Analysis and trading recommendations for EUR/USD and GBP/USD on September 4

Trading recommendations for EUR/USD on September 4

Analysis of transactions

Long positions from 1.1834 brought about 25 points of profit in EUR/USD. The main reason for this price increase is the steady pressure in USD, created by weak ISM report for the US non-manufacturing sector.

analytics5f51e0f0201c5.jpg

Today, an important report for the US labor market is scheduled to be published, and it may affect the rate of EUR/USD in the market. A weak reading will lead to a sharp rise in the euro, while a recovery in the indicators will bring demand back to the US dollar.

analytics5f51e0ffba961.jpg

  • Set long positions from 1.1865 (green line on the chart) to 1.1911, and take profit at the price level 1.1865. A weak indicator for the US labor market will decrease dollar demand even more, which will lead to a rise in EUR/USD in the market.
  • As for shorts, only good data on the US labor market will lead to a decline in the pair, and in such a case, sell shorts at price level 1.1831 (red line on the chart) to price level 1.1779. Take profit at 1.1779.

Trading recommendations for GBP/USD on September 4

Analysis of transactions

Good PMI for the US service sector slightly spoiled market sentiment of GBP/USD bears, nonetheless, short positions from 1.3286 still were able to bring profit of about 40 points.

analytics5f51e1076a560.jpg

A very important report for the US labor market will be published today, and its data will very much affect trading in the market. Thus, if indicators come out strong or better than the forecasts, that is, a decrease in unemployment in the United States, demand for the dollar will rise, which will inevitably decline GBP/USD.

analytics5f51e1112a98b.jpg

  • Since long positions are quite risky today, set them from 1.3299 (green line on the chart) to 1.3352 (thicker green line on the chart), and take profit at price level 1.3299. Only weak data on the US labor market will lead to an increase in GBP/USD.
  • Meanwhile, shorts may be opened from 1.3257 (red line on the chart) to 1.308, with target profit around 1.3208.
The material has been provided by InstaForex Company - www.instaforex.com

Analysis and forecast for EUR/USD on September 4, 2020

According to some investment houses, a downward scenario of the main currency pair of the Forex market is possible, while others predict a long-term growth of EUR/USD. The required technical and fundamental factors must be present for the implementation of a particular scenario. Since the author is more inclined to perceive the factors of a technical nature, they will mainly be discussed today. However, how can we ignore the US labor market data for August, which is the main event of today and the entire week? This cannot be done. Thus, according to the consensus forecast of experts, the unemployment rate in the United States will fall from the previous 10.2% to 9.8%. This forecast for unemployment can be considered very optimistic given that the situation with COVID-19 in America is one of the most difficult in the world. Also, the change in the number of employees in the private non-agricultural sector of the US economy is expected to be within 1200, while the previous indicator was at the value of 1462. The expectations are more realistic here. Finally, the average hourly wage growth is estimated by economists at 0%, compared with a 0.2% increase in July. In my personal opinion, the expectations are very reasonable in general, except for the decline in unemployment below the level of 10%. Although, on the other hand, the lifting of quarantine restrictions and the resumption of work of almost all enterprises involves large-scale hiring. Today at 13:30 London time, American labor reports will be released, which are among the most important macroeconomic indicators. By the way, I note that yesterday's initial applications for unemployment benefits in the United States came out better than expected - 881 thousand.

Daily

analytics5f51ce16cce57.jpg

On the daily chart, the first thing that you will observe is the frequent appearance of reversal candles (in our case, every other day). In other words, they unfold whenever they want, thereby causing confusion in the ranks of traders. There are signals that the US dollar will continue to weaken, then there is a signal of the opposite value. Yesterday, the market once again signed in its ignorance of where to keep the course. The candle for September 3 with a very long lower shadow (or tail) made it clear that the pair is not in a hurry to decline. Is it going to grow? As expected at the beginning of this week, a lot will be decided on the last day of trading, when labor reports from the United States will be published.

Now about the future of the euro/dollar pair. The level of 1.2092 is located at the top, where the maximum values of three years ago were shown. Above is an important and strong level of 1.2555, where the highs of February 2018 were recorded. I would like to note that the pair fell strongly from both marks, which once again confirms their significance and strength.

The historical and technical level at the bottom is 1.1750 and the mark of 1.1700. If the euro/dollar will be fixed under the 17th figure will open the way to 1.1500 and 1.1600. To continue the upward trend, euro bulls need to close the current trades above the previous highs on 1.2010. The task is difficult, however, given the importance of statistics and increased volatility, it is quite feasible. The same can be said about the bears' plans to push through a strong technical support zone of 1.1750-1.1700.

At the moment, taking into account today's macroeconomic statistics, it is difficult to give any specific trading recommendations, especially on the last day of weekly trading. The most likely scenario from the technical picture is an upward one, that is, an increase near the most important level of 1.2000.

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

Pound's problem: Brexit

Nonfarms will be published at the start of today's American session, which will determine the fate of the dollar in the medium term, especially if the release is not clear (either extremely positive or extremely negative). If the components of the report turn out to be contradictory, then the market will focus on the inflationary factor – wages. Once the Fed has decided to adopt a new average inflation targeting strategy, all relevant indicators will be under the special target of the market. Therefore, if wages are disappointing today, the dollar could come under strong pressure, even as unemployment declines and Nonfarm employment rises.

