Trading plan for SPX500 for December 31, 2020

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Technical outlook:

SPX500 might have carved a meaningful top just above the 3,759 level, or it is very close to forming a top soon. The indice futures is seen to be trading around the 3,734 level at the momen tof writing the article. It might be preparing to continue drifting lower from here.

Immediate price resistance is seen towards 3,760 while support comes in around the 3,600 level respectively. A break below 3,600 would certainly confirm that SPX500 has carved a meaningful top and that bears are back in control. The indice has been in a religious uptrend since March 2020. Then, it reached lows around the 2,200 level and managed to carve a series of higher highs and higher lows through the 3,759 high.

The overall uptrend looks to be mature and bears might be preparing for a meaningful corrective drop towards the 3,200 and 2,800 levels respectively over the next several weeks. A break below 1,3230 will confirm that a much deeper correction is due.

Trading plan:

Remain short, stop is above 3,800, target is 3,200 and 2,800.

Good luck!

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AUD/USD Price Analysis, 31 December 2020

  • AUD/USD gained traction for the third consecutive session on Thursday amid sustained USD selling.
  • AUD/USD rose to the fresh high since April 2018 following China's NBS PMI data.
  • US stimulus, virus updates are the key issues untill the year ends.

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The AUD/USD pair edged higher through the Asian session and reclaimed the 0.7700 mark for the first time since April 2018.The pair built on the previous day's strong breakout momentum and gained some follow-through traction on the last trading day of the year.

The underlying bullish sentiment around the global equity markets continued undermining the safe-haven US dollar and benefitted the perceived riskier aussie. Strong RSI conditions, not overbought, keeps buyers hopeful at the ascending trend-line (since April 2001) which resist the price.

Having successfully breached the 32-month top of 0.770, AUD/USD is ready to challenge 2016 swing high resistance region around the 0.780 round figure mark. This level coincides with the trendline resistance . Meanwhile, any downside below December 17 top near 0.7640 can probe the bulls for a short-term.

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Trading plan for Dow Jones for December 31, 2020

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Technical outlook:

Dow Jones has managed to print yet another high over the 30600 mark before pulling back lower. The index is seen to be trading (futures) around the 30435 levels at this point of writing and is expected to continue drifting lower from here towards the 29000 and 26000 levels respectively.

Immediate resistance zone is at 30650/700 while support is found towards the 29400/500 levels respectively. Please note that Dow Jones has managed to produce an uptrend since March 2020 lows around the 18200 levels. The index has been in control of bulls and managed to carve a series of higher lows and higher highs towards the 30600 levels recently.

The above trend looks mature and might be preparing for a meaningful corrective drop towards the 23000 levels in the next several weeks. A breakout below 26000 will confirm that a much deeper correction is on its way towards the 23000 levels, which is also the fibonacci 0.618 retracement of the entire rally between the 18200 and 30600 levels respectively.

Trading plan:

Remain short against 31000, targeting at 26000 and 23000.

Good luck!

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Trading plan for USD/CHF for December 31, 2020

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Technical outlook:

USDC/HF might have carved a bottom just above the 0.8800 levels today or is very close to carving soon. The single currency pair is seen to be trading around the 0.8818 levels at this point of writing and is expected to resume the rally towards the 0.9200 levels over the next few weeks.

Immediate price resistance is seen towards 0.8920, while intermediary support comes in at the 0.8800 levels respectively. A breakout above 0.8920 would also confirm that bulls are back in control and a meaningful bottom is now in place. Please note that USD/CHF has been in downtrend since March 2020 highs around the 0.9900 levels.

The overall bearish trend looks to be mature now, and USD/CHF is expected to produce a meaningful corrective rally at least towards the 0.9500 mark, which is fibonacci 0.618 retracement of the entire drop between the 0.9900 and 0.8800 levels respectively. Bulls might be inclined to take control back over the next several weeks.

Trading plan:

Remain long with stop below 0.8700, targeting at 0.9500.

Good luck!

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Trading plan for US Dollar Index for December 31, 2020

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Technical outlook:

The US Dollar Index end-of-the day chart has been presented here with fresh lows registered yesterday around the 89.50 levels. The index is seen to be trading around he 89.60 levels at this point of writing and could be extremely close to carving a major bottom.

Immediate price resistance is seen around 91.04 while intermediary support comes in around the 89.50 levels respectively. Although the daily chart is showing a bullish divergence on the RSI (not shown here), we still need to see a clear breakout above 91.04 to confirm that a bottom is in place. The index topped around the 103.00 levels in March 2020 and since then it has been in control of bears, carving a series of lower lows and lower highs towards the 89.50 levels.

The overall bearish structure might be complete, and bulls might be preparing to take control back soon. Please note that potential remains for a push through the 94.50 levels, which is fibonacci 0.382 retracement of the entire drop between 103.00 through 89.50 respectively.

Trading plan:

Remain long, stop below 88.00, target @ 94.50

Good luck!

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Trading plan for GBP/USD for December 31, 2020

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Technical outlook:

GBP/USD has managed to print fresh highs today around the 1.3649 mark before pulling back. The single currency is seen to be trading around the 1.3627 levels at this point of writing and might be preparing to continue lower towards the1.3400 levels in the short term.

Immediate price resistance is seen around the 1.3650/70 zone, while support comes in at 1.3430, followed by 1.3200 respectively. A drop below 1.3400 could be seen as confirmation of a meaningful top in place around 1.3649 today. The wave structure depicted on a daily chart here looks mature, and a break below 1.3200 from here might trigger further selloff.

Also note that prices would break below its March 2020 trend line support if bears are successful to take out the 1.3200 support. Furthermore, potential remains for a drop to materialize towards the 1.2200 zone, which is fibonacci 0.618 retracement of the entire rally between 1.1414 through the 1.3649 levels respectively.

Trading plan:

Remain short with stop above 1.3700, target is at 1.2200

Good luck!

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Trading plan for USD/JPY for December 31, 2020

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Technical outlook:

USD/JPY dropped yesterday through the 102.96 levels before facing support again. The drop might be seen as a correction of the previous rally between the 102.87 and 103.90 levels respectively. The single currency pair is seen to be trading around the 103.12 levels at this point of writing and is expected to resume its rally until 102.87 remains intact.

Immediate price support is seen around 102.80 while resistance is at 104.00 (intermediary), followed by 105.50 levels respectively. The overall wave structure looks constructive for bulls but we need to see a breakout above 105.50 at least to confirm that a meaningful low is in place. The above daily chart structure also remains favorable to bulls until prices stay above March 2020 lows at the 101.18 levels going forward.

The entire rally between 101.18 and 111.75 has retraced to fibonacci 0.786 levels as depicted here. If bulls are to take control back, it should be from here. Any drop below 102.87 would test 102.50 and also 101.18 levels respectively.

Trading plan:

Remain long with stop @ 101.18, target is at 105.00, 109.00 and higher.

