Indicator analysis. Daily review on GBP / USD for August 21, 2020

Trend analysis (Fig. 1).

The market may continue to move upward from the level of 1.3215 (closing of yesterday's daily candle) with the target at the upper fractal 1.3267. (red dotted line). Upon reaching this level, the price may continue to move upward with the next target at the historical resistance level of 1.3310 (blue dotted line).

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Figure: 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger lines - up;

- Weekly chart - up.

General conclusion:

Today the price may continue to move upward from the level of 1.3215 (closing of yesterday's daily candle) with the target at the upper fractal 1.3267. (red dotted line). Upon reaching this level, the price may continue to move upward with the next target at the historical resistance level of 1.3310 (blue dotted line).

Another possible scenario is upon reaching the upper fractal 1.3267 (red dotted line), the price may begin to move downward with the target at 1.3118 - a 14.6% pullback level (red dotted line). If this level is broken down, the next target will be at 1.3028 - a 23.6% pullback level (red dotted line).

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Indicator analysis. Daily review on EUR / USD for August 21, 2020

Trend analysis (Fig. 1).

The market may begin to move upward from the level of 1.1862 (closing of yesterday's daily candle) with the target at the upper fractal 1.1967 (red dotted line). From this level, the upward trend may continue with the next target of 1.2102 - a 76.4% pullback level (blue dotted line).

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Figure: 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - down;

- Trend analysis - down;

- Bollinger lines - up;

- Weekly chart - up.

General conclusion:

Today the price may move upwards with the target at the upper fractal 1.1967 (red dotted line). From this level, the upward trend may continue with the next target of 1.2102 - a 76.4% pullback level (blue dotted line).

Another possible scenario is an upward movement to the historical resistance level of 1.1912 (blue dotted line), In case of testing this level, the price may move downward to the lower fractal 1.1803. A breakdown of this level may prompt further downward movement with the next target at 1.1779 - a 23.6% pullback level (red dashed line).

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US weak statistics disappointed the markets, but could not bring them down (a recovery in the growth of the EUR/USD pair

The markets were shaded by fears again that the US economy, amid a pandemic, the inability of Congressmen from Democrats and Republicans to agree on the measures proposed by D. Trump to help the population amid coronavirus infection, as well as weak data on the country's economy, will recover extremely slowly.

What happened and how bad is it?

On Thursday, data on the American economy came out, which turned out to be significantly worse than expectations and values for the previous period under review. According to economic statistics, the number of applications for unemployment benefits rose to 1.106 million against the forecast of decline to 925,000. The value of the index of manufacturing activity from the Federal Reserve Bank of Philadelphia fell to 17.2 points in August against the forecast of decline to 21.0 points and the July value of 24.1 points.

These data reinforced the negative, which was initiated on Wednesday by the published minutes of the July meeting of the Federal Reserve on monetary policy. Of course, investors could not stand aside. On this wave in Asia, Europe and North America, trading on Thursday passed in a negative zone. Demand for risky assets, assets of the commodity market was under pressure. Nevertheless, there has been a marked increase in interest in protective instruments - the US dollar, Japanese yen, Swiss franc and US Treasury bonds.

Observing everything that happens, the question arises, how serious is all this and what can be expected?

In our opinion, nothing critical has happened. Everyone already knows that the US economy is under the strongest pressure from COVID-19, which forces again and again one State or another to carry out preventive quarantine measures, expressed in the partial or even complete closure of regions. To simply put it, if this negativity turns from a one-off phenomenon into a long period in the future, then, of course, we will see a strong growth in demand for the US dollar, yen and franc, along with Treasuries. As for the growth of gold, we do not see any factors contributing to this so far.

Will we see a new wave of dollar growth?

Of course, such a possibility exists, and here, such a scenario should be most likely considered as a result of the start of profit-taking on the American stock market and the departure of investors to defensive assets. Even more, the local stock market should be recognized, according to the dynamics of the main indexes, either it has already tested a pre-covid level, like the S&P 500, or it has already overcome it long ago, like the NASDAQ or still has not reached it, like the Dow industrial index.

In this case, the dollar will only receive support against all major currencies except defensive ones. But we believe that from a temporary point of view, if this happens, it will not be global in nature. Most likely, we will witness a local surge of pessimism, which will be neutralized by new and positive data on the US economy.

Conclusions

The dynamics of the world markets on Thursday and the Asian trading session on Friday showed that the decline was still of a local, temporary nature. We believe that, perhaps, t after some corrective movement, everything will return to square one and the dollar will resume its downward movement in the currency markets.

Forecast of the day:

The EUR/USD pair found support at 1.1830 and turned up on a wave of better risk mood among investors. We believe that breaking through the level of 1.1900 will lead to the resumption of growth to 1.1965.

The USD/CAD pair resumed its decline in the wake of the rise in oil and improved mood in global markets. We believe it is possible to resume its selling after breaking the level of 1.3150 with a likely decline to 1.3100.

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Trading idea for the AUD/USD pair

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After a strong short impulse on Wednesday and Thursday, the AUD / USD pair has partially recovered and is now trading around the round level of 0.72. Its quote is at half of the total drop realized on the pair, so to reduce even further the price, following the scheme presented below:

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So, using Elliott Wave Theory, take the latest impulse as wave "A" and work for a breakout from the current support level. Overcoming the level of 0.7060 is a priority, and such will be the target profit in trading.

However, the short scenario will be canceled if the quote breaks out of the price level 0.72700. Nonetheless, Price Action and Stop Hunting strategies shall be used for further techniques.

Good luck!

