GOLD – Technical Analysis of the Situation

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GOLD

Gold is conquering new heights. Record highs are left behind, and freedom of choice and uncharted territory are ahead. For bullish players, forming a new all-time high is the primary objective. The nearest upward target in this section of the chart can be identified as being at the psychological level of 2600.00. Further resistance for bullish interests may be encountered around the 2650–2700–2750 (psychological levels). A slowdown and shift in sentiment could lead to a decline. In this case, the market would first meet the levels of the daily Ichimoku cross (2528.48–2501.00), strengthened by the psychological boundary of 2500.00. The 2500 area was tested for a long time before the bulls could break through, increasing the likelihood that this level could now be a good enough support.

H4 – H1

Bullish traders hold the upper hand on lower time frames and have successfully leveraged this, developing a large-scale trend movement. However, as the week closed on Friday, there was a slight downward correction, which may continue with the start of the new week. On the lower time frames, the most important reference point for the corrective decline is the weekly long-term trend (2523.03), which is responsible for the current distribution of forces. Trading above this trend typically corresponds with stronger bullish sentiment. A breakthrough and reversal of the trend often leads to a change in sentiment and priorities. New values for the classic Pivot levels, which will serve as reference points for Monday's trading, will appear at the market's opening.

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Technical Analysis Includes:

• Higher time frames: Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels
• H1: classic pivot points + 120-period Moving Average (weekly long-term trendline)

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How to Trade the EUR/USD Pair on September 16? Simple Tips and Trade Analysis for Beginners

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Analyzing Friday's Trades:

EUR/USD on 1H Chart

The EUR/USD pair traded in a flat with low volatility on Friday. The market found nothing of interest in the reports on industrial production in the EU and consumer sentiment in the U.S. Most macroeconomic data were mostly ignored. And there was little data to begin with. It's worth highlighting the U.S. inflation report again, which showed a stronger decline than expected yet triggered a rise in the dollar. We should also note the European Central Bank meeting, where rates were lowered, but despite that, the euro rose. As we can see, there was almost no logic in the pair's movements.

The downward trend persists, as indicated by the trend line. However, the euro's downward movement in recent weeks has been very weak so far. We highly doubt that we are witnessing the start of a new downtrend. Although the trend line suggests a sustained decline, it seems that this fall won't last long.

EUR/USD on 5M Chart

One trading signal was technically formed in the 5-minute time frame on Friday. However, the price traded sideways all day. A significant downside of flat trading in any form is the complete disregard for levels and other technical indicators. This was also evident on Friday—the 1.1091 level offered neither support nor resistance to the price.

How to Trade on Monday:

In the hourly time frame, the EUR/USD pair can form a downward trend that would be logical and consistent according to all factors and types of analysis. Unfortunately, illogical dollar sales could quickly resume in the medium term, as no one knows how long the market will continue to price in the Federal Reserve's monetary policy easing. The market continues to price in all future rate cuts by the Fed into the dollar's value while ignoring the ECB's policy easing factor.

On Monday, novice traders can trade from the 1.1091 level. Bouncing off this level will provide selling opportunities, while a breakout will signal buying. However, a flat market is highly likely.

The key levels to consider on the 5M time frame are 1.0726-1.0733, 1.0797-1.0804, 1.0838-1.0856, 1.0888-1.0896, 1.0940, 1.0971, 1.1011, 1.1048, 1.1091, 1.1132, 1.1191, 1.1275-1.1292. No significant reports or events are scheduled in the Eurozone or the U.S. for Monday, so we will likely see another "boring Monday."

Basic Rules of the Trading System:

1) The strength of a signal is determined by the time it takes for the signal to form (bounce or level breakthrough). The less time it took, the stronger the signal.

2) If two or more trades were opened around any level due to false signals, subsequent signals from that level should be ignored.

3) In a flat market, any currency pair can form multiple false signals or none at all. In any case, it's better to stop trading at the first signs of a flat market.

4) Trades should be opened between the start of the European session and midway through the U.S. session. After this period, all trades must be closed manually.

