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The best broker in Asia www.instaforex.com Daily analysts mail subscription Elliott wave analysis of EUR/JPY for January 18, 2020 2021-01-18 EUR/JPY has pushed lower than the ideal 125.72 and is hovering just above 125.14. This leaves us with two possible scenarios. The first sees the decline from 127.50 as red wave iv and one more push higher to above 127.50 should be expected in red wave v. The second scenario sees red wave i/ completed with the test of 127.50 and ongoing decline in red wave ii/. If this is the case, we should expect a small breach below 125.14 before EUR/JPY starts to turn higher again as red wave iii/ takes over and takes us well above 127.50 towards 129.06. R3: 126.17 R2: 125.88 R1: 125.51 Pivot: 125.30 S1: 125.14 S2: 124.95 S3: 124.67 Trading recommendation: We bought EUR at 125.75 and we have placed our stop at 124.75 Elliott wave analysis of GBP/JPY for January 18, 2021 2021-01-18 The break below 141.38 demonstrates that the push to 142.26 cannot be green wave iv, but rather a green wave i/, and the ongoing decline is green wave ii/. We expect that short-term key-support 140.31 will be able to protect the downside for a break above minor resistance at 141.09 indicating that the correction from 124.26 is complete and a new push to above 142.26 is developing. A break below 140.31 will force us to make a revision of our bullish count. R3: 141.50 R2: 141.29 R1: 141.06 Pivot: 140.73 S1: 140.63 S2: 140.31 S3: 140.09 Trading recommendation: We are long GBP from 140.71 with our stop placed at 140.25 EUR/USD: plan for the European session on January 18. COT reports (analysis of deals). Risk of US riots and increased quarantine measures in Germany weigh on the euro 2021-01-18 To open long positions on EUR/USD, you need: The euro was sold all day last Friday. I highlighted the area where the first breakdown of the 1.2144 level occurred on the 5-minute chart, afterwards the pair returned several times and tested this range from the bottom up, which resulted in creating a signal to sell the euro. Support at 1.2113 was the target, which is where the downward movement stopped. They focused on this level in the afternoon. Its breakout and test from the bottom up created another sell signal for EUR/USD, which pulled down the pair to a new low of 1.2080, from where I recommended opening long positions with a view to a slight correction, which happened. The technical levels have slightly changed at the moment. The situation in Germany and the strengthening of the quarantine, along with the expected unrest during the inauguration of Joe Biden, are supporting the US dollar, which may continue to strengthen against the euro. The task of the EUR/USD buyers is to protect the support level of 1.2064, and forming a false breakout on it will create a buy signal. Temporarily stopping the downward movement in the first half of the day was shown by the MACD indicator, which is in the oversold zone. In the absence of bullish activity, it is best to postpone long positions until the test of the next monthly low in the area of 1.2026 and 1.1986, from where you can buy EUR/USD immediately on a rebound, counting on a correction of 20-25 points within the day. An equally important task for the bulls is to regain control of the 1.2102 level, where the moving averages pass, playing on the side of the euro sellers. A breakout and being able to settle above 1.2102 and testing this area from top to bottom creates a convenient entry point to long positions in hopes to return and update resistance at 1.2142, where I recommend taking profits. To open short positions on EUR/USD, you need: Sellers of the euro will focus on the breakout and being able to settle below support at 1.2064. Weak fundamental data on the Italian economy will harm the euro, but it will not provide optimism to buyers either. A breakout and being able to test this level from the bottom up, similar to sales, which I analyzed above, will create a new signal to open short positions and open a direct path to the low of 1.2026, where I recommend taking profits. A more distant target will be 1.1986, but we can hardly expect such an active fall at the beginning of the week. An equally important task for the bears is to protect resistance at 1.2102. If EUR/USD recovers, forming a false breakout there will produce a signal to open short positions in sustaining the downward trend. If sellers are not active when resistance has been tested at 1.2102, it is best to refuse to sell. In this case, you can take a closer look at short positions after updating the high of 1.2142, or sell EUR/USD immediately on a rebound from the 1.2179 level, counting on a downward correction of 20-30 points within the day. Let me remind you that the Commitment of Traders (COT) report for January 5 recorded an increase in both short and long positions. Buyers of risky assets continue to believe in a bullish trend despite the euro's decline at the beginning of this year, which will make it possible for new major players to enter the market. News of ongoing vaccinations against the first strain of coronavirus Europe will also support euro buyers. Pressure on the euro will come from isolation measures and ongoing quarantines in many European countries. Thus, long non-commercial positions rose from 222,443 to 224,832, while short non-commercial positions jumped from 78,541 to 81,841. Due to the larger increase in short positions, the total non-commercial net position decreased from 143. 