Brief trading recommendations for EUR/USD and GBP/USD on 09/23/20

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The EUR/USD pair managed to break through its lower limit and consolidate below 1.1680 for the first time in seven weeks that the side channel 1.1700 // 1.1810 // 1.1910 existed. In fact, this is the exact signal that we have been waiting for. The price movement is gradually changing direction, and if the quote is kept below 1.1700, the price may decline to the level of 1.1550. To simply put, the market trend changes from an upward to a downward one just after a seven-week stop in the form of a sideways channel.

Based on the obtained data about finding a quote, we can assume that a sell signal as well as a sell position already exists on the market. But if the stability of the current movement is uncertain, then you can wait for a price consolidation below 1.1650, where the price will most likely move in the direction of 1.1550.

But uncertainty consists of alternative development, that is, it is considered difficult to break through the level of the 1.1700. So, before starting a full-fledged change in direction, market participants can temporarily form an amplitude in the range of 1.1680/1.1730.

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On the other hand, the GBP/USD pair continues to move along a downward course, where the important support level 1.2770 was broken this time, which acted as a kind of border for sellers.

The pound's decline will further continue to the range of 1.2620-1.2500 if we maintain the previously set course and the level of 1.2770 will be broken. In the medium term, changing the direction in the market from an upward to a downward one is likely.

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Indicator analysis. Daily review on EUR / USD for September 23, 2020

The pair traded downward on Tuesday testing 1.1690 - a 38.2% pullback level (red dotted line). Today, the price may continue to move down. As per the economic calendar, euro news is expected at 07:30 UTC, and dollar news is expected at 14:00 and 14:30 UTC.

Trend analysis (Fig. 1).

The market may move downward from the level of 1.1710 (closing of yesterday's daily candlestick) with the target at the support level 1.1676 (black bold line). If this line is tested, the downward trend may continue with the next target of 1.1590 - a 50% pullback level (red dashed line).

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Figure: 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - down;

- Volumes - down;

- Candlestick analysis - up;

- Trend analysis - down;

- Bollinger lines - down;

- Weekly chart - down.

General conclusion:

Today, the price may move downward with the target at the support level 1.1676 (black bold line). If this line is tested, the downward trend may continue with the next target at 1.1590 - a 50% pullback level (red dashed line).

Another possible scenario: from the support level 1.1676 (black bold line), the price may begin to move upward with the target of 1.1823 - a 61.8% pullback level (blue dashed line).

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Technical Analysis of GBP/USD for September 23, 2020

Technical Market Outlook:

After the GBP/USD pair had broken out from a narrow consolidation zone seen between the levels of 1.2869 - 1.2979 the bears has hit the 38% Fibonacci retracement located on the level of 1.2697 on the Daily time frame chart. The immediate technical resistance is still seen at the level of 1.2749 and it should temporary stop any bullish attempts. The intraday technical support is seen at the levels of 1.2686 and 1.2668. Momentum is weak and negative, which supports the short-term bearish outlook despite the oversold market conditions.

Weekly Pivot Points:

WR3 - 1.3253

WR2 - 1.3131

WR1 - 1.3027

Weekly Pivot - 1.2896

WS1 - 1.2795

WS2 -1.2660

WS3 - 1.2557

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. The key long-term technical resistance is still seen at the level of 1.3518. Only if one of these levels is clearly violated, the main trend might reverse (1.3518 is the reversal level) or accelerate towards the key long-term technical support is seen at the level of 1.1903 (1.2589 is the key technical support for this scenario).

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Technical Analysis of EUR/USD for September 23, 2020

Technical Market Outlook:

The bearish pressure had intensified on the EUR/USD pair as a new local low had been made at the level of 1.1672 already and the bears are willing to continue the down wave. The levels of 1.1697 and 1.1710 will now act as an intraday technical resistance for the price. The nearest technical support is seen at the level of 1.1655 - 1.1648 zone. The momentum remains weak and negative, so another wave down is anticipated. The weekly time frame trend remains up, but the up trend is very close to be terminated.

Weekly Pivot Points:

WR3 - 1.2077

WR2 - 1.1988

WR1 - 1.1919

Weekly Pivot - 1.1829

WS1 - 1.1748

WS2 -1.1662

WS3 - 1.1583

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. Nevertheless, weekly chart is recently showing some weakness in form of a several Pin Bar candlestick patterns at the recent top. This means any corrections should be used to buy the dips until the key technical support is broken. The key long-term technical support is seen at the level of 1.1445. The key long-term technical resistance is seen at the level of 1.2555.

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Technical Analysis of BTC/USD for September 23, 2020

Crypto Industry News:

According to reports, the EU intends to introduce new regulations by 2024, thanks to which cross-border payments will be faster and cheaper thanks to the use of blockchain technology and cryptocurrencies. Moreover, he hopes that they can increase the potential value in this sector by EUR 27-55 billion.

The EU will present a bill clarifying how the existing rules apply to cryptocurrencies and, in addition, laying down new rules in case of gaps, Reuters reports.

The Union also wants to facilitate the exchange of data in the financial sector to encourage competition and a wider range of services, while respecting the principle of "same risk, same rules, same rules".

Brussels also plans to introduce new rules that will enable new clients to quickly start using financial services after the anti-money laundering and identity checks are over.

Meanwhile, a separate report by the European Parliamentary Research Service concluded that a number of legislative proposals could strengthen the digital operational resilience of EU financial sector actors, including their ICT security, by streamlining and updating existing rules and introducing requirements.

"The potential added value in this sector would increase by EUR 55 billion compared to the baseline scenario. A more cautious scenario points to a lower limit for the estimate of the value added increase of EUR 27 billion," the EPRS report reads.

Technical Market Outlook:

The BTC/USD pair has reversed the local bounce at the level of $10,536 after the Doji candlestick pattern was made at the H4 time frame chart. The intraday support is seen at the levels of $10,343 and $10,248. The upside momentum had clearly decreased and if the bearish pressure intensify, the market might extend a correction towards the level of $10,000 (intraday support, psychological level) or $9,863 (lower technical support). The weekly trend remains up.

Weekly Pivot Points:

WR3 - $12,186

WR2 - $11,616

WR1 - $11,271

Weekly Pivot - $10,739

WS1 - $10,293

WS2 - $9,807

WS3 - $9,393

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 corrections 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 $10,000.

