Indicator analysis. Daily review of GBP/USD on February 21, 2020

Trend analysis (Fig. 1).

Today, from the level of 1.2884 (closing of yesterday's afternoon candle), a downward movement is possible with the target of 1.2849, the lower fractal (red dashed line). If this level is reached, the continuation of work down is towards the target of 1.2700, the retracement level of 61.8% (yellow dashed line).

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - up;

- Trend analysis - down;

- Bollinger lines - down;

- Weekly schedule - down.

General conclusion:

Today, the price may continue to move down.

An unlikely but quite possible scenario is from the level of 1.2884 (closing of yesterday's candle), work up with the target of 1.2947, the pullback level of 38.2% (red dashed line).

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Indicator analysis. Daily review of EUR/USD on February 21, 2020

Trend analysis (Fig. 1).

The market may begin to move up today with the target of 1.0807, the resistance line (blue bold line). The upward movement is likely to continue from the level of 1.0807.

analytics5e4f7b2829d42.png

Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

An upward movement is expected today with the target of 1.0807, the resistance line (blue bold line). The upward movement is likely to continue from the level of 1.0807.

An unlikely but possible scenario is from the level of 1.0787 (closing of yesterday's daylight candle), continued work down with the target of 1.0664, the retracement level of 85.4% (yellow dashed line).

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EUR/USD Bearish Until Buyers Appear. Eurozone Data In Spotlights Today.

EUR/USD continues moving sideways above the critical support area. It can drop anytime, if the eurozone data turns out to be disappointing today. The euro wasn't strong enough to drag the pair higher despite several false breakdowns and rejections from the 1.0785 static support.

The outlook is bearish. The current range can represent distribution and the price can resume the downside movement. The French, German, and the eurozone services and manufacturing data can shake the EUR/USD pair today. You should be ready for high volatility. I believe that some poor figures can force the euro to depreciate versus the US dollar.

analytics5e4f7e1e7f987.jpg

EUR/USD is under massive selling pressure after another failure to reach and retest the lower median line (lml) of the descending pitchfork. It continues trading right above the S2 (1.0785) level and above the 150% Fibonacci line. In the previous analysis, I said that only a reversal pattern would signal a potential upside movement.

Stochastic and MACD are signaling a bullish divergence. But we cannot consider a reversal as long as the price is located below the previous high of 1.0820. An aggressive breakdown below the S2 (1.0785) level and below the 150% line can confirm a drop towards the S2 (1.0741) level and towards the first warning line (wl1) of the descending pitchfork.

  • Trading Tips

The bias is bearish as long as the price is below the lower median line (lml) and below the 1.0820 high. Long positions can be opened, if the price stays above the S1 (1.0785) level, if it breaks above the lower median line (lml), and after it makes another high.

Personally, I believe that we'll have a significant move after the eurozone and the US data. A major false breakdown below the near-term support area will validate a potential leg higher for the upcoming period. A further drop will be imminent, if EUR/USD closes right below the support area.

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Technical analysis of ETH/USD for 21/02/2020:

Crypto Industry News:

Governments around the world face difficult choices when it comes to cryptocurrencies: regulate them strictly and risk losing economic benefits, or do nothing and be exposed.

According to a note issued by Executive Vice President Dombrovskis on behalf of the European Commission, the Libra association did not answer the questions asked by the EU. As a result, all the information provided by Facebook "remains insufficient to establish the exact nature of Libra and hence its relationship with existing EU law."

However, Dombrovskis also stated that the Commission "is ready to act quickly" when it comes to exploiting the potential of cryptography by establishing rules and supervision. This position confirms their declaration of December 5 to introduce a policy for stablecoins and monitor all risks to the financial stability of the region.

Mark Zuckerberg, Facebook president, spoke to the US House of Representatives Financial Services Committee on October 13 last year. Lawmakers have expressed similar concerns as the European Commission, citing Zuckerberg's vague responses regarding the digital currency, which said it actually doesn't know if Libra will work.

Governmental authorities in both the United States and the EU are working to better understand cryptocurrencies. The Commission has launched an open public consultation that will be available until March 19, while the US Internal Tax Service is preparing for the cryptocurrency summit on March 3.

Technical Market Overview:

The ETH/USD pair keeps testing the short-term trendline support from the upside after the sudden reversal from the level of $285. The market did it three times already, but the bears were too weak to break through and close a H4 candle below the trendline. Moreover, the swing high has not been hit yet as the last rally was capped around the level of $285.55. The local counter-trend corrective cycle might continue any time soon and the first target for bears is seen at the level of $238.68 - $235.62 zone. The weak and negative momentum supports the short-term bearish outlook.

Weekly Pivot Points:

WR3 - $358.03

WR2 - $324.90

WR1 - $285.60

Weekly Pivot - $248.62

WS1 - $213.91

WS2 - $176.19

WS3 - $141.12

Trading Recommendations:

The wave 2 corrective cycles are completed at the level of $115.05, so the market might be ready for another impulsive wave up of a higher degree and uptrend continuation. This strategy is valid as long as the level of $146.94 is not violated. The current move up might be a wave 3 in developing in the overall long-term Elliott wave scenario and so far the top at the level of $288.01 might be wave 1 of the overall wave 3.

analytics5e4f75a015373.jpg

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Technical analysis of BTC/USD for 21/02/2020:

Crypto Industry News:

In Sweden, testing of the e-krona has begun, bringing it closer to the proper issuance of the central bank's digital currency (CBDC). The pilot program will run for a year, until February 2021.

