Tag: Analisis

Overview of the GBP/USD pair. July 15. A “winter wave” of “coronavirus” in the UK could claim the lives of another 120,000

4-hour timeframe

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Technical details:

Higher linear regression channel: direction – upward.

Lower linear regression channel: direction – upward.

Moving average (20; smoothed) – sideways.

CCI: -121.2859

The British pound, unlike the European currency, was trading lower on Tuesday, July 14. On the one hand, the reason for the uncorrelation of the two main currency pairs could be the macroeconomic statistics from the UK, which turned out to be quite weak. On the other hand, no less weak statistics from the Eurozone were ignored by market participants, so such a conclusion can not be considered unambiguous. It should also be noted that the nature of the movement of both pairs in recent months has been completely different. The euro currency has spent the last month in an absolutely indistinct sideways or weak upward movement. While the pound was trading very actively and did not standstill. At the same time, it is the position of the British pound in the foreign exchange market that now looks weakest due to the uncertainty associated with the future relationship between the European Union and Britain, as well as an extremely strong fall in the British economy as a result of the pandemic and Brexit. However, the British currency regularly shows growth, which we correlate with the epidemiological emergency in the United States, as well as the political and economic crisis in this country. As we wrote earlier, the Fed lowered key rates “almost to zero”, so the strength of the monetary policies of these two states equalized. The US dollar no longer has the unquestionable advantage that it previously had.

Macroeconomic statistics from the UK disappointed traders. GDP in May was recorded at +1.8%, although traders expected to see at least +5% after the failed -20.4% a month earlier. Industrial production, as in the European Union, decreased by 20% in annual terms, which was more or less ready for market participants. Such a package of statistics could not cause the British pound to strengthen. Therefore, the GDP report may have created additional pressure on the British pound. Also, negative news continues to come from the fields of Brexit. According to the survey, only a quarter of all UK companies are fully prepared to complete the transition period and switch to the EU trade regime under WTO rules.

Meanwhile, no less negative forecasts are given by representatives of the UK health sector. According to them, in 2020-2021, the country will face the so-called “winter wave” of the epidemic, which will be much worse than the first “wave”, which claimed the lives of about 45,000 people, which is the highest figure in all of Europe. A report from the British Academy of Medical Sciences says that people spend much more time indoors in winter, which contributes to the faster and easier spread of infection. Thus, between September and June, about 120,000 Britons may die from COVID. The author of the report, Professor Stephen Holgate, believes that if the necessary measures are taken now, it will be possible to avoid such a scenario. “This is not a prediction, but it is a possibility. The model suggests that there may be more fatalities with a new wave of COVID-19 this winter, but the risk of this can be reduced if immediate action is taken,” said Professor Holgate. The Academy of Medical Sciences believes that under the current circumstances, it is necessary to more actively vaccinate the population against influenza, more widely test the population for “coronavirus”, constantly remind the population of the importance of observing safety measures, improve the definition of epidemic foci and more effectively localize them.

At the same time, the US recorded a record budget deficit. In June, it amounted to $ 864 billion, which is much higher than the average annual value. The deficit came from the fact that the White House and Congress allocated trillions of dollars to support the economy. But tax revenues during the pandemic were greatly reduced, as at least 25 million workers were laid off, which significantly reduced tax revenues to the Treasury. Meanwhile, the total public debt in the United States has already exceeded $ 26 trillion. The Budget Office forecasts that the budget deficit will be at least $ 3.7 billion in 2020.

Meanwhile, the American president Donald Trump does not allow you to forget about yourself for a day. A few months ago, we reported that YouGov conducted quite an interesting study, which resulted in the figure of 14,000. That’s how many times, according to YouGov calculations, Donald Trump was misled in his speeches, comments, and social media posts. A similar study was conducted by the Washington Post, which estimated that the US President has already made more than 20 thousand erroneous or deceptive statements. That is, on average, Donald Trump makes thirteen false statements a day. However, the Washington Post’s research is much more in-depth. For example, the publication reports that most often Trump made false statements on the topics of his impeachment, the “coronavirus” pandemic, as well as the racist scandal caused by the death of George Floyd. The publication also reports that most often the President made statements that do not correspond to reality when he spoke about the US economy, that it achieved the best state in the history of the country. Also, Trump lied when he said that he had the largest tax cut in the history of the country. Such statistics again do not paint Trump in the run-up to the presidential election.

