Trading plan for EUR/USD on August 28

analytics5f48b4ff40123.jpg

Infection rate stabilizes at 40-45 thousand a day in United States and Brazil, while in India, incidence has accelerated to more than 76 thousand a day.

The same increase can also be observed in Spain - almost 4 thousand new cases; France - 6 thousand new cases; and Germany - 1.5 thousand.

analytics5f48b5f0d963b.jpg

EUR / USD: Euro experienced sharp jumps both up and down - first up to 1.1900, then down below 1.1800 - but eventually, the euro climbed up in the morning.

Open long positions from 1.1905 to 1.1860, targeting profit at 1.2005 and above.

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

Technical Analysis of GBP/USD for August 28, 2020

analytics5f48b3868c637.jpg

Overview:

The GBP/USD pair continues to move upwards from the level of 1.3200.

Yesterday, the pair rose from the level of 1.3200 (the level of 1.3200 coincides with a ratio of 61.8% Fibonacci retracement) to a top around 1.3289.

Today, the first support level is seen at 1.3199 followed by 1.3143, while daily resistance 1 is seen at 1.3340.

According to the previous events, the GBP/USD pair is still moving between the levels of 1.3200 and 1.3340; for that we expect a range of 140 pips (1.3340 - 1.3200).

On the one-hour chart, immediate resistance is seen at 0.3299, which coincides with the double top. Currently, the price is moving in a bullish channel.

This is confirmed by the RSI indicator signaling that we are still in a bullish trending market. The price is still above the moving average (100) and (50).

Therefore, if the trend is able to break out through the first resistance level of 1.3299, we should see the pair climbing towards the daily resistance at 1.3340 to test it.

The second resistance has already set at the price of 1.3390.

It would also be wise to consider where to place stop loss; this should be set below the second support of 1.3109.

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

Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on August 28

Trading recommendations for EUR / USD on August 28

Analysis of transactions

Price decreased no more than 15 points yesterday, after which it reversed and rose sharply in the market. The increase came after the speech of Fed chairman Jerome Powell, who announced changes in the central bank's monetary policy. It rose the price about 40 points.

analytics5f4899afb0e8d.jpg

Today, attention should be given to the upcoming data on the French economy, as it could support the euro in rising in the market. The upcoming data on US income and expenses that is scheduled to be published in the afternoon may also further weaken the dollar and raise the rate of the European currency.

analytics5f4899bc7852b.jpg

  • Set long positions from 1.1883 (green line on the chart) to 1.1935. Take profit at a price level of 1.1935.
  • Trade shorts at the level of 1.1845 (red line on the chart) to the level of 1.1776. However, a price decrease would only occur if data on the US economy turns out worse than forecasts. Take profit at the level of 1.1776.

Trading recommendations for GBP / USD on August 28

Analysis of transactions

Short positions on the pound brought losses yesterday, as after passing 1.3180, price did not move even further in the chart. Fortunately in the afternoon, longs from the level of 1.3225 gave profit as much as 45 points, which canceled the losses realized in the morning.

analytics5f4899c46cf5f.jpg

Bank of England governor, Andrew Bailey, is scheduled to have a speech today, and he may touch upon the topic of monetary policy. If he announces a soft policy, demand for the pound could decrease, which will weaken the rate of GBP / USD in the market.

analytics5f4899cc658db.jpg

  • Open long positions from 1.3282 (green line on the chart) to 1.3345 (thicker green line on the chart), and take profit at a price level of 1.3345.
  • Trade shorts at the level of 1.3231 (red line on the chart), as a breakout from which will lead to a larger decline in the pair, perhaps in the direction of 1.3244. Take profit at 1.3244.
The material has been provided by InstaForex Company - www.instaforex.com

Trading recommendations for EUR/USD currency pair on August 28

The trading week is coming to an end, and it's time for us to summarize the preliminary results. The 85-hour stagnation in the range of 1.1784/1.1850 declined under the attack of speculators, who managed to show very high activity during the past day. A local breakdown of the upper boundary of stagnation at 1.1784/1.1850 led to a fast price movement to the 1.1900 area, where the level of the main flat channel 1.1700 // 1.1810 // 1.1900 (1.1910) is located.

Price behavior and the fixing point suggests that the market remains unclear, where the flat formation, as before, will be its integral part.

The tactic of trading based on local operations has proved its efficiency once again. We will continue to stick to this method until the market gets out of the emotional background.

Considering the last trading day by the minute, we can see that the surge in long positions and the flow of short positions.

Moreover, volatility increased by 61% in daily trends relative to the average level. The growth in activity is due to the prolonged stagnation, paired with the information and news background. The activity on Thursday exceeds the dynamics of Monday - Wednesday by 120%.

As discussed in the previous review, traders have been waiting for a local surge based on the existing stagnation for a long time, positions have already been prepared, and I am sure that many have managed to capitalize on price spikes towards 1.1900.

Considering the trading chart in general terms (daily period), it can be seen that high activity during the breakdown of stagnation 1.1784/1.1850 did not change the boundaries of the main flat 1.1700 // 1.1810 // 1.1900 (1.1910).

The second estimate of the United States' GDP for the second quarter was published yesterday, where, according to the Bureau of Economic Analysis (BEA), the Department of Commerce recorded a decline in economic growth to -31.7% against the forecast of -32.9%.

A small discrepancy in the data does not cancel out the fact GDP's recorded decline.