The blockchain-based currency would fuel conventional payments and banking activities nationwide. Instead of swiping a credit card or spending cash, daily transactions can switch to Blockchain.

CBDC is currently a hot topic, and Sweden is the second country (after the Bahamas) to reveal what appeared to be a real, working national cryptocurrency. The Bahamas launched the CBDC pilot program in December and is planning full implementation in the second half of 2020.

China has announced that it is developing its own CBDC, but current events are not as consistent as in the case of Sweden and Bahamas.

The launch of CBDC in Sweden seems to match Swedish innovation - the country is already one of the most cashless societies in the world.

Technical Market Overview:

The BTC/USD pair keeps trading in a narrow zone between the levels of $9,448 - $9,704, but it does not look like the bears are done, so the downtrend might resume any time now. The momentum is weak and negative and there is no indication of any bullish reversal coming. The next target for bears is seen at the level of $9,123 and the immediate resistance is located at the level of $9,645.

Weekly Pivot Points:

WR3 - $11,039

WR2 - $10,715

WR1 - $10,112

Weekly Pivot - $9,845

WS1 - $9,424

WS2 - $8,941

WS3 - $8,335

Trading Recommendations:

The market might have made the first impulsive wave up of a higher degree. This strategy is valid as long as the level of $7,582 is not violated. Nevertheless, the larger timeframe trend is still down and all the shorter timeframe moves are still being treated as a counter-trend correction inside of the uptrend until the level of $10,433 is clearly broken.

analytics5e4f7472b454e.jpg

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Technical analysis of GBP/USD for 21/02/2020:

Technical Market Overview:

The GBP/USD pair has bounced after hitting the level of 1.2848, but the bounce itself is shallow so far. All the moves up looked corrective anyway and the breakout from the recent range might be the beginning of a larger correction to the downside. In the meantime, the next technical resistance for the bulls is seen at the level of 1.2904 and 1.2939 and the local support is seen at the level of 1.2971 and 1.2848.

Weekly Pivot Points:

WR3 - 1.3333

WR2 - 1.3194

WR1 - 1.

Weekly Pivot - 1.3006

WS1 - 1.2943

WS2 - 1.2804

WS3 - 1.2739

Trading Recommendations:

The best strategy for current market conditions is to trade with the larger timeframe trend, which is up, so all downward market moves will be treated as local corrections in the uptrend. In order to reverse the trend from up to down in the longer term, the key level for bulls is seen at 1.2756 and it must be clearly violated. The key long-term technical support is seen at the level of 1.2231 - 1.2224 and the key long-term technical resistance is located at the level of 1.3512.

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Technical analysis of EUR/USD for 21/02/2020:

Technical Market Overview:

The EUR/USD pair has stopped to move lower and the price has been trading sideways between the levels of 1.0782 - 1.0815. All the bounces after the sell-offs had been shallow, so the bearish pressure is still high despite the extremely oversold market conditions. The momentum is still weak and negative and there is no indication of any trend reversal yet. The next target for bears is seen at the level of 1.0772 and the immediate technical resistance is seen at the levels of 1.0832 and 1.0823. Beware of short-squeeze.

Weekly Pivot Points:

WR3 - 1.1027

WR2 - 1.0991

WR1 - 1.0896

Weekly Pivot - 1.0858

WS1 - 1.0763

WS2 - 1.0726

WS3 - 1.0633

Trading Recommendations:

The best strategy for current market conditions is the same as it was for recent months: trade with the larger timeframe trend, which is down. All upward moves will be treated as local corrections in the downtrend. The downtrend is valid as long as it is terminated or the level of 1.1445 clearly violated. There is an Ending Diagonal price pattern visible on the larger timeframes like weekly, which indicates a possible downtrend termination soon. The key short-term levels are technical support at the level of 1.0981 and the technical resistance at the level of 1.1267.

analytics5e4f72650a61c.jpg

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GBP/USD: plan for the European session on February 21. Pound plunged to regular lows a week before the start of negotiations

To open long positions on GBP/USD you need:

Buyers of the British pound were delighted with good data on retail sales, but the euphoria did not last long, and after an unsuccessful breakout of the resistance of 1.2925, the pair returned to a downward trend. At the moment, the bulls have coped with the task of regaining the resistance of 1.2884, and while trading above this level, we can count on growth to a high of 1.2922, as well as updating a larger resistance in the region of 1.2967, where I recommend taking profits. In case GBP/USD drops to the support level of 1.2884 in the morning, it is best to return to long positions on a false breakout from the low of the month at 1.2851, or open long positions immediately to rebound from levels 1.2830 and 1.2799. A false breakout at 1.2884 will be an additional signal to buy the pound after the release of data.

