The EURUSD pair has failed to maintain enough bearish momentum below 1.1150 (consolidation range lower zone) to enhance further bearish decline.

Instead, bullish breakout above 1.1380-1.1400 has lead to a quick bullish spike directly towards 1.1700 which failed to offer sufficient bearish pressure.

Bullish persistence above 1.1700-1.1760 favored further bullish advancement towards 1.1975 where some considerable bearish rejection has been demonstrated.

The price zone around 1.1975-1.2000 ( upper limit of the technical channel ) remains a strong SUPPLY-Zone to be watched for bearish reversal.

However, Conservative traders should be waiting for bearish closure below 1.1700 - 1.1750.

As this indicates lack of bullish momentum and enhances further bearish decline initially towards 1.1645 and 1.1600.

Trade recommendations :

Conservative traders should wait for the current bullish movement to get back below 1.1750 as an indicator for lack of bearish momentum for a valid SELL Entry.

T/P levels to be located around 1.1645, 1.1600 and 1.1500 while S/L to be placed above 1.1860 to minimize the associated risk.

Technical outlook:

GBPUSD climbed through 1.3483 highs before reversing sharply on September 01, 2020. An Evening Star candlestick pattern was ready in the next few trading sessions indicating a trend reversal and major top in place at 1.3483. Please note the GBPUSD bulls remained shy by just a few pips from major resistance at 1.3515 levels. We would still consider the overall wave structure to be constructive for bulls but after a meaningful corrective drop is complete. GBPUSD has produced a sharp reversal from 1.3483 highs, dropping over 700 pips through 1.2763 lows on Friday. The Cable currency pair is seen to be trading around 1.2880 levels and is expected to produce a retracement towards 1.3200/1.3300 before resuming lower again. The recent boundary being worked upon is between 1.3483 and 1.2763 levels and potential resistance zone is around 1.3200/300 respectively.

Trading plan:

Sell @ 1.3200/1.3300, stop @ 1.3500 and target is towards 1.2250.

Good luck!

Technical outlook:

US Dollar Index might have finally carved a meaningful bottom at 91.75 levels on September 01, 2020. The index also managed to rally in the next few trading sessions and took off immediate resistance at 93.47 levels. The index is seen to be trading above 93.25 levels for now and is expected to push through 94.00 and further in the over the next several trading sessions. Immediate support is seen around 91.75, while resistance is seen at 94.00 levels respectively. The recent boundary that is being worked upon is between 91.75 and 93.65 and prices have dropped to fibonacci 0.50 retracement levels around 92.69. Please note that is is quite possible for US Dollar Index to drop towards fibonacci 0.618 retracement seen around 92.45 levels. Once the pullback is complete, the index would resume higher towards 94.00 and beyond.

Trading plan:

Remain long, stop at 91.60, target is 94.00 and 98.00 at least.

Good luck!

The two-week advance of the US dollar is over. Now the greenback is slipping ahead of the Fed's policy meeting later this week.

The market sentiment is lifted by the news from the pharmaceutical giant AstraZeneca. The company resumes its trials of the coronavirus vaccine which is is considered one of the most efficient jabs. The risk-on mood is putting pressure on the US dollar as a safe haven currency.

Its index is now on the defensive trying to hold at around 93 points.

Interestingly, investors seem to neglect the growing number of COVID-19 cases in Europe because the mortality rate remains low. In the meantime, national healthcare facilities cope well with such a number of infected people.

Last week, ECB President Christine Lagarde made comments that the regulator is monitoring the euro's strength and its impact on inflation. However, her remarks were of little importance to EUR/USD. Meanwhile, the currency pair got into a more narrow trading range of 1.1750–1.1920, having pulled back to the values of the last week of August.

Now traders are sitting on the sidelines of the Fed's policy meeting in the hope of finding some clues to further monetary policy.

Looking back on the Fed's annual symposium in Jackson Hole in late August, Jerome Powell stated that the central banks gave up the idea of rate hikes in view of curbing inflation.

The FOMC is expected to review its outlook for further changes in interest rates. So, the official federal funds rate may be put on hold for the nearest 3-4 years, MUFG analysts say.

From their viewpoint, the likelihood that interest rates in the US could remain at near zero in the long-term is bearish for the US dollar.

On the other hand, experts at Standard Chartered think that the outcome of the Fed's meeting could discourage dollar bears.

The Federal Reserve rejected the idea of monitoring the curve of the Treasuries yield as an option for the short-term monetary policy. It seems there is no consensus in the ranks of the FOMC on what to do with the expanding balance sheet, Standard Chartered makes its comments.

