Forex analysis review

Forex analysis review

Forecast for AUD/USD on January 6, 2021

Posted: 05 Jan 2021 07:04 PM PST

AUD/USD

On Tuesday, the Australian dollar, as well as other major currencies, slightly strengthened on the news of an increase in the official exchange rate of the yuan to 6.4760. This helped the "Australian" to work out the target level of 0.7770, which it failed to reach the previous two days, and now it is turning down from it.

analytics5ff5256bdd761.jpg

The price formed a double divergence with the Marlin oscillator. The signal line of the oscillator once again turns from the upper boundary of its own channel. Fixing the price below the level of 0.7641 will coincide with the exit of the marlin signal line from the channel down. This will strengthen the bears' position in the Australian currency.

analytics5ff52575c3dde.jpg

A divergence quickly formed (not confirmed) on the four-hour chart. Now, there are even stronger conditions for a price reversal and a short-term (so far) decline with a target of 0.7465.

The material has been provided by InstaForex Company - www.instaforex.com

Overview of the GBP/USD pair. January 6. Scotland and Northern Ireland will seek secession from the United Kingdom. The third

Posted: 05 Jan 2021 05:52 PM PST

4-hour timeframe

analytics5ff4feb044a85.jpg

Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - sideways.

CCI: 47.2026

The British pound, paired with the US currency, continues to trade near 2.5-year highs. Thus, so far, we can not even conclude the correction. What we saw on January 5, pulls the maximum on the rollback. The pair went down about 100 points. Thus, the upward movement can be resumed at any time. The technical picture suggests that the upward trend continues. Market participants simply continue to ignore all the really important factors and continue to buy the pound sterling. Of course, there is a possibility that it is not ordinary traders who make purchases of the British currency, which leads to its serious strengthening. No one canceled the actions of major players, central banks, as well as the Fed itself, which quite legitimately pumps the economy with freshly printed dollars. Thus, although we consider the current strengthening of the pound to be speculative and completely unfounded, there is no denying the presence of a strong upward trend. Therefore, you need to continue to trade according to the trend, and not against it.

Even though the pound sterling continues to rise in price and you can even conclude based on this growth that everything is fine in the UK, not all experts and publications believe that this is the case. In reality, we have not yet encountered the view that Britain will have a happy and majestic future outside the EU. Unless, of course, you count the opinion of Boris Johnson. Many world experts, economists, and political scientists believe that the British economy will continue to feel the consequences of Brexit for a long time. Well, I don't even want to talk about a pandemic. It is in the UK that the third lockdown is being introduced. However, in addition to those reasons that lie on the surface, there are also more hidden and not obvious factors. For example, geopolitical ones. We have repeatedly talked about Scotland in the last year, which has firmly set out to secede from the United Kingdom. Needless to say, the losses of London associated with Brexit may seem like flowers compared to the possible loss of Scotland. On May 6, elections will be held in Scotland, as a result of which the strength and influence of the Scottish National Party can be strengthened in Parliament. Its head Nicola Sturgeon, who is the country's first minister, believes that she must return the country to the EU. Sturgeon has repeatedly said that the people of Scotland did not choose to leave the EU, this choice was imposed on them by London. Thus, the main slogan of the election program of Sturgeon and her party considers a return to the EU and exit from the UK. According to Sturgeon, for 50 years, Scotland has benefited from close cooperation with the European Union, in particular from freedom of movement and more than 230 thousand people across Europe have made Scotland their home. "Scotland doesn't want that to change," says Sturgeon. Also, the First Minister of Scotland said that Edinburgh intends to get the right to a referendum legally and legitimately. It's true, without official permission from London, it is impossible. However, only recent years have repeatedly shown and proved that everything is possible. The referendum has become fashionable in the last decade and a lot of geopolitical issues are solved with the help of a referendum. Thus, Edinburgh may also try to hold a not-quite-legal referendum. And if its results show that the majority of the country's citizens are "for" leaving Britain, then Sturgeon will have a very significant trump card in negotiations with London. So far, the last referendum, by the way, sanctioned by London, held in 2014, showed that the majority of Scots do not want to leave Britain. And this is now the main trump card of London in the negotiations.

Also, many experts believe that attempts to separate from England will be carried out by Northern Ireland. Maybe not right now, maybe in a few years. The problem is that Northern Ireland will always be drawn to Ireland, which has remained in the EU. No matter how friendly and "soft" the border on the island of Ireland is, it is still a border. On the island of Ireland, there was a confrontation or even a war for decades, which was only extinguished in 1998 thanks to the Belfast Agreement. Many experts believe that the tension on the island will now increase again.

So no matter how hard we try to find the factors that will help Britain "get off its knees", we can't do it. No matter which way you look, Britain may face new challenges everywhere, and it has already faced some. Thus, if we consider the prospects for the British pound purely from an economic and geopolitical point of view, then nothing rosy is still visible. Nevertheless, the pound continues to grow and does so very confidently. Market participants continue to ignore the fact that the British economy will almost certainly contract in the fourth quarter of 2020 and the first quarter of 2021, unlike the American one. This is already indicated by official GDP forecasts for the specified period. According to forecasts, the British economy will lose 2% in the fourth quarter, and 2.6% in the first quarter. The US economy is forecast to grow by 3.4% in the fourth quarter and 1.5% in the first quarter. But even this comparison is now not taken into account by traders. The US dollar can't even adjust normally. Thus, "technique" now remains a priority for traders.

analytics5ff4fed348aa6.jpg

The average volatility of the GBP/USD pair is currently 109 points per day. For the pound/dollar pair, this value is "high". On Wednesday, January 6, thus, we expect movement inside the channel, limited by the levels of 1.3511 and 1.3729. The reversal of the Heiken Ashi indicator downwards signals a new round of downward movement within the "swing".

Nearest support levels:

S1 – 1.3611

S2 – 1.3550

S3 – 1.3489

Nearest resistance levels:

R1 – 1.3672

R2 – 1.3733

R3 – 1.3794

Trading recommendations:

The GBP/USD pair on the 4-hour timeframe is now in a new round of upward movement after a rebound from the moving average. Thus, today it is recommended to stay in long positions with targets of 1.3672 and 1.3733 until the Heiken Ashi indicator turns down. It is recommended to trade the pair down again with the targets of 1.3550 and 1.3511 if the price is fixed below the moving average line. In general, the pair is now continuing to "swing".