To open short positions on GBP/USD you need:

Expectations of trade negotiations between the UK and the EU put pressure on the British pound, since it is unlikely that Prime Minister Boris Johnson will be able to quickly find a common language with the leaders of the euro bloc. Sellers today will also rely on weak fundamental statistics on activity in the manufacturing sector and the service sector, which will allow them to return the pair to support 1.2884, and sell in the area of a low of 1.2851, a breakthrough of which will open a direct road to 1.2830 and 1.2799, where I recommend taking profit. If the reaction to the data is on the side of the pound buyers, then it is best to return to new short positions after the formation of a false breakout in the area of 1.2922, and you can sell GBP/USD immediately for a rebound from a high of 1.2967.

Signals of indicators:

Moving averages

Trading is carried out below 30 and 50 moving average, which saves the likelihood of continued decline in the pound.

Bollinger bands

If the pair decreases, the pound will be supported by the lower boundary of the indicator at 1.2860, and a break of the upper level at 1.2895 may lead to new purchases of the pound.

analytics5e4f72248269d.png

Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - Moving Average Convergence / Divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
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EUR/USD: plan for the European session on February 21. Euro stuck in region of annual lows due to lack of willingness to

To open long positions on EURUSD you need:

Yesterday, the minutes of the European Central Bank helped the euro stay in the region of annual lows, but the downward movement did not stop because of the active struggle of buyers for the level, but due to the temporary absence of those wishing to sell the pair at current lows. At the moment, the bulls are focused on support in the area of 1.0785, the update of which was about six times, but there were no people who wanted to open new long positions. It is possible that the fundamental statistics that are released today on the PMI indices for the manufacturing and service sectors will help the bulls form another false breakout and return to the high of 1.0822, where I recommend taking profits. However, given the current state of the manufacturing sector, one can hardly count on good performance. Only a breakthrough of 1.0822 will lead to the formation of a larger upward correction to the area of highs 1.0860 and 1.0886. In the scenario of a breakthrough of support at 1.0785 in the morning, it is best to open long positions in euros after updating the lows of 1.0765 and 1.0740, however, with the current bear market, you will be very careful with finding the low.

To open short positions on EURUSD you need:

Bears continue to bend their line, and are waiting for the next weak fundamental data on the state of the European economy, which can be published today in the morning. A break of support of 1.0785 will bring EUR/USD to the area of new annual lows 1.0765 and 1.0740, where I recommend taking profits. However, be careful with selling the euro at current lows, especially the breakout, since a bullish correction could form at any time. In case the pair grows in the morning, only the formation of a false breakout in the area of 1.0822 will be a signal to open short positions in euros. I recommend selling immediately on the rebound only after a test of a high of 1.0860.

Signals of indicators:

Moving averages

Trading is carried out in the region of 30 and 50 moving average, which indicates another attempt by euro buyers to form an upward correction.

Bollinger bands

A break of the lower boundary of the indicator at 1.0775 will cause the euro to fall.

analytics5e4f71ef17d39.png

Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - Moving Average Convergence / Divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
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XAU/USD (Gold) trying for Moving Towards to the 1684.81

analytics5e4f36e5e55d7.jpgk

Gold (XAU/USD) has broken out and closed above the weekly bearish level at 1191.41 Gold is moving in market maker buy model pattern. It is trying to hit monthly bearish order block at 1684.81 as its primary target and the monthly target at 1795.10. If the bullish bias is strong and gold does not retrace bellow the 1535.51, gold may reach both of these targets.

The overall bias for gold (XAU/USD) is bullish.

(Disclaimer)

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Bearish Wolfe Waves Pattern spot at the EUR/JPY Daily Chart

analytics5e4f3a75a9094.jpg

EUR/JPY has already broken out and closed above the daily bearish level at 119.98. It is trying to form a market maker buy model pattern. However, the pair is unlikely to grow and it is showing its weakness by forming a bearish wolfe waves pattern. Unless this pair breaks out and closes above the 122.84, it will decrease to the EPA line (from point 1 to 4) as its prime target.

The overall bias for EUR/JPY is bearish.

(Disclaimer)

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Forecast for EUR/USD on February 21, 2020

EUR/USD

On Thursday, the published minutes from the last ECB meeting were expected to be inconspicuous, the central regulator is no longer confident in the economy's stable growth for a number of external and internal reasons. Against this background, the growth of the US index of business activity in the manufacturing sector of Philadelphia for the current month from 17.0 to 36.7 with a forecast of decline to 10.1 only confirmed the desire of investors to continue buying the dollar. The stock market fell 0.38% (S&P 500), but this is not important for the US currency, since even if a new global crisis erupts, which is expected to begin with the collapse of the Chinese economy, the dollar will only continue to strengthen as a safe haven . The United States is fully utilizing the crisis situation by placing long-term bonds in large volumes. Short-term and long-term bonds worth 214 billion dollars were placed this week, the total US debt reached 23.310.929 trillion. dollars. The next week announced the placement of an incredible $241 billion. With this supply (and demand) for US values, the dollar can only strengthen.

analytics5e4f54dcd9f13.png

On the daily chart of the euro, the price continues to decline to its goals: 1.0745 (Fibonacci level of 200.0%) and in the range of 1.0650/80 formed by Fibonacci levels and an embedded line of the price channel.