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GBP/USD: plan for the European session on August 21 (analyzing yesterday's trades). Pound making a crazy return to monthly

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

Quite a lot of interesting entry points to long positions in the British pound were formed yesterday. The very first purchases I considered in my yesterday's review for the afternoon. Now let's see where it was possible to enter the market during the US session and what came out of it. On the 5-minute chart, you can see how the bulls are trying to gain a foothold above the 1.3126 resistance and there seems to be an increase of 20 points from this level, but then the momentum slowed down and buyers leave the market. I also paid attention to this scenario yesterday and I think many people were ready for it. Purchases on the repeated test of 1.3075 support allowed a good entry into the market. But on the chart, you can see that the pair fell just a couple of points short of 1.3075. For those who did not enter into purchases from this area, and I think there were many of them, another good entry point was formed after settling above the resistance of 1.3126. As a result, the pound shot another 40, and then another 50 points up. The bulls are currently focused on updating this week's high around 1.3260. However, consolidating above this range is a buy signal, since it is a bad idea to buy on a breakout near the high. We can only expect the pound to continue growing towards the 1.3316 and 1.3375 areas after good data on UK retail sales and the PMI index, where I recommend taking profits. In case GBP/USD falls in the first half of the day, you can consider buying if a false breakout forms in the 1.3223 area. But I recommend postponing larger long positions immediately on a rebound until lows of 1.3185 and 1.3135 have been tested, based on a correction of 30-40 points within the day.

Let me remind you that the Commitment of Traders (COT) report for the previous week showed a reduction in short non-commercial positions from the level of 60,704 to the level of 59,874. On the contrary, long non-commercial positions increased from the level of 45,977 to the level of 48,053. As a result, the non-commercial net position decreased its negative value again to -2,821, against -14,727. This suggests that the market trend is about to change in the near future and buyers of the pound will gain control in the medium term.

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

Sellers of the pound will primarily focus on protecting the resistance of 1.3260. A false breakout there, along with weak data on PMI indices, will form a signal to open short positions in anticipation of a return to the support of 1.3223. Under this condition, it will be possible to add to short positions only after consolidating below the 1.3223 level, counting on the renewal of the low of 1.3185, where I recommend taking profits, since the moving averages are concentrated in this range, which will not allow the price to go down so easily. In case the pound grows further above the resistance of 1.3260, it is best to postpone short positions until the high of 1.3316 has been updated, or sell GBP/USD immediately on the rebound from the resistance of 1.3375, based on a correction of 30-40 points within the day.

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Indicator signals:

Moving averages

Trading is already underway above 30 and 50 moving averages, which indicates a return to the market of buyers of the pound.

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

Bollinger Bands

Growth will be limited by the upper level of the indicator around 1.3280. In case of a decline, support will be provided by the average border of the indicator at 1.3190.

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.
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EUR/USD: plan for the European session on August 21 (analyzing yesterday's trades). Bears didn't have enough strength to

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

Yesterday, buyers have been actively defending the 1.1830 level all day and this is clearly seen on the hourly chart. The closing price turned out to be either at or above the level each time, which only strengthened the belief in the euro's recovery after a major fall on Wednesday. Weak data on the US labor market resulted in the pair's growth in the second half of the day. If you look at the 5-minute chart, you will see how several entry points to long positions have formed. If I analyzed the first point in the morning forecast, then another unsuccessful attempt by bears to break below 1.1830 brought the pair back to this level in the afternoon, which led to forming a signal to open long positions. As a result, the movement was about 60 points up. As for the current situation on the market, it is quite possible that today buyers will once again have to protect the support of 1.1830, where only a false breakout will be a signal to open long positions. If there is no activity at this level, it is best to postpone purchases until the low of 1.1784 has been updated, where the pair could decline only after poor data on manufacturing activity and activity in the services sector of the eurozone. However, the reports are expected to be good, so we can expect the bullish momentum to continue. An equally important task for the bulls is to break through the resistance of 1.1884 and consolidate on it. Only this will allow you to regain the position of major players and open a direct path to the levels of 1.1920 and 1.1952, where I recommend taking profits.

Let me remind you that the Commitment of Traders (COT) reports for August 11 continued to record the growth of long positions and the reduction of short ones, which tells us about the continued interest of investors in risky assets, even at such high prices, as many bet on a further weakening of the US dollar. Problems are also piling up due to disagreements in the US Congress on the further approval of financial assistance to the unemployed, as well as the aggravation of US trade relations with China and the EU. The report shows an increase in long non-commercial positions from the level of 262,109 to the level of 266,078, while short non-commercial positions decreased from 81,461 to 66,327. As a result, the positive non-commercial net position sharply jumped to 199,751, up from 180,648 a week earlier, indicating an increase in interest in buying risky assets.

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

Sellers failed to pick up support at 1.1830 yesterday, and you should seriously think about protecting resistance at 1.1884. A false breakout at this level along with weak data composite PMI Eurozone forms a signal for opening short positions in anticipation for another decline to 1.1830, which bears so actively fought yesterday. However, it will be possible to talk about continuing the downward correction only after sellers consolidate below the 1.1830 level, which will raise the pressure on the pair and open a direct path to the lows of 1.1784 and 1.1746, where I recommend taking profits. If EUR/USD continues to rise above the 1.1884 resistance in the morning, I recommend postponing short positions until the high at 1.1920 is renewed, or sell the euro immediately on a rebound from the 1.1952 weekly resistance, based on a correction of 25-30 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 an active opposition and struggle for the further direction of the pair.

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

In case the pair falls, support will be provided by the lower border of the indicator around 1.1830. A breakout of the upper border of the indicator in the 1.1884 area will result in the euro's growth.