The material has been provided by InstaForex Company - www.instaforex.com

Overview of the EUR/USD pair. January 6. Trump again "got involved" in a scandal.

Posted: 05 Jan 2021 05:52 PM PST

4-hour timeframe

analytics5ff4fe6fa4d18.jpg

Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - upward.

CCI: 109.9299

The EUR/USD currency pair traded extremely calmly on Tuesday, January 5. Although the pair's quotes continue to remain near local, and at the same time 2.5-year highs, market participants show amazing calm. The quotes tried to start a downward correction twice, and the pair bounced back up twice, unable to even really overcome the moving average line. Thus, at the moment, we can make an unambiguous conclusion about the continuation of the upward trend. Even if the price is fixed below the moving average, this will not mean a change in the trend, since in recent weeks the price has repeatedly overcome the moving average, after which the upward movement has resumed each time. Thus, the current technical picture speaks in favor of continuing the upward movement.

Fundamental events in the first days of the new year were frankly few. Perhaps all the attention of the markets is now again shifted to the States, as well as Donald Trump. Even though no one doubts that Joe Biden will officially become president on January 20, Trump continues to attract attention with his statements and actions. For example, Trump wants to reconsider the results of the vote in Georgia, where he lost by a narrow margin. And again "surfaced" a telephone conversation between Trump and the state authorities, in which the former demanded to find him the missing number of votes. Allegedly, a recording of the conversation by the US president was published in The Washington Post. Presumably, Trump had a conversation with Georgia Secretary of State Brad Raffensperger. Trump's pressure on the Secretary of State is audible in the conversation. Trump offered to recount the votes and find 11,780 missing votes, since "he won the state". Trump said that the people of Georgia are angry, and his defeat in the state is impossible. Also, the US president (presumably) said that this is a criminal offense and it is a big risk for the Secretary of State and his lawyer. Notably, Trump himself tweeted that he had a conversation with Raffensperger about election fraud in Georgia. According to Trump, the Secretary of State failed to answer his questions regarding "elections under the table", the destruction of ballots, "dead" voters. Raffensperger himself called Trump's accusations empty and false. The White House did not comment on the recording of the conversation. However, with a high degree of probability, the person who conducts the conversation on the tape is Donald Trump. Recall that last year, Donald was already caught in a similar attempt to exert pressure. However, then it was about the Ukrainian President Zelensky, and Trump did not deny the existence of the conversation and its content. Democrats simply believed that Trump was blackmailing the Ukrainian president with military aid to initiate an investigation into Joe Biden's activities in Ukraine. So putting pressure on the Georgia Secretary of State is Trump – style. However, it is unlikely that there will be any evidence, and it is unlikely that a trial will be initiated on this matter. As we have already said, few people in the United States believe that Trump will be able to turn the election results around by some miracle. Thus, almost none of the Democrats are worried that Joe Biden will become President of the United States on January 20.

By the way, many high-ranking officials in the United States oppose Trump and have previously spoken out. Simply put, Trump does not currently have the level of support to try to turn the outcome of the election around. All courts reject the claims of his team, the US president does not present any evidence of his rightness. Therefore, it is now extremely difficult for him to attract someone else to his side. Moreover, many openly speak out against Trump. For example, 10 former US defense ministers issued a statement calling on the Pentagon not to interfere in politics, clearly hinting at possible instructions from Trump to interfere in the process of transferring power to Joe Biden. The statement says that the elections have taken place and are completely legitimate, all the necessary checks that the president demanded have been completed, it has been repeatedly proved that there was no election fraud, and all errors in the vote count were identified and corrected. Thus, the former heads of the Pentagon believe that the time has come for the announcement of the official election result by the electoral colleges. After that, the Lower House of Congress and the Senate must officially approve the new president of the country. Former ministers have also warned that anyone who gives illegal orders or executes them will face criminal liability. They called on the Ministry of Defense to refrain from any "political action".

Thus, we will witness interesting events in the States for another couple of weeks. There is no doubt that during this time, Trump will remain the number one figure in the media space. Already, there is information that on January 6, when the electoral college will have to officially publish the results of the vote, a protest rally will be held in Washington. More than 100 Republican congressmen intend to vote against Joe Biden and demand a review of the election results. However, these forces are not enough for Republicans, since the House of Representatives is controlled by Democrats. Thus, the block won't even reach the Senate. However, in the Senate, nothing worthwhile for Trump and his company will shine. For such an important and fateful decision as blocking the transfer of power, given the fact that Trump has not presented any evidence of election violations, at least 2/3 of the Senate must vote "yes". There is no simple majority. In the Senate, the Republicans have the advantage, but minimal. It is impossible to imagine that any of the Democrats will vote "for" this proposal. So all of Trump's activity now is nothing more than waving his fists after a fight. Meanwhile, the third "wave" of the "coronavirus" has begun in the United States. Every day, 300,000 new cases are recorded. However, at the same time, the US authorities continue to focus on the beginning of the vaccination procedure of the population, keeping silent about the fact that it will take at least a year to vaccinate about 300 million people. Thus, the US dollar, which has fallen in price in recent months, may continue to do so, although there are still few reasons for this. The economy in the United States is now stronger than in the EU and feels much better. "Coronavirus" in Europe has not been canceled, only Europeans are also actively introducing "lockdowns" at home, unlike the Americans. We continue to believe that, from a fundamental point of view, the growth of the US dollar is more logical. But, from a technical point of view, we continue to signal an upward trend and recommend trading on the trend, not against it.

analytics5ff4fe7a80f16.jpg

The volatility of the euro/dollar currency pair as of January 6 is 73 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.2227 and 1.2373. A reversal of the Heiken Ashi indicator down may signal a new round of downward movement.

Nearest support levels:

S1 – 1.2268

S2 – 1.2207

S3 – 1.2146

Nearest resistance levels:

R1 – 1.2329

Trading recommendations:

The EUR/USD pair has started a new round of upward movement. Thus, today it is recommended to hold open long positions with targets of 1.2329 and 1.2373 as long as the Heiken Ashi indicator is directed upwards. It is recommended to open new sell orders if the pair is fixed below the moving average with targets of 1.2227 and 1.2207.