At the same time with GDP, the volume of applications for unemployment benefits in the United States was published. So, the number of initial applications for benefits decreased by 98 thousand, while the volume of repeated applications decreased by 223 thousand.

The market's reaction at the time of the publication of data on GDP and claims for benefits did not coincide with the principles of fundamental analysis. The US dollar sharly lose momentum, before the speech of Jerome Powell.

An economic symposium started yesterday in Jackson Hole, which is held annually with the participation of representatives of central banks, finance ministers, leading economists, heads of the world's largest companies. Fed's head made a teleconference and explained the provisions of the new strategy of the regulator.

Jerome Powell said that the FOMC is targeting inflation that will average 2% over time. He believes that after a period when it has held steadily below 2%, the goal of appropriate monetary policy is likely to reach inflation directly above 2% for some time.

In fact, the market has not received a clear answer whether the regulator will discuss the interest rate until the inflation target is reached. Powell, as always, said both "yes" and "no" about rates, highlighting the point that the Fed always has tools to influence.

Market reaction

Before Powell's speech, there was an obvious speculative drift of the rate to the 1.1900 area, followed by a sharp return of the quote and stabilization.

In terms of the economic calendar, today is a quiet day, the only thing that can be noted is personal income and expenses in the United States. However, anything dramatic should not be expected, since the market is still moving away from the past day.

analytics5f48b1fabf129.jpg

The upcoming trading week expects to be eventful in terms of statistics. First, we have preliminary data on Inflation in Europe, followed by the ADP US report and retail in the EU. Lastly, we have the report of the US Department of Labor.

(All time zones below are in Universal form)

Tuesday , September 1

EU 9:00 UTC+00 - Unemployment rate for July

EU 9:00 - Inflation, Preliminary

USA 14:00 - ISM Manufacturing PMI for August

Wednesday September 2nd

USA 12:15 - ADP report on employment in the private sector for August

Thursday September 3rd

EU 9:00 - Retail sales for July

USA 12:30 - Unemployment benefits claims

USA 14:00 - ISM US Non-Manufacturing Purchasing Managers Index for August

Friday September 4th

USA 12:30 - Report of the US Department of Labor

- Change in the number of people employed in the non-agricultural sector

- Unemployment rate

- Average hourly wages

Further development

Analyzing the current trading chart, you can see the price movement along a rising direction towards the border of the side channel 1.1700 // 1.1810 // 1.1900 (1.1910). We can assume that the residual background from the information flow will lead the quote to the 1.1900/1.1920 area, where there will be a stop with subsequent consolidation, which will end the trading week. In case of a repetition of the regular basis of the past, relative to the upper border of the flat, another movement in the direction of the average level of 1.1810 may appear next week.

For significant changes in the quote, it is necessary to break through the local high (1.1965) on August 18, which will lead to a further structure of the medium-term upward trend.

analytics5f48b20e8ff11.jpg

Indicator analysis

Analyzing different sectors of time frames (TF), we see that the indicators of technical instruments on minute, hourly and daily intervals signal a buy due to price movement within the upper border of the main flat.

analytics5f48c80076800.jpg

Weekly volatility / Volatility measurement: Month; Quarter; Year

The volatility measurement reflects the average daily fluctuations, calculated per Month/Quarter/Year.

(It was built considering the time of publication of the article)

The volatility of the current time is 79 points, which is considered a high value for the start of the European session. We can assume further growth in activity, but only limited to the 1.1900/1.1920 area.

analytics5f48c803716a0.jpg

Key levels

Resistance zones: 1.1910 **; 1.2000 ***; 1.2100 *; 1.2450 **; 1.2550; 1.2825.

Support zones: 1,1800; 1.1650 *; 1,1500; 1.1350; 1.1250 *; 1.1180 **; 1.1080; 1.1000 ***; 1.0850 **; 1.0775 *; 1.0650 (1.0636); 1.0500 ***; 1.0350 **; 1.0000 ***.

* Periodic level

** Range level

*** Psychological level

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

Analysis and forecast for EUR/USD August 28, 2020

As expected, at his speech yesterday in Jackson Hole, US Federal Reserve Chairman Jerome Powell announced a review of the monetary policy strategy. The main point of this revision is the presence of a strong labor market, which will not affect the growth of inflation in the country. Powell believes that the rate of inflation remains high, despite the July decline to 10.2%. As for inflation, its target level will remain around 2% in the long term. However, in the near future, the head of the Fed does not rule out higher inflationary growth as compensation for lower inflation, which was observed before. According to the Chairman of the Federal Reserve, this revision of the monetary policy strategy should support the labor market and help strengthen the American economy.

In my opinion, this is a rather unusual decision, which reflected a minimum of specifics. This conclusion is also indicated by the ambiguous reaction of the market, which we will see on the price charts of the main currency pair.

Daily

analytics5f48af8d9cb2b.jpg

Following the results of yesterday's trading, a "Rickshaw" candle appeared on the daily chart, with approximately equidistant shadows and a small bearish body. Does this not indicate the uncertainty that reigned in the ranks of investors? In addition, yesterday's expectations of high volatility were fully confirmed. The pair soared to 1.1900 and fell to 1.1762, but in the end, the trading closed at 1.1820, which is quite a good result for the euro bulls.