Now, the dollar pairs froze in anticipation of the most important data. So, almost all of them are trading in a flat narrow range – traders do not dare to open large positions for both sell and buy. Therefore, it is not suggested to trade in dollar pairs before Nonfarm, unless, you consider trading as a game of the lottery.

analytics5f51d3cdc919a.jpg

Meanwhile, events in the US barely affect many crosses, among which is the euro/pound pair, which is now reacting to the news flow regarding Brexit. In particular, we are talking about the prospects for a trade agreement between London and Brussels, which have been negotiating for several months. On the other day, the parties summed up the results of the next round of negotiations, which were clearly not in favor of the pound.

Firstly, we are concerned about the rhetoric of the EU's chief negotiator, Michel Barnier, who said yesterday that he was "very concerned and extremely disappointed" with London's position. According to him, Britain still does not express any intention to compromise in the negotiations, although Brussels recognized the "red lines" of Britain in matters of fair competition, fisheries and management, including the Europe's Court of Justice. Despite such compromise, London refused to make proposals for state support and fisheries. Thus, the comments of the EU's representative only added fears that the UK will leave the EU in January next year without any agreement.

Britain's "principle" is explained by the fact that they want to conclude an agreement with the European Union like Canada or Australia. Boris Johnson has repeatedly insisted on this. However, the EU initially rejected the so-called "Canadian option" of concluding the deal (as well as the "Australian scenario"). The first option assumes almost duty-free trade, with the exception of a number of goods and services market. Alternatively, Britain proposes to consider the "Australian option." In this case, the parties can choose which sectors of the economy they can agree on, while all other areas will be regulated by the rules of the World Trade Organization.

However, the European Union initially opposed the above options, and last February this year, it already outlined its position in the form of an approved document: the EU General Affairs Council approved the mandate of the European Commission in negotiations on future relations with Britain.

The EU's position is also well-founded. Brussels is trying to tighten Britain to the standards of the EU in terms of regulation and trade rules. In addition, the Europeans insist that London should accept the jurisdiction of the EU court of Justice in possible trade disputes. But in turn, the UK is categorically against such proposals. In view of these differences, many experts and politicians predict that the current negotiations will ultimately fail.

Yesterday, Barnier reiterated the position of the European Union. He said that Britain's demand that they simply want an agreement like Canada or Australia is not based on reality. He recalled that the UK's proximity to the EU distinguishes it from other trading partners, since it automatically increases the volume and scope of trade.

analytics5f51d3c2d2751.jpg

Everything suggests that the European Union and Britain still have different positions in negotiating. Even Brussels' concessions, which were so widely announced by the European side, could not change anything. The situation remains at a dead end, and they only have limited time until January. At the same time, Boris Johnson categorically refuses to extend the transition period. As a result, this fundamental background is negative for the pound, so the current growth of the EUR/GBP cross-pair may continue.

Amid Barnier's comments, the pair rebounded from the support level of 0.8870 (the lower line of the Bollinger Bands indicator on the daily chart) and rose to the current value of 0.8920. At the same time, the cross retains the potential for further growth towards the first resistance level of 0.8980 (middle line of the Bollinger Bands) and the main resistance level of 0.9010 (lower border of the Kumo cloud at D1). Now, if the negotiations between London and Brussels failed again in the medium term, long positions to the above resistance levels will be considered.

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

Control Zones EUR/USD 09/04/20

The halt of the fall at the weekly short-circuit of 1.1811-1.1791 allowed some of the sales to be fixed. The main resistance is NKZ 1/2 1.1899-1.1889. If ever the EUR / USD pair fails to merge above the specified zone, the downward movement will press on, and the main target will be the low mark of the current week.

analytics5f51e51454eac.jpgDespite this, the work in the downward direction should still be prioritized. Therefore, purchases opened after the test of the weekly short-circuit should be transferred to break-even.

The upward reversal pattern will develop should today's trading closes above NKZ 1/2. This situation will pave the way for further growth in the next week. The target of the upward movement will be the weekly KZ 1.2009-1.1989, which coincides with the September maximum.

analytics5f51e5173124e.jpg

Daily SC - day control zone. This is an area formed by principal data from the futures market that adjusts several times yearly.

Weekly short circuit - weekly control zone. This is an area formed by important marks of the futures market, which also change several times a year.

Monthly short circuit - monthly control zone. This is a zone that presents the reflection of the average volatility over the past year.

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

Technical Analysis of GBP/USD for September 4, 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 1.3241, slightly below the 50% Fibonacci retracement seen at the level of 1.3266. The next technical support is seen at the level of 1.3215 and 1.3183. This is the immediate support for bulls and a clear violation of this level will be an intraday bearish signal. 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 conditions are now oversold on the H4 time frame chart, so after a spike down a relief rally might occur.

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.

analytics5f51dec6150f3.jpg

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

Technical Analysis of EUR/USD for September 4, 2020

Technical Market Outlook:

The EUR/USD pair had tested the technical support located at 1.1790, but then bounced slightly to the level of 1.1864. Currently, the pair is trading inside of a narrow intraday range, but 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. The key technical resistance is seen at the level of 1.1908 - 1.1915. 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.

analytics5f51dda3af945.jpg

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

Technical Analysis of BTC/USD for September 4, 2020

Crypto Industry News:

Blockchain for Europe, the main European association advocating sustainable blockchain regulation, has welcomed the world's largest cryptocurrency exchange by daily trading volume, Binance. Entering the group, the exchange follows major industry companies such as Ripple, developer EOS Block.one, Fetch.ai, and Blockseed Ventures. In addition to welcoming a new member of the association, Blockchain for Europe has appointed the head of Binance UK operations, Teana Baker-Taylor, as its new CEO.