Good luck!

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EUR/USD price analysis, 31 December 2020

  • EUR/USD gained traction for the third consecutive session on Wednesday amid weaker USD.
  • The prevalent upbeat market mood continued weighing heavily on the safe-haven greenback.

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EUR/USD reclaims 1.2300 mark for the first time since April 2018. US Congress further delayed a decision on stimulus, although $600 checks will start going out this week

EUR/USD pokes the 32-month high, flashed the previous day, while taking rounds to 1.2305, up 0.12% intraday, during early Thursday.The pair built on the previous day's bullish breakout momentum through a short-term descending trend-line resistance and gained some follow-through traction on Wednesday. The uptick marked the third consecutive day of a positive move and was exclusively sponsored by sustained US dollar selling bias.

Technical indicators remain within positive levels with uneven strength but without signs of upward exhaustion, any correction lower is an opportunity to go long .Having successfully crossed the monthly high, highest since April 2018, EUR/USD bulls are up for challenging the 32-month peak surrounding 1.2415. However, the 1.2300 round-figure may offer an intermediate halt during the surge.

From a technical perspective, the pair, so far, has managed to defend the weekly trend-line support. A convincing break below will be seen as the first sign of bullish exhaustion and turn the pair vulnerable. Some follow-through selling could lead the pair to 1.2170 mark.

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Trading Signals for GBP/USD on December 31, 2020

The daily chart of the British pound shows that the pair remains within its bullish trend channel. At the level of 1.3696 there is strong resistance that coincides with the top of the uptrend channel. If the GBP/USD pair breaks this level, it may face the strong resistance at 1.3733. It is an area where it would be a good opportunity to sell.

On the other hand, a correction below 1.3623, a level which the GBP/USD pair tried to break several times. There could be a good selling opportunity. Below this level, the correction would accelerate to the SMA 21, which is located around 1.3460.

In addition, we expect the pair to consolidate at the level of 1.3460. At this level we can buy again, because there is the SMA of 21.

Support And Resistance Levels For December 31 – January 1, 2021

Resistance (1) 1.3665

Resistance (2) 1.3712

Resistance (3) 1.3790

Support (1) 1.3525

Support (2) 1.3443

Support (3) 1.3397

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Trading tip for GBP/USD on December 31 – January 1, 2021

Sell below 1.3620 (strong resistance) with take profit at 1.3460, stop loss above 1.3655.

Sell if pullback is at 1.3733, with take profit at 1.3620 and 1.3460, and stop loss above 1.3763.

Buy, if there is a rebound around SMA 21 at 1.3460, with take profit at 1.3620 and 1.3670, stop loss below 1.3405.

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GBP/USD Hot Forecast, 31 December 2020

  • GBP/USD gained strong follow-through on Wednesday.
  • Brexit deal approved by the UK Parliament, GBP/USD stays positive above 1.3600

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The GBP/USD pair maintained bullish momentum yesterday, but it seemed some pullback beyond the 1.3600 mark took place during the Asian session. The pair added to the previous day's positive move and continued scaling higher. The momentum was supported by the heavily offered tone surrounding the US dollar, which tumbled to fresh multi-year lows amid the prevalent risk-on environment.

GBP/USD stays on the front foot near the multi-month top, rising for the third consecutive day. On the upside, if the quote manages to cross 1.3600 on a daily closing, it needs to pierce the monthly peak surrounding 1.3625 before eyeing the March 2018 low near 1.3710.

On the flip side, the key 1.3600 psychological mark might now support the immediate downside on the 4-hour chart. Bearish traders might now wait for sustained weakness below 1.3500. Any subsequent fall might now be seen as a buying opportunity. Failure to defend the mentioned support levels might prompt some technical selling and turn the pair vulnerable to slide back below the 1.3440.

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Gold price analysis, 31 December 2020

Gold prices continue to trade sideways as the US dollar weakness continues. The declining trendline has been prevailing since Gold reached its peak in August. Since reaching its peak in August, gold continues to trade within confluent zones with price hovering between support and resistance.

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However, it lacked any follow-through near the $1,900 round-figure mark.Despite the two-way price moves, the yellow metal remained well within the last week's broader trading range.The $1,900 round figure mark coincides with the upper boundary of a bearish channel which acts an immediate resistance. Consolidation above could open doorways to next the barrier at $1930.

On the flip side, the recent doji formations highlight indecision. Moreover, after a couple of weeks of strength, there could be a change in direction. If the given levels holds, the price for gold could consolidate inthe range of $1,900 to $1,860 before a clear breakout. The market sentiment remains mixed leading to the rather flat price at the moment.

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Technical Analysis of EUR/USD for December 31, 2020

Technical Market Outlook:

The EUR/USD pair has broken above the last swing high located at the level of 1.2272 and made a new swing high at the level of 1.2309 (at the time of writing the article). Nevertheless, the Broadening Wedge price pattern is still in progress, so please notice that this particular pattern is a trend reversal pattern, which indicates a possible correction on the Euro market soon. For now, the zone located between the levels of 1.2154 - 1.2177 remains the key demand zone for bulls. The positive momentum supports the short-term bullish outlook as long as the demand zone is not clearly violated. The next target for bulls is seen at the level of 1.2555, but due to the overbought market conditions we might see some corrective move first.

Weekly Pivot Points:

WR3 - 1.2368

WR2 - 1.2314

WR1 - 1.2240

Weekly Pivot - 1.2185

WS1 - 1.2118

WS2 - 1.2062

WS3 - 1.1987

Trading Recommendations:

Since the middle of March 2020 the main trend is on EUR/USD pair has been up. This means any local 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 1.1609. The key long-term technical resistance is seen at the level of 1.2555.

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Technical Analysis of GBP/USD for December 31, 2020

Technical Market Outlook:

The GBP/USD pair has finally broken out of the consolidation zone and made a new marginal high located at the level of 1.3648. The local low during the recent the pull-back was made at the level of 1.3428 and will now act as a key short-term technical support. Nevertheless, the bullish pressure is clear, and if the swing high is broken, then the next target is seen at the level of 1.3667 and 1.3708. Please notice, the market is coming off the overbought conditions, so a horizontal range trading might be still in progress. The momentum remains strong and positive, which supports the short term bullish outlook.

Weekly Pivot Points:

WR3 - 1.4170

WR2 - 1.3890

WR1 - 1.3745

Weekly Pivot - 1.3458

WS1 - 1.3319

WS2 - 1.3039

WS3 - 1.2880

Trading Recommendations:

The GBP/USD pair might have started a long term up trend and the trigger for this trend was the breakout above the level or 1.3518 on the weekly time frame chart. All the local corrections should be used to enter a buy orders as long as the level of 1.2674 is not broken. The long-term target for bulls is seen at the level of 1.4370.

