Technical analysis of GBP/USD for September 25, 2020

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Overview:

The GBP/USD pair continues to move downwards from the level of 1.2897. this week, the pair dropped from the level of 1.2897 to the bottom around 1.2674. But the pair has rebounded from the bottom of 1.2674 to close at 1.2774.

Today, the first support level is seen at 1.2674, the price is moving in a bearish channel now. Furthermore, the price has been set below the strong resistance at the level of 1.2812, which coincides with the 38.2% Fibonacci retracement level.

This resistance (1.2812) has been rejected several times confirming the veracity of a downtrend. Additionally, the RSI starts signaling a downward trend.

As a result, if the GBP/USD pair is able to break out the first support at 1.2759, the market will decline further to 1.2674 in order to test the weekly support 1 again.

Consequently, the market is likely to show signs of a bearish trend. So, it will be good to sell below the level of 1.2812 with the first target at 1.2674 and further to 1.2551.

On the other hand, in case a reversal takes place and the GBP/USD pair breaks through the resistance level of 1.2897, then the best slution to set your stop loss at the level of 1.2920.

Overall, we still prefer the bearish scenario which suggests that the pair will stay below the zone of 1.2897/1.2812 today.

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Trading plan for the EUR/USD pair on September 25

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Another pandemic wave seems to be starting in Europe, as incidence rate has again increased in some states. France recorded a surge in cases, about 16 thousand a day, while Spain listed about 10 thousand.

Meanwhile, the earlier leading countries have finally observed a stabilization in daily new cases, if not a reduction. India records about 90 thousand cases a day, while the United States and Brazil have an average of 30 to 40 thousand cases.

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EUR/USD: The bulls are trying to turn the downward trend.

To resume a bearish mood, keep selling from the level of 1.1735, and place stop at 1.1760

A halt in the downward move will signal the end of the bearish trend.

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USD: Time to attack

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Positive US economic data and the threat of the second wave of the coronavirus have paved the way for the US dollar. Thus, on Wednesday, the US currency rose against major currencies.

The Australian dollar depreciated and hit a six-week low of $0.7116. The drop was triggered by the unjustified expectations of the interest rates cut by the Reserve Bank of Australia.

The New Zealand dollar also fell by 0.33% to trade at $0.6612 after the Reserve Bank of New Zealand left its key rate at 0.25%. Moreover, future job cuts and business closures in the country have strengthened expectations of a transition to negative interest rates in the coming months.

Analysts believe that the US dollar's rise is a short-lived phenomenon. However, the main reason for the currency's volatility is uncertainty over the US presidential election.

The US dollar has reached its highest level over the last 2 months. It jumped to $1.1675 per euro.

The pound sterling, on the contrary, has reached its lowest point. The currency is trading at $1.2721. The crash of the British currency was caused by a statement of Mr. Johnson about new restrictions in order to stop the COVID-19 spread.

Moreover, the Swiss franc declined against the greenbacks to settle at $1.08. Besides, the USD/JPY grew to trade at 105.98 yen.

At the same time, experts from the Federal Reserve Bank of Chicago are sure that the US Congress should provide an additional fiscal stimulus package. Otherwise, the US economy will show a long and slow revival.

The USD index, which measures the US dollar against a basket of six major currencies, finally climbed to 94.197 reaching its highest point in the last two months.

The euro is no longer attractive to investors, as there is a risk of the second quarantine. In France and Spain, the number of people infected with COVID-19 grows every day. Besides, in France, a curfew was imposed at 22:00, apart from other restrictions. By this time, all bars and restaurants should be closed.

Travel restrictions have been reintroduced in many countries. Moreover, airlines have to cut passenger traffic again.

The UK and the EU have not signed a trade deal yet. This creates additional economic tension.

Also, traders are closely monitoring the situation in Egypt and Turkey. The Turkish lira continued falling and reached the lowest level. In Egypt, the local central bank does not intend to change its benchmark rate on deposits. It will remain at the level of 9.25%. By the way, Egypt's real interest rate is one of the highest in the world.

USD/TRY slid by 0.1% to hit 7.5869, while USD/EGP inched up by 0.3% to settle at 15.7500.

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Technical Analysis of EUR/USD for September 25, 2020

Technical Market Outlook:

The EUR/USD pair has made a new swing low at the level of 1.1626, but a Bullsih Englufing candlestcik pattern was made at the bottim of the down wave, so now the market might be ready for some corrective bounce.The levels of 1.1697 and 1.1710 will now act as an intraday technical resistance for the price. The next target for bears is seen at the level of 1.1590, which is a 50% Fibonacci retracement level on a Daily time frame chart. The momentum remains weak and negative, so another wave down is anticipated once the correction is terminated.

Weekly Pivot Points:

WR3 - 1.2077

WR2 - 1.1988

WR1 - 1.1919

Weekly Pivot - 1.1829

WS1 - 1.1748

WS2 -1.1662

WS3 - 1.1583

Trading Recommendations:

On the EUR/USD pair the main trend is up, which can be confirmed by almost 10 weekly up candles on the weekly time frame chart and 4 monthly up candles on the monthly time frame chart. Nevertheless, weekly chart is recently showing some weakness in form of a several Pin Bar candlestick patterns at the recent top. This means any corrections should be used to buy the dips until the key technical support is broken. The key long-term technical support is seen at the level of 1.1445. The key long-term technical resistance is seen at the level of 1.2555.

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Technical Analysis of GBP/USD for September 25, 2020

Technical Market Outlook:

The GBP/USD pair has hit the 38% Fibonacci retracement located on the level of 1.2697 on the Daily time frame chart and keeps hovering around this level. Just above the Fibonacci retracement level there is a immediate technical resistance seen at the level of 1.2769 and 1.2789, so it should temporary stop any bullish attempts. The intraday technical support is seen at the levels of 1.2686 and 1.2668. The market conditions are oversold, but momentum is weak and negative, which supports the short-term bearish outlook.

Weekly Pivot Points:

WR3 - 1.3253

WR2 - 1.3131

WR1 - 1.3027

Weekly Pivot - 1.2896

WS1 - 1.2795

WS2 -1.2660

WS3 - 1.2557

Trading Recommendations:

On the GBP/USD pair the main, multi-year trend is down, which can be confirmed by the down candles on the monthly time frame chart. The key long-term technical resistance is still seen at the level of 1.3518. Only if one of these levels is clearly violated, the main trend might reverse (1.3518 is the reversal level) or accelerate towards the key long-term technical support is seen at the level of 1.1903 (1.2589 is the key technical support for this scenario).

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Technical Analysis of BTC/USD for September 25, 2020

Crypto Industry News:

The Russian Ministry of Finance continues to push through regulations for the cryptocurrency industry by proposing new tax requirements. This time, the ministry wants to introduce criminal liability for failure to declare cryptocurrency transactions.

According to a report by local media on September 24, the ministry introduced amendments to the cryptocurrency act. People who do not report cryptocurrency transactions amounting to over 1 million Russian rubles ($ 13,000) per year will be able to go behind bars for up to 3 years.

The ministry also proposed high fines for smaller, unreported amounts. Consequently, each entity in Russia would have to report its annual cryptocurrency income if its amount exceeded 100,000 rubles ($ 1,300). Failure to report such transactions, the report says, would be subject to a penalty of 30% of the total amount of digital assets held, but not less than 50,000 rubles ($ 650).

The authorities also came up with the idea that local cryptocurrency exchanges should report all cryptocurrency transactions to the tax office once a quarter. The new proposals relate to both the new Russian cryptographic law "On digital assets" and the upcoming draft law "On digital currency". In the current version of the Act on Digital Assets, neither tax rates for transactions nor general rules for their declaration have been established.

It is not clear what transactions the ministry wants to tax. The authority only recognizes a few ways to become a cryptocurrency holder. In early September, the ministry proposed a total ban on all cryptocurrency transactions. The exception is obtaining them in three ways: through inheritance, bankruptcy and enforcement proceedings.

Technical Market Outlook:

The BTC/USD pair had retraced more than 61% of the last wave down, but was capped at the level of $10,865. There is a Pin Bar candlestick made at the top of the retracement, so now the market sends a first indication of a possible reversal and down trend continuation. Any violation of the intraday technical support seen at the level of $10,555 would be seen as down trend resumption. The first local target for bears is seen at the level of $10,430. For now the momentum remains neutral on the H4 time frame chart, but is might change soon.

Weekly Pivot Points:

WR3 - $12,186

WR2 - $11,616

WR1 - $11,271

Weekly Pivot - $10,739

WS1 - $10,293

WS2 - $9,807

WS3 - $9,393

Trading Recommendations:

The weekly trend on the BTC/USD pair remains up and there are no signs of trend reversal, so buy orders are preferred in the mid-term. All the dynamic corrections are still being used to buy the dips. The next mid-term target for bulls is seen at the level of $13,712. The key mid-term technical support is seen at the level of $10,000.