Description of indicators

  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart.
  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart.
  • MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Fast EMA period 12. Slow EMA period to 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
  • Non-profit 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 21, 2020

Technical Market Outlook:

The GBP/USD pair has reversed all weekly losses again, broke above the short-term technical resistance and almost hit the weekly high established at the level of 1.3265 when the Doji candlestick pattern was made. This is another V-shaped reversal on the GBP/USD pair, so the battle between the bulls and bears is continued. If the weekly high is violated, then the next target is seen at the level of 1.3283, but the long-term target for bulls is still located at 1.3518. The immediate technical support is seen at the level of 1.3183 and 1.3169.

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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Technical Analysis of EUR/USD for August 21, 2020

Technical Market Outlook:

The EUR/USD pair has bounced from the level of 1.1803 which is still a technical support for the price and had retraced 50% of the last wave down already. The momentum is positive and the market is bouncing from the oversold conditions, so another wave up is still on the table befroe the week ends. The next target for bulls is seen at the level of 1.1908 - 1.1915 and the immediate technical support is located at the level of 1.1822, 1.1813, 1.1803 and 1.1790. The larger time frmae 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 BTC/USD for August 21, 2020

Crypto Industry News:

Due to the turmoil in the global aviation industry caused by the pandemic, the new Bulgarian start-up gives travelers the opportunity to receive compensation in Bitcoin.

Compensation via the Colibra app is available for passengers who experienced a flight delay of one hour or more. Since its launch in June 2019, the Bulgarian start-up has been offering travelers cash compensation, and has now added the opportunity to receive money in cryptocurrencies.

Since BTC is a volatile asset, users can choose whether they want to lock in the price on the day they buy the ticket or the day they travel. For example, a person who flies frequently and booked a flight last week, with a $ 11,000 locked-in, would get a decent return on a delayed flight today when BTC is above $ 12,000.

Colibra states that it will guarantee a BTC payment to any user whose flight is delayed by one hour or more, no matter what the airline gives.

In the EU, airlines are required to compensate each passenger for delays of three hours or more due to the company's fault. The application works by submitting a claim for compensation for all eligible passengers with a flight delay of 3 hours or more and those with a delay of more than one hour. According to data published by the company, the likelihood of an airline delaying 90 minutes is 30 times more likely than a three-hour delay, and travelers are therefore compensated much more frequently.

In France, the insurance company AXA has implemented a similar blockchain-based compensation process for passengers whose flights are delayed by more than two hours.

Today, however, there are far fewer airplane passengers than last year, due to airlines and authorities trying to slow the spread of the coronavirus. Global travel data provider OAG says the number of scheduled flights on August 10 fell by 47.9% globally, with the number of flights from Hong Kong and Singapore falling by as much as 91%.

Technical Market Outlook:

Yet again the technical support located at the level of $11,646 has stopped the bearish pressure and the price bounced towards the technical resistance seen at the level of $11,855. Currently, the market is trading inside of a tight horizontal range between the levels of $11,855 - $11, 646, but any clear violation of $11,646 will result in sell-off acceleration towards the next technical support seen at the level of $11,220. On the other hand, the next target for bulls is seen at the level of $12,004 - $12,035 zone. 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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Technical Analysis of ETH/USD for August 21, 2020

Crypto Industry News:

Tokyo District Court issued the first cryptocurrency seizure order in Japan. $ 46,000 worth of bitcoins were confiscated in connection with the Coincheck hack in 2018.

Kyodo said police had seized Bitcoins, which were being held by a Hokkaido doctor and a director from Osaka Prefecture. Two men were arrested in connection with the burglary. They are accused of knowingly buying stolen NEM via the dark web market, in violation of the country's organized crime laws.

The Coincheck exchange suffered a record break-in when NEM worth $ 534 million was stolen from its wallets. Research by Asahi Shimbun showed that personal computers belonging to Coincheck employees were infected with a virus related to Russian hackers.

According to the media, the exchange experienced another data breach in June 2020, involving unauthorized access to the platform's domain registration service.

Technical Market Outlook:

The ETH/USD pair has bounced from the level of $396.47 which is a 61% Fibonacci retracement, broke through the trend line resistance and made a new local high during the bounce at the level of $419.05. In order to continue the up trend, bull will have to push the price towards the next local technical resistance seen at the level of $430.71. The momentum is slowly increasing as the market bounces from the oversold conditions as well. 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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Forecast for EUR/USD on August 21, 2020

EUR/USD

The euro attempted a correction on Thursday after a significant fall on Wednesday, yesterday's growth was 25 points. The price continues to move in a horizontal trend within the uncertainty range of 1.1712-1.1905. The double divergence of the Marlin oscillator continues to exert overall pressure on the price on the daily chart.

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The price went over the MACD line on the four-hour chart. The barrier to it is the upper limit of the uncertainty zone at the 1.1905 level.

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When the price rises to this level, the signal line of the Marlin oscillator will reach the border of the rising trend territory, from which it can turn down, thereby showing a proactive direction to the price, since Marlin belongs to the group of leading indicators. With the price returning to the area under the MACD line, we expect a new wave of decline from the euro.

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Forecast for AUD/USD on August 21, 2020

AUD/USD

The Australian dollar's first attack on the support of 0.7110 failed yesterday. The price stopped on the MACD line of the daily timeframe. At the moment, the price continues to slightly adjust up, in accordance with the general mood of the market. The market sentiment is neutral, that is, the main commodities are in narrow consolidations.

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The AUD/USD consolidation range is the same - 0.7110-0.7240. And since the indicators present in our study remain the same, we are waiting for another attempt to overcome the lower limit of 0.7110 consolidation. Next, we expect the pair to decline to the target level of 0.6975.