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Technical Analysis of ETH/USD for September 23, 2020

Crypto Industry News:

The People's Bank of China places great emphasis on the geopolitical importance of the development of the central bank's digital currency in this country.

An article published in the media this weekend said Beijing should "accelerate [CBDC development] to take the lead" in the global race to issue digital currencies. In addition, it was argued that China should seize the advantage of becoming the first player in the digital currency arena it describes as the "new battleground" of interstate competition. At stake would be significant changes in the geopolitical status quo in international finance, and a chance to break the dollar's hegemony and internationalize the yuan.

In addition, feedback from the digital currency data issued by the PBoC would be beneficial for domestic monetary policy, which is all the more important in the post-pandemic situation. The article indicates that by the end of April 2020, the PBoC research unit filed 130 patent applications related to cryptocurrencies, which cover a range of issuing, circulation and implementation.

The central bank's research unit was first established in 2015, and the project moved forward in 2020. Digital wallet testing for currency is ongoing under the responsibility of Chinese state-owned commercial banks.

In August, Beijing announced the trial launch of its digital yuan in Shanghai, Beijing, Guangzhou and Hong Kong, involving 400 million people, or about 29% of the country's population.

PBoC also plans to use digital yuan at the 2022 Winter Olympics. A senior management member recently indicated that the currency would be "primarily positioned" as M0 and as such would have to comply with cash management laws and regulations.

Technical Market Outlook:

The ETH/USD pair has been consolidating in a narrow range that looks like a Triangle pattern. The high of the triangle was made at the level of $349.13 and the low was made at the level of $336.83. In a case of a brakout lower, the first target for bears is seen at the level of $332.28 and the next one is located at the level of $323.87. The key short-term technical resistance is seen at the level of $355.24.

Weekly Pivot Points:

WR3 - $426.36

WR2 - $409.08

WR1 - $387.32

Weekly Pivot - $370.45

WS1 - $348.67

WS2 - $331.18

WS3 - $309.49

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. The key mid-term technical support, seen at the level of $364.95 had been violated, but 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.

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Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on September 23

Trading recommendations for the EUR / USD pair on September 23

Analysis of transactions

Another surge in coronavirus incidence, together with good reports on the US economy, led to a sharp decline in the euro yesterday. As a result, EUR / USD moved down 30 pips from the level of 1.1728, following a bearish trend.

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Upcoming reports on the euro area's PMI may help the euro regain its position in the market, provided that data turns out to be better than the forecasts. But if the reports indicate a slowdown in activity in late summer and early autumn of this year, the decline in EUR / USD will continue.

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  • Buy positions only when the quote reaches a level of 1.1703 (green line on the chart). However, large movements will only be seen if data on the PMI reports come out good. Take profit around the level of 1.1758.
  • Sell positions starting from the level of 1.1671 (red line on the chart). A breakout from which will lead to another strong drop in EUR / USD, especially if the situation with coronavirus intensifies in Europe. Take profit around the level of 1.1624.

Trading recommendations for the GBP / USD pair on September 23

Analysis of transactions

The statements of the Bank of England regarding negative interest rates led to a sharp surge in volatility in the pound. As a result, short positions from the level of 1.2771 brought about 40 points of profit., While long positions from the level of 1.2814 gave about 30 points of profit. Now, the GBP / USD pair is trading around the target price level of 1.2716.

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The decline in the pound may continue, especially if data on UK PMI comes out today as weaker than forecasts. Bad data will lead to a new wave of sales in the market.

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  • Buy positions when the quote reaches the level of 1.2755 (green line on the chart). However, large upward moves are not expected, since there is not much impetus for growth in the GBP/USD pair. Take profit around the level of 1.2810.
  • Sell positions after the quote reaches a price level of 1.2714 (red line on the chart), and take profit at least at the level of 1.2655. However, weaker PMI data will quickly derail the pair towards its intended target.
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AUD/USD. The Aussie follows the dollar: the target is 0.7000

The Australian dollar paired with the US currency follows the General trends in the market, weakening under the attack of the greenback. After another unsuccessful assault on the 73rd figure, the AUD/USD currency pair turned around and has been steadily declining for three consecutive days, currently falling to the base of the 71st price level. Despite all the" trumps" of the Aussie, the dollar was stronger, so the AUD/USD bears may soon capture at least 100 more points getting close to 0.7000 key support level.

Mainly, the pair's summer growth was primarily due to the weakness of the US dollar. All the fundamental factors associated with the Australian did not interfere with this process but rather did not contribute also to the strengthening of the Northern trend. For example, the Reserve Bank of Australia relays cautious optimism while maintaining a wait-and-see attitude. Representatives of the regulator do not tire of repeating that low rates will remain in effect for a long time until the Australian economy fully recovers from the coronavirus crisis. And judging by the dynamics of Australian inflation and the labor market, this path will be long. The coronavirus outbreak and subsequent lockdown in the country's largest state of Victoria negatively affected the dynamics of the national economic recovery. Therefore, the RBA's optimism is extremely restrained, without any "hawkish" notes.

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The growth dynamics of key macroeconomic indicators is also contradictory. First of all, we are talking about the labor market. So, we are seeing a decrease in the unemployment rate and an increase in the number of people employed. In contrast, the latter indicator is growing only due to the growth of part-time employment while full-time employment shows weak growth dynamics. This imbalance is also reflected in the growth of wages, since full-time positions imply higher salaries. Hence, the decline in consumer activity of Australians and weak inflation growth.

For several months, the Australian dollar intentionally ignored all these shortcomings of macroeconomic reporting: "Aussie" was guided by the optimism of RBA members, who assured the market that the coronavirus strike was weaker relative to early forecasts and the national economy is on the path of recovery. This was quite enough for AUD/USD traders not to bother with the problems of the Aussie and focus on the dynamics of the US currency. Figuratively speaking, the Australian dollar was the leader and the US dollar was the leader, but the fundamental factors of the "Aussie" did not drown the pair.

