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Forex Traiding

Analytics and trading signals for beginners. Analysis of Thursday deals.


DATE OF PUBLICATION: 2020-12-24 21: 49: 19 Hourly chart of the GBP / USD pair. The GBP / USD pair on Thursday, December 24, was trading quite actively again. About 130 points were passed during the day. Not as much as in previous days, but still a lot. The upward movement continued for most of the day, and only at lunchtime there was a downward reversal and the pound sterling began to fall. So far, not strong, within the same upward trend. But it started exactly when London and Brussels signed a trade agreement and this was announced by Boris Johnson (Prime Minister of Great Britain) and Ursula von der Leyen (head of the European Commission). That is, the following picture is obtained: the markets were buying the pound in anticipation of the signing of the agreement for several months, but when this agreement was finally reached, they began to sell the pound. A paradox, but quite a logical paradox. We have already said in our articles that the pound sterling can indeed start a long decline amid the end of the epic of trade negotiations. Since the markets have been buying the pound for several months in the hope of a trade deal between the EU and the UK, now is the time to close open deals with a profit. Accordingly, there are fewer long positions, the demand for the pound sterling does not change, but the supply grows. What happens in the end? Rollback begins. While a rollback, but it can develop into a full-fledged downtrend. If the pair quotes manage to overcome the uptrend line, it will be the second serious signal for a long-term fall in the pound / dollar pair. The whole fundamental background of the day was reduced to the topic of trade negotiations on Brexit. However, now that they seem to be completed, this does not mean that there are no more problems left. The pound sterling, as we have already found out above, may start to fall, and the EU and the UK have yet to make this deal through their own Parliaments. Moreover, if the British Parliament is likely to unquestioningly approve the deal, since the majority of seats in it are occupied by conservative deputies (members of Boris Johnson’s party), then the European Parliament will need to take into account the interests of 27 countries. However, in any case, the deal is likely to be approved and ratified. Perhaps with a delay, perhaps “retroactively”, perhaps the European Council will use its opportunity to temporarily sign any international agreement before it is ratified by Parliament. As of December 28, the following scenarios are possible: 1) Purchase orders are now valid, since a new upward trend has been formed. Thus, novice traders can now wait for a new buy signal, although on the 28th. As before, the MACD indicator needs to be discharged to the zero level or the price bounced off the trend line. The targets for purchases in this case are the resistance levels 1.3690 and 1.3811, which are located much higher than the current highs of the pair. 2) Selling is now inappropriate, since the downtrend has been canceled, and a new one has not yet formed. Thus, now you need to wait for the quotes to consolidate below the uptrend line and only after that sell the pair with the targets of support levels 1.3471 and 1.3373. What is on the chart: Price levels of support and resistance – levels that are targets when opening buy or sell … You can place Take Profit levels around them. Red lines – channels or trend lines that display the current trend and show which direction it is preferable to trade now. Up / down arrows – show when reaching or overcoming which obstacles to trade for an increase or decrease. MACD is a histogram and a signal line, the crossing of which is a signal to enter the market. Recommended for use in conjunction with trend plots (channels, trend lines). Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement. Beginners in the Forex market should remember that every trade cannot be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time. Material provided by InstaForex – Source – InstaForex


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