In the meantime, EUR/USD is extending its bounce from the lows of the last week, aiming at local highs of 1.1870–1.1880.

Here is the outlook from Credit Suisse analysts. The true breakout above 1.1885 will open the door for the euro bulls towards 1.1913–1.1930 and higher to 1.2011 and 1.2145–1.2155. The nearest support is seen at 1.1826. Alternatively, the break to the levels under 1.1794–1.1799 will signal the possibility of a down move. However, only a decline below 1.1754 will confirm this bearish scenario. Further support is expected at 1.1689–1.1699 and 1.1671.

Technical outlook:

EURUSD has finally carved a meaningful top around 1.2010 on September 01, 2020. It had dropped to 1.1750/60 lows in the next few days, breaking below immediate support at 1.1754. The single currency pair is seen to be trading around 1.1870 /72 levels at this point in writing, and is expected to turn lower towards 1.1754 and beyond. Immediate resistance is seen towards 1.2010, while support is around the 1.1700 levels. A push below 1.1754 will accelerate further towards 1.1700 and 1.1500 in the next several trading sessions. Also note that next major price support comes in around 1.1167 levels and bears might be determined to push through those levels. It is possible that EURUSD might remain sideways for a while before turning lower again.

Trading plan:

Remain short for now, stop @ 1.2020, target is 1.1167.

Good luck!

In the most global terms, the construction of a new downward section of the trend continues. So, for now, I can't say anything other than that the decline in quotes is likely to continue though everything will depend on the news background for the British. After several months of appreciation, markets have begun to sharply reduce demand for the British currency but the US dollar itself does not have enough reasons to increase. In the instrument with the Euro currency, for example, it does not grow at all. Thus, everything now depends on the news from the UK; as well as the attitude of the markets to them.

Over the past trading day, the GBP/USD instrument has lost several dozens more base points and is presumably preparing to complete the construction of wave 1 or A as part of a new downward trend section. How strong and long this wave will turn out will depend entirely on the news background which is why such a strong decline in the British pound's quotes began. At the moment, the pair has moved away from the previously reached highs by 50-62% so the construction of an upward wave 2 or B now has a good chance of implementation.

The news background from the UK continues to be absolutely negative. It is even better to say that since the first of September, there have been only a few news articles but such articles that just killed the pound which had been doing quite well for several months before. However, first came news of the failure of the next two stages of negotiations between Brussels and London, which further reduced the likelihood of a free trade agreement. Then Boris Johnson set a new deadline for negotiations which further reduced the chances of a positive outcome of the negotiations. In the end, the British Prime Minister put to the vote a bill that involves changing the mechanism of trade with Northern Ireland and changing the customs regime which were previously agreed with the European Union. Thus, if the parliament approves Johnson's initiative, then a conflict may begin with the European Union in which the Brits would be wrong, since they are the ones who violate the previously signed Brexit agreement and the principles of international law. All this, of course, had a negative impact on the British position. However, if the UK Parliament approves the "Johnson act" this week then I will expect a new drop in demand for the British.

On Monday, news and economic reports are not listed in the calendar. Thus, I believe that there will be no major price changes today. A corrective upward wave is overdue, but it is unlikely to start if the Parliament votes "Yes".

General conclusions and recommendations:

The Pound-Dollar instrument presumably completed the construction of the upward wave Z and the entire upward trend section. At the same time, there is a high probability of building a correction wave 2 or B, but it is also unclear what the results of the Parliamentary vote will be. Thus, I would recommend waiting for news from the UK now and trading based on them. If you look only at the wave pattern, I would say that the instrument now has a good opportunity to return to the level of 1.3013, which corresponds to 38.2% of the Fibonacci.

The EUR / USD instrument's wave marking looks quite convincing in global terms. The departure of quotes from the reached highs confirms the assumption that the construction of wave 3 or C is complete. Wave 4 (assumed) takes on a three-wave form, at least it now clearly presents waves 1 and 2 or a and b. Thus, a new decline in quotes may begin in the near future. At the same time, the US currency really needs the support of the news background. We see how reluctant the markets are to invest in the dollar. Therefore, wave 4 may turn out to be non-stretched, and the entire section of the trend, which originates in March, may take a 5-wave form.

The estimated wave 5 in 5 in 3 or C completed its construction, based on what the wave count of a smaller scale shows. If this is true, then the decline in quotes will continue with targets located near the 23.6% Fibonacci level within the descending wave C in 4 or, possibly, even a new descending set of waves. At the moment, we see that the first and second waves of the new global wave have been completed, so a new decline in the instrument's quotes is expected.

