GBP/USD: plan for the European session on July 21. COT reports (analysis of yesterday's trade). Bears failed to maintain

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

The British pound significantly strengthened its positions yesterday. After breaking through the rather important resistance of 1.2618, GBP/USD continued to grow with renewed vigor, as the bearish trend was completely broken, which forced speculators to close short positions. If you look at the 5-minute chart, you will see how several signals were formed to buy the pound. It was quite difficult to determine the pound's direction in the European session after updating the resistance of 1.2571, but then the buy signal was obvious closer to the beginning of the US session. The breakout and consolidation above the level of 1.2618, followed by its top-down test, became a good entry point into long positions, which led GBP/USD to the resistance area of 1.2668, which will be the focus of buyers today. Another increase in short and long positions was recorded in the Commitment of Traders (COT) report for July 14, which indicates a confrontation between buyers and sellers. However, there were many more bulls than sellers, which caused the net position to decrease. This does not mean that the market has become bullish, since there is still a fairly high probability of the pound's decline amid Brexit uncertainty and other economic problems. However, signals to change the trend are coming more and more often, especially given the fact that the bulls managed to break the bearish formation formed on July 9. The COT report indicates that short non-commercial positions increased from the level of 56,300 to the level of 56,761 during the week. During this time, long non-commercial positions rose from the level of 39,892 to the level of 43,175. As a result, the non-commercial net position decreased its negative value to -13,568 against -16,408, which indicates that the market is still under pressure, but there are fewer that are willing to sell. As for the current situation in GBP/USD, the main focus of buyers today in the morning will be at 1.2668, since a return to it and consolidating above will be another signal to open long positions in the pound in order to continue the bullish momentum to the high of 1.2742 and 1.2809, where I recommend taking profits. If buyers are not able to take advantage of the lack of important fundamental data, and the UK only has a report on public sector borrowing today, then it is best to look at long positions only after a downward correction to the support area of 1.2618, provided that a false breakout is formed there, or buy GBP/USD immediately on a rebound from the low of 1.2571 with the goal of an upward correction of 30-40 points within the day.

analytics5f1684c2e52c8.jpg

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

Sellers of the pound need to consolidate below 1.2668 and test it from the bottom up with the condition that a false breakout is formed there. It is very dangerous to trade against a new trend, so if you are not sure of the entry point, it is better to wait for the pound to grow to a larger high of 1.2742 and open short positions from there immediately for a rebound, counting on a correction of 30-40 points within the day. The pressure on the pound could increase if the bears manage to stay below the 1.2668 level, which will push it to the support of 1.2618, where the moving averages are already located. But the long-term goal for short positions are lows of 1.2571 and 1.2517, where I recommend taking profits. Updating these areas will also hit the mood of buyers of the pound hard, as it will lead to locking the pair in the side channel.

analytics5f1684d64a58b.jpg

Indicator signals:

Moving averages

Trading is conducted above 30 and 50 moving averages, which indicates that buyers are returning the market under their control.

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

Bollinger Bands

A break in the lower border of the indicator at 1.2618 will increase the pressure on the pound. Breaking the upper limit of the indicator in the area of 1.2690 will lead to a larger increase in the pound.

Description of indicators

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

Technical Analysis of EUR/USD for July 21, 2020:

Technical Market Outlook:

The EUR/USD pair has made another higher high at the level of 1.1467 and it looks like the next target for bulls is seen at the level of 1.1489 - 1.1497. If the momentum will be still high and positive, then the odds for this scenario are high, but please notice, the momentum is now decreasing as the price goes higher. Moreover there is another Bearish Engulfing candlestick pattern made at the top of the move, so the bears are still active at this levels. The nearest technical support is seen at the level of 1.1406, but only a sustained breakout below the level of 1.1347 will change the short-term trend from up do down.

Weekly Pivot Points:

WR3 - 1.1642

WR2 - 1.1541

WR1 - 1.1496

Weekly Pivot - 1.1397

WS1 - 1.1342

WS2 - 1.1243

WS3 - 1.1193

Trading Recommendations:

On the EUR/USD pair, the main long-term trend is down, but the local up trend continues. 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).

analytics5f1683a4c2aeb.jpg

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

Technical Analysis of GBP/USD for July 21, 2020:

Technical Market Outlook:

The GBP/USD pair has tested the key short-term supply zone located between the levels of 1.2668 - 1.2686, but the Bearish Engulfing pattern had been made at the H4 time frame chart. The volatility has decreased and the momentum is just slightly above the level of fifty. Only a sustained breakout above of below certain level can provide a clue regarding the next market move: supply zone seen between 1.2668 - 1.2686 or demand zone seen between the levels of 1.2466- 1.2484.