5) In the hourly time frame, trades based on MACD signals are only advisable amidst good volatility and a trend confirmed by a trendline or trend channel.

6) If two levels are too close to each other (5 to 20 pips), they should be considered a support or resistance area.

7) After moving 15 pips in the intended direction, the Stop Loss should be set to break even.

What's on the Charts:

Support and Resistance price levels: targets for opening long or short positions. You can place Take Profit levels around them.

Red lines: channels or trend lines that depict the current trend and indicate the preferred trading direction.

The MACD indicator (14,22,3): encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a source of signals.

Important speeches and reports (always noted in the news calendar) can profoundly influence the movement of a currency pair. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to avoid sharp price reversals against the prevailing movement.

For beginners, it's important to remember that not every trade will yield profit. Developing a clear strategy and effective money management is key to success in trading over the long term.

The material has been provided by InstaForex Company - www.instaforex.com #

Analysis for EUR/USD on September 13, 2024

The wave pattern for EUR/USD on the 4-hour chart is becoming increasingly complex. If we analyze the entire trend, which began in September 2022 when the euro dropped to 0.9530, it appears that we are currently part of an upward wave structure. However, there is a constant alternation of three- and five-wave corrective structures. It can be assumed that an impulsive upward trend began forming on April 16, but its internal structure raises many questions. In my view, it is crucial to focus on the simplest and most comprehensible wave structures.

Since January 2024, I can identify only two a-b-c three-wave patterns, with a reversal point on April 16. Therefore, the first thing to understand is that there is no clear trend at the moment. Once the current "c" wave is completed, a new downward three-wave structure may begin. The trend from April 16 may take on a five-wave form, but it would still be corrective in nature, as the lows of corrective waves fall below the peaks of impulsive ones. Under such circumstances, I find it difficult to believe in a prolonged rise for the euro. However, it may continue for some time.

The Market Reversed Course Again

The EUR/USD rate rose by 80 basis points on Thursday and Friday. This might seem like a modest move, if not for one key factor. As expected, the ECB lowered all three interest rates yesterday, shifting the market's focus to ECB President Christine Lagarde's speech. However, this raised more questions than it provided answers to.

Let's first analyze the market's reaction to these events. It was clear—buying the euro. But why, given the ECB's rate cuts? Was Christine Lagarde "hawkish"? Personally, I didn't hear anything hawkish in her speech. Did the market expect the ECB head to explicitly state that the regulator would continue cutting rates at the next meeting and beyond? When has that ever happened? However, it seems the market interpreted it that way, which I believe is completely wrong. In my opinion, the market once again interpreted the information in a way that suited its needs.

It could also be argued that the market had already accounted for the ECB's rate cut. But if that's the case, how should we interpret the behavior of the U.S. dollar, which has been declining for almost two years? Does this mean that the market has also priced in the Federal Reserve's monetary easing, which has been discussed throughout 2024? If this assumption holds true, then we may see a rise in the U.S. dollar next week, regardless of the outcome. However, we must still wait for next week's developments, and the market continues to increase demand for the euro even today, despite the decline in industrial production in the EU and the lack of other significant news throughout the day.

General Conclusions

Based on my analysis of EUR/USD, I conclude that the pair continues to form multiple corrective wave structures. The rise in prices may continue within a five-wave corrective structure, with targets around the 1.13 level, but the scenario for wave "d" has been reactivated. Unfortunately, this wave may already be completed, so I cannot be confident in the pair's resumption of decline.

On a larger wave scale, it is also clear that the wave pattern is becoming more complex. We are likely to see an upward wave set, but its length and structure are difficult to predict at this stage.

Key Principles of My Analysis:

* Wave structures should be simple and comprehensible. Complex structures are difficult to trade and often subject to change.
* If there is uncertainty in the market, it is better to stay out of it.
* There is never 100% certainty in the direction of movement. Always use Stop Loss orders for protection.
* Wave analysis can be combined with other forms of analysis and trading strategies.


