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1 Analytics and trading signals for beginners. How to trade EUR/USD on September 18? Plan for opening and closing trades on Friday
Hourly chart of the EUR/USD pair The EUR/USD currency pair continued to move up last Friday night, which began as a...
Hourly chart of the EUR/USD pair The EUR/USD currency pair continued to move up last Friday night, which began as a correction after quotes fell, triggered by the results of the Federal Reserve meeting and Chairman Jerome Powell's speech on Wednesday. In practice, however, it turned out that this correction in strength is approximately the same as the main downward movement. Yesterday we even tried to build a downward trend line, hoping for the price to rebound from it, which would...

Hourly chart of the EUR/USD pair

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The EUR/USD currency pair continued to move up last Friday night, which began as a correction after quotes fell, triggered by the results of the Federal Reserve meeting and Chairman Jerome Powell's speech on Wednesday. In practice, however, it turned out that this correction in strength is approximately the same as the main downward movement. Yesterday we even tried to build a downward trend line, hoping for the price to rebound from it, which would enable novice traders to consider new opportunities for opening short positions today. However, as you can see from the graph, the quotes did not stop near the trend line even for a minute. This suggests that either the trend line is irrelevant or extremely weak. In general, we failed to use it so we can receive a sell signal, and the buy signal is weak. In general, it is now the most unfavorable time for trading over the past few weeks.

The most interesting thing now concerns the fundamental background. Recall that the European Central Bank held a meeting last week, while the Federal Reserve held its own this week. As we have already mentioned many times, there was a lot of interesting information at both meetings, but it did not change the general fundamental background, which could lead the EUR/USD pair out of the horizontal channel at 1.17-1.19 in the future. The European Union released its inflation report yesterday, which showed deflation of 0.2% y/y for the second consecutive month. First, it is very bad for the eurozone and for the single currency (euro). Secondly, everything is also very bad in comparison with the US inflation (+1.3% y/y). However, the euro did not fall, but instead it continued to strengthen all day.

In addition, not a single important macroeconomic report is scheduled at all on the last trading day of the week. In news calendars, the US University of Michigan Consumer Confidence Index is marked in red, indicating its highest level of importance. However, we would like to note that this indicator rarely causes any market reaction. Thus, we can assume that there will be no reports and news from both the eurozone and the United States today. The only possible exception is unscheduled messages from, for example, US President Donald Trump. But this information cannot be predicted and taken into account in advance.

Possible scenarios for September 18:

1) Novice traders are still not recommended to buy the pair, since the upward movement taking place at this time is very unexpected and in no way predictable from a technical point of view. In such an unexpected way, the pair's quotes returned to the upper area of the horizontal channel at 1.17-1.19, in which, again, it is better to consider selling rather than buying. We recommend novice traders to not force events and wait for the situation to clear up. You can consider long positions if the pair breaks through the upper channel line, but even if this happens today, the price is unlikely to go up for any significant distance.

2) Selling still looks more attractive now, however there are no technical patterns that could provide a sell signal. There was no rebound from the trend line. Thus, the MACD indicator, having turned to the downside, may provide a sell signal, however, we believe that it will be fuzzy and weak. Novice traders themselves must decide whether to work with this signal or not. MACD may turn down in the next hour or two. The nearest target for short positions is 1.1772.

On the chart:

Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now.

Up/down arrows show where you should sell or buy after reaching or breaking through particular levels.

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

Important announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal.

Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.

Forex analysis 18 Sep 2020, 06:38 UTC+00
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2 Overview of the EUR/USD pair. September 18. The Fed announced a direct correlation between monetary policy and the "coronavirus".
4-hour timeframe Technical details: Higher linear regression channel: direction - upward. Lower linear regression...
4-hour timeframe Technical details: Higher linear regression channel: direction - upward. Lower linear regression channel: direction - sideways. Moving average (20; smoothed) - sideways. CCI: -83.1883 The EUR/USD pair marked the fourth trading day by multidirectional movements. Since the Fed meeting ended late last night and at the same time, its results were summed up and the speech of the head of the organization Jerome Powell took place, in principle, the rest of the day before...

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - sideways.

Moving average (20; smoothed) - sideways.

CCI: -83.1883

The EUR/USD pair marked the fourth trading day by multidirectional movements. Since the Fed meeting ended late last night and at the same time, its results were summed up and the speech of the head of the organization Jerome Powell took place, in principle, the rest of the day before yesterday and all of yesterday was held under the auspices of this event. Markets do not react to such an important event for only one hour after it. For example, last night, the European markets were already closed, so European large institutional traders were not able to win back the information they received. Now, when more than a day has passed since the results of the next Fed meeting were summed up, we can say with confidence that this meeting can also be considered completely neutral and "passing". There was a lot of new and fundamentally important information, however, nothing that could affect the US economy or monetary policy in the near future. The rhetoric of Fed Chairman Jerome Powell also remained virtually unchanged from previous meetings.

At the end of the last day, the pair's quotes first fell to the level of 1.1738, then they began to return to the positions from which the fall began. Thus, by the end of the last trading day, almost all losses of the European currency were leveled. What does this mean? First, the fact that the words of Jerome Powell and the results of the Fed meeting can not be considered unambiguous. They are rather neutral, however, some traders have made "their conclusions" based on them. Someone saw Powell's optimism and ignored his concerns and fears. Someone noted only negative points but did not see any positive ones. Therefore, the US dollar rose by 100 points and then lost about the same amount. Recall that just a week ago, the same thing happened at the ECB meeting and Christine Lagarde's speech. Then the European currency rose by 100 points and lost the same amount over the next day. And with all this, the euro/dollar pair continues to trade inside the side channel of 1.17-1.19, from which it has not been able to exit for almost two months. However, let's take a closer look at the most important event of this week.

