Indicator analysis. Daily review on GBP / USD for August 26, 2020

Trend analysis (Fig. 1).

The market may move downward from the level of 1.3153 (closing of yesterday's daily candle) with the target at the 21 average EMA at 1.3051 (black thin line). In case of testing this level, the downward trend may continue with the next target of 1.3027 - a 23.6% pullback level (red dotted line).

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Figure: 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - neutral;

- Trend analysis - up;

- Bollinger lines - up;

- Weekly chart - up.

General conclusion:

Today, the price may begin to move downward from the level of 1.3151 (closing of yesterday's daily candlestick) with the target at the 21 average EMA at 1.3051 (black thin line). In case of testing this level, the downward trend may continue with the next target of 1.3027 - a 23.6% pullback level (red dotted line).

Another possible scenario is, from the level of 1.3240 (closing of yesterday's daily candle), the price may begin to move downward with the target at 1.3118 - a 14.6% pullback level (red dashed line). From this level, the price may begin to move upwards with the target at the upper fractal 1.3267 (red dotted line ).

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GBP/USD: plan for the European session on August 26. Bears will not give up. COT reports. Bulls need to defend support 1.3115

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

Several rather profitable signals formed yesterday, both to buy and sell the British pound, which we will now consider. If you recall yesterday's review, I paid attention to buying from the 1.3122 level in the afternoon. On the 5-minute chart, you can clearly see that after repeatedly testing the 1.3122 level, the signal to open long positions appeared, which caused GBP/USD to rise to the resistance area of 1.3170, from which I recommended selling the pair immediately for a rebound. As a result, it was possible to pick up the movement, and then the same number of points down. Such days are rare, but they do happen. Nothing has changed today from a technical point of view. Bulls need to protect the 1.3115 level, since a false breakout there will be the only signal to continue buying the pound in anticipation of a repeated return to the resistance of 1.3170. There are also moving averages in the 1.3115 area, which can provide additional support for the pair. A breakout and consolidating GBP/USD above the resistance of 1.3170 will be the long-term goal, which forms the entry point to buy in anticipation of updating the 1.3218 level, where I recommend taking profits. If bulls are not active in the 1.3115 area, and since we do not have fundamental data to focus on today, it would be best to postpone purchases until the lower border of the 1.3063 side channel has been updated and open long positions from there immediately for a rebound based on a correction of 35-40 points within the day.

You also need to take note of the Commitment of Traders (COT) reports for August 18, which showed a growth in long positions, as well as the reduction of short ones. The COT report indicates that short non-commercial positions decreased from 59,874 to 47,806 during the week. On the contrary, long non-commercial positions increased from the level of 48,053 to the level of 54,310. As a result, the non-commercial net position became positive and reached 6,504, against – 2,821. This suggests that the market trend has changed and from an investment point of view, it has become more attractive and interesting to buy the pound with its decline.

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

The main task of the bears in the morning is to return the 1.3115 level under their control, which they failed to do yesterday. At least the 1.3170 resistance was defended. A sell signal for the pound can only be formed in this scenario, however, before selling, be sure to wait until GBP/USD returns to 1.3115 and test this area from the bottom up, which will form an entry point into short positions. The plan is to fall to the support area of 1.3063, where I recommend taking profits. In case the pair grows further, I recommend considering new short positions only after updating the high of 1.3170, or immediately on a rebound from the larger resistance of 1.3218 based on a correction of 20-30 points within the day.

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Indicator signals:

Moving averages

Trading is carried out slightly above 30 and 50 moving averages, which indicates an active opposition of buyers and sellers for the further direction of the market.

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

Bollinger Bands

A break of the lower border of the indicator around 1.3115 will increase the pressure on the pound. A breakout of the upper border of the indicator around 1.3160 will cause the pair to grow higher.

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.
  • Total non-commercial net position is the difference between short and long positions of non-commercial traders.
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Analysis and trading recommendations for the GBP/USD pair on August 26

Trading recommendations for GBP / USD on August 26

Analysis of transactions

Pound jumps upward due to weak US consumer sentiment report, but long positions set at gave only 30 points of profit, as movement ended at a price level of 1.3165.

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Further growth factor could be the upcoming US orders for durable goods report, as such will indicate the confidence of consumers on their financial positions in the future. Thus, reduced orders will negatively affect the US dollar, decreasing its demand in the market.