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The price is falling below both indicator lines on the four-hour chart, the signal line of the Marlin oscillator has returned to negative territory.

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Forecast for GBP/USD on February 21, 2020

GBP/USD

The British pound fell by 38 points yesterday, at the peak of decline, almost reaching the first target at the Fibonacci level of 110.0% at the price of 1.2844. After overcoming yesterday's low, the price will move to the second target of 1.2758 – to the Fibonacci level of 123.6%. Then 138.2% at the price of 1.2665. This can be prevented by the impeding convergence of Marlin on the daily scale. If an active downward movement takes place today, the convergence will not form, and the signal line of the oscillator will continue to decline.

analytics5e4f5480637a3.png

In this situation, it is worth tracking the pound's reaction to the release of today's British business activity data for February. Manufacturing PMI is expected to fall from 50.0 to 49.7, Services PMI is projected at 53.4 points from 53.9 earlier. The fall of the pound on negative data is highly likely to cancel out the growing (and alternative) scenario with technical convergence.

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On the four-hour chart, it is noticeable how the price overcame the range on February 2 with effort and struggle. This is also a sign of the intention of the bears to consolidate success.

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Forecast for USD/JPY on February 21, 2020

USD/JPY

The yen has soared (actually falling against the dollar) by 220 points over the past two weeks, showing the highest daily dynamics over the past two years. After leaving the MACD line on the daily chart, the price resolutely overcame a number of Fibonacci levels, not staying at 138.2%, stopping last night and this morning at 161.8% (111.93).

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Here, the price may linger a little longer, after which, according to the main scenario, it will continue to grow to the Fibonacci level of 200.0% at the price of 112.93.

analytics5e4f542c2c3c9.png

The Marlin oscillator is falling on the H4 chart, but in the current situation this can only mean that the price can really stay at the level reached before further growth.

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Trade Of The Day - NZD/USD Video Analysis

Our trade of the day today is NZD/USD! We use Fibonacci retracements, extensions, support/resistance, momentum and trend lines to identify trading opportunities in this exciting pair today!

Feel free to ask me questions on the analysis here: https://forum.mt5.com/showthread.php?226855-Dean-s...

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Trade Of The Day - NZD/USD Video Analysis

Today we take a look at NZDUSD and see how we are going to play the bounce!

Feel free to ask me questions on the analysis here: https://forum.mt5.com/showthread.php?226855-Dean-s-Daily-Video-Analysis-Instaforex-Chief-Strategist&p=14079976&

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Trade Of The Day - NZD/USD Video Analysis

Today we take a look at NZDUSD and see how we are going to play the bounce!

Feel free to ask me questions on the analysis here: https://forum.mt5.com/showthread.php?226855-Dean-s-Daily-Video-Analysis-Instaforex-Chief-Strategist&p=14079976&

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Trade Of The Day - NZD/USD Video Analysis

Today we take a look at NZDUSD and see how we are going to play the bounce!

Feel free to ask me questions on the analysis here: https://forum.mt5.com/showthread.php?226855-Dean-s-Daily-Video-Analysis-Instaforex-Chief-Strategist&p=14079976&Read more: https://www.instaforex.com/forex_analysis/165123

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Fractal analysis of the main currency pairs for February 21

Forecast for February 21:

Analytical review of currency pairs in scale H1:

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For the euro / dollar pair, the key levels on the H1 scale are: 1.0891, 1.0861, 1.0832, 1.0807, 1.0775 and 1.0751. Here, we expect a correction in a downward trend. Short-term upward movement is expected after the breakdown of the level of 1.0807. Here, the target is 1.0832. The breakdown of which will lead to in-depth movement. In this case, the target is 1.0861. This level is a key resistance for the subsequent development of the ascending structure. For the potential value for the top, we consider the level of 1.0891. We await the design of expressed initial conditions before this value.

Short-term downward movement is expected in the range 1.0775 - 1.0751. From here, we expect a reversal to the top.

The main trend is a downward structure from January 31, we expect a correction

Trading recommendations:

Buy: 1.0807 Take profit: 1.0830

Buy: 1.0834 Take profit: 1.0860

Sell: 1.0775 Take profit: 1.0752

Sell: Take profit:

analytics5e4f2d7d28b96.png

For the pound / dollar pair, the key levels on the H1 scale are: 1.2990, 1.2955, 1.2932, 1.2891, 1.2863, 1.2827 and 1.2804. Here, we are following the development of the downward cycle of February 13. Short-term downward movement is expected in the range 1.2891 - 1.2863. The breakdown of the latter value will lead to a pronounced movement. Here, the target is 1.2827. For the potential value for the bottom, we consider the level of 1.2804. Upon reaching which, we expect consolidation, as well as a rollback to the top.

Short-term upward movement is possibly in the range of 1.2932 - 1.2955. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.2990. This level is a key support for the downward structure.

The main trend is the downward cycle of February 13.