The material has been provided by InstaForex Company - www.instaforex.com

Analytics and trading signals for beginners. How to trade GBP/USD on January 6? Analysis of Tuesday. Getting ready for Wednesday

Posted: 05 Jan 2021 01:51 PM PST

Hourly chart of the GBP/USD pair

analytics5ff4c03f68257.jpg

The GBP/USD pair began a new round of upward movement on Tuesday, January 5. We would like to remind you that earlier, like the euro, the pound settled below the trend line, so the trend for the pair changed to a downward one. However, a strong sell signal from MACD was not created. We advised you to consider trading down. The signal from the indicator was created, but it was below the zero level, that is, the MACD did not have time to discharge. This signal was weak and should not be used to open short positions. No other signals were created during the day. Since the price has not yet surpassed the 2.5-year highs, which are located at 1.3703, the downward trend is formally preserved. Thus, we still advise you to consider sell orders. At the moment, the MACD indicator has been discharged enough. Another thing is that the signal can appear at night. In this case, it will be quite problematic to work it out. Also, the price may rise to the 1.3703 level, then the chances for bringing back the upward trend will significantly increase.

Fundamentally, things remain bad for the pound. A third lockdown was announced in Great Britain and, of course, it will affect the British economy. Thus, we expect the GDP to fall. On the other hand, this does not matter for the pound. The British currency both rose in price and continues to increase in price, not paying attention to the fundamental background or macroeconomic reports. Market participants continue to sell off the dollar, although there is simply no visible and compelling reason for this. Nevertheless, this is the reality now and novice traders should understand it.

The UK PMI is scheduled to be published on Wednesday, and the US Federal Reserve Minutes will be published in the evening. As a rule, no fundamentally new information is contained in the minutes. Most likely, it will be the same this time. Both events are unlikely to provoke any market reaction. Thus, technical factors and signals will be prioritized.

Possible scenarios for January 6:

1) Buy orders have lost their relevance, since the pair's quotes have settled below the upward trend line. Thus, in order to be able to consider long positions, you should wait for a new upward trend or the end of the downward trend. This scenario is not expected until Wednesday morning.

2) Selling is relevant now as traders have broken the upward trend line. Thus, at this time you are advised to monitor a new sell signal from MACD. The indicator is already sufficiently discharged and is able to generate a strong signal. The main thing is that, as usual, the upward movement does not resume. In this case, the sell signal may be false. Aim for the support level of 1.3503.

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

Analytics and trading signals for beginners. How to trade EUR/USD on January 6? Analysis of Tuesday. Getting ready for Wednesday

Posted: 05 Jan 2021 01:51 PM PST

Hourly chart of the EUR/USD pair

analytics5ff4aa8c9d0d6.jpg

The EUR/USD pair was moving up on Tuesday, and it rose to the 1.2309 level, which is the peak for the last 2.5 years. Thus, with a high degree of probability, the EUR/USD pair will reach this level again. If the quote rebounds from it again, then a new round of the downward movement may begin. If it surpasses the level, the upward trend will resume. Let us remind you that earlier, the pair's quotes settled below the rising trend line, which, according to all the canons of technical analysis, means that the trend has changed to the opposite. But in practice, we see a different picture. The pair's quotes have the highest chances for a new round of upward movement. Thus, until the quote surpasses the 1.2309 level, there are still chances for a new round of downward movement, which can even be worked out, but in general, the chances of a new downward trend are quite low right now. In our morning review, we advised you to sell the pair on a new sell signal from MACD. Such a signal was generated, but it turned out to be false, so novice traders could lose about 15 points. It is okay, it happens. Now you need to wait for new signals and strictly adhere to the trading strategy.

No important macroeconomic reports were released in the EU and the US on Tuesday. At least not a single one that would affect the movement of the euro/dollar pair. The ISM PMI in the US manufacturing sector exceeded the forecasted values, but did you see the dollar increase by at least a couple of dozen points today? The dollar rose by 20 points at the very beginning of the US trading session, but can such a movement be called growth at all? No other important reports and news today.

On Wednesday, January 6, you can pay attention to the EU's index of business activity in the services sector, meanwhile, in the US, look into the minutes of the last Federal Reserve meeting, which will be published late in the evening. However, both events have a rather formal character and there is a 90% probability that they will not provoke any reaction. From the PMI, we can only understand how bad things are in the EU services sector after a month of quarantine. The worse things are, the more chances for the economy to contract in the fourth quarter. However, the euro does not really need support now. Its growth is likely to continue no matter what.

Possible scenarios on January 6:

1) Long positions are not relevant at the moment, since quotes have settled below the trend line, and the previous local highs have not yet been updated. Thus, in order to be able to re-consider buying the pair, you need to wait for a new upward trend or until the quote settles above the 1.2309 level following the results of the next hourly candle. In this case, you are advised to trade bullish with targets at the resistance levels of 1.2342 and 1.2374.

2) Trading for a fall still looks more appropriate. You are advised to open new short positions while aiming for 1.2263 and 1.2216 on a new sell signal from MACD (if the price remains below 1.2309) or in case of a rebound from 1.2309. Formally, a downward trend has been created, but in fact the price is only 10 points from the 2.5-year highs. Therefore, the probability of bringing back the upward trend is very high.

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

Pound is expected to collapse soon

Posted: 05 Jan 2021 09:11 AM PST

analytics5ff496c651158.jpg

GBP / USD remains afloat in the market, but is trading below the price levels reached in the previous sessions. The new restrictive measures imposed by the UK government was the main reason for this, and the optimism brought by the Brexit trade deal did not help either.

As a result, today, GBP / USD was trading at 1.35, and there are severals factors that point to a possibility that the quote will drop to 1.34 in the coming sessions. There is even a high chance that it would collapse even deeper.

analytics5ff496b166d8e.jpg

Firstly, a decline is inevitable amid an economic lockdown, which the UK is currently facing because of the rapid and persistent spread of COVID-19. Many are even concerned that the UK health system would collapse in just three weeks.

These restrictive measures worsen investor sentiment, therefore, many project that the UK economy will shrink by about 10% soon.

Another factor is the uncertainty surrounding the UK's financial services sector, which accounts for about 7% of the country's economy. The new Brexit deal does not regulate relations in this direction, so many expect that the Bank of England will resort to softer policies in the future. In particular, they expect a drop in base interest rates, which increases pessimism around the British currency.