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Technical Analysis of ETH/USD for September 25, 2020

Crypto Industry News:

The Venezuelan government said it had legalized the mining of Bitcoin and altcoins - however, it added that miners would need to obtain licenses and consent to regulatory oversight.

According to media agency Criptonoticias, the government has issued an official decree stating that all cryptocurrency mining platform manufacturers, cryptocurrency farm builders and mining equipment importers will also be subject to random checks.

Citizens looking to mine Bitcoin and other cryptocurrencies will need to apply for a license from the National Crypto Asset and Related Activities Authority (SUNACRIP), which will oversee miners in the country.

SUNACRIP did not mention how much the license would cost, but added that pricing details would be made available through an online system that is currently under construction.

The regulator added that it will create a "comprehensive miners registry", an online database containing detailed information about individual miners detailing what kind of mining activity they conduct, whether they sell, manufacture, import or use cryptocurrency mining equipment.

The new rules don't stop there: SUNACRIP has created what it calls the National Digital Mining Pool, insisting that membership is "mandatory" - and non-compliance will be sanctioned. The regulator said the measures it had taken were part of an effort to "connect all Venezuelan miners".

According to figures published earlier this year by the Center for Alternative Finance at the University of Cambridge, Venezuela is the largest Bitcoin miner in Latin America and ranks among the world's top ten.

Technical Market Outlook:

The ETH/USD pair has bounced from the key technical support zone located between the levels of $305.20 - $321.95 and made a new local high at the level of $352.80, just below the technical resistance seen at the level of $355.24. The bounce had ended with a Shooting Star candlestick pattern, so the market might be ready to reverse and continue lower. Only a sustained breakout above the level of $352.80 would have change the current negative outlook for Ethereum.

Weekly Pivot Points:

WR3 - $426.36

WR2 - $409.08

WR1 - $387.32

Weekly Pivot - $370.45

WS1 - $348.67

WS2 - $331.18

WS3 - $309.49

Trading Recommendations:

The weekly and monthly time frame trend on the ETH/USD pair remains up and there are no signs of trend reversal, so buy orders are preferred in the mid-term. The key mid-term technical support, seen at the level of $364.95 had been violated, but all the dynamic corrections are still being used to buy the dips. The next mid-term target for bulls is seen at the level of $500.

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Hot forecast and trading recommendations for EUR/USD on 09/25/2020

The trend of tightening anti-epidemiological measures has reached France. The second most populous and largest economy in the European Union, after the UK and Spain, introduced new restrictions. More precisely, it tightened a number of existing ones. In particular, as in England, bars and restaurants can now only be open until ten in the evening. Also, more than ten people can not gather in public places. So far, these measures concern only individual cities, but Paris is among them. So it is quite obvious that over time, these measures will be extended to the entire territory of France. And if we consider the fact that French business suffered much more than British business during the spring quarantine, then even such lenient measures can cause colossal damage to it. There was already a significant increase in unemployment in France, and apparently, the situation could worsen dramatically. The number of bankruptcies, with subsequent layoffs, can grow to some exorbitant values. So the fears are well-founded.

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Nevertheless, the euro was able to withstand. Data on applications for unemployment benefits in the United States provided support, which turned out to be slightly worse than forecasted. In particular, the number of initial applications for unemployment benefits increased from 866,000 to 870,000. Although they were supposed to decrease from 860,000 to 840,000. In addition to the growth in the number of applications, the previous value was also revised for the worse. The number of repeated applications for unemployment benefits, although reduced, turned into 12,580,000 from 2,747,000. The fact is that it should have decreased to 12,100,000, and not with 12,747,000, but 628,000 instead. This means that previous data will be revised for the worse.

Repetitive Unemployment Insurance Claims (United States):

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As you can see, investors continue to monitor macroeconomic data despite growing concerns about the possibility of a second wave of the coronavirus pandemic. In this regard, today's data on orders for durable goods in the United States may provide additional support to the dollar. After all, the volume of orders should grow by 2.0%. This is a pretty significant increase. Moreover, it speaks for the growth potential of industrial production and retail sales, which speaks of a strong economic recovery. Moreover, there is no talk about the possibility of reintroducing any restrictive measures in the United States itself.

Durable Goods Orders (United States):

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The euro/dollar pair showed active downward interest during the entire trading week, as a result, the euro fell below 1.1650. The gradual change in direction has already led to a breakout of the variable horizontal channel 1.1700/1.1900. The next stage consists of changing the medium-term trend, where if the quote is staying below 1.1700, the sequential development of the price towards the 1.1500 level is not excluded.

If we proceed from the quote's current location, then we can see a pullback from 1.1626 towards 1.1686.

A slight slowdown is recorded in relation to market dynamics, but the coefficient of speculative operations is high.

Looking at the trading chart in general terms (daily period), you can see a horizontal movement in the range of 1.1700/1.1910, which was broken in the downward direction this week.

We can assume that the current pullback seems temporary, and so if the low of 1.1626 has been updated, the quote will immediately return the downward movement towards the values of 1.1550-1.1500. An alternative scenario considers delaying the pullback towards the previously passed flat border.

From the point of view of complex indicator analysis, we see that the indicators of technical instruments on the hourly and daily timeframes indicate a sell signal due to the prevailing downward interest in the market.

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Analysis and forecast for EUR/USD on September 25, 2020

After a continuous four-day decline, the main currency pair of the Forex market rose in yesterday's trading. Perhaps this course of events was facilitated by macroeconomic statistics, as well as the speech of the head of the Federal Reserve Bank of Boston Rosengren.

Thus, according to yesterday's reports, all three IFO indices for Germany came out stronger than analysts' forecasts. At the same time, the number of initial applications for unemployment benefits in the US increased more than expected. As for Rosengren's speech, the head of the Boston Federal Reserve made it clear that current employment, as well as the inflation indicator, are far from the values that were observed before the COVID-19 pandemic, and will remain at low levels for several years. Moreover, Eric Rosengren expressed fears that the US economy may shrink even further in the autumn-winter period if the COVID-19 epidemic is not localized, and additional financial assistance will not be sufficient to overcome the negative consequences caused by the coronavirus infection.

The main macroeconomic events of the last day of this week will be reports on orders for durable goods in the United States, which will be published at 13:30 London time. Williams, a member of the Federal Reserve's Open Market Committee, is also scheduled to speak.

Daily

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As already noted at the beginning of the article, the four-day decline of the main currency pair stopped yesterday. The bears intended to continue to put pressure on the quote, however, strong support was found at 1.1626. Thus, the assumption that the correction may begin after a decline in the price zone of 1.1620-1.1600 was confirmed. However, it will be too early for the euro bulls to rejoice. Trading on EUR/USD is below the key support level of 1.1700, the breakdown of which is still questionable.

If today and the entire week close above this mark, its breakdown will be considered false and the chances of resuming the upward trend will increase. If this fails and the session ends at 1.1700, we will most likely see a continuation of the downward trend for the main currency pair of the Forex market next week.

H1

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A very significant moment is seen on the hourly chart. At this time, the pair is trading above the 50 simple moving average and is ready to continue rising. Characteristically, it is at 1.1700 that the 89th exponential moving average is located, which can significantly strengthen this level as resistance.

If characteristic candlestick patterns are indicating a reversal at 1.1700 on the hourly or four-hour timeframes, this will be a signal for opening sales. In this case, I recommend opening short positions on EUR/USD, however, with small goals in the area of 1.1650/40. You should look for higher selling prices near the strong technical level of 1.1740, but even in this case, it is better not to transfer open positions to Monday and close them before the end of current trading. Due to COVID-19, it is not known what figures we will open on Monday. If the situation with the spread of coronavirus worsens, a price gap is possible at the opening of trading.

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Technical analysis for EUR/USD and GBP/USD on September 25

EUR / USD

The euro marked a new daily low yesterday, but we can say that there has been a slowdown at the end of the day, and now it is possible to develop an upward correction. Currently, the main pivot points for the bulls can be noted in the areas of 1.1740-64 (daily Tenkan + upper limit of the daily cloud + lower limit of the monthly cloud) and 1.1820-30 (daily Kijun + weekly Tenkan). If the downturn continues, the support zone has not changed its location and is still waiting for the Euro at 1.1567 (lower limit of the daily cloud) -1.1521 (weekly Fibo Kijun) - 1.1486 (monthly Fibo Kijun).

In the smaller time frames, the pair is in the correction zone. The bulls are now working above the central pivot level (1.1660). The main pivot point for the current correction is the weekly long-term trend (1.1733), while the nearest resistances can be noted at 1.1694 (R1) and 1.1721 (R2). Now, the bulls will change the balance of power in the lower halves in their favor and achieve support for the daily short-term, since they already consolidated above 1.1733, deployed moving averages and broke through the resistance of the higher time frames (1.1740-64) strengthening this area. At the end of the upward correction and exit from its zone (1.1626), the support of the classic pivot levels S2 (1.1599) and S3 (1.1572) will play the role of downward targets within the day.

