Thread: Daily Market Analysis from ForexMart

Analysis and trading recommendations for EUR/USD and GBP/USD on August 2

Analysis of transactions in the EUR / USD pair

Euro fell on Friday despite good GDP and inflation reports from the Euro area.

Trading recommendations for August 2

EUR / USD will again move depending on the economic reports that the Euro area will release today. Strong data on manufacturing activity will lead to a price increase, while a weaker than expected report could result in another decline in the market. Then, in the afternoon, a similar report will be published from the US. This time, if the data expectations exceeds, dollar will regain its strength, which could lead to a decline in the pair.

For long positions:

Open a long position when euro reaches 1.1882 (green line on the chart), and then take profit at the level of 1.1920. Demand will increase if the Euro area publishes strong economic data. But before buying, make sure that the MACD line is above zero, or is starting to rise from it.

It is also possible to buy at 1.1857 and 1.1818, but the MACD indicator line must be in the oversold area in order to bring about a market reversal to 1.1882.

For short positions:

Open a short position when euro reaches 1.1857 (red line on the chart), and then take profit at the level of 1.1818. A decline will occur if the Euro area releases weak economic reports. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.

It is also possible to sell at 1.1882 and 1.1920, but the MACD line must be in the overbought area in order to provoke a market reversal to 1.1857.

Analysis of transactions in the GBP / USD pair

Pound did not hit the local high last Friday. To be more specific, it was the multiple failed attempts to break through 1.3975 that led to the closure of many long positions in the market.

Trading recommendations for August 2

Pound will trade today depending on the data on UK manufacturing activity. If the figure turns better than the forecast, then GBP/USD will increase rather sharply. Then, in the afternoon, a similar report will be published from the US. This time, if the data exceeds expectations, dollar will regain its strength, which could lead to a decline in the pair.

For long positions:

Open a long position when pound reaches 1.3910 (green line on the chart), and then take profit at the level of 1.3956 (thicker green line on the chart). GBP/USD will climb up if UK publishes good PMI data. But before buying, make sure that the MACD line is above zero, or is starting to rise from it.

It is also possible to buy at 1.3885 and 1.3846, but the MACD line should be in the oversold area in order to set off a market reversal to 1.3910.

For short positions:

Open a short position when pound reaches 1.3885 (red line on the chart), and then take profit at the level of 1.3846. A decline will occur if UK releases weak economic reports. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.

It is also possible to sell at 1.3910 and 1.3956, but the MACD line should be in the overbought area in order to trigger a market reversal to 1.3885.

Another trillion dollars for the American economy

Yesterday, the leading US stock indexes fell slightly, but in general they continue to be near their absolute highs and can update them any time. All three leading indexes, the S&P 500, Dow Jones, and NASDAQ Composite, maintain upward trends. We have already mentioned earlier why this is happening. First, the Fed continues to buy bonds and mortgage-backed securities from the open market, saturating it with liquidity. And all the cash immediately flows into the most profitable stocks that can provide profit to their investors in the future. Moreover, the profit is not even a dividend, but a profit due to a constant increase in value. The dividends of almost all American companies are already below the current inflation. Therefore, it is extremely difficult to make a profit from dividend payments in the near future. However, since investors do not have much choice, and stocks are the most common investment tool, it is the stock market that capital continues to flow.

At the same time, the US Senate agreed on a new package of assistance to the US economy. Previously, it appeared under the name "infrastructure package". It can be recalled that Joe Biden offered two stimulus packages for the American economy, each of about $2 trillion. As you can see, the final version of the first package is half as small. However, we have not yet seen the second package, which is the "social" one. The infrastructure package will be aimed at investing in roads, bridges, ports, the internet, and other facilities over the next 5-8 years. It is noteworthy that the source of the formation of this package is planned to be tax revenues, but not the attraction of loans. In other words, the US government will not climb into even greater debts to finance this $1 trillion package. Of course, we cannot judge where this money will come from. In America, they really like to live on credit, and the size of the public debt in the United States already exceeds the volume of GDP. Simply put, the States owe more money than their economy is worth. In fairness, it should be noted that about half of the debts are debts to themselves. Simply put, the American government owes American investors, various American funds, the Fed, and so on. For example, the United States owes China or Japan only $1 trillion, which is not so much. Thus, a default is unlikely to threaten Washington. Moreover, the money is spent on improving infrastructure, which will attract new investors to America even more in the future. The Fed can also print money in almost any volume without fear of hyperinflation, since the dollar remains the world's number one currency. One way or another, the US economy continues to accelerate and will continue to do this for many years to come.