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Technical Analysis of BTC/USD for December 31, 2020

Crypto Industry News:

On the Lunarcrush platform, which offers data on how social media is influencing cryptocurrency markets, bitcoin critic Peter Schiff ranks 2nd in the pantheon of the biggest cryptocurrency influencers, right after bitcoin and bitcoin podcast host Anthony Pompliano. Max Keizer is fifth. It's worth noting that recently, Schiff and Keizer have frequently exchanged views on Bitcoin on Twitter.

The Lunarcrush ranking shows the status for the last 7 days - from December 24 to the present. According to the website's data, it was during this period that Schiff published 54 tweets, which translated into 17,140 likes and 30,384 engagements.

From the list we learn that his statements influenced in particular two coins: Bitcoin and Litecoin. Its "impact on BTC" was much greater than on LTC.

Technical Market Outlook:

The BTC/USD pair has made a new ATH at the level of $29,225 (at the time of writing the article), so the up trend is continued. The local low during the pull-back was made at the level of $25,801, but there is no sign of a trend reversal and the next target for bulls is seen at the level of $30,000. The intraday support is seen at the levels of $28,000 and $28,186. The strong and positive momentum supports the short-term bullish outlook for Bitcoin. Moreover, the market still trades above the short-term trend line support. Considering that the Bitcoin price has risen by 64.9% since the beginning of December, reaching the 161% Fibonacci extension level located at the level of $30,196 could be a signal that a larger correction is indeed in the game. Ultimately, however, the volume may prove to be the main determinant of which direction price may go.

Weekly Pivot Points:

WR3 - $35,468

WR2 - $31,807

WR1 - $29,313

Weekly Pivot - $25,209

WS1 - $23,706

WS2 - $19,294

WS3 - $16,598

Trading Recommendations:

Bitcoin made another ATH and bulls are in control of the market. The up trend continues and the next long term target for Bitcoin is seen at the level of $30,196, so any correction or local pull-back should be used to open the buy orders. This scenario is valid as long as the level of $20,000 is clearly broken.

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Technical Analysis of ETH/USD for December 31, 2020

Crypto Industry News:

Ethereum's competitor, Polkadot (DOT), is making huge profits after receiving support from the Binance cryptocurrency exchange. According to CoinMarketCap, in the past seven days, DOT soared from its low of $ 4.77 on December 24 to a record high of $ 7.65 today. Traffic means an increase of 60% in six days.

Polkadot's growth comes the day after Binance announces $ 10 million funding for projects built around the Polkadot ecosystem. The multi-million dollar investment is part of the stock market's efforts to provide users with even better access to decentralized finance.

Since its announcement, Polkadot has replaced ETH on the Binance homepage. This has given the cryptocurrency more exposure and a basis for potentially competing with the world's second largest cryptocurrency.

Technical Market Outlook:

The ETH/USD pair keeps struggling with the level of $745.60 which is a 50% Fibonacci retracement on the weekly time frame chart of the last, big, main wave down from the ATH located at the level of $1,422. During the quick pull-back the market hit the level of $688.26, but bounced right back up. The last high was made at the level of $756.12, but the price reversed quickly under the level of $745 again. The intraday support is seen at the levels of $700 and $673. The additional support is being provided by the short-term trend line as well. The strong and positive momentum supports the short-term bullish outlook for Ethereum.

Weekly Pivot Points:

WR3 - $907.99

WR2 - $803.63

WR1 - $751.04

Weekly Pivot - $647.44

WS1 - $590.99

WS2 - $493.57

WS3 - $441.00

Trading Recommendations:

The up trend on the Ethereum continues and the next long term target for ETH/USD is seen at the level of $800, so any correction or local pull-back should be used to open the buy orders. Nevertheless, the momentum has decreased recently on the lower time frames and volatility is not that great either. This scenario is valid as long as the level of $500 is broken.

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Hot forecast for EUR/USD on 12/31/2020

The single European currency ends the year at its highs. Like almost the entire current year, yesterday's gradual growth was still associated with COVID-19, particularly the complete failure of the US healthcare system with its vaccination plan against coronavirus. It was planned to make 20 million vaccines before this year ends, however, only 2.7 million people were vaccinated. This means that only 13.5% of the plan was fulfilled and this, despite the fact that the epidemiological situation in the US is almost catastrophic. Based on the total number of COVID-19 cases, the United States is ahead of India and Brazil, which are in second and third places. In terms of the number of deaths, it is comparable to them. Such a situation should have prioritized vaccination against coronavirus for both the state and society. However, the results of the vaccination program clearly showed that the entire healthcare system simply cannot handle it. But there is practically no talk about the need for any reform in the US. Therefore, it is not surprising that the single European currency ends the year positively even if the macroeconomic calendar is completely empty. At the same time, the conclusion of a trade agreement between London and Brussels also adds slight optimism.

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No activity is expected on the market today, as it is shortened. Although the United States will publish data on claims for unemployment benefits, this data can be multi-directional. On the one hand, the number of repeated applications for unemployment benefits is expected to decline from 5,337 thousand to 5,290 thousand. On the other hand, the number of initial applications may grow from 803 thousand to 815 thousand. And judging by the dynamics of the reduction in the total number of applications, the most important thing here is that the labor market has lost the recovery pace. So, this is no longer a serious concern not only for investors, but also for the Fed. However, any reaction to these data should not be expected due to the New Year.

Number of re-claims for unemployment benefits (United States):

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The EUR/USD pair has updated the local high of the medium-term upward trend once again. As a result, market participants reached the lower limit of the 2018 flat range of 1.2300/1.2500.

At the same time, the market dynamics does not go beyond the limits of the average indicator, which may indicate an inertial movement in the market.

If we proceed from the quote's current location, an insignificant pullback from the coordinate 1.2300 can be observed, where market participants continue to focus on the conditional high of the medium-term trend.

Considering the overall trading chart, it is worth highlighting in the daily time frame that the flat range of 1.2300/1.2500 is a kind of high of the last upward trend.

It can be assumed that the range of 1.2300/1.2500 will exert psychological pressure on market participants, which may eventually lead to the formation of a large-scale correctional movement in the market. It should be noted that the Euro has recently acquired the highest overbought status.

From the point of view of a comprehensive indicator analysis, it can be seen that the technical indicators of the pair unanimously signal a buy, which is confirmed by the fact that the price is at the high of the trend.

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Trading plan for EUR/USD for December 31, 2020

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Technical outlook:

EUR/USD hovers around the 1.2300 levels for now as the currency faces resistance at 1.2300/10 zone. The single currency pair is seen to be trading around 1.2290/95 levels at this point of writing and is expected to drop lower anytime soon.

Immediate price resistance is seen around 1.2310/20, while support comes in at 1.2190, followed by 1.2130 levels respectively. A break below 1.2130 certainly confirms a meaningful top in place and signals that bears are back in control. EUR/USD had dropped through fresh yearly lows around 1.0636 levels before turning higher. Since then, bulls had remained in control, printing higher highs and higher lows through 1.2310 levels yesterday.