Founded in late 2018, Blockchain for Europe is a major blockchain association in Europe with the goal of promoting education and proactive blockchain regulation across the continent. Initially, the association consisted of four member companies, including Ripple, the NEM Foundation, Fetch.AI, a smart ledger development company, and a Cardano-related start-up, Emurgo.

According to the latest announcements from Blockchain for Europe, the association is currently focusing on responding to the European Union's action plan to combat money laundering, public consultation and the Services Digital Act on smart contracts. The group is also participating in the ongoing discussions on the proposed EU market framework for crypto asset consultation conducted in December 2019.

Technical Market Outlook:

The BTC/USD pair has hit the level of $10,000 during the dynamic sell-off again ( the low was made at the level of $9,931) and keeps hovering around this level. The immediate bounce was rather shallow as the price was capped at the level of $10,248, which is a local technical resistance. The other intraday important levels are $10,343 and $10,430. Please notice, the momentum indicator is very weak and negative, so are the market conditions and this situation favors some kind of rebound.

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.

analytics5f51dc82a7538.jpg

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

Technical Analysis of ETH/USD for September 4, 2020

Crypto Industry News:

Swiss Zug, nicknamed "Crypto Valley" for its positive outlook on cryptocurrencies, will start allowing citizens to pay taxes using Bitcoin and Ethereum from next year. According to the media, tax settlement with cryptocurrency will be available to both companies and individuals up to the amount of CHF 100,000, i.e. over $ 109,600.

About 127,000 people live in the region, and they previously took steps to accept Bitcoin payments for selected government services. A new, much wider move to accept taxes on cryptocurrencies has been made possible by a partnership between the canton and the Zug-based crypto broker Bitcoin Suisse AG.

Bitcoin Suisse previously worked with the Swiss authorities in Zermatt to allow taxpayers in the region to use Bitcoin as a means of payment.

Bitcoin Suisse founder Niklas Nikolajsen told reporters that "there is almost nothing controversial in Bitcoin trading anymore. This is totally mainstream. "In his opinion, the strong increase in Bitcoin's value during the coronavirus pandemic is likely to strengthen the arguments for the resilience and longevity of the currency in a rapidly changing economic landscape.

The Swiss federal government recently rejected a request for 100 million francs from the Canton of Zug to help keep local crypto companies afloat.

Technical Market Outlook:

The ETH/USD pair has dropped to the level of $370.87 and this level is a part of the demand zone located between the levels of $362.80 - $375.62. The momentum is weak and negative, so the drop might extend even lower. The strong mid-term bearish signal would be a clear violation of the level of $362.80 and a sell-off continuation towards the level of $288,85. For now, the key intraday technical resistance is seen at the level of $407.03 and the technical support is still seen at the level of $362.80.

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.

analytics5f51da05efa7b.jpg

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

Elliott wave analysis of GBP/JPY for September 4, 2020

analytics5f51d21166854.jpg

The corrective decline in red wave iv/ continues to unfold as expected. More downside pressure is expected towards the ideal target near 138.33 before a new impulsive rally in red wave v/ takes over for a rally towards 144.80 to complete red wave v/ and red wave iii.

In the short-term, we could see a temporary sideways consolidation before the next push lower towards 139.87 and ultimately our ideal target near 138.33.

R3: 141.62

R2: 141.39

R1: 141.16

Pivot: 140.85

S1: 140.64

S2: 140.10

S3: 139.87

Trading recommendation:

We will buy GBP near 138.50

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

Elliott wave analysis of EUR/JPY for September 4, 2020

analytics5f51d0ae7bb24.jpg

EUR/JPY has found temporary support near 125.24. After a sideways consolidation, it may continue to drop through this support to the corrective target near 124.41 to complete wave C/ and 2/ and set the stage for a new impulsive rally higher to at least 129.24 and likely much higher to 135.46.

However, for now, we should stay focused on the downside and the final parts of the correction in wave C/ and 2/ closer to 124.41.

R3: 126.29

R2: 126.13

R1: 126.01

Pivot: 125.79

S1: 125.58

S2: 125.24

S3: 125.07

Trading recommendation:

We will re-buy EUR near 124.41

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

GBP/USD intraday high and low, September 04, 2020

analytics5f51cf8d73852.jpg

The intraday high and low from the Asian Range are usually formed on STDV 2-STDV 4 in the normal condition market but sometimes they can reach the STDV 5-STDV 6 during the high volatility in the market. Here are today's levels:

STDV 10 - 1.3493.

STDV 9 - 1.3472.

STDV 8 - 1.3451.

STDV 7 - 1.3430.

STDV 6 - 1.3409.

STDV 5 - 1.3388.

STDV 4 - 1.3367.

STDV 3 - 1.3346.

STDV 2 - 1.3325.

STDV 1 - 1.3304.

CBDR - 1.3283.

==================

CBDR - 1.3262.

STDV 1 - 1.3241.

STDV 2 - 1.3220.

STDV 3 - 1.3199.

STDV 4 - 1.3178.

STDV 5 - 1.3157.

STDV 6 - 1.3136.

STDV 7 - 1.3115.

STDV 8 - 1.3094.

STDV 9 - 1.3073.

STDV 10 - 1.3052.

Pay attention to the level of confluence between today's & yesterday range at 1.3263, 1.3388, & the previous day high 1.3357 with the previous day low 1.3242.