Now this dependence on the behavior of the greenback plays against buyers of AUD/USD. The American is rapidly gaining momentum reacting to the changed fundamental background. The dollar index returned to the area of the 94th figure during the Asian session on Wednesday, where it has not been since the end of July. The strengthening of the US currency is due to several fundamental factors. First, there is a surge in anti-risk sentiment in the market associated with the growing number of coronavirus cases worldwide. The United States still ranks first in the world in both the number of infected and fatal cases. But recently, COVID-19 is returning to those countries where it has already been seemingly defeated, while restarting the economy. In particular, many countries of the European continent are again tightening quarantine restrictions such as Britain, Spain, Czech Republic, Germany, thus foreshadowing a slowdown in recovery processes.

In addition, the growth of anti-risk sentiment was also promoted by the loud scandal of The "FinCEN dossier" - a major leak of financial documents. The FinCEN file leak differs from all previous similar cases that are not just documents from one or two companies, but files that came from different banks and from different countries. The documents mention such giants as Deutsche Bank, JPMorgan, Standard Chartered, HSBC, Barclays, BNY Mellon and Societe Generale. News of the data leak and possible consequences caused shares in European banks to fall earlier this week – i.e. the Stoxx 600 Banks sector fell by more than 5%, and the HSBC share price hit a 25-year low.

The third factor in the dollar's strength has a first and last name. This is Treasury Secretary Steven Mnuchin. He said at the House financial services Committee that the White house continues to work with Congress to pass an economic aid package. At the same time, he assured that the administration is "ready to come to a bipartisan agreement." And although he had repeatedly voiced such confidence (while subsequent negotiations reached an impasse), this time his words coincided with the General strengthening of the greenback.

Thus, the AUD/USD currency pair will decline as long as the US currency continues to grow, which in turn will remove from the current market situation. From the technical point of view, the price is currently testing the support level of 0.7130 (the upper limit of the Kumo cloud on the daily chart). With a high degree of probability, we can assume that sellers will overcome it and open their way to the lower border of the above cloud up to the level of 0.7020. This is the key goal of the southern movement, since it is better to close short positions at the base of the 70th figure as this target may be too tough for the AUD/USD bears.

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Analytics and trading signals for beginners. How to trade EUR/USD on September 23? Plan for opening and closing trades on

Hourly chart of the EUR/USD pair

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Instead of starting a round of upward correction, the EUR/USD pair continued to decline on Tuesday night. This is rather strange, or at least unexpected, since we rarely see trend movements in overnight trading. As a rule, the pair either corrects at night or trades in a very narrow range. However, we saw a downward movement last night, and since the price was already near the lower border of the horizontal channel of $1.17-1.19, quotes settled below this line. Therefore, formally, we have the end of the sideways movement. "Formally" - because the pair has only gone 20 points below the channel so far. The downward movement continues for three consecutive days, so it is possible that an upward correction will start by today or tomorrow. Unfortunately for novice traders, it is still not possible to plot a downward trend line or a channel. Therefore, we recommend trading down at the moment, but we warn you that the risk of losses is higher without trend patterns. Moreover, due to the fact that there is no correction, the MACD indicator cannot discharge normally in order to subsequently generate clearer and more timely sell signals. Thus, even trading on the MACD indicator isn't very convenient now.

The fundamentals for the third trading day of the week are likely to be fairly mediocre. Federal Reserve Chairman Jerome Powell is set to deliver another speech in the US Congress today, however, most likely, it will exactly repeat yesterday's speech. Therefore, traders will not receive any new information. In addition, the indices of business activity in the services and manufacturing sectors will be released in the European Union and some of its countries, separately. All business activity indices are expected to remain at the same levels it was in last month, meaning, it will not change. However, if we consider the European indices separately, they are very close to the 50.0 level, below which it is believed that the area is experiencing a decline. Thus, if one or more European indicators fall below the 50.0 mark, it will be a clear bearish factor for the euro. The same goes for US PMIs. If one or more drops below 50, it could put pressure on the US dollar. However, the US PMIs are much higher than the European ones, so there is even less chance of falling below 50.0 on them.

Possible scenarios for September 23:

1) Novice traders are recommended to consider buy positions at this time, since the price has overcome the lower line of the 1.17-1.19 horizontal channel and is now aiming for a new downward trend. Since traders do not have either a channel nor a trend line at their disposal, it will be rather difficult to identify the end of a downward trend. Therefore, long positions are definitely not relevant now, according to the simplest analysis of the EUR/USD pair.

2) Selling looks reasonable, since the pair is still below the horizontal channel. At the same time, the pair has already fallen by around 200 points, which requires an upward pullback. This is not only a logical development of events, but it will also make it possible for a downward channel to appear (for example). Plus, following the trend, you are advised to open new positions only on pullbacks and corrections. If the upward pullback does not begin today, then novice traders can try to trade down, if the price settles below the first support level of 1.1675 and then you can have 1.1643 and 1.1594 as targets, without paying attention to the MACD indicator. Stop Loss is placed above 1.1675 in this case, Take Profit - slightly above the target levels.

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 (10,20,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).

Important announcements and economic reports 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.

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Who will win in the confrontation between D. Trump and the USD?

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The US dollar has been experiencing an exceptional volatility recently. Its transition from falling to rapid increasing continues to amaze the markets. The position of the American President D. Trump, who seeks to weaken the dollar, contributed more to this.

Donald Trump's strategy changes from time to time: earlier, he was resentful about the strong dollar, but now, he is much more calm about this turn of events. In May of this year, he changed his previous rhetoric, supporting the strengthening of the US currency after criticizing its strength for years. The Head of the White House previously said that the strengthening of the USD damages the competitiveness of the United States.

He then continued this topic earlier this week, recalling that the US Treasury recently refused to adjust the dollar exchange rate to counter China's so-called currency manipulation of the yuan exchange rate. It can be recalled that Washington tried to call Beijing a currency manipulator last August 2019, but later decided not to rush to assign this status. Currently, D. Trump, explaining his position, said that he seeks to resist China's aggressive behavior in the global markets. The Central Bank of China disagrees with this opinion, denying accusations of the weakening of the yuan and the cheapening of its exports to the US.

In view of this, the US currency has the main role in the current situation. In the wake of the sale of securities and a total reduction in risks, the DXY dollar index, showing its value against a basket of six key currencies, rose to 93.81. Analysts said that this is the highest figure in the past six weeks.