The most important thing is what Powell said. 1) The US Economy, in his opinion, is recovering at a faster pace than the regulator expected. 2) The outlook for the US economy remains very dim due to the coronavirus pandemic and the complete uncertainty associated with it. It is from these two theses that we should start when analyzing everything that is happening. The second thesis does not raise any questions or doubts. It is clear even to a child that it is impossible to predict the scale of growth, decline, or recovery of the economy if the whole world is covered by an epidemic that has already killed about 200,000 people in America alone. It is impossible to predict when the vaccine will appear and how much longer the COVID-2019 virus will terrorize humanity and leave a negative imprint on the economy of each country. Tomorrow, the second or third "wave" may begin and any economy may start to decline again. Thus, Powell is right to say that the American economy will not fully recover until the virus is over and that the future of the economy is uncertain. However, the first thesis raises a lot of questions. In general, we can note that only the inflation indicator shows really good dynamics in the States. The latest report showed that inflation is holding steady at around 1.5%, which is not so bad for the biggest crisis in the last 100 years. The unemployment rate has also started to decline sharply recently, however, it remains quite high. Also, it is very difficult to judge the GDP now. We have data only for the second quarter, according to which the economy lost almost 32%. For example, if 20% of growth is recorded in the third quarter, will this be a good recovery rate or not? After all, we should not forget that the European economy lost only 12%, while the American economy lost 32%. It is logical to assume that the American one will recover longer and harder. Plus, in Europe, the situation with the "coronavirus" is much more favorable than in the United States. Thus, Powell's first thesis may be overly optimistic.

A few more important theses. First, the Fed said that rates will not be raised until the labor market is fully restored, which is the unemployment rate, not exceeding 3-3.5%. Also, inflation should be stable at 2% or slightly higher. Even if we calculate that the US economy is recovering at a high pace, then according to the most conservative estimates, the rate increase will not begin until 2022-2023. Thus, traders should not even be interested in such forecasts at this time. Does it matter for the euro/dollar exchange rate if the Fed plans to raise rates in 2 or 3 years?

Also, we remind you that not everything in America and its economy depends only on the Fed. For example, for a faster recovery, the US Congress has already allocated several trillion dollars during 2020. However, this money ran out relatively quickly and now the issue of providing a new aid package is still open on the agenda. This is a huge problem since Democrats and Republicans can't agree on the size of this package. Powell has previously stated that the support from the US government is of great importance to the economy. Therefore, it is logical to assume that without the help of Congress, the recovery will not be fast again. Moreover, Congress is now busy preparing for the 2020 presidential election.

Based on all of the above, we can conclude that the day before yesterday's meeting of the Fed was passable. Interesting information came to the markets, however, this is not the information that radically changes something. Thus, the ECB and the Fed failed to influence the euro/dollar pair and withdraw it from the 200-point side channel.

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The volatility of the euro/dollar currency pair as of September 18 is 77 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1754 and 1.1892. A reversal of the Heiken Ashi indicator back downward signals a round of downward movement in the remaining side channel of $ 1.17 - $ 1.19.

Nearest support levels:

S1 – 1.1719

S2 – 1.1597

S3 – 1.1475

Nearest resistance levels:

R1 – 1.1841

R2 – 1.1963

R3 – 1.2085

Trading recommendations:

The EUR/USD pair has fixed below the moving average line but continues to trade in an absolute flat. Thus, formally, we can now consider short positions with the goal of the volatility level of 1.1754, after the Heiken Ashi indicator turns downward. It is recommended to re-consider options for opening long positions if the pair is fixed back above the moving average with a target near the level of 1.1892.

Forex analysis 18 Sep 2020, 00:20 UTC+00
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3 Hot forecast and trading signals for EUR/USD on September 18. COT report. Neither bears nor bulls can pull the pair out of the horizontal channel at 1.17-1.19
EUR/USD 1H The EUR/USD pair, as part of the downward movement that had begun the day before, reached the support...
EUR/USD 1H The EUR/USD pair, as part of the downward movement that had begun the day before, reached the support level of 1.1760 on the hourly timeframe on September 17. However, sellers, as usual, failed to overcome this level. "As usual" - because neither bulls nor bears have the necessary strength and desire to, in principle, bring the pair out of the horizontal channel, in which it has been for almost two months. The channel is limited by the levels of 1.17 and 1.19, therefore,...

EUR/USD 1H

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The EUR/USD pair, as part of the downward movement that had begun the day before, reached the support level of 1.1760 on the hourly timeframe on September 17. However, sellers, as usual, failed to overcome this level. "As usual" - because neither bulls nor bears have the necessary strength and desire to, in principle, bring the pair out of the horizontal channel, in which it has been for almost two months. The channel is limited by the levels of 1.17 and 1.19, therefore, rebounding from important levels / support areas / resistance constantly occurs within this channel, especially when not approaching its upper or lower line. At the moment, the pair's quotes have settled above the Kijun-sen line, so it can continue to move up while aiming for the Senkou Span B line. It will be quite difficult for the bulls to overcome this line, since it also borders on the resistance area of 1.1884-1.1910, from which prices only rebound twice in the last few days.