Trading recommendations:

Buy: 1.2924 Take profit: 1.2954

Buy: 1.2957 Take profit: 1.2990

Sell: 1.2861 Take profit: 1.2828

Sell: 1.2802 Take profit: 1.2755

analytics5e4f2da465a32.png

For the dollar / franc pair, the key levels on the H1 scale are: 0.9899, 0.9883, 0.9858, 0.9819, 0.9804 and 0.9783. Here, we are following the local ascendant structure of February 12. The continuation of movement to the top is expected after the breakdown of the level of 0.9858. In this case, the target is 0.9883. We consider the level of 0.9899 to be a potential value for the ascending structure. Upon reaching which, we expect consolidation, as well as a pullback to the bottom.

Short-term downward movement is possibly in the range of 0.9819 - 0.9804. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 0.9783. This level is a key support for the top.

The main trend is the local potential for the top of February 12

Trading recommendations:

Buy : 0.9858 Take profit: 0.9880

Buy : 0.9883 Take profit: 0.9899

Sell: 0.9819 Take profit: 0.9805

Sell: 0.9803 Take profit: 0.9784

analytics5e4f2dc0e71fc.png

For the dollar / yen pair, the key levels on the scale are : 112.97, 112.53, 112.29, 111.84, 111.51 and 111.10. Here, we are following the development of the ascending structure of January 31. Short-term upward movement is expected in the range 112.29 - 112.53. The breakdown of the last value will lead to a pronounced movement to the potential target - 112.97, and when this level is reached, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 111.84 - 111.51. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 111.10. This level is a key support for the top.

Main trend: upward structure of January 31

Trading recommendations:

Buy: 112.30 Take profit: 112.52

Buy : 112.55 Take profit: 112.95

Sell: 111.82 Take profit: 111.53

Sell: 111.49 Take profit: 111.12

analytics5e4f2ddeb6fc4.png

For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3281, 1.3259, 1.3242, 1.3201, 1.3165, 1.3137 and 1.3105. Here, the descending structure of February 10 is considered medium-term. The continuation of the movement to the bottom is expected after the breakdown of the level of 1.3201. In this case, the target is 1.3165. Short-term downward movement, as well as consolidation is in the range of 1.3165 - 1.3137. For the potential value for the top, we consider the level of 1.3105. The movement to which is expected after the breakdown of the level of 1.3135.

Short-term upward movement is possibly in the range of 1.3259 - 1.3281. The breakdown of the latter value will lead to the formation of an upward structure. In this case, the potential target is 1.3328.

The main trend is the descending structure of February 10, the correction stage

Trading recommendations:

Buy: 1.3260 Take profit: 1.3280

Buy : 1.3284 Take profit: 1.3325

Sell: 1.3200 Take profit: 1.3165

Sell: 1.3163 Take profit: 1.3140

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For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6668, 0.6647, 0.6632, 0.6614, 0.6594, 0.6567 and 0.6551. Here, we are following the descending structure of February 12. Short-term downward movement is expected in the range of 0.6614 - 0.6594. The breakdown of the latter value will lead to a pronounced downward movement. Here, the target is 0.6567. For the potential value for the bottom, we consider the level of 0.6551. Upon reaching which, we expect consolidation, as well as a rollback to the top.

Short-term upward movement is possibly in the range of 0.6632 - 0.6647. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 0.6668. This level is a key support for the downward structure.

The main trend is the descending structure of February 12

Trading recommendations:

Buy: 0.6632 Take profit: 0.6645

Buy: 0.6649 Take profit: 0.6666

Sell : 0.6612 Take profit : 0.6596

Sell: 0.6592 Take profit: 0.6569

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For the euro / yen pair, the key levels on the H1 scale are: 123.38, 122.61, 122.04, 121.25, 120.97, 120.50, 119.97 and 119.44. Here, we are following the initial conditions for the top of February 18. The continuation of the movement to the top is expected after the price passes the noise range 120.97 - 121.25. In this case, the target is 122.04. Short-term upward movement, as well as consolidation is in the range of 122.04 - 122.61. For the potential value for the top, we consider the level of 123.38. Upon reaching this level, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 120.50 - 119.97. The breakdown of the last value will lead to an in-depth correction. Here, the target is 119.44. This level is a key support for the upward structure.

The main trend is the formation of initial conditions for the top of February 18

Trading recommendations:

Buy: 121.25 Take profit: 122.04

Buy: 122.06 Take profit: 122.60

Sell: 120.50 Take profit: 120.00

Sell: 120.95 Take profit: 119.47

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For the pound / yen pair, the key levels on the H1 scale are : 146.35, 145.56, 145.19, 144.60, 143.89, 143.51 and 142.91. Here, we are following the ascending structure of February 10. The continuation of the movement to the top is expected after the breakdown of the level of 144.60. In this case, the target is 145.19. Short-term upward movement, as well as consolidation is in the range of 145.19 - 145.56. For the potential value for the top, we consider the level of 146.35. Upon reaching this value, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 143.89 - 143.51; hence, the high probability of a reversal to the top. The breakdown of the level of 143.50 will lead to an in-depth correction. Here, the goal is 142.91. This level is a key support for the top.