(Disclaimer)

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

EUR/USD intraday high and low, September 04, 2020

analytics5f51cefea168e.jpg

The intraday high and low from the Central Bank Dealer Range (CBDR) are usually formed on STDV 2-STDV 4 in the normal condition market but sometimes they can reach the STDV 5-STDV 6 during the high volatility in the market. Here are today's levels:

STDV 10 - 1.2048.

STDV 9 - 1.2029.

STDV 8 - 1.2010.

STDV 7 - 1.1991.

STDV 6 - 1.1972.

STDV 5 - 1.1953.

STDV 4 - 1.1934.

STDV 3 - 1.1915.

STDV 2 - 1.1896.

STDV 1 - 1.1877.

CBDR - 1.1858.

==================

CBDR - 1.1839.

STDV 1 - 1.1820.

STDV 2 - 1.1801.

STDV 3 - 1.1782.

STDV 4 - 1.1763.

STDV 5 - 1.1744.

STDV 6 - 1.1725.

STDV 7 - 1.1706.

STDV 8 - 1.1687.

STDV 9 - 1.1668.

STDV 10 - 1.1649.

Pay attention to the level of confluence between today's & yesterday range at 1.1706, 1.1782 and the previous day high 1.1864 with the previous day low 1.1789.

(Disclaimer)

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

Control zones NZD/USD 04.09.20

Yesterday's fall led to the formation of the "absorption" pattern of the daily level. The close of trading occurred below the WCZ 1/2 0.6711-0.6704. This gives you the opportunity to search for the pattern on sale at today's auction. The nearest resistance is the WCZ 1/4 0.6731-0.6727.

analytics5f51da55e0202.jpg

The downward movement will aim to return to the upper limit of the average move of the previous week, located at the level of 0.6659.

If the fall continues from the current levels, the target of the decline will be the weekly short-term price of 0.6636-0.6621. A test of this zone will cause the price to go beyond the weekly average move zone. This will allow you to fix part of the sales and consider corrective purchases in the event of the formation of the "absorption" pattern on TF H1.

analytics5f51da58c45f0.jpg

DCZ - Daily Control Zone. A zone formed by important data from the futures market that changes several times a year.

WCZ - Weekly Control Zone. The zone formed by important marks of the futures market, which change several times a year.

MCZ - Monthly Control Zone. A zone that reflects the average volatility over the past year.

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

Forecast for EUR/USD on September 4, 2020

EUR/USD

The euro was down by more than 60 points on Thursday, but then it increased in the evening and eventually ended the day by only losing two points. The reason for the correction was the weekly data on applications for unemployment benefits - the indicator showed 881,000 applications, which business observers considered a high value, slowing down the recovery of the labor market. But here we will take note of two points: the forecast was 955,000 and last week there were 1,011,000 applications, that is, there is definitely an improvement. An even more important factor is that unemployed people are in no hurry to look for a new job while they have compensation payments from the government. Relatively speaking, the labor market does not experience a shortage of workers; it will fill up as the economy further opens. Today's employment data for August will show a more objective market reaction. The forecast for the unemployment rate is 9.8% against 10.2% in July, 1,375,000 new jobs are expected in the non-agricultural sector. These are good numbers and we expect the dollar to strengthen.

analytics5f51bdf95ee65.jpg

The daily chart shows that the balance indicator line stopped yesterday's decline – the market has not yet decided on a clear trend change, but there is such a possibility today. The Marlin oscillator settled in the zone of negative values.

analytics5f51bdfc49d79.jpg

The four-hour chart shows that the price is under both the balance line and the MACD line. Marlin is also in the bearish zone. We are waiting for the price to reach the first target of 1.1720 – on the daily MACD line.

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

Forecast for GBP/USD on September 4, 2020

GBP/USD

The pound sterling lost 67 points on Thursday, now it is growing correctively in the Asian session. The 23.6% Fibonacci level limits growth at 1.3328.

analytics5f51ba4753acb.jpg

After completing the correction, we expect the pound to decline towards 1.3213 and 1.3120 targets, set by the Fibonacci levels of 38.2% and 50.0%. This grid is visible on the daily and four-hour charts. The price is under pressure from the divergence on the Marlin oscillator.

analytics5f51ba4a3df25.jpg

The price is trying to break away from the support of the MACD line upwards on the four-hour chart, it can succeed, but the resistance is the 23.6% Fibonacci level at 1.3328. The Marlin oscillator is in the downtrend zone. We are waiting for the price to turn around and move towards the bearish targets that were mentioned.

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

Forecast for AUD/USD on September 4, 2020

AUD/USD

The Australian dollar lost 66 points yesterday, weighed down by external markets; oil -1.28%, copper -1.81%, dollar index 0.14%. The price reached the MACD indicator line (0.7255) this morning, now it should gain a foothold below it in order to head for a medium-term decline. The first target is 0.7075 - the August 3 low. We expect a powerful triple divergence in the Marlin oscillator to provide help in this task.

analytics5f51b79384300.jpg

The price settled below the balance and MACD indicator lines on the four-hour chart, while Marlin is in the downward trend zone. We are waiting for the price to fall.

analytics5f51b7966fcd4.jpg

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

Forecast for USD/JPY on September 4, 2020

USD/JPY

The price almost reached the 106.60 target on Thursday, set by the embedded price channel line. We can assume that the goal was reached, if we take into account the errors of linear constructions and the actual price fluctuation. But the task is different - it needs to gain a foothold above this level in order for the price to continue growing.

analytics5f51b5695cc16.jpg

Subsequent yen targets: 107.00, 107.35, 107.90. The price is staying above the red balance indicator line, which means that the market is still interested in growth.

analytics5f51b56c546d7.jpg

The price is above the balance line and the MACD line on the four-hour chart. Yesterday, the Marlin oscillator turned around from the border where the downward trend is located. We are waiting for the price to move up even further.

