Positivity in the market outweighs threat of the second wave of the pandemic (decline in GBP/USD pair is expected to continue)

Judging by what is happening in the currency markets, it can be said that investors are increasingly focused on the way out of the countries of Europe and the United States, as well as economically strong countries of Asia, led by China, from the pandemic crisis.

Markets are clearly starting to ignore the "threats" from WHO (World Health Organization), which has persistently reported a high probability of a second wave of the COVID-19 pandemic. It can be recalled that it was these intimidations from WHO that slowed down the growth of demand from investors for risky assets earlier this month. This has led to an appreciation of the US dollar as a safe haven in extreme and critical situations in the world.

However, despite the outweighing of common sense towards understanding that the problem of the coronavirus will eventually go away, it is too early to talk about a complete change of mood in the markets. We believe that the positive attitude will still be replaced by negative sentiments, but it will more and more outweigh, which ultimately will cause increased demand for shares of companies, which is fundamentally supported by radical measures of support from the economically leading countries of the world. The weakening of the influence of the theme COVID-19 will definitely lead to a strong increase in the value of stocks of companies, the strengthening of upward dynamics in the commodity market, and will also stimulate a more noticeable depreciation of the dollar in the currency markets.

It is believed that the main beneficiaries of this process will be primarily the commodity currencies - the Canadian and Australian dollars, as well as the Norwegian krone. As for the dynamics of the euro and pound, despite the support measures taken and the proposal to create a 500 billion recovery fund, it will be difficult for the euro to grow steadily against the dollar due to large-scale internal problems. Regarding the pound, it can be noted that the restoration of Brexit's topic will prevent it from increasing, since the uncertainty factor around the process of the final divorce of the EU and Great Britain will dominate it.

More recently, many believed what should be expected after a sharp increase in April, a marked drop in demand for risky assets. In March, as now, we believe that this is a mistaken opinion. The very nature of the pandemic crisis has specific properties and bears signs of more external negative impact (COVID-19) with existing internal (weak recovery of the world economy after the crisis of 2008-09) problems, but not critical. Therefore, the disappearance of an external factor in the wake of unprecedented incentive measures will certainly bring a restorative effect in the global economy and financial markets. But what comes next is, as they say, is something that will have to be seen.

Forecast of the day:

The GBP/USD pair is under pressure on the wave of Brexit's recovery and the weakness of the British economy amid COVID-19, which may push the Bank of England to resume lowering interest rates, possibly even to a negative zone. We believe that while the pair is below the level of 1.2215, it will continue to decline to 1.2160, and then to 1.2075.

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

Technical Analysis of BTC/USD for May 21, 2020:

Crypto Industry News:

From April 11 to May 14, Bitcoin transaction fees increased by more than 1,250% from $ 0.38 to $ 5.16.

Although transaction fees have since fallen by 33.3% to around $ 3.44, they have risen again by 36.5% since the May 11 halving.

The average cost of transactions in the Bitcoin network increased by over 800% in just one month, with the highest transaction fees from July 2019 recorded in May.

Halving fees increased by more than a third, which resulted in a 105% increase in transaction costs in three days. Although fees reach their highest levels in almost a year, current transaction costs account for less than one-tenth of the record levels recorded at the end of 2017.

Before Bitcoin's second halving on July 9, 2016, fees increased by approximately 200% from $ 0.081 on May 1, 2016, to a peak of about $ 0.24 published both in mid-June and late July of that year.

Bitcoin's first halving on November 28, 2012 increased fees by 300% from November 26 to November 27, followed by a return to pre-halving levels within two days of reducing block prizes.

Technical Market Outlook:

The BTC/USD pair has been seen hovering around the level of $10,000 which is the key short-term technical resistance for the bulls for almost all week, but after the recent local high was made at the level of $9,884, the bears started to make more pressure on the market. In the result, two Bearish Engulfing candlestick patterns were made side by side and the price reacted accordingly. The nearest technical support is seen at the level of $9,382 and $9,249. Please notice, the market conditions on daily time frame chart are extremely overbought.

Weekly Pivot Points:

WR3 - $12,194

WR2 - $10,994

WR1 - $10,553

Weekly Pivot - $9,337

WS1 - $8,765

WS2 - $7,555

WS3 - 7,013

Trading Recommendations:

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

Technical Analysis of ETH/USD for May 21, 2020:

Crypto Industry News:

The team responsible for the tBTC project, an attempt to transfer Bitcoin to Ethereum via decentralized depositories, closed the bridge just two days after launch.

The decision was revealed today by Matt Luongo, founder of Thesis, a company that supports tBTC as part of the Keep project. TBTC was launched on May 16 in the Ethereum network, operating just two days before performing a temporary shutdown operation.

Although the team did not specify the reason for disabling the protocol, it seems likely that this was due to a smart contract error discovered by Antonio Salazar Cardozo, head of labor engineering. Luongo explained that the contract has been checked many times, but it seems that this was not enough.

Luongo emphasized that tBTC will "rise again", probably after the team re-implements the agreed smart contracts.

Technical Market Outlook:

The ETH/USD pair has broken out of the Triangle pattern and the breakout direction was down. Moreover, the bears has manage to break through the short-term trend line support as well ( marked in navy on chart). The local low was made at the level of $205.05 which is a technical support for the price. Any violation of this level will lead to the correction extension towards the level of $198.72. Please notice, that the momentum is decreasing as market is coming off from the overbought conditions.

Weekly Pivot Points:

WR3 - $259.01

WR2 - $231.70

WR1 - $222.59

Weekly Pivot - $197.56

WS1 - $188.48

WS2 - $163.94

WS3 - $154.56

Trading Recommendations:

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

Indicator analysis. Daily review on GBP / USD for May 21, 2020

The pair traded in the side channel on Wednesday and did not manage to break through 1.2293 - 38.2% pullback level (presented in a red dashed line). Today, the price may begin to move down. Economic calendar news for the pound is expected at 08:30 UTC, and for the dollar at 12:30, 14:00 and 18:30 UTC.

Trend analysis (Fig. 1).

Today, a downward trend is possible from the level of 1.2244 (closing of yesterday's candle) with the target of 1.2174 - a 38.2% pullback level (presented in a blue dotted line). If this level is reached, the downward movement may continue with the target at the lower fractal 1.2077 (presented in a red 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 - down;

- Bollinger Lines - down;

- Weekly schedule - up.

General conclusion:

Today, the price may move downwards with the target at the lower fractal 1.2077 (presented in a red dashed line).