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The decline in the US and global stock indices, as well as commodity currencies and metals is supporting the strengthening of the US currency. Yesterday, it continued to rise, despite the growth in European stock indices. It can be recalled that an inverse correlation has been established between US stock indices and dollars in the past few months. The collapse of these indices strengthens the USD as a defensive asset. Today, the EUR/USD pair also shows miracles of falling, trading near 1.1682-1.1683. This pair's extremely low levels plunge the market into despair, although there is still hope for a rise.

But experts consider the downward trend of the EUR/USD pair to be temporary, expecting its growth in the near future. The collapse also affected risky currencies such as the Australian dollar, which fell 0.5% to 0.7185, while the New Zealand dollar fell 0.4%, to 0.6643. The negative background for most of them is due to the introduction of new quarantine measures necessary to fight the second wave of COVID-19. However, experts warn that a further increase in current risks threatens the active recovery of the global economy.

Experts are sure that there will be no winners or losers in the confrontation between D. Trump and the US dollar. In case that there will be a bias in USD dynamics, both the world economy and the US economy will suffer. In this regard, the US President will have to be cautious with his actions and carefully weigh his statements regarding the dollar.

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Elliott wave analysis of GBP/JPY for September 23, 2020

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GBP/JPY saw a final dip below 133.51 to a low of 133.08 just as we expected. This should complete wave ii/, but we need a break above minor resistance at 134.57 and more importantly, a break above resistance at 135.55 to confirm that wave ii/ has completed and wave iii/ now is in motion.

Wave iii/ should ultimately break above the former peak at 142.72.

At no point should the low at 133.08 be broken and key-support at 131.68. A break below that level will invalidate our bullish outlook.

R3: 136.00

R2: 135.55

R1: 134.57

Pivot: 133.96

S1: 133.48

S2: 133.08

S3: 132.85

Trading recommendation:

We bought GBP at 133.51 and we have placed our stop at 133.00

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Elliott wave analysis of EUR/JPY for September 23, 2020

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We are still expecting a final dip closer to our ideal target at 122.15 to complete wave 2/ and set the stage for a new impulsive rally in wave 3/ to above the former peak at 127.07. In the short-term, a minor triangle is developing as the penultimate wave and this should ultimate give away for the final dip to 122.15 to complete wave 2/.

Only a direct break above minor resistance at 123.42 wil indicate that wave 2/ already has completed while a break above resistance at 124.01 will confirm that wave 3/ is in motion.

R3: 124.40

R2: 124.01

R1: 123.66

Pivot: 123.30

S1: 122.87

S2: 122.53

S3: 122.15

Trading recommendation:

We are short EUR from 123.90 and we will buy+revers our short position to a long EUR-position at 123.25 or upon a break above 123.45

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Forecast for EUR/USD on September 23, 2020

EUR/USD

Yesterday, the euro came out of a two-month range and today, it approached the first target of 1.1620 during the Asian session. There are no reversal signs on the daily chart. We are waiting for the price to quickly fall to the third target of 1.1480, about a week. On this path, the second target (1.1550) is located in front of the price – the low of November 2017.

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The price has formed a small convergence with the Marlin oscillator on the four-hour chart, which could mean that it would take some time for the price to reach the target level of 1.1650. This is expected, as the price fell by one and a half figures over the previous two days.

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Forecast for GBP/USD on September 23, 2020

GBP/USD

The pound sterling has lost 240 points over the past three days in order to hit the first target of 1.2725, Fibonacci 100.0% (Feb 28 low). A slight convergence has formed on the Marlin oscillator on the daily chart.

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Now the price has a choice - either it will go into the correction right now, or do so later on from the 1.2645 level. However, if the correction starts from the current levels, then it will most likely take the form of a horizontal consolidation, since the formation is not strong. Furthermore, the price has the following targets for Fibonacci levels: 1.2535, 1.2424.

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The price declines with no clear reversal signs on the four-hour chart. This makes it more likely for the price to fall to 1.2645 today.

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Forecast for AUD/USD on September 23, 2020

AUD/USD

The Australian dollar continues to rapidly fall to the target range of 0.7065-0.7110, which is formed by the lows of July 24 and August 12. According to the main scenario, we expect the price to fall to the embedded line of the price channel in the 0.6970 area.

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The Marlin oscillator is already entering the oversold zone on the daily chart, therefore, we expect a deep correction of the Australian dollar from the 0.6970 level back to the 0.7065-0.7110 range.

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The four-hour chart shows that there are no clear indications of a reversal for the leading Marlin oscillator, which makes it possible for the aussie to reach the target range by the end of the week. We expect it to reach 0.6970 on Tuesday, September 29th.

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Forecast for USD/JPY on September 23, 2020

USD/JPY

The dollar has grown by more than 50 points against the yen over the past day, the price is already attacking the resistance of the embedded price channel line on the daily chart. Main US stock indices gained more than 1% yesterday, the market is forming a correlation between the stock market's growth and the strengthening dollar, which creates the basis for the greenback's appreciation in the medium-term. The 103.75 target has not yet been reached.

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The price formed a strong convergence with the Marlin oscillator, its potential is enough to bring the price to the 107.35 target, set by the 76.4% Fibonacci level on the weekly timeframe. But for now, the closest target for the yen is the Fibonacci level of 100.0% at 106.00.

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The price broke through the area above both indicator lines on the four-hour chart - the balance line and the MACD line. Marlin is actively growing in the positive zone. We are waiting for the price to settle above the embedded price channel line and continue growth.

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Hot forecast and trading signals for GBP/USD on September 23. COT report. Andrew Bailey failed to affect the markets with

GBP/USD 1H

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The GBP/USD pair continued to trade with a downward bias on September 22. A new descending channel appeared, within which trading is taking place at this time. Thus, after pausing for about a week, bears began to put pressure on the pound/dollar pair again. We saw an expressive rebound from the Kijun-sen line yesterday, which increases the likelihood of the pair's decline. The bulls have completely released the initiative from their hands, due to the UK's fundamental background. But more on that below. Traders will only get a chance of a small upward movement if they manage to gain a foothold above the descending channel.

