Trading plan for the GBP/USD pair for the week of January 25-29. New COT (Commitments of Traders) report. The pound is quietly

GBP/USD - 24H.

analytics600d9d0679e49.jpg

The GBP/USD currency pair continued its upward movement during the current week, as did the EUR/USD pair. But if the euro currency had previously adjusted at least a little, then there was no question of a correction for the pound sterling. The British currency just keeps rising and that's it. From time to time, of course, there are pullbacks, however, there has not been a strong correction for a long time. Even the "high-volatility swing" mode has recently changed to a stable and confident upward movement. All this only suggests that market participants still regard the pound as an attractive currency for investment, and the dollar is not. In past fundamental reviews, we have already published several different hypotheses of a strong fall in the dollar over the past year. There are absolutely no fundamental reasons for this. Therefore, since the current trend is not built on a "foundation", then all the more attention should be paid to technical factors. And technical factors do not even allow the idea that the upward trend may end in the near future. What can prevent it from continuing if its nature is not fundamental? It turns out that the pound will become more expensive as long as it is bought, and the dollar is sold. And no one knows how long it will last.

COT report.

analytics600d96cfa118b.jpg

During the last reporting week (January 12-18), the GBP/USD pair increased by 70 points. It seems to be a little, but the growth is stable. But the latest COT report is again disappointing. Recall that over the past two to three months, the absolute majority of reports indicated minimal changes. In most cases, professional traders sought to close contracts for the pound, with both buying and selling. Only the penultimate report showed that the number of purchase contracts increased immediately by 10,460, which is a lot. The latest report showed that non-profit traders have returned to their favorite activity – a sluggish reduction in the number of contracts. 2 thousand buy contracts and 3.1 thousand sell contracts were closed. Thus, the net position for the "Non-commercial" group of traders has become more "bullish". However, the indicators show a very different picture. If the figures of the COT report could tell traders about the continuation of the upward trend (which it is), then the indicators show that the mood of non-commercial traders changes about once a month. The green line of the indicator (the net position of the "Non-commercial" group) constantly changes the direction of movement and intersects with the red line (the net position of the "Commercial" group), which means that there is no trend. However, there is a trend, and the changes displayed by the COT report are minimal and do not allow us to draw any long-term conclusions.

Talking about the fundamental background, especially for the pound/dollar pair, sometimes makes no sense at all. News, events, and reports are all available, however, all these important data do not have any influence on the movement of the pair. Thus, 90% of fundamental events and macroeconomic reports can be viewed out of pure sporting interest or just to keep abreast of what is happening. The last most important events concerned the speeches of several top officials of the UK and US economies. We wrote about Janet Yellen's speech in an article on the euro/dollar. Andrew Bailey also made it clear to the markets that the Bank of England is not going to introduce negative rates in the near future, but he also did not make any optimistic statements. The head of the Bank of England tried to instill optimism in the markets. After all, the pound continues to grow in any case. However, Andrew Bailey promised that the economy is waiting for a rapid recovery and in general "everything will be fine". Even regarding the UK's GDP for the fourth quarter, Bailey said that "it will not change at best compared to the third". However, the macroeconomic indicators continue to signal that if the British economy starts to recover, it will not be in the near future. The second and third "lockdowns" caused damage to the economy, although not as huge as the first. Now, we can say that the world has already learned to live with the pandemic, so the impact on the economy from a full quarantine is less than last spring. Nevertheless, the British economy is shrinking and will continue to shrink, and the American economy continues to recover.

Trading plan for the week of January 24-29:

1) The price keeps the upward trend without any problems. Thus, in the 24-hour timeframe, the target for an upward movement remains at the level of 1.3851. We recommend that you continue to trade for an increase on the higher timeframe as long as the price is above the critical line, and do not try to guess the moment when the upward trend ends. On the lower timeframes, respectively, upward trends are also more important.