Another possible scenario is an upward trend from 1.2172 - a 38.2% pullback level (presented in a blue dashed line) with the target of 1.2293 - a 38.2% pullback level (presented in a red dashed line).

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

Weak positivity determines the mood of the markets; Overview of NZD and AUD

The minutes of the FOMC meeting, published on Wednesday evening, did not provoke revival in the markets, since Fed Chairman Powell had already visited the banking committee of Congress literally the day before, where he had revealed the main parameters of the Fed's current position.

The growth of oil and the gradual lifting of quarantine measures objectively contribute to the revival of markets, but economic problems and trade contradictions have not disappeared, and current optimism has no reliable basis.

NZD/USD

The New Zealand dollar experienced the effect of three important events last week - the transition to alert level 2 and the partial lifting of quarantine measures; QE growth following the RBNZ meeting to 60 billion; government adoption of an expanded budget with strong cost increases. It is predicted that in August QE will grow to 90 billion, which will fill the budget.

Kiwi has not yet gone beyond the range, the resistance is 0.6160, and the calculated price is directed down confidently, which means only one thing - major players do not yet see any reason for growth, since the probability of a strong decline in markets remains very high.

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The New Zealand dollar, like other commodity currencies, supports the current positive growth, but there is no fundamental reason for continued growth of the markets. Testing the resistance level of 0.6173 is possible, but even updating the maximum will not mean an upward turn of the NZD/USD. For now, we must proceed from the fact that growth is corrective and its completion will provide a good opportunity for sale.

AUD/USD

Investors expect that the coronavirus will start the processes in the economy in a positive scenario – business activity has fallen to the lowest levels in a very short time, having absorbed in this movement, the objective reasons for the slowdown of the global economy, and a gradual recovery will begin from the lowest point, which can no longer interfere with the purely economic reasons that were relevant 3-4 months ago.

According to a study by Commonwealth Bank, PMI in the service sector is already slightly higher in May than in April (25.5p vs. 19.5p), and despite the fact that this result clearly indicates a further decline in business activity, it is already perceived as a positive result. Comment by Garrett Aird, RBA spokesman: "We must mark the lowest point of the PMI, and now expect activity to increase monthly"

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More attention is focused on China's intentions to adjust trade with Australia. Today, China announced its intention to raise duties on grain exports from Australia. A day earlier, it gave the opposite signal about the possibility of expanding exports, including wine, seafood, fruits and dairy products.

The Australian dollar is moving in clear anti-phase with an estimated price. Speculators are building up a short position on AUD's futures, which reached $ 2.292 billion and helps to weaken the Australian currency, but the current short-term positive impulse keeps it in the range.

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Despite a successful attempt to break through the resistance 0.6650/60, the chances of continued growth are low. A short-term impulse may push the AUD/USD pair slightly higher to the resistance zone 0.6665 / 80, but a serious recovery in the debt market is necessary for the development of the upward movement.

There are first signs - last week, Woolworths retailer issued bonds for the first time since the pandemic amounting to $ 400 million, La Trobe Financial also issued bonds with mortgage coverage in the amount of 1.25 billion. The demand is high, which should lead to an increase in demand for AUD. Corporations start issuing bonds because the RBA implements a program to support the bond market by adding corporate-level securities to the list of acceptable collateral. Perhaps, this measure will support the Australian dollar in the coming weeks and contribute to its growth, but there is no reversal in the long run, and the probability of a sharp decline in AUD amid the deteriorating external conditions remains high.

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

Breaking forecast for GBP/USD on May 21, 2020 and trading recommendation

Yesterday, the publication of the construction report in the United States was cancelled. It became the most notable event of the day. Honestly, the situation is rather unusual. Recently, similar events have happened several times. However, that was less important data from the UK. Usually, it concerns some kind of data on housing prices and only in the United Kingdom. This time, the cancellation of the US construction data changed everything. The events did not develop as expected. Thus, throughout the day, the British pound was weakening.

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The pound had every reason to fall. Inflation plunged to 0.8% from 1.5%. Market participants were certainly prepared for such a development of events. Thus, the reaction was relatively restrained. The worst thing is the monthly data, which showed that in April, consumer prices dropped by 0.2%. This is definitely a sign of the beginning of deflation. If this tendency does not change, we will see a negative dynamic in the near future and in annual terms. And that will be deflation.

Inflation in the United Kingdom:

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Today, the pound may receive a reason for growth. This reason is the preliminary data on business activity indices. The fact is that the services PMI is expected to rise to 21.0 from 13.4. The manufacturing business activity is likely to increase to 34.0 from 32.6. As a result of all this, the composite index is anticipated to grow to 22.0 from 13.8. However, the situation may develop in a completely different way. After all, until recently, it was predicted that indices will continue to decline. Just a couple of days ago, forecasts indicated a decrease in the services business activity index, lower than 10.0. The same is true for the composite PMI. Such forecasts are not unfounded, since easing of quarantine restrictions is somewhat delayed and the opening of all kinds of shops and restaurants, in fact, is postponed to June. Thus, it is highly likely that we will see just a decrease in the indices. However, if the basic forecasts are confirmed, the pound may strengthen insignificantly, at least until the US indices are released.

The UK's composite business activity index:

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Elsewhere, the process of lifting the quarantine measures in the United States is gradually moving forward. More and more states are deciding to ease lockdown. Thus, it is not surprising that business activity indices are expected to grow. The manufacturing PMI is likely to rise to 39.0 from 36.1. The services business activity is projected to increase to 32.0 from 26.7. As a result, the composite business activity index is expected to grow to 32.5 from 27.0. Given the high importance of American statistics, such results will contribute to further strengthening of the dollar.

Composite business activity index in the United States:

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In terms of technical analysis, we see a significant inertial move that led the quote to the area of interaction of the trading forces 1.2240 / 1.2280, where the quote slowed down and moved on to the recovery phase. It should be taken into account that the inertial move did not violate the integrity of the clock cycle set in the first days of May, thereby maintaining downward sentiment in the market.

Analyzing the trading chart in general terms, the daily period, it is worth noting the consistent recovery process, where the flat formation 1.2150 // 1.2350 // 1.2620 no longer plays a key role in the market.

It can be assumed that the recovery process will gradually return the quote to the point of variable support on May 18. However, before this, a temporary freezing of prices within the 1.2150 / 1.2180 region may occur.

Specifying all of the above into trading signals:

- It is better to consider opening short positions below the level of 1.2180, with the prospect of a move to 1.2150. The second stage proceeds from taking profit below 1.2140, with a move to 1.2100-1.2080.

