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22.01.2021
04:59 PM


Ichimoku cloud indicator Daily analysis of EURUSD

EURUSD remains in a bullish trend according to the Ichimoku cloud indicator and as price continues to move higher, the bullish scenario is becoming stronger. Bulls have recaptured the tenkan-sen and now face the kijun-sen.

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The tenkan-sen (red line indicator) is support at 1.2137. The kijun-sen (yellow line indicator) is resistance at 1.22. Holding above the Kumo (cloud) and breaking above 1.22 would be another bullish sign. The Chikou span (black line indicator) is on top of the candlestick pattern and slightly above it. This indicator is slightly bullish as long as it holds above the candlesticks. All in all a bullish picture for EURUSD according to the Ichimoku cloud indicator.The material has been provided by InstaForex Company - www.instaforex.com

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22.01.2021
04:55 PM


Gold bulls target $1,900

Gold price has started making higher highs and higher lows in the short-term. Price has made another higher low at $1,836 and is now back above $1,850 again. There is potential for Gold price to reach $1,900 next week.

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Green rectangle - support

Blue rectangle -target

Blue line -RSI support trend line

Red lines - Fibonacci extensions

Gold price has made an important low around $1,809 and has now broken above $1,850. As we explained in previous posts, Gold bulls need to recapture $1,850 and stay above it as this is a pivotal level. As long as price is above today's low at $1,836 then we expect a short-term upward move at least towards $1,900.

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

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22.01.2021
04:51 PM


USDCAD challenges wedge pattern boundaries

In our previous USDCAD analysis we warned bears that although trend remained bearish and price continues making lower lows and lower highs, there are some signs that show limited downside potential and possible reversal to the upside.

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Red lines - wedge pattern

Blue line- bullish divergence

As we mentioned in our last post, we prefer to be neutral if not bearish at current levels because the chances of an upward reversal are high. The bullish RSI divergence combined with the downward sloping wedge pattern are the two most important things we notice in the Daily chart. Price today bounced back to the upper wedge boundary challenging resistance at 1.2720. Trend remains bearish but we expect an upward reversal as long as the RSI does not break below the blue support trend line. Bounce target is at 1.30-1.31.

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

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22.01.2021
04:14 PM


January 22, 2021 : EUR/USD daily technical review and trade recommendations.

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By the end of November, Signs of BUYING Pressure have been initiated around the depicted price zone of 1.1800-1.1840.

Shortly after, the EUR/USD pair has demonstrated a quick upside movement.The pair has targeted the price levels around 1.1990 initially which exerted considerable bearish pressure bringing the pair back towards 1.1920 which constituted a temporary KEY-Zone for the EUR/USD pair.

That's why, another episode of upside movement was expressed towards 1.2160 where a false breakout above the price level of 1.2200 was regarded as a considerable bearish reversal signal.

Three weeks ago, a short-term reversal pattern has been demonstrated around 1.2265. Intraday downside retracement to the downside was expected to occur.

However, the EUR/USD pair has failed to pursue towards lower price levels. Instead, the pair has spiked above the depicted Weekly HIGH around 1.2270 before the current bearish rejection was initiated around 1.2350.

Bearish closure below the mentioned price zone of 1.2250 - 1.2200 enabled a quick bearish decline towards 1.2170 then 1.2150 which corresponded to a previous congestion zone as well as a prominent key-zone.

Persistence below the price level of 1.2170 has turned the intermediate outlook for the pair into bearish and should enhance further downside decline towards 1.2080 and probably 1.2040.

On the other hand, the current upside pullback towards 1.2170 should be considered for SELLING the EURUSD pair again.

Trade Recommendations :-

SELL Positions that were suggested around the price levels of 1.2300 are already running in profits.

Exit Level should be lowered to 1.2180 to secure profits while Next Target level should be projected towards 1.2040.

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

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22.01.2021
04:11 PM


January 22, 2021 : GBP/USD Intraday technical analysis and trade recommendations.

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In December, the price levels of (1.3380-1.3400) have prevented further bullish movement for a few weeks.Bearish target was projected towards 1.3300. However, the pair has failed to pursue towards lower targets.

Instead, a bullish spike was expressed towards 1.3480-1.3500 where the upper limit of the depicted movement channel has previously provided bearish pressure on the pair.

Shortly after, another bullish spike has recently been demonstrated towards 1.3600 where the upper limit applied considerable bearish rejection again.Recently, the GBPUSD pair looked overbought while consolidating above the key-level of 1.3400.

As expected, bearish reversal was recently initiated around 1.3600. A quick bearish decline was demonstrated towards 1.3200.

However, the GBP/USD pair has failed to maintain bearish decline below 1.3200 in the previous attempt. Instead, bullish persistence above 1.3400 invalidated the bearish scenario for the short-term.

Another temporary bullish movement is being expressed to test the previous WEEKLY High around 1.3700. Further upside movement is expected towards the upper limit of the current movement channel around 1.3800 where bearish rejection and a possible SELL Entry are suggested.

Intermediate-term outlook can turn into bearish if only the GBP/USD pair could break below and maintain movement below 1.3400. If so, a quick bearish decline initially towards 1.3200-1.3150 would be expected.

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

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22.01.2021
04:09 PM


Gold outlook for January and February 2021

As time has shown, the assumption that gold will not rise in price, made in the fall of 2020, turned out to be true - gold did not rise in price. Will gold be able to reverse negative trends, or is it likely to lose its value in the short term, we will analyze in this article.

As you know, trends are divided into three types: long-term, medium-term and short-term. Long term trends are trends that usually last for more than a year. Medium-term trends live on average from three to six months. The life span of short-term trends lasts up to one month. In this article, we will consider the prospects for the short-term and medium-term trend of gold.