2) Sellers are still quite weak. The week before last, the bears tried to seize the initiative, but it ended with only a minimal pullback. Thus, for the possibility of opening short positions, it is now recommended to wait again for the price to consolidate below the critical line. If this condition is met, a downward trend may form on the 4-hour timeframe. The price broke through the important level of 1.3700 this week, which significantly increased the likelihood of further movement to the north.

Explanation of the illustrations:

Price levels of support and resistance (resistance/support) – target levels when opening purchases or sales. You can place Take Profit levels near them.

Ichimoku indicators, Bollinger Bands, MACD.

Support and resistance areas – areas from which the price has repeatedly bounced before.

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

Trading plan for the EUR/USD pair for the week of January 25-29. New COT (Commitments of Traders) report.

EUR/USD - 24H.

analytics600d934266044.jpg

During the past week, the EUR/USD pair turned up and began a new round of upward movement. So far, in global terms (on a 24-hour timeframe), this move doesn't look convincing. That is, the pair's quotes remain below the critical line, thus, the prospects for an upward movement are questionable. At the same time, a strong upward trend persists. This is very eloquently signaled by the Ichimoku indicator. The price has so far managed to overcome the Kijun-sen line with difficulty and could not even work out the upper line of the Ichimoku cloud. From a purely technical point of view, everything looks like a banal pullback down, after which the upward trend will resume. Thus, the bears need to strengthen their positions over the next week and not give the initiative back to the bulls. It is difficult to say whether they will succeed or not. During the last correction period, which lasted for 4 months, the pair managed to go from a high to a low of 400 points. At the beginning of the new year, the quotes went down 300 points. Thus, in the current realities of the depreciation of the US currency, this is quite enough to start a new round of upward movement.

COT report.

analytics600d5b0ddc3bd.jpg

During the last reporting week (January 12-18), the EUR/USD pair fell by 80 points. As we have already written above, the pair has started to adjust globally, however, the upward trend is not canceled. The latest COT reports show just that. The previous COT report showed a sharp increase in the net positions of the "Non-commercial" group, the latest COT report also showed that non-commercial traders are increasing their purchase contracts. If the net position increased a week earlier due to a reduction in the number of sales contracts, now the Non-commercial group has opened new 8.2 thousand purchase contracts and only 1.4 thousand sales contracts. Thus, the net position increased again by almost 7 thousand contracts. This means that the mood of the most important group of traders continues to become more "bullish". This is also evidenced by the indicators. The first indicator again shows that the red and green lines are moving away from each other, which indicates the continuation of the trend (in our case, the upward one). The second indicator shows the net position of non-commercial traders, but on the chart. That is, we can see firsthand how their mood becomes more "bullish". From all of the above, we can conclude that the upward trend is highly likely to continue. A couple of months ago, we made the opposite conclusion, however, the bears were so weak that they could not start a new trend.

This week, there were few really important events for the foreign exchange market. There were many high-profile events. For example, the inauguration of Joe Biden, which was held without excesses, rallies, and riots. The new US president immediately began to cancel some of the decisions and decrees of Donald Trump, showing that he radically disagreed with his policies. This means that the course of America will remain the same, but the direction of movement may change quite strongly. Also this week, the ECB held a meeting, at which no important decisions were made. Thus, the most important thing was the press conference with Christine Lagarde and not the results of the meeting. However, Lagarde also did not tell the markets anything fundamentally new. As usual, it was about the high euro rate, low inflation, threats, and risks associated with the "coronavirus" pandemic. Also, this week, Janet Yellen, the former head of the Federal Reserve, and now the US Treasury Secretary, made a voluminous speech. The most important thesis voiced by Yellen was the rejection of attempts to influence the exchange rate of the US currency, as it was under Donald Trump. According to Yellen, her office will not interfere in the exchange rate of the dollar. In general, as we can see, there were many interesting events, but none of them had a special impact on the movement of the pair. For most of the week, the euro currency has been quietly growing, as it likes to do in the last 9-10 months. There is also nothing to highlight from the macroeconomic statistics. Inflation in the EU remained at a negative level. Business activity in the service sector remained below the level of 50.0. Nothing unexpected.

