Simplified wave analysis and forecast for AUD/USD and GBP/JPY on August 20

AUD/USD

Analysis:

On the chart of the Australian dollar since March of this year, an upward wave is developing, which sets the trend. The scale of the movement already exceeds the level of the daily time frame. Quotes are now in the area of the reversal zone, forming a correction. It has the shape of a shifting plane and is nearing completion.

Forecast:

Today in the first half of the day, a general downward movement is expected, until the full completion of the entire corrective wave. The probable site of the completion of the design acts as support. Then you should wait for a reversal and the beginning of price growth.

Potential reversal zones

Resistance:

- 0.7200/0.7230

Support:

- 0.7140/0.7110

Recommendations:

Selling the Australian dollar today can be very risky. We recommend that you focus on searching for reversal signals to buy the instrument.

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GBP/JPY

Analysis:

The direction of the short-term trend of the cross is set by the downward wave from June 8. In its structure, the middle part (B) is nearing completion. In the last 2 weeks, the quotes are located in the area of the resistance zone of a large TF. Since the end of July, a reversal pattern has been formed on the chart.

Forecast:

In the coming trading sessions, the general downward course of the cross movement is expected. A short-term price rise is not excluded in the European session. The active phase of the decline can be expected in the US session.

Potential reversal zones

Resistance:

- 139.30/139.60

Support:

- 138.30/138.00

Recommendations:

In the pair's market, trading is risky today. Transactions are only possible within the session with a reduced lot. The priority is to sell the tool.

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Explanation: In the simplified wave analysis (UVA), waves consist of 3 parts (A-B-C). The last incomplete wave is analyzed. The solid background of arrows shows the formed structure, and the dotted ones show the expected movements.

Note: The wave algorithm does not take into account the duration of the tool movements in time!

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

Gold will no longer rise above the level of $2,000 per ounce (continuation of the correction in gold prices and the EURUSD

The quotes of the "yellow metal" entered a steady growth phase from the first days of June before the beginning of August. So what was the reason for this and is it worth hoping that it will be able to gain a foothold above the $ 2,000 mark?

The main reasons for the rise in gold prices

So, gold quotes, after experiencing strong pressure from the strengthening of the US dollar in March, as well as other commodity and raw materials assets, began to rise sharply as the demand for risky assets (company shares) began to rebound in financial markets. Hopes on the part of investors that the coronavirus pandemic would be brought under control in April-May triggered these sentiments. Additional support for the prices of gold was provided by unprecedented stimulus measures from the US Treasury and the Federal Reserve, which weakened the position of the dollar in the currency markets. And since gold is traded in dollars, then its fundamental weakness began to support the rise in prices for this precious metal.

On the other hand, the disappointment of investors who hoped that the global economic recovery would be faster and more energetic, led to an increase in demand for gold as a safe-haven asset. This was the main reason for the rally at the end of last month, which ended with a successful assault on the level of 2,000 dollars per ounce and an attempt to gain a foothold above this mark.

Why is gold unlikely to hold above $ 2,000?

The sharp drop in gold prices began amid rising yields on US Treasury government bonds. So the profitability of the benchmark of 10-year Treasuries began to grow actively on August 7, which became a signal for fixing the previously received profit by investors who had only recently bet on the growth of quotes. However, there were two more important reasons that put pressure on oil prices. This is the publication of generally strong reports of American companies for the 2nd quarter amid positive economic data for the month of July, which showed that, despite the situation with the coronavirus pandemic, the country's economy is beginning to revive, which means the dollar is an asset that does not bring interest will lose its attractiveness. An additional factor not in favor of buying the dollar was its strong technical overbought.

Assessing the change in market mood, a gradual increase in interest in buying risky assets, we should hardly expect a resumption of growth in gold prices, and even more so, its consolidation above the $ 2,000 mark. The market is clearly seeing a steady shift in investor priorities from safe-haven assets to instruments that have the potential to rise in price and generate interest. Of course, we mean company stocks.

What awaits gold in the foreseeable future?

Observing everything that happens in the markets, as well as the possibility of a possible surge in inflationary pressure in America, we believe that the decline in gold prices will only strengthen in the near future. The flow of investment capital from safe-haven assets to stocks with upside potential, the risks of a smooth change in the Fed's monetary exchange rate amid rising inflationary pressures will help lower prices for the gold. As the global economy recovers, gold prices will only decline.

If we pay attention to the technical side of the issue, then on the daily chart, a structure of two peaks clearly looms, the second of which is lower than the previous one, which indicates the formation of a reversal pattern with a likely decline in the price to the area of $ 1825.00 per ounce.

Here's the last thing. In our opinion, all of the above reasons and factors play against the prospects for the resumption of strong growth in gold quotes. We expect that the price of gold will rise above 2,000 not only in the near future, but also in the long-term, unless, of course, the second wave of the pandemic begins. But in this case, it will be necessary to revise the entire philosophy of the issue.

Forecast of the day:

Spot gold is correcting downward. Breaking through the level of 1908.00 will become the basis for the continuation of the decline to 1835.00.

The EUR/USD pair declined on the back of the dollar's strengthening following the publication of the Fed's minutes of the meeting on monetary policy, where the regulator expressed high concern about the prospects for a slowdown in the US economic recovery due to the pandemic. The pair is trading above the level of 1.1830, breaking which will lead to a decline to 1.1700.

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Analysis and trading recommendations for the GBP/USD pair on August 20

Trading recommendations for GBP / USD on August 20

Analysis of transactions

Good data on UK inflation failed to raise the rate of the British pound in the market. And although a buy signal at the level of 1.3250 was formed in the morning, it did not lead to any significant growth on the GBP / USD pair. Nonetheless, sell transactions from the level of 1.3208 gave more than 50 points of profit, thereby blocking the losses realized in the morning.

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The rumors of a progress in the negotiations on a new aid package to the US economy increased demand for the US dollar. In addition, any good news on the US labor market, which will be released today, will be another impetus on the rise of the dollar and sinking of the British pound in the market.

