Daily Market Analysis from ForexMart

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.

Forecast for USD/JPY on August 16, 2021

USD/JPY

Unfortunately, the USD/JPY pair could not withstand external pressure and fell by almost 80 points on Friday as restrictive stops below 110.10 were triggered.

It passed the 109.80 target level and the 109.20 target is open. New stop losses are likely to accumulate below this level, and big players may be tempted to repeat Friday's success and push the price down to 108.35. And here the question arises - do the big players need it? The answer may be in the affirmative if the majority of investors expect an imminent collapse in the stock markets. But so far there is no such unequivocal sentiment in the business media. If investors still expect growth in the medium term (and companies' financial statements are good), then the pair may not reach the 109.20 target level to maintain market calm. Or the price will go down very slowly to the target level.

Consolidating above the resistance at 109.80 will bring back the rising sentiment, the price will try to once again go above the price channel line (110.60).

The price settled below the target level of 109.80 on the four-hour chart, the Marlin Oscillator outlined a reversal from the oversold zone. This could be an early sign of the dollar's intention to recover, or it could spend a few days in the 109.20/80 range.

Where will gold end up?

The price of gold stopped just below $ 1,800 per ounce after Monday's growth. Now, some analysts are warning of a new sell-off if the level of $ 1800 turns out to be too strong resistance.

After a sudden collapse at the beginning of last week, gold managed to recover well, and demand for it returned.

Many people think about the geopolitical outbreak in Afghanistan after the Taliban seized the country after the recent withdrawal of American troops.

Therefore, everyone is waiting for the speech of the Central Bank Governor Jerome Powell on Wednesday.

Gold's movement to the level of $ 1,800 or higher will be important not only from a technical point of view but will also determine its future price direction.

Another multinational investment bank is urging investors to abandon gold, predicting stronger economic growth and an appreciation of the US dollar next year.

Dominic Schneider, Head of Commodities and Asia Pacific Foreign Exchange at UBS Global Wealth Management CIO Office, said that gold could decline to $ 1,600 per ounce, while silver could fall to $ 22 per ounce.

However, not all analysts hold this opinion.

Goldman Sachs still expects gold to hit $ 2,000 an ounce by the end of the year as demand for the yellow metal rebounds.

According to Craig Erlam, senior market analyst at OANDA Europe, there are currently several supporting factors for gold, including a combination of a weak US dollar and low bond yields.

Gold is also receiving additional price support from the growing demand of central banks for the precious metal, with Brazil and India being the latest to increase their official purchases of gold. This provided a counteraction to speculative pressure on the precious metal. In turn, gold prices recovered to the range of $ 1,780 per ounce, which could serve as a catalyst for additional coverage of short positions from trend followers.

Analysis and trading recommendations for EUR/USD and GBP/USD on August 18

Analysis of transactions in the EUR / USD pair

Euro initially rose by 15 pips on Tuesday as traders managed to set up long positions, thanks to the signal to buy that appeared when the MACD line was at the oversold area.

Then, immediately after that, the price turned around and provoked a sell signal, but traders had to ignore it since the indicator was far from zero.

The reason why EUR / USD rose in the morning is the slight increase in EU employment levels. But by afternoon, the pair declined despite a sharp drop in US retail trade data. Euro even reached new local lows.

And today, a report on EU inflation will be released, which will most likely provoke another decline in the market provided that the figure comes out the same or worse as expected. Then, in the afternoon, the Fed will publish its minutes of the meeting, which many expect to contain similar clauses as the last discussions.

For long positions:

Open a long position when euro reaches 1.1732 (green line on the chart), and then take profit at the level of 1.1772. EUR / USD will climb higher if the Euro area publishes a better than expected inflation report. 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 1.1708 and 1.1670, but the MACD indicator line must be in the oversold area in order to bring about a market reversal to 1.1732 and 1.1772.

