Forex analysis review |
- EURUSD approaching resistance, potential big drop coming up!
- October 31, 2019 : EUR/USD Intraday technical analysis and trade recommendations.
- October 31, 2019 : GBP/USD showing respect for supply-level around 1.2980. Bearish rejection is anticipated.
- GBP/USD: Britain remains in the EU for another 3 months, the pound is preparing for early elections
- GBP/USD. Results of the month. The pound rose in October amid another postponement of Brexit
- EUR/USD. Results of the month. The euro made an impressive breakthrough in October but has no strength for further growth
- BTC 10.31.2019 - Broken falling wednge and new momentum up on MACD, watch for buyhing opportunities
- Gold 10.31.2019 - Gold near multi pivot resistance at $1.520, big decision level
- EUR/USD for October 31,2019 - Value is still overlapping to lower, potential for rotation down into 1.1111 area
- Trading recommendations for the GBPUSD currency pair – placement of trade orders (October 31)
- EURUSD and USDJPY: the eurozone economy is sliding into recession and inflation growth is slowing. The Bank of Japan pointed
- EUR/USD. Inflation in the European Union slowed to 0.7%, GDP – also decreased
- GBP/USD: plan for the American session on October 31st