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  • Long positions may be set up from the level of 1.3161 (green line on the chart) to the level of 1.3234 (thicker green line on the chart). Target profit is the price level of 1.3234.
  • Set short positions from the level of 1.3119 (red line on the chart) to below, as a breakout of which will certainly lead to a larger price reduction to the support level of 1.3053. However, for this to happen, data on US durable goods orders must come out better than the forecasts. Target profit is the level of 1.3053.
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EUR/USD: plan for the European session on August 26. Lack of reaction to weak US data and struggle for 1.1842. COT reports

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

Yesterday, we waited until a signal appeared to sell the euro from the 1.1842 level, however, weak economic indicators on consumer sentiment in the United States spoiled the entire bearish momentum. Let's figure out where it was necessary to enter the market. If you look at the 5-minute chart and recall yesterday's review for the afternoon, you will see how the bears still achieved a convenient entry point into short positions by forming a false breakout during the repeated resistance test of 1.1842. The downward movement was around 35 points. As a result, nothing has changed for either of them from a technical point of view. Trading remained in the side channel of 1.1787-1.1842, from which an exit is required. I do not recommend rushing to open long positions. It is best to wait for the pair to decline to the major support of 1.1787, since only a false breakout in that area will be a signal to open long positions while counting on a recovery to the high of 1.1842, which is where you can watch the first profit taking. However, an equally important task for the bulls is a breakout and consolidating at the 1.1842 level, since only this will lead to a complete reversal of the downward correction and open the way to a high of 1.1884, where I recommend taking profits. But for such active growth, we need good macroeconomic data, which is not planned today in the economic calendar. If buyers are not active in the support area of 1.1787, it is best to postpone purchases until last week's low has been updated in the area of 1.1755, or open long positions immediately for a rebound from the support of 1.1714 in anticipation of a correction of 20-30 points within the day, since the market is still under the control of bears.

It is also worth recalling that the Commitment of Traders (COT) reports for August 18 recorded a reduction in long non-commercial positions from the level of 266,078 to the level of 259,244, while short non-commercial positions also decreased from the level of 66,327 to 62,301. Given that the closing of long positions turned out to be much bigger, as a result, the positive non-commercial net position sharply fell to 196,943, compared to 199,751 a week earlier. However, such changes did not seriously affect the balance of power in the market, and most likely the demand for the euro will return, after a slight correction of the US dollar.

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

Sellers of the euro will try to break through below the support of 1.1787. Settling below this level forms a good entry point into short positions in anticipation of continuing the downward correction to the area of last week's low at 1.1755, where I recommend taking profits. Support for 1.1714 will be the long-term goal. But do not disregard the bulls' attempts to return to the market, since the triangle that formed on smaller timeframes should be traded. You should see in which direction. It is best to open short positions on the euro's growth only when a false breakout forms at the 1.1842 level, as it was yesterday. If bears are not active, then the market can quickly switch to the side of buyers. In this case, I recommend selling EUR/USD immediately on the rebound but only from a high of 1.1884, counting on a correction of 20-30 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 a small market uncertainty with further direction.

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

A breakout of the lower border of the indicator around 1.1815 will increase pressure on the euro. A breakout of the upper border of the indicator in the 1.1842 area will lead to an upward correction.

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.
  • 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

Dollar continues to decline before Powell's speech in Jackson Hole

On Tuesday, the market focused their attention to the continuation of trade negotiations between the United States and China. It led to growing optimism, which represented an undeniable demand for risky assets. However, the risk appetite of economic statistics from Germany and the US, has slightly declined yesterday.

What happened?

According to the presented data, Germany's GDP for the 2nd quarter fell slightly than expected in both annual and quarterly terms. Annually, the GDP declined by 11.3% against the forecast of 11.7%, while quarterly, it declined by 9.7% against the forecasted decline of 10.1%. Although the data is expectedly negative, their slight decline did not cause pressure on the single currency rate. In addition, it was supported by positive statistical data such as the IFO business climate index and the assessment of the current situation in Germany, which increased positivity than expected. The IFO business climate index rose to 92.6 points from 90.4, and the assessment of the current situation in Germany rose to 87.9 points from 84.5 points.

As a result, the Euro received support and continued to grow, amid the presented data from the United States, which turned out to be unclear. So, the consumer confidence index (CCI) in August came out, resulting in 84.8 points, against the forecasted growth of 93.0 points. This was worse than expected and even lower than the July value. Yet, new homes sales rose markedly by 901,000 against 791,000 last month. The development was 13.9% in rate terms.