Therefore, yesterday, the GBP / USD pair traded in a bearish pattern, and in six hours, the quote dropped by more than 1.5%. The fall preceded Boris Johnson's announcement, but after the prime minister introduced a national lockdown, the pound began to recover in the charts.

However, many view this slight upward move as only temporary, and they expect the pound to continue declining soon. It seems that traders are no longer optimistic about the currency's outlook.

The material has been provided by InstaForex Company - www.instaforex.com

Evening review on EUR/USD for January 5, 2020

Posted: 05 Jan 2021 08:04 AM PST

analytics5ff48d20932e6.jpg

EURUSD - The US ISM Industrial Index for December was released registering 60.7% which is significantly better than the forecast.

The oil turned sharply upward.

You may keep buying from 1.2190.

Turn down from 1.2210.

The material has been provided by InstaForex Company - www.instaforex.com

January 5, 2021 : EUR/USD daily technical review and trade recommendations.

Posted: 05 Jan 2021 08:01 AM PST

analytics5ff48bd03b79e.jpg

By the end of November, Signs of BUYING Pressure have been initiated around the depicted price zone of 1.1800-1.1840.

Shortly after, the EUR/USD pair has demonstrated a quick upside movement.The pair has targeted the price levels around 1.1990 initially which exerted considerable bearish pressure bringing the pair back towards 1.1920 which constituted a temporary KEY-Zone for the EUR/USD pair.

That's why, another episode of upside movement was expressed towards 1.2160 where a false breakout above the price level of 1.2200 was regarded as a considerable bearish reversal signal.

Two weeks ago, a short-term reversal pattern has been demonstrated around 1.2265. Intraday downside retracement to the downside was expected to occur.

However, the EUR/USD pair has failed to pursue towards lower price levels. Instead, the pair has spiked above the depicted Weekly HIGH around 1.2270 before the current bearish rejection was initiated around 1.2300.

Bearish closure below the mentioned price zone of 1.2200 - 1.2170 is needed to turn the intermediate outlook for the pair into bearish and enhance a quick bearish decline towards 1.2040 then 1.1920.

Trade Recommendations :-

Conservative traders can be looking look for SELL Positions anywhere around the price levels of 1.2300.

Stop Loss should be placed above 1.2350 while Target levels should be located around 1.2200, 1.2170 then 1.2120.

The material has been provided by InstaForex Company - www.instaforex.com

January 5, 2021 : EUR/USD Intraday technical analysis and trade recommendations.

Posted: 05 Jan 2021 07:59 AM PST

analytics5ff48be4dbda1.jpg

The EURUSD pair was trapped below the previous key-level (1.2000) until bullish breakout occured to the upside recently in December.

Further quick bullish advancement was expressed towards 1.2150 just as expected after failing to find sufficient bearish pressure at retesting of the backside of the broken channel around 1.1970-1.2000 which corresponds roughly to Fibonacci Level of 0%.

Recently, the pair looked overbought while approaching the price levels of 1.2250 (138% Fibonacci Level).That's why, conservative traders were advised to look either for SELL Positions or low risk BUY trades around lower price levels.

Bearish closure and persistence below 1.2160 then 1.2000 is needed to abort the ongoing bullish momentum to initiate a bearish movement at least towards 1.1860 and 1.1770.

Otherwise, the intermediate-outlook for the pair would remain bullish at least towards 1.2330 where 150% Fibonacci Level is located. This is where an Intraday SELL Entry may be offered.

The price zone around 1.2000-1.1975 remains a Demand Zone to offer bullish SUPPORT for the EURUSD pair if any bearish pullback occurs.

The material has been provided by InstaForex Company - www.instaforex.com

January 5, 2021 : GBP/USD Intraday technical analysis and trade recommendations.

Posted: 05 Jan 2021 07:57 AM PST

analytics5ff48bdb55c2d.jpg

In December, the price levels of (1.3380-1.3400) have prevented further bullish movement for a few weeks.Bearish target was projected towards1.3300. However, the pair has failed to pursue towards lower targets.

Instead, a bullish spike was expressed towards 1.3480-1.3500 where the upper limit of the depicted movement channel has previously provided temporary bearish pressure on the pair.

Shortly after, another bullish spike has recently been demonstrated towards 1.3600 where the upper limit applied considerable bearish rejection again.Recently, the GBPUSD pair looked overbought while consolidating above the key-level of 1.3400.

As expected, bearish reversal was recently initiated around 1.3600. A quick bearish decline was demonstrated towards 1.3200.

Intermediate-term outlook could turn into bearish if only the EUR/USD pair could maintain movement below 1.3400.

However, the pair has failed to maintain bearish decline below 1.3200.Instead, bullish persistence above 1.3400 invalidated the bearish scenario for the short-term.

Another temporary bullish movement is being expressed towards 1.3700 (the channel's upper limit) where bearish rejection and a possible SELL Entry can be anticipated.

The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD. RMB records, US Senate by-elections, and "coronavirus anchor"

Posted: 05 Jan 2021 07:04 AM PST

The euro-dollar pair is trading within the 22nd figure amid a conflicting fundamental background. On Monday, buyers made a cautious attempt to storm the 23rd price level, but as soon as the price surpassed the 1.2300 mark, the pair fell under a wave of sales, after which it fell by almost 100 points. Nevertheless, the EUR/USD bears were unable to seize the initiative, so the upward trend is still in force.

In the kaleidoscope of recent events, several fundamental factors can be identified that determine the current dynamics of dollar pairs, and most importantly, will determine in the medium term.

Let's start with China. The unexpected correction of the USD/CNY pair provided some support for Asian currencies (primarily the Australian dollar), and this fact stimulated a broader greenback sell-off. The US dollar index returned to the 90th mark, reflecting the skeptical attitude of the market to the US national currency.

analytics5ff476af97590.jpg

It is worth noting that the Chinese yuan started the new year with a powerful spurt, rising to a 31-month high against the US dollar. During Tuesday's Asian session, the yuan was trading at 6.429 – its strongest level since June 2018. The Chinese currency rose by almost 1.5% in the first trading days of this year, while last year it strengthened by 6.27%. The downward momentum of USD/CNY has developed after overcoming last year's resistance level of 6.52. According to economists surveyed by Bloomberg, such dynamics are due to the recovery of the Chinese economy, the double deficit of the United States (a record current account deficit in the United States combined with a growing budget deficit), and the dovish rhetoric of the Fed. During its recent meeting, the US regulator clarified that it will not rush to curtail large-scale incentives even if the main parameters of the US economy grow steadily.

