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The best broker in Asia www.instaforex.com Daily analysts mail subscription Elliott wave analysis of GBP/JPY for February 5, 2021 2021-02-05 GBP/JPY continues to push higher as expected. After a dip to 142.84 (a little lower that our ideal 142.92) GBP/JPY started to rally again and broke above the former peak at 144.10 for a continuation towards the minor green wave v/ target between 144.70 - 145.15. Once green sub-wave v/ completes we should see another corrective set-back close to 142.84, but to secure the base for the next impulsive rally towards 147.96 and ultimately above here too. Support is now seen at 143.96. R3: 145.99 R2: 145.60 R1: 145.14 Pivot: 144.70 S1: 144.23 S2: 143.96 S3: 143.67 Trading recommendation: We are long GBP from 142.27 and we will move our stop higher to 142.75 Indicator analysis. Daily review for the EUR/USD currency pair on February 5, 2021 2021-02-05 Trend analysis (Fig. 1). On Friday, the market from the level of 1.1963 (closing of yesterday's daily candle), while moving down, will try to reach the support line of 1.1883 (white thin line). In the case of testing this line, it is possible to work upwards with the target of 1.1948 - the historical resistance level (blue dotted line). Figure 1 (Daily Chart). Comprehensive analysis: Indicator analysis - down Fibonacci levels - down Volumes - down Candlestick analysis - down Trend analysis - down Bollinger bands - down Weekly chart - down General conclusion: Today, the price from the level of 1.1963 (closing of yesterday's daily candle), while moving down, will try to reach the support line of 1.1883 (white thin line). In the case of testing this line, it is possible to work upwards with the target of 1.1948 - the historical resistance level (blue dotted line). Alternative scenario: when the price moves down and tests the support line 1.1883 (white thin line), it is possible to continue moving downward with the target of 1.1811 - the historical support level (blue dotted line). Technical analysis EUR/USD for February 5, 2021 2021-02-05 EUR/USD has broken clearly below the uptrend-line from May 2020 indicating a deeper corrective decline is unfolding. We are ultimately looking for a corrective decline to solid support near 1.1608 from where renewed upside pressure is expected. But for now we should stay focused towards the downside for a dip to 1.1865 form where a minor counter-rally close to 1.2048 is expected before the next push lower to 1.1608 should be expected. R3: 1.2113 R2: 1.2048 R1: 1.2003 Pivot: 1.1963 S1: 1.1926 S2: 1.1869 S3: 1.1865 Trading recommendation: Sell EUR near 1.2048 and place the stop+revers at 1.2190 EUR/USD: plan for the European session on February 5. COT reports. Bears ready to surpass another low (1.1952), but be careful with selling 2021-02-05 To open long positions on EUR/USD, you need: Several signals to enter the market appeared yesterday. Let's take a look at the 5-minute chart and break down the entry points. We can see that nothing sensible happened at the 1.2005 level. We also couldn't wait for a normal false breakout and the quote to return to 1.2005. The pair was under pressure after the release of weak statistics on the volume of retail sales in the eurozone. The fact that the price settled at the 1.2005 level and it was tested from the bottom up had created a good entry point for short positions. Subsequently, the bears managed to update the low of 1.1965, where I recommended taking profits. To be fair, it was quite difficult to wait for this level to be tested, since there were problems with the euro's fall in the support area of 1.1985 during the first half of the day. Buying on the rebound from the support at 1.1965 resulted in a slight upward correction by 13 points, and afterwards the euro was under pressure again. Nothing interesting for the European economy this morning, so the euro will be under pressure until the US labor market report is released, which will set the direction of the market at the end of the week. Data on changes in the volume of orders in the German industry and changes in the number of people employed in the private sector of the French economy may garner attention. Buyers of the euro need to focus on protecting a new support at 1.1952, on which the succeeding upward correction of EUR/USD depends. The lower border of the descending channel is below this level, the breakdown of which will only increase the pressure on the pair. A good fundamental report on the eurozone, indicating an improvement in the economic situation, will allow a false breakout to form in the support area of 1.1952, which will then create a good entry point into long positions. If buyers are not active at this level, I recommend postponing long positions until the test of the next low of 1.1921, from where you can buy the euro immediately on a rebound, counting on an upward correction by 15-20 points. A larger support can be seen in the 1.1885 area, from which the euro can also be bought on a rebound. An equally important task is to return to resistance at 1.1997, where the moving averages pass, playing on the side of the sellers. A breakout and consolidation above this level, along with a disappointing report on the US economy, creates a good signal to buy the euro in order to return to the high of 1.2042, where I recommend taking profit. The next target will be the 1.2084 area. To open short positions on EUR/USD, you need: Selling at current lows can be dangerous. Therefore, I recommend opening short positions only after an upward correction to the resistance area of 1.1997, which is where the moving averages are. Forming a false breakout in this area creates a signal to sell the euro in order to sustain the current bear market. Weak data on the eurozone will certainly allow the bears to return EUR/USD to the support area of 1.1952, as the pair's succeeding direction depends on whether