Brief trading recommendations for EUR/USD and GBP/USD on 08/07/20

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After a short movement within the green channel (4 + 5 + 6), the EUR/USD currency pair returned to the previous range from trend lines 1 and 2, where the conditional maximum, expressed in the area of 1.1900/1.1920, did not yield to the buyers' attack.

The absence of a clear breakdown of the 1.1900 1.1920 area leads to the formation of a flow of short positions (sell positions), which may lead to the price movement towards trend lines 2 and 3.

To optimize risks, it is advised not to rush to place sell trades until the breakdown of trend line # 2 (area of 1.1800), since we should not exclude a price rebound along the path 2 ---> 1, as shown in the chart below.

If the market participants still manage to consolidate below the level of 1.1800, then the chance of the price going down to the area of trend line # 3 (1.1730 / 1.1750) will be high.

An alternative development scenario will be considered in the event of a price rebound from trend line # 2, followed by a breakdown of the 1.1900/1.1920 high, which will lead to a movement in the 4 + 5 + 6 channel.

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The GBP/USD currency pair has been moving along an ascending channel from trend lines 1,2 and 3 for a long time, where the quote rebounded from the line No. 2 and headed towards line No. 3 during the previous day, thereby having a looped amplitude.

Based on the path of the price movement relative to the trend lines, it can be assumed that if line No. 3 (area 1.3100) plays the role of a support, and the quote manages to bounce off it and consolidated 1.3150, then the chance of touching the high of the previous day (1.3184) will be high.

An alternative scenario considers changes in the structure of the ascending channel (1 + 2 + 3), in case the price is consolidated below 1.3070, which will lead to a downward movement towards the psychological level of 1.3000.

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

GBP/USD: plan for the European session on August 7 (analysis of yesterday). Bank of England's decision will not save the

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

The British pound generated several signals to enter the market yesterday, but given the volatility after the Bank of England announced its decision on interest rates, and the uncertainty of traders, all this led to another unsuccessful attempt to build the upward momentum. In my review for the second half of the day, I paid attention to the breakout and consolidation above the 1.3143 level and recommended opening long positions from it in case this range was tested. And so it happened. However, the movement did not pull more than 30-35 points. Then, a signal to sell the pound formed during the US session. On the 5-minute chart, we see how the pair returns to the support range of 1.3143 and tests it from the bottom up, creating a good selling point. But even from there, the first wave of decline did not bring 25 points. From the 1.3143 level, there was a larger movement of GBP/USD down to the support area of 1.3065 during the Asian session, which the pair is now aiming for. At the moment, buyers need to protect this range. From there, you can open long positions immediately for a rebound in anticipation of a correction of 30-40 points within the day. If the pound does not rapidly move up from this area, and the price begins to slowly slide back to the support area of 1.3065, it is best to abandon long positions before updating the low of 1.2980. How the market will react to the US labor market data remains a mystery. In case the pound grows in the morning, it will be possible to talk about continuing the bullish trend only after consolidating above the resistance of 1.3181, which will open a direct road to the highs of 1.3228 and 1.3265.

Let me remind you that the Commitment of Traders (COT) report for July 28 recorded 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 the 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. On the contrary, 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.

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

Sellers were convinced that the Bank of England's latest decision creates pressure on the British pound, since the central bank did not announce expansion measures to support the economy. Now their task is to return to the 1.3065 level, consolidating under which forms a good signal to open short positions in the area of the low of 1.2980, where I recommend taking profits. In case the pound grows in the morning, you can return to short positions on a rebound from the weekly high of 1.3181 in anticipation of a correction of 30-40 points within the day. If buyers are not active in this range, I advise you to postpone short positions until the new highs around 1.3228 and 1.3265 are updated.

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Indicator signals:

Moving averages

Trading is carried out just below 30 and 50 moving averages, which indicates an attempt by the bears to take control of the 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

A breakout of the upper border of the indicator at 1.3181 will lead to a new wave of growth in the pound. A break of the lower border of the indicator in the 1.3110 area will increase the pressure by the pound.

Description of indicators

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

EUR/USD: plan for the European session on August 7 (analysis of yesterday). Euro has problems with growth. COT report. Bears

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

I paid attention to sales from the resistance level of 1.1906 yesterday, which brought more than 80 points of profit. I analyzed this entry in more detail on the 5-minute chart in yesterday's review, which you can find on the company's website. A signal to buy the euro formed on Thursday afternoon, when the pair declined to the support of 1.1813, but unfortunately, the reversal occurred 5 points earlier than the when the price tested the 1.1813 level. At the moment, we see how bears are gradually pushing the pair to this level, but it is now possible to open long positions from it only if a false breakout forms there, which may occur today in the first half of the day after fundamental data on industrial production in Germany and France have been released. The indicators should please traders. In this scenario, you can count on EUR/USD growing to the weekly high of 1.1906, but the further direction of the market will depend on how the bulls will show themselves there after the US labor market data has been published. Only a break and consolidation above this range will allow you to increase long positions in anticipation of continuing the bullish trend to the highs of 1.1987 and 1.2020, where I recommend taking profits. The 1.2054 area will be a more distant target. If the pressure on the euro persists, and there is no bull activity at the 1.1813 level, the next major support will be 1.1721, which is also the lower border of the current wide side channel.