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

Overview of the GBP/USD pair on September 4. Brussels and London announced a new failure in negotiations on the deal.

4-hour timeframe

analytics5f518558501a5.jpg

Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - sideways.

CCI: -110.1244

In recent weeks, the British pound has been trading identical to the euro/dollar pair. The upward movement of the pound was slightly stronger. At the moment, the quotes of the pound/dollar pair are fixed below the moving average line, which predicts a change in the trend. However, the picture for this pair is the same as for EUR/USD: each subsequent minimum and maximum price is higher than the previous one. Thus, the upward trend continues although the pair is fixed below the moving average line. Moreover, if traders have been actively buying the British currency and selling the dollar over the past few months based on the fundamental background from America, nothing has changed in recent weeks. Consequently, the British pound can continue to grow, as the fundamental background in America has not changed at all, and the entire British background is ignored by traders recently. We have already talked about the problems of the British economy that it has already faced. For example, the loss of 20% of GDP in the second quarter, which is not so much different from the 32% loss of GDP in the US. Moreover, the British economy will face new challenges from January 1, 2021. This will be an additional blow to the economy. Also, it is completely unknown what will happen to the coronavirus epidemic in the Foggy Albion with the arrival of the cold season. If the epidemic continues to rage in the United States at this time (and this factor has also been worked out by the market with a vengeance), then a second "wave" may begin in Britain with the arrival of autumn. This is not only an epidemiological problem but also a new economic one. And let's not forget that the Kingdom may face its own "ScExit" (from Scotland Exit) in the coming years. Scotland has been hinting to London for more than a year that it does not want to remain part of the Kingdom and wants to return to the EU. London does not give the go-ahead for a new independence referendum, however, this does not mean that the desire of Scots to remain in the European Union has disappeared. In general, the problems in Britain are no less than in America, however, it is the British pound that has grown steadily in recent months. Even if this is true, since before that there was a collapse in the British currency quotes at the very beginning of the "coronavirus" epidemic, now the quotes have fully recovered and we need a banal pullback down. Therefore, no matter how you look at the situation for the pound/dollar pair, a significant downward correction is necessary.

Meanwhile, London and Brussels have managed to hold another round of negotiations on a future agreement that no one believes in anymore. Angela Merkel, for example, has already openly stated that her country does not want to participate in the negotiations and "waste time". Michel Barnier said on September 2 that he returned from London and saw no change in the UK's position. "I am disappointed and concerned," the chief negotiator said. At the same time, British negotiator David Frost said that "the parties have maintained serious differences", but at the same time called the talks "useful". "We remain in close contact with the EU and look forward to the next round of talks next week in London," said David Frost. Thus, the negotiations continue to proceed formally. London is taking its time, showing full readiness to remain without an agreement, and there is less of the time left. There is no progress on key issues. Thus, it is highly likely that the parties will not sign any agreement in 2020.

Also this week, the head of the Bank of England, Andrew Bailey, made a statement. He said that in the near future, the British regulator is not going to resort to the introduction of negative interest rates, however, he did not say anything about a possible new expansion of the quantitative stimulus program. According to traders' expectations, by the end of the year, the Bank of England will once again expand the QE program by 50-100 billion pounds. Also, Andrew Bailey stated that "the risks due to a new outbreak of the coronavirus epidemic are higher than the risks of Brexit". Thus, it is also impossible to interpret Bailey's speech as positive.

As for macroeconomic statistics, at the beginning of the new week, it was also few in the UK. Business activity indices for manufacturing and services declined slightly. American statistics were more important, however, market participants cheerfully ignored them. Thus, it turns out that the pound/dollar pair depends on everything on technical factors and the banal desire or unwillingness of traders to buy the pound or sell the dollar.

As a result, we have a change in the downward trend, however, there are no special prospects for strengthening the US currency. The whole country continues to be in limbo and the main issue that concerns everyone - who will win the election? Because a lot will depend on this: the future domestic and foreign policy of the country, health care in the country, as well as its relations with China. Thus, now the situation indicates an upward trend where the technique speaks in favor of sales in the short term and both channels of linear regression (medium and long-term perspective). The fact that the price does not manage to overcome the last local minimum also suggests that the bears are extremely weak and are not ready to form a downward trend. In general, the situation is extremely confusing, and there are a huge number of factors that need to be taken into account now in medium and long-term trade. Therefore, we recommend paying more attention to intraday trading.

analytics5f518566d00fb.jpg

The average volatility of the GBP/USD pair is currently 125 points per day. For the pound/dollar pair, this value is "high". On Friday, September 4, therefore, we expect movement within the channel, limited by the levels of 1.3140 and 1.3390. A reversal of the Heiken Ashi indicator to the top will indicate a possible resumption of the upward trend or a round of upward correction.

Nearest support levels:

S1 – 1.3245

S2 – 1.3184

S3 – 1.3123

Nearest resistance levels:

R1 – 1.3306

R2 – 1.3367

R3 – 1.3428

Trading recommendations:

The GBP/USD pair started a downward movement on the 4-hour timeframe. Thus, today it is recommended to continue trading lower with the goals of 1.3184 and 1.3140 until the Heiken ASHI indicator turns upward, which will indicate a round of correction. It is recommended to trade the pair for an increase with the goals of 1.3367 and 1.3390 if the price returns to the area above the moving average line.