GBP / USD

The decline continues in the zone of attraction and supports at 1.2111-77 (weekly Kijun + monthly Fibo Kijun + the lower limit of the daily cloud). Today, we are closing the trading week. According to the result, it will be possible to judge the likely formation of a rebound from the weekly short-term trend and the lower limit of the daily cloud. Now, the nearest pivot points for the development of an upward correction are the daily Tenkan (1.2840) and the weekly Fibo Kijun (1.2943). If the downward trend (1.2674) recovers, the main downside interest will be directed to the liquidation of the weekly gold cross, the last line of which is the support level at 1.2612.

Implementing an upward correction, the bulls are fighting for the key levels of the smaller time frames, which are located today at 1.2737 (central pivot level) and 1.2796 (weekly long-term trend). A consolidation above and a reversal of moving averages will lead to a change in the balance of power in the lower TFs, which means that it will be possible to focus on the pivot points of the upper time frames. On the other hand, the resistances of the classic pivot levels are now located at R2 (1.2828) and R3 (1.2877). The loss of the central pivot level (1.2737) and the restoration of the downward trend (1.2674) will return the relevance to the supports of the classic pivot levels - S2 (1.2646) and S3 (1.2604).

Ichimoku Kinko Hyo (9.26.52), Pivot Points (Classical), Moving Average (120)

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Joe Biden pledges to strengthen climate leadership if he wins the November US presidential election

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After years of abandoning global action to combat climate change, the United States faced an official challenge from China this week, having announced bold new climate commitments.

As a result, Democrat Joe Biden has promised to strengthen the US leadership on climate change if he wins the November presidential elections.

However, restoring this role is not easy, especially since under Donald Trump's regime, the US is actually planning to withdraw from its treaty and cooperation with China.

In addition, the situation got even more difficult because just this week, Chinese President Xi Jinping announced plans to achieve zero carbon emissions by 2060.

He even called on the world to take part in this.

Former US Climate Ambassador Todd Stern said that it is impossible to achieve global progress on climate without fixing the relationship between the US and China.

As of the moment, China produces 29% of global emissions, more than the EU and the US combined.

Thus, Stern said that Biden's team has to balance the forces of competition and cooperation with China, otherwise, the resumption of climate cooperation will not get off the ground.

In a speech, President Xi said that China's CO2 emissions will peak before 2030, but will decrease sharply by 2060.

These statements, in essence, set the agenda for future climate talks ahead of pressure from would-be president Joe Biden regarding the use of coal and coal-fired power plants around the world.

Biden has already pledged that the United States will produce carbon-free electricity by 2035, and achieve zero emissions by 2050.

A for Europe, the country is more assertive on climate change now than it was during Obama's leadership. The EU has pledged to introduce a border carbon tax, as well as investment in clean technologies.

Officially, China insists that its position on climate negotiations will remain unchanged, regardless of who wins the elections in the United States. It also said that renewed cooperation with the United States is optional.

Under his leadership, Biden said that the United States will seek to work again with China in fighting climate change, but will push Beijing to restrict the export of coal technology.

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Outlook for EUR/USD. USD consolidates while traders take profit.

After a surge to 94.5 points from 92.9 points, the US dollar index slowed down and got stuck. This week, the economic calendar has not been rich in events. That is why traders have to rely on the fundamental data (the level of anti-risk sentiments) and political events in the US. However, the news flow has become poor and all dollar pairs began to consolidate. Moreover, yesterday, the US reported on its labor market. The data turned out to be below the forecasts. This factor has also influenced the greenback. In other words, the US currency has lost momentum. Notably, on Fridays, traders close their positions ahead of weekends thus influencing currency pairs.

Under the current conditions, the market has shown rather high volatility this week. For example, the euro/dollar pair covered over 200 pips in five days. On Monday, the price was near the limits of the 19th pattern. At the moment, it is hovering within the 16th price level. Bears failed to push the price towards the limit of the Kumo cloud on a daily chart. They need additional informational impulse.

News about the approval of the long-awaited bill on additional assistance to the US economy could become such an impulse. Recently, US Treasury Secretary Steven Mnuchin hinted that the White House was consulting with congressmen to develop a bipartisan document that would be supported by both Democrats and Republicans in both houses of the US Congress. The greenback reacted very positively to this news, increasing its influence in all dollar pairs. Thus, if the US authorities implement the announced agreements, the US currency will again rise throughout the market, including in the pair against the euro.

This week, the House of Representatives approved a funding bill that will allow to avoid the government shutdown. The document was adopted before the deadline, that is before September 30, and sent to the Senate for the approval. Thus, it is hardly possible that the congressmen will come to an agreement concerning additional stimulus measures.

At the same time, yesterday, the White House National Economic Council director Larry Kudlow said that the US economy did not need another major package of emergency stimulus measures. In his opinion, the current measures are still useful and they do not need "another gigantic, multi-trillion-dollar package." After these words, the US dollar showed a significantly smaller rise. Notably, this is not the first time when Mnuchin and Kudlow have different views on the issue.

Today, the euro/dollar pair is likely to show weak performance amid an almost empty economic calendar. Traders may focus only on the US durable goods orders data that will be published during the US trading session. According to the forecasts, the indicator will show a smaller increase. In July, it jumped by 11%. In August, it is expected to inch up by 1%.

The market will hardly show high volatility after the publication of such weak figures. However, high volatility may take place if the indicator enters the red zone. From the technical point of view, the euro/dollar pair is trading in the Kumo cloud (on a daily chart) and on the middle line of the Bollinger Bands indicator that is located at the level of 1.1650. If the pair breaks the mentioned level, it may decline to the key support level of 1.1600 (a lower limit of the above-mentioned cloud).

A possible rebound could be limited by the upper border of the Kumo cloud that is located at the level of 1.1750. There, a stop loss order could be placed. However, short deals still prevail. The single currency is extremely weak after the ECB's comments about its exchange rate and prospects for the recovery of the eurozone economy. Moreover, a rapid spread of the coronavirus also affects the euro. Thus, tighter containment measures in the largest European countries have a negative influence on the recovery process. Besides, the most important macroeconomic indicators in Europe showed a significant slowdown. Thus, the euro does not have a trump card against the US dollar.

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GBP/USD: turning point for the pound's bulls

The position of the pound has largely shaken by several negative developments related to the economic outlook and uncertainty over Brexit from the EU. According to experts, now comes a critical moment when the pound can pass the point of no return.

The British currency has approached a really important level of 1.2700 and in case of a break through, it will be able to turn its dynamics by 180 degrees. CitiBank experts believe that this level is fundamental, since the 100 - and 200-day moving averages pass near this level. Therefore, the critical moment is coming for the pound — its further dynamics will depend on breaking through this level.

The current situation is crucial for the bulls of the British currency. They will have to seriously "fight" with the bears for a place under the financial market. In February of this year, the GBP/USD pair kept the bearish dominance. As a result, the pound returned to the level of 1.3200. Today, the indicated pair is trading near the range of 1.2746-1.2747.

On another note, the information provided by the Confederation of British Manufacturers (CBI) was the main factor that supported the GBP this week. The data turned out to be more positive than economists expected and based on the CBI report, the retail sales balance increased from -6 points to +11 in the first month of autumn. Analysts were pleased who were expecting a drop to -10. Meanwhile, experts say that the total balance of sales in the retail, wholesale and automotive sectors rose from -9 to -7.

The current situation is complicated by a rather tense atmosphere in the financial markets. The pound's growth is being held back by widespread negativity about the global economic recovery and the exhausting uncertainty surrounding the upcoming US presidential election. Citi emphasizes that if the tension rises, the GBP/USD pair may plunge into a downward spiral, breaking the barrier of 1.2700 and approaching 1.2624 - 1.2626. But experts do not rule out a pullback to the lows of June this year (up to 1.2250), and to the May values below 1.2100 in the future.

According to experts, the British currency, moving around to such turning points, can surprise the market with both a sharp rise and a decline. However, much will depend on the situation in global markets, as well as on where Brexit lies — is it towards accepting a trade deal or leaving the EU without an agreement? Experts made it clear that this issue remains relevant for the British economy.

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Brief trading recommendations for EUR/USD and GBP/USD on 09/25/20

The EUR/USD pair continues to move along a downward direction, where the support level of 1.1650 was locally broken yesterday, which indicates the prevailing interest from the sellers. Holding the price steadily below the side channel 1.1700 // 1.1810 // 1.1910 also confirms the development of the downside, which can lead to a trend change from an upward to a downward one.