Let me remind you that 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 against the background of the 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.

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

Sellers keep the 1.1906 resistance under control, and protecting it this week will allow us to count a larger bearish market forming in the future. In case the pair repeatedly grows, all the bears can count on another false breakout forming in the resistance area of 1.1906 in the morning. Only this scenario forms an entry point into short positions with the goal of descending to the middle of the 1.1813 channel. An equally important task for sellers of the euro today will be to consolidate below the 1.1813 level, which will form an additional signal to open short positions and push EUR/USD to a further low of 1.1721, where I recommend taking profits. If the demand for the euro persists after the US labor market data is released, then I recommend returning to short positions only after updating the high of 1.1987, or immediately on a rebound from the resistance of 1.2020, 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 the sideways nature of the market before the release of important data.

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 around 1.1890 will lead to a new wave of euro growth. A breakout of the lower border of the indicator in the 1.1815 area will increase pressure on the euro.

Description of indicators

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

Technical Analysis of GBP/USD for August 7, 2020:

Technical Market Outlook:

The GBP/USD pair moved higher towards the recent swing high that was made at the level of 1.3169, violated it and made a new swing high at the level of 1.3184. Any clear violation of this level will lead to another wave up towards the next target seen at the level of 1.3199 and 1.3282. On the other hand, only a sustained breakout below the level of 1.2980 would change the short-term market sentiment and deepen the correction towards the level of 1.2869. The nearest technical support are seen at the level of 1.3067 and 1.3047.

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

Technical Analysis of EUR/USD for August 7, 2020:

Technical Market Outlook:

The EUR/USD pair has been seen testing the 61% Fibonacci retracement seen at the level of 1.1822 for some time now. The market is hovering around the level of 1.2840, keeps trading inside of a narrow range and might soon test the recent swing high located at 1.1908. The momentum is strong and positive, so the local up trend might be continued for quite some time. In a case of a clear and strong breakout higher, the next target for bulls is seen at the level of 1.2000. The key technical support is still seen at the level of 1.1655 - 1.1648 and the last swing high is located at the level of 1.1908.

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

EUR/USD intraday high and low, August 07, 2020

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The intraday high and low from the Central Bank Dealer Range (CBDR) are usually formed on STDV 2-STDV 4 in the normal condition market but sometimes they can reach STDV 5-STDV 6 during the high volatility in the market. Here are today's levels:

STDV 10 - 1.2043.

STDV 9 - 1.2027.

STDV 8 - 1.2011.

STDV 7 - 1.1995.

STDV 6 - 1.1979.

STDV 5 - 1.1963.

STDV 4 - 1.1947.

STDV 3 - 1.1931.

STDV 2 - 1.1915.

STDV 1 - 1.1899.

CBDR - 1.1883.

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CBDR - 1.1867.

STDV 1 - 1.1851.

STDV 2 - 1.1835.

STDV 3 - 1.1819.

STDV 4 - 1.1803.

STDV 5 - 1.1787.

STDV 6 - 1.1771.

STDV 7 - 1.1755.

STDV 8 - 1.1739.

STDV 9 - 1.1723.

STDV 10 - 1.1707.

Pay attention to the level of confluence between today's & yesterday range at 1.1723, 1.1803, 1.1883, 1.2043 & the previous day high 1.1916 with the previous day low 1.1818.

(Disclaimer)

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

GBP/USD intraday forecast of high and low of the day for August 07, 2020

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The daily high and low, according to the Central Bank Dealer Range (CBDR), are usually at STDV 2-STDV 4 amid normal market condition. However, sometimes, it can reach the STDV 5-STDV 6 due to high volatility in the market. Here are today's levels:

STDV 10 - 1.3340.

STDV 9 - 1.3321.

STDV 8 - 1.3302.

STDV 7 - 1.3283.

STDV 6 - 1.3264.

STDV 5 - 1.3245.

STDV 4 - 1.3226.

STDV 3 - 1.3207.

STDV 2 - 1.3188.

STDV 1 - 1.3169.

CBDR - 1.3150.

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CBDR - 1.3131.

STDV 1 - 1.3112.

STDV 2 - 1.3093.

STDV 3 - 1.3074.

STDV 4 - 1.3055.

STDV 5 - 1.3036.

STDV 6 - 1.3107.

STDV 7 - 1.2998.

STDV 8 - 1.2979.

STDV 9 - 1.2960.

STDV 10 - 1.2941.

Pay attention to the level of confluence between today's and yesterday's range of 1.3112, 1.3169, 1.3226. Besides, the previous day high of 1.3185 with the previous day low of 1.3108 should be taken into account as all these levels could be potential turning points.

