Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on September 3

Trading recommendations for EUR / USD on September 3

Analysis of transactions

Another weak data in the eurozone, retail sales report in Germany in particular, led to a price decrease in EUR / USD, which brought the quote back to 1.1874 and gave profit of over 45 points to short positions.

analytics5f508de180cc0.jpg

Today, data on activity in the EU service sectors is scheduled to be published, and if the indicators show a slowdown in growth, or worse, a reduction in activity, demand and price of EUR / USD will decline in the morning.

In the afternoon, during the US session, a report for the US labor market will also come out, the data for which will affect EUR / USD rates as well.

analytics5f508de6d3b4d.jpg

  • Set long positions from 1.1834 (green line on the chart) to 1.1903, and take profit at the level of 1.1903. Good data on activity in Germany will support the euro in rising in the market.
  • Meanwhile, traders need to be very careful with shorts in the euro, as the downward movement in the last few days have been quite strong, and an upward correction is needed. Thus, sell shorts only from 1.1789 (red line on the chart) to 1.1733, as a large drop will only occur if retail sales in the eurozone come out weak in the reports. Nonetheless, take profit at price level 1.1733.

Trading recommendations for GBP / USD on September 3

Analysis of transactions

Short positions from 1.3357 to 1.3300 gave about 55 points of profit from the market.

analytics5f508ded73b9a.jpg

Price may continue to decrease today, provided that PMI for the UK services sector come out weak in the reports. In addition, if Bank of England governor Andrew Bailey introduces a super-soft monetary policy, demand for the pound will decline even further.

analytics5f508df58f38c.jpg

  • Set long positions from 1.3330 (green line on the chart) to 1.3381 (thicker green line on the chart), and take profit at the level of 1.3381. Only a strong PMI data will help the pound rise in the market again.
  • Sell shorts from 1.3286 (red line on the chart) to 1.3221, and take profit at price level 1.3221. However, price will decrease only if the PMI turns out worse than the forecasts.
The material has been provided by InstaForex Company - www.instaforex.com

Indicator analysis. Daily review on GBP / USD for September 3, 2020

Trend analysis (Fig. 1).

The market may continue to move downward from the level of 1.3352 (closing of yesterday's daily candle) with the target at the support level 1.3212 (white thick line). In case of testing this level, an upward pullback is possible with the target at the historical resistance level of 1.3310 (blue dotted line).

analytics5f509d02e9bf6.jpg

Figure: 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - down;

- Trend analysis - down;

- Bollinger lines - down;

- Weekly chart - down.

General conclusion:

Today, the price may continue to move downward with the target at the support level 1.3212 (white bold line). In case of testing this level, an upward pullback is possible with the target at the historical resistance level of 1.3310 (blue dotted line).

Another possible scenario is, from the level of 1.3352 (closing of yesterday's daily candle) the price may move downward with the target at the support level of 1.3212 (white bold line). From here, the downward trend may continue with the next target at the 21 middle EMA at 1.3175 (black thin line).

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

Bitcoin Trading Idea

analytics5f508b28b8eac.jpg

Good afternoon, dear traders! I present this Bitcoin trading idea to your attention.

Yesterday, there was a powerful momentary initiative for the instrument, bringing it down to 80,000 in one day. This initiative brought the asset close to a clear technical platform of buyers at a price of 11,000:

analytics5f50afc5e56f8.png

I suggest working on a breakdown of this quote from a rollback according to the plan shown in the screenshot above.

In this graph, we have an ABC structure, showing wave A as yesterday's short initiative. The hunt will be carried out for the stops of buyers, which are under 11,000. On the breakdown of this level, the so-called broach, or slippage, and a significant increase in volatility, exhibit how you can earn extra money.

The trading idea is presented using the Price Action and Stop Hunt method.

Success in trading and control your risks!

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

USD/JPY. Abe leaves, "abenomics" remains: the yen is under pressure again

The yen is running down compared to the dollar again. The market is being practical now as the emotion about the unexpected resignation of Prime Minister Shinzo Abe subsides. This decision is not favorable to the Japanese currency because they are against the background of a corrective recovery of the greenback. Added to that, the Japanese political Olympus reported on the latest news that the course "abenomics" will continue as the changes are still not expected until the election of the new head of the government. USD/JPY traders should focus on the movement of the US currency since it is going strong in the market.

