Forex analysis review |
- Forecast and trading signals for GBP/USD on January 7. COT report. Analysis of Wednesday. Recommendations for Thursday
- Forecast and trading signals for EUR/USD on January 7. COT report. Analysis of Wednesday. Recommendations for Thursday
- Overview of the GBP/USD pair. January 7. The paradoxical US dollar continues to trade according to its own rules.
- Overview of the EUR/USD pair. January 7. Trump's last battle: what legacy will the current US president leave to the Republicans?
- Gold back tests break out area
- Ichimoku cloud analysis of NZDUSD
- EURUSD continues inside the bullish channel
- January 6, 2021 : EUR/USD daily technical review and trade recommendations.
- OPEC reached an agreement, but the World Bank still has a rather low economic forecasts
- January 6, 2021 : GBP/USD Intraday technical analysis and trade recommendations.
- January 6, 2021 : EUR/USD Intraday technical analysis and trade recommendations.
- Elections in Georgia: dollar prepares to break down another support
- Trading Signal for GBP/USD for January 06 - 07, 2021: Sell below 1.3671
- The GBP/USD pair retreated around 100 pips from daily swing highs.
- EUR/USD Price Analysis for 6 January 2021
- Trading Signal for EUR/USD for January 06 - 08, 2021: Key Level 1.2329
- BTC analysis for January 06,.2021 - Confirmed completion of the ABC correction and potential for test $36.600
- Analysis of Gold for January 06,.2021 - Upside target at $1959 has been reached and potenttial for the next upside target
- Trading idea for gold
- EUR/USD analysis for January 06 2021 - First upside ttarget at 1.2345 reached and potential for second at 1.2420
- Trading idea for the GBP/USD pair
- Forecast for GBP/USD, January 6. Donald Trump loses control and support. Traders not scared by possible third lockdown in
- Analysis of EUR/USD for January 6. Georgia could bring triumph to Democrats. Things to clear up in nearest days
- EUR/USD. Senate election in Georgia continues
- Gold kicks off new year with a surge
| Posted: 06 Jan 2021 07:14 PM PST GBP/USD 15M The higher linear regression channel turned to the upside on the 15-minute timeframe, while the lower one turned downward. And so, a new downward trend has started in the short term, but it may be extremely short-lived. By and large, the price continues to revolve around the critical line and around 2.5 year highs. GBP/USD 1H The GBP/USD pair initially jumped on Wednesday, then it fell, which is very similar to the EUR/USD pair's movement. Also, as in the case of the EUR/USD pair, one might say that the 1.3606-1.3626 resistance area has lost its relevance, because the quotes overcame it several times yesterday. Thus, as in the case of the euro, the pound's situation is confusing and current movements are extremely difficult to work out. An upward trend seems to exist and is clearly visible, but the signals are often false or there are none at all. Important lines and support/resistance levels do not have the desired impact on the price. Thus, we recommend that traders, first of all, conduct extremely cautious trading, since, given the specifics of the market, it is possible to get quite high losses. A new downward channel even managed to appear yesterday. But it does not clarify the current picture. One could count on a rebound from the Kijun-sen line, but the quotes also crossed this line several times on Wednesday. Thus, you need to wait for strong signals and only focus on them now. COT report The GBP/USD pair fell by 15 points during the last reporting week (December 22-28). Despite the fact that around 300 points were passed from low to high during these four trading days. Thus, first of all, we can conclude that the upward trend is still present for the pound. Secondly, there are minimal price changes. A new Commitment of Traders (COT) report showed that professional traders closed both Buy (longs) and Sell (shorts) contracts. In general, there are minimal changes in the number of open/closed contracts for large traders on the pound in recent months. During the reporting week, a group of non-commercial traders closed 1,640 Buy-contracts and 296 Sell-contracts. Thus, this group of traders became a little more bearish. We can clearly see what is happening among large traders through the two indicators in the chart. The first shows regular changes in the direction of movement of the green and red lines for at least four months. That is, to put it simply, professional traders cannot decide what to do in the long term. We are increasingly inclined to believe that it is not the pound that is getting more expensive, but that the dollar is getting cheaper. Thus, almost everything depends on the demand for the dollar, and not on the actions of large traders on the pound or euro. The second indicator shows that the net position has become bullish for professional traders, but has stopped growing. Thus, according to the latest COT report, we can conclude that non-commercial traders are not too eager for new purchases of the pound. The fundamentals for the British currency have been extremely weak recently. The news about the new lockdown should have knocked down the pound, but market participants continue to confidently ignore all the negative information coming from the UK. Although the third lockdown will clearly not pass without leaving a trace for the British economy, which is already going through hard times because of Brexit. Actually, this is exactly what the British service business index testifies to, which fell to 49.4 in December, indicating a reduction in the service sector, which suffers the most from any kind of quarantines. Bank of England Governor Andrew Bailey did not tell the markets anything very important during his speech on Wednesday. Only minor reports are scheduled for release in the UK on Thursday, like the PMI for the construction sector. More interesting publications will come from the United States, where the index of business activity for the ISM services sector will be announced (however, we do not expect it to fall below 50.0), as well as the number of primary and secondary applications for unemployment benefits. This report will allow us to conclude whether the unemployment in the United States continues to decline? In general, America can now boast of stronger macroeconomic reports. But the dollar cannot yet receive any dividends from this. We have two trading ideas for January 7: 1) Buyers of the pound/dollar pair did not stay above the trend line, but at the same time they refuse to let the bears go even deeper. Thus, if buyers manage to get the pair above the new descending channel, then we recommend buying the pound again while aiming for the resistance level of 1.3753. Take Profit in this case will be up to 75 points. 2) Sellers seem to have seized the initiative in the market, but so far they cannot continue to fall, the price is constantly going back up. Thus, we recommend selling the pound/dollar pair while aiming for the support level of 1.3496 if the pair rebounds off the Kijun-sen line (1.3620) or the upper line of the descending channel. Take Profit in this case can be up to 100 points. Forecast and trading signals for EUR/USD Explanations for illustrations: 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. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the "non-commercial" group. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 06 Jan 2021 07:13 PM PST EUR/USD 15M Both linear regression channels are directed to the upside on the 15-minute timeframe, but this does not provide any clarity. As we mentioned above, the price ignores strong lines and generates false signals, therefore trading at this time is associated with increased risks. EUR/USD 1H The EUR/USD pair initially made a new round of upward movement, then downward, falling to the critical Kijun-sen line on the hourly timeframe on January 6. In general, nothing has changed over the past day. The resistance area of 1.2295 - 1.2311, which until recently had resisted the quotes, let the pair go above and below itself without any problems. Thus, the only thing that you can pay attention to now is the upward channel, global and long-term. But on the whole, the EUR/USD pair continues rather vague trading. Signals are often false or weak. Target levels are not always reached. In general, the pair is rising by 20-30 points. It will renew the 2.5-year high and retreat by 50-60 points. Such movements are extremely difficult to work out, since it seems that the trend persists, but at the same time all movements are inaccurate, not pronounced. We have already mentioned in our fundamental article that the quotes of the EUR/USD pair have grown by around 700 points over the past two months. If we divide these 700 points (there were no strong corrections during this time) by 44 working days (approximately), then it turns out that the pair rose by an average of 16 points per day. Formally there is a trend, but it is very inconvenient to work it out. COT report The EUR/USD pair fell by 30 points during the last reporting week (December 22-28). Minimal price changes, however, the EUR/USD pair has been steadily moving up in recent weeks, but at a slow pace. Thus, it was not necessary to hope for serious changes in the mood of professional traders. On the eve of the New Year, a group of non-commercial traders closed 57 Buy-contracts (longs) and opened 1,660 Sell-contracts (shorts). Thus, formally, their mood became more bearish, but in fact, the net position of this category of traders decreased by only 1,600 contracts. For comparison, the total number of contracts for this group of traders is 340,000. Thus, changes by 1,500 are scanty. In general, the bullish sentiment remains. A few weeks ago professional traders were actively reducing their net position and we concluded that a new downward trend was on the way. However, the demand for the dollar was so low in the foreign exchange market that the downward trend did not start for the euro, and non-commercial traders began to increase the number of longs again. For the last two weeks, no conclusions can be drawn at all about the change in their mood. Indicators also do not help much in this situation, since the changes are minimal. The green and red lines of the first indicator no longer move towards each other, but they are not moving away either. The second indicator shows that the net position of non-commercial traders decreased in the long term, but it is not significant and has stopped in the last month and a half. The European Union published an index of business activity in the service sector for December, which fell as expected, reaching 46.4. However, at that time the euro was facing a new round of upward movement. It retreated a little later on. When the weak news from overseas began to arrive. Like the ADP report on the change in the number of employees in the US private sector, which decreased by 123,000 in December, instead of the projected increase of 60,000. This is a very weak value of a fairly important indicator. The index of business activity in the US services sector also slightly decreased (55.3-54.8), but remained above the 50.0 level, so it could not have a particular negative impact on the dollar. However, the greenback was already growing at that time, so we can conclude that traders ignored the macroeconomic reports again. The European Union will publish the consumer price index for December on Thursday, January 7. According to analysts' forecasts, inflation will remain negative and reach -0.4% in annual terms. In addition, the retail sales in the EU, which are of lesser importance, will also be released. However, what difference does it make if the markets continue to stubbornly ignore any macroeconomic background? We have two trading ideas for January 7: 1) Buyers keep the initiative in their hands. They manage to keep the pair inside the rising channel, so chances of continuing the upward movement remain high. You are advised to open new long positions in case the price rebounds from the lower channel line, or from the Kijun-sen line (1.2282), or when the quote surpasses the 1.2295-1.2311 area, while aiming for the resistance level of 1.2365. Take Profit in this case can be up to 60 points. However, take note that the pair's movements are unstable. 2) Bears remain very weak at the moment and cannot settle below the rising channel. Thus, you are advised to open short positions if the bears manage to surpass the lower line of the rising channel while aiming for the support levels of 1.2162 and 1.2107, not earlier. Take Profit in this case can range from 40 to 100 points. Forecast and trading signals for GBP/USD Explanations for illustrations: 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. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the "non-commercial" group. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 06 Jan 2021 06:21 PM PST 4-hour timeframe
Technical details: Higher linear regression channel: direction - upward. Lower linear regression channel: direction - upward. Moving average (20; smoothed) - sideways. CCI: -12.1970 The British pound sterling paired with the US currency began another round of decline in trading on Wednesday, January 6. However, the "next fall" so far looks standard. It was after such turns of the downward movement that the pound/dollar pair then resumed the upward trend and updated the 2.5-year highs. Thus, for the time being, it is not necessary to make premature conclusions that the upward trend is complete. We have been expecting its completion for several months now simply because there is no fundamental reason for the pound to continue growing. Moreover, it is the pound sterling that now looks the weakest of the major currencies, the currency whose issuing country is experiencing serious economic problems. Even despite reaching an agreement on Brexit. The mode in which the pound is traded is still most similar to the "high-volatility swing". Thus, now the pair can easily go down 200-250 points, and then resume the upward trend. Meanwhile, the third "wave" of the pandemic is gaining momentum in the UK. On January 5, the next "coronavirus" anti-record was updated, during this day about 61,000 Britons were infected. The fact that the country has already introduced the third "lockdown", so far, does not affect the number of cases of the disease. The UK is now far ahead of countries such as France, Italy, Spain, Russia, and others in the number of new cases per day. Thus, it is the UK that is again suffering from the pandemic most severely among European countries. Recall that during the first "wave" it was in Britain that the largest number of deaths from the "coronavirus" was recorded, as well as one of the largest values of the number of infections. As we can see, in the second and third "waves", the situation does not change much, although the government had to conclude. However, although Boris Johnson is not afraid to introduce a new "lockdown", so far it is impossible to give him a high rating for the fight against COVID-2019. This means that dissatisfaction with his government will grow among the British. However, neither these problems nor economic ones put any pressure on the pound sterling. Even the fact that the British economy will shrink in the fourth quarter of 2020 and the first of 2021 does not frighten buyers of the British currency. Meanwhile, it can be assumed that the strengthening of the US dollar on Wednesday had reasons related to the States. Let's try to figure it out. Macroeconomic statistics from overseas were not in favor of the US currency. What else has happened in the US that the euro and the pound have fallen in sync over the past day? Only the news that the Democrats can win in Georgia and thus form a majority in the Senate. But since when does the dollar show growth on the news about the strengthening of the Democrats' positions in the government? Recall that for the last 2 months, the Democrats have only been resting after winning the election. All this time, the American currency has been declining despite everything. And then suddenly it turns out that the Democrats can form a majority in the Senate and control the entire Congress and the White House and the dollar began to grow? Absurd. Thus, we believe that the