Forecast for USD/JPY on August 4, 2021

USD/JPY

Yesterday, the yen continued strengthening against the dollar and overcame the target level of 109.20. The Marlin Oscillator is declining and the price is expected to move towards the target of 108.35, but for this the yen still needs support from external markets, which is now weakening.

Yesterday, the US stock index S&P 500 gained 0.80%, this morning the Chinese Shanghai Composite added 0.69%, only the Japanese Nikkei 225 lost 0.16%. The dollar index is in a neutral position. Consolidating above 109.20 may lead to growth to the nearest target of 109.80.

On the four-hour chart, the signal line of the Marlin oscillator continues to develop inside the wedge, the exit from which statistically predominates downward, but due to the reversal of the signal line from its lower border, a double convergence of the price with the oscillator has formed, and this is already a sign of an upward breakthrough.

The result is an uncertain situation, although rather an expectant one. The price movement in either direction can be fast and deep, so investors are in no hurry to get ahead of events. Together with the market, we will also wait.

Hot forecast for GBP/USD from August 5, 2021

Today, in terms of the economic calendar, a meeting of the Bank of England is scheduled, during which no changes in the parameters of monetary policy, including the interest rate, are expected.

Investors are most interested in comments during the meeting, which may lead to speculative manipulations in the market.

During the US session, weekly data on applications for unemployment benefits in the United States will be published, where they predict a reduction in their volume, which is considered a positive factor and may lead to a strengthening of dollar positions.

The GBP/USD pair, following the correction pattern from the psychological level of 1.4000, reached the support of 1.3900, where there was a slowdown and as a result, a rebound in the price.

The pivot point of 1.3900 was tested twice for strength by the quote, which indicates interest in sales from market participants.

The volatility of the currency pair at the beginning of the trading week is 61 points, which is considered a low indicator and may indicate the process of accumulation of trading.

Expectations and prospects

The downward development of the price according to the correction scenario is still relevant in the market. But in order to confirm the sellers' intentions, the quote needs to stay below the 1.3870 mark. In this case, it will open in the direction of 1.3825-1.3780.

The upward development will be relevant in the case of holding the price above the level of 1.4000 on the daily period. In this scenario, the correction course will end, and the upward cycle from the local minimum on July 20 will be prolonged to new levels.

A comprehensive indicator analysis signals a sale relative to the short-term and intraday periods, due to the price movement within the 1.3900 level.

EUR/USD and GBP/USD: Trading plan for novice traders for August 6, 2021

Economic calendar for August 6

Today, in terms of the economic calendar, a report by the United States Department of Labor will be published, which in the world of finance is considered one of the most important economic events.

Expectations for the report:

The unemployment rate in July may decrease from 5.9% to 5.7%

Outside agriculture, 870,000 new jobs can be created against 850,000 in the previous reporting period.

As you can see from the details of statistical expectations, experts predict a further recovery process, and this may lead to an increase in the US dollar if the forecast coincides.

The time of publication of the report is 12:30 UTC.

Trading plan - EURO/DOLLAR (August 6)

Market participants are working to depreciate the euro, which corresponds to the process of recovery of the downward movement in relation to the correction. Trading expectations consider the value of 1.1752 as a possible outlook for the downward trend. In this scenario, we will receive a full price recovery relative to the corrective move, as well as a signal to prolong the downward cycle from the beginning of June.

Trading Plan - POUND/DOLLAR (August 6)

The price movement along a sideways trajectory is still relevant in the market, but traders are already ready for changes since working within the established boundaries does not have high profits.

Traders will consider an upward movement if the price holds above the level of 1.4000, opening the way in the direction of the values 1.4100-1.4150.

A downward movement will be relevant if the price is kept below the level of 1.3885, opening the way in the direction of 1.3825-1.3800.

Analysis and trading recommendations for EUR/USD and GBP/USD on August 9

Analysis of transactions in the EUR / USD pair

A signal to sell appeared in the market on Friday, which provoked a 30-pip decline in EUR / USD. Apparently, the signal came when the MACD line was going down from zero, so traders were able to open short positions in the market.

The improved situation in the US labor market contributed to such a sharp downward movement, especially since good employment figures are evidence of strong economic recovery. Meanwhile, other data released last Friday, such as reports on industrial production in Germany and foreign trade balance in France, were not remarkable at all.