the quote will go beyond it or not. A breakout and being able to test this level from the bottom up will create a new entry point for short positions in order to sustain the downward trend, which will pull down EUR/USD to a new annual low in the 1.1921 area, where I recommend taking profit. The succeeding target will be support at 1.1885. If we observe an upward correction of the euro in the first half of the day, and the bears are not active in the resistance of 1.1997, then it is best to postpone short positions until the 1.2042 high has been tested, from where you can sell EUR/USD immediately on a rebound for the purpose of pulling it down by 15- 20 points within the day. The Commitment of Traders (COT) report for January 26 recorded a sharp increase in long positions and a reduction in short ones. The incoming data is limiting the euro's upward potential, as is the fact that vaccinations in the euro area will proceed at a slower pace than expected. This will certainly affect the GDP for the first quarter of 2021, but it is unlikely to be able to seriously affect the medium-term prospects for the EUR/USD recovery. With each significant downward correction in the pair, the demand for the euro returns, and the lower the rate, the more attractive it will become for investors. The prospect of canceling quarantine will clearly keep the market upbeat in the future. However, the risk of extending quarantine measures in February is still a restraining factor for euro growth. The COT report indicated that long non-commercial positions rose from 236,533 to 238,099, while short non-commercial positions fell from 73,067 to 72,755. Due to continued growth in long positions, the total non-commercial net position rose to 165,344 against 163,466 a week earlier. Indicator signals: Moving averages Trading is carried out below 30 and 50 moving averages, which indicates the pressure on 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 D1 daily chart. Bollinger Bands A breakout of the lower border of the indicator in the 1.1952 area will increase pressure on the euro. A breakout of the upper border of the indicator in the 1.1995 area will lead to a new wave of growth for the euro. 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. USD/JPY: Japanese yen depends on the US dollar 2021-02-05 The USD/JPY pair shows a strong upward trend: it rose by 200 points in just a week and a half, reaching the three-month highs. Despite small corrective pullbacks, the pair is steadily rising. Looking at the daily chart, any bearish candles were not observed since January 27. The general strengthening of the US currency amid the pessimistic rhetoric of the Japanese regulator allowed the buyers of USD/JPY to reach new peaks, recovering their lost positions. Currently, the main resistance level of 106.00 (upper line of the Bollinger Bands indicator on the weekly chart) hovers in the range. We can assume that this target will be reached in just a matter of time. The yen fails to resist the dollar, as the USD bulls are supported by treasury growth and good macroeconomic reports. Therefore, if today's Nonfarm data enters the "green" zone, then the US currency will receive an additional reason to further strengthen. In this case, the level of 106 will most likely be reached today after the results of the key data in the United States. First, let's start with the problems of the Japanese currency. It should be noted that the Japanese yen paired with the US dollar reacts weakly to Japanese macroeconomic reports – it is primarily affected by external fundamental factors. The Japanese regulator also plays a decisive role, which becomes a victim to its "dovish" rhetoric. For many months, Haruhiko Kuroda has been allowing the easing of monetary policy parameters (if necessary), but the Central Bank does not dare to expand QE or even more so, reduce the interest rate further into the negative area. Moreover, one of the Council members voted against keeping the rate at the current level during the last meeting. In general, the Bank of Japan's first meeting this year turned out to be very pessimistic. The regulator kept the monetary policy parameters unchanged, but at the same time worsened the GDP forecast for the current fiscal year, which ends in April. The downward revision of the forecast is related to the quarantine, which has been tightened in Japan since this year began. After the January meeting, it became known that the emergency regime was extended until March 7 (but apparently, this is not the final date). The regime operates in 11 of the 47 prefectures, where more than half of the country's population lives. In fact, we are talking about a lockdown with all the ensuing consequences – including for the national economy. At the same meeting, the regulator decided to extend the additional repurchase of commercial papers and corporate bonds until the end of September this year. The Central Bank also maintained the annual volume of repurchases of securities of exchange-traded investment funds and assets of real estate investment trusts. They also have plans to buy an unlimited number of government bonds and continue to target the yield of 10-year government bonds at a level close to zero. Analysts from the United Overseas Bank believe that BoJ will increase the volume of the stimulating program in March, when it assesses the effectiveness of existing measures. In fact, Kuroda noted at the January meeting that the Central Bank failed to raise inflation to the 2% target level despite all the steps taken. Due to the lockdown in Japan, inflation indicators will continue to show a decline. Therefore, it is clear that any adjustments to monetary policy will be on the way to easing. Such a fundamental background suggests that the yen, paired with the US currency, will continue to move in the wake of the US dollar. The greenback, in turn, is influenced by several major fundamental factors – Nonfarm