Indicator analysis. Daily review on EUR / USD for July 31, 2020

Trend analysis (Fig. 1).

The market may continue to move upward from the level of 1.1849 (closing of yesterday's daily candle) with the target at 1.2103 - a 76.4% pullback level (blue dotted line).

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - down;

- Trend analysis - up;

- Bollinger lines - up;

- Weekly chart - up.

General conclusion:

Today the price may continue to move upward with the target at 1.2103 - a 76.4% pullback level (blue dotted line).

Another possible scenario is an upward movement to the upper border of the Bollinger line indicator 1.1990 (purple dashed line). From this level, a downward pullback is possible with the target at 1.1871 - a 14.6% pullback level (red dotted line).

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US economy collapsed in the 2nd quarter, so the dollar has no choice but to keep declining (the continuation of global growth

The presented provisional US GDP data for the second quarter showed all the sad state of the country's economy, which has experienced a spring closure period against the background of a coronavirus pandemic, as well as huge losses that may be eliminated for a considerable period of time.

According to the published statistics, the US economy fell by 32.9%, which is slightly better than the consensus forecast for a decline of 34.1%, but still cannot serve as some reassurance for investors. Of course, the numbers reflect what happened and do not guarantee that this state of affairs will continue in the third and fourth quarters. On the contrary, after already finding the bottom in the wake of the industrial production of vaccines for COVID-19, it will be possible to observe a sharp recovery in economic activity, accompanied by positive moods in the global financial markets.

In addition to the data and GDP from America, the GDP values of Germany also came out on Thursday, which were also negative, but not as much as in the States. The German GDP in quarterly terms declined by 10.1% against the forecast of decline by 9.0%. As can be seen when comparing the absolute values of the US and FRG GDP, here, if I may say so, Germany is in a more advantageous position. And when comparing the potential strength of the euro and the dollar, the former clearly wins. We expect that the strengthening of the European currency against the US currency one will only intensify in the short-term. It is also likely to decline against the pound, yen and franc, but if negative trends continue and the commodity market experiences pressure, the dollar may receive limited support against the Australian, New Zealand and Canadian dollars. On the other hand, currencies of developing countries will be under pressure, not only from the dollar, but also from the Euro.

Now, let's go back to the likely dynamics of the dollar against major currencies with the exception of commodities. Here, previously known factors will play against it: massive quantitative easing programs, the actual use of the dollar as a funding currency, as well as a new foundation - in fact, the disastrous state of the US economy, which may experience another shock from the presidential elections in the fall, when the confrontation between the Democrats and The Republicans will reach its climax and may result in direct clashes with all the resulting problems not only for America, but also for the entire world.

Forecast of the day:

The EUR/USD pair is trading above the level of 1.1850 amid global weakness in the US dollar. It will most likely continue to rise to 1.1950 if it consolidates above 1.1850.

The GBP/USD pair also has all chances to continue its rise to the level of 1.3200 if it holds above 1.3100.

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Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on July 31

Trading recommendations for the EUR / USD pair on July 31

EUR / USD

Analysis of transactions

Sell transactions opened at the level of 1.1750 did not bring much profit to traders, since the downward movement of the quote was just about 17 points. But the buy transactions, which were opened at the level of 1.1786, brought quite good profit of about 50 points.

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The drop in the euro yesterday came after the release of gloomy data on unemployment in the eurozone and weak data on the labor market in Germany. However, the report on the US GDP for the 2nd quarter, which was released in the afternoon, turned out to be better than the forecast of economists, so investors gained confidence in the rapid recovery of the world economy, which led to the increased demand of the European currency.

  • Open buy transactions when the quote reaches the level of 1.1895 (green line on the chart), targeting a rise to the level of 1.1935. The most important reports today are the upcoming data on the eurozone GDP, as well as the inflation rate, co confidently buy the euro if the figures turn out better than the forecasts. Take profit at the level of 1.1935.
  • Open sell transactions after the quote reaches the value of 1.1862 (red line on the chart), targeting a drop to the level of 1.1825. But before selling, make sure that the data for the eurozone are much worse than the previous one, as such will scare off new buyers in the euro and lead to a decrease in quotes in the trading chart. Take profit at the level of 1.1825.

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Trading recommendations for the GBP / USD pair on July 31

GBP / USD

Analysis of transactions

Sell transactions, which were opened when the quote reached the level of 1.2952, brought losses to traders yesterday. Fortunately, the succeeding buy transactions, opened when the quote reached the level of 1.2993, brought profit of about 30 points, covered the losses on the first trade.

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The pound continues to rise, taking advantage of the weakness of the US dollar. Many traders are also counting on the conclusion of the Brexit trade agreement, as such will strengthen the position of the pound in the world market in the future.

  • Open buy transactions when the quote reaches the level of 1.3140 (green line on the chart), targeting a rise to the level of 1.3195 (thicker green line on the chart). Take profit at the level of 1.3195.
  • Open sell transactions after the quote reaches the level of 1.3105 (red line on the chart). This is because a breakout of it will lead to a rapid decline in the quotes, with which the target level will be 1.3055. Take profit when the quote reaches the level of 1.3055.

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Comprehensive analysis of movement options for Palladium & Platinum (H4) on July 31, 2020

Minute operational scale (H4)

Early August - how Palladium & Platinum will behave - overview of movement options from July 31, 2020.

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#PAF (Palladium) Current Month

From July 31, 2020, the movement of #PAF (Palladium) will be determined by the development and direction of the breakdown of the boundaries of the 1/2 Median Line channel (2150.00 - 2102.00 - 2058.00) of the Minute operational scale fork - details of working out these levels are shown on the animated chart.

If the resistance level of 2150.00 is broken at the upper border of the channel 1/2 Median Line Minute and the Median line Minuette (2165.00), the upward movement of Palladium can be continued to the borders of the channel 1/2 Median Line (2230.00 - 2280.00 - 2330.00) of the Minute operational scale fork with the prospect of reaching the lower limit of ISL38.2 (2375.00) of the balance zone of the Minute operational scale fork

If the support level of 2058.00 breaks, the downward movement of #PAF may continue to the warning lines - UWL38.2 (2012.00) and UWL61.8 (1944.00) - Minute operational scale fork.

The markup of #PAF (Palladium) movement options from July 31, 2020 is shown on an animated chart.

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#PLF (Platinum) Current Month

The development of the #PLF (Platinum) movement from July 31, 2020 will be determined by the development and direction of the breakdown of the boundaries of the 1/2 Median Line channel (949.0 - 926.0 - 904.5) of the Minute operational scale fork - details of the movement marking in this zone are shown in the animated graphics.