pound and the euro on Wednesday fell banally for technical reasons. A banal rollback to buy more at a more favorable rate. The upward trend is still maintained and nothing can be done about it. Meanwhile, Britain has begun vaccinating the population against COVID-2019. It is reported that about 1.3 million people have been vaccinated throughout the country. It is also reported that more than half of this number was due to vaccinations of people over 80 years of age. This is good news, however, the pound began to fall. Thus, the positive news about the "coronavirus" and the fight against it has nothing to do with it. It should also be noted that most of the world's media continue to insist that Brexit will leave an indelible mark on Britain. We already wrote about Scotland and its possible exit from the EU yesterday. However, the issue of the island of Ireland is becoming more acute. Recall that the "hard" border between Ireland and Northern Ireland will not appear, however, when crossing the Irish Sea, many goods will be subject to customs checks. There will also certainly be some difficulties when crossing the EU border with the UK. Simply put, the Northern Ireland border. Thus, many experts expect a serious deterioration in the mood in the Foggy Albion. So far, only Wales has shown no concerns. From a technical point of view, the upward trend persists and this is signaled by both linear regression channels. Also, the pair can not yet go much below the moving average line. Thus, even the consolidation of quotes below the moving average does not guarantee a strong decline, although we expect it within the "highly volatile swing". However, the movement of the pound now defies logic and analysis, so you need to be ready for absolutely any scenario. Perhaps it is better to use lower timeframes in trading now and try to filter out weak signals.
The average volatility of the GBP/USD pair is currently 120 points per day. For the pound/dollar pair, this value is "high". On Thursday, January 7, thus, we expect movement inside the channel, limited by the levels of 1.3484 and 1.3724. The reversal of the Heiken Ashi indicator to the top signals a new round of upward movement within the "swing". Nearest support levels: S1 – 1.3550 S2 – 1.3489 S3 – 1.3428 Nearest resistance levels: R1 – 1.3611 R2 – 1.3672 R3 – 1.3733 Trading recommendations: The GBP/USD pair on the 4-hour timeframe is now in a new round of downward movement. Thus, today it is recommended to open new long positions with targets of 1.3672 and 1.3724 if the price bounces off the moving average or the Heiken Ashi indicator turns up. It is recommended to trade the pair down again with the targets of 1.3489 and 1.3428 if the price is fixed below the level of 1.3550. In general, the pair is now continuing to "swing". The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 06 Jan 2021 06:21 PM PST 4-hour timeframe
Technical details: Higher linear regression channel: direction - upward. Lower linear regression channel: direction - upward. Moving average (20; smoothed) - upward. CCI: 90.8796 The EUR/USD currency pair on Wednesday, January 6, quietly continued its upward movement. Quotes have once again updated their 2.5-year highs and do not want to go far from them. Thus, the progressive upward movement is preserved. During almost the entire term of Donald Trump's presidency, we have criticized the actions and statements of the American president. All because his actions and statements were often devoid of any logic, sometimes absurd to the point of impossibility, and sometimes contrary to common sense. We have already written earlier that Donald Trump ran the country as his business. And managing a business empire and a country are different things. We will not now list all the failures of America over the past four years. It is only worth noting that most of the goals that Trump announced in 2016 were not achieved. From our point of view, the fact that Trump is leaving is fair. He did not return American production to the United States, his trade war with China did not bring the desired results, and China's position in the international arena only strengthened during the Trump era. Donald Trump himself suffered a crushing defeat in the election. The difference in the number of votes with Democrat Joe Biden is about 7 million. And this is quite a big difference. But the fact that Donald Trump will not be re-elected for a second term was clear even before the election. Biden's odds were up to 90%. And most importantly, Joe Biden did nothing supernatural to win the election. He simply drew the attention of the electorate to Trump's mistakes, while he seemed to be clean before the American nation. Republicans also failed to win back the Lower House of Congress in the same election. They strengthened their positions in it, however, they failed to achieve a majority. Thus, the president of the country will be a Democrat and the House of Representatives will be also controlled by Democrats. There is only one open question: who will control the Senate? At first glance, everything seemed obvious. At least until the day before yesterday, no one even discussed the election in the state of Georgia in which the first round of elections to the Senate did not reveal the winners. None of the 4 candidates received more than 50% of the vote. And on January 6, the second round of elections was held. And in the native Republican state, there is a trend of voting for Democrats. To understand the importance of the state of Georgia, it should be clearly understood that there are exactly 100 seats in the Senate. 50 seats have already been secured by Republicans, thus, a victory in Georgia for any Republican candidate will bring them control of the Senate as a consolation prize. However, Jona Ossoff and Raphael Warnock (both Democrats) were leading the vote yesterday. And if they win (although the margin of victory over their opponents from the Republican Party is minimal, so it is not yet a fact), then this will mean that the seats in the Senate will be divided in the proportion of 50/50. But that's not all! A 50/50 distribution of power in the Senate would mean victory for the Democrats. Because with any equality of votes, according to US law, the (future) US Vice President Kamala Harris will have a decisive vote. It's the same as if the Democrats had a majority in the Senate. Thus, Republicans could lose everything in the 2020 election. Thus, we can once again conclude how it is necessary or not necessary to lead the country. This is an object lesson to Boris Johnson, who resembles Trump in his manner of governing. Although Johnson is not a businessman like Trump, he often tries to negotiate from a position of strength and is guided by the principle of "either the way I want or nothing". However, Johnson still concedes at the end, which was proved by the trade deal concluded with the European Union. Without London's concessions, there would be no deal. Well, the US dollar, meanwhile, continues to almost free fall. No, the US currency does not lose 100 points a day. It decreases systematically. But this fall is stable and almost recoilless. We wrote about the absence of a tangible and proportionate correction a few months ago, when the euro/dollar pair was flat for about 4 months. Even then, it was clear that there was no demand for the US dollar. And it is absent to such an extent that the pair cannot even correct after a sufficiently strong upward movement. Now the dollar continues to fall from November 4 (very symbolic, because on November 3 there were elections). During this time, the pair "plowed" up 720 points. The maximum correction for these two months was 170 points and lasted for three days. And even though there were no visible reasons for the strengthening of the euro currency, yet the upward trend remains and trading should continue to increase. At least this is logical. As for the technical picture, both linear regression channels are directed upwards, as is the moving average line. No consolidation of the price below the moving average led to a significant drop in the pair. Thus, the upward trend is not in doubt.