data, process of the aid package for the US economy, and the dynamics of Treasury yields. It can be recalled that the last Nonfarm, which was published in early January, reminded us once again that the US economy is still under the influence of the coronavirus crisis. For the first time since the spring of last year, the number of employed in the non-agricultural sector declined (140 thousand), despite the general forecasts of minimal growth. The rest of the release was also disappointing. For example, the number of people employed in the private sector has also fallen by 98 thousand. The situation in January is expected to slightly improve. Here, the number of people employed in the non-agricultural sector is forecasted to rise by 77 thousand, while the private sector by 50 thousand. The manufacturing sector is also expected to grow by 30 thousand. At the same time. the unemployment rate should remain unchanged, that is, at around 6.7%. If experts' optimistic forecasts are not confirmed, then the US dollar will be under pressure again. In the context of USD/JPY, this means that buyers will get the chance to enter longs at a better price, since the upward trend is still in force. Moreover, political factors, as well as rising Treasury yields, will push the US currency upward, at least in pair with the Japanese currency. From a technical viewpoint, the pair on the three bigger time frames (H4, D1 and W1) is either on the upper line of the Bollinger Bands indicator, or between the middle and upper lines, which indicates the priority of the upward direction. Meanwhile, H4 to W1 time frames (except for the monthly chart) shows that the Ichimoku indicator formed a bullish signal "Parade of Lines", when the price is above all the indicator lines, including the Kumo cloud. This signal indicates a bullish mood. The first upward target is the strongest resistance level of 106.00 (upper line of the BB on the W1). Trading plan for EUR/USD on February 5. COVID-19 is retreating. Euro continues to decline. 2021-02-05 Global incidence remains 30% below record peaks. The largest decline was recorded in the US, followed by Europe. With regards to vaccination, pace is still slow, but it is staring to pick up a bit. EUR/USD - euro continues to decline. This is because yesterday, the US released strong data on employment, which suggests that its economy is progressing better than the EU. Taking this into account, it is better to set up more short positions at 1.2055, then expect further decline. There is no good level for long positions yet. The US will release Non-farm payrolls later today at 13:30 GMT. GBP/USD: plan for the European session on February 5. COT reports. Bears didn't hear what they wanted. Pound buyers took control of the market 2021-02-05 To open long positions on GBP/USD, you need: Quite a lot of signals to enter the market appeared yesterday. Let's take a look at the 5-minute chart and break them down. You can clearly see how the bears are trying to surpass support at 1.3612 and so it was tested from the bottom up, which then created a signal to open short positions in the pound. To be fair, that one point was not enough before this level was tested, so whoever ignored this entry point and expected a clearer signal did everything right. Then the pound was bought on the rebound from support at 1.3575. An upward correction took place when this level was initially tested, which brought the expected 25 points of profit. Everything is exactly as I predicted. Those who did not leave the market could get a fat profit, since the pound jumped after the Bank of England meeting. This happened after the central bank announced that the topic with negative interest rates was not "close". In the afternoon, I paid attention to the 1.3632 level and advised you to open long positions from it after a breakout and consolidation at this range. And so it happened. This level was tested from top to bottom and created a good entry point for long positions, afterwards the pair grew by around 45 more points and stopped at the resistance area of 1.3679. After returning below this level by the end of the US session, the bears achieved a slight downward correction by 2-0 points. Like yesterday, the buyers' initial target will be resistance at 1.3688. A breakout and consolidation above this level along with being able to test it from top to bottom creates an excellent buy signal in sustaining the bull market. In this case, you can count on an update of the new high around 1.3723, where I recommend taking profits. The succeeding target will be the annual high of 1.3755, which will be possible only after Bank of England Governor Andrew Bailey's speech, provided that he does not raise the issue of negative interest rates again. A more optimal scenario for opening long positions would be a downward correction to the support area of 1.3641, where the moving averages pass, playing on the side of the pound buyers. You can buy GBP/USD from this level immediately on a rebound, at least counting on an upward correction of 20-25 points within the day. A larger support level is seen around 1.3605. To open short positions on GBP/USD, you need: Once again, the bears will form a false breakout in the resistance area of 1.3688. Such a scenario will lead to a downward correction to the support area of 1.3641, where I recommend taking profit. The pound might be under pressure if Bailey raises the topic of negative interest rates, leaving the possibility of their introduction in the future if necessary. In this case, the pound might settle below 1.3641. Testing this level from the bottom up creates a good signal to sell the pound in order to update support at 1.3605. If GBP/USD does not rapidly move down after a false breakout forms in the resistance area of 1.3688, then it is best not to rush to sell, but wait for a new wave of growth and an update of the 1.3723 high, from which you can open short