- It is preferable to open long positions in terms of local pullbacks in the recovery process above 1.2205, towards 1.2240.

From the point of view of a comprehensive indicator analysis, you can see that the technical tools have returned to the original sell signal, due to the recovery process.

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

Indicator analysis. Daily review on EUR / USD for May 21, 2020

Trend analysis (Fig. 1).

Today, a downward trend is likely to take place from the level 1.0981 (closing of yesterday's candle) with the target of 1.0945 - a 23.6% retracement level (presented in a red dashed line). From this level, the price may continue to move downwards with the next target of 1.0911 - a 38.2% 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 - down;

- Weekly schedule - up.

General conclusion:

Today, a downward trend is likely to take place from the level 1.0981 (closing of yesterday's candle) with the target of 1.0945 - a 23.6% retracement level (presented in a red dashed line). From this level, the price may continue to move downwards with the next target of 1.0911 - a 38.2% retracement level (presented in a red dashed line). Upon reaching this level, an upward pullback is possible.

Another possible scenario is an upward trend from 1.0945 - a 23.6% pullback level (presented in a red dashed line), with the target at the upper fractal 1.1000 (presented in a red dashed line).

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

Fractal analysis of the main currency pairs on May 21

Forecast for May 21:

Analytical review of currency pairs on the scale of H1:

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For the euro / dollar pair, the key levels on the H1 scale are: 1.1082, 1.1041, 1.1005, 1.0986, 1.0935, 1.0912 and 1.0885. Here, we are following the development of the ascending structure of May 14. The continuation of the upward movement is expected after the price passes the noise range of 1.0986 - 1.1005. In this case, the target is 1.1041. Price consolidation is near this level. For the potential value for the top, we consider the level of 1.1082. Upon reaching which, we expect consolidation, as well as a downward pullback.

A short-term downward movement is expected in the range of 1.0935 - 1.0912. The breakdown of the last level will lead to an in-depth correction. Here, the target is 1.0885. This level is a key support for the top.

The main trend is the upward structure of May 14

Trading recommendations:

Buy: 1.1005 Take profit: 1.1040

Buy: 1.1043 Take profit: 1.1080

Sell: 1.0935 Take profit: 1.0914

Sell: 1.0910 Take profit: 1.0890

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For the pound / dollar pair, the key levels on the H1 scale are: 1.2414, 1.2361, 1.2325, 1.2272, 1.2226, 1.2192 and 1.2143. Here, we are following the formation of the initial conditions for the upward cycle of May 15. At the moment, the price is in the correction zone. The continuation of the upward movement is expected after the breakdown of the level of 1.2272. In this case, the target is 1.2325. Short-term upward movement, as well as consolidation are in the range of 1.2325 - 1.2361. For the potential value for the upward movement, we consider the level of 1.2414. Upon reaching this level, we expect a downward pullback.

Consolidated movement is possible in the range of 1.2226 - 1.2192. The breakdown of the last value will lead to an in-depth correction. Here, the target is 1.2143. This level is a key support for the top and its breakdown will lead to the formation of initial conditions for the downward cycle. In this case, the target is 1.2069.

The main trend is the upward structure of May 15

Trading recommendations:

Buy: 1.2274 Take profit: 1.2325

Buy: 1.2327 Take profit: 1.2360

Sell: 1.2190 Take profit: 1.2145

Sell: 1.2138 Take profit: 1.2070

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For the dollar / franc pair, the key levels on the H1 scale are: 0.9701, 0.9683, 0.9671, 0.9653, 0.9639, 0.9617, 0.9605 and 0.9579. Here, we are following the descending structure of May 14. The continuation of the downward movement is expected after the price passes the noise range of 0.9653 - 0.9639. In this case, the target is 0.9617. Short-term downward movement, as well as consolidation is in the range of 0.9617 - 0.9605. For the potential value for the bottom, we consider the level of 0.9579. Upon reaching which, we expect an upward pullback.

A short-term upward movement is possible in the range of 0.9671 - 0.9683. The breakdown of the last level will lead to an in-depth correction. Here, the potential target is 0.9701. This level is a key support for the bottom.

The main trend is the descending structure of May 14

Trading recommendations:

Buy : 0.9671 Take profit: 0.9681

Buy : 0.9685 Take profit: 0.9700

Sell: 0.9651 Take profit: 0.9640

Sell: 0.9637 Take profit: 0.9619

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For the dollar / yen pair, the key levels on the scale are : 108.43, 108.31, 108.09, 107.91, 107.67, 107.46 and 107.24. Here, we are following the development of the ascending structure of May 14. Short-term upward movement is expected in the range of 107.91 - 108.09. The breakdown of the last value should be accompanied by a pronounced upward movement. In this case, the target is 108.31. For the potential value for the top, we consider the level of 108.45. Upon reaching which, we expect consolidation, as well as a downward pullback.

A short-term downward movement is possible in the range of 107.67 - 107.46. The breakdown of the latter level will lead to an in-depth correction. Here, the potential target is 107.24. This level is key support for the top.

The main trend: the upward structure of May 14

Trading recommendations:

Buy: 107.91 Take profit: 108.07

Buy : 108.11 Take profit: 108.30

Sell: 107.65 Take profit: 107.48

Sell: 107.44 Take profit: 107.25

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For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.4044, 1.4004, 1.3976, 1.3898, 1.3855, 1.3828, 1.3774 and 1.3732. Here, we are following the development of the descending structure of May 14. The continuation of the upward movement is expected after the breakdown of the level of 1.3898. In this case, the target is 1.3855. The price passing the noise range of 1.3855 - 1.3828 will lead to the development of pronounced movement. Here, the goal is 1.3774. For the potential value for the bottom, we consider the level of 1.3732, upon reaching which, we expect an upward pullback.

A short-term upward movement is possible in the range of 1.3976 - 1.4004. The breakdown of the latter level will lead to an in-depth correction. In this case, the target is 1.4044. This level is a key support for the downward structure.

The main trend is the downward cycle of May 14

Trading recommendations:

Buy: 1.3976 Take profit: 1.4002

Buy : 1.4006 Take profit: 1.4042

Sell: 1.3898 Take profit: 1.3855

Sell: 1.3828 Take profit: 1.3775

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For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6705, 0.6666, 0.6608, 0.6561, 0.6494, 0.6472, 0.6434 and 0.6401. Here, we are following the formation of the initial conditions for the upward cycle of May 15. The continuation of the upward movement is expected after the breakdown of the level of 0.6561. In this case, the target is 0.6608. Price consolidation is near this level. The breakdown of the level of 0.6608 will lead to the development of pronounced movement. Here, the goal is 0.6666. For the potential value for the top, we consider the level of 0.6705. Upon reaching which, we expect a downward pullback.