As per Japanese events, they will have a new Prime Minister by the end of the month and on September 14, the members of the democratic party will elect a new leader that will automatically be a contender for the post of the head of government. The parliament will consider the candidacy and pass its verdict on September 16. According to the results of the last elections, the ruling party controls the majority in both houses of Parliament. So, all other approval mechanisms will be considered formal after an internal party vote.

analytics5f507e865af73.jpg

General Secretary of the Cabinet of Ministers of Japan Yoshihide Suga - the main contender for the high post said in a report that he will follow the steps of Prime Minister Shinzo Abe. Other contenders are also "from the political cage" of Abe such as former Japanese foreign Minister Fumio Kishida, who is considered as a "moderate politician" and a long-time supporter of pensioner Shinzo Abe, has a good chance of being elected. According to the experts, the country's economic course will radically change if one of the above mentioned candidates will win the election. The "abenomics" will continue to be at the forefront. Therefore, analysts mostly discuss the prospects for foreign policy changes. For example, in the context of the fate of the Kuril Islands or the prospects for difficult relations between Japan and South Korea.

Thus, when the market learned the names of the most likely successors of Shinzo Abe, figuratively speaking, "let go" of this situation, focusing on other fundamental factors. It is also worth considering one more nuance – the powers of the Bank of Japan Governor Harukiko Kuroda will not end soon (in 2023). So far, he has not expressed any intentions to leave his position ahead of schedule. So in terms of monetary policy, we should also not expect changes, at least in connection with the change of the head of the ruling party and, accordingly, the government.

According to the lower line of the Bollinger Bands indicator on the daily chart, the USD/JPY pair fell to the support level of 105.21. At this stage, the southern momentum faded, as the bears had no additional arguments for further price reduction. While the US dollar began to recover from their fall for several days in the market. After a high-profile speech of Jerome Powell, the greenback has been dipping down since last Thursday. This factor will continue to haunt dollar bulls for a long time, but at the moment the greenback is correcting after a multi-day decline.

The immediate reason for the strengthening was the us ISM index, which was much better than the forecast values. At the same time, the market yesterday completely ignored the negative ADP report, which showed a minimal increase in the number of employees (just over 400 thousand with a forecast growth of 1.5 million). A month ago, ADP specialists announced a similar result but the official increase in the number of people employed in the non-agricultural sector in July was at the level of 1 million 700 thousand.

Definitely, the Nonpharmes tomorrow will swing the pendulum in one direction or another. The dollar will either get additional support or will be under the wave of sales. As of the moment, the US currency can afford a correction including the pair with the yen which demonstrates absolute "spinelessness" and dependence on the greenback.

analytics5f507e7ce855e.jpg

Based on the chart, the pair is now at the lower limit of the Kumo cloud. Long positions should only be considered if this target is exceeded. In this case, buyers of USD/JPY will open the way to the upper line of the Bollinger Bands indicator on the same time frame such as the level of 106.90 and to the main resistance level of 107.30. In general, the pair remains bullish, even if the price declined. The current corrective recovery of the greenback allows USD/JPY bulls to return the pair to the familiar price range of 106.00 - 107.50.

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

Trading plan for EUR/USD on September 3

analytics5f509971b6f78.jpg

Infection rate continues to accelerate in India, having recorded 82 thousand new cases a day, the highest since the start of the pandemic.

Meanwhile, a steady improvement is observed in the United States and Brazil, recording not higher than 45 thousand new cases per day on their latest data.

analytics5f509a02a06ab.jpg

EUR/USD - Euro has formed a new price range and is waiting for an impulse from the upcoming US data due today at 13:30.

Sell shorts from 1.1760.

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

GBP/USD: plan for the European session on September 3. Pound could collapse if the head and shoulders pattern is realized.

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

A rather interesting signal to sell the British pound was formed yesterday, since long deals failed due to the fact that we just missed a level. In general, the pressure on the pound has remained, and the resulting technical head-and-shoulders reversal pattern may result in a larger decline for the pair. But let's deal with yesterday's trade. Missing long deals from the 1.3326 level was very obvious, but those who were more attentive and have read my afternoon review were waiting for a breakout and a chance to settle under this level, which happened. Testing the 1.3326 area from top to bottom formed an excellent entry point into short positions, which brought about 45 points of profit. At the moment, a very important task for bulls is to protect the support of 1.3315, where a false breakout is a signal to open long positions while counting on a return and a chance to settle above the resistance of 1.3378. Afterwards, you can add long deals on the pound and wait until this week's high has been updated at 1.3467, which is where I recommend taking profits. In case the pound falls in the long term, and everything will depend on the PMI data for the UK services sector, it is best to consider new long positions after the support test of 1.3243 or buy GBP/USD for a rebound from the low of 1.3165 based on a correction of 30-40 points within the day.