Dollar's negative dynamics can be explained not only by unclear statistical data, but also by the expectation of J. Powell's speech at a symposium in Jackson Hole. In this regard, investors are waiting for an important statement that can change the whole situation in the US and financial markets. So, Powell is expected to report on the regulator's decision to target inflation in America to stimulate its growth and as a consequence of the revival of economic activity in the country. In response to these expectations, the debt market shows strong increase in government bond yields. Therefore, the profitability of the benchmark 10-year Treasury rose by more than 9% by the end of Tuesday's trading. But this failed to support the dollar rate, although in other cases, we would have seen its strengthening along the entire currency market.

What should we expect before Powell's speech on Thursday?

The weakening trend of the dollar is expected to continue before Powell's speech. This is what the market thinks, but as experience shows, things can be completely different. This is the reason why the dollar declines against all major currencies. In fact, investors continue to reduce their open positions in favor of the US currency.

Forecast of the day:

The USD/JPY pair is trading above 106.30. Maintaining a positive mood on global markets, as well as the expectation of J. Powell's speech at the Jackson Hole on Thursday, will put pressure on the US currency. Thus, the pair is expected to continue to rise to 107.00.

The prices of WTI crude oil are still in the range of 41.85-43.50. If they do not overcome the upper limit of the range, a local price reversal and their decline to 41.85 should be expected.

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Analysis and trading recommendations for the EUR/USD pair on August 26

Trading recommendations for EUR / USD on August 26.

Analysis of transactions

Dollar remains trading in the market even amid disastrous US consumer sentiment report. This suggests that the market is playing in the hands of the bulls at the moment, so a rise in dollar and plunge in euro may well occur in the near future.

At the same time, data on US durable goods orders is scheduled to be released today, which will very much indicate the confidence of consumers on their financial positions in the future. Good data will certainly help raise demand for the dollar, but reduced orders will negatively affect the currency's position in the market.

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  • Set long positions from a price level of 1.1839 (green line on the chart) to a price level of 1.1907, but only if data on US durable goods orders turn out worse than expected. This is because such weak report will inevitably help the euro rise in price in the daily chart. Take profit at the level of 1.1907.
  • Meanwhile, short positions may be set up from the level of 1.1804 (red line on the chart) to the level of 1.1735, especially if demand for dollar increases, as such will lead to a sure downturn in the EUR/USD pair. Take profit at the level of 1.1735.
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Indicator analysis. Daily review on EUR / USD for August 26, 2020

Trend analysis (Fig. 1).

The market may move down from the level of 1.1836 (closing of yesterday's daily candle) with the first target of 1.1779 - a 23.6% pullback level (red dotted line). If this level is reached, the downward trend may continue with the next target at the support level of 1.1697 (black bold line).

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Figure: 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - neutral;

- Trend analysis - up;

- Bollinger lines - up;

- Weekly chart - up.

General conclusion:

Today the price may begin to move downward with the target of 1.1779 - a 23.6% pullback level (red dotted line). If this level is reached, the downward trend may continue with the next target at the support level of 1.1697 (black bold line).

Another possible scenario is, upon reaching 1.1779 - a 23.6% pullback level (red dotted line), the price may begin to move up with the target at the historical resistance level of 1.1912 (blue dotted line).

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EUR/USD Price Movement On August 26, 2020.

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Although Fiber is declining in a Pitchfork Channel, on the 4-hour chart, EUR/USD is trying to reach the 1.1784 level as its first target and the 1.1754 as its second target. This scenario is unlikely to occur if the pair rises again and closes above the 1.1844 level.

(Disclaimer)

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

Analytics and trading signals for beginners. How to trade the EUR/USD on August 26? Plan for opening and closing trades on

Hourly chart of the EUR/USD pair

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The EUR/USD pair could not continue to move up during Wednesday night trading. Thus, the MACD indicator reversed to the downside (marked with red circles in the illustration) and the quotes fell to the upward trend line. If there is a rebound from this line, then the upward movement can still resume according to the new trend. However, setting the price below the trend line will force us to admit that the downward trend has resumed, and now we should trade precisely for the decline. In general, we can not say that the US dollar has somehow gained strength in recent days. Most likely, buyers simply did not take advantage of the given chances and felt that it was not yet time to make new purchases of the euro. In general, the demand for the dollar is small. Therefore, if we take into account the medium-term perspective (a week or more), then the pair can move in any direction from its current position.