The volatility of the euro/dollar currency pair as of January 7 is 76 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.2236 and 1.2388. A reversal of the Heiken Ashi indicator to the top can signal a new round of upward movement. Nearest support levels: S1 – 1.2207 S2 – 1.2085 S3 – 1.1963 Nearest resistance levels: R1 – 1.2329 R2 – 1.2451 R3 – 1.2573 Trading recommendations: The EUR/USD pair has started a new round of correction. Thus, today it is recommended to open new long positions with a target of 1.2388 if the Heiken Ashi indicator turns up or the price bounces off the moving average. It is recommended to open new sell orders if the pair is fixed below the moving average with targets of 1.2236 and 1.2207. The material has been provided by InstaForex Company - www.instaforex.com |
| Gold back tests break out area Posted: 06 Jan 2021 09:30 AM PST Gold price could not break above the $1,950 resistance and is now pulling back to back test the break out area. Previous resistance at $1,900 is now support. This back test could provide a bullish signal if price bounces off $1,900 and moves to higher highs, but could also prove that this break out was a fake one.
Red line - support trend line Blue rectangle- horizontal resistance Gold price is under pressure. After a sharp rally to $1,950, price is swiftly turning lower towards the break out area. Bulls remain in control of the trend as long as price holds above the red trend line support. A back test of the break out area and green trend line is not unusual price action. However after such a back test bulls will need to step in and provide a strong bounce off the support area. It is important to see where Gold price ends this week.
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| Ichimoku cloud analysis of NZDUSD Posted: 06 Jan 2021 09:23 AM PST NZDUSD is in a bullish trend. Price continues making higher highs and higher lows and now it has reached as high as 0.7310. Using the Ichimoku cloud indicator we see that price remains above the Kumo (cloud) and continues to respect the kijun-sen indicator.
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| EURUSD continues inside the bullish channel Posted: 06 Jan 2021 09:16 AM PST EURUSD today reached as high as 1.2348 inside our target area of 1.23-1.2350. Trend remains bullish as long as price is above 1.2250 and as long as price respects the lower channel boundary.
Green lines - bullish channel Price continues making higher highs and higher lows inside the green upward sloping channel. There is no sign of reversal yet and trend remains bullish. Our next target area is at 1.25 but we might need first to see a pull back towards 1.21-1.20. We do not want to go against the trend but also it is too risky to open longs at current levels. The RSI is not making higher highs as the price, so bulls need to be very cautious. A pull back is imminent. The material has been provided by InstaForex Company - www.instaforex.com |
| January 6, 2021 : EUR/USD daily technical review and trade recommendations. Posted: 06 Jan 2021 06:50 AM PST
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. Threeweeks 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 1.2350. Bearish closure below the mentioned price zone of 1.2250 - 1.2200 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 |
| OPEC reached an agreement, but the World Bank still has a rather low economic forecasts Posted: 06 Jan 2021 06:46 AM PST On Tuesday, January 5, OPEC reached an agreement, which is to retain the current production volume for the next two months, with the exception of Russia and Kazakhstan, as both countries will already begin increasing their output by a total of 75,000 bpd. This means that the cuts will be eased by 7.125 million bpd in February, and then by 7.05 million in March. Accordingly, in order to offset the increased supply, Saudi Arabia will decrease its output by 8.5 million barrels. And although the exact details of the deal are yet to be released, the price of oil has already begun to grow rapidly in the charts. Yesterday, it already reached the high recorded last February 2020. Most likely, the decision to reduce output was made by Saudi Arabia itself, amid news of the rapid spread of the new strain of coronavirus, as well as on the new quarantine measures in Europe. At the time of writing, the cost of March futures for Brent oil is at $ 53.99 per barrel, which is 1.14% higher than the closing price of the previous session. The next meeting of OPEC members is on March 4, while the meetings of its monitoring committee are scheduled for February 3 and March 3. Last May 2020, OPEC decided to decrease production by 9.7 million bpd. Then in August of the same year, the committee eased the cut and changed it to only 7.7 million bpd. For this month, OPEC set it to 7.2 million. The group said it would make decisions on oil production every month, all while assuring the public that it would depend on market conditions. However, they have a condition that it has to be no more than 500,000 bpd. But despite this news, the World Bank still released rather low economic forecasts for 2021. According to their report, the world economy will grow by 4%, but on the condition that COVID-19 vaccinations continue on a large scale throughout the 12 months. Last year, global GDP fell by 4.3%, which is less significant than the projected drop of 5.2%. This is good news since it means that the recession in the countries was not as deep as expected. In 2022, the World Bank expects the global economy to grow by 3.8%, mainly due to the rapid and large-scale introduction of vaccines. However, the short-term outlook is highly uncertain. In the worst case scenario, that is, with a continuing increase in COVID-19 incidence and delay in the widespread introduction of vaccines, economic growth will be limited to 1.6%. But looking at the future with optimism, the world economy has a chance of growing by up to 5%. The material has been provided by InstaForex Company - www.instaforex.com |
| January 6, 2021 : GBP/USD Intraday technical analysis and trade recommendations. Posted: 06 Jan 2021 06:44 AM PST