Weekly Pivot Points:

WR3 - 1.2834

WR2 - 1.2735

WR1 - 1.2648

Weekly Pivot - 1.2555

WS1 - 1.2463

WS2 - 1.2373

WS3 - 1.2271

Trading Recommendations:

On the GBP/USD pair the main trend is down, which can be confirmed by the down candles on the weekly time frame chart. 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 these 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 even lower in the longer-term.

analytics5f168297c86de.jpg

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

EUR/USD: plan for the European session on July 21. COT reports (analysis of yesterday's trade). EU budget and economic aid

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

The euro traded in a side channel yesterday amid the lack of news from the EU summit. After an unsuccessful attempt to gain a foothold at weekly highs, the pair fell to the morning support level, where the bulls were active again. In total, several entry points were formed. If you look at the 5-minute chart, you will see how the bears returned the pair to the 1.1453 level closer to the afternoon, which I paid attention to in my forecast, forming a signal to sell the euro there, which caused EUR/USD to rapidly fall to the low of 1.1412. There, the formation of a false breakout was a signal to open long positions, which in the end threw the euro to the resistance of 1.1453, where trading ended. Today, there is news that the EU budget and economic assistance plan were approved at the EU summit, but this did not cause the euro to grow, but on the contrary, put pressure on it. Most likely, the rapid growth did not occur due to the fact that many expected this to be the end of the meeting. You also need to analyze the details. Meanwhile, the Commitment of Traders (COT) report for July 14 recorded an increase in long positions and a very small rise in short ones, which indicates a gradual increase in demand for risky assets. There are more and more people willing to buy euros in the current conditions and at high prices,which may lead to further growth in the medium term. The report shows an increase in short non-commercial positions from the level of 881,562 to the level of 83,340, while long non-commercial positions jumped from the level of 185,159 to the level of 194,252. As a result, the positive non-commercial net position increased to 110,912 against 103,597, which indicates an increase in interest in purchasing risky assets at current prices. A positive conclusion of the EU summit will support the euro in the long term, which will certainly lead to an increase in long positions. As for the intraday strategy, today everything will depend on the market's reaction to the results of the summit, since there is no important fundamental data that will be released today. Bulls need a breakout and consolidation above the resistance of 1.1466, which will be a signal to open long positions while expecting the upward trend to continue to the high of 1.1514 and 1.1539, where I recommend taking profits. If the pressure on the euro persists in the first half of the day, it is best to postpone purchases until a false breakout forms in the area of 1.1412. Larger buyers will protect the low of 1.1371, as the market's further direction depends on it.

analytics5f168191c798d.jpg

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

Sellers of the euro aim to protect the 1.1466 resistance, and so far they are doing quite well. Forming a false breakout there will be a signal to open new short positions in the hope of breaking the upward trend, which will quickly push the pair to support 1.1412, which acts as the middle of the channel. Much will depend on traders' reaction towards news from the EU summit. Consolidating below the level of 1.1412 forms an additional signal to sell EUR/USD, but the long-term goal is to break the low of 1.1371, which will lead to a complete break in the bullish market and increase pressure on the pair, opening a direct road to the lows of 1.1307 and 1.1257, where I recommend taking profits. If the bulls are stronger and active sales of 1.1466 resistance are seen, it is best to defer short positions to update the high of 1.1514 or sell EUR/USD immediately on a rebound from the larger resistance of 1.1569, based on a correction of 25-30 points within the day.

analytics5f1681a5513a0.jpg

Indicator signals:

Moving averages

Trade is conducted in the area of 30 and 50 moving averages, which indicates market uncertainty with the further direction, as there was no sharp growth following the good news from the EU summit.

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

Bollinger Bands

Breaking the lower border of the indicator in the area of 1.1415 will increase pressure on the euro. Breaking the upper limit at 1.1466 will lead to a new wave of euro growth.

Description of indicators

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

Elliott wave analysis of EUR/JPY for July 21, 2020

analytics5f167c753dad7.jpg

A minor corrective dip to 122.23 is likely to occur before the next rally higher towards 124.43. A break above here will open the way to 129.26. Only an unexpected break below 121.79 will delay the expected impulsive rally higher to 124.43 and a corrective dip to 121.43 before the next rally higher.

R3: 124.12

R2: 123.32

R1: 123.00

Pivot: 122.79

S1: 122.50

S2: 122.23

S3: 122.19

Trading recommendation:

We are long EUR from 122.51 with our stop placed at 121.75

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

Bitcoin trying to break out from triangle pattern, July 21, 2020.

analytics5f1665d4d0c98.jpg

Judging by a triangle pattern on the 60-minute chart, we can see that bitcoin is gaining momentum. On the monthly-weekly-daily charts, bitcoin is already making an Inside Bar. It is likely to test the previous intraday high at 9201.56. This scenario will come true if bitcoin does not decline and close bellow the 9095.25 level.

(Disclaimer)

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

Natural Gas now moving towards 1.706: Analysis For July 21, 2020.

analytics5f1661ab7f960.jpg

Since we spotted the divergence between the price of the Natural Gas and the Stochastic Oscillator on the 4-hour chart, we predict this commodity will retrace upwards to test the previous intraday high and the previous weekly low level between 1.690 - 1.706. However, this movement will be automatically canceled if the #NG is going down and closes below 1.605.

(Disclaimer)

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

Trading plan for GBPUSD for July 21, 2020

analytics5f16477143e22.jpg

Technical outlook:

GBPUSD is seen to be trading around 1.2682 levels at this point in writing. It is approaching the Fibonacci 0.786 resistance at 1.2700 level. The corrective rally from 1.2250 level is likely to be completed around 1.2682/1.2700 levels. Immediate resistance is at 1.2800, while support is seen around 1.2486 respectively. The wave structure indicates that GBPUSD should drop below 1.2250 levels to complete the corrective drop from 1.2800. A break below 1.2846 support will confirm that GBPUSD is heading towards 1.2250 and 1.2000 levels. A bullish bounce can be expected towards 1.1900/1.2000 levels. Please note that 1.1900 is close to Fibonacci 0.618 retracement of the entire rally between 1.1414 and 1.2800 respectively.

