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- Analytics and trading signals for beginners. How to trade GBP/USD on January 11? Analysis of Friday. Getting ready for Monday
- Analytics and trading signals for beginners. How to trade EUR/USD on January 11? Analysis of Friday. Getting ready for Monday
- Trading plan for the GBP/USD pair for the week of January 11-15. New COT (Commitments of Traders) report. There are no changes
- Trading plan for the EUR/USD pair for the week of January 11-15. New COT (Commitments of Traders) report. Another sluggish
| Posted: 10 Jan 2021 01:54 PM PST Hourly chart of the GBP/USD pair
The GBP/USD pair corrected quite strongly towards the upper border of the descending channel last Friday, January 8. The price rebound from this line provoked the return of the downward movement. Unfortunately, not as strong as we would like. But in general, the entire trend (if you can call it a trend) that began on January 4 was very weak. But novice traders received two strong sell signals at once, which could and should have been worked out. First, the price rebounded off the channel's limit. Secondly, the MACD indicator turned down. Both signals were strong, so the GBP/USD pair could be sold. You could make 20 points on this signal if you closed deals on Friday evening. However, there was no signal to cancel the downward movement, thus, beginners could leave open sell orders, not forgetting to place a protective Stop Loss order. It is extremely difficult to predict what will happen in the upcoming week. Despite the fact that the pair was in a downward movement for a whole week, it was able to move away from the highs by 140 points in total. In fact, quotes continue to be around 2.5-year highs. Getting the price to settle above the downward trend will break the current downward trend. Fundamentally, everything remains difficult for the British pound. However, the market does not take the complication into account, therefore, everything remains good for the pound. The pound has gained 21 cents in the past nine months, often ignoring the weak fundamental background from the UK. Even now, when it would seem that a trade agreement with the EU has been signed, the background remains negative. The British economy will still suffer losses in the fourth and first quarters. The new, third lockdown will also have a negative impact on the economy. And in 2021, the country may also face the demarche of Scotland, which has been furiously wanting to leave the United Kingdom for two years. No major UK and US releases scheduled for Monday, January 11. The political situation in America has calmed down a bit, although after what happened in Washington, in the Capitol, Donald Trump again risks being impeached. At least ten days are left until the day of Joe Biden's inauguration. However, traders are not interested in this, and there are no reports from the UK, except for epidemiological ones. However, the British currency is calmly reacting to new anti-records for the coronavirus disease. Possible scenarios for January 11: 1) Buy orders have lost their relevance, since there is a downward trend and a descending channel has appeared. Thus, in order to be able to consider long positions, you should wait until the pair's quotes have settled above the descending channel. In this case, long positions can be opened with targets at 1.3675 and 1.3718 (to be revised in the morning). However, this scenario is not expected until Monday morning. 2) Sell positions are relevant at this time. Beginners can remain in shorts from last Friday, when two strong signals were created. The targets are 1.3518 and 1.3475. In principle, it is logical to expect the quote to fall to the lower border of the channel, but it is far from a fact that the bears will be able to surpass the 1.3541 level, from which the price rebounded five times already. For new shorts on the pair, you need to wait for the MACD indicator to discharge and a new fall. On the chart: Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now. Up/down arrows show where you should sell or buy after reaching or breaking through particular levels. The MACD indicator consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines). Important announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 10 Jan 2021 01:54 PM PST Hourly chart of the EUR/USD pair
The EUR/USD pair resumed its downward movement several times last Friday. Since the pair's quotes settled below the rising trend line earlier, the trend is currently downward. As such, we advised you to consider trading bearish on Friday. However, we also recommended waiting for a strong sell signal from MACD, which did not appear during the day. The MACD indicator turned down twice, but both times it did it well below the zero level. Therefore, both sell signals were considered weak and should not be rejected. Therefore, in principle, no positions should have been opened on Friday. The downward trend was not reversed on that day. On the contrary, a new downward trend channel was created, which supports bear traders. The price just rebounded off its lower border. And so, we are expecting a round of upward correction on Monday, and after that - the downward movement. The European Union did not publish a significant macroeconomic report last Friday. But the United States released several important reports. The unemployment rate did not increase or decrease in December, while the average wages rose by 0.8% m/m. However, it was not these reports that caught the attention of traders. The most important was the NonFarm Payrolls report - the number of jobs created outside the agricultural sector. This is a very important report on the state of the US labor market. Unfortunately, market participants ignored it too. Once again. The number of NonFarm Payrolls decreased by 140,000, although forecasts predicted an increase of 70-100,000. Naturally, this is bad news for the US economy and the dollar. However, as we can see, the dollar rose in price on Friday (fall of the euro/dollar pair = growth of the dollar). Thus, macroeconomic reports were once again ignored, and the pair continued to trade according to its own rules. No major releases scheduled in the United States or Europe on Monday, January 11. Thus, traders will have nothing to pay attention to. Although Friday showed us that all statistics, even the most important reports, are still ignored. The pair continues to trade according to its own rules, so the best advice for novice traders is to trade exclusively on technical signals and, most importantly, on strong technical signals. Possible scenarios on January 11: 1) Long positions are currently irrelevant, since the quote overcame the upward trend line. Thus, those who wish to buy the EUR/USD pair on such a market should wait for a new upward trend or the end of the downward trend (quotes would have to settle above the downward channel). In this case, you can consider long positions with targets around the 1.2328 level. 