In the UK, the consumer price index for June is scheduled to be published on the third trading day of the week. According to experts’ forecasts, inflation will slow even more and amounted to 0.4% in June. In monthly terms, the price increase will be 0%. It is possible that in reality, we will see even weaker figures, but the main question now is how market participants look at the topics of the deep economic crisis in the UK, complete uncertainty in the future, and the topic of the epidemiological crisis in the US. Judging by the fact that the quotes of the pound/dollar pair were fixed below the moving average line, the trend changed to a downward one, and traders began to pay more attention to the problems of the Foggy Albion. Thus, in the near future, we still expect a further decline in the pound. However, the reverse fixing of the price above the moving average can bring buyers back into the game. Both linear regression channels are directed upwards.

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The average volatility of the GBP/USD pair continues to remain stable and is currently 88 points per day. For the pound/dollar pair, this value is “average”. On Wednesday, July 15, thus, we expect movement within the channel, limited by the levels of 1.2458 and 1.2634. Turning the Heiken Ashi indicator upward will indicate a possible resumption of the upward movement.

Nearest support levels:

S1 – 1.2512

S2 – 1.2451

S3 – 1.2390

Nearest resistance levels:

R1 – 1.2573

R2 – 1.2634

R3 – 1.2695

Trading recommendations:

The GBP/USD pair has started a new round of downward correction on the 4-hour timeframe, which may turn into a downward trend. Thus, today it is recommended to open sell orders with the goals of 1.2451 and 1.2390 if the Heiken Ashi indicator does not turn up in the next few hours. It is recommended to resume buying the pair after fixing quotes above the moving average with the first goals of 1.2634 and 1.2695.

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

Overview of the EUR/USD pair. July 15. The “coronavirus” mutates and becomes more contagious. The United States is waiting

4-hour timeframe

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Technical details:

Higher linear regression channel: direction – upward.

Lower linear regression channel: direction – upward.

Moving average (20; smoothed) – upward.

CCI: 180.3218

The second trading day of the week again remained behind the European currency, which slowly but surely continues to creep up. The upward movement has not stopped since June 26, that is, for 13 working days. During this period, the pair managed to cover a distance of approximately 150 points. Judge for yourself whether this can be called an “upward trend”. Moreover, during the past day, the pair again traded near the Murray level of “5/8”-1.1353, which is also the upper limit of the side channel 1.1200-1.1350, in which the pair has been trading for more than a month. Thus, the current technical picture is quite ambiguous. On the one hand, there is a side channel, above which buyers have not managed to gain a foothold, on the other – a weak upward trend. One thing is for sure – now is not the most favorable time to conduct trading. The movements of the euro/dollar pair are multidirectional alternating segments.

As we expected, the macroeconomic statistics of the last day did not have any impact on the mood of market participants. Yesterday, the consumer price index in Germany for June was published first. This indicator fully coincided with the forecast values, amounting to 0.9% in annual terms and 0.6% in monthly terms. A little later, data from the ZEW Institute was published, which reflects the mood in the business environment of Germany and the European Union. Without going into the figures, we can say that all three indicators were worse than the forecast values. Absolute values of indicators indicate that investors are very skeptical about the current state of the German and EU economies, but still optimistic about the future. But industrial production in the European Union turned out to be much worse than experts’ forecasts. In annual terms, the reduction was 20.9% with a forecast of -20.0%, and in monthly terms – an increase of 12.4% with a forecast of 15.0%. Thus, the conclusions on European statistics are unambiguous – it failed. However, the euro currency was trading higher in the European session. In the afternoon, the United States published a report on inflation for June, which showed 0.6% in annual and monthly terms for the main indicator and +1.2% y/y and +0.2% m/m for the indicator excluding food and energy. In general, these values almost completely coincided with the forecast. They are neither optimistic nor pessimistic. So the general conclusion is this. In the European session, traders had reason to sell the euro but did not do so. There was no reason to change the mood in the American session. In general, the entire package of macroeconomic information was ignored.

