Forex analysis review |
- SpaceX also owns Bitcoin!
- EURJPY reversal
- Reversal in Bitcoin.
- Weekly analysis on Gold.
- Weekly analysis on EURUSD
- Trading plan for the GBP/USD pair for the week of July 26-30. New COT (Commitments of Traders) report.
- Trading plan for the EUR/USD pair for the week of July 26-30. New COT (Commitments of Traders) report.
| Posted: 24 Jul 2021 07:34 PM PDT
The quotes of the main cryptocurrency are still very low relative to their absolute highs. The fundamental background for bitcoin remains very negative. However, Elon Musk has become more active recently, who changes his opinion about bitcoin more often. Recall that at the beginning of the year, his company Tesla announced investments in bitcoin for $ 1.5 billion. Then Tesla added the ability to buy its electric cars for bitcoins. And a month later, they canceled this opportunity, and Elon Musk began to criticize the main cryptocurrency. According to him, bitcoin is too non-energy efficient. A huge number of coins are mined using non-renewable energy sources. In general, bitcoin is too harmful to the environment. However, this week, Musk said that his Tesla is again considering paying for electric cars for cryptocurrency, and it became known yesterday that his company, SpaceX, also invested in cryptocurrency. However, the head of Tesla did not say anything about the size of the investment. Thus, the markets once again found themselves in a difficult situation. On the one hand, Musk has been accused of market manipulation many times. At the same time, both stock and cryptocurrency. He also changes his rhetoric about bitcoin too often. On the other hand, if such an influential business person says that his two main companies own cryptocurrency, like himself, then he expects its growth and believes that digital assets are the future. Thus, bitcoin began to grow again, having received quite unexpected support. Another question is, how long will this growth continue? Recall that the vast majority of experts believe that in the coming months and until the end of 2021, "digital gold" will become cheaper. However, we should pay tribute to the fact that Musk once again managed to force investors and traders to buy "bitcoin." As for us, we continue to believe that bitcoin will continue to decline further. There is too much talking against it now. China's actions against miners will be "exposed" to the cryptocurrency market until the end of the year, until all repressed businessmen place and launch their equipment in other countries. The market is also waiting for news from the United States, where the authorities also want to tighten the cryptocurrency segment's regulation seriously. And in any case, it is unlikely that bitcoin will add $ 10,000 to one statement by Musk about SpaceX investments. Most likely, in the coming days, the growth will be replaced by a new fall. However, no one forbids Musk to distribute comments at least every day.
In technical terms, bitcoin worked out the level of $ 29,700 but failed to overcome it. Thus, a round of upward correction has now begun, which may end in the near future. There is practically no fundamental support for bitcoin now, so we expect a resumption of the fall in quotations and the return of BTC to the level of $ 29,700. We also hope that this level will be overcome, and the main cryptocurrency will continue its decline to the level of $ 24,000. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 24 Jul 2021 09:43 AM PDT EURJPY has reached our target and is now bouncing higher. Price has potential to bounce towards 131.50-132. Short-term trend remains bearish.
Blue lines - Fibonacci retracement Once the green channel was broken we expected a decline to follow towards the 38% Fibonacci retracement. Now that our target has been achieved we expect price to bounce higher from this important support level. Traders need to be cautious. Short-term trend remains bearish but it is justified to see a bounce higher towards 131.50-132. Failure to hold above 129 will open the way for a move towards 127.80-126.30. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 24 Jul 2021 09:37 AM PDT Bitcoin made a triple bottom around $29,000 and has broken the short-term trend line resistance to the upside. In previous posts we mentioned the importance of the horizontal support.
Green line - trend line resistance Bitcoin has provided us with a bullish signal after a long time. Price has made a triple bottom and broke out of the green trend line resistance. Bitcoin has the potential to reach next resistance level at $36,600 and if broken we could see a test of the recent highs of June at $41,176. Breaking below $29,000 will be a very bearish signal and price will be expected to reach $25,000-$20,000. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 24 Jul 2021 09:30 AM PDT Gold price ended the week just above $1,800. Observing the weekly chart we see price respecting the upward sloping green trend line support from $1,200.
Green line - support trend line Gold price is in a weekly bullish trend despite the decline from $2,076 to $1,670. Major support is at $1,740 and resistance at $1,910. As long as price is above $1,740 we expect to see a new higher high above $1,910 and eventually above $2,100. Breaking below $1,740 will be a sign of weakness and could push price lower towards $1,500. Risk reward favors bulls at current levels. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 24 Jul 2021 09:26 AM PDT EURUSD closed the week near its weekly lows. Price is just above the major support of 1.1750. At 1.17 we see the 38% Fibonacci retracement where the previous low was made. Breaking below 1.1750 will increase chances of a making a new lower low below 1.17.