The calendar of macroeconomic events in the European Union is empty on August 26. Meanwhile, a fairly important indicator of orders for durable goods will be published in the United States. Last night we already said that in order for the pair to continue moving up, the figures in the report should be worse than the forecasts. If today, the quotes overcome the upward trend line in the morning, then you will need to trade down, and then you will need stronger figures from the report than what market participants expect to see. In addition, Federal Reserve Chairman Jerome Powell will give a speech in Jackson Hole by tomorrow. The head of the US central bank will deliver a report on monetary policy, and Powell's speech is always interesting and important for the currency market. The Fed chief may notice that the economy is recovering too slowly and new stimulus tools will be needed. It may be noted that the lack of a new package of financial assistance to the economy, which has not been agreed by the Democrats and Republicans, hinders the recovery. On the contrary, he can say that "everything is going according to plan". The dollar's fate over the next week may depend on Powell's rhetoric and comments. At the same time, a new wave of protests and rallies began in the United States. With words of support for the nation, Melania Trump has already spoken, who called on everyone to calm down and not feel alone and defenseless. However, the words and actions of her husband, US President Donald Trump, are more important. He does not need new rallies and protests before the elections. But the harder he tries to break up new riots that have emerged on racial grounds, the more his political ratings may fall, and along with them the US dollar.

Possible scenarios for August 26:

1) You can consider buying the pair at this time, but this will require a price rebound from the upward trend line in the next hour or two and the MACD indicator has to turn to the upside. Then we recommend that novice traders start trading upward with the targets at 1.1858 and 1.1881. However, there is a high probability that the price will still go below the upward trend line.

2) But we recommend considering selling only after the price settles below the trend line. At the moment, the pair is trying to overcome it. If successful, the targets for short positions will be the support levels of 1.1798 and 1.1761. It will be possible to exit short positions by Take Profit near target levels or by a reversal of the MACD indicator to the upside.

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 better 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 that you can always in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal.

Beginners on Forex should remember that not every single trade has to 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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Control zones for NZDUSD on 08/26/20

The downward movement remains a priority, so today's test of the WCZ 1/2 0.6568-0.6561 provided an opportunity to enter the sale to those who did not do so on Monday. The first goal of the downward movement is the previous week's low, the test of which will determine the further priority.

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The accumulation zone has been formed for the last three days. There is an increased number of limit orders for sale at the upper border of this zone.

To cancel the downward movement, you will need to close today's trading above the WCZ 1/2. This will indicate the need to eliminate sales and open a long position after a corrective pattern forms tomorrow.

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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 GBPUSD on 08/26/20

The downward flat-shaped movement made it possible to form an accumulation zone. The WCZ 1/2 1.3050-1.3029 is an obstacle in pulling down the price of the British pound. The upward medium-term momentum remains a priority while the pair is trading above this zone.

Testing the WCZ should be considered when forming a pattern for buying an instrument.

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Working within the flat makes it possible to consider weekly extremes as support and resistance levels.

An alternative fall pattern will develop if today's closing occurs below the WCZ 1/2. This will open the way for the British pound to become cheaper in the second half of this week.

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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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GBP/USD Price Movement On August 26, 2020

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On the 4-hour chart, the Cable seems to be going down, having touched the previous monthly high at 1.3169 level. This down movement has been already confirmed too by the William %Range (10) which is already back from the overbought level. Based on this information, there is a possibility for GBP/USD to go down with the target at the 1.3075 level as long as the pair does not retrace upwards and closes above the 1.3169 level. If this happens, the downward movement will be automatically canceled.

(Disclaimer)

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

Technical Analysis of ETH/USD for August 26, 2020

Crypto Industry News:

The People's Bank of China plans to use its digital currency at the 2022 Winter Olympics in Beijing.

According to a Reuters report, Sun Guofeng, head of the PBoC's monetary policy department, said the bank did not have a schedule to introduce digital currency. However, according to Sun's statement, the PBoC will likely launch it ahead of the 2022 Winter Olympics as they plan to use it at an international sporting event.

The news comes as China is ramping up pilot projects for the digital yuan. Currently, China's central bank is testing its digital currency in Shenzhen, Suzhou, Xiongan and Chengdu. The bank also planned to introduce a digital currency for pilot tests in other regions, including Beijing, Tianjin, Hebei and the Greater Bay area of Hong Kong.

A recent official statement from the bank also noted that the digital yuan was only tested for small retail transactions. Debunking rumors about the impossibility of converting digital currency into banknotes, the central bank also clarified that digital yuan is legal tender that users can convert into banknotes at a 1: 1 ratio.

While there is still too little information on the Chinese digital currency to say anything about its launch and use cases, it is fairly obvious that the bank is making rapid progress towards its introduction.

