Dollar rose on profit-taking and nothing more (the continuation of growth of AUD/USD and USD/JPY pairs is expected)

The US dollar continued the correction on Monday that started last Friday, which is really long overdue on the wave of its significant technical oversold, which was largely supported by the growth in demand for risky assets during the period of corporate reporting of companies.

On Monday, a different picture was already noted on the currency market. Demand for shares of companies in Asia, Europe and the United States strengthened on the wave of positive economic data, but the dollar continued to correct, strengthening against all major currencies. It can be recalled that the reason for the surge in demand for risk was the data of business activity indices in China, the eurozone, Britain and the United States. Everywhere, the indicators either exceeded the expected values, or I will send a little worse than the forecasts, but still higher than the previous June values.

For example, the ISM manufacturing business activity index (PMI) in America jumped to 54.2 points from 52.6 points, the ISM manufacturing employment index came out worse than expected, rising to 44.3 points from 42.1 points against the forecast of growth to 44.3 points.

One would think that the dollar's strengthening is connected precisely with the positive statistics, however, this is unlikely. Fundamentally, the dollar remains at a huge disadvantage against major currencies. We have repeatedly listed these reasons, which have not disappeared anywhere and may even become even more negative. American parliamentarians began to discuss D. Trump's new initiatives, which are expected to include new measures to support the American and business in a total amount of about $ 1 trillion. Assessing the current strengthening of the dollar, we believe that this phenomenon is temporary and is connected only with the technical oversold of the dollar and with the desire of the investors who have made a profit to fix it. We are confident that after a short correction, the weakening of the US currency will continue.

Today, the RBA meeting was held, at which it was decided to leave interest rates at the same level. The key interest rate was kept at 0.25%. Investors expected a comment from the Australian regulator on the situation in the country's economy, as well as its exposure to external and internal factors, which, from a positive point of view, can be attributed to the growth after the coronavirus infection in the Chinese economy, and to the negative state of the pandemic in Australia.

Against the background of the final decision of the regulator, the Australian dollar received support, but this is most likely due to the general positive sentiment on the markets in Asia after the confident growth of stock markets in Europe and the United States the day before.

In general, we believe that the correction will not last long and the weakening of the dollar will continue.

Forecast of the day:

The AUD/USD pair held above the level of 0.7115, supported by the RBA's decision to keep interest rates unchanged and positive sentiment in the markets in the Asia-Pacific region. The pair may test the level of 0.7200 today.

The USD/JPY pair is trading above the level of 106.00. It is supported by the demand for risky assets. Maintaining positive mood in the market will push the pair to further rise to the level of 106.70.

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

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

Trend analysis (Fig. 1).

The market may continue to move downward from the level of 1.1765 (closing of yesterday's daily candle) with the target of 1.1714 - a 14.6% pullback level (red dotted line). From this level, the price may continue to move downward with the next target of 1.1656 - a 23.6% pullback level (red dotted line).

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Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - down;

- Trend analysis - down;

- Bollinger lines - down;

- Weekly chart - down.

General conclusion:

Today, the price may continue to move downward from the level of 1.1765 (closing of yesterday's daily candle) with the target of 1.1714 - a 14.6% pullback level (red dotted line). From this level, the price may continue to move downward with the next target of 1.1656 - a 23.6% pullback level (red dotted line).

Another possible scenario is upon reaching the level of 1.1765 (closing of yesterday's daily candle) an upward pullback may take place with the target at the upper fractal 1.1910 (blue dotted line).

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

Fed officials call for more stimulus to weather the current recession

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Fed officials argue that the US economy needs a lot of stimulus in order to weather the current recession.

Calls for more government intervention came after US lawmakers and the White House resumed talks on a new government aid package, including a possible extension of unemployment benefits that expired on Friday.

"It would be quite a traumatic move to quickly drop the support that consumers and businesses are receiving," said Richmond Fed President Thomas Barkin.

This opinion, albeit in a slightly different expression, was shared by Dallas Fed President Robert Kaplan and St. Louis Fed President James Bullard. Kaplan dismissed the idea that the additional $ 600 weekly unemployment benefits have made things more difficult for businesses, and Bullard said that earlier efforts to preserve the integrity of businesses and households during the crisis have paid off.

"We looked at a number of studies and saw no problem getting people back to work with benefits," Kaplan said on Monday, answering the question of whether the enhanced unemployment assistance is preventing people from returning to work.

Kaplan also said that he disagrees with Minneapolis Fed President Neel Kashkari, who believes that the US economy should shut down again in about four to six weeks in order to curb the spread of COVID-19.

Instead, "universal mask wearing can substantially disable transmission of the virus without widespread blocking", Kaplan said. "I think we have to learn to live with this virus," he added.

"If we put too much emphasis on the vaccine, people will do nothing and sit around waiting for it," Bullard also commented. "If you stop the economy again by quarantining people, you risk getting depressed."

The comments from regional bank presidents came just days after the last two-day FOMC meeting, at which officials reiterated their pledge to do whatever they can to help the economy weather the recession.

During the meeting, the Fed cut interest rates to near zero, which is expected to remain for years. It also deployed about a dozen emergency programs to support financial markets and support businesses.

Bullard said that he hopes economic growth would resume in the third quarter, despite the fact that in July, recovery slowed down compared to May and June. "I think that the slowdown observed in July is in line with the idea that we should not wait for an absolutely smooth transition regarding economic recovery, because this is a crisis, there will be ups and downs," he noted.

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

GBP/USD: plan for the European session on August 4. COT reports (analysis of yesterday's trade). Be careful with pound purchases

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

It was not possible to achieve a clear signal to enter the market yesterday afternoon, as there were entry points for both sellers and buyers. And if the first sale deal, which I analyzed in detail during the European session, worked out as a great advantage, then everything was not so simple in the afternoon. Let's analyze the deals and see the entry points on the 5-minute chart. A false breakout formed immediately after the update of support 1.3023, which gave us an excellent entry into long positions, but a major growth did not form immediately. After the pair returned to this area, amid the release of data on the US economy, a signal formed to sell the pound after the pair tested the 1.3023 level from the top down, but even here the downward movement did not reach more than 18 points. In this regard, the technical picture did not change, as traders still dragged the pound under the resistance of 1.3100 by the end of the day. Special attention is drawn to data on holders of long and short positions in the futures markets.