In December, the price levels of (1.3380-1.3400) have prevented further bullish movement for a few weeks.Bearish target was projected towards 1.3300. 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 |
| January 6, 2021 : EUR/USD Intraday technical analysis and trade recommendations. Posted: 06 Jan 2021 06:40 AM PST
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.However, the intermediate-outlook for the pair remained bullish towards 1.2330 where 150% Fibonacci Level is located. This is where an Intraday SELL Entry can be offered if sufficient bearish rejection is appliedThe 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 |
| Elections in Georgia: dollar prepares to break down another support Posted: 06 Jan 2021 06:12 AM PST In general, the markets were calm, but today's trading day in America and subsequent ones may stir up investors who are in post-holiday hibernation. It has already become known that the Democrats took one seat in the US Senate from Georgia and pulled ahead in the race for the second. Thus, they came closer to controlling the upper house. The Senate, controlled by the Democratic Party, will contribute to global economic growth, and therefore will be a positive event for risky assets. Against this background, the dollar will feel the negative dynamics, as the US budget and trade deficit will greatly increase. It is possible that the final results of the elections in Georgia will be known on Wednesday. However, given the rigidity of the calculation, the official results will be published later. Market players know from the presidential election in November that it may take several days to get a final result. Until there is clarity in the markets about the Georgia election, the dollar will not feel a strong momentum. As soon as the first bets on a particular scenario are placed, the general reaction of the players will follow, which means that we will see an impulse. Once again, the GOP victory is positive for the dollar, while the Democratic victory is negative. Some strategists assume a drop in the dollar if both Senate seats in Georgia go to Democrats. The dollar index on Wednesday morning trading fell to the lowest level since April 2018, at the opening of the US session, the downward trend continued. The greenback continues to aim for the 88.2 support level In addition, the dollar sank to a 6-year low against the Swiss franc, at 0.8760. The euro continues to take advantage of the weakness of the dollar. The main tandem of the Forex market is firmly entrenched in the area of the 23rd figure. Against the background of a further decline in the greenback, the euro is quite capable of conquering new heights. At the moment, it is assumed that the pair can reach the level of 1.28 by the end of the year. "We did not expect the Democrats to win this election. Now the weakness of the dollar, which is expected this year, will become more justified," analysts at MUFG wrote. Similar to the euro, the pound's growth at present is not due to its own strength, but due to the decline of the dollar. The GBP/USD pair managed to gain a foothold above 1.33. On Wednesday, trading was at 1.36, but everything is very shaky here. The pound can break down at any time upon the news of the next restrictions due to the coronavirus and the expectation of economic consequences.  |
| Trading Signal for GBP/USD for January 06 - 07, 2021: Sell below 1.3671 Posted: 06 Jan 2021 06:08 AM PST The momentum on the 4-hour chart for GBP / USD shows that the pair has failed to break the 8/8 Murray resistance at 1.3671 and is turning lower. We can also point out the area of the 21 SMA, which is located at 1.3627, this moving average continues to support and give the British pound an upward momentum, but a break or negotiation below this level, we could expect a fall of the pair to the Murray's 7/8 zone at 1.3549. Our recommendation is to sell below 1.3671, a zone of strong resistance, with targets up to the support of the SMA of 21, this level may give a technical upward rebound, if the pair breaks this zone, we will continue to sell until the EMA of 200 at 1.3427 . The eagle indicator gave a bearish signal 3 days ago, at this time it faces an overbought zone, which could support a correction of GBP / USD in the short term. The market sentiment for today January 6 shows a figure of 51% of operators who are selling the GBP / USD, this could be generating a probable correction or change in trend in the short term. Support And Resistance Levels For January 06-07, 2021 Resistance (1) 1.3692 Resistance (2) 1.3745 Resistance (3) 1.3844 Support (1) 1.3587 Support (2) 1.3517 Support (3) 1.3481
Trading tip for GBP/USD for January 06-07, 2021 Sell Now 1.3670/0 (8/8 of murray) with take profit at 1.3620 and 1.3549, stop loss above 1.3705 Sell if breaks 1.3625, (trend line) with take profit at 1.3549, stop above 1.3670. Sell if breaks 1.3549, (7/8) with take profit at 1.3427 (EMA 200), stop above 1.3595. The material has been provided by InstaForex Company - www.instaforex.com |
| The GBP/USD pair retreated around 100 pips from daily swing highs. Posted: 06 Jan 2021 06:03 AM PST
The GBP/USD pair retreated around 100 pips from daily swing highs and dropped to the 1.3560 neighbourhood in the last hour, albeit quickly recovered few pips thereafter. The pound witnessed some selling after the UK Prime Minister Boris Johnson said this Wednesday that the end of the lockdown will not be a big bang and that it will be a slow unravelling. All in all, cable has limited room to rise. Resistance is at the daily high of 1.3700 critical round figure mark, which is also the highest since 2018. Next resistance awaits at 1.3730 and 1.3810, levels last seen nearly three years ago. On the flip side ,key support resistance awaits at 1.3600, a swing high point around Christmas which coincides with an ascending trend-line support , followed by 1.3560 that supports the pair last week. Further down south , 1.344 awaits GBP/USD. The material has been provided by InstaForex Company - www.instaforex.com |
| EUR/USD Price Analysis for 6 January 2021 Posted: 06 Jan 2021 05:43 AM PST EUR/USD is trading just below 1.2350, the highest since 2018 as the safe-haven dollar is falling. Democrats are leading Georgia's special runoffs, opening the door to more fiscal stimulus.