High probability remains for a bearish turn from these levels. On the flip side, if bulls continue pushing higher, the currency might reach the 1.2500 mark in the next few trading sessions. A drop below 1.2130 is crucial for bears to regain control.

Trading plan:

Remain short with stop around 1.2450 levels, target at 1.1600.

Good luck!

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Trading Signal for EUR/USD for December 31, 2020

The EUR/USD pair continues its third bullish day. It is now approaching the strong resistance of 1.2323. If it fails to break through it, we could see a correction in the next few hours.

You can see on the daily chart that EUR/USD remains within the bullish trend. A correction to the bottom of the bullish channel may give us an opportunity to buy.

If the pair fails to break through the 1.2323 resistance, we recommend selling below 1.2280 because at that level, the daily pivot and the 1-hour 21 SMA are located.

The eagle indicator is showing an overbought signal and is approaching an imminent correction.

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Trading tip for EUR/USD for December 31 – January 1, 2021

Sell Below 1.2280 ( Pivot point) with take profit at 1.2230, Stop loss above 1.2315

Buy if there is a rebound at 1.2227, with take profit 1.2205 and 1.2323, stop loss below 1.2190.

Support And Resistance Levels For December 31 – January 1, 2021

Resistance (1) 1.2323

Resistance (2) 1.2349

Resistance (3) 1.2376

Support (1) 1.2257

Support (2) 1.2217

Support (3) 1.2188

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Forecast for EUR/USD on December 31, 2020

EUR/USD

The euro decided to leave the final days of the outgoing year more beautifully than expected. It continues to grow throughout the week, very little is left to the target level of 1.2330, afterwards a double divergence will be formed on the daily chart and the euro will go into the unknown in 2021.

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The first task in the new year is to reach the consolidation range of August-November at 1.1750-1.1885. The first target in order to fall to 1.2035 is the MACD line.

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Growth continues on the four-hour chart. There is a possibility of forming a divergence, due to which the signal line of the Marlin oscillator has clearly slowed down its growth and lies a little in the horizon.

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Forecast for GBP/USD on December 31, 2020

GBP/USD

The pound sharply grew yesterday, approaching the target level of 1.3680. But when this level is reached, there is an 80% probability that the pound will fall (that is, the MACD line will be surpassed in the 1.3300 level, which will be the first sign of a change in the medium-term trend), since the price prepares a double divergence with Marlin.

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The price continues to rise without signs of a reversal on the four-hour chart. Obviously, it will only happen in January. The first sign will be when the price drifts below the MACD line around 1.3515.

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Forecast for AUD/USD on December 31, 2020

AUD/USD

The Australian dollar threw itself a holiday yesterday and grew stronger than the market (78 points). It surpassed the 0.7675 target level, and the signal line of the Marlin oscillator returned to the tilted path, from which, it would seem, it had already left on the 22nd. Now the aussie's target is the 0.7770 level.

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As with other leading currencies, the euro and the pound, with the establishment of a new high, AUD/USD will form a reversal divergence with the Marlin oscillator. There will be a double divergence for AUD/USD. Accordingly, the reversal factor will increase. The target levels of the downward trend were revised, now they are: 0.7465, 0.7285 and others, marked on the daily chart.

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The price continues to rapidly rise on the four-hour chart. Its decline under the MACD line, below 0.7642, will be the first sign of a reversal in the Australian dollar.

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Forecast for USD/JPY on December 31, 2020

USD/JPY

The yen has finally rallied and crossed the target level of 103.18 yesterday, opening the target level of 102.35. Further development of the Japanese currency will largely depend on the US dollar. If the greenback starts a large-scale offensive that we are expecting, then the USD/JPY pair will move up from the target level.

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But several powerful uncertain risks can intervene at once: an outbreak of a post-epidemic, a collapse of stock markets, the emergence of new hot spots on the geopolitical map. And the yen's reaction is unpredictable. In general, given the decline in the role of the yen as a safe-haven currency, the main pressure on the pair will increase. Trading the yen in 2021 will be challenging.

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The price has settled below the signal-target level of 103.18 (November 16 low ) and, without external signs of a reversal, is heading towards the target level of 102.35 on the four-hour chart.

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Oil, Gold. Results of the outgoing year 2020 - prospects for 2021

Dear colleagues!

By tradition, at the end of the outgoing year, it is customary to sum up the results and assess plans for the future. Therefore, I would like to dedicate an article on this topic. It will be all the more interesting to compare forecasts that were given last year with what we received today. Given the extraordinary circumstances in which the world economy finds itself this year, it would be at least naive to expect that December 2019 ideas can be implemented on the value of certain assets in December 2020, but at least it will be very useful.

Let's start summing up the outgoing year with the oil price. In December 2019, the US Energy Information Agency - US EIA - assumed the price of North American WTI oil in December 2020 would be at $60 per barrel, however, NYMEX traders were more pessimistic and considered the most likely price of WTI #CL grade at $55. As you can see, the collective mind turned out to be stronger and more accurately determined the price than a host of analysts on the US government salary.

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Figure 1: WTI #CL Oil Price Forecast for 2021

The US EIA's forecast for next year is $46 a barrel, and NYMEX traders are forecasting $45, which is not bad considering that the coronavirus hit the oil industry in 2020. Moreover, the Agency assumes that by the end of next year, WTI #CL oil will be at $47.

Naturally, if it weren't for the OPEC+ deal and the measures taken to cut production, the market situation would have been completely different. However, in fairness, take note that price planning has shown high efficiency, and the Covid-19 epidemic has dealt a heavy blow on American oil companies that did not take part in the deal. In 2019, US oil production was 12.25 million barrels per day. In 2020, production dropped to 11.34 million barrels, and in 2021 it is projected even lower, at 11.10 million. Thus, more than a million barrels of American shale oil will leave the market, and the United States will actually lose the exporter status that it received in 2019. This is a success. Moreover, the number of drilling rigs in the United States and Canada has decreased by 457 units compared to last year, more than twice, and the current price increase does not make it possible for shale oil production to recover. In this sense, investing in US shale producers is a very dubious story.

It can be assumed that the Joe Biden administration that came to power is unlikely to lobby for the interests of oil producers by introducing a ban on hydraulic fracturing technology on federal lands, which will actually put an end to the United States as an oil exporter. Thus, with the price of oil at $50 per barrel, the growth of oil consumption by the world economy will bring benefits to countries that are members of the OPEC+ agreement, as well as corporations engaged in traditional production methods. In turn, American shale producers will experience a lack of capital investment, which means that they are unlikely to be able to significantly reduce the cost of production technologies in the foreseeable future.

Given the current circumstances - falling oil consumption in the world and falling production in the United States - inflationary processes that may occur in the event of a decline in the dollar will pose as a great danger for oil producers. If OPEC+ manages to meet the interests of the parties by increasing production and preventing a sharp increase in the price of oil, then in the long term this may finally, if not bury, then significantly limit the possibilities of shale production in the United States. If oil producers prefer short-term benefits to strategic goals, they risk facing not only resurrected shale oil producers, but also competition from alternative energy sources.