The Commitment of Traders (COT) report for July 28 marked another increase in short positions, but long positions were seriously reduced. This suggests that there are more and more bears and also confirms the theory that the pound's strength is only based on the US dollar's weakness and sooner or later, everything will end, which will lead to a sharp decline in the pair, as problems with Brexit and uncertainty about the prospect of economic recovery have not gone away. The COT report indicates that short non-commercial positions increased from the level of 61,310 to the level of 64,738 during the week. Long non-commercial positions decreased from the level of 46,230 to the level of 39,392. As a result, the non-commercial net position increased its negative value to -25,409, against -15,080, which indicates the likelihood of a sharp fall in the pound after the US dollar recovers its strength. As for the current technical picture, buyers of the pound will continue to focus on the resistance of 1.3100, which they need in order to return to maintaining the bullish trend. A return and consolidation at this level forms a good signal to buy the pound. The goal of the movement is to update the previous week's high at 1.3165, as well as to consolidate above it. This scenario will lead to the removal of the bears' stop orders and a larger strengthening of the GBP/USD to the highs of 1.3228 and 1.3265, where I recommend taking profits. In case the pound falls in the first half of the day, it is best not to rush to open long positions, but wait for a false breakout to form in the support area of 1.3012. Buy GBP/USD immediately on the rebound, I recommend doing so only from the low of 1.2949 based on a correction of 30-40 points within the day.

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

Sellers of the pound need to protect the resistance of 1.3100, as it did yesterday, and a false breakout forming there will be the first signal for a possible downward correction of the pair to the support area of 1.3012. An equally important task is to break through and consolidate under this range, which will lead to removing a number of bullish stop orders and a larger decline in GBP/USD to the support area of 1.3949, where I recommend taking profits. If bears are not active in the 1.3100 resistance area, it is best to postpone short positions until the test of last week's high in the 1.3165 area, provided that a false breakout forms there. Or sell the pound immediately on a rebound from the larger resistance of 1.3228, based on a correction of 30-40 points within the day.

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Indicator signals:

Moving averages

Trading is carried out in the area of 30 and 50 moving averages, which indicates market uncertainty with further direction, since the bulls are afraid to buy, and no one is willing to sell the pound yet.

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

A breakout of the upper border of the indicator in the area of 1.3100 will lead to a new wave of growth for the pound. In case the pair falls, support will be provided by the lower border of the indicator around 1.3012.

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

Fractal analysis of major currency pairs on August 4

Forecast for August 4:

Analytical overview of currency pairs on the H1 scale:

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The key levels for the euro / dollar pair on the H1 scale are: 1.1911, 1.1842, 1.1805, 1.1733, 1.1678, 1.1613 and 1.1568. Here, the price is forming a potential for the downside movement from July 31st. The continuation of the downward movement is expected after the breakdown of the level of 1.1733. In this case, the target is 1.1678. There is consolidation near this level. The breakdown of the level of 1.1678 will lead to a pronounced downward movement. Here, the target is 1.1613. For the potential value for the bottom, we consider the level of 1.1568. Upon reaching which, we expect consolidation, as well as an upward pullback.

A short-term upward movement is possible in the range of 1.1805 - 1.1842. The breakdown of the last level will encourage the formation of an upward structure. Here, the potential target is 1.1911.

The main trend is the formation of a potential for a downward movement from July 31

Trading recommendations:

Buy: 1.1805 Take profit: 1.1840

Buy: 1.1844 Take profit: 1.1910

Sell: 1.1733 Take profit: 1.1680

Sell: 1.1676 Take profit: 1.1615

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The key levels for the pound / dollar pair on the H1 scale are: 1.3189, 1.3145, 1.3054, 1.2996 and 1.2943. Here, the price is in a correction from the upward trend of July 14. A short-term upward movement possible in the range of 1.3145 - 1.3189, is not yet considered further targets for the top. The level of 1.3054 is the key support for the upside and breaking through this will lead to a movement to the level of 1.2996. For the potential value for the bottom, we consider the level of 1.2943, to which we expect the initial conditions for the downward cycle to be formed.

The main trend is the upward cycle from July 14, the stage of correction

Trading recommendations:

Buy: 1.3145 Take profit: 1.3187

Buy: Take profit:

Sell: 1.3054 Take profit: 1.2998

Sell: 1.2994 Take profit: 1.2944

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The key levels for the dollar / franc pair on the H1 scale are: 0.9340, 0.9297, 0.9275, 0.9240, 0.9217, 0.9171, 0.9146 and 0.9112. Here, we are following the ascending structure for July 31. The continuation of the upward movement is expected after the price passes the noise range 0.9217 - 0.9240. In this case, the target is 0.9275. Price consolidation is in the range of 0.9275 - 0.9297. For the potential value for the top, we consider the level of 0.9340. Upon reaching which, we expect consolidation, as well as a downward pullback.

A short-term downward movement is possible in the range of 0.9171 - 0.9146. The breakdown of the last level will lead to a deep correction. Here, the target is 0.9112. This is a key support level for the top.

The main trend is the upward structure of July 31

Trading recommendations:

Buy : 0.9240 Take profit: 0.9275

Buy : 0.9298 Take profit: 0.9340

Sell: 0.9170 Take profit: 0.9147

Sell: 0.9144 Take profit: 0.9114

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The key levels for the dollar / yen pair on the scale are : 107.99, 107.51, 106.78, 106.19, 105.61, 105.33, 104.91 and 104.21. Here, the price is forming a potential for the July 31st cycle. The continuation of the upward movement is expected after the breakdown of the level of 106.19. In this case, the target is 106.78. There is consolidation near this level. The breakdown of the level of 106.80 will lead to the development of a pronounced upward movement. In this case, the target is 107.51. We consider the level of 107.99 as a potential value for the top. Upon reaching which, we expect consolidation, as well as a downward pullback.

A short-term downward movement is possible in the range of 105.61 - 105.33. The breakdown of the last value will lead to a deep correction. Here, the target is 104.91. Upon reaching which, we expect consolidation and its breakdown will lead to the cancellation of the upward structure from July 31.

