Forex analysis review

Forex analysis review

EUR/USD. The downward tour is not over yet: a "hot" week ahead

Posted: 20 Aug 2021 11:15 AM PDT

The euro-dollar pair continues its downward "tour", opening more and more new price horizons. And although by the end of the trading week the sellers of EUR/USD tempered their ardor, they managed to consolidate at the borders of the 16th figure. The last time the pair was in this price area was at the end of November last year, when the dollar was in high demand amid the next wave of the coronavirus outbreak. Today, the "coronavirus factor" also plays a role, but far from the main one.

The uncorrelation of the positions of the Fed and the ECB is the main anchor that pulls the pair to the bottom. Representatives of the Federal Reserve maintained their hawkish attitude, despite the first signs of a slowdown in inflationary growth in the United States. The minutes of the last Fed meeting also added fuel to the fire. The document published the day before yesterday was evidence that the issue of early curtailment of QE was discussed by members of the Federal Reserve back in July. Despite the fact that the July meeting was held even before the publication of the latest data on inflation growth, traders appreciated the mood that was hovering among the Fed members at this meeting. Now dollar bulls are looking forward to the key event of the current month, which will begin next Saturday in Jackson Hole.

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We are talking about the economic symposium, in which Jerome Powell and the heads (deputies) of other central banks of the leading countries of the world will speak. It is expected that the chairman of the Fed will "give the go signal" to curtail incentives during the meeting, while at the September meeting, the members of the regulator will already officially announce the appropriate steps regarding QE. On the eve of this event, the dollar is in high demand – traders follow the trading principle "buy on rumors, sell on facts". It is unknown whether the second part of this principle will be implemented, but the first part is being implemented with a vengeance: the excitement around the greenback is gaining momentum, exerting significant pressure on the EUR/USD pair.

And apparently, this pressure will only increase – at least in the medium term. While dollar bulls are living with expectations, the single currency is under the background pressure of the indecisive position of the European Central Bank. This week, the Reuters news agency interviewed more than 30 experts on the prospects for the ECB's monetary policy. Most of the analysts surveyed expressed confidence that the decision on the gradual curtailment of the PEPP will be made by the European regulator no earlier than December of this year. At the same time, many of them also note the existing risks regarding the implementation of this forecast. According to them, the number of new cases of coronavirus in the EU countries is still growing, and uncertainty about the development of the situation with Covid remains (this is especially true for the autumn-winter period). If the epidemiological situation worsens, the European Central Bank is likely to continue buying bonds at the current pace until the end of the year to prevent an undesirable increase in yields. Therefore, the decision on curtailing the incentives will be made in February or at one of the spring meetings.

Such "gloomy" prospects reduce the attractiveness of the single currency, and even more so when paired with the dollar, which is strengthening its position against the background of hawkish expectations of traders. In the American news feeds, it is increasingly possible to meet the assumption that the head of the Federal Reserve may sound a signal at the end of August about his readiness to begin weakening monetary support. Whether this scenario is actually being implemented or not is not so important if we are talking about the prospects of the coming days. To date, dollar bulls are determined, American inflation has not refuted the "hawkish" attitude of the Fed (judging by the comments of many representatives of the regulator after the release), while strong nonfarm payrolls and the minutes of the last meeting of the Federal Reserve speak in favor of tapering incentives. Therefore, the market will live with hopes next week, playing out the implementation of the "hawkish" scenario in advance. The euro is not able to organize "its own game" to restrain the onslaught of dollar bulls or (even more so) reverse the trend. Therefore, it will be possible to catch upward pullbacks to open short positions only due to the temporary weakness of the greenback.

Thus, the prevailing fundamental background for the EUR/USD pair indicates the priority of short positions. The nearest target of the downward movement is the mark of 1.1650 – this is the lower line of the Bollinger Bands indicator on the daily chart. Trend indicators signal the further development of a downward movement: the price for D1 is located between the middle and lower lines of the Bollinger Bands indicator, and the Ichimoku indicator has formed a bearish "Line Parade" signal. The main target of the downward trend is the mark of 1.1610 – this is the lower line of the Bollinger Bands indicator on the W1 timeframe.

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GOLD decline seems over. Another upwards movement?

Posted: 20 Aug 2021 10:52 AM PDT

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The price of Gold stood at 1,784.33 after failing to stabilize under 1,780. It decreased a little within a minor descending channel. It failed to approach and reach the downside line again signaling that the sellers are exhausted.

Further on, it jumped above the downtrend line, and the channel's resistance line is indicating that it could resume its uptrend. In the short term, it could move somehow sideways between 1,780 and 1,795 levels. The former high of 1,795 is seen as an upside obstacle. If the price jumps and stabilizes above it, it will signal further growth.

Trading conclusion

The price of Gold is likely to register important growth after breaking through the former high of 1,795. A jump above it could signal an upside continuation.

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Ethereum imminent upside breakout

Posted: 20 Aug 2021 10:51 AM PDT

Ethereum is located at 3,265.76 below today's high of 3,305.09. It is likely to move somehow sideways in the short term. We'll have to wait for strong confirmation before deciding to go long on ETH/USD.

The bias is bullish but the price of Ethereum stands right below strong resistance levels. ETH/USD has increased as the price of Bitcoin jumped higher. Ethereum added 6.97% in the last 24h, and it's up by 1.12% in the last 7days.

