Indicator analysis. Daily review on GBP / USD for May 4, 2020

Trend analysis (Fig. 1).

Today, a continuation of the downward trend is possible from the level of 1.2499 (closing of Friday candle) with the target of 1.2357 - a 23.6% retracement level (presented in a blue dotted line). In case of breaking this level downwards, the downward movement may continue with the target of 1.2177 - a 38.2% retracement level (presented in a blue dashed line).

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - down;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - down.

General conclusion:

Today, the price may continue to move downward with the target of 1.2357 - a 23.6% retracement level (presented in a blue dotted line).

Another possible scenario is a bullish trend from the level of 1.2357 - a 23.6% retracement level (presented in a blue dashed line) with the target at the resistance line 1.2522 (presented in a red bold line). In case of breaking this level upwards, the continuation of the upward movement is possible with the target at the upper fractal 1.2643 (presented in a blue dashed line).

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GBP/USD High & Low Intraday Projection For MAY 04, 2020

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The High Of The Day and Low Of The Day from the Central Bank Dealer Range (CBDR) today are usually formed at STDV 2-STDV 4 under normal market conditions, but sometimes the price can reach the STDV 5-STDV 6. Here are the levels for today:

STDV 10 - 1.2905.

STDV 9 - 1.2863.

STDV 8 - 1.2821.

STDV 7 - 1.2779.

STDV 6 - 1.2737.

STDV 5 - 1.2695.

STDV 4 - 1.2653.

STDV 3 - 1.2611.

STDV 2 - 1.2569.

STDV 1 - 1.2527.

CBDR - 1.2485.

==================

CBDR - 1.2443.

STDV 1 - 1.2401.

STDV 2 - 1.2359.

STDV 3 - 1.2317.

STDV 4 - 1.2275.

STDV 5 - 1.2233.

STDV 6 - 1.2191.

STDV 7 - 1.2149.

STDV 8 - 1.2107.

STDV 9 - 1.2065.

STDV 10 - 1.2023.

Pay attention to the level of confluence between today's & yesterday range at 1.2863, 1.2443 & the previous Day High 1.2600 with the Previous Day Low 1.2482. All these levels can be a potential turning point level.

(Disclaimer)

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EUR/USD High & Low Intraday Projection For MAY 04, 2020

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The High Of The Day and Low Of The Day from the Central Bank Dealer Range (CBDR) today are usually formed at STDV 2-STDV 4 under normal market conditions, but sometimes the price can reach the STDV 5-STDV 6. Here are the levels for today:

STDV 10 - 1.1233.

STDV 9 - 1.1207.

STDV 8 - 1.1181.

STDV 7 - 1.1155.

STDV 6 - 1.1129.

STDV 5 - 1.1103.

STDV 4 - 1.1077.

STDV 3 - 1.1051.

STDV 2 - 1.1025.

STDV 1 - 1.0999.

CBDR - 1.0973.

==================

CBDR - 1.0947.

STDV 1 - 1.0921.

STDV 2 - 1.0895.

STDV 3 - 1.0869.

STDV 4 - 1.0843.

STDV 5 - 1.0817.

STDV 6 - 1.0791.

STDV 7 - 1.0765.

STDV 8 - 1.0739.

STDV 9 - 1.0713.

STDV 10 - 1.0687.

Pay attention to the level of confluence between today's & yesterday range at 1.0973, 1.0765 & the previous Day High 1.1019 with the Previous Day Low 1.0935. All this level can be a potential turning point level.

(Disclaimer)

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

Elliott wave analysis of EUR/GBP for May 4, 2020

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EUR/GBP dipped to a low of 0.8671 (just one pip above our stop) before taking of strongly again, breaking above minor resistance at 0.8769 and now awaits the much more important key-resistance at 0.8866 and a break above here will confirm the next impulsive rally to above 0.9499 is unfolding.

Short-term we see support in the 0.8730 - 0.8750 area.

R3: 0.8866

R2: 0.8819

R1: 0.8792

Pivot: 0.8775

S1: 0.8752

S2: 0.8736

S3: 0.8721

Trading recommendation:

We remain long EUR from 0.8765 with our stop placed at 0.8670.

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Elliott wave analysis of GBP/JPY for May 4, 2020

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GBP/JPY failed to break below short-term important support at 131.88 and instead staged a mini rally to 135.45 just below the April peak at 135.75. This rally wasn't expected, but the fact that it didn't break above the April 9'th high is positive in relation to our preferred count that calls for one more decline to below 123.99 to complete the decline from 149.96.

We still need that break below short-term key-support at 131.88 to confirm renewed downside pressure to below 123.99.

R3: 135.45

R2: 134.27

R1: 133.40

Pivot: 132.64

S1: 132.35

S2: 131.88

S3: 131.10

Trading recommendation:

We will sell GBP at 134.10 or upon a break below key-support at 131.88

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Indicator analysis. Daily review on EUR / USD for May 4, 2020

Trend analysis (Fig. 1).

Today, a downside pullback is possible from the level of 1.0984 (closing of the Friday afternoon candle) with the target of 1.0908 - a 38.2% retracement level (presented in a red dashed line).

If this level is broken down, a continuous downward pullback is possible with the target of 1.0874 - a 50.0% retracement level (presented in a red dashed line). Upon reaching this level, an upward pullback is possible.