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  • Buy positions when the quote reaches a price level of 1.3112 (green line on the chart), targeting a rise to the level of 1.3161 (thicker green line on the chart). However, growth will only occur if data on the US labor market comes out worse than the forecasts. Nonetheless, take profit at the level of 1.3161.
  • Sell positions after the quote hits a price level of 1.3070 (red line on the chart). A price drop will occur if data on the US labor market indicates another decrease in the number of initial applications for unemployment benefits. Nevertheless, the target and take profit level is 1.3021.
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EURUSD breaks support and reaches our short-term pull back target.

EURUSD broke below our key short-term levels we noted yesterday using our Ichimoku cloud indicator. Price has reached our target area and we must say that this is an important support on a daily basis.

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Price has broken below both the tenkan-sen and kijun-sen indicators and has reached our target area of 1.1850-1.1820. The Chikou span (black line indicator) is touching the candlestick pattern from above. The Chikou span is testing support. Next support level is at 1.1810. Bulls do not want to see price break below this level on a daily basis. Failure to hold above 1.18 would be a bearish sign and could imply a deeper correction is coming for EURUSD. For now we consider this as a pull back and expect price to bounce strongly off 1.18 area. This is a buying level with stops at 1.18 on a daily basis.The material has been provided by InstaForex Company - www.instaforex.com

Bearish setup for AUDUSD

AUDUSD is making new higher highs but the RSI is not following. Eventually price will break down and a push lower towards 0.69 at least. That is why we prepare for such a scenario and we prefer to be bearish than bullish AUDUSD at current point in time.

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Green lines - bearish divergence

Red line - support

AUDUSD is trading around 0.7170 and we see consecutive higher highs and higher lows. Support is at 0.7110 area. We prefer to be slightly bearish at current levels as we expect a major pull back. Breaking below the red line support at 0.7110 will confirm our bearish view and we will add to our short position. The RSI is not making higher highs producing a bearish divergence. We are bearish. We look for a pull back towards 0.69 at least.

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Analysis and trading recommendations for the EUR/USD pair on August 20

Trading recommendations for EUR / USD on August 20

Analysis of transactions

Sell transactions from the level of 1.1911 brought more than 50 points of profit yesterday. This is because the euro dropped in rate after the White House announced that informal negotiations between Republicans and Democrats were underway on the approval of a new aid package for the US economy.

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The decrease is certain to continue today, mainly because traders will wait for the details of the talk between the two parties. Any good news will drive the US dollar up, and the euro down

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  • Buy positions when the quote reaches the level of 1.1856 (green line on the chart), targeting a rise to the level of 1.1906. An increase may occur today only if the data on the US labor market comes out negative. Take profit at the price level of 1.1906.
  • Sell positions after the quote reaches the level of 1.1825 (red line on the chart), targeting a drop to the level of 1.1787. Strong data on the US labor market will lead to a sharp decrease in the euro, thus, take profit at the level of 1.1787.
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Gold price has reached our bearish short-term target

In our previous analysis we noted that the bearish scenario would have little chances of success if price did not break below $1,982. Breaking below this level will confirm our bullish view and would push price towards $1,910-30.

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Red rectangle - resistance

Green line - support

Green rectangle - target if blue rectangle fails to hold

Blue rectangle- broken support

We have exited our short-term bearish positions as price has reached our target area. Gold price remains inside the medium-term bullish channel. The short-term top we saw at $2,015 has provided us with a nice short-term bearish profit. Pushing lower towards $1,900-$1,880 is not out of the question and should not be ruled out. However we still consider this as a buying pull back for Gold price. We wait patiently to identify a bullish setup before jumping back in the bullish short-term train. Our longer-term view remains bullish as long as price is above $1,860. Breaking below this level will open the way for a move below $1,800.

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GBP/USD: plan for the European session on August 20 (analyzing yesterday's trades). British pound remains very weak. COT

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

Which was exactly what I needed to prove. The growth of the British pound, which we have seen recently, was entirely based on the US dollar's weakness. Any prerequisites for strengthening the dollar have a very strong pressure on the pound. As for yesterday's entry points into the market, sales continued in the afternoon. In my forecast, I recommended returning to short positions after an unsuccessful attempt to settle above the 1.3212 level, which happened. On the 5-minute chart, you can see how the bears go below 1.3212, forming a new wave of the pound falling to the support area of 1.3173, where I have already recommended opening long positions immediately on the rebound, which brought about 30 points of profit. The repeated return and settling below the 1.3173 level and the test on the reverse side of which took place after Federal Reserve minutes was released, also formed a new entry point into short positions, which led to another wave of the pound's collapse to the area of the low of 1.3126.

At the moment, the bulls are focused on protecting the support of 1.3075, and only a false breakout forming on it will be a signal to open long positions in anticipation of an upward correction to the high of 1.3126. An equally important task for buyers, to correct the overall picture, will be settling above 1.3126 and GBP/USD growing to a high of 1.3164, where I recommend taking profits. In case of a breakout of the 1.3075 support, it is best to refrain from buying until the 1.3044 low has been updated, or to open long positions immediately for a rebound from the 1.3007 support in anticipation of a correction of 30-40 points within the day. Let me remind you that there was a reduction in short non-commercial positions from the level of 60,704 to the level of 59,874 in the Commitment of Traders (COT) report for the previous week. On the contrary, long non-commercial positions rose from the level of 45,977 to the level of 48,053. As a result, the non-commercial net position again decreased its negative value to 2,821 against 14,727. This suggests that the market trend is about to change in the near future and control will go to the side of buyers of the pound in the medium term.

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

Sellers of the pound will try to push the pair to support 1.3075, which will be the main struggle in the first half of the day. It is best to open short positions only after settling below this level, which forms a good entry point in anticipation of updating the low of 1.3044. The 1.3007 area will be the long-term goal of sellers, where I recommend taking profits. However, a more acceptable scenario for opening short positions will be implemented in case of an upward correction to the resistance of 1.3126, where you can sell the pound if a false breakout forms. You are advised to postpone short positions on the rebound until the test of a large high of 1.3164 in anticipation of a correction of 30-40 points within the day. There are also moving averages that are already playing on the side of sellers of the pound.

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Indicator signals:

Moving averages

Trading is carried out below 30 and 50 moving averages, which indicates that a bearish correction will form.

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 D1 daily chart.

Bollinger Bands

In case the pound falls further, support will be provided by the lower border of the indicator at 1.3044. It is possible to sell the pound immediately on a rebound from the upper border at 1.3212.