GBP/USD 15M

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Both linear regression channels are directed downward on the 15-minute timeframe, which fully corresponds to the pair's current trend. The new Commitments of Traders (COT) report for the British pound, which came out last Friday, was very expressive. The previous report shows that professional traders became more bullish despite the fact that the British currency fell 700 points in price. The new COT report turned out to be much more logical. Non-commercial traders closed 4,500 Buy-contracts (longs) and opened 7,000 Sell-contracts (shorts) from September 9 to 15. Thus, the net position for the "non-commercial" category of traders decreased by 11,500 contracts at once. This is very significant, since this group has 81,000 contracts. Therefore, this time the data of the COT report coincides with the nature of trading in the foreign exchange market. Commercial traders were even more interesting, as they closed 37,000 Buy-contracts and 45,000 Sell-contracts in just a week. This suggests that many large players are currently not interested in the pound as an investment currency. The future of the UK and its economy is so uncertain that traders are not interested in buying or selling. Commercial traders are hedgers and, judging by the COT report, they simply switch to other currencies rather than use the pound in their accounts. The new COT report, to be released this Friday, may show minor changes, however, the sentiment of non-commercial traders is likely to become even more bearish.

The fundamental background for the pound/dollar pair was fairly neutral on Tuesday, despite the speeches of Federal Reserve Chairman Jerome Powell and Bank of England Governor Andrew Bailey. The speeches were interesting, but they didn't really influence the general trend. Bailey tried to convince the markets that the British central bank is not going to apply negative rates in the near future, but this still did not save the pound sterling from new short positions. On Wednesday, traders are advised to pay attention to the indices of business activity in the services and manufacturing sectors in the UK, as traders traditionally react to these reports more readily than to European or American ones. However, no major changes are expected in these figures. Therefore, if there are no surprises, then it is unlikely that traders will work out these numbers.

We have two trading ideas for September 23:

1) Buyers have let go of the initiative and now they have to work hard enough to get it back. We can talk about long positions on the British currency, but first the price should settle above the descending channel with the first target at the resistance level of 1.3020. However, given the fundamental background and the general mood of market participants, it is unlikely for the trend to change to an upward one in the near future. Take Profit in this case will be about 120 points.

2) On the other hand, sellers can only trade down at this time. The nearest targets are support levels 1.2667 and 1.2558. It is best to sell the pair from the upper area of the descending channel, however, to do this, the quotes should rise in that area. Price rebounds from the Kijun-sen line (1.2857) or the upper channel line can be used to open new positions. Take Profit in this case can range from 50 to 170 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 23. COT report. Powell's speech did not stop the dollar from appreciating

EUR/USD 1H

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The EUR/USD pair finally fell into the support area of 1.1702-1.1726 on the hourly timeframe on September 22, where it had not been in for a long time. However, this area is the lower border of the $1.17-1.19 horizontal channel, which we have mentioned every day for almost two months now. We say that because the euro/dollar pair spent 90% of these two months within this channel. The quotes continue to trade in flat and even fell during the last two trading days, and this still does not change the overall technical picture. If the bears manage to confidently overcome the 1.1702-1.1726 area, then one can expect quotes to fall towards targets of 1.1663 and 1.1588. Globally, such a downward correction has been brewing a long time ago, since after rising by 1300 points, the pair corrected by only 200, which is very little.

EUR/USD 15M

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Both linear regression channels are directed to the downside on the 15 minute timeframe, signaling a downward movement. The EUR/USD pair continued to trade in the horizontal channel of 1.17-1.19 last week. Therefore, even if there were changes in the mood of large traders, it did not show on the pair's chart. And there were changes. Non-commercial traders closed as many as 17,000 Buy-contracts (longs) and only 1,500 Sell-contracts (shorts) during the reporting week (September 9-15). Thus, the sentiment of the most important group of traders, "non-commercial", has shifted towards bearish. The net position for this group also decreased by 15,000 contracts. In turn, this means that professional traders began to look towards buying the US dollar and selling the euro. Commercial traders actively closed both types of contracts. However, we are less interested in this group. We still haven't seen results from all these changes. And the nature of the pair's movement hasn't changed much from September 16 to 22. We still failed to get out of the horizontal channel, and falling towards the 1.1700 level is not something extraordinary. Thus, the new COT report, which will be released on Friday, may signal new changes, but there were none on the foreign exchange market during the reporting period.

No important speeches or publications in the European Union on Tuesday, September 22. Federal Reserve Chairman Jerome Powell delivered a speech in the US Congress, but traders were not that impressed, who, in principle, were anticipating the speech. Powell reiterated that economic recovery entirely depends on the success of the fight against the coronavirus epidemic and called on Congress to approve a new package of assistance to all the most affected areas of the economy. Powell is scheduled to make another speech in Congress today, which will most likely repeat yesterday's one with accuracy. Thus, traders can pay more attention to the indexes of business activity in the services and manufacturing sectors of Germany, the European Union and the United States. Changes in these indicators are expected to be minimal, therefore, most likely, market participants will ignore all these reports.

We have two trading ideas for September 23:

1) Buyers released the EUR/USD pair to the lower area of the $1.17-1.19 horizontal channel. Therefore, we recommend considering long positions if the pair remains inside the horizontal channel, and the bulls manage to settle above the Kijun-sen line (1.1782), while aiming for the Senkou Span B line (1.1835) and the resistance area of 1.1894-1.1910... Take Profit in this case will be from 40 to 90 points.

2) Bears pulled down the pair in half to the lower area of the 1.17-1.19 horizontal channel, but now they have to overcome the lower border. If this attempt is successful, we recommend trading down with targets at the support levels of 1.1663 and 1.1588. The potential Take Profit in this case is from 25 to 90 points. Otherwise, the pair will start a new round of upward movement inside the horizontal channel.

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

Overview of the GBP/USD pair. September 23. The speeches of Jerome Powell and Andrew Bailey did not add clarity to the markets.

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - downward.

CCI: -178.8262

On the third trading day, the British pound traded in a downward movement again, although it made a significant upward leap during the day. Such versatile trading and sharp changes in the direction of the pair's movement during the day were caused by two speeches by the heads of central banks (America and the UK). Recall that last week, with a difference of one day, meetings of the Bank of England and the Fed were held, during which all the parameters of both monetary policies remained unchanged. But if Jerome Powell was optimistic enough in his statements, Andrew Bailey was not. However, neither the first nor the second event had a special impact on the movement of the pound/dollar pair. For the British currency, the topic of the lack of a free trade agreement with the European Union, as well as the resonant bill of Boris Johnson, which can finally divide Brussels and London, remains much more important. Thus, we can make almost one hundred percent conclusion that the British pound resumed falling based on this fundamental background, although there have been no new reports on the two above-mentioned topics in recent days. We also remind you that the euro/dollar remains flat for two months, which is not observed for the pound/dollar pair.