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - down;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

Today, the price may move downwards with the target of 1.0908 - a 38.2% retracement level (presented n a red dashed line).

Another possible scenario is a bullish trend from the level of 1.0984 (closing of the Friday afternoon candle), with the target at the upper fractal 1.1020 (presented in a blue dashed line).

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Technical Analysis of ETH/USD for 04/05/2020:

Crypto Industry News:

The Grayscale Investments digital asset management company has bought about 50% of all newly mined Ethereum coins this year. According to recent reports, Grayscale currently owns the equivalent of 1.1% of all ETH in circulation.

Grayscale supports 10 cryptocurrency investment products targeted at institutional investors. As of April 24, the company managed $ 2.7 billion of digital assets. Ethereum Trust has $ 234.7 million investment. Over USD 2.3 billion is in Bitcoin Trust. Other fund resources include BCH, Zcash, XRP, among others.

Since the beginning of this year, Grayscale has bought 756 539 ETH. That's 48.4% of all coins mined since the beginning of 2020. A total of 1 563 245 ETH was mined during this period.

Technical Market Outlook:

The ETH/USD pair did not manage to rally above the recent swing high located at $225.84 and has broken below the local low at $201.01 during the weekend. The bears have manage to push the price towards 38% Fibonacci retracement located at the level of $195.94. Moreover, the short-term trend line support has been violated as well and the price is testing the technical support at the level of $193.78.The weak and negative momentum supports the short term outlook towards the next support located at $188.86 or even towards 50% retracement at $186.72.

Weekly Pivot Points:

WR3 - $296.61

WR2 - $243.36

WR1 - $224.05

Weekly Pivot - $205.69

WS1 - $188.49

WS2 - $168.64

WS3 - $150.80

Trading Recommendations:

The fear of the coronavirus consequences is very strong among the global investors and it rules on the financial markets. So far the global investors are not so keen to invest in cryptocurrency, because they are being perceived as risky assets. The larger time frame trend on Ethereum remains down and as long as the level of $288 is not violated, all rallies will be treated as a counter-trend corrective moves. This is why the short positions are now more preferred.

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Technical Analysis of BTC/USD for 04/05/2020:

Crypto Industry News:

A new study revealed a growing increase among cryptocurrency users in Europe and the Americas. Studies show a 43.24% increase among women in the first quarter of 2020. For comparison, in the fourth quarter of 2019 an increase of only 15.5% was observed.

The number of people aged 18-24 increased by 65%, and the continents of the Americas and Europe recorded a more than 50% increase. Studies show over 80% growth in some Latin American, European and Asian countries. Argentina excels throughout Latin America. Their increase was over 98.23%, followed by Columbia from 82.03% and Venezuela from 80.23%.

Greece has the fastest growth in Europe at 163.67%. Romania is second with 125.09%, Portugal with 89.95%, Ukraine with 86.68% and the Czech Republic with 85.6%. In Asia, only Indonesia recorded an increase of over 88.92%.

Europe seems to be at the forefront of women's growth, showing 58.55% in Q1 2020, followed by both American continents from 50.59%. In Africa, there is still low growth of only 17.99%.

Technical Market Outlook:

The BTC/USD pair has been continuing the corrective cycle all weekend and during the early Monday trading hours the price has been seen heading towards the recent low at $8,357. Any violation of this level will deepen the correction towards the level of $7,934 which is a key short-term technical support for the price. Weak and negative momentum supports the short-term bearish outlook.

Weekly Pivot Points:

WR3 - $11,425

WR2 - $10,480

WR1 - $9,720

Weekly Pivot - $8,578

WS1 - $7,824

WS2 - $6,750

WS3 - $5,970

Trading Recommendations:

The recent rally in Bitcoin was made in anticipation of Bitcoin halving and it is a classic pump and dump scheme. The larger time frame trend remains down and as long as the level of $10,791 is not violated, all rallies will be treated as a counter-trend corrective moves. This is why the short positions are now more preferred until the level of $10,791 is clearly violated.

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Control zones for NZD/USD on 05/04/20

Testing the weekly control zone 0.6022-0.6007 today allows you to consider two options. The main ones are the pair's purchases. The growth target will be the maximum of April which was formed last week. To enter the purchase, taking an absorption pattern at the session or daily levels is necessary. It is desirable that the closing of today's trading occurred above the opening.

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The upward pattern may be a continuation of medium-term growth, which was started in mid-March. The main goal of the upward movement is the level of 0.6196, which is the lower boundary of the monthly control zone of March.

An alternative decline pattern will be developed if today's trading closes below the weekly control zone. This will allow us to consider medium-term sales within the current week. The pattern of "absorption" at the daily level has already formed, so there is a high probability that the decline will continue.

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Daily CZ - daily control zone. The zone formed by important data from the futures market that changes several times a year.

Weekly CZ - weekly control zone. The zone formed by the important marks of the futures market, which change several times a year.

Monthly CZ - monthly control zone. The zone that reflects the average volatility over the past year.