Based on the data obtained on the price level, we can assume that the market is experiencing a pullback, which will temporarily postpone the downward development. The maximum pullback/correction value is based on the border of the previously broken side channel, that is, movement towards the level of 1.1700/1.1710. Moreover, the resumption of the downward interest will occur after the price focuses below the level of 1.1650, in the direction of 1.1550-1.1500.

On the other hand, the GBP/USD pair is in a slowdown stage after letting the price consolidate below the level of 1.2770, where the range of 1.2674/1.2770 has become a temporary amplitude. The breakdown of the support level 1.2770 is undeniable, and the market is gradually changing its medium-term direction from an upward trend to a downward one. Contrary to the euro, the pound has already managed to decline by about 6% since the beginning of September, which indicates the current downward interest.

The amplitude within the boundaries of 1.2674/1.2770 will soon be set, where the downward development will be considered as the main strategy based on the previously obtained data from price consolidation below the support level 1.2770 and the depth of the downward movement from September 1.

Theoretically, an alternative scenario of market development may arise in terms of a more significant correction, instead of the existing stagnation within the boundaries of 1.2674/1.2770, but even with this result, we still have a high chance of resuming the downward movement, but with a small time delay.

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

EUR/USD: plan for the European session on September 25. COT reports. Bears took a break at the end of the week after the

To open long positions on EUR/USD, you need:

No matter how much the bears tried to continue pulling down the euro yesterday afternoon, nothing came of it. On the 5-minute chart, you can see how, having taken the 1.1648 level, sellers of the euro are desperately resisting and won't allow the pair go above this range, but each time a new downward wave becomes shorter than the previous one, and as a result, sellers gave up and released the market, although the signal to open short positions was quite good. It's a pity we didn't go down more than 25 points. A similar situation, if you remember, happened with buy positions in the morning, when bulls formed a false breakout and tried to pull the euro into the resistance area of 1.1695, but nothing came of it either.

At the moment, buyers of the euro will focus on a breakout and settling above the resistance of 1.1688, because in this scenario we can expect the upward correction to continue for the euro, with the main goal of updating the high of 1.1734, which is where I recommend taking profit. The 1.1779 level will be a distant target, but it will not be so easy to reach it, since important fundamental data will not be released today. If EUR/USD declines in the first half of the day, and it is worth recalling that we have a downward trend and it is better to trade on it, then I recommend looking at long positions only after a false breakout forms in the 1.1631 area. You can buy EUR/USD immediately on a rebound only from the low of 1.1585 or even lower, from the 1.1541 area, counting on a correction of 20-30 points within the day.

Let me remind you that the Commitment of Traders (COT) reports for September 15 continued to record a reduction in long non-commercial positions and an increase in short ones, which confirms the downward correction in EUR/USD that we recently observed. Long non-commercial positions fell from 248,683 to 230,695, while short non-commercial positions rose from 51,869 to 52,199. The decisions that the Federal Reserve made last week supported the US dollar. and new problems with the spread of coronavirus infection in the EU do not make it possible for euro buyers to seriously expect large players to return to the market. But do not forget that even though the euro has fallen, the total non-commercial net position, which slightly decreased over the reporting week, still remained at a positive level. As a result, the non-commercial net position fell to 178,576 against 196,814 a week earlier.

To open short positions on EUR/USD, you need:

Sellers keep the market under their control, and all they need in the morning is to form a false breakout in the resistance area at 1.1688, which will increase pressure on the euro and cause the pair to fall to a low of 1.1631, below which yesterday's break through failed. Settling below this range forms a new entry point for short positions on EUR/USD in order to test the low of 1.1585, which is where I recommend taking profit. In case the euro grows in the first half of the day, and the correction might continue since there is no important fundamental data for today, which hindered the euro all week, you can consider short positions only after a false breakout forms at 1.1688. If bears are not active at this level, it is best to postpone sell positions until the larger resistance at 1.1734 has been updated and open short positions from there immediately for a rebound, counting on a downward correction of 20-30 points by the end of the day.

Indicator signals:

Moving averages

Trading is carried out in the area of 30 and 50 moving averages, which indicates the possibility of an upward correction in the euro.

Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart.

Bollinger Bands

A breakout of the lower border of the indicator in the 1.1631 area will lead to a new wave of decline for the euro. A breakout of the upper border at 1.1688 will lead to an increase in the euro.

Description of indicators

  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart.
  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart.
  • The MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages). Quick EMA period 12. Slow EMA period to 26. The 9 period SMA.
  • Bollinger Bands (Bollinger Bands). The period 20.
  • Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
  • Long non-commercial positions represent the total long open position of non-commercial traders.
  • Short non-commercial positions represent the total short open position of non-commercial traders.
  • Total non-commercial net position is the difference between short and long positions of non-commercial traders.
The material has been provided by InstaForex Company - www.instaforex.com

GBP/USD: plan for the European session on September 25. COT reports. Trading in a horizontal channel, but this has its advantages

To open long positions on GBP/USD, you need:

Trading remained in a horizontal channel at the end of Thursday, which led to forming a fairly large number of signals to enter the market. Let's take a look at the 5-minute chart and analyze all the entry points. I think many of you have read yesterday's review, where I analyzed buy positions for the pound, which were from the 1.2709 level in the morning. Let me remind you that after the pair returned to this range, testing it from top to bottom caused the pound to sharply rise to a high of 1.2772, where I advised you to open short positions immediately on a rebound. The first downward movement from this level was around 40 points. But the sell signal from 1.2772 became more interesting after returning and testing this level in the afternoon. Forming the next false breakout produces an excellent entry point for short positions, which brought GBP/USD back to the 1.2709 area by the middle of the US session, which is where I also advised you to take a closer look at long positions. An unsuccessful breakout of 1.2709 and another signal to buy the pound sharply rising to the 1.2772 area, where it was possible to sell the pound along the trend again. In any case, you should have taken at least some of these movements, since the pair was providing excellent signals.

Bulls currently need to defend the 1.2709 level, since quite a lot depends on it. Forming a false breakout at the1.2709 level will be a signal to open long positions while expecting an upward correction to the resistance area of 1.2772, similar to yesterday. However, you can only count on successive growth if we receive positive dynamics in Brexit, since today's fundamental data on UK lending is unlikely to be able to provide support for the pound. You can also count on settling above 1.2772, which will be an excellent entry point into long positions in GBP/USD with the main task of recovering to a high of 1.2816. A large resistance at 1.2863, will be a distant target, which is where I recommend taking profits. In case the pair falls below the 1.2709 level, and this is more likely, it is best not to rush to buy the pound, but wait until the next low of 1.2645 has been updated, or buy GBP/USD even lower, immediately on a rebound from support at 1.2585, counting on a correction of 30- 40 points within the day.

Let me remind you that the Commitment of Traders (COT) reports for September 15 showed a reduction in long positions and a large increase in short positions, which indicates market expectations and a high possibility that the pound will fall in the long term, which is probably due to uncertainty regarding the conclusion of the Brexit trade deal. And if last week, it was possible to say that the downward momentum may start to gradually slow down, which the market showed us, now the situation is on the side of the pound sellers once again and the pair may succeedingly fall. Short non-commercial positions increased from 33,860 to 41,508 during the reporting week. Long non-commercial positions decreased from 46,590 to 43,801. As a result, the non-commercial net position sharply fell to 2,293, against 12,730, a week earlier.

To open short positions on GBP/USD, you need:

Today is a fairly empty news day for the British pound, so don't be surprised if trading continues in a horizontal channel. Expectations regarding the introduction of negative interest rates, Brexit and the rise of coronavirus-infection - all this plays on the side of the pound sellers. Bears need a breakout of support at 1.2709 in the first half of the day, settling below it opens a direct way for the pound to move to a low of 1.2645, while the 1.2585 level will be a distant goal, which is where I recommend taking profit. In the event of an upward correction in GBP/USD, I recommend not to rush to sell, but wait until a false breakout forms in the resistance area of 1.2772, similar to yesterday. It is possible to open short positions immediately on a rebound from a larger resistance in the 1.2816 area, counting on a correction of 30-40 points within the day.

Indicator signals:

Moving averages

The trade is in the 30 and 50 moving averages, which indicates some form of market pause in the bearish movement.

Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart.

Bollinger Bands

A breakout of the lower border of the indicator in the 1.2720 area will lead to a new wave of decline for the pound. The breakout of the upper border in the 1.2765 area will lead to a new wave of growth for the pound.

Description of indicators

  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart.
  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart.
  • MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
  • Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
  • Long non-commercial positions represent the total long open position of non-commercial traders.
  • Short non-commercial positions represent the total short open position of non-commercial traders.
  • Total non-commercial net position is the difference between short and long positions of non-commercial traders.
The material has been provided by InstaForex Company - www.instaforex.com

Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on September 25

Trading recommendations for the EUR/USD pair on September 25

Analysis of transactions

The bears failed to trigger a large decrease in the EUR/USD pair yesterday, so as a result, short positions in the market only brought about 20 pips of profit. Nevertheless, the priority is still on sales, since weak reports for Germany put pressure on the European currency.