(Disclaimer)

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

Technical Analysis of BTC/USD for August 7, 2020:

Crypto Industry News:

Someone with access to 119,756 Bitcoins stolen from the Bitfinex cryptocurrency exchange in 2016 transferred $ 12 million to unknown wallets in the last six days.

According to a series of tweets posted by Whale Alert on Twitter on August 3, wallet addresses known to be linked to one of the largest attacks in the history of cryptocurrency exchanges resulted in the transfer of 620 Bitcoins - with a current value of around $ 7 million - using 4 transactions. On July 29, nearly $ 5 million - or 448 BTC - was transferred in a single transaction.

Coupled with the last move of $ 39 million from July 27-28, this is about $ 51 million in Bitcoin that was transferred in over 17 transactions during the week.

On August 2, 2016, hackers compromised Bitfinex by stealing 119,756 BTC - worth $ 72 million at the time. After four years and recent growth movements, their total value is now $ 1.3 billion.

However, despite the recent movement of $ 51 million, burglars only transferred 1-2% of stolen funds. This suggests that criminals may struggle as they enforce the new anti-money laundering (AML) laws.

Technical Market Outlook:

The BTC/USD pair keeps hovering around this year's highs and the market sentiment is clearly bullish. The price has broken out from a narrow zone located between the levels of $10,895 - $11,317 and then the local high was made at the level of $11,738 on increased momentum, so bulls are showing their strength. The next target for bulls is of course the last yearly high seen at the level of $12,035. The immediate support for the intraday traders are seen at the levels of $11,646, $11,395 and $11, 317. The volatility is now quite subdued, but it might increase again once any important technical level is tested and broken.

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 ETH/USD for August 7, 2020:

Crypto Industry Outlook:

The People's Bank of China (PBoC) allegedly plans to use its Digital Currency Electronic Payment system (DCEP) - another term for a central bank's digital currency - to undermine the dominance of tech giants such as Alibaba and Tencent in the digital payments industry.

The report comes just days after the central bank's claims prompted a leading antitrust agency to investigate Alipay and WeChat Pay for using their dominance to stifle competition.

Even regulators and executives from Alibaba Ant's financial group have agreed that the PBoC will seek to undermine the market dominance of Alipay and WeChat Pay, according to the financial media.

Currently, Alibaba's financial subsidiary Alipay and Tencent's WeChat Pay control most of China's digital payments, while banks are lagging far behind. In the first quarter of 2020, Alipay processed nearly 56% of all mobile payments in China.

According to details received by the media from several officials familiar with central bank strategies, the PBoC will use DCEP to provide banks with a level playing field in digital payments, as it has done to tech giants before.

Reflecting on the unprecedented use of digital payments by tech giants, head of Asian economic research at a major international bank said former PBoC governor Zhou Xiaochuan had allowed Alipay and WeChat Pay to "grow into monsters" despite complaints from Chinese banks and the China Banking Regulatory Commission.

Technical Market Outlook:

The ETH/USD pair has been trading in a narrow range after the pair had broken out from the narrow range located between the levels of $379.59 - $392.79 and made a new local high at the level of $407.03. For now the price is trading close to the recent ATH, around the level of $393 and the up trend is still being continued. The next target for bulls is seen at the level of $414.00 and $425.25. The nearest technical support is seen at the level of $363.20 - $355.24, but 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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Analysis and trading signals for beginners. How to trade the EUR/USD pair on August 7? Plan for opening and closing deals

Hourly chart of the EUR/USD pair

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Since the last article was written (the evening of August 6), the EUR/USD pair managed to slightly correct upward, and resume the downward movement at the signal of the MACD indicator, and reach the first target for Friday, August 7 (support and resistance levels are updated every day). Thus, at the moment, the quotes of the pair have already reached the previous local low - 1.1818, and now the question is open, will traders be able to break through it and continue moving down? We have already mentioned in previous reviews that sellers are now extremely weak and do not have enough desire to start another long downward hike. Although most of the technical and fundamental factors favor them. The difficult epidemiological and economic situation in America continues to deter traders from making serious purchases of the US dollar.

The Nonfarm Payrolls report will be released on August 7, in the afternoon, which is extremely important for the prospects of the US dollar. This is the name of the indicator that reflects the number of new jobs created in the country, excluding the agricultural sector. This indicator is considered to have the same degree of importance as GDP and inflation. That is, the market reaction to it can be very strong. But what will it be like today? Recall that the dollar is growing very reluctantly now (falling EUR/USD = rising US dollar). Thus, the Nonfarm Payrolls indicator should impress traders to rush to buy the US currency. The forecast for this report is +1.6 million jobs in July, which is actually quite a bit. Let us remind novice traders that in March and April, the number of these same jobs in the United States fell by 22 million. This was followed by a recovery in May and June by 2.7 and 4.8 million respectively. Thus, if we see +1.6 million today, it would mean that the labor market recovery is slowing and traders are unlikely to be impressed by this. In order for the US dollar to go into growth (based precisely on this report), it is necessary that the forecast be surpassed by at least 200-300,000 or better - at least 2 million. Reports on unemployment and wages are also important, but will be overshadowed by Nonfarm Payrolls. We also remind novice traders that corrections often occur on Fridays (movement against the main trend, now an upward trend), which are caused by traders closing positions according to the trend before the weekend, which leads to a downward pullback.