After yesterday's speech by Powell, the market today is growing and the pair is trading near 1.1863. From the technical nuances, it is worth noting that yesterday the euro bulls again failed to close trading above the Tenkan line of the Ichimoku indicator, as well as a strong rebound that occurred from the significant level of 1.1900. It is also worth paying attention to the failed breakdown of the sellers' resistance at 1.1882. This level was only punctured, but not breached. I believe that players on the rise today need to close trading above yesterday's highs of 1.1900, and it is even better for the euro bulls to end today and the week's sessions above the falsely broken resistance of 1.1915. The primary task of bears for the pair will be to break through the strong support zone of 1.1773-1.1753, where the Kijun line of the Ichimoku indicator passes. Yesterday's lows and the minimum trading values were marked on August 21. Judging by market sentiment, the most likely scenario is an upward trend and another attempt to gain a foothold above the important mark of 1.1900.

H4

analytics5f48afa492d0e.jpg

The four-hour chart shows even better what happened during the Fed Chairman's speech in Jackson Hole. The market was tossing from side to side, not knowing how to react to the presented changes in the monetary policy of the US Central Bank. At today's Asian trading, the euro/dollar currency pair showed strong growth, during which the simple moving average and the middle line (dotted) of the ascending channel were broken through 50. After that, a pullback was given to the dotted line and an opportunity to open purchases, after which the quote again rushed up.

Trading recommendations for today suggest buying the instrument. Risky from current prices, less risky after the actual breakdown of sellers' resistance at 1.1882 (this is what is happening now), on a pullback to this level. At the same time, I do not recommend setting large goals, however, it will be limited to the price area of 1.1900-1.1915.

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

Technical Analysis of BTC/USD for August 28, 2020

Crypto Industry News:

Lazarus, a hacker group purportedly backed by North Korea, is now reportedly targeting cryptocurrency and Blockchain talents via the professional social network LinkedIn.

According to a report by Finnish cybersecurity and privacy company F-Secure, the latest Lazarus attack was made via a cryptocurrency-related job advertisement on the site. Their investigation revealed that a person working in the Blockchain space received a phishing email that mimicked a legal Blockchain job offer.

The message contained an MS Word document titled "BlockVerify Group Job Description" which, when opened, launched malicious code.

F-Secure discovered that the document had the same names, authors, and word counts as publicly available code from the main security website, VirusTotal. According to VirusTotal data, the original malicious macro was created in 2019 and reported by 37 antivirus engines.

The purpose of this malware was mainly to retrieve login credentials and provide access to the victim's network, and ultimately reach the system required to steal the cryptocurrency.

In the report, F-Secure indicated that the interests of the Lazarus group reportedly coincide with the interests of the government of the Democratic People's Republic of Korea (DPRK). According to the company, DPRK's cyber operations are likely to target organizations and companies outside the cryptocurrency industry as well.

Technical Market Outlook:

The BTC/USD pair had bounced from the demand zone located between the levels of $11,062 - $11,220, but keeps trading inside of a descending channel. The bulls keep trying to resume the local up trend 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 $11,484, which is the rally high 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.

analytics5f48b228f3e8a.jpg

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

Technical Analysis of ETH/USD for August 28, 2020

Crypto Industry News:

Insiders helped Tavanir, an Iranian energy company, shut down 1,100 cryptocurrency mining farms that allegedly operated without proper licenses.

Although Tavanir claims that some miners were using "high level" subsidized electricity, their report explained that no significant changes in electricity consumption were observed. Local authorities said that was why they had to rely on whistleblowers, noting that Tavanir "cannot detect all illegal farms just by studying their consumption patterns."

People who provided information leading to the discovery of unauthorized miners were awarded Rial 100 million ($ 480) for their cooperation, the Financial Tribune said.

Iran recently announced it would allow industrial-scale power plants to act as Bitcoin miners - provided they don't use subsidized fuel.

National cryptocurrency mining law states that miners should disclose their identity and provide detailed information to the Ministry of Industry, Mines and Trade. This information includes the size of the mining farms and the type of equipment they use. They are collected to prevent smuggling into the country. Miners are defined both as natural persons and companies.

Illegal cryptocurrency miners risk fines ranging from $ 2,000 to $ 5,000 for each piece of equipment used, and an additional $ 20,000 fine for being caught using a subsidized source of electricity.

Technical Market Outlook:

The ETH/USD pair keeps trading below the short term trend line resistance after it was rejected at 50% Fibonacci retracement of the last wave down located at the level of $389.66. The market reversed, but managed to bounce from the intraday technical support seen at the level of $375.62. If the level of $369.58 is clearly violated, then the next target for bears is seen at the level of $362.30. The nearest technical resistance is seen at the level of $391.73. 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.

analytics5f48b0cc523eb.jpg

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

Technical Analysis of EUR/USD for August 28, 2020

Technical Market Outlook:

The EUR/USD pair has broken out above the short-term trend line resistance and the local high was made at the level of 1.1901. The next target for bulls is seen at 1.1908 - 1.1915. The momentum is strong and positive, so the odds for another move up are high. 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.

analytics5f48afcf4bf68.jpg

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

Technical Analysis of GBP/USD for August 28, 2020

Technical Market Outlook:

The GBP/USD pair has been seen testing the supply zone located between the levels of 1.3264 - 1.3283 at the end of the week. The momentum is now positive and strong, but the market conditions remain overbought. The 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. In a case of an upside breakout, the next target is seen at the level of 1.3315.

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.

analytics5f48aee05aacd.jpg

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

GBP/USD: plan for the European session on August 28. Pound buyers are preparing to settle at the August highs. COT reports.

