What are the major institutions trading? | Weekly Commitment of Traders (COT) report (17/2 to 21/2)

On the H4 chart, the price crossed both indicator support lines - the balance line (red) and the MACD line (blue). Marlin is declining in the negative trend zone. The Australian dollar will continue to decline.

Our strongest currency is the US Dollar with a bullish strength factor of 1.73 and with institutions adding more long contracts.

Our weakest currency is the New Zealand Dollar with a bearish strength factor 1.43 and with a net bearish positions of 2,287 meaning that there are a lot of institutions adding on to their short positions (2,983) while at the same time, reducing their long positions (-696).

With a weak NZD and a strong USD, it would be good to look for short NZD/USD positions for this week.

Also worth noting are the weak Japanese Yen, Australian Dollar and the strong Euro, Pound and Canadian dollar.

Analysis are provided byInstaForex.

AUD/USD. "There would be a reason, but there will be a seller": aussie slumps to multi-year lows

The Australian dollar today completely lost ground: after the release of conflicting data on the labor market in Australia, the AUD/USD pair fell while updating multi-year lows. The last time the price was at such lows was 11 years ago - back in 2009. It should be noted right away that such price dynamics are caused not only by a weak macroeconomic report - first of all, traders are concerned about the prospects of the RBA monetary policy. Published on Tuesday, the minutes of the Australian central bank's last meeting fueled speculation on this subject, while today's release has become a kind of "last straw".

Let me remind you that at the end of the first meeting of the RBA this year, the regulator voiced a signal that it does not exclude further easing of monetary policy. The minutes of this meeting, published the day before yesterday, somewhat eased concern about the dovish intentions of the central bank. The Australian regulator acknowledged that the risks of further easing monetary policy parameters "outweigh its benefits." That is, on the one hand, the Reserve Bank of Australia is ready to resort to decisive action in response to the slowdown of the national economy and the economy of China. On the other hand, members of the central bank stated the need to "balance the risks that inevitably involve even lower interest rates."

The market interpreted this wording in favor of the Australian currency - they say, the central bank will resort to lower rates only in extraordinary situations. That is why the rather dovish minutes exerted a slight downward pressure on the pair.

Nevertheless, the minutes of the February meeting laid the foundation for strong volatility for the pair in the future. The fact is that the RBA members "linked" the issue of monetary easing with the dynamics of Australia's key macroeconomic indicators. According to them, the need to reduce rates depends on progress or regression in achieving the central bank's goals for inflation and employment. This suggests that the data on the growth of the Australian labor market and the main indicators of inflation are now viewed by the market through the prism of further prospects for the RBA monetary policy.

Actually, for this reason, the aussie slumped in almost all of the pairs today (not only against the US dollar). Published data reinforced rumors that the regulator will lower rates this spring. In particular, according to the Bank of Australia, the RBA members will announce this step at the March meeting, and they will reduce the interest rate by 25 basis points in April .

In my opinion, the regulator will take a wait-and-see attitude approximately until the summer. Firstly, by this time it will become clear how seriously the coronavirus slowed down the Chinese economy (and, as a consequence, the world economy). Secondly, the Australian regulator in six months will be able to see a more complete picture regarding the dynamics of indicators of the national economy.

In fairness, it is worth saying that the latest Australian labor market data was not catastrophic. The market focused on rising unemployment to 5.3% - this fact served as a kind of red flag for traders who panicked over the rate cut this spring. Although the remaining components came out better than expected. For example, the number of employees in January increased by 13 thousand, while experts expected growth by only 10 thousand. Another positive point of today's report is the growth of full employment. This component jumped to 46 thousand. On the contrary, part-time employment declined by 32 thousand. This trend can have a positive effect on the dynamics of wage growth, as regular positions, as a rule, offer a higher level of wages and a higher level of social security. The share of the able-bodied population was 66.1% (with a forecast of growth to 66.0%). This fact, in theory, was supposed to partially offset the negative effect of rising unemployment.

Thus, the Australian today fell under the hot hand of traders who were ready to sell the aussie since Tuesday, when the minutes of the last RBA meeting were published. Today, the market has gotten a chance to fulfill its intentions: an increase in unemployment has become a signal that the regulator will nevertheless lower the rate in the foreseeable future. In my opinion, this conclusion seems premature, but the principle of sell by rumors still works. In addition, the general hegemony of the US dollar and the ongoing panic over the spread of coronavirus reinforces the pair's downward momentum. Bears overcame almost all levels of support, heading towards the 65th figure. If the fundamental picture for the pair does not change, then sellers will test the most powerful support level in the near future, which is located at 0.6570 and corresponds to the lower line of the Bollinger Bands indicator on the monthly chart.