If the resistance level of 949.0 is consistently broken at the upper border of the 1/2 Median Line Minute channel and the upper border of ISL38.2 (954.0) equilibrium zone of the Minuette operational scale fork, the upward movement of Platinum will be directed to the borders of the 1/2 Median Line Minuette channel (975.5 - 988.5 - 1001.0) with the prospect of reaching the lower bound of ISL38.2 (1008.5) balance zones of the Minute operational scale fork.

With a joint breakdown of the support level of 904.5 at the lower border of the channel 1/2 Median Line Minute and the initial SSL line (899.5) of the Minute operational scale fork, the downward movement #PLF can continue to the goals:

FSL end line (862.0) of the Minuette operational scale fork;

warning line LWL38. 2 (854.0) of the Minute operational scale fork;

LTL Minute control line (832.0).

Details of the #PLF (Platinum) movement options from June 31, 2020 are shown in the animated chart.

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The review is compiled without taking into account the news background, the opening of trading sessions of the main financial centers and is not a guide to action (placing "sell" or "buy" orders).

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Brief trading recommendations for EUR/USD on 07/31/20

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The EUR/USD currency pair showed a sharp upward mood once again, following the yellow trend channel. As a result of which, the local maximum of 1.1805 ---> 1.1904 was updated, as well as the slope of the trend lines was changed.

The technical analysis coincides with the expectations of market participants regarding the price following the direction of trend lines, as a result of which the recommendations of the last analytical review coincided, having a profit on the trading deposit.

The US dollar, as before, is experiencing strong pressure, where traders receive signals of its weakening not only from technical, but also from fundamental analysis.

Yesterday, in terms of the economic calendar, the United States Department of Labor released a report on claims for unemployment benefits. Based on the report, it can be seen that the number of initial applications increased by 12 thousand, from 1,422,000 to 1,434,000, and the number of repeated applications for benefits increased immediately by 867,000 from 16,151,000 to 17,018,000.

The report indicates the weakness of the US labor market, which entails a weakening of the US dollar.

The pressure on the US economy did not end there.the first estimate of GDP for the second quarter, which became a record once again, was a blow. The annual decline in GDP is almost 10%, and the quarterly decline is more than 30%. Now, all questions about the weak dollar immediately disappear, seeing the details of the fundamental analysis.

Regarding the current development of the quote, the vertical movement of the price can be seen, where market participants, as before, follow the direction of the trend lines. Overbought of the European currency is already something inherent in the market, but this does not stop traders who continue to take positions to buy.

Based on the above, it can be assumed that in case of consolidating the price above the level of 1.1905, the quote continued to follow the upper border of the yellow trend channel 1.1970, but there is only one note. Today, the indicators on inflation and GDP will be published in Europe, where if signals of a slowdown in the economy are confirmed, the euro may well come under pressure from sellers.

As a result, you can consider selling positions lower than 1.1880, towards the lower trend line of yellow – 1.1840/1.1850.

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GBP/USD: plan for the European session on July 31 (analysis of yesterday's trade). Pound breaking through to new highs, ignoring

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

My fears about the possibility of a downward correction of the British pound were not justified. The US dollar's weakness continued to drive the pound to new highs. If you look at the 5-minute chart and remember my forecasts for yesterday morning, you will see how after the first point formed for entering the market at the breakdown and consolidating above the resistance of 1.3008, buyers very quickly tightened the pound to the resistance of 1.3075, where you could watch the sales. A repeated return to this range and its breakout formed a new signal to open long positions, as a result of which we hit the resistance of 1.3138, for which the main fight is now unfolding. Bulls need to exit above this level, which forms the next point for entering the purchase in anticipation of continuing the bull market to the high of 1.3192. The 1.3228 area will be the long-term target of the bulls, where I recommend taking profits. But a more interesting moment for opening long positions may be the downward correction of GBP/USD in the first half of the day to the support area of 1.3075. But it is best to make purchases there only after a false breakout has formed. I recommend opening long positions immediately for a rebound only after testing the low of 1.3009, counting on a correction of 30-40 points within the day. The moving averages are also located there.

In addition, you should take note that the Commitment of Traders (COT) reports for July 21 recorded another increase in short and long positions, and it is obvious that there are more bears, despite the active opposition of buyers of the pound. This suggests that the growth of the market is not due to the British pound's strength, but because of the US dollar's weakness. Problems with Brexit and uncertainty about the prospect of economic recovery have not gone away. The COT report indicates that there was an increase in short non-commercial positions from the level of 56,761 to the level of 61,310 during the week. Long non-commercial position increased from the level 43 to level 175 46 230. As a result, the non-commercial net position increased its negative value to -15,080 against -13,568, which indicates the likelihood of a sharp fall in the pound after the US dollar regains strength.

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

Sellers of the pound need to protect the resistance of 1.3138, since forming a false breakout there will be the first signal for a possible downward correction of the pair to the support area of 1.3075. An equally important task is to break through and consolidate under this range, which will lead to the demolition of a number of bull stop orders and a larger decline in GBP/USD to the support area of 1.3009, where the lower border of the current ascending channel passes. They recommend taking the profit. If bears are not active in the resistance area of 1.3138, I advise you to postpone short positions until the test of the high of 1.3192 or sell the pound immediately on the rebound from the larger resistance of 1.3228 in anticipation of a correction of 30-40 points within the day.

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Indicator signals:

Moving averages

Trading is carried out above 30 and 50 moving averages, which indicates the continued growth of the pound.

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

Bollinger Bands

Growth will be limited by the upper level of the indicator in the area of 1.3145. In case the pair falls, support will be provided by the lower border of the indicator at 1.3009.