Trading plan:

Remain short for now, stop at 1.2800, target is 1.1900

Good luck!

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

Trading plan for EUR/USD for July 21, 2020

analytics5f1643f770f67.jpg

Technical outlook:

EUR/USD is trading close to major resistance at 1.1500 levels, and bulls might remain inclined to break higher. Once resistance is taken out at 1.1500, we can expect EUR/USD to produce a meaningful corrective drop as projected on the above chart view. Immediate resistance is at 1.1500, while support is seen at 1.1370 levels respectively. The fibonacci 0.618 retracement of the entire rally between 1.0775 through 1.1450 is seen around 1.1000 mark. Please note that one can expect a bullish bounce if prices manage to reach there as a corrective wave. At the moment, focus shall remain around the 1.1500 levels, and a break higher would confirm a major trend reversal ahead.

Trading plan:

Prepare to sell around @ 1.1500, stop @ 1.1600, target is open for now.

Good luck!

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

How much it costs to resist the virus?

analytics5f166dd5e0927.jpg

The coronavirus pandemic has led to a global recession. In many countries, there are budget deficits due to the huge spending on health care to combat the spread of the virus. According to analysts, it is necessary to cut health care expenses, otherwise some of the world's largest emerging economies will face a financial crisis in the coming years. In this case, it is better to discuss debt restructuring with investors in order to avoid protests.

Government spending to suppress the pandemic in countries such as India, Malaysia, Poland, Qatar, South Africa, Thailand, etc., exceeded 10% of GDP. The World Bank said that countries dependent on tourism as well as major commodity-producing countries are at risk. While many countries that previously had surpluses faced deficits. Moreover, the public debt of developing countries has reached a record of 51% of GDP.

Gabriel Stern, chief economist at research firm Oxford Economics, said it is necessary to fund budget spending if it rises.

According to the latest data, the loss of production in the global economy will amount to $12.5 trillion in 2020 and 2021. As a result, 37% of bonds in JPMorgan's benchmark Emerging Markets Sovereign External Debt Index could be on the verge of default next year.

Oxford Economics reported that budget deficits in Brazil and South Africa will exceed 15% of GDP this year. William Jackson, emerging markets economist at Capital Economics, argues that it will be necessary to cut the budget by 6-7% of GDP per year over several years to keep the debt level below 100% of Brazil's GDP. South Africa and Mexico faced the same problems.

Emerging bond markets lost $33.5 billion in March due to the global spread of the virus. Central banks in developed countries are pumping trillions of US dollars into financial markets as an incentive for developing countries. So, the authorities of developing countries have allocated almost $90 billion in international bond markets.

The financial situation of developing countries was only temporarily eased. In the future, they will face an increase in the cost of paying interest on debt and paying compensation.

Phoenix Cullen, emerging market strategist at Societe Generale said that he had never faced such a thing before. The solution to the problem of refinancing the sharply increasing debt has been postponed. According to him, it is difficult to deal with the worsening financial situation.

The IMF and the World Bank will help poor countries to cope with the crisis.

However, analysts warn that the magnitude of the economic shock in middle-income countries is enormous. Therefore, it is necessary to focus not only on the debts of poor countries. The magnitude of the problem will require trillions of dollars. The worst is yet to come for developing countries.

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

EURJPY facing bullish pressure, potential for further upside

analytics5f16666fa1c5d.jpg

Trading Recommendation

Entry: 122.542

Reason for Entry: Ascending trend line, 61.8% fibonacci retracement and 61.8% fibonacci extension

Take Profit: 123.345

Reason for Take Profit: 78.6% fibonacci retracement

Stop Loss: 121.962

Reason for Take Profit: Horizontal overlap support, 38.2% fibonacci retracement

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

Forecast for EUR/USD on July 21, 2020

EUR/USD

The euro rose by 20 points on Monday, but with the upper shadow it marked the upper limit of the target range of 1.1420/65, which, in fact, created a condition for forming a reversal divergence with the Marlin oscillator. Of course, the euro can continue to grow, but the price needs to overcome 1.1465 for this, then the next goal is the 1.1560 level – the record average level of the January 2018 high and the November 2017 low. In this case, the forming divergence line along the Marlin will become more flat. In the current situation, a downward movement to the target level of 1.1265 is possible if the price goes below the July 16 low, which is also the Fibonacci level of 61.8% on the daily chart (1.1371).

analytics5f16611fcefc5.jpg

The divergence of the price and the oscillator has already formed on the four-hour chart. This is the first signal of the euro's reversal to the target level of 1.1265 that can take place today. To fully generate the signal, the price should be fixed under the MACD line, below 1.1395. We are waiting for developments.

analytics5f16613255dbe.jpg

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

Forecast for AUD/USD on July 21, 2020

AUD/USD

The Australian dollar rose by 19 points yesterday, but this was enough to shift the indicator technical picture towards growth. Reversal of the Marlin oscillator signal line from the zero line has received confirmation, the nearest target is the 0.7080 level, after which it is possible to form a triple divergence on the Marlin.

