenback and the subsequent flat did not prevent America from bypassing Europe and Asia. Now there are more and more signs that the dollar may turn around, clearing the way for the euro upward. The weakening of the greenback is likely to occur in parallel with the lag of the US markets from foreign ones. The material has been provided by InstaForex Company - www.instaforex.com |
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