Thread: Daily Market Analysis from ForexMart

Forecast for GBP/USD on September 27, 2021

On Friday, the British pound tried to break above the resistance of the MACD indicator line (the line was pierced by the upper shadow), but under general market pressure it was forced to leave this venture until more favorable circumstances. In case of a positive development of events, with the breakthrough of the MACD line (1.3722), the 1.3888 target will open - the nearest embedded line of the rising price channel. The Marlin Oscillator is still in the downward trend zone, therefore, the observed rise in prices during the Asian session does not mean anything yet, especially since there has been a falling gap since the opening of the market.

Marlin stayed in the growth zone on the four-hour chart, the price is trying to rise above the balance indicator line. This is the first positive sign. To confirm it, the price needs to overcome the resistance of the MACD line in the price area of 1.3745.

Forecast for USD/JPY on September 27, 2021

Over the past three days, the USD/JPY pair has shown strong and confident growth when the price overcame the target level of 110.65. To some extent, this growth was unexpected, but it does not mean that now the market is returning to the strengthening of the dollar, to reaching 111.39 and 112.22.

We estimate the reversal of the pair from the reached level with a further decline to the MACD line to the area of 109.65 with a probability of 70%; confusion in the stock markets, the general tendency for the dollar to weaken in other currency pairs may implement a downward trend scenario for USD/JPY. The Marlin Oscillator is giving an early reversal signal.

The price is trying to return below the target level of 110.65 on the H4 chart, the Marlin Oscillator is sharply turning down from the overbought zone. We are waiting for the development of events.

But on the daily scale, the exit above the MACD line will occur earlier (1.3722), and in order not to happen that the opening of a position will happen on a false breakout of resistance on the daily scale, it is advisable to open a position after a reinforcing signal on H4.

European equity markets closed positive

Olaf Scholz, candidate for the chancellor from the victorious Social Democratic Party (SPD), expressed the hope that the new German government will be formed before Christmas. "We will try to form a government with greens and the Free Democratic Party," he said.

According to the results of the 2017 elections, it took the government 172 days to form a "grand" coalition of the CDU / CSU and the SPD. Elections were held in September, and the coalition agreement was signed on March 12, 2018. Scholz promised that in the case of a government under his leadership, this will not happen.

The British FTSE 100 and the French CAC 40 increased by 0.2%. Italy's FTSE MIB and Spain's IBEX 35 added 0.6% and 1.5%, respectively.

Meanwhile, the composite index of the largest enterprises in the region Stoxx Europe 600 by the end of trading fell by 0.2% and amounted to 462.42 points.

In Spain, the leaders of growth were the shares of banks, in particular, UniCredit (+ 5%) and IntesaSanpaol, as well as oil producers Tenaris (+ 3.4%), Eni (+ 2.3%) and Saipem (+ 1.7%) ).

Producer prices in Spain in August increased by 18% compared to last year, according to the statistics of the country. Growth rates were at their highest since May 1980. In July, the figure rose by 15.6% in annual terms.

Meanwhile, European Central Bank President Christine Lagarde said yesterday that inflation could exceed the ECB's forecasts, but there is little sign of that so far.

Due to the shortage of natural gas supplies in Europe, oil prices are rising, which pushes energy stocks up. BP rose 3.5%, Royal Dutch Shell rose 4.5%, Italian ENI rose 2.3%.

Rolls-Royce Holdings Plc shares jumped 11.3%. The British engineering holding announced the sale of the Spanish aircraft engine manufacturer ITP Aero to a consortium of investors led by investment company Bain Capital Private Equity for 1.7 billion euros. In addition, Rolls-Royce has signed a 30-year contract with the US Air Force.

The value of the German pet store chain Zooplus rose 4.3% after the Swedish private investment company EQT AB made an offer to buy it for 3.36 billion euros.

Swedish office rental IWG rose 4.4% on news that the company is considering dividing and listing one of its New York divisions through a merger with specialized mergers and acquisitions (SPAC).