Today, the euro may rise on the grounds that upcoming reports or statements by the authorities do not serve as an impetus for depreciation. Otherwise, the quotes will close in a sideways channel, at 1.1647-1.1685 in particular, without forming a good upward correction.

  • Buy positions when the quote reaches a price level of 1.1685 (green line on the chart). However, a huge price increase is not really expected today. Thus, take profit at the level of 1.1758.
  • Sell positions after the quote reaches the level of 1.1647 (red line on the chart). A breakout and consolidation below this level could lead to another large drop in the euro. Take profit at the level of 1.1586.

Trading recommendations for the GBP/USD pair on September 25

Analysis of transactions

Major players were absent in the market yesterday. Thus, short positions from 1.2704 did not lead to the desired downward movement in the GBP/USD pair.

Meanwhile, in the afternoon, long positions from 1.2740 became very profitable, as growth in the pound amounted to about 35 pips.

Nonetheless, there are no important statistics today, so it is likely that the pair will remain in a sideways channel that it has been in over the past few days. An upward correction could occur though after a huge drop in quotes this week.

  • Buy positions when the quote reaches a price level of 1.2773 (green line on the chart). Take profit at the level of 1.2826 (thicker green line on the chart).
  • Sell positions after the quote reaches the level of 1.2744 (red line on the chart). Take profit at the level of 1.2677.
The material has been provided by InstaForex Company - www.instaforex.com

Elliott wave analysis of GBP/JPY for September 25, 2020

GBP/JPY remains locked just below short-term key-resistance at 134.57. Ultimately we see a break above here to confirm the completion of wave ii/ and the onset of wave iii/ to above the former peak at 142.70. The longer we stay locked just below short-term key-support the stronger the coming rally is expected.

Short-term support is seen at 134.01 and then at 133.58.

R3: 136.00

R2: 135.55

R1: 134.57

Pivot: 133.96

S1: 133.58

S2: 133.48

S3: 133.14

Trading recommendation:

We are lobg GBP from 133.51 with our stop placed at 133.00

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

Elliott wave analysis of EUR/JPY for September 25, 2020

EUR/JPY remains locked within the triangle consolidation, but we remain focused on the downside for a final dip closer to our ideal target at 122.15 to complete wave 2/ and set the stage for a new impulsive rally to above the former peak at 127.07.

The longer the pair stays in the sideways consolidation, the greater the risk of a break to the upside and thorugh minor resistance at 123.43 indicating a completion of wave 2/ already and the onset of wave 3/ higher.

R3: 123.43

R2: 123.19

R1: 122.95

Pivot: 122.70

S1: 122.55

S2: 122.30

S3: 122.15

Trading recommendation:

We are short EUR from 123.90 and we will take profit+revers our short-position to a long EUR-Position at 122.25 or upon a break above 123.25

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

Analytics and trading signals for beginners. How to trade EUR/USD on September 25? Plan for opening and closing trades on

Hourly chart of the EUR/USD pair

The EUR/USD pair essentially stood in one place last Thursday night. The pair slightly increased after our evening review. This increase was enough for the pair to settle above the previous descending channel, thus, it ceased to be relevant, and the trend formally changed to an upward one. However, the euro did not grow at night. And the previous downward trend channel was so narrow that almost any correction brought it out of it. Instead of the higher channel (now shown with a dotted line), a new descending channel has appeared, which is wider and provides more opportunities. However, there are also problems with it. First of all, it was built using only three control points, the last one was obtained yesterday. In other words, it may not be a reference point, in which case the entire channel can be rebuilt several times. However, for lack of anything better, we believe that the channel is correctly built. And if so, then the price will continue to trade in its lower area, respectively, there is a high probability of an upward correction to the upper area of the channel. We would not recommend novice traders to work with corrections. Therefore, we are not interested in today's upward movement (if it happens).

Fundamental background for Friday may be extremely weak. First, traders ignored several speeches from Federal Reserve Chairman Jerome Powell and US Treasury Secretary Stephen Mnuchin this week. Of course, both figures did not mention anything fundamentally new and important, but nevertheless. A report on orders for durable goods in the US (the indicator has four variations at once) is scheduled for release today. We believe that this report will not have any impact on the pair's movement. Forecasts for it are very weak in terms of changes in indicators in relation to the previous period. Maximum change at +1.5%. Therefore, if predictions come true, then traders will simply have nothing to react to. It will be another matter if the report comes out much worse than the weak forecasts. Then the US dollar might be under pressure, which will contribute to an upward correction (growth of the pair = fall of the dollar). In general, we do not recommend losing sight of this report. Apart from it, there are no other planned publications for today.

Possible scenarios for September 24:

1) Novice traders are advised to not consider buy positions at this time, since, even according to the new descending trend channel, the downward trend remains in effect. Accordingly, any upward movement is acknowledged as corrective until the pair leaves the downward channel through its upper border. As part of the upward correction, it may start growing today with targets at 1.1694 and 1.1721.

2) Selling still looks more appropriate despite the fact that there is a high probability of a correction, and the price is also in the lower area of the descending channel. Even the MACD indicator has eased, as expected, to the zero level and is now ready to generate sell signals. One of these signals can appear in the next hour, this will allow you to sell the pair while aiming for support levels of 1.1633 and 1.1599. However, once again we warn traders that there is a high probability of an upward correction today, and the report on orders for US durable goods, set to be released in the afternoon, may turn out to be weaker than expected and could provoke an increase in the EUR/USD pair.

On the chart:

Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now.

Up/down arrows show where you should sell or buy after reaching or breaking through particular levels.

The MACD indicator (10,20,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).

Important announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal.

Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.

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

Overview of the GBP/USD pair. September 25. "Anti-Johnson" sentiment in the UK is gaining strength.

4-hour timeframe

Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - downward.

CCI: -65.8594

The British pound sterling spent the fourth trading day of the week in fairly calm trading without serious movements. Most of the trading took place between the Murray levels of "0/8" and "1/8". Thus, the bears have not yet managed to overcome the level of 1.2700, and a correction may begin. At the same time, the British currency still has no reason to grow. There is no positive news from overseas. Thus, the reasons for the possible strengthening of the British currency may be purely technical. But the problems in the UK are becoming more and more every day. This is just the case when you do not know which side to approach, and from which side to start. In principle, from which side you do not approach, you can immediately see a huge mass of problems. The most interesting thing is that similar problems are present in other countries of the world and the European Union. But it is probably in times of crisis that the main qualities of government are revealed. Where it is incompetent or engaged in non-governmental issues, and the result is a greater number of problems.

The UK had one of the highest numbers of infections among European countries during the first "wave". The highest number of deaths from COVID-2019. Its economy shrank by a record 20% in the second quarter, and even Italy, Spain, and Portugal, which were also very seriously affected by the pandemic, fell short of this figure. Now the second "wave" of the epidemic has begun in the Foggy Albion, and already in its first days, it became clear that it will be much stronger and "tougher" than the first. First, the number of daily illnesses reached maximum levels in the spring at the very beginning of the campaign. Secondly, if in the spring many governments were frankly afraid of the epidemic and we're not afraid to introduce "lockdowns" and strict quarantine measures, now almost all world leaders say that "lockdown" is the most extreme measure since after it the economy is in complete decline, which in terms of consequences can be even more serious than the consequences of the epidemic. Therefore, there is no doubt that no matter how tough the second and third waves of the pandemic were, "lockdowns" will now be introduced only as a last resort. This means that potentially the number of victims from the "coronavirus" may be much higher than in the first "wave". And this will inevitably lead to a reduction in the economy. As we have said many times, even if "lockdown" is not introduced, it does not mean that people live their normal lives. Their social and economic activity is falling sharply, business activity is falling, and the unemployment rate is rising, which puts pressure on the country's budget. That is, there will be no such option that the "lockdown" is not introduced, those who are ill are treated, and everyone else lives a normal life. This is also understood by Boris Johnson, who seems to have set his only goal a year ago to complete Brexit, but fate threw him a rather difficult test, for which he was objectively not ready. Now in the UK, bars, and restaurants will be closed from 10 pm to 5 am, groups of more than 15 people are banned, stadiums will continue to remain empty, and masks will be mandatory to wear on public transport and in any public places. "In the last two weeks, the number of hospital admissions has doubled in England. Tens of thousands of new infections in October could lead to hundreds of daily deaths in November. These numbers will grow if we do nothing," said Boris Johnson, whose confidence among Britons plummeted in 2020. Before the Parliament, the Prime Minister said that the government is doing everything possible to avoid a new "total quarantine".