Trading plan for the week of January 24-29:

1) The pair's quotes attempted to resume the upward trend over the past week. We believe that if the bulls manage to return the pair to the area above the critical line, then the upward movement will resume with the first target at the resistance level of 1.2376. An upward trend has already been formed on the hourly timeframe. At the 4-hour chart, you need to overcome the Senkou Span B line to continue moving north. In general, we would say that if we continue to ignore the fundamental background, which has not changed much in recent weeks, then the euro currency has an excellent chance of even greater growth.

2) The downward trend seems to have started, however, it didn't last very long. As long as the price is below the critical line, the downward movement can resume with the targets of the support level of 1.1992 and the Senkou Span B line. However, if the quotes go above Kijun-sen, then the upward trend is highly likely to resume. If there is a rebound from the Kijun-sen line, it will signal the opening of shorts, but extremely neat shorts.

Explanation of the illustrations:

Price levels of support and resistance (resistance/support) – target levels when opening purchases or sales. You can place Take Profit levels near them.

Ichimoku indicators, Bollinger Bands, MACD.

Support and resistance areas – areas from which the price has repeatedly bounced before.

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

Technical Analysis of BTC/USD for January 22, 2021

Crypto Industry News:

BlackRock manages assets worth 7.81 trillion dollars. The fund wants to allocate funds to bitcoin futures. The world's largest mutual fund decided to take this step through two of its sub-funds. BlackRock's intentions are confirmed by documents submitted yesterday. They were received yesterday by the US Securities and Exchange Commission.

Each Fund may use instruments known as derivatives, which are financial instruments. Their value comes from one or more securities, commodities (such as gold or oil), currencies (including bitcoin), interest rates, loans or indices (a measure of value or interest rates, such as the S&P 500 index or the principal borrowing rate ) ".

Last month, BlackRock CEO Larry Fink suggested Bitcoin could "possibly" transform into a global market. It is worth noting that Fink has in the past declared a rather skeptical attitude towards cryptocurrencies.

"Bitcoin has captured the attention and imagination of many people. It is still an untested, fairly small market compared to other markets. You see these big giant moves every day. Can it transform into a global market? It's possible. "

"Having a digital currency has a real impact on the US dollar," added Fink. He also commented that assets such as bitcoin, Chinese digital Yuan, and Facebook's freshly renamed project make the US dollar "less important."

Technical Market Outlook:

The BTC/USD pair has dropped like a stone during the last 24 hours and broke below all of the important technical support levels including long-term trend line support around the level of $32,000. The bears have managed to hit the level of $29,000 before the market had a chance to bounce towards the level of $32,000 again. Nevertheless, the momentum is still weak and negative, so the outlook remains bearish. The next important technical support for Bitcoin is seen at the level of $25,000.

Weekly Pivot Points:

WR3 - $50,241

WR2 - $45,262

WR1 - $41,218

Weekly Pivot - $35,725

WS1 - $31,875

WS2 - $26,553

WS3 - #22,402

Trading Recommendations:

Bitcoin made another ATH and bulls are in control of the market. The up trend continues and the next long term target for Bitcoin is seen at the level of $50,000, so any correction or local pull-back should be used to open the buy orders. This scenario is valid as long as the level of $20,000 is clearly broken.

analytics600a85f1e7512.jpg

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

Biden's Keystone decision to deliver blow to Canada's economy

analytics600a839688944.jpg

The leader of the Canadian oil center called Biden's decision to cancel the Keystone XL pipeline project an "insult" and urged Prime Minister Justin Trudeau to consider retaliation.

