Tag: Forex Daily

Opposite forces at work all the time in the Forex Market

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In the currency market opposite forces are at work all the time. Some companies need to buy USD and sell EUR to pay for goods or services and some companies needs to sell USD to buy EUR to pay for goods or services.

At the same time you have investors buying USD and selling EUR to buy US assets and you have investors selling USD to buy EUR to buy assets within the EU and the list of opposite forces working in the currency market goes on.

If the group of companies, investors and speculators selling USD and buying EUR is larger/stronger, than the opposite group EUR/USD will go up in price, which means you will have to pay more USD for the one EUR. In that case, we speak of EUR/USD being in an uptrend.

The above chart shows EUR/USD being in an uptrend, but within that uptrend, there will be times when the opposite forces will be equal or almost equal and the price of EUR against USD for a time will move sideways until one of the forces gains or regains the upper hand and the trend continues or it changes direction.

Currency pairs tend to move in a channel up or down and in the above chart of EUR/USD we can see that EUR/USD moved higher within the channel from mid-March to September, where EUR/USD top, at lest for now, and started a smaller channel lower. The question of course becomes has the uptrend from mid-March completed or will it continue higher?

This is still an open question. The uptrend from mid-March remains intact and only a break below key-support at 1.1605 will indicate a change in the trend from up to down, but as long as key-support at 1.1605 remains intact, we will need consider the decline from the 1.2014 peak as a temporary pause in the uptrend and more upside likely to come, once this temporary pause is complete.

Remember, that the primary trend – in this case the uptrend – is the most likely to continue rather than being reversed.

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

The market is expecting a shake-up on Wednesday

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The energy and financial sectors determined the mood of market players. All this was compounded by the official statistics on coronavirus – about 1 million deaths. The statement of New York Mayor Bill de Blasio that the number of positive test results for coronavirus is more than 3% for the first time in several months did not bring relief to the market.

This week, financial companies, in particular banks, which lost a significant part of the profit achieved just a day earlier, are also suffering a defeat. In recent months, investors have been concerned about how much the growth of coronavirus infection can affect the revival of the economy. Moreover, this problem is still open. The market is looking forward to the adoption of a bill to stimulate economic growth, however, this long-awaited event remains unfulfilled.

The following events may affect market sentiment on Wednesday: the next IPO of the technology company Palantir, the confrontation between two contenders for the US presidency (Trump and Biden), and the publication of economic data on home sales in the US.

Let’s start with the IPO or the first public sale of shares of a joint-stock company to an unlimited number of people. This time, Palantir Technologies is a public company. Founded in 2003, Palantir is a privately held American company that develops software for data analysis. It focuses on the intelligence agency of the US government, intelligence agencies, investment banks, and hedge funds. Palantir launches through a direct listing on the New York stock exchange. It is worth noting that investors expect the latest technologies to enter the market with great interest. It is noteworthy that the company’s founder, Peter Thiel, is also a co-founder of PayPal Holdings Inc. and one of the first investors in Facebook and Microsoft.

The declarative battle of US presidential candidates can also affect the market. On Tuesday night in Cleveland, Trump and Biden met for their first debate, and according to polls, the winner of the verbal battle was Joe Biden. During an hour and a half of the argument, he gave Donald Trump a large number of offensive characteristics. Two more meetings are expected ahead, during which the audience will form a certain opinion about the problem and largely determine the outcome of the upcoming elections in November. The second meeting of candidates for the post of head of the White House is scheduled for October 15 and will be held in Miami, and the third – on October 22 in Nashville. According to the Financial Times newspaper, which refers to a study by financial consultant deVere Group, the US presidential election concerns investors many times more than the second wave of coronavirus.

However, we will not underestimate the role of other equally important factors that can affect the market on Wednesday. Investors are waiting for the publication of economic data on home sales and expect that in the third reading, the US GDP for the 2nd quarter will remain unchanged, namely at the level of 31.7%. It is worth noting that the press release will present GDP statistics for the first time concerning industries. Investors also expect that the number of pending home sales in the US in August will be able to rise by 3.2% compared to July (then the number of transactions increased by 5.9%). Analysts also forecast that the number of people employed in the US non-agricultural sector will rise from 428 thousand in August up to 650 thousand.

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

Pre-election passions in the US heats up, USD rate rises

The US presidential election is about five weeks away, and the tension is growing every day. According to polls, Democratic candidate Joe Biden’s leadership has eased slightly, while the popularity of his Republican rival, Donald Trump, has recently sl…

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

US stocks fell while Asia went multidirectional

The US stock exchanges crashed on Tuesday. Major stock indexes reduced their positions amid unfavorable news in the surge of COVID-19 infection in New York. According to the official statement released by the city authorities, the number of cases that …

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…