The most successful prediction in 2019 was the growth in the price of gold. However, take note that since it updated the record high, the yellow metal exceeded analysts' expectations, bringing investors a yield of 20% per annum in US dollars. Given the work of the printing press on both sides of the ocean, as well as low interest rates, in 2021, we can assume a further increase in the price of gold against all currencies. In an environment where money does not generate income, and rates are close to zero or have a negative value, investors will by compulsion be forced to consider gold as an alternative to other investments.

The global economic recovery from the stress of 2020 could spur demand from the jewelry industry, pushing the price of gold and gold miners further higher. However, it is unlikely that we should assume the price will soar, rather, traders and investors can count on a 15% rise in gold quotes to the level of $2,250 per troy ounce. At the same time, one cannot exclude the possibility that next year gold will not be able to renew the current year's high and it will not bring significant returns to investors. The average return in US dollars that gold has generated over the past ten years has been around 8%. This year was an exception, so if in 2021 gold adds 10% to its value and ends the year above the $2000 level, it can already be considered a good result.

Happy New Year, be careful and follow the rules of money management, may the coronavirus pass us by!

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Trading Signal for EUR/USD for December 30 - 31, 2020

At the beginning of the Asian session, the EUR/USD pair is trading at 1.2285 which is very close to the new yearly high of 1.2293. The pair remains strongly bullish and slowly continues its rise.

The 4-hour chart shows that the price remains above the 21 moving average and is trading within an uptrend channel. The eagle indicator is showing a bullish signal, approaching the 90 zone which represents overbought conditions.

The EUR/USD pair has been supported by the weakness of the US dollar index (USDX). The US dollar is close to covering the GAP that was formed at the 89.34 level. The weakness of the US dollar is likely to continue which could drive the euro/dollar pair higher to 1.2329.

On the 4-hour chart, you can see that EUR/USD remains above the 21-day SMA. We can continue buying the pair only if it remains holding above or bounces back from this area with the targets at 1.2329, +2/8 of Murray.

The EUR/USD pair has reached a new high of 1.2293. It is likely to pull back to the 1.2230 zone before developing a further bullish rally.

We recommend buying after a technical correction to the 1.2230 level where the 21 SMA is located, or when the price bounces to the bottom of the uptrend channel.

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Trading tip for EUR/USD for December 30 – 31

Buy if the price rebounds at 1.2255, with take profit at 1.2290 and 1.2329, stop loss below 1.2220.

Buy if the pair rebounds around 1.2225 (SMA 21), with take profit at 1.2268 (+1/8 of Murray) and 1.2329, stop loss below 1.2190.

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Trading recommendations for starters on GBP/USD and EUR/USD for December 30, 2020

Yesterday's trading was not unusual for the market, since everything followed the planned scenario. So, US statistics were the only data that was published, where the S&P/Case-Shiller house price index rose from 6.6% to 7.9%, which is more than expected. However, the market did not react to the positive statistics, as traders are still focused on the Brexit results, and trading volumes have been reduced in connection with the preparation for the end of the year.

What happened on the trading charts?

The pound sterling rebounded from the variable support level of 1.3428, but there were only enough buyers for the Asian session. Since the beginning of the European session, the market has been affected by a sideways move of 1.3470/1.3520, which ended the trading day.

The Euro was more active compared with the pound. Market participants were developing an upward trend, and as a result, the quote approached the local high (1.2275) of the medium-term upward trend, where a local stop with a slight pullback occurred.

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Trading recommendation for GBP/USD on December 30

The economic calendar is practically empty today. The only news is the data on unfinished sales in the real estate market in the United States, but only few will be interested.

In terms of price movements, an upward move occurred during the opening of the Asian session, which broke through the upper limit of the side channel 1.3470/1.3520. It can be assumed that holding the price above the level of 1.3560 will lead to a subsequent increase towards the local high of 1.3618.

An alternative scenario considers deceleration at current levels, followed by the formation of an amplitude of 1.3500/1.3550.

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Trading recommendation for EUR/USD on December 30

Significant statistics are also not expected in Europe. Therefore, the primary focus will be on technical analysis.

After the recent price fluctuations, it can be seen that the quote of the EUR/USD pair re-updated the local high of the medium-term upward trend. Before it, there is an important range of 1.2300/1.2500, where a stop occurred in 2018. This was followed by a change in the trend.

It can be assumed that the price area of 1.2300/1.2500 will continue to put pressure on buyers, which may eventually lead to a large-scale correctional movement for the euro.

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EUR/USD and GBP/USD: Democrats continue to insist on a $2,000 additional payment to Americans. The UK parliament is expected

Heated debates continue in the US House of Representatives, as Democrats are still actively promoting their stance, which is to increase payments to Americans. According to latest reports, the lower house approved the bill to increase payments up to $ 2,000 per person. However, they will only apply to those with an annual income below 75,000.

The new bill was passed by a majority of 275 votes to 134 votes, and even received support from 44 Republicans. Such payments will cost the Treasury $ 464 billion. Immediately thereafter, Senate Minority Leader Chuck Schumer called on President Donald Trump to convince Republican Senators to vote for a raise, but that did not happen.

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Senate Majority Leader Mitch McConnell objected to the bill on Tuesday, which prompted Trump to tweet again, urging Republicans to accept larger stimulus payments.

In the meantime, the US Internal Revenue Service started to distribute $ 600 payment to Americans who meet the required criteria. The first payouts will go to low and middle-income Americans. Dependent children aged 16 and under, which are also from these families, are eligible as well.

With regards to the EUR / USD pair, the euro reached a new yearly high this week, probably because demand for the dollar continues to decrease amid rumors that the US Fed may resort to new stimulus measures next year, as well as change its monetary policy ...

Aside from that, the EU parliament has temporarily approved the Brexit trade deal, in which, according to the reports, the member states of the European Union gave an official response and formally supported the agreement concluded last week. Now, all that is left is the approval of the UK parliament, which is expected today. If the bill is ratified, it will come into force starting January 1, 2021. The final vote of the EU parliament on this document is scheduled for March 2021.

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About the state of the economies, the Redbook recently reported that retail sales in the US rose by 8.9% in the week of Dec 20-26, and jumped by 0.4% in the first 4 weeks of December.

The data published by S&P / CoreLogic / Case-Shiller, meanwhile, indicated that the national house price index increased by 8.4% in October, after rising by 7% in September. Economists had expected prices to rise by only 6.9%.

Going back to the EUR/USD pair, the breakout of the 23rd figure will lead to a new wave of growth in risky assets, in particular, a sharp upward move towards 1.2350 and 1.2405. But if the quote returns to 1.2265, the euro will collapse to 1.223,5 and then to 1.2200.