902 to 142,991 weeks earlier. The insignificant change in the delta at the beginning of the year hardly indicates a change in the tactics of euro buyers, who count on the euro's growth after the abolition of quarantine measures in the EU countries. Indicator signals: Moving averages Trading is carried out below 30 and 50 moving averages, which indicates a succeeding decline for the euro. 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 lower border of the indicator around 1.2050 will increase pressure on the euro. In case of growth, the upper border of the indicator in the 1.2142 area will act as resistance. 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. GBP/USD: plan for the European session on January 18. COT reports (analysis of deals). Pound weakens against dollar amid general decline in investor optimism 2021-01-18 To open long positions on GBP/USD, you need: In my forecast for the first half of the day, I paid attention to the 1.3661 level and advised you to act based on it. Let's take a look at the 5-minute chart and talk about the signals that led to a market entry. Forming a false breakout in the support area of 1.3661 resulted in creating an entry point to the market, as the trend at the end of the previous day was upward. However, nothing came of this signal, and after a slight increase by 15 points, the bears achieved a breakdown of support at 1.3661. Then the situation began to develop in an interesting manner, a slight consolidation below 1.3661 and returning and being able to test this area from the bottom up resulted in creating a signal to sell the pound and caused the euro to fall to 1.3624. The downward movement was around 40 points. I missed the sell positions from the 1.3624 level, which appeared in the afternoon, since I could not wait for a convenient signal to appear. Testing a low at 1.3585, from which I recommended buying the pound immediately on a rebound, made it possible for us to take a couple more points from the market. Pound buyers need to think of a way to protect support at 1.3567. Forming a false breakout there in the first half of the day creates a signal to enter long positions, which will result in an upward correction to the resistance area of 1.3602. A critical confrontation will begin for this level, since the pound's succeeding direction depends on it. A breakout and consolidation above this area will create another entry point into long positions and will lead to an increase in GBP/USD to the high of 1.3636, where I recommend taking profits. Moving averages also pass there, playing on the side of the sellers of the pound. If buyers are not active at the 1.3567 level, and the situation is likely, since the bulls have nothing to rely on at the beginning of this week, I recommend postponing long positions until the 1.3539 low has been updated, or buy GBP/USD immediately on a rebound in the support area of 1.3505, counting on a correction by 25-30 points within the day. To open short positions on GBP/USD, you need: The bears will protect resistance at 1.3602 in every possible way, since the pair's succeeding direction depends on it. Forming a false breakout there in the first half of the day will be a signal to open short positions, and its purpose is a downward correction to the support area of 1.3567, a breakout of which will cause the pound to fall to a low of 1.3539. A distant target at the beginning of this week is support at 1.3505, where I recommend taking profit. No important fundamental statistics expected for today, so we can count on sustaining the downward trend for the pound. If the bears ignore resistance at 1.3602, then it would be best to postpone short positions until the 1.3636 high is updated, where the moving averages pass, playing on the side of the pound sellers. It is possible to open short positions immediately on a rebound in the 1.3668 area, counting on a downward correction of 30-40 points within the day. The Commitment of Traders (COT) report for January 5 recorded a slight decline in interest in the British pound, but this does not affect the overall picture. Long non-commercial positions decreased from 37,550 to 35,526. At the same time, short non-commercial positions remained practically unchanged and only increased from 31,518 to 31,861. As a result, the non-commercial net position, although it decreased, remained positive and reached 3,665 against 6,032 a week earlier. All this suggests that traders continue to bet on the strengthening of the pound, even in the face of the new Covid-19 strain, for which there is no vaccine yet. The demand for the pound is limited by quarantine measures in the UK, which will sooner or later be canceled after the infection stabilizes. Additional stimulus from the Bank of England, which economists will soon talk about, may also somewhat smooth out the upward trend in the pound. Indicator signals: Moving averages Trading is carried out below 30 and 50 moving averages, which indicates a succeeding decline for the pair in the short term. 