Trading plan for starters of EUR/USD and GBP/USD on September 29, 2021

September 29 economic calendar:

Today, the UK's lending market data will be released. And although the number of approved mortgage loans should be reduced from 75.15 thousand to 73.00 thousand, the volume of mortgage lending may increase by 0.5 billion pounds. However, such results will cancel each other out.

Therefore, the fate of the pound will be determined by consumer lending, the volume of which should be reduced by 0.75 billion pounds. Consequently, consumer activity is declining. Nevertheless, it is not the driver of economic growth. It can be seen that the prospects for the pound do not look the best.

Trading plan for EUR/USD on September 29:

The US dollar strengthened again since the opening of the European session, as a result of which the quote managed to break through the local low (1.1664) of August 20. A confirmation signal about the prolongation of the downward cycle from the beginning of June should arrive when the price is kept below the level of 1.1660 for an H4 period. In this case, there is a chance to further decline towards the level of 1.1600.

An alternative scenario will arise if the quote still fails to stay below the level of 1.1660, which will lead to a natural price rebound.

Trading plan for GBP/USD on September 29:

The oversold pound does not stop greedy speculators who continue to work on the decline. The quote is rapidly declining, where there is already an attempt to keep the price below the level of 1.3500. If the market maintains the set pace, we should not rule out a decline towards the 1.3450 area. As a result, the oversold status of the British currency will reach the highest level, which will lead to a technical correction.

Analysis and trading recommendations for GBP/USD on September 30

Pound continued the collapse that began a few days ago due to the inability of UK authorities to quickly deal with the fuel crisis that erupted across the country over the weekend. Looking at the chart, there was a single test of 1.3536 that occurred during the time that the MACD line was moving down from zero. It formed a signal to sell in the market, which provoked a 50-pip decline to 1.3487. Obviously, reports on lending and aggregate of the M4 money supply did not help pound in any way, as did the speech of Bank of England chief Andrew Bailey. Expectations that the central bank will raise interest rates later this year also dissipated amid multiple problems in the country.

Today, data on UK GDP may shake the markets, provided that the figure exceeds expectations. Then, in the afternoon, there will be speeches from Fed representatives and US Treasury Secretary Janet Yellen, followed by reports on jobless claims. The data, however, is unlikely to harm dollar even amid poor performance.

For long positions:

Open a long position when pound reaches 1.3467 (green line on the chart) and take profit at the level of 1.3529 (thicker green line on the chart). However, there is little chance of a price increase, given the steep downward move yesterday. In any case, 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 1.3430, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3467 and 1.3529.

For short positions:

Open a short position when pound reaches 1.3430 (red line on the chart) and take profit at the level of 1.3384. Pressure is likely to continue ahead of the vote on the US national debt ceiling, which is scheduled for today in the Senate. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.

The pair could also be sold at 1.3467, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3430 and 1.3384.

Gold comes under pressure from stronger US dollar

The yellow metal has been trading with losses lately. Its recent steep gains have been trimmed, and new victories are not in sight. However, experts of the precious metals market are optimistic about the long-term future of Gold

The precious metal closed September with a 3.4% decline. According to analysts, this is the first significant drop in the value of gold since June this year. Its attempts to gain momentum are unsuccessful, although it does not give up. As of October 1, the XAU/USD pair is trading at $1,752.22, showing a slight upward trend. At the same time, the price of the COMEX gold futures for December delivery traded on the New York Stock Exchange fell by 0.25% to $1,725.75 per troy ounce.

Experts consider the stronger US currency to be an obstacle to an increase in the precious metal. The greenback has grown steadily over the past several trading sessions, thus taking the lead. This hindered the growth of gold, in which investors preferred to invest in the third quarter of 2021. Notably, during that period, market participants expressed concerns about the spread of the new Delta COVID-19 variant. Against this background, the demand for defensive assets increased sharply, primarily for the yellow metal. However, at the end of the summer, the dynamics of the asset became sluggish. In July, gold added 2.3%. In August, the precious metal rose by 0.3%. In September, it dropped by 3.4%. According to analysts, the September decline was the first since the beginning of this summer. As a result, gold lost 0.8% in the third quarter of 2021. Since the beginning of this year, it has fallen by more than 7.8%.