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Technical Analysis of GBP/USD for 04/05/2020:

Technical Market Outlook:

The GBP/USD pair has been rejected at the previous high at the level of 1.2645 and it is possible, that a Double Top pattern was made at the end of the move. Since then the bears have managed to push the prices towards the level of 50% Fibonacci retracement located at 1.2443. Any violation of this level will open the road towards the next target for bears seen at 61% Fibonacci retracement at 1.2397. There is a short-term ascending trend line close to this level, so it might get tough for bears to violate it in one go. Please notice, the market is coming off the overbought levels and the momentum indicator is neutral, but when it turn south, then the sell-off might accelerate towards 1.2246 level.

Weekly Pivot Points:

WR3 - 1.2909

WR2 - 1.2757

WR1 - 1.2605

Weekly Pivot - 1.2476

WS1 - 1.2324

WS2 - 1.2200

WS3 - 1.2054

Trading Recommendations:

The fear of the coronavirus consequences is very strong among the global investors and it rules on the financial markets. On the GBP/USD pair the main trend is down, but the reversal is possible when the corona virus pandemic will be tamed. The key long-term technical support has been recently violated (1.1983) and the new one is seen at the level of 1.1404. The key long-term technical resistance is seen at the level of 1.3518. Only if one of this levels is clearly violated, the main trend might reverse (1.3518) or accelerate (1.1404). The market might have done a Double Top pattern at the level of 1.2645, so the price might move lower in the longer-term.

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EUR/USD facing bearish pressure from resistance, potential for further drop!

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Trading Recommendation

Entry: 1.09948

Reason for Entry: Horizontal overlap resistance, 61.8% fibonacci retracement and 1.272% fibonacci extension

Take Profit : 1.08706

Reason for Take Profit: Horizontal pullback support, 50% fibonacci retracement

Stop Loss: 1.10692

Reason for Stop loss: 78.6% fibonacci retracement

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Technical Analysis of EUR/USD for 04/05/2020:

Technical Market Outlook:

The EUR/USD pair has broken above the swing high located at the level of 1.0991, but a Shooting Star candlestick pattern has been made at the top of the move. The market reversed back below the high and is currently trading below the technical support located at 1.0951. The momentum is still strong and positive, but the market conditions are overbought, so the odds for another dynamic wave up are decreasing. The nearest technical support is seen at the level of 1.0893 and if violated, the sell-off might accelerate towards 1.0809.

Weekly Pivot Points:

WR3 - 1.1279

WR2 - 1.1141

WR1 - 1.1073

Weekly Pivot - 1.0940

WS1 - 1.0861

WS2 - 1.0728

WS3 - 1.0662

Trading Recommendations:

The fear of the coronavirus consequences is very strong among the global investors and this fear still rules on the financial markets. On the EUR/USD pair the main long term trend is down, but the reversal is possible when the coronavirus pandemic will be tamed. The key long-term technical support is seen at the level of 1.0336 and the key long-term technical resistance is seen at the level of 1.1540. Only if one of this levels is clearly violated, the main trend might reverse (1.1540) or accelerate (1.0336).

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Control zones for GBPUSD on 05/04/20

Today's fall may provide two entry points. The first pattern will be an absorption towards growth, since the pair is trading near the defining support zone for WCZ 1/2 1.2426-1.2405. Keeping prices above the zone will enable you to buy the instrument. The purpose of purchases is the weekly control zone 1.2721-1.2678. Moving from current marks to the target zone will provide a favorable risk-to-profit ratio for a long transaction.

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It is important to understand that the upward movement is still a priority, so first the test of the zone must be considered for purchases.

In case today's trading in the European or American session closes below the WCZ 1/2, sales will come to the fore. The downward movement will become the weekly CZ 1.2210-1.2167. Work towards weakening the British pound could be the main one for the entire current week.

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Daily CZ - daily control zone. The area formed by important data from the futures market, which changes several times a year.

Weekly CZ - weekly control zone. The zone formed by important marks of the futures market, which changes several times a year.

Monthly CZ - monthly control zone. The zone, which is a reflection of the average volatility over the past year.

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GBP/USD: plan for the European session on May 4. Bears continue to pull down the pound. Next support in the 1.2441 area

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

Pressure on the British pound continued to increase on Friday, which I paid attention to in my forecasts. At the moment, the bulls need to protect the support of 1.2441, forming a false breakout at this level will be the first signal to open long positions while expecting an upward correction to the resistance area of 1.2507, where I recommend taking profits, since the moving averages pass above this range. In addition, the lower border of the ascending channel from April 21 passes in the support area of 1.2441, the break of which will indicate a trend reversal. If there is no activity in this range, it is best to postpone purchases until the test of the larger lows of 1.2391 and 1.2347, where you can open long positions immediately for a rebound while expecting a correction of 30-40 points within the day. If the bulls manage to cling to the resistance of 1.2507, the growth will be limited by another major high of 1.2567.

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

Sellers of the pound will act cautious, and most likely there will be very few people willing to sell further on the breakout of the 1.2441 support in the first half of the day. Consolidating below this level with a test from bottom to the top on the volume will be a signal to open short positions based on a breakthrough of the lower border of the ascending channel and a more powerful bearish momentum to the lows of 1.2391 and 1.2347, where I recommend taking profits. More interesting sales will be seen only if there is an upward correction to the resistance area of 1.2507, where forming a false breakout along with the test of moving averages will be a signal to open short positions. I recommend selling GBP/USD immediately on a rebound only from the high of 1.2567.