Description of indicators

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

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

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The EUR/USD currency pair did not manage to stay above the side channel 1.1700 // 1.1810 // 1.1910, (6 + 5 + 4, lines), after a short stagnation within the values of 1.1920/1.1965, the quote is rapidly declined below line No. 4 (area 1.1910).

The price return to the sideways channel from lines No. 4, 5 and 6 leads to the resumption of the rebound/breakout tactic relative to the preset lines.

Based on the recommendation in the previous review, we can see that there are already sell positions as soon as the price has consolidated below line No. 4 (1.1910 area). The prospect of the move is directed towards the middle line No. 5 (area 1.1810).

The subsequent development of the quote will depend on the behavior of the price relative to line No. 5 (area 1.1810), where two scenarios can be considered at once:

First, a rebound from line No. 5.

In this situation, the logical basis of the price rebound from line No. 5 (area 1.1810) is considered, as it has repeatedly happened in the history of the side channel 1.1700 // 1.1810 // 1.1910. An entry point for a buy position will be indicated under a number of circumstances, it can be a touchdown at the level of 1.1810 with a subsequent price rebound, or a price slowdown on one coordinate. The prospect of price development will be directed towards line 4 (area 1.1910).

Second, the breakdown of line No. 5

Based on this scenario, line No. 5 (area 1.1810) will be broken, which will open the way for the development of a downward movement towards the lower border of the side channel line No. 6 (area 1.1700).

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The GBP/USD currency pair has followed the path of the European currency once again, where the quote quickly returned to the previous fluctuation after a short stay of the price above the side channel 1.2985 // 1.3085 // 1.3185 (No. 6; 5; 4).

It can be assumed that following the price within the boundaries of the side channel will become an actual trading tactic again, where, given the existing downward mood, movement towards the lower border of the channels, line No. 6 (area 1.2985 / 1.3000) is not excluded.

Moreover, alternative scenarios of the market development will be considered if the middle line No. 5 (area 1.3085) puts pressure on sellers and the quote is consolidated above 1.3120, which may give an opportunity for the price movement in the direction of line No. 4 (area 1.3185).

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Technical Analysis of ETH/USD for August 20, 2020

Crypto Industry News:

The Bank of England will attend a key meeting tomorrow to discuss Central Bank Digital Currencies (CBDCs) and their possible infrastructure projects.

The event is hosted by the global central banking think tank, OMFIF (Official Monetary and Financial Institutions Forum). The event will take place on August 19 this year, among others, with the participation of Simon Scorer, a senior BoE fintech specialist. Delegates from Swiss National Bank, ING Nederland and Hungarian National Bank (Magyar Nemzeti Bank) are also expected to arrive. Additionally, Sky Guo, CEO of the Cypherium enterprise-focused blockchain platform, will join the discussion.

The main topic of the meeting will be to discuss the ways in which blockchain technology can benefit various CBDC models. This includes the use of smart contracts, for example, as in the case of 'programmable money' projects and blockchain interoperational models both within and outside national borders.

"As long as CBDCs remain at an early stage of concept development, we need to discuss the advantages and disadvantages of infrastructure concepts, especially with regard to how these instruments will interact and function" - Guo said.

Each central bank delegate, Simon Scorer from the Supervisory Board, Anko Szombati, Cees Van Wijk, IT specialist in the ING blockchain team, and Thomas Moser, a board member of Swiss National Bank, will present the results of internal CBDC research at their institution.

As the OMFIF notes, the pressure from the private sector is enormous. It has resulted in around 80% of central banks in the world taking CBDC issues seriously and evaluating various infrastructure options, including blockchain.

In March 2020, the Economic Council issued a document based on the discussion on CBDC. In it, she analyzed the rapidly changing payment model and the potential role of digital currency in supporting the bank's tasks in managing monetary and financial stability.

Technical Market Outlook:

The ETH/USD pair has retraced 61% of the last wave up and bounced from the level of $396.47 (61% Fibonacci retracement).However, the market is still trading below the short-term trend line resistance, so in order to resume the up trend, the bulls will have to break through the level of $414.11. If they fail to break, then the next target for bears is seen at the level of $362. 60. All the bigger time frame charts looks very bullish and the up trend should be continued after the correction is completed.

Weekly Pivot Points:

WR3 - $542.08

WR2 - $493.82

WR1 - $466.95

Weekly Pivot - $411.50

WS1 - $387.37

WS2 - $337.80

WS3 - $311.68

Trading Recommendations:

The weekly and monthly time frame trend on the ETH/USD pair remains up and there are no signs of trend reversal, so buy orders are preferred in the mid-term. All the dynamic corrections are still being used to buy the dips. The next mid-term target for bulls is seen at the level of $500. The key mid-term technical support is seen at the level of $364.95.

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

FOMC minutes disappointed investors, liquidity may be limited, and the dollar reacts with growth; Overview of USD, EUR,

Before the publication of the FOMC minutes, the markets continued to recover confidently, which was facilitated especially by positive macroeconomic data. So, inflation in the UK in July unexpectedly turned out to be noticeably higher than forecasts, the pound reacted with growth, pulling the entire range of currencies with it, the eurozone reported a growing current account surplus. In Canada, the growth of retail sales in July significantly exceeded the forecast, which gave reason to expect a continuation of the recovery in consumer demand. The S&P 500 added about 10p. to a record close on Tuesday, and Apple made history by becoming the first public company with a capitalization of over $ 2 trillion.

However, after the publication of the minutes, the markets turned around - the S&P 500 declined by half a percent, the yield on bonds increased, and the dollar also reacted with growth. The reversal is based on several factors at once, including rather gloomy forecasts for the economy. FOMC members focused on the health crisis, which they believe will have a strong impact on employment, inflation and economic activity.

Another clearly negative point is skepticism about the effectiveness of bond purchases as a tool to control the yield curve. Japan was the first in world practice to take this path, and the accumulated experience allows us to conclude that along with positive results, such as filling the budget and controlling profitability. There are also clearly negative ones, which are expressed in a complete lack of interest in Japanese GKOs from foreign investors and the increasingly slow rate of repatriation of capital of Japanese investors, which ultimately leads to the formation of a vicious circle.

Moreover, yield inversion has most likely already occurred. The graph of the difference between short-term and long-term securities exactly repeats similar movements in the other three crises since 1980, the recession has already begun, and the only question is how deep it will turn out to be.

