Tag: Analysis

Trading recommendations for the GBP/USD pair on September 30

The GBP / USD pair is currently in the stage of a correction, but yesterday, there was a stagnation at price levels 1.2822 / 1.2900, which could well serve as a signal of the end of the process. In addition, the bearish sentiment is prevailing all throughout the market, and it could result in a strong downward move, perhaps even below the current local lows.

Thus, if we analyze the M15 chart and look closely at the trades set yesterday, we will see that speculative positions surged in the market at 15: 15-17: 00, particularly at price levels 1.2822 / 1.2900.

The lowest activity was also recorded in terms of daily dynamics, so as a result, volatility was only 78 points, which is 37% below the average level. This very phenomenon indicates an upcoming surge in activity, as well as the completion of the current correction.

This is because as discussed in the previous review , market participants used the levels 1.2825 / 1.2885 / 1.2910 as a temporary platform for a slowdown, setting off such a result.

Meanwhile, if we look at the daily chart, we will see the consistent downward price movement with a scale of more than 800 points. Two corrections from this movement were recorded this September.

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With regards to news, a better-than-expected statistics were published for the UK lending market yesterday, one of which was the strong improvement on approved mortgage loans. According to the latest report, it number to 84.7 thousand, while the volume of mortgage lending increased from £ 2.90 billion to £ 3.10 billion.

At the same time, the House of Commons have passed the third reading of the controversial internal market bill, which, if approved, would allow UK to violate the terms of the Brexit agreement. The next step is a formal consideration of the House of Lords, however, if this really happens, negotiations as well as relationship between the UK and the EU could break down.

Any update in this direction would lead to more speculative positions in the GBP / USD pair.

Back to statistics, the final data for the UK 2nd quarter GDP was released today, but it revealed that economic decline accelerated from -1.7% to -21.5%.

The same data will be published in the afternoon for the US GDP, but this time, it is expected to show an economic decline of -9.1% in annual terms, which coincides with the preliminary estimate.

However, what investors will pay particular attention to is the upcoming ADP report on the level of employment in the US private sector, where there is an expected increase of employment by 610,000. If this happens, the US dollar will rise in the markets.

US 13:15 – ADP Employment change report (September)

US 13:30 – GDP (Q2)

Further development

As we can see in the trading chart, the quote has broken out of the earlier price range (1.2822 / 1.2900) during the start of the European session, as a result of which the pound traded at a price of 1.2820. If the quote continues to consolidate below this level, short positions will rise again, which will then lead to a further decline towards 1.2770-1.2720.

But if the quote returns to the previous levels, the pound will move towards 1.2900, where activity will be high again in the market.

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Indicator analysis

Looking at the different time frames (TF), we can see that the indicators on minute period signal SELL due to a local breakout from the earlier price range. Meanwhile, the hourly period signals BUY due to the current bullish correction in the GBP / USD pair. The daily period, which as before signals SELL, is still under the depth of the September decline.

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Weekly volatility / Volatility measurement: Month; Quarter; Year

Volatility is measured relative to the average daily fluctuations, which are calculated every Month / Quarter / Year.

(The dynamics for today is calculated, all while taking into account the time this article is published)

Volatility is at 67 points, which is 45% below the average value.

The current accumulation has already managed to concentrate a sufficient amount of trading volumes, so as a result, an acceleration is to follow soon.

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Key levels

Resistance zones: 1.2885 *; 1.3000 ***; 1.3200; 1.3300 **; 1.3600; 1.3850; 1.4000 ***; 1.4350 **.

Support Zones: 1.2770 **; 1.2620; 1.2500; 1.2350 **; 1.2250; 1.2150 **; 1.2000 *** (1.1957); 1.1850; 1.1660; 1.1450 (1.1411).

* Periodic level

** Range level

*** Psychological level

Also check trading recommendations for the EUR/USD pair here, or brief trading recommendations for the EUR/USD and GBP/USD pairs here.

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

Trading plan for US Dollar Index for September 30, 2020

Technical outlook:GBPUSD had managed to push through 1 2930 levels early this week, after dropping through 1.2675 lows last week. The Cable currency pair is seen to be trading around 1.2833 levels at this point in writing and could continue to rally to…

Trading plan for EURUSD for September 30, 2020

Technical outlook:EURUSD had managed to push through 1.1720 levels yesterday and hit close to 1.1750 before pulling back. The single currency pair is seen to be trading around 1.1705/08 levels at this moment in time and might continue dropping lower fr…

Analysis of EUR/USD on September 30. First debate between Biden and Trump unexpectedly ended with Democrat’s victory

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Globally, the wave pattern of EUR/USD pair still looks quite convincing. According to it, the formation of the expected wave 4 as part of the upward trend section could already be completed. But the upward section of the trend can still take a longer, 5-wave form. This scenario requires only a strong news background for the EUR and a weak one for the USD..

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In a smaller time frame, the wave pattern shows that there are three waves of a smaller order inside the supposed wave 4, while there are three more waves of an even smaller order inside the supposed wave b in 4. Thus, the entire wave 4 may already be completed. If this assumption is true, then the price can continue to rise from the current levels to goals located above the wave peaks 3 or C. How much higher will it go depends on the news background for this pair.

Last night, the first round of debate took place between Donald Trump and Joe Biden. Prior to this event, many expected the US President to win, considering his oratory skills. However, as practice has shown, his skills were not very useful. The six issues that both presidential candidates should have addressed were the most pressing ones for America and that is why they were not in favor of Donald Trump. In general, the debate was an hour and a half of mutual insults and accusations. However, the following polls showed that it was Biden who performed better in the debate – only 28% of respondents believe that the current President performed well. Moreover, 65% believe that Biden’s answers were true, and only 29% believe that Trump did not lie in his statements. 69% of respondents also said Biden’s attacks on Trump were fair. As we can see, public opinions are very important, since this is what debates are held for. Biden won the first round. However, there will be two more rounds.

According to the current wave pattern, there is a very high probability of a new decline in dollar quotes. Thus, it is only necessary that the news background does not suddenly take the side of the US currency, which can lead to a problem of wave 4. Today, the US GDP report will be released, but it is unlikely to cause a strong market reaction. The fact is that this is already the third publication of this report in recent months. Thus, the markets simply do not expect other numbers than those already known.

A report from ADP on the change in the number of employees, which has a very optimistic forecast of $ 650 thousand will also be released today. However, we don’t expect that it will be reached and so, the US currency will not receive market support today.

General conclusions and recommendations:

Since it is assumed that the euro/dollar pair has already completed the formation of a global wave 3 or C and wave 4, I recommend buying the pair with goals around the calculated level of 1.2012, which equates to 0.0% Fibonacci.

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