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Signals of indicators:

Moving averages

Trading is below 30 and 50 moving averages, which indicates forming a bearish momentum.

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

Bollinger bands

If the pound rises in the first half of the day, the average indicator border at 1.2500 will act as resistance, and you can sell the pound immediately for a rebound from a high of 1.2567. A break of the lower border of the indicator in the region of 1.2420 will increase the pressure on the pair.

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 May 4. Bulls will defend support at 1.0936, but it is better not to rush with purchases

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

Buyers of the European currency reached an important level of 1.1000 on Friday after the release of a report on manufacturing activity in the US, which continued to decline at a slower pace than expected. However, it was not possible to hold on to the reached highs, which has already resulted in the euro's sell-off in the Asian session on Monday. Most likely, the pressure on the pair will gradually return, so I recommend looking at long positions only after forming a false breakout at the support level of 1.0936 while expecting a return and an upward correction to the resistance of 1.0973. The breakout of this range depends on the outcome of the reports on business activity in the manufacturing sector of the eurozone countries. If the data turns out to be better than economists' forecasts, it is likely that they will try to regain the resistance of 1.0973 and achieve a test of the high of 1.1013, where I recommend taking profits. In case the pair falls below the 1.0936 level, it is best to return to long positions only on the support test of 1.0895, or buy immediately on the rebound from the low of 1.0852.

To open short positions on EUR/USD you need:

Sellers will be more careful. Most likely, at the beginning of the European session, we will see an unsuccessful attempt to break below the support of 1.0936 and a rebound from this level, after which there will be a small increase in EUR/USD. It is best to return to short positions after forming a false breakout in the resistance area of 1.0973, where larger players will show themselves in the market. If there is no rapid downward movement from this level, I recommend that you stop selling before the resistance test of 1.1013, based on a correction of 25-30 points within the day. An equally important task for sellers will be to consolidate below the support of 1.0936, which will push the pair further to the larger lows of 1.0895 and 1.0852, where I recommend taking profits. If the reports on manufacturing activity and the European Commission's forecast are much worse than economists' projections, most likely the pressure on the euro will only increase at the beginning of the week.

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Signals of indicators:

Moving averages

Trading is carried out in the region of 30 and 50 moving average, which indicates the likelihood of the completion of the bull market.

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

Bollinger bands

Growth will be limited by the upper level of the indicator at 1.1010. A break of the lower border of the indicator at 1.0935 will increase pressure on the euro.

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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Forecast for EUR/USD on May 4, 2020

EUR/USD

The euro took the opportunity to increase and hit the first target level for the growing trend of 1.1026. Today started with a falling gap and attempts to test support for the price channel and the MACD line on the daily chart of the currency pair.

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The signal line of the Marlin Oscillator is turning down, but the gap is not closed, so there is a chance of another upward movement before the expected reversal and medium-term downward movement.

A prerequisite for a further decline will be for the price to fall below the MACD line on the four-hour chart (1.0870). At this point, the Marlin oscillator will also be in the negative trend zone.

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If the price goes above Friday's high, growth to the second bullish target of 1.1094 (peak on February 3) will be possible. We are waiting for events to unfold.

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GBP/USD right on ascending trendline support! Bounce expected.

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Trading Recommendation

Entry: 1.24435

Reason for Entry: Ascending trendline support, 78.6% Fibonacci retracement

Take Profit : 1.26161

Reason for Take Profit: Horizontal swing high

Stop Loss: 1.23892

Reason for Stop loss: Graphical swing low

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Forecast for GBP/USD on May 4, 2020

GBP/USD

The British pound lost 100 points on Friday, which strengthened the reversal potential and the convergence power of the Marlin oscillator on the daily chart.

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To completely form conditions for the price to go down, it is necessary to gain a foothold under the MACD line (1.2365), while the Marlin signal line must go into the zone of negative values.

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Marlin is already in the decreasing trend zone on the four-hour chart, the price should overcome the support of the MACD line (1.2405). The support of the MACD line of the daily scope runs a little lower, in the region of 1.2365, therefore, the 1.2365-1.2405 range is transitional, it is possible to consolidate in this range.

An attempt to move the price under technical support may occur after a preliminary increase to 1.2540 or slightly lower without breaking convergence on a daily basis. The current situation is not defined under any scenario, the price can freely wander in the range of 1.2365-1.2540.

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Forecast for AUD/USD on May 4, 2020

AUD/USD

The Australian dollar lost 92 points on Friday, continued to decline this morning and reached support for the embedded line of the price channel, indicated on the daily chart, at 0.6374.

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Overcoming the support will allow the price to test the strength of the MACD line at 0.6270 and in case of a breakout, develop success to 0.6150. The reason for prioritizing a declining scenario is the divergence on the Marlin oscillator.

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The price has consolidated under all indicator lines on the four-hour chart, Marlin is deep in the negative zone, this shows a further decline.

So, with the price overcoming the support of 0.6374, it is possible to open a sale with a target near 0.6270.

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Forecast for USD/JPY on May 4, 2020

USD/JPY

The US stock index S&P 500 lost 2.81% last Friday, afterwards, the yen strengthened against the dollar (decreased on the chart) by 25 points. The embedded line of the price channel line did not make it possible for the price to go lower.