Let me remind you that the Commitment of Traders (COT) reports for August 25 recorded a reduction in long positions, as well as a reduction in short positions. This suggests that players are leaving the market who want to lock in profits at current highs in anticipation of very strong market fluctuations in the future. The COT report indicates that there was a reduction in short non-commercial positions from the level of 47,806 to the level of 39,790 during the week. Long non-commercial positions declined more significantly from 54,310 to 45,390. As a result, the non-commercial net position also fell slightly, but remained in positive territory and reached 5,600 against 6,504 a week earlier.

analytics5f509a8e7ffa4.jpg

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

The main task of the bears is to implement the head and shoulders technical pattern, which will bring about a breakout and a chance to settle below the support of 1.3315, thereby leading the pound to sharply fall to the support area of 1.3243, and afterwards, an update of 1.3165, which is where I recommend taking profits. However, this scenario can only be implemented with weak PMI data for the UK services sector. Bank of England Governor Andrew Bailey will also deliver another speech today. In case the pound grows, it is best not to rush to open short positions, but to wait until a false breakout forms in the resistance area of 1.3378. I recommend selling GBP/USD immediately for a rebound only after when the high of 1.3467 has been updated, based on a correction of 30-40 points within the day.

analytics5f509a917cc0d.jpg

Indicator signals:

Moving averages

Trading is carried out just below the 30 and 50 moving averages, which indicates continued pressure on the British pound.

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

Bollinger Bands

A breakout of the lower border of the indicator in the 1.3310 area will lead to selling the pound. A breakout of the upper border of the indicator in the area of 1.3375 may lead to a new wave of growth for the pair.

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. The 9 period SMA.
  • Bollinger Bands (Bollinger Bands). The period 20.
  • Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
  • Long non-commercial positions represent the total long open position of non-commercial traders.
  • Short non-commercial positions represent the total short open position of non-commercial traders.
  • Total non-commercial net position is the difference between the short and long positions of non-commercial traders.
The material has been provided by InstaForex Company - www.instaforex.com

The rise of USD will be limited; Local decline in the EURUSD and GBPUSD pairs is likely

ADP's weak data on the number of new jobs disappointed the financial markets yesterday, but not so much, firstly, because the official values from the Ministry of Labor are the most important, which are released on Friday, but they greatly differ sometimes. Secondly, investors already understand that coronavirus outbreaks in the States last summer forced employers to cut the number of jobs, which is reflected in the official statistics.

Will ADP's weak data and possibly from the US Department of Labor, be able to turn the dollar upward?

We believe that the market is still obliged to strengthen the dollar rate following the trading results of Wednesday's dull profit-taking after a clear prolonged period of its weakening. Moreover, weak data from ADP was a great reason to close a lot of short positions in USD. It can be recalled that the US currency has been under pressure over the past four months, which is clearly shown by the dynamics of the ICE dollar index.

Traditionally, the dollar received support for several years in September, which is mainly due to the dynamics of the US stock market. However, this picture is currently not necessary and relevant. We believe that after a short-term correction, the dollar will continue to decline, since it primarily remains in an extremely weak position against major currencies.

The downward reversal of the yield on US Treasury bonds is also negative for the rate of the dollar. The yield of the benchmark of 10-year Treasuries, after declining on August 28 after reaching a local high of 0.789%, fell the following days, rushing to the support line at 0.630%.

Will continued growth in the US stock market weigh on the dollar?

The demand for shares of American companies, which will totally and clearly change from stocks that liked wide interest during the pandemic to industrial securities, banking sectors and other sectors of the economy that were under pressure, will definitely stimulate the dollar to decline in the near future. The global decline will only be stopped by emergency measures from the world's central banks, which is starting to worry about the high rates of their national currencies against the US, and which will prevent their national producers from successfully competing with US goods.

Conclusions:

As a result, it is believed that the dollar's strength will remain limited. Sales will only resume, after its growth to important technical levels.

Forecast of the day:

The EUR/USD pair clearly plays out the movement in the "rising flag" pattern on the wave of investor's profit taking, which was primarily caused by Eurozone's weak data on consumer inflation and then ADP's negative values on employment. We believe that the pair should be bought on a decline from 1.1785 with a local target of 1.1875, if it holds.

The GBP/USD pair is under pressure from both internal Brexit issues and common profit-taking on the dollar, after a rather long period of decline. Thus, we believe that after falling below 1.3300, the pair will further decline to the level of 1.3250.

analytics5f5075f7178f1.jpg

analytics5f50760e8d0d1.jpg

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

EUR/USD: plan for the European session on September 3. Bad data puts pressure on the euro. Bears will fight for 1.1812. COT

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

The trend towards strengthening the US dollar continued after weak fundamental reports, indicating a slowdown in the growth of the European economy. Yesterday, we formed several quite interesting points for entering the market in both buying and selling. Let's deal with them. If you look at the 5-minute chart, you will see how the bulls formed a correction of about 25 points after the first test of 1.1849 support. Even if you did not have time to enter the market at the very beginning, an additional entry point was formed when you retested this range, which also resulted in an increase of 30 points.