As for the GBP/USD pair, most likely, the quote will climb above 1.3565, however, such a move will slightly slow down the bull market. Nonetheless, the target is still 1.3620. But if the quote moves below 13515 instead, the pound will drop to 1.3435, and then to 1.3310.

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AUD/USD. Iron ore's records and US dollar's vulnerability

The Australian dollar is ending this year positively. It managed to update its multi-month high and reached the level of 0.7664 before the New Year's holiday. The last time the AUD/USD pair was at such price highs was in April 2018. Now, buyers clearly intend to test the price level of 0.77 in the near future, indicating the nearest prospects.

On the one hand, current price fluctuations should be treated with a certain degree of caution, since traders trade in conditions of low liquidity. It should be noted that a narrow market increases the sensitivity of currency pairs – even a minor information can provoke increased volatility. On the other hand, the current growth of the Australian dollar fits accordingly into the general outline of the latest trends. Let's take the AUD/USD weekly chart as an example: Since November started, the pair has been growing almost without pullback, rising by almost 700 points in two months. Therefore, the investors should not be confused with the pre-New Year growth of the Australian dollar, which continues to gain impulse amid a weakening US dollar.

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The upward trend of the AUD/USD pair is primarily due to the growth of the commodity market and the general demand for risky assets. Moreover, the current optimism in the market is putting pressure on the US currency: the US dollar index declined below the 90th mark again, reflecting another massive sell-off.

Now, let's start with events in the US. It can be recalled that Donald Trump approved a stimulus package totaling $ 900 billion on Monday. Despite criticizing this bill, he still signed the document, while asking congressmen to increase the amount of direct payments to Americans, that is, from $ 600 to $ 2,000. Oddly enough, the Congressmen listened to the President's requests and voted for the corresponding amendment. This is that rare moment when Trump's position coincided with the position of the representatives of the Democratic Party. However, the above amendment has so far been approved by the Lower House of Congress only – the House of Representatives. The Democrats are the majority there, while on the contrary, the Republicans are the majority in the Senate. The Upper House of Congress decided not to rush to a vote, postponing the issue until January. However, this fact did not disappoint investors: the markets are still dominated by optimistic sentiment, as proven by the key indices of the US stock market.

The Australian dollar, in turn, is receiving additional support from the commodity market. Last week, iron ore rose to nine-year highs, while on Monday, the price of a strategically important raw material for the Australian economy rose by almost $ 177 per tonne. At the moment, this indicator has slightly reduced, but it still has an upward dynamic. Since the beginning of the year, iron ore has almost doubled in price. Experts believe that its price will continue to grow in the first half of next year due to several factors:

For example, Brazil significantly reduced ore exports (including due to the collapse at the Vale mine). At the same time, Brazil is the second largest global exporter of this raw material after Australia. In turn, the rainy season begins in Australia – due to adverse weather conditions, production at the mines is limited. Additionally, the tense relations between Beijing and Canberra also plays a vital role. There are rumors circulating in the market that China may introduce a tax next year that can be levied on the supply of Australian iron ore. Amid such (possible) prospects, Chinese industrialists are creating additional reserves of raw materials as soon as possible.

The current fundamental picture pushes the AUD/USD pair up to new heights. The narrow market only strengthens the upward dynamics, allowing buyers to open the next price ranges. This trend will continue in the medium-term, especially given the vulnerability of the US currency.

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In other words, the upward trend of the AUD/USD pair is still in force. From a technical point of view, the pair on all higher time frames (from H4 and above) is either on the upper line of the Bollinger Bands indicator or between the middle and upper lines, which indicates the priority of the upward direction.

Meanwhile, the Ichimoku indicator in time frames from H4 to W1 (except for the monthly chart) formed a bullish signal "Parade of Lines" when the price is above all the indicator lines, including above the Kumo cloud. This signal indicates a bullish mood. The strongest resistance is at 0.7700 – upper Bollinger Bands line on the daily TF. It is important for buyers to break through this target in order to consolidate within the level of 0.77 and plan future prospects.

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Indicator analysis. Daily review of GBP/USD for December 30, 2020

The pair traded upward on Tuesday and broke through the historical resistance level 1.3481 (blue dotted line). Today, the price may continue to move upward. As per the economic calendar, dollar news is expected at 15:00 and 15:30 UTC.

Trend analysis (Fig. 1).

The market may continue to move upward from the level of 1.3496 (closing of yesterday's daily candlestick) with the target at the upper fractal 1.3623 (red dotted line) - a daily candlestick from 12/17/2020. In case of testing this level, the upward trend may continue with the next target of 1.3676 - a 76.4% retracement level (yellow dashed line).

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Figure: 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger lines - up;

- Weekly chart - up.

General conclusion:

Today, the price may continue to move upward from the level of 1.3496 (closing of yesterday's daily candlestick) with the target at the upper fractal 1.3623 (red dotted line) - the daily candle from 12/17/2020. In case of testing this level, the upward trend may continue with the next target of 1.3676 - a 76.4% retracement level (yellow dashed line).

Alternative scenario: the price may continue to move upward from the level of 1.3496 (closing of yesterday's daily candlestick) with the target at the upper fractal 1.3623 (red dotted line) - the daily candle from 12/17/2020. In case of testing this level, a downward trend is possible with the target at the historical support level 1.3481 (blue dotted line).

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Technical Analysis of ETH/USD for December 30, 2020

Crypto Industry News:

Lebrija, a small town in the province of Seville in Spain, introduced a cryptocurrency called Elio to support local transactions between residents and traders during the ongoing pandemic. The newly launched cryptocurrency is linked to the Euro.

According to a report by the Spanish news agency Europa Press, the Elio cryptocurrency will enable the Lebrija City Council to send economic aid to 593 selected beneficiaries. Beneficiaries will receive aid in the amount of 50 to 200 euros. In addition, the City Council announced that as part of the City's Reactive Plan, it will pay out economic aid of 400 euros to 393 local businesses through its virtual currency Elio. According to the said report, 165 stores in the city joined the platform.

Digital currencies gained popularity across Europe as governments began exploring opportunities in the cryptocurrency market. The European Central Bank published a report on the development of CBDC in early November. ECB President Christine Lagarde mentioned that the ECB could introduce digital Euro in the next 2-4 years. In addition to government efforts, some private financial companies in Europe have started issuing stablecoins.

Technical Market Outlook:

The ETH/USD pair has been seen trading under the level of $745.60 which is a 50% Fibonacci retracement on the weekly time frame chart of the last, big, main wave down from the ATH located at the level of $1,422. During the quick pull-back the market hit the level of $688.26, but bounced right back up. The intraday support is seen at the levels of $700 and $673. The additional support is being provided by the short-term trend line as well. The strong and positive momentum supports the short-term bullish outlook for Ethereum.