Consider the situation in the gold market by the end of January 2021 based on an analysis of the supply and demand balance. The main factors affecting the mid-term and short-term dynamics of quotes are the demand from North American and European investors for physical gold and investments in exchange-traded funds, positioning in the futures market, and opportunity cost.

Investor demand to buy gold-based ETFs hit a multi-year record last 2020 with a net inflow of the precious metal of 877 tonnes. However, during the year, demand was not evenly distributed: if in the first half of 2020 investors were building up long positions in the so-called "paper gold", then in the third quarter the growth rates of inventories slowed down, and in the fourth quarter they became generally negative (Fig. 1). This led to a decline in the price of gold denominated in US dollars. The price of gold dropped even more in euros, as the dollar was actively depreciating against the euro. It can be clearly seen that the price of gold followed investment flows, but rose in December despite negative gold inflows, which is a fundamental divergence

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Figure 1: Gold Flows to ETFs: December 2018 - December 2020

Now let's see how the futures market traders behaved when trading futures contracts on the CME-COMEX exchange.

The dynamics of supply and demand in the futures market almost completely repeats the dynamics of the movement of gold in exchange-traded funds - ETFs. Having reached a maximum in August, at the level of 1,135,000 contracts, by December 2020, Open Interest, which is an indicator of demand, decreased to 752,000 contracts, after which it recovered to a value of 810,000 contracts in December, but collapsed in January 2021 and now again amounts to 754,000 contracts. At the same time, interest from the main buyers of gold fell exactly in January, which from a fundamental point of view implies a further decline in gold in the medium and short term.

As usual, there are several reasons why this happened. There are artificial barriers in the form of increased collateral requirements set by the CME exchange. Throughout 2020, the exchange has steadily increased its margin requirements despite declining volatility, which has led to a decline in trader interest. This, and the increase in the yield of US Treasury bonds, led to a decrease in the opportunity cost. Since August 2020, the yield on 10-year US bonds has increased by 0.5% and in January 2021 was 1.092% per annum. There was a slowdown in consumer demand. In December, the American economy began to lose jobs again.

At the same time, after Joe Biden's "victory" in the US presidential election, the stock market continued to grow actively, which deprived gold of its function as a protector against market risk.

As you can see, by January 2021, gold approached in a state crushed by fundamental reasons, which could not but affect its quotes. Based on the analysis of the factors above, it is safe to say that in the current environment, gold may continue to decline in the medium and short-term trends, which suggests looking for points to sell.

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Figure 2: Technical Analysis of Gold Price - Medium Term Trend

If you conduct a technical analysis of the gold price, it becomes clear that in December there was an unsuccessful attempt by gold to gain a foothold above the $1900 level, after which the price again dropped to the 1778-1900 range and has now formed a signal to move to the lower border of this range. If gold manages to overcome the level of $1778 and gain a foothold below, then in this case there is a high probability that the price will drop by another $100, to the level of $1680. After that, the quotes may return to the values of 1520-1550 dollars per troy ounce.

If we consider the situation in terms of time, it may take from one to two weeks for the price to decline to the level of $1778. And, in case, a decline to the level of 1680, can take up to three months. It will take up to six months to decrease to the level of 1550. At the same time, a decline to 1778 should be regarded as very probable, a decline to 1680 as probable, and a decline to 1550 as unlikely. Naturally, as this scenario develops, the probability of the outcome of a particular event can both increase and decrease. Be careful and make sure to follow the money management rules.

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

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22.01.2021
04:09 PM


January 22, 2021 : EUR/USD Intraday technical analysis and trade recommendations.

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The EURUSD pair was trapped below the previous key-level (1.2000) until bullish breakout occured to the upside recently in December.

Further quick bullish advancement was expressed towards 1.2150 just as expected after failing to find sufficient bearish pressure at retesting of the backside of the broken channel around 1.1970-1.2000 which corresponds roughly to Fibonacci Level of 0%.

Recently, the pair looked overbought while approaching the price levels of 1.2250 (138% Fibonacci Level).

That's why, conservative traders were advised to look either for SELL Positions around the previous price levels at 1.2330 (150% Fibonacci Level) in the previous article.

Recently, Bearish closure and persistence below 1.2160 was needed to abort the ongoing bullish momentum. This allowed the recent bearish movement to pursue towards 1.2050 where the depicted key-zone is located.

Bearish closure below 1.2000 would enhance the continuation of the current bearish Head and Shoulders Pattern towards lower targets.

However, Intraday traders should were advised to look for price action around the price zone around 1.2000-1.1975. This price zone stands as a Demand Zone which can offer bullish SUPPORT for the EURUSD.

Suggested bullish trade is currently running in profits. Bullish closure above 1.2160 is needed to enhance further upside movement towards 1.2250 as an Intraday target.

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

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22.01.2021
02:55 PM


EUR/USD: euro continues rising despite various factors

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The US dollar may show the worst trading week of this year.

In recent days, the US stock market was rising. All three main US indices have advanced by 2% and more since the beginning of the year.

Strategists at the National Australia Bank note that market participants are focused on the possible benefits of budgetary plans developed by Joe Biden's administration. They prefer ignoring various negative factors. While stocks are gaining in value, the US dollar will hardly rise.

Analysts suppose that the new record highs hit by the US key stock indices early this week is a sign that investors remain positive.

European Central Bank President Christine Lagarde also shares this attitude.

She said that "risks to growth in the eurozone remained tilted to the downside", though the bias had become less pronounced.

She also added that the vaccination programs launched at the end of December gave confidence that European countries would successfully cope with the crisis in the healthcare system. In the medium term, the recovery of the eurozone economy should be supported by favorable financial conditions

The ECB remained its monetary policy unchanged during its meeting in January. The regulator also noted that the asset-purchasing program would be only partially used, if the EU funding conditions remained favorable.