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The main conclusion to be drawn from the minutes is that it does not contain any promises regarding additional liquidity supplied to the market. The Fed has long hinted that tax incentives will not be the most effective tools to generate liquidity from central banks, but this is precisely the issue where Republicans and Democrats clinched in Congress and are still far from compromise.

As a consequence, the markets conclude that liquidity will be limited on both sides – by the Fed and by Congress. The situation is developing negatively for the bears on the dollar. The limitation of liquidity will inevitably lead to an increase in USD.

Thus, the main result of the publication of the minutes is the growing probability of the dollar strengthening across the entire spectrum of currencies.

EUR/USD

Markets' positive mood at the beginning of the week encouraged renewed growth in the euro, but the resistance at 1.1950 held out. The pullback on Wednesday was a reaction to the publication of minutes and profit taking, but the probability of a bearish reversal is rising.

Consumer inflation declined by 0.4% in July, which turned out to be worse than forecasted, the core index also fell by 0.3%, and the recovery in consumer demand is not proceeding as actively as forecast.

PMI data for the eurozone countries will be published on Friday. There are no serious domestic impulses that are expected to change the moods in the next 24 hours.

Technically, the impulse has not yet been worked out and the probability to overcome 1.1950 and go above 1.20 remains, however, fundamental factors insist on a reversal. We expect a decline to the support zone 1.1700/50.

GBP/USD

Good inflation data is counterbalanced by reports of new difficulties in negotiations with the EU. The market is still hoping that major agreements will be reached in September, but the chances of a positive outcome are diminishing every day.

Strong inflation data allow us to revise the forecasts for the Bank of England's rate, but, obviously, the first move will be made by the FOMC on September 16-17. This event is key for the entire currency market, and the pound will not fall out of the general trends. The pound reached the annual maximum of 1.3270, but failed to break through it. The pullback to 1.30 on Thursday morning looks reasonable. The end of the week will be marked by the revaluation of the dollar's prospects, which will lead to bulls' profit-taking and a deep correctional wave. We expect a decline to 1.30 and continue further to 1.2810, where consolidation may start.

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

Technical Analysis of BTC/USD for August 20, 2020

Crypto Industry News:

Expobank, a commercial bank in Russia, issued the country's first cryptocurrency-backed loan.

According to a report by the local news agency Kommersant on August 19, Expobank granted a loan by issuing an individual bank loan powered by Waves tokens (WAVES).

Waves CEO and founder Alexander Ivanov confirmed this information, noting that the loan used Waves tokens as collateral. A new loan was made to local entrepreneur Mikhail Uspensky earlier this week. The businessman said he is obligated to continue using Waves tokens and has no plans to sell them. According to data, the Waves token can be purchased for about $ 4. This means a decrease of over 5% in the last 24 hours.

Some legal experts are convinced that a new type of loan has the potential to be recognized by Russian law. However, there is still a lot of uncertainty, as cryptocurrencies do not have many sympathizers among the Russian authorities.

Kirill Nikitin, a lawyer at Vegas Lex, admitted that the circulation of digital assets in Russia still involves a lot of legal uncertainty. In fact, it is still unknown what type of cryptocurrency transaction is legal and what is prohibited. This is related to the recently passed cryptocurrency law in Russia, which prohibits payments using digital assets. More regulatory clarity will emerge under another draft law to be adopted at the end of 2020.

Some legal experts are sure that Waves tokens can be legally used in Russia as they are not a payment tool. Yuri Brisov, a local attorney who advised on a bank loan powered by Waves, said the Waves are absolutely legal in Russia.

Technical Market Outlook:

The BTC/USD pair has reverses all the recent gains above the $12,000 and is currently testing the technical support located at the level of $11,646 as anticipated. Any clear violation of this level will result in sell-off acceleration towards the next technical support seen at the level of $11,220. In order to bounce and resume the up trend, bulls have to break through the short-term trend line resistance around the level of $11,855, which is the nearest technical resistance. The weekly time frame trend remains up.

Weekly Pivot Points:

WR3 - $13,201

WR2 - $12,569

WR1 - $12,222

Weekly Pivot - $11,635

WS1 - $11,298

WS2 - $10,689

WS3 - $10,325

Trading Recommendations:

The weekly trend on the BTC/USD pair remains up and there are no signs of trend reversal, so buy orders are preferred in the mid-term. All the dynamic correction are still being used to buy the dips. The next mid-term target for bulls is seen at the level of $13,712. The key mid-term technical support is seen at the level of $10,463.

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Analytics and trading signals for beginners. How to trade the EUR/USD pair on August 20? Plan for opening and closing trades

EUR/USD 1H

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The EUR/USD pair continued its strong downward movement, which began yesterday afternoon. Novice traders could witness a fairly rare phenomenon - a mass reset of open positions by traders. Simply put, the pair's collapse was caused by the mass closing of long positions. Thus, with a high probability, the upward trend is completed. The price settled below the upward trend line at the beginning of this movement, so the trend changed to a downward trend. We did not expect that the movement would be so strong, but it turned out that the dollar rose by 100 points in less than a day. Now we believe that we need to wait for an upward correction, after which it will be possible to start selling the euro/dollar pair. The MACD indicator has already turned up, although the price is not moving up, this phenomenon is called "indicator discharge".

There are no important events or publications in the European Union scheduled for August 20. And in principle, the EU has recently received an extremely small amount of news, most of which is not taken into account by traders. Therefore, we recommend that novice traders fully focus their attention on America. Now is a difficult time for trade, as the whole world is mired in an economic crisis that has not been seen for several decades, at least. Accordingly, markets often behave illogically. As we said earlier, some reports do not cause any reaction from market participants, although before the crisis, they could be safely traded. Therefore, technical factors and the general fundamental background are now in first place. Technical factors indicate that the euro/dollar pair is ready for a long fall, since instruments from the currency market can not move in one direction for too long, plus the upward trend line has been overcome. The overall fundamental background is clearly not in favor of the dollar, since there are still a very large number of problems in the United States. The coronavirus epidemic, political squabbles, lack of understanding between Democrats and Republicans, who must agree and accept a package of financial assistance for unemployed Americans and small businesses, a serious deterioration in relations with China, and the upcoming presidential election. All this in the background puts pressure on the US currency. But from time to time, the pair should still be adjusted. Therefore, we believe that in the coming week, novice traders can expect to move down by 200-300 points. The main thing is that the flow of negativity from America has stopped for some time at least.