"This is a gut punch to the Alberta and Canadian economies," Alberta's Premier Jason Kenney said in a press conference on Wednesday. "It's an insult," he continued.

Last year, Kenny's government invested $1.1 billion of taxpayer money to accelerate the construction of the pipeline. According to the plan, the pipeline would carry more than 800,000 barrels a day from Alberta's oil sand to the south of the US, that is, to the coast of the US Gulf of Mexico.

Kenny said that Trudeau, Canada's prime minister, should demand that the new US administration discuss the project in the context of environmental, climate, and security policy. If this plan fails, then Canada should be willing to use "meaningful" punitive measures against its largest trading partner.

Biden's decision announced on Wednesday will affect the jobs of more than 2,000 people working on the project, Kenny said.

The pipeline is one of three projects that Alberta's oil sands producers have counted on to get their oil to foreign markets, especially after struggling for years with a lack of export pipelines. Environmentalists say the pipeline would worsen global warming by spurring the development of carbon-intensive oil sands.

If Biden does not change his decision, Alberta is prepared to "use every legal means" to seek compensation through the courts, Kenny said. He also added that the province has consulted legal experts and "has a strong case to make."

Angela Merkel supported Moscow on the Nord Stream project, saying on Thursday that sanctions are unacceptable and that Washington itself has energy ties to Russia.

"It's not as if there aren't any trade relations in the oil sector between the US and Russia," Merkel said. "We need to put all this on the table and discuss whether we won't have any more trade with Russia in the gas sector, what degree of dependence is acceptable."

Nord Stream is one of a long list of issues that Biden will have to face at the start of his four-year term. Anthony Blinken, Biden's pick for the secretary of state, is "determined to do whatever we can to prevent" the completion of the pipeline, he said during the hearing on Tuesday.

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

Technical Analysis of ETH/USD for January 22, 2021

Crypto Industry News:

One of the first steps taken by President Joe Biden on his first day in office was the freezing of the federal regulatory process, including the controversial private cryptocurrency wallet legislation proposed by former Treasury Secretary Steven Mnuchin.

The above decision was included in a White House memorandum addressed to the heads of various federal agencies, including the Financial Crimes Enforcement Network (FinCEN). The decree does not specify a cryptocurrency wallet proposal, but does make a general recommendation to freeze any agency rules pending feedback for a period of 60 days from the date of the memorandum.

The proposal for a self-hosted cryptocurrency wallet was made by FinCEN on December 18 under the rule of former US Treasury Secretary Steven Mnuchin. If the regulations were implemented, it would require banks and money service companies to file reports, keep records and verify the identity of customers who transact to and from private cryptocurrency wallets.

The proposal was widely criticized by industry leaders, including Square CEO Jack Dorsey, who said collecting a counterparty's name and address should not be required for cryptocurrencies, as it is not required for cash.

Other critics have also argued that it would be technically impossible to meet Mnuchin's requirements for many projects, as smart contracts do not contain information about the name or address.

Technical Market Outlook:

The ETH/USD pair has dropped significantly during the last 24h. The bears has managed to push the price towards the technical support seen at the level of $1,070, the local low was made at the level of $1,048. Since then the market bounced a little, but did not make it above the level of $1,223, which is the key short-term technical resistance now. If the bears will intensify the pressure, then the next target for them is seen at the level of $1,008 and $922. The weak and negative momentum supports the short-term bearish outlook.

Weekly Pivot Points:

WR3 - $1,800

WR2 - $1,551

WR1 - $1,448

Weekly Pivot - $1,183

WS1 - $1,077

WS2 - $810

WS3 - $699

Trading Recommendations:

The up trend on the Ethereum continues and the next long term target for ETH/USD is seen at the level of $1,500, so any correction or local pull-back should be used to open the buy orders. Please notice, the up trend starting to go vertical, so the volatility will be higher than average. The bullish scenario is valid as long as the level of $830 is broken.

analytics600a83b9c6636.jpg

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