Less dovish than expected ECB comments allowed the euro to recoup some of its losses against the US dollar. On Thursday, the euro/dollar pair reached its multi-day high near 1.2170.

At the same time, the US dollar index dropped to its week low near 90 points.

The euro ignored Lagarde's announcement. She said that the regulator was closely monitoring the euro's appreciation. The fact is that the exchange rate is halting the EU inflation that has failed to reach the targeted level.

It seems that only a lower cost of loans may lead to a weaker euro. Otherwise, it will be extremely difficult to lower the euro without serious reasons. Moreover, the US may continue accepting new stimulus packages putting the greenback under pressure.

On Friday, the main currency pair jumped to its week highs around 1.2180.

European leaders are concerned about new strains of the coronavirus. The spread of the new virus type may result in longer and tougher containment measures.

Today's preliminary data showed that the eurozone composite PMI dropped to 47.5 points compared to 49.1 points in December.

The current reading is the lowest in the last two months.

"A double-dip recession for the eurozone economy is looking increasingly inevitable as tighter Covid-19 restrictions took a further toll on businesses in January," said Chris Williamson, chief business economist at IHS Markit.

Despite bad news, the single currency is staying afloat against the US dollar.

If the pair breaks the key resistance level of 1.2190, it may reach such levels as 1.2200, 1.2270, and 1.2310.

The support level is located at 1.2150 and then, at 1.2130 and 1.2080.

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

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22.01.2021
02:54 PM


Dollar gives off buy signal

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Western markets traded in the negative zone before the weekend, which is most likely due to the correction after the rally. The markets have absorbed the maximum of positive news and are now looking for new drivers for growth or decline.

The main events next week will be the meeting of the US Federal Reserve, the publication of data on the US economy, and orders for durable goods in the country. Germany will present GDP statistics, and the United Kingdom to release data on the labor market.

The focus is on the topic of the pandemic. European authorities are discussing the possibility of longer lockdowns. In the United States, the new president signs decree defining strategies to combat coronavirus.

The main focus now is on vaccination, which is currently faced with problems. Insufficient government funding prevents the vaccination company from becoming more active. It would seem that the $1.9 trillion stimulus package presented by Joe Biden could solve everything, but there may be obstacles in this matter. The fact is that the lawmakers may not accept the Biden plan in its original form. A $1 trillion package seems more realistic, if not less. With such a scenario, investors' optimism will diminish.

According to House Speaker Nancy Pelosi, the detailed study of the bill will begin next week. During this time, the peak of the reporting season will also pass, which means that volatility will increase in the short term.

The US dollar also started a correction on Friday against the background of a decrease in demand for risk, but one should hardly expect significant movements or a change in trend. After a difficult year in 2020, it has been just above the 90 point mark for more than a month. The USD index is likely to continue to trade within the range of 90–91 points established in recent sessions. There is no reason for a stronger breakthrough, at least for now. At the same time, there are no grounds for another departure to the 89 point mark

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Market forecasts are mainly based on a further decline in greenback. However, opposite opinions appear, which is important. Everything can change, and positive factors for the dollar can support, including US stocks.

The biggest negative for the dollar will be the recovery of the countries most affected by the pandemic faster than the US economy. Since this driver is key to the dollar's fall, it may gradually exhaust itself.

As soon as vaccination will increase the rate of growth of activity, the Central Bank can begin to normalize monetary policy. Due to the annual increase in the spread between the key rates of the Fed and the ECB, Treasury yields will rise, while the growth of yields on government securities of the eurozone will be tough. Against this background, the attractiveness of the dollar on the world stage will increase.

Although now the leadership of the American regulator says that it will not raise rates until 2023, everything is possible. As soon as the situation changes, the Fed's opinion will also change. As a rule, interest rates are increased during periods of strengthening economic activity, as the Central Bank tries to prevent inflation from accelerating too quickly.

This is a distant prospect. Now traders are negative about the dollar and prefer to open short positions. At the same time, with any unexpected strengthening of the dollar, they can rebuild. The rise in the rate will force the holders of short positions to start buying the greenback to close these positions.

The topic of vaccination has not yet exhausted itself, if last year there was infinite optimism from it, now there are reasonable doubts. Any reports of a slowdown in the campaign or drug ineffectiveness could lead to a situation similar to March last year when investors pumped the dollar well in pursuit of shelters. Also, such news will only harm the economy and US stocks, since it will be short-term.

If we talk about the long-term prospects for the recovery of the dollar, then they are based on a serious growth rate of activity in the United States compared with other countries. This factor will also contribute to the active growth of the US stock markets.

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

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22.01.2021
02:51 PM


Outlook for USD, EUR, and GBP: Fed prepares to act while ECB stays cautious

Last week, FOMC member Richard Clarida unveiled several key factors that will determine the Fed's policy in the near future. He believes that the Fed will continue adjusting its monetary policy in accordance with expected inflation and not actual inflation. Clarida also highlights that once the Fed starts its hiking cycle, he intends to monitor the Taylor rule with no emphasis on the labor market.

This announcement may signal the Fed's intention to launch a new policy while inflation and unemployment rates are still lagging behind the target levels. Inflation expectations are already outrageous: the 5-year TIPS yield, which helps measure inflation expectations, has already reached an 8-year high and keeps gaining momentum.

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Other FOMC members mentioned earlier that a refusal to consider the unemployment rate also implies a refusal to follow the Phillips curve.

Markets should be prepared that the Fed may start its rate hike cycle unexpectedly. The likelihood of this scenario will push the US dollar higher. The period of the US dollar weakness is likely to end soon, unless the new US administration tries to solve the problem of rapidly growing budget deficit.

