Trading signals

FOREX market trading signals

As a gentle reminder, China was absent throughout the week due to New Year's lunar holidays and will return to the market next week. As for Friday calendar, the main indicators are data on German trade (may have a negative pressure on the Euro), UK GDP and a report on employment in Canada. Yesterday’s dollar pullback remain only in the project, as sellers didn’t have enough power to seize the initiative. Nevertheless, the Friday trading session carries the chances for profit taking, which can provoke an increase in volatility and USD dollar pullback closer to the end of the day.

 

EUR / USD

The pressure for European currency persists amid weak expectations for the leading European economy. In the new conditions, the market expects that ECB will return to a softer monetary policy, which is a medium-term negative signal for the European currency. Yesterday, the pair displayed signs of weakening pressure and exhalation of a negative impulse. Under these conditions, we can expect the market to consolidate within the range of 1.1320-1.1360. In case of a decline resumption (which is unlikely), only a breakthrough and consolidation below 1.1300 will give us the right to say that the market is moving out of the medium-term sideway range. The nearest resistance is now located in the zone 1.1400.

Trading recommendations - longs 1.1320, 1.1300

GBP/USD

This market takes every chance to surprise us with its unexpected and interesting turns. Yesterday, the pound was trading very volatile and those who were out of the market and watched the developments from outside did the right thing. As a rule, on such days it is better to be out of the market, because the level of uncertainty is very high. The most important thing to note is that after yesterday's “roller coaster” quotes returned above the level of 1.2900. And if today the week will be closed above the mark, it will be a good signal for the growth next week. Nevertheless, opening long positions at current levels is risky but can be somewhat profitable. Support is located in 1.2920-1.2900.

Trading recommendations - out of the market

Gold

Yesterday's growth from 1300 up to 1310 leaves a double impression. The quotes did not fix above the former local support 1310 and most likely there was a local shorts close. Today the market forms a narrow triangular consolidation. In this case, all our previous considerations remain in force — the market will at least fall to 1300. Now, area 1310 is becoming a stronger area of resistance.

Trading recommendations – careful longs in the area 1300-1297

US dollar index

Dollar index continues to gain. Yesterday the market marked signs of a reversal near 96.35 mark -as Thursday’s session was closed below this level. But today the growth continues. The dollar has not shown such a strong weekly dynamics for a long time, the last time it was June 2018. Meanwhile, the index has entered a strong technical area, further growth is becoming increasingly difficult. The conditions for technical correction are evident, but the fundamental background and weakness of the main currencies do not allow this script to  evolve.

Trading recommendations - out of the market