Analysis are provided byInstaForex.

Trading plan for EUR / USD and GBP / USD on 02.25.2020

What is happening in the currency market raises more and more questions especially if you look at the behavior of the single European currency and the pound, which behave in completely different ways. And it would be nice if this happened under the influence of certain macroeconomic data or political events both in the European Union and Great Britain. So no, nothing of the kind happened yesterday.

At the same time, as usual, the market completely ignored the rather secondary data on Germany. We are talking about the IFO indices, which remained completely without any attention. At the same time, the business optimism index increased from 96.0 to 96.1, but the current situation assessment indicator declined from 99.2 to 98.9. In turn, the expectations index rose from 92.9 to 93.4. At the same time, it is surprising how expectations can grow if the current situation worsens. So, on the whole, the data can be characterized as multi-directional, and no conclusions can be drawn from them. Moreover, the lack of reaction is also associated with this.

IFO Business Optimism Index (Germany):

On the other hand, the single European currency began to grow actively from the very opening of the American trading session, although at the same time, I placed French government securities, the yield on which went down. In particular, the yield on 6-month bonds decreased from -0.587% to -0.589%, while 12-month bills from -0.582% to -0.591%. Only on 3-month bills was an increase in profitability recorded from -0.596% to -0.587%. And yes, this is not a mistake. The yield on them is negative for all. That is, investors will receive less than they invested. And in theory, this situation should scare investors, but the single European currency was growing.

And against the background of all this, the subsequent behavior of the dollar at the time of placement of already US government debt securities, looks extremely untypical. It's just right. The profitability went down and the dollar became cheaper. But then again, only in relation to the single European currency. So, the yield on 3-month bills decreased from 1.545% to 1.505%, while on 6-month bills from 1.51% to 1.44%. And here is where the behavior of the dollar is completely logical and correct. However, another thing is surprising, because the yield on government loans should go down if the market expects a decrease in the refinancing rate of the Federal Reserve. But the fact is that American macroeconomic statistics clearly indicate that Jerome Powell just right to think about the possibility of raising this refinancing rate. So questions are raised by the dynamics of the yield on government debt securities, since it is clearly moving in the wrong direction. Although this may be due to just growing demand associated with a clear deterioration in the economic situation in Europe, while the US economy is doing quite well.

The market continues to demonstrate its indifference to European macroeconomic data since early in the morning. Although in Germany, Europe's largest economy, the fourth quarter final GDP data showed that economic growth did not slow down from 0.6% to 0.4%, as preliminary data showed, but to 0.3%. In other words, the German economy is moving toward recession even faster, but the market does not seem to notice it. Just as he did not notice the slowdown in the decline in producer prices in Spain from -1.9% to -0.8%. Although everything is clear here, since the Spanish macroeconomic data are in any case not as important as the German ones.

GDP growth rate (Germany):

However, today is seriously different from yesterday, as the United States publishes important macroeconomic data. Well, the market reacts extremely sensitive to American statistics. So, the S & P / CaseShiller data should show an acceleration in the growth rate of housing prices from 2.6% to 2.8%. Given the fact that rising house prices is a leading inflation indicator, then inflation will continue to rise. It turns out that American statistics may well be the reason for the resumption of the strengthening of the dollar.

S & P / CaseShiller (United States) Housing Price Index:

The euro / dollar currency pair which is in the correction phase returned to the area of 1.0850, where the quote slowed down and formed a range of 1.0840 / 1.0870. It is likely to assume that the fluctuation in the given framework will continue in the market, where in case the price is fixed lower than 1.0830, a signal of working off the level of 1.0850 will be received and, as a fact, the downward trend will be restored.

The pound / dollar currency pair is within the correctional course of the past week, where the quote tends to a maximum of 1.2976. It is likely to assume that the local upward interest will soon change, and the quote will return to the values of 1.2900 ---> 1.2885 again.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Analysis are provided byInstaForex.