The recent surge has placed momentum on the four-hour chart on positive ground while the Relative Strength Index is below 70 – outside overbought condition which is a bullish scenario for EUR/USD . Against this, EUR/USD is now expected to approach the 1.2400 mark in the short-term horizon. Further north of this hurdle aligns 1.2413 (April 2018 high) ahead of 1.2476 (March 2018 high). Support awaits at 1.2300, the former double top, followed by 1.2275, a high point in mid-December. Further down, 1.2240 and 1.2210 await EUR/USD. The material has been provided by InstaForex Company - www.instaforex.com |
| Trading Signal for EUR/USD for January 06 - 08, 2021: Key Level 1.2329 Posted: 06 Jan 2021 05:35 AM PST The EUR / USD pair, at the opening of the American session, is trading near the highs of 1.2347, the demand for the EURO is partly due to the downward force that pressures the US dollar, which has dragged the USDX Dollar Index to test the zone of the low of April 2018 around 89.12. Technically we notice that the EUR / USD, in daily charts, after having made a correction on Friday, is now with strong bullish momentum, however, the eagle indicator in the daily chart shows that it is in the overbought zone and could occur an imminent decline or correction in the short term. As the EUR / USD is facing resistance and overbought levels, our recommendation is to wait for a correction in the pair and then buy again, only if the pair trades below Murray's 5/8 below 1.2329, a decline to the 21 SMA area could occur. We can take advantage of this setback to sell, only if the pair trades below Murray's 5/8 below 1.2329, we can have short positions. The next support is located at the 4/8 of Murray around 1.2207, this level is important because at this point the SMA of 21 is located, if the pair breaks this area, we could consider a change in trend to bearish, with targets at 1.1962 in the medium term. On the other hand, the market sentiment for today January 6 shows that there are 66% of operators that are selling the EUR / USD pair, which remains unchanged, therefore a correction to the 1.2265 or 1.2215 area, will be good bounce areas to buy the Euro-dollar again. Support And Resistance Levels For January 06-08, 2021 Resistance (1) 1.2367 Resistance (2) 1.2383 Resistance (3) 1.2426 Support (1) 1.2315 Support (2) 1.2278 Support (3) 1.2237
Trading tip for EUR/USD for January 06-08, 2021 Sell bellow 1.2329 ( 5/8 of murray) with take profit at 1.2265 and 1.2215 (SMA 21), Stop loss above 1.2370 Buy if rebound at 1.2265 (trend line), with take profit 1.2345 and 1.2450, stop loss below 1.2230. Buy if rebound at 1.2215 (SMA 21), with take profit 1.2345 and 1.2450, stop loss below 1.2175. Sell if breaks below 1.2205 (4/8) with take profit at 1.2085 and 1.1962, stop above 1.2240. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 06 Jan 2021 04:56 AM PST Further Development
Analyzing the current trading chart of BTC, I found that there is completion of the ABC downside correction and that there is the chance for further upside continuation., Stochastic oscillator is in overbought zone so there is chance for the pullback first. Key Levels: Resistance: $36,600 and $41,675. Support level: $33,400 The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 06 Jan 2021 04:41 AM PST 
*data week ending 25 December A modest jump in mortgage activity but this owes more to refinancing than purchases. That said, purchase activity continues to keep at a solid level and that trend in the housing market is likely to continue as rates remain lower for the time being. Further Development Analyzing the current trading chart of Gold, I found that Gold tested our first upside target at $1,959 and that is probably heading towards the second target at $2,010. My advice is to watch for buying opportunities on the dips with the next target at $2,010.. Stochastic oscillator is in overbought zone so there is chance for the pullback first. 1-Day relative strength performance Finviz
Based on the graph above I found that on the top of the list we got Live Cattle and Rusell 2000 today and on the bottom Ethanol and Lumber. Gold is negative for today but I see no bigger reversal. Key Levels: Resistance: $1,959 and $2,010 Support level: $1,941 The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 06 Jan 2021 04:31 AM PST Gold has risen in price, more precisely by 540 pips. However, many traders have begun working for a fall, especially those who were inspired by the gap that occurred during the transition from 2020 to 2021. As a result, growth has stalled yesterday and today, and there is a key level ahead, at which the quote is likely to go. This is 1950 or the high reached last November. At the moment, there are 100 pips left before it, but the breakout itself can be volatile, so the quote may move by another 100 pips. Nonetheless, afterwards, a downward correction may begin, which many are counting on. Therefore, if you want the price to drop today, you should open short positions after a false breakout at 1950, not earlier. This follows the Price Action and Stop Hunting strategies. Of course, traders still need to control the risks to avoid losing money. Trading is very precarious, but also profitable as long as the right approach is used. Good luck! The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 06 Jan 2021 04:12 AM PST UK PM Johnson: The end of lockdown will not be a big bang, will be a slow unravelling Remarks by UK prime minister, Boris Johnson, in parliament
Johnson is largely trying to manage expectations as the UK sees a national lockdown until 15 February at the very least currently. There is plenty of talk that this could even extend all the way through to Easter, as the virus situation remains rather severe for now. Further Development
Analyzing the current trading chart of EUR/USD, I found that EUR tested our first upside target at 1,2345 and that is probably heading towards the second target at 1,2420. My advice is to watch for buying opportunities on the dips with the next target at 1,2420. Stochastic oscillator is in overbought zone but with the fresh bull cross, which is confirmation for the upside movement. 1-Day relative strength performance Finviz
Based on the graph above I found that on the top of the list we got Live Cattle and Rusell 2000 today and on the bottom Ethanol and Lumber. Key Levels: Resistance: 1,2400 Support level: 1,2310 The material has been provided by InstaForex Company - www.instaforex.com |
| Trading idea for the GBP/USD pair Posted: 06 Jan 2021 02:53 AM PST The conclusion of the Brexit trade deal led to a sharp rise in GBP / USD. In particular, it reached a price level of 1.37. But since the UK government decided to impose a national lockdown just recently, it would be best to short the pound, because in such a situation, a price decline is inevitable. In fact, the quotes have already formed three wave patterns (ABC), in which wave A is the movement observed last January 4. Considering that the market has pulled back above the 50% retracement level, short positions may be opened from the current prices, and the target may be set at 1.35400. Of course, traders have to monitor the risk to avoid losing money. Trading is very precarious, but also profitable as long as the right approach is used. The above strategy uses Price Action and Stop Hunting methods. Good luck! The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 06 Jan 2021 02:50 AM PST
The trend, which started on September 23, has taken a five-wave form. However, wave marking can be complicated many times. The pound sterling is growing. So, the expected fifth wave can also take a five-wave form. If this assumption is correct, then the quote will continue to rise. It may well approach the 40 figure.