There was not much news and reports last Friday, September 11. Meanwhile, in America, a report on the consumer price index for July was released, which, of course, could please buyers of the US currency. But the markets at the end of the working week had no desire to actively trade and just brought it to the end in a calm tone. Nonetheless, US inflation has started to accelerate, raising hopes for a faster economic recovery. However, after the strongest fall of 32% in the second quarter, the economy will still recover for a long time, which is probably longer and heavier than the European one. This means that the markets now favor the Euro currency. I note that the US dollar has been rising very reluctantly for the past 5-6 weeks.This alludes that markets do not generate additional demand for the US dollar. As a result,

This week, an important event - the Fed meeting - will take place. Most likely, the key rate and the volume of the asset purchase program from the market will remain unchanged. Thus, most attention will be paid to the speech of FRS Chairman Jerome Powell. He can again talk about inflation, about changing the approach to the correlation of inflationary processes and monetary policy. However, it is impossible to predict now what Powell will say. Last week, Christine Lagarde did not seem to report anything optimistic for the Euro, but it rose by 100 points. So there should be a reaction to the FOMC meeting and Powell's speech, but what are they?

General conclusions and recommendations:

The Euro-Dollar pair presumably completed the construction of the global wave 3 or C and the second corrective wave as part of the trend section that begins on September 1. Thus, at this time, I recommend selling the instrument with targets located near the calculated levels of 1.1706 and 1.1520, which corresponds to 23.6% and 38.2% Fibonacci level, for each MACD signal down. I expect to build a descending wave from 4. The Potential of this wave is 150 points.

Price holding above ascending trendline support and moving average. A bounce above intermediate support at 1.31512 towards 1st resistance at 1.32393 can be expected. Bullish scenario will remain intact as long as price is above 1st support at 1.31309

Trading Recommendation

Entry: 1.31512

Reason for Entry:

Moving average support

Take Profit: 1.32393

Reason for Take Profit:

Recent swing high 61.8% and -27.2% Fibonacci retracement

Stop Loss: 1.31309

Reason for Stop Loss:

61.8% Fibonacci retracement, 61.8% Fibonacci extension

Price is facing bearish pressure from the first resistance level, in line with 61.8% fib retracement and descending trendline resistance where we could see a drop to our support level where the 50% fib retracement and horizontal swing low support are. Stochastics is also showing that more bearishness is possible.

Trading Recommendation

Entry: 77.41

Reason for Entry:

61.8% fib retracement , descending trendline resistance

Take Profit :76.94

Reason for Take Profit:

50% fib retracement, horizontal swing low support

Stop Loss: 77.71

Reason for Stop loss:

Horizontal swing high

Price is testing our downside confirmation level where a break below this level, in line with our 50% fibonacci retracement, 78.6% fibonacci extension and horizontal overlap support could provide the bearish acceleration to our first support target.

Trading Recommendation

Entry: 106.037

Reason for Entry:

50% fibonacci retracement, 78.6% fibonacci extension and horizontal overlap support

Take Profit: 105.594

Reason for Take Profit:

Horizontal swing low support, 100% fibonacci extension

Stop Loss: 106.248

Reason for Stop Loss:

Horizontal swing high resistance, 78.6% fibonacci extension, 78.6% fibonacci retracement

There was a multidirectional movement in the main indicators of the US stock exchanges on Friday. The Dow Jones and S&P 500 indexes increased their positions, while the Nasdaq, on the contrary, rushed down and recorded its maximum weekly drop, which has not happened since the beginning of March this year. However, at the end of the week, all indicators were in the red zone: the Nasdaq declined by 4.1%, the Dow Jones by 2.5%, and the S&P 500 by 1.7%.

Companies in the US technology sector also recorded a significant decline last week, which worries market participants about the further dynamics of exchange indicators. Most experts say that investors will have to face quite significant volatility in the market, which, as a trend, will prevail over the next few months. All the fundamental factors point to this. The level of coronavirus infection in the world remains high and occupies almost all the attention of traders. In addition, the upcoming presidential election is bringing turmoil to the markets. Another pressure factor is the unresolved situation around Brexit. However, the greatest tension is still associated with the aggravation of the conflict between the US and China, which regularly forces market participants to reconsider their work.

The decline in US stock markets, among other things, is also due to the rejection of a bill proposed by the Republicans on a new package of incentive payments. The Democrats have allegedly found some points fundamentally inappropriate.