Forecast for EUR/USD on February 28, 2020

EUR/USD
The euro showed an abnormal growth of 120 points on Thursday amid moderate (canadian dollar) or even indistinct (Australian dollar) development in other leading currencies.. The reason for this was the widespread risk aversion and the curtailment of European carry trade transactions. The US stock market (S&P 500) fell 4.42%, in one week the decline blocked the previous four-month growth. The market likelihood (in accordance with futures on federal funds) of the Fed's rate cut in March in one day increased from 44.3% to 97.4%, even for April, another cut is 73.1% compared to 27.5% the day before. At a time when the epidemic of the coronavirus began to subside, a storm came to the markets. On the other hand, this is the best time to blow out market bubbles and remove small players from the market. Major players left the market last year. Euro trading volumes were the highest yesterday in the last 5.5 months. The lion's share did not fall on purchases, but on closing stop losses above 1.09. The euro corrected 50% of the entire decline on December 31-March 20. Now you can turn down. The fact is that if investors really consider the collapse to be the beginning of a new global crisis, whether they want it or not, the world will buy dollars even when rates are lowered, but carry trade deals, according to experience, are closed very quickly.

The euro reached a low of January 2020 and the resistance of the embedded line of the price channel on the daily chart. Growth was stopped by the red indicator line of balance, which from a purely technical point of view indicates that the downward mood will continue. The MACD line is also higher than the price. The Marlin has risen, but shows an intention to turn down.

The situation is completely upward on the four-hour chart. The Marlin oscillator in the overbought zone. Taking into account yesterday's volumes, we can expect some price delay in the area of the reached high, investors will need several days to make new decisions. A signal for the resumption of sales will be when the price leaves the under the MACD line, approximately, around 1.0890-1.0900, that is, from the place where there were recent stop losses.

Analysis are provided byInstaForex.

Forecast for GBP/USD on March 3, 2020

GBP/USD
The quote of the British pound remained at the Fibonacci level of 123.6% for two days. Investors are waiting for news from the negotiations of the British delegation with European politicians. The current stage of negotiations will end on Thursday. Consolidating the price under yesterday's low opens the target at the Fibonacci level of 138.2% at the price of 1.2670. The second target is 161.8% at 1.2530. It is also possible to continue trading in the range, then the price can once again be marked at the Fibonacci level of 110.0% (1.2844).

On the four-hour chart, the signal line of the Marlin oscillator is moving up, which may be a warning of another local increase before the medium-term decrease (potential, expected). Here, the resistance is the MACD line, which moves to the Fibonacci level of 110.0%. The Marlin oscillator by this time will reach the boundary with the growth territory and will turn down from it.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Analysis are provided byInstaForex.

Forecast for EUR/USD on March 5, 2020

EUR/USD
The EUR/USD quote continues to stay at the Fibonacci level of 76.4% on the daily scale chart, in the area of Monday's close. Trading volumes were high, indicating closing positions from purchases since February 21. The euro is unfolding.

The first goal 1.1035 is to support the MACD line on a daily chart. The second target, 1.0990, is an embedded price channel line, overcoming of which, in turn, opens the way to a medium-term decline in the euro. Investors are laying a 90% chance that the ECB will lower the deposit rate from the current -0.50% to -0.60% at its meeting on March 12th.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Analysis are provided byInstaForex.

GBP/USD. Trumps of the pound and the dollar's hopeless prospects

EUR/USD
The pound ended the trading week on a major note: paired with the dollar, the pound was able to return to the area of the 30th figure, after falling to around 1.2725 at the end of February. Such dynamics is explained not only by the weakness of the US currency. The buyers of GBP/USD gave a rather positive assessment of the first results of the negotiation process between Brussels and London, although representatives of the parties announced serious disagreements that could not be overcome yet. Nevertheless, the negotiators also voiced encouraging theses - it was on them that the market focused its attention.

In particular, the head of the European delegation Michel Barnier expressed confidence that they will be able to negotiate with the UK, despite the "very, very serious disagreements." He noted that the parties initially had completely different positions on key issues, so these differences in views were not a surprise to anyone. Nevertheless, he was optimistic about the prospects for negotiations.

The market seized on this phrase, although it is actually unclear how the parties plan to find a common denominator. Barnier named four points on which there are serious differences. According to him, if no compromise is reached on these issues, an agreement is unlikely to be signed.

First, it is about maintaining European standards that would guarantee equal trading opportunities. At the moment, London does not want to oblige itself to comply with these standards, and most importantly, it is opposed to the creation of appropriate mechanisms that could monitor the situation and record "unjustified commercial advantages".