ETH/USD retreat is over

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ETH/USD has found strong demand right below the upside 50% Fibonacci line of the ascending pitchfork and under the weekly S1 (3,023.95) level. Its failure to stabilize under these obstacles signaled weak sellers and strong bullish pressure.

Now the ascending pitchfork's upper median line (UML) exerts pressure. This line is seen as a dynamic resistance. Making a valid breakout above 3,330.08 former high and through the 61.8% (3,367.79) could activate an upside continuation.

Ethereum forecast

If the price jumps and stabilizes above the 61.8% (3,367) level, it will be a long opportunity. In the short term, we cannot exclude a temporary sideways movement. Technically, only a new lower low, a drop below 2,951.97 could invalidate the bullish scenario.

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USD/CAD: temporary or larger correction?

Posted: 20 Aug 2021 10:49 AM PDT

USD/CAD dropped after reaching today's high of 1.2948. A temporary decline was expected after its amazing rally. Still, the current decline will be only a temporary one if the immediate support levels hold.

The pair declined as the DXY slipped lower. The Dollar Index has registered an impressive rally up to 93.72 level. The index could come back to test and retest the level of 93.43 which is the former high and a broken resistance level. Its current decline makes the US dollar depreciate versus its rivals.

The Canadian retail sales data have come in mixed earlier. It showed an increase of 4.2% versus 4.4% expected, while the Core Retail Sales registered 4.7% growth, exceeding the 4.5% estimate.

USD/CAD Reverses

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USD/CAD plunged after reaching the 1.2928 - 1.2957 resistance area. Now it is close to reaching the fourth warning line (WL4) of the former descending pitchfork. Personally, I've drawn a Fibonacci retracement on the last swing higher.

If the price stays above the 23.6% retracement level and beyond the 1.2807 static support, it will signal potential upside continuation. So, if the current decline is only a temporary one, USD/CAD could offer great long opportunities from above the mentioned support levels.

Trading conclusion

False breakouts or rejections from the 1.2807 static support could signal a new upside momentum. Also, if the price moves sideways above this level, it will be a signal that the decline is likely to be over.

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USD/CHF flirts with resistance area

Posted: 20 Aug 2021 10:48 AM PDT

USD/CHF is moving somehow sideways in the short term. It was into a corrective phase which is over. The pair has managed to stay higher as the Dollar Index has reached new highs in today's session.

The US dollar remains still strong after the US Unemployment Claims dropped unexpectedly lower. It was reported at 348K, far below the 362K estimate and compared to 377K in the previous reporting period. The US manufacturing and services data could be decisive on Monday. Better than expected US reports slated for release next week may help USD/CHF to jump towards new highs.

USD/CHF imminent breakout

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USD/CHF continues to stay below the descending pitchfork's upper median line (UML). As you can see on the H4 chart, it has dropped to retest the 50% retracement level and now it could try to take out the dynamic resistance represented by the upper median line (UML).

It could move sideways in the coming hours and days before making a valid breakout. Techncially, its failure to stay below the descending pitchfork's lower median line (LML) may signal an upside breakout through the upper median line (UML).

USD/CHF Outlook

Jumping and stabilizing above the upper median line (UML) and through the 0.9200 psychological level indicates an upside continuation.

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Wave analysis of GBP/USD for August 20. Markets are tired of selling the pound around 36th figure

Posted: 20 Aug 2021 10:29 AM PDT

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The wave counting for the Pound/Dollar instrument at this time still looks quite clear, but, unfortunately, it continues to get confusing. The assumed wave b continues its construction and it turns out to be too deep. Although the second chart (below) clearly shows that waves a and b of the previous upward trend segment are also almost the same size, which did not prevent the instrument from rising by another 600 basis points later. However, the current wave b casts doubt on the assumption that the new upward section of the trend will be impulsive. Now the wave counting looks like another corrective section of the trend, which can take a three-wave form. And the assumed wave b may well correspond in size to wave a. That is, equal to 90-100 percent of its size. If you look at all the wave structures over the past six months, their distinctive feature is quite deep corrective waves. In addition, all these structures are corrective, so it is very difficult to expect the instrument to go beyond the range of 1.3600-1.4240. I am still waiting for the completion of the decline in quotes and the construction of a new upward wave, presumably c.

The Pound/Dollar instrument fell by 35 basis points on Friday, but around the 36th figure, the quotes began to move away from the reached lows. The news background today was quite important for the pound. The retail trade report in the UK was released in the morning, which states that volumes decreased by 2.5% MoM in July, taking into account fuel consumption. Excluding fuel costs, the pound began to spend less by 2.4% MoM compared to June. The markets were waiting for much higher and at the same time positive values. Thus, the decline in the quotes of the pound sterling continued naturally. However, here is the paradox. Yesterday, when there was no news background, the sterling fell by 120 basis points. And today, when the news background was also strong, sterling fell by only 35 and has already rushed up. Perhaps the markets are already tired of selling the pound sterling, which gives hope for the completion of the construction of wave b and the transition to the construction of wave c, the targets of which will be located at least at the 40th figure. That is, there is a growth potential equal to 400 basis points. However, a decrease below the low of wave e of the previous downward trend segment is likely to lead to adjustments to the entire wave count of the instrument.