The following scenarios are possible on August 20:

1) You are advised to not consider buying the pair on Thursday. Even if the upward trend resumes from the current positions (which is unlikely), then reasons are needed for new purchases of the euro. Technical factors now speak in favor of the dollar's growth, no macroeconomic reports are planned for today, so only unexpected and extremely important news from the EU or the US can return the market's demand for the euro. But this option is also unlikely for today. Thus, we do not consider buying just yet.

2) But we recommend to start selling the pair after the price corrects upward. The nearest target for short positions is 1.1794. It would be ideal if the pair went up by 50 points, after which the MACD indicator would turn down, and on this signal it would be possible to open sells. However, this is a market and it is so beautiful when everything happens. Therefore, the pair may resume falling today even without an upward correction. You also need to be prepared for this option.

What's on the chart:

Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

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

Up/down arrows show where you should sell or buy after reaching or breaking through particular levels.

The MACD indicator consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).

Important announcements and economic reports (you can always find them in the news calendar) can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal.

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

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Technical Analysis of EUR/USD for August 20, 2020

Technical Market Outlook:

The EUR/USD pair has reversed the local up trend after the Doji candlestick pattern was made at the level of 1.1965. The market is coming off the overbought conditions with momentum below its fifty level already. Currently the price is hovering just above the weekly 61% Fibonacci retracement seen at the level of 1.1822. There are technical support levels as well seen at 1.1813, 1.1803 and 1.1790 and if violated, then the sell-off might accelerate towards the level of 1.1710. The weekly time frame trend remains up.

Weekly Pivot Points:

WR3 - 1.2065

WR2 - 1.1962

WR1 - 1.1908

Weekly Pivot - 1.1808

WS1 - 1.1753

WS2 - 1.1661

WS3 - 1.1600

Trading Recommendations:

On the EUR/USD pair the main trend is up, which can be confirmed by 8 weekly up candles on the weekly time frame chart and 3 monthly up candles on the monthly time frame chart. This means any corrections should be used to buy the dips. The key long-term technical support is seen at the level of 1.1445. The key long-term technical resistance is seen at the level of 1.2555.

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Technical Analysis of GBP/USD for August 20, 2020

Technical Market Outlook:

The GBP/USD pair has reversed all weekly gains and broke below the short-term trend line support as well. The swing top has been established at the level of 1.3265 when the Doji candlestick pattern was made. Currently the market is coming off the overbought conditions and the momentum is below its fifty level already. The next target for bears is seen at the level of 1.3017 and the immediate resistance is seen at the level of 1.3121. The larger time frame trend remains up.

Weekly Pivot Points:

WR3 - 1.3292

WR2 - 1.3216

WR1 - 1.3155

Weekly Pivot - 1.3068

WS1 - 1.3000

WS2 - 1.2930

WS3 - 1.2880

Trading Recommendations:

On the GBP/USD pair the main, multi-year trend is down, which can be confirmed by the down candles on the monthly time frame chart. Nevertheless, the recent rally form the multi-year lows seen at the level of 1.1404 has been successful and the trend might be reversing. 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 towards the key long-term technical support is seen at the level of 1.1404.

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Forecast for EUR/USD on August 20, 2020

EUR/USD

It is very likely that the euro's exit from the 1.1712-1.1905 range on Wednesday and Thursday turned out to be false. The price's fall from yesterday overshadowed the previous two-day growth. According to Marlin, a double divergence formed with the price, more precisely, two divergences in a row - a flatter one and immediately after it a steeper one, and a double one.

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Now the price will try to get out of the specified range downwards with a further target of reaching the 1.1620 level. The MACD line is approaching it to strengthen this level. Accordingly, settling the price below it (1.1620) triggers a scenario of a medium-term fall in the euro.

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The price settled under the MACD line on the four-chart. The Marlin oscillator is in its lower half, in a downward trend zone. We are waiting for the price to go down from the 1.1712-1.1905 range within two or three days.

Taking into account that the 1.1712-1.1905 accumulation range in its current form is a free-roaming range, short-term exits of the price above the MACD line are possible. The approximate area is highlighted in a bluish color.

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Forecast for GBP/USD on August 20, 2020

GBP/USD

After the British pound gained 135 points on Wednesday and Thursday, this growth was offset by a fall of 140 points. This figure of two extreme candlesticks is called the pattern of rails, a reversal pattern. Also, the Marlin Oscillator formed a divergence with the price.

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The closest target for the pound is the 61.8% Fibonacci level at 1.3026, where the British currency has already found support in the period from August 3 to 13. That is, the level is strong enough, and breaking it will send the price to the second target of 1.2912 (76.4% Fibonacci). The main struggle will unfold on the daily MACD line in the 1.2812 area, which is also the price peak from June 10. Overcoming this level reveals the scenario of a medium-term fall of the British currency.

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The price settled below the Fibonacci level of 50.0% on the four-hour chart and below the MACD indicator line, which clears the way for the price to 1.3026.

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Forecast for AUD/USD on August 20, 2020

AUD/USD

The Australian dollar abandoned its attempt to reach the target level of 0.7296 on Wednesday and, under the US dollar's strong attack throughout the market, dropped 60 points. The signal line of the Marlin oscillator is about to go into the negative trend zone. This could be a significant technical aid for the price, preparing for an attack on the MACD line. Success, that is, the price falling below the 0.7110 level, opens the second bearish target at 0.6975.

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There is an intensified decline in the Australian currency on the four-hour chart. The price broke through the support of the MACD line with force and is heading towards its first target at 0.7110. Marlin is also steadily declining in the negative trend zone.

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Forecast for USD/JPY on August 20, 2020

USD/JPY

The dollar's growth from yesterday was so strong that the USD/JPY pair rose by 70 points even against the fall in the stock market. The dollar index added 0.78%. The Marlin oscillator has entered the growing trend zone. Thus, the nearest target for the dollar is the embedded price channel line at the 106.70 level. The MACD line will be overcome.