The key trend: building capacity for the top from July 31

Trading recommendations:

Buy: 106.20 Take profit: 106.74

Buy : 106.80 Take profit: 107.50

Sell: 105.60 Take profit: 105.35

Sell: 105.30 Take profit: 104.94

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The key levels for the Canadian dollar / US dollar pair on the H1 scale are: 1.3556, 1.3522, 1.3497, 1.3460, 1.3441, 1.3401, 1.3378, 1.3351 and 1.3327. Here, price is forming potential for the July 29 upward cycle. The continuation of the upward movement is expected after the price passes the noise range 1.3441 - 1.3460. In this case, the target is 1.3497. Price consolidation is in the range of 1.3497 - 1.3522. For the potential value for the top, we consider the level of 1.3556. Upon reaching which, we expect a downward pullback.

A consolidated movement is possible in the range of 1.3401 - 1.3378. The breakdown of the last level will lead to a deep correction. Here, the target is 1.3351. This is the key support level for the upward structure and its breakdown will lead to a movement to the potential target - 1.3327.

The main trend is the formation of initial conditions for the top from July 29

Trading recommendations:

Buy: 1.3441 Take profit: 1.3458

Buy : 1.3460 Take profit: 1.3497

Sell: 1.3400 Take profit: 1.3378

Sell: 1.3376 Take profit: 1.3351

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The key levels for the Australian dollar / dollar pair on the H1 scale are: 0.7231, 0.7178, 0.7155, 0.7113, 0.7081. 0.7037 and 0.7007. Here, the price forms the potential for the downward movement from July 31st. A short-term downward movement is expected in the range of 0.7113 - 0.7081. The breakdown of the last level will lead to a pronounced downward movement. Here, the target is 0.7037. We consider the level of 0.7007 as a potential value for the bottom. Upon reaching which, we expect consolidation, as well as an upward pullback.

A short-term upward movement is possible in the range of 0.7155 - 0.7178. The breakdown of the last value will encourage the formation of an upward structure. In this case, the potential target is 0.7231.

The main trend is the formation of potential for the bottom of July 31

Trading recommendations:

Buy: 0.7155 Take profit: 0.7176

Buy: 0.7180 Take profit: 0.7230

Sell : 0.7111 Take profit : 0.7083

Sell: 0.7079 Take profit: 0.7040

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The key levels for the euro / yen pair on the H1 scale are: 126.32, 125.80, 125.54, 125.11, 124.81, 124.37 and 123.82. Here, we are following the July 24 upward structure. A short-term upward movement is expected in the range of 124.81 - 125.11. The breakdown of the last value will lead to a pronounced upward movement. Here, the target is 125.54. There is consolidation in the range of 125.54 - 125.80. For the potential value for the top, we consider the level of 126.32. Upon reaching which, we expect a downward pullback.

A short-term downward trend is expected in the range of 124.37 - 123.82. The last level is the key support for the upside.

The main trend is the upward structure from July 24

Trading recommendations:

Buy: 124.81 Take profit: 125.10

Buy: 125.14 Take profit: 125.54

Sell: 124.30 Take profit: 123.85

Sell: Take profit:

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The key levels for the pound / yen pair on the H1 scale are : 140.25, 139.65, 138.95, 138.15, 137.73 and 137.29. Here, we are following the July 17 upward structure. The continuation of the upward movement is expected after the breakdown of the level of 138.95. In this case, the potential target is 139.65. There is consolidation near this level. For the potential value for the top, we consider the level of 140.25. Upon reaching which, we expect consolidation, as well as a downward pullback.

A short-term downward movement is possible in the range of 138.15 - 137.73. The breakdown of the last value will lead to a deep correction. Here, the target is 137.29. This is a key support level for the top.

The main trend is the upward structure from July 17

Trading recommendations:

Buy: 138.95 Take profit: 139.60

Buy: 139.70 Take profit: 140.25

Sell: 138.15 Take profit: 137.80

Sell: 137.70 Take profit: 137.30

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

EUR/USD: plan for the European session on August 4. COT reports (analysis of yesterday's trade). Euro buyers do not want

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

Both sellers and buyers of the European currency achieved their goals yesterday, and in general, the trading day brought a fairly good profit, as all the signals worked in a positive way. In my forecast for the second half of the day, I analyzed the deal at the 1.1777 level that formed in the European session. If we look at the 5-minute chart, we will see that approximately the same situation and a false breakout formed in the support area of 1.1704, from where I advised opening long positions, which caused the pair to return to 1.1777, for which a fierce fight will again unfold today. In this regard, the technical picture has not changed in any way. Special attention is drawn to data on holders of long and short positions in the futures markets.

The Commitment of Traders (COT) report for July 28 recorded a sharp increase in long positions and only a small increase in short ones, which tells us about the continued interest of investors in risky assets amid confusion that is happening in the US due to the coronavirus and the presidential election. The report shows an increase in long non-commercial positions from 204,185 to 242,127, while short non-commercial positions have grown only from 79,138 to 84,568. As a result, the positive non-commercial net position sharply jumped to 157,559, up from 125,047 a week earlier, indicating increased interest in buying risky assets even at current high prices. As for today's intraday strategy, the bulls' continue to focus on the 1.1777 area. Most likely, they will still be able to repel it in the first half of the day, which will form a signal to buy the euro, since important fundamental data will not be released today, except for data on producer prices in the eurozone. Active growth of the indicator will allow the bulls to get beyond 1.1777, which will open a direct road to the resistance of 1.1840, where I recommend taking profits. The long-term goal is still a weekly high of 1.1906. In case EUR/USD repeatedly falls, I recommend considering purchases only after forming a false breakout in the support area of 1.1704, as it was yesterday, or opening long positions immediately on a rebound from the low of 1.1648, based on a correction of 25-30 points within the day.

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

The bears will defend the resistance of 1.1777, but I don't want to bet much on it the second time. A false breakout forming in this range after the release of data on producer prices in the eurozone will be a signal to sell the euro. The goal of bears in this scenario will be to support 1.1704, where I recommend taking profits. A further area will be the low of 1.1648, but we will be able to reach it only in the event of a breakout and consolidation below the support of 1.1704. If the pair shows growth in the first half of the day, it is possible to open short positions on a rebound from the resistance of 1.1840, since in my opinion, there the bears will try to form the upper border of a new descending channel. If there is no activity in this range, it is best to sell EUR/USD only for a rebound from last week's high in the area of 1.1906, based on a correction of 25-30 points within the day.