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

Federal Reserve Chairman Jerome Powell's recent decision on monetary policy caused buyers of the British pound to make an attempt at growth, which allowed them to renew the August highs, at which they will try to gain a foothold today. As for yesterday's entry points, it was possible to make money on selling the pound – this could be done by more risky traders, as well as on long deals, which made it possible for you to get around 50 points. Let's analyze the entry points. On the 5 minute chart, the pound sharply grew in the resistance area of 1.3260 after Powell's statements, which is where I recommend opening short positions from the rebound. Then, closer to the middle of the US session, when the pair fell to the support area of 1.3170, the bulls achieved a false breakout, which formed a good entry point into long positions. At the moment, focus has shifted to the resistance of 1.3228, settling on which will be a good signal to open long positions in the hope of continuing the growth of GBP/USD to the area of yesterday's high of 1.3281, where I recommend taking profits. The 1.3316 area will be a long-term target. If the bulls do not manage to gain a foothold above the resistance of 1.3228, then it is best not to rush in buying when the pair declines, but wait for the support test of 1.3177, where a false breakout will be a signal to enter the market. If bulls are not active, I recommend opening long positions immediately for a rebound only from a low of 1.3115, counting on a correction of 30-35 points within the day.

You also need to take note of the Commitment of Traders (COT) reports for August 18, which recorded growth in long positions again, 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 long deals on the pound when it declines become more attractive and interesting from an investment point of view.

analytics5f48b2202e281.jpg

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

Bears need to try to prevent a breakout of the 1.3228 resistance, which is so actively prepared by buyers of the pound. An unsuccessful consolidation above this range and returning under it in the morning forms a good entry point for selling the pound in anticipation of a return and decline to the support of 1.3177, where the downward movement may slow down. Settling below this range forms a more powerful bearish wave that can return the pair to the 1.3115 area, where I recommend taking profits. Bank of England Governor Andrew Bailey will deliver a speech this afternoon, which may also negatively affect the growth prospects of the British pound. However, in case sellers are not active at the 1.3228 level, it is best to defer short positions to the months's high in the area of 1.3281, or sell GBP/USD immediately on a rebound from a major new resistance 1.3316 based on the correction of 20-30 points within the day.

analytics5f48b2231af5f.jpg

Indicator signals:

Moving averages

Trading is carried out above 30 and 50 moving averages, which indicates a continuation of the upward trend for 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 daily D1 chart.

Bollinger Bands

In case of a decline, the pair will be supported by the lower border of the indicator at 1.3175.

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

EUR/USD: plan for the European session on August 28. Changes in the Fed's monetary policy did not strongly support the dollar.

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

Yesterday the bravest ones managed to make money on selling the euro, and those who don't like risk could make money on long deals of the single currency. Let's figure out where it is possible and necessary to enter the market. In the 5 minute chart, you can see that after Federal Reserve Chairman Jerome Powell said that the target inflation rate would go beyond 2.0%, there was a sharp increase in the euro to the resistance area of 1.1884, from where I recommended opening short positions immediately on the rebound. The downward movement was about 100 points. In addition, a good signal for buyers had appeared after a false breakout formed at the 1.1774 level, which led to an upward correction of about 50 points, as well as to the middle of the side channel of 1.1809. At the moment, we can see on the hourly chart that the bulls have not given up on the idea of breaking through the area above the 1.1849 resistance and are doing everything possible for this. Settling at this level forms a signal to buy the euro and will lead to a second update of the resistance of 1.1900, where I recommend taking profit. Today's fundamental data on the state of the US economy will help the euro's growth, since we can't expect anything good from this, according to economists' forecasts. The long-term goal of the bulls will be a high of 1.1947. In case of an unsuccessful attempt to settle above 1.1849, I recommend not to rush with long positions, but wait for a decline and a false breakout to the support of 1.1809. The moving averages also pass just above this level. It is best to open long positions in EUR/USD only for a rebound from the low of 1.1764, based on a correction of 25-30 points within the day. This level is also the lower limit of the current side channel, in which the euro is located for the entire week.

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 larger, 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.

analytics5f48ae1198acb.jpg

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

Euro sellers have new tasks and goals for the end of the week. To begin with, you need to try and not let EUR/USD go above the resistance of 1.1849, where a false breakout will be a signal to open short positions in anticipation of a decline to the middle of the side channel of 1.1809, in which the pair spent the entire week. Settling below 1.1809 will be an additional signal to sell the euro while counting on a return to the lower border of the side channel of 1.1764, where I recommend taking profits. If the eurozone data that will be released in the morning allows EUR/USD to continue growing above the resistance of 1.1849, in this case I recommend postponing short positions once a rebound occurs from the resistance of 1.1900, or sell the pair even higher – from 1.1947 based on a correction of 25-30 points within the day.

analytics5f48ae14a6e97.jpg

Indicator signals:

Moving averages

Trading is carried out just above the 30 and 50 moving averages, which indicates a slight 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 daily D1 chart.

Bollinger Bands

A breakout of the upper border of the indicator around 1.1850 will strengthen the demand for the euro. In case of a decline in the pair, intermediate support will be provided by the lower border of the indicator at 1.1785.

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

Brief trading recommendations for EUR/USD and GBP/USD on 08/28/20

analytics5f48a7b45e45a.jpg

After a long price fluctuation in the range of 1.1780/1.1850, the EUR/USD currency pair managed to show a very high activity, locally breaking the upper boundary of 1.1850 and directing the quote towards line no. 4 (1.1900), the main flat formation (side channel).

The recommendation to work on the breakdown of one or another boundary of the range coincided by 100%, which brought us a quick profit.