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The price paused at the resistance of the MACD line on the four-hour chart. The Marlin oscillator has also moved into a growing trend zone. The price leaving the area above the MACD line, above the 106.18 level, opens the first target to 106.70.

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Hot forecast and trading signals for the GBP/USD pair on August 20. COT report. Trump is going to end his dependence on China

GBP/USD 1H

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The GBP/USD pair began a downward movement in the morning of August 19, failing to reach the third resistance level of 1.3284. And so there are reasons to assume the end of the fairly long upward trend. Especially if you consider a much weaker fundamental basis for this trend. Therefore, overcoming the support area of 1.3157-1.3181 will make it possible for the pair's quotes to continue moving down. It is not yet possible to say for sure that the bears have taken the initiative in the market, since most likely, the current drop in quotes is due to buyers closing long positions.

GBP/USD 15M

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The lower channel of linear regression turned down on the 15-minute timeframe, signaling the possible beginning of a new downward trend. The latest Commitments of Traders (COT) report for the British pound, which was released last Friday, turned out to be almost an exact copy of the report on the euro currency. As for the euro, large traders opened new Buy-contracts in the reporting week (2,569) and closed Sell-contracts (8,405). Thus, the net position for non-commercial traders increased by almost 11,000 during the reporting week, which, in fact, means an increase in bullish sentiment. We could draw the same conclusions based on the nature of the pair's movement itself. Given the fact that we have not seen a normal correction of the British pound for several weeks, we can make a clear conclusion that big traders are not selling this currency now. Therefore, even the COT report does not yet suggest the beginning of a new downward trend. At the same time, quotes began to fall on Wednesday, but this day will not be included in the new COT report, which will be formed for the period of August 12-18. Therefore, it is unlikely that we will see a major change in the mood of non-commercial traders in the new report.

The fundamental background for the GBP/USD pair was interesting on Wednesday, as UK inflation for July was published. And immediately it can be noted that traders, despite a fairly optimistic report, began to get rid of long positions on the pound. Thus, we can safely assume that the report was ignored. But US President Donald Trump recently announced his intention to return the production of American companies from China to the United States. In fact, Trump announced his intention even before he became president. Now Trump is going to impose duties and taxes on companies that leave America and create jobs in other countries (a direct reference to China - approx. author), as well as introduce tax incentives for those who return jobs from China to America. On the one hand, Trump's desire is absolutely logical. On the other hand, he recalled this when the United States had an unprecedented high unemployment rate. Therefore, many analysts believe that Trump is trying to increase his political ratings again with such statements. They say that if Americans elect him for a second term, unemployment will quickly decrease, and new jobs will be created in the country again. "Car factories are opening and developing in Michigan. This has not been the case for the past 42 years. We will end our dependence on China. We will produce our most important medicines and other goods here in the US," the US leader said.

There are two main options for the development of events on August 20:

1) Buyers finally let go of the pound/dollar pair, which immediately led to a fall. Thus, we recommend opening new purchases of the British currency but not before quotes return to the area above 1.3157-1.3181. Although now buyers will have to do it very hard in the near future.

2) Bears got down to business and, together with the bulls, which began to drop longs, started to invest in the dollar. Thus, settling the price below the Kijun-sen line (1.3156) will allow opening short positions with the targets of the Senkou Span B line (1.3084) and the support level of 1.3010. Take Profit in this case will be from 40 to 100 points. After such a strong fall in quotes, an upward pullback is not excluded.

Hot forecast and trading signals for the GBP/USD pair.

We recommend that you also explore the fundamental background in these articles:

Overview of the EUR/USD pair. August 20. Is Joe Biden the American version of Jeremy Corbyn? What can a Democratic presidential candidate give America?

Review of the GBP/USD pair. August 20. Traders are not interested in the negative from Great Britain. Chinese giant Alibaba next in line to be banned in the US

Explanations for illustrations:

Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one.

Support and resistance areas are areas from which the price has repeatedly rebounded off.

Yellow lines are trend lines, trend channels and any other technical patterns.

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Hot forecast and trading signals for the EUR/USD pair on August 20. COT report. Traders started taking profits on long positions

EUR/USD 1H

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The euro/dollar pair perfectly reached the second resistance level of 1.1958 on the hourly timeframe of August 19, rebounded off it and after standing in one place for almost a day, began a strong fall. It seems that the upward trend has come to an end, at least now it seems that buyers have started to reduce their long positions en masse. If the price manages to gain a foothold below the support area of 1.1886-1.1910, this will be another signal for a new downtrend to form. In addition, the Kijun-sen line is also in the way of sellers, which should also be overcome if they want to count on something more than a downward movement of a hundred points. At the same time, it should be noted that at this time, sellers can continue to remain on the fence, since there is a 99% probability that the pair's quotes are falling because buyers are reducing their longs. Demand for the euro is falling, which causes the currency to drop against the US dollar.

EUR/USD 15M

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The lower channel of linear regression turned down on the 15-minute timeframe, which signals a change in the trend in the most short-term plan. A new Commitments of Traders (COT) report was released last Friday. According to this report, non-commercial traders reopened Buy-contracts and closed Sell-deals. The net position for the "non-commercial" category of traders, which is the most important and significant category of traders, has grown again and this time by 15,000 contracts, which is a high value (5,128 Buy-contracts were opened and 9,681 Sell-contracts were closed). This leads to the conclusion that the mood of big traders has not changed at all over the past week. In principle, the same conclusion can be drawn by looking at the chart of the euro/dollar currency pair itself. The pair has been in the side channel since July 27, that is, for three weeks, after which the upward movement resumed. During all this time, traders managed to adjust the pair by a maximum of 200 points down, which is very small to be reflected in the COT report. The euro began to fall in price yesterday evening, which gives reason to assume the end of the upward trend. If we see non-commercial traders sharply reducing Buy-contracts or increasing the number of Sell-contracts in the next COT report, it will show that their mood is beginning to change in favor of a bearish one.

The fundamental background for the EUR/USD pair remained extremely weak on Wednesday. And the fact that both European currencies moved almost synchronously again indicates that the reasons should again be sought in the US. Since there has not been much positive news in the United States recently, and nothing overly optimistic happened in the US yesterday, we are inclined to believe that the fall in the euro/dollar pair quotes is purely technical. Yesterday's report on inflation in the European Union was, for example, ignored. The next report on US applications for unemployment benefits is scheduled for today. If our assumption that the bulls have started to massively reduce longs is correct, then now the market will cling to any positive message from overseas. If tomorrow it turns out that the number of new applications for unemployment benefits has decreased again, compared to the previous week, then the dollar can continue to grow.