Jerome Powell's speech to the US Congress was expected by traders, as well as any of his other speeches. However, we have warned in our recent articles that it is unlikely that Jerome will report anything fundamentally important and new, since just recently the Fed meeting took place, after which he could report everything that was required. According to Powell, the risks to the US economy remain extremely high. Financial assistance ($4 trillion approved by the US Congress in March) has had a mitigating effect on the consequences of the "coronavirus epidemic". However, the future of the US economy depends entirely on how well the fight against the epidemic is conducted in the future. Powell stressed that the pandemic has not gone anywhere, and there was no end to the "wave". States continue to be in a permanent state of development of the epidemic. The head of the Fed also noted that recently there has been an improvement in macroeconomic indicators, which, however, should not be misleading, since the "lockdown" is over, and the economy would have revived after that in any case. Powell is very concerned about the country's unemployment rate, which remains well above pre-crisis levels. The head of the Federal Reserve has also stated several times that before the complete victory over the "coronavirus", it makes no sense to expect a full recovery in business and economic activity. In other words, the US economy will not be able to return to pre-crisis levels until there is a complete victory over the pandemic. Powell also called on the US Congress to consider and approve a new package of assistance to the US economy, which will go to support those industries that have suffered the most from the pandemic.

In principle, Powell's speech fairly accurately reflects our own opinion. We have repeatedly stated that the most important thing for America is the confrontation with the "coronavirus". Donald Trump failed to fight the epidemic, perhaps Biden will be able to cope with it. In any case, the approach needs to be changed, as 40-45 thousand new cases of the disease continue to be recorded daily in the United States.

Jerome Powell's colleague Andrew Bailey also made an interesting statement. The head of the Bank of England said that in the near future, the regulator is not going to resort to the introduction of negative rates, although this topic has been discussed by traders and economists for several months. Recall that many market participants believe that sooner or later the Bank of England will have to resort to this step since the economy fell by a record 20% in the second quarter, and the risks of the UK leaving the EU without a "deal" are growing every day. Moreover, thanks to Boris Johnson and his new bill "on the national market of Great Britain", the chances of a quarrel with the alliance are also growing, which will undoubtedly affect the British economy. Thus, many traders are waiting for new stimulating steps from the BA. They are equally waiting for a reduction in the key rate and an expansion of the quantitative stimulus program. Thus, Andrew Bailey refuted traders' expectations for the rate in the near future. "It would be a mortal sin to say that we have a tool that we can't put into practice," the BA chief said. Bailey also added that the regulator's statement following the September meeting was only intended to make sure that banks are ready to switch to negative rates.

Meanwhile, the most famous American publication the Washington Post reports that during the reign of Donald Trump, the "prestige" of the United States fell. Although the President regularly declares in his interviews that he has returned America to its "former greatness", practice shows that the opposite is more likely the case. A study conducted this summer shows that the attitude of countries such as France, Canada, Japan, Australia, France and other "first players" of our world has fallen to the lowest level in the last 20 years. The approval rating, therefore, is 34%, although in 2016 it was less than 52%. 86% of respondents said that America has completely lost the fight against the epidemic. Further, the biggest reason for the unpopularity of the United States is called Donald Trump. It should also be noted that all the leaders of the "Big Eight" scored more approval ratings than Trump.

As for the near-term outlook for the pound/dollar pair, it is likely to remain downward. Too many negative things are happening in the Foggy Albion right now. In the United States, as we have repeatedly noted, there are also enough problems, however, the UK managed to "surpass" America. At the same time, almost all the problems in Britain are "short-playing" in nature. In other words, they may start to have an impact (or they already do) on the economy in the very near future. Thus, the outlook for the pound remains even bleaker than for the US dollar. However, both of these currencies are still absolute outsiders in 2020. From a technical point of view, the downward trend resumed after a minimal upward correction. Bulls finally left the market as the pound has been rising since March 20. Further, we have repeatedly said that its growth cannot be called fully justified.

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The average volatility of the GBP/USD pair is currently 141 points per day. For the pound/dollar pair, this value is "high". On Wednesday, September 23, thus, we expect movement inside the channel, limited by the levels of 1.2593 and 1.2876. A reversal of the Heiken Ashi indicator to the top signals the beginning of an upward correction.

Nearest support levels:

S1 – 1.2695

S2 – 1.2634

S3 – 1.2573

Nearest resistance levels:

R1 – 1.2756

R2 – 1.2817

R3 – 1.2878

Trading recommendations:

The GBP/USD pair resumed a strong downward movement on the 4-hour timeframe. Thus, today it is recommended to keep open short positions with targets of 1.2695 and 1.2634 as long as the Heiken Ashi indicator is directed downward. It is recommended to trade the pair for an increase with targets of 1.2939 and 1.3000 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. September 23. Joe Biden's victory will lead to a change in US trade policy.

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) – down.

CCI: -156.3390

The EUR/USD pair continued its downward movement for the second trading day, although the pair's quotes are located near the lower border of the side channel of 1.17-1.19, where it is more logical to consider long positions. However, market participants decided otherwise. In any case, the flat should end sooner or later. Why not now? We are not saying that it has already been completed, however, the fall in the euro currency quotes should not cause too much surprise either. Recall that after the European currency rose by 1300 points, which caused almost a panic in the ranks of the European Central Bank, there was no normal correction. All the traders managed to do was lower the pair by 200 points, which is very small to be called a "correction". Moreover, the euro/dollar pair has been trading in a 200-point sideways range for two months, thus, it is too early to talk about the end of the flat because the pair is declining for the second day in a row.

Meanwhile, the "battle for the seat" continues in the States. We are talking about the presidential election, which will be held on November 3. We have repeatedly written about this event, stating that this event is now the most important and significant for the country and the dollar. This is not an event that can have a momentary impact on the movement of the US currency. However, for a long-term perspective, it is of great importance. In the last two trading days, the US currency has become more expensive, but if the flow of negative news resumes from overseas, the dollar's strengthening may be very short. In the meantime, Donald Trump and Joe Biden continue to mutually insult each other, believing that this will somehow increase their chances of winning in a month and a half. We have repeatedly conducted an analysis, during which it became clear that the upcoming elections will be one of the most interesting in the history of the United States. Neither Trump nor Biden will accept defeat, thus, there will probably be "foul play" and various "tricks", after which the fight for the president's seat can safely move to the courts.