According to experts, the Chinese yuan will continue to strengthen (and the dollar will continue to lose its position) - if the Democrats take control of the Upper House of Congress following the results of the by-elections to the Senate. Let me remind you that at the moment, representatives of the Democratic Party control the House of Representatives (the Lower House of Congress), while the White House will soon be headed by Democratic leader Joe Biden. Now it is vital for the Democratic camp to take the Senate. In this case, they will hit the jackpot: Biden will be able to carry out structural reforms without looking back at the wishes of Republicans, who at the moment can block legislative initiatives in the Upper House of Congress.

That is why all attention today is focused on the state of Georgia, where the second round of elections to the Senate will come to an end during the American session, the outcome of which depends on who will control it – Democrats or Republicans.

Georgia fills the last two vacant seats: if at least one of the Republicans is re-elected, the current balance in Congress will remain (i.e., the Upper House will be controlled by the Republican Party, the Lower - by the Democratic Party). Otherwise, the Democrats will get full power: they will be able to freely promote many of their initiatives, which are opposed by Republicans. If this scenario is implemented, the dollar will be under additional pressure against the background of the likely growth of the stock market and a decrease in the yield of treasuries. In addition, if the Democrats win, the probability of a political crisis caused by the behavior of Trump, who still does not intend to admit his defeat in the election, considering Biden illegitimate, will decrease.

According to American journalists, the state of Georgia is considered the fiefdom of the Republicans, while representatives of the Democratic Party have not won there for several decades. On the other hand, the situation is ambiguous. The presidential election showed that this state can already be attributed to the status of "vacillating". Therefore, the intrigue regarding the election results (counting of votes will begin today) remains.

analytics5ff476a0cc72a.jpg

Against the background of all the above events, the dollar index shows a downward trend: traders do not risk investing in the US currency. However, buyers of EUR/USD are not in a hurry to use the vulnerability of the greenback. The coronavirus is to blame, which acts as an anchor for the pair quotes. Despite the start of the vaccination process in Europe, the epidemiological situation in key EU countries remains severe. For this reason, for example, Germany decided to extend the lockdown until the end of January. Similar decisions were taken, in particular, by Italy and Greece. Such trends do not allow EUR/USD bulls to develop an upward trend, despite the vulnerability of the US dollar.

Given the current fundamental picture, longs can be considered only for "short distances" - from the current levels to the upper line of the Bollinger Bands indicator on the daily chart (i.e., to the mark of 1.2320), which acts as the main resistance level. Despite the "coronavirus anchors" the pair's sales are now riskier, as the greenback's position is still extremely weak. Even if the Republicans win in Georgia, the EUR/USD bears will receive only temporary support: the price decline can be used as a reason to open longs.

The material has been provided by InstaForex Company - www.instaforex.com

Bitcoin exchange rate may soar to $90,000

Posted: 05 Jan 2021 06:54 AM PST

analytics5ff45b30820b4.jpg

Bitcoin kicked off this year on a grand scale. According to the Binance exchange, on the first day of the new year, the bitcoin exchange rate rose to $29,600, on the second day to $33,300, and by the third day of January, it has already overcome the level of $34,000. In just three days, the growth of the cryptocurrency was 17%.

However, by January 4, the quotes fell by almost 16%, to $29,180. Despite this, the cryptocurrency did not greatly disappoint investors who believed in it and ended yesterday's trading with an insignificant decline, losing only 2.8% and falling to $32,000.

Today, bitcoin was initially trading in the red zone, but at the time of writing this article, it moved to growth, adding 4.5%, and eventually traded near the $31,590 mark.

hZgFybGO7ekcxmcvvETx4DqWT05jC1yeArETXlz3

Many experts predict that in 2021, the bitcoin exchange rate may well soar to $90,000.

Rosenberg Research strategist and part-time former Merrill Lynch economist David Rosenberg believes that, at the moment, we are witnessing a bloated bubble in both the cryptocurrency market and the stock market. Such active trading with a weakened economy cannot lead to anything good. Rosenberg believes that some assets today are highly overvalued, at least by 20-30% on a number of different indicators. And the biggest bubble, according to the expert, is the most popular cryptocurrency – bitcoin.

This incredibly rapid growth of the digital currency in a short period (just a few months) may not be normal. But despite this verdict, the Rosenberg Research strategist is confident that as long as interest rates remain at the lowest possible level, the bubble formed in the markets will not burst. Low rates and budget incentives encourage investors to invest in various alternative assets, including cryptocurrencies.

At the same time, David Rosenberg advises investors to pay special attention to the assets of the utilities and energy sectors in the coming year. Rosenberg called gold the most reliable asset, explaining that this precious metal is five times less volatile than bitcoin.

The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD Price Analysis for January 5, 2020

Posted: 05 Jan 2021 06:36 AM PST

  • EUR/USD keeps the bid note despite faltering around 1.2300.
  • Above 1.2300 comes in monthly peaks at 1.2413 and 1.2476.

analytics5ff477ea794c3.jpg

EUR/USD is trading above 1.2250, up on the day as markets eagerly await Georgia's special elections that determine control of the Senate. Concerns about the new covid variant and vaccine deployment are also moving markets.

EUR/USD keeps the bullish stance unchanged despite the recent move up run out of steam in the 1.2300 neighbourhood.The euro currency has been consolidating near the rising trend line over the past few days.While price action was making modestly higher highs, the pace of gains was gradual. The slowing momentum has led to a decline off the trendline consolidation

The bias in EUR/USD, therefore, remains unaltered and allows for the continuation of the current leg higher in the short-term horizon. However, the proximity of the overbought territory carries the potential to spark occasional corrections. These are expected to meet initial support at the weekly low at 1.2129.

In the meantime, a breakout of recent tops just above 1.2300 should pave the way for extra gains as well as a potential move to 1.2413 (April 2018 high) ahead of 1.2476 (March 2018 high).