On the chart, wave marking also underwent certain changes. Wave 5 has already taken a more extended form, and if the current wave marking is correct, then wave 3 in 5 is being built at this time. An unsuccessful attempt to break through the 127.2% Fibonacci level indicates a possible formation of an internal correction wave, but the entire wave pattern has not yet taken a complete form. Thus, I'm awaiting when the pair breaks through the 37 figure and continue to grow further. Investors suddenly shifted their attention from the UK to the US. The UK has long remained in the limelight. So, everyone is already used to the fact that news from there shapes the market sentiment. However, the Brexit agreement has been finally signed. Besides, the third wave of the epidemic with a new strain (more contagious) did not scare the markets and did not halt the rally of the pound sterling. Today or tomorrow, we will learn who will control the US Senate. At the moment, the votes are being counted in the state of Georgia, and it is quite possible that two Democrats will win, which will bring their total presence in the Senate to 50. And with Kamala Harris's decisive vote, it is the Democrats who will control the Senate. Yet, Republicans and Donald Trump are facing new challenges. The US president, who will remain in power for two weeks, continues to make attempts to stay in power. However, more and more officials are turning away from him. Not all Republican senators are now ready to support Trump's interests and fight for him. US Vice President Mike Pence said in a personal conversation with Trump that he does not have the authority to somehow influence the results of the election. As a result, both Trump and the Republicans may eventually suffer a crushing defeat. Over the next four years, Democrats can control all power in the country. Today the Governor of the Bank of England Andrew Bailey will deliver a speech. In the evening, the Fed will unveil the minutes of the last meeting. Investors are sure to take notice of these events. Besides, market participants are anticipating the ADP National Employment Report as well as the Services PMI data from the US and EU. Recommendations: The GPB/USD pair is likely to resume the upward movement. Thus, it is recommended to open long deals on this pair after it breaks through the 37 figure with targets located near the 40 figure, within the expected 3 in 5 in 5 wave of the uptrend section. You can also open long deals on the pair after the new signals of the MACD. However, the upward movement is unlikely to last long. When the whole structure comes to completion, it is recommended to open long deals. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 06 Jan 2021 02:47 AM PST The wave layout of EUR/USD still indicates that the upward trend is in progress. The wave structure has got more complicated and elongated as the price has made higher highs. Nevertheless, the wave picture looks the same in principle. Only wave 3 in 5 has got lengthier. Now the wave structure clearly consists of 5 waves. Thus, at the moment the currency pair is building wave 5 in 5. If it is true, EUR/USD is expected to continue with a further climb for a while. At the same time, wave 5 could develop into a five-wave structure, so it might become rather lengthy. Nevertheless, the wave layout of a shorter time frame indicates a possible completion of the upward section even despite complications in building wave 3. The inner wave structure of the expected wave 5 looks rather convincing. At present, its inner wave 5 is underway, but it could finish anytime. The thing is that amid low demand for the US dollar, wave 5 in 5 could get more complicated and lengthy. Everything will depend on market sentiment. Global financial markets opened the new year in quiet trading. The bulk of news and economic data has been coming mainly from the US in late 2020 and early 2021. The event of major importance is the election to the Senate, though the market used to downplay the importance of this event. For your reference, November 3 was the day not only of the presidential election. Americans also voted in the elections to Congress and the Senate. The President-elect has been announced. The results of the election to the House of Representatives are also clear. The Democratic President won the election this time. Democrats also are going to set the tone in the House of Representatives. As for the Senate, it was dominated by Republicans under Donald Trump's presidency. So, it was the Senate which forged ahead with Trump's decisions. Two Senators from each state are elected to the Senate. If the election in a certain state does not reveal a winner, a runoff has to be held. On November 3, only in Georgia neither of the candidates collected over 50% of votes. So, the runoff is scheduled for January 5. In fact, people in Georgia have already voted. Now the results are being counted. According to the latest update, two Democrats are taking the lead in Georgia. As half of the ballots have been already counted, Jon Ossoff has outpaced Republican David Perdue by 7%. Raphael Warnock has outrun Republican Kelly Loeffler by 8%. Certainly, the final count could differ from interim results. The thing is that Republicans need a victory at least of one candidate in this state to maintain control in the Senate. However, if both Republican candidates lose the runoff in Georgia, the Senate will consist of 50% Democrats and 50% Republicans. The decisive vote will belong to Kamala Harris, the new Vice President in Biden's team. This scenario means that all three branches of power in the US will be controlled by Democrats. Conclusions and trading tips EUR/USD resumed building the upward section. Nevertheless, the upward trend is about to complete soon. In the meantime, you are recommended to sell EUR/USD with targets at neat 1.20 and 1.19 at every bearish signal of the MACD indicator. Let me warn you that the wave layout of the uptrend section could evolved into a more complicated and lengthy structure. The expected wave 5 could end up with a complicated and elongated shape. So, it is premature to sell the currency pair. The material has been provided by InstaForex Company - www.instaforex.com |
| EUR/USD. Senate election in Georgia continues Posted: 06 Jan 2021 02:24 AM PST Today, the focus of dollar pair traders is not on macroeconomic reports, or even coronavirus reports, but on the 10-million state in the Southeast United States, where local residents elect Senate representatives. In fact, Georgia's residents have already made their choice – the votes of American voters are currently being counted. This process is exciting, because a) The rivals go side by side; b) The Upper House of Congress is at stake. Given the importance of this event, all other fundamental factors faded into the background – at least for the dollar pairs included in the major group. The news flow about the preliminary election results is controversial. During the Asian session, it was reported that Republicans defended the Senate – according to The New York Times, Republican candidate Kelly Loeffler won 51% of the vote, while Democrat Raphael Warnock received the support of 48% of voters. In another pair of rivals, Republican David Perdue allegedly beat Democratic representative Jon Ossoff by 1.2%. The market calmly reacted to this news, since Georgia is considered one of the base states of the Republicans – representatives of the Democratic Party have not won here for decades. As a result, the US dollar index showed a slight increase, but did not even exceed the 90th mark. In other words, if the situation will not change, the main dollar pairs would have been trading in the same mode, in line with the previous day.