EURUSD in the short-term justifies a trend reversal and a move higher towards 1.19 as we explained in previous posts. Trend in the near term remains bearish. There is no reversal confirmation yet. On a weekly basis trend also remains bearish. On a weekly basis a bounce towards 1.19 will not be enough to cancel the downward trend. Weekly view remains bearish with increased chances of a move towards 1.15. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 24 Jul 2021 01:31 AM PDT GBP/USD - 24H.
The GBP/USD currency pair was trading very actively this week. However, it is very difficult to explain all the pair's movements from the point of view of fundamental analysis. The euro/dollar pair has been standing almost in one place all week, and the pound/dollar pair has gone down 260 points and up 200. Why? It turns out that the data from the UK provoked such a movement? But there was no special news of a macroeconomic nature from the UK this week. It turns out that it's not about "macroeconomics." It turns out that the main reason was some nervousness of the traders themselves, which can only be based on data about the fourth "wave" of the epidemic. In the articles last week, we already said that a powerful fall in the pound does not look quite logical since the data on the epidemic is certainly important data. Nevertheless, the foreign exchange market should respond to the macroeconomic consequences of the pandemic and not to the pandemic itself. It is clear that the more sick and dead there are in Britain, the worse its economic prospects become, and the more chances there are for a new quarantine. However, London, on the contrary, lifted all quarantine restrictions this Monday. Thus, we believe that the markets panicked about the "fourth" wave, and then they realized that this was not entirely logical and began to restore the pair. We also said earlier that we expect the pair to decline to the area of 1.3600-1.3666. On the 24-hour timeframe, it is visible that the previous local minimum of the last correction round is located in this area. Thus, the overall picture is similar to the euro/dollar pair. We expect the formation of a new upward trend from the current positions, and we consider the current round of correction to be completed. Confirmation of this hypothesis should be sought on the lower timeframes. COT report.
During the last reporting week (July 13-19), the GBP/USD pair fell by 200 points. The data of the latest COT report fully support this development of events: the net position of non-commercial traders is falling, and the pound exchange rate is also falling. Thus, everything seems to be logical. However, the first indicator in the illustration above clearly shows not the end of the upward trend but the beginning of a new downward trend. The green and red lines have crossed, which means that the traders' mood is already "bearish." Recall that the green line is the net position of the "Non-commercial" group, and the red line is the net position of the "Commercial" group. Therefore, professional players have already opened a greater number of contracts for sale at this time than for purchase. And this suggests that the major players believe in a further fall in the British currency. But the same factor also works here as for the euro/dollar pair. Trillions of dollars continue to pour into the American economy, due to which its rapid recovery is achieved. However, while the money supply is growing, inflation is growing, which devalues the dollar much faster than the sales of major players of the British currency. Therefore, we have every right to expect that the pound will also begin to rise in price again simply because the factor of inflating the money supply in the United States is more global. Major players immediately opened 11,600 contracts for sale during the reporting week and closed 1,100 contracts for purchase. Their net position decreased by 12,700 at once. They already have more open sell positions than buy positions. However, the pound barely managed to get to the last local minimum on all these actions of major players, which was formed even when the mood of traders was "bullish." During the current week, there were practically no important publications and events in the UK. The only data that really should have been paid attention to is the data on business activity on Friday. The reports themselves did not provoke any market reaction. However, they have deteriorated quite seriously compared to previous values. For example, the index of business activity in the manufacturing sector decreased by 3.5 points, and in the service sector – by almost 5. They remained above the level of 50.0, so the decline is not critical. However, it reflects the falling mood of top purchasing managers, who expect the situation to worsen. And this can only be due to the virus spreading through the UK. By the way, the fourth "wave" seems to have begun to weaken after all. Yesterday, "only" 36 thousand new cases of the disease were recorded. It's still a lot, but it's already less than 54 thousand. And the dynamics are also pleasing. Therefore, the pound may soon get grounds for further strengthening. Trading plan for the week of July 26-30: 1) The pound/dollar pair has worked out the area of 1.3600-1.3666. Thus, there are reasons to assume the completion of a downward correction. We believe that now the pair will continue to grow in the long term. However, it needs to overcome the critical Kijun-sen line. We also remind you that on a 4-hour timeframe, a sign of an upward trend is finding the price above the moving average line (the "Regression Channels" trading system) or above the key lines of the Ichimoku indicator. 2) Sellers squeezed out of the pound/dollar pair everything they could at this stage. So far, the chances of continuing the downward movement remain high, but a sharp rebound from the level of 1.3600 suggests that this is the end of the downward movement. Therefore, sales can be considered again if the price bounces off the Kijun-sen line and fails to gain a foothold above it. In this case, the price may once again fall to the level of 1.3600 or slightly lower. Explanations to the illustrations: Price levels of support and resistance (resistance/support) – target levels when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators, Bollinger Bands, MACD. Support and resistance areas – areas from which the price has repeatedly bounced earlier. Indicator 1 on the COT charts – the net position size of each category of traders. Indicator 2 on the COT charts – the net position size for the "Non-commercial" group. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 24 Jul 2021 01:25 AM PDT EUR/USD - 24H.