In addition, the statistics released on the last day of the week also disappointed analysts and market participants. According to the US Department of Labor, the level of consumer prices in the country over the last month of the summer increased by 1.3% compared with the same period a year earlier. All this was evidence of the acceleration of inflation rates compared to the July index of 1%. However, initial forecasts practically coincided with the real ones with an estimated growth of at least 1.2%.

Moreover, the level of the state budget deficit in America at the end of the summer amounted to $ 200.1 billion, while in the same period a year earlier it consolidated by $ 200.3 billion, and last month it was $ 63 billion. The negative budget balance over the past eleven months has reached $3 trillion 7.4 billion, which is three times more than the same indicator last year.

The Dow Jones Industrial Average was up 0.48%, or 131.06 points, at the end of Friday's trading, which allowed it to reach 27,665. 64 points.

The S&P 500 index gained 0.05% or 1.78 points. Its current mark is 3,340. 97 points.

The Nasdaq Composite index, on the other hand, did not support the overall positive mood and reduced its positions by 0.6% or 66.05 points. This moved it to a position of 10,853. 55 points.

Meanwhile, Asian stocks showed mostly positive dynamics of changes in the main exchange indicators on Monday. Market participants anticipate the meeting of the main US regulator-the Federal reserve service, as well as the Bank of Japan. However, today's positive market participants experienced on the news about the resumption of clinical trials of the coronavirus vaccine, which is conducted by AstraZeneca in conjunction with the University of Oxford.

Japan's Nikkei 225 index rose 0.58% in the morning. There is also a positive trend in the index of business confidence of large companies in the manufacturing industry. For the current month, it has already added 4 points and moved to the level of minus 29 points. Thus, this was the highest value for the last six months. In addition, the state is preparing for the appearance of a new Prime Minister of the country. So far, the main candidate for this post is the General Secretary of the Cabinet of Ministers, Yoshihide Suga. At least, this is the candidate who is determined to continue the course started by Shinzo Abe, aimed at maintaining low borrowing costs.

The Stoxx Europe 600 General index of large enterprises in the European region rose 0.27% this morning, which moved it to 368.94 points.

China's Shanghai Composite Index gained 0.26%. The Hong Kong Hang Seng Index supported the trend and climbed 0.67%.

South Korea's Kospi index jumped 1.14%.

Australia's S&P / ASX 200 index was up 0.35%. As it became known, the head of the government of the state of Victoria presented his plan for economic incentives. The document cites the total amount of incentives at $ 3 billion Australian dollars, which corresponds to about $ 2.2 billion USD.

European stock markets also noted a mostly positive mood on Monday. Major stock market indicators are growing, the reason for which is the hope for an early release of the coronavirus vaccine. At the very least, the resumption of clinical trials of the drug, which is being jointly prepared by the pharmaceutical company AstraZeneca and the University of Oxford, reassures investors.

The Stoxx Europe 600 General index of large enterprises in the European region rose 0.27% on Monday, which moved it to 368.94 points.

The UK FTSE 100 Index gained 0.16%. The German DAX index rose by 0.27%. France's CAC 40 index was up 0.46%. Spain's IBEX 35 Index rose 0.25%. However, there is one lagging behind among the positive movement: the Italian FTSE MIB index slightly (by 0.07%) reduced its positions.

The pound sterling strengthened against the US dollar and the euro on Monday, which made its position more stable after the fall that occurred with it until the last moment.

The past week has tested the strength of sterling over the past six months. Market participants stopped looking at the currency through rose-colored glasses, which greatly worsened their mood. The pound was particularly suffered after news that a trade deal between the UK and the EU after the former leaves the Commonwealth, may remain without a final conclusion since the parties cannot overcome fundamental differences. Note that the deadline for the agreement is December 2020.

Moreover, the UK made the entire world community nervous after it issued a bill for adoption that potentially violates the provisions of international law. It also concerns certain parts of the agreement on withdrawal from the EU, which was signed at the beginning of this year. The vote on this law is expected on Monday where its fate will be decided. Market participants are closely watching this whole situation, as it can make significant changes in the balance of power in the foreign exchange market. In particular, the first victim may again be the pound sterling.

The EU has already made statements that it is not worth trusting those who violate these obligations initially. This means that if the controversial law is signed in the UK, the trade deal will not take place at all, and the country will leave the Commonwealth without any economic agreements. One can only guess what damage the British economy will suffer in the course of such a turn of events.