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The price went over both indicator lines on the four-hour chart – the red balance line and the blue MACD line. Thus, the balance of market sentiment has shifted towards growth.

The signal line of the Marlin oscillator has reached the border of the growth territory and is turning down from it. It is likely that the price only briefly moved above the MACD line, using it as a consolidation level. If so, the sideways movement of the price will continue all day. Given this circumstance, simply settling the price under the MACD line (0.7182) may not be enough for a confident breakout. We are waiting for the price to drop below 0.7110.

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Forecast for USD/JPY on August 21, 2020

USD/JPY

The yen slightly strengthened on Thursday, turning around from the resistance of the balance indicator line on the daily chart. Also, the signal line of the Marlin oscillator failed to overcome the resistance of the border of the growth territory at the first attempt and lay down to drift under it with the intention of overcoming it a little later.

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The price pullback is supported by the price channel line with the current mark of 105.40. The price may not reach the support level. The target and resistance of the price is the upper embedded line of the price channel at 106.65.

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On the four-hour chart, the price turned from the MACD line, failed to overcome it and gained a foothold over it. The Marlin oscillator shows a remarkable pattern - a horizontal trend with an actively declining price, which indicates that such a decline will soon stop and the price will turn up. The MACD line also acts as a resistance to the price around the 106.25 mark. Overcoming it opens the first goal of 106.65.

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Control zones for USD/CAD on 08/21/20

Working in the direction of the downward movement remains a priority. The nearest goal is a monthly minimum. It is important to note that the local accumulation zone is formed on the third day. Going outside this zone will indicate further priority. The continuation of the pair's declining is more likely.

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On the other hand, working within the flat implies a partial fixing of a sale during the retest of the weekly control zone 1.3160-1.3137.

The option to continue the downward medium-term impulse will become relevant if the current week's trading closes below the weekly control zone. This will open an opportunity to hold part of the short position to the level of 1.3050.

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Daily CZ - daily control zone. A zone formed by important data from the futures market that changes several times a year.

Weekly CZ - weekly control zone. A zone formed by important marks of the futures market that change several times a year.

Monthly CZ - monthly control zone. A zone that reflects the average volatility over the past year.

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Control zones for EURUSD on 08/21/20

The pair was corrected by 50% after forming the absorption pattern of the daily level. The main resistance for today is the WCZ 1/2 1.1902-1.1893. If testing this zone leads to forming a sell pattern, then the short position will come to the fore. The target of the fall is still the weekly control zone of 1.1784-1.1766.

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Working in a range between two control zones implies partial profit taking at the lower border. Selling should be made only after an absorption pattern has formed not lower than the TF M30.

An alternative model will develop if today's trading closes above the WCZ 1/2. This cancels the option to sell the instrument and allows you to search for purchases that will be aimed at updating the monthly high.

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Daily CZ - daily control zone. The area formed by important data from the futures market, which changes several times a year.

Weekly CZ - weekly control zone. The zone formed by important marks of the futures market, which changes several times a year.

Monthly CZ - monthly control zone. The zone, which is a reflection of the average volatility over the past year.

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Control zones for AUDUSD on 08/21/20

A medium-term accumulation zone continues to form for the fourth week. This allows you to consider purchases when testing the lower part of the range and selling when updating the monthly high. Working within the framework of a flat implies short profit taking on its borders.

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The target for the upward movement is still the weekly control zone of 0.7308-0.7290. Yesterday's purchases should be kept until the structure of the upward movement is broken.

The alternative option will develop if the closing of Asian or US trades occurs below the WCZ 1/2 0.7187-0.7178. This will allow you to review your trading plan and sell the instrument. The first goal of the decline will be a weekly low.

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Daily CZ - daily control zone. The area formed by important data from the futures market, which changes several times a year.

Weekly CZ - weekly control zone. The zone formed by important marks of the futures market, which changes several times a year.

Monthly CZ - monthly control zone. The zone, which is a reflection of the average volatility over the past year.

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Hot forecast and trading signals for the GBP/USD pair on August 20. COT report. Crazy pound. Sterling neutralized almost

GBP/USD 1H

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The GBP/USD pair nearly collapsed on August 20 until yesterday morning. And since yesterday morning, it has moved on to a strong growth and at the time of writing, offset 75% of losses. Thus, the pair's quotes returned to the area above the critical line, the bulls quickly caught on, and the bears once again showed their weakness and unwillingness to attack. By the way, the European currency did not grow on the fourth trading day of the week. Thus, uncorrelation has occurred, which raises questions. If the pound sterling rose today but not on the basis of the US fundamental background, then why? One way or another, at this time the pair has excellent chances of resuming the upward trend, but at the same time, yesterday's growth may just be a deep correction, after which the downward movement will resume.

GBP/USD 15M

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The lower linear regression channel has already turned up on the 15-minute timeframe, signaling a possible resumption of the upward trend. The latest Commitment 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, big 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 started falling on Wednesday, August 19, but, first, this day will not be included in the new COT report, which is for the period of August 12-18, and secondly, the pair began to sharply grow on Thursday.. 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 on Thursday was not strong or interesting. During the day, not a single macroeconomic report was published in the UK, but there was one report on applications for unemployment benefits in the United States, however, it could not cause the dollar to fall by 130 points. The fall began in the morning, and the report was released in the afternoon. Thus, there can be only two explanations. Either traders caught on very quickly and started buying the pound again, selling off the dollar, or the market received some optimistic news from the UK. However, no news has been received from the UK, so we are leaning towards the first option. UK business activity indices are also set to be published in the last trading day of the week, but the macroeconomic background currently plays a low role in the exchange rate.