Meanwhile, large companies continue their flight from the UK. It is now 98% clear that there will be no trade deal between the EU and Britain. Thus, if earlier many large companies were still thinking about leaving the Foggy Albion, now they are already implementing their plans. Next in line was one of the world's largest banks, JPMorgan. It is reported that the board of the bank is going to transfer more than 200 billion euros from London to Frankfurt, and about 200 employees of British branches will also move to other cities in continental Europe.

Meanwhile, "anti-conservative" sentiments continue to mature in Britain, replacing "anti-European" ones. We have already briefly touched on the achievements of Boris Johnson as Prime Minister of Great Britain. From our point of view, they simply do not exist. According to the latest information, the Prime Minister's approval rating among the country's residents has dropped to 30%. The disapproval rating rose to 63%. Thus, the result of Johnson's year-long work is "obvious." British people are disappointed with the government's actions and are increasingly inclined to believe that the new labor leader, Keir Starmer, would have done a much better job as head of state. The current government, according to the overwhelming majority of Britons, failed to cope with the pandemic, failed to conclude a trade deal with either the European Union or the United States, risks falling out with Brussels for many years, seriously undermine confidence in the Kingdom at the international level, all this negatively affects the economy, and therefore every single Briton. It is already having an impact because it is no secret that the standard of living and well-being has already begun to fall. Further, in almost any case, it is ordinary citizens who will pay for any crisis. Either by raising taxes or by reducing wages. Thus, all the collapses in GDP, past and future, are not the problems of the British government, but of the British, who elected this government at the end of last year, and even leaving all the threads of government in the hands of one person. Thus, we do not rule out the possibility that next year in the UK Parliament, a fight will begin with Boris Johnson himself. If Theresa May was twice passed a vote of no confidence and called for her resignation because she only failed to conclude an agreement with Brussels that would have satisfied the majority of parliamentarians, then Boris Johnson did even less. He also failed to reach an agreement with the Parliament, and there will be no trade deal with Brussels at all.

The average volatility of the GBP/USD pair is currently 126 points per day. For the pound/dollar pair, this value is "high". On Friday, September 25, thus, we expect movement inside the channel, limited by the levels of 1.2615 and 1.2867. The reversal of the Heiken Ashi indicator back down to signal the completion of the spiral upward correction.

Nearest support levels:

S1 – 1.2695

S2 – 1.2634

S3 – 1.2573

Nearest resistance levels:

R1 – 1.2756

R2 – 1.2817

R3 – 1.2878

Trading recommendations:

The GBP/USD pair on the 4-hour timeframe began to adjust to the moving average. Thus, today it is recommended to open new short positions with targets of 1.2695 and 1.2634 as soon as the Heiken Ashi indicator turns back down or the price bounces off the moving average line. It is recommended to trade the pair for an increase with targets of 1.2867 and 1.2939 if the price returns to the area above the moving average line.

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

Overview of the EUR/USD pair. September 25. The growth of the American economy in its complete collapse.

4-hour timeframe

Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - downward.

CCI: -99.1177

On the fourth trading day, the EUR/USD pair continued to trade with a downward bias, which has already assured everyone of the completion of the sideways movement in the $ 1.17 - $ 1.19 channel. The US dollar is finally strengthening, which we have been expecting for at least the last month. Thus, there was only a logical development of events, since after 1300-point growth, traders could not be satisfied with just 200 points of correction. Thus, the current downward movement is just a technical correction of the US currency after the previous growth. Thus, if we were traders, we would not even look for any fundamental reasons for strengthening the US currency. Just because they're not there right now. It is impossible to interpret the speeches of Jerome Powell and Steven Mnuchin in the US Congress in any way unambiguously. It is impossible to unambiguously interpret the results of the Fed meeting. It should be understood that the more pessimistic Powell and Mnuchin are, the more negative the impact will be on the stock market. If the fall of the US currency against its main competitors is in the hands of the US government, as Donald Trump himself has repeatedly stated, then the fall of the stock market is completely unprofitable for the States. After all, it is with the growth of the stock market that the strength and power of the American economy are identified. And this is one of the biggest misconceptions of many traders and readers. They equate the growth of the capital of rich Americans with the growth of the general welfare of the country. However, back to the US dollar. There has been no overtly positive news from America recently. Powell and Mnuchin said the US economy is recovering at a faster-than-expected pace. It's good. At the same time, both noted the high degree of uncertainty in the issue of further economic recovery, and also called on Congress to quickly approve a new package of stimulus measures for the economy. This is bad. This means that the economy cannot recover on its own, and the many trillion-dollar measures already taken are not enough for a full recovery. The situation with the "coronavirus" is also not improving. No important macroeconomic reports have been published recently. There was also no really important news on key topics for the States and the dollar. These topics are: the confrontation with China, the "coronavirus", and preparations for the elections. The key theme remains the "elections". Both candidates continue to throw mud at each other, trying to prove to the electorate why it is not worth voting for the opponent. The media and publications continue to calculate the probability of a candidate's victory. At the same time, both candidates are preparing not even for the elections and voting themselves, but for legal proceedings after them. As strange as it may sound, but almost no one doubts that the elections will smoothly move from the election commissions to the US Supreme Court. We have already written about this.

In the meantime, let's return to the figure of Donald Trump and his results as President of the United States for 4 years. Apart from the absolute obvious failures like counter "coronavirus", a complete collapse of the economy in the second quarter, rising unemployment, falling labor market, we can also highlight some not so obvious failures of the Trump administration. First, according to many political analysts, it was during the Trump presidency that the country was strongly divided in opinion. It was in the last 4 years that the problems of racism flared up again in the States. And all this against the backdrop of a global epidemic that has killed 200,000 people in America alone. Secondly, all of trump's statements about the growth of the economy, about the growth of the welfare of Americans in practice are another lie. Absolutely all economists note that Trump's policy is particularly loyal to rich people. They are the ones who got richer during the Trump era. The US stock market, which does not stop growing even in times of crisis, is a collection of investors. Investors are not American farmers, sellers, and Walmart. 92% of all shares are owned by 10% of Americans. So if the stock market is rising, it means that the rich are getting richer, not the wealth of the American people is growing. The rich get richer, their capital grows, so "on average in the house" some farmer from Texas also began to "live better" under Donald Trump. Though I didn't notice it. We don't know what will happen in Trump's second term (if he wins), but in the first term, taxes for billionaires and corporations were lowered. That is, Trump is a President who is primarily convenient for rich people, not for the middle and lower class. Under Barack Obama, health care reform was implemented, and the number of people with health insurance grew under the Democrat. Under Trump, the opposite trend is observed. And everything would be fine if the "coronavirus" did not come to America (and to the whole world). And then the availability of insurance became a very important condition for life and health for every American. Thus, under Trump, health levels, and life expectancy dropped, and the entire country was engulfed in an epidemic. Third, as we have said several times, Trump has not solved his "main mission". It failed to establish "fair and just" trade relations with China. Of course, Trump himself constantly declares that under him America has ceased to be completely dependent on China. However, the trade deficit under Trump has grown, not decreased, as the President wanted. Also, the country found itself in a situation of "shutdown" two or three times, when the money to finance the government and the functioning of public services simply ran out. Under Trump, the country's national debt has grown and fewer jobs have been created than under Barack Obama. That is, in almost all indicators that grew under Trump, this growth was only a continuation of the growth that began under Obama. And as a result of all the above – the first place in the world in the number of cases of the disease; the first place in the world in the number of deaths from the "coronavirus"; one of the maximum drops in GDP (recall that in the European Union in the second quarter of 2020, a drop of only 12% was recorded). Thus, from our point of view, such depressing results are not a coincidence or accident. We believe that these are fair results of the rule of Trump, who is indeed a great businessman, but hardly anyone can call him a great President of the country and leader of the nation.

The volatility of the euro/dollar currency pair as of September 25 is 78 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1588 and 1.1744. A reversal of the Heiken Ashi indicator upward signals a round of upward correction.

Nearest support levels:

S1 – 1.1658

S2 – 1.1597

Nearest resistance levels:

R1 – 1.1719

R2 – 1.1780

R3 – 1.1841

Trading recommendations:

The EUR/USD pair continues its downward movement. Thus, now you can continue to hold short positions with targets of 1.1597 and 1.1588 until the Heiken Ashi indicator turns upward. It is recommended to re-consider options for opening long positions if the pair is fixed above the moving average with the first targets of 1.1780 and 1.1841.

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Hot forecast and trading recommendations for GBP/USD on 09/24/2020

The pound froze in place in the absence of any news regarding the coronavirus epidemic. Which once again proves that the reason it fell is because of the pandemic and the introduction of new restrictions. There have been no changes in this matter since Tuesday evening, and investors do not yet know what to focus on. At the same time, the panic due to the epidemic is so great that the market is ignoring any data for now. But yesterday the preliminary data on business activity indices were published. Despite fears, they turned out to be slightly better than forecasts. Thus, the index of business activity in the service sector, as expected, fell from 58.8 to 55.1. The index of business activity in the manufacturing sector, which was supposed to decline from 55.2 to 53.8, decreased to 54.3. As a result, the composite PMI fell from 59.1 to 55.7, although it was expected to decline to 54.9. Although we are still talking about a decline in business activity indices, which can hardly be called a positive factor. But in the light of recent events, there were indeed strong fears that the decline in the indices would be on a much larger scale.