The wave pattern is now more or less clear. I continue to count on the construction of a new upward wave, so at this time I propose to consider buying the instrument for each MACD signal "up" with targets located near the 1.4000 mark. The instrument is still at the stage of constructing a corrective wave 2 or b and its construction is being greatly delayed, which can negatively affect the integrity of the current wave counting.

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The upward section of the trend, which began its construction a couple of months ago, has taken a rather ambiguous form and has already been completed. A new section of the trend can get an impulse form, its first wave has already acquired a sufficiently extended form and exceeded the peaks of waves b and d. The chances of a new strong increase in quotes are growing. If the information background does not interfere, then the increase in quotes should resume in the near future.

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Bitcoin: Forecast worked out quickly and clearly. Where to go next?

Posted: 20 Aug 2021 10:09 AM PDT

As you can see, we were not mistaken with the sideways 44,807.24 - 48,178.13 for bitcoin, located between two red dotted lines. Its support persisted and closed yesterday with a sharp price increase, today reaching the upper limit of the corridor.

Meanwhile, the expiration date of bitcoin options is approaching. There are now 3,700 ultra-bullish call options contracts above $ 50,000.

The adjusted open interest volume for neutral and bullish call options now stands at $190 million. After the expiration of contracts for $48,000, the volume will be reduced to $138 million.

The 73% of total protective put options are below the $44,000 level. However, upon expiration above this mark, the volume of open interest in bitcoin options will decrease to $65 million.

If expiration takes place at $46,000, open interest can grow to $105 million. This is a good enough reason for buyers to push the price up so sharply today.

Meanwhile, Glassnode notes that bitcoin outflow dominates now: investors are withdrawing coins. Over the past year, the market has gone through several phases of currency flow dominance, with the last outflow dominance seen at the end of 2020.

What to expect after today's growth? Two scenarios are technically possible here. The first is a sideways reversal 44,807.24 - 48,178.13 downward, if the two-day growth was really dictated by the expiration of options. It is worth watching the level of 48,178.13, as it is a strong mirror horizontal.

The second scenario is a breakdown of the level of 48,178.13 and consolidation above. If confirmed as resistance, the main cryptocurrency could continue to rally towards the psychological mark of $50,000 per coin and the technical area near $52,000.

And finally, some good news. Wells Fargo bank is in the top of the headlines today, which has registered a private bitcoin fund to provide crypto services to rich clients.

The giant's partners will be FS Investments and New York Digital Investment Group (NYDIG).

Perhaps this news, in addition to the expiration of options, became one of the bullish factors in the rapid and rather technical growth of the main cryptocurrency.

Earlier this year, a report was released titled "The investment rationale for cryptocurrencies". At the time, the bank's investment arm announced that the new fund would be available to "qualified investors." The document stated:

"WFII believes that cryptocurrencies have gained stability and viability as assets, but the risks lead us to favor investment exposure only for qualified investors, and even then through professionally managed funds."

Interest in cryptocurrency among banks is growing, indicating that bitcoin and other large digital assets are more and more firmly rooted in the minds of institutions as assets in which it is possible and even worth investing.

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

August 20, 2021 : EUR/USD daily technical review and trading opportunities.

Posted: 20 Aug 2021 09:45 AM PDT

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Recently, Persistence below the depicted price zone of 1.1990 indicated further downside movement towards 1.1840 and 1.1780 where a sideway consolidation range was established.

During last week, the EURUSD pair has been trapped within a narrow consolidation range between the price levels of 1.1780 and 1.1840. A bullish breakout was executed above 1.1840 shortly after.

Temporary Upside pullback was expected towards 1.1990. However, re-closure below the price level of 1.1840 has initiated another downside movement towards 1.1780 which failed to hold prices before the end of last week.

On the other hand, intraday traders are waiting for another candlestick closure above 1.1780 for another ascending swing to be initiated.

Initial targets are to be located around 1.1840 and 1.1910

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August 20, 2021 : EUR/USD Intraday technical analysis and trading plan.

Posted: 20 Aug 2021 09:43 AM PDT

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Bearish persistence below the price zone of 1.2050-1.2000 allowed the current short-term downtrend to be established.

Initial bearish targets were located around 1.1940 then 1.1800 which offered some bullish rejection for sometime before another bearish movement could take place towards 1.1770 and 1.1700.

So, the EURUSD pair has been moving downwards within the depicted bearish channel while the price level of 1.1780 stood as a prominent demand level that prevented further bearish decline.

The bullish pressure that originated around 1.1780 failed to push higher than the price level of 1.1900. That's why, another bearish pullback towards 1.1700 was being executed.

Bullish signs were expected around the current price levels of 1.1700-1.1730 as it corresponded to the backside of the broken channel.

Bullish breakout above 1.1830 was needed to enhance the bullish side of the market and enable further bullish advancement towards 1.1900 and 1.1970.

Any upcoming bullish pullback towards 1.1985 should be considered for bearish rejection and a valid SELL Entry.

On the other hand, bearish breakout below 1.1700 will probably enable further bearish decline towards 1.1650 and 1.1600.

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

August 20, 2021 : GBP/USD Intraday technical analysis and significant key-levels.