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 lower border of the indicator around 1.3545 will increase pressure on the pound. Growth will be limited to the area of the upper level of the indicator at 1.3636. 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. Non-commercial short 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. Trading plan for EUR/USD on January 18. Euro is on sale. 2021-01-18 Just like the previous times, global COVID-19 incidence decreased over the weekend. However, further observation is needed before we can confirm if the virus has really retreated. With regards to vaccinations, its pace has slowed around the world. Some countries have insufficient supplies, while some have no wide campaign among the population. EUR/USD: No important report is scheduled for release this week, except for the upcoming inauguration of Joe Biden this January 20. In any case, there is a sell-off in the euro, therefore, open positions from 1.2180. Technical analysis of GBP/USD for January 18, 2021 2021-01-18 Overview : On the one-hour chart, the shared currency is trading in a bear trend below the 100 -day simple moving averages (EMAs). The GBP/USD pair's breaking above a multi-week trend line and is challenging the 100 EMA. When applying RSI Analysis to the price chart, one can see that price is trading below the EMA 100 period Moving Average line, a fact which confirms the GBP/USD pair's downward direction. Additionally, the Relative Strength Index (RSI) registers values below the 30 line which indicates negative sentiment. Suggesting bearish momentum in the medium term. The GBP/USD pair is consolidating the weekly gains below the 1.3710 resistance as bears remain in control. A break below the level of 1.3580 can expose the 1.3540 support, according to the technical Fibonacci indicator. US Dollar and Brexit An improvement in market sentiment and the deal between the United Kingdom and the European Union on Brexit boosted the pair during the week. Also, the Greenback pulled back across the board, adding more strength to the move lower in the GBP/USD pair. The GBP/USD pair posts biggest weekly gains since 2020 and highest close at the top point of 1.3710. Near the end of the week, it is hovering around 1.3580, posting the best weekly result in months. The last leg higher took place amid a decline of the Pound. The GBP /USD pair has broken support at the level of 1.3653 which acts as a resistance now. According to the previous events, the GBP/USD pair is still moving between the levels of 1.3653 and 1.3453. Therefore, we expect a range of 200 pips in coming three days. The trend is still below the 100 EMA for that the bearish outlook remains the same as long as the 100 EMA is headed to the downside. Hence, the price spot of 1.3650 -1.3710 remains a significant resistance zone. Consequently, there is a possibility that the GBP/USD pair will move downside. The structure of a fall does not look corrective. In order to indicate a bearish opportunity below 1.3650, sell below 1.3600 -1.3650 with the first target at 1.3545. Besides, the weekly support 1 is seen at the level of 1.3545. If the pair succeeds in passing through the level of 1.3545, the market will indicate the bearish opportunity below the level of 1.3545 in order to reach the second target at 1.3511. In our opinion, the GBP/USD pair may grow up to test 1.3511 from below and then form the second descending impulse with the third objective 1.3450 so as to form a double bottom at the same time frame. However, traders should watch for any sign of a bullish rejection that occurs around 1.3450. The level of 1.3450 coincides with the last bearish wave which is expected to act as a major support today. Since the trend is below the 78% Fibonacci level (1.3653), the market is still in a downtrend. Overall, we still prefer the bearish scenario. Indicator Analysis. Daily review for the GBP/USD currency pair 01/18/21 2021-01-18 Trend Analysis (Figure 1). Today, the market may continue to go down from the level of 1.3585 (Friday's daily candle close) with the target of 1.3481 at the historical resistance level (blue dotted line). When testing this line, it will continue to go down with the target of 1.3373 at the retracement level of 14.6% (red dotted line). Figure 1 (daily chart). Comprehensive Analysis: Indicator Analysis – down Fibonacci Levels – down Volumes – down Technical Analysis – down Trend Analysis – down Bollinger Bands – down Weekly Chart – down General Conclusion: Today, the price may continue to go down with the target of 1.3481 at the historical resistance level (blue dotted line). When testing this line, it will go down with a target of 1.3373 at the retracement level of 14.6% (red dotted line). Unlikely scenario: the price may continue to go down from the level of 1.3585 (Friday's daily candle close) with the target of 1.3481 at the historical resistance level (blue dotted line). When testing this line, it is possible to go up with the target of 1.3550 - 21 average EMA (black thin line). EUR/USD: Biden's special inauguration, Italy's crisis, and US weak retail sales 2021-01-18 The US dollar index reached monthly highs, amid continued demand for the US currency. The general nervousness associated with the inauguration of Joe Biden serves as an impulse for the dollar's growth. In addition, the market continues to make use of last week's report about the "Plan to Save America", with a total volume of $ 1.9 trillion. Such a fundamental background allows the US dollar to gain momentum – including in a pair with the euro, which is under the weight of its own problems (prolongation of lockdowns in key EU countries, political crisis in Italy and slowdown in the main economic indicators). As a result, the EUR/USD pair declined to the mid-20th mark, that is, to almost two-month lows. It also lost 300 points in less than two weeks after reaching a two and a half year price high at the level of 1.2350. But despite such a sharp decline, it is too early to talk about a change in a trend: it can be assumed that we are dealing with a large-scale correction after a multi-week decline in the US dollar and accordingly, the growth of the EUR/USD pair. The nature of key factors that push up the US currency are emotional: the transfer of presidential power in the US is taking place in an overly tense environment, which is special in the country's recent history. However, this fundamental factor will lose its power in just two days, unless the alarming forecasts of American security officials become a reality. Another important fact is also noteworthy: the yield of treasuries (in particular, 10-year Treasury securities) is declining for three consecutive days, while bond yields' growth was one of the supports of the dollar's revaluation. This circumstance tells us that the strengthening of the US currency should be carefully treated now, since interest in a safe dollar may fade after January 20. The information flow related to the preparations for the inauguration of the newly elected US president resembles a report from the military fronts: the central part of the American capital was blocked with concrete blocks and metal fences. The city was divided into sectors, with a special regime operating within a radius of several kilometers from the Capitol, emptying almost all the streets. In addition, National Guard troops who will keep things in order are marching into Washington to prevent riots from repeating. It also became known that Trump supporters and representatives of far-right radical movements can hold armed marches in the territory of all 50 state capitals – such information was distributed by the FBI. The governors of Maryland, New Mexico and Utah have already declared a state of emergency in connection with possible riots. National Guard in California, Pennsylvania, Michigan, Virginia and Wisconsin was activated, and in Texas, the state capital was even closed from Saturday until Inauguration Day. This informational background contributes to the growth of anti-risk sentiment and interest in the US dollar, which is used as a protective tool. It is worth noting that traders even ignored the US retail sales data, which came out in the red zone. In particular, this indicator declined to -1.4% (weakest result since April last year) excluding car sales. All other components were also below zero, reflecting the decline in American consumer activity. In view of this, December's disappointing Nonfarm, inflation's weak release and Powell's "dovish" remarks should be recalled. These fundamental factors should restrain the growth of the US dollar, but the current general nervousness associated with US events is pushing the dollar up across the market. In terms of the EUR/USD pair, its downward dynamics is due to European events. In particular, traders are mainly paying attention to Italy, where the ruling coalition has collapsed. Over the next two days, it will become clear whether Italian politicians will be able to keep their government or the country will go to early parliamentary elections. Therefore, Italy's Prime Minister Giuseppe Conte will be put to a vote of confidence in the Lower House of Parliament today. He must receive confirmation of the continued support of the majority of deputies, or else his cabinet will be forced to resign. Tomorrow, a similar vote will be held in the Upper House of Parliament (Senate). And if today's voting ends in favor of Conte, then there is still intrigue