The following scenarios are possible on August 7:

1) Purchases are not relevant yet, as the price left the ascending channel and could not overcome the 1.1903 level. However, given the fact that the downward trend has not yet begun, it is possible that the upward trend will eventually resume. Therefore, for novice traders, we still recommend buying the euro if the price closes above the 1.1903 line at the end of the next hour , which passes through the last three price highs. In this case, targets are the resistance levels of 1.1968 and 1.2020. Although you are advised to take profit near the first target.

2) Selling the currency pair is still more promising now. The price managed to drop to the support level of 1.1824 at night and now sellers need to close the price below it at the end of the next hour. If this happens, the downward movement will continue with targets at the support levels of 1.1772 and 1.1726. But a price rebound from 1.1824 or an upward reversal of the MACD will indicate the resumption of the upward movement on Friday morning. And then it will be necessary to wait for the Nonfarm Payrolls report in the hope that it beats forecasts.

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 EUR/GBP for August 7, 2020

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EUR/GBP came dangerously close to test the short-term important support level at 0.8980 but stoppped at 0.8984 which keeps our bullish outlook alive. We would like to see a clear break above minor resistance at 0.9063 soon to confirm our bullish outlook and the next impulsive rally higher towards the former peak at 0.9148 on the way higher to 0.9298.

Short-term important support remains at 0.8980.

R3: 0.9108

R2: 0.9080

R1: 0.9063

Pivot: 0.9034

S1: 0.9021

S2: 0.9006

S3: 0.8980

Trading recommendation:

We bought EUR at 0.9025 and we have our stop at 0.8975

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

Elliott wave analysis of EUR/JPY for August 7, 2020

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EUR/JPY rallied nicely to test the low of our target area between 125.58 - 125.82. EUR/JPY peaked at 125.59 and then, turned around in wave iv. There should be a simple zig-zag correction towards 123.78 before the next impulsive rally higher towards 127.25 and ideally closer to 129.26.

Resistance at 125.43 should be able to protect the upside from the downside pressure towards 123.78.

R3: 125.82

R2: 125.59

R1: 1255.43

Pivot: 125.01

S1: 124.63

S2: 124.25

S3: 123.78

Trading recommendation:

We sold the last 50% of our long position at 125.10 and booked another 175 pips. We will buy EUR at 123.85 or upon a break above 125.43

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

Forecast for EUR/USD on August 7, 2020

EUR/USD

The euro made a symbolic crossover on the 31st yesterday, thus forming a divergence reversal with the Marlin oscillator on the four-hour chart. Now there is divergence on two scales simultaneously: daily and H4.

The single currency gained 14 points yesterday. The price is currently at the area where it ended Thursday. The Marlin oscillator is declining daily. We are waiting for the price to drop below the first target level of 1.1806, after which the way to 1.1620 will open.

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The formed divergence is visible on the 4-hour time scale. We are waiting for the price to overcome the support of the MACD line, but a more effective signal for a further decline should be when the price moves under the target level of 1.1806 - the peak on July 29. After that, wait for the price at 1.1620.

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Markets are waiting for the release of US employment data today. The forecast for new jobs in the Nonfarm sector for July is 1,530,000 against 4,800,000 in June. Business media consider the forecast insufficient for a speedy recovery, but we disagree with this position. In the context of the balance of currencies in the current situation, the main criterion is not so much Non-Farm Employment Change, but the general indicator of the unemployment rate. Unemployment in the United States was 11.1% in June, the forecast for July is 10.5%, which shows a faster recovery of the US labor market than in the eurozone, where unemployment even increased from 7.7% to 7.8% in June.

So, we are waiting for the euro's development towards a downward direction.

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

Forecast for GBP/USD on August 7, 2020

GBP/USD

A small divergence has formed on the British pound's daily chart. But this is still a reversal sign. In general, the price was in the January 2020 trading range last week, and is now going to go down from it. The first target is 1.3027, then 1.2912, then 1.2725. Target levels are determined by Fibonacci levels stretched along the baseline of the movement on December 13, 2019 to February 28, 2020. They are still working, but soon the target levels will need to be adjusted.

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The Marlin divergence looks more significant on the four-hour chart. The signal line of the oscillator has already entered the negative trend zone (decreasing). After overcoming the support of the MACD line (1.3086), the first target of 1.3027 at the Fibonacci level of 61.8% will open. The second target is 1.2912.

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

Forecast for AUD/USD on August 7, 2020

AUD/USD

The Australian dollar reached the target level of 0.7240 for the second time on Thursday. The first time this level was tested was on Wednesday. Now a four-fold price divergence with the Marlin oscillator has formed on the daily chart. We have not seen such a formation for any currency over the past ten years. This is a strong reversal pattern. Accordingly, we are waiting for the price to overcome the nearest support of 0.7190, then move towards 0.7070 with an attack on the MACD line (blue indicator).