EUR/USD 15M

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The lower linear regression channel turned up on the 15-minute timeframe, signaling an upward movement on the hourly chart. The latest Commitment of Traders (COT) report, which, recall, comes out with a three-day delay and so it only covers September 2-8, turned out to be absolutely predictable. We expected that the report would not show any fundamental changes in the mood of large traders, because the EUR/USD pair continues to trade in a horizontal channel. At the end of the reporting week, the non-commercial trader category closed 3,073 Buy-contracts (longs) and opened 789 Sell-contracts (shorts). The changes are minimal considering that the total number of contracts for this category exceeds 300,000. Take note that the net position for players in this category has slightly decreased, which means a weakening of the bullish sentiment, but again minimal. The commercial trader category was much more active and closed as many as 30,000 contracts during the reporting week. However, we remind you that the actions of non-commercial traders are more important, since they are considered to be the ones driving the market, and commercial traders usually open positions opposite to them. The last three trading days of last week were not included in the latest COT report, however, no serious price changes were recorded on those days. There are also no major price changes during the current trading week.

The European Union published a report on Thursday, September 17, that deserves attention. The report shows that EU inflation was in the negative area at -0.2% y/y in August. The situation with the so-called core inflation is slightly better, as it reached 0.4% y/y (the indicator does not take into account changes in energy prices and food prices, which tend to change frequently and strongly). However, these are still very low values, which create a headache for the European Central Bank. It is unlikely that this indicator alone should sound the alarm and immediately call for new stimulus from the ECB, but the worse the statistics from the eurozone is, the more likely it is for the euro to fall against the dollar. For example, inflation in the United States was solid, as for the crisis, 1.3% y/y in August.

We have two trading ideas for September 18:

1) Buyers have not been able to break through several resistances near the upper line of the horizontal channel at $1.17-1.19. Therefore, we recommend considering long positions once the 1.1884-1.1910 area is overcome, afterwards, you can aim for the resistance level of 1.2003. Take Profit in this case will be about 60 points. You can also reject the Senkou Span B line (1.1882), since the price has crossed the Kijun-sen line (1.1819).

2) Bears managed to pull down the pair to the lower area of the 1.17-1.19 horizontal channel, but did not stay there for a long time. The upward movement resumed, and sellers showed their weakness once again, since they could not even reach the 1.1700 level. Now the bears need to wait for the price to settle below the Kijun-sen line (1.1819) in order to open short positions while aiming for the support level at 1.1760. The potential Take Profit in this case is about 45 points.

Explanations for illustrations:

Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one.

Support and resistance areas are areas from which the price has repeatedly rebounded off.

Yellow lines are trend lines, trend channels and any other technical patterns.

Forex analysis 18 Sep 2020, 02:03 UTC+00
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4 Hot forecast and trading signals for GBP/USD on September 18. COT report. Bulls need to overcome 1.3024. Otherwise, the pound will fall again
GBP/USD 1H The GBP/USD currency pair traded even more sluggish than the EUR/USD pair on September 17. A rising...
GBP/USD 1H The GBP/USD currency pair traded even more sluggish than the EUR/USD pair on September 17. A rising channel with a minimum slope appeared, which, in fact, reflects a corrective movement after the pair fell by 700 points. The pound/dollar pair fell to the critical Kijun-sen line, rebounded from it and resumed an indistinct rising movement. Also, over the past two days, buyers could not overcome the resistance area of 1.3004-1.3024. Thus, the prospects for strengthening the...

GBP/USD 1H

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The GBP/USD currency pair traded even more sluggish than the EUR/USD pair on September 17. A rising channel with a minimum slope appeared, which, in fact, reflects a corrective movement after the pair fell by 700 points. The pound/dollar pair fell to the critical Kijun-sen line, rebounded from it and resumed an indistinct rising movement. Also, over the past two days, buyers could not overcome the resistance area of 1.3004-1.3024. Thus, the prospects for strengthening the British currency even more are also in doubt. Therefore, bulls need to overcome the 1.3004-1.3024 area in order to expect anything more than 200 points of correction. The bears need to urgently regain the initiative by setting the price below the rising channel.

GBP/USD 15M

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The lower channel turned down on the 15-minute timeframe, a downward movement is possiblel due to the price rebound from the 1.3004-1.3024 area. The latest Commitments of Traders (COT) report for the British pound was completely unexpected. Non-commercial traders (the most important group of traders) closed Sell-contracts (shorts) during September 2-8, despite the fact that the pound only lost 700 points during this period. Sell-contracts decreased by 8,000. Buy-contracts (longs) were also closed, but in smaller quantities, down by only 3,500. Thus, according to the logic of things, the pound should have increased in price during this period, since the net position in the "non-commercial" category increased. One might think that other categories of traders have had a greater impact on the pound. However, this is not the case either, since commercial traders opened 14,000 Buy-contracts and 9,000 Sell-contracts in the same period of time. That is, the net position for this category of traders has grown, in other words, traders have become more bullish. Therefore, we have witnessed a paradoxical situation when the report absolutely does not correspond to what is happening on the market. The next report, therefore, may show even more serious changes.

The fundamental background for the GBP/USD pair was absolutely neutral on Thursday. There was no news on the conflict situation between Brussels and London. The Bank of England disappointed market participants instead of making them happy. The central bank allowed the introduction of negative rates in the future and noted high risks for the economy due to the new wave of the pandemic and also because of the high probability of the UK leaving the EU without a trade deal. Traders also believe that the BoE will have to expand its quantitative stimulus program from its current £745bn during 2020. No major macroeconomic events and publications in the UK and the United States are scheduled on the last trading day of the week. Thus, most likely, we can expect calm trading in a weak rising channel.