There are two main options for the development of events on August 21:

1) Buyers finally let go of the pound dollar pair, which immediately led to a landslide fall. However, this process did not last long. Since the price returned to the area above 1.3157-1.3181, now you are advised to consider long positions while aiming for 1.3213 and 1.3284. A rebound from any target can provoke a strong new round of the downward movement. Take Profit in this case will be up to 70 points.

2) Bears gave up very quickly and released the initiative from their hands. Thus, settling the price below the Kijun-sen line (1.3156) is required, so that the downward movement can resume 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 50 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 21. FOMC minutes: nothing interesting. US tech giants do not benefit from Trump becoming president a second time. The war with China will continue.

Overview of the GBP/USD pair. August 21. Ongoing Brexit talks. Boris Johnson will have to rebuild the economy and keep Northern Ireland and Scotland as part of Britain.

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

Hot forecast and trading signals for the EUR/USD pair on August 21. COT report. Rumors completely baffled traders. Price

EUR/USD 1H

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The euro/dollar pair perfectly reached the Senkou Span B line on the hourly timeframe of August 20, which, let me remind you, is the most important and strong line of the Ichimoku indicator. So the price reached it and rebounded. Thus, the bears' fuse dried up very quickly. And now, in order for the US dollar to continue to rise in price, it is necessary for sellers to keep the pair through the Senkou Span b line. However, now the most interesting question is whether yesterday's fall was an accident? We have already concluded yesterday that traders of both major pairs just started taking profits, which resulted in the simultaneous fall of both the euro and the pound. However, both pairs stopped falling today, and the pound sterling has jumped at a breakneck speed. Thus, both pairs may soon return to the upward trend.

EUR/USD 15M

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Both linear regression channels turned down on the 15-minute timeframe, but this still did not help the quotes to continue falling. The last available Commitment of Traders (COT) report was released last Friday. According to this report, non-commercial traders reopened Buy-contracts and closed Sell-deals. Thus, the net position for the "non-commercial" category of traders, which is the most important and significant category of traders, has grown again, this time by 15,000 contracts, which is a high value (5,128 Buy-contracts were opened and 9,681 Sell-contracts were closed). Hence, the conclusion is 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. 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 little to be reflected in the COT report. The euro only began to fall in price the day before yesterday,, which gives reason to assume the end of the upward trend. If in today's COT report we see non-commercial traders sharply reducing Buy-contracts, or an increase in the number of Sell-contracts, it will show that their mood is beginning to change in favor of a bearish one.

The fundamental background for the EUR/USD pair was extremely contradictory on Thursday. There are a lot of rumors on the market now, but there are practically no facts. Let's start with the fact that yesterday the media leaked information that Republicans and Democrats began to conduct almost secret talks on a new package of financial assistance to the US economy. Furthermore, it was also reported yesterday that China and the United States have begun preparing for new talks on trade relations. In both cases, the participants in the negotiation process did not want to advertise the upcoming dialogues. And this is the main doubt that this information is true. Of course, this may be the case in reality, but what is confidential? Germany, the European Union and the United States will publish business activity indices in the services and manufacturing sectors on Friday. We believe that there will not be much reaction to these reports, as they are highly likely to exceed the 50.0 level, above which the corresponding area is considered to be growing.

Based on the above, we have two trading ideas for August 21:

1) Bulls temporarily abandoned further purchases of the pair and began to take profits. The pair dropped to the Senkou Span B line and stopped. Thus, in order for the upward trend to resume, the quotes must return to the area above the 1.1886-1.1910 range. In this case, we will recommend buying the euro again with targets at the levels of 1.1958 and 1.2051. Take Profit in this case will be from 40 to 120 points.

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 closed part of the longs. Nevertheless, we recommend to continue selling the pair with the target of the support level of 1.1745 if sellers manage to overcome the Senkou Span B line (1.1812). The potential Take Profit in this case will be about 50 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 21. FOMC minutes: nothing interesting. US tech giants do not benefit from Trump becoming president a second time. The war with China will continue.

Overview of the GBP/USD pair. August 21. Ongoing Brexit talks. Boris Johnson will have to rebuild the economy and keep Northern Ireland and Scotland as part of Britain.

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

Control zones for NZDUSD on August 21, 2020

Yesterday's decline led to a test of two significant supports at once. The weekly CZ 0.6498-0.6483 coincided with the zone of the weekly average move, which led to a sharp increase in demand. It is important to note that the growth did not lead to the formation of a reversal model, so sales still remain relevant.

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If there are still short positions that are in breakeven, then you can continue to lead them. The most favorable prices for repeat sales are within the WCZ 1/2 0.6568-0.6561.

An alternative growth model will develop if the closing of today's trading occurs above the WCZ 1/2. This will open the way for growth and updating the monthly maximum. The probability of development of this model is 50%, so it must be taken into account when building a trading plan within the day.

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Daily CZ - daily control zone. A zone formed by important data from the futures market that changes several times a year.

Weekly CZ - weekly control zone. The zone formed by important marks of the futures market, which change several times a year.

Monthly CZ - monthly control zone. A zone that reflects the average volatility over the past year.

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

Overview of the GBP/USD pair. August 21. Brexit negotiations continue. Boris Johnson will have to rebuild the economy and

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: 67.0898

The British pound also settled slightly below the moving average line following the fall that began the day before yesterday. However, due to the fact that the fall began quite abruptly and unexpectedly, the moving average line could not go too far up, and now the price is very close to it. On August 20, sellers failed to continue moving the pair down. Thus, none of the previous local lows were updated, and fixing the price above the moving average line will return the bulls to the market at all. Thus, we would not rush to declare the end of the upward trend. It may still resume despite the fact that the pound is heavily overbought, there were no special reasons for the growth of the British currency, but, nevertheless, traders continue to sell the US dollar, so in general it may continue to fall in price. A new COT report will be released today, which could show a reduction in buy-contracts for non-profit traders, however, this is unlikely to happen, since the report will cover only the period of August 12-18, and the fall in the British pound quotes occurred on August 19.