The material has been provided by InstaForex Company - www.instaforex.com

Analysis of GBP/USD on January 5. In the UK, a new "lockdown" is being introduced. The Briton is in no hurry to start falling

Posted: 05 Jan 2021 06:12 AM PST

analytics5ff4700de37fb.jpg

The section of the trend, which originates on September 23, took a five-wave fully equipped form. However, the wave marking can be complicated any number of times. The increase in the quotes of the instrument continues, so the expected wave 5-5 can also take a five-wave form. If this assumption is correct, then the increase in quotes will continue with targets located up to the 40th figure.

analytics5ff4701413b8f.jpg

On the lower chart, wave marking also suffered certain changes. The assumed wave 5 has already taken a more extended form, and if the current wave marking is correct, then wave 3-5 is currently being built. An unsuccessful attempt to break through the 127.2% Fibonacci level indicates a possible construction of an internal correction wave, however, the entire wave picture has not yet taken a complete form. Thus, I expect a successful attempt to break through the 37th figure and continue to increase the pound/dollar instrument.

Recent years for the UK are associated with setbacks and disappointments. Brexit and the preparations for it have already sucked quite a lot of blood out of the UK's circulatory system. The Kingdom's economy is weakened by Brexit and a pandemic. And as soon as positive news finally appeared for the country (a trade deal with the European Union), fate struck a new blow. This time, a new strain of COVID-2019 was discovered in the UK, which is 50-70% more contagious, and the number of diseases jumped immediately from 20,000 per day to 60,000. Thus, the government led by Boris Johnson simply had no other choice but to introduce a new quarantine, which begins to operate today. In the UK, schools, all shops that do not sell necessities, universities, cafes, gyms, and so on are being closed from today. Britons are only allowed to leave the house for 1 hour a day to buy food or exercise. The introduction of a new "lockdown" was recommended by the chief health officer of England, Chris Whitty, as "if this is not done now, the National Health Service will be under great pressure". "Our hospitals are under the greatest pressure because of the coronavirus since the beginning of the pandemic," said British Prime Minister Boris Johnson. Thus, in the next 6 weeks, England will be closed for quarantine, which is unlikely to have a positive impact on its economy. I expect it to be reduced again. Consequently, the British may also be under market pressure. However, unfortunately, the demand for the American dollar remains extremely low, which can once again save the pound from a completely natural decline.

General conclusions and recommendations:

The pound/dollar instrument resumed the construction of an upward trend section. Thus, I currently recommend buying the pound/dollar instrument after a successful attempt to break through the 37th figure with targets located near the 40th figure, within the expected wave 3,5,5 of the upward trend section. You can also buy the British dollar on the new signals of the MACD "up". But still, it should be understood that the upward section of the trend cannot be extended indefinitely. And the closer it gets to completion, the more dangerous it is to buy the pound.

The material has been provided by InstaForex Company - www.instaforex.com

Trading Signal for GBP/USD for January 05 - 06, 2021: Inverted Pennant

Posted: 05 Jan 2021 05:28 AM PST

The GBP / USD pair at the opening of the American session, is trading below the SMA of 21, after yesterday's correction the pair is consolidating below this level, if it remains below this moving average, we could expect a move down to Murray's 6/8 zone at 1.3427.

In the 4-hour chart in the GBP / USD pair we notice a technical formation of an inverted pennant, which is a bearish continuation pattern, which if it breaks the low of yesterday could occur a fall to the area of 1.3427, and continue further down to the 1.3305 area of Murray 5/8.

The eagle indicator on the 4-hour chart is giving a bearish signal, which supports the technical pattern mentioned above, therefore our recommendation is to sell below 1.3585.

Conversely, if GBP / USD trades above 1.3615 again, our bearish outlook would be invalidated and there could be a bullish move to 1.3723.

The market sentiment for today January 5 shows a figure of 55% of operators that are selling this pair, which adds a favorable perspective that a bearish movement of GBP / USD could occur in the short term.

Support And Resistance Levels For January 05-06, 2021

Resistance (1) 1.3603

Resistance (2) 1.3745

Resistance (3) 1.3828

Support (1) 1.3503

Support (2) 1.3440

Support (3) 1.3341

analytics5ff46961dd7b2.jpg

Trading tip for GBP/USD for January 05-06, 2021

Sell below 1.3585 (SMA of 21) with take profit at 1.3427, stop loss above 1.3625.

Buy if rebound around EMA 200 at 1.3415, with take profit 1.3549 and 1.3670, stop loss below 1.3375.

The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of Gold

Posted: 05 Jan 2021 05:26 AM PST

As we mentioned yesterday Gold price broke above key resistance. This was a major bullish signal and we expect Gold price to continue higher towards $1,980-$2,000 area.

analytics5ff46852af700.jpg

Red line - support trend line

Horizontal red lines - Fibonacci extensions

Gold price is making higher highs. Bulls are targeting $1,980 area and as long as price is above the red support trend line we remain bullish. Support is at $1,890. Bulls are in full control of the trend as long as price is above this level. Resistance is now found at $1,950 and next at $1,980. Gold is in a short-term bullish trend. The November low is a key low for the medium-term trend.

The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of EURUSD

Posted: 05 Jan 2021 05:15 AM PST

EURUSD continues to trade above the key trend line support and remains in a bullish trend. As long as price is above 1.2230 short-term trend will remain bullish.

analytics5ff465e38be2e.jpg

Red line - bearish divergence

Blue line - support trend line

EURUSD is respecting so far the blue support trend line. We remain bullish short-term as long as price is above it. The red lines show the bearish RSI divergence. This is important warning for bulls and should not be ignored. This is not a bearish reversal signal, but if it is combined with a break below 1.22 then we should expect more downside and selling pressure to increase. This could lead to a move towards 1.21-1.2070 at least. If price continues to respect the blue trend line, we should soon see 1.2350 target achieved.

The material has been provided by InstaForex Company - www.instaforex.com

Trading Signal for EUR/USD for January 05 - 06, 2021: Strong Resistance at 1.2308

Posted: 05 Jan 2021 05:14 AM PST

At the opening of the American market we noticed that the EUR / USD pair is moving above the 21 SMA, and the 200 EMA on the 1 hour chart, the eagle indicator is giving a slight bullish signal in the short term.

The EUR / USD pair remains bullish, supported by additional fiscal stimulus from the Fed and the ECB. Furthermore, real interest rates continue to favor the euro area versus the US, which is also another factor supporting the euro in the medium term.

There is strong resistance in the 1.2308 area, this level the euro has tried to break twice (leaving a double top) and has failed, above this level a definitive break, we would expect the pair to make a maximum at 1.2354.

