EUR / USD
On February 26, the EUR / USD pair did not gain and did not lose a single basis point, but it has rushed up again today and added about 30 points. Thus, the proposed wave 4 continues its construction with targets located near the 50.0% and 61.8% Fibonacci levels. There are still questions as to whether the instrument is at the stage of building wave 4 or the new upward trend section. If the current wave marking is correct, then the construction of wave 5 will begin from one of the Fibonacci levels.
Fundamental component:
The news background for the EUR / USD instrument on February 26 was empty again. There is still no important news. Thus, there was no effect on demand for the dollar or the euro in the first days of the week. However, markets will finally witness important economic reports today. In America, the annual data on GDP for the fourth quarter will be released, as well as a report on orders for durable goods, which are distinguished by their high cost and quite a strong impact on the economy.
Unfortunately for the American currency, neither GDP nor orders are expected by markets with positive dynamics. According to economists, GDP will remain at 2.1% y / y while orders for durable goods may lose 1.5% compared to December. Thus, I believe that there will be a favorable environment today so that the instrument continues to build correctional wave 4.
On the other hand, less significant reports from the USA, such as initial applications for unemployment benefits or pending home sales transactions, are most likely not to be taken into account by the markets at all. There have been no political and geopolitical messages lately. The trade war between China and the United States was paused, and the resonant impeachment case of Donald Trump was resolved in favor of the American president.
Thus, the news background now generally has very little effect on the markets, their mood and their activity. The trade war between China and the United States was paused, and the resonant impeachment case of Donald Trump was resolved in favor of the American president. Thus, the news background now generally has very little effect on the markets, their mood and their activity.
The trade war between China and the United States was paused, and the resonant impeachment case of Donald Trump was resolved in favor of the American president. Thus, the news background now generally has very little effect on the markets, their mood and their activity.
General conclusions and recommendations:
The euro-dollar pair continues to build correctional wave 4. Based on the current wave counting, an unsuccessful attempt to break through the 50.0%, or 61.8% Fibonacci levels, may lead to the start of the construction of the impulse wave 5. Thus, I recommend waiting for such an attempt and the MACD signal “down”, after which to sell the instrument again with targets located about 8th figures and below.
GBP / USD
On February 26, the GBP / USD pair lost about 110 basis points, however, the minimum of the alleged wave d of 3 or b was not updated. Thus, the instrument retains the chances of building the estimated upward wave e. If this is true, then the increase in quotes will resume today with targets located on the way to the level of 23.6% Fibonacci. Moreover, after the completion of the entire extended wave 2 or b, I expect a new strong decline in the British pound in the framework of wave 3 or C.
Fundamental component:
There was also no news background for the GBP / USD instrument on Wednesday. Today, it will just be the US GDP reports and on durable goods orders. Thus, the EUR / USD and GBP / USD instruments can show a high degree of correlation with each other today. Both wave markings now involve the construction of rising waves, after the completion of which, the instruments can each go their own way.
The British will be waiting for news from the fields of negotiations between the EU and Britain on a trade agreement, and its dynamics and amplitude will depend on these news for most of 2020. So far, there is still no new information from Boris Johnson, Michel Barnier has not received. This probably explains the extended wave 2 or b, which shows that markets do not want to take risks ahead of time and are waiting for a specific news background.
General conclusions and recommendations:
The pound / dollar instrument has complicated the current wave marking, which now takes on a much more extended form. Thus, now, I recommend to wait for a new “down” signal from MACD around the level of 23.6% Fibonacci and sell the instrument with targets located around 1.2767, which corresponds to 50.0% Fibonacci.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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