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Due to the second test of 0.7240 with the Marlin Oscillator, a divergence has formed on the four-hour chart. This strengthens the overall descending vector. MACD's line coincides with the 0.7190 level, which increases its significance. The price overcoming such a level will be a strong signal for a decline further. The nearest target is 0.7070.

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AUDUSD looking for short term push up above trendline!

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Trading Recommendation

Entry: 0.72028

Reason for Entry: Ascending trendline support, moving average support, 61.8% Fibonacci retracement

Take Profit: 0.72412

Reason for Take Profit: Graphical swing high

Stop Loss: 0.71743

Reason for Stop Loss: 100% Fibonacci extension

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Forecast for USD/JPY on August 7, 2020

USD/JPY

The Japanese yen laid down on the support of the embedded price channel line on the daily chart for the third day. The signal line of the Marlin oscillator is slowly turning up. The general upward trend for the last day has not been broken, we expect the price to rise to the upper embedded line of the price channel to the 106.78 area.

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There is also increasing market interest on the four-hour chart. The price is above both indicator lines of balance (red) and MACD (blue). The Marlin oscillator is in the negative zone, but has stopped declining, the line is moving horizontally. If the price rises, the oscillator will quickly move to the territory of positive values.

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USDCAD testing upside confirmation, possible bounce!

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Trading Recommendation

Entry: 1.3361

Reason for Entry: Horizontal overlap resistance

Take Profit :1.3415

Reason for Take Profit: Horizontal swing high

Stop Loss:1.1.3300

Reason for Stop loss: Horizontal overlap support

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USDJPY facing bearish pressure, potential for further drop

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Trading Recommendation

Entry: 106.541

Reason for Entry: 61.8% fibonacci retracement and horizontal overlap resistance

Take Profit: 104.274

Reason for Take Profit: Horizontal swing low support

Stop Loss: 107.330

Reason for Stop Loss: Horizontal swing high resistance

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Hot forecast and trading signals for the GBP/USD pair for August 7. COT report. Britain fears no trade deal with the US if

GBP/USD 1H

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The GBP/USD pair moved almost identically to the European currency on August 6, although the pound had extremely important fundamental factors at its disposal that the euro did not have. However, the quotes of the pound/dollar pair rose to its previous local high of 1.3169 and also failed to overcome it. Thus, in the case of the British pound, buyers were unable to overcome an important resistance and continue forming an upward trend. Therefore, the bears get a new chance to start a downward movement with the lowest level near the previous local low – 1.2980. The question is: do they need these chances?

GBP/USD 15M

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Both linear regression channels are directed upwards on the 15-minute timeframe, and signal an upward trend in the most short-term plan. The latest Commitments of Traders (COT) report for the British pound was even more suspicious than the previous one. The COT report for July 15-21 showed that non-commercial traders opened more Sell-contracts than Buy-contracts, however, the British pound continued to grow during this period. The COT report for July 22-28 showed approximately the same picture. The non-commercial category of traders, which is considered the "engine" of the market, opened 2,700 Sell-contracts and closed (!) 8,700 thousand Buy-contracts. Thus, the net position for this category of traders has fallen even further, which generally means that the bearish mood has increased. It turns out that professional traders have been getting rid of Buy-contracts or opening Sell-positions for two weeks, and the pound has been falling for only a few days and has already managed to win back all the losses. We believe that this particular behavior of non-commercial traders still indicates that the market is preparing for a new and prolonged fall in the British currency. By and large, this discrepancy between the actions of professional traders and what is happening in the market is called divergence which usually warns of a possible change in the trend.

The fundamental background for the GBP/USD pair remained the same on Thursday, August 6, although Bank of England Governor Andrew Bailey managed to give additional optimism to buyers of the pound, stating that "BA is not going to move to negative rates in the near future", and also raising forecasts for GDP for 2020. However, it seems that even without this information, the pound would have continued to grow today, as the euro did, for example. Meanwhile, the UK is beginning to worry that US President Donald Trump will be defeated in the election and then the trade deal between the UK and the US will not come to fruition, which British Prime Minister Boris Johnson is counting on. Not that it was harder to negotiate with Joe Biden, but rather the opposite. However, the Democrat is a proponent of more global views on trade and will certainly not appreciate London's offer. Plus, we should not forget that the potential deal between London and Washington is almost a personal promise of Trump to Johnson. And at the same time, the US leader wants Britain to have no trade deals with the European Union. Formally, the first meetings to discuss trade issues between the two countries have already been held, but the negotiations have not officially started yet. And if Trump loses the election, it may not start. As we can see, there are still countries in the world that are interested in Trump's re-election.

There are two main options for the development of events on August 7:

1) The buyers quickly returned the initiative to their own hands. However, they cannot go above the previous high of 1.3169. Thus, we recommend opening new purchases of the British currency, but not before we overcome 1.3169 with targets at the resistance levels of 1.3240 and 1.3400. Potential Take Profit in this case is from 40 to 200 points.