The EUR/USD currency pair has been steadily sliding to the level of 1.1700 during the current week. Earlier, we have repeatedly noted that we consider the level of 1.1700 to be the target for the coming weeks. In the 24-hour timeframe, it is visible that a new round of corrective movement against the global upward trend is currently continuing. And the level of 1.1700 is the minimum of the previous round of correction. Thus, given that after the first round of correction, the pullback to the top was almost one hundred percent, we believe that the current round will also end near the level of 1.1700. Another question is that traders now do not find any reason to buy the US currency more actively. Despite the COT reports, which will be discussed below, the pair remains close to its three-year highs and retains excellent chances of resuming the upward trend. Also, on the 24-hour timeframe, it is visible that the pair has passed most of the current downward movement in three trading days. These are the days when the Fed summed up the results of its last meeting and gave the market illusory hopes for an earlier curtailment of the quantitative stimulus program, for which the market seized a stranglehold. Thus, while the US dollar slowly rises in price, we are still waiting for this movement to end and the global upward trend to resume. Moreover, around the level of 1.1700 lies an important corrective level of 38.2% on the Fibonacci grid, which covers the entire upward trend, which has been going on for a year and a half. COT report.
During the last reporting week (July 13-19), the EUR/USD pair fell by 60 points. In recent weeks, major players have continued to reduce the number of buy-contracts and increase sales contracts. It is visible on the first indicator. The green line (the net position of the "Non-commercial" group) continues to decline, and the red line (the net position of the "Commercial" group) continues to grow. Recall that when these two lines move towards each other, it means that the current trend is ending or has already been completed. However, we have repeatedly drawn traders' attention that global cash injections into the US economy continue, as the Fed has often stated. Thus, it turns out to be a somewhat paradoxical situation: professional traders sell the euro, but at the same time, it becomes very cheap and has excellent chances of resuming the upward trend. The money supply in the US continues to increase, and the dollar is now also depreciating due to high inflation and high supply in the foreign exchange market. It turns out that the situation in which the euro is getting cheaper is because players are selling it, and the dollar is getting cheaper due to the actions of the Fed and the US government. Consequently, as a result, the currency falls, and the rate of depreciation is higher. So far, this is the euro. However, its fall is very weak. During the reporting week, non-profit traders opened another 7,000 contracts for sale and closed 5,600 contracts for purchase. Thus, their net position decreased by another 12,600 contracts, and the mood became even less "bullish." The total number of contracts for the purchase of Non-commercial is already 210,000, and for sale – 162,000. More recently, the gap was twofold. The current trading week was very quiet. By and large, only one event of the week had at least a theoretical chance of somehow reviving the foreign exchange market. However, the ECB meeting turned out to be passing and did not provoke any special reaction. Christine Lagarde repeated at a press conference everything that traders have known for a long time. In short, she again stated that the PEPP economic stimulus program would be in effect at least until the end of March 2022, and the APP program will be in effect for a long time after the key rates are raised for the first time. Lagarde also noted that the EU economy continues to recover. However, there are risks associated with the "coronavirus," since recently, there has been an increase in the number of diseases in European countries. In general, if we have heard at least some hints from the Bank of England and the Fed about a possible curtailment of the stimulus program a little earlier than the deadline, we have not received such hints from the ECB. Perhaps that is why the European currency continues to slide down slowly, and traders do not find any reason to buy it. Trading plan for the week of July 26-30: 1) In the 24-hour timeframe, the trend remains downward. We still expect that the decline will continue to the level of 1.1700. However, it is still unclear whether the bears will find the strength to continue selling the pair because most of the distance of the current downward spiral was covered exclusively on one event. 2) The upward movement is not relevant yet, although the fundamental global factors for the pair remained the same as they were. Nevertheless, the price continues to be located below the Kijun-sen and Senkou Span B lines. Thus, it does not make sense to consider buy orders now. Therefore, now for the possibility of opening long positions, you should wait for signals to change the trend to an upward one. We believe that this can happen between the levels of 1.1600 and 1.1700. Explanations to the illustrations: Price levels of support and resistance (resistance/support) – target levels when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators, Bollinger Bands, MACD. Support and resistance areas – areas from which the price has repeatedly bounced earlier. Indicator 1 on the COT charts – the net position size of each category of traders. Indicator 2 on the COT charts – the net position size for the "Non-commercial" group. The material has been provided by InstaForex Company - www.instaforex.com |
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