We have two trading ideas for September 18:

1) Buyers are slowly becoming active, but they failed to overcome the 1.3004-1.3024 area twice, so moving up in the long term is in doubt. You can open new long positions after breaking through this area and aim for the resistance level of 1.3121. Take Profit in this case will be about 80 points.

2) Sellers temporarily let go of the initiative, but not overcoming the 1.3004-1.3024 area gives them hope for returning the downward trend. Thus, in case the price settles below the critical line (1.2891) and the rising channel, we recommend trading down again while aiming for 1.2661. The target is distant and may take several days to reach it. Take Profit in this case can be about 200 points.

Explanations for illustrations:

Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one.

Support and resistance areas are areas from which the price has repeatedly rebounded off.

Yellow lines are trend lines, trend channels and any other technical patterns.

Forex analysis 18 Sep 2020, 02:04 UTC+00
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5 Trading recommendations for the GBP/USD pair on September 18
The GBP / USD pair traded around the level of 1.3000, during which a rebound occurred, followed by price fluctuations...
The GBP / USD pair traded around the level of 1.3000, during which a rebound occurred, followed by price fluctuations within the values 1.2930 / 1.3000. The main resistance to long positions is the psychological level of 1.3000, so a rebound was seen again for the third time this week, which indicates high activity in the market within the price range. This also confirms the fact that sharp changes will only occur if the quote consolidates above 1.3035, as such will lead to a strong...

The GBP / USD pair traded around the level of 1.3000, during which a rebound occurred, followed by price fluctuations within the values 1.2930 / 1.3000.

The main resistance to long positions is the psychological level of 1.3000, so a rebound was seen again for the third time this week, which indicates high activity in the market within the price range.

This also confirms the fact that sharp changes will only occur if the quote consolidates above 1.3035, as such will lead to a strong ascend relative to the decline that happened on September 1.

On the other hand, a larger downward move will occur if traders are able to push the quote beneath 1.2770.

So, if we look at the M15 chart, we will see that the quotes formed a V-shaped pattern, as a round of short positions appeared from 12:00 to 13:15, during which the GBP / USD pair declined to the level of 1.2885. Then, long positions arose at 15:30 to 17:30, and brought a complete recovery to the pound's position relative to the recent decline. The reason for such high activity lies in the latest news for the UK and the US.

In terms of daily dynamics, an acceleration is recorded for 13 subsequent days, during which volatility did not fall below 100 points. Thursday's volatility is 132 pips, 5% above the average value. Consistently high dynamics indicate that speculators have a high influence on the market.

With regards to the daily chart, the clear downward from September 1 can be seen, and if the quotes manage to breakout of 1.2770, the structure of the medium-term upward trend will be changed.

As for news, the main event yesterday was the meeting of the Bank of England, during which the committee members decided to keep the parameters of the monetary policy, as well as the level of interest rates, unchanged. However, the bank said that if negotiations on Brexit still do not yield results, rates may come out negative next year.

Such a gloomy forecast fanned the pound to decline.

Meanwhile, the European Commission head Ursula von der Leyen said that the EU hopes that the UK will change its mind regarding its proposed bill, and that there will be a common ground in the negotiations.

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The upcoming trading week will be more relaxed than this week, as the only highlights are the preliminary assessment of the UK and US PMI, as well as jobless claims in the United States. The main impetus for price jumps, as before, will be news on Brexit and the progress of the bill to protect the UK domestic market.

Tuesday, September 22

US 15:00 - sales in the secondary housing market (August)

Wednesday, September 23

UK 09:30 - preliminary manufacturing PMI (September)

UK 09:30 - preliminary service PMI (September)

US 14:45 - preliminary manufacturing PMI (September)

US 14:45 - preliminary business activity index in the services sector (September)

Thursday, September 24

US 13:30 - jobless claims

US 15:00 - new home sales (August)

Friday, September 25

US 13:30 - orders for durable goods (August)

Further development

As we can see on the trading chart, the GBP / USD pair traded around 1.2930 to 1.3000, so the scenario described at the beginning of the article could still very much occur.

Thus, if the quote fails to break out of the control levels, the pair will still trade within the levels 1.2770 // 1.2885 // 1.3000, but if a rebound occurs from 1.3000, the quote may consolidate below 1.2930 and move towards 1.2885. Then, a breakout from it will bring the pair even lower, to a price level of 1.2865.

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Indicator analysis

Looking at the different time frames (TF), we can see that the indicators on minute and hourly periods signal BUY due to a consolidation around the level of 1.3000, while, the daily period signals SELL, in reflection of the downward move that started on September 1.

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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 52 points, which is 58% below the average value.

It is assumed that the market will remain active, as long as speculative investments are high.

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Key levels

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

Support areas: 1.2885 *; 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 .

Forex analysis 18 Sep 2020, 11:37 UTC+00
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6 European Commission is expected to save the pound (Review of EUR/USD and GBP/USD on 09/18/2020)
Yesterday began with the growth of the single European currency and the decline of the pound. Moreover, the scale of...
Yesterday began with the growth of the single European currency and the decline of the pound. Moreover, the scale of the movements was quite average. Euro's growth was largely due to the fact that the US macroeconomic dynamics in the United States are questionable, despite the statements of Jerome Powell. In turn, the pound was waiting for the meeting of the Board of England, after which it began to decline immediately. After all, there could be no other development of events, since the...