On the other hand, the SMA of 21 is located at 1.2260, if the euro remains above this level for the next few hours our recommendation is that you can buy the EUR / USD pair with targets at 1.2308.

On the contrary, a break of the 200 EMA that is at 1.2240, will give us a good opportunity to sell the EUR / USD, because it would mean a break of the uptrend channel and we could take advantage of the fall to the zone of 1.2207 there is the 8/8 of Murray and the 7/8 of Murray in 1.2146.

Market sentiment for today January 5, shows a figure of 62% compared to yesterday, we have noticed a slight decrease, which implies that the euro will not have much bullish strength above 1.23, so we could expect sales opportunities in the short term.

Support And Resistance Levels For January 05-06, 2021

Resistance (1) 1.2295

Resistance (2) 1.2345

Resistance (3) 1.2368

Support (1) 1.2237

Support (2) 1.2212

Support (3) 1.2165

analytics5ff4652abd279.jpg

Trading tip for EUR/USD for January 05-06, 2021

Buy if rebound SMA 21 at 1.2265, with take profit at 1.2308 and 1.2354, stop loss below 1.2230.

Buy if rebound at 1.2240, with take profit 1.2308 and 1.2354, stop loss below 1.2205.

Sell bellow 1.2235 ( EMA 200) with take profit at 1.2207 and 1.2146 (7/8), Stop loss above 1.2270.

The material has been provided by InstaForex Company - www.instaforex.com

USDJPY continues lower but with warning signs for bears

Posted: 05 Jan 2021 05:11 AM PST

USDJPY has reached finally our target of 103 and now is trading below it. Trend remains bearish as price continues making lower lows and lower highs.

analytics5ff464f185c0b.jpg

Red lines - wedge pattern

USDJPY is forming a downward sloping wedge pattern. The upper boundary resistance is at 104 while the lower boundary is at 102.60. As per our past analysis posted in the end of November, our target has been achieved so now we would like to lower or short exposure and we would change to neutral if not bullish if price breaks above 104.

The material has been provided by InstaForex Company - www.instaforex.com

Oil prices fall amid possible lockdowns and uncertainty over OPEC+ deal

Posted: 05 Jan 2021 04:58 AM PST

On Tuesday, global oil prices are steadily sliding down amid concerns about quarantine restrictions aimed at combating the COVID-19 pandemic.

analytics5ff4622762c2f.jpg

So, on the London ICE Futures Exchange, Brent oil futures for March decreased by 0.41% to $50.88 per barrel. At the close of trading on Monday, they sank by 1.4% to $51.09 per barrel.

On the New York Mercantile Exchange, WTI oil futures for February fell by 0.44% to $47.41 per barrel. On the first trading day of 2021, these futures lost 1.9%. They were estimated at $47.62 per barrel.

analytics5ff4623bb1e18.jpg

Market participants fear that the re-introduction of lockdowns around the world to contain the spread of the new strain of coronavirus will slow down the process of getting back to normal. If this scenario comes true, demand for oil is likely to be sluggish.

In addition, investors are looking forward to the continuation of the meeting of OPEC + members, postponed to Tuesday evening. Yesterday, after a break in the meeting, such a proposal was received simultaneously from the Minister of Energy of Azerbaijan and the Minister of Saudi Arabia.

At the same time, at the beginning of the meeting on Monday, two opposing proposals were on the negotiating table. The first party recommended to increasing oil production in February by 500,000 barrels per day, while the second one suggested keeping it at the January level.

Earlier, only two countries, Russia and Kazakhstan, voted for an increase in production by 0.5 million b/d since February, while all other countries supported the extension of the current level.

Following the December meeting, the alliance agreed on a systematic increase in oil output, which fell drastically in 2020. OPEC+ countries were planning to enhance oil production by a maximum of 500,000 barrels per day from January 1 of this year. The ministers agreed to meet monthly to be able to respond quickly to any market changes.

.

The material has been provided by InstaForex Company - www.instaforex.com

BTC analysis for January 05,.2021 - Potential completion of the ABC correction and test of $33.750

Posted: 05 Jan 2021 04:17 AM PST

Further Development

analytics5ff458a328c90.jpg

Analyzing the current trading chart of BTC, I found that there is potential for the ABC downside correction to complete.

Key Levels:

Resistance: $32,835, $33,748 and $34,770.

Support level: $30,000

The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD analysis for January 05 2021 - Pottential for the uspide swing towards 1.2300-1.2340

Posted: 05 Jan 2021 04:11 AM PST

Is inflation ready to make a comeback?

Morgan Stanley seems to think so

The reflation/inflation theme is going to be a key topic for the market this year but the big question remains, is it really coming back? Well, at least Morgan Stanley says it is.

The firm argues that US core PCE inflation will overshoot 2% this cycle, highlighting that the divergence in their view from the consensus being the assumption surrounding strength of private sector risk appetite.

"Our views on inflation, as on growth, are more bullish than the consensus. Since 3 April 2020, we have argued that a V-shaped recovery in growth would unfold and in May 2020, we warned that inflation will make a return this cycle. Since then, our conviction has only increased. Our GDP growth forecast of 5.9% y/y for the US in 2021 is significantly above consensus estimates at 3.9% y/y. We see US core PCE inflation ending the year at 2% y/y and staying above 2% on a sustained basis from 2022. In contrast, the consensus sees it reaching 2% over a longer timeframe and is skeptical that inflation will exceed 2% for a sustained period."

There's going to be a lot of debate on this matter but if there's one side of the camp that has been wrong more often than not in recent years, it is the inflationistas.

Further Development

analytics5ff456f61fc56.jpg

Analyzing the current trading chart of EUR/USD, I found that EUR got potential for the another upside swing.

1-Day relative strength performance Finviz

Based on the graph above I found that on the top of the list we got Natural Gas and Platinum today and on the bottom Ethanol and Feeder Cattle.

Key Levels:

Resistance: 1,2300 and 1,2340

Support level: 1,2240

The material has been provided by InstaForex Company - www.instaforex.com

Analysis of Gold for January 05,.2021 - Stonng upside momentum and potential test of our major target at $1.960

Posted: 05 Jan 2021 04:05 AM PST

UK's Sunak: Will set out next stage of economic response in March

Comments by UK finance minister, Rishi Sunak

  • March budget will be excellent opportunity to take stock
  • Will lay out next steps on virus support measures at March budget

This follows the earlier announcement of additional grants totaling £4.6 billion to aid businesses amid the third national lockdown in the UK.

