| Trading plan for the EUR/USD pair for the week of December 7-11. New COT (Commitments of Traders) report. The unprecedented and groundless growth of the euro currency continues. 2020-12-06 EUR/USD - 24H.  EUR/USD - 24H. Over the past week, the EUR/USD pair has grown by more than 200 points. If a week earlier there was still hope for the bears, who for four months have not been able to start forming a new downward trend, then last week all these hopes collapsed. Quotes of the euro/dollar pair updated the previous high, and at the same time, two-year highs. Thus, we can now conclude that the upward trend has resumed. However, it is very difficult to say how long it will last. We have repeatedly drawn the attention of traders to a complex fundamental situation and a large number of factors that can affect the mood of traders and the movement of the pair. We still believe that from a fundamental point of view, there is no reason to strengthen the European currency. Macroeconomic statistics also do not speak in favor of the dollar and against the euro. Thus, the growth of the euro currency is purely speculative, or central banks and major players who conduct operations with the dollar and euro have entered the market without taking into account the "foundation" and other factors. Thus, as before, we recommend that any fundamental hypothesis be confirmed by "technique". COT report. 
During the last reporting week (November 24-30), the EUR/USD pair increased by only 80 points. However, the new COT report for the second week in a row signals an increase in the "bullish" mood among professional traders. This time, the Non-commercial group opened 4.3 thousand new purchase contracts and closed 300 sales contracts. These numbers are not large. Even the general changes in favor of the bulls over the past two weeks can not be called "breaking the bearish trend". However, for two weeks in a row, the net position of non-commercial traders is growing. And it began to grow synchronously with the resumption of the upward movement of the euro/dollar pair. Unfortunately, COT reports are released three days late. Thus, they can be used to determine the trend, however, technical confirmation is always required for any conclusions made based on COT reports. What do we end up with? The number of open buy-contracts for professional traders remains high – 212 thousand, and the number of sell-contracts is three times lower than 67 thousand. The gap between them began to decrease around September (the second indicator showing the net position of the "Non-commercial" group), but at the moment it is increasing again. Thus, we still expect the end of the upward trend formation, because this is what all the data in the COT report (especially the first indicator) indicate. However, we need technical confirmation of this. What can we say about the fundamental background of the past trading week? It didn't matter. Macroeconomic statistics were mostly ignored. Fundamental events were not taken into account. By and large, there are similar problems in the United States and the European Union, however, the American economy looks even a little more promising since it did not have a second "lockdown". This is very eloquently evidenced by data on business activity in the US and EU services sectors. There were fears that the unemployment rate in America will start to increase again due to the huge number of cases of "coronavirus", which is recorded daily. However, recent reports have shown that applications for unemployment benefits remain normal, secondary applications for benefits are decreasing in number, the official unemployment rate is decreasing, and inflation remains at quite normal values. Thus, we can even say that everything is fine in the US now if we take into account the global crisis and the pandemic. Of course, Jerome Powell regularly calls on the US Congress to agree on a new aid package for the economy. But it has not yet been agreed and it is unlikely that this is why the dollar is falling. After all, the European Union also has problems with assisting the economy. Poland and Hungary have blocked the EU's seven-year budget and recovery fund, and it may now take a long time to convince Warsaw and Budapest to withdraw their vetoes. And to do this, you will need to change the mechanism for observing the rule of law, which is not as easy as it may seem. In general, we do not believe that the European economy is now in a better state than the American one. Therefore, the reasons for the growth of the euro currency are not fundamental. Trading plan for the week of December 7-11: 1) The pair's quotes have resumed the upward trend and now, in the next few weeks, they will aim for the levels of 1.2245 and 1.2487. Although the COT report and the fundamental background continue to signal a possible and very likely fall in the pair's quotes and the baselessness of the current growth, it can continue. "Technique" now eloquently signals an upward trend after a four-month flat. 2) To be able to sell the EUR/USD pair, you need to at least wait for the price to consolidate below the Kijun-sen and Senkou Span b lines. However, we do not expect such a development in the near future, since the price is very far from these lines. Thus, short positions can only be considered on lower timeframes if a downward trend is formed. Explanation of the illustrations: Price levels of support and resistance (resistance/support) – target levels when opening purchases or sales. You can place Take Profit levels near them. Ichimoku indicators, Bollinger bands, MACD. Support and resistance areas – areas that the price has repeatedly bounced from before. Indicator 1 on the COT charts – shows the net position size of each category of traders. Indicator 2 on the COT charts – the net position size for the "Non-commercial" group. Trading plan for the GBP/USD pair for the week of December 7-11. New COT (Commitments of Traders) report. Negotiations continue to stall, however, the pound is still growing. 2020-12-06 GBP/USD – 24H.  The GBP/USD currency pair has increased by about 100 points over the past week. Nevertheless, the upward trend, although not strong at the moment, is stable. There are almost no downward corrections, and the previous high from September 1 was updated. Formally, we now have the "double top" pattern at our disposal. However, we now recommend paying more attention to short-term trends and technical factors. The problem is the same as in the case of the euro/dollar pair. The fundamental background does not support the growth of the pound in any way. However, it is this currency that continues to grow steadily, although there are now a huge number of global problems in the UK. Nevertheless, market participants continue to sell the dollar. Last week, the pair's quotes worked out the first resistance level of 1.3526. It can provide serious resistance to buyers. However, as long as the upward trend continues, we recommend continuing to trade higher, despite the "foundation", "macroeconomics", COT reports, and other factors. COT report.  