A short-term downward movement is possible in the range of 0.6514 - 0.6488. The breakdown of the latter level will lead to an in-depth correction. Here, the target is 0.6456. This level is a key support for the upward structure.

The main trend is the formation of initial conditions for the top of May 15

Trading recommendations:

Buy: 0.6561 Take profit: 0.6606

Buy: 0.6610 Take profit: 0.6666

Sell : 0.6514 Take profit : 0.6490

Sell: 0.6488 Take profit: 0.6456

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For the euro / yen pair, the key levels on the H1 scale are: 120.27, 119.86, 119.16, 118.68, 118.20, 117.51, 117.10 and 116.52. Here, we are following the development of the ascending structure of May 14. The continuation of the upward movement is expected after the breakdown of the level of 118.20. In this case, the goal is 118.68. The breakdown of which, in turn, will allow you to count on the movement to 119.16. Price consolidation is near this level. A pronounced upward movement is expected after the breakdown of 119.16. Here, the goal is 119.86. For the potential value for the top, we consider the level of 120.27. After which, we expect consolidation in the range of 119.86 - 120.27.

A short-term downward movement is possible in the range of 117.51 - 117.10. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 116.52. This level is a key support for the top.

The main trend is the formation of medium-term initial conditions for the top of May 14

Trading recommendations:

Buy: 118.20 Take profit: 118.66

Buy: 118.70 Take profit: 119.14

Sell: 117.50 Take profit: 117.15

Sell: 117.05 Take profit: 116.62

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For the pound / yen pair, the key levels on the H1 scale are : 134.28, 133.86, 133.16, 132.62, 132.13, 131.49, 130.98 and 130.40. Here, we are following the development of the ascending structure of May 15. At the moment, the price is in the correction zone. The continuation of the upward movement is expected after the breakdown of the level of 132.13. In this case, the first goal is 132.62. The breakdown of which, in turn, will allow us to count on moving to 133.16. Price consolidation is near this level. The breakdown of the level of 133.16 should be accompanied by a pronounced upward movement. Here, the goal is 133.86. For the potential value for the top, we consider the level of 134.28. Upon reaching which, we expect a downward pullback.

A short-term downward movement is possible in the range of 131.49 - 130.98. The breakdown of the last level will lead to an in-depth correction. Here, the target is 130.40. This level is a key support for the top.

The main trend is the upward structure of May 15, the correction stage

Trading recommendations:

Buy: 132.13 Take profit: 132.60

Buy: 132.64 Take profit: 131.12

Sell: 130.96 Take profit: 130.44

Sell: 130.30 Take profit: 129.70

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

GBP/USD. Pound will become cheaper until the Bank of England does not abandon Bailey's idea

The pound-dollar pair retreated from two-month price lows due to the general wave of optimism associated with the possible creation of a fund to restore the European economy. By and large, the pound followed the euro, while its own fundamental factors are only negative for the British currency. The single currency suspended its growth during the Asian session on Thursday, after which the GBP/USD pair turned down similarly, returning to the 21st figure. The latest inflation data, and in particular the subsequent comments by Bank of England Governor Andrew Bailey, put significant pressure on the pound, so the resumption of the downward trend was only a matter of time. Looking ahead, we can say that long positions on the pair will be extremely risky until the English regulator abandons its intentions to lower the interest rate in the negative area. To date, this issue is still a matter of discussion, which means the pound is still vulnerable.

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It should be noted that the BoE governor has significantly softened his rhetoric in three months. For example, in early March, Bailey actually ruled out the option of reducing the rate "under zero" – in his opinion, negative interest rates will have a negative impact on the UK banking sector. But in early May, he surprised the markets with his dovish attitude. First, he allowed the expansion of incentives – according to him, the central bank will make a decision on expanding QE in June, when the epidemiological picture and the extent of restrictive measures will be clear. Secondly, he said that the regulator has not yet used the arsenal of monetary policy tools – "all options remain open." Third, Bailey was less clear about the likelihood of a negative rate. According to him, "there is no question of negative rates in the near future." Although in this case it was about subtle changes in verbal wording, traders paid attention to this nuance, anticipating a further softening of the rhetoric.

And they were not mistaken – this week the BoE governor has already openly stated that the central bank is "actively considering the option of introducing a negative rate." He added that economists are now studying the similar experience of other central banks, not ruling out that this scenario can be implemented in the UK. This rhetoric was voiced by Bailey at a parliamentary hearing on the BoE's report on the prospects for monetary policy. He first spoke in the British Parliament as the head of the English regulator, and probably for this reason decided to "go with the trumps", demonstrating his determination in the fight against the consequences of the coronavirus crisis.

It is also worth noting that the parliamentary hearings were held after the publication of disappointing inflation data, so such dovish rhetoric may be due to this factor. Yesterday's release of data on the growth of British inflation really turned out to be a failure. Almost all components came out in the red zone, significantly falling short of the forecast values. For example, the overall consumer price index in April fell to -0.2% on a monthly basis. There is also a downward trend in annual terms: the indicator fell to 0.8% - the weakest growth rate in many years. Core inflation also disappointed – the core consumer price index came out at 1.4%, that is, at a three-year low. The retail price index also showed a weak result, both in annual and monthly terms. The index of purchasing prices of producers was also in the red zone, as it fell by almost ten percent in April – this is another anti-record.

It is worth noting that inflationary data only supplemented the negative fundamental picture. Key macroeconomic reports have recently been disappointing, perhaps without any exceptions. According to the forecasts of the English regulator, according to the results of the current year, the volume of GDP will decrease by almost 15% - according to economists of the central bank, this is the most significant economic slowdown since 1709, that is, over the past 311 years (Britain was then plagued by natural disasters and war). Moreover, according to the central bank, large-scale programs to stimulate the economy will not restrain the downward trend of key macroeconomic indicators.

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Such a fundamental picture looks like a springboard for bears. But here it should be noted that the pair simultaneously retains the potential for its upward rebound. The fact is that Bailey's statement about introducing a negative rate is more political than practical in nature, given where and under what circumstances this statement was made. In addition, as you know, the BoE governor does not have the power to solely lower or raise the rate. And if other members of the Committee oppose this idea, the pound can quickly regain its position. But until this happens, the pair will be dominated by bears.