Posted: 20 Aug 2021 09:42 AM PDT

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Since March, the GBPUSD pair has been moving sideways within a wide consolidation range extending between 1.3670 up to 1.4250 which acted as a prominent SUPPLY that prevented further bullish advancement.

On the other hand , the GBPUSD pair has been contained above the demand level of (1.3660) a few times while Bearish breakout below 1.3600 was needed to enhance further bearish decline.

Recently, Failure to maintain bearish pressure below 1.3670 (100% Fibonacci Level) has enhanced another bullish movement for retesting of the price level of 1.3880. Further bullish advancement was to be expected towards 1.4025.

On the other hand, the nearest SUPPLY level is located around 1.4025 where bearish rejection and a valid SELL Entry should be anticipated.

That's why, the pair remained trapped between the mentioned key-levels (1.3800 and 1.4025) until recent bearish breakout occurred earlier this week.

Bearish breakout below 1.3800 enabled more bearish decline towards 1.3670 while the price level of 1.3520 is expected to be reached if sufficient bearish pressure is maintained.

While on the other hand, bullish breakout above 1.3800 will probably initiate another bullish movement towards 1.3880 and 1.4100.

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

Wave analysis of EUR/USD for August 20. Markets continue to suffer with a downward wave

Posted: 20 Aug 2021 09:32 AM PDT

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The wave counting of the 4-hour chart for the Euro/Dollar instrument remains unchanged for the time being. The decline in quotes over the past three days, including today, amounted to only 40 basis points. That is, the decline in quotes is weak, but the assumed wave e still took a five-wave form and continues its construction. A successful attempt to break through the 100.0% Fibonacci level allows us to expect a continuation of the decline in quotes but does not allow us to assume an even greater complication of the downward wave e. This wave now looks quite convincing, so the construction of a corrective set of waves suggests itself. However, the instrument has already made one unsuccessful attempt to break through the 100.0% Fibonacci level from below, which showed that the markets are not ready to buy the euro currency. It turns out that the markets are tired of moving the instrument down, but do not have the strength to move it up. The amplitude yesterday was 25 basis points, today – 13.

The news background for the Euro/Dollar instrument was again zero on Friday. During the day, nothing was interesting in Europe nor the US. Thus, it is not surprising that the amplitude of movements on Friday is 13 points. The day is not over yet, perhaps the markets will still take a couple of active actions. However, I want to note something else. Now the situation with the instrument is "neither here nor there", as the common people say. The instrument cannot continue to decline, but at the same time, it cannot begin to increase. So it turns out that the instrument is slightly reduced by 20-30 points per day, but these movements are very difficult to identify, although their belonging to the wave e is not in doubt. As a result, the wave counting indicates that the instrument is ready to build not just a new upward wave, but a new upward section of the trend. And the news background at the same time regularly supports the US currency. The markets, in turn, are waiting for new speeches by Jerome Powell, the symposium in Jackson Hole, as well as a new meeting of the Fed to find out when the regulator is going to complete the asset purchase program. This is now one of the key issues for the entire foreign exchange market. If a positive response is received, the US dollar may rise even more, which will inevitably lead to a complicated wave counting. However, so far there is no specific information on the QE program and its timing. Thus, the dollar is not retreating backward, but it is also moving forward with difficulty.

Based on the analysis, I conclude that the construction of the downward section could have ended around the level of 1.1704, which is equal to 100.0% according to Fibonacci. Wave e has received a pronounced five-wave internal structure, so now I expect the beginning of building an upward set of waves or complicating the current trend section. A successful attempt to break through the 100.0% Fibonacci (1.1704) will indicate the readiness of the markets to buy the instrument. If the markets find the strength to keep the instrument above the 17th figure, then I advise you to buy euros for each MACD signal "up" in order to build a new upward set.

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The wave counting of the higher scale looks quite convincing. We see three three-wave sections of the trend, which are approximately the same in size. However, the last section of the trend quite unexpectedly began to take a more complex form, but it can still end in the near future.

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

Trading Signal for LITECOIN - LTC/USD for August 20 - 23, 2021: Key level $192.63 (EMA 200)

Posted: 20 Aug 2021 08:15 AM PDT

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The daily chart of Litecoin shows that it has approached the EMA of 200. The first attempt to break thought this level was on August 18. This is where it started a technical correction. Now it is likely that Litecoin will try to break through this level for the second time and thus be able to reach the psychological level of 200.00.

Litecoin fell below the 200 EMA on May 19 and since then it has been consolidating between an upper range of 188 to a low of the range at 102. Now it is approaching the top of this level. The breakout of the 200 EMA could give it more bullish strength to hit the target at 200.00 and thus rise to the 61.8% Fibonacci level at 291.00.

As Litecoin remains below the 200 EMA located at 192.62, we believe that in the medium term it could continue with a bearish bias and fall towards the low of 102.00.

The last daily candlesticks show an intact uptrend projected with a trend channel. A breakout and consolidation below this channel could be the start of a new bearish wave up to the 150.00 level, 4/8 murray line and a pivot point.

The key is to wait until Litecoin pulls back to the level of 192.63 (EMA 200), or wait for a sharp breakout of the uptrend channel with the targets at 160.00 and 150.00 in the short term.