The main trend is the rising structure of February 10

Trading recommendations:

Buy: 144.60 Take profit: 145.19

Buy: 145.21 Take profit: 145.54

Sell: 143.87 Take profit: 143.52

Sell: 143.49 Take profit: 142.95

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

Gold vs dollar: battle of the titans continues

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Gold returned to its seven-year highs, soaring above $1,600 per ounce. However, the yellow precious metal did this not because of, but contrary to. At first glance, gold is growing amid uncertainty about the impact of the coronavirus outbreak on the global economy. Trying to smooth out the negative consequences of the epidemic, central banks soften their monetary policy, which negatively affects the exchange rates of national currencies. As a result, the precious metal denominated in euros, yens and other monetary units feels rather confident.

Stocks of gold ETFs expand for the sixth week in a row, tire of rewriting record highs.

The strengthening of the precious metal positions occurs despite the confident tread of the US stock indices and the greenback's growth. Investors redeem failures in the securities markets, because they are confident that China will cope with the misfortune that has befallen it thanks to large-scale monetary and fiscal stimulation. While corporate profit growth in the United States is slowing, cash flow earnings are still high and loan rates remain low. In addition, the Federal Reserve can support the S&P 500 at any time by resorting to monetary expansion.

No less surprising is the synchronous growth of the gold exchange rate and the USD index. Since the beginning of the year, the US currency has risen in price to the basket of its main competitors by more than 3%, and an ounce of gold - by 6%.

The greenback is stronger than ever thanks to the US economy, which is firmly on its feet, and the significant inflow of capital to the US securities market. The USD index reached three-year highs and came close to 100 points.

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"The dollar seems to be winning in the face of risk, when its profitability against the background of extremely low volatility of exchange rates is still standing out, and the US stock market continues to look better than the securities market elsewhere. Risk aversion also supports the dollar thanks to the demand for defensive assets, including US treasury bonds," said the currency strategists at National Australia Bank.

Nevertheless, investors prefer to leave a place in their portfolios for precious metals as well, apparently trying to insure the risks of a possible correction of the S&P 500 index and the US central bank's return to the cycle of preventive interest rate cuts. Greenback revaluation slows inflation, so it is possible that the regulator will want to stimulate it by cutting interest rates.

Meanwhile, the decline in US Treasury bond yields lends a helping hand to the bulls in gold. Investors buy debt instruments for the same reasons as precious metals: they are frightened by the uncertainty associated with the coronavirus epidemic. It should be noted that the fall in rates does not occur only in the United States. For example, since the beginning of the year, the yield on Chinese ten-year government bonds has fallen by more than 25 basis points due to the potential slowdown of the Chinese economy and incentive measures by the People's Bank of China. By the end of January, non-residents increased their stocks of debt obligations of the PRC by $14 billion, to a record $2.2 trillion.

In 2019, falling global debt market rates and weakening major world currencies became the main drivers of the gold rally. The XAU/USD situation for bulls continues to be favorable in 2020 due to the coronavirus epidemic.

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The main question now is how long the new virus will excite the minds of investors.

According to UBS experts, if the global economy can withstand the blow, then the risks of gold correction will increase.

In turn, Deutsche Bank strategists maintain an optimistic outlook on the prospects for precious metals.

"Trade protectionism continues to have a chilling effect on global economic growth, central banks in developing countries are still looking for an alternative to the US dollar as a reserve asset, global monetary policy remains stimulating, and inflation is below target levels, while the geopolitical situation poses serious risks", - experts noted.

According to them, perhaps the hype around gold is only just beginning.

Thus, it is quite possible that in the face of easing fears about the coronavirus, gold will undergo moderate corrective pullbacks, maintaining the momentum for the increase formed in December. Moving up from one area of consolidation to another, quotes can develop growth up to levels near $1,700 per ounce, which could be observed at the beginning of 2013. A more extreme scenario for the coming months implies an acceleration of prices to $1,800 per ounce (peak values of 2012).

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

AUD/USD. "There would be a reason, but there will be a seller": aussie slumps to multi-year lows

The Australian dollar today completely lost ground: after the release of conflicting data on the labor market in Australia, the AUD/USD pair fell while updating multi-year lows. The last time the price was at such lows was 11 years ago - back in 2009. It should be noted right away that such price dynamics are caused not only by a weak macroeconomic report - first of all, traders are concerned about the prospects of the RBA monetary policy. Published on Tuesday, the minutes of the Australian central bank's last meeting fueled speculation on this subject, while today's release has become a kind of "last straw".

Let me remind you that at the end of the first meeting of the RBA this year, the regulator voiced a signal that it does not exclude further easing of monetary policy. The minutes of this meeting, published the day before yesterday, somewhat eased concern about the dovish intentions of the central bank. The Australian regulator acknowledged that the risks of further easing monetary policy parameters "outweigh its benefits." That is, on the one hand, the Reserve Bank of Australia is ready to resort to decisive action in response to the slowdown of the national economy and the economy of China. On the other hand, members of the central bank stated the need to "balance the risks that inevitably involve even lower interest rates."

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The market interpreted this wording in favor of the Australian currency - they say, the central bank will resort to lower rates only in extraordinary situations. That is why the rather dovish minutes exerted a slight downward pressure on the pair.