Yesterday began with the growth of the single European currency and the decline of the pound. Moreover, the scale of the movements was quite average. Euro's growth was largely due to the fact that the US macroeconomic dynamics in the United States are questionable, despite the statements of Jerome Powell. In turn, the pound was waiting for the meeting of the Board of England, after which it began to decline immediately. After all, there could be no other development of events, since the British regulator literally stated that if Brexit passes without a trade agreement, then the Bank of England will have to reduce the refinancing rate to negative values. But the most interesting thing happened a few hours later, when the pound quickly began to recover its losses, because of Ursula von der Leyen. The head of the European Commission said that she is confident of signing a trade agreement between Brussels and London. And what is happening now, especially with the UK internal market protection Act, is just a temporary embarrassment and misunderstanding. She also confirmed that the next round of negotiations which will start next week as planned, although the situation around the law on the protection of the internal market of the UK is not yet clear. The discussions and approvals are still ongoing and apparently, the second vote on it will be held on the weekend. Nevertheless, the words of Ursula von der Leyen were enough to make investors optimistic about European currencies. Most importantly, they should forget about the Bank of England's statements. Technically, the growth of the pound and euro is largely based on emotions.

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Several macroeconomic data were published yesterday, which, in connection with the events described above, were not very interesting. For example, Europe's final data on inflation in Europe, which coincided with the preliminary estimate confirmed the fact that consumer prices fell by 0.2%, which means that deflation started in Europe. However, everyone knew this even earlier. What's more important is how long will it last. This is the reason why there was not much reaction from the market.

Inflation (Europe):

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The US statistics turned out to be quite interesting and also much better than forecasts. Theoretically, the dollar should have risen well after that, but unfortunately, the publication of this data coincided with the statements of Ursula von der Leyen.

So, the number of initial applications for unemployment benefits fell from 893 thousand to 860 thousand, which turned out to be slightly worse than the forecast of 830 thousand. However, the number of repeated applications, which is forecasted to rise from 13 385 thousand to 13 500 thousand, suddenly declines. Moreover, the data were revised for the worse - from 13,544,000 to 12,628,000. Such a huge decline in the number of repeated applications compensates for both the smaller decline in the number of initial applications and the revision of previous data. In any case, it is clear that the US labor market continues to recover, which means that the Fed could really consider raising the refinancing rate next year. Therefore, yesterday's weakening of the dollar was caused solely by emotions regarding Brexit.

Repetitive Unemployment Insurance Claims (United States):

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The Euro stopped rising at the moment, while on the contrary, the pound has grounds to strengthen. In view of this, the UK retail sales accelerated from 1.4% to 2.8%. This is a clear increase in consumer activity, and in fact it neutralizes the recent impressive decline in inflation. However, the market now lives exclusively with emotions and expectations regarding Brexit.

Retail Sales (UK):

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If there is no news today regarding the approval of the provisions of the law on the protection of the UK internal market, the euro will be trading around 1.1850. And given the extreme interest of the UK in signing a trade agreement with the EU, it is obvious that British parliamentarians will try to smooth out the most controversial provisions of the bill as much as possible, which will be perceived as a very positive factor. So if there is news coming from London, it will be positive and help strengthen European currencies. In this case, it may rise to the level of 1.1900.

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The scenarios are exactly the same for the pound, but the scale of growth will be somewhat more important for this currency. Thus, it is possible that the pound will rise to the level of 1.3075 by the end of the trading week. But if there is no news, then it will remain around 1.3000.

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Forex analysis 18 Sep 2020, 08:45 UTC+00
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7 Hot forecast and trading recommendations for GBP/USD on 09/18/2020
Ursula von der Leyen unexpectedly supported the pound, saying that she was convinced that the EU-UK trade deal is...
At first, everything went as planned, and the pound rapidly fell immediately after the Bank of England meeting. This is not surprising, since the British central bank stated in plain text that if Brexit goes without a deal, then it will be necessary to consider the possibility of reducing the refinancing rate to negative values. To be honest, this completely coincides with the worst expectations. So the BoE looks to the future without much optimism. However, after just a few hours, the...

At first, everything went as planned, and the pound rapidly fell immediately after the Bank of England meeting. This is not surprising, since the British central bank stated in plain text that if Brexit goes without a deal, then it will be necessary to consider the possibility of reducing the refinancing rate to negative values. To be honest, this completely coincides with the worst expectations. So the BoE looks to the future without much optimism. However, after just a few hours, the pound also rapidly went up, having completely won back all its losses. Help came from where no one expected. The head of the European Commission, Ursula von der Leyen, said she was confident in the possibility of concluding a full-fledged trade deal between Brussels and London. In addition, despite the ongoing saga with the UK Internal Market Bill, the next round of negotiations will begin next week. In general, the purely informational background around Brexit greatly encouraged the pound. Although this growth itself is extremely emotional and not supported by anything specific.

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At the same time, market participants were so inspired by such statements that they did not pay attention to US data at all. And it wasn't just better than forecasts. The data on claims for unemployment benefits showed that the likelihood that the Federal Reserve's monetary policy will tighten next year clearly isn't zero. The number of initial applications for unemployment benefits fell from 893,000 to 860,000. But the most interesting thing was the repeated applications, which fell from 13,544,000 to 12,628,000. And this despite the fact that a slight increase in the total number of applications was expected ... The figure has decreased by nearly a million.