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.
  • The MACD indicator (Moving Average Convergence/Divergence - convergence/divergence of moving averages). Fast EMA period 12. Slow EMA period to 26. The 9 period SMA.
  • Bollinger Bands (Bollinger Bands). The period 20.
  • Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
  • Long non-commercial positions represent the total long open position of non-commercial traders.
  • Short non-commercial positions represent the total short open position of non-commercial traders.
  • The total non-commercial net position is the difference between short and long positions of non-commercial traders.
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EUR/USD: plan for the European session on July 31 (analysis of yesterday's trade). Euro continues to rise, and it seems that

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

My fears about a slowdown in the bullish momentum of the European currency turned out to be wrong, and yesterday, after breaking the resistance of 1.1762, which I paid special attention to in the forecast for the second half of the day, EUR/USD resumed to grow with a new force. If you look at the 5-minute chart, you will see how the bulls break through 1.1762 and after a correction from the 1.1804 level, where sales were noticeable, take control of the market again. Large purchases in today's Asian session have already pushed the euro to the 19th figure. At the moment, the bulls should break through and consolidate above this level, which will open a direct road to new highs of 1.1940 and 1.1987, where I recommend taking profits. We should not forget that today is filled with different fundamental statistics for the countries of the eurozone, which may lead to a small downward correction of the pair in the first half of the day, which will only benefit the bulls. Forming a false breakout in the support area of 1.1840 will be a good signal to open long positions to continue the bullish trend. You can also buy EUR/USD immediately on the rebound from the 1.1777 support, where both the moving averages and the lower border of the ascending channel pass.

Let me remind you that the Commitment of Traders (COT) reports for July 21 recorded a sharp increase in long positions and a reduction in short ones, which tells us about the return of investors' interest in risky assets amid confusion that is happening in the US due to the coronavirus, the presidential election and the fall in Treasury yields. The report shows an increase in long non-commercial positions from 194,252 to the level of 204,185, while short non-commercial positions, on the contrary, decreased from the level of 83,340 to the level of 79,138. As a result, the positive non-commercial net position increased to 125,047 against 110,912, which indicates an increase in interest in buying risky assets even at the current fairly high prices.

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

The bears should make another attempt to stop the bull market, and to do this, you need to protect the high of 1.1900. Forming a false breakout there will be a signal to open short positions in the euro in anticipation of a decline to the support of 1.1840, just below which the moving averages pass. An equally important goal will be a breakout and consolidating below this range, which will form an additional signal to sell EUR/USD in order to fall to a low of 1.1777, where the lower border of the ascending channel passes. Therefore, I recommend taking profit at this level. Only a break in this range will start a downward correction for the euro and lead to a low of 1.1704. If euro sellers are not active in the resistance area of 1.1900 in the first half of the day, and today there are quite a lot of important reports on the state of the eurozone economy, especially on inflation and GDP, it is best to postpone short positions until the highs of 1.1940 and 1.1987 are updated and sell there for a rebound in anticipation of a correction of 25-30 points within the day.

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Indicator signals:

Moving averages

Trading is carried out above 30 and 50 moving averages, which indicates a continuation of the bull market.

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

Bollinger Bands

Growth will be limited by the upper level of the indicator around 1.1925. In case of a decline, support will be provided by the middle border at 1.1840, and the euro can be bought on a rebound from the lower border at 1.1760.

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.
  • The MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages). Fast EMA period 12. Slow EMA period to 26. The 9 period SMA.
  • Bollinger Bands (Bollinger Bands). The period 20.
  • Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
  • Long non-commercial positions represent the total long open position of non-commercial traders.
  • Short non-commercial positions represent the total short open position of non-commercial traders.
  • The total non-commercial net position is the difference between short and long positions of non-commercial traders.
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Technical Analysis of GBP/USD for July 31, 2020:

Technical Market Outlook:

The GBP/USD pair has made another local high at the level of 1.3141, just a little above the technical resistance located at 1.3121, which is rather another confirmation of the positive sentiment despite the extremely overbought market conditions. The bulls are still in control over this market and the next target for bulls is seen at the level of 1.3199. The nearest support is seen at the level of 1.3067 and 1.3047. Please notice the extremely overbought market conditions despite strong and positive momentum might result in dynamic pull-back soon. Today is the last day of the month, so the end of the mont's flos might interrupt the bullis plans.

Weekly Pivot Points:

WR3 - 1.3215

WR2 - 1.2993

WR1 - 1.2929

Weekly Pivot - 1.2717

WS1 - 1.2632

WS2 - 1.2427

WS3 - 1.2355

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 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).

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Technical Analysis of EUR/USD for July 31, 2020:

Technical Market Outlook:

The EUR/USD pair has broken through the key long-term Fibonacci retracement located at the level of 1.1822 and made a new high at the level of 1.1904 ( at the time of writing the analysis). The bulls are still in control of the market and both momentum and stochastic indicators are showing a possible up wave extension towards the level of 1.2000. Please notice, today is the last day of the month, so the end of the month's flows might interrupt the bulls plan to prosper. The nearest technical support is seen at the level of 1.1813 - 1.1790.

Weekly Pivot Points:

WR3 - 1.2024

WR2 - 1.1839

WR1 - 1.1768

Weekly Pivot - 1.1582

WS1 - 1.1509

WS2 - 1.1334

WS3 - 1.1257

Trading Recommendations:

The key long-term technical resistance is seen at the level of 1.1540 has been violated, so the EUR/USD pair confirmed the up trend. The next targets in the long-term are seen at the levels of 1.1813 - 1.1851. There is no indication of any bigger correction to come, so all the dips should be bought until the level of 1.1347 is clearly violated.

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Who hasn't made profit on Bitcoin yet?

There are only 7% of all Bitcoins currently in circulation that were purchased more than today's figures. TThis is evidenced by data from the Glassnode service. Accordingly, 9 out of 10 investors have already earned on the first cryptocurrency. But experts are sure that it is too early to fix the profit.

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What the statistics say

The curve of the address chart with profitable Bitcoins has not yet risen above the 90% indicator this year. Moreover, in March, the number of investors with profits in BTC was less than half of the total number. The last time this indicator was at 93-94% was in July-August 2019.

Nine weeks ago, the same Glassnode reported on the excessive passivity of the holders of the first cryptocurrency. At that time, according to this analytical service, about 60% of the bitcoins in circulation did not move at all during the year. And even then, experts drew attention to the fact that the statistics repeat the situation in 2016, when the Bitcoin bull market began after stagnation.

What the experts say

Many analysts believe that the peak has not yet been reached. In particular, the media quoted a representative of the Amsterdam Stock Exchange, who predicts growth to $ 15,000 per bitcoin. However, with the condition that for such a jump, the cryptocurrency must overcome the "resistance zone" at around $ 11,200-11,700.

This assumption is bolder than the forecasts made by individual traders at the beginning of this week. Their maximum expectations were around the $14,000 mark.

Moreover, American analysts do not rule out that many investors will want to take profits, but this does not mean that the price of Bitcoin will stop rising. Today, you can already hear forecasts that we will see both $ 20,000 and $ 50,000 by the end of the year, and the most daring experts have already started talking about six-digit values.

