EUR/USD: time to exchange dollars to euros?
on September 3, 2020 at 2:02 pm
Experts predicted that a sharp fall of the American currency by 36% against the euro may happen in 2021. The US currency has lost approximately 11% from its peak in 2020 against a basket of major currencies. Hedge fund rates against the dollar hit a record high in ten years. Besides, traders often bet on the US dollar fall. At the beginning of the year, the dollar exchange rate was 1.12 per euro, and now it is already 1.18. Despite low-interest rates, stimulus to mitigate the COVID-19 consequences, unprecedented money printing, the US economy continues falling. In this regard, analysts say that the depreciation of the American currency is inevitable. Goldman Sachs analysts estimate that in 2023 one euro will cost $1.3. Others, however, believe that the American currency will find support if the US economy improves. And BlackRock experts are confident that the US dollar will be able to avoid its collapse, as the world depends on the American currency. Nevertheless, rates of the euro and the US dollar will fluctuate slightly. Economists believe that the market will stabilize in the near future, despite the existing financial risks. Others believe that sharp fluctuations in the currency will occur in autumn, especially after the presidential elections in America. Experts explain that a strong euro harms the export-oriented economy of the EU. Products made in the European Union are getting more expensive for American customers. Moreover, the second wave of coronavirus is beginning in the eurozone, which could lead to a deeper crisis. Naturally, there is a risk of the euro collapse. However, it is more likely that the American currency will continue to depreciate as the economic situation in the US is dire. Experts believe that the greenback will rise in price as means of payment, storage, funding, and exchange due to measures of stimulating the US economy. As a result, investors may lose interest in the US dollar and switch to other currencies. Is it reasonable to exchange dollars to euros? There is a difference of opinion between the experts. Both currencies are global and have the same risk exposure. Therefore, experts advise keeping funds in both the US dollars and the euros. Also, you may use the currencies of other countries, as well as purchase gold coins. If you choose other currencies, you should take a closer look at the Swiss franc, as experts advise.The material has been provided by InstaForex Company - www.instaforex.com
Analysis of EUR/USD on September 3. Markets did not pay attention to the statistics and are trading according to the instrument's
on September 3, 2020 at 1:26 pm
Globally, the formation of the wave pattern of the EUR/USD pair is fully complete again. The quotes left the highs recently, which suggest that the formation of wave 3 or C is already completed. If so, then the decline in quotes will continue with targets located below the low of the wave 4 in 5 in 3 or C. It is possible that wave 4 will be built, and after the quotes are completed, the formation of the upward trend section within wave 5 will continue. Moreover, it is possible that the entire section of the trend, which begun in March, will take a three-wave form and will be completed around the level of 1.2011. At the same time, the wave pattern on the lower chart shows that wave 4 in 5 in 3 or C has taken on a longer form than originally assumed, while wave 5 in 5 in 3 or C has already completed its construction. If the current wave pattern is correct, the quotes will continue to decline with targets located near the 200.0% Fibonacci level. In turn, the markets will prepare for further sales of the euro, considering that the low of wave 4 is broken through. On another note, the news background from America remains negative – coronavirus, which infected more than 6 million people and killed 185 thousand in US, a 32% economic collapse in the second quarter due to the "lockdown", the upcoming presidential elections, trade war with China, did not please the markets, which lead to dollar's low demand in recent months. But at the same time, any trend comes to an end sooner or later. Now, we should wait for the downward wave 4 to be formed. After that, everything will depend on the news background. If it improves even slightly for the dollar, then we can expect the upward trend to continue to be formed around 1.2011. In Germany, retail sales for July were released yesterday. The annual indicator rose by 4.2%, which is better than what was expected, however, the monthly indicator fell by 0.9%, which is worse than the market expectations. In addition, the ADP report was even more disappointing – markets expected 950,000 new employees, but instead, they got 428,000. Nevertheless, the demand for the US currency remained stable the whole day. Therefore, it is believed that the wave pattern is now more important than the news background. Today, there are indices of business activity in the service sector in the US, while retail sales in the EU and business activity. These reports may slightly affect the direction of trading. General conclusions and recommendations: Since the euro/dollar pair has already completed the construction of a global wave 3 or C, selling the pair is recommended with targets located near the calculated level of 1.1571 or 200.0% Fibonacci. Now, If wave 4 is currently being built, then it can take on a three-wave form. The quotes, in turn, will continue to decline within the framework of wave c to 4, after an upward pullback. The material has been provided by InstaForex Company - www.instaforex.com