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Indicator signals:

Moving averages

Trading is carried out just below the 30 and 50 moving averages, which indicates a downward correction forming in the short term.

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

The breakout of the upper border of the indicator in the area of 1.1777 will return new buyers of the euro to the market. In case the pair falls, support will be provided by the lower border of the indicator in the area of 1.1705.

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

EUR/GBP Price Movement On August 04, 2020

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EUR/GBP is moving towards 0.8980. If the momentum is strong, there is possibility for this pair to reach the 0.8937 level. This movement has been already confirmed by the price moving below the 30-period Moving Average and is already making a higher low and a lower low too. Please pay attention to the divergence between the price with the Stochastic Oscillator. This condition indicates there will be an upward retracement soon. As long as EUR/GBP does not moving and closes above the 0.9062 level, the price will be moving following the previous bias.

The overall bias of EUR/GBP is Bearish.

(Disclaimer)

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

Trading idea for Litecoin

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Good day traders! A trading idea for Litecoin.

On August 2, a strong short impulse occurred, during which Litecoin dropped in value by $ 10 at once.

After that, a two-day growth was observed, in the area of 50% Fibonacci.

Trade short positions to continue the impulse, targeting a breakout of the 51.7 low, relative to the ABC wave pattern in the chart.

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The impulse went not only in Litecoin, but to other cryptocurrencies as well, which rather speaks of the fundamental fixing of longs by large crypto players.

Hold on to the plan until the quote breaks the price level of $ 64.

The second target after the breakout is the 161.8 Fibo, located at the price level of $ 44.

This plan is developed, on the grounds of Price Action and Stop Hunting strategies.

Good luck!

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

Technical Analysis of ETH/USD for August 4, 2020:

Crypto Industry Outlook:

Another YouTube channel dedicated to cryptocurrencies appears to have violated the platform's community rules.

According to a tweet posted from members of the cryptocurrency community and brothers Aaron and Austin Arnold, their Altcoin Daily channel with 214,000 subscribers was shut down by YouTube for "encouraging illegal activities."

"We are a news / opinion channel. We have never promoted anything illegal. The appeal was sent," they both said on Twitter.

The brothers reached out to Altcoin Daily's 27,700 Twitter followers, urging them to contact YouTube and request a reinstatement using hashtags.

After more than two days with the channel's content completely unavailable to subscribers, Altcoin Daily announced on August 3 that YouTube lifted the ban.

YouTube was aggressively removing videos with cryptocurrency-related content in December 2019 on channels with tens of thousands of subscribers or more, including Chris Dunn's videos, while the Crypto Beadles website was completely removed. YouTube called one of these deletions a "bug" during the review process.

Technical Market Outlook:

After the Flash Crash event, the ETH/USD pair has bounced towards the level of $400.74, but did not make a new ATH yet. For now the price is trading close to the recent ATH, around the level of $388 and the up trend is still being continued. The next target for bulls is seen at the level of $500. The key short-term support is seen at the level of $300. The momentum is still strong and positive, which supports the short-term bullish outlook.

Weekly Pivot Points:

WR3 - $532.98

WR2 - $470.84

WR1 - $423.16

Weekly Pivot - $365.99

WS1 - $312.04

WS2 - $255.55

WS3 - $208.47

Trading Recommendations:

Due to the violation of the level of $351, Ethereum is now in the up trend on the long-term time frame. The next target for bulls is seen at the level of $500. The key long-term technical support is located at the level of $86.10, but the zone around $300 - $308 is an important technical support as well.

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

Technical Analysis of BTC/USD for August 4, 2020:

Crypto Industry Outlook:

Americans are relinquishing the safety of the dollar in favor of more speculative assets like stocks, gold, and Bitcoin.

Due to the COVID-19 situation, the personal savings rate in the US is at a historically high level. The profitability offered by financial institutions on savings accounts, however, is close to zero. Meanwhile, assets such as Bitcoin, stocks and gold have posted double-digit gains since March. This makes them an attractive option for investors.

Financial journalists report a 28-year-old Californian who told a reporter that he intends to convert his $ 15,000 savings into a high-yield savings account at one of the commercial banks to Bitcoin. He says he is doing this as he expects a long-term economic stagnation. Of course, there are many more such people in the USA.

The reality is even worse. It's no secret that the dollar is depreciating rapidly against other major fiat currencies. In fact, July is the worst month for the dollar in a decade, according to the financial media.

With the next stage of tightening that seems inevitable and most countries still suffering from severe restrictions due to COVID-19, it is possible that this problem will only get worse. Americans may possibly have a more depreciating decree in the short term and may seek to turn their resources into more profitable assets. However, there is no such thing as a "free lunch". In the investment world, high return comes with high risk.

Technical Market Outlook:

The Flash Crash is now a history and the level of $12,035 is the new yearly ATH on BTC/USD pair. The market sentiment is clearly bullish. Currently, the market trades around the level of $11,000 in a narrow zone located between the levels of $10,895 - $11,317. Any violation of either of those levels will indicated a possible direction for the nearest future. Please notice the neutral momentum that support the sideways view for the market during the next 24 hours.

Weekly Pivot Points:

WR3 - $14,325

WR2 - $13,003

WR1 - $12,116

Weekly Pivot - $10,976

WS1 - $9,784

WS2 - $8,681

WS3 - $7,717

Trading Recommendations:

Due to the level of $12,000 violation, the Bitcoin is now in the up trend on the long-term time frame. The next target for bulls is seen at the level of $13,712 and $15,000. The key long-term technical support is located at the level of $7,897, but the zone around $9,500 - $10,500 is an important technical support as well.