Repetitive Unemployment Insurance Claims (United States):

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Data on retail sales in the UK is already out, and its growth rate accelerated from 1.4% to 2.8%. But the market ignored this data. Frankly speaking, the pound is only concerned with Brexit and the further course of negotiations both on a trade deal and the UK Internal Market Bill. All other news is practically irrelevant. We do not expect anything more until the end of the day. So only all sorts of rumors and statements on the most important issue can move the pound from its place.

Retail Sales (UK):

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The GBPUSD pair is moving within the psychological level of 1.3000, where a slowdown occurs on a natural basis as a result of a price rebound. Market participants interacting with the 1.3000 price coordinate happened in the course of a corrective move from the support level of 1.2770.

Based on the quote's current location, we can see that there is a variable range from 50 to 80 points along the psychological level.

High rates are recorded in relation to the general volatility, which have not dropped below 100 points since the beginning of September.

Looking at the trading chart in general terms, the daily period, you can see an intense downward trend from September 1, which brought the quote to the important price level of 1.2770. The current correction is a small part of the inertia recovery.

We can assume that price fluctuations along the psychological level of 1.3000 will remain on the market for some time, where it is worth working both for a natural rebound, if the price stays below 1.2935, and for a breakout in the event of price taking above 1.3025.

From the point of view of complex indicator analysis, we see that the indicators of technical instruments on the minute and hour periods signal a buy due to price fluctuations within the 1.3000 level. The daily interval, as before, signals a sell due to the inertial movement from September 1.

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Forex analysis 18 Sep 2020, 07:43 UTC+00
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8 EUR/USD. September 18. COT report. The topic of coronavirus is coming to the fore again.
EUR/USD – 1H. On September 17, the EUR/USD pair continued the growth process and ended it at the moment near the...
EUR/USD – 1H. On September 17, the EUR/USD pair continued the growth process and ended it at the moment near the corrective level of 61.8% (1.1857). Thus, the pair's quotes returned to the level from which the fall began two days ago, caused by the Fed meeting and its results. Now, a rebound from the Fibo level of 61.8% will allow traders to expect a reversal in favor of the US currency and a resumption of the fall towards the levels of 76.4% and 100.0%, and a close above it will...

EUR/USD – 1H.

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On September 17, the EUR/USD pair continued the growth process and ended it at the moment near the corrective level of 61.8% (1.1857). Thus, the pair's quotes returned to the level from which the fall began two days ago, caused by the Fed meeting and its results. Now, a rebound from the Fibo level of 61.8% will allow traders to expect a reversal in favor of the US currency and a resumption of the fall towards the levels of 76.4% and 100.0%, and a close above it will increase the chances of continuing growth towards the Fibo levels of 50.0% and 38.2%. Meanwhile, the topic of coronavirus is once again coming out on top of the world. In America, a new increase in the number of cases has begun. According to the Johns Hopkins Institute, 40-45 thousand Americans get sick every day, which is not much less than the maximum values that were recorded a few weeks ago. This made Anthony Fauci, doctors, and epidemiologists of the country sound the alarm. Donald Trump promises that a vaccine against COVID-2019 can be created and approved as early as October. At the same time, some categories of Americans who need the vaccine the most may begin to be vaccinated. And as usual, Trump's words were immediately criticized by Anthony Fauci, who "doubts that the vaccine will be created before December 2020 and will go into mass production before 2021". A statement was also made by Bill Gates, who also expressed doubt that at least one of the vaccines will be approved during October. Trump's push to get the vaccine in October is clear as day. Trump needs a vaccine to win the November 3, 2020 election.

EUR/USD – 4H.

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On the 4-hour chart, the EUR/USD pair performed a reversal in favor of the euro currency near the corrective level of 127.2% (1.1729) and began the process of growth towards the upper border of the side corridor, in which the pair has been trading for several months. Closing the pair's rate above the side corridor will work in favor of continuing growth towards the next Fibo level of 161.8% (1.2027).

EUR/USD – Daily.

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On the daily chart, the quotes of the EUR/USD pair performed another reversal in favor of the EU currency and fixed above the corrective level of 261.8% (1.1825), which does not mean much, because the quotes continue to remain in the blue rectangle, which perfectly reflects the flat. The pair's quotes are fixed under the upward trend corridor, which slightly increases the probability of continuing the fall. However, the key remains the side corridor.

EUR/USD – Weekly.

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On the weekly chart, the EUR/USD pair has completed a consolidation above the "narrowing triangle", which now allows us to count on further growth of the euro currency, which may be strong, but in the long term.

Overview of fundamentals:

On September 17, the European Union released a report on inflation, which again showed a very weak and negative value. Unemployment in America continues to decline. Traders ignored both reports – the euro was growing.

The news calendar for the United States and the European Union:

On September 18, the calendars of economic events in the European Union and the United States are completely empty. Thus, the influence of the information background will be absent today.

COT (Commitments of Traders) report:

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The latest COT report was very interesting. According to the results of the previous report, major traders of the "Non-commercial" group closed about 11 thousand long contracts. The latest COT report showed a reduction of another 3.7 thousand purchase contracts. At the same time, speculators increased their sales contracts. Thus, the last two COT reports show that the mood of the most important group of traders (speculators) is beginning to change in the direction of "bearish". The "Commercial" group actively got rid of both long contracts and short contracts, closing almost 40,000 in total. All major players in the foreign exchange market got rid of 69 thousand contracts during the reporting week. Thus, I can conclude that the trend is beginning to change and major players are starting to look at purchases of the US dollar.