EURUSD

The euro continues to trade mixed and neither resumes the uptrend nor starts the correction. The existing drivers are not enough, and yesterday's meeting of the ECB did not add any clarity.

The ECB monetary policy remained unchanged, and Christine Lagarde chose words carefully, not allowing the euro to change direction. Such cautiousness may reflect the uncertainty in the regulator's forecast as the accompanying statement excluded any references to exchange rate.

The outcome of the meeting made it clear that the regulator is not going to expand the PEPP. This is obviously a bullish signal for the euro. We can also assume that the volume of asset purchases will gradually decrease. Most likely, markets will no longer see any peak volumes.

The indicator signals are inconsistent. According to the European Commission, Consumer Confidence Index fell to -15.5 in January from -13.8 in December. This is a bearish signal, especially together with zero inflation growth, which points at weak consumer demand.

At the same time, the ZEW index, which reflects investor sentiment, rose from 54.4 to 58.3, indicating a recovery in business confidence. Markit has also published mixed data today. According to it, activity in the services sector fell to 45 from 46.4. The manufacturing PMI is slightly worse. So, it is too early to stop financial incentives.

At the moment, EUR/USD is unlikely to return to 1.2350. The US dollar will need to react to a number of bullish signals. So the pair will continue to trade in the sideways channel, tending to hit its lower boundary. The resistance is located at 1.2200/20, while the stop loss is set slightly higher. It is worth opening sell positions from the current levels with the nearest target at 1.2055.

GBPUSD

Despite downbeat economic data, the pound has hit a new local high and looks much stronger than the euro. The GfK Consumer Confidence Index dropped to -28 in January from -26 in December. GfK Group's view of the economic situation remains rather gloomy.

As predicted, retail sales rose in December but failed to meet analysts' expectations. The Markit Manufacturing PMI declined from 57.5 to 52.9, while the services sector collapsed to an 8-month low of 38.8. Obviously, such business activity indicators signal slow economic recovery.

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Such economic downturn may be explained by COVID-19 restrictions. Anyway, the fundamental support for the pound is weak. Its short-term rise can be a speculative reaction to a new trading system being formed after Brexit. In other words, the pound benefits from the UK's intention to readjust the system of international agreements in its favor.

As the saying goes, time will tell. The pound remains positive and may try to resume an upward movement. The strategic target of 1.4300/50 is still relevant. Recommendations for the short term remain the same: buy on pullbacks with the nearest support level at 1.3610/20.

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

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22.01.2021
01:51 PM


Review of EUR/USD for January 22

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EUR/USD - The market is waiting for the closing prices of this week.

In any case, at the time of writing, dollar is increasing against other currencies such as pound and yen, while euro is holding on (for now).

Trade long positions only after a strong pullback.

Open short positions from 1.2075.

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

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22.01.2021
01:39 PM


Trading Signal for EUR/USD for January 22 - 25, 2021: Sell Below 1.2185

The EUR / USD pair, before starting the American session, is trading close to the EMA of 200 in 4-hour charts, and above the SMA of 21, the last 2 candles have left a Doji, which means that there is much indecision in the market.

There is a probability that the EUR / USD pair, in 4-hour charts, has a decline below this level of the 200 EMA, for which it would be a good opportunity to sell below this level.

In addition to the 4/8 of Murray, around 1.2207, it is also another immediate resistance, any of these levels may continue to push the EUR / USD down, until the support of the 21 SMA.

If the EUR / USD pair again trades below the 21 SMA on 4-hour charts, it would be a good selling opportunity targeting Murray's 3/8 around 1.2085.

The eagle indicator shows a weak bullish signal, we should expect a consolidation above 1.2207, for a new bullish impulse, otherwise the euro-dollar will continue under downward pressure.

The sentiment of the market for today January 22, shows that the EUR / USD pair is being sold by 58% of operators, they maintain positions to the downside, this is a sign that in the short term, the euro / usd could fall to the levels ed support at about 1.2050, for further bullish momentum.

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Support And Resistance Levels For January 22-25, 2021

Resistance (1) 1.2189

Resistance (2) 1.2217

Resistance (3) 1.2261

Support (1) 1.2123

Support (2) 1.2071

Support (3) 1.2025

Trading tip for EUR/USD for January 22-25, 2021

Sell below 1.2185 (EMA 200) with take profit at 1.2133 and 1.2085 (3/8), stop loss above 1.2215.

Sell below 1.2136 (SMA 21) with take profit at 1.2085 (3/8 of murray), stop loss above 1.2185.

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

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22.01.2021
01:27 PM


BTC analysis for January 22,.2021 - IDownside target reached at $30.100 and potential for reversion to the mean towards $33.000

Further Development

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Analyzing the current trading chart of BTC, I found that BTC reached and rejected of my downside target from yesterday at the price of $30,200.

Key Levels:

Resistance: $33,100

Support levels:$30,200

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

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22.01.2021
01:21 PM


Analysis of Gold for January 22,.2021 - Strong downside rotation today and potetnial for test of $1.824

Manufacturing PMI 54.7 vs 54.4 expected

  • Composite PMI 47.5 vs 47.6 expected

Another divergence between manufacturing and services which makes sense as the social (services sector) is more vulnerable to COVID-19 transmission. EURUSD unfazed on this and the coming vaccine will mean all this will be looked through in the big picture.

Further Development

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Analyzing the current trading chart of Gold, I found that there was a strong downside rotation due to overbought condition but that support is near the active price.

1-Day relative strength performance Finviz

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Based on the graph above I found that on the top of the list we got VIX and Feeder Cattle today and on the bottom Wheat and Crude Oil.