positions immediately on a rebound, counting on a downward correction at 20 -25 points within the day. The next major resistance is seen around 1.3755. The Commitment of Traders (COT) reports for January 26 showed an increase in both long and short positions. This time there were much more sellers, which led to a decrease in the positive delta. Apparently, the bulls' failure to rise above the annual highs still do not go unnoticed, forcing traders to raise short positions as they expect a more active downward correction from the pound. Long non-commercial positions rose from 45,904 to 47,360. At the same time, short non-commercial positions jumped from 32,199 to 39,395, which is a very tangible increase. As a result, the non-commercial net position decreased to 7,965 against 13,705 a week earlier. And although traders are trying to take a more wait-and-see position in the area of annual highs, and this is a consequence of the fact that it is very difficult for the bulls to update them, the demand for the pound will still be high. The GBP/USD pair will continue to rise as quarantine measures are lifted, which have been strengthened due to the new Covid-19 strain. Population and labor market support, which could last until the early summer of 2021, will also have a positive effect on the British pound. All the talk about negative interest rates on the part of the Bank of England has no real basis yet. The British central bank will report on this topic in the near future, which can outline the picture in more detail with the further course of interest rates. Indicator signals: Moving averages Trading is conducted above 30 and 50 moving averages, which indicates a succeeding recovery in the pair. 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 D1 daily chart. Bollinger Bands A break of the middle border of the indicator around 1.3655 will increase pressure on the pound. Growth will be limited around the upper level of the indicator in the 1.3723 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. Technical Analysis of GBP/USD for February 5, 2021 2021-02-05 Technical Market Outlook: The GBP/USD pair has retraced 61% of the last wave down after the low at the level of 1.3565 had been made. The bulls has broken back above the short-term trend line and made a local high at the level of 1.3696 during a 4h rally. Nevertheless, there was no 4h candle close above the level of 1.3683, which is the 61% Fibonacci retracement level. Anyway, the price is back to the consolidation zone and the momentum is currently neutral. The intraday technical support is seen at the level of 1.3624 and the intraday technical resistance is located at 1.3696. Weekly Pivot Points: WR3 - 1.4011 WR2 - 1.3877 WR1 - 1.3788 Weekly Pivot - 1.3646 WS1 - 1.3564 WS2 - 1.3416 WS3 - 1.3342 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 1.3744 and this was the higher close in over two years. 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. Indicator Analysis. Daily review for the GBP/USD currency pair 02/05/21 2021-02-05 Yesterday, the pair moved down, tested the support line of 1.3565 (the red bold line) and then went up, testing the pullback level of 76.4% (the yellow dotted line), closing the daily candle at 1.3667. Today, the price may continue to go down according to the economic calendar news, it is expected at 13.30 UTC (pound) and at 13.30 UTC (dollar). Trend analysis (Fig. 1). Today, the market will try to start moving down from the level of 1.3667 (the closing of yesterday's daily candle) with the target of 1.3573 at the support line (the red bold line). When this line is reached, the price can start moving up with a target of 1.3676 - a pullback level of 76.4% (yellow dotted line). Figure 1 (daily chart). Comprehensive Analysis: - Indicator Analysis – down - Fibonacci Levels – down - Volumes – down - Candle Analysis – down - Trend Analysis – up - Bollinger Bands – up - Weekly Chart – down General Conclusion: Today, the price will try to start moving down from the level of 1.3667 (the closing of yesterday's daily candle) with the target of 1.3573 at the support line (the red bold line). When this line is reached, the price can start moving up with a target of 1.3676 – a pullback level of 76.4% (yellow dotted line). Alternative scenario: from the level of 1.3667 (the closing of yesterday's daily candle), it will try to start moving down with the target of 1.3573 at the support line (the red bold line). When this line is reached, the price may continue to go downwards with the target of 1.3481 at the historical support level (blue dotted line). Technical Analysis of EUR/USD for February 5, 2021 2021-02-05 Technical Market Outlook: The EUR/USD pair has made another local low at the level of 1.1952 as the bears are in control of the market. All the previous bounces were very shallow and after a failure to break back above the level of 1.2053 - 1.2060 the market went straight down. The new intraday technical support is seen at the level of 1.1965 and the intraday technical resistance is located at 1.2000. The momentum is weak and negative, together with the oversold current market conditions, so the next target for bears is seen at the level of 1.1914. This is the technical support for bulls, so violation of it would result in a deeper correction towards the level of 1.1888 (61% Fibonacci retracement of the last wave up). Weekly Pivot Points: WR3 - 1.2318 WR2 - 1.2247 WR1 - 1.2192 Weekly Pivot - 1.2115 WS1 - 1.2070 WS2 - 1.2000 WS3 - 1.1940 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. Any violation of the level of 1.2154 supports the trend change/corrective cycle scenario. GBP/USD. February 5. COT report. The Bank of England has abandoned negative rates for the near future 2021-02-05 GBP/USD – 1H. According to the hourly chart, the quotes of the GBP/USD pair performed a drop to the level of 1.3570 during the past day, a rebound from it, a reversal in favor of the