Just keep in mind the timing, as the UK likes to coordinate efforts between the government and the central bank - so this could lend to some possibility of the BOE acting as well.

For now though, the money market has fully priced in a 10 bps rate cut by the BOE by August as compared to November previously last week. The timeframe in which implied rates turn negative has moved up to May as compared to June previously though.

analytics5ff455a8758bb.jpg

Further Development

analytics5ff455b212170.jpg

Analyzing the current trading chart of Gold, I found that the Gold is heading to test our major targets at the price of $1,960 and $1,965.

1-Day relative strength performance Finviz

analytics5ff455bce23a5.jpg

Based on the graph above I found that on the top of the list we got Natural Gas and Platinum today and on the bottom Ethanol and Feeder Cattle.

Key Levels:

Resistance: $1,960

Support level: $1,948 (previous day high)

The material has been provided by InstaForex Company - www.instaforex.com

US stock markets closed the first trading of 2021 with a steady decline

Posted: 05 Jan 2021 04:02 AM PST

analytics5ff4550c87f0f.jpg

The US stock indices declined by 1.3-1.5% during the first trading day of the new year.

In particular, the S&P 500 broad market index lost 1.48% and showed 3700.65 points. The industrial Dow Jones Industrial Average also fell by 1.25%, that was, to 30223.89 points, while NASDAQ declined by 1.47%, namely to 12698.45 points.

analytics5ff4625a9b5c4.jpg

Stock indicators reported negative dynamics, despite investors' quite optimistic mood in anticipation of an early global economic recovery after the COVID-19 pandemic. Market participants hope that economic activity will increase this year following the massive vaccination of the population and the continuation of operation of large enterprises. However, they are well aware that with all this, the path to a complete economic recovery will be long and difficult.

The latest news about the situation with coronavirus around the world is not encouraging either. So, the number of cases in the United States broke another anti-record on Sunday. At the same time, the authorities in many European countries are extending the terms of quarantine restrictions, which aims to slow down the spread of virus.

In addition, experts have increasingly expressed their concern in recent years about the rising tension amid the results of the second round of elections to the US Senate in Georgia. The results of the vote will show whether the Republicans are able to retain control of the Senate. Many investors believe that the probability of a Republican Party victory has decreased, and there is a tense struggle for Senate seats from day to day.

Now, let's return to the indicators of the US stock markets and find out how the first trading session of 2021 ended for them.

Coca-Cola shares declined by 3.8%. RBC Capital Markets downgraded their rating from "above sector" to "on par with sector". Experts explain this by the fact that public events and consumer visits to restaurants will continue to decline due to the coronavirus pandemic, which will significantly limit the demand for Coca-Cola products.

Airline securities affected by COVID-19 also saw a decline on the first business day of the year. Thus, American Airlines shares lost 4.1%, and Delta Air Lines securities lost 3.7%.

At the same time, quotes of hotel chain operators fell under the general wave of negativity: Hilton Worldwide Holdings fell by 3.4%, followed by Marriott International by 5.4%.

The American manufacturer of electric cars Tesla, on the contrary, grew by 3.4%. Company representatives reported that they delivered a record 499,550 cars in the previous year, almost reaching the target level of 500,000 units.

In view of large-scale sale of shares, gold's price rose by 2.7% – $ 1,944.70 per troy ounce. This figure was the most significant percentage increase since April 2020.

Toward the end of trading, the pan-European Stoxx Europe 600 rose by 0.7% and partially reduced the growth observed at the beginning of the session.

Britain's FTSE 100 also surged by 1.7%. It is clear that the market was supported by the trade agreement between the UK and the EU, which was concluded at the end of last year.

An additional reason for investors' optimism was the latest data on the state of the manufacturing sector. According to current information, factories in Asia and Europe in December 2020 increased production volumes and showed an impressive increase in activity.

On another note, strong growth was reported on Asia-Pacific stock market. South Korea's Kospi Composite led the ranking of the strongest indexes, rising almost by 2.5%.

By the end of the trading session, the Shanghai Composite increased by 0.9%, despite the latest data that China's manufacturing activity in December declined amid falling demand for exports from the country.

Experts note that this information confirms the continuing fragility of China's economy. However, it also reduces concerns that the Central Bank of the People's Republic of China will soon tighten monetary policy, which will most likely choose a more cautious tactic in the current situation.

Unfortunately, Japan's Nikkei 225 significantly fell behind the rest of the leading Asia-Pacific indices. It declined by 0.7% amid yen's strengthening. Analysts believe that the statement of the Japanese Prime Minister saying that the authorities are going to declare a state of emergency in Tokyo and surrounding areas due to the rising number of COVID-19 cases is a possible reason for this decline.

The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD Fights At Resistance!

Posted: 05 Jan 2021 03:53 AM PST

EUR/USD is trading in the green on the H4 chart at 1.2285. Technically, the pair has shown overbought signs but is premature to go short as long as the rate stays in the buyer's territory.

Euro has received a helping hand from the German Retail Sales which have registered a 1.9% growth in November even if the specialists have expected to see a 2,0% drop. Also, the German Unemployment Change remained in the negative territory at -37K, versus -40K in the former reading period. The traders have expected an increase to 10K.

You should keep an eye on the economic calendar as the US is to release its ISM Manufacturing PMI, ISM Manufacturing Prices, and the Wards Total Vehicle Sales figures later today. The economic data could bring life on EUR/USD.

EUR/USD Bearish Divergence!

analytics5ff452f1a382b.jpg

EUR/USD is trapped between the inside sliding parallel line (sl) and the outside sliding line (sl1). It has reached the R1 (1.2291) level again after failing to retest the Pivot Point (1.2234) and the sliding line (sl) in the most recent attempt.

Is trapped also between 1.2309 and 1.2214 level, so only a valid breakout from this range could bring us a great trading opportunity. EUR/USD has failed to reach and retest the outside sliding line (sl1) in the last attempts signaling exhausted buyers.

EUR/USD Trading Tips!

Buy a valid breakout above the 1.2309 level and use the 1.24 as a first upside target.

Sell a bearish closure under the 1.2214 level and use the S3 (1.2029) level as a downside target.

The material has been provided by InstaForex Company - www.instaforex.com
Posted by: at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)