Key Levels:

Resistance: $1,857

Support levels:$1,832-$1,823.

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

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22.01.2021
01:18 PM


EUR/USD: plan for the US session on January 22 (analysis of morning trades)

To open long positions on EURUSD, you need to:

In my morning forecast, I paid attention to the level of 1.2178 and recommended to act based on it. Let's look at the 5-minute chart and talk about what happened. We see how the bulls make an unsuccessful attempt to break through this area, after which a false breakout is formed and a return to the level of 1.2178. A test of this level from the bottom up forms a convenient entry point into short positions, which I paid attention to in my forecast. Weak PMI activity data put pressure on the euro in the first half of the day.

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The entire focus of buyers in the US session will be shifted today to a new resistance level of 1.2187, which was formed in the first half of the day. A break in this range with a top-down test will form a good signal to enter long positions to reach a maximum of 1.2220, where I recommend taking the profit. The longer-term goal of euro buyers remains a maximum of 1.2260, but such a breakthrough today will be possible only after very weak data on the PMI indices of the United States. If the bulls in the second half of the day again can not do anything at the level of 1.2187, then there is a risk of a downward correction to the support area of 1.2138, where only the formation of a false breakdown will be a signal to open long positions in the continuation of the trend. There are also moving averages that play on the side of euro buyers. If there is also no noticeable activity on the part of buyers in the area of 1.2138, it is best to wait for a downward correction to the more powerful area of 1.2098, where the lower border of the new ascending channel passes. From it, you can open long positions immediately for a rebound in the expectation of an upward movement of 20-25 points within the day.

To open short positions on EURUSD, you need to:

As long as trading is below the range of 1.2187, the pressure on the euro will continue. An important task for the bulls is to maintain control over this level, and in case of growth, the next formation of a false breakout will become an additional entry point into short positions with the aim of a downward correction at the end of the week. No less important task will be the support of 1.2138, at the first test of which the profit-taking on short positions will be noticeable. A break and test of the level of 1.2138 from the bottom up, as well as a break of the moving averages that pass in this range, forms an excellent signal to open short positions with the aim of a larger downward correction to the support area of 1.2098, for which an active confrontation will again unfold. In the scenario of EUR/USD growth in the second half of the day above the resistance of 1.2187, and this will happen only on weak data on the US economy, it is better not to rush with sales. I recommend waiting for the update of the area of 1.2220 and opening short positions, provided that a false breakout is formed. It is fashionable to sell EUR/USD immediately for a rebound only from the maximum of 1.2260, based on a downward correction of 20-25 points within the day.

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Let me remind you that the COT report (Commitment of Traders) for January 12 recorded a sharp increase in long positions and a reduction in short ones. Buyers of risky assets continue to believe in a bullish trend, especially after such a large decline in the euro earlier this year, which allows new major players to enter the market. In Europe, vaccination against the first strain of coronavirus continues, which leads to the appearance of new euro buyers on the market. The likely approval of another $ 1.9 trillion aid plan for the US economy is likely to further dilute the US dollar's position. The risk of extending quarantine measures in February this year, both in Germany and in several other European countries, is a deterrent to the growth of the euro. Thus, long non-commercial positions rose from 224,832 to 228,757, while short non-commercial positions fell from 81,841 to 72,867. Due to the sharp drop in short positions, the total non-commercial net position rose to 155,890 from 143,902 a week earlier.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 daily moving averages, which indicates the probability of growth in the short term.

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

Bollinger Bands

A break of the lower limit of the indicator in the area of 1.2160 will increase the pressure on the euro.

Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
  • Non-profit speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
  • Long non-commercial positions represent the total long open position of non-commercial traders.
  • Short non-commercial positions represent the total short open position of non-commercial traders.
  • Total non-commercial net position is the difference between the short and long positions of non-commercial traders.
The material has been provided by InstaForex Company - www.instaforex.com

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22.01.2021
01:18 PM


GBP/USD: plan for the US session on January 22 (analysis of morning trades)

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

The breakout of the support level of 1.3704, which occurred in the first half of the day, led to the formation of pressure on the British pound, and weak data on retail sales in the UK only increased the pressure on the pair. In the first half of the day, there was only one signal to buy the pound, as, after the breakout of the level of 1.3704, the reverse test did not take place, as a result of which I was forced to miss this entry point. As for the purchase, it did not bring the expected result, although the signal was quite clear. On the 5-minute chart, I highlighted the area where after forming a false breakout at the level of 1.3669, there was a reverse test from the top down of this level, which formed the entry point to long positions. It was not possible to wait for its implementation, as the trade curled around the level of 1.3669.

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Given the nature of the market, the technical picture has changed slightly. The bulls need to defend the support of 1.3656, and only the formation of a false breakout on it will be a signal to open long positions in the expectation of an upward correction of the pair in the second half of the day. This may happen just after the release of fundamental data on the US economy. In this case, the bulls can expect the pound to recover to the resistance area of 1.3695, above which it will be difficult to break through, as there are moving averages that limit the upward potential. In the event of a further decline in the pound in the second half of the day, it is better not to rush to buy but to wait for the support update at 1.3624, from where you can open long positions immediately for a rebound to move up by 20-25 points within the day.

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

The bears have taken control of the market after disappointing UK retail sales data. However, total control will occur only if the sellers of the pound achieve a breakdown and consolidation below the support of 1.3656, the test of which from the bottom up forms an excellent signal to sell the pound with the main goal of reducing to the area of 1.3624, where I recommend fixing the profits. A further target will be the minimum of 1.3685, where a lot of buyers will be concentrated. In the scenario of an upward correction of GBP/USD in the second half of the day, do not rush to sell. The best option is to form a false breakout at the level of 1.3695, where the moving averages that play on the sellers' side also pass. If there is no activity at this level, I recommend selling the pound immediately for a rebound from the high of 1.3743, based on a downward correction of 25-30 points within the day.