British currency, and a sharp increase of 140 points within just two hours to the level of 1.3698. The pair's quotes also performed a close over the downward trend corridor, which changed the current mood of traders to "bullish". The Bank of England did not make any important decisions during its meeting. And the tone of the final summary on monetary policy can be interpreted as you like. The Bank of England did not change the key rate, did not change the size of the asset purchase program, and at the vote of its members, no one voted in favor of changing the parameters of monetary policy. However, the final summary said that the key rate will not be lowered in the next six months. There was no clear statement at all that "the rate will not be lowered". It said that commercial banks will need 6 months to prepare for a negative rate. The fact that the forecasts for the economy remain very uncertain since the issue of the pandemic is still acute. Especially for the UK, where the third "lockdown" continues. The Bank of England also expects minimal GDP growth in the fourth quarter and a 4% contraction in the first quarter. He lowered the forecasts for this indicator for 2021. All other statements were "standard". The regulator will, as before, strive for 2% inflation and keep a "finger on the pulse" to quickly respond to any changes in the economy. Also, the regulator is not going to tighten monetary policy in the near future. Thus, the growth of the British dollar this time may be very limited, as the hint of not introducing a negative rate in the coming months is unlikely to be a support factor for the British dollar for a long time. GBP/USD – 4H. On the 4-hour chart, the GBP/USD pair performed a fall to the lower border of the side corridor indicated by the blue rectangle and even closed below it. But the events of yesterday returned the interest of traders to the British dollar, which eventually resumed the growth process within this corridor. Now the pair may aim for the upper limit of the corridor, however, a second close under it will increase the probability of a new fall in the British currency quotes in the direction of the corrective level of 100.0% (1.3481). GBP/USD - Daily. On the daily chart, the pair's quotes performed a consolidation above the corrective level of 100.0% (1.3513), and then rebound from it. Thus, the growth process can be continued in the direction of the Fibo level of 127.2% (1.4084). GBP/USD - Weekly. On the weekly chart, the pound/dollar pair completed a close over the second downward trend line. Thus, the chances of long-term growth of the pound are significantly increased. Overview of fundamentals: On Thursday, only the results of the Bank of England meeting were summed up in the UK. Against the background of this event, all the other reports had no meaning. US and UK news calendar: UK - Bank of England Governor Andrew Bailey will deliver a speech (12:15 GMT). US - unemployment rate (13:30 GMT). US - change in the number of people employed in the non-agricultural sector (13:30 GMT). US - change in the average hourly wage (13:30 GMT). On February 5, the results of the Bank of England meeting will be summed up in the UK, and this is the main event of the day, which is very important for the prospects of the Briton. COT (Commitments of Traders) report: The latest COT report from January 26 showed quite significant changes. To begin with, speculators, as the most important category of traders, dramatically changed their mindset and began to increase short-contracts. More than 6 thousand of them were opened. But 2.5 thousand long contracts were also opened. Thus, I can conclude that the mood of the "Non-commercial" category has become more "bearish", therefore, the probability of a fall in the British dollar quotes in the near future is growing. Thus, if the level of 1.3744 is not overcome, then the chances of a fall in the British dollar will increase dramatically. In the meantime, speculators can accumulate short positions. Forecast for GBP/USD and recommendations for traders: It is recommended to make new purchases of the British dollar when closing above the level of 1.3744 on the hourly chart with a target of 1.3820. It is recommended to sell the pound sterling at the rebound of quotes from the level of 1.3744 on the hourly chart with targets of 1.3698 and 1.3625 or at a new close under the level of 1.3625 with targets of 1.3570 and 1.3522. Terms: "Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors. "Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency, not for speculative profit, but to support current activities or export-import operations. "Non-reportable positions" - small traders who do not have a significant impact on the price. Simplified wave analysis and forecast of EUR/USD and AUD/USD for February 5 2021-02-05 EUR/USD Analysis: The unfinished section of the dominant upward trend in the European currency major market has been counting down since November 4 last year. The price has reached the upper limit of the strong support zone of a large time frame. The structure of the descending section of the wave looks complete. Forecast: In the current day, the end of the downward trend of the movement, the formation of a reversal, and the beginning of a price rise are expected. The exchange rate change may coincide with the release of important economic news. Potential reversal zones Resistance: - 1.2000/1.2030 Support: - 1.1930/1.1900 Recommendations: Selling the euro today is very risky and can be unprofitable. In the area of settlement support, it is recommended to track the signals for the purchase of the instrument. AUD/USD Analysis: The dominant upward trend of the Australian dollar led the quotes to the lower border of a strong reversal zone. In the short term, the upward wave from December 21 is not completed at the end of the main trend. Since the beginning of the year, the average part (B) is formed