Meanwhile, more and more media are paying attention to the raging “coronavirus” epidemic in the United States. According to the American doctor Chad Krilich, the second “wave” is currently taking place in the United States, but after it, there will be a third. The doctor also said that in the near future we should not expect a vaccine against “coronavirus”, as “this is a very long and time-consuming process”. Meanwhile, Hong Kong scientists have concluded that the “coronavirus” has mutated and is now even more contagious than before. Previously, a person with the COVID-2019 virus could potentially infect three other people, but now this figure has increased to four. This was stated by the Dean of the medical school of the University of Hong Kong, Professor Gabriel Leung. Earlier, the same was reported by the chief epidemiologist of the United States Anthony Fauci. Dr. Fauci, who remains at this time almost the main actor in America, continues to conflict with President Donald Trump based on the epidemic. The conflict is very simple. The doctor makes statements based on his knowledge, experience, and research, which Donald Trump does not like, who makes his statements based on nothing. The leader of the American nation does not like that Fauci’s attitude is too pessimistic and he constantly predicts deterioration of the situation. Fauci’s latest statement, made on July 14, states that “the US authorities have not been able to impose a total quarantine, which is why we are currently seeing a huge increase in new cases”. According to the epidemiologist, the United States managed to achieve a significant reduction in the number of diseases, to about 20,000 per day, which is not so terrible for a multi-million country. But at this point, it was necessary to maintain the “lockdown”, instead, the government began to remove restrictive measures and received a second “wave” of the pandemic, according to Fauci. Also, Fauci said that now the country does not need to introduce a full range of restrictions, it is enough to “roll back a little” and then prudently take steps towards lifting the restrictions.

Donald Trump himself continues to bend his line on the issue of the gigantic scale of the epidemic in the United States. The President still believes that the high incidence of diseases in his country is due to the large number of tests carried out, and the death rate from the “coronavirus” is falling. “We check more than anyone in the world. We have one of the lowest death rates in the world. We are doing a great job. We have the best and most extensive testing program in the world. If you were testing China, Russia, or any of the major countries like we are testing, you would see numbers that would surprise you,” Trump said during a speech at the White House.

On the third trading day of the week in the US, only a more or less important report is planned – on industrial production for June. We believe that in the current conditions, it is the production indicator that is one of the most important, but yesterday’s report on European production shows that most traders do not think so. Therefore, we do not expect a serious reaction from market participants to this report. There are no more planned events in the EU or the US today unless you count the evening economic review of the Federal Reserve “Beige Book”, which rarely causes any reaction from the market.

Thus, from our point of view, technical factors continue to be in the first place, which, unfortunately, can not lead the pair out of an inarticulate upward movement, which is extremely difficult to reject. However, the upward movement continues, and cautious and small purchases of the euro currency are allowed as long as the EUR/USD pair is located above the moving average line. Moreover, both linear regression channels are also directed upwards.

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The volatility of the euro/dollar currency pair as of July 15 is 84 points and is characterized as “average”. We expect the pair to move today between the levels of 1.1336 and 1.1504. A reversal of the Heiken Ashi indicator downwards will signal a turn of the downward correction to the moving average.

Nearest support levels:

S1 – 1.1353

S2 – 1.1230

S3 – 1.1108

Nearest resistance levels:

R1 – 1.1475

R2 – 1.1597

R3 – 1.1719

Trading recommendations:

The EUR/USD pair seems to have resumed the formation of an upward trend. Thus, it is now recommended to trade for an increase with the goals of 1.1475 and 1.1504 before the Heiken Ashi indicator turns down. Sell orders are recommended to be considered no earlier than fixing the pair below the moving average line with the first goal of 1.1230.

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

EURUSD breaks important long-term trend line

EURUSD is trading above 1.14. Price is now breaking above a long-term downward sloping trend line resistance that connects the 2018 highs and the recent 2020 highs at 1.1450 area. EURUSD has been mostly moving sideways the last few months but now the c…

EURUSD breaks important long-term trend line

EURUSD is trading above 1.14. Price is now breaking above a long-term downward sloping trend line resistance that connects the 2018 highs and the recent 2020 highs at 1.1450 area. EURUSD has been mostly moving sideways the last few months but now the c…