The bears achieved a breakout and gained a foothold under this level during the US session, forming two convenient market entries while testing it from top to bottom, which brought about 25 points of profit. At the moment, a very important task for euro buyers is to protect the support of 1.1812, a divergence may form on the MACD indicator while testing it, which will also be an additional buy signal. But only a false breakout of the 1.1812 area will be able to form an entry point into long positions as we count on returning to the resistance of 1.1858. A breakout and being able to settle above this range will be important, since it will provoke the removal of a number of stop orders and a more powerful bullish momentum to the area of the highs of 1.1905 and 1.1949, where I recommend taking profits.

However, take note that there are a number of reports today on activity in the services sector of the eurozone countries, and poor indicators can harm the euro. Therefore, if there is no activity in the support area of 1.1812, I recommend postponing long positions until the low of 1.1764 has been updated, or even buying EUR/USD for a rebound from the support of 1.1714 based on a correction of 20-30 points within the day.

Let me remind you that the Commitment of Traders (COT) report for August 25 recorded an increase in long non-commercial positions from 259,244 to 262,061, while short non-commercial positions fell from 62,301 to 50,309. Since closing long positions has stopped, and after a short pause, traders began to actively buy euros on the futures market, we can expect the upward trend to continue in the first half of September.

analytics5f509a297995c.jpg

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

Sellers continue to control the market and every attempt to update this week's low has been successful. Today we are waiting for reports on retail sales in the eurozone and once we ensure that activity in the service sector is slowing down, we can open short positions in the euro. Settling below the support of 1.1812 will be a clear signal to sell, counting on updating the low of 1.1764. However, the 1.1714 area will be the long term target of the sellers, which is where I recommend taking profits. In case bulls make an attempt to return to the market, it is best to open short positions only after a false breakout forms in the resistance area of 1.1858, where the moving averages that play on the side of the bears also pass. In the absence of active sales from this level and good data for the euro area, it is best to postpone short positions for a rebound from the high of 1.1905, counting on a correction of 20-30 points within the day.

analytics5f509a2c63ea7.jpg

Indicator signals:

Moving averages

Trading is carried out below 30 and 50 moving averages, which indicates the bears' attempt to build a downward correction for the euro.

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 1.1812 will increase pressure on the euro. Growth will be limited by the upper level of the indicator in the 1.1860 area.

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. The 9 period SMA.
  • Bollinger Bands (Bollinger Bands). The period 20.
  • Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
  • Long non-commercial positions represent the total long open position of non-commercial traders.
  • Short non-commercial positions represent the total short open position of non-commercial traders.
  • Total non-commercial net position is the difference between the short and long positions of non-commercial traders.
The material has been provided by InstaForex Company - www.instaforex.com

Technical Analysis of ETH/USD for September 3, 2020

Crypto Industry News:

Sygum, Switzerland's major cryptocurrency bank, is gearing up to finally launch digital asset trading after receiving regulatory approval. Yesterday, Sygum announced that it had received approval from the financial market regulator, which allowed the company to extend its services to a digital asset trading platform. This approval enables the Signatory to "cover the full life cycle of collateral", from services such as primary issuance, settlement and custody to secondary trading. As part of the new Signum capabilities, users now have access to instant settlement via digital Swiss franc (DCHF) issued by Signum.

Following news of regulatory approval, Sygum has also revealed its plans to establish two new entities in Switzerland. The new units will focus on promoting the knowledge of the Signum blockchain technology as well as introducing new products and services developed by the regulated branch of Sygum in Singapore.

Zurich-based Signum claimed to be the first Swiss company to become a cryptocurrency bank. The bank is aggressively developing its services, where, after obtaining a Swiss banking license in August 2019, Sygum was also licensed by the Monetary Authority of Singapore the following month.

In addition to providing care for digital assets such as Bitcoin, Sygum is also known to be the first issuer of the digital franc. In late August, Switzerland's largest online retailer, Galaxus, implemented the DCHF Signature stablecoin in its e-commerce payment process.

Technical Market Outlook:

The ETH/USD pair has dropped more than 50% from the last high seen at the level of $487.70 and made a new local low at the level of $418.32. This low is below the 50% Fibonacci retracement of the last wave up, which is located at the level of $428.68. The next target for bears is seen at the level of $414.72, which is a 61% Fibonacci retracement of the last wave up. Any violation of this level will be a first indication the short-term top might be in already. The key technical support remains at the level of $362.60.