The key factor determining the dynamics of the precious metal in September is still the US dollar's rate. In early autumn, the greenback was trading under pressure from expectations of further changes in the Fed's monetary policy. Earlier, Federal Reserve Chairman Jerome Powell announced that the regulator would probably phase out its stimulus programs, while some of his comments were hawkish in nature. The fact that the Fed was close to tapering its support measures supported the US dollar, experts emphasize.

The current high rate of the US currency lowered the demand for the precious metal among investors. At the same time, the situation in the precious metals market sometimes changed dramatically. Earlier, the yellow metal showed an inverse correlation with the greenback. However, in the current year and in late 2020, there were times when the dynamics of these assets were synchronized. Lately, experts have recorded an inverse correlation when the stronger greenback exerted pressure on gold.

The short-term outlook for the precious metal is rather pessimistic. Analysts believe that gold has lost its directional vector, so the US dollar is in the focus of market participants. According to Michael Langford, executive director at corporate advisory and consultancy firm AirGuide, greenback is now the best defense against most risks, unlike gold. In the medium term, the precious metal may gain momentum amid weak US macroeconomic statistics or the debt problems of China's Evergrande. As for the long term, these factors will hardly support gold.

According to DailyFX currency strategist Ilya Spivak, only the long-term outlook for the price of the yellow metal is optimistic. The recent simultaneous drop in gold and stocks indicates that the precious metal cannot save from losses in risky assets, Spivak believes. Analysts note that the foreseeable future of gold is rather dull, since the odds of gaining strong bullish momentum are pretty slim.

European stock indices fell on the basis of trading on Friday

Investors analyzed statistics that indicate accelerating inflation and a slowdown in economic recovery from the effects of COVID-19. In addition, they are under pressure from the ongoing energy crisis in China, which could lead to even greater problems in global supply chains, especially ahead of New Years and Christmas holidays, when the demand for goods traditionally increases.

In the eurozone, inflation in September accelerated to 3.4%, the highest since 2008, up from 3% a month earlier, preliminary data from the Statistical Office of the European Union show. Experts on average expected an acceleration in the growth rate of consumer prices in September to 3.3%.

The growth rate of retail sales in Germany in August fell short of analysts' expectations. The indicator increased by 1.1% from the previous month, according to data from the country's Federal Statistical Agency (Destatis). The economist had on average expected growth of 1.5%.

The September purchasing managers' index (PMI) for the manufacturing sector in the eurozone fell to its lowest level since February at 58.6, final data from IHS Markit showed. In the month before last, the indicator was at the level of 61.4 points.

In Germany, the industrial PMI was revised to 58.4 points from 58.5 points previously announced by IHS Markit. In August, the indicator was 62.6 points. In the UK, the indicator fell to 57.1 points from 60.3 in August. However, IHS experts previously estimated the country's September PMI at 56.3 points. The French manufacturing purchasing managers' index fell to 55 points last month from 57.5 points, the Italian index fell to 59.7 from 60.9 points. The Spanish PMI fell to 58.1 points from 59.5 in August.

In general, the decline in manufacturing activity in European countries was caused by problems in global supply chains and, as a result, an increase in purchase prices, according to the HIS report.

The composite index of the largest enterprises in the region Stoxx Europe 600 fell by 0.42% and amounted to 452.9 points.

The British FTSE 100 dropped 0.8%, the French CAC 40 fell 0.04%, and the Italian FTSE MIB dropped 0.3%. The German DAX has decreased by 0.7%, since the beginning of the week the indicator has lost more than 3%, that is, the maximum since January 25. At the same time, the Spanish IBEX 35 index grew by 0.04%.