Technical Market Outlook:

The ETH/USD pair has made another lower low at the level of $369.51, which was in line with 1:1 market geometry target for correction. Currently, the bulls are trying to bounce higher towards the level of $400 in order to reclaim it again, but if they fail, then a new local low should be made. The intraday technical support is seen at the level of $375.62 and the nearest technical resistance is seen at the level of $385.98. 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 - $491.79

WR2 - $470.70

WR1 - $424.12

Weekly Pivot - $402.20

WS1 - $357.21

WS2 - $333.72

WS3 - $286.54

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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Technical Analysis of BTC/USD for August 26, 2020

Crypto Industry News:

Japanese Finance Minister Taro Aso has suggested that Blockchain will play a key role in the global fight against the coronavirus pandemic as the technology can be used to track contacts while ensuring privacy.

Aso delivered the opening speeches of the Blockchain Global Governance Conference, also known as FIN / SUM Blockchain & Business, on August 24 in Tokyo.

"In the fight against widespread infectious diseases, Blockchain provides one solution for contact trading" he said, referring to the coronavirus.

There are nearly 24 million COVID-19 cases worldwide, with over 60,000 in Japan. Despite the subject of Aso's speech, a limited number of people could physically participate in the Blockchain conference, while others watched the speakers live.

The Finance Minister admitted that while the threat from the coronavirus has not subsided, Blockchain could provide privacy to anyone who gets a positive through contact tracing. In addition, this technology could give authorities a better measure of what needs to be done to contain the spread, preventing possible future outbreaks.

Technical Market Outlook:

The BTC/USD pair has been trading inside of a descending channel and made a new local low at the level of $11,062. The bulls are trying to bounce from the oversold market conditions as they do not want to lose the $11,000 support. The nearest technical resistance is seen at the level of $11,350 (for intraday traders) and the level of $11,220 will act as a support from now. The key short-term technical support is seen at the level of $11,062. The weekly time frame trend remains up.

Weekly Pivot Points:

WR3 - $13,245

WR2 - $12,828

WR1 - $12,122

Weekly Pivot - $11,728

WS1 - $11,022

WS2 - $10,628

WS3 - $9,978

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 GBP/USD for August 26, 2020

Technical Market Outlook:

The GBP/USD pair has been moving only inside of a smaller horizontal zone located between the levels of 1.3059 - 1.3161, so the breakout is highly anticipated. The bulls have managed to retrace 50% of the last wave down, but so far were capped at the level of 1.3161. The immediate technical support is seen at the level of 1.3077 and 1.3017. 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 1.3518The zone between the levels of 1.3264 - 1.3077 on GBP/USD pair is now a clear battle zone between bulls and bears, so the winner will determine the next move of GBP.

Weekly Pivot Points:

WR3 - 1.3388

WR2 - 1.3323

WR1 - 1.3185

Weekly Pivot - 1.3117

WS1 - 1.2973

WS2 - 1.2907

WS3 - 1.2796

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 26, 2020

Technical Market Outlook:

The EUR/USD pair is about to break out from the Bearish Pennant price pattern around the level of 1.1813. Any violation of this level and 1.1803 and 1.1790 will be an indication of bearish pressure. The next target for bears is seen at the level of 1.1755 and 1.1710. In order to make a new high, the bulls will have to break through the short-term trend line resistance seen at the level of 1.1900. The key short-term technical support is located at the level of 1.1720 and 1.1710. The larger time frame trend remains up.

Weekly Pivot Points:

WR3 - 1.2107

WR2 - 1.2031

WR1 - 1.1883

Weekly Pivot - 1.1825

WS1 - 1.1682

WS2 - 1.1616

WS3 - 1.1470

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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Control zones for EURUSD on 08/26/20

The downward movement remains a priority, since the test of WCZ 1/2 1.1854-1.1845 stopped growth. All conditions are in place for the fall to continue, but you may need to retest the weekly high. This should be taken into account by those who have already entered a short position.

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There is a high probability of working in a downward direction, and short positions have a favorable risk-to-profit ratio, since the goal for the decline is the WCZ 1/2 1.1675-1.1666.

To cancel the downward momentum, you will need to close today's trading above the WCZ 1/2 1.1854-1.1845. This will allow you to search for favorable prices for purchasing the instrument tomorrow. The growth target will be the August high. The probability of implementing this pattern is 30%.