Today, the market will move depending on the reports scheduled to be published. In the morning, there will be data on the foreign trade balance in Germany and investor confidence from the Euro area, which are expected to post a decline. If this happens, demand for euro will continue to decrease. Then, later in the afternoon, the situation may exacerbate as Fed representatives will deliver speeches, which could provoke increased demand for dollar and accordingly, a further decline in EUR / USD.

For long positions:

Open a long position when euro reaches 1.1779 (green line on the chart), and then take profit at the level of 1.1828. Demand will increase if the Euro area publishes good data on investor confidence. But before buying, make sure that the MACD line is above zero, or is starting to rise from it.

It is also possible to buy at 1.1741 and 1.1705, but the MACD indicator line must be in the oversold area in order to bring about a market reversal to 1.1741 and 1.1705.

For short positions:

Open a short position when euro reaches 1.1741 (red line on the chart), and then take profit at the level of 1.1705. A decline will occur if the Federal Reserve hints at a future policy change. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.

It is also possible to sell at 1.1779 and 1.1828, but the MACD line must be in the overbought area in order to provoke a market reversal to 1.1741.

Analysis of transactions in the GBP / USD pair

There were several market signals on Friday, but only some were successful. In fact, the first one, which was to sell, had to be ignored because it came when the MACD line was far away from zero, which significantly limited the downward potential of GBP / USD. Fortunately by afternoon, the indicator had moved down from zero, so the pair was able to decline by about 50 pips. And today, price has reached the target level, which is 1.3855.

Surprisingly, long-term prospects for bond purchases did not help pound, which cannot be said about the data on the US labor market, which exceeded all expectations. Meanwhile today, there are no macro statistics scheduled to be published, so pound will most likely undergo an upward correction. But later in the afternoon, the situation may change as Fed representatives will deliver speeches, which could provoke increased demand for dollar and accordingly, a decline in GBP / USD.

For long positions:

Open a long position when pound reaches 1.3881 (green line on the chart), and then take profit at the level of 1.3919 (thicker green line on the chart). GBP / USD may climb today since there are no macro statistics scheduled to be published. But before buying, make sure that the MACD line is above zero, or is starting to rise from it.

It is also possible to buy at 1.3854 and 1.3820, but the MACD line should be in the oversold area in order to set off a market reversal to 1.3881.

For short positions:

Open a short position when pound reaches 1.3854 (red line on the chart), and then take profit at the level of 1.3820. A decline could occur in the afternoon, during the speech of Fed representatives. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.

It is also possible to sell at 1.3881 and 1.3919, but the MACD line should be in the overbought area in order to trigger a market reversal to 1.3854.

Fractal analysis of major currency pairs on August 10, 2021

Outlook on August 10:

Analytical overview of popular currency pairs on the H1:

The key levels for the EUR/USD pair are 1.1791, 1.1773, 1.1761, 1.1741, 1.1723, 1.1705, and 1.1694. The price has been moving in a downward trend since July 30. Now, we expect a short-term decline in the 1.1741 - 1.1723 range. If the last value is broken, it will allow us to move to a potential target of 1.1694. After that, the price may consolidate in the range of 1.1705 - 1.1694, from which a pullback into a correction can be expected.

A short-term growth, in turn, is likely in the range of 1.1761 - 1.1773. If the latter is broken, a deep correction will occur. The target is set at 1.1791, which is also the key support level.

The main trend is the downward trend from July 30.

Key levels of structure development:

Upward resistance: 1.1761 Target: 1.1772

Upward resistance: 1.1775 Target: 1.1790

Downward resistance: 1.1736 Target: 1.1724

Downward resistance: 1.1721 Target: 1.1705

The key levels for the GBP/USD pair are 1.3934, 1.3897, 1.3870, 1.3831, 1.3813, 1.3781, 1.3749, 1.3728 and 1.3683. The further development of the downward trend from July 29 is expected after the price breaks through the noise range of 1.3831 - 1.3813. The target is set at 1.3781 and the price may consolidate around it. If the indicated target is broken, it will lead to a strong decline to the next target of 1.3749. After that, the price may consolidate in the range of 1.3749 - 1.3728. The ultimate potential downward target is 1.3683. After reaching it, an upward pullback can be expected.

Short-term growth is expected in the range of 1.3870 - 1.3897. If the last value is broken, a deep correction will occur. The target is set at 1.3934, which is also the key support level.