Secondly, the British refuse to recognize not only the jurisdiction of the European Court of Justice, but also the European Convention on Human Rights and the rules for the exchange of data. As Barnier noted, if the parties do not come to an understanding on this item, then further cooperation in this area will be "carried out in accordance with the norms of world law". Here you can also mention the contradictions in the field of law enforcement: we are talking about coordinated actions to combat terrorism, financial crime, organized crime and so on.

Another contradiction is more fundamental. We are talking about the legal basis for future relationships. Britain plans to enter into several agreements – in every area where this is necessary. Brussels insists on signing a single, comprehensive agreement. In addition, the UK does not want to agree to common terms for both sides in the deal.

And the last, fourth, disagreement is about fishing. London insists that fishing matters be discussed on a regular basis, that is, annually. On the contrary, Europeans want to include fishing in the structure of the general economic agreement. According to Barnier, the British position on the issue of fishing is "unacceptable".

As you can see, the positions of the parties are still at different poles, and the first round of negotiations was inconclusive. But the market nevertheless "trusted" Barnier's optimism, which expressed confidence that Brussels and London would still come to a common opinion on all key issues.

It is worth noting that last week, figuratively speaking, Brexit "did not prevent" the GBP/USD from growing, while the main driving force of the upward movement was the dollar, which swooped down on all fronts. Yesterday, the Federal Reserve Bank of New York significantly lowered its forecasts for US GDP growth in the first quarter of this year. While the previous estimate was at 2.15%, expectations have now dropped to 1.7%. Comments from Donald Trump's economic adviser, Larry Kudlow, also put pressure on greenback. According to him, certain sectors of the US economy will feel the "strong negative impact" of the epidemic, but it is "too early" to make decisions about supporting the economy with fiscal measures. At the same time, Trump himself is demanding that the Fed should hold another round of rate cuts.

In this case, we can talk about a certain de-correlation. For example, if the head of the Bank of England (Andrew Bailey) insists on applying fiscal responses, the White House is trying to offset the impending threat with monetary policy. And the Fed seems to agree with this scenario. At least, the latest comments from the Fed representatives (Bullard, Kaplan) indicate a willingness to further soften monetary policy. While representatives of the BoE and the ECB are increasingly reminded that they are limited in their actions – in particular, Bailey allowed a rate cut to 0.1%, but at the same time excluded the option of reducing to a negative area.

Thus, the pound is still in a winning position relative to the US currency. According to general market expectations, the Fed will lower the rate by another 25 basis points at the March meeting, and later, by another 25 basis points by the beginning of summer. In turn, the BoE can maintain a wait-and-see attitude on March 26, saving an arsenal of available actions for the future. Such a de-correlation provides support for GBP/USD, especially against the background of quite calm rhetoric of the Brexit negotiators. If this fundamental background for the dollar and the pound persists next week, the pair can test the next resistance level, which is located at 1.3105 - this is the lower boundary of the Kumo cloud on the daily chart.

Analysis are provided byInstaForex.

How is coronavirus spreading around the planet? The US, Italy, Spain, China and Iran are at high risk

The Chinese pneumonia virus COVID-2019 has "captured" more than 100 countries around the world. More than 105,000 people are infected, mostly in China. The largest number of infected and deaths is in the "hotbed" of infection - China. Apart from China, Italy has been the most affected at the moment, with more than 6,000 cases of infection. More than 200 people were killed. The entire country is under quarantine. Schools and cinemas have been closed, all sporting events have been canceled, and any events where a large number of people may gather are prohibited. Some regions with the highest number of cases are quarantined. Citizens are not allowed to leave their homes without good reason. According to the current plan, such measures have been taken until April 3. No one knows what will happen after April 3. Everything will depend on whether it is possible to stop the spread of infection in the country. The Italian authorities decided to involve an additional 20,000 doctors and nurses in the fight against the virus. The main thing now is to stop the infection. It is noted that about 600 people are in intensive care, but about 600 have fully recovered. The average age of those who died from the virus is 81 years. It follows that first of all deaths are recorded in the elderly. People with weak, due to age-related reasons, immunity and health. 80% of people who died from the virus had other diseases. Thus, on the example of Italy, we can conclude that the virus is not fatal, but can lead to a fatal outcome if the patient has poor health. Thus, the elderly and people with weak immune systems are primarily at risk.