However, there are also experts who point out that in addition to the upper "psychological barrier" that the cryptocurrency must overcome for further growth, there is also a lower "psychological barrier". They claim that if the price declines to $10,300, Bitcoin will start a prolonged decline.

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Technical Analysis of BTC/USD for July 31, 2020:

Crypto Industry News:

The Australian Securities and Investments Commission (ASIC) asks people to be cautious about Bitcoin scam sites promoted by celebrities.

According to the commission's public warning, the Australian regulator has received a series of reports of bogus crypto sites allegedly being promoted by well-known companies, new sites, and government agencies. Some even seem to have the backing of national celebrities like Waleed Aly, Mike Baird, Dick Smith, and Virginia Trioli.

ASIC provided a number of examples as part of its warning. One of them mentions Bitcoin Evolution as a bogus cryptocurrency trading bot. The scam site was reported by other countries as well, including the Philippines and Malta. Other similar scams operate under the names Bitcoin Revolution and Bitcoin Trader.

These sites are advertised using fake celebrity endorsements that pop up on social networks such as Facebook, Instagram, LinkedIn, and Twitter. When an investor clicks on an article or ad, it is often sent to a "mirror site" - a bogus version of a legitimate news site such as ABC News.

ASIC explained that scammers combine online search terms to generate fake news articles and social media ads that contain fake recommendations from celebrities or the media.

Search engines and news sites often republish these articles or ads, perpetuating the excitement and interest in the cryptocurrency. This drives a shopping frenzy, and as more and more people buy the cryptocurrency, its value goes up and other traders grab on to what drives it up even more, then scammers sell their own share of the overvalued cryptocurrency. This causes its value to decline and victims hope to get back their original investment.

Australians recently reported 1,810 cryptocurrency fraud cases in 2019, totaling over AU $ 21.6 million ($ 14.9 million). According to a study by Scamwatch, a splinter of the Australian Competition and Consumer Commission, younger Australians between the ages of 25 and 34 were the hardest hit by cryptocurrency investment scams.

Technical Market Outlook:

Since the BTC/USD pair had made a possible Double Top price pattern at the level of $11,317, the market started to consolidate the recent gains and is still doing so.The momentum is still strong and positive, but is decreasing. In a case of a up wave extension, the next target is seen at the level of $11,855 and $11,500. The nearest technical support is located at the level of $10,855 and $10,430. There is the last day of the mont and current monthly candle looks bullish.

Weekly Pivot Points:

WR3 - $11,362

WR2 - $10,720

WR1 - $10,360

Weekly Pivot - $9,731

WS1 - $9,314

WS2 - $8,690

WS3 - $8,269

Trading Recommendations:

The volatility on Bitcoin has significantly increased, but still 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. The key long-term technical support is located at the level of $7,897.

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Technical Analysis of ETH/USD for July 31, 2020:

Crypto Industry News:

The story of PlusToken, one of the biggest scams in the cryptocurrency industry, unveils another card as reports of the arrest of nearly thirty suspects related to the case surfaced. PlusToken extorted nearly $ 6 billion from investors.

As many as 27 members of PlusToken's core team have been arrested by Chinese police, according to a report by local ChainNews magazine on July 30. According to the report, the total amount of investors' losses in the PlusToken fraud is estimated at 40 billion Chinese yuan, which is 5.7 billion dollars. The report also mentioned that investigators also arrested other 82 major members of the system.

Dovey Wan, co-founder of blockchain-based investment firm Primitive Ventures, tweeted that the owner key is already "burned", so technically he won't be able to commit a fraud.

"I sincerely hope this attempt will be a good educational experience for the Chinese community to start a successful DAO (Decentralized Autonomous Organization)," said Wan.

PlusToken has proven to be one of the biggest cryptocurrency scams in history. The project was initially presented as a South Korean based stock exchange offering high returns for investors. Ultimately, the entire operation was exposed as a fraud after several million interested parties said they had not been able to withdraw their investment. As previously reported, it was estimated that investors were defrauded for a total of around $ 5 billion.

Technical Market Outlook:

The ETH/USD pair has made a new local high at the level of $341.37 after the period of local consolidation was over. The bulls are still in control of the market and will try to continue the up trend soon. The next target is seen at the level of $355 and the nearest technical support is located at the level of $305.20 and $300.00. Please notice, the momentum is decreasing as the price go up, so there is a clear bearish divergence made at the H4 time frame. Today is the last day of the month end and the current monthly candle looks bullish.

Weekly Pivot Points:

WR3 - $435.28

WR2 - $378.51

WR1 - $351.41

Weekly Pivot - $292.40

WS1 - $265.43

WS2 - $206.30

WS3 - $178.38

Trading Recommendations:

The volatility on Ethereum is higher than usual, so all the dynamic moves up and down might reverse quickly. The larger time frame trend on Ethereum remains down and as long as the level of $365 is not violated, all rallies will be treated as a counter-trend corrective moves. This is why the short positions are now more preferred. The key long-term technical support is seen at the level of $174.82.

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Analysis and trading signals for beginners. How to trade the EUR/USD pair on July 31? Plan for opening and closing deals

Hourly chart of the EUR/USD pair

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The EUR/USD pair consolidated below the rising channel yesterday, which already gave hope to traders that the euro would fall. However, there were several important macroeconomic reports in the European Union and the United States released during the day, which contributed to the change in the intraday mood of traders. As a result, everything returned to the scenario that we observe every day - the fall of the US currency. The MACD indicator gave a signal to buy (circled in red) and all sales had to be closed based on this signal. And after the pair returned to the ascending channel, it was already possible to open new long positions (Long, buy).

The most significant highlight of the day was the release of America's second-quarter GDP. GDP - Gross Domestic Product - is the most important indicator of the state of the economy, since it reflects the change in the sum of the values of all goods and services produced in the country for a certain period. Yesterday's GDP report showed that in the second quarter, compared to the first, goods and services were produced by 32.9% less. This is a huge reduction that no one has seen, at least since the 1940s, when such calculations began to be carried out at all. Thus, in general, it is not at all surprising that the euro has resumed to grow. The European Union issued several important reports in the morning, which were also rather weak. For example, in Germany, GDP in the second quarter decreased by 10.1% compared to the first, and the consumer price index (inflation) to -0.1% y/y and to -0.5% m/m. Deflation was already observed in Germany in July (falling prices). From an economic point of view, deflation does not contribute to GDP growth, therefore the central bank and the government of any country try to avoid such a process. However, in times of crisis, deflation or hyperinflation is normal. And the reports from Germany themselves are important because the German economy is considered the locomotive of the entire European Union, the most important part of it.