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Technical Analysis of EUR/USD for August 4, 2020:

Technical Market Outlook:

After the EUR/USD pair has returned then below 61% Fibonacci retracement on weekly time frame chart (seen at the level of 1.1822) it keeps trading inside of the ascending main channel. The bears had made a new local low located at the level of 1.1696 during the recent pull-back, but the price is not bouncing again. The momentum is neutral and the market is coming off the overbought conditions, so the next target for bears is seen at the level of 1.1655 - 1.1629. If the market hits this level, then the healthy correction is completed and the up trend might be resumed.

Weekly Pivot Points:

WR3 - 1.2175

WR2 - 1.2036

WR1 - 1.1886

Weekly Pivot - 1.1756

WS1 - 1.1625

WS2 - 1.1507

WS3 - 1.1369

Trading Recommendations:

The EUR/USD pair confirmed the up trend, so all pull-backs and corrections should be used to accumulate the EUR. The next targets in the long-term are seen at the levels of 1.2000 - 1.2089. 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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Technical Analysis of GBP/USD for August 4, 2020:

Technical Market Outlook:

The up trend on GBP/USD pair is developing despite some local pull-backs. The recent one has hit the level of 1.3017, but the bulls has managed to lift the price back up towards the level of 1.3070. The next target for bulls is seen at the level of 1.3199 and the nearest technical support is located at the level of 1.3067, 1.3047 and 1.3017. The market conditions are now extremely overbought, so the bears might still try to push the prices towards this levels during a pull-back. The key short-term technical support is located at the level of 1.2869.

Weekly Pivot Points:

WR3 - 1.3655

WR2 - 1.3405

WR1 - 1.3252

Weekly Pivot - 1.2996

WS1 - 1.2877

WS2 - 1.2627

WS3 - 1.2492

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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Analysis and trading signals for beginners. How to trade the GBP/USD pair on August 4? Plan for opening and closing deals

Hourly chart of the GBP/USD pair

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The technical picture remains more clear and unambiguous for the GBP/USD pair. Sellers tried to gain a foothold below the upward trend line yesterday, which, we will remind, is one of the most important technical constructions. However, the attempt to overcome this line was unsuccessful (circled in red). Thus, either the upward movement will resume, or traders will make a second attempt to overcome it. We are inclined to the second option, although formally, after the rebound from this line and the reversal of the MACD indicator up (circled), traders should have started buying the pound. Those who did this currently made profit of about 40 points. If there is a new reversal of the MACD down, the pair's purchases will have to be closed. Although we would have done it already.

On Monday, novice traders of the pound/dollar pair could turn their attention to reports on business activity from the UK and the US in the areas of manufacturing. But, as we said in the EUR/USD article, these reports are now of extremely low significance. The UK is not releasing important information at the moment. Thus, the pound/dollar pair is traded exclusively on news and reports from America. It was trading like that until Friday, when a technical correction began (a correction that was caused not by news or reports, but by market participants closing their positions, which lowers the demand for a currency that had been actively bought before). Now we are witnessing a downward movement, which may develop if we exclusively talk about the pound/dollar pair. The fact is that a Bank of England meeting will take place this Thursday, during which a lot of negative information may come at the disposal of traders. The BoE may cut its key rate, hint that it will cut the key rate in the near future, may declare that "the economy will be recovering hard and for a long time", or "that the economy needs new significant cash injections." All this will reduce the demand for the pound sterling, as it reflects the deterioration or potential deterioration of the economy. We are also still waiting for the UK Q2 GDP report, which may also be a little good. The pound was appreciating for the entire month of July, it did not have its own reasons for growth. In fact, the pound did not increase in price, but it was the dollar that was getting cheaper. There were no reasons for the growth of the pound, and there is still no reason. Therefore, now it can become quite seriously cheaper.

The following scenarios are possible on August 4:

1) A buy signal formed yesterday (a rebound from the trend line and a reversal of the MACD indicator up). Since the price has not yet reached the first target (1.3117), and the MACD indicator has not turned down, you can stay with purchases. On the other hand, 40 points of profit is also not bad. You are not advised to consider making new purchases yet.

2) Sales, from our point of view, can be considered after fixing the price below the trend line. In this case, the trend will change to a downward trend and the initiative will go to the sellers. The targets for sales will be the support levels of 1.3009 and 1.2953. We believe that today, the pair will try to gain a foothold below the trend line. There are no important events in the US and UK news calendar for Tuesday.

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

Analysis and trading signals for beginners. How to trade the EUR/USD pair on August 4? Plan for opening and closing deals

Hourly chart of the EUR/USD pair

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At first, the EUR/USD currency pair continued to go down on Monday, but it turned up towards the evening and began a round of correction against a new downward trend. We remind you that at the moment, we believe that a downward trend has developed for the pair, as the quotes have left the ascending channel. Therefore, traders, especially novice traders, should be interested only in selling now. Thus, during the present day, beginners are advised to look for new opportunities to sell the pair. But in order to return to buying the euro, new technical constructions, new trend lines or channels will be required, which is not yet available.

Novice traders should have paid attention to several secondary reports on business activity on Monday. We offered to review these reports solely for general development. They did not have any proper impact on the market and the movement of the pair. However, the values of these reports showed that the manufacturing sectors of the EU countries continue to recover. Recall that any value of the business activity index above 50 means that the sector itself is growing, not shrinking. However, in the current conditions, it is already obvious that the economies of all countries began to recover after the end of quarantines and lockdowns. Thus, at this time, novice players can get acquainted with such a concept as "the priority of factors". In other words, some factors that affect the pair's movements are now more significant than others. And we believe that technique is really important now. After a long, almost monthly growth of the euro/dollar pair, it is absolutely necessary to correct it. The correction started on Friday and continued for most of Monday. We believe that this is how it should be. Only after the completion of this correction will it be possible to take into account fundamental and macroeconomic factors again. However, in any case, traders will have nothing to pay attention to on Tuesday, August 4, since the news calendars for the European Union and America will be empty.

The following scenarios are possible on August 4:

1) Purchases are no longer relevant since the price left the ascending channel. Therefore, in order to trade the euro/dollar pair for an increase, new technical constructions are now needed (trend lines, channels, triangles, and others). Since none of this is currently available, we do not recommend buying the euro or doing it at your own peril and risk. The last upward reversal of the MACD indicator gave a signal with the 1.1803 target, and at the moment the pair went up about 40 points after its formed.