For short positions:

Open a short position when euro reaches 1.1708 (red line on the chart), and then take profit at the level of 1.1670. A decline will occur in the event of poor data on UK inflation and strong Fed protocols. 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 1.1732 and 1.1772, but the MACD line must be in the overbought area in order to provoke a market reversal to 1.1708.

Analysis of transactions in the GBP / USD pair

Pound fell by 25 pips yesterday as traders managed to set up short positions, thanks to the signal to sell that appeared when the MACD line was going down from zero. At the same time, there were no other market signals for the rest of the day.

The weak employment data that UK released was the main reason for the decline, followed by the US retail trade report and statements from Fed Chairman Jerome Powell. And most likely, this bearish sentiment will continue amid inflation statistics from UK. But if the indicator turns out to be better than expected, there may be an upward correction in the market. Then, in the afternoon, the Fed will publish its minutes of the meeting, which many expect to contain similar clauses as the last discussions.

For long positions:

Open a long position when pound reaches 1.3764 (green line on the chart), and then take profit at the level of 1.3812 (thicker green line on the chart). GBP / USD will trade higher if UK reports strong statistics on inflation. 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 1.3731 and 1.3684, but the MACD line should be in the oversold area in order to set off a market reversal to 1.3764 and 1.3812.

For short positions:

Open a short position when pound reaches 1.3731 (red line on the chart), and then take profit at the level of 1.3684. A decline will occur if UK publishes weak inflationary indicators. 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 1.3764 and 1.3812, but the MACD line should be in the overbought area in order to trigger a market reversal to 1.3731 and 1.3684.

Analysis and trading recommendations for EUR/USD and GBP/USD on August 19

Analysis of transactions in the EUR / USD pair

Euro rose by 20 pips on Wednesday as traders managed to set up long positions, thanks to the signal to buy that appeared when the MACD line was at the oversold area. But in the afternoon, demand for dollar increased, as the Fed protocol said the members are considering an early tapering in order to prevent the economy from overheating.

Today, there will be a report on the current account balance of ECB, which will not have a serious impact on the market if it does not diverge from the forecasts. Then, in the afternoon, US will release weekly data on jobless claims, which, if exceeds expectations, will put more pressure on EUR / USD.

For long positions:

Open a long position when euro reaches 1.1697 (green line on the chart), and then take profit at the level of 1.1742. EUR / USD will climb higher 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 1.1665 and 1.1624, but the MACD indicator line must be in the oversold area in order to bring about a market reversal to 1.1697 and 1.1742.

For short positions:

Open a short position when euro reaches 1.1665 (red line on the chart), and then take profit at the level of 1.1624. A decline will occur if the Euro area releases weak economic indicators and US publishes a strong labor market report. 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 1.1697 and 1.1742, but the MACD line must be in the overbought area in order to provoke a market reversal to 1.1665.

Analysis of transactions in the GBP / USD pair

GBP / USD declined by 20 pips yesterday because traders took short positions amid a signal to sell in the market, which came after the pair became oversold. Earlier, the market signal was to buy, but pound did not grow even though the MACD line was moving up from zero.

The main reason for the slump was the weak data on UK inflation, followed by the Fed protocols that set off increased demand for dollar. Apparently, many members said the central bank may already cut measures in the coming months.

Today, there are no UK statistics scheduled to be released, so the market will most likely focus on the reports from US. If the figures on jobless claims turn out better than expected, pressure on EUR / USD will intensify.

For long positions:

Open a long position when pound reaches 1.3741 (green line on the chart), and then take profit at the level of 1.3812 (thicker green line on the chart). 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 1.3700 and 1.3638, but the MACD line should be in the oversold area in order to set off a market reversal to 1.3741 and 1.3812.

For short positions:

Open a short position when pound reaches 1.3700 (red line on the chart), and then take profit at the level of 1.3638. GBP / USD will decline further if US releases a strong labor market data. 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 1.3741 and 1.3812, but the MACD line should be in the overbought area in order to trigger a market reversal to 1.3700 and 1.3638.