analytics5f165eb8ce631.jpg

The price is pinned above the signal level of 0.7000 on the four-hour chart, with this fact, we accept the scenario that locally increases the price – growth to 0.7080. Moreover, forming a triple divergence by Marlin comes first here, regardless of what price level it will be formed at – exactly at the target level of 0.7080, or above it in the 0.7080-0.7190 range. Visually, the signal line of the Marlin oscillator will touch the forming divergence line when the AUD/USD pair reaches 0.7130, that is, halfway from 0.7080 to 0.7190.

analytics5f165ecbdf1b6.jpg

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

Forecast for USD/JPY on July 21, 2020

USD/JPY

The dollar rose 22 points against the yen on Monday. The price tried to overcome technical resistance on both the daily and four-hour charts, but even the growth of US stock indexes did not help. As a result, the price, as before, remained stuck between the balance and MACD indicator lines on the daily chart. The Marlin oscillator moves horizontally under the border of the growth territory. It is technically easier for the price to choose the upward direction, where the first target is the 107.77 level, but in the event of consolidating under 106.96, where the price channel and MACD lines run, the price may break down to the lower line of the price channel in the 105.63 area.

analytics5f165c4db2a29.jpg

The MACD line became an insurmountable resistance for the price on the four-hour chart. This may be a temporary difficulty for the price, but it is also very possible for the price to overcome it soon, since the price is consolidating under this line and there could be a breakout with a subsequent increase in the price.

analytics5f165c600ebac.jpg

In this situation, the price has two signal levels before moving down: 106.96, 106.68. Overcoming the first level will be a signal to attack the second signal level. Overcoming the second opens the specified goal of 105.63.

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

USDCAD approaching 1st support, possible bounce!

analytics5f16518f03672.jpg

Trading Recommendation

Entry: 1.3509

Reason for Entry: The 61.8 fib extension

Take Profit :1.3539

Reason for Take Profit: Horizontal horizontal swing high

Stop Loss:1.3485

Reason for Stop loss: The 78.6 fib extension

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

Hot forecast and trading signals for the GBP/USD pair for July 21. COT report. Pound soared amid developing pandemic in the

GBP/USD 1H

analytics5f164d5466828.jpg

The GBP/USD pair returned to the much-loved resistance area of 1.2634-1.2660 on Monday, which it had previously reached at least four times and rebounded off it each time. Thus, it is possible that this time buyers will not be able to sell it, although each subsequent test, of course, increases the probability of overcoming it and, accordingly, to further strengthen the British currency, which seems to favor the fundamental background. However, the prospects for buyers remain quite vague until this area is overcome, and the pair's movement appears flat in recent weeks. Yesterday, the bulls easily passed the downward trend line, which gave hope that now the bears will begin to attack. But their fervor ended near previous local lows near the 1.2520 level.

GBP/USD 15M

analytics5f164d682afba.jpg

Both linear regression channels turned up on the 15-minute timeframe, which in principle corresponds to the general trend that has developed on the higher chart. However, this trend may come to naught today if the 1.2636-1.2660 area keeps the pair from continuing growth. The latest COT report showed minimal changes compared to the previous one. The British currency mainly continued to strengthen until July 14 (the final date of the report), so it is not surprising that at this time, non-commercial traders (professional players) continued to open 2,811 Buy-contracts. The non-commercial category only opened 182 Sell-contracts (only 12 a week earlier). Although the bullish mood is slightly weakening, which can be seen from the technical picture, the prospects for the British currency remain very attractive, thanks to the improving epidemiological situation in America. Therefore, the latest COT report makes it possible to complete the upward movement on the pair, but overcoming the 1.2636-1.2660 area may return traders' interest in buying the pound.

The fundamental background for the GBP/USD pair remains the same. Nothing interesting happened in either the UK or the US on Monday. Market participants have completely forgotten that negotiations on the terms of mutual co-existence of Britain and the EU after 2020 are firmly stuck in place and London is not very willing to reach a consensus as soon as possible. Thus, the pound's current growth can even be considered as a crackdown before a new long fall, as soon as it becomes clear that there will be no deal between London and Brussels. However, if the epidemiological situation in the United States continues to deteriorate, and British Prime Minister Boris Johnson somehow manages to reach an agreement with Brussels, this could lead to a powerful increase in the pound. At the same time, there are a huge number of factors that can hypothetically send the pair up by 500 points and down by the same amount. For example, the Bank of England may lower the key rate to negative values. For example, a second wave of coronavirus could begin in the UK, as doctors predict. In general, in times of a global pandemic, it is definitely not worth making long-term forecasts, since at any moment everything can change dramatically.

There are two main scenarios as of July 21:

1) The bulls' prospects continue to depend on overcoming 1.2660. At this time, purchases are still not relevant, although buyers managed to overcome the trend line. Thus, you are advised to buy the pound, but not before overcoming the 1.2636-1.2660 area while aiming for the resistance levels of 1.2755 and 1.2846. Potential Take Profit in this case will be from 80 to 170 points.

2) Sellers are advised to consider short positions with the goals of support levels 1.2474 and 1.2383, but to do this, you need to wait until the Senkou Span B line (1.2551) has been overcome. The pair rebounded several times from the previous value of the Senkou Span B line at 1.2414, so the bears may have problems with overcoming this level the next time. So we advise you to wait below 1.2414 before opening the shorts. Potential Take Profit ranges from 30 to 120 points.