EURUSD and GBPUSD: Traders sharply recalled Brexit and negative interest rates in the UK
on September 3, 2020 at 1:26 pm
The European currency is not feeling in the best shape at the beginning of autumn this year against the background of major profit-taking, which occurred after the recent statement of the ECB's Governing Council, Philip Lane. This triggered the closing of several long positions on risky assets. I have also already paid attention to this point, as hard times are still ahead for the euro. Although some fundamental data that are persistently ignored by the market do not affect the euro exchange rate, this does not make the European Central Bank's problems any less. The self-evident strengthening of the euro will also harm exports because it will make national goods more expensive, which will not add to optimism in a weak economy. Many assume that at its next meeting, the European Central Bank will still tighten its rhetoric against the euro and take additional monetary stimulus measures, which may negatively affect the quotes of risky assets and lead to their decline. However, many experts already say that the ECB has enough space to fight the further strengthening of the single European currency and the reversal of this trend in the coming quarters. However, while the yields of American and some European securities will be similar, and all because of a sharp decline in the attractiveness of treasuries and a sharp rise in the price of gold, it will be wrong to talk about a reversal of the upward medium-term trend in the European currency. Most likely, even against the background of negative fundamental statistics on the Eurozone, which will cause downward corrections, the general trend for strengthening the euro will continue. The only moment that can affect the euro exchange rate in the short term is a technical correction. An unsuccessful attempt to take the 20th figure at the end of summer and the first days of autumn resulted in a sell-off of risky assets, which can only get stronger. The only hope remains the September meeting of the European Central Bank, before which the euro may remain afloat. Most likely, major support levels will be concentrated in the area of 1.1760, as a break in this level will lead to a more powerful sell-off of risky assets already in the area of 1.1710 and 1.1590. It will be possible to talk about the return of control over the market by euro buyers only after the trade returns above the level of the 19th figure. Only after that, you can count on a repeat test of the maximum of 1.2000 and its breakout. However, this requires adequate fundamentals, although the weakness of the US dollar, which depends on the attractiveness and yield of US bonds and demand for gold, may again lead to the uncontrolled growth of the euro. Today's statistics on activity in the services sector of the Eurozone countries once again prove the cooling of the bullish momentum of the European economy. Germany is the only country that has managed to demonstrate a more or less stable state of health. Repeated outbreaks of coronavirus infection have slowed the recovery of the economies of Italy and Spain. The risk of a second wave of the epidemic is also holding the back activity in the service sector due to low demand. The maintenance of social distancing measures and the quarantine regime in some European countries also do not improve the situation of the service sector. According to a report by Markit, the purchasing managers' index (PMI) for the Italian services sector in August this year fell below the 50-point mark, indicating a reduction in the activity. Low tourist flow against the background of the coronavirus pandemic in late summer did not allow the indicator to stay above the growth mark. So the index fell to 47.1 points in August, against 51.6 points in July. The PMI for Italy's services sector was forecast at 49.0 points. Another problem for Italy remains employment, which is likely to continue to decline in the next 12 months. The end or partial curtailment of the employment support program, which assumes a reduced working day, the end of which is December 31, will necessarily lead to a sharp increase in the unemployment rate. Let me remind you that employment increased in July for the first time since February, but at the same time, the unemployment rate rose to 9.7%. Meanwhile, in France, the same purchasing managers' index (PMI) for the services sector in August this year fell to 51.5 points, against 57.3 points, while it was forecast at 51.9 points. As noted above, Germany has more firmly experienced the final stage of summer growth. There, the purchasing managers' index (PMI) for the services sector in August was 52.5 points, up from 55.6 points in July, while a decline of 50.8 points was forecast. The German labor market is also returning to its former form. At least the IFO Institute report shows that the number of part-time employees in Germany fell to 4.6 million in August. The share of part-time workers in the total number of employees fell to 14% from 17% in July. In the Eurozone as a whole, the purchasing managers' (PMI) indices for the services sector managed to keep the territory above 50 points, however, the line is quite close. We learned above that there is a very sharp difference in the recovery of activity across the Eurozone countries. According to the data, the purchasing managers' index (PMI) for the Eurozone services sector in August was 50.5 points, compared with 54.7 points a month earlier. The indicator was