Meanwhile, the democratic presidential candidate Biden said that the States suffered from the "coronavirus" more than other countries in the world because the current president did not take all the necessary measures. According to Biden, Donald Trump failed to keep his cool at an extremely important moment for a multi-million-strong country, which caused the loss of more than 200,000 human lives. However, this is far from the end, because, despite all Trump's promises to create a vaccine in the near future, the real vaccination of the population will begin at the beginning of next year. And in America, about 40,000 people are infected with the "coronavirus" every day. "All his life, Donald Trump has been running from the problems he faced. In light of this crisis, when it took the president to play a leading role, he failed, and all of America paid the price," Biden told supporters in Wisconsin. "More than 200,000 people have died in the past six months. So many lives have been lost because the only thing the president cares about is the stock markets and the election," Biden added. Joe Biden also calls the US president a "fool" who "does stupid things and shows false masculinity". To this insinuation, Trump responded as follows: "Look at sleepy Joe, how did he handle the swine flu? It was a failure, a nightmare." However, Trump did not say what exactly was the "failure" and "nightmare". Therefore, his accusations against Biden do look rather weak. Especially because Biden was not president at the time, which means that he can not be blamed completely for any events taking place in the United States when he was Vice President under Barack Obama.

Meanwhile, many US trade partners are counting on Joe Biden to win the election. They are counting on him because they hope for a change in US trade policy. According to sources close to Biden, it is unlikely to expect strong changes, however, it may become softer and more consistent. Although Biden also promises to reduce US dependence on China, he may still be more lenient in negotiations and strike a fairer deal that ends the trade war that is negatively affecting both the US and Chinese economies, as well as the global economy. By the way, a change in trade strategy would be in the hands of the States themselves. As we have said several times, the trade deficit has only increased under Donald Trump. Thus, it doesn't matter what deal was made with China or how much the trade deficit with that country has shrunk. In fact: the overall trade balance for America continues to shrink. If something doesn't work as expected, then you need to change your strategy. Trump can't provide a new strategy, however, Biden can. Joe Biden promises to use a wider range of tools in his trade policy. In general, Biden's proposals are in many ways similar to Trump, however, they are more loyal, which means they have a better chance of positive implementation. Because we once again remind you that negotiations are always at least two countries. While Washington can negotiate with weak and small countries from a position of strength, it cannot do so with Russia and China. Biden understands this and Trump doesn't.

Thus, we believe that if Joe Biden wins the election, the demand for the US dollar will automatically grow. Simply because it will mean the end of the war with American manufacturers, whose production has been operating for years in China, Taiwan, and other countries with cheap labor, as well as the possible end of the trade war with China, which is almost openly supporting the democratic candidate. As for the near-term perspective, until the euro/dollar pair leaves the channel of 1.17-1.19, there is no need to talk about any trend movement. Near the Murray level of "4/8" - 1.1719, an upward turn may occur and a new round of upward movement will begin inside the same side channel.

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The volatility of the euro/dollar currency pair as of September 23 is 91 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1621 and 1.1803. The reversal of the Heiken Ashi indicator back upward signals a round of upward movement in the remaining side channel of $ 1.17 - $ 1.19.

Nearest support levels:

S1 – 1.1719

S2 – 1.1658

S3 – 1.1597

Nearest resistance levels:

R1 – 1.1780

R2 – 1.1841

R3 – 1.1902

Trading recommendations:

The EUR/USD pair is fixed below the moving average line but remains in the side channel. Thus, formally, you can now hold short positions with targets of 1.1658 and 1.1621 until the Heiken Ashi indicator turns upward. It is recommended to re-consider options for opening long positions if the pair is fixed above the moving average with the first targets of 1.1841 and 1.1902.

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

How will the US and China share the TikTok Global app?

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The popular Chinese app "TikTok" is considered to be a national security threat by the US government. D. Trump expressed concern that the Chinese government could collect data on Americans and transfer it to Chinese intelligence agencies using smartphones of TikTok users. CIA representatives said that this is possible, but they could not prove it.

Therefore, the head of the White House issued a statement that the United States will be banned from downloading TikTok and WeChat through the App Store and Google Play, as well as other applications from September 20, 2020. Otherwise, the Internet company ByteDance, the owner of TikTok, must sell the local division of any American company so that its application in America will not be blocked entirely. Microsoft, Walmart and Oracle were initially considered as potential buyers.

According to Reuters, D. Trump agreed to a deal between the IT giant Oracle and the Chinese company ByteDance. Moreover, he approved participation in the deal by the American retailer Walmart. The US Department of Commerce agreed to postpone a possible ban on TikTok downloads for a week. As a result, American citizens can use this application until September 27.

A new company, TikTok Global, will be created to manage the TikTok business, which is designed to keep the service running both in the United States and in most countries of the world. On Monday, September 21, ByteDance confirmed that it managed to negotiate with Oracle and Walmart to own 80% of TikTok Global, while the two American companies will acquire the remaining 20% of the popular application.

According to the agreement signed by D. Trump, Oracle will buy 12.5% of the shares of the new company, and Walmart will receive 7.5%. With Oracle and Walmart stakes, the TikTok Global app is expected to become fully controlled by US investors.

As for the board of directors of the new company, it will include the founder and current chairman of the board of directors of ByteDance, as well as the chief executive of Walmart. TikTok Global management plans to improve the transparency of corporate governance.

According to TikTok, there are about 100 million users of the app, and about 19 million users of the WeChat app in the US. Thus, America accounts for about 26% of total TikTok traffic.

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

Analytics and trading signals for beginners. How to trade GBP/USD on September 23? Getting ready for Wednesday session

Hourly chart of the GBP/USD pair

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Trading is about to end at this time and it is quite difficult for the GBP/USD pair. The MACD indicator generated two sell signals here, each of which was weak and unconfirmed. The downward trend line only appeared in the evening, and was not available during the day. Thus, the downward trend for the pound/dollar pair has been extended and, one might even say, has intensified, since now traders have a trend line at their disposal. We advised not to trade up in the morning article, and also recommended waiting for the price to settle below 1.2774, which is the previous local low. At the moment, we can conclude that this level has been overcome, which means that the path for a long term decline is open for traders. New targets for trading will appear tomorrow, but for now the closest one is the support level of 1.2659.