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

Overview of the GBP/USD pair. July 21. Joe Biden continues to break away from Trump in the ratings. Boris Johnson refuses

4-hour timeframe

analytics5f1634b69ff85.jpg

Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - upward.

CCI: -215.1910

While market participants are closely watching the EU summit, and the euro currency is trading in different directions, the British pound on Monday sharply and unexpectedly jumped up. In recent days, however, the pound/dollar pair has also been trading in completely different directions and it is also unclear whether it will continue its upward movement. However, one thing is absolutely certain. There is no positive news from the UK at this time, as well as from the European Union. Thus, either the reasons for today's strengthening of the British currency are purely technical, in other words, the market continues to "swing on a swing", or the reasons again need to be looked for in the US. And in the US, you don't need to look for reasons. They lie on the surface and are visible to the naked eye. We have already discussed the most obvious reason several times. It's a coronavirus. Traders fear that the second wave of the epidemic in the United States will lead, even if not to a new "lockdown", which Donald Trump flatly refused, to a new contraction of the economy, or at least to a weakened pace of economic recovery after the first "lockdown". We have repeatedly said that a situation in which half of the country will become infected with the "coronavirus", and the economy will continue to work in the usual, "pre-quarantine" mode, will not work. Thus, the more cases of the disease are registered in the United States, the more likely it is that the American economy will start experiencing serious problems again. But this time it will start experiencing problems not at the "pre-crisis", high levels, but at the "post-crisis", low levels. In the event of a new round of decline, the "coronavirus crisis" can really be called "depression". Therefore, we continue to believe that the overall strengthening of the euro and the pound is due to low market demand for the US dollar.

Meanwhile, British Prime Minister Boris Johnson said that even if the country begins the second wave of the pandemic, he is not going to launch a second "lockdown". The British Prime Minister said that British doctors continue to study the "coronavirus", constantly receive new information about it and now understand much better what social groups it affects, how it works and how it is transmitted. "Now we can quickly identify outbreaks and localize them," Johnson said. A similar rhetoric is shared by Boris Johnson's friend Donald Trump, who may be re-elected for such carelessness. Recall that most doctors in the world believe that with the arrival of autumn in many countries of the world will begin the second wave of the epidemic, which, in Britain, can be much worse than the first. Also, do not forget that if Europe managed to stop the spread of "coronavirus", then the world continues to establish and update anti-records almost every day. For example, over the past day, 260 thousand new cases of the disease were detected in the world, which is a record since the beginning of the pandemic. The total number of victims from the "coronavirus" is already about 600,000. And the vaccine against COVID-2019, according to the same doctors, should not be expected before 2021.

Meanwhile, Donald Trump continues to criticize his main opponent in the election, Joe Biden. Well, how to criticize. "Offend" is a more accurate expression of reality. This time, Trump said that "Biden can't connect the two proposals." "They are taking it out. He gets up, repeats, they ask him questions. He reads the text from the teleprompter, then returns to his basement. And you will tell me that Americans want to have this in an era when we have problems with other countries that want to mess with us?" Trump asked. "He is incompetent to be President. To be President, you need to be smart, tough, and a lot more. Joe does not know that he is alive," summed up Trump, who is only 3 years younger than his opponent and is currently the oldest US President in history. Meanwhile, the FOX TV channel (which supports the current President) conducted a poll, according to which 49% of voters are ready to support Biden in the election, and 41% are ready to support Trump. But opinion polls conducted by ABC News and The Washington Post indicate an even greater gap between Biden and Trump. At the moment, 55% of respondents are ready to vote for the Democrat, and only 40% give their vote to Trump. Thus, as practice shows, Americans do not care about Biden's age. It seems that in the United States there may be a situation that was already observed in December in the parliamentary elections in the UK, when people voted not for the Conservative Party, but for the fastest possible "divorce" from the European Union, which was promised by the conservatives led by Boris Johnson. In America, there may be a situation in which the vote will not be for Biden, but against Trump. After all, Joe Biden, in fact, is not doing anything at this time. He sits in his residence, rarely goes out, rarely gives interviews and comments. All the work is done for him by Trump himself, who does not seem to understand that almost every statement he makes only lowers his chances of re-election. Thus, Biden can become not only the oldest President, but also the President who most easily won the vote.

As for the technical picture of the GBP/USD pair, the quotes again returned to the Murray level of "6/8"-1.2634, from which they had previously bounced, and the Murray level of "7/8"-1.2665, from which the pair also bounced twice recently, is also located nearby. Thus, it is absolutely possible that in this area, the bulls will again ease their pressure and start another round of downward correction. Below the Murray level of "2/8"-1.2512, the pair also cannot escape, so we can even assume that the price is inside the side channel. Important macroeconomic statistics are not scheduled for Monday or Tuesday. Thus, market participants will again have to trade only on the basis of data on "coronavirus" in the United States. But even this topic can not constantly cause market pressure on the dollar.

analytics5f1634ccc624c.jpg

The average volatility of the GBP/USD pair continues to remain stable and is currently 99 points per day. For the pound/dollar pair, this value is "average". On Tuesday, July 21, thus, we expect movement within the channel, limited by the levels of 1.2551 and 1.2749. A reversal of the Heiken Ashi indicator downwards will indicate a downward movement, and the pair may re-establish itself below the moving average.