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The price is trying to overcome this support again in the Asian session. Advancement will enable the price to fall to the first target of 105.10. The Marlin indicator on the negative trend territory (falling).

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The signal line of the Marlin oscillator entered the zone of negative values on the four-hour chart, the price breaks below the blue MACD indicator line, and the subsequent departure of the line at a low of 106.62 Friday is a signal to open a short position while aiming for 105.10. You are advised to set a stop loss above 107.10.

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Overview of the GBP/USD pair. May 4. Great Britain came third in the world in the number of deaths from the "coronavirus."

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - upward.

CCI: 37.3988

The British pound finished last week with a correction. However, the overall picture is very similar to that of the euro/dollar pair (although it has started to adjust). The pound also worked out the previous local maximum during the upward movement, which it failed to overcome and now the "double top" pattern suggests the end of the upward trend. As a confirmation of this hypothesis, we recommend waiting for the price to fix below the moving average line. But in order to start trading on the downside, you need to overcome the moving average in any case. On the other hand, the consolidation of quotes above the Murray level of "7/8"-1.2634 will provoke further strengthening of the British currency. No important macroeconomic statistics are scheduled for the first trading day of the week in the UK and the United States.

At a time when the European Union is beginning to relax quarantine measures, the UK has reached fourth place in the world in the number of infections with "coronavirus". According to the latest data, Britain has overtaken France and Germany – 183,500 diseases. In addition, the country is in third place in the world in terms of the number of deaths from COVID-2019 – almost 29,000. Behind them were Spain, France, and Germany, where the epidemic started earlier. However, the UK also does not want to lag behind countries that remain in the European Union and plan to begin easing quarantine measures from May 26. The government is expected to present a plan for a gradual easing of the quarantine on May 7. However, the date of lifting the restrictions may be revised if the situation with the epidemic in the country does not change (that is, it does not get better). Representatives of the UK health sector believe that the "peak" of the epidemic has passed, so from May 26, residents can be allowed to leave their homes without an emergency, as well as shops, cinemas, etc. Schools are planned to open a little later, in June. However, if rallies are held in the States in favor of the quickest possible end of quarantine, people want to return to work and their usual life, then in Britain people have developed the so-called "coronophobia". More than 60% of citizens are afraid of mass gatherings of people and public transport. Thus, experts say that business and economic activity in the UK may recover at a slower pace than in other countries. The British government also fears that the easing of quarantine measures at the end of May may be too early, which could cause a new wave of pandemics and create a new powerful burden on the health system. Thus, the date of the country's exit from quarantine also wants to be linked to a decrease in the number of patients in medical institutions in case a new outbreak follows, so that the health sector will be able to cope with the wave of newly infected people.

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The average volatility of the GBP/USD pair has increased again due to the last trading day and now stands at 128 points. For the pound, this is not too much, the main thing is not to start a new trend of increasing volatility, which may mean a new panic in the market. On Monday, May 4, we expect movement within the channel, limited by the levels of 1.2365 and 1.2621. A reversal of the Heiken Ashi indicator upward will indicate the completion of the round of corrective movement.

Nearest support levels:

S1 – 1.2451

S2 – 1.2390

S3 – 1.2329

Nearest resistance levels:

R1 – 1.2512

R2 – 1.2573

R3 – 1.2621

Trading recommendations:

The GBP/USD pair started to adjust on the 4-hour timeframe. Thus, traders are recommended to buy the pound again with the goals of 1.2573 and 1.2621, if the Heiken Ashi indicator turns upward or the pair bounces off the moving average line. It is recommended to sell the pound/dollar pair not before fixing the price below the moving average with the first goal of the Murray level of "3/8"-1.2390.

Explanation of the illustrations:

The highest linear regression channel is the blue unidirectional lines.

The lowest linear regression channel is the purple unidirectional lines.

CCI - blue line in the indicator window.

Moving average (20; smoothed) - blue line on the price chart.

Murray levels - multi-colored horizontal stripes.

Heiken Ashi is an indicator that colors bars in blue or purple.

Possible variants of the price movement:

Red and green arrows.

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

Overview of the EUR/USD pair. May 4. The EU will survive the "coronavirus" crisis much more severely than the rest of the

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - sideways.

Lower linear regression channel: direction - sideways.

Moving average (20; smoothed) - upward.

CCI: 157.1972

The EUR/USD currency pair on Monday, May 4, has every chance to start a downward correction. The reasons for this are banal and simple. The market is not currently in a panic stage, so we do not expect a recoilless movement in one direction by several hundred points. There are a few fundamental reasons for the growth of the euro currency. The pair worked out the Murray level of "2/8"-1.0986, from which it had previously rebounded. On Monday, there will be no important statistics that could hypothetically affect the movement of the pair and support the euro currency. Thus, from our point of view, we will see a correction at the beginning of the week. However, it is still extremely difficult and even impossible to make forecasts for the long term. The reason is also simple and obvious - "coronavirus". In previous articles, we have already said that the countries of Europe and the United States are beginning to gradually weaken the quarantine measures, but no one knows how this step will end. Let's hope that it is not the second wave of the epidemic, but if it were so easy and 100% accurate to predict the development of the epidemic, then this epidemic would not have happened. The quarantine has helped reduce disease rates, but this does not mean that the virus will not return, for example, in the fall or winter, when most people on the planet are prone to diseases. And at the moment, we can not say that the virus is gone. It just slowed down. But people keep getting sick, they keep dying. Thus, it is completely impossible to say when the vaccine will be created, when the epidemic will end, when the negative impact on the economy will end, when the economy will begin to recover, and when it will fully recover, and how much the economy of each country will decline. But these factors will influence the exchange rates of the euro and the dollar. Thus, we believe that predicting the movement of the pair in the long term is like guessing on coffee grounds. We still recommend that traders trade strictly in accordance with technical analysis because it is the one that responds most quickly to reversals, trend changes, and corrections.