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Trading Recommendations and Analysis for EUR/USD on September 13; Nothing to Talk About After the ECB Meeting

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Analysis of EUR/USD 5M

The EUR/USD pair showed no desire to move on Thursday. Volatility barely exceeded 40 pips. And this was on the day of the European Central Bank meeting and Christine Lagarde's speech. And on the day when the ECB lowered key interest rates for the second time! Moreover, the euro price rose due to the ECB's decision to ease monetary policy! That's all you need to know about the logic of Thursday's movements. The euro has been correcting for several weeks, but there's still no sense that it has begun a downward trend. The pair corrected by 200 pips and failed to overcome the psychological level of 1.1000. For now, the dollar's situation is being saved by the trend line and the Ichimoku indicator lines. These are located above the price, so the downward trend remains intact. Since the EUR/USD pair has never been super-volatile, one might assume everything is proceeding as usual. But we still don't see the market eager to buy the US currency.

Now, we should expect the pair to rise to the Kijun-sen line. Near this line lie two other lines that currently support the bears. We will see another round of illogical growth in the euro if these are overcome.

In yesterday's 5-minute time frame, there was one reasonably good trading signal to buy. The price bounced off the 1.1006 level and moved upward for the rest of the day. The movement was weak, but even such a move allowed traders to profit from a long position. In principle, it could have been closed anywhere.

COT report:

The latest COT report is dated September 3. The illustration above clearly shows that the net position of non-commercial traders has remained bullish for a long time. The bears' attempt to take over failed miserably. The net position of non-commercial traders (red line) declined in the second half of 2023 and the first of 2024, while commercial traders (blue line) grew. Currently, professional players are again increasing their long positions.

We also still do not see any fundamental factors supporting the strengthening of the euro. Technical analysis indicates that the price is in a consolidation phase—in other words, a flat. In the weekly time frame, it is clear that since December 2022, the pair has been trading between levels 1.0448 and 1.1274. In other words, we have moved from a seven-month flat into an 18-month one.

At the moment, the red and blue lines are slightly moving away from each other, which indicates that long positions on the euro are increasing. However, such changes cannot be the basis for long-term conclusions within a flat market. During the last reporting week, the number of long positions in the non-commercial group decreased by 2,400, while the number of short positions fell by 9,600. Accordingly, the net position increased by another 7,200. Yet, there is still potential for the euro to fall.

Analysis of EUR/USD 1H

In the hourly time frame, the EUR/USD pair finally has a real chance to end the baseless upward trend from eight months to two years. A new downtrend has formed, which is currently short-term. Since the Federal Reserve meeting is still a week away, the market could resume the reckless selling of the US currency. However, some technical grounds exist to expect a decline in the pair for now. The price is below the Ichimoku indicator line, which opens up at least some prospects for the US dollar.

For September 13, we highlight the following levels: 1.0658–1.0669, 1.0757, 1.0797, 1.0843, 1.0889, 1.0935, 1.1006, 1.1092, 1.1137, 1.1185, 1.1234, 1.1274, as well as the Senkou Span B (1.1114) and Kijun-sen (1.1085) lines. The Ichimoku indicator lines can move during the day, so this should be considered when identifying trading signals. Remember to set a Stop Loss to break even if the price has moved in the intended direction by 15 pips. This will protect you against potential losses if the signal turns out to be false.

On Friday, a secondary industrial production report will be published in the European Union and, in the US, the secondary Consumer Sentiment Index from the University of Michigan. The market has again fallen into hibernation; volatility is decreasing, so we do not expect strong movements today. Unfortunately, the pair is again starting to trade illogically and is practically ceasing to move.

Explanation of illustrations:

Support and resistance levels: Thick red lines near which the trend may end.

Kijun-sen and Senkou Span B lines: These Ichimoku indicator lines, transferred from the 4-hour timeframe to the hourly chart, are strong lines.

Extreme levels: Thin red lines from which the price previously bounced. These provide trading signals.

Yellow lines: Trend lines, trend channels, and other technical patterns.