Regarding the current market situation, it can be seen that after the high activity, the quote still remained in the upper part of the main side channel 1.1700 // 1.1810 // 1.1900 (1.1910), (lines No. 6, 5 and 4).

Based on the obtained data on finding the quote relative to the side channel, the following possible scenarios can be considered:

First, a movement towards line No. 4.

In this situation, we consider the retention of the current price movement in the upper part of the side channel 1.1700 // 1.1810 // 1.1900 (1.1910), where the quote will approach the line number 4 (area 1.1900/1.1910).

Second, another slowdown with the transition to the lower part of the channel, lines no. 5 and 6.

After yesterday's high activity, the quote resumes the slow down process within the boundaries of 1.1780/1.1850, where price consolidation below 1.1770 leads to a price change to the lower part of the main flat 1.1700 // 1.1810 // 1.1900 (1.1910).

analytics5f48a7c224a6c.jpg

On the other hand, the GBP/USD currency pair repeated the scenario of a very high activity of the Euro, and as a result of which, price jumps occurred in the market, which led us to the area of local highs on August 19 and 21.

The scenario of high activity was considered in the previous review, where it was set that if the price consolidates above 1.3225, it will open the way towards the values of 1.3250/1.3265. This brought us a quick profit.

Regarding the current market situation, you can see that the quote of the pound is located around the local highs on August 19 and 21 (1.3250/1.3265 area).

Based on the obtained data on finding the quote relative to local highs, the following possible scenarios can be considered:

First, price consolidation above local highs.

In this situation, the price consolidating above the 1.3265/1.3280 area is considered, rather than piercing the shadows, as it was the day before. This step can lead to the further upward development of the price, in the direction of 1.3380-1.3450.

Second, a slowdown followed by a price rebound.

This scenario considers the natural basis of the past, where the area of 1.3265/1.3280 exerts pressure on the quote, which leads to a slowdown and a price rebound towards 1.3200.

analytics5f48a7cd7bde5.jpg

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

Simplified wave analysis and forecast for EUR/USD and USD/JPY on August 28

EUR/USD

Analysis:

As a result of the six-month price rise, the euro quotes reached the borders of a strong resistance zone of a large timeframe. Since the end of July, the price has been moving mostly sideways, forming a corrective plane. Since the beginning of this week, the price has been frozen in a narrow corridor.

Forecast:

In the coming day, a general flat mood is expected, with an expansion of the range of the price move. In the first half of the day, the upward vector of the pair's movement is more likely. In the next session, a short-term decline in the support area is not excluded.

Potential reversal zones

Resistance:

- 1.1900/1.1930

Support:

- 1.1830/1.1800

Recommendations:

It is better to reduce the size of the trading lot. Purchases of the pair remains the priority.

analytics5f48a194292bd.jpg

USD/JPY

Analysis:

The direction of short-term trends of the Japanese yen since June 5 is set by the descending wave algorithm. In its structure, the final part (C) started on August 12. Within its framework, the internal correction is nearing completion. The downward movement that started this morning has a reversal potential.

Forecast:

The final descending segment is expected to start in the next day. In the European session, a short-term price rise to the resistance zone is not excluded. At the end of the day, it is possible to accelerate the rate of decline, with a break through the boundaries of the nearest support.

Potential reversal zones

Resistance:

- 106.50/106.80

Support:

- 105.90/105.60

- 105.20/104.90

Recommendations:

Today, there are no conditions for buying the yen. It is recommended to track all emerging sales signals of the instrument.

analytics5f48a1a316dd9.jpg

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

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

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

Indicator analysis. Daily review on GBP / USD for August 28, 2020

Trend analysis (Fig. 1).

The market may move upward from the level of 1.3202 (closing of yesterday's daily candle) with the target at the upper fractal 1.3285. (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).

analytics5f489029cc1f6.jpg

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 1.3202 (closing of yesterday's daily candle) with the target at the upper fractal 1.3285 (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 1.3285 (red dotted line), the price may move downward with the target of 1.3134 - a 14.6% pullback level (red dotted line). If this level is broken downward, the next target will be at 1.3041 - a 23.6% pullback level (red dotted line).

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

Indicator analysis. Daily review on EUR / USD for August 28, 2020

The pair moved sideways on Thursday due to the news. At the beginning of the day, the price almost tested the historical resistance level of 1.1912 (blue dotted line), but the news lowered the price by 140 points. The day ended with the resumption of the upward movement. Today the market may continue to move up. No news is expected on the economic calendar.

Trend analysis (Fig. 1).

The market may move upward from the level of 1.1824 (closing of yesterday's daily candle) with the target at the upper fractal 1.1967 (red dotted line). From here, the upward movement may continue with the next target at 1.2102 - a 76.4% pullback level (blue dotted line).

analytics5f488ded425d9.jpg

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 here, the upward trend may continue with the next target at 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 begin to move down to the lower fractal 1.1803. If this level is broken, the downward movement may continue with the next target at 1.1779 - a 23.6% pullback level (red dashed line).