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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 08/26/20

Last week's downward momentum is still the basis for choosing the direction of trade. The probability of continued bearish movement is estimated at 75%. The main target of the decline is the weekly CZ 0.7097-0.7079. Upon reaching this zone, it is necessary to close most of the sales.

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The most favorable prices for selling the instrument can be obtained if the price reaches the WCZ 1/2 0.7236-0.7227.

To form an alternative model, it will be necessary to close today's trading above WCZ 1/2. This will allow you to consider purchases in the second half of the week. This pattern is a form of support, since the bearish impulse has not yet reached 100%.

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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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Forecast for EUR/USD on August 26, 2020

EUR/USD

Yesterday's US economic data did not provide much help to the market; sales of new homes increased to 901,000 in July from 791,000 a month earlier, business activity in the manufacturing sector of Richmond for the current month increased from 10 to 18 points, but the Dow Jones lost -0.21%, while the S&P 500 added 0.36%, which was affected by the negative situation in the commodity sector. At the same time, the Conference Board's US Consumer Confidence index for August fell from 91.7 to 84.8. The euro, buoyed by the growth of sentiment in the German IFO business circles from 90.4 to 92.6, closed the day by gaining 47 points, which was not difficult to do from the technical side, since it is located in the free-roaming zone of 1.1710-1.1905. The daily chart shows that the signal line of the Marlin oscillator is located in the zero line - the border, that is, the situation is neutral.

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The price is on the MACD line and Marlin is also exactly on the neutral line on the four-hour chart. If today's data on orders for durable goods in the United States does not fail, then it is more likely that the neutrality of the situation will shift towards the euro's decline. The forecast for Durable Goods Orders for July is 4.4%. We are waiting for developments. The main scenario is still falling in order for the euro to reach the lower limit of the 1.1710 range.

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Forecast for AUD/USD on August 26, 2020

AUD/USD

The Australian dollar rose by 31 points yesterday while the US dollar weakened, rebounding off the support of the MACD line on the daily chart. The Marlin oscillator has returned to the zone of positive values, and now the price along with this oscillator can form another six-fold wave of divergence. To do this, the aussie should grow to the target level of 0.7296 (December 2018 high). The target level of 0.7240 can prevent the price from doing this. If the price moves below the MACD line (0.7165) and settles, this will trigger a medium-term decline in the Australian dollar and the nearest target will be 0.6975 (June 23 high).

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The price left the triangle up while simultaneously leaving the downward trend zone of the Marlin oscillator on the four-hour chart. The price is above the MACD line. The trend is completely upward. We are waiting for the development of the first target level of 0.7240, and if the price settles above it, the growth will continue to the second goal of 0.7296.

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Forecast for USD/JPY on August 26, 2020

USD/JPY

The USD/JPY pair finally rallied, amid yesterday's mixed closing of stock indices, and grew by 42 points with a clear intention to attack the first target along the embedded line of the price channel at 106.68. The Marlin oscillator is growing on the daily chart. The S&P 500 stock index rose 0.36%, while the Dow Jones fell 0.21%. The Japanese Nikkei 225 index lost 0.10% today in the Asian session. Meanwhile, the growth of European stock exchanges will bring back optimism to the yen. So, the nearest target is 106.68, breaking it opens the second target at 107.00.

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The price has settled above the MACD indicator line on the four-hour chart, the Marlin oscillator is in the growth zone, we are waiting for the pair to continue rising.

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Overview of the EUR/USD pair. August 26. A new headache for Trump: a second "wave" of racially motivated protests and rallies

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: -27.3565

The EUR/USD pair was held in quiet trading for the second trading day of the week. In fact, during the day, traders did not receive any important macroeconomic reports and news that would be able to move the pair momentarily. Thus, the quotes continued to be slightly below the moving average line for most of the day, allowing both the option of resuming the fall, which has been brewing for more than a month. And the option of resuming the upward trend, which is less logical, but is more supported by market participants who still do not want to buy the US dollar. On the one hand, the upward trend continues, as evidenced by both channels of linear regression, on the other hand, for further growth of the euro, new reasons and grounds are also needed, which are also not available at this time.