Indicator 1 on COT charts: The net position size for each category of traders

The material has been provided by InstaForex Company - www.instaforex.com #

EUR/USD. ECB and PPI

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The European Central Bank cut all three key interest rates following its September meeting. The main refinancing rate was lowered to 3.65%, the marginal lending rate to 3.90%, and the deposit rate to 3.5%. EUR/USD traders ignored the formal outcomes of the September meeting since the central bank's decision fully matched the expectations of most experts. In particular, 64 out of 80 economists surveyed by Reuters predicted that the ECB would cut the deposit rate by 25 basis points in September. Analysts also expressed confidence that the central bank would take another step in this direction at the December meeting, thereby bringing the rate to 3.25%.

The September rate cut was preceded by a slowdown in inflation in the Eurozone. According to the latest data, the harmonized index of consumer prices fell to 2.2% y/y in August after rising to 2.6% in July. This is the weakest growth rate since August 2021. The core index also showed a downward trend, reaching 2.8% y/y after July's increase to 2.9%. This is the lowest level for this indicator in the past four months.

Amid the slowdown in inflation, many macroeconomic indicators were also disappointing: weak PMI, IFO, GfK, and Sentix indices were published during August-September. A contraction in the German economy was also recorded. All these fundamental factors contributed to strengthening dovish sentiments in the market. Therefore, the ECB made an entirely expected decision by lowering interest rates in September.

However, the central bank voiced mixed signals, preventing EUR/USD sellers from turning the results of the September meeting to their advantage. On the one hand, ECB representatives lamented the slowdown in economic activity, stating that financing conditions remain restrictive. The central bank reduced its forecast for Eurozone GDP growth for the next three years: for 2024—to 0.8% (from the previous estimate of 0.9%), for 2025—to 1.3% (from 1.4%), and for 2026—to 1.5% (from 1.6%). On the other hand, the central bank revised its inflation forecasts upward. Inflation is expected to rise again in the second half of this year, partly because previous sharp declines in energy prices will fall outside the annual figures. Regarding core inflation, forecasts for 2024 and 2025 were revised upward as services inflation was higher than expected.

This is a hawkish signal reinforced by ECB President Christine Lagarde's rhetoric at the concluding press conference. Lagarde said that inflation in the services sector "requires attention and monitoring," that inflation indicators will rise in the fourth quarter, and that regarding the October meeting, "the ECB has no commitments."

Traders interpreted the rhetoric of the head of the ECB in favor of the single currency. Let me remind you that the main "flaw" in the August inflation report in the Eurozone was the services sector. Lagarde mentioned this circumstance for a good reason. Inflation in the services sector increased by 4.2% in August, exceeding the July result (when a growth of 4.0% was recorded).

Thus, the ECB made an expected decision but once again called into question further steps to ease monetary policy—at least in the context of the October meeting. Such ambiguous outcomes of the September meeting allowed EUR/USD buyers to organize a minor correction: the pair bounced off the base of the 1.10 figure and rose to the target of 1.1060.

Another fundamental factor contributed to the pair's growth. At the start of the US trading session, an important inflation indicator—the Producer Price Index—was published. The overall PPI decreased to 1.7% annually in August, against a forecasted decline of 1.8%. The indicator has been decreasing for the second consecutive month. The core index increased slightly but slower than most experts expected (2.4% instead of 2.5%).

The resulting fundamental background has put (at least) the downward trend of EUR / USD on hold. The prospects of a decline into the area of the 0.9000 level have come into serious question. Now, market participants will await the Federal Reserve's verdict, which will be announced on September 18.

From a technical standpoint, the pair on the daily time frame is between the middle and lower lines of the Bollinger Bands indicator, above the Kumo cloud, below the Kijun-sen line, and on the Tenkan-sen line. It is advisable to consider buying only when the pair overcomes the resistance level of 1.1080—that is when it moves above the middle line of the Bollinger Bands and above all the lines of the Ichimoku indicator, which will form a bullish Parade of Lines signal. The target for the upward movement is 1.1180, which is the upper line of the Bollinger Bands indicator on the daily chart. However, since buyers have not yet confirmed the "seriousness of their intentions" (that is, they have not yet overcome the target of 1.1080), it is advisable to maintain a wait-and-see position on the pair.