Very little macroeconomic information has been received from the UK recently. And most importantly, there is no information about the progress of negotiations on the relationship between the UK and the European Union after the end of the "transition period". Thus, "who is still there", and the pound still has little reason to strengthen. As we said earlier, if everything is relatively calm and good in the European Union, which really contrasts with what is happening in the US, the situation in the UK (economic and political) is no better. The economy is clear. The loss of 20.4% of GDP in the second quarter is the highest among all EU countries, among which the Kingdom will not be listed very soon. But the political situation is not so clear. We have been skeptical of Boris Johnson and his manner of governing since day one, repeatedly criticizing him. By and large, in more than a year of his rule, Johnson won few victories. He can only be credited with bringing Brexit to an end and not delaying the process for several more years. However, what is blood? We are sure that any politician could have taken the country out of the EU in such a way as Johnson did. After all, think about it, Johnson did not agree with Brussels on a "soft divorce", he did not manage to conclude a trade deal, and what will happen after the "transition period" can only be guessed, although all economists as one continue to say that the British economy will be dealt another blow due to the complete severance of ties with European companies. It is to the EU countries that more than 50% of exports from the UK are sent. Thanks to Boris Johnson, who simply "took the axe" and cut all the ropes that stretched from Britain to the EU, the bloc and the Kingdom will now trade under WTO rules. That is, with duties, quotas, and so on. And now tell me, what did Johnson do so special for Great Britain? Nothing. Moreover, in the best traditions of Donald Trump, Johnson tried several times to play dishonestly. First, he blocked the work of the Parliament in order to take the country out of the EU unhindered and in the way he wants. Before that, he kicked out of his party all those who did not support his views on Brexit. Thus, at the head of Britain is just a smaller copy of Donald Trump. A little later, the British government completely failed to fight the "coronavirus" in the Foggy Albion, as well as his colleague and friend across the ocean. And if two more friends worked for each other, there would be a lot to forgive. But there is no trade deal between the United States and Britain yet. There are no negotiations between London and Washington. And Johnson, apparently, is very much counting on this deal. It seems that he really believes that "friendship" with Trump will help him. However, Trump can leave his post in six months and then have to negotiate with another President. In general, we believe that the UK is headed by the same ambiguous leader as the US.

At the same time, we should not forget that almost the main task of Johnson is not to restore the economy now (this is already clear), but to keep Scotland and Northern Ireland as part of the United Kingdom. We have already written several times about the fact that Scotland is trying to leave the EU since 2014, when the first independence referendum was held. However, at the time, most Scots thought it would be better to remain part of the Kingdom. Now the majority (according to opinion polls) believe that it would be better to leave the Kingdom and return to the European Union. However, to do this, you need to get official permission from London to hold a second referendum, and it is obvious that London will not give the "go-ahead" for this. However, the events of recent decades show that a region does not always need "good" from above to leave or join another state or bloc. Just as it is not always possible for the government to reassure its population, which does not want to live by the new rules or vice versa, in the old way. The events in Ukraine and Belarus are a clear confirmation of this. Thus, it is quite possible that one of these scenarios is also possible in Scotland. And there is nothing to say about Northern Ireland, which has been in conflict with the British authorities for decades. Its residents are clearly not happy that the island of Ireland will now have a border, customs and border crossing system, even if it will pass by sea.

Thus, we once again point to the fact that the reasons for growth in the pound are few. And we once again point out that you still need to trade in accordance with the technical picture, since it best reflects what is happening now in the market.

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The average volatility of the GBP/USD pair is currently 122 points per day. For the pound/dollar pair, this value is "high". On Friday, August 21, thus, we expect movement within the channel, limited by the levels of 1.3069 and 1.3313. Turning the Heiken Ashi indicator upward will indicate a possible new round of 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 is trying to resume the upward trend on a 4-hour timeframe. Thus, today it is recommended to consider new longs with the goals of 1.3245 and 1.3306, which could be opened after fixing the price above the moving average,and hold them until the MACD indicator turns down. It is recommended to open sell orders no earlier than fixing the price below the moving average with the goals of 1.3062-1.3000.

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

Overview of the EUR/USD pair. August 21. The FOMC minutes: nothing interesting. The US tech giants do not benefit from Trump

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: -29.7360

The EUR/USD currency pair, after rebounding yesterday from the Murray level of "6/8" - 1.1963, continued to move down for most of Thursday, August 20. And as a result, it was fixed below the moving average line. However, despite the fact that we have been waiting for the pair's quotes to fall for a long time, and despite the fact that the price has fixed below the moving average, and despite the fact that the dollar has finally risen in price, we do not believe that the upward trend is definitely over. Yes, the pair is fixed below the moving average, however, look at the illustration: over the past two weeks, the price overcame the moving average three times and each time could not start forming a downward trend. Thus, it is absolutely possible that this time the bears will fail and the upward movement will resume, although we have repeatedly said that the euro/dollar pair, from our point of view, is strongly overbought. But market participants are not interested in this. Major traders do not seem to leave the market, and yesterday recorded only a part of the profit on long positions. Thus, in order for the downward movement to continue, it is necessary that professional traders continue to reduce longs. At the same time, sellers should start opening short positions. Only in this case, the US currency can count on further strengthening. In fundamental terms, nothing has changed for the euro/dollar pair. There was no positive news from America. The overall fundamental background has not changed.