Analysis and trading recommendations for EUR/USD and GBP/USD on August 20

Analysis of transactions in the EUR / USD pair

EUR / USD declined by 20 and then 30 pips on Thursday as traders managed to set up short positions, thanks to the signals to sell that appeared when the MACD line was at the overbought area. The driver was the stable decrease in weekly US jobless claims, which provoked increased demand for dollar.

Today, there will be a report on German PPI, but it is unlikely to help euro regain its lost positions. At most, the movement will be horizontal, unless dollar bulls close their positions this weekend.

For long positions:

Open a long position when euro reaches 1.1697 (green line on the chart), and then take profit at the level of 1.1733. 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 1.1675 and 1.1644, but the MACD indicator line must be in the oversold area, as only by that will the market reverse to 1.1697 and 1.1733.

For short positions:

Open a short position when euro reaches 1.1675 (red line on the chart), and then take profit at the level of 1.1644. A decline will occur if Germany releases a weak economic report. 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 1.1697 and 1.1742, but the MACD line must be in the overbought area, as only by that will the market reverse to 1.1675.

Analysis of transactions in the GBP / USD pair

GBP / USD continued to decline yesterday even though there was a signal to buy that coincided with the MACD line being at the oversold area. This resulted in huge losses, especially since there were no other market signals for the rest of the day.

The main reason for the slump was the continued decrease in weekly jobless claims. And today, this bearish sentiment may continue if the data on UK retail sales turn out bad. But in the afternoon, there may be a slight correction in the market, as dollar bulls may close their positions since it is already the end of the week.

For long positions:

Open a long position when pound reaches 1.3645 (green line on the chart), and then take profit at the level of 1.3688 (thicker green line on the chart). 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 1.3618 and 1.3583, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3645 and 1.3688.

For short positions:

Open a short position when pound reaches 1.3618 (red line on the chart), and then take profit at the level of 1.3583. 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 1.3645 and 1.3688, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3618 and 1.3583.

Hot forecast for EUR/USD on August 23, 2021

The need for correction is not just long overdue, but has even already begun last Friday. However, the process is extremely slow. Nevertheless, there is no doubt that this is a corrective movement. The uncertainty of the single European currency is caused by business activity indices. The fact is that the preliminary assessment should show a decrease in all indices without exception. For example, the production index should fall from 62.8 points to 62.2 points. The index of business activity in the service sector may fall from 59.8 points to 59.4 points. So, the composite index should decrease from 60.2 points to 59.8 points. Thus, even a slight decline in the single European currency is quite possible during the European session. It will be small for the simple reason that the single European currency is already seriously oversold, which means that its downward movement is extremely limited.

However, this does not mean that the correction is postponed indefinitely. American statistics are much more important, and it is precisely with these data that things will be much worse today than in the eurozone. And we are talking about the same preliminary estimates of business activity indices. Thus, the manufacturing index may decrease from 63.4 points to 63.0 points, while the index of business activity in the service sector from 59.9 points to 59.0 points. As a result of all this, the composite index should decrease from 59.9 points to 59.0 points. And due to the fact that American statistics have much more weight, the market will react to it noticeably more actively. Plus, the dollar is clearly overbought. This will be the final reason for the correction.

After updating the local minimum of 2021, the EUR/USD pair slowed down its downward course. As a result, there was a corrective movement, which led to the return of the quote above the previously passed level of 1.1700.

The RSI technical indicator confirms the correction move by crossing the 50 level from the bottom up.

The daily trading chart shows a downward cycle from the beginning of June, the scale of which leads to a change of trading interests.

Expectations and prospects:

The corrective move returned the quote in the area of the Fibonacci line 23.6-1.1720, where the possibility of completing the existing movement is being considered. If there is no reduction in the volume of long positions in the area of this level, then the subsequent Fibo level is located around the 1.1760 mark.

A comprehensive indicator analysis gives a buy signal based on the short-term period. At the same time, the intraday and medium-term periods signal a sale.