As we have already said, it makes no sense to talk about the future of each currency now. However, we can speculate about what exactly awaits any economy. For example, the economy of the European Union. According to the absolute majority of experts, the whole world is racing towards the worst crisis in the last 100 years. Absolutely all countries will suffer from it, but political scientists and economists believe that the EU will have the worst (although the latest GDP data predict the largest fall in the American economy). The problem is that the EU can always print money or create it in bank accounts (functions of the ECB), or take it on credit. But how to distribute the created or raised funds? Even in peaceful years, the process of channeling financial flows is a long process, since there are 27 countries in the EU. Now, when some countries (Spain, Italy, France) have suffered more from the crisis, and others (Germany, Finland) are less affected, accordingly, the amount of assistance to all EU participants needs different. However, the very essence of the European Union implies the principle of unity and mutual assistance. This means that rich countries will have to help the poor. This is precisely the position that the increasingly rich do not like, who believe that less well-off countries should live within their means and form their reserve funds for a rainy day. But, as practice shows, Italy itself does not form any funds, it is knocked out of the EU norms on the budget and the maximum state debt, and now it requires huge amounts of assistance from the European Union. Amounts for which all EU members will pay. The idea with the "coronabond" at the moment has failed. The European Council could not approve the total amount of aid to the European economy, as well as the sources of attracting this money. No, Europe is not poor, and it feels no worse than the rest. But the greater the differences between countries, the greater the risk of falling European economy, the higher the probability of a split of the European Union. The UK has shown that it is possible to leave the EU, and London makes it clear to the whole world that the country almost fled the Alliance and does not want any new agreements on "mutually beneficial" terms. London is now ready to cooperate and trade either on terms that are favorable to it or will look for other markets and partners for cooperation. And, as we can see, the British are not afraid of this prospect at all. Other EU countries, again the wealthiest, can count as well. Therefore, it is very important for Europe that the current crisis, which is unknown how long it will continue, does not end in the collapse of the EU. This is, of course, the most pessimistic scenario, but who could have predicted 10 years ago that Britain would want to leave the EU?

Many experts also note that the current crisis has already become much stronger than the debt crisis in 2008-2009. Then Europe had to save small states with small economies (Greece, Cyprus, Ireland, Portugal), for which about 500 billion euros were spent. Now the problems are experienced by European giants (Spain, France, Italy), whose economies are estimated in trillions of euros, respectively, requiring much higher costs for salvation. Several trillion euros have already been spent and several more are required.

From a technical point of view, now the pair has formed an upward trend. The Heiken Ashi indicator continues to color the bars purple, so the upward movement is still expected to continue. Only a reversal of the Heiken Ashi indicator downwards will indicate the beginning of a correction or the end of an upward trend. Both linear regression channels are directed sideways, which indicates that there is no trend movement in the medium and long term. In principle, if you look at the entire chart of the EUR/USD pair, you can see with the naked eye that after the strongest movements in late February – early March, the pair is now consolidating. It's just not in a narrow price range, as we previously expected, but in a range of 250 points wide – between the levels of 1.0750-1.1000. Now the pair's quotes are just near its upper limit.

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The volatility of the euro/dollar currency pair as of May 2 is 84 points. Volatility, therefore, remains average in strength, close to high, and there is still no reason to expect a new wave of panic. Today, we expect the pair's quotes to move between the levels of 1.0897 and 1.1065. The reversal of the Heiken Ashi indicator downwards may signal the beginning of a downward correction.

Nearest support levels:

S1 – 1.0864

S2 – 1.0742

S3 – 1.0620

Nearest resistance levels:

R1 – 1.0986

R2 – 1.1108

R3 – 1.1230

Trading recommendations:

The EUR/USD pair overcame the moving average and continues to move up. Thus, traders are recommended to stay in the purchase of the euro currency with targets at levels 1.0986 and 1.1065 until the Heiken Ashi indicator turns down. It is recommended to consider selling the euro/dollar pair not before fixing the price below the moving average line with the first target of 1.0742.

Explanation of the illustrations:

The highest linear regression channel is the blue unidirectional lines.

The lowest linear regression channel is the purple unidirectional lines.

CCI - blue line in the indicator window.

Moving average (20; smoothed) - blue line on the price chart.

Murray levels - multi-colored horizontal stripes.

Heiken Ashi is an indicator that colors bars in blue or purple.

Possible variants of the price movement:

Red and green arrows.