Weekly Pivot Points:

WR3 - $507.05

WR2 - $468.00

WR1 - $450.50

Weekly Pivot - $409.09

WS1 - $391.88

WS2 - $350.52

WS3 - $335.87

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.

analytics5f5090b34e93f.jpg

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

Elliott wave analysis of GBP/JPY for September 3, 2020

analytics5f50900309e9b.jpg

GBP/JPY peaked in red wave iii/ at 142.72 and the expected correction in red wave iv/ towards 138.33 is now unfolding. The break below minor support at 141.30 was the catalyst we need to declare red wave iii/ for complete and red wave iv/ in motion.

We expect minor resistance at 141.89 now will act like a cap for further downside progress in the days to come towards the ideal target near 138.33.

R3: 142.72

R2: 142.20

R1: 141.89

Pivot: 141.64

S1: 141.23

S2: 140.99

S3: 140.69

Trading recommendation:

We will re-buy GBP near 138.33.

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

Indicator analysis. Daily review on EUR / USD for September 3, 2020

Trend analysis (Fig. 1).

The market may continue to move downward from the level of 1.1856 (closing of yesterday's daily candle) with the target at the support level 1.1791 (white thick line). From here, the price may begin to move upward with the next target at the historical resistance level of 1.1912 (blue dotted line).

analytics5f508d378526e.jpg

Figure: 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - down;

- Trend analysis - up;

- Bollinger lines - down;

- Weekly chart - down.

General conclusion:

Today, the market may continue to move downward from the level of 1.1856 (closing of yesterday's daily candle) with the target at the support level 1.1791 (white thick line). From here, the price may begin to move upward with the next target at the historical resistance level of 1.1912 (blue dotted line).

Another possible scenario is a downward trend and a test of the support level 1.1795 (white bold line). After this, the price may continue to move down with the next target of 1.1723 located at the lower border of the Bollinger line indicator (blue dotted line). If this level is broken down, the next target will be at the support level 1.1691 (black bold line).

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

Technical Analysis of BTC/USD for September 3, 2020

Crypto Industry News:

The Vienna stock exchange, or Wiener Borse, has only become the third "official regulated stock exchange" in the world to list a product in the form of Bitcoin.

Thomas Rainer, head of the exchange's development, emphasized that listing allows "seasoned local investors" access to the benefits that the exchange can offer cryptocurrency traders, including "monitored, regulated and transparent real-time information trading and secure settlement through its permanent traders." brokers ".

21Shares CEO Hany Rashwan emphasized that the Wiener Borse quotation means Bitcoin ETP is now available for all three "DACH" countries, namely Germany, Austria and Switzerland:

"We are pleased to announce that Bitcoin is now available everywhere for both retail and institutional investors throughout the DACH region. Except for the DACH region, no other jurisdiction in the world provides such comprehensive and broad access to Bitcoin."

In July, 21Shares's Ethereum and Bitcoin ETP were also admitted to listing on the Deutsche Boerse XETRA reference market, where over 90% of German equities and around 30% of European ETFs are traded. In less than two years of operation, 21Shares has acquired over $ 100 million in assets under its management.

Another impetus for the institutional adoption of cryptocurrency is the Singapore Exchange (SGX), which announced that, in collaboration with the British crypto data company CryptoCompare, it will provide price indices for Bitcoin and Ethereum.

Technical Market Outlook:

The BTC/USD pair had reversed from technical resistance seen at the level of $12,004 and is currently approaching the key short-term demand zone located between the levels of $11,062 - $11,220. Any violation of this zone will be a bearish signal in the near term for Bitcoin. On the other hand, the key supply zone is still located between the levels of $12,269 - $12,429 and only a clear breakout through this zone will be seen at an end of the corrective cycle. The weekly time frame trend remains up.

Weekly Pivot Points:

WR3 - $12,658

WR2 - $12,221

WR1 - $11,935

Weekly Pivot - $11,435

WS1 - $11,232

WS2 - $10,778

WS3 - $10,510

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.

analytics5f508f4d59b79.jpg

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

Elliott wave analysis of EUR/JPY for September 3, 2020

analytics5f508e8a719e6.jpg

EUR/JPY declined as expected. The break below minor support at 126.43 confirmed that wave B/ was completed and wave C/ was unfolding. The ideal target for the ongoing wave C/ of 2/ is seen near 124.41 or more likely just below.

In the short-term, more downside pressure remains expected with minor resistance seen in the 125.95 - 126.10 area, which likely will act as a cap as wave C/ is falling to 124.41.