However, the general fundamental background can again come to the aid of buyers of the pair. We have already repeatedly talked about the "four American crises", which are very likely the reasons for the strongest fall of the US dollar against the pound and the euro in the past few months. At least the "coronavirus" epidemic has begun to decline. Plus, Donald Trump officially announced that it was decided to introduce blood plasma from people who have already been ill as a vaccination for Americans, which should help develop immunity against COVID-2019. Thus, the situation with the pandemic is not getting worse, and that is a good thing. There is nothing you can do about the economy at this time. It has collapsed by 33%, and the unemployment rate is more than 10%. Thus, it only needs time to recover and the support of the Federal Reserve and the government of the country. And with this, problems have started recently. Recall that the Democrats and Republicans were not able to agree on a new package of economic assistance. Although the talks are rumored to be ongoing, there is no new information on this topic. But Steven Mnuchin promised that the new package will be adopted no later than the beginning of August. Thus, for a whole month, the US economy should have received cash injections, however, it did not happen, so the process of its recovery may be delayed. As for the election, this is already a "byword" for America. Trump himself calls the upcoming elections the most important in the history of the United States. A political crisis is the name of what is happening in the United States right now. Political lawlessness is what has been observed in the States in the past four years. Never before in the history of the United States have the actions of opposition forces been directed during the entire term of the presidency to expose the leader of the country and attempt to remove him from office. Trump himself spent more time dealing with the Democrats and the trade war with China, which ultimately led to disastrous consequences. By the way, do not forget the trade war with China, which can smoothly turn into a full-fledged "cold war". This is not a crisis, however, it also hit both Trump and the country's economy. And the last is the social crisis that was caused by the murder of a black man by a white police officer a few months ago. After that, in many cities of America, daily meetings, protests, and in some places outright pogroms, accompanied by looting, took place. The problem was so strong that Trump recalled the law of 1812, which allows him to resort to the help of the US army to suppress a popular uprising. It is good that the Defense Minister explained to the President in time that rallies and a popular uprising are not the same thing. Only in recent weeks, the protesters have calmed down a little, but not for long.

On Monday, August 24, in the city of Kenesha, Wisconsin, a man named Jacob Blake, an African-American man, was taken to the intensive care unit with a gunshot wound. As it turned out, during the arrest, the police shot him several times in the back. As usual, "someone" managed to capture everything on video. The video quickly spread across social networks and sparked new mass protests that have already taken over Chicago, Portland, New York, Madison and other US cities. And all this, we recall, in the midst of an epidemic that has just begun to wane. As during the first "wave" of protests, rallies are often accompanied by looting, arson, vandalism and other "pleasant" things. It is reported that it is unclear why the police opened fire on Blake's car, given that there were three of his minor children in the cabin. In the video, you can clearly hear seven pops, which means at least seven shots. It is also reported that Blake himself did not have a weapon and did not resist arrest. In general, now we can only guess what social movements will cause this new shooting involving white police officers and an African-American man who, fortunately, survived, underwent surgery, but remains in a serious condition in the hospital. It is possible that the country will again be overwhelmed by a new "wave" of unrest. And all this is very similar to a purposeful fight with Donald Trump...

If all these events develop, it is possible that the US dollar will start falling again despite any technical factors. As for the economic factors, there is absolutely nothing to note now. As we have already said, there were no macroeconomic reports on Tuesday. On Wednesday, August 26, in America, the publication of orders for durable goods for July is scheduled. In general, this is a fairly important indicator that includes three derived values. However, it requires a strong deviation from the actual forecast values for market participants to respond to this report. There are no scheduled reports in the European Union today. Taking into account the fact that the bears are still unable to update the previous local lows near the Murray level of "4/8"-1.1719, the pair can now continue to move up above the moving average to the area of 1.1897-1.1963.

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The volatility of the euro/dollar currency pair as of August 26 is 89 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1727 and 1.1905. The reversal of the Heiken Ashi indicator down may signal about a possible resumption of the downward movement.

Nearest support levels:

S1 – 1.1719

S2 – 1.1597

S3 – 1.1475

Nearest resistance levels:

R1 – 1.1841

R2 – 1.1963

R3 – 1.2085

Trading recommendations:

The EUR/USD pair is trying to continue its downward movement and is located slightly below the moving average. Thus, today it is recommended to open new long positions with the goals of 1.1905 and 1.1963, if the pair returns to the area above the moving average line. Since the price still overcame the moving, it is now recommended to trade lower with the goals of 1.1727 and 1.1719. Further downward movement will be possible only after confident overcoming of these goals.

