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Overview of the EUR / USD pair. April 8. The IMF and the head of Amazon have supported Janet Yellen’s idea of ​​creating a single corporate tax in the world.

4-hour timeframe Technical data: Major linear regression channel: direction – down. The lowest linear regression channel: direction – down. Moving average (20; smoothed) – up. СCI: 122.9260 The EUR / USD currency pair continued its upward movement on Wednesday, although, for example, the pound sterling was falling down at the same time. Thus, the correlation between the two main pairs is now completely absent and this makes us think very seriously about what is happening in the foreign exchange market, since this means that either everything is too good in the European Union, or everything is bad in the UK. The most interesting thing is that things are not going well in the European Union now, and this is obvious to anyone. And in the UK everything has been bad for a long time, and this is also obvious to anyone. But why is there now a uncorrelation of major pairs? We believe that everything is going according to the plan, as they say. Recall that we have repeatedly stated that the entire downward movement in 2021 is nothing more than a correction against the uptrend that has been observed for most of 2020. Thus, the overall decline in the euro currency quotes by 640 points (from maximum to minimum) is a global correction. According to this assumption, after the completion of the correction, the main trend should resume, which, perhaps, we are now observing. Thus, one can even assume that the fundamental or macroeconomic background has nothing to do with it now. The euro is rising as the markets are adjusting to buy it again. Or the second version: the dollar is falling again because trillions of dollars began to flow into the American economy as part of stimulus programs. Therefore, it is possible that participants in the foreign exchange market are not selling dollars for euros now. However, the money supply in the US is swelling, which leads to a fall in the dollar, which is banal due to the growth of its supply in the foreign exchange market. Now for the pound sterling. We noted earlier that the pound corrected very weakly in 2021. The size of the correction absolutely does not correspond to the size of the uptrend that preceded it. Moreover, the uptrend itself was very strong, which suggests that it was unfounded. We have already assumed that the pound may be influenced by a “speculative” factor. Therefore, if we assume that speculators have now begun to leave the market, then the pound sterling, based on this factor, may continue to fall, since the correction against the uptrend is too small. We believe that this is the most likely explanation for what is happening. In the meantime, the US Treasury Secretary Janet Yellen had no time to propose to introduce a single corporate tax to all countries of the world, as she was immediately supported by the International Monetary Fund. Chief economist Gita Gopinath said the IMF has long considered the possibility of introducing such a tax. However, Ms Gopinath believes that this will help in the fight against tax evasion, which is a serious problem for the global economy. It is strange that Janet Yellen and the IMF feel entitled to speak out what is good for the global economy and what is not. Perhaps it would be better to say that this is beneficial to the United States and the IMF? After all, Janet Yellen came up with this initiative exactly at the same time when Joe Biden proposed raising the corporate income tax from 21% to 28% in order to have an additional source of funding for her new stimulus package and to inflate the national debt even more. Thus, the United States is now very afraid that a new outflow of companies and industries from the country abroad will not begin. Moreover, the world is full of countries where there are minimal taxes or they are completely absent. Media reports that the US is already in talks with the G20 countries on this issue. According to Janet Yellen, governments must receive enough money to invest in public goods. “Competition should be manifested not only in the confrontation of American companies with others,” – says Yellen. “It is important that every citizen fairly shares the tax burden,” the US Treasury Secretary said. Experts believe that if it is possible to agree on the introduction of a single corporate tax, then the risk of American companies leaving the United States will significantly decrease. Thus, all this is not done for the sake of global justice and because of concerns about filling the budgets of other countries. This is all done so that the US budget does not begin to lose even more money due to the outflow of capital abroad, to more tax-loyal states. Ms. Gita Gopinat also believes that different corporate tax rates in different states lead to the fact that companies are registered where taxes are lowest, thus depriving the state of the income that is necessary for social needs. According to Janet Yellen, all countries of the world over the past 30 years have been actively reducing corporate tax in order to attract large corporations to their territory. Now, Yellen believes, is the time to put an end to this. From our point of view, this initiative is bound to fail. This is the essence of international competition at the level of various states. Why should states that have the ability to attract multicorporations to their territory at the expense of low taxes to abandon their policies if they objectively have much fewer sources of budget replenishment than the United States? Why should other countries in the world support Janet Yellen exactly when the United States needs it? In general, to be honest, so far Yellen’s proposal looks extremely unconvincing. It is completely incomprehensible why China or Russia should be led by Washington, given that they are constantly called America’s main enemies? It is strange that this initiative was also supported by the head of Amazon Jeff Bezos. However, everything can be very simple here. Amazon practically does not produce goods, so in any case, its business is concentrated in the United States, and in any case, the company will pay American taxes. While some companies have the ability to transfer part of their activities abroad and, accordingly, pay taxes in other countries, where they are objectively lower. The volatility of the euro / dollar currency pair as of April 8 is 65 points and is characterized as “average”. Thus, we expect the pair to move between the levels of 1.1816 and 1.1946 today. A downward reversal of the Heiken Ashi indicator will signal a possible round of a downward correction. The nearest support levels: S1 – 1.1841 S2 – 1.1780 S3 – 1.1719 The nearest resistance levels: R1 – 1.1902 R2 – 1.1963 R3 – 1.2024 Trading recommendations: The EUR / USD pair continues a rather strong upward movement … Thus, today it is recommended to stay in long positions with targets at 1.1902 and 1.1946 until the Heiken Ashi indicator reverses downward. It is recommended to consider sell orders if the pair consolidates back below the moving average line with targets at 1.1780 and 1.1719. Recommended reading: Review of the GBP / USD pair. April 8. The IMF believes that rich countries will emerge from the crisis with little or no loss. Trading signals, COT report: Forecast and trading signals for the EUR / USD pair for April 8. Forecast and trading signals for the GBP / USD pair for April 8. – Source: InstaForex

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