Support and Resistance Levels for August 20 - 23, 2021

Resistance (3) 197.75

Resistance (2) 192.70

Resistance (1) 183.81

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Support (1) 178.49

Support (2) 175.31

Support (3) 169.60

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

US stock market trading mixed

Posted: 20 Aug 2021 08:03 AM PDT

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US stock indices showed a mixed dynamic by the end of the trading session on Thursday. On the one hand, the NASDAQ technology sector index and the broad-based S&P500 index were are up by 0.11% and 0.13% respectively, while the Dow Jones was down by 0.19%.

Several factors determined investors' behavior. Fears over continuing spread of COVID-19 is among them. Another important event was the publication of the US Fed's minutes for July. According to them, the regulator is planning to roll back its stimulus program that was aimed at supporting the economy. Finally, the employment data in the US surprised investors. The number of new jobless claims dropped to 348,000 over the past week, while analysts expected a fall to 363,000.

Among the companies included in the Dow Jones, the best performers were Cisco Systems Inc (+ 3.84%), UnitedHealth Group Incorporated (+ 2.53%), and Microsoft Corporation (+ 2.08%). At the same time, shares of the following companies lost their value: Boeing Co (-3.12%), Caterpillar Inc (-2.55%), and Chevron Corp (-2.49%).

Among the companies included in the S&P 500, the largest gains were among Macy's Inc (+ 19.59%), Bath Body Works Inc (+ 10.49%), and Synopsys Inc (+ 8.73%). The companies whose stocks showed the biggest decline were Illumina Inc (-7.88%), Occidental Petroleum Corporation (-5.80%), and CF Industries Holdings Inc (-5.31%).

Among the companies included in NASDAQ, the largest increase in value was among Sonnet Biotherapeutics Holdings Inc (+ 63.74%), Sonoma Pharmaceuticals Inc (+ 52.31%), and Dlocal Ltd (+ 26.57%). The biggest losses were posted by PharmaCyte Biotech Inc (-64.85%), Ontrak Inc (-44.51%), and OLB Group Inc (-38.93%).

The number of shares which ended lower (2,329) significantly exceeded the number of shares that closed the session with gains (906) on the New York Stock Exchange. The situation is similar on the NASDAQ stock exchange where shares of 2,545 companies showed a decline, while only 1,015 posted gains.

Notably, the shares of some companies showed unprecedented growth, while others recorded a sharp decline. Thus, the shares of such companies as Macy's Inc, Synopsys Inc, Cisco Systems Inc, Dlocal Ltd, and Microsoft Corporation rose to yearly highs, having jumped to 21.61, 315.99, 57.27, 62.38, and 296.77 respectively. At the same time, the shares of Ontrak Inc (-44.51%) and OLB Group Inc (-38.93%) have reached their lowest value over the past few years.

The Volatility Index, which is based on the implied volatility of the S&P500 Index options, increased by 0.46% and stood at 21.67, its highest value for the month.

Gold Futures for December delivery fell by 0.09% to $1,782.85 per troy ounce. Futures for WTI crude oil also lost 2.02% and dropped to $63.89 per barrel. Brent crude futures fell 1.96% to $66.89 a barrel.

On Forex, the situation is also ambiguous: the EUR/USD pair decreased by 0.29% to 1.676, and the USD/JPY pair increased by 0.03%, reaching the level of 109.78.

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

Trading Signal for Crude Oil - #CL/ WTI for August 20 - 23, 2021: Buy above $62.35 (0/8)

Posted: 20 Aug 2021 07:27 AM PDT

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The price of Crude Oil (#CL or WTI) has reached a key level of 0/8 murray around 62.35. This level represents strong support. Given that it has tested this level for the second time, we believe it could form a double bottom reversal pattern.

The weekly report on crude inventories revealed a decrease of -3.2 million barrels in the week ending August 13. Although this data was higher than expected, oil could not make a significant rebound as the downward pressure continued to weaken the price.

Crude Oil has quickly fallen to a critical level of 62.30 (0/8). The spread of the virus in China and other parts of Asia is probably affecting the demand for crude. If oil loses this level, there could be a drop to the psychological level of 60.00.

On the other hand, OPEC + has begun to normalize its oil production which will alleviate a potential upside in oil prices. For now, we expect a technical rebound towards the levels of 63.44 (SMA 21).

On the chart, we can notice a downtrend line that is projected from the high of 74.00, and it is still prevailing. Now the line converges around 65.00. This could be the objective if WTI makes a technical rebound from the low of 62.35.

The technical reading of the eagle indicator, that measures the strength and volume of the market, has reached a level of extreme oversold condition(5). Therefore, we believe that at the current price levels there could be a technical rebound. The key level to buy from is above 62.35, with the targets at 63.44 (21 SMA) and 65.62 (4/8 and top of bearish channel).

Support and Resistance Levels for August 20 - 23, 2021

Resistance (3) 64.68

Resistance (2) 63.51

Resistance (1) 62.96

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Support (1) 61.39

Support (2) 60.95

Support (3) 60.38

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

Bitcoin is doomed to further growth

Posted: 20 Aug 2021 07:11 AM PDT

Over the past year, the quotes of the main digital coin have increased by more than four times. In April 2021, the value of the virtual currency at all marked a historical record, almost breaking the $ 65,000 mark. However, now Bitcoin is going far from its best times, forcing investors to doubt the feasibility of investing in the first digital coin. At the same time, analysts of the crypto market are much more positive and confidently declare that BTC has a long and bright future ahead.