The following scenarios are possible on July 31:

1) Buying the euro is still relevant, as the euro/dollar pair returned to the upward channel. Thus, today we recommend buying the pair if it remains inside the ascending channel with the targets of resistance levels for July 31 - 1.2927 and 1.2004. It is advised to exit purchases upon reaching any target level or upon a downward reversal of the MACD indicator, which will indicate the beginning of a fall in quotes. A correction is possible on Friday.

2) We advise you to start selling the currency pair again after consolidating below the ascending channel, although in general, selling now contradicts the direction of the main trend, that is, they are dangerous in terms of risks. However, if the price breaks the ascending channel again, then you can sell with targets at the support levels of 1.1768 and 1.1691. The second target is quite distant, so you can take profit at the level of 1.1768.

What's on the chart:

Support and Resistance Price Levels - Levels that are targets when buying or selling. You can place Take Profit levels near them.

Red lines - channels or trend lines that display the current trend and show which direction it is preferable to trade now.

Arrows up/down - indicate when you reach or overcome which obstacles you should trade up or down.

MACD indicator is a histogram and a signal line, the crossing of which is a signal to enter the market. It is recommended to use in combination with trend lines (channels, trend lines).

Important speeches and reports (always contained in the news calendar) can greatly influence 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

Elliott wave analysis of GBP/JPY for July 31, 2020

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GBP/JPY is ready to test the resistance line near 137.85 and break above here. If so, it will rise higher to 139.80 as the next upside target. However, in the longer-term, we are looking for much more upside pressure and a rally to 148.32.

Support at 136.07 will be able to protect the downside for the test and break above the resistance line at 137.85.

R3: 138.34

R2: 137.85

R1: 137.39

Pivot: 136.67

S1: 136.34

S2: 136.07

S3: 135.64

Trading recommendation:

We are long GBP from 135.48 and we will move our stop higher to break-even at 135.48

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

Elliott wave analysis of EUR/JPY for July 31, 2020

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EUR/JPY is ready to break above minor resistance at 124.29 which will call for a continuation higher towards 125.82 and 127.38 on the way towards the next upside target at 129.26. We need to be aware that a failure to break above resistance at 124.29 will lead to a prolonged corrective phase and a retest of support at 122.80 before the next impulsive rally above 124.29 is seen. A break below support at 123.30 will confirm that a more prolonged corrective phase is developing.

R3: 125.05

R2: 124.85

S3: 124.30

Pivot: 123.92

S1: 123.60

S2: 123.30

S3: 122.80

Trading recommendation:

We are long EUR from 123.35 and we will move our stop higher to 123.25. If our stop is hit, we will re--buy EUR at 122.90.

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

Forecast for EUR/USD on July 31, 2020

EUR/USD

US President Donald Trump threw a bit of confusion into the markets by proposing to postpone the presidential vote from November 3 to a later date on the grounds that he believes too many voters have started voting by mail. Later, Trump abandoned the idea of postponing the elections, but the markets worked out the "joke": S&P 500 -0.38%, euro +56 points.

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Yesterday's growth has seriously changed the technical picture of the euro. First of all, the price went beyond the upper border of the global price channel, built on the highs of July 2008 and May 2014. Now this channel does not exist; instead, after creating a new peak, a new one will form.

Yesterday's trading volume was not lower than the volumes of the last four days. This confirms the strength of the given momentum, now the growth target is the 1.2040/55 range. The reference point for the goal is the low of July 2017. The chances of forming a divergence between the price and the Marlin oscillator are already small, although this option is possible. This creates its own risks for opening new longs for the pair.

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The situation is completely upward on the H4 chart: the Marlin oscillator is moving up, the price is above the indicator lines. Growth in the target range of 1.2040/55 is possible even after a pullback. Safe for growth, the price may pull back to the 1.1806 level - to the July 29 high. Consolidating below the level, but even more reliable, consolidating under the MACD line, will mean the end of local growth.

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

Forecast for AUD/USD on July 31, 2020

AUD/USD

The Australian dollar was down 70 points towards the evening on Thursday. The currency relatively calmly accepted the news of a 32.9% drop in US GDP for the second quarter (the expectation was even worse: -34.5%), but it could not stand US President Donald Trump's announcement of his intention to postpone the presidential election to a later date. A few hours later, Trump refused his offer, but the aussie showed an increase of 7 points by the end of the day.

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The price is struggling in the upper border of the target range of 0.7190-0.7225 this morning, the success of which will lead to an increase to 0.7296 (January 2019 high). The triple divergence on the Marlin oscillator will remain. As a result, we expect a reversal of the Australian dollar either from the current levels or from 0.7296.

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The possibility of forming a divergence remains. Visually, this possibility will remain even if the price rises to 0.7296. We are waiting for the development of the situation. Opening positions today in any direction is associated with an increased risk of uncertainty.

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

Forecast for USD/JPY on July 31, 2020

USD/JPY

The Japanese yen continues to develop according to the main scenario: a consistent decline to the target levels of 103.80, 102.45. The price forcefully overcame the 104.60 level on the daily chart, about 60 points to the nearest at 103.80. It seems that the level will be reached, as the readings of the indicators are decreasing and strong.

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The signal line of the Marlin Oscillator on the four-hour chart has turned down from the border of the growth territory.

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

Hot forecast and trading signals for the GBP/USD pair on July 31. COT report. Traders do not see the problems of the UK economy,

GBP/USD 1H

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The GBP/USD pair also continues its upward movement, even stronger and more confident than the EUR/USD pair. Buyers managed to overcome the second resistance level of 1.2988 this week, so now the road is open to the next target of 1.3174. The upward trend line is still relevant and supports bull traders. There are no other traders on the market now. As in the case of the euro, the pair cannot even get close to the critical Kijun-sen line, below which a trend reversal could be expected. Thus, sellers continue to stay out of the market and wait for the bulls to give them a chance.