R3: 126.10

R2: 125.95

R1: 125.60

Pivot: 125.52

S1: 125.36

S2: 125.08

S3: 124.82

Trading recommendation:

We will buy EUR again near 124.50

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

Technical Analysis of EUR/USD for September 3, 2020

Technical Market Outlook:

After making the swing high at the level of 1.2010, the EUR/USD pair had immediately reversed and is trading currently below the 61% Fibonacci retracement seen on the weekly time frame chart. The nearest technical support seen at the level of 1.1790 might be tested soon as the market is coming off the overbought conditions. If the level of 1.1790 is clearly violated, then the next technical support is seen at the level of 1.1710. and 1.1696. Nevertheless, the weekly and monthly time frame trend remains up and he next target for bulls is the swing high seen at the level of 1.2089

Weekly Pivot Points:

WR3 - 1.2130

WR2 - 1.2019

WR1 - 1.1975

Weekly Pivot - 1.1859

WS1 - 1.1812

WS2 - 1.1706

WS3 - 1.1664

Trading Recommendations:

On the EUR/USD pair the main trend is up, which can be confirmed by almost 10 weekly up candles on the weekly time frame chart and 4 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.

analytics5f508e03e49f9.jpg

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

Technical Analysis of GBP/USD for September 3, 2020

Technical Market Outlook:

The GBP/USD pair has felt out of the parallel channel and made a new local low at the level of 1.3282. This is the immediate support for bulls and a clear violation of this level will be an intraday bearish signal. The next technical support is seen at the level of 1.3264 and 1.3183. Weekly and monthly time frame trend remains up, so if the bullish pressure sustain, then the next target for bulls is seen at the level of 1.3447. Please notice, the market is coming off the overbought conditions, so the downward correction might last a while.

Weekly Pivot Points:

WR3 - 1.3797

WR2 - 1.3564

WR1 - 1.3482

Weekly Pivot - 1.3256

WS1 - 1.3192

WS2 - 1.2962

WS3 - 1.2882

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.

analytics5f508cedde841.jpg

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

Analytics and trading signals for beginners. How to trade the EUR/USD on September 3? Plan for opening and closing trades

Hourly chart of the EUR/USD pair

analytics5f508c0cb32a0.jpg

The EUR/USD pair minimally corrected to the upside through the MACD signal (circled by the first circle) last Thursday night, after which it resumed to calmly move down. It was quite difficult for novice traders to reach a new sell signal. First, it formed at night, when most people are asleep. Secondly, the MACD indicator was significantly late in reacting to the downward price reversal. Moreover, if the downward movement continues (strong or weak - it doesn't matter), the indicator will be inclined to start discharging today. We have already discussed such a concept as "discharge" in recent articles. This is a process in which the indicator and the price move in different directions, since the indicator can no longer move in the direction of the price. Thus, novice traders have every right to open new short positions based on the existing sell signal. However, they must clearly understand and be aware of all possible risks and complexity of supporting such a transaction. There is no descending trend line or descending channel. Thus, it is quite difficult to determine the goals of a possible correction.

On September 3, we advise novice traders to pay attention to the Markit services PMI in the euro area, retail sales in the European Union for July, and the ISM PMI in the US services sector. The first report is interesting because it might go below the 50.0 mark again (last month the value slumped to 50.1). And if this happens, it will mean that the service sector is experiencing problems and shrinking again, which will negatively affect the pace of recovery of the entire EU economy. Retail sales in the EU are forecast at 1.5% m/m and 3.5% y/y. If the real values of both indicators are worse than the forecasts, then we can expect the pair to move down in the long term. However, we have to warn you that traders can also easily ignore these reports. The probability of working them out will increase if the actual values are very different from the forecasts. The same applies to the ISM index for the US service sector. The value is expected to decrease from 58.1 to 57.0. Such a reduction is unlikely to create pressure on the dollar. But if, for example, the index falls to 51-52, then the US dollar may start to get cheaper.

Possible scenarios for September 3:

1) Novice traders are advised to not consider buying the pair at this time, since the pair has settled below the rising trend line, so the trend has now changed to a downward trend. In the near future, the upward movement may resume, but now an upward trend line or channel is needed in order to identify a new trend and trade accordingly.

2) Sales are still looking more relevant now. The US dollar is confidently rising in price, but it is difficult to say how long this process will continue. We remind novice traders that the overall fundamental background in the US remains weak, and it contributes to the strong drop in dollar quotes over the past three months. Nevertheless, now it is necessary to trade for a fall. There is a new signal from MACD (although not the most accurate and clear). Thus, it was possible to open short positions on it with the targets of 1.1761 and 1.1701. We believe that these goals are quite achievable. Sell positions can be closed by an upward reversal of MACD, and this is where the difficulty lies - the indicator can be discharged, so you need to catch the moments when both the indicator and the price move upward synchronously.