It is already clear that the pound has lost almost 4% over the past month only because market participants stopped believing in a positive outcome of all the risks associated with Brexit. And, if the situation does not start to improve, the pound will face even more problems.

The value of sterling was $1.2832 per pound Monday morning. This is 0.3% more than the level at which trading ended on the last business day of last week. However, the value of the currency is still consolidating very close to its minimum values over the past seven weeks.

The pound also slightly strengthened in relation to the euro. By morning it rose 0.2% and the current level is 92.40 pence per euro.

The level of currency volatility for the month is again at its maximum values. This indicates that market participants are preparing for possible fluctuations in the value of the pound, which may begin in the near future. According to some analysts, the current situation may worsen the fall of sterling at the beginning of the week to 1.25 dollars per pound.

However, there are also those experts who firmly believe that leaving the EU will not happen without signing a trade agreement. The problem is expected to be resolved by Monday.

Meanwhile, the possible introduction of negative interest rates by the state does not pass without a trace for the pound. The pressure it feels about this is also dragging its value down. Next Thursday, a meeting of the country's main regulator, the Bank of England, will be held, which also aims for the resolution of this problem.

Recently, investors are betting on the depreciation of the US dollar very often. This trend was caused by the extreme stimulus from the Fed. Experts believe that withdrawal of money from risk assets may trigger the closure of a large number of short positions on the US currency, which will strengthen it and put serious pressure on oil prices.

During the pandemic, the DXY dollar index fell by 9.5%. This was facilitated by a flurry of liquidity from the Fed and increasing investor fears about the US budget deficit. In any case, oil prices are under pressure because selling of the US dollar has become a generally accepted strategy.

According to the chart below, we can say that the rise in the US dollar rate led to the oil depreciation.

What can lead to a sharp rise in the US dollar? In case of an even greater increase in the number of coronavirus cases or worsening geopolitical tensions, investors will be forced to sell risky assets and go to "quality", which will provoke a cascade of closing short positions on the American currency. Accordingly, the US dollar will rush up.

Today, oil prices have dropped once again. November's Brent futures fell by 0.43% to trade at $39.66 per barrel, and October's WTI futures decreased by 0.4% to settle at $37.18 per barrel. This indicates the end of the growth phase. Moreover, there is still the danger of another collapse in global oil demand amid new outbreaks of COVID-19. Every day more and more countries report a rise in the number of people suffering from the Chinese virus and the reinstatement of quarantine measures. This will certainly have a negative impact on oil prices.

Moreover, the OPEC + oil deal is also under pressure. The Iraqi authorities, following in the footsteps of Saudi Arabia, will cut their oil prices for the US, Europe, and Asian markets from October by $1, $0.75, and $2.65, respectively.

Discounts indicate that there is still too much oil in the global market and customers refuse to buy it at the current prices.

In my morning forecast, I recommended opening long positions after the breakout and consolidation above the level of 1.2843, which happened. On the 5-minute chart, the bulls gained a foothold above this resistance, even testing it several times from top to bottom, forming an excellent entry point for long positions. While trading will be conducted above the level of 1.2843, the continuation of the upward correction to the area of the maximum of 1.2921 can be expected, where I recommend fixing the profits. A further target will be the area of 1.2991. If the pound falls below the level of 1.2843, it is best to postpone long positions until the update of a large monthly minimum of 1.2777 or open long positions immediately for a rebound from the support of 1.2725 in the expectation of a correction of 30-40 points within the day. Given the lack of important fundamental statistics, the bulls have a chance to continue growing.

To open short positions on GBPUSD, you need:

It's too early for bears to panic. This week, hearings in the British Parliament will begin on the Brexit bill, which will continue to put pressure on the GBP/USD pair. Therefore, sales can be delayed until the update of the larger resistance of 1.2921. However, even if the growth scenario is even higher, you can safely sell the pair for a rebound from the maximum of 1.2991 and wait for the resumption of the bear market. No less important task in the short term will be the return of the bears to the level of 1.2843, the test of which from the bottom up forms a fairly good entry point into short positions that will lead GBP/USD to the area of the minimum of 1.2777. All further downward movement in the short term depends on the breakout of this level. This scenario will lead to a test of the new ranges of 1.2725 and 1.2675.

Signals of indicators:

Moving averages

Trading is just above the 30 and 50 daily averages, which indicates that the bulls are trying to build an upward correction in the pair.

Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of classic daily moving averages on the daily chart D1.