Nevertheless, the minutes of the February meeting laid the foundation for strong volatility for the pair in the future. The fact is that the RBA members "linked" the issue of monetary easing with the dynamics of Australia's key macroeconomic indicators. According to them, the need to reduce rates depends on progress or regression in achieving the central bank's goals for inflation and employment. This suggests that the data on the growth of the Australian labor market and the main indicators of inflation are now viewed by the market through the prism of further prospects for the RBA monetary policy.

Actually, for this reason, the aussie slumped in almost all of the pairs today (not only against the US dollar). Published data reinforced rumors that the regulator will lower rates this spring. In particular, according to the Bank of Australia, the RBA members will announce this step at the March meeting, and they will reduce the interest rate by 25 basis points in April .

In my opinion, the regulator will take a wait-and-see attitude approximately until the summer. Firstly, by this time it will become clear how seriously the coronavirus slowed down the Chinese economy (and, as a consequence, the world economy). Secondly, the Australian regulator in six months will be able to see a more complete picture regarding the dynamics of indicators of the national economy.

In fairness, it is worth saying that the latest Australian labor market data was not catastrophic. The market focused on rising unemployment to 5.3% - this fact served as a kind of red flag for traders who panicked over the rate cut this spring. Although the remaining components came out better than expected. For example, the number of employees in January increased by 13 thousand, while experts expected growth by only 10 thousand. Another positive point of today's report is the growth of full employment. This component jumped to 46 thousand. On the contrary, part-time employment declined by 32 thousand. This trend can have a positive effect on the dynamics of wage growth, as regular positions, as a rule, offer a higher level of wages and a higher level of social security. The share of the able-bodied population was 66.1% (with a forecast of growth to 66.0%). This fact, in theory, was supposed to partially offset the negative effect of rising unemployment.

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Thus, the Australian today fell under the hot hand of traders who were ready to sell the aussie since Tuesday, when the minutes of the last RBA meeting were published. Today, the market has gotten a chance to fulfill its intentions: an increase in unemployment has become a signal that the regulator will nevertheless lower the rate in the foreseeable future. In my opinion, this conclusion seems premature, but the principle of sell by rumors still works. In addition, the general hegemony of the US dollar and the ongoing panic over the spread of coronavirus reinforces the pair's downward momentum. Bears overcame almost all levels of support, heading towards the 65th figure. If the fundamental picture for the pair does not change, then sellers will test the most powerful support level in the near future, which is located at 0.6570 and corresponds to the lower line of the Bollinger Bands indicator on the monthly chart.

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

EUR/USD and GBP/USD. February 20. Results of the day. Pound continues to fall, ignoring reports, euro awaits news

4-hour timeframe

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Amplitude of the last 5 days (high-low): 55p - 33p - 22p - 52p - 26p.

The average volatility over the last 5 days: 38p (weak).

The EUR/USD currency pair maintains a strong and long-term recoilless trend on Thursday, February 20, with weak daily movement and frank trampling in one place today and yesterday. Either the lack of important macroeconomic information, or the fact that the euro is reaching the bottom, but the pair continues to trade along the support level of 1.0786. After all, even though we have not seen a continuation of the downward movement for the second consecutive day, it is also impossible to say that the euro/dollar has started to adjust. There is still no upward correction, the 14th trading straight day. The MACD indicator continues to discharge, and traders are confused - what should they do next?

There really was little macroeconomic information today. Nothing was important. It is unlikely that any of the traders were interested in data on consumer confidence in Germany or inflation in France, or applications for unemployment benefits in the United States. These reports have the right to exist, but they never cause any reaction of market participants, except for absolutely fantastic cases. Thus, Thursday's macroeconomic background can be considered completely empty. In principle, the same conclusion could have been made without even looking at the calendar, one glance at the illustration of the pair's movement today would be enough ...

As a result, we have an absolute flat not even about 3-year lows, but directly on them. It is not known how much more the pair will trade around the 1.0786 level. Several more or less significant reports will be released tomorrow that could try to move the pair off the ground, and the degree of significance of these data does not allow us to suggest such an outcome with a high degree of probability. However, in any case, under current conditions, one should wait for news and economic publications. The volatility of the currency pair, by the way, again fell below the 40 mark and is now characterized as weak.

4 hour timeframe

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Amplitude of the last 5 days (high-low): 43p - 126p - 62p - 56p - 78p - 115p.

Average volatility over the past 5 days: 88p (average).

The GBP/USD currency pair continued its downward movement on February 20, which had begun the previous day. Now, the pound/dollar pair is clearly much more interesting than the euro/dollar. Firstly, we state a fact: after a series of unsuccessful attempts to overcome the upper line of the Ichimoku cloud - the Senkou Span B line - the pair completely logically resumed the downward movement. This is what we wrote about in our recent reviews, saying that the downward movement should resume almost anyway. Macroeconomic, technical, fundamental factors - all spoke in favor of a new fall of the British pound. And finally, traders could not stand it, and the British currency is pretty much cheaper against the US currency for the second straight day. Of course, now it's quite difficult to say exactly how long the recoilless fall will continue; according to the euro currency, it has been going on for three weeks already. However, the trend for the pound/dollar pair is again downward. Secondly, traders ignored relatively good macroeconomic statistics from the UK both yesterday and today. The pair was trading inside the Ichimoku cloud in those days when the fall would have been more logical, and yesterday and today, the pound fell when reports from Britain were not frankly disastrous or weak to provoke strong sales.