From a technical point of view, the upward dynamics of the pair is also a priority. The price is under the Kumo cloud on the daily chart, under all the lines of the Ichimoku indicator and between the middle and lower lines of the Bollinger Bands trend indicator. All this suggests that from current positions you can consider selling to the nearest support level of 1.2100 - this is the lower line of Bollinger Bands on the same timeframe.

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Market Review. Trading ideas. Answers on questions

Trading recommendations:

SILVER - limit sales grid set

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GBP/USD: plan for the European session on May 21 (analysis of yesterday's trade). Pressure on the British pound is gradually

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

Yesterday afternoon, I advised you to open short positions on the pound after the resistance update of 1.2282, which happened. If you look at the 5-minute chart, you will see how, after a test of this resistance, activity began to slow down, and the speech of Bank of England Governor Andrew Bailey returned pressure to the British pound, which quickly collapsed by the end of the US session in the 1.2222 support area. The breakdown of this range in the Asian session returns market control over to the bears, therefore, growth in this area is so important today in the morning. Consolidating at 1.2222 and testing it from top to bottom will be a signal to buy the pound while expecting a return to this week's high at 1.2282, where I recommend taking profits. If pressure on the pair returns after reports on the services and production sectors, it is best to postpone long positions until the test of a low of 1.2173, and then subject to forming a false breakout there, or buy GBP/USD for a rebound from a low of 1.2122 per 30 correction -40 points. There will also be the lower border of the new rising channel in the British pound.

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

Sellers need to keep the pair below resistance 1.2222 for as long as possible, and the forming a false breakout there in the morning after the release of reports on the UK PMI composite index will be a good sell signal to break through and consolidate below support 1.2173, which will only raise the pressure on the pound and will result in an update of a larger low of 1.2122, where I recommend taking profits. With a growth scenario above 1.2222, it is best not to rush into selling and wait for a test of the high of 1.2282. You can open short positions from there immediately on the rebound, counting on a correction of 30-35 points within the day.

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Signals of indicators:

Moving averages

Trading is below 30 and 50 moving averages, indicating a return of pressure on the British pound.

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

In case of growth of GBP/USD, the average border of the indicator in the area of 1.2245 will act as resistance, and you can sell immediately for a rebound after the test of the upper border in the region of 1.2282.

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 21 (analysis of yesterday's trade). Euro buyers might be less optimistic after

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

The European currency continued to grow against the US dollar yesterday afternoon, following good data on the eurozone consumer sentiment index, which has slightly grown from its negative values. The bulls even tried to maintain a bullish momentum before the release of the Federal Reserve's minutes on the top-down test of the 1.0972 level, but nothing good came of it, and so the bears regained this level at the Asian session, forming a new resistance of 1.0979. Now the main task of euro buyers is to break through and consolidate above this range, which will lead to a new wave of growth and preservation of the upward trend with a test of the high of 1.1013 and also with an update of a larger resistance of 1.1093, where I recommend taking profits. If pressure on EUR/USD persists in the first half of the day, then the bulls will show themselves after updating the 1.0941 level, but I recommend buying from there only after forming a false breakout. It is best to open long positions immediately for a rebound after a test of a low of 1.0904, counting on a correction of 25-30 points within a day.

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

Pressure on the European currency may intensify today in the morning after the release of reports on PMI indices for the services and manufacturing sectors of the eurozone countries. Poor indicators will lead to forming a false breakout in the resistance area of 1.0979, which will be a signal to open short positions in order to pull down as well as a breakdown of the support of 1.0941, consolidating below which will quickly pull down EUR/USD to the lows of 1.0904 and 1.0855, where I recommend taking profit. In case the euro grows above resistance 1.0979, it is best to postpone short positions until the high of 1.1013 is updated, the test of which can only strengthen the bulls' faith in further growth, therefore, you can sell for a rebound from this range, but subject to a higher short stop order. Larger players will return to the market only from a high of 1.1093.

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Signals of indicators:

Moving averages

Trading is slightly higher than 30 and 50 moving averages, which indicates a slowing of the bullish 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

A break of the lower border of the indicator in the region of 1.0941 will increase pressure on the euro, which will result in the pair's decline. Growth will be limited by the upper level of the indicator in the area of 1.1000.

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
  • Send feedba
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XAUUSD close to ascending trendline support. Bounce incoming!

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Trading Recommendation

Entry: 1736.57

Reason for Entry: Ascending trendline resistance, 38.2% Fibonacci retracement.

Take Profit : 1764.06

Reason for Take Profit: Horizontal swing high, 161.8% Fibonacci extension

Stop Loss: 1719.35

Reason for Stop loss: 61.8% Fibonacci retracement

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USDCAD bouncing off 1st support, potential bounce !

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Trading Recommendation

Entry: 1.3880

Reason for Entry: Horizontal swing low ,78.6% fibonacci extension

Take Profit :1.3961

Reason for Take Profit: Horizontal swing high resistance

Stop Loss: 1.3828

Reason for Stop loss: 127% fibonacci extension

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CAD/JPY facing bearish pressure from resistance, potential for further drop

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Trading Recommendation

Entry: 77.860

Reason for Entry: horizontal swing high resistance and 100% fibonacci extension

Take Profit: 76.383

Reason for Take Profit: horizontal overlap support, 50% fibonacci retracement

Stop Loss: 78.499

Reason for Stop loss: Horizontal swing high resistance

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Forecast for EUR/USD on May 21, 2020

EUR/USD

Yesterday, the euro continued to work out positive economic statistics; on Tuesday it was the release of a strong eurozone business sentiment index for May from the ZEW institute - an increase from 25.2 to 46.0, on Wednesday the consumer confidence index also showed an increase from -23 to -19 in May. The eurozone balance of payments also came out yesterday, but in March, so the indicator worsened: 27.4 billion euros against 37.8 billion in February.

Today, US statistical services have to answer Europe. The Ministry of Labor will publish a weekly report on applications for unemployment benefits - a forecast of 2,400 million against 2,981 million a week earlier. The Philadelphia Manufacturing PMI is expected to improve from -56.6 to -40.0 in May, Manufacturing PMI is projected to grow slightly to 39.3 from 36.1, Services PMI is expected to reach 32.6 points from 26.7 in last month. We believe that all data will come out better than forecasts, regardless of whether this is true or not. We saw a similar picture in 2011 and 2014 during periods of tough confrontation between the US and the eurozone, when US statistics were subsequently revised to deteriorate.