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 28? Plan for opening and closing trades on

Hourly chart of the EUR/USD pair

analytics5f48a6ef8d5a0.jpg

The EUR/USD pair unexpectedly traded very actively during Friday night trading. But that's what we talked about in yesterday evening's review. Markets need to be given time to calm down after Federal Reserve Chairman Jerome Powell's speech yesterday. As you can see, they have not yet calmed down by the morning of August 28 and are still under the impression. Thus, the quotes of the euro/dollar pair have returned to the upward trend line and are reaching from below(!!!). But there is no ascending trend line (new and relevant) or an upside channel at this time, since the price has been moving mostly sideways for most of the current week. Thus, novice traders still do not have any signals and patterns at their disposal in order to trade bullish. Meanwhile, quotes are approaching the 1.1903 level , which is the upper line of the side channel, in which the pair has been trading for more than a month. If this level is crossed, the chances of resuming the upward trend will sharply increase. At the same time, we would like to remind you that the price also crossed this level on August 18-19, after which it started to calmly fall. Therefore, we still recommend that you focus on trend lines and channels when trading. Now there is nothing like that.

The calendar of macroeconomic events for the European Union is empty again on August 28. Meanwhile, the Economic Symposium in Jackson Hole will continue in the United States, but no high-profile speeches concerning the euro or the dollar are planned for today. Thus, novice traders will have nothing to pay attention to today. We could recommend considering the reports on changes in the volume of personal income and spending of Americans for July or the consumer confidence index, but we believe that these reports will not cause any market reaction. Especially after Powell's speech from yesterday, which is why the pair is still extremely actively trading. At the same time, US President Donald Trump officially gave his consent to run for president for a second term. This decision was made at the convention of the US Republican Party, although it has long been clear to everyone that Trump is the only Republican presidential candidate. It is ironic that his official consent was just announced, and the US dollar collapsed by 55 points against the euro right after this. In any case, the US president seems to continue to be the main supplier of fundamental information, and traders are closely monitoring the development of the conflict with China and a new wave of rallies and protests caused by a new racial scandal in America.

Possible scenarios for August 28:

1) It is still not recommended to consider buying the pair at this time, since there is no clear upward trend at the disposal of traders. It was possible to use the 1.1850 level as a signal for buying (we wrote about it in our earlier reviews). This is the level from which the price rebounded twice earlier. Overcoming it makes it possible to count on growth to 1.1895 and 1.1903. However, this is a rather dangerous signal.

2) Selling the pair, after yesterday's trading, also became irrelevant, as the price surpassed all local highs of the last days. Accordingly, the upward movement has resumed. However, we do not have a trend line, channel, or other pattern that clearly shows an upward trend. Thus, we recommend that novice traders do not take unnecessary risks and wait until the markets calm down and form a new, "calm" trend, within which it will be possible to trade.

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 find 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.

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

What did the Fed do to the dollar?

J. Powell announced the regulator's decision to start targeting the average inflation rate at around 2.0% as he spoke via video conference during the symposium. Moreover, he will now allow inflation to exceed the 2% mark, so that low inflation will flatten. In our opinion, this action turned out to be a compromise, capable of supporting the demand for risky assets without swaying the markets and putting pressure on the yield on US Treasury government bonds, which, in turn, will put pressure on the dollar.

Why did the Fed decide on targeting inflation at 2%?

Due to their rotation on the current Open Market Committee (FOMC), Fed members who voted have previously set out different inflation targeting levels that ranged from 2% to 2.5%. However, Powell said that the 2% target clearly fits into the desired inflation level formed in the last decade. As we see it, this was a compromise solution to support the recovery of the labor market amid the most stimulating monetary policy for the economy. In fact, the unanimous decision taken by the FOMC will allow the regulator to take all necessary measures to achieve an average 2% inflation rate. It should also be noted that this decision guarantees a long period of low interest rates, which completely excludes Fed's attempts to totally change the monetary rate at any time.

What are the consequences of targeting inflation rate?

In view of this, the stock markets will be in steady demand for company shares. Moreover, this demand will only grow if the US economy and the world as a whole will recover. A guaranteed long period of low interest rates will contribute to this. At the same time, there will be a recovery in demand for US Treasuries, through reducing yields, which are putting pressure on the US dollar in light of Powell's speech yesterday. We believe that the dollar rate will remain under strong pressure in the new reality – a guaranteed period of low interest rates in the wake of inflation targeting, large-scale stimulus measures from the Fed and the US Treasury.

Should we expect a rise in the price of gold in the new reality?

We believe that the regulator's new monetary policy will fully change markets' focus from protective assets that do not bring interest income, which include, gold to company shares, which will push up stock indices both in Asia, Europe and North America. The same fate is expected in silver.

Will the dollar fall again?

In the context of the new reality, the dollar is likely to show weakness against major currencies due to specific measures aimed at stimulating the recovery of the US economy, but at the same time, its strongest decline is not expected to continue. Much of its recent decline has already been factored into prices in the wake of expectations of the Fed's decision to target inflation. We believe that its fate will fully depend on the incoming data of economic statistics on the US economy. To simply put it, the dollar will decline if the values of important economic indicators show a generally positive trend. At the same time, if they show values worse than expected, the dollar rate will then at least balance in sideways ranges, primarily to major currencies.

Conclusions

The Fed's decision to target inflation is indeed important and for long-term solution. These measures will weaken the dollar over time, contributing to the growth of demand for company shares, while lowering investor's interest in non-interest bearing assets - gold and silver. However, the decline rate will still be connected to the incoming US economic statistics and the process of national economic recovery.

Forecast of the day:

The AUD/USD pair is gaining support amid Fed's decision to target inflation, which points to potential weakness in the US currency. In addition, the resumption of the trade negotiation between Washington and Beijing contributes to the positivity of AUD. Thus, we can expect the price to break the 0.7270 level, which opens the way to rise first to the level of 0.7320 and then to 0.7385.