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

Overview of the EUR/USD pair on September 4. The last months of Donald Trump pass without improving the situation in America.

4-hour timeframe

analytics5f51851fcfde1.jpg

Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - downward.

CCI: -82.4114

The EUR/USD currency pair has started a new round of downward movement. Based on this, we can conclude that it will be as weak and indistinct as the previous three. I would also like to note that each next minimum price is higher than the previous one. In other words, bears can't even update the previous minimum for more than three months. This is applicable even to trades during the last month. Thus, if the downward movement does not continue from the current positions, then traders will be entitled to expect a new upward movement to the area of the previous maximum – 1.2011. By the way, an interesting feature is that each previous maximum price is also lower than the next. Thus, we have a classic upward trend like in the textbook. Based on this, the future of the US currency is still unclear because it is not the increased demand for the dollar that caused its strengthening. Presumably, it was buyers in the market who fixed some of the positions to buy that provoked another pullback down.

Meanwhile, it is still very difficult to say what guides major traders when making trading decisions. The fundamental background remains very extensive. There are a huge number of factors that can hypothetically influence the preferences of traders. For convenience, we can combine all the negatives from overseas into one group: the "coronavirus" epidemic, the "coronavirus" crisis, the lack of a vaccine, the political crisis (the confrontation between Democrats and Republicans), the social crisis (racial scandals, rallies and protests), high unemployment, the strongest drop in US GDP, a possible constitutional crisis (if Trump refuses to accept the election results), the fall in US bond yields. Thus, the situation has recently become slightly better only in the epidemiological sphere. The number of daily recorded cases of the "coronavirus" has decreased to 30-40 thousand. However, this is where the positive news from overseas runs out. On closer inspection, even this single positive point can hardly be called "positive", since the COVID-2019 virus continues to spread among Americans. Thus, slowing down the economic recovery and severely reducing economic and business activity. There is no really positive news. Moreover, huge problems arose with the adoption of a new package that stimulates the economy. Democrats and Republicans should have come to a common decision in early August, when the previous package of assistance to the economy ended. However, fierce negotiations were going on throughout August, and their result was a failure. The maximum that Donald Trump's party agreed to do is to increase the offer to $ 1.3 trillion. Democrats also agreed to lower the proposed package to 2.2 trillion. Thus, there are still 0.9 trillion "disagreements" between the parties. House Speaker Nancy Pelosi said this week that "the differences remaining between the parties are serious". According to Pelosi, the administration of Donald Trump does not realize the seriousness of the situation in which Americans who lost their jobs due to the "coronavirus crisis" found themselves. "During our conversation, I once again expressed my hope that Republicans will sit down at the negotiating table and work to save the lives and livelihoods of Americans," Pelosi said. Democrats believe that it is impossible to save on vital things in times of crisis and offer to finance the unemployed, small businesses, children, schools, and so on with a new package. Republicans are concerned about the 4 trillion national debt for 2020, so they suggest saving on a new aid package, which should also motivate unemployed Americans to return to work, rather than sitting at home on benefits.

As for ordinary macroeconomic statistics, on Wednesday, September 2, a fairly important report on the change in the number of employees in the US private sector from ADP was published in the States. This report is considered to be the second most important after NonFarm Payrolls. Its value was 428,000, while forecasts predicted an increase of 950,000. Yesterday, in the European Union, business activity indices were slightly higher than forecast values, and retail sales, on the contrary, were much worse. But these statistics did not have much impact on the course of trading.

What conclusions can be drawn in the end? America is full of preparations for the elections. Most of the news from this country is now related to Donald Trump or Joe Biden. There is simply no news about the "coronavirus" or the trade standoff with China right now. It seems that these topics are put on pause and everyone is waiting to see who will win the election. After the answer to this question is known, the topics will be "taken off the pause". In general, the fundamental background does not change and certainly does not become more favorable for the US currency. Thus, from a fundamental point of view, the US dollar should not grow strongly compared to the euro currency now. At the same time, there is zero news from the European Union. Thus, there is no point in trying to take the European fundamental background into account at all. As for macroeconomic statistics, most of the reports continue to be ignored by market participants. Thus, it turns out that attention should now be paid to technical factors that should be passed through the prism of the general fundamental background. If something in America changes for the better, then we can reasonably expect to continue moving down. Up to this point, the fall in quotes can continue solely on the desire of buyers to get rid of purchases of euro currency (in order to fix profits on them). However, until the price breaks the last local minimum (1.1754 or 1.1762), the downward movement will also not be able to continue.

Also, do not forget about the election, as this will remain the most hot topic in the United States. According to the latest information, Donald Trump began to reduce the gap from Joe Biden.

analytics5f518528ddc05.jpg

The volatility of the euro/dollar currency pair as of September 4 is 93 points and is characterized as "high". Thus, we expect the pair to move today between the levels of 1.1750 and 1.1936. A reversal of the Heiken Ashi indicator back down will signal a possible resumption of the downward movement, as well as a price rebound from the moving average line.