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According to experts, at the moment, the virtual currency market and the crypto economy are at the initial stage of development. Thus, they urgently need a clear infrastructure, uniform regulatory rules, and a clear legislative framework. In addition, the high energy consumption and the lack of blockchain specialists of the required level are serious constraining factors for the industry. However, the most important reason for the crypto market is still the use by giant global companies and large banks of the international payment systems SWIFT, VISA, etc., that are familiar to them.

At the moment, the capitalization of the securities market is $ 80 trillion, the gold market is $ 13 trillion, and digital assets are $ 2 trillion (about 2% of the total capital market). And to occupy a worthy place in the general list of assets, BTC should belong to about 5-6%. And here, experts believe, bitcoin has all the reasons to reach the desired level, first of all – support from financial institutions, exchanges, and miners. At the same time, the more vigorously the infrastructure is developed, the more actively the value of the coin will increase.

As for the question of the expediency of buying bitcoin, most analysts of the crypto market confidently assure: "Feel free to buy both bitcoins and altcoins." However, such a step will be rational only in the case of long-term, several-year-long investments. Short-term investments in the conditions of the high volatility of the digital coin market are extremely dangerous, even taking into account the frequent updates of historical records by bitcoin.

Today, the main buyers of virtual currency are institutional investors and large funds. Their investments in digital assets confirm the confidence in the crypto market and support its permanent growth.

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

The third force in the market: ADA rose by 20% and set a new record

Posted: 20 Aug 2021 07:03 AM PDT

Five years ago, there was a certain division structure in the cryptocurrency market that looked like this. There is bitcoin - the main digital asset with the greatest opportunities and prospects, and there is the altcoin market - little-known coins that are of interest to the retail audience. Over the past few years, Ethereum has managed to break this division, and already in 2021, the main altcoin is on a par with Bitcoin. However, due to the difficulties that BTC and ETH are experiencing, a coin has emerged that can be considered a contender for a place in the top three.

We are talking about the altcoin Cardano, which has received a lot of updates over the past year and has improved the structure of the speed and processing of transactions. The last month was a breakthrough for the cryptocurrency. As of August 20, Cardano is among the top 3 crypto assets in terms of capitalization with a result of $80.5 billion. Over the past day, the coin has risen in price by 18% and is quoted at $2.5. Over the week, the cryptocurrency showed an increase of 38%, and, judging by the growing interest, this figure will increase significantly.

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Over the past month, the altcoin has made a massive bullish breakout and hit a new all-time high. This achievement is usually compared with the upcoming 'Alonzo' upgrade, but the popularity of the asset is connected not only with this. Thanks to constant upgrades, the ADA developers manage to maintain user interest, which positively affects the on-chain activity of the coin. According to the analysis of the indicators Daily Active addresses and Active addresses 24 hour, Cardano significantly outperforms Ethereum. Thanks to this, many venture capital funds put altcoin on par with the market leaders, which allows the project to attract large investments. For example, Grayscale Investments and Wall Street funds began to actively invest in the development of the Cardano ecosystem. According to data from cryptocurrency exchanges, over the past week, altcoin managed to attract $1.3 million in investments, including institutional ones.

The powerful bullish breakout of ADA/USDT started on July 23rd thanks to the momentum that the BTC market gave. The coin managed to bounce off the local low of $1.13, after which the cryptocurrency slowly but surely approached the resistance zone around $1.5. The bullish breakout of this line has strengthened the interest in the asset, as a result of which the technical indicators of ADA acquired an upward direction. The next difficult line was the $1.8 mark, which later became a support zone. The breakout of this mark allowed Cardano to make a bullish spurt to a local high at $2.25, after which the coin began to correct to a local support level around $1.8. The bulls managed to regain this milestone, and the cryptocurrency continued its upward trend to $2.47. The asset's technical indicators indicate weakness, but this is a normal signal when the mid-May high is crossed. A local correction and the formation of a support zone around $2.2 are quite likely.

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In the long-term plans, Cardano has all the chances to break the high of the price from May 16 and continue the upward movement to the next important line at $2.87. At this mark, the first level of external expansion starts, which the bulls will start to create after the breakdown of $2.47. Further movement of the coin will begin after the breakdown of the round $3 mark. In this area, a short-term correction is possible, as the asset will move in the range of corrective structures, where it will be necessary to form a buy shelf. In the range of $3- $4, the main resistance levels will be $3.30 and $3.9. The cryptocurrency has every chance to overcome all these milestones by the end of 2021 and bring the project to a completely new level. This is facilitated not only by on-chain activity and institutional interest, but also by the upcoming 'Alonzo' upgrade.

Thanks to the upgrade, smart contracts with support for the Plutus language will be implemented in the ADA network. In the long term, Alonzo should lead to the emergence of decentralized applications and services, including DeFi. Experts assure that ADA's activities will not affect the prospects of the ether in any way, but it is already clear that the Cardano project has made a significant step towards full-fledged competition with ETH.

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Trading Signal for GBP/USD for August 20 - 23, 2021: Buy above 1.3610 (-1/8)

Posted: 20 Aug 2021 06:50 AM PDT

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Since the FOMC announced the possible tapering of the bond purchases on Wednesday, the GBP/USD pair has fallen for a long time without showing any technical rebound. It has been 8 consecutive sessions in the 4H bearish candles. At the opening of the New York session, we expect that there will be a technical rebound around -1/8 for Murray (1.3610).