2) Trading for a fall is more relevant now, since a downward channel has formed. Thus, you are advised to open new short positions with targets at the support levels 1.2188 and 1.2130 (they will be revised in the morning) if a new MACD sell signal is generated, which should be discharged to zero before that. Also, a rebound from the upper border of the descending channel can be considered as a sell signal. On the chart: Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now. Up/down arrows show where you should sell or buy after reaching or breaking through particular levels. The MACD indicator (14,22,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines). Important announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 10 Jan 2021 03:49 AM PST GBP/USD - 24H. The GBP/USD currency pair fell by 90 points during the first trading week of this year. That is, a downward correction has begun, which looks like a correction. More like a rollback. Such pullbacks in the pound sterling occur regularly, each time in recent months after they resumed the upward trend. The upward trend continues at this time, even though there are a lot of unresolved problems in the UK. A trade agreement with the European Union has been agreed upon, so the economic losses of the bloc and the Kingdom will be less than they could have been. But they will still be there. In particular, this applies to the UK's services sector and its financial sector, which accounts for a large part of GDP. But traders continue to stubbornly ignore all these factors. Moreover, all macroeconomic statistics continue to be ignored. Thus, it is still extremely difficult to understand why the British pound as a whole continues to rise in price against the dollar. The most interesting thing is that nothing disastrous and disappointing is happening now in the States. Thus, it cannot be concluded that the problem is in the fundamental background of America. The COT report. During the last reporting week (December 29-January 4), the GBP/USD pair increased by 120 points. The pound continues to maintain a steady upward trend. And the latest COT report, which was released this Friday, again showed minimal changes. Professional traders opened about 1 thousand contracts for buying and 1 thousand contracts for selling during the New Year's week. Thus, the net position for the "Non-commercial" group of traders has not changed at all. There is no point in considering changes for other groups of traders, as they are also insignificant. Thus, for several weeks in a row, non-profit traders are extremely cautious about the pound, trying to trade it at a minimum. This is also supported by the fact that the total number of contracts for the pound in the "Non-commercial" group is only 85 thousand (for comparison with the euro 340 thousand). The first indicator shows that the mood of major traders has not changed much in recent weeks. If earlier the green and red lines regularly changed the direction of movement, crossed, moved away, or converged, now they are directed sideways. But even this factor does not prevent the British pound from continuing to rise in price. We conclude that everything now depends on the demand for the US dollar. As for the conclusions on the COT report itself, there are none. The entire fundamental background for the GBP/USD pair this week was reduced to the fact that the third "lockdown" began in the UK due to an excessively strong increase in cases of "coronavirus" and, in particular, a new strain of "coronavirus", which is 50-70% more contagious than usual. Thus, the country is closed for the third time for total quarantine. However, for market participants, this news meant little. The pound did not fall down but slightly corrected. There was simply no other important news for the British currency. We continue to draw traders' attention to the fact that the fundamental background and macroeconomic statistics continue to be ignored. On Friday, the failed report on nonfarm Payrolls was supposed to create serious pressure on the US dollar. But there was no such thing. As we have already discussed above, there is also no pressure on the pound due to the growing number of new cases of COVID-2019 every day (68,000 Britons fell ill on January 8). Thus, it is still possible to pay attention only to technical factors. In recent weeks, both the euro and the pound have often formed false signals. However, there is nothing to do. Either trade on the "technique" or do not trade at all. There is little hope that something will change in the near future, and the markets will once again take into account the fundamental background and "macroeconomics". However, we remind you that you need to trade strictly according to the trend, although the factors for strengthening the pound sterling still need to be sought out. Trading plan for the week of December 11-15: 1) The price retains the upward trend without any problems and barely began to adjust. Thus, in the 24-hour timeframe, the target for an upward movement remains at the level of 1.3851. We recommend that you continue to consider options for opening long positions on the higher timeframe as long as the price is above the critical line, and do not try to guess the end of the upward trend. 2) Sellers are still quite weak. This week, the bears tried to seize the initiative, but it ended with only a minimal pullback. Thus, for the possibility of opening short positions, it is now recommended to wait again, at least, for the price to consolidate below the critical line. If this condition is met, a downward trend may form in the 4-hour timeframe. Explanation of the illustrations: Price levels of support and resistance (resistance/support) – target levels when opening purchases or sales. You can place Take Profit levels near them. Ichimoku indicators, Bollinger Bands, MACD. Support and resistance areas – areas from which the price has repeatedly bounced. Indicator 1 on the COT charts – the net position size of each category of traders. Indicator 2 on the COT charts – the net position size for the "Non-commercial" group. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 09 Jan 2021 11:52 PM PST EUR/USD - 24H. During the past week, the EUR/USD pair again updated 2.5-year highs and began a new round of downward correction at the end of the week. At the same time, as before, this downward movement is very difficult to call a correction, rather a rollback. Recall that the euro/dollar pair has been growing for 2 months without any serious corrections and managed to rise in price by 700 points during this time, which is not so small for it. Thus, another sluggish pullback down can be completed very quickly. The resumption of the upward trend. Unfortunately for logic and common sense, the euro/dollar pair continues to move in the most confusing and groundless way. That is, there seems to be a fundamental background, there are macroeconomic reports, however, the pair is trading exactly the opposite, as it should be trading. Thus, a price rebound from the critical Kijun-sen line may trigger a resumption of the upward trend. The COT report. During the last reporting week (December 29-January 4), the EUR/USD pair increased by 55 points. Again, minimal price changes, however, the euro/dollar pair has been moving steadily up in recent weeks. Even though the pair rises or falls by no more than 100 points per week, the upward trend remains strong and stable. However, the changes shown by the latest COT report are also minimal. During the reporting week, a group of Non-commercial traders opened 2 thousand buy orders and 3 thousand sell orders. Thus, formally, the net position has decreased, and the mood of professional traders has become more "bearish". However, this is only formal, because the total number of contracts opened by non-commercial traders exceeds 340 thousand. Thus, opening/closing 2-3 thousand contracts is nothing. Moreover, the strengthening of the "bearish" mood now also means little, because COT reports signal demand for the euro currency. They do not take into account the demand for the US dollar. Thus, a few months ago, when the net position steadily decreased (as can be seen from the second indicator), the demand for the euro among major traders decreased. However, the dollar's demand may decrease, so with a visible drop in the interest of major traders in the euro currency, it was still growing. An unpleasant moment. In the last few weeks, changes in the COT reports are such that no conclusions can be drawn at all. If earlier the green and red lines of the first indicator converge or diverge, now they are simply directed sideways, signaling the absence of changes. The entire fundamental background of the past week applied only to the States. In the European Union, nothing interesting happened. It should immediately be noted that when Donald Trump provoked an attack on the Capitol, and the last two Democratic senators took their seats from the state of Georgia and it turned out that all power in the country over the next four years will be concentrated in the hands of Democrats, the US dollar continued to fall calmly. And it was logical, the events are still important and not in favor of the dollar. Trump's actions were condemned by the whole world, at least 4 people were killed. However, it is still very difficult to explain why the dollar continues to fall in principle. We have repeatedly noted that the US economy looks stronger and more stable than the European one. Therefore, paired with the euro, it is the dollar that should grow. However, investors (and primarily large investors) have their own opinion on this matter, so the US dollar continues to decline. The most ridiculous and paradoxical thing happened on Friday. On this day, the European Union became aware of a decrease in the unemployment rate to 8.3%, and in the States, there were reports on nonfarm Payrolls and average wages with the unemployment rate. In the first place in terms of importance, of course, were nonfarm Payrolls and they completely failed. Instead of the projected +70-100 thousand new jobs created outside the agricultural sector, in reality, the indicator decreased by 140 thousand jobs. The unemployment rate remained unchanged, and wages rose slightly stronger than expected. But in general, the package of macroeconomic statistics from overseas can be called a failure. Therefore, on Friday, the dollar rose by 60 points. Trading plan for the week of January 11-15: 1) The pair's quotes have started another pullback from 2.5-year highs, however, the upward trend remains. Even though the COT reports and the fundamental background continue to signal a possible and very likely fall in the pair's quotes and the baselessness of the current growth, the trend persists. "Technique" now continues to signal an upward trend, so it is recommended to trade for an increase in the current timeframe. 2) To be able to sell the EUR/USD pair, you need to at least wait for the price to consolidate below the Kijun-sen lines. But even in this case, there is no guarantee that a downward trend will start. Recall that in recent weeks and even months, technical signals for the beginning of a downward trend have been formed several times, and each time they turned out to be false. Thus, despite the high values of the euro exchange rate, we recommend that you be careful about sales, although they are very attractive now, and the euro currency will not be able to grow forever. Explanation of the illustrations: Price levels of support and resistance (resistance/support) – target levels when opening purchases or sales. You can place Take Profit levels near them. Ichimoku indicators, Bollinger Bands, MACD. Support and resistance areas – areas from which the price has repeatedly bounced. Indicator 1 on the COT charts – the net position size of each category of traders. Indicator 2 on the COT charts – the net position size for the "Non-commercial" group. The material has been provided by InstaForex Company - www.instaforex.com |
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