Bollinger Bands

If the pound declines, the lower border of the indicator around 1.2775 will provide support, from where I recommend buying the pair immediately for a rebound.

Description of indicators

• Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
• Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
• MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
• Bollinger Bands (Bollinger Bands). Period 20
• Non-profit 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 the short and long positions of non-commercial traders.

The first half of today was exactly the same as last Friday, which I paid attention to in the morning forecast, as well as purchases from the level of 1.1854 at the breakdown and consolidation above, which happened. The lack of important fundamental statistics did not prevent the bulls from continuing their attempts to resume the growth of the European currency. As long as trading is conducted above the range of 1.1854, you can expect the EUR/USD to continue growing to the resistance area of 1.1905, where I recommend taking the profits. However, it will not be so easy to expect a breakout of this range due to the lack of important data in the afternoon. A consolidation above 1.1905 will open a direct road to the highs of 1.1949 and 1.1994, where I recommend fixing the profits. If the pair again falls below the level of 1.1854 in the afternoon, then I recommend returning to long positions for a rebound from the larger support of 1.1800, based on a correction of 20-30 points within the day.

To open short positions on EURUSD, you need to:

Sellers need to return the euro to the level of 1.1854, and its test on the reverse side on the volume forms a good entry point for short positions with the main goal of updating the minimum of 1.1800, where I recommend fixing the profits. The area of 1.1756 will be a more distant support level, however, it will also not be very easy to reach it without support from good macroeconomic indicators for the Eurozone. If the demand for EUR/USD continues in the second half of the day, it is best not to rush with sales. However, you should wait for the test of yesterday's resistance of 1.1905 and open short positions subject to the formation of a false breakdown. It is best to sell the euro immediately for a rebound from the more recent high of 1.1949, based on a correction of 20-30 points within the day.

Signals of indicators:

Moving averages

Trading is above the 30 and 50 daily moving averages, which indicates an attempt by the bulls to resume the upward correction of the euro.

Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of classic daily moving averages on the daily chart D1.

Bollinger Bands

If the pair declines, support will be provided by the lower border around 1.1825, from which you can open long positions immediately for a rebound.

Description of indicators

• Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
• Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
• MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
• Bollinger Bands (Bollinger Bands). Period 20
• Non-profit 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 the short and long positions of non-commercial traders.

Analyzing the current trading chart of BTC, I found that there is no change since my last analysis and I still expect another downside movement towards the $9,135 and $8,400.

There is the breakout of the rising channel in the background and I see the current rally like the re-test phase after the downside breakout, which is another confirmation for the downside continuation.

Watch for selling opportunities on the rallies...

Key Levels:

Resistance: $11,000

Support level: $9,135 and $8,40

Domestic sight deposits 635.3bn vs 633.2bn

This data tracks the level of SNB intervention in supporting the CHF by buying euros and dollars. Intervention alive and well.

As I discussed in the previous review, the Gold managed to complete the upside correction ABC and I see further downside movement towards the $1,921

Further Development

Analyzing the current trading chart of Gold, I found that there is potential for the downside roation but that Gold is still trading sideways at the price of $1,945

1-Day relative strength performance Finviz

Based on the graph above I found that on the top of the list we got Natural Gas and Lumber todaay and on the bottom Coffee and Orange Juice

Gold is slightly positive but with no big momentum.

Key Levels:

Resistance: $1,950

Support level: $1,910

prior +9.1%

• Industrial production WDA -7.7% y/y vs -8.1% y/y expected
• prior -12.3%, revised to -12.0%

Industrial production is down from June's reading as the lockdown lift spike higher recedes. ECB was more optimistic at their last meeting and nothing here to dampen that optimism. Revisions a touch higher for the WDA too.

As I discussed in the previous review, the EUR managed to complete the upside correction ABC and I see further downside movement towards the 1,1800.

Further Development

Analyzing the current trading chart of EUR, I found that the buyers got exhausted today and the downside roattion would be probablyto complete the ABC correction.

Watch for selling opportunities on the rallies with the targets at 1,1810 and 1,1800.

1-Day relative strength performance Finviz

Based on the graph above I found that on the top of the list we got Natural Gas and Lumber todaay and on the bottom Coffee and Orange Juice

Key Levels:

Resistance: 1,1873

Support level: 1,1800

The pound updated the almost two-month low reaching at 1.2775 at the start of trading on Monday. The GBP/USD pair began to show corrective growth heading to the middle of the 28th figure against the background of the weakening of the dollar index. A certain logic is unquestionably present here. Falling to two-month lows, the pair attracted buyers who at the end of last week did not risk opening long positions in the run up to the weekend. Secondly, the dollar came to the aid of GBP/USD buyers, which began to lose its positions at the start of trading. This dynamic has affected all dollar pairs, even the pound-dollar pair which is not exempted. The Briton was also helped by today's comments from the Irish foreign Minister. According to him, all recent actions on the part of Johnson should be considered as a kind of negotiating tactic, while in fact Britain is interested in a deal.