Nearest support levels:

S1 – 1.2634

S2 – 1.2604

S3 – 1.2573

Nearest resistance levels:

R1 – 1.2665

R2 – 1.2695

R3 – 1.2726

Trading recommendations:

The GBP/USD pair on the 4-hour timeframe continues to trade "up-down" near the moving average, then fixing above it, then below. Thus, now there is a kind of flat, and there is no trend as such. Thus, formally, buy orders with the goals of 1.2665, 1.2695 and 1.2726 are currently relevant. However, there is a high probability of another rebound from the Murray level of "7/8". Short positions can also be formally considered after fixing below the moving average with goals of 1.2512 and 1.2482, but there is also a high probability of a rebound from the Murray level of "2/8".

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

Overview of the EUR/USD pair. July 21. Negotiations on the distribution of the recovery fund are continuing. But there are

4-hour timeframe

analytics5f16344e57a85.jpg

Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - upward.

CCI: 100.7928

The first trading day for the EUR/USD pair was held in multidirectional movements. If in the first half of the day the European currency continued to rise in price, then in the second half of the day it began to decline. However, at the same time, the pair's quotes continue to be located above the moving average line directed upwards. Therefore, the upward trend, although not strong, continues to persist. In principle, the euro has been trading higher over the past week. Earlier (long before the EU summit), we repeatedly said that we should look for the reasons for the appreciation of the euro currency exclusively overseas. Because in the European Union, no optimistic information is published, and there is no encouraging news. But the situation in America raises serious concerns, both in epidemiological and economic terms. We would like to remind you once again that it is impossible for half of the US population to get sick with coronavirus (even in a mild form), and the economy will grow at the same time. Thus, we believe that the very difficult situation with the "coronavirus" in the US is the true reason for the fall of the US currency in recent weeks. The EU summit is certainly a very important event. However, we do not believe that the euro is now strengthening "on expectations of a positive outcome". If you look closely at the chart of the currency pair, it becomes clear that the nature of the movement has not changed completely. The same frequent corrections, the same weak upward movement. Thus, we believe that the EU summit has absolutely nothing to do with it, and traders frankly ignore it. Moreover, there is no positive news from this event. But there are a lot of disappointing messages. The very fact that the politicians failed to reach an agreement within the agreed two days is a very bad call. The summit has been extended for a fourth day, and a new round of talks will begin later today. In fact, everyone is only interested in the so-called 750 billion euro fund for economic recovery after the pandemic. This amount has already been approved by all EU members, but five countries are opposed to the system of dividing this amount into grants and loans. Finland, Austria, Denmark, Sweden and the Netherlands are opposed to giving as much as 500 billion euros to the most affected countries and economic sectors free of charge. These countries believe that the entire amount should be given to those in need in the form of loans, but not in the form of gifts. And, as we wrote earlier, this position can be understood. At the same time, the President of the European Council, Charles Michel, lowered the offer first to 450 billion euros, and later to 400 billion euros, in order to convince the "lean four" and Finland to agree to the proposed financing option. Moreover, the countries of the "lean four" and Germany are even offered certain discounts in future contributions to the European budget. However, it seems that this proposal was left without approval. As a result, French President Emmanuel Macron said that he was ready to leave the summit rather than "sign a bad agreement".

Meanwhile, according to other information, Hungarian Prime Minister Viktor Orban told reporters that the number of disputed issues has been reduced to 4, but they may require another week of discussion. "Now there are four outstanding issues. This means that the European Council and Charles Michel did a good job, because at the beginning of the summit there were several dozen questions. We have a good chance to reach an understanding," Orban said. Also, the Prime Minister of Hungary said that his delegation had booked a hotel for a week and were ready to negotiate for at least a whole week, so as not to return home with nothing. The first point of contention is the structure of loans and grants in a package of 750 billion euros. "The best thing to do is to give money to those who need it most and let them spend it as they see fit, instead of conducting complex bureaucratic discussions," Orban commented on this point. The second is the amount of payments that each country will receive according to the recovery fund. The third is the payment of compensation payments as part of the formation of the EU's general budget for 2021-2027. Orban calls this system a privilege for rich countries, which these richest countries do not want to get rid of yet. The fourth issue is the rule of law.

How can we comment on the preliminary results of the summit? First, the parties are likely to reach a consensus. If the summit has already been extended for another two days and no one goes home, then the parties see that it is possible to come to a common agreement, the main thing is that each country is ready to compromise. Second, even if the summit ends in nothing, it will only mean an additional delay for the European economy. Of course, European leaders like to throw "loud phrases" and the phrase "the European Union is on the verge of death" has already been repeated several times at the summit, but we do not believe that this is really true. A 10% reduction in GDP (the maximum among EU countries) is not a death sentence. A serious blow to the economy - yes, but not death. Accordingly, discussions in absentia may continue for several more weeks, after which a decision will be made precisely at the next summit. Third, the "lean four" countries are most likely not going to try to reduce the amount of grants to 0. Most likely, their goal is to reduce this amount as much as possible, so sooner or later they will probably support Charles Michel with his next proposal. Well, the euro currency in any case continues to strengthen against the US currency in general. The "coronavirus" epidemic continues to rage in the United States, and the US government continues to calm the media with expressions that make many even more nervous. According to the latest information, Donald Trump continues to read his mantra that in America they just do a large number of tests, and the majority of patients have a mild form, which is expressed only by a runny nose. Based on all this, we believe that the euro continues to grow more expensive due to events in the US, and not on the sidelines of the European summit.