The material has been provided by InstaForex Company - www.instaforex.com #

EUR/USD. September 12. Don't Expect a Strong Reaction to the ECB Meeting

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EUR/USD. September 12. Don't Expect a Strong Reaction to the ECB Meeting


On Wednesday, the EUR/USD pair experienced




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On Wednesday, the EUR/USD pair experienced another reversal in favor of the U.S. dollar and resumed its decline towards the corrective level of 127.2% – 1.0984. A rebound from this level would favor the euro and lead to some growth towards the corrective level of 161.8% – 1.1070. However, I remind you that a "bearish" trend is currently forming, not a "bullish" one. A close below the 1.0984 level will increase the likelihood of a further decline toward the next




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Forecast for GBP/USD on September 12, 2024

On the hourly chart, the GBP/USD pair made a new reversal in favor of the U.S. dollar on Wednesday and settled below the corrective level of 127.2% – 1.3054. Today, the pair has returned to this level. A rebound from it will allow traders to expect a further decline of the pound towards the level of 1.2931. If the quotes consolidate above 1.3054, a slight rise in the pair can be expected.

The wave situation raises no questions. The last completed wave down did not break the low of the previous wave, but the last upward wave also failed to break the peak of the previous wave, which is located at the level of 1.3264. Thus, we are currently dealing with a trend reversal downwards. The last, not yet completed, wave down has already broken the low of the previous wave, which also confirms the formation of a bearish trend.

The fundamental backdrop on Wednesday mostly favored a rise in the pair, but bears remained persistent. Traders realized that the time for the Fed's monetary policy easing had come, so there is no longer a need to react with a mass exodus from the U.S. dollar in response to each inflation drop. Furthermore, the bullish trend cannot last forever. A bearish trend is currently forming, which leaves little doubt. Therefore, it is important to look for opportunities to open short positions. The market has long been preparing for the first rate cuts in the U.S., and this event had been fully priced in weeks before the meeting. I believe that the pair's decline will continue. For the bulls to regain control, the bearish trend needs to be broken. Today's fundamental backdrop is weak, and I wouldn't expect the Producer Price Index (PPI) to have a significant impact on the pair's movement. Bears need to defend the 1.3054 level, and if they succeed, the decline might resume as soon as today.

On the 4-hour chart, the pair has returned to the level of 1.3044. A rebound from this level, along with bullish divergence on the CCI indicator, suggests some potential for the pair's growth, though I don't expect it to be strong. I am more inclined to see the pair consolidate below 1.3044, which would allow for further decline toward the next corrective level of 61.8% – 1.2745.

Commitments of Traders (COT):

The sentiment among the "Non-commercial" trader category became significantly more bullish during the last reporting week. The number of long positions held by speculators increased by 8,610, while the number of short positions decreased by 9,537. Bulls still hold a solid advantage. The gap between long and short positions is 108,000: 160,000 versus 52,000.

The British pound still has prospects for decline, although the COT reports suggest otherwise. Over the past three months, the number of long positions has risen from 102,000 to 160,000, while the number of short positions has fallen from 58,000 to 52,000. I believe that over time, professional players will begin to reduce their long positions or increase their short positions, as all the potential drivers for buying the British pound have already been priced in. However, it's important to note that this is just speculation. Technical analysis still points to a likely decline in the near future, though an unequivocal bullish trend remains for now.

News Calendar for the U.S. and UK:

* U.S. – Producer Price Index (12:30 UTC).
* U.S. – Initial Jobless Claims (12:30 UTC).




On Thursday, the economic calendar includes two entries, neither of which are particularly important. The influence of the fundamental background on the market sentiment for the rest of the day will be weak.

GBP/USD Forecast and Trading Tips:

Sales of the pair were possible after a rebound from the 1.3258 level on the hourly chart, with a target of 1.3054. The target was achieved as expected. New sales are possible upon a close below the 1.3054 level, targeting 1.2931, and today, upon a rebound from the 1.3054 level from below. I would not rush to buy even if the pair closes above the 1.3054 level.