Forecast for EUR/USD and recommendations for traders:

Today, I recommend selling the euro with a target of 1.1762, if a rebound is made from the upper line of the side corridor on the 4-hour chart or from the level of 61.8% (1.1857) on the hourly chart. I recommend buying the pair if it closes above the side corridor on the 4-hour chart with a target of 1.2027.

Terms:

"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.

"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency, not for speculative profit, but for current activities or export-import operations.

"Non-reportable positions" - small traders who do not have a significant impact on the price.

Forex analysis 18 Sep 2020, 08:32 UTC+00
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9 EUR/USD: plan for the European session on September 18. Euro buyers defended the support level of 1.1756, returning optimism to the market. COT reports. Bulls aim for 1.1852
Yesterday, I paid attention to longs in the support area at 1.1756 and also analyzed the entry point into long...
To open long positions on EUR/USD, you need: Yesterday, I paid attention to longs in the support area at 1.1756 and also analyzed the entry point into long positions in more detail. Look closely at the 5 minute chart. You will see how the bulls regained the 1.1756 area, testing it from top to bottom, thereby forming an excellent entry point into long positions, which brought about 45 points of profit. Then we had a signal to sell the euro from the 1.1800 level, however, since the bears...

To open long positions on EUR/USD, you need:

Yesterday, I paid attention to longs in the support area at 1.1756 and also analyzed the entry point into long positions in more detail. Look closely at the 5 minute chart. You will see how the bulls regained the 1.1756 area, testing it from top to bottom, thereby forming an excellent entry point into long positions, which brought about 45 points of profit. Then we had a signal to sell the euro from the 1.1800 level, however, since the bears did not try to do anything slightly above this level, and the emphasis in the afternoon forecast was shifted to the resistance of 1.1810, this did not lead to a larger sell-off and instead it continued to rise. Unfortunately, we could not wait for a new convenient entry point for long positions, and the rest of the movement passed by. Today, the key struggle between buyers and sellers will unfold for resistance at 1.1852, around which the trade is now being conducted. A breakout and consolidation above this level, similar to buying from 1.1756, forms a good entry point for long positions. After that, we can expect an upward correction for the euro towards a weekly high of 1.1900, where I recommend taking profit. The 1.1949 area will be the long term target, but it will not be easy to get to it. If the euro is under pressure on the first half of the day, and there are data on inflation in Germany and a number of less important statistics for the eurozone today, then it is best not to rush into longs, but calmly wait until a larger support at 1.1803 has been tested, which is where the moving averages are also concentrated. ... Open long positions from there immediately on a rebound, counting on a correction of 20-30 points within the day.

Let me remind you that the Commitment of Traders (COT) reports for September 8 showed that long non-commercial positions decreased from 250,867 to 248,683, while short non-commercial positions also fell from 54,130 to 51,869. Political uncertainty in the US and central bank meetings forced many traders to wait and see ahead of the fall marathon. As a result, the positive non-commercial net position slightly increased to 196,814, against 196,747, a week earlier.

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To open short positions on EUR/USD, you need:

Euro sellers need to recuperate, since they have a chance to lose everything they won after the Federal Reserve's decision on interest rates. It is necessary to form a false breakout in the resistance area at 1.1852, which forms a good entry point in short positions, thereby allowing us to expect EUR/USD to return to the support area of 1.1803, where I recommend taking profit. I don't think the bears will manage to break through the area below this range, since there are no important reports scheduled for today, except for consumer sentiment from the University of Michigan in the US. A breakout of 1.1803 would pull down the pair to a low of 1.1756. If the demand for the euro persists in the first half of the day, and we don't see bears at the 1.1852 level, it is best to postpone short positions until the high of 1.1900 has been updated and then you can sell the euro from there immediately on a rebound, counting on a correction of 20-30 points within the day.

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Indicator signals:

Moving averages

Trading is carried out above 30 and 50 moving averages, which indicates an attempt to intercept the initiative on the part of euro buyers.

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

Bollinger Bands

A breakout of the upper border of the indicator around 1.1870 will lead to a new wave of euro growth. The euro's fall will be limited by the lower border of the indicator in the 1.1790 area.

Description of indicators

  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart.
  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart.
  • MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
  • NOn-commercial 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 short and long positions of non-commercial traders.
Forex analysis 18 Sep 2020, 06:15 UTC+00
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10 Overview of the GBP/USD pair. September 18. The second "wave" of the COVID-2019 epidemic in the UK.
The results of the Bank of England meeting were even less optimistic than the results of the Fed meeting. The outlook...
4-hour timeframe Technical details: Higher linear regression channel: direction - upward. Lower linear regression channel: direction - downward. Moving average (20; smoothed) - sideways. CCI: 89.2458 Now, what about the British pound, which has recently been hit by new misfortunes thanks to Boris Johnson and London's position in negotiations with the European Union? The British currency has completely repeated the movements of the euro/dollar pair over the past two days. After the...

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - sideways.