On the first trading day of the week, the European Union and the United States did not publish any important macroeconomic reports. On Tuesday, July 21, the situation with the calendar of macroeconomic events will not change at all, it is empty. Thus, traders will continue to follow the news from the European summit and from across the ocean about the spread of the COVID-2019 virus.

analytics5f163461d3490.jpg

The volatility of the euro/dollar currency pair as of July 21 is 69 points and is still characterized as "average". Thus, we expect the pair to move today between the levels of 1.1371 and 1.1509. Turning the Heiken Ashi indicator upward will signal the end of the next round of downward correction within the ascending trend.

Nearest support levels:

S1 – 1.1414

S2 – 1.1353

S3 – 1.1292

Nearest resistance levels:

R1 – 1.1475

R2 – 1.1536

R3 – 1.1597

Trading recommendations:

The EUR/USD pair has started a new round of corrective movement. Thus, it is now recommended to consider buy orders with targets of 1.1475 and 1.1509, but after the price rebounds from the moving average. It is recommended to open sell orders no earlier than when the pair is fixed below the moving average line with the first targets of 1.1353 and 1.1292.

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

Hot forecast and trading signals for the EUR/USD pair for July 21. COT report. Euro struggling to grow after the failed talks

EUR/USD 1H

analytics5f1647ccbb347.jpg

The euro/dollar pair rose for the third time to the level of 1.1430 on the hourly timeframe of July 20. This time, buyers managed to push this level, but the quotes failed to go far up. After it became clear that the EU summit could end in nothing, the fervor of the bulls noticeably decreased. As a result, we have a slightly paradoxical picture. On the one hand, we still have a pronounced upward trend, which is displayed by the ascending channel. On the other hand, the bulls push the pair up very reluctantly, with great difficulty. Each upward push is accompanied by an equally strong pullback or correction, which significantly complicates the process of trading the euro/dollar pair. Bears continue to rest, as they have nothing to do in the market before consolidating below the channel.

EUR/USD 15M

analytics5f1647e084053.jpg

Both linear regression channels are directed upwards on the 15-minute timeframe, signaling an upward trend in the most short-term plan. At the end of last week, we assumed that professional traders continued to buy the euro, which will be reflected in the new COT report. In practice, and so it turned out. The "non-commercial" category of traders (the most important and significant) opened new 9,648 Buy-contracts, and a total of 3,719 Sell-contracts during the reporting week. Thus, the net position in the non-commercial category has grown again and now stands at 112,124. Recall that the net position reflects the mood of market participants. If it is positive, the mood is bullish. If it's negative, it is bearish. We have a strong bullish interest in the euro. The last working days of the past week also ended with the euro's growth, so the new COT report, which will be released at the end of this week, can also show an increase in the number of Buy-contracts among non-commercial traders.

The fundamental background for the EUR/USD pair remained unchanged on Monday. Important macroeconomic statistics were not published on this day, so traders, in fact, had nothing to react to during the day. However, the pair did not stand in one place. It grew in the first half of the day, and fell in the afternoon. We believe that such movements are still extremely difficult to work with, despite the fact that the upward trend continues. Moreover, traders are now at a crossroads. On the one hand, the dollar is under pressure from the situation with the epidemic in the United States, which may end very badly for the US economy. On the other hand, the European Union summit has been going on for four days and it is far from certain that the 27 EU member states will be able to reach a common denominator in the negotiations. We, of course, assume that the countries of the "frugal four" are not going to stand until the "bitter end" and wait for Charles Michel to abandon the idea of providing even 400 billion euros in grants to the most affected by the pandemic. This means that the parties can come to a consensus on this issue, but still, you will agree that it is likely that it will take another meeting of the EU leaders to come to a final agreement. And this factor may become bearish for the euro, at least for a while.

Based on all of the above, we have two trading ideas for July 21:

1) Buyers clearly continue to dominate the market, as quotes remain above the Kijun-sen line and inside the ascending channel. But at the same time, they move the pair up with great difficulty. Buy orders remain relevant with the target resistance levels of 1.1486 and 1.1544, but traders should be clearly aware of the risks of opening positions at this time, as the pair is constantly being corrected. The potential Take Profit in this case is from 40 to 100 points.

2) Bears are now simply resting and waiting for buyers to stop suffering with the euro. Sellers do not have enough power to form a new downward trend. Thus, we can only wait for the price to consolidate below the Kijun-sen line, and ideally - below the ascending channel, and only then trade down to the support level of 1.1242. The potential Take Profit in this case is about 80 points.