Fibonacci retracement levels are drawn from 1.2892 – 1.2298 on the hourly chart and from 1.4248 – 1.0404 on the 4-hour chart.Pentru mai multe detalii, va invitam sa vizitati stirea originala.

EUR/USD: Simple Trading Tips for Beginners on September 12. Analysis of Yesterday's Forex Trades

Trade Analysis and Advice for Trading the Euro



The price test at 1.1036 occurred when the MACD indicator had just started moving downward from the zero mark, confirming the correct entry point for selling the euro. As a result, the pair fell by 30 pips, after which the pressure eased. We didn't quite reach the target level of 1.0994, so there were no other market entry points. Yesterday, data on the U.S. Consumer Price Index matched economists' forecasts, which positively affected the U.S. dollar, as it dismissed expectations of more aggressive rate cuts in the U.S. next week. Today, the euro may weaken further as the European Central Bank's decision on the key interest rate, the monetary policy report and ECB President Christine Lagarde's press conference are ahead. The fact that rates will be lowered is already priced into the market, and much now depends on the ECB's rhetoric regarding future policy. The higher the chances of two or three rate cuts this year, the cheaper the euro will be against the U.S. dollar. As for the intraday strategy, I will rely more on the realization of scenarios No. 1 and 2.

Buy Signal



Scenario No 1: Today, you can buy the euro upon reaching the price level of 1.1027 (green line on the chart) with a target of rising to 1.1064. At the 1.1064 mark, I plan to exit the market and sell the euro in the opposite direction, aiming for a movement of 30-35 pips from the entry point. Counting on the euro's rise today during the first half of the day will only be possible after a relatively cautious position from the ECB. Important! Before buying, ensure the MACD indicator is above the zero mark and is just beginning to rise.

Scenario No 2: I also plan to buy the euro today in case of two consecutive tests of the 1.1005 price level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth to the opposite levels of 1.1027 and 1.1064 can be expected.

Sell Signal



Scenario No 1: I plan to sell the euro after reaching the 1.1005 level (red line on the chart). The target will be the 1.0963 level, where I will exit the market and immediately buy in the opposite direction (aiming for a 20-25 pips movement in the opposite direction from the level). Pressure on the pair may return today in case of a failed attempt at a correction in the first half of the day and a dovish ECB stance. Important! Before selling, make sure the MACD indicator is below the zero mark and is just beginning to decline.

Scenario No 2: I also plan to sell the euro today in case of two consecutive tests of the 1.1027 price level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decline to the opposite levels of 1.1005 and 1.0963 can be expected.

What's on the Chart:



Thin green line: the entry price at which you can buy the trading instrument.

Thick green line: the estimated price at which you can set Take Profit or manually close positions, as further growth above this level is unlikely.

Thin red line: the entry price at which you can sell the trading instrument.

Thick red line: an estimated price at which you can place Take Profit or manually close positions, as further decline below this level is unlikely.

MACD indicator: when entering the market, it is essential to be guided by overbought and oversold zones.

Important: Novice traders in the forex market need to be very careful when making decisions about entering the market. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. You must set stop orders to avoid losing your entire deposit, especially if you don't use money management and trade in large volumes.

Remember, a clear trading plan, like the one I've outlined, is essential for successful trading. Making impulsive decisions based on the current market situation is a losing strategy for novice intraday traders.Pentru mai multe detalii, va invitam sa vizitati stirea originala.

How to Trade the GBP/USD Pair on September 12? Simple Tips and Trade Analysis for Beginners

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How to Trade the GBP/USD Pair on September 12? Simple Tips and Trade Analysis for Beginners


Analyzing Wednesday's Trades:GBP/USD on 1H Chart




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Analyzing Wednesday's Trades:GBP/USD on 1H Chart On Wednesday, the GBP/USD pair sustained its decline, albeit modest, but a decline nonetheless. And for those who don't remember, a decline in the British currency has been very rare in 2024, especially when U.S. macroeconomic data aren't supporting the dollar. We can't recall the last time the dollar grew on weak data. However, we have repeatedly warned that the market, for at least the entire year of 2024 (if not




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Review of GBP/USD on September 12; Data That No One Cares About

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The GBP/USD currency pair traded fairly calmly on Wednesday, though with a significant decline. The inflation report strengthened the dollar, which makes us very happy. However, this article isn't about that report, which has been the focus of discussions for over a week. Instead, we would like to draw attention to a series of macroeconomic reports from the UK.