about the Senate. Considering that Italian politicians fail to keep the government and go to re-election, the euro will be under additional pressure. The continuing intrigue regarding tomorrow's vote in the Senate only worsens the situation, putting pressure on the EUR/USD pair. On another note, Germany will be deciding this week if they should introduce the so-called "mega-lockdown". Here, the country will stop public transport and impose a curfew. Austria, in turn, announced yesterday that their national quarantine will be extended until February 7. In this case, the rest of the EU countries where quarantine restrictions are in force are expected to make similar decisions in the next few days. Thus, the current fundamental outlook contributes to a short-term further decline in the EUR/USD pair. It may test the support level of 1.2000 (upper line of the Bollinger Bands indicator in the daily time frame) until January 20. We can consider short positions to this level, as the general panic associated with Biden's special operation for its inauguration will support the dollar bulls. It should also be noted that the United States is celebrating Martin Luther King Day today, so American trading floors will be closed. Therefore, the currency market will start fully working tomorrow. Technical Analysis of GBP/USD for January 18, 2021 2021-01-18 Technical Market Outlook: The GBP/USD pair had tested the recent swing high located at the level of 1.3698, but no breakout higher occurred and the market reversed towards the level of 1.3624. This level had been violated as well and new low was made at the level of 1.3556 (at the time of writing this analysis). The next target for bears is seen at the level of 1.3450, which is the recent swing low. The weak and negative momentum supports the short-term bearish outlook for Cable. Weekly Pivot Points: WR3 - 1.3982 WR2 - 1.3839 WR1 - 1.3718 Weekly Pivot - 1.3586 WS1 - 1.3464 WS2 - 1.3322 WS3 - 1.3204 Trading Recommendations: The GBP/USD pair keeps developing the up trend and the trigger for this trend was the breakout above the level or 1.3518 on the weekly time frame chart. The recent top was made at the level of 1.3702. All the local corrections should be used to open a buy orders as long as the level of 1.2674 is not broken. The long-term target for bulls is seen at the level of 1.4370. Technical analysis of EUR/USD for January 18, 2021 2021-01-18 Overview : The EUR/USD pair faced resistance at the level of 1.2223, while minor resistance is seen at 1.2125. Support is found at the levels of 1.2040 and 1.2015. The EUR/USD pair opened below the daily pivot point (1.2125). It continued to move downwards from the level of 1.2125 to the bottom around 1.2065. Today, the first resistance level is seen at 1.2125 followed by 1.2223, while daily support 1 is seen at 1.2223. Furthermore, the moving average (100) starts signaling a downward trend; therefore, the market is indicating a bearish opportunity below 1.2125. So it will be good to sell at 1.2125 with the first target of 1.2040. It will also call for a downtrend in order to continue towards 1.2015. The strong daily support is seen at the 1.2015 level, which represents a major support on the one-hour chart today. According to the previous events, we expect the EUR/USD pair to trade between 1.2125 and 1.2015 in coming hours. The price area of 1.2125 remains a significant resistance zone. Thus, the trend is still bearish as long as the level of 1.2125 is not broken. On the contrary, in case a reversal takes place and the EUR/USD pair breaks through the resistance level of 1.2223, then a stop loss should be placed above the point of 1.2223. On the four-hour chart : The EUR/USD pair continued to move upwards from the level of 1.2015. Since December 8th, 2020, the pair has risen from the level of 1.2015 to the top around 1.2340. Current price : 1.2077. In consequence, the EUR/USD pair broke resistance at 1.2015, which turned into strong support at the level of 1.2015. In the H4 time frame, the level of 0.9887 is expected to act as major support today. Currently, the price is moving in a bullish channel. This is confirmed by the RSI indicator signaling that we are still in a bullish market. The price is still above the moving average (100). From this point, we expect the EUR/USD pair to continue moving in the bullish trend from the support level of 1.2015 towards the target level of 1.2125. If the pair succeeds in passing through the level of 1.2125, the market will indicate the bullish opportunity above the level of 1.2125 so as to reach the second target at 1.2223. At the same time, if the EUR/USD pair is able to break out the level of 1.2125, the market will decline further to 1.2015 (daily support 2). Technical Analysis of EUR/USD for January 18, 2021 2021-01-18 Technical Market Outlook: After the Rising Wedge price pattern was made, the EUR/USD pair has dropped towards the level of 1.2088, which is inside of the main ascending channel. The lower channel