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

Saudi Arabia cuts oil supplies to the United States

analytics5f50885f15379.jpg

Saudi Arabia continues to cut its exports to the United States. Data from Bloomberg even indicated that the kingdom was only loading about 5.6 million bpd on tankers this August, which is just slightly more than in July. That said, the United States accounted for an ever-decreasing share, with which import data show that August shipments were the lowest in decades.

It seems that for Saudi Arabia, a reduction in exports to the United States is the fastest way to inform the global market of a cut in oil supplies. The US is the only major oil-consuming country to publish weekly crude oil inventories and imports, and it has a huge impact on oil traders.

Thus, exports of Saudi crude to the US fell to about 177,000 bpd in August, which is only a fraction of the 1.3 million bpd that the kingdom has sent in April.

Imports of the US, on the other hand, as reported by Bloomberg, amounted to only 355,000 barrels of Saudi crude in the week leading up to August 28, which is equivalent to 51,000 bpd. Meanwhile, preliminary EIA data for the same period show that imports amounted to only 197,000 bpd, nearly a record low.

Combining the calculations of Bloomberg and the EIA data, August imports are about 310,000 barrels bpd. However, government data processing, as well as the weather, complicate the picture even further.

Hurricane Laura, which struck the US Gulf Coast last week, could also affect shipments, as more than 60 oil and gas tankers sought refuge in the western Gulf, awaiting the end of the storm. Only two supertankers from Saudi Arabia were supposed to arrive in the region in the second half of August, since the rest were heading to the West Coast.

Usually, it takes a tanker five to six weeks to travel from Saudi Arabia to the Persian Gulf or the US west coast. This means that any ships that leave in August won't arrive until at least mid-September.

In any case, Tariq Zahir, managing member at Tyche Capital Advisors, said that the increasing dollar demand is putting pressure on oil prices, particularly in the impending drop in demand. If the resurgence of coronavirus leads again to school and office closures, it would have a strong "impact on gasoline demand during refinery repairs and at the end of the year."

Demand may also ease in September and October, as contracts for Chinese imports were cut by a surge in oil purchases earlier this year.

Thus, US crude oil inventories are falling for six straight weeks already, the longest period of losses this year.

Gasoline inventories have fallen to 4.32 million barrels, while refinery utilization fell to 76.7%, its lowest level since June.

Overall product demand also dropped to 16.98 million barrels per day, the same lowest level in 13 weeks.

In addition, the situation with Hurricane Laura led to a reduction in US production to only below 10 million bpd, the lowest level since 2018.

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

NZD/USD Price Movement On Sept 03, 2020.

analytics5f507182d8a80.jpg

On the 4 hour chart, we can see a divergence between the Stochastic Oscillator and the price. The NZD/USD pair is trying to break out bellow the Moving Average which acts as its dynamic support and the 0.6735 level. If this level is broken, the pair will decline to 0.6597 as its first target and the 0.6512 level as its second target. This scenario will not come true if the pair rises and closes above the 0.6786 level.

(Disclaimer)

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

USD/CAD Price Movement On Sept 03, 2020

analytics5f506f54891d9.jpg

On 4 hour chart, USD/CAD is now moving in a downslope channel after touching the lower channel. The Loonie is trying to break through the 1.3095 level. The pair is likely to reach the upper line level from the downslope channel. It has already been confirmed by the Divergence between the Stochastic Oscillator and the price. If Loonie declines especially and closes bellow the 1.3034 level then this scenario is unlikely to occur.

(Disclaimer)

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

Forecast for EUR/USD on September 3, 2020

EUR/USD

The euro continues to decline in the uncertainty range of 1.1710-1.1905. The double divergence on the Marlin oscillator is unfolding in full force on the daily chart, the indicator is already in the negative zone, which further increases the technical pressure on the price.

analytics5f5066b652adc.jpg

We are waiting for the price at the lower border of the range, at which the MACD indicator line is already located. Setting the price below it will become a condition for the mid-term fall of the euro.

analytics5f5066b943dd6.jpg

The price settled below the balance (red) and MACD (blue) indicator lines on the four-hour chart. Marlin is in the negative zone. The situation is completely decreasing in this timeframe. The target for the decline is 1.1710.

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

Forecast for AUD/USD on September 3, 2020

AUD/USD

The extended triple divergence on the Australian dollar's daily chart, which started in mid-April, increases the pressure on the currency. The decline can be long-term, more than six months. But the price must settle below the MACD line for a downward trend to form, below 0.7255. After that, the aussie will initially aim for 0.7075 - the high on June 10.

analytics5f50655cad877.jpg

The MACD line at 0.7295 is also located in the same path towards 0.7255 on the four-hour chart. Thus, the 0.7255/95 range is a single broad support for the price that needs to be overcome.

analytics5f50655fa5ff4.jpg

The price can overcome this support for a long time and it is difficult, since there isn't a single picture in the indicators' readings overall. But it can also immediately do so, if fundamental factors and the external market provide help. The US labor data will be released tomorrow, and they will either keep the price from immediately breaking down, or help to do just that. We are waiting for the development of events in the next two days.

