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Forex Traiding

Speculators are shifting trading forces to the European currency, get ready for a change in strategy



DATE OF PUBLICATION: 2021-02-25 14:40:28 Following the growing British currency, its European counterpart, which for a long time has been in the stage of correction from the peak of the mid-term trend of 1.2349, reached out. Will speculation in the air now dominate the European currency? A series of articles on the UK economy and news about the success of the vaccination program has made it clear that the media is shaping speculators’ opinion, which is fundamentally different from common sense. Now journalists from bloomberg have taken up the euro. telling speculators that vaccination is gaining momentum across Europe, and investor optimism about the economic recovery is growing almost daily. A familiar scheme, will speculators take up the euro? If we proceed from the analogy with the British currency, then why not, unlike the pound sterling, it has been in correction since the beginning of the year. Recovering from the corrective movement 1.2349 -> 1.1950 is a top priority task for speculators who will cope with it easily if the media continue to stimulate their actions. In this situation, not only speculation on the euro is of interest to traders, but also the downside currency pair. So, how long have you analyzed the dollar index (DXY)? The prospects for its recovery in January gave hope for a rebound from the lows, but since February, the index has again taken the path of a downtrend. In simple words, before the update of the local minimum, the index remained some 0.5%, this slightly frightens dollar investors, who literally recently experienced a series of global sales of green paper. The question arises: is everything so good in the United States economy or are investors just wary of the large-scale fiscal stimulus programs that are so actively promoted in the White House? Time will tell, we only have to follow the stream of speculative interest, since strategic positions based on fundamental analysis are not yet so relevant in a greedy market. What is happening on the trading chart? Speculators working to increase the euro rate, managed to overcome the resistance area 1.2160 / 1.2190 and are already holding the quote above 1.2200 in a four-hour period … This step is considered the primary signal of a possible prolongation of the medium-term trend. In simple words, the development of a correction of more than 50% already indicates that the trading interest has changed, and market participants are ready to follow a different path. If we return to the English currency, we will recall how the quote stubbornly followed at the peak of the trend, despite the fact that the pound has been overbought for a long time. The European currency has overcome the overbought stage due to the recent correction, and although we have global economic problems throughout Europe, from the point of view of technical analysis, there is still a chance for an upward move and the trend prolongation in the market. Expectations and Prospects Looking at the trading chart relative to the current day, we see that the quote follows in the area of ​​January 8, which means that the local maximum is slightly more than 100 points, which is not so much. You should not expect a quick update of the peak of the medium-term trend (1.2349), a logical basis associated with a rebound and a reduction in volume long positions can still overcome speculative sentiment in the market. Thus, moving along an upward trajectory, be prepared for a regrouping of trading forces in the 1.2300 / 1.2350 area. The topic of an uptrend prolongation will become relevant after the price holds above 1, 2350 for the day period. In this scenario, one should not forget that a new upward price step will not just update the local maximum, it will bring it closer to the peak of 2018, and this is not such an easy price area for speculators. What is happening on the market in terms of indicator analysis and market dynamics? Analyzing different sectors of timeframes, we see that technical instruments, due to the recovery process relative to the corrective move, have entered the buying phase, which is confirmed by the dynamics on the trading chart. In terms of market volatility, acceleration is recorded, but only relative to the current day, since before that we had an average on the scale of price fluctuation. Acceleration coincides with the breakdown of the resistance area. Key levels of the Resistance Zone: 1.2350 **; 1.2450 **; 1.2550 ***; 1.2825. Support zones: 1.2190 *; 1.2000 ***; 1.1890-1.1900-1.1920 **; 1.1810 *. * Periodic level ** Range level *** Psychological level I advise you to read the articles: Insane speculations on the English currency Trading recommendations on the foreign exchange market for beginners – EURUSD and GBPUSD 02.25.21 Material provided by InstaForex – www.instaforex.comSource – InstaForex

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