Based on the above, we have two trading ideas for August 20:

1) Bulls abandoned further purchases of the pair and began to take profits. The pair reached the 1.1958 level and after that a strong fall began. Thus, we do not expect the upward trend to resume in the near future. It is recommended to consider new purchases of the pair only if the price returns to the area above 1.1910 with targets at the resistance levels of 1.1958 and 1.2051.

2) Bears finally seized the initiative in the market and began to attack. However, so far, more and more depends on the bulls, which simply close the longs. Nevertheless, we recommend opening sales after breaking through the support area of 1.1886-1.1910 and the Kijun-sen line (1.1874) with the targets of the Senkou Span B line (1.1805) and the support level 1.1745. Potential Take Profit in this case will be from 40 to 100 points.

Hot forecast and trading signals for the GBP/USD pair.

We recommend that you also explore the fundamental background in these articles:

Overview of the EUR/USD pair. August 20. Is Joe Biden the American version of Jeremy Corbyn? What can a Democratic presidential candidate give America?

Review of the GBP/USD pair. August 20. Traders are not interested in the negative from Great Britain. Chinese giant Alibaba next in line to be banned in the US

Explanations for illustrations:

Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one.

Support and resistance areas are areas from which the price has repeatedly rebounded off.

Yellow lines are trend lines, trend channels and any other technical patterns.

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

Overview of the GBP/USD pair. August 20. Traders are not interested in the negative from Foggy Albion. The next in line to

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: 35.8597

The British pound stayed in one place for most of the past day, and in the second half of the day – started a downward movement, so far a correction. As in the case of the euro currency, we believe that the pound is overbought very much, but the dollar is oversold. Therefore, we continue to insist on the option that the US dollar should start growing again, at least within the framework of a corrective movement. Yesterday, the pound/dollar pair, having worked out the area of 1.3250-1.3260, began to adjust to the moving average line and only fixing the price below it will change the current trend to a downward one.

By the way, yesterday, the British currency could well continue to move up. On August 19, in the morning, the UK inflation report was published and it turned out that the main CPI indicator accelerated to 1% with a forecast of 0.6% y/y, and core inflation accelerated to 1.8%, while experts expected it to slow from 1.4% to 1.3% y/y. Thus, it was a pleasant surprise for buyers of the pound. So pleasant that they were even confused and began to reduce long positions. However, we have repeatedly noted in recent months that macroeconomic statistics are ignored by market participants. Thus, we are not surprised by the fact that the next report did not have any impact on the movement of the currency pair. Plus, we have already noted several times that inflation is not the most significant indicator at this time. This leads to the conclusion that it is better to keep track of all macroeconomic reports, but now we need to pay more attention to the overall fundamental background. This is what traders focus on when opening any positions, and especially large, professional traders who drive the market.

Unfortunately, at this time, currency market participants do not pay any attention even to the general fundamental background from the UK. For example, the latest GDP data showed that the British economy is the leader in losses among all the countries of the European Union, which it will no longer be a member of at the end of the year. In addition, in Northern Ireland and Scotland, as many journalists and political analysts note, separatist sentiments have begun to mature and strengthen. It is no secret that Scotland wants to leave the United Kingdom and return to the EU. And Northern Ireland is completely unimpressed by the prospect that the island will now have a physical border with Ireland, which will remain in the EU. Moreover, the economic crisis can only worsen the mood of the left that the UK should leave the same way as Britain itself left the Alliance. After all, if the EU countries now have every right to rely on free aid from other countries of the bloc (the 750 billion euro economic recovery fund), then Britain can now only rely on itself. Negotiations with Brussels on a trade agreement that would take effect on January 1, 2021, are still in place, and all reports of the beginning of the seventh, unplanned round of negotiations between Michel Barnier and David Frost sound like an anecdote. Just like reports that London expects to conclude an agreement in September. Recall that according to Michel Barnier, London is absolutely not eager to make concessions. In other words, London is just waiting and hoping that the EU will give in to everything and the parties will sign a deal. Moreover, Bloomberg economists conducted a vote among top managers and bankers, which shows that few of them expect the economy to fully recover by the end of 2021, as promised by the Bank of England. Most likely, by the end of 2021, the British economy will be 5% smaller than before the pandemic. Moreover, this figure reflects the most optimistic scenario, in which the second "wave" of the epidemic will not occur. However, doctors as one declare that with the arrival of autumn and, moreover, winter, the second "wave" of COVID-2019 will begin. Thus, potentially, the economy of almost any country in the world with the arrival of the cold season can again begin to slow down or even shrink. We have repeatedly said that even if the government of a country does not impose strict quarantines, people will not be forced to work or lead an active social life if an epidemic is raging outside the window. Especially in developed countries, where it is quite possible to live on unemployment benefits. In general, all forecasts of the Central Bank of England are regarded by investors as "surprisingly optimistic". Moreover, most economists expect that the Bank of England will once again expand the asset purchase program by 50 or 100 billion pounds. All these factors are now simply ignored by traders, so in general, it is the US dollar that continues to fall.

Interesting information at the same time comes from overseas. On August 19, Donald Trump said in a conversation with reporters that trade talks with China were put on pause. "I don't want to talk to him at this time," Trump said. "What they did to this country and the world is unthinkable." The US President did not forget to once again prick his opponent Joe Biden: "If sleepy Joe worked with them, they would already own America. Biden would give them everything. He is not very smart and is frankly weak." In addition to the war we have already mentioned against the Chinese company Huawei, Trump seriously intends to work against other Chinese giants, forcing them out of the American market. Just the other day, Trump said that he is studying the possibility of banning the Chinese giant Alibaba in the United States. Earlier, we wrote that Trump requires the sale of the social network TikTok to any American company, or this network will be banned in the States. Any such aggression against a Chinese company is explained by national security interests. In addition to all this,Trump seriously intended to return American companies from China to the States. He promised to do this during the 2016 election campaign, and now, a few months before the end of his first presidential term, he recalled this issue. It is not known whether Trump will have time to solve this problem, but it is expected that all companies with production facilities in China will receive tax benefits when returning to America and, conversely, will be punished and fined if they refuse to do so. Thus, relations between the United States and China will continue to deteriorate with a 90% probability. And especially if Trump wins the 2020 election.