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

Forecast for USD/JPY on September 3, 2020

USD/JPY

Yesterday, the stock market significantly grew by 1.54% (S&P 500) while the dollar strengthened by 0.37%. These factors made it possible for the USD/JPY pair to maintain an upward trend and also gain a foothold above key resistance indicators.

analytics5f5062892df7b.jpg

The daily chart shows that consolidation took place above the balance line. Now the market's nearest price target is the price channel line at 106.62. The price leaving the area above it will prolong growth towards the 107.00 level.

analytics5f50628c0bf85.jpg

The price settled above both indicator lines on the four-hour chart: above the balance line (red) and the MACD line (blue). The Marlin oscillator is in the growth zone, and the 106.62 target is open.

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

Hot forecast and trading signals for EUR/USD on September 3. COT report. US dollar grows, but data has nothing to do with

EUR/USD 1H

analytics5f5050bab43dc.jpg

The euro/dollar pair calmly crossed the support area of 1.1886-1.1910, then the Kijun-sen and Senkou Span B lines on the hourly timeframe on September 2. Thus, the bears were finally active and can now take the pair back to two-month lows located near the $1.17 level. It is still difficult to say whether the US dollar will be able to continue strengthening below this level. Considering the fundamental background that continues to come from overseas. However, as we have said more than once, no currency can rise in price forever, and a correction has been brewing for the euro for more than a month. And not a 200-point downward correction, but at least by 300-400 points, since the total upward movement over the past three months is 1200 points. Thus, at this time, we expect the quotes to decline to $1.17.

EUR/USD 15M

analytics5f5050bd93d40.jpg

Both linear regression channels turned down on the 15-minute timeframe, thereby signaling a downward trend. A new Commitments of Traders (COT) report was released last Friday. Take note that its character has not changed at all compared to previous COT reports. Despite the fact that the euro/dollar has been trading within the side channel for more than a month, professional traders continue to increase their net position. In other words, the number of Buy-contracts is growing for non-commercial traders (the most important group of traders), while the number of Sell-contracts is decreasing. The non-commercial category of traders opened 1,302 Buy-contracts and closed 11,310 sell contracts during the reporting week on August 19-25. Thus, the net position (the difference between the number of buy and sell contracts) increased by 12,000. Therefore, we can draw the same conclusions as a week ago and two weeks ago: professional traders continue to view the euro as a more attractive currency to invest than the US dollar. The euro continued to steadily grow during the last five trading days (August 26 - September 1), which will be included in the next COT report. The fall started on the evening of September 1, thus, it is unlikely that the new report will reflect the euro's fall. Moreover, as before, so far the euro's fall is not too strong. All the same notorious 200 points.

The only report that was released in the eurozone on Wednesday, September 2 was data on retail sales in Germany, which showed a decrease in July by 0.9% m/m. However, US data were no better - the ADP report on changes in the number of employees in the private sector showed an increase of only 428,000, while forecasts predicted an increase of 950,000. A month earlier, this report also turned out to be significantly weaker than expert forecasts. Thus, the US data could have hardly triggered the dollar's rise. Meanwhile, some case studies show that US President Donald Trump is closing the lead over his main opponent in the presidential election, Joe Biden. At the moment, USA Today reports Biden's 7% gap from Trump. Earlier, many publications and opinion polls showed a gap of at least 12%. However, in total, about 1,000 Americans were interviewed, which is very small for such conclusions. The error of the results can be 5-10%. Thus, in reality, Biden's lead of 10-12% may remain.

Based on the above, we have two trading ideas for September 3:

1) Bulls continue to take profits after reaching the 1.2000 level. Since the price has settled below the Kijun-sen and Senkou Span B lines, which are the two strongest lines of the Ichimoku indicator, it is not recommended to open long deals at this time. Bulls can become active again above the 1.1886-1.1910 area. In this case, long positions will be relevant with targets at the resistance levels of 1.1961 and 1.2020. Take Profit in this case will be from 30 to 90 points.

2) Bears got a new opportunity to start forming a new downward trend, as they managed to gain a foothold below the Senkou Span B line (1.1860). Thus, we recommend staying in short positions with targets at the 1.1803 level and the support area of 1.1705-1.1728 as long as the price is below the Senkou Span B line. The potential Take Profit in this case is 20 to 90 points... An upward correction is possible after the quotes fall by almost 200 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