An indicator of inflation on Great Britain was published yesterday, which accelerated immediately to 1.8% in annual terms. Yes, as you and I found out, inflation fell by 0.3% in monthly terms, which, in essence, means deflation. That is, the annual indicator turned out to be simply irrelevant at this time, but in general, it should be noted that inflation did not fail. Even in monthly terms, the inflation rate was higher than forecast values, which predicted a greater decline. Retail sales data for January were published today, and it turned out that, although the growth rate of this indicator slowed to 2-year lows, real data still exceeded forecasts. In annual terms, the increase was 0.8%, and in monthly terms 0.9%. Also turned out to be stronger than forecast values, and data excluding fuel sales, +1.2% y/y and + 1.6% m/m. Even a more minor report on changes in the volume of industrial orders turned out to be negative, but at the same time higher than forecast values. However, none of the three macroeconomic reports was taken into account by traders, and the pound continued to fall today against the dollar, updating the lows of February 10.

From a technical point of view, it continues to move down, a new Dead Cross is formed, Bollinger Bands turned down. Macroeconomic statistics now have an indirect effect on the movement of the pair, so more attention should be paid to technical factors.

Trading recommendations:

The EUR/USD pair is finally showing signs of the beginning of an upward correction. Thus, it is now recommended to wait until the 1.0786 level is overcome and resume selling the euro with targets of 1.0765 and 1.0742. It will be possible to consider buying the euro/dollar pair with low lots and the goal of a first resistance level of 1.0916, if traders manage to gain a foothold above the critical line. However, it is better not to risk it on such a strong downward trend.

GBP/USD continues to move down. Thus, it is now recommended to sell the pound with targets at 1.2829 and 1.2796 before the MACD indicator turns up. We recommend considering the pair's purchases with a target of 1.3118 if the Ichimoku cloud is overcome, but the fundamental factors remain on the side of the US dollar.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen is the red line.

Kijun-sen is the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dashed line.

Chikou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and bar graph with white bars in the indicators window.

Support / Resistance Classic Levels:

Red and gray dashed lines with price symbols.

Pivot Level:

Yellow solid line.

Volatility Support / Resistance Levels:

Gray dotted lines without price designations.

Possible price movements:

Red and green arrows.

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

EURUSD and GBPUSD: Pound drops before the start of EU-UK trade negotiations. ECB minutes knocked down bearish momentum in

Today's data on Germany, as well as the minutes of the European Central Bank, clearly indicate the problems that the eurozone continues to experience, which is associated with weak economic prospects, especially compared with the prospects of the United States, which puts pressure on the euro.

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According to a report by the German GfK Institute, German consumer sentiment will slightly fall in March 2020. The fall of the leading index is directly related to the danger of the spread of the coronavirus, which further adds uncertainty to the German economy. It should be noted that the leading indicator of consumer sentiment GfK fell to 9.8 points against 9.9 points in February, while economists expected the March value to be 9.8 points. Subindexes also fell. The decrease is especially noticeable in the index of expectations regarding income and the propensity to buy index. The economic expectations index in February was 1.2 against -3.7 in January.

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As for the current minutes of the ECB, the leaders signaled a tendency to maintain negative interest rates at the January meeting, saying that monetary policy should remain very soft for a long period of time, which, of course, did not provide confidence to the euro. However, it is necessary to note some signs of stabilization of economic growth, which were able to discern in the leadership of the ECB. Despite all this, the euro slightly regained its position, as the last "nail in the lid" would be the hints of the regulator on lowering interest rates this spring, which I mentioned several times in my previous reviews. Until this is done, chances for a euro correction to the area of 1.0900 and 1.1000 remain. Any statements to this effect will quickly push EURUSD further to the 2017 lows in the region of 1.0500. The ECB minutes also said that the current actions of the regulator will continue to support the economy. No additional incentive measures have been discussed so far.

GBPUSD

Big pound sellers did exactly the same thing today as they did yesterday. After waiting for good fundamental data on retail sales in the UK, which grew in January 2020, the bears began to actively sell the pound after a slight upward correction, which resulted in a breakthrough of large support areas and a test of new local lows near 1.2850.

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According to the National Bureau of Statistics, retail sales rose immediately by 0.9%, while economists had forecast growth of only 0.7%. Let me remind you that there was a drop in this indicator in November and December. Mostly, sales of clothes and shoes contributed to the increase. If we remove gasoline sales from this indicator, then sales compared with the previous month increased by 1.6%. On the positive side, the fact that after the uncertainty of the period with Brexit consumers began to more actively manage their assets, which led to a revival of costs.

Of course, the pressure on the pound, which was formed immediately after a slight increase today in the morning, can be attributed to the uncertainty in trade between the UK and the EU. Formal negotiations will begin in early March this year. It is from them that the state of the UK economy this year will depend.

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