Nearest support levels:

S1 – 1.1719

S2 – 1.1597

S – 1.1475

Nearest resistance levels:

R1 – 1.1841

R2 – 1.1963

R3 – 1.2085

Trading recommendations:

The EUR/USD pair may continue its downward movement. Thus, it is recommended to open new short positions after the end of the upward correction round, which is signaled by a downward reversal of the Heiken Ashi indicator or a rebound from the moving average, with the goal of 1.1750. If the price is fixed above the moving average, it is recommended to trade for an increase with the goals of 1.1936 and 1.1963.

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

Hot forecast and trading signals for GBP/USD on September 4. COT report. Bulls reluctant to release the pound. Bears need

GBP/USD 1H

analytics5f519a1fab337.jpg

The GBP/USD pair, in contrast to the euro, moderately moved down for most of the day on September 3, Wednesday. Therefore, we believe that the upward trend is coming to an end. At least now it looks as if the bulls have finally had enough and are ready to put the initiative in the bears' hands. Consolidating quotes below the ascending channel was an important signal. Now the Senkou Span B is in the way of the sellers' plans to move down, which is the strongest among the Ichimoku indicator lines. If traders manage to overcome it, then the chances of forming a new downward trend will significantly increase.

GBP/USD 15M

analytics5f519a2290c83.jpg

Both linear regression channels continue to be directed downward on the 15-minute timeframe, since the pair has started a correction. The latest Commitments of Traders (COT) report for the British pound, which came out on Friday, was completely neutral. Professional traders did not open new Buy-contracts during the reporting week on August 19-25, despite the fact that the UK currency has grown against the dollar and continues to do so at the beginning of the new week. On the contrary, 9,700 Buy-contracts and 9,100 Sell-contracts were reduced. Thus, the net position for the non-commercial category of traders even slightly decreased. However, this change is so insignificant that it makes no sense to draw conclusions on it. Therefore, the general attitude of big traders remains the same. Trading days from August 26 to September 1 will not be included in the new COT report, and the pound grew in price on such days. Thus, we can see that non-commercial traders seriously increased their net position in the new COT report, while the fall from the last 24 hours is unlikely to be reflected in the report. However, take note that the fall itself is not that strong, currently at 230 points. Therefore, it is unlikely in principle to be reflected in the COT report.

The fundamentals for the British currency were very weak on Thursday. However, despite the fact that another round of talks between Brussels and London failed, which further reduces the chances of concluding a deal by the end of 2020, traders are in no hurry to get rid of the pound sterling. All of the downward movement looks like a correction now, and afterwards, an upward trend will resume. Market participants continue to attach great importance to the "four crises" in the US, and this is why the majority of investors and traders are afraid of serious investments in the dollar. At least two important reports will be released in the United States on Friday: the unemployment rate and Nonfarm Payrolls. And since traders are currently ignoring all the news and data from the UK, we recommend focusing on these two reports instead. If results show that forecasted values are exceeded, then we can expect a new round of growth for the US currency. If not, then it could offset the bears' efforts again.

We have two trading ideas for September 4:

1) Buyers continue to be in the shadows. The quotes of the pound/dollar pair have settled below the ascending channel, therefore, it is not relevant to buy the pound at the moment. So far, there are no prerequisites for reviving the upward trend. We can expect buyers to return to the market only if sellers fail to cross the Senkou Span B line. But it is not recommended to consider buy positions until the Kijun-sen line is crossed. The targets are 1.3451 and 1.3555.

2) Bears continue to slowly exert effort, so short positions remain relevant while aiming for the Senkou Span B line (1.3208). The 1.3005-1.3025 area will be the next target for the shorts, but you are advised to trade with this target after overcoming the 1.3148 level. Take Profit in this case will be about 100 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 September 4. COT report. Bears take a short break, await Nonfarm Payrolls

EUR/USD 1H

analytics5f5199d07631d.jpg

The hourly timeframe on September 3 shows that the euro/dollar pair reached the first support level of 1.1803 and failed to overcome it. Therefore, a correction is overdue, after the euro fell for almost two days. We continue to hope that the current downward movement from the 1.2000 level is a correction against the euro's three-month growth, which has been brewing for more than a month. One way or another, the bears got another chance to move down. To do this, they need to stay below the Senkou Span B line, then today, September 4, the quotes can fall to the level that previously served as the lower border of the side channel – 1.1700.

EUR/USD 15M

analytics5f5199d36d0ea.jpg

Both linear regression channels are directed downward on the 15 minute timeframe, signaling a downtrend now. A new Commitments of Traders (COT) report was released last Friday. Take note that its pattern has not changed at all compared to previous COT reports. Professional traders continue to increase their net position despite the fact that the euro/dollar has been trading within the side channel for more than a month. In other words, non-commercial traders (the most important group of traders) are increasing the number of Buy-contracts, 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 in than the US dollar. The euro continued to steadily grow for five trading days (August 26-September 1), which will be included in the next COT report. The fall only began on the evening of September 1, thus, it is unlikely that the new report will reflect the fall in the euro's quotes. Moreover, as before, the euro has not sharply fallen. All the same notorious 200 points.

The eurozone released several business activity indices for the services sector of European countries, as well as for the EU as a whole on Thursday, September 3. We can immediately say that traders were not impressed by the figures, as they did not signal any major changes. Therefore, the retail sales report was more important, which showed a drop in volumes by 1.3% in July instead of an increase of 1.3%. This may have helped the European currency, which has been moderately rising for most of the day. As for US data, the number of secondary applications for unemployment benefits reached 13,254,000, which is much lower than the previous value and forecast. This means that real unemployment continues to fall, which is good for the dollar. In addition, the business activity index for the ISM services sector remained at a high level, which, as we feared, may begin to decline due to the ongoing coronavirus epidemic in the United States. However, this news did not provide any support to the US currency. It can do so tomorrow, if the reports on unemployment and Nonfarm Payrolls do not turn out to be weak, as the report from ADP in the middle of the week.