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

GBP/USD. Preview of the week. Bank of England meeting, NonFarm Payrolls, US unemployment rate

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The British currency traded more logically than the euro during the past week. The main logic was that a downward movement began at the end of the week. And it began after the pair worked out the 1.2467 level, which is the previous local high. Thus, we can assume that the pound/dollar pair has encountered strong resistance and will not be able to continue the upward movement, which is completely unjustified, from a fundamental point of view. The US dollar could still fall against the euro, since the EU economy can suffer less than the American one (although this cannot be said with utmost certainty at the moment), but there will almost certainly be greater losses in the British economy than in the United States . And what will happen in 2021 is even hard to imagine. After all, negotiations between London and Brussels on an agreement that will be in force after 2020 have once again reached an impasse. They now continue only formally. No personal meetings between delegations. There are only videoconferences between David Frost and Michel Barnier, each of which only recently recovered from the coronavirus. The parties need to make a decision to extend the transition period until July 1 and London has flatly refused to postpone the deadlines.

The second half of the upcoming week will be interesting for the GBP/USD pair. No news is expected from the United States and Britain on Monday, while indices of business activity in the service sectors will be published on Tuesday. The ISM index will be released in the United States, which is considered quite important and significant, but, as we already mentioned in the EUR/USD article, these data do not really matter now, as business activity has fallen to record low in all countries affected by the virus COVID 2019.

There will be no economic data in the UK on Wednesday, and the April ADP private sector employment report will be released in the US. Recall that this report displays the change in the number of employees in the United States. Thus, its negative values, in fact, indicate the number of unemployed for a month and practically coincide with the total values of reports on applications for unemployment benefits for the same period. Thus, in April, the ADP report, according to experts, will show a reduction of ... 20-21 million workers. During the mortgage crisis in the United States, the highest decrease in ADP was 800,000. In total, the report showed negative values for about two years. On average, up to -10 million workers were recorded during this period. For two years. Now -20 million in one month. No matter how shocking this figure looks, we believe that market participants have long been ready for such values. After all, unemployment reports come out every week and the general trend is already clear. Thus, the ADP report can only confirm the data that has already been known for a long time. Accordingly, we believe that traders will ignore this report as well.

The results of the Bank of England meeting will be summed up on Thursday. No special changes in monetary policy are expected. Bids will remain at an ultra-low level. As for programs to stimulate the economy, it is quite possible to inject additional money through lending and repurchasing securities from the open market, or to expand existing ones. However, this will not surprise traders. Especially after the Federal Reserve and European Central Bank announced similar actions. Accordingly, the speech of the BoE Chief Andrew Bailey will be of the greatest importance. Most likely, Bailey will declare an economic shock, the scale of the economy's decline, and so on. That is, it will provide the markets with exactly the same information that Jerome Powell and Christine Lagarde provided a week earlier. Since the news of the fall of the British economy is clearly not unexpected, then this event can be ignored. Only official forecasts for 2020 on the main macroeconomic indicators of the British economy will arouse interest. In the United States, the next report on applications for unemployment benefits is scheduled for publication on this day, which predicts an additional 3 million applications. Reflecting more accurately current unemployment levels, the secondary application rate is projected at 19.5 – 20.5 million as of April 25. In other words, it almost matches the value of the ADP report. Another few million unemployed people in the US are also unlikely to cause a shock among market participants.

US nonfarm payrolls reports, the unemployment rate and changes in the average hourly wage are set to be released in the last trading day of the week. Everything is quite simple with the latest report– a neutral forecast value of 3 – 3.3%. But the official unemployment rate will jump to 15.5-16.0% by the end of April. And this will no longer be data on applications for benefits, but specifically on unemployment, that is, more accurate. Needless to say, during the publication of this report, it will be very difficult for US President Donald Trump to hold back tears? As he is eager to be re-elected for a second term. The number of new jobs created outside of agriculture may be reduced by 20-21 million. That is, the figures are exactly the same as for secondary unemployment claims, and as for the ADP report.

What can I say about the result? First, all the most important information will come back from overseas, and it is unlikely to be a surprise for traders. Second, we will not get the most important data on how much the UK economy may contract this week. Thus, traders can continue to trade based solely on technical analysis or their own reasons, which are not related to macroeconomic data and the fundamental background.

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In technical terms, the pair began a downward correction against a new upward trend. The downward movement may continue since quotes consolidated below the critical Kijun-sen line. However, until the Ichimoku cloud is overcome, the sell signal (not yet formed) will remain extremely weak. Accordingly, short positions should not be large in volume.

Recommendations for the pair GBP/USD:

The pound/dollar may start a new downward trend now. We still believe that some unease remains on the market, and that the entire fundamental background is ignored. Therefore, increased attention should be paid specifically to technique. Consequently, as long as the pair is located below the critical Kijun-sen line, short positions with the goals of Senkou Span B and 1.2240 lines (will be reviewed at the opening of trading on Monday) are relevant.

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

EUR/USD. Preview of the week. EU countries are starting to weaken quarantine. Coronavirus continues to rage in the US, where

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The new trading week promises to be quite boring in macroeconomic terms. News and reports will be, however, their degree of significance and quantity will not be comparable to the previous week. And since economic data will be, if not secondary, then not the most significant for sure, and market participants still ignore 95% of all incoming information, then, most likely, next week we will not see any correlation between the fundamental background and movement of the euro/dollar pair. Really important data are expected only on Friday. Thus, technical factors will continue to remain in first place, to which it is advised to pay increased attention when performing any trading actions. Last week ended with an upward movement, still baseless from a fundamental point of view. Thus, at least a correction is expected on Monday-Tuesday.