boundary, seen at the level of 1.2065 is very close to the key technical support, located at the level of 1.2060. If this level is clearly violated, then the corrective cycle will get deeper and the next target for bears will be at the level of 1.2000. The weak and negative momentum supports the short-term outlook for this market. Weekly Pivot Points: WR3 - 1.2304 WR2 - 1.2263 WR1 - 1.2147 Weekly Pivot - 1.2111 WS1 - 1.2005 WS2 - 1.1985 WS3 - 1.1848 Trading Recommendations: Since the middle of March 2020 the main trend is on EUR/USD pair has been up. This means any local corrections should be used to buy the dips until the key technical support seen at the level of 1.1609 is broken. The key long-term technical resistance is seen at the level of 1.2555. The market made the Falling Wedge trend reversal pattern around the levels of 1.2200 - 1.2300 and now the corrective cycle might have started. Any violation of the level of 1.2154 supports the trend change/corrective cycle scenario. GBP/USD. January 18. COT report. Future US President Joe Biden is preparing to make a number of important decisions 2021-01-18 GBP/USD – 1H. According to the hourly chart, the quotes of the GBP/USD pair performed three rebounds from the level of 1.3698 and then continued the process of falling in the direction of the corrective level of 76.4% (1.3522). Closing the pair's quotes below this level will increase the probability of a further fall in the direction of the next corrective level of 61.8% (1.3458). However, in general, the British pound is now trading like the euro. Thus, if the euro has a good chance of further decline, then the British can resume the growth process almost at any time. Traders are still not worried about the coronavirus in the UK, as well as the third "lockdown" and the extremely gloomy outlook for the British economy. The pound worked out the words of the Governor of the Bank of England, Andrew Bailey, about the problem of applying negative rates. Now it will be extremely difficult to find new reasons for growth. However, there have not been many of them in recent months, however, traders have found reasons to buy the British. Meanwhile, Joe Biden, who should officially become president the day after tomorrow, is preparing to pass several bills, some of which will cancel the initiatives of Donald Trump, some are aimed at repaying the "four crises". Biden's team believes that the country urgently needs to make radical decisions on the coronavirus, which has already claimed about 400,000 American lives, the economy, climate change, and racial discrimination. It is expected that quarantine requirements will be tightened, the number of tests conducted for coronavirus will be increased, almost $ 2 trillion will be allocated to support the economy, and the United States will return to the Paris Climate Agreement. GBP/USD – 4H. On the 4-hour chart, the GBP/USD pair performed a new rebound from the corrective level of 127.2% (1.3701), a reversal in favor of the US currency, and began a new fall in the direction of the Fibo level of 100.0% (1.3481). Most likely, the pair will fall to this level. In the event of a rebound, a reversal in favor of the British currency and a new increase in quotes will follow. GBP/USD - Daily. On the daily chart, the pair's quotes performed a consolidation above the corrective level of 100.0% (1.3513). Thus, the growth process can be continued in the direction of the Fibo level of 127.2% (1.4084). The closing of the pair below the level of 100.0% will work in favor of the US currency and a further decline in quotes. GBP/USD - Weekly. On the weekly chart, the pound/dollar pair closed above the second downward trend line. Thus, the chances of long-term growth of the pound are significantly increased. Overview of fundamentals: On Friday, the UK released reports on GDP and industrial production. GDP was slightly better than traders expected, while industrial production was slightly worse. In general, traders again did not pay due attention to these reports, as the whole day the British did nothing but fall. US and UK news calendar: UK - Bank of England Governor Andrew Bailey will deliver a speech (13:30 GMT). On January 18, Andrew Bailey will perform in the UK, the second in 2021. The first reaction was quite strong. No more events are expected today. COT (Commitments of Traders) report: The latest COT report from January 12 finally showed a major change in the mood of major market players. The "Non-commercial" category of traders opened 10,460 long contracts during the reporting week and this is the maximum number of open long contracts in recent months. Thus, the mood of speculators became sharply more "bullish". 