Composite PMI (UK):

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Take note that in the United States, the preliminary data on business activity indices were significantly better than forecasted. Instead of declining from 53.1 to 53.0, the index of business activity in the manufacturing sector rose to 53.5. The index of business activity in the service sector should have decreased from 55.0 to 54.1, but it only fell to 54.6. The composite PMI, instead of declining from 54.6 to 53.0, only decreased to 54.4. And given the fact that data turned out to be better than forecasts in both the UK and the United States, despite showing a decline, all other things being equal, then, we should still have observed stagnation.

Composite PMI (United States):

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If there is no news on the coronavirus today, investors will have to pay closer attention to macroeconomic data. And oddly enough, this will also help strengthen the dollar. After all, the number of initial applications for unemployment benefits should decrease from 860,000 to 840,000. The number of repeated applications may even decrease from 12,628,000 to 12,100,000. So the data will once again indicate a gradual recovery of the labor market, which is the main guarantee of economic growth.

Repetitive Unemployment Insurance Claims (United States):

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The GBPUSD pair continues to focus below the 1.2770 price level, which signals the prevailing downward interest in the market. The consistent decline in the value of the British pound since the beginning of September signals a possible change in the market sentiment, which may well lead to a change in the medium-term trend.

Based on the quote's current location, you can see a variable fluctuation within 100 points below the 1.2770 benchmark, which probably reflects the stage of price taking.

In terms of volatility, there is a high dynamic that has been following the British currency for a long time.

Looking at the trading chart in general terms, the daily period, we can see that the current downward movement is the largest for the last six months.

We can assume that the price fluctuation in the 1.2670/1.2770 range will not last long and as soon as market participants overcome the value of 1.2670 we will see the resumption of the downward movement in the direction of 1.2600.

From the point of view of a complex indicator analysis, we see that the indicators of technical instruments on the hourly and daily keep the sell signal by focusing the price below the reference level of 1.2770.

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Indicator analysis. Daily review on GBP / USD for September 24, 2020

The pair traded downward on Wednesday and tested 1.2721 - a 61.8% pullback level (red dotted line). Today, the price may continue to move down. As per the economic calendar, pound news is expected at 14:00 UTC, and dollar news is expected at 12:30 and 14:00 UTC.

Trend analysis (Fig. 1).

The market may move downward from the level of 1.2725 (closing of yesterday's daily candlestick) with the target at the historical support level 1.2646 (blue dotted line). Upon reaching this level, the downward trend may continue with the next target of 1.2542 - a 76.4% pullback level (red dotted line).

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Figure: 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - down;

- Trend analysis - down;

- Bollinger lines - down;

- Weekly chart - down.

General conclusion:

Today, the price maymove down with the target at the historical support level 1.2646 (blue dashed line). Upon reaching this level, the downward trend may continue with the next target of 1.2542 - a 76.4% pullback level (red dotted line).

Another possible scenario: from the level of 1.2725 (closing of yesterday's daily candlestick), the price may move down with the target at the historical support level 1.2646 (blue dotted line). Upon reaching this level, the price may begin to move upward with the target at the historical resistance level 1.2769 (white dashed line).

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Brief trading recommendations for EUR/USD and GBP/USD on 09/24/20

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The EUR/USD pair keeps the quote below the side channel 1.1700 // 1.1810 // 1.1910, which is considered a good signal for a downward development. Yesterday, the quote approached the coordinates of 1.1650, which made it possible to further strengthen the sellers' position in the market. The fact of changing the structure of the side channel is already unquestionable, thus working for sale will be considered the most attractive trading tactic. It is also worth noting that there are pullbacks and local corrections even with the most stable course, so take this point into account when setting restrictive Stop Loss orders.

Based on the obtained data on the location of the quote, we can assume that a downward development is possible in the market, but if you have not yet opened positions in the level of 1.1690, it is now most ideal to enter the market after holding the price below the variable level of 1.1650. The late entry is due to the fact that the quote may temporarily fluctuate between the values of 1.1650 and 1.1700.

If the forecast for the development of a downward movement is fulfilled, it may have a long-term character, where the first coordinates for fixing profit are in the range of 1.1550-1.1500.

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On the other hand, the GBP/USD pair, following a downward course, managed to firmly consolidate below the price level of 1.2770, which can cause the price trend to change from an upward to a downward one in the future. The process of consolidating prices at new levels is considered a difficult task. The quote slowed down for a while, having a variable amplitude of 1.2674/1.2770. To resume the quote's decline, it is necessary to complete the consolidation stage, where a possible signal to sellers will be the price passing through the level of 1.2670.

The prospect of developing a downward course has long distances, but we should move in the form of steps, consistently fixing profits. Thus, the first stage will be considered the level of 1.2620, where the transaction volume is fixed by 50-100%, while the second step is the level of 1.2500.

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Euro aims to bypass the US dollar

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Another rally of the EUR/USD pair is being experienced in the market, triggered by the inspiring rise of the Euro. Against the background of the falling USD, the euro is trying to take the lead in the pair. However, the dollar does not yield, as it breaks through to the top from time to time.

By the end of this week, experts recorded an increase in the rally of the US currency. Analysts believe that one of the main reasons for the dollar's strengthening is the unclear prospects of a new medium inflation targeting regime in the United States. The Fed notes that this uncertainty is due to the lack of suitable instruments that can raise inflation and analyze the consequences of its rise. At the moment, only fiscal measures are helping to raise inflation. In this regard, J. Powell, supports the strengthening of such measures. However, Fed's officials believe that the US economy will plunge into recession without significant fiscal support.

Technically, the US currency remains vulnerable in view of the regulator's aggressive stimulating monetary policy and uncertainty ahead of the US presidential election.

The failures of the US dollar gave a chance to the European one. Taking advantage of the weakening USD, the euro decided to move to the next highs. Its attempts were successful, which led to a temporary leadership against its rival. As this week began, the EUR/USD pair entered a downturn, breaking the key support level of 1.1720. At the same time, experts did not record a deeper decline in the pair. On the contrary, during yesterday's start of the trading session, the indicated pair resumed its growth and tried to break through the level of 1.1720. But today, it is trading near the extreme lows of 1.1655-1.1656 and so experts admitted that the pair will further collapse.

It is difficult for many analysts to know how the rally between the EUR/USD pair will end, but they do not exclude its correction in the near future. Currency strategists at TD Bank recommend using pair recovery attempts to open short positions. Its analysts also expect a correction of the EUR/USD pair and its departure to the extremely low level of 1.1550.

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Among the reasons for the confusing rally in the EUR/USD pair, the bank's strategists note a decline in investor optimism about a possible tightening in quarantine measures related to the COVID-19, as well as doubts about an early recovery of the global economy. What's worsened the situation is the negative data on business activity indices in the euro area services. Despite the disappointing statistics, the Euro is not going to give up. However, the current deterioration of the situation may disappoint the "bulls", who have significant investments in the European currency and are in long positions. In this regard, TD Bank experts prefer short positions for this pair.

According to experts, the further dynamics of the classic pair will depend on a number of factors, including the fight against COVID-19 and the possible adoption of additional measures to stimulate the US economy. Many market participants are confident that if new fiscal incentives are introduced, the dollar will be under pressure. In a similar situation, the euro will win, which will try to overtake its opponent once again.

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Another pandemic wave will raise the price of gold

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Economists, especially those in Europe, believe that another pandemic wave is coming, and that it will positively affect gold in the markets. Re-imposing quarantine will lead in a strong gold rally, however, for that, the measures should also extend in the United States, as a restriction only from Europe could strengthen the dollar against the euro and gold, which will neutralize the increased demand for the yellow metal as a safe haven.

Suffice to say, gold will rise amid a second wave not only because of the associated economic slowdown and increased uncertainty, but also because of new stimulus programs that are likely to be announced by both central banks and governments.

At the moment though, both stocks and gold are trading at low prices because of the dovish stance of the Federal Reserve with regards to economic policy. However, there are speculations that a new stimulus may emerge in the near future, and it will greatly benefit the gold markets.

Anyhow, the plunge in gold prices this week left investors wondering if the safe-haven asset is experiencing a respite or a very sharp fall.

The key driving force of the drop is the dollar, which strengthened this week due to dying hopes for additional stimulus in the United States.

Now, because of the upcoming US presidential election, gold may rally again, since over the past 20 years, the yellow metal always moved before and after the event. This is because investors tend to weigh the potential impact of the election results to the dollar, Treasury yields and global political risks.