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The average volatility of the GBP/USD pair is currently 103 points per day. For the pound/dollar pair, this value is "high". On Thursday, August 20, thus, we expect movement within the channel, limited by the levels of 1.3052 and 1.3258. Turning the Heiken Ashi indicator upward will indicate the possible completion of the downward correction.

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 started a strong correction on the 4-hour timeframe. Thus, today it is recommended to consider new longs with the goals of 1.3245 and 1.3258 if the Heiken Ashi indicator turns upward or the price rebounds from the moving average. It is recommended to open sell orders no earlier than fixing the price below the moving average with the goals of 1.3062 - 1.3052.

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Overview of the EUR/USD pair. August 20. Is Joseph Biden the American version of Jeremy Corbyn? What can a Democratic presidential

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: 15.7404

On Wednesday, August 19, trading was held in a very quiet and calm channel. After the price managed to break out of the three-week 200-point side channel, it seems that traders again do not know what to do next. After all, the technical picture for the euro/dollar pair has not changed. The US dollar has been heavily oversold, and remains so. There was no normal correction for the pair either. And yet, in recent weeks, the overall fundamental background in America has become less negative. First, somehow in many American cities rallies and protests against police violence and racism "Black Lives Matter" ended. And this is a small victory, because they very much hindered the recovery of the economy, and at the same time were an excellent springboard for the spread of the "coronavirus". Second, the coronavirus epidemic has been on the wane in recent weeks. In the last three days, no more than 50,000 illnesses were recorded every day. This is still a lot, but at least this figure has crept down, which means the situation is gradually improving. Third, the bottom of the US economy has probably already passed. Although the recovery promises to be long and difficult, but still the worst is over. But in the European Union, nothing has changed for the better, everything is as it was, and remains quiet and calm. However, there are several factors that may have caused the US currency to resume its decline. First, this is another escalation in relations between China and the United States. Now these two countries are at war for/against Huawei, which US President Donald Trump has accused of spying and stealing the data of American citizens. Second, Republicans and Democrats cannot agree on a new package of economic assistance to small and medium-sized businesses, as well as to Americans who lost their jobs during the pandemic. Differences remain over the size of the package. Trump is offering no more than $ 1 trillion, which means $ 200 in "coronavirus surcharges" to every unemployed person, Democrats are pushing for $ 600 in surcharges. Trump wants Americans not to sit at home without work and not live on unemployment benefits, and Democrats believe that the unemployed should be helped in any case, and not driven into poverty. Third, the political crisis in America is gaining momentum and may soon reach its climax. Biden and Trump continue to conduct their election campaigns, all leading publications and media continue to count the political ratings of both candidates, and in general, this topic is now the most popular in America.

Just yesterday, we wrote that Americans, judging by the polls, are going to vote for Biden not because he is good, but because Trump is bad. The list of "merits" of Trump is so extensive that it does not raise questions why many Americans do not want to see him in the presidential chair for a second term. The biggest claims against Trump are a complete failure in the fight against the COVID-2019 epidemic, as well as a record decline in the American economy. Thus, the majority of Americans are really ready to vote on November 3 on the principle of "just not Trump". However, if Trump loses, and so far everything is going to this, one can not help but wonder what awaits the United States with President Biden? According to many American political analysts, Biden is one of the most unattractive presidential candidates in the history of the United States. They call him "their guy" and respect him for his human qualities and the hardships of life that he had to go through. For example, Robert Gates, the Secretary of Defense under Obama, said that it was impossible not to love Biden, but at the same time, he was wrong on almost any issue related to foreign policy and national security. That is, in fact, Biden can become President not because of his knowledge of the economy, the ability to lead the country, the ability to negotiate, in general, not because of the leadership qualities that the President should undoubtedly have, but because he is "his own guy" and after Trump, it is better to choose someone "calmer". Many experts also believe that Biden will lead the country without a certain political course, without reformist plans. That is, in fact, it will be extremely similar to the former leader of the British Labor Party, Jeremy Corbyn, who during the parliamentary wars over Brexit and the parliamentary elections suffered a crushing defeat just because he did not have a clear policy that would offer his voters. Biden may become a complete antipode of Trump, but the results of his rule may not differ much from the results of the rule of Trump himself. It is unlikely that Biden will further worsen the situation of the United States, with him there will almost certainly be a recovery and growth, because this always happens after a crisis, but at the same time, in the international arena, Washington may again make important mistakes that will eventually "return" to the country. Trump is a pure businessman who is used to promoting and pushing his personal interests. This is what he did as President of the United States for almost four years, often forgetting that what is good for him is not always good for the country. He was well versed in Economics, but at the same time could not agree with anyone, fought and conflicted with everyone who did not support his point of view. As a result, he made a huge number of enemies in the US government and around the world. Biden, according to many, who will turn 78, also does not have the qualities that a President needs. First, he is already too old and there is a big question in his energy, will he be able to lead the country, especially when in the last year of the presidency, he will be 82 years old? Second, Biden does not give a clear political course. It is unclear what policy the White House will follow, for example, in the conflict with China. Third, Biden is often in the shadows. Thus, we believe that the Americans will choose Biden on the same principle that the conservatives in Britain were chosen in the parliamentary elections. Then it was "we want to leave the EU", now it will be "we do not want Trump to be president".

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The volatility of the euro/dollar currency pair as of August 20 is 78 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1794 and 1.1950. A reversal of the Heiken Ashi indicator to the top will signal a possible resumption of the upward trend.

Nearest support levels:

S1 – 1.1841

S2 – 1.1719

S3 – 1.1597

Nearest resistance levels:

R1 – 1.1963

R2 – 1.2085

R3 – 1.2207

Trading recommendations:

The EUR/USD pair has started to adjust, but still continues to be located above the moving average. Thus, today it is recommended to open new long positions with targets of 1.1950 and 1.2085 if the pair bounces off the moving average line. It is recommended to consider short positions only after fixing the price below the moving average with the first goals of 1.1794 and 1.1719.

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