2) The bears missed the chances given to them, but still have the opportunity to start a new course down. You are advised to open new short positions in the pound/dollar pair while aiming for the Senkou Span B line (1.2908) and the support level of 1.2850 in case consolidating the price below the Kijun-sen line (1.3083). Potential Take Profit in this case is from 140 to 190 points.

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Hot forecast and trading signals for the EUR/USD pair on August 7. COT report. Trump complains about Russia, laments the

EUR/USD 1H

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The euro/dollar pair returned to the resistance level of 1.1911 on the hourly timeframe of August 6, which it had previously reached. However, yesterday this level was not overcome, so sellers again have the chance of forming a new downward trend or at least a noticeable downward correction. However, at the same time, we have to admit that the bears are now extremely weak and have no desire to sell the currency pair. Bulls can resume active trading if they still manage to overcome the resistance area of 1.1886-1.1910.

EUR/USD 15M

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The lower channel turned down again on the 15-minute timeframe, which should be expected, given the next rebound from the 1.1911 level. The latest Commitments of Traders (COT) report showed a significant increase in bullish sentiment among major 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 indicates a sharp strengthening of the bullish mood. However, this was obvious even without the COT report, since the euro continued to grow non-stop over the past four weeks. As for other categories of traders, their actions in the currency market do not matter much now. Mostly commercial traders opened Sell positions, which did not affect the chart of the currency pair in any way. But commercial traders usually trade against the trend. This is not surprising. The most interesting thing now is what will be the actions of professional traders according to a new report that will be released this Friday. The euro began to decline at the beginning of the trading week and it even seemed that a downward trend would now begin. However, on Wednesday, the pair recovered all the losses of the previous days and reached its local and at the same time two-year highs of about $1.19. Thus, logically, the mood of professional traders should not have changed much. Recall that the next COT report will include data for July 29-August 4. In other words, the rest of this week will not be counted in it.

The "four US crises" remain sources of pressure on the US dollar: epidemiological, economic, social and political. During these crises, the US dollar has fallen very much against the euro over the past three months, but it is not a fact that market participants are ready to continue selling the greenback. However, US President Donald Trump is doing everything to ensure that its national currency continues to depreciate. For those who do not remember, Trump wanted the dollar to be as "cheap" as possible from the very beginning of his presidential term, so the current weakening of the US currency is in his favor. At the same time, it is unlikely that Trump is doing everything he does specifically to make the dollar cheaper. For example, Trump has previously openly stated that China does not want him to win the election and openly supports the party of Joe Biden, even regularly holding talks with them and funding them. Now Trump has accused Russia of the same, though as the reasons he called the increase in military spending to ensure NATO in Europe, which is not beneficial to Moscow, since it wants to weaken the EU. Today, we advise you to closely monitor the report on Nonfarm Payrolls, which will be released in the afternoon.

Based on the above, we have two trading ideas for August 7:

1) Buyers continue to hold the initiative and have returned once again to the 1.1911 level. Now, in order to continue making purchases, you need to wait for the price to be pinned above this level. Then we will recommend new purchases with the target at the resistance level of 1.2043. In this case, the potential Take Profit is about 100 points.

2) The bears failed to use their chances. Now the same 1.1911 is the key level for them. If the bulls fail to overcome it, then the downward movement may resume. However, for greater confidence, we recommend waiting for the price to be pinned below the critical line (1.1806) and only after that open shorts with the first target of the Senkou Span B line (1.1724). The potential Take Profit in this case is about 50 points.

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Overview of the GBP/USD pair. August 7. The Bank of England makes "ultra-optimistic" forecasts and is not going to introduce

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: 116.2358

For the British pound, yesterday was quite important. Even if you omit the meeting of the Bank of England and the speech of its head Andrew Bailey, traders of the pound/dollar pair had to decide whether they were ready to overcome the previous local high or intend to start a new downward trend. The day is over, and we have not received a clear answer to this question. By the end of the day, the pair's quotes reached the Murray level of "8/8" - 1.3184, which is located near the previous local maximum of 1.3169, but they did not manage to clearly and confidently overcome it. Thus, we still believe that new long positions are extremely dangerous at this time. Especially those for which Stop Loss levels are not set. Despite the fact that the trend is clearly upward and continues to persist, we still draw the attention of traders to the fact that the pound has already risen quite strongly against the dollar, and the sane correction since June 30 was only once.

