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Market News Sterling is expected to rise by more than 400, Dollar hits seven-week low (With Trading strategy)

Sterling is expected to rise by more than 400, Dollar hits seven-week low (With Trading strategy)

The dollar index was nearly flat against a basket of currencies at 92.801, having marked its lowest level since Sept. 2 overnight.

LEO
2020-10-22
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外汇.jpg


The U.S. dollar steadied against most major currencies on Thursday as U.S. stimulus talks remained the focus for markets with trading buffeted over recent days by the extent of progress made on the potential size of the aid package.


The dollar index was nearly flat against a basket of currencies at 92.801, having marked its lowest level since Sept. 2 overnight.


At 11:30(GMT+8), the dollar index rose 0.22% to 92.802.


The dollar weakened after U.S. President Donald Trump and House Speaker Nancy Pelosi boosted hopes an agreement on stimulus was close, sparking demand for riskier assets.


“We’ve entered a secular bear market for the dollar,” said Axel Merk, president, and portfolio manager at Merk Hard Currency Fund in Palo Alto, California.


As the U.S. economy accelerates, something that might not happen for months or even a year, and the Fed is committed to keeping rates low, real U.S. interest rates are going to go down further, faster than in other countries, Merk said. And with that, the dollar should weaken further.


The GBP/USD fell 0.13% to 1.31262 at 11:30(GMT+8) on Thursday.


Sterling jumped to a one-week high against the U.S. dollar on Wednesday after the European Union’s Brexit negotiator said on Wednesday that a new trade deal with Britain was “within reach”.


The Brexit talks will resume on Thursday, with negotiators tasked with working through weekends in pursuit of a deal in the remaining few weeks, after Michel Barnier met the prime minister’s demands for re-engagement.


Kenneth Broux, head of corporate research at Societe Generale, said the fact that Barnier was speaking in front of the EU Parliament could have meant he sounded more optimistic, giving the reason for the hungry traders to buy sterling.


“The market doesn’t sit there thinking ‘there isn’t going to be a deal, we should be trading at $1.25’. The market wants to rally. Any positive soundbites that do come out are being jumped on as a reason to buy,” Broux said.


“Our current forecast profile already incorporates our base case scenario for an eventual deal to be reached in the weeks ahead. This leaves us fairly constructive on sterling on a longer-term basis, particularly in the context of a broadly-weaker USD. We continue to target a move up in GBPUSD to 1.35 for year-end," European head of FX strategy at TD Securities. 


Trading Strategy (source: Trading Central)

Pivot: 1.3100


Our preference: long positions above 1.3100 with targets at 1.3175 & 1.3200 in extension.


Alternative scenario: below 1.3100 look for further downside with 1.3075 & 1.3045 as targets.


Comment: the RSI is mixed to bullish.


Supports and resistances:

1.3225

1.3200

1.3175

1.3125 Last

1.3100

1.3075

1.3045

Guideline for Trading Central strategy 


Trend chart reading guideline


1. First look at the time period in the upper left corner of the chart: ·30MIN and 1H chart shows the trading suggestions for intraday ·Daily chart shows the market trend analysis in next 2-3 days


2. The blue horizontal line on the chart marks the pivot: pivot indicates the reversal of the market. When the price is above the pivot, it indicates an upward trend, when the price is below the pivot , it indicates a downward trend. When the price breaks through the pivot, the trend is reversed.


3. The red and blue thin curves in the Candlestick chart chart are technical indicators: Red line is MA20+Bollinger bands, Blue line is MA50. under the Candlestick chart chart are also the technical indicators: Blue line is RSI, Red line is 9MA;


4. The green horizontal line is the resistance level for a price increase, and is also the profit target for long orders; the red horizontal line is the support level for a price decrease, and is also the profit target for short orders.


How to use TC strategy?


1.[Pivot] is the reversal line of the market trend. When the price up the pivot line which means in Bullish, you can open a long position or Buy. on the contrary, when the price under pivot line which means in bearish. You ‘d better make short positions or Sell. 


2. [our preference] is the main trading suggestion for your reference. You can exit your trading refer to this target or close positions before it.


3. [Alternative scenario] is the plan B for your reference. 


4. [Comment] is the technical analysis of market trends and technical support for trading strategies. 


5. [Supports and resistance] Supports are levels where the price tend to find support as it falls.

Resistances are levels where the price tend to find resistance as it rises. So, exit before the trend reverse.

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