in the form of a descending pennant. Forecast: In the next trading sessions, the end of the bearish vector of movement, a reversal, and the beginning of a price rise is expected. A short-term puncture of the lower border of the support zone is not excluded when the exchange rate changes against the background of increasing volatility. Potential reversal zones Resistance: - 0.7640/0.7670 Support: - 0.7550/0.7520 Recommendations: In the Australian dollar market today, it is recommended to refrain from entering the market until the current decline is fully completed and after the appearance of reversal signals, track the signals for buying the pair. Explanation: In the simplified wave analysis (UVA), waves consist of 3 parts (A-B-C). The last incomplete wave is analyzed. The solid background of the arrows shows the formed structure, and the dotted one shows the expected movements. Attention: The wave algorithm does not take into account the duration of the tool movements in time! Technical analysis of EUR/USD for February 05, 2021 2021-02-05 Overview : The EUR/USD pair has dropped sharply from the spot of 1.2038 - 1.2005 towards 1.1950. Now, the price is set below the price of 1.2038 to act as a daily pivot point. It should be noted that volatility is very high for that the EUR/USD pair is still moving between 1.2038 and 1.1860 in coming hours. Furthermore, the price has traded below the strong resistance at the levels of 1.2038 and 1.2064, which coincides with the 38.2% and 50% Fibonacci retracement level respectively. Additionally, the price is in a bearish channel now. Amid the previous events, the pair is still in a downtrend. From this point, the EUR/USD pair is continuing in a bearish trend from the new resistance of 1.2038 - 1.2005. The price spot of 1.2038 - 1.2005 remains a significant resistance zone. Therefore, a possibility that the EUR/USD pair will have downside momentum is rather convincing and the structure of a fall does not look corrective. In addition to, the RSI is still signaling that the trend is downward as it remains strong below the moving average (100). This suggests the pair will probably go downig coming hours. Accordingly, the market is likely to show signs of a bearish trend. In other words, sell orders are recommended below the region of .2038 - 1.2005 with the first target at the level of 1.1900. If the trend is be able to break the first support at the level of 1.1900, then the market will continue falling towards the weekly support 2 at 1.1860. Conclusion : If the EUR/USD pair fails to break through the resistance level of 1.2038 today, the market will decline further to 1.1900. The pair is expected to drop lower towards at least 1.1860 with a view to test the support 2. Also, it should be noted that the weekly pivot point will act as minor resistance today. However, if a breakout happens at the resistance level of 1.2090, then this scenario may be invalidated. Analytics and trading signals for beginners. How to trade EUR/USD on February 5? Plan for opening and closing deals for Friday 2021-02-05 Hourly chart of the EUR/USD pair The EUR/USD pair resumed its downward movement on Thursday and Friday. The downward trend line had to be rebuilt as the price settled above it on Thursday. In the last review, we advised novice traders to trade bullish if the pair settles above the trend line. However, in reality, after this signal, the price rose by another 10 points and resumed its downward movement. And a strong movement. Thus, the buy signal turned out to be false and it should have been closed following a downward reversal of the MACD indicator. As a result, this signal brought 15 points of losses to traders. However, the quotes closed below the previous local low of 1.2003 and it signaled the resumption of the downward trend. At this point, novice traders could rebuild the downward trend line (both of its variants are shown in the chart) and open new short positions. These short positions could have been held until the MACD indicator reversed to the upside that night, but this trade would have generated 54 points and would have completely covered the losses on the first trade. Not the easiest trades in the last two days, but it was possible to get out of them with honor. Fundamentally, Thursday was quite interesting. We have already mentioned that market participants continue to ignore the macroeconomic reports, and we even described why this is happening in our fundamental review on the euro. We recommend you read it. The fact remains. Both the US and the European Union had a sufficient number of important reports on Wednesday, but on this day the volatility of the pair decreased and traders did not react. One report on inflation in the eurozone is worth it! Its sharp rise by 1.2% was bound to provoke the euro's growth! When important reports were not released yesterday, volatility increased, and the US dollar continued to strengthen. Thus, the main conclusion to be drawn is technical factors. The EU released a report on retail sales, which was slightly worse than expected, and in the US - claims for unemployment benefits, this report was slightly better than expected. However, in general, these are completely different deviations from forecasts that should have plunged traders into shock and made them rush to buy or sell the pair. Read the second article on pound/dollar for today's macroeconomic reports. Possible scenarios on February 5: 1) Long positions are currently irrelevant, since the price resumed the downward movement and a new downward trend line was formed. Thus, you should consider buying the pair if the price settles above the new trend line while aiming for resistance levels 1.2017 and 1.2059. 2) Trading for a fall remains relevant at the moment. However, we advise novice traders to trade bearish after the next round of correction, the MACD indicator is reset to zero and a new and strong sell signal is formed. Or if the price rebounds off a new trend line. Targets - support levels 1.1931 and 1.1903. 