CCI: 89.2458

Now, what about the British pound, which has recently been hit by new misfortunes thanks to Boris Johnson and London's position in negotiations with the European Union? The British currency has completely repeated the movements of the euro/dollar pair over the past two days. After the Fed meeting ended and the markets became aware of all the necessary information, the US dollar rose by 100 points, after which it also rushed in the opposite direction, as if showing that it rose for no reason. Over the past day, all losses of the British currency were leveled. Thus, in general, the pound/dollar pair just continued to correct in the last two days after the 700-point drop that began on September 1. In total, the pound managed to win back more than 220 points. The pound has risen in price in recent days with great difficulty, which indirectly indicates that the fall may resume with a new force at almost any moment. However, there is one "but".

This "but" is the meeting of the Bank of England that took place yesterday, which almost went unnoticed. In the article on the euro/dollar, we focused the traders' attention on two theses of Jerome Powell. The first is "the outlook for the economy remains uncertain". We fully agreed with this. Thus, the Bank of England in its final communique used the same wording for the prospects of the UK economy. "Absolutely indeterminate." Naturally, for the same reasons – the "coronavirus" epidemic. "The recent increase in COVID-19 cases in some parts of the world, including the United Kingdom, may have an additional impact on economic activity, although probably on a smaller scale than seen earlier this year," BA said in a statement. It should be noted that in the UK, there has been a recent increase in cases of "coronavirus", which can be called the "second wave". The maximum daily levels of the disease at the peak of the previous wave were 4-5 thousand per day. In recent weeks, 3-4 thousand people have been infected every day in Britain. Thus, just like this, Britain has reached almost maximum levels of morbidity. And this creates the risks of a new quarantine, a new "lockdown" (whatever Boris Johnson says), as well as increased risks for the economy, which is still in a state of shock after Brexit and is preparing for a new "knockout" in the form of a new trade deal with the EU. As for the second thesis – about the pace of economic recovery – the Bank of England refrained from assessing, saying only that the economy grew by 6% in July.

The main parameters of monetary policy remained unchanged. The rate is 0.1%. The program of quantitative stimulation – in the amount of 745 billion pounds. However, there is one more thing that should be noted – the British Regulator again started talking about negative rates. This time in the context that it is openly considering the possible use of this tool. BA also emphasizes that not only the second "wave" of the "coronavirus" creates high risks for the economy. Leaving the European Union without a deal (which is almost guaranteed to the Kingdom) will also leave its mark on the "face" of the British economy. Thus, it is likely that BA refrained from enthusiastic assessments of the economic recovery for good reason. Most likely, before the end of 2020, the British Regulator will still resort to another expansion of the quantitative stimulus program. Well, what will happen in 2021 is anyone's guess. As for inflation and the timing of the key rate increase, the Bank of England also considers the 2% level as a target and reports that it is not going to raise rates until inflation returns to this value, which it does not expect for the next two years. Meanwhile, many British experts believe that the unemployment rate in the UK will continue to grow and reach its maximum value in the fourth quarter of 2020. The regulator may have to introduce negative rates. All this is a bearish factor for the British pound.

Meanwhile, Boris Johnson said that the UK government is doing everything in its power to avoid a new wave of the pandemic and prevent another nationwide "lockdown". However, even if the number of new cases increases significantly, a new "lockdown" is unlikely to be introduced. Boris Johnson, like his colleague Donald Trump, is an ardent opponent of "total quarantine" and believes that the consequences of the "lockdown" will be even more serious than from the epidemic. Therefore, Johnson is already stating that " Britain cannot afford a second lockdown, as its financial consequences will be disastrous". According to Johnson, "Britain must cope with the methods and tools at its disposal now, namely mass testing, social distancing, the rule of six, and the mandatory wearing of masks in public places".

Based on all of the above, we conclude that the pound and the dollar now remain absolute outsiders of the currency market. If you look at the euro/dollar pair, you can see that the US dollar is not strengthening. It only strengthens against a currency that is as weak at the moment as it is, against the pound. The outlook for both the dollar and pound issuing economies remains extremely uncertain. At the same time, much more uncertain than the prospects for the European economy or any other. In the United States, elections are approaching. Also, a constitutional crisis is planned in the United States if Trump loses the election and refuses to leave the post of president. This is also possible, and the American media regularly write about it. Britain has its own "Santa Barbara" called "Brexit, negotiations with the European Union", which recently also risks being continued in the form of a new series "violation of the Northern Ireland Protocol by Boris Johnson". Overall, the outlook for the pound is even bleaker. Thus, none of the currencies has a pronounced advantage now. Anyone can fall. It is best to make decisions now based on technical analysis and only taking into account the general fundamental background. For example, if there are new reports of disagreements between London and Brussels, then a new round of downward movement of the pair may immediately begin.

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The average volatility of the GBP/USD pair is currently 125 points per day. For the pound/dollar pair, this value is "high". On Friday, September 18, thus, we expect movement inside the channel, limited by the levels of 1.2818 and 1.3064. The reversal of the Heiken Ashi indicator downward may signal about a possible resumption of the downward movement.

Nearest support levels:

S1 – 1.2817

S2 – 1.2695

S3 – 1.2573

Nearest resistance levels:

R1 – 1.2939

R2 – 1.3062

R3 – 1.3184

Trading recommendations:

The GBP/USD pair continues to correct on the 4-hour timeframe and the price has already been fixed above the moving average line. Thus, today it is recommended to consider options for opening long positions with targets of 1.3062 and 1.3128 as long as the price is above the moving average. It is recommended to trade the pair down with targets of 1.2817 and 1.2695 if the price returns to the area below the moving average line.

Forex analysis 18 Sep 2020, 00:20 UTC+00
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