Market participants did not expect much from the Bank of England meeting. However, you can always expect surprises from this scale of events. The British regulator left the key rate at the same level of 0.1%, the program of buying bonds from the open market at the same level of 745 billion pounds, and all 9 members of the monetary committee voted for the unchanged rate. However, the final communique of the regulator said that by the end of 2020, the British economy could lose 9.5%, which would be the worst indicator in the last 100 years. However, earlier the Bank of England announced a figure of -14.5% of GDP by the end of 2020, so the forecasts have improved. The question is only based on what? On the basis of what does the Bank of England expect that the losses will be less? On the basis of what he expects that during 2021, GDP growth will be 9%, which will almost completely offset all losses in 2020? Both the Fed and the ECB refrain from such optimistic forecasts, and in the UK, whose economy has been suffering for 4 years due to Brexit and whose damage from the pandemic is the highest among the EU countries, they expect a reduction in losses and a rapid recovery? So the regulator and the government of the Kingdom are not afraid of a second "wave" of coronavirus? BA made equally optimistic forecasts for inflation, which should rise to 2.3% y/y by 2023, and for unemployment, which may rise to 7.5% by the end of this year. Experts of the Bank of England believe that in the medium term, it will be possible to return inflation to the target level of 2%, and it does not matter that the last time inflation in Britain at this level was in July 2019, and since the beginning of 2018, it has been steadily falling. However, the statement of the monetary policy committee still states that the risks associated with the "coronavirus" pandemic still remain high, so most forecasts for the coming years can be adjusted depending on the epidemiological situation.

But what really supported the British pound was the speech of Bank of England Governor Andrew Bailey. The chairman directly stated at a press conference that "negative rates are part of the BA toolkit, but at the moment the regulator is not going to introduce them". Bailey also said that two main risks remain for the British economy – the lack of a trade deal with the EU and "coronavirus".

Meanwhile, Donald Trump is working on all fronts. The US leader has declared war on the Chinese social network TikTok and plans to ban it on American territory. The claims of the American government are simple. Trump believes that the social network collects personal data of American users and transmits it to the Chinese government. Of course, this hypothesis cannot be supported by evidence. TikTok management said that it does not transmit any information to the Chinese intelligence services or the government, and that it "does not plan to leave the American market". However, Trump spoke clearly and clearly: "We prohibit TikTok in the United States. Immediately." Some may think that this war between Trump and the Chinese social network is far-fetched. However, we recall that about a month ago, when Trump held his first campaign rally in the American city of Tulsa, it was with the help of this social network that his speech was disrupted. It was with the help of TikTok that Trump's opponents among voters agreed to fail the rally, registered en masse to participate in it, and then simply did not come. As a result, the stadium where Trump spoke was filled by about one-third, despite the fact that all the tickets were sold out. However, Trump is not against another scenario – if the TikTok platform is sold to the American company Microsoft, which offers about $ 30 billion for it. In this case, all claims to the social network will be withdrawn.

Well, the final thing is not to ignore the topic of the upcoming presidential elections in the United States, which are already a little less than 3 months away. Trump continues to push the idea that voting by mail can be rigged to the masses. In addition, the US President believes that it may take months or even years to count the votes. He said that in the last election in New York state, where remote voting was used, the vote count lasted several weeks, and its results were revised several times. There is a certain logic and meaning in the words of the US leader. One thing is for sure, we are looking forward to a terrifically fun end to 2020. Elections in America can become an event that will not leave the pages of all publications for several months.

On the last trading day of the week in America, several extremely important reports are planned, the main of which is NonFarm Payrolls. If the value of this report is weak (weaker than the forecast +1.6 million), then we can expect a new weakening of the US currency in a pair with the pound. However, in general, Friday is a good day to start a new round of corrective movement, which may later develop into a full-fledged downward trend. We are still leaning more towards this option. No macroeconomic reports are expected from the UK today.

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The average volatility of the GBP/USD pair continues to remain stable and is currently 103 points per day. For the pound/dollar pair, this value is "high". On Friday, August 7, thus, we expect movement within the channel, limited by the levels of 1.3055 and 1.3261. Turning the Heiken Ashi indicator downward will indicate the beginning of a new round of corrective movement.

Nearest support levels:

S1 – 1.3123

S2 – 1.3062

S3 – 1.3000

Nearest resistance levels:

R1 – 1.3184

R2 – 1.3245

R3 – 1.3306

Trading recommendations:

The GBP/USD pair resumed its upward movement on the 4-hour timeframe, but could not yet overcome the Murray level "8/8" - 1.3184. Thus, today it is recommended to stay in the longs with the goals of 1.3245 and 1.3264 while the Heiken Ashi indicator is directed upwards. Or close long positions near the level of 1.3184. Short positions can be considered no earlier than fixing the price below the moving average with the first goals of 1.3000 and 1.2939.

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Overview of the EUR/USD pair. August 7. Joe Biden: the trade deal with China is collapsing. Donald Trump benefits from "coronavirus"

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: 83.7564

The EUR/USD currency pair has resumed its upward movement over the past two trading days after failing to break the moving average line. However, yesterday, after reaching the previous local maximum, the bulls retreated and a new round of downward correction began within the ascending trend. Based on this, we can conclude that buyers still doubt the feasibility of further purchases of the euro currency near its two-year highs and are frankly afraid of them. However, in order for the upward trend to change to a downward trend, you need not only the fear of bulls, but also the desire of bears to take the initiative. This is not the case now. Unfortunately, now only technical factors are on the side of sellers, and even then, not so much "factors" as "assumptions". "Foundation" does not help them in any way.