About 3000 cases of infection have been recorded in the UK, five have died. All of them were elderly people with poor health. All who contacted the dead are isolated, including medical staff. The United States also recorded several hundred cases of the disease (about 700). Most are in the New York State, where a state of emergency has already been declared. Several people died. New York Governor Andrew Cuomo believes mass quarantine is the best way to slow the spread of infection. Washington state has also been one of the most infected. The state recorded about 70 cases of the disease. As in many other countries, those who die from the virus are elderly people. In addition, a large number of patients were recorded in Iran - about 6,000. 145 people died. At the same time, firstly, representatives of the medical sphere believe that the real numbers can be much higher, and secondly, two representatives of the Parliament have already died from the coronavirus.

Meanwhile, panic is brewing in countries with the highest incidence of the disease. Thank God that so far this word only refers to the desire of people to stock up on all necessary products and not to leave the house without unnecessary need. Therefore, a shortage of certain foods may occur. For example, in the UK, Secretary of Health Matt Hancock urged people not to buy more than they needed, assuring that there was enough food for everyone. The minister also assured that he works with supermarkets in the direction of delivering food and necessary goods to the home in case people have to isolate themselves. However, representatives of UK supermarkets argue that the demand for the most necessary food products is "going wild" and cast doubt on the fact that the authorities will be able to keep the situation under control and provide all citizens with food and basic necessities. One of the directors of large supermarket chains even stated that there were no contacts with the government.

Quite unexpectedly, Spain took the lead in the number of cases, where according to the latest data, the number of infected exceeded 1200. According to the Minister of Health of Spain, Salvador Illa, the situation with coronavirus in the country has significantly worsened in recent days. Most infections have been reported in Madrid. Most of the cases are elderly people in nursing homes and employees of these homes. Two weeks quarantine has also been announced in Madrid with the closure of all schools, universities and kindergartens.

Analysis are provided byInstaForex.

EURUSD reaches key Fibonacci level and bounces

EURUSD was expected to pull back towards the key Fibonacci levels we have mentioned in our previous analysis. EURUSD has reached the 61.8% Fibonacci retracement level and has bounced off of it.

EURUSD has pulled back as a back test of the broken wedge pattern. Price has so far reached the 61.8% level and is bouncing. As we explained in our last Ichimoku cloud analysis, we had a weak sell signal and the first target was the cloud support at 1.1130. Price surpassed our target and reached 1.1060.

So far the back test is successful and supportive of the bullish continuation of the break out. If price pushes back inside the wedge pattern and stays below, then this would be a very bearish sign.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Analysis are provided byInstaForex.

Forecast for EUR/USD on March 19, 2020

EUR/USD
Yesterday, trading in the euro took place in a wide range of about 250 points, this morning the price tested the resistance of the embedded line of the price channel on the daily chart and returned to the red indicator line balance, and opening day occurred under this line, which speaks of the intention of the price to decline further, the market came under the control of the bears. The goal of the decline is the low line of the price channel around 1.0640.

On the four-hour chart, yesterday's convergence on the Marlin oscillator turned out to be broken, although its effect was reflected in more than 80-point growth in the euro. Currently, Marlin is developing in its own downward channel, the lower boundary of which is very, very low.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Analysis are provided byInstaForex.

Forecast for EUR/USD on March 23, 2020

EUR/USD
The price was marked on the support line of the embedded price channel in the region of 1.0636 on Thursday, Friday, and today. Finally, the signal line of the Marlin oscillator turned upwards on the daily chart, which creates the prerequisite for corrective growth to the level of 1.0879 - to a low of October 1, 2019. Overcoming the Friday low of 1.0636 opens the target 1.0493 - the low of February 2017.

On the four-hour chart, the Marlin oscillator did not form a strong convergence, the signal line has not yet left the zone of negative indicators. The indicator potential may be enough to work out the price of correctional target of 1.0879.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Analysis are provided byInstaForex.

Forecast for AUD/USD on March 25, 2020

AUD/USD
The Australian dollar grew by 145 points on Tuesday, since it worked the correction level of 38.2% of the movement on March 9-19. There are no strong reversal signs, growth to the second correction target by Fibonacci level of 50.0% at the price of 0.6095 is possible.

On the four-hour chart, the price has consolidated above the MACD line (blue indicator), which shows the price's intention to continue rising to the next Fibonacci level of 50.0% at the price of 0.6095. The signal line of the Marlin oscillator lies in the lateral direction, which indicates the imminent completion of growth, that is, above 50%, the correction will no longer work.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Analysis are provided byInstaForex.