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The euro worked out the upper limit of the trading range with a false on the daily chart, as it now seems, exit over the MACD indicator line and the embedded price channel line. Similar turns of the euro occurred on May 4 and March 30, these points are marked by sand-colored ovals. The Marlin oscillator begins to turn down.

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A divergence has formed on the four-hour chart on Marlin - a reversal pattern. Overcoming the price of the signal level of 1.0914 will correspond to the price falling below the line of the price channel on the daily chart. The 1.0888 level corresponds to the support of the MACD line on the daily chart, but then we see a coincidence with the expected support of the MACD line on a four-hour scope - the line tends to this level and can meet the price on it. Leaving the price below 1.0888 will return the market in anticipation of a medium-term decline.

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Forecast for AUD/USD on May 21, 2020

AUD/USD

The Australian dollar grew by 60 points on Wednesday, and it almost returned to yesterday's opening today in the Asian session. This is a sign that the price will not reach the target level of 0.6677, the aussie aimed to overcome the price channel line in the region of 0.6492, which will be a good reason for continuing the fall to 0.6338. A slightly veiled double divergence is formed on the Marlin oscillator.

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The price returned to the signal level of 0.6562 on the four-hour chart - yesterday's exit above it turned out to be false. The MACD indicator line is located at the 0.6492 level taken from the daily time, which strengthens this level. Accordingly, overcoming it will become a significant condition for opening short positions with a target above 0.6338.

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Forecast for USD/JPY on May 21, 2020

USD/JPY

The USD/JPY pair traded in the range of 65 points yesterday, but the body of the candle remained in the space between the downward line of the price channel and the red balance indicator line. This means consolidating the price over the MACD line (blue) and the line of the price channel itself. The Marlin oscillator is growing in the zone of positive values. Now the price should move above the balance line, and it can confidently continue to rise to the goals of 108.30 and 109.50.

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The downward trend will recover if the price goes below the MACD line, around 107.20. But this is now an alternative scenario.

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The price is supported by the indicator lines of balance and MACD on the four-hour chart. The signal line of the Marlin oscillator is unfolding from the border with the bears''territory. The price needs to leave the area above the signal level of 107.78 in order to continue growth to the nearest target of 108.30.

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Hot forecast and intraday trading signals for the GBP/USD pair on May 21. COT report. Bears urgently need to return to the

GBP/USD 1H

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Lateral movement was observed on the hourly chart for the pound/dollar pair on May 20. Quotes of the pair left the downward channel, although yesterday there were hopes that they would remain within it. At the same time, traders managed to overcome the resistance area of 1.2196-1.2215. Thus, at the moment, it is more preferable to continue the upward movement. However, we believe that it will be difficult for traders to go above the Senkou Span B line and before overcoming this line, we advise you not to buy the British pound, since so far everything is very similar to a protracted correction in a downward trend. If this hypothesis is confirmed, the pair will turn down and consolidate below the Kijun-sen line and the 1.2196-1.2215 area, which will enable us to conclude that the downward trend will resume.

GBP/USD 15M

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The higher linear regression channel shows a continuing upward trend on the 15-minute timeframe. But the lower channel signals a turn down. Thus, our concerns about a possible downward movement based on an analysis of the hourly timeframe are not in vain. On the lowest timeframe, there is also reason to assume the end of the British currency's growth.

COT report

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The latest COT report for May 12 shows that the total number of buy and sell transactions among large traders per week increased by 4,000, mainly due to purchases. However, the total number of transactions for the purchase is only 16,000 more than transactions for selling. Such an imbalance persists for a long period of time, and it was not enough for the pair to begin forming an upward trend. In the reporting week, professional traders opened more new deals for sale (4539), which means that most of them are waiting for the British currency to fall again.

The fundamental background for the British pound remains sharply negative. Despite the fact that the macroeconomic background is equally disappointing both in the United States and Great Britain, we believe that the UK economy is experiencing and will face much more serious problems than the US economy, despite the fact that the latter has serious problems due to the highest unemployment. The business activity indices that will be published today in the US and Britain are unlikely to attract the attention of market participants. Jerome Powell's speech in the evening can affect the course of trading. And even then, only if the Federal Reserve chief, who has recently been giving interviews almost daily, reports really new and interesting information.

We have two main options for the development of the event on May 21:

1) The initiative for the pound/dollar pair remains in the hands of the bears, despite the fact that the quotes have come out of the downward channel. Thus, we recommend buying the British pound no earlier than consolidating the price above the Senkou Span B line - 1.2323 and the resistance level of 1.2325 with the first target as the resistance area of 1.2404-1.2422. The next goal, in case of overcoming the area, will be the resistance level of 1.2550. Take profit will be about 75 points in the first case and 120 points in the second.

2) Sellers currently have greater chances to implement their trading ideas. It will be enough to return the price to the area below the Kijun-sen line and the 1.2196-1.2215 area in order to resume selling the pair while aiming for the May 18 low, 1.2073 and the support level of 1.1987. In this case, take profit will be about 105 and 190 points.

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Hot forecast and intraday trading signals for the EUR/USD pair on May 21. COT report. Dollar buyers need to stay below 1.0990-1.1008

EUR/USD 1H

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Quotes of the EUR/USD pair resumed the upward movement and overcame a new downward trend on the hourly timeframe over the past day, built at the highs of March 27 and May 1. In addition, the quotes of the pair ideally worked out the April 19 high at 1.0990, which is also the upper boundary of the side channel of 1.0750-1.0990, in which the pair has been trading in recent weeks. Thus, from current positions, a downward movement can begin with targets near the lower boundary of the channel, near the 1.0750 level. However, the key condition for executing this option is to not overcome the area of 1.0990-1.1008. If traders succeed in pushing this area, then the pair will be able to move to form a new upward trend with targets near the March 27 high at 1.1147.

EUR/USD 15M

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We see a confident upward trend that continues on the 15-minute timeframe, judging by the two channels of linear regression. The lowest linear regression channel made an attempt to turn down yesterday, but the bulls today began to attack with renewed vigor and held the initiative in their hands. Turning the lower channel down will indicate the end of the upward trend in the short term, we also continue to monitor the pair's behavior near the area of 1.0990-1.1008.

COT report

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The latest COT report dated May 12 showed a new decrease in the number of buy and sell transactions among large traders, by 4,781 and by 3,554. Thus, the general mood of large traders remains bullish (the total number of purchase transactions is higher, 549,000-521,000), in addition to this, traders still managed to stay above the trend line on the 4-hour timeframe. Also, purchase positions increased among entities engaged in professional activities in the foreign exchange market (+4569 purchase transactions). Thus, the euro can continue to grow for some time, which we see this week.