The USD/CAD pair fell below the strong support level of 1.3130 amid fundamental weakness in the US dollar. Thus, we expect the pair to continue falling to 1.3030.

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

BCH/USD price movement On AUG 28, 2020.

analytics5f4876291d348.jpg

On the 4 hour chart, the BCH/USD pair is now moving in a downslope Pitchfork Channel and bellow the Moving Average. We can see that BTC has already failed a few times to touch the middle line of the Pitchfork Channel as its target. Moreover, we can see the Divergence between the price and the Stochastic Oscillator. The BCH/USD pair may rise to 278.19 as its first target and 294.37 as its secondary target. This scenario is likely to occur if the pair does not drop and close bellow 257.74.

(Disclaimer)

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

Forecast for EUR/USD on August 28, 2020

EUR/USD

Federal Reserve Chairman Jerome Powell made a keynote speech at the Jackson Hole online conference on Thursday, in which he modified the central bank's attitude to inflation and employment. Now the Fed can raise the rate when inflation is slightly higher than 2.0%, and employment will be assessed by such a criterion as the lack of jobs. Powell cited the example of failed rate hikes during the Paul Volcker administration (the 1980s), which subsequently (after defeating it with its 14 percent increase due to the oil crisis) led to high unemployment (10.8%) and pulled down inflation to low levels for a long time.

Well, the Fed's fears are very well founded, because now the main reason for the unwinding of inflation will not be the Fed's rate, but the incredible liquidity poured into the free market in the form of subsidies and allowances during the coronavirus crisis, which Powell did not mention. This is why, in our view, the Fed refused to consider employment without reference to inflation, so that the investment community (and Congress) would not pressure the central bank to delay raising the rate when employment becomes high.

analytics5f487d2d1a908.jpg

Yesterday, the range of fluctuations in the euro was 140 points due to Powell's speech,

and the upper shadow of the daily candle reached the upper limit of the uncertainty range of 1.1710-1.1905. As a result, the day ended near the opening level. The signal line of the Marlin oscillator has deepened into negative territory. Now it is logical to expect the euro to reach the lower limit of the range with an attempt to overcome it and further decrease.

analytics5f487d300e8c0.jpg

The price settled by the MACD line on the four-hour chart. Marlin is slightly higher than the neutral line, but in the current situation, it already repeats the sideways movement of the price and therefore is not so indicative. We are waiting for the price in the range of 1.1625/70, which has already implemented the MACD line of the daily timeframe.

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

Forecast for AUD/USD on August 28, 2020

AUD/USD

Yesterday, the Australian dollar followed the euro's wide-range fluctuation due to Federal Reserve Chairman Jerome Powell's speech, who presented the central bank's new attitude towards inflation and employment, but that hesitation was, of course, a more modest 70 points. However, this was enough to show a new local high and almost reach the target level of 0.7296 to form a six-fold divergence with the Marlin oscillator on the daily chart.

analytics5f487882634d0.jpg

It is possible that the price will once again try to approach the target level of 0.7296, although there are no external reasons for this. Oil is falling (-0.20%), iron ore (-0.14%), agricultural futures, and the dollar index rose by 0.13% yesterday. It will be easier for the aussie to decline to the nearest support of 0.7196 – to the MACD line on the daily chart.

analytics5f4878855a27d.jpg

The price is in an upward trend for all indicators on the four-hour chart. There is only one sign of a potential reversal – a weak divergence on Marlin. But if we do not expect the price to rise, then the reversal will not be quick, one or two days, which means a sideways movement of the aussie, at least today.

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

Forecast for USD/JPY on August 28, 2020

USD/JPY

The yen managed to gather strength and reach the nearest target of 106.65 even faster than we expected – we were waiting for the price at this level today, but it hit the level on Thursday. At the moment, the price is already attacking the target level of 107.00. The Marlin oscillator is on a path of optimal growth, price left above balance indicator line (red) that speaks about the growth's strength and, accordingly, we expect the nearest level to be overcome and also a short correction from the second target of 107.35, that is, from the upper borders of consolidation 9-22 July.

analytics5f487644ba2be.jpg

The price settled above both indicator lines on the four-hour chart, the Marlin oscillator is growing, and we are waiting for the price to continue growing to the specified levels.

analytics5f4876479b01d.jpg

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

Hot forecast and trading signals for GBP/USD on August 28. COT report. US dollar trades on the brink of another collapse

GBP/USD 1H

analytics5f486b1e25a15.jpg

The GBP/USD pair showed the same movements as the EUR/USD pair during Federal Reserve Chairman Jerome Powell's hour of speech on August 27. Since quotes of the pound sterling were near the upper line of the descending channel, we expected either a rebound from it, or settling above it. However, as a result, the pair went above the channel by 60 points and at the same time failed to overcome it. In general, the markets panicked as much as they could. As a result, the technical picture has not changed in any way. Setting the pair above the downward channel will make it possible for the British currency to continue growing, which is absolutely unfounded, if we take into account the fundamental background from the UK. The final rebound from the upper line of the channel and the resistance level of 1.3217 will enable the US currency to rise again. In general, the pair continues to "swing". And you don't need to be an analyst to make such a conclusion. Looking at the graph, the essence of this concept becomes clear.