The fundamental background is still the main reason why the pound's quotes are falling in September. Moreover, speeches from Federal Reserve Chairman Jerome Powell and Bank of England Governor Andrew Bailey do not affect the mood at the moment. And neither did the central bank meetings last week. Traders are only fixated on events related to Brexit and the future relationship between the UK and the European Union. The pound started to fall when it was announced that two regular rounds of negotiations with Brussels regarding a free trade agreement have both ended in failure. And the pound also continued to move down when Prime Minister Boris Johnson's resonant bill was announced, this bill allows the UK government to violate its agreement with the EU on the Northern Ireland border. These two factors pull down the pair. Bailey delivered a speech today, but he only said one thing. Negative rates will not be introduced in the near future, although the Bank of England allows their use in the future. This is positive news for the pound, as we remind novice traders that any rate cut or expansion of the quantitative stimulus program is a bearish factor for the currency, the central bank of which is doing this. Therefore, one might say that Bailey even managed to please some buyers of the pound. But they could not take advantage of the given chances. Indexes of business activity in the service and manufacturing sectors will be published tomorrow in the UK and the United States, which are currently not important. You shouldn't skip them, however, they are unlikely to be followed by a serious market reaction.

Possible scenarios for September 23:

1) We still do not recommend buying the pound/dollar pair, since a strong downward trend has currently appeared. We believe that quotes will continue to decline in the near future, therefore, to be able to open long positions, you should wait until the trend changes to an upward one. That is when the price settles above the new descending trend line. This is unlikely to happen in the next few hours, so we recommend waiting at least in the morning.

2) Sell positions, from our point of view, are much more convenient now. They can be kept open until the MACD indicator reverses to the upside and then you can aim for the support level of 1.2659, if novice traders still entered the market using one of today's MACD signals. In general, as long as the downward trend line remains relevant, you are still advised to trade for a fall. It is recommended to study the possibilities of opening new sell orders tomorrow morning.

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 (10,20,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).

Important announcements and economic reports 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

GBP/USD. Fight in the House of Commons, tightening quarantine in Britain and strengthening the greenback

The pound continues to plunge down. After a short rise, the GBP/USD pair fell to the bottom of the 27th figure, opening new price horizons for itself. The pair traded in the 1.24-1.27 range throughout July, after which it went up against the background of a weakening dollar and optimism about negotiations on the Brexit trade deal. At the moment, we are observing a mirror situation: the greenback is strengthening throughout the market, and hopes for a deal are dwindling every day, amid consideration by the House of Commons of the resonant draft UK Internal Market Bill. The threat of a second wave of the coronavirus epidemic in Great Britain organically complements the negative fundamental picture for the pound, which is why it is forced to retreat throughout the market.

Let's start with the political battles within the walls of the British Parliament, where a scandalous bill is being considered for the second week, which, in fact, crosses out some of the provisions of the Brexit deal. Prime Minister Boris Johnson continues to insist that this law will ensure the integrity of the UK internal market after the end of the transition. However, according to European and many British politicians, this legislative initiative violates the norms of international law. Just today, the German Minister for European Affairs Michael Roth made a rather harsh statement, saying that the Brits should "stop playing games in negotiations with Brussels."

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But despite the powerful political confrontation, the resonant bill passed the first reading - 340 deputies of the Lower House of Parliament voted for it. A second vote is expected this week. During the discussion of the amendments, Johnson agreed to the amendments, according to which the "last word" in the issue of changing the Brexit deal will remain with the House of Commons, and not with the government. On the one hand, this is a compromise, but on the other hand, it does not change anything in the context of relations with Brussels. As the former British Prime Minister Theresa May noted, "a violation of international obligations will still remain a violation of international obligations, regardless of whether it is allowed by the prime minister or Parliament." A similar position is voiced by EU representatives, threatening to withdraw from the negotiation process to conclude a deal if the law is still adopted.

The pound was afloat for some time due to the notorious position of the House of Lords. Most peers do not support Conservative initiatives, especially anti-European ones. But at the end of last week, representatives of the British government recalled the existence of the Salisbury Convention, according to which members of the House of Lords should "without delay pass bills aimed at implementing the election program of the winning party or coalition." According to Johnson, his legislative initiative falls within the scope of this convention. In addition, take note that the Upper House of the British Parliament is not an appellate instance that can overturn or block certain bills. Peers can express their opinions in the form of amendments, which can later be rejected by members of the Lower House.

In other words, GBP/USD buyers have lost an important advantage of a fundamental nature that kept the pair at the borders of the 30th figure. If the second vote is in favor of the controversial bill, the pound will accelerate its decline.

In addition, details of tightening quarantine restrictions in the UK have become known today. Ahead of which, Johnson has ruled out a second nationwide lockdown, but investors were not pleased with the latest measures either. In particular, now all pubs, bars, restaurants and other similar establishments must close no later than 22:00. The list of places where it is necessary to wear masks will also be expanded, and compliance with the rules will be stricter - even the military will be involved in helping the police. It is obvious that the tightening of quarantine will negatively affect the recovery process of the economy. First of all, the labor market will suffer, consumer activity will decrease, and the service sector, which has just begun to show signs of life, will be under attack.

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To be fair, the GBP/USD pair is decreasing not only due to the weakening of the pound, but also due to the general strengthening of the dollar. The greenback is in high demand amid a surge in anti-risk sentiment - a loud scandal with FinCEN, as well as coronavirus anti-records make investors nervous. In addition, US Treasury Secretary Stephen Mnuchin just announced that the White House is working with Congress representatives on the next program to help the economy. This rhetoric provided additional support for the greenback.

All this suggests that the downward dynamics will continue for the GBP/USD pair. At the moment, bears are testing the lower border of the Kumo cloud on the daily chart, which corresponds to the 1.2730 level. If sellers overcome this support level (which I personally have no doubt about), then they will open their way to the lower line of the Bollinger Bands indicator - to the 1.2630 level. Short positions are a priority both in the short and (even more so) in the medium term.

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