In fact, the fundamental component remains the same all this time, since no new information is received from the US on the most important key topics. "Coronavirus" in America continues to spread at the same rate. The US government also continues to be inactive and does not want to impose a quarantine. There is little news about the escalation of trade and economic relations with China. Dr. Anthony Fauci, the country's chief epidemiologist, goes on the air much less often than before, and is much more cautious in his comments. Well, Donald Trump still continues to amuse the public with his discouraging statements aimed at distracting Americans from their own internal problems. No important information has been received from Europe in recent weeks. It is still unclear whether the European Parliament is going to approve the budget plan for 2021-2027 and the EU economic recovery fund, which were adopted with such difficulty at the last EU summit.

However, from time to time, information still comes from overseas that deserves attention. For example, yesterday, Joe Biden said in an interview that the trade deal with China that Donald Trump reached is "collapsing." According to Biden, the trade deficit between the US and China increased by 5% in June this year, data from the US Department of Commerce shows that Beijing does not fully meet its obligations to purchase American goods. We would like to clarify Joe Biden's statement. It is not "the deal is crashing," but "the first phase of the trade is failing while the negotiations for the second phase have not even started yet". We want to remind traders that there is no talk of any truce between Washington and Beijing now, and most of the duties and sanctions between the countries remain in force. The first phase of the agreement implied the abolition of only part of the duties, most of them remaining in effect.

At the same time, Donald Trump continues to get into stories that are worthy of some American schoolboy, but not the President of the United States. For the first time, Facebook deleted a message from Donald Trump that contained a small video. In this video, Donald Trump himself, in an interview with FOX, states that "American children have almost complete immunity from coronavirus", so "schools should be opened in September". Recall that a new wave of rallies and protests has now begun in the United States, which are organized this time by teachers who oppose the opening of schools this fall due to a massive pandemic. However, Trump believes that "school children are immune". Unfortunately, no one else thinks so. Neither doctors, nor other politicians and officials, nor Facebook. Representatives of Facebook said that the video contains absolutely false statements about "coronavirus" and violates the policy on the dissemination of false information about COVID-2019. Also, another social network Twitter, which completely blocked the official page of the US President's staff, reported that this decision will remain in force until the video is removed. In the video, the US President also says that "by some miracle, children have a stronger immune system and they do not have problems with this coronavirus". "The facts show that they are not affected by this problem, and we must reopen our schools," Trump concluded. Unfortunately, Trump is not supported by official healthcare institutions. For example, the US Centers for Disease Control and Prevention reports that children are equally at risk of contracting the virus with adults. In principle, even the governors of most states of America do not listen to Trump at this time – most of them have decided not to open schools until at least January 2021 and to conduct classes remotely. And of course, officials from the Trump campaign immediately accused social networks Facebook and Twitter of favoring the Democrats.

In general, half of the country is now against Trump. And we understand why, if the president makes such statements every day, but in order to stop the spread of the "coronavirus", he does nothing. However, the closer the elections, the more we are inclined to believe that in the current situation, with a serious lag behind Joe Biden, Trump is even benefiting from the epidemic. If the epidemic continues to be high on November 3, it will really be a great reason, if not to postpone the election, then at least to block or complicate voting in many cities and states, especially those that are under the power of Republicans and in which Biden can potentially win. Based on this, we are increasingly inclined to the view that these elections can be as "dishonest and falsified" as possible, as Trump himself said. However, the US President hardly meant himself...

There will be no important publications in the European Union on the last trading day of the week. Only in Germany will there be several reports, one of which is on industrial production. The main macroeconomic data will come from overseas, where the average wage for July, the unemployment rate for July and the number of new jobs created outside the agricultural sector (NonFarm Payrolls) will be published. Special attention should be paid to the latest report, although the unemployment rate is also very important. We believe that the data may be worse than forecasts (1.6 million for NonFarm Payrolls and 10.5% for unemployment), as this week's ADP report was significantly worse. Accordingly, from a fundamental point of view, the US dollar may again be under pressure from traders. But from a technical point of view, a strong downward movement has been suggested for a long time.

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The volatility of the euro/dollar currency pair as of August 7 is 109 points and is characterized as "high". Thus, we expect the pair to move today between the levels of 1.1765 and 1.1983. The reversal of the Heiken Ashi indicator downwards signals a new round of downward correction within the framework of the still continuing upward trend.

Nearest support levels:

S1 – 1.1841

S2 – 1.1719

S3 – 1.1597

Nearest resistance levels:

R1 – 1.1963

Trading recommendations:

The EUR/USD pair is trying to continue its upward movement, but is not yet able to overcome the level of 1.1909. Thus, at this time, it is formally recommended to continue to stay in long positions with the goals of 1.1963 and 1.1975 until the Heiken Ashi indicator turns downward. But the pair may not overcome the previous high of 1,1909. 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 1.1719.

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