We have two trading ideas for September 4:

1) Bulls continue to take profits after reaching the 1.2000 level and do not intend to return with new long deals yet. 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 new purchases until the price settles above the 1.1886-1.1910 area. In this case, long positions will again be relevant with the 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 an opportunity to start forming a new downward trend, as they managed to gain a foothold below the Senkou Span B line (1.1860). If, following the results of night and morning trading, they manage to stay below this line, then downward trading can resume with targets at the level of 1.1803 and the support area of 1.1705-1.1728. In this case, the potential Take Profit ranges from 30 to 100 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

EUR/USD. All attention on Nonfarm Payrolls report

The euro-dollar pair is in a difficult situation due to the contradictory fundamental background. On the one hand, we have the European Central Bank representatives worried about the high euro exchange rate, on the other hand, the weak dollar, which is still under pressure from the Federal Reserve's latest decisions. In addition, the US macroeconomic data is also showing mixed dynamics: if the ISM manufacturing index came out better than forecasts, the ISM composite index for the non-manufacturing sector disappointed investors. In such conditions, the EUR/USD pair failed to develop a downward momentum, and did not return to its previous positions, in the area of the 19th figure. Traders are stuck at the crossroads, on the middle line of the BB indicator on the daily chart (1.1840). The August Nonfarm Payrolls report is a kind of arbitrator in this situation, which is set to be released at the beginning of the US session on Friday.

What happened?

As mentioned above, the fundamental picture for the euro-dollar pair is quite ambiguous. The US currency fell on all fronts for almost an entire week, after the Fed announced that it has decided to resort to a new strategy of targeting average inflation. Fed Chairman Jerome Powell made it clear that rates will remain at the current level for a long time – much longer relative to earlier forecasts. Now, not only should US inflation approach the two percent level, but also gain a foothold above this target level. Only then will the Fed return to the issue of tightening monetary policy. The Fed will also focus on key data on the labor market. That is why the Nonfarm Payrolls report will play such a big role for the dollar pairs tomorrow.

analytics5f517eccc8e3b.jpg

But let's talk about the Nonfarm data a little later on, and focus on the problems of the European currency now, which arose quite suddenly. Let me remind you that the latest data on inflation growth in the euro area turned out to be much worse than the forecast values. The recession is serious - Europe has faced deflation for the first time in four years. There are many reasons for this weak inflationary dynamics. In particular, outbreaks of coronavirus were reported in many EU countries in August (first of all, we are talking about Spain, France and Germany).The memory of the spring lockdown is still fresh in people's minds, when economic activity actually stopped in Europe, and the unemployment rate, on the contrary, increased. Therefore, as soon as the first reports of repeated outbreaks of COVID-19 appeared in the press, the consumer activity of Europeans significantly decreased . People began to save more and spend less on non-essential goods.

But the weak growth of European inflation is due to another reason, the high euro rate. The European currency has strengthened against the dollar by a thousand points in recent months. If the pair traded within the 1.08-1.09 price range in the spring, now the price niche is located much higher - in the 1.18-1.20 area. Not only does currency revaluation have a negative impact on inflationary processes, but also on foreign trade - on the export sector. That is why, as soon as the EUR/USD pair touched the 1.20 mark, the ECB immediately became concerned about this fact. In particular, the ECB Chief Economist Philip Lane said that the current euro rate is "unacceptable for the central bank." Traders were alarmed with this rhetoric: rumors spread throughout the market that the central bank would conduct a currency intervention to devalue the single currency. The pair dropped to 1.1790 due to this factor.

However, the pair's bears failed to gain a foothold in the area of the 17th figure. First, most analysts still tend to believe that ECB members will limit themselves to verbal interventions for the time being, reserving more powerful levers of influence for the future. Secondly, the US ISM index in the non-manufacturing sector was published today. Contrary to growth forecasts, it fell to 56 points (from the previous value of 58.1 points). Third, an extremely weak ADP report was released yesterday. According to ADP, only 428,000 jobs were created in August (the forecast was at the level of one and a half million).

analytics5f517ecfc98a0.jpg

Traders do not risk investing in selling the EUR/USD pair for these reasons. If the key data on the growth of the US labor market comes out worse than projected, the dollar will be under great pressure, and buyers of the pair will be able to return to the area of the 19th figure and possibly test the resistance level of 1.2000. According to preliminary forecasts, the number of people employed in the non-agricultural sector should increase by 1,500,000 people. For comparison: this figure increased by 1,700,000 in July. The unemployment rate should remain within 10 percent. But salaries might disappoint: in both monthly and annual terms, the indicator should demonstrate negative dynamics. In this case, the dollar will react negatively, even if other components enter the green zone. Inflationary indicators are now under special scrutiny, so weak wage growth will hit dollar bulls.

How to trade?

You should take a wait-and-see attitude before the Nonfarm Payrolls report is released. If the data supports the greenback, the pair may fall to the lower line of the BB indicator on the daily chart, that is, to the 1.1730 level and below, to the bottom of the 17th figure. If the Nonfarm Payrolls report disappoints (or at least the wages does), the price may return to the 19th figure. In view of this uncertainty, trading decisions should now be delayed.

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