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. Technical analysis recommendations for EUR/USD and GBP/USD on February 5 2021-02-05 EUR/USD The first working week of February is nearing completion. The bears were more active and productive this time. They continued their downward movement and reached the supports that were previously indicated near the lower border of the daily cloud (today the Senkou Span B is at 1.1956) and the weekly medium-term trend (1.1975). As a result of the meeting with the supports, another deceleration is possible, the formation of a rebound from the supports will bring back the pair to the area of 1.2064, where the daily short-term trend and the weekly level are now located. Overcoming and breaking the encountered support levels (1.1975-56) will open the way to the weekly Fibo Kijun (1.1886). The bearish traders in the current situation retain the advantage and support of all the analyzed technical instruments. Thanks to this, they continue to develop a downward movement. The downside targets within the day are now the support of the classic Pivot levels 1.1931 – 1.1901 – 1.1845. If the currently emerging upward correction develops, the first important resistance level on H1 will be the central Pivot level (1.1987). The next significant milestone is located at 1.2048 (weekly long-term trend), on the way to it, you can note the first resistance of the classic Pivot levels R1 (1.2017). GBP/USD Yesterday, the final support of the daily golden cross (1.3604 – 1.3568) managed to defend the interests of the players for the increase. These levels served as the basis for the formation of a rebound and the return of the pair to the area of the daily short-term trend (1.3661). Today, we close the next working week. If the weekly candle again has the character of uncertainty, and at the moment this is exactly what is observed, then the market will still lack a clear leader and the situation with opportunities for players of all directions will remain. Yesterday, after the decline, the pair returned to the area of attraction of the key levels of 1.3643-70 (the central Pivot level + the weekly long-term trend). It should be noted that these boundaries are now strengthened by the levels of the daily cross (1.3661-1.3640), so it is possible to slow down and stay in the zone of influence of the encountered levels for a longer time. With the active continuation of the rise, the classic Pivot levels will act as resistances within the day (1.3721 – 1.3775 – 1.3853). Consolidation under the key levels (1.3643-70) will change the current balance of power, returning the relevance to bearish sentiment and support 1.3589 (S1) – 1.3511 (S2) – 1.3457 (S3). Ichimoku Kinko Hyo (9.26.52), Pivot Points (classic), Moving Average (120) Technical analysis of GBP/USD for February 05, 2021 2021-02-05 Overview : Time to rebound (GBP/USD pair). The GBP/USD pair continues to move downwards from the level of 1.3758. Yesterday, the pair dropped from the level of 1.3758 to the bottom around 1.3568. But the pair has rebounded from the bottom of 1.3568 to close at 1.3700. Today, the first support level is seen at 1..3684, the price is moving in a bullish channel now. Furthermore, the price has been set above the strong support at the level of 1.3661, which coincides with the 50% Fibonacci retracement level. This support (1.3661) has rejected several times confirming the veracity of an upward. Additionally, the RSI starts signaling an upward trend. According to the previous events, the USD/CHF pair is still moving between the levels of 1.3684 and 1.3790; so we expect a range of 106 pips. If the trend is able to break out through the first resistance level at 1.3716 , we should see the pair climbing towards the double top (1.3758) to test it. Therefore, buy above the level of 1.3700 with the first target at 1.3758 in order to test the daily resistance 1 and further to 1.3790. Also, it might be noted that the level of 1.3758 is a good place to take profit because it will form a double top. On the other hand, in case a reversal takes place and the GBP/USD pair breaks through the support level of 1.3661, a further decline to 1.3565 can occur which would indicate a bearish market. Overall, we still prefer the bullish scenario which suggests that the pair will stay below the zone of 1.3661 today. Analytics and trading signals for beginners. How to trade GBP/USD on February 5? Plan for opening and closing deals for Friday 2021-02-05 Hourly chart of the GBP/USD pair The GBP/USD pair began to move down on Thursday. Overcoming the 1.3610 level, which we called the lower border of the horizontal range, opened up excellent growth prospects for the dollar. However, the pair continues to trade in an absolutely unpredictable and illogical manner. Therefore, instead of a logical downward movement, we got an illogical upward movement. In our previous review for the pound, we advised you to consider trading bearish, but only on a new strong sell signal from MACD. For Thursday and the first half of Friday, such a signal was generated during the evening, which was just a few hours ago. No such signals were generated on Thursday, and this is for the best, as they could get big losses due to a 100-point candlestick in the middle of the day. But it is quite possible to try to work the signal that was formed a few hours ago. First, from our point of view, yesterday's growth was absolutely illogical. The Bank of England did not make any decisions that could provoke the pound's growth. Secondly, yesterday's breakdown of the 1.3610 level still gives some hope for a downward movement. But in general, we continue to draw your attention to the fact that this is one of the most inconvenient times to trade the pound/dollar pair. The key event for Thursday was the Bank of England meeting. Novice traders