projected at 50.1 points. The composite index, which takes into account both the service sector and the manufacturing sector, was at 51.9 points in August, up from 54.9 in July. Another report on retail sales, which reflects how quickly the pace of recovery in the Eurozone is slowing, disappointed traders. The EU statistics agency noted a 1.3% decline in retail sales in the Eurozone in July compared to June. Economists had forecast an increase of 1.2%. As you can see, the deferred demand is coming to naught, as well as the easing of restrictions on the operation of stores. Compared to the same period of the previous year, retail sales in the Eurozone increased by 0.4% in July. GBPUSD Meanwhile, the British pound continues to actively lose its position against the US dollar, having played the technical model of a head-to-shoulders reversal. The breakout of the large support of 1.3310, which was not possible yesterday, led to a new wave of the decline of the trading instrument to the area of the lows of 1.3240, keeping the larger level of 1.3165. The continued growth in activity in the UK services sector in August did not help the bulls implement their plans to return the pound to the level of 1.3380. According to a report by IHS Markit and CIPS, the purchasing managers' index (PMI) for the UK services sector in August was revised up to 58.8 points from a preliminary reading of 60.1 points. Back in July, the indicator was equal to 56.5 points. Index values above 50 indicate an increase in the activity. But many economists continue to emphasize that the current figures should not be perceived as the most accurate, as the UK government is taking active measures to support the economy after the coronavirus crisis. The pressure on the pound is expected to return in early autumn when the next round of trade negotiations between the UK and the EU is about to start. In front of investors, the Bank of England is also waving the possibility of introducing negative interest rates in the UK in the autumn of this year. And although the Governor of the Bank of England, Andrew Bailey, recently stressed that the Central Bank does not currently plan to lower rates into negative territory, it is not certain that it will not change its mind tomorrow. The material has been provided by InstaForex Company - www.instaforex.com
September 3, 2020 : GBP/USD Intraday technical analysis and trade recommendations.
on September 3, 2020 at 12:35 pm
Transient bearish breakout below 1.2265 (consolidation range lower limit) was demonstrated in the period between May 13 - May 26. However, immediate bullish rebound has been expressed around the price level of 1.2080 bringing the GBP/USD back towards 1.2780 (Previous Key-Level) where another episode of bearish pullback was initiated. Short-term bearish movement was expressed towards 1.2265 where Significant bullish rejection was originated bringing the GBP/USD pair back towards 1.2780 where this key-level failed to offer enough bearish rejection. Intermediate-term Technical outlook for the GBP/USD pair remains bullish as long as bullish persistence is maintained above 1.2780 (Depicted KeyLevel) on the H4 Charts. On the other hand, the GBPUSD pair looked overbought after such a quick bullish movement while approaching the price level of 1.3475.That's why, short-term bearish reversal shouldbe excluded provided that bearish persistence is maintained below the current price level Of 1.3300. Trade recommendations : Intraday traders are advised to look for continuation of bearish rejection below the price levels of (1.3300) as a valid SELL Entry. Initial T/p level is to be located around 1.3300, 1.3200 and 1.3100. On the other hand, bullish persistence above 1.3350 invalidates this trading scenario.The material has been provided by InstaForex Company - www.instaforex.com
September 3, 2020 : EUR/USD Intraday technical analysis and trade recommendations.
on September 3, 2020 at 12:01 pm
On May 14, the EUR/USD has expressed evident signs of Bullish rejection as well as a recent ascending bottom around the price zone of (1.0815 - 1.0775).Thus, enhancing the bullish side of the market in the short-term. Bullish breakout above 1.1000 has enhanced further bullish advancement towards 1.1150 then 1.1380 where another sideway consolidation range was established. The EURUSD pair has failed to maintain enough bearish momentum below 1.1150 (consolidation range lower zone) to enhance further bearish decline. Instead, bullish breakout above 1.1380-1.1400 has lead to a quick bullish spike directly towards 1.1700 (Fibonacci Expansion 150% level) which failed to offer sufficient bearish pressure. Bullish persistence above 1.1700-1.1760 favored further bullish advancement towards 1.1975 where some considerable bearish rejection has been demonstrated. The price zone around 1.1975-1.2000 ( upper limit of the technical channel ) remains a strong SUPPLY-Zone to be watched for bearish reversal. However, Conservative traders should be waiting for bearish re-closure below 1.1700. As this indicates lack of bullish momentum and enhances further bearish decline initially towards 1.1600 and 1.1500. Trade recommendations : Conservative traders should wait for the current bullish movement to get back below 1.1700 as an indicator for lack of bearish momentum for a valid SELL Entry.T/P levels to be located around 1.1600 and 1.1500 while S/L to be placed above 1.1760 to minimize the associated risk.The material has been provided by InstaForex Company - www.instaforex.com
September 3, 2020 : EUR/USD daily technical review and trade recommendations.