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Let me remind you that in the COT reports (Commitment of Traders) for January 12, the growth of long and short positions was recorded, but the first ones turned out to be more, which led to an increase in the delta. Long non-profit positions rose from the level of 35,526 to the level of 47,935. At the same time, the short non-profit increased from the level of 31,861 to the level of 34,993. It can be seen that there were much fewer sellers than there were new buyers. As a result, the non-profit net position increased to 12,942 from 3,665 a week earlier. All this suggests that traders continue to bet on the strengthening of the pound even in the face of a new strain of COVID-19, for which there is no vaccine yet. The demand for the pound is limited by quarantine measures in the UK, which will be lifted sooner or later after the situation with infections has stabilized. The recent failure of the Bank of England from the introduction of negative interest rates and the pound earlier this year – all of it brought many large and medium customers relying on the continuation of the bull market this spring.

Signals of indicators:

Moving averages

Trading is below 30 and 50 daily averages, which indicates a further downward correction of the pound.

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

Bollinger Bands

In the case of an upward correction, the average border of the indicator in the area of 1.3695 will act as a resistance.

Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
  • Non-profit speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
  • Long non-commercial positions represent the total long open position of non-commercial traders.
  • Short non-commercial positions represent the total short open position of non-commercial traders.
  • Total non-commercial net position is the difference between the short and long positions of non-commercial traders.
The material has been provided by InstaForex Company - www.instaforex.com

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22.01.2021
01:11 PM


Bitcoin slumps below $ 30,000 yesterday

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Bitcoin dropped sharply yesterday, trading below $ 30,000 for the first time since January 4. But today, it climbed up a bit, reaching a price of $ 31,421.

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According to CoinDesk, the cryptocurrency fell at its lowest level yesterday, after rising a bit rapidly in early January. In particular, it dropped to $ 28 800 for 1 virtual coin.

Fortunately, today, price has slightly adjusted as compared to yesterday's indicators, trading near $ 31,721 in CoinMarketCap, which is 7.80% lower than its previous value. Meanwhile, in Binance, it traded at $ 31,530, which is 9.2% lower than its earlier price.

Most likely, this drop is directly related to the active profit taking of large investors. For example, major US indices such as DJIA, NASDAQ and S&P 500 have shown positive dynamics by the end of yesterday's trading due to the recent inauguration of the new US president. Stock market participants have pinned their hopes that the new administration will implement large-scale measures to stimulate the US economy.

At the same time, a couple of days ago, Janet Yellen, who was nominated by the Joe Biden for the post of Treasury Secretary, spoke about cryptocurrencies, calling them a reason for "special concern". According to Yellen, they are mainly used for illegal financing, so she suggests exploring ways to restrict the use of virtual coins to prevent money laundering.

As a result, Michael van de Poppe of the Amsterdam Stock Exchange said this decline is only the beginning. In his opinion, in the coming weeks, bitcoin will continue to declining, collapsing by another 30-40%, that is, up to $ 24,000- $ 26,000.

Scott Minerd, chief investment officer at Guggenheim, also believes Bitcoin will drop in value, in particular, to $ 20,000. He also does not see any renewed all-time highs in the coming year.

As for the head of CryptoQuant, Ki Yang Joo, he is confident that Bitcoin will further drop in value, explaining that large investors are starting to transfer their cryptocurrencies to exchanges, most likely for the purpose of selling. If buyers do not focus on this, the market will tend to decline in the short term. At the same time, Ki Yang Joo expressed confidence that this year. Bitcoin could still soar to $ 100,000.

Prior to this sharp decline, analyst Willie Wu said $ 100,000 was a very low value for Bitcoin, stating that the cryptocurrency will definitely cost at least $ 200,000 this year.

In any case, the recent drop in bitcoin has cost the entire cryptocurrency market more than $ 100 billion.

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

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22.01.2021
12:32 PM


EUR/USD analysis for January 22 2021 - Potential for the downside cycle and completion fo the ABC upside correction. Downside

  • Prior 57.5
  • Composite 40.6 vs 45.5 expected
  • Prior 50.4

Ouch that's a bad miss. Fastest rate of contraction since May 2020. Understandably, GBPUSD not liking it and GBPUSD falling back through S1 daily pivot at 1.36663. DXY finding buyers helped by the falling GBP. Increased restrictions in the UK being felt strongly in the services sector.

Further Development

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Analyzing the current trading chart of EUR/USD, I found that there is potential lfor the downside movement.

1-Day relative strength performance Finviz

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Based on the graph above I found that on the top of the list we got VIX and Feeder Cattle today and on the bottom Wheat and Crude Oil.

Key Levels:

Resistance: 1,2180

Support levels: 1,2144 and 1,2080.

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

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22.01.2021
11:24 AM


Twitter stock shows worst dynamics in S&P 500

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Twitter shares are showing the worst dynamics relative to other components of the broad S&P 500 index. Here, the company's securities have plummeted by a significant 10% or more since the beginning of 2021, while the S&P 500 index has increased by 2.5%. It can be noted that the current Twitter shares are trading at $47.13, which is just 4% higher than the initial trading price on the day of the IPO, namely in November 2013.

Apparently, investors did not like how the account of the 45th US President Donald Trump was blocked by Twitter's management as a response to the Capitol attack on January 6. Such drastic actions on the part of the company's management are absolutely likely to worsen its short-term prospects. Moreover, there is not enough time left to show really good financial results in the current year.

Experts of the leading analytical company Argus Research predict that such solutions of Twitter will deprive the social network of several million active users. In turn, Congress is likely to continue the fight against monopolies in the light of these developments.