The pound sterling has been under downward pressure due to the UK retail sales data. The reading was worse than expected. It fell by 2.5% in July compared to market expectations of 0.4% growth.

This data, together with the persistent nervousness around COVID-19, and the expectations that the Fed will begin to reduce its asset purchases at the end of this year, has continued to exert downward pressure on the GBP/USD pair. We believe that there may be an imminent technical bounce in the next few hours.

According to the 4H chart, you can see the formation of a descending wedge that ends at the -1/8 Murray line. Consolidation at this level or a break above the technical pattern can occur and could push GBP to the 21 SMA (1.3702).

The pound sterling is very oversold as confirmed by the eagle indicator that has fallen to a level of 5. It means that there could be an imminent upward rebound in the next few hours or the next few days.

The GBP / USD pair has reached the important support, which is the -1/8 Murray line located at 1.3610. If the pair consolidates above this level, we can buy with targets at.1.3670 (0/8) and 1.3702 (SMA of 21).

Our perspective in the short term, is to expect a recovery of the GBP / USD pair, only if it remains above 1.3560, there it is located -2/8 of a murray, it could be the last opportunity for a correction and an upward movement to levels of the 200 EMA located at 1.3811.

Support and Resistance Levels for August 20 - 23, 2021

Resistance (3) 1.3745

Resistance (2) 1.3701

Resistance (1) 1.3653

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Support (1) 1.3586

Support (2) 1.3543

Support (3) 1.3458

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Trading tip for GBP/USD for August 20 - 23, 2021

Buy if breaks 1.3615, with take profit at 1.3671 (0/8), and 1.3702 (SMA 21) stop loss below 1.3580.

Buy if rebound 1.3560 (-2/8), with take profit at 1.3671 (0/8), and 1.3702 (SMA 21) stop loss below 1.3525.

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

EUR/USD: Euro is not a competitor to the dollar

Posted: 20 Aug 2021 06:11 AM PDT

Who benefits from this? This is an extremely important question not only for detectives but also for Forex traders. Will the ECB worry about the collapse of the EUR/USD? I don't think so. A weak euro will boost exports and accelerate inflation in the euro area. Will the Fed tear its hair out because of the strengthening of the US dollar? Unlikely. If Treasury yields rose and the S&P 500 went to a serious correction – it would be another matter. While there is neither one nor the other, financial conditions remain favorable, and the Federal Reserve can afford to normalize monetary policy.

A strong dollar is also an export of inflation. The fact that consumer prices in the United States are growing by 5.4%, and in the eurozone - by 2.2%, is an extremely useful thing for the Fed. Based on the CPI differential, the EUR/USD pair should move towards parity. But Nordea puts forward a more modest forecast - 1.1. It is based on the fact that the Fed will raise the federal funds rate four times by the end of 2023 (the first hike is expected by the company in September 2022), and the ECB's quantitative easing program is serious and for a long time.

Dynamics of EUR/USD and inflation differential in the USA and the Eurozone

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In general, I agree with Nordea's forecast, but I discount such a factor as COVID-19, and I think that 1.1 in EUR/USD is very cool, and 1.12 is quite acceptable. So far, according to Jerome Powell, the Fed is monitoring the spread of the pandemic in the United States but adheres to the idea that the economy has adapted to it. However, should the authorities in certain American states return to lockdowns, the Central Bank's opinion may change. In the face of a slowing US economy, abandoning QE is not the best choice. It's another matter if it is overheated. Can the Fed give up the temptation to take away the punch bowl just as the party gets going?

According to the minutes of its July meeting, the majority of FOMC members believe that the inflation target of 2% has been met. It is more difficult with unemployment, but there is progress. The recovery in the labor market, thanks to the abolition of stimulus checks for $300 a week, risks accelerating in the fall. Looking at the skyrocketing job openings, unemployment could plummet to historically low levels. Will the Fed's "doves" then have arguments to contain the offensive impulse of their opponents?

Dynamics of vacancies and unemployment in the United States

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Jackson Hole was supposed to be the centerpiece of the last full week of August, but the markets do not expect a message from Jerome Powell about the curtailment of QE. The Fed needs at least one more strong report to do this. In addition, the absence of Christine Lagarde at the meeting further reduces investor interest. Most likely, their attention will be focused on leading indicators for the eurozone economy, including business activity, as well as US GDP and inflation.

Technically, there is no reason to doubt the stability of the EUR/USD downward trend. Sales on the rebound from the moving averages near 1.1775 were successful. We keep shorts and periodically increase them on growth. The target is 1.15, which corresponds to the 261.8% target for the AB=CD pattern.

EUR/USD, Daily chart

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GOLD Price Outlook, 20 August

Posted: 20 Aug 2021 05:37 AM PDT

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XAUUSD recovered some losses after yesterday's decline. Now, it is trading at 1,785. In the absence of significant news, the US dollar index (DXY) remains the only indicator of the pair's moves.

If the price passes the initial resistance level of 1,789.42, it could test the next higher at 1,795.71.

Gold prices have stalled having bounced to retest the familiar congestion area clustered around the 1800/oz figure. A pullback from here sees initial support in the 1755-65 zone, marked by another long-standing inflection region as well as the 38.2% Fibonacci expansion.