should clearly understand why these meetings are so important. The country's main bank can announce changes in monetary policy - in fact, a set of tools for influencing the economy. It is believed that the BoE can tighten or ease monetary policy. In the first case, it is assumed that the economy is doing well and does not need stimulation. In the second case, it needs stimulation and feels bad (as now). Therefore, if the Bank of England announces policy easing or softens it (for example, lowers the key rate or increases the stimulus program), this would be a dovish decision and can cause the national currency to weaken. If the central bank does nothing, then usually there is no market reaction. Yesterday the Bank of England did nothing, and in its cover letter it was speculating that negative rates may be introduced, but this is inaccurate, and it is not known when they will be introduced, but commercial banks, just in case, should prepare for this decision. No specifics. Consequently, the pound should not have grown either. As in the past few months. Possible scenarios on February 5: 1) Long positions ceased to be relevant, since the price surpassed the upward trend line and failed to go beyond the 1.3744 level. So, now you need to wait for the upward trend to resume in order to be able to trade bullish again. The current movement can hardly be called downward, upward or flat. This is a "swing" - random movements in different directions. 2) Short positions are slightly more relevant at the moment. Following an absolutely illogical growth from yesterday, now we can expect a round of downward movement. But novice traders should understand that there is no trend line, no side channel, nothing that could help identify the nature of the current movement. Therefore, you can open sell positions while aiming for 1.3610 and 1.3589 solely at your own peril and risk. The probability of a decline is 55%, that is, not much higher than the further up, to the 1.3744 level. 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 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 forecast 02/05/2021 on EUR/USD, USD/CAD, USDX and Ethereum from Sebastian Seliga 2021-02-05 Let's take a look at the technical picture of EUR/USD, USD/CAD and USDX ahead of the NFP-Payrolls data release. Moreover, the Ethereum cryptocurrency analysis on the daily time frame chart is included as well. Trading idea for GBP/USD 2021-02-05 Pound soared yesterday after the Bank of England announced possible rate hikes. In fact, the news set off a pin bar in GBP / USD, which points to a bullish scenario in the market. Taking this into account, it is a good idea to open long positions, the strategy for which is below: So, since the quotes formed a wave pattern (ABC), in which wave "A" is the bullish initiative observed yesterday, long positions may be opened from 1.36350, the target of which is a 50% retracement. Limit should be set at 1.36, and then take profit as soon as the quote breaks through 1.37 and 1.37600. Of course, traders still need to carefully assess the situation before placing any position. Trading is very precarious, but profitable as long as the correct strategy is used. The plan above follows Price Action and Stop Hunting methods. Good luck! 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. 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. 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. Irina Manzenko Irina Manzenko Mihail Makarov - 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 Vyacheslav Ognev Vyacheslav was born on August 24, 1971. In 1993, he graduated from Urals State University of Economics in the Russian city of Ekaterinburg holding a degree in Commerce and Economics of Trade. In 2007, he started concentrating on the Russian stock market, trading stocks on the RTS Stock Exchange and futures contracts on FORTS. Since 2008 he has been engaged in analyzing Forex market and trading currencies. He is an author of a simplified wave analysis method. He has also developed a trading strategy. At present, Vyacheslav is a co-author of training materials on two web portals dedicated to Forex trading education. Interests: fitness, F1 "Experience is the best of schoolmasters, only the school fees are heavy." - Thomas Carlyle 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. 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. Zhizhko Nadezhda Graduated from Irkutsk State University. Having acquainted with Forex market in 2008, followed the courses in the International Academy of Stock Exchange Trading. The agenda was so exiting that she moved to St. Petersburg in order to get professional education. Obtained a diploma of the retraining course on the discipline Exchange market and stock market issues, defended the graduation paper with distinction on the subject "Modern technical indicators as the basis of the trading system". At the moment obtains a master degree in International Banking Institute on specialty Financial markets and investments. Apart from trading is occupied with development of trading systems and formalization of the working strategies using Ichimoku indicator. At the moment is working on the book dedicated to the peculiarities of Ichimoku indicator and its operating methods. Interests: yoga, literature, travelling and photograph. "You can only get smarter by playing a smarter opponent" Basics of Chess play, 1883 "Successful people change by themselves, the others are changed by life" Jim Rohn Andrey Shevchenko Andrey Shevchenko 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: 1 866 8000 719 0 8000 51 88 99 0 800 898 548 1 800 882 528 001 803 017 910 0 800 500 329 822 140 799 8 800 080 5553 Other countries +7 (499) 7042343, +7 (812) 4580351 E-mail: support@instaforex.com InstaForex Group is an international brand providing online trading services to the clients all over the world. 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