As for the fundamental background, it is almost neutral for the pair. There is still a lot of news coming from both the European Union and the United States. Many of them are of great importance for the future of both countries, for their economies. However, traders continue to ignore current macroeconomic reports; therefore, the mood of traders and their preferences are in no way connected with the macroeconomic background. And the fundamental background is now so ambiguous that it is difficult to interpret in anyone else's favor. On Thursday, May 21, we recommend that you pay attention to the next report on applications for unemployment benefits in the United States. According to expert forecasts, this indicator may again grow by several million, which will indicate a continued trend of rising unemployment overseas and, accordingly, may create additional pressure on the dollar, which, incidentally, will contradict the current technical picture.

Based on the foregoing, we have two trading ideas for May 21:

1) It is possible for quotes to grow if the resistance range of 1.0990-1.1008 is overcome, which consists of two corresponding levels. This will mean that the pair has left the side channel and is ready to form an upward trend with the first goal, the March 27 high at 1.1147. Potential to take profit in this case will be about 140 points.

2) The second option - bearish - is more likely. It is advised to sell euro from the resistance area of 1.0990-1.1008, not forgetting about the Stop Loss in case the bulls still continue to push the pair up. If a rebound occurs, the pair will begin to move downward, which we advise traders to practice, with targets at the 1.0952 level, the Kijun-sen line (1.0889), the Senkou Span B line (1.0846) and the upward trend line (1 , 0810). Potential to take profit in executing this scenario will be from 35 to 180 points.

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Overview of the GBP/USD pair. May 21. The British government has announced a new tariff policy that will be in effect after

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - sideways.

CCI: 83.1255

The British pound spent the third trading day of the week in a very narrow price range and began to move down by the end of the trading day, despite the previous consolidation above the moving average line. In general, we can say that by the end of Wednesday, the pound failed to continue its upward movement, which increases the chances of resuming the downward trend. Market participants ignored the macroeconomic report on inflation, as well as many previous ones. The head of the Bank of England, Andrew Bailey, did not say anything new in principle at his speech. The only thing that the media is reporting now is that the Board of the British regulator is still considering the possibility of further expanding the quantitative stimulus program, as well as the possibility of reducing the key rate to a negative area. It is reported that BA is now studying the experience of other countries that already have negative rates.

However, all this information does not significantly change the already established fundamental background. And it remains extremely negative for the British currency. Even if everyday traders do not get information feed that would allow them to sell the pound again and again, nevertheless, the "Sword of Damocles" has been hanging over the British currency for the past 3-4 years. With the emergence and arrival of the "coronavirus" epidemic in the Foggy Albion, all the problems of Great Britain only increased. However, Boris Johnson is not discouraged, and the country is preparing to terminate all agreements with the EU after December 31. Today, the UK government announced that up to 60% of goods entering the UK will not be subject to any tariffs or duties. The Ministry of Foreign Trade of the country has announced a new tariff regime, which will be much simpler and cheaper than the single external tariff of the European Union. It is also noted that it will be in pounds, not euros. "For the first time in 50 years, we can set our own tariff regime, which will be adapted to the UK economy. Our new tariff will benefit British consumers and households by removing various red tape and reducing the cost of thousands of goods," the Ministry of Foreign Trade said.

As we have repeatedly stated, there is almost no correlation between the euro and the pound. If the euro currency has grown in recent days by 250 points against the US currency but generally holds inside the side channel, then the pound has started a new downward trend against the US currency and is currently only being corrected. Thus, despite all the political upheavals in the United States, the eternal war (during the reign of Donald Trump) between the Democrats and Republicans, which, in particular, does not allow to approve a new package of assistance to the US economy for $ 3 trillion, despite the strong economic decline, strong unemployment and large-scale defeat by the "coronavirus", the American dollar still looks much more attractive to investors and traders than the British pound. Buyers of the pound can only hope that the government of Boris Johnson will still be able to agree with the European Union on trade terms and other aspects of a comprehensive agreement that will determine the relationship between Brussels and London after 2020. Or it is still hoping for an even greater deterioration of the situation in America. And this may well happen. We have already said that a new trade war between China and the United States will hit the entire world economy and the economy of the United States itself. So far, Donald Trump and the company have refrained from concrete actions, but there is some progress in this direction. However, it is foolish to assume that China plays a secondary role in this confrontation. We believe that China is very competent in its battles with Washington. First, Beijing does not get into trouble, does not provoke conflicts first, and only responds to the attacks of the United States. Secondly, after all, the Chinese economy is the largest in the world along with the American one, so there is something to respond to Beijing in any case. Accordingly, it is foolish to expect that the United States will impose new duties, apply sanctions to Chinese officials, Chinese companies, and at this time, Beijing will simply remain silent and wait for everything to end. Thus, any actions against China will primarily affect America itself. Consequently, its economy will be weakened even more, although it continues to decline at the moment, despite the weakening of the "lockdown".

On the penultimate trading day of the week in the UK, the publication of business activity indices in the services and manufacturing sectors is scheduled. As in the case of the European Union and Germany, both indices should grow by the end of May, in the service sector - to a value of 25, in the production sector - to a value of 36. However, we believe that this data will be ignored by market participants and will only allow us to understand whether the British economy is beginning to recover? In the United States, more interesting data will be published on Thursday. First, this is a report on applications for unemployment benefits. According to experts' forecasts, the number of initial applications in the week of May 15 will amount to another 2.4 million, so the total number of initial applications will reach 40 million in 10 weeks. But the number of secondary applications, which is considered a more accurate indicator of real unemployment, could reach 24.765 million for the week of May 8. However, in any case, we will see an increase in both indicators, which means that the situation with unemployment in the US will worsen. Also, data on business activity in the service sector (forecast – growth from 26.7 to 30.0), as well as in the manufacturing sector (forecast – growth from 36.1 to 38.0) will be received from overseas. As we can see, the situation is about the same as in Britain, the EU, and Germany. Late in the evening, there will be another speech by the head of the Fed, Jerome Powell, who has spoken or given interviews three times in the past 5 days. Thus, we do not expect any new information from him. Most likely, the Fed Chairman will again talk about a "strong economic shock" and the need for additional monetary injections into the US economy.

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The average volatility of the GBP/USD pair remains stable and currently stands at 105 points. On Thursday, May 21, thus, we expect movement within the channel, limited by the levels of 1.2129 and 1.2339. The reversal of the Heiken Ashi indicator indicates a possible resumption of the downward trend. Fixing the price below the moving average will confirm this hypothesis.