The main trend is the downward trend from July 29.

Key levels of structure development:

Upward resistance: 1.3870 Target: 1.3895

Upward resistance: 1.3899 Target: 1.3934

Downward resistance: 1.3813 Target: 1.3781

Downward resistance: 1.3779 Target: 1.3750

Trading plan for starters of EUR/USD and GBP/USD on August 11, 2021

August 11 economic calendar:

Today, the US inflation data will be released. The consumer price index is expected to decline from 5.4% to 5.3%. But at the same time, there is a forecast that inflation will remain at the level of 5.4%.

Taking into account expectations, dollar positions look quite good in the market.

Trading plan for EUR/USD on August 11:

Market participants are testing the strength of this year's base, but they are extremely cautious about selling positions. Traders will consider the next decline after the price is kept below the level of 1.1680, which may open the way towards 1.1620.

The scenario of a price rebound from the area of 1.1704 will become relevant if the quote is kept above the level of 1.1745.

Trading plan for GBP/USD on August 11:

The downward trend is still relevant, but if one hasn't worked with sell positions before, then it is logical to wait for the price to be kept below the level of 1.3800.

It is worth noting that there is currently a stagnation, so local buy positions may be opened if the price is kept above the level of 1.3845, opening the path towards 1.3865.

Simplified wave analysis and forecast for AUD/USD and USD/CHF, GOLD on August 12

AUD/USD

Analysis:

The direction of movement of the Australian dollar in the main pair is set by the bearish wave of February 25. The quotes have reached the upper limit of the strong zone of a large TF, along which a correction plane has been developing in the last three weeks.

Forecast:

Today, the pair's price movement is expected mainly horizontally, within the boundaries of the previously formed price corridor. An upward vector is likely further after the possible pressure on the support zone in the next session.

Potential reversal zones

Resistance:
- 0.7420/0.7450

Support:
- 0.7350/0.7320

Recommendations:

When making trade transactions on the Australian dollar market today, it is more reasonable to reduce the lot, trying not to go beyond the intraday. Sales are riskier and are not recommended.

USD/CHF

Analysis:

The direction of short-term fluctuations of the Swiss franc chart is set by the downward wave algorithm of June 18. A week ago, an ascending section started towards the main course. At the current moment, its wave level does not go beyond the correction.

Forecast:

Today, the price movement is likely to move to a sideways plane. At the European session, a decline in the support area is not excluded. The probability of a return to the bullish movement vector increases, with the price rising into the area of the resistance zone.

Potential reversal zones

Resistance:
- 0.9250/0.9280

Support:
- 0.9190/0.9160

Recommendations:

Trading in the conditions of the upcoming flat on the franc market today is possible only for supporters of short-term transactions. Purchases are more promising.

American stock market rose, Dow Jones and S&P 500 indices renewed records after statistics

The Dow Jones Industrial Average rose 14.88 points (0.04%) to a record 35,499.85 points. Standard & Poor's 500 gained 13.13 points (0.3%), rising to a record 4460.83 points. The Nasdaq Composite added 51.13 points (0.35%) to 14,816.26 points.

EBay Inc. yesterday rose 1.3%. The world's largest online auction in the second quarter of this year received profit and revenue above analysts' expectations, but reported a decrease in the number of active buyers, while the revenue forecast for the current quarter did not meet the expectations of experts.

The price of securities of the American Palantir Technologies Inc. jumped 11.4%. The big data solution provider increased its revenue by 49% in the second quarter of 2021, thanks to a significant increase in revenue from commercial orders in the United States.

Nio Inc. shares quoted in the USA. decreased by 3.4%. The Chinese electric vehicle maker cut its net loss by 45.4% in the second quarter, while the adjusted figure was better than forecast.

Investors are studying the statistics, trying to understand how they will affect the plans of the Federal Reserve System (FRS) to roll back asset repurchases.

In recent months, representatives of the Federal Reserve are increasingly speaking out in favor of the regulator beginning to roll back stimulus measures introduced to support the economy amid the coronavirus pandemic.

The US Central Bank may begin to roll back stimulus measures for the US economy by the end of this year, given the strength of the economic recovery, said the head of the Federal Reserve Bank (FRB) of San Francisco, Mary Daly.

In an interview with the Financial Times, Daily expressed confidence that the significant growth in economic activity of households and businesses will continue as people return to jobs and persist in high consumer spending, which will create conditions for adjusting monetary policy in the coming months.