In my opinion, traders should not mislead themselves about the current growth of the GBP/USD pair. The main exam for the pound is still ahead, so the pair is expected to experience increased volatility in the near future. Deputies will start today considering a high-profile bill that essentially crosses out one of the points of Brexit in the house of Commons. If this bill gets the support of the British Parliament, the pound will collapse all over the market including the pair with the greenback. If this scenario will be implemented, the GBP/USD pair will be in the area of the 25th figure according to some estimates. The Outlook looks quite realistic given that the pair collapsed by more than 400 points last week on the mere rumors surrounding this bill. Now the political battle will begin within the walls of the British Parliament.

It is worth remembering that the adoption of this document is opposed not only in Brussels and Washington. Many of Johnson's party members also criticized this legislative initiative, saying that this step would undermine the UK's authority in the international arena. Three of the current Prime Minister's predecessors – Theresa May, Tony Blair and John Major have called on Parliament to vote no. Major said without hesitation that the bill dishonor and disrespect the reputation of the UK.

Brussels is absolutely furious: both the head of the European Commission, the head of the European Council and representatives of the European Parliament have spoken out against Johnson's initiative. They emphasize that this is an international Treaty, so London cannot change its terms unilaterally.

Meanwhile, Johnson himself called on members Of the House of Commons last Friday to support his initiative. According to him, he was initially dissatisfied with the Protocol on Northern Ireland which is part of the deal between London and Brussels. So, he decided to supposedly hedge in case the parties could not conclude a trade agreement. The new internal market act will allow Ministers to repeal the above Protocol for trade between Northern Ireland and the rest of the UK. Johnson also accused the European Union of trying to organize a roadblock of the UK. According to him, Brussels can not only set tariffs on goods that are imported from Britain to Northern Ireland but can actually block the transportation of food. At the same time, the blockade of one of the parts of the United Kingdom threatens to "destroy the economic and territorial integrity" of the country.

The British Prime Minister convinced his fellow party members in the House of Commons is an open question. Some prominent conservatives criticize Johnson but others preferred to remain silent, thus preserving the intrigue. The current growth of the pound is also due to the fact that the market hears mainly criticism of the British government. And there seems to be growing confidence among traders that the bill will either be withdrawn or failed in Parliament. It's, because of its resonance and possible consequences. In particular, Brussels has already warned that if it is adopted, Europe will automatically withdraw from negotiations on a trade deal. Some representatives of the EU leadership threatened to court and even sanctions.

For me, the bill will not really pass and will not even pass even to the House of Commons in any case. But previous events (discussion in Parliament, speeches by Johnson's supporters, speech by Johnson himself, etc.) will still put significant pressure on the pound. Therefore, the growth of the GBP/USD pair in the medium term should be considered as a reason to open short positions.

After all, we should not forget that negotiations on a trade deal are actually frozen and the transition period is less than four months away. The parties priority will not have time to agree on all the disputed points of the agreement and Boris Johnson categorically refuses to discuss the issue of extending the transition period. Thus, even if the controversial bill does not become law, the Brexit issue will remain putting pressure on the British currency. The nearest GBP/USD resistance level is located at 1.2940 – this is the upper limit of the Kumo cloud on the daily chart. Either from the current positions or from the above resistance level, you can consider sales with the main target of 1.2775 – this is a four-month low that was reached during the Asian session on Monday.

The September GBP / USD sell-off can really be compared to a wake-up call. Until the beginning of autumn, investors ignored the risks of a no-deal Brexit, but rumors about Britain's violation of the agreement with the EU brought them out of hibernation. As a result, the pound fell to the lowest level in five and a half months against the US dollar and to the semi-annual bottom against the Euro, but this is far from the limit. Nomura believes that the GBP / USD pair can dive to 1.18, and EUR / GBP can grow to 0.98. The power reserve is still large, and the rise in sterling at the beginning of the week by September 18 is nothing more than the hope that Boris Johnson's bill will not be approved by the parliament. Johnson certainly has a lot of critics, but if the lawmakers support the Prime Minister, the picture will become quite gloomy. A sharp increase in the monthly volatility of the pound and a decrease in the risks of a GBP/USD reversal indicates that the situation is tense to the limit.