Weekly Pivot Points:

WR3 - $907.99

WR2 - $803.63

WR1 - $751.04

Weekly Pivot - $647.44

WS1 - $590.99

WS2 - $493.57

WS3 - $441.00

Trading Recommendations:

The up trend on the Ethereum continues and the next long term target for ETH/USD is seen at the level of $800, so any correction or local pull-back should be used to open the buy orders. Nevertheless, the momentum has decreased recently on the lower time frames and volatility is not that great either. This scenario is valid as long as the level of $500 is broken.

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Technical Analysis of BTC/USD for December 30, 2020

Crypto Industry News:

Binance will expand its cryptocurrency trading directory by introducing European Bitcoin Options Contracts.

The launch announced today follows a successful trial in November. The press release also shows that the new options contract will be priced and settled in Tether.

According to Binance, the debut of the new product took place due to the growing appetite for BTC options. In early December, Bitcoin options surpassed $ 1 billion for the first time, with total open interest reaching nearly $ 6 billion. Commenting on the launch, Binance CEO Changpeng Zhao noted that Bitcoin's recent $ 28,000 hit highlighted the growing level of investment in the crypto space.

"The growth of the cryptocurrency industry can largely be attributed to a combination of factors, including broader public education and institutional interest, innovation in DeFi protocols and smart contracts, and the development of a solid derivatives market," he added.

In April, Binance joined a growing number of exchanges introducing Bitcoin options trading by launching American-style BTC options contracts. The main difference between the US and European format is that traders can only use the latter after the contract expires.

The previous iteration of Bitcoin Options on Binance has been criticized for being one-sided as users were unable to "write" options and reap bonuses. Consequently, Binance options were generally more expensive due to the inability to conduct arbitrage.

Technical Market Outlook:

The BTC/USD pair has made a new ATH at the level of $28,526 (at the time of writing the article), so the up trend is continued. The local low during the pull-back was made at the level of $25,801, but there is no sign of a trend reversal and the next target for bulls is seen at the level of $30,000. The intraday support is seen at the levels of $28,000 and $28,186. The strong and positive momentum supports the short-term bullish outlook for Bitcoin. Moreover, the market still trades above the short-term trend line support (market orange on chart).

Weekly Pivot Points:

WR3 - $35,468

WR2 - $31,807

WR1 - $29,313

Weekly Pivot - $25,209

WS1 - $23,706

WS2 - $19,294

WS3 - $16,598

Trading Recommendations:

Bitcoin made another ATH and bulls are in control of the market. The up trend continues and the next long term target for Bitcoin is seen at the level of $30,000, so any correction or local pull-back should be used to open the buy orders. This scenario is valid as long as the level of $20,000 is clearly broken.

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Technical Analysis of GBP/USD for December 30, 2020

Technical Market Outlook:

The GBP/USD pair has keeps trading in the middle of the consolidation zone as the volatility decreases. The local low during the recent the pull-back was made at the level of 1.3428 and will now act as an intraday support. Nevertheless, the bullish pressure is clear, and if the swing high is broken, then the next target is seen at the level of 1.3667 and 1.3708. Please notice, the market is coming off the overbought conditions, so a horizontal range trading might be still in progress. The momentum remains strong and positive, which supports the short term bullish outlook.

Weekly Pivot Points:

WR3 - 1.4170

WR2 - 1.3890

WR1 - 1.3745

Weekly Pivot - 1.3458

WS1 - 1.3319

WS2 - 1.3039

WS3 - 1.2880

Trading Recommendations:

The GBP/USD pair might have started a long term up trend and the trigger for this trend was the breakout above the level or 1.3518 on the weekly time frame chart. All the local corrections should be used to enter a buy orders as long as the level of 1.2674 is not broken. The long-term target for bulls is seen at the level of 1.4370.

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Technical Analysis of EUR/USD for December 30, 2020

Technical Market Outlook:

The EUR/USD pair has broken above the last swing high located at the level of 1.2272 and made a new swing high at the level of 1.2294 (at the time of writing the article). Nevertheless, the Broadening Wedge price pattern is still in progress, so please notice that this particular pattern is a trend reversal pattern, which indicates a possible correction on the Euro market soon. For now, the zone located between the levels of 1.2154 - 1.2177 remains the key demand zone for bulls and the zone located between the levels of 1.2250 - 1.2272 will now act as a support zone. The positive momentum supports the short-term bullish outlook as long as the demand zone is not clearly violated. The next target for bulls is seen at the level of 1.2555.

Weekly Pivot Points:

WR3 - 1.2368

WR2 - 1.2314

WR1 - 1.2240

Weekly Pivot - 1.2185

WS1 - 1.2118

WS2 - 1.2062

WS3 - 1.1987

Trading Recommendations:

Since the middle of March 2020 the main trend is on EUR/USD pair has been up. This means any local 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 1.1609. The key long-term technical resistance is seen at the level of 1.2555.

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Markets will enter 2021 hoping for growth and general recovery. Overview of USD, NZD, AUD

US stock indices closed at record levels due to the signing of the $ 2.3 trillion economy and government spending bill. The rising optimism led to the growth of stock indices in the Asia-Pacific countries and February Brent futures, which is positively supported by the API report on the decline of stocks.

In general, the markets are positively rising, while the US dollar will remain under pressure.

NZD/USD

The New Zealand dollar has a good chance of continuing growth in the medium term. The latest NZIER consensus forecasts show a significant upward revision in almost all significant macroeconomic parameters, which suggests a recovery in the form of a V-shaped graph. This was not expected in the summer for either the US or European countries.

Initially, a significant increase in demand is expected as a reaction to RBNZ's stimulus measures. In particular, the wage subsidy scheme, increased social benefits and lower mortgage rates have boosted housing demand and retail spending. Rising expectations for consumer demand led to a higher inflation forecast, while a recovery in business confidence and an increase in the intention to hire more employees led to a lower forecast for unemployment.

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NZIER also believes that increasing capacity utilization will lead to faster wage growth, and since New Zealand's economy has proven more resilient to stress than expected, concerns about the introduction of a negative RBNZ rate are reduced.

The latter situation is probably the key to the reorientation of financial flows. The CME net long speculative position remains confidently bullish. The target price continues to rise, so the growth of NZD/USD pair on the spot is absolutely logical.

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On the other hand, a number of secondary forecasts do not fall out of the general trend – it is expected that annual growth of private consumption will grow by 7.2% until March 2022. The uncertainty about exports has declined, whose forecast for 2021 is revised upwards. Here, investment in construction is expected to rise by 8%.

Everything indicates that the New Zealand dollar will be in demand, especially amid high uncertainty over the US economic recovery. This morning, the price of NZD/USD overcame the resistance level of 0.7166 and reached the two and a half year high of 0.7185. The strategic goal of the bulls is to consolidate above the resistance level of 0.7560, which will mean a reversal of the long-term trend. And although the NZD might fail on the first attempt, growth towards this key resistance is still possible in the next few weeks.