GBP/USD 15M

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Both linear regression channels are still directed upwards on the 15-minute timeframe, so there are no prerequisites for changing the trend direction at the moment. The latest Commitments of traders (COT) report on the British currency alerted market participants. The pound sterling again grew against the US dollar during the reporting period (July 15-21), however, the "non-commercial" category, the most important, opened more Sell-contracts than Buy at this time. In just a week, non-commercial traders opened 4,500 new Sell-contracts and 3,000 Buy-contracts. Thus, the net position has decreased by about 1,500, which means that the bearish mood has strengthened among professional traders. The commercial category of traders also did not open Buy-contracts, but got rid of them, closing almost 5,000. Thus, both groups of traders did NOT increase their longs, nevertheless, the pound grew in price and continues to rise to this day. We still believe that such behavior of large players is evidence of an emerging trend change, but at the same time we admit that it could be an accident. Today's new COT report will show you how things are. If the net position for non-commercial traders decreases again (which would mean an increase in bearish sentiment), it will be quite strange.

The fundamental background for the GBP/USD pair also remains the same. No important communications have been received from the UK in recent days. Therefore, the latest information that could interest traders was about yet another failure of the Brexit negotiations and several reports that the deal was not achievable in principle. Michel Barnier still gave hope to the market and said that an agreement is still possible, but so far it looks like fantasy. Thus, the fundamental background, which continues to push the pair upward, is now coming exclusively from overseas. If the Federal Reserve meeting and its results were completely ignored by traders, then yesterday's GDP report only added fuel to the fire and increased the desire of market participants to buy the pound sterling. Thus, the general conclusion remains the same: we believe that the pound sterling is growing unfairly in some way, as the situation in Britain is now not much better than in the United States, if we consider the economic side of the issue. Nevertheless, the coronavirus and riots, along with the political crisis, are still outweighed. Accordingly, the pound may continue to grow further, but a downward reversal may be abrupt and unexpected, as traders could remember all the problems Britain has already faced and will surely face in 2020 and 2021.

There are two main options for the development of events as of July 31:

1) Buyers are still the dominant traders in the pound/dollar market. The second target for this week was overcome yesterday - the resistance level of 1.2988. Thus, it is now recommended to keep long positions open with the target of the resistance level of 1.3174. In this case, the potential Take Profit will be about 90 points.

2) Sellers are advised to start considering the possibility of opening short positions with the target of the Senkou Span B line (1.2707), but for this they need to wait until the Kijun-sen line (1.2916) and, accordingly, the upward trend line have been overcome. Sellers will have a good chance of forming a downward trend below these two barriers. In this case, the potential Take Profit is about 170 points.

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

Overview of the GBP/USD pair. July 31. The US economy showed the strongest decline since the 1940s. Donald Trump proposed

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - upward.

CCI: 146.3113

If the European currency was still making sluggish attempts to start correcting, the pound continued to grow strongly all this time without any signs of correction. The pound ignored the Fed's meeting the day before yesterday as if it was a meeting of the Central Bank of Zimbabwe and had nothing to do with the pound/dollar currency pair. Thus, despite the fact that there was nothing optimistic for the US currency at this meeting, and the US dollar had every reason to continue falling, we believe that traders of the GBP/USD pair simply continue to ignore the entire macroeconomic background. Given the fact that no optimistic macroeconomic or fundamental background is currently coming from the Foggy Albion, the conclusion is self-evident: market participants continue to pay great attention to the "coronavirus" pandemic in the United States, the strongest economic, political and social crisis in this country. There can be no other explanation for why the British pound is growing.

On Thursday, the UK again did not publish any macroeconomic reports. Thus, all the attention was on the United States where the second-quarter GDP was expected to be published. The figure announced by the Bureau of Economic Analysis is hardly optimistic, however, it is still slightly better than forecasts. -32.9% q/q/. Market participants expected to see from -34% to -35%. On the one hand, the value is still depressing, on the other – it is still better than the forecasts, and on the third – traders did not care that the forecasts were even worse. The British pound rose again. Other reports from overseas were no longer important. However, the number of new primary applications for unemployment benefits for the reporting week was 1.434 million, and the total number of secondary applications (real unemployment) – 17 million and increased compared to the value of a week ago by 800 thousand. Thus, first, we can conclude that the real unemployment in the country is higher than Jerome Powell believes, and second, it also has a tendency to grow in recent weeks, which can not be attributed to a sharp increase in coronavirus diseases. If this connection is really present, then a new period of decline may come for the American economy, instead of the "rapid and powerful recovery in the third and fourth quarters" that Donald Trump promised.

Meanwhile, in the White House, something happened that the most ardent skeptics of Donald Trump's rule have long been waiting for. The American President via Twitter proposed to postpone the presidential election in 2020 because of the "coronavirus" epidemic and fears that the vote "by mail" will be inaccurate and fraudulent. "This will be a disgrace to America," Trump wrote. As usual, the American President did not say why he believes that the election by mail will be "fraudulent", especially given the fact that according to all the latest opinion polls and research, it is he who is significantly behind Joe Biden and if anyone is interested in election fraud, it is he himself. However, Trump advocates that American voters should be able to vote "correctly, reliably and safely". In fact, Trump's most ardent opponents spoke about this proposal a few months ago. A lot of opposition forces in the United States expect Trump to play foul in the election or try to postpone the election itself. As we can see, the president started from afar, voluntarily offering to postpone the election for an indefinite period. Clearly, time is playing against Trump right now. If the US leader was given at least another year, it is likely that during this period, a cure for COVID-2019 would be found, and the economy would at least be able to revive. And now, with three months remaining before the election, it is almost impossible to do this. Especially given the current levels of coronavirus contamination in the United States. Thus, we expect the continuation of the "marleison ballet" under the title "Trump and the election" in any case. It is obvious that this story will have a very interesting sequel, that's just whether it will be beneficial for the American economy and the dollar?

Meanwhile, the number of victims from the "coronavirus" in the United States has exceeded 150,000. Well, Donald Trump at a regular briefing in the White House said the following: "I believe in hydroxychloroquine. I used it. Many, many people agree with me." A curtain. To be honest, we once again do not know how to react to such a statement by the US leader. The country's chief infectious disease specialist and epidemiologist, Anthony Fauci, has repeatedly denied the effectiveness of hydroxychloroquine (a drug for malaria) as a treatment for COVID-2019. "Most clinical trials that have studied the effectiveness of hydroxychloroquine have shown that it is ineffective in coronavirus," Fauci said. At the same time, Twitter banned Trump Jr. for posting a video in which some doctors recommended the use of hydroxychloroquine as therapy against "coronavirus." In general, the factory of the absurd continues.