3,200 short contracts were also opened. Thus, in general, speculators opened almost 14,000 new contracts, which also did not happen for a very long time. Traders seem to be starting to believe in the British pound again and are also ready to trade the pound more actively than in the last few months. Brexit is behind us, the UK and the EU continue to trade duty-free with each other, so interest in the British is starting to return. GBP/USD forecast and recommendations for traders: It is recommended to buy the British now when the quotes rebound from the level of 100.0% (1.3481) on the 4-hour chart with a target of 1.3625 on the hourly chart. It was recommended to sell the pound at the close of quotes under the level of 1.3625 on the hourly chart with the target of 1.3522. Now you can continue to hold open positions. 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 to ensure current activities or export-import operations. "Non-reportable positions" - small traders who do not have a significant impact on the price. Analytics and trading signals for beginners. How to trade EUR/USD on January 18? Plan for opening and closing deals on Monday 2021-01-18 Hourly chart of the EUR/USD pair The EUR/USD pair calmly fell last night, which started on Friday. Thus, novice traders who opened deals on the last sell signal from MACD could still remain with short positions that night. However, as we predicted in yesterday's evening review, the MACD indicator turned almost immediately to the upside when trading started on Monday, as it has nowhere to go. But the price did not turn up and continues to fall in general. Thus, today's trading will be difficult and not the usual for beginners. The downward trend continues, but there is no new sell signal and we don't expect one in the near future. The MACD indicator needs to be discharged now, and the price needs to adjust. The same goes for a possible buy signal. The upper limit of the descending channel is far away. Therefore, if the price starts to sharply rise, then when it leaves the channel, it will go up by about 70-80 points. Considering that the average daily volatility of the EUR/USD pair is currently at around 75 points, it is unlikely that it will continue by at least 50 points after such an upward movement. Thus, the only possible option for today is a correction to the upper channel line and a rebound from it. Nothing extraordinary happened on Monday night in terms of the foundation. There isn't much exciting news in the European Union right now, but there are plenty of interesting events in America. Unfortunately, almost all of them are related to politics. The day after tomorrow, Donald Trump will officially leave the post of president of the United States, and Joe Biden will take over this post. The inauguration procedure is scheduled for January 20, to which Donald Trump will not come, and the Washington authorities are very much afraid that there will be mass and, possibly even armed riots. Therefore, Washington is now overcrowded with the military and the National Guard, and the Capitol is completely surrounded by barbed wire. Trump, who has been blocked by almost all social networks, already hardly even has the opportunity to organize any rally or protest. Nevertheless, many still fear that something will happen on January 20. But there is practically no news of an economic plan. As of today, no reports are planned either in the US or in the European Union. Possible scenarios on January 18: 1) Long positions are still irrelevant at the moment, as the downward trend remains in force. Those who wish to buy the EUR/USD pair should wait for the quotes to settle above the descending channel. In this case, you can consider long positions with targets at support levels 1.2194 and 1.2226. However, you should take note that after passing around 80 points in one direction, there is little chance of continuing the movement in the same direction. 2) Trading for a fall is more relevant now, but now novice traders need to wait for a new sell signal to appear. You are advised to open new short positions with targets at support levels 1.2048 and 1.2016. However, the MACD indicator must first be discharged to the zero level and only after that will it be able to create a new strong signal. Also, a rebound from the upper border of a new descending channel can be considered as a sell signal. 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 (14,22,3) 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. Indicator analysis. Daily review for the EUR/USD currency pair on January 18, 2021 2021-01-18 Trend analysis (Fig. 1). Today, the market from the level of 1.2078 (closing of last Friday's daily candle), while moving down, may test the pullback level of 38.2% - 1.2063 (red dotted line). If this level is tested, the price may continue to move down with the target of 1.1975 - a pullback level of 50% (red dotted line). Figure 1 (Daily Chart). Comprehensive analysis: Indicator analysis - up Fibonacci levels - up Volumes - up Candlestick analysis - up Trend analysis - up Bollinger bands - down Weekly chart - down General conclusion: Today, the price from the level of 1.2078 (closing of last Friday's daily candle), while moving down, may test the pullback level of 38.2% - 1.2063 (red dotted line). If this level is