UK sporting goods retailer JD Sports slumped 1.3% after it was reported that the UK regulator had begun investigating possible antitrust violations in the country as part of its partnership with Leicester City F.C. football club.

The market capitalization of the British beverage maker Diageo PLC declined 2%. The company will provide $ 500 million to boost production of tequila in Mexico.

The value of Deutsche Post AG fell by almost 5%. DHL Express's logistics division plans to increase shipping rates for US customers by an average of 5.9% starting January 1.

Oil and gas BP PLC fell 0.7%. The company announced a day earlier that, as part of the investment round, it will allocate $ 13 million to the ****** startup-developer of the service for electric car rental and charging stations BluSmart.

Growth leaders in the Stoxx 600 include French electricity and gas supplier Electricite de France S.A., which gained almost 6% after French Prime Minister Jean Castex said potential electricity price increases in February would be capped at 4%.

German automaker Bayerische Motoren Werke (BMW) AG gained 1.3%. The company has improved its forecast for a number of financial indicators for 2021, citing the fact that the rise in car prices will offset the negative impact of the global chip shortage.

Daimler AG's value increased by 0.9%. The shareholders of the German automotive concern have approved the spin-off of the Daimler Truck division into an independent company with a separate listing. The remainder of Daimler AG, which will exclusively produce luxury and premium passenger cars and minivans, will be renamed Mercedes-Benz Group AG from February 2022.

GBP/USD pair is looking for a favorable buy pattern

The GBP/USD pair is in the phase of forming an upward momentum unlike the EUR/USD pair. So, only a strong impulse decline at today's European session can disrupt this structure.

If the quotes do not decline, then the upward movement will continue in the area of the Weekly Control Zone of 1/4 1.3561-1.3553. The upward trend is a priority. The WCZ of 1.3789-1.3755 remains the upward target. Trading based on this pattern guarantees a favorable risk-to-reward ratio. It is important to understand that there is a 30% probability to completely implement the upward movement this week, so it is necessary to be prepared to transfer purchases through the weekend.

The probability of selling profitably from the current levels is below 30%, so it is better not to consider short positions. One should focus their attention on finding a pattern to buy. The probability of updating yesterday's high is 80%.

Analysis and trading recommendations for EUR/USD and GBP/USD on October 7

Analysis of transactions in the EUR / USD pair

Euro bears went over their heads yesterday and pushed EUR/USD to a new monthly low. However, the chart clearly shows that after the fall during the Asian session, the MACD line was still far from zero, so sellers did not have the opportunity to take more positions. Fortunately, buyers also could not open positions because they were unprofitable.

It was the disappointing data from the Euro area that pushed the pair down yesterday. Then, in the afternoon, the price plunged deeper amid strong US statistics that supported dollar.

There is a huge chance that the pair will drop lower today because the upcoming ECB minutes may not be in favor of euro. Aside from that, in the afternoon, there will be weekly data on the US labor market and report on the volume of consumer lending, although it will not have that much impact as many investors anticipate the US Department of Labor report tomorrow.

For long positions:
Open a long position when euro reaches 1.1565 (green line on the chart) and take profit at 1.1599. There is little chance that price will increase sharply today. However, there may be a small upward correction during the publication of the ECB minutes.

In any case, 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 1.1548, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1565 and 1.1599.

For short positions:
Open a short position when euro reaches 1.1548 (red line on the chart) and take profit at 1.1510. Pressure is likely to continue because of the political risks in the US and sharp rise in EU inflationary pressures. Strong US statistics will also support dollar.

But before selling, make sure that the MACD line is below zero, or is starting to move down from it. Euro could also be sold at 1.1595, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1548 and 1.1510.

Analysis of transactions in the GBP / USD pair

Wednesday's market signals were very profitable. The first one, which was to sell, coincided with the time that the MACD line was going down from zero. This allowed GBP / USD to decline by 50 pips. The signal to buy that followed provoked a 30-pip increase in the pair.