During the last reporting week (November 24-30), the GBP/USD pair did not grow or fall by a single point. In other words, there were no price changes during this period. But in general, there was still an upward trend, which continued into the next week. If in the case of the euro/dollar pair, we have long expected the beginning of a new downward trend, in the case of the pound/dollar pair, COT reports did not allow us to draw such conclusions. You only need to look at both indicators in the illustration to understand that there is no trend in the mood of major players. The first indicator constantly shows the change of mood of commercial and non-commercial traders from "bearish" to "bullish" and vice-versa. The second indicator constantly shows that the net position of the "Non-commercial" group is growing and decreasing. In other words, no conclusions can be drawn about the future of the pair based on COT reports. During the reporting week, non-commercial traders opened 3.6 thousand new purchase contracts and closed 4.4 thousand sales contracts. That is, the net position increased by 8 thousand at once, which is a lot for the pound. But there were no price changes. The number of open buy and sell contracts for the "Non-commercial" group is almost the same. The fundamental background for the GBP/USD pair remained discouraging last week. Throughout the trading week, participants in the negotiation process made it clear that "everything should be resolved in the coming days" and "the negotiations have entered a crucial phase". However, no official statements were made again. On Friday, Michel Barnier has traditionally announced the continuation of negotiations, however, information was received from a member of the government about the deterioration of the atmosphere at the talks. According to the unnamed MP, the European Union has started to introduce new items, which worsens the prospect of signing the agreement. According to London, because of Brussels, progress in the negotiations has rolled back by 24 hours. On Friday, the pair's quotes fell slightly in price. But in general, it cannot be said that this was due to the appearance of another tension in the negotiations on a trade deal. However, now it is very difficult to understand what guides traders when making trading decisions. First of all, of course, we are interested in major traders who set the tone for trading. For example, on Friday, the States also published quite important statistics that were not in favor of the US currency (NonFarm Payrolls report). But in the second half of the day, it was the dollar that rose in price. Most likely, there was a purely technical correction, traders simply decided to fix some of the long positions to withdraw profits. However, even in this case, the correction was extremely weak. In general, the upward trend continues, and we recommend starting from this fact in trading. Trading plan for the week of December 7-11: 1) The upward movement continues in recent weeks. The maximum from September 1 was updated, and the "double top" pattern may be formed. However, the fundamental background continues to confuse, which does not support the British pound. Thus, for the time being, upward trends remain more preferable for working out on lower timeframes, but we continue to expect the end of the upward trend. 2) Sellers now remain quite weak. Some hopes are associated with a rebound from the resistance level of 1.3526. However, in any case, to start trading for a decrease, you need to wait for the formation of a downward trend at least in the 4-hour timeframe. So far, there is a fairly strong upward movement. If the level of 1.3526 is overcome, the start of a new downward trend will be postponed indefinitely. Bears can still rely only on the fundamental background, however, it is not recommended to open shorts without technical confirmation. Explanation of the illustrations: Price levels of support and resistance (resistance/support) – target levels when opening purchases or sales. You can place Take Profit levels near them. Ichimoku indicators, Bollinger bands, MACD. Support and resistance areas – areas that the price has repeatedly bounced from before. Indicator 1 on the COT charts – shows the net position size of each category of traders. Indicator 2 on the COT charts – the net position size for the "Non-commercial" group.
Author's today's articles: Stanislav Polyanskiy  Graduated from Odessa State Economic University. On Forex since 2006. Writes analytical reviews about international financial markets for more than 3 years. Worked as a currency analyst in different finance companies for a long time including the biggest companies of Russia and Ukraine.
Subscription's options management Theme's:
Fundamental analysis, Fractal analysis, Wave analysis, Technical analysis, Stock Markets
Author's :
A Zotova, Aleksey Almazov, Alexander Dneprovskiy, Alexandr Davidov, Alexandros Yfantis, Andrey Shevchenko, Arief Makmur, Dean Leo, Evgeny Klimov, Fedor Pavlov, Grigory Sokolov, I Belozerov, Igor Kovalyov, Irina Manzenko, Ivan Aleksandrov, l Kolesnikova, Maxim Magdalinin, Mihail Makarov, Mohamed Samy, Mourad El Keddani, Oleg Khmelevskiy, Oscar Ton, Pavel Vlasov, Petar Jacimovic, R Agafonov, S Doronina, Sebastian Seliga, Sergey Belyaev, Sergey Mityukov, Stanislav Polyanskiy, T Strelkova, Torben Melsted, V Isakov, Viktor Vasilevsky, Vladislav Tukhmenev, Vyacheslav Ognev, Yuriy Zaycev, Zhizhko Nadezhda
Edit data of subscription settings
Unsubscribe from the mailing list Sincerely,
Analysts Service | If you have any questions, you can make a phone call using one of the
InstaForex Toll free numbers right now:
|  | InstaForex Group is an international brand providing online trading services to the clients all over the world. InstaForex Group members include regulated companies in Europe, Russia and British Virgin Islands. This letter may contain personal information for access to your InstaForex trading account, so for the purpose of safety it is recommended to delete this data from the history. If you have received this letter by mistake, please contact InstaForex Customer Relations Department. |
No comments:
Post a Comment