Last night, the minutes of the last Fed meeting were published in the States. And this document could well send the US dollar into another "knockout". However, we warned traders that market participants rarely pay attention to this publication, so the reaction is unlikely to follow. In reality, there was no reaction, and the US dollar was actively rising in price at this time, which clearly does not correspond to what was stated in the document. The first thing to note is that the Fed leaders consider it necessary to further support the US economy through various types of stimulus measures. Representatives of the Monetary Committee note that the uncertainty in the future of the economy is extremely high and will depend on how the fight against the "coronavirus" epidemic will take place and what its results will be. Members of the Monetary Committee agreed that the economy will need additional incentives, but have not yet decided what tools and when to use them. Two key factors that will affect the economy in the future are government actions and the scale of the pandemic. The greatest concerns are related to the economic activity of Americans, which may remain at a low level for a long period of time if the COVID-2019 virus can not be curbed or a vaccine against it is created soon. However, not everyone supports additional monetary stimulus. Opinions differ. Some members of the FOMC believe that serious fiscal stimulus will be needed to improve labor market conditions, and some believe that new monetary injections will be needed to return inflation to the 2% level. The minutes also said that at the next meeting, representatives of the Federal Reserve may re-evaluate monetary policy, which will lead to a significant change in the text of the final communique.

Thus, there was nothing optimistic about this protocol. By and large, everything really depends on how strong the "coronavirus" epidemic will be in America in a month, two, three or six months. Now we all see that the United States continues to lead in the number of cases, in the number of deaths from the pandemic. Of course, the United States is also one of the most numerous countries in the world, so the large number of diseases and deaths is partly due to this. Moreover, many countries clearly falsify real data, hiding the real scale of the epidemic. In particular, this is China, which, according to the Johns Hopkins Institute, currently recorded a total of 90,000 cases of diseases and 4,707 deaths. Obviously, this information is not true.

Meanwhile, US President Donald Trump once again "rode the roller" on his main opponent in the presidential election, Joe Biden. Recall that for America and, accordingly, the US dollar, now the topic of elections is one of the most important. After all, the entire international policy of the country depends on who will become the next President. "Putin, President Xi Jinping, Kim Jong Un, Turkish President Erdogan, all of them are world-class grandmasters. We can't let a man who can't think straight deal with them. He was not very good at his best," Trump said. The US leader also said that Biden is "a puppet of the ultra-left political forces and does not understand what is happening". However, the Americans will choose a new President clearly not based on how well the new leader will stand up to Xi, Erdogan, Kim Jong-Un and Putin. After all, everyone knows that people are primarily interested in their own standard of living, and not in foreign economic policy. It is Trump who is interested in the struggle and confrontation with other countries. 90% of the inhabitants of any country are interested in going to work, getting a salary, starting a family and living well, and not the political course of Syria or Turkey. Trump has shown himself to be a leader in 2020 who cannot effectively lead the country at a difficult moment. Another question is, can Biden be a better President than Trump?

If Trump becomes President for the second time, there is no doubt that he will launch an even greater campaign against China. There is no doubt that Trump will impose new duties, require all American companies to return their production to the United States, impose duties on those who refuse, and give benefits to those who agree. Thus, by and large, all the industrial and technological giants of America do not benefit from Trump becoming President for the second time. Well, a new trade war with Beijing or an escalation of the old one does not benefit anyone at all, but the US President is unlikely to stop these judgments. He set a goal to eradicate the injustice in China's attitude to America and will go to it to the end. The US dollar remains in the high-risk zone. Yes, technical factors speak in favor of the fact that this currency should have started strengthening long ago, however, it is not technical factors that rule the currency market, but traders. If traders continue to find reasons to get rid of the US currency, it will continue to fall in price.

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The volatility of the euro/dollar currency pair as of August 21 is 82 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1771 and 1.1935. 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 and is located just below the moving average. Thus, today it is recommended to open new long positions with targets of 1.1935 and 1.2085, if the pair returns to the area above the moving average line. It is recommended to consider short positions only after a more confident fixing of the price below the moving average with the first goals of 1.1771 and 1.1719.

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

Analytics and trading signals for beginners. How to trade the EUR/USD pair on August 21? Analysis of Thursday trades. Preparation

Hourly chart of the EUR/USD pair

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The EUR/USD pair tried to continue its downward movement for most of the day on Thursday, August 20. However, the pair's sellers failed to do any of this. The MACD indicator turned up, as we warned this morning, and began to discharge. If you look closely at the illustration, you will see that the indicator began to rise while the pair was trying to continue moving down. This is called "discharge", but today it has provided an excellent service to novice traders, since a new signal to sell did not form, and the price eventually began an upward correction. This is good. If the trend has changed to a downward trend, then in any case, you need to wait for a pullback to the top and only then should you open new sales of the euro/dollar pair. Of course, the downward movement can continue without a pullback, but in this case, it will be more difficult and dangerous to work with such a movement.

There was only one macroeconomic release today. The report on applications for unemployment benefits. We have said in previous articles that this is not the most important report in the current environment, so there is unlikely to be a reaction to it. In practice, it turned out that the report was worse than forecasts (1,106,000 against 925,000), so in any case, it could not support the US dollar. Therefore, the upward movement of the euro/dollar pair (which means the fall of the dollar and the growth of the euro currency) could be caused by a technical correction, a weak report on applications for benefits, or both. As for the overall fundamental background, it has not changed much in recent days. Democrats and Republicans continue to negotiate a new package of economic assistance to the unemployed and small businesses, relations between China and the United States continue to deteriorate, and the scale of the pandemic in America remains high. Thus, if the current positions of the pair were led by a US fundamental background (absolutely negative), then it has not changed recently.