Nearest support levels:

S1 – 1.2207

S2 – 1.2146

S3 – 1.2085

Nearest resistance levels:

R1 – 1.2268

R2 – 1.2329

R3 – 1.2390

Trading recommendations:

The GBP/USD pair turned down on the 4-hour timeframe, and fixing below the moving average will trigger a change in the downward trend. Thus, it is now recommended to trade the pound/dollar pair for a decrease with the goals of 1.2146 and 1.2129, but after fixing the price below the moving average line. It is recommended to buy the pound/dollar pair if traders manage to keep the pair above the moving average and after overcoming the Murray level of "5/8"-1.2268, with goals of 1.2329 and 1.2390.

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Overview of the EUR/USD pair. May 21. Donald Trump's unsubstantiated accusations against Barack Obama and Joe Biden did not

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: 125.4280

The EUR/USD currency pair starts near the level of 1.1000 on May 21 and intends to start a downward correction. During yesterday's day, the pair's quotes perfectly worked out the upper limit of the side channel of 1.0750-1.0990. The maximum price value was 1.0999. Thus, the upper border of the channel is now worked out exactly and clearly. Thus, now the quotes can begin to fall to the lower border of the channel, located near the level of 1.0750. This is potentially a decrease of 250 points. Only overcoming the levels of 1.1000 and 1.1008 will allow us to expect the formation of a new upward trend and further growth of the European currency. The macroeconomic and fundamental backgrounds were weak on Wednesday, but market participants, in any case, continue to ignore most of the incoming information, considering it uninteresting and unimportant.

Just the other day, we wrote that US President Donald Trump has started a new round of accusatory speeches against the Democrats. However, this time the name of Joe Biden was touched only indirectly, so to speak "for the company". The main accusations poured in against former US President Barack Obama, whom Trump accused of provoking the "Russian affair" and leading the campaign to prevent Trump from winning the election in 2016. And Joe Biden, according to Trump, "was in the same boat with Obama" and in general, all Democrats are against him. However, the US leader did not provide any concrete evidence or arguments. Thus, most political scientists and experts immediately concluded that Trump has nothing to blame for Obama and Biden. You can claim their guilt every day, but what are the facts? And no one knows the facts, except for Trump himself. Thus, it seems that the American leader, using the so-called "Obamagate" case, is simply trying to divert the attention of Americans from himself, from the "coronavirus" pandemic and the economic crisis. And of course, he tries to put himself in the best possible light before the voters and to denigrate the Democrats as much as possible. US Attorney General William Barr also confirmed that Barack Obama and Joe Biden are unlikely to face any charges, hence there will be no criminal prosecution. Trump himself was very surprised by this position of Barr and immediately criticized the Prosecutor General at the same time: "I think this is a manifestation of double standards. If I were in their (Obama and Biden's) place, they would start an investigation."

Most TV channels and periodicals in the United States almost immediately made a similar conclusion. The conclusion that Donald Trump is trying to distract the attention of Americans from the "coronavirus" pandemic, which has already claimed the lives of more than 90,000 people in the United States and the number of people infected with the COVID-2019 virus is already more than 1.5 million. Most experts in America associate such a strong defeat of the country by "coronavirus" with the name of Trump and his administration, which until recently did not want to take the virus seriously. The media call the "Obamagate" case an "informational story", knowing perfectly well that it is an interesting story, but not a real political or judicial trial. It is reported that only the Fox News channel loyal to the US President has seized on this topic and is actively promoting it. Thus, accusing Obama of "the largest crime in the history of America", Trump aims to worsen the reputation of the former President, and at the same time, Joe Biden.

Joe Biden himself also speaks out against his main political rival very unflatteringly, but not so sharply. Biden said that if he wins future elections, he will not use his presidential powers to pardon Donald Trump for his potential crimes. Biden also previously said that President Gerald Ford made a big mistake when he pardoned his predecessor, Richard Nixon, in the 1974 Watergate case. According to Biden, Trump's pardon will not unite the United States, but only show that some people are above the law. Also, some American publications report that as long as Donald Trump is President, he has the so-called "constitutional immunity", which does not allow to bring a criminal case against him. However, everything will change when Trump leaves office. Several charges could end up with a 10-year sentence for Donald. Among the main charges against Trump are obstruction of justice in the case of Russian interference in the 2016 election, illegal delay of military assistance to Ukraine, blackmail of the Ukrainian President to launch an investigation against Joe Biden, and extortion of campaign donations from foreigners.

On the penultimate trading day of the week in the European Union and Germany, the publication of business activity indices in the services and manufacturing sectors for May is planned. The values are not final but will allow us to draw certain conclusions about the trend in these areas. According to forecasts, business activity in Germany will start to grow in May. In the service sector, it will increase from 16.2 to 26.6, and in the manufacturing sector - from 34.5 to 39.2. These figures will remain scanty, but if they start to grow, it will be a good sign of economic recovery. In the European Union, the situation is approximately the same. In the manufacturing sector, business activity is expected to grow from 33.4 to 38.0, and in the service sector – from 12 to 25. However, we still do not believe that these macroeconomic reports will have any impact on the movement of the euro/dollar currency pair. First, the indicator values will remain extremely low. Secondly, in America, most likely, due to the gradual abolition of "lockdown", business activity will also begin to grow. Thus, the synchronously falling US and EU economies can now begin to recover synchronously. The main question is how much each economy will lose in the end and what will be the pace of their recovery?

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The average volatility of the euro/dollar currency pair as of May 21 is 79 points and has not changed in recent days. Thus, the value of the indicator remains stable and is characterized as "average", despite a fairly active Monday. Today, we expect quotes to move between the levels of 1.0905 and 1.1063. A reversal of the Heiken Ashi indicator downwards may signal a turn of the downward movement within the channel of 1.0750-1.0990.

Nearest support levels:

S1 – 1.0925

S2 – 1.0864

S3 – 1.0803

Nearest resistance levels:

R1 – 1.0986

R2 – 1.1047

R3 – 1.1108

Trading recommendations:

The EUR/USD pair continues its upward movement. However, the level of 1.1000 was worked out, so there is a high probability of the pair turning down and a downward movement within the side channel of 1.0750-1.0990. Thus, it is recommended to consider selling the pair with the goal of 1.0750 after the Heiken Ashi indicator turns down, and buying is recommended to consider only above the level of 1.1000 with the goals of 1.1047, 1.1063 and 1.1108.

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