on September 3, 2020 at 11:48 am
The EUR/USD pair has been moving sideways within the depicted expanding channel since August 3. Previously, a temporary resistance level was formed around 1.1900 which prevented further upside movement for and forced the pair to have a downside pause for sometime. On August 31, the EURUSD pair achieved another breakout above the previously mentioned resistance zone. Significant SELLING pressure was applied around 1.2000 where the upper limit of the movement pattern came to meet the pair. Currently, the EUR/USD pair has demonstrated a quick bearish decline towards 1.1800. More downside movement is expected towards the lower limit of the movement pattern around 1.1770-1.1750. Any downside pullback towards this price zone around 1.1750 should be considered for a BUYING opportunity. Initial target would be located around 1.1860 while Stop Loss should be placed just below 1.1720The material has been provided by InstaForex Company - www.instaforex.com
BTC analysis for September 03,.2020 - BTC is in cretion of the C leg and I see potential drop towards the $10.650
on September 3, 2020 at 11:44 am
Further Development Analyzing the current trading chart BTC I found that my yesterday's idea is stil active and I expect further downside movement towards the levels at $10,650 $9,900 In my opinion, the BTC is in creation of C leg to complete major ABC correction. Most recently I found that BTC is in consolidation but I see it like confrontational for the downside. Key Levels: Resistance: 1,1825 Support levels: 1,1760-1,1705The material has been provided by InstaForex Company - www.instaforex.com
EUR/USD analysis for September 03 2020 - Potential for drop towards the 1.1705
on September 3, 2020 at 11:36 am
Says that GOP are moving even further in the wrong direction The battle rages on between US lawmakers on the coronavirus relief plan and Schumer's remarks above are pretty much the same as what we have heard for over a month now. The clock is ticking as we move further down the fiscal cliff, as time will tell how much of a hit the US economy faces in the coming months with this issue going nowhere. As I discussed in the previous review, the EUR started the down cycle and in my opinion is heading to test major pivot support at 1,1760-1,1705. Further Development Analyzing the current trading chart EUR, I still expect more downside roation towards the 1,1760-1,1705. 1-Day relative strength performance Finviz Based on the graph above I found that on the top of the list we got Lean Hogs and Palladium today and on the bottom Heating Oil and Lumber. EUR is on the bottom of the list with no evidence of counter rection, which is good sign for further continuation. Key Lvels: Resistance: 1,1825 Support levels: 1,1760-1,1705The material has been provided by InstaForex Company - www.instaforex.com
Analysis of Gold for September 03,.2020 - Gold is heading towards our downside target and bottom fo trading range at $1.912
on September 3, 2020 at 11:26 am
JP Morgan analyst, Malcolm Barr, remarks in a research note to clients The firm says that it would be a surprise if there was enough progress made to bring about an agreement by the end of October, though chances of a no-deal Brexit materialising is about one third in their view: "The chance of a no-deal is about a third, but with brinksmanship part of the process it may appear higher than that before an agreement is reached." In other words, negotiators from both sides are expected to leave it to the last minute - as per what we have been accustomed to with all things Brexit over the years. We're now entering the supposed "hot phase" of negotiations but both sides are still unlikely to produce much room for a compromise, so that may be a key risk factor to consider for the pound over the next few weeks. As I discussed in the previous review, the Gold managed to reject from the key pivot resistance at $1,975 as I expected yesterday. Further Development Analyzing the current trading chart, of Gold I found that Gold is heading towards our yesterday's target at $1,912. In case of the stronger breakout of the $1,912, there is potential for test of next downside reference at $1,863. Watch for selling on the rallies... 1-Day relative strength performance Finviz Based on the graph above I found that on the top of the list we got Lean Hogs and Palladium today and on the bottom Heating Oil and Lumber. Key Levels: Resistance: $1,975 Support levels: $1,912 and $1,863The material has been provided by InstaForex Company - www.instaforex.com
Daily Video Analysis: USDJPY High Probability Setup
on September 3, 2020 at 11:20 am
Today we take a look at USDJPY. Combining advanced technical analysis methods such as Fibonacci confluence, correlation, market structure, oscillators and demand/supply zones, we identify high probability trading setups.The material has been provided by InstaForex Company - www.instaforex.com