Six business activity indices in the manufacturing and services sectors will be published at once on August 21, Friday, in America and the European Union. These indices reflect the activity of purchasing managers and business conditions in the areas of economics. As a reminder, any reading above 50 is considered positive. All six indices have higher than 50.0 past values as well as higher forecasts. Moreover, after the severe fall of both economies, a recovery has now begun, which means that all business activity indices are simply obliged to go up. Accordingly, market participants can be disappointed only if one or more indices are unexpectedly below 50.0. In this case, pressure on the currency of this country may begin.

The following scenarios are possible on August 21:

1) Longs on the pair are currently not relevant, since the price has overcome the upward trend line. Thus, now buyers need to wait for a new upward trend to form. You need to wait until new trend patterns have been constructed or cancel the corresponding descending patterns. Since the latter are not available at this time, it is not necessary to expect buy signals in the near future.

2) Sales of the currency pair are more relevant at this time, since the breakdown of the trend line was not false. Thus, we recommend waiting for the MACD indicator to turn down and then open new sell orders with the goals of 1.1794 and 1.1751. The closer to the zero mark the MACD indicator turns down, the less the indicator will be late to react.

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.

MACD indicator (10,20,3) 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.

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

EUR/USD. Dollar's fragile position and deceptiveness of the China issue

The downward momentum of the EUR/USD pair faded in the middle of the 18th figure. Now traders are faced with a difficult choice, given the contradictory fundamental picture. Neither the bears nor the bulls of the pair have enough weighty arguments to lure investors to their side. As a result, the price stands still waiting for the next news impulse.

What happened?

As a rule, one of them dominates all news items during the day - whether it is a macroeconomic report or a comment by a politician/official. But now the market has a different situation, more complicated from the point of view of fundamental analysis. The market receives a lot of contradictory information that confuses traders and analysts. This explains the flat for the EUR/USD pair – in contrast to positive news, negative news comes and vice versa.

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In general, the focus of the market is now on US-China relations. And if at the beginning of the week the dollar was losing ground amid the strengthening of anti-Chinese rhetoric on the part of US President Donald Trump, then yesterday the situation turned 180 degrees. The fact is that, according to authoritative news resource Bloomberg, the United States and China are still preparing for joint negotiations, although they do not advertise this in the public plane. It is worth recalling here that literally the day before yesterday, Trump made a loud statement that he refused to negotiate with Beijing. Along the way, he again accused China of spreading the coronavirus (negligent attitude to the epidemic), saying that he "does not want to talk to this country."

But, as it turned out a little later, in fact, the White House not only wants to conduct a dialogue with China, but is already in the stage of "building bridges." According to Bloomberg sources, representatives of the countries are holding consultations, paving the way for negotiations at a higher level. Moreover, today representatives of the Ministry of Commerce of China indirectly confirmed these rumors, saying that "both sides are in favor of continuing the dialogue, which will resume very soon." And although he did not speak about any specific dates, what was said was enough for the dollar to restore its positions throughout the market.

This fundamental factor is clearly on the side of the US currency. But all other factors put pressure on the greenback in one way or another.

For example, today's release on the data on the US labor market turned out to be worse than predicted values. First of all, we are talking about the increase in the number of initial applications for unemployment benefits. This indicator has been steadily declining for 11 weeks starting in May, reflecting the recovery in the US labor market. But then the weekly indicators began to come out in disarray, often exceeding the forecast values. This is what happened today: according to forecasts, the number of initial applications should have increased by 930,000. But in reality, the indicator jumped by 1,106,000. Let me remind you that the last Nonfarm data pleased the dollar bulls - the number of people employed in the non-agricultural sector increased by 1,763,000 (with a forecast of growth of 1.5 million). The unemployment rate also fell to 10.3%. But here it is worth noting that Nonfarm are two weeks behind the reports on claims for unemployment benefits. Therefore, given the dynamics of these reports, the August figures for Nonfarm could be disappointing. In addition, the manufacturing index of the Fed-Philadelphia was also published today, which also turned out to be in the red zone (a slowdown was recorded to 17 points from the previous 21-point value).

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In addition to macroeconomic reports, the dollar is also under pressure from the domestic political situation in the United States, in the context of the adoption of a long-suffering bill to provide additional assistance to the country's economy. Here, the information is also contradictory: according to some representatives of the White House, talks have finally reached an impasse. According to other representatives of the administration, the parties can still sit down at the negotiating table. At the moment the pendulum has swung towards a negative scenario: apparently, the bill will not be agreed until at least September. Yesterday, there was hope that Democrats would support a truncated version of this bill, but later representatives of the Democratic party flatly refused such a proposal.

How to trade?

As you can see, the fundamental background for the euro-dollar pair is contradictory. And yet, in my opinion, the pair retains the potential for its further growth. The fact is that the US currency is now being kept afloat mainly due to the Chinese issue. Rumors that the parties may resume negotiations in the near future are supporting the dollar bulls. But the fact of the matter is that information about this is either unofficial, or semi-official - from the Chinese side. The White House, including Trump, are voicing anti-Chinese rhetoric amid the dire coronavirus crisis. In my opinion, Trump will adhere to such tactics until the end of the presidential race. And this means that in the foreseeable future he will again voice aggressive rhetoric against China (for example, in the context of sanctions against Alibaba). In this case, dollar bulls will lose an advantage, and buyers of EUR/USD will be able to regain their lost positions. This means that longs can be viewed from current positions with the first target at 1.1930 (the upper line of the Bollinger Bands indicator on the daily chart).

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