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Overview of the GBP/USD pair. August 26. China and the United States are holding new talks, and Donald Trump is going 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: -2.2619

The British pound started a new round of upward movement on Tuesday. In principle, if the movement of the pair over the past month and a half can not be called an absolute flat, then it is absolutely accurate and not a trend movement. At the same time, the upward trend is absolutely preserved, since we have not seen a normal correction. Therefore, there is no evidence yet that the upward trend is complete. The pair is only consolidating in a relatively narrow side channel. The previous local lows were never worked out or overcome. But at the same time, there are also a large number of factors that speak in favor of resuming the upward trend. In an article on the euro/dollar, we described in detail all the crises and problems that America is currently facing. Formally, they may well cause new sales of the US currency. But we should also take into account the fact that the US dollar has already fallen quite significantly, which makes the bulls think several times before opening new long positions. So in a sense, we are witnessing a new paradoxical situation where traders simply refuse to sell a few despite the fact that there are a lot of technical reasons. All the fundamental reasons for the growth have already been practiced several times, and in a situation specifically with the pound, the pair should have begun to fall long ago since in the UK, problems are slightly less than in the States.

Meanwhile, in the US, President Donald Trump said that he was ready to completely end any cooperation with China. As reasons, Trump cited "unfair treatment of the US", "loss of billions of dollars from unfair trade with China", "excessive dependence on China", and "the Chinese virus". It is absolutely unclear how the American President is going to simply stop any cooperation with a country that is his country's largest trading partner. Let's say that Trump is re-elected for a second term and somehow persuades all American companies whose production is located in China to return production facilities to the United States. But what about, for example, the sale of farm products? After all, China will impose retaliatory sanctions and take retaliatory measures. In fact, any action that Washington does not favor China will provoke a response. The US President cannot fail to understand that he will make it worse not only for China, but also for America. At the same time, with reference to the US trade representative Robert Lighthizer, the media got information that the US and China held telephone talks and were satisfied with the implementation of the first phase of the trade agreement, which was signed on January 15. Lighthizer himself stated: "Both sides see progress and are committed to taking the necessary steps to ensure the success of the agreement." At the same time, it is reported that China does not fully comply with the terms of the deal, as the global epidemic of "coronavirus" has made its adjustments. Beijing was supposed to increase annual purchases of American products to $ 200 billion, which did not happen. Well, Donald Trump says that the second phase of the trade agreement will not be discussed in the near future, because he "can't forgive China for what it did to America" (meaning the pandemic and the economic crisis caused by it). This is a set of statements and actions that are essentially opposite.

Meanwhile, nothing interesting is happening in the UK itself. It might even be a good thing. In some EU countries, 5-15 thousand new cases of the disease are already registered every day, so it is good that the pandemic has receded in Britain and is not yet returning. Otherwise, the British economy could suffer a new blow. In the Foggy Albion, no more than 1.5 thousand new cases of "coronavirus" are recorded daily, which is an absolutely acceptable figure. On the other hand, Britain has faced so many problems in recent months and even years that it hardly needs additional blows of fate. We have already said that the national debt in the country continues to grow and recently exceeded 2 trillion for the first time in its history. There have been no trade deals with the European Union and the United States, and there are no preconditions for their conclusion in the near future either. Thus, the British economy is experiencing serious problems that will only get worse from January 1, 2020. Thus, despite the fact that the pound has been doing just fine in recent months, its prospects remain vague and uncertain. And only the general situation in the US and its "four crises" do not allow the British to start a new fall, which would be no less logical than the fall of the US currency in recent months.

From a technical point of view, the pound/dollar pair continues to "swing" with the full preservation of the upward trend. Thus, the upward trend can resume at any time. But a new downward trend, which has been brewing for a long time, can be identified by overcoming past local lows. However, at the moment, the bears have serious problems even getting close to them. Thus, despite several price fixes below the moving average in recent weeks, the downward movement has not started, and sellers continue to show their weakness and unwillingness to conduct active trading from time to time.

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The average volatility of the GBP/USD pair is currently 142 points per day. For the pound/dollar pair, this value is "high". On Wednesday, August 26, thus, we expect movement within the channel, limited by the levels of 1.2989 and 1.3273. Turning the Heiken Ashi indicator downward will indicate a possible new round of downward movement.

Nearest support levels:

S1 – 1.3123

S2 – 1.3062

S3 – 1.3000

Nearest resistance levels:

R1 – 1.3184

R2 – 1.3245

R3 – 1.3306

Trading recommendations:

The GBP/USD pair on the 4-hour timeframe is constantly trying to start a new downward trend, but so far to no avail. Thus, today it is recommended to consider short positions with the goals of 1.3062 and 1.3000, if the bears again manage to secure the pair below the moving average. At this time, it is recommended to trade the pair for an increase with the goals of 1.3184 and 1.3245, as the price has returned to the area above the moving average line.

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