Meanwhile, the pound continues to break all records, without ceasing to grow. On the last trading day of the week, only a few minor publications are planned in the US, and none at all in the UK. However, it will now be interesting to wait and see how much UK GDP will shrink in the second quarter of 2020. Recall that this indicator will be published on August 10 and assumes a decrease of 20.4%, which is also a lot. Thus, we still believe that trading the pound/dollar pair should only follow the trend, but also be prepared for the fact that this most upward trend can end at any moment, because the fundamental and macroeconomic picture in the Foggy Albion is no less depressing than overseas.

From a technical point of view, all indicators of the "linear regression channels" system are directed upwards, so there are no signs of a correction beginning at the moment. In any case, you should first wait for the quotes to be fixed below the moving average line, and only after that, you can consider the possibility of trading lower. There is no news about the negotiations on the Brexit agreement between London and Brussels at the moment, and there is no news about the "coronavirus" in the UK.

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The average volatility of the GBP/USD pair continues to remain stable and is currently 110 points per day. For the pound/dollar pair, this value is "high". On Friday, July 31, thus, we expect movement within the channel, limited by the levels of 1.2953 and 1.3173. Turning the Heiken Ashi indicator downward will indicate a new round of downward correction.

Nearest support levels:

S1 – 1.2939

S2 – 1.2817

S3– 1.2695

Nearest resistance levels:

R1 – 1.3062

R2 – 1.3184

R3 – 1.3306

Trading recommendations:

The GBP/USD pair continues to move up on the 4-hour timeframe. Thus, today it is recommended to stay in purchases of the British currency with the goals of 1.3173 (the level of volatility on July 31) and the Murray level of "5/8" - 1.3306, before the reversal of the Heiken Ashi indicator downward. Short positions can be considered no earlier than fixing the price below the moving average with the first goal being the Murray level of "0/8" - 1.2695.

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

Overview of the EUR/USD pair. July 31. The Fed left monetary policy unchanged and does not see "light at the end of the tunnel".

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - upward.

CCI: 121.9175

The EUR/USD currency pair continues to stay within the upward trend. In the last two trading days in the United States, there were quite important and significant events, and all of them, by and large, were ignored by market participants. In general, the US dollar continues to fall in price and at the moment, buyers do not even want to fix part of their profitable long positions in order to adjust the euro/dollar pair slightly. Thus, we can't do anything else but declare that the absolute upward trend is still there. The Heiken Ashi indicator has turned down a couple of times in recent days, but the US dollar has not found any fundamental support for itself. Therefore, it could not fall even to the moving average line, which is a reference point for any correction.

We decided not to force events and wait for the reaction of both Europeans and Americans to the results of the Fed meeting. Recall that the Fed announced the results of the meeting late yesterday, when the US trading session was already over, and the European one was already closed. Thus, in fact, neither the Europeans nor the Americans had the opportunity to fully work out all the decisions of the Fed, as well as the speech of Jerome Powell. However, as it turned out at the same time, traders did not have much to react to. The regulator left all monetary policy parameters unchanged. Thus, the most interesting event on Wednesday was automatically Jerome Powell's speech. What did the Fed chief say?

There were many theses. We will not list all of them, we will focus only on the really important ones. And the most significant thesis is Powell's statement that until the "coronavirus" is defeated or at least curbed, there will not be a full economic recovery in the United States. In fact, this is what we have been talking about in recent months. Even if Donald Trump or the entire Congress decides not to introduce a new "lockdown", and state governors refuse to tighten quarantine measures, it still will not help the economy "restart". There will certainly be some recovery, but not complete and slow. In fact, this is exactly what Powell said in the next remark: "The recovery of the American economy will be long and difficult." Even if the economy is fully "open", as Trump wants it to be, this does not mean that Americans will live the same pre-crisis life. Given current disease rates, how many people in the United States want to risk their health and lives, as well as the health and lives of their loved ones? After all, it is already scientifically proven that there are risk groups that include people with various diseases, people of age, as well as people with excess weight. It is no secret that the problem with the nation's obesity is much more pronounced in the United States than, for example, in Europe. Therefore, all these factors will definitely make the majority of Americans not take extra risks. Yes, people will not give up going to the store, however, they will certainly give up optional trips, vacations, leisure in public places, and so on. And all this, in other words, is economics. All this is a drop in demand for a lot of goods and services provided in the United States. All these are layoffs and bankruptcies. All this is a slowdown or decline in the economy. This is why, in principle, it does not matter whether the country has a strict quarantine or not. Now, when everyone already knows what exactly "coronavirus" is and what the risks are, each person makes a decision for himself whether he wants to take risks or not. And there are more and more people who take the side of the "don't risk" opinion.

In addition, Jerome Powell noted the problem of deflationary pressure on the economy. Simply put, Powell is worried about slowing inflation. "At the moment, core inflation has fallen to 1%, and overall inflation is even lower. Some food groups rose in price during the pandemic, which increased the burden on people who lost income due to unemployment. However, the decline in sectors such as tourism and hospitality has led to a slowdown in consumer price growth," said Jerome Powell. "I think that for a long time we will struggle with deflationary pressure," the head of the Federal Reserve summed up the topic of inflation.

The Fed chairman also noted that much of the confrontation with the crisis will depend on the actions of the government, clearly hinting that the Congress will quickly make a decision with a new package of stimulus measures for the economy. Recall that while Republicans and Democrats can not come to a common opinion on the scope of the new package of measures to support the economy. Republicans are proposing $ 1 trillion, as well as cutting "coronavirus surcharges" to unemployment benefits by three times. Democrats believe that it is necessary to pour another $ 3 trillion into the economy and not cut payments to the unemployed. Powell promised to use the full range of monetary instruments available to support the economy.

In addition to all the above, the head of the Federal Reserve also admits that the situation may deteriorate in the near future. Everything will again depend on the "coronavirus" and the pace of its spread across the United States. According to Powell, many of those who lost their jobs in the most affected sectors of the economy will not be able to regain it. About 14 million people are currently unemployed. "The labor market still has a long way to go before recovering. We had a good job market before the epidemic. It was not perfect, there were always problems in the economy," said Powell, adding that about a third of those who lost their jobs in March and April were able to find a new one. However, the unemployment rate in the US still remains extremely high (11.1%), which is much higher than before the pandemic and during the 2008 mortgage crisis.

What follows from all this? From all this, it follows that the head of the Fed can not please the markets, can not give an optimistic forecast, can not inspire hope. And the blame for this situation is not the Fed and its head, who was mercilessly criticized and continues to be criticized by Donald Trump. The blame is just Donald Trump and his administration, who did not want to strengthen the quarantine, so now the economy can begin to slow down again, and its prospects are absolutely not defined, according to Powell. Recall that Powell is only a financier and manages only the economy, and even then not personally. There is also the Treasury Department, there is Congress, there is Trump, which also affect the economy. But Trump can make almost single-handedly decisions. At least, if they are wise, Congress can't help but support them. However, wise and far-sighted decisions of the President of the United States in recent years are obvious problems...

