Forex And Cryptocurrency Forecast For August 17 - 21

First, a review of last week’s events:


Citing data from the Labor Department, optimists say that the U.S. economic recovery is gaining momentum. The pandemic-stricken labor market is beginning to recover and may have already overcome the worst stage of the crisis. Unemployment in July fell to 10.2% (against the April peak of 15%). 1.8 million people returned to work in July, a trend that continues for the third month in a row.

But, on the other hand, the revival of 9 million jobs in three months is only 43% of the 21 million lost in March-April. And 15.5 million Americans are still receiving unemployment benefits, which is more than twice higher than the maximum of the previous global financial crisis (6.6 million).  

The market is waiting for the next stage of QE - pumping the economy with liquidity and other measures of fiscal stimulus, but Democrats and Republicans cannot find common ground in Congress. President Trump does not want to inflate the next aid package for Americans too much, believing it will make them dependents clinging to the government's neck. But he is willing to make concessions to Democrats in exchange for cancelling postal voting in the upcoming US presidential election.

Negotiations go on, and the markets have taken a wait and see attitude. Although the S&P 500 index continues to grow, it does not do it so vigorously. The yield on the 30-year US Treasury bonds seemed to have grown after a weak auction, but then fell along with a fall in risk sentiment in Europe associated with a worsening epidemiological situation and poor employment data. The disappointment of the latest macroeconomic data from China does not contribute to the growth of risk sentiment.

In general, uncertainty reigns across the board. As a result, both bulls and bears decided not to resort to active action, spending the last month of summer anywhere on the beach. The  EUR/USD  pair could not go beyond the 1.1700-1.1910 side corridor in three weeks, moreover, the fluctuation boundaries became even narrower, 1.1710-1.1865, the maximum volatility did not exceed 155 points, and the final chord of this quiet week sounded at 1.1840;


The forecast, which was announced seven days ago, turned out to be almost accurate: the UK GDP in the II quarter decreased by 20.5%. (For comparison, the Eurozone economy fell by 12.1% over the same period). However, this did not affect the quotes of the pound. As already mentioned, the GBP/USD pair has recently stopped playing independently and obediently follows the EUR/USD in the wake. So, if it moved east within 1.2980-1.3185 two weeks ago, now its trading range has narrowed to 1.3000-1.3140, the pair finished at 1.3085;


Recall that last week, most experts, supported by graphical analysis on H4, expected that the pair would try to test the 106.40 level again, and if successful, it would not stop there and go further up. This is exactly what happened: the pair went up against the background of growth in the yield of 30-year US Treasury securities, and, breaking through the resistance of 106.40, reached the height of 107.00. However, the dollar's growth soon stopped, and the pair rolled back downward, completing the five-day period in the zone of the strong mid-term support/resistance level of 106.60;

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