However, the balance of power changed during the start of the European session. Many American publications, citing their sources, announced sensational news: the Democrats suddenly took the lead. Looking ahead, it is noteworthy that if this information is officially confirmed, and Ossoff and Warnock retain their leadership, Republicans and Democrats will each have 50 votes in the Upper House of Congress. In this case, Kamala Harris, the US Vice President-elect who belongs to the Democratic party, will get the decisive vote. If this happens, it is likely that Democratic representatives will receive full power, who will control the majority not only in the House of Representatives, but also in the Senate. Moreover, the party has a Democrat president who will be able to implement structural reforms that require the approval of legislators. It should be noted that the approval of congressmen is necessary not only for the approval of laws, but also for key personnel appointments. Therefore, the senate election in Georgia is very important for both Democrats and Republicans. But if the former wins, they will receive a kind of huge power control, while the latter will no longer be able to negotiate with the White House using leverage in the form of blocking bills. 98% of the ballots have been processed at the moment. Fox News reported that Democrat Ossoff is ahead of Republican David Perdue (who is the current Senator) by 3,560 votes – this is only 0.08% in percentage terms. In the other pair of opponents, the gap is more significant. Incumbent Republican Senator Kelly Loeffler is behind Warnock by 40,575 votes or 1%. Most American analysts believe that the representative of the Democratic Party has already secured a victory in this pair. In any case, the "all or nothing" principle is applied here: Democrats need the victory of both candidates, so the main attention of traders is now focused on a pair of rivals Ossoff - Perdue. As mentioned above, the gap between them is 0.08%. This is also an important point in the context of further events, since the loser will be able to demand a recount if the final difference between the candidates is less than 0.5%.
It can be said that the situation is still unclear, and the advantage of the Democrats is minimal. However, the market already considered the headlines, which reported the victory of the Democratic camp a few hours ago. Amid such news flow, the US dollar index collapsed below the 89th mark: the last time it was at such lows was exactly three years ago, in January 2018. The main dollar pairs reacted accordingly: in particular, the EUR/USD pair surged to the support level of 1.2350 (upper line of the BB indicator on the daily chart), but could not impulsively break through it. In my opinion, it is risky to trade the euro/dollar pair as well as other dollar pairs (with the exception of AUD/USD - where the Australian has individual reasons for growth) today, since things may change in favor of the Republican at the end of the day. Moreover, given the fact that the EUR/USD buyers already celebrated the Democrats' victory earlier, a large-scale corrective pullback can be expected. Therefore, it is better not to currently risk it, although the buyers of the pair will most likely approach the limits of 1.24 mark if the preliminary results are confirmed. The material has been provided by InstaForex Company - www.instaforex.com |
| Gold kicks off new year with a surge Posted: 06 Jan 2021 02:13 AM PST It would seem that there should be a hangover after Christmas and New Year, but the precious metal continues to grow as zealously as it did in 2020. At the end of last year, XAU / USD quotes added about 24% due to a weak dollar and low real rates on US Treasury bonds. The latter were pressured by the growing likelihood of a crackdown on inflation. At the beginning of 2021, the external background did not change at all. The agreement of OPEC + to keep production volumes at the same level within the framework of the collective agreement and the intention of Saudi Arabia to reduce production by 1 million b / d in February-March unilaterally inflated oil futures prices and increased rumors of a rapid increase in inflation. The yield on 10-year TIPS fell to a historically low level, and US inflation expectations for the next 10 years, measured using the break-even rate, jumped to the highest level since 2018. Especially since the ratings signal that two vacant Senate seats will be taken by Democrats. If they manage to take control of both the White House and Congress, Joe Biden will have no problem implementing his idea of increasing fiscal stimulus. This will strengthen the reflationary environment and will contribute not only to the growth of stocks but also gold. TIPS and gold yield dynamics
Adding fuel to the fire is the Fed's intention to sit on the sidelines until at least 2024. The minutes of the December FOMC meeting, which is scheduled for publication on January 6, will certainly show the Central Bank's intention to maintain the current parameters of ultra-soft monetary policy until the regulator sees steady progress in the area of inflation and employment. The Federal Reserve is ready to tolerate an increase in the index of personal consumption expenditures to 2.5-3%, and this circumstance seriously complicates the status of the US dollar. The worse for the greenback, the better for gold! Thus, in the short term, the fate of the precious metal depends on the elections in Georgia. The "blue wave" can return its quotes above $2000 per ounce, a Republican victory will also not be a disaster. In this scenario, the chances of fiscal stimulus will decrease, but the risks of higher taxes and increased regulation will fall, which will support stocks. The growth of global risk appetite is a reason for selling the US dollar and for the continuation of the XAU/USD rally. In the medium term, investors will return to the topic of pandemic and trade wars. Problems with the production, transportation of vaccines, the reluctance of the population to get vaccinated, as well as the continuation of tense relations between the United States and China under Joe Biden can increase the appetite for reliable assets, contribute to the correction of the USD index and the precious metal. Biden understands that the only way to slow down China is to create a ring of allies around it. The problem is that Xi Jinping also understands this. Technically, a Wolfe Wave pattern was formed on the daily chart of gold with targets at $1990 and $2060 per ounce. The mood remains bullish, so I recommend that if the Democrats win the elections in Georgia, increase the longs formed on the breakouts of the $1890 and $1905 levels for the precious metal. Gold, daily chart
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