The European Union will publish indices of business activity in the manufacturing sector on Monday. These figures have not surprised anyone for a long time. In Germany, it is expected to fall to 34.4 points in April, and to 33.6 in the EU as a whole. Only a secondary report is planned in the US – production orders for March, which are at risk of falling by 9.5% m/m.

I would like to note at once that macroeconomic statistics do not have a strong impact on the pair, because the fall of the EU and US economies occurs synchronously and simultaneously. In other words, it's not that one economy is falling down, but the other is just feeling stable. And since both economies are contracting, neither currency has an advantage. As we found out last week, the US economy contracted by a higher value (-4.8% of GDP). Thus, we can expect the US dollar to face pressure in the following weeks. However, this pressure is unlikely to be long-term. We would like to note that after three months of highly volatile trading, one month of which was frankly panic-stricken, the quotes of the pair returned to their original positions - the positions that were traded at the end of January.

No important statistics on the European Union are set for Tuesday. Data on business activity in the EU services sector in April will be published, and these figures threaten might be miserable. However, this is not surprising, since the service sector has suffered a lot from the quarantine measures. The volume of retail sales for the month of March will also be published, which is expected to decrease by 10% in annual terms and 12% in monthly terms. Needless to say, there were no such reductions in terms of volume, if not ever, then during the period of statistics collection – for sure (and this is at least 25 years). Again, these figures are unlikely to surprise market participants. As well as in the US, retail sales also sharply plunged.

On Thursday, Germany will publish an indicator of industrial production in March. According to experts, the indicator will fall by 7% on a monthly basis. No economic data is expected from the European Union on Friday. We would also like to note that all the most important data will be received again from overseas and will be discussed in the next article on GBP/USD.

What can be said as a result? We believe that all macroeconomic statistics from the eurozone will not cause any reaction from traders. Therefore, statistics will be the only thing that matters when the crisis, quarantine and epidemic are over. Unfortunately, despite the fact that coronavirus is a treatable disease, there is still no vaccine against it, people continue to get sick, and governments can only mitigate quarantine measures at the risk of new outbreaks of the epidemic. Because if this is not done, then there will be nothing to restore in six months or a year. Thus, in fact, the theme of the issue now is precisely the COVID-2019 virus pandemic. The world will not be able to return to normal life until an effective medicine or vaccine is found, and the economy will function at best in a limited mode.

Almost 3.5 million cases of coronavirus were recorded in the world on Sunday morning, May 3. More than a million people recovered, almost 250,000 fatal outcomes. However, the fact that people are recovering from a disease cannot be positive for the economy. The problem is that the treatment takes around two weeks to a month or more. Thus, any person who becomes infected, firstly, can infect a huge number of other people, even if he suffers from the disease in a mild form, and secondly, all patients will not be able to work for at least a month. Thus, the removal of quarantine measures can lead to a second wave of infection, which will lead to new quarantines and new pauses in the work of the entire world economy.

However, in the most infected Italy, quarantines begin to weaken from May 4. The industry and construction sector will resume work on this day. However, only vital enterprises and industries will be able to leave quarantine. For example, schools will open no earlier than September, so as not to risk the lives of children. In Germany, the situation with the coronavirus is one of the most favorable in Europe. Of the 167,000 patients, about 123,000 recovered, about 6.5 thousand people died. This is one of the lowest mortality rates in the world. Schools, museums, exhibition centers, galleries, various gardens and memorials will open in May (exact dates are still unknown). However, holding public events will be prohibited at least until the fall. Angela Merkel only opposes the opening of restaurants and cafes, considering the catering places to be the most dangerous. "We cannot check whether people at the table belong to the same family or they are from different households," said the German Chancellor. "We have no medicine, we have no vaccine against the virus, and therefore, the goal is to slow the spread of the virus," Merkel concluded. In Spain, which also suffered greatly from the pandemic, some quarantine prohibitions are also lifted. After a seven-week ban on people, people are allowed to go for walks and go in for sports from the second of May. The number of deaths from the coronavirus has been falling steadily for several weeks. The most difficult situation remains in the United States, where the coronavirus continues to spread rapidly, but Donald Trump is eager to restart the economy. The state of Texas has already resumed its work and will act in some way as an "experimental rabbit." If the number of infected people does not increase in this state, then another quarantine measure will be lifted starting on May 18. At the same time, the states of California and New York are toughening quarantine measures.

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The technical picture of the EUR/USD pair shows that the upward movement could end near the 1.0985 level. At least there is no panic in the foreign exchange market now, which means that the price is unlikely to go 100 points one way without a single correction. Therefore, we have the right to expect a corrective movement on Monday. I will clarify the goals of the Ichimoku framework on the same day.

Trading recommendations for the EUR/USD pair:

We believe that the influence of the fundamental background could be present next week, and the most important data will come from America. There may be low volatility of the euro/dollar pair and a corrective mood of traders on Monday and Tuesday. Turning the MACD indicator down will signal a round of downward correction.

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