2) Sales of the currency pair are now much more promising, so we recommend waiting for the MACD indicator to turn down, and then open new sales with the goals of 1.1702 and 1.1648. Important macroeconomic statistics are not planned for today, so there should be no sharp price reversals.

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 August 4, 2020

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GBP/JPY should continue rising to resistance at 140.35 to complete blue wave iii and set a stage for a temporary correction towards 137.74 before entering a new impulsive rally higher towards 144.29 on the way towards 148.32.

Support is currently seen at 138.34 and again at 137.74.

R3: 140.35

R2: 139.80

R1: 139.20

Pivot: 138.75

S1: 138.34

S2: 137.74

S3: 137.14

Trading recommendation:

We are long on GBP from 135.48 and we will move our stop slightly higher to 137.00. We will take 50% profit on our long position at 140.25.

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Elliott wave analysis of EUR/JPY for August 4, 2020

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EUR/JPY is still expected to move higher towards resistance in the 125.58 - 125.82 area, from where a lager correction towards 123.79 is possible. We are not looking for a major top, but just a temporary top before the next impulsive rally higher towards 127.23 and ideally closer to 129.26.

Support is now seen in the 124.33 - 124.57 area.

R3: 125.82

R2: 125.58

R1: 125.06

Pivot: 124.57

S1: 124.33

S2: 124.23

S3: 123.78

Trading recommendation:

We are long on EUR from 123.35 and we will move our stop higher to 124.00 and we will take profit on 50% of our long position at 125.50

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

GBP/USD price movement, August 04, 2020

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On the 4 hour chart, we can see that GBP/USD continues to rise as the bullish momentum is strong. The price is moving above the Moving Average periods (30). There is a possibility that Cable will reach the 1.3112 level as the first target and the 1.3169 level as the second target. This scenario is likely to come true if the pair does not decline and close bellow the 1.2990 level.

The overall bias for GBP/USD is bullish.

(Disclaimer)

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Forecast for AUD/USD on August 4, 2020

AUD/USD

The Australian dollar nearly hit its first bearish target of 0.7070 on Monday. And since the technical situation is still decreasing, even intensified somewhat, today we expect the price to attack support at 0.7070. Success will contribute to further decline to the target level of 0.6970, which was approached by the MACD indicator line. Thus, the level acquires strategic importance - breaking it will trigger a mid-term decline of the aussie": the target is 0.6570 - the high on April 30.

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The price is developing under the balance and MACD indicator lines on the four-hour chart, Marlin in the downward trend zone. There are no signs of a reversal, we are waiting for the price to try to gain a foothold below the 0.7070 level.

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Forecast for USD/JPY on August 4, 2020

USD/JPY

The Japanese yen met yesterday's extremes with technical resistance: the upper shadow is the resistance of the balance indicator line, the lower shadow is the support of the embedded price channel line. This fact enhances the value of active technical instruments, therefore, we are waiting for the attack at the resistance of the upper line of the price channel at 106.85.

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Slightly below the level is the MACD line (blue indicator), which is an independent resistance level, but taking into account the rapid growth of the signal line of the Marlin oscillator, which, according to visual assessment, will enter the zone of positive values before the price approaches the MACD line, one should expect it to be overcome. Also, the price will try to gain a foothold above the trend line (106.85), where it may linger for a short while in the consolidation range of July 10-23. The range is highlighted in a gray area on the daily chart.

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The price reversed upward from the MACD line on the four-hour chart. Marlin in the growth zone. We are waiting for the price to reach the 106.85 level and the subsequent consolidation above it.

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Forecast for EUR/USD on August 4, 2020

EUR/USD

The euro continues to develop a downward movement towards the first target of 1.1620. Yesterday, the price fell by 85 points, but it eventually ended the day by losing 17 points, which was partly due to worse-than-expected construction costs in the United States - the June indicator showed a decrease of 0.7% against expectations of a rise of 1.0 % and -1.7% in May. Factory orders for June will be released today - forecast 5.1% against 8.0% in May. The dollar has an opportunity to strengthen its positions. US President Donald Trump said that the coronavirus epidemic is declining in the United States. Indeed, the decline in new infections in the United States per day was 23%, and the number of deaths became the lowest over the past three weeks.

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The price consolidated below the MACD indicator line (blue) and below the balance line (red), the Marlin oscillator is in the territory of negative values, the situation is completely decreasing at this timeframe. We are waiting for the price to decline to the first target level of 1.1620. Overcoming the level will allow the price to decline to the second target of 1.1490.

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Hot forecast and trading signals for the EUR/USD pair on August 4. COT report. US dollar goes on the offensive after a month

EUR/USD 1H

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The euro/dollar pair continued its downward movement on the hourly timeframe of August 3, which may turn into a downward trend, but met an obstacle in the form of a support area of 1.1702-1.1727 and rebounded off the lower border. Thus, further downward movement still has good prospects, as the bears managed to overcome the Kijun-sen line. However, a slight upward correction may now follow, afterwards a new test of the 1.1702-1.1727 area. If the sellers manage to push this area this time, then the downward movement will continue. Take note that buyers need to gain a foothold above the Kijun-sen line to restore their positions.

EUR/USD 15M

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Both linear regression channels turned down on the 15-minute timeframe, which now signals a downward trend in the very short term. The new Commitments of Traders (COT) report showed a very telling change in the mood of professional traders. The category of non-commercial traders opened 36,000 new Buy-contracts during the reporting week (July 22-28). This category has opened only 3,700 Sell-contracts. Thus, the net position (the difference between purchases and sales) immediately increased by 32,000, which is a signal of a sharp strengthening of the bullish mood. However, these conclusions were obvious even without the new COT report, since the euro continued to grow non-stop throughout the previous week, except for Friday (Friday was not included in the report). As for other categories of traders, their movements in the market do not matter now. For example, commercial traders opened 48,000 Sell-contracts, which is much more than the volume of all open contracts of the non-commercial category, but the euro still continued to sharply grow! In total, all major market players opened more Sell-contracts, but as we can see, this factor also did not significantly affect the pair's movement during the week. Thus, the data of the last report completely coincided with what is happening in the market.