tested, the price may continue to move down with the target of 1.1975 - a pullback level of 50% (red dotted line). Alternative scenario: from the level of 1.2217 (closing of the Friday daily candle), while moving down, the price may test the pullback level of 38.2% - 1.2063 (red dotted line). If this level is tested, the price may start moving up with a target of 1.2176 - the resistance level (blue bold line). Make money Deposit funds Author's today's articles: Torben Melsted Born in November 1962. Graduated from CBS, got Diploma in Finance. Began trading on Forex in 1986 and since that time held various positions such as advising clients, hedging client flows on FX and commodity markets. Also worked for major corporations as Financial Risk Manager. Uses Elliott wave analysis in combination with classic technical analysis, and has been using a Calmar Ratio of 5.0 for over 3 years. Has his own blog, where he uses Elliott wave and technical analysis on all financial markets. Maxim Magdalinin In 2005 graduated from the Academy of the Ministry of Internal Affairs of the Republic of Belarus, law faculty. Worked as a lawyer for three years in one of the biggest country's company. Besides the trading, he develops trading systems, writes articles and analytical reviews. Works at stock and commodity markets explorations. On Forex since 2006. Mihail Makarov - Mourad El Keddani Was born in Oujda, Morocco. Currently lives in Belgium. In 2003 obtained B.S. in Experimental Sciences. In 2007 obtained a graduate diploma at Institut Marocain Specialise en Informatique Applique (IMSIA), specialty – Software Engineering Analyst. In 2007–2009 worked as teacher of computer services and trainer in a professional school specializing in computer technologies and accounting. In 2005 started Forex trading. Authored articles and analytical reviews on Forex market on Forex websites and forums. Since 2008 performs Forex market research, and develops and implements his own trading strategies of Forex analysis (especially in Forex Research & Analysis, Currency Forecast, and Recommendations and Analysis) that lies in: Numerical analysis: Probabilities, equations and techniques of applying Fibonacci levels. Classical analysis: Breakout strategy and trend indicators. Uses obtained skills to manage traders' accounts since 2009. In April 2009 was certified Financial Technician by the International Federation of Technical Analysts. Winner of several social work awards: Education Literacy and Non-Formal Education (in Literacy and Adult Education in The National Initiative for Human Development). Languages: Arabic, English, French and Dutch. Interests: Algorithm, Graphics, Social work, Psychology and Philosophy. Sergey Belyaev Born December 1, 1955. In 1993 graduated from Air Force Engineering Academy. In September 1999 started to study Forex markets. Since 2002 has been reading lectures on the technical analysis . Is fond of research work. Created a personal trading system based on the indicator analysis. Authored the book on technical analysis "Calculation of the next candlestick". At present the next book is being prepared for publishing "Indicator Analysis of Forex Market. Trading System Encyclopedia". Has created eleven courses on indicator analysis. Uses classical indicators. Works as a public lecturer. Held numerous seminars and workshops presented at international exhibitions of financial markets industry. Is known as one of the best specialists in the Russian Federation researching indicator analysis. Irina Manzenko Irina Manzenko Sebastian Seliga Sebastian Seliga was born on 13th Oсtober 1978 in Poland. He graduated in 2005 with MA in Social Psychology. He has worked for leading financial companies in Poland where he actively traded on NYSE, AMEX and NASDAQ exchanges. Sebastian started Forex trading in 2009 and mastered Elliott Wave Principle approach to the markets by developing and implementing his own trading strategies of Forex analysis.  Since 2012, he has been writing analitical reviews based on EWP for blogs and for Forex websites and forums. He has developed several on-line projects devoted to Forex trading and investments. He is interested in slow cooking, stand-up comedy, guitar playing, reading and swimming. "Every battle is won before it is ever fought", Sun Tzu Grigory Sokolov Born 1 January, 1986. In 2008 graduated from Kiev Institute of Business and Technology with "Finance and Credit" as a major. Since 2008 has studied the behavior of various currency pairs and their correlation on Forex. In his works and trading practice he uses candlestick analysis and Fibonacci technique. Since 2009 has written analytical reviews and articles which are published on popular Internet resources. Interests: music, computers and cookery. "Out of five deadly sins of business and as a rule, the most widespread, excessive striving to get profit is the worst". P. Drucker 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. 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