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The volatility of the euro/dollar currency pair as of July 31 is 91 points and is still characterized as "average". Thus, we expect the pair to move today between the levels of 1.1714 and 1.1895. The reversal of the Heiken Ashi indicator downwards signals a new round of downward correction within the ascending trend.

Nearest support levels:

S1 – 1.1780

S2 – 1.1719

S3 – 1.1658

Nearest resistance levels:

R1 – 1.1841

Trading recommendations:

The EUR/USD pair resumed its upward movement. Thus, today it is recommended to stay in the longs with the goals of 1.1841 and 1.1895 until the new reversal of the Heiken Ashi indicator downward. It is recommended to open sell orders no earlier than when the pair is fixed below the moving average line with the first target of 1.1597.

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

Hot forecast and trading signals for the EUR/USD pair on July 31. COT report. Traders have no choice but to continue buying

EUR/USD 1H

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The EUR/USD pair continued to move upward on the hourly timeframe on July 30. The minimum correction did take place, however, the bears remain extremely weak. In fact, the pair has never even approached the Kijun-sen line over the past days and even weeks, which just means the absence of tangible corrections and puts an end to the prospects of bears to build a downward trend. At this time, the pair has overcome the first resistance level of 1.1741 and slightly slowed down the upward movement. However, the pair could not even go below this level within the circle of the corrective movement. Thus, the trend remains unambiguously upward, and buyers continue to dominate the market.

EUR/USD 15M

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The lower linear regression channel turned down on the 15-minute timeframe, however, it does not seem like a correction at the moment. Bulls quickly blocked the minimal downward movement. The latest Commitments of Traders (COT) report showed a dramatic change in favor of buyers. Professional traders (non-commercial) opened 9,500 new Buy-contracts and closed 8,000 Sell-contracts during the reporting week (from 15 to 21 July). The net position for this category of traders, which is the most important, grew by 17,500 at once. In general, the European currency continued to rise in price even after July 21, and it does so to this day. Thus, non-commercial traders continue to increase their purchases of the euro. Consequently, the COT report does not give any reason to suppose the end of the upward trend for the euro. A new COT report will be released today in the afternoon, in which we will most likely see another increase in the net position of non-commercial traders, as well as an increase in Buy contracts for this category of traders.

The fundamental background for the EUR/USD pair remained unchanged on Wednesday and Thursday. The day before yesterday there was an important event - the Federal Reserve meeting, during the summing up of the results of which the US currency did not receive any support. Fed Chairman Jerome Powell only said how bad everything is now in the country and with the economy, and it is difficult to disagree with his opinion. In addition, the Fed chairman promised to do everything necessary to keep the American economy afloat. The words that the regulator is not going to raise the key rate in the near future sounded like a mockery. The US released a report on GDP for the second quarter of 2020, which we talked about from the very beginning of the week, calling it extremely important. Despite the fact that the value of the indicator turned out to be slightly better than the forecasts, this did not in any way affect the mood of traders. Buyers continued to do their thing after it was announced that the US economy had contracted by only 32.9% instead of the expected 35%. It is difficult to call the figure -32.9% optimistic or positive. A conditionally important report on inflation in the European Union is scheduled for the last trading day of the week. "Conditionally" because inflation is far from the most significant indicator, in a pandemic and crisis. However, a much more significant report will also be published in the EU - GDP for the second quarter, which, according to experts' expectations, will decline by 12% in quarterly terms. As reported, -33% in the United States and -12% in the EU. Basically, this is an answer to the question of what state the two competing economies are in now. And also to the question why the dollar is falling now.

Based on the above, we have two trading ideas for July 31st:

1) Buyers continue to completely dominate the market. Buy orders remain relevant with the targets at resistance levels 1.1827 and 1.1996, the first of which has already been reached. Thus, now traders are advised to either stay in purchases with the second goal, or wait until the first one is overcome and open new buy positions. In this case, the potential Take Profit is about 150 more points.

2) Bears continue to rest and wait for the bulls to give them at least a minimal chance to seize the initiative in the market. This requires consolidating the price below the Kijun-sen line (1.1712). In this case, you are advised to sell the pair with the targets Senkou Span B line (1.1575) and the support level of 1.1486. You are advised to seriously consider sales after the price consolidates below the rising channel. Potential Take Profit in this case is from 120 to 210 points.

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

Presidential election factor in action: Trump postpones date

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The US dollar fell to a new 25-month low and hit 93.30 against a basket of competitors. Despite today's rebound, market experts believe that the dollar still has room to decline. This is due to the actions of the Federal Reserve and its willingness to further ease monetary policy.

Nevertheless, the dollar index recovered by 30 points on Thursday afternoon. The evening session was confusing, but it did not lose the upward trend.

USDX

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In principle, the greenback had something to flinch from. US GDP in the second quarter contracted by 32.9% in annual terms. This is the worst drop in history, but the forecast was even worse. The dollar was able to hold out, as the figure turned out to be no worse than market expectations and is to some extent meaningless. The fact is that the quarantine restrictions that caused the recession have since been largely lifted.

However, this does not mean that there are no problems in the economy now. The Labor Department said the number of Americans who filed initial applications for unemployment benefits increased again in the week. The indicator grew by only 12,000, but the fact that it is an increase for the second straight week is important here. This number has been gradually decreasing in the previous 15 weeks, which gave hope to the markets for the recovery of the US economy.

Uncertainty over the November presidential election is weighing on the dollar. It is difficult to say what this is connected with, but immediately after the release of a portion of important macroeconomic statistics on the United States, President Donald Trump went online with a statement. The current head of the White House considers it necessary to postpone the date of the presidential elections to a later date. According to him, American citizens cannot "properly and safely vote." Thus, he questioned the legality of the ballots that were used in much greater numbers in the primary in the pandemic. Trump also said without any reason that the vote would be rigged, and chose not to comment on whether he would accept the situation if he lost the election.

Trump made it clear that the upcoming elections will not be easy. Democrats reacted. Together with Joe Biden began preparations for voter and election protection.

It seems that the factor of the presidential election entered the scene ahead of time and will begin to put pressure on the markets and the position of the US dollar, which briefly slumped after Trump's statements.

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