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

AUDUSD holding above long term ascending support! Further push up expected!

analytics5f1640cb22cb8.jpg

Trading Recommendation

Entry: 0.70259

Reason for Entry: Ascending trendline support

Take Profit: 0.70513

Reason for Take Profit: -27.2% Fibonacci retracement

Stop Loss: 0.70191

Reason for Stop Loss: 23.6% Fibonacci retracement, moving average support

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

AUDUSD holding above long term ascending support! Further push up expected!

analytics5f1640cb22cb8.jpg

Trading Recommendation

Entry: 0.70259

Reason for Entry: Ascending trendline support

Take Profit: 0.70513

Reason for Take Profit: -27.2% Fibonacci retracement

Stop Loss: 0.70191

Reason for Stop Loss: 23.6% Fibonacci retracement, moving average support

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

Analysis and trading signals for beginners. How to trade the EUR/USD pair on July 21? Plan for opening and closing deals

Hourly chart of the EUR/USD pair

analytics5f163b8ea0f7b.jpg

Traders again could not decide in which direction to trade the pair on the first trading day of the week. To begin with, the price crossed the red resistance line, from which it had previously rebounded three times, but the upward movement did not work out. In fact, this is a false signal to buy. Yesterday's news can be interpreted as you like. The first thing that became known is that the EU summit is being extended for one more day, and its participants will continue to try to agree on the distribution of 750 billion euros, which are intended for the countries of the European Union most affected by the coronavirus epidemic. In the evening, information appeared in the media that they seemed to have succeeded, but it is better to wait in order to be sure of what is happening. If the aid package is nevertheless adopted at the summit (that is, it is approved by all 27 EU member states), the euro may continue its upward movement. If there is no positive result, then the euro may start falling. In any case, now traders are advised to exercise caution, as the market swings from side to side, and traders cannot clearly understand which way to move. We remind you that an equally strong factor that can deter traders from buying the US dollar (selling the EUR/USD pair) is the coronavirus epidemic in America, which not only does not subside, but is also growing in scale. The inaction of the White House is upsetting the foreign exchange market, as it seems that for US President Donald Trump, the lives and health of Americans do not matter the most, but the economy in order to be re-elected for a second term in November. And economic reports for today are generally not listed in the news calendar. In general, the situation is rather ambiguous.

Technical analysis still warns that the pair may start falling. The only problem is that in the end, the growth does not continue, and the fall does not begin. The market seems to be in standby mode. Thus, novice traders will also need to wait a bit for more favorable conditions. At the same time, we should clearly analyze how the market will react to the results of the EU summit. The following scenarios are possible on July 21:

1) Purchasing the euro is possible, but this will definitely require news that the EU economic recovery fund after the pandemic is approved. If such information is received in the media, then we can expect the euro to grow again. But to do this again, you will have to overcome the red resistance line, at least. In this case, the trade will open – we recommend setting Take Profit according to the volatility, that is, 50-60 points higher than the opening of the transaction.

2) As the pair continues to trade below the 1.1442 level, sales are still more preferable now with targets of 1.1371 and 1.1325. We have a new sales signal in the form of a rebound from 1.1442. The probability of the euro's fall will increase if positive results are not achieved at the summit.

Important speeches and reports (always contained in the news calendar) can greatly affect the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.

Beginners in the forex market should remember that every trade cannot be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.

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

Analysis and trading signals for beginners. How to trade the GBP/USD pair on July 21? Plan for opening and closing deals

Hourly chart of the GBP/USD pair

analytics5f163e9e749c3.jpg

The situation with the GBP/USD pair did not clear up for a long time. The descending trend line made it possible to consider selling the pound/dollar pair. However, the price already consolidated above it on the first trading day of the week. This means that sellers turned out to be weak, so now the British currency can start growing again. However, it is not so simple. In the analysis of the EUR/USD pair, we said that the markets now clearly do not know exactly in which direction to trade the euro. Roughly the same is observed now for the pound sterling. When there is no pronounced movement in one direction, and all segments of growth and decline in size and length are approximately the same, this indicates that an equilibrium has been formed in the market between supply and demand. In other words, the number of buyers and sellers of the pound is now equal, so the pair cannot form a new upward trend or a new downward trend. The COVID-2019 pandemic in the United States continues to speak against the US dollar, where individual states, cities and counties are beginning to quarantine again. Of course, the economy will start to slow down again and it will be difficult for the dollar to show growth in such conditions. But it will be difficult for the pound to continue increasing, as the key topic Brexit remains in limbo. You should keep in mind the UK's exit from the EU, which has been the key topic for traders in recent years. It is thanks to the contraction of the British economy against the background of Brexit and even more unhappy prospects that the pound has fallen against the US dollar in recent years. The news calendar for Tuesday, July 21 does not include UK and EU events. Thus, traders will not be able to react to news on that day.

Technical analysis now makes it possible for the pound to continue growing. But since the price has reached the level of 1.2664, from which it previously rebounded, which is clearly visible in the illustration, this time it is possible to rebound and move down. Thus, we advise novice traders to carefully monitor this level and the price behavior around it. Based on the technical constructions there are two possible scenarios:

1) Since the trend line has been overcome, and the level of 1.2664, which was presented as the first goal, has been reached, we now recommend waiting for the closing above this level. In this case, novice traders can try to work out the intermediate target of 1.2734 on July 21, which is obtained based on volatility calculations (the average daily distance of the pair's movement). In other words, we place the Take Profit order just below the 1.2434 level.

2) But sales, from our point of view, are risky to consider now. There could be an attempt to get a signal over a rebound from the 1.2664 level, which will formally allow you to open sales, but we do not advise trying to work with a round of correction. Although this does not mean that the pair can not fall on this signal to the area of the 1.2515 level.

Important speeches and reports (always contained in the news calendar) can greatly affect the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.

Beginners in the forex market should remember that every trade cannot be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.

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