Disappointing data on the UK construction sector pushed pound down yesterday. In addition, only a few were willing to buy GBP / USD at weekly highs, so there were hardly any long positions in the market. Then, strong ADP report on the US private sector employment further limited the upside potential of the pair in the afternoon.

There are no important UK reports today so pound will have a chance to return to weekly highs. In the afternoon, weekly data on the US labor market will be released, as well as a report on the volume of consumer lending. Most likely, these reports will not have a serious impact on the market, as many investors anticipate the US Department of Labor report tomorrow.

For long positions:
Open a long position when pound reaches 1.3593 (green line on the chart) and take profit at 1.3629 (thicker green line on the chart). Price may climb up since there are no UK statistics scheduled to be released today.

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 1.3574, however, the MACD line should be in the oversold area, as only by that will the market reverse to 1.3593 and 1.3629.

For short positions:
Open a short position when pound reaches 1.3574 (red line on the chart) and take profit at 1.3535. Pressure will return if buyers remain inactive in the market and if the US reports strong labor market data.

But before selling, make sure that the MACD line is below zero, or is starting to move down from it. The pair could also be sold at 1.3593, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.3574 and 1.3535.

Simplified wave analysis and forecast for EUR/USD, USD/JPY on October 8

EUR/USD

Analysis:
The main pair of the European currency market has been dominated by an upward trend since March last year. The price has been adjusted downwards for the entire current year. Moreover, the wave structure looks complete. Quotes are at the lower border of a strong potential reversal zone. There are no reversal signals yet.

Forecast:
The general flat nature of price fluctuations is expected today. A short-term depreciation of the exchange rate is possible in the next session, no further than the support zone. By the end of the day, the probability of price growth increases.

Potential reversal zones

Resistance:
- 1.1600/1.1530

Support:
- 1.1520/1.1490

Recommendations:
The upcoming rise goes against the trend of movement, so buying the euro today may be risky. It is better to split the lot in them. It is optimal to refrain from entering the pair's market until the price pullback is completed, tracking the signals for the sale of the instrument.

USD/JPY

Analysis:
The price on the daily TF chart of the Japanese yen has been forming a downward correction wave since March of this year. By the current day, it looks like a shifting plane. Its structure lacks the final part. The price is approaching the lower boundary of the resistance zone of the W1 scale.

Forecast:
On the next day, the price of the pair is expected to move with an upward vector. Settlement zones indicate the boundaries of the price corridor. By the end of the day, the probability of a change of course and the beginning of a decline increases.

Potential reversal zones

Resistance:
- 112.50/112.80

Support:
- 111.60/111.30

Recommendations:
Trading the Japanese yen today can be safe only within the intraday, a fractional lot. Until clear reversal signals appear in the area of the resistance zone, sales are not recommended.

Analysis and trading recommendations for GBP/USD on October 11

GBP/USD rallied, thanks to the buy signal that coincided with the MACD line being at the oversold area. Such allowed bullish traders to take long positions, provoking a 60-pip increase in the pair. No other signal appeared for the rest of the day.

It was the latest Bank of England minutes that pushed pound up, coupled with weak data on the US labor market.

Today, a report on UK GDP will be published, which may push pound above local highs. But by afternoon, the market will turn calm amid a US holiday. Many markets will close by then.

For long positions:

Open a long position when pound reaches 1.3658 (green line on the chart) and take profit at 1.3727 (thicker green line on the chart). Price may rise in the morning as there are no UK statistics scheduled for release today. 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 1.3607, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3658 and 1.3727.

For short positions:

Open a short position when pound reaches 1.3607 (red line on the chart) and take profit at 1.3535. But there is little chance that the price will decline, especially since the Bank of England seems to be set on raising interest rates as soon as possible. Nevertheless, before selling, make sure that the MACD line is below zero, or is starting to move down from it.

The pair could also be sold at 1.3658, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3607 and 1.3535.