On Tuesday, reports on wages, unemployment, and jobless claims were released in the UK. We're not claiming that these are "super-important" reports. We mentioned that no significant reaction should be expected. The same applies to Wednesday's reports – GDP and industrial production. Despite all the talks about the British economy's recovery, GDP did not grow in July. Industrial production decreased by 0.8%. Yes, the reports on Tuesday were more optimistic, so perhaps it is fair that the pound neither rose nor fell after the whole package of macroeconomic data. However, we would note the market's almost complete disregard for this data package.

It feels as if the market is not interested at all in Britain, its data, or the Bank of England's monetary policy. The British central bank began easing, which had no effect – the pound continues to rise. The UK's macroeconomic data have been facing serious challenges over the past two years, yet everyone seems only to be talking about the weakness of the U.S. economy, which grows by several percent each quarter. Thus, it seems fair to suggest that it's not the pound sterling rising but the dollar constantly falling.

We've already discussed why the dollar is falling many times. This week has only again shown us that the market doesn't care about reports from the UK or whether the BoE is raising or lowering rates. Everything boils down not even to the U.S. economy itself but to the market's expectations about this economy and the Fed's monetary policy.

But here, it's even more straightforward. The Fed hasn't reduced the key rate a single time, yet the dollar has fallen for two years. If it started declining when inflation began slowing down, logically, it should stop falling when inflation stabilizes around 2%. That's why, as before, we expect the dollar to rise. We believe there were reasons for its decline since October 2022, but not for such a steep drop. The market has overreacted, and now it's time to restore a fair exchange rate.

At the moment, it's difficult to say that a new global downward trend has begun. The price barely crosses the moving average occasionally (and rarely), and it still isn't in a hurry to decline. We believe a global decline in the British currency should be expected after the Fed lowers the rate at least once. That will remove the psychological barrier. However, it's also unrealistic to expect the global drop in the pair to start on September 19.

The average volatility of the GBP/USD pair over the past five trading days is 83 pips, which is considered average for this pair. Therefore, on Thursday, September 12, we expect movement within a range limited by the levels of 1.2947 and 1.3113 . The upper linear regression channel is directed upwards, signaling the continuation of the upward trend. The CCI indicator has formed four bearish divergence, suggesting a significant drop.

Nearest Support Levels:

• S1 – 1.3031
• S2 – 1.3000

Nearest Resistance Levels:

• R1 – 1.3062
• R2 – 1.3092
• R3 – 1.3123

Trading Recommendations:

The GBP/USD pair has taken the first step towards a downtrend, and we hope this won't be the only one. We are not considering long positions now, as we believe that the market has repeatedly factored in all the bullish factors for the British currency (which are not much). Short positions can be considered with targets at 1.2939 and 1.2878, as the price has once again consolidated below the moving average. However, last week's U.S. macroeconomic data again put pressure on the dollar, and the market may continue to work on easing the Fed's monetary policy in the future. Caution is advised.

Explanations for Illustrations:

Linear Regression Channels: help determine the current trend. If both are directed in the same direction, it indicates a strong trend.

Moving Average Line (settings 20,0, smoothed): defines the short-term trend and the direction in which trading should be conducted.

Murray Levels: target levels for movements and corrections.

Volatility Levels (red lines): the probable price channel in which the pair will spend the next 24 hours, based on current volatility indicators.

CCI Indicator: Entering the oversold area (below -250) or the overbought area (above +250) indicates an impending trend reversal in the opposite direction.

The material has been provided by InstaForex Company - www.instaforex.com #