GBP/USD 15M

analytics5f486b21242f6.jpg

Both linear regression channels turned up on the 15-minute timeframe, therefore, an upward trend is now observed in the shortest term. The latest Commitments of Traders (COT) report for the British pound, which came out last Friday, was very predictable. Non-commercial traders reopened Buy-contracts (almost 6,000) and closed Sell-contracts (around 2,000) in the period from August 12 to 18. Thus, the net position for the "non-commercial" category of traders has grown again, by as much as 8,000 contracts. The pound sterling continued to rise against the US currency until August 18 inclusive, so the data from the COT report perfectly reflects what was happening in the market at that time. In the period from August 19 to 25, according to which the new COT report will be released on Friday, the British currency fell by around 150 points, which again does not give any good reason to expect that professional traders started to close Buy-contracts or open Sell-positions. Most likely, the new COT report will not show significant changes in the mood of large traders. And we will not be able to draw any conclusions about the end or maintaining the upward trend for the pound sterling. Nevertheless, the figures of the report can turn out to be unexpected and do not reflect the essence of what is happening in the foreign exchange market.

The fundamental background for the GBP/USD pair on Friday may be quite interesting for the pound. Bank of England Governor Andrew Bailey will deliver a speech at the same symposium in Jackson Hole. Of course, everything will depend on what exactly Bailey says, but keeping in mind what the movements were during Powell's speech, it is quite possible that we will see something similar today. The problem is that it is impossible to predict how the market will react to Bailey's speech. Yesterday, the pound/dollar pair rose 100 points in several hours and down the same amount. Therefore, there was no question of exactly how the market reacted to Powell's words. We believe that during Bailey's speech, you just need to be as careful as possible and clearly control all open trades at that time. No other British pound events are scheduled for Friday.

Based on the above, we have two trading ideas for August 28:

1) Buyers have become a little more active in recent days, but they failed to get the pair out of the downward channel. Thus, they need to overcome the upper line of the descending channel and the resistance level of 1.3217 for the British currency to continue to rise in price. In this case, we will recommend making new purchases with the target of 1.3346. Take Profit in this case will be about 100 points.

2) Bears can let go of the pair. If quotes go above the descending channel, then sales will cease to be relevant. Now, as a result, the price will remain below the 1.3217 level, this will allow you to sell the pair with the targets of the Senkou Span B line (1.3132) and the lower channel line. For greater confidence, you can wait for the price to settle below the Senkou Span B line. Take Profit in this case will be from 60 to 140 points.

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 EUR/USD on August 28. COT report. Jerome Powell's Jackson Hole speech didn't change

EUR/USD 1H

analytics5f48676bbf2bb.jpg

The euro/dollar pair literally surged for an hour and reached the 1.1886-1.1910 area on the hourly timeframe on August 27 and then it immediately fell by the same 110 points, returning to its original positions. Of course, such volatility and market behavior were associated with Federal Reserve Chairman Jerome Powell's speech in Jackson Hole, which had just begun by that time. However, market participants began to panic even before this event, not knowing what to expect. In general, the technical picture has not changed at all, as the pair continues to trade between the levels of $1.17 and $1.19. Or between the areas of 1.1702-1.1728 and 1.1886-1.1910, if you like. The essence remains the same - movement inside the side channel. The quotes tried to leave this channel on August 18-19, but quickly returned to it.

EUR/USD 15M

analytics5f48676ec1a96.jpg

Both linear regression channels reverse every day on the 15 minute timeframe as the pair is constantly changing direction. In general, it is flat. The latest Commitments of Traders (COT) report was released last Friday. According to this report, non-commercial traders were extremely calm during the reporting week (August 12-18). During this period, the "non-commercial" category of traders, which is considered the most important, closed 4,500 Buy-contracts and 4,500 Sell-contracts. Thus, the net position for this category of professional players has not changed. Accordingly, we cannot draw a conclusion about the change in the mood of professional traders. The COT report still does not provide any grounds to assume that the upward trend has ended. Even if we take into account the fact that the pair fell by 200 points in the period from August 19 to 21, it still does not change anything. The pair has already fallen by 200 points during the current upward trend, which has been forming for more than three months. This value continues to remain small, since the pair's overall growth reached around 1200 points during this period. The pair has been in an absolutely incomprehensible movement throughout the current week, and certainly this movement cannot mean a change in the mood of large market participants. The last three trading days of this week will not be included in the new COT report, but even without them it is clear that no major changes should be expected from it.

The fundamental background for the EUR/USD pair will be extremely weak on Friday, August 28. The Jackson Hole symposium will continue, but no important speeches by the ECB or Fed representatives are planned. There is also nothing special to single out from macroeconomic data. Various secondary indicators such as the level of consumer confidence and the index of economic sentiment in the European Union will be published. Since the beginning of the pandemic, market participants around the world have constantly ignored much more significant news. Thus, the probability of working out these reports is zero. In the United States, we can expect data on personal income and spending of Americans, as well as the University of Michigan consumer confidence index. These reports are also completely secondary. Thus, we can conclude that there will be no significant reaction to macroeconomic data on Friday.

Based on the above, we have two trading ideas for August 28:

1) Bulls in general continue to wait for the right moment to resume the upward trend. Or that the bears will finally take the initiative into their own hands. The pair continues to trade slightly below the Senkou Span B line, but cannot continue to fall. 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 with the target at the resistance level of 1.2051. Take Profit in this case will be up to 110 points.

2) Bears have finally seized the initiative in the market, but they do not have big dividends from this. Thus, you can sell the pair with the target of the support area of 1.1702-1.1727, if the price manages to stay below the Senkou Span B line (1.1835), but you can also see how the quotes "willingly" move down. In this case, the potential Take Profit is 70-80 points.

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