Dynamics of GBP / USD reversal risks:

But sterling will face a very busy week in terms of the economic calendar. Releases of data on the labor market, inflation, and retail sales, as well as the meeting of the Bank of England, riveted heightened attention. However, judging by the lack of reaction of the pound to the GDP growth of 6.6% in July, we can assume that the statistics will only give a hint about the mood of the bears. If strong data does not lead to an increase in GBP / USD, and weak data accelerate sales, the situation is completely under the control of sellers.

As for the Bank of England, none of the 21 Bloomberg experts expect it to take action. The REPO rate will remain at 0.1%, while the QE volume will remain at £750 billion. At the same time, the risks of a disorderly Brexit, the second wave of COVID-19, and the termination of programs to support the unemployed population are fraught with serious problems. Of particular concern is the labor market, where even in the most optimistic scenario, unemployment should be expected to double.

UK unemployment forecasts:

It is possible that the GBP/USD pair has reached the maximum bearish mood. You make threats and create the risk of a crisis just to get concessions. Signs that Boris Johnson's latest actions are nothing more than bluster may be the catalyst for a quick rebound in sterling.

Technically, only a rebound of the GBP / USD above 1.3 will allow us to think about buying. On the contrary, the renewal of the September low will give reason to open short positions with targets at 1.269 and 1.257.

GBP / USD daily chart:

Gold price has key support at $1,900 and as long as price respects this price level we think an upward break out is more probable. If support at $1,900 fails to hold, we should expect price to move towards $1,800.

Pink line - support trend line

EURUSD is bouncing off the channel boundary. As long as price is above the 1.18 level trend will remain bullish. Next key short-term resistance is found at 1.1945. Breaking above this level will open the way for a move towards 1.20 and higher. My first upside target is at 1.2055. Secondary target is at the upper boundary near 1.2250-1.23. Breaking below 1.18 will be a bearish sign which will imply a move towards 1.1650 is underway.

Pink line - resistance

With resistance confirmed at 106-106.30 area, we keep a close eye on short-term support at 105.90 and next at 105.35. Bulls need to break below these two key support levels in order to push lower towards 104.

The second COT reporting in a row shows a decline in interest in the European currency. According to the COT report (Commitments of Traders on 09/08/20), open interest in the euro fell to 690782 (-7429). At the same time, all leading major players showed a reduction in positions both in the long and short directions (Non-Commercial: long -2184 - short -2251; Commercial: long -7495 - short -10031; Total position: long -6704 - short -9307; Dealer Intermediary: long -2290 - short -12824). As a result, net positions have declined, which definitely weakens the current priorities.

The main conclusion

The next report confirms the conclusions made earlier. Major players continue to reduce the number of contracts and take a wait-and-see attitude on the euro, not expressing any clear investment preferences. All this contributes to the preservation and amplification of uncertainty.

Technical picture

The wait-and-see attitude of major players has affected the technique of the euro movement in recent years. The pair continues to be above one of the important supports of this area at 1.1740 (the lower border of the monthly cloud), while the Ichimoku cloud is an area of uncertainty and contemplation. On the other hand, a long opposition and the absence of a directional movement delayed the development of the upward movement, the main reference point of which is the rise to the upper border of the cloud (1.2167), in order to consolidate in the bullish zone relative to it. During the current consolidation, the preferences of the lower time intervals have changed. In the daily time frame, a dead cross of Ichimoku is formed today, which prefers the strengthening of bearish moods. The main task of downside players to resume the decline is now to overcome the strengthened support zone at 1.1740-00 (the lower border of the monthly cloud + weekly short-term trend + daily cloud). The center of attraction is currently the daily cross of 1.1840-60 and consolidating higher can serve as a further restoration of positions by players to increase and return their plans.

The key levels of the lower halves are now in a horizontal position, which confirms the uncertainty and the absence of a clear priority even on hourly TF. Nevertheless, the pair is above the weekly long-term trend (1.1818), which means that bulls have some current advantage. At the same time, the resistance of the classic pivot levels 1.1876 - 1.1907 - 1.1939 serves as upward guidance within the day. A consolidation below the current support zone 1.1844-18 (central pivot level + weekly long-term trend) will affect the current balance of power, and in this case, the next supports can be noted at 1.1781 (S2) and 1.1750 (S3).

Ichimoku Kinko Hyo (9.26.52), Pivot Points (Classic), Moving Average (120)