In addition, gold increased last summer because of negative Treasury rates, which, since the beginning of August, have remained unchanged. A significant increase in inflation expectations is needed to to reduce them.

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Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on September 24

Trading recommendations for the EUR / USD pair on September 24

Analysis of transactions

The weaker-than-expected data on the euro area's PMI halted the growth of the European currency in the market, so as a result, long positions from 1.1703 only made about 15 pips of profit in the EUR / USD pair. Then, afterwards, the quote turned in the other direction, but the movement was not as large as anticipated.

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A number of important reports for Germany are scheduled to be published today, one of which is the data on business activity and confidence. Since these are leading indicators for the EU economy, good performance could lead to a new wave of growth in the EUR / USD pair.

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  • Buy positions when the quote reaches a price level of 1.1685 (green line on the chart), and then take profit around the level of 1.1758. However, a huge price increase is not really expected, especially if data for Germany comes out weaker than the forecasts.
  • Sell positions when the quote reaches the level of 1.1647 (red line on the chart) A breakout from which will lead to a huge price drop in the euro, especially if confidence in German businesses decreases. Take profit at the level of 1.1586.

Trading recommendations for the GBP / USD pair on September 24

Analysis of transactions

Large movements were not seen on the GBP / USD pair, mainly because major players were absent in the forex market yesterday. As a result, short positions from the level of 1.2714 got profit of only 20 points, while long positions from the level of 1.2755 got about 15 points.

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No important statistics are scheduled to be published today, so all attention will be on the indicators for the US economy. The upcoming speech of Bank of England president Andrew Bailey may put pressure on the British pound, so it is best to stick with trading along the trend.

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  • Set long positions from 1.2740 (green line on the chart), and take profit around the level of 1.2810 (thicker green line on the chart).
  • Sell positions when the quote reaches 1.2704 (red line on the chart), and take profit at the level of 1.2655. Statements regarding negative interest rates will cause the pound to fall.
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Indicator analysis. Daily review on EUR / USD for September 24, 2020

The pair traded downward on Wednesday and broke through the support level 1.1674 (black bold line). Today, the downward trend is likely to continue. As per the economic calendar, euro news is expected at 08:00 UTC, and dollar news is expected at 12:30 and 14:00 UTC.

Trend analysis (Fig. 1).

The market may move downward from the level of 1.1662 (closing of yesterday's daily candlestick) with the target at 1.1590 - a 50% pullback level (red dotted line). Upon testing this level, the price may begin to move upward with the target at the resistance level 1.1673 (black thick line). If this level is reached, the upward trend may continue with the next target at 1.1823 - a 61.8% pullback level (blue dashed line).

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Figure: 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - up;

- Trend analysis - down;

- Bollinger lines - down;

- Weekly chart - down.

General conclusion:

The market may move downward from the level of 1.1662 (closing of yesterday's daily candlestick) with the target at 1.1590 - a 50% pullback level (red dotted line). Upon testing this level, the price may begin to move upward with the target at the resistance level 1.1673 (black thick line). If this level is reached, the upward trend may continue with the next target at 1.1823 - a 61.8% pullback level (blue dashed line).

Another possible scenario: from the level of 1.1662 (closing of yesterday's daily candlestick), the price may continue to move downward with the target of 1.1590 - a 50% pullback level (red dotted line). Upon testing this level, the price may continue to move down, with the target at the historical support level 1.1544 (blue dashed line).

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Technical Analysis of ETH/USD for September 24, 2020

Crypto Industry News:

Catherine Coley, CEO of the US cryptocurrency exchange Binance, says the adoption of cryptocurrencies may be one of the only ways for companies to be "pandemic-proof" in the future.

In an online interview, Coley said cryptocurrencies may offer "uses beyond speculation" where investors can engage in e-commerce transactions, run new businesses, and other real-world uses such as mortgages:

"If you build a business in the next five years and don't treat digital assets as an ingredient, you are unconsciously stepping in. It's a pandemic-proof case."

The president continued that in the future, companies should draw inspiration from cryptocurrencies, which made talking about money more accessible to the average person, but also more accessible to professionals dealing with traditional finance.

"It's an industry that reaches a much different audience than finance. (...) there are so many benefits to it that people don't appreciate."

Coley has been CEO of Binance.US since 2019. Last month, the stock market announced that it had overcome regulatory hurdles to expand into Florida, Alabama and Georgia.

Technical Market Outlook:

The ETH/USD pair has broken out from a Triangle pattern as anticipated and hit the technical support located at the level of $321.95. The zone located between the levels of $321.95 - $305.20 is the key mid-term demand zone, so traders should expect some price reaction from this area. The key short-term technical resistance is seen at the level of $332.38 and $355.24.

Weekly Pivot Points:

WR3 - $426.36

WR2 - $409.08

WR1 - $387.32

Weekly Pivot - $370.45

WS1 - $348.67

WS2 - $331.18

WS3 - $309.49

Trading Recommendations:

The weekly and monthly time frame trend on the ETH/USD pair remains up and there are no signs of trend reversal, so buy orders are preferred in the mid-term. The key mid-term technical support, seen at the level of $364.95 had been violated, but all the dynamic corrections are still being used to buy the dips. The next mid-term target for bulls is seen at the level of $500.

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GBP/USD: plan for the European session on September 24. COT reports. Pound continues to produce excellent market entry points.

To open long positions in GBP/USD, you need:

In yesterday's review, I drew attention to placing buy positions on the pound above 1.2714, returning to which occurred in the middle of the European session. I also said that you can take your time, but wait until support at 1.2714 has been tested from the reverse side, those from top to bottom. Let's take a look at a 5-minute chart. We see how the bulls quickly returned to the market when the 1.2714 level was reached, which resulted in a powerful upward momentum for the pound, thereby rising to the resistance area of 1.2782, to which we literally fell short of almost seven points. In total, the upward movement was about 60 points, which is pretty good.

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Bulls currently need to defend the 1.2709 area, because a lot depends on it. Forming a false breakout at the 1.2709 level will be a signal to open long positions while expecting an upward correction to the resistance area of 1.2772. However, you can only count on succeeding growth if we receive positive news on Brexit, since it is unlikely that today's speech from the governor of the Bank of England will be able to support the pound, and we also do not have other UK fundamental data for the day. Settling above 1.2772 will be the entry point into long positions on GBP/USD with the main goal of moving towards the high of 1.2816. A large resistance at 1.2863 will be a distant goal, which is where I recommend taking profits. In case the pair falls below the 1.2709 level, and this is more likely, it is best not to rush to buy the pound, but wait until the next low of 1.2645 has been updated, or buy GBP/USD even lower, immediately on a rebound from support 1.2585, counting on a correction of 30- 40 points within the day.

Let me remind you that the Commitment of Traders (COT) reports for September 15 showed a reduction in long positions and a large increase in short positions, which indicates market expectations and a high possibility that the pound will fall in the long term, which is probably due to uncertainty regarding the conclusion of the Brexit trade deal. And if last week, it was possible to say that the downward momentum may start to gradually slow down, which the market showed us, now the situation is on the side of the pound sellers once again and the pair may succeedingly fall. Short non-commercial positions increased from 33,860 to 41,508 during the reporting week. Long non-commercial positions decreased from 46,590 to 43,801. As a result, the non-commercial net position sharply fell to 2,293, against 12,730, a week earlier.

To open short positions on GBP/USD, you need:

Bank of England Governor Andrew Bailey is set to deliver a speech again today. We all remember his recent statements about the high likelihood of negative interest rates, which put sharp pressure on the pound. The GBP/USD pair may continue to fall today if Bailey mentions this problem again. There is also Brexit and the growth of coronavirus infection. In general, everything plays on the side of the pound sellers. Bears need a breakout of support at 1.2709 in the first half of the day, consolidation below which will open a direct way for the pound to a low of 1.2645, and the 1.2585 area will be a distant goal, which is where I recommend taking profit. In the event of an upward correction in GBP/USD, I recommend not to rush in selling, but wait for a false breakout in the resistance area of 1.2772, just below which the moving averages pass. It is possible to open short positions immediately on a rebound from a larger resistance in the 1.2816 area, counting on a correction of 30-40 points within the day.

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Indicator signals:

Moving averages

Trading is carried out below 30 and 50 moving averages, which indicates a continuation of the bearish trend.

Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart.

Bollinger Bands

A breakout of the lower boundary of the indicator in the 1.2695 area will lead to a new wave of decline for the pound. A breakout of the upper border in the 1.2765 area will lead to a new wave of growth for the pound.

Description of indicators

  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart.
  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart.
  • MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
  • Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
  • Long non-commercial positions represent the total long open position of non-commercial traders.
  • Short non-commercial positions represent the total short open position of non-commercial traders.
  • Total non-commercial net position is the difference between short and long positions of non-commercial traders.
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