The fundamental background for the EUR/USD pair did not change much on Monday. In addition, as we have already said, it does not have a prevailing meaning right now. The US currency has been falling in price against the euro and other competitors for at least a month. Now it is time for a banal technical correction and the main question is whether buyers of the pair believe in the possibility of the euro's further growth and the dollar's fall? If so, the pair will resume growth. The fundamental background that pushed the pair up in the last month remains the same. The coronavirus epidemic is still raging in the United States. The epidemiological situation is getting easier. In many cities of the country, protests continue to take place, and in Portland and Seattle, they have already turned into skirmishes with the police and special forces of US President Donald Trump, sent just to quell mass riots. Thus, with a strong desire, the bulls can start buying the European currency again. However, we believe that this will not happen in the near future, since the euro has already risen in price by 12 cents over the past three months. This is a lot, given that there is also a bit of positivity in the eurozone itself. Yes, the EU economy has contracted much less than the American one, but this is not a reason for exuberant joy.

Based on all of the above, we have two trading ideas for August 4:

1) Buyers gave the bears an opportunity to start implementing their ideas. Buy orders remain relevant for the resistance level of 1.1911, but now the bulls need to return to the area above the Kijun-sen line (1.1803), which will mean the resumption of the upward trend. The potential Take Profit in this case is about 90 points.

2) Bears have made a good first step towards a new downward trend, which, from our point of view, is very likely. Now they need to overcome the support area of 1.1702-1.1727 and continue to open short positions while aiming for the support level of 1.1644 and the Senkou Span B line (1.1575). The potential Take Profit in this case is from 40 to 110 points.

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Overview of the GBP/USD pair. August 4. Ratings of friends of Boris Johnson and Donald Trump are falling synchronously. The

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: 46.7847

The British pound, as well as the euro, continued to fall on Monday, August 3. If the European currency worked out the moving average line during the day, the pound moved towards it very slowly. However, as in the case of the euro currency, we believe that the British currency is quite overbought at this time, so at least a strong downward correction is needed. We also believe that all the negative fundamental background from overseas ("4 crises") has already been worked out by traders and now is the time to enter the period of consolidation. Thus, we expect that the bears will not sit "on the fence" and will start actively selling the pound/dollar currency pair.

There hasn't been much news coming out of the UK lately. There were none last week. However, this week the results of the Bank of England's meeting on Thursday will be summed up, and the second-quarter GDP report will be published next week.We believe that these two events are extremely important for the pound. If the Bank of England lowers the rate or takes a step in this direction (which will be seen based on the balance of votes among members of the monetary committee), it will be a strong bearish factor for the pound. Recall that in recent months, Andrew Bailey has considered the possibility of further reducing the key rate, and Bank of England economists are studying the experience of other central banks that have gone into negative rates. Therefore, this is a real prospect for the British regulator. Recall that at the moment the rate level is 0.1%. The same applies to the GDP report, which can show a 20% reduction in this most important indicator of the state of any economy. This is certainly not "minus 33%", as in the US, but "minus 20%" is also a lot. This is much more than in any EU country, even in the worst-affected Spain. Thus, we believe that in the coming weeks, sellers will have reasons to get rid of the British pound. And then market participants can remember about the threats to the British economy associated with Brexit and the lack of free trade agreements with the European Union and America. And that Boris Johnson was going to go to Brussels at the end of July to personally hold talks with EU leaders and persuade them to make concessions in the negotiations. August has already begun, and the British Prime Minister has not gone anywhere. And in a month, with the onset of autumn, Johnson may even wind down any negotiations with the EU, as he promised to do earlier. Thus, there are no prospects in this issue. And all this negative for the British currency, traders can remember at once.

In the meantime, we would like to point out (as we have said before) that Boris Johnson's political ratings continue to fall. According to recent polls, Johnson's approval rating is only 37%, while his disapproval rating is 44%. It is reported that back in mid-April, the difference between approval and disapproval was 28 points. That is, the number of approvers was 28 percentage points higher. However, we have already said that the British can strongly regret that they gave all the power in the hands of virtually one person. The British in December last year so much wanted to close the issue with Brexit that they gave their votes to the conservatives just to get out of the EU as soon as possible. As a result, there will be no "soft" Brexit now, and the British economy is preparing for a new shock in 2021, when it will start trading with EU countries under the rules and regulations of the WTO. "Coronavirus" also put its "black" imprint on the popularity of Boris Johnson. If in America, Trump is criticized for the fact that his administration failed to fight the epidemic, the same is imputed to his friend Boris Johnson in the Foggy Albion, where it was still possible to stop the spread of the virus.

In America, at this time, there is still outrage about the proposal of Donald Trump to postpone the election to a later date. Economists have calculated that under Trump, the American economy, thanks to the second quarter of 2020, did not grow, but on the contrary, contracted. Thus, removing Trump's main trump card in the election – economic growth. Also, do not forget about the "coronavirus". And how can you forget, if it is the United States that remains the leader in the world in the number of diseases and deaths from the "Chinese virus". Recent opinion polls have shown that two-thirds of Americans believe that at this time, not even the economy is the most important problem, namely the COVID-2019 epidemic. In fact, Trump's last hope to raise his own ratings and make a real competition for Biden in the election is to develop a vaccine or drug against the "coronavirus". American pharmaceutical companies have three months for everything. But even here, Trump has few reasons to be happy. The fact is that 157 vaccines are currently being developed in the world, but most doctors still continue to say that it is not worth waiting for a drug before 2021. Moreover, it is not enough just to create a drug or vaccine, it still needs to be produced in the right amount. More than 250 million people live in America. If we are talking about a vaccine, we need 250 million doses. It may take a year to produce such a volume of the drug.

On the first trading day of the week in the UK, a report on business activity in the manufacturing sector was released, which did not interest traders. Business activity indices, which are not strong reports even in normal, quiet times, are even less noticeable now. There are no publications scheduled for the second trading day of the week in Britain. On Wednesday, we expect only business activity indices for the services sector. Thus, we believe that now nothing can prevent the pair from continuing to fall, and its further fate will be decided around the moving average. If there is no consolidation below it or it is extremely short-lived, then whatever the fundamental background, we will be forced to state the continuation of the upward trend.