Breaking lower with confirmation on a daily closing basis puts the 50% Fib at 1717.42 into focus, followed by the 2021 bottom in the 1670-80 area. The 61.8% expansion acts as reinforcement here. Alternatively, securing a breach above resistance may bring a test of the 1830-40 sector.

Alternatively, if the price reverses, then it could reach the first support level of 1,778.85.A pass below the first level can move the price up lower toward 1,770.62.

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

EUR/JPY Price Analysis:

Posted: 20 Aug 2021 05:35 AM PDT

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EUR/JPY is trying to reach 128.00.

A deeper pullback could extend to 127.00.

EUR/JPY is trading near recent lows at128.00 on Friday.

The selling pressure has accelerated after the cross broke below the 200-day SMA (129.10) as well as the key 2021 line around 129.15 at the end of last week. In the current context, further losses appear well in the pipeline.

A breach of recent lows near 128.00 should pave the way for a probable move to the next support near 127.00, where sits a Fibo level (of the January-June rally).

If the breakdown of the 200-day SMA at 129.04 becomes sustainable, then the outlook for the cross is expected to shift to negative.

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

Market Update for August 20, 2021

Posted: 20 Aug 2021 05:32 AM PDT

Watch for buying opportunities on the BTC....

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

BTC analysis for August 20,.2021 - Ascending triangle pattern in creation

Posted: 20 Aug 2021 05:32 AM PDT

Technical analysis:

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BTC has been trading sideways at the price of $47,100 but I see potential for the upside breakout and test of $48,000.

Trading recommendation:

Due to outside bullish day yesterday and ascending triangle in creation, I expect further upside movement.

Watch for buying opportunities with the upside target at $48,300

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

AUD/USD Update for August 20, 2021 - Intraday rally in play towards 0.7150

Posted: 20 Aug 2021 05:28 AM PDT

Technical analysis:

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AUD/USD has been trading upside in last few hours and there is chance for the corrective rally towards upside references.

Trading recommendation:

Due to the breakout of the downside channel, there is potential for the upside movement.

Watch for buying opportunities with the upside target at 0,7155 and 0,7180

Key intraday support is set at the price of 0,7105

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

Analysis of Gold for August 20,.2021 - Tight consolidation and potential for the breakout play

Posted: 20 Aug 2021 05:23 AM PDT

Technical analysis:

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Gold has been trading sideways at the price of $1,783. Watch for the breakout opportunities to confirm further direction.

Trading recommendation:

In case of the breakout of resistance at $1,793, watch for buying opportunities with the upside target at $1,826

In case of the downside breakout of the support at $1,775, watch for selling opportunities with the downside target at $1,755.

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

Technical analysis recommendations for EUR/USD and GBP/USD on August 20

Posted: 20 Aug 2021 04:01 AM PDT

EUR/USD

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The current week is nearing its end. The bearish traders approached this situation in a positive way again. Now, the question will be decided whether they will be able to maintain what they have reached and close the week with the current bearish mood. A similar scenario failed last Friday. The current center of gravity is the monthly Fibo Kijun (1.1695). The pivot point to resume the decline can be designated the support of 1.1602 (previous minimum extremum).

In turn, the nearest resistance zone is formed by the levels of the daily cross 1.1736 - 1.1759 - 1.1787, while the final level of the daily cross (1.1816) is strengthened by the weekly short-term (1.1822).

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The long-term lack of results for bears on the hourly time frame and being in the correction zone led to the fact that the analyzed technical indicators were tuned to a bullish wave. But to achieve a more significant result, the bulls need to break through the key supports of 1.1686 (central pivot level) and 1.1734 (weekly long-term trend) in the smaller time frames. The nearest resistance is set at 1.1707 (R1). If the bears manage to end the correction and further decline, we can consider the downward targets, namely the support levels of the classic pivot levels at 1.1657 - 1.1636 - 1.1607.

GBP/USD

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The bears are clearly eager to update their results. Their target is now the low of the previous decline (1.3571). The breakdown of this level and consolidation below will allow us to consider new perspectives. Yesterday, the bearish traders left the monthly support of 1.3690 far behind in the daily timeframe. A consolidation below it in the weekly interval will raise the issue of breaking through the level after the monthly time frame.

It should be noted that gaining support for the monthly short-term trend (1.3690) will play a role in strengthening the bearish mood and advantages. In case of a pullback, the monthly Tenkan (1.3690) is likely to offer resistance and try to fight for bearish interests.

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The advantage in the smaller time frames is currently on the bearish side. The downward trend is in an active phase. The support of the classic pivot levels 1.3588 - 1.3546 - 1.3461 serves as the intraday downward pivot points. Today, the key levels act as the resistances – 1.3673 (central pivot level) and 1.3764 (weekly long-term trend). A consolidation above which can affect the current balance of forces and change priorities not only on the H1 time frame, since at the same time, it will be possible to consider the failed breakout and the implementation of the rebound from the encountered monthly support of 1.3690 in the higher time frame.

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Ichimoku Kinko Hyo (9.26.52) and Kijun-sen levels in the higher time frames, as well as classic Pivot Points and Moving Average (120) on the H1 chart, are used in the technical analysis of the trading instruments.

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