In fact, Twitter is not the only social network that blocked Donald Trump's account. However, it was its shares that sharply declined in this context. In comparison, Facebook shares only plummeted by just 2% in January, while Snap increased by 4%, and Pinterest by 10%.

The blocking of the account of the former US president was not something exclusive to Twitter's CEO. Before this issue emerged, the company began to cleanse its social network from various "fake and suspicious" users. This operation began back in October, when Twitter executives suggested that Russia was using the social network to interfere in the 2016 presidential election. However, the scale of blocking different accounts has recently turned out to be truly frightening, which is why the market could not help but react to it. The Washington Post said that around 70 million accounts were blocked over the past two months, which is almost 20% of the total number of Twitter users. Thus, the decision to block Trump only added negativity and increased outrage. As a result, the company's shares sharply fell.

Nevertheless, it is noteworthy that the value of Twitter shares gained 6.8% last week, due to Wells Fargo's analyst Peter Stabler, who highly praised the social network's management for improving monetization efficiency and for successfully integrating video content. Unfortunately, this market optimism associated with the positive review, subsided. The reason lies in the current sweep of the social network, which showed an incredibly large number of accounts that do not represent commercial value. Given this, it becomes clear that the nearest prospects for monetization are not so rosy.

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

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22.01.2021
11:22 AM


Trading plan for EURUSD for January 21, 2021

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Technical outlook:

EURUSD might have now carved the first corrective wave around 1.2189 highs today. The rally might be followed by a corrective drop towards 1.2100 levels, the second wave of the correction before resuming rally towards 1.2250/60 levels respectively. The single currency is seen to be trading around 1.2175 levels at this point in writing and might be preparing to correct lower towards 1.2100 at least, in the short term. Please note that the corrective phase might extend a bit longer in time and price (1.2250/1.2300 range), before resuming lower towards 1.1600 levels. We can expect the above target to be hit in the next several weeks. Also looking at the larger wave structure, EURUSD rally looks complete from 1.0636 lows in March 2020 through 1.2350 highs on January 06, 2021. If the above holds well, bears might be preparing to produce a meaningful corrective drop towards 1.2100/2200 which is fibonacci 0.618 retracement of the entire rally. Long term potential also remains for a drop below 1.0636 lows. At the moment we focus on a push through 1.1600 support in the next few weeks.

Trading plan:

Remain short, stop @ 1.2450, target @ 1.1600

Good luck!

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

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22.01.2021
11:07 AM


Challenges in oil market become more apparent

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On Friday, the crude oil price slipped into the negative zone. It decreased due to the mounting doubts that the demand for oil will rise in the near future. Investors are worried about demand largely because of extremely negative statistics on the coronavirus spread around the world. The epidemiological situation is getting significantly worse every day, which means that new restrictive measures are likely to come in force. If so, the consumption of hydrocarbons will be reduced considerably.

Market participants are still looking forward to a new official report on changes in the level of oil reserves in the United States. Meanwhile, preliminary forecasts are rather grim. The US Department of Energy will unveil its report only this afternoon. This is due to the fact that Monday was a holiday, and on Wednesday, Joe Biden's inauguration took place.

According to analysts surveyed by S&P Global Platts, a drop in inventories by about 2.5 million barrels is likely to occur. At the same time, the level of gasoline stocks will increase by 2.7 million barrels. Distillates will rise by an average of 600,000 barrels.

Other experts at the American Petroleum Institute assume that the total level of crude oil reserves may rise by an average of 2.56 million barrels last week. We will find out who is right only tonight. So, for now, the oil price halts its decline.

Moreover, investors are trying to figure out how the political situation in the United States may change the balance of power in the oil market. The policy that Joe Biden has already announced will support oil prices, but no one can predict its consequences yet.

From what we have already learned, Biden is going to conduct a fairly strict policy in the environmental protection sector, which means that the regulation of federal routes of petroleum products will become even more stringent. Thus, the producer costs are likely to rise, it will also have an impact on oil production, which in such conditions will be limited. All these factors will inevitably affect the oil price. This is what most analysts urge market participants to be ready for.

On the trading floor in London, this morning, Brent futures contracts for March fell by 1.3% or $0.73. It is valued at $55.37 per barrel. Yesterday Brent crude gained momentum although at the end of the session its growth was limited and amounted to only 0.1% or $0.02 dollars. The final price totaled $56.1 per barrel.

On the electronic trading platform in New York in the morning, WTI futures contracts for March decreased by 1.37% or $0.73. Their price was $52.4 per barrel. Yesterday, they dropped by 0.3%, or $ 0.18. The final price amounted to $53.13 per barrel.

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

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22.01.2021
11:06 AM


Silver Continuation Pattern!

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Silver (XAG/USD) could drop deeper after the current sideways movement. Technically, the breakdown through the red uptrend line signaled a downside movement. The price has dropped as much as 24.57 level and now it has developed a minor ascending channel.

The up-channel could represent a downside continuation pattern if the rate drops below the minor red uptrend line, channel's downside line, and under 24.57 former low. XAG/USD is trapped between 24.57 and 25.92 levels, a new lower low, drop under 24.57, suggests selling while jumping above 26.000 represents a buying opportunity.

Trading Conclusion!

Sell if the price falls under the 24.50 level. This scenario could lead the rate towards the 23.00 level.

Buying could be suggested by an increase above 26.00 psychological level.

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

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22.01.2021
11:01 AM


European stocks decline in anticipation of PMI data

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The pan-European STOXX 600 index by 11:27 GMT +2 fell 0.84%, the German DAX index - 0.76%, the French CAC index dropped 0.92%.