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The average volatility of the GBP/USD pair continues to remain stable and is currently 111 points per day. For the pound/dollar pair, this value is "high". On Tuesday, August 4, thus, we expect movement within the channel, limited by the levels of 1.2953 and 1.3175. Turning the Heiken Ashi indicator upward will indicate the resumption of the upward movement of the pair.

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 its downward correction on the 4-hour timeframe. Thus, today it is recommended to wait for the completion of the correction and resume trading for an increase with the goals of 1.3184 and 1.3306. Short positions can be considered no earlier than fixing the price below the moving average with the first goal of the Murray level "1/8" - 1.2817.

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Overview of the EUR/USD pair. August 4. Now the American economy is in need of emergency assistance. Republicans and Democrats

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) - sideways.

CCI: -37.7517

For most of the first trading day of the week, the European currency continued to adjust. Thus, we have witnessed the biggest correction in the past month. Technically, the future prospects of the euro/dollar currency pair now depend on whether there will be an overcoming of the moving average or a rebound. If the former, then sellers will finally get a real chance to start forming a downward trend. We have repeatedly stated that the situation in the US continues to be very difficult, however, traders have repeatedly played it back, as only in the last month, the euro rose by 7 cents, and a few weeks before that by another 6. Thus, just two and a half months of increased pandemics in America and mass riots, the US dollar lost positions by about 12 cents. For comparison, with a favorable fundamental background for the whole of 2019, the dollar rose by 2 cents against the euro. Thus, we are almost sure that the euro currency will now start to fall significantly, since at the moment this currency is already heavily overbought. At a minimum, you need to see a major correction before the upward movement can resume. Of course, if the situation in the United States does not change for the better, the euro will continue to rise in price, but not immediately and so sharply.

On Monday, August 3, in the EU countries, business activity indices in manufacturing sectors were published. In Spain, Italy, France, Germany and the EU as a whole, business activity indices exceeded the forecast values and all amounted to more than 50. Unfortunately, the fact that the spheres of production and services are currently recovering (it simply can't be otherwise, since quarantines and lockdowns have been canceled) was already known to everyone without these reports, so the indices had no effect. No more publications were planned in the European Union for yesterday.

Meanwhile, despite the fact that the US dollar has started to get more expensive, the situation with "coronavirus" in the US is not improving. As of Monday, there were only 4.6 million cases in the country. Every day, 60-70 thousand new cases continue to be recorded, and the total number of deaths is already 155 thousand. However, experts note that COVID-2019 is almost completely out of control. Health experts predict that another 40,000 deaths from the "coronavirus" will be recorded in August. Deborah Birks, coordinator of the White House working group on the fight against coronavirus, said on Monday: "We are in a new phase. The current situation is different from what we had in March and April. The virus has spread enormously both in rural areas and in cities." Despite such a pessimistic statement by Deborah Birks, speaker of the House of Representatives of the US Congress Nancy Pelosi said that she does not trust the person of Donald Trump and believes that the coordinator of the "coronavirus" misinformed people. "I think the president is spreading misinformation about the virus, and she is his protege, so I don't have confidence in her," said Pelosi, a Democrat. However, it is difficult to disagree with her, recalling all of Trump's statements about the virus, starting in March. Now it is also difficult to disagree with the fact that the "coronavirus" practically puts an end to Trump's hopes of re-election to a second term, since Americans believe that the current government has not coped with the epidemic. Well, the more attention to the epidemic and the more victims and cases of the disease, the more Trump's chances of winning fall. Thus, it is very profitable for the US president to spread misinformation about the virus and its scale in the US, especially given the fact that misinforming for Trump is an absolutely habitual occupation. We are reminded of research by major media outlets that counted more than 20,000 cases of misinformation from Trump during his entire term as president.

Also, the United States is now faced with a new serious problem concerning assistance to the American economy. On July 31, payments of unemployment benefits allowances that were agreed to by the previous stimulus package ended. Now Democrats and Republicans need to agree on a new aid package. Democrats are in favor of maintaining the "coronavirus" allowance for benefits of $ 600 a week, at least until the end of 2020. Republicans believe that such large allowances deprive the unemployed of motivation to look for a new job, since often the total unemployment benefit significantly exceeds their wages. They suggest lowering the allowances to $ 200 a week and simultaneously developing a package where the amount of assistance will depend on their salary and should not exceed 70% of it. According to Republicans, such payments will not allow the unemployed to descend into poverty, but will motivate them to look for work, and not sit on unemployment benefits forever. It is reported that about 20 million unemployed people are currently registered in America. However, according to congressional speaker Nancy Pelosi, "Saturday's talks were productive," so there is hope that the aid package will still be accepted. Treasury Secretary Steven Mnuchin and Senate Democratic leader Charles Schumer confirmed this information. In this situation, we must recognize that the Republican's proposal looks more reasonable and logical in the current conditions, since in difficult times for the country, you need to "tighten your belt", and not throw money right and left. But the problem is that the position of the Republicans is not popular among the Americans themselves, who blame the "coronavirus", the crisis, and unemployment on the government and, of course, do not want to be deprived of the $ 2,400 allowance per month.

On Tuesday, August 4, no important macroeconomic information will be available to traders. The EU and US event calendar is empty. Thus, traders will trade based on technical factors (we discussed them in the first paragraph), as well as pay attention to the general fundamental background, which remains completely in favor of the US currency. We believe that technical factors are stronger at this time, as buyers have started to take profits on long positions. This means that you will need very good reasons to force them to make new purchases of the European currency near two-year highs.

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The volatility of the euro/dollar currency pair as of August 4 is 98 points and is characterized as "high". Thus, we expect the pair to move today between the levels of 1.1655 and 1.1851. The upward reversal of the Heiken Ashi indicator signals the end of the downward correction within the framework of the continuing upward trend.

Nearest support levels:

S1 – 1.1719

S2 – 1.1597

S3 – 1.1475

Nearest resistance levels:

R1 – 1.1841

R2 – 1.1963

Trading recommendations:

The EUR/USD pair continues to adjust. Thus, at this time, it is recommended to continue to consider the possibility of opening purchases with the goals of 1.1841 and 1.1963, but to do this, you need to wait for the Heiken Ashi indicator to turn upward. 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 1.1655 and 1.1597.

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