AUD/USD

The Australian dollar also has a good chance to continue rising. The net short position for the reporting week declined by 372 million. In general, the situation is neutral with a slight bullish advantage. The target price is above the long-term average, so the trend remains bullish.

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Contrary to New Zealand, Australia's economy is complicated by growing tensions with China. Diplomatic communication between the two countries at the ministerial level and above has been suspended for more than a year. From China's viewpoint, Australia is the most consistent supporter of the United States in the sanctions war against China, despite the fact that China is its largest trading partner.

In view of this, tensions with China are the main factor preventing Australia from benefiting from a changing external environment that can support its economy. At the same time, Biden's victory in the US election increases the chances of additional stimulus, which means an expected increase in commodity prices.

COVID-19 risk in Australia is lower than other Northern countries, due to approaching summer and low seasonal activity of the virus.

Technically, the AUD/USD pair has no serious resistance up to the level of 0.8136, so the most logical strategy is to hold long positions in the short-term, buy on pullbacks and ignore small fluctuations.

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Analysis and trading recommendations for the GBP/USD pair on December 30

Analysis of transactions in the GBP / USD pair

Two signals emerged in the pound yesterday. However, they turned out not as profitable as expected.

First, since the MACD line moved below zero, short positions build up at 1.3470, but the downward movement did not take place. Instead, the market quickly reversed, in which the test of 1.3499 led to the build up of long positions. Such was also supported by the rise of the MACD line in the chart. However, the growth was only 15 pips, and after which, the market turned down again.

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Trading recommendations for December 30

The pound grew strongly today during the Asian session, and it seems that it would continue doing so for the rest of the day. The bulls are working to return the quote to the yearly high, which indicates their faith in the continued strengthening of the pound next year.

Aside from that, economic reports from the US, which are scheduled to be released this afternoon, are unlikely to help the dollar regain its positions against risky assets. However, attention should still be paid to data on foreign trade, Chicago PMI index and the US wholesale price index. Better-than-expected values could limit the upward potential for the pound.

With regards to the Brexit trade deal, the only thing that is left is the approval from the UK parliament.

For long positions:

Buy the pound when the quote reaches 1.3546 (green line on the chart), and then take profit at the level of 1.3580 (thicker green line on the chart). Demand for the currency will increase even more if the UK parliament ratifies the Brexit trade deal.

But keep in mind that before buying, make sure that the MACD line is above zero and is starting to rise from it.

For short positions:

Sell the pound after the quote reaches 1.3526 (red line on the chart), and then take profit at the level of 1.3481. Demand for the currency is expected to decline due to lack of positive news and uncertainty among traders.

Also, keep in mind that before selling, make sure that the MACD line is below zero and is starting to move down from it.

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What's on the chart:

The thin green line is the key level at which you can place long positions in the GBP/USD pair.

The thick green line is the target price, since the quote is unlikely to move above this level.

The thin red line is the level at which you can place short positions in the GBP/USD pair.

The thick red line is the target price, since the quote is unlikely to move below this level.

MACD line - when entering the market, it is important to be guided by the overbought and oversold zones.

Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.

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Indicator analysis. Daily review of EUR/USD for December 30, 2020

The pair traded upward on Tuesday and tested 1.2275 - an 85.4% retracement level (yellow dashed line), closing slightly below 1.2247. Today, the market may continue to move up. As per the economic calendar, dollar news is expected at 15:00 and 15:30 UTC.

Trend analysis (Fig. 1).

The market may continue to move upward from the level of 1.21247 (closing of yesterday's daily candlestick) with the target at 1.2328 - the upper border of the Bollinger line indicator (black dotted line). Upon reaching this level, the upward trend may continue with the next target at the historical resistance level 1.2462 (blue dotted line).

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Figure: 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger lines - up;

- Weekly chart - up.

General conclusion:

Today, the price may continue to move upward with the target at 1.2328 - the upper border of the Bollinger line indicator (black dotted line). Upon reaching this level, the upward trend may continue with the next target at the historical resistance level 1.2462 (blue dotted line).

Alternative scenario: upon reaching 1.2275 - an 85.4% retracement level (yellow dashed line), the price may start moving down to the support level 1.2177 (blue bold line).

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GBP/USD: plan for the European session on December 30. COT reports. Pound tries to return to annual highs amid US dollar's

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

Yesterday, we did not have a single signal to enter the market, while the British pound's volatility remained at a fairly low level, and the pair failed to test the designated levels, from which one could make a decision to enter the market.

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Buyers are currently focused on resistance at 1.3567. A breakout and consolidation at this level with a test from top to bottom creates a good entry point into sustaining the bull market. In this case, we can expect a larger upward movement to the high of 1.3615 along with an update and an exit to the 1.3690 area, where I recommend taking profits. If the pound is under pressure in the morning, then it is best to open long positions only when a false breakout has formed in the support area of 1.3516, where the moving averages are, playing on the side of those who buy the pound. I recommend buying GBP/USD immediately on a rebound from a low of 1.3475, or even lower, from a larger support area of 1.3433, counting on an upward correction of 25-30 points within the day.

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

The dollar's weakness will continue to push the British pound. In this regard, it is best not to rush to sell GBP/USD today. Only a false breakout in the new resistance area of 1.3567, which was formed as a result of a sharp decline in the pair's volatility, will return pressure to the pound and lead to a downward correction to the support area of 1.3516, on which the succeeding direction depends. A breakout of this level and being able to test it from the bottom up creates a good signal to open short positions in sustaining the downward correction, in hopes for the pound to fall to lows of 1.3475 and 1.3404, which is where I recommend taking profits. In case the pound grows further, I recommend not rushing to sell. It is best to wait for the renewal of annual highs around 1.3615, where forming a false breakout will be a signal to open short positions. I recommend selling GBP/USD immediately on a rebound from a high of 1.3690, counting on a decrease of 25-30 points within the day.

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The Commitment of Traders (COT) reports for December 21 recorded an increase in interest in the British pound, both among buyers and sellers. Long non-commercial positions increased from 35,128 to 37,550. At the same time, short non-commercial remained practically unchanged and increased only from 31,060 to 31,518. As a result, the non-commercial net position remained positive and grew to 6,032, against 4,068 a week earlier. All this suggests that traders continue to bet on the pound's growth, even in the face of the new Covid-19 strain, which was first reported in the UK. Everyone believes in the vaccine and that the beginning of next year, as soon as the quarantine measures are lifted, will be associated with strong economic growth, which will give the market a new bullish impetus and cause the pound to update new annual highs. Additional stimulus from the Bank of England may somewhat smooth out the upward trend in the pound, but it may not be there, since the trade agreement with the EU was concluded at the very last moment.

Indicator signals:

Moving averages

Trading is carried out in the area of 30 and 50 moving averages, which indicates the sideways nature of the market in the short term.

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 upper border of the indicator around 1.3620 will lead to a new wave of growth for the pound. A breakout of the lower boundary at 1.3510 will increase pressure on the pair.

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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