Shares of Lufthansa and Air France are down 1.9% and 4.4%, respectively. Tour operator TUI shares fall by 10%. The reason for this was that the European Union proposed to designate the regions where the outbreak of coronavirus is observed as dark red zones. Those people who want to leave such areas will have to pass a COVID-19 test in advance and leave the quarantine.

The British FTSE 100 Index fell 0.6% as retail sales rebound in the country in December was weaker than forecasted, and the volume of government debt jumped to its highest since 1962.

Purchasing Managers' Indexes (PMI) for the Eurozone and the UK are due Friday. These indices are calculated by IHS Markit.

German engineering firm Siemens AG is up 5.1%. The reason for this was the financial statements for the first financial quarter, which turned out to be higher than forecasted.

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

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22.01.2021
10:55 AM


Lockdown in UK is not expected to end soon

The third restrictive measures against the UK coronavirus may last until the summer, as the government sees no other way out. They say that it is too early to think about easing the restrictions.

Prime Minister Boris Johnson and Interior Minister Priti Patel are no longer considering getting citizens back to normal this spring, even if the country's mass vaccination program is ongoing.

Alternatively, the government has focused on intensifying compliance with the current restrictions amid concerns that too many people are still disregarding the rules, making it difficult to control the spread of the virus.

Ministers are considering paying £ 500 each to anyone who tests positive for COVID-19 to persuade more people with symptoms to come forward for testing. Such an extraordinary proposal could cost the treasury about 2 billion pounds a month. All this is done so that citizens can overcome the fear of losing their jobs if they are forced to self-isolate themselves with a positive test.

At the same time, the Home Secretary announced that new police fines of £ 800 will be imposed on people caught attending house parties. Ms. Patel said that this fine for going to parties will double for each further violation to a maximum fine of £ 6,400. In this case, party organizers can be fined 10 thousand pounds.

Earlier, Journalists asked Boris Johnson if the restrictive measures could last until summer, to which he replied that he did not exclude this possibility. He also warned about the higher risk of a new strain of coronavirus than the previous one.

Due to the restrictions, most shops, restaurants and schools are closed. Citizens were also told to stay at home unless very necessary. These restrictions threaten to push the economy into another recession after it experienced its worst recession in three centuries.

The latest data in the United Kingdom showed that 1,290 people died from COVID-19 in a day, accounting for 95,829 people, which is the highest death rate in Europe.

Following the above material, the coronavirus pandemic will continue to put pressure on the UK economy, which might have a negative impact on investments, business and the national currency.

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What happened on the trading chart?

The pound sterling managed to update the local high of the mid-term upward trend yesterday, after consecutive price rebounds from the three-week high. The speculative mood covers all other problems associated with the British currency, such as economic consequences of COVID-19 and Brexit, as well as the massive overbought status.

It is worth noting that speculators cannot eternally block the attention of pressing problems, as everything can end with another collapse of the pound.

At this time, the quote is not just at the high. It also follows the peak of the previous medium-term trend from 2018, or else, speculators will be scared, which will lead to a sharp decline in long positions in the market.

To put it simply, the range of 1.3750/1.4000/1.4350, which reflects the slowdown of the previous trend, could be decisive in the market.

What is currently happening in the market?

The quote moves below the 1.3700 coordinate, which provides confidence to sellers and increases the chances of repeating the pattern associated with the level. In this case, we are talking about a price rebound and a rise in the volume of short positions.

If the natural basis coincides, a price decline will be likely to the value of 1.3610-1.3550.

An alternative scenario of the market development will be considered after the prices holds above 1.3750 in the daily TF ,which will lead to the final movement in the range from 2018.

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Key levels

Resistance zones: 1.3750 **; 1.3850; 1.4000 ***; 1.4350 **.

Support zones: 1.3610 *; 1.3300 **; 1.3000 ***; 1.2840/1.2860/1.2885; 1.2770 **; 1.2620; 1.2500; 1.2350 **; 1.2250; 1.2150 **; 1.2000 *** (1.1957).

* Periodic level

** Range level

*** Psychological level

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22.01.2021
10:45 AM


USD/CAD Shows Oversold Signs Again

USD/CAD rallies in the short term after failing to close below 1.2600 psychological level in its last attempt. It's traded at 1.2694 and is almost to hit strong static and dynamic resistance levels.

The Loonie loses ground versus the greenback after yesterday's US and Canadian data. The USD was boosted by better than expected Unemployment Claims, Building Permits, Housing Starts, and Philly Fed Manufacturing Index figures.

You should be careful today as the Canadian and the US data could bring more volatility and high action. Canadian Retail Sales could increase by 0.0% after 0.4% in the former reading period, while the Core Retail Sales indicator is expected to grow by 0.3% in November.

Moreover, the US is to release its Flash Manufacturing PMI and Flash Services PMI data later today. Manufacturing and services sectors could slow down their expansion according to specialists. Fundamentally, worse Canadian data and some good US figures could attract more buyers on USD/CAD, while better than expected Canadian figures and poor US data could send the price down.

USD/CAD Turned To The Upside!

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USD/CAD has escaped from a major Falling Wedge and now it has developed a minor Falling Wedge reversal pattern. An upside breakout from this pattern and a new higher high could activate a bullish reversal.

It has found support around the S1 (1.2629) failing to retest the Falling Wedge's downside line and now it approaches the Pivot Point (1.2731) and the upside line, the red downtrend line.

The selling pressure remains high as long USD/CAD is trapped with the minor Falling Wedge's body. Only a valid upside breakout above the red downtrend line and passing above 1.2799 high suggests buying again.

Forecast!

Buy a valid breakout above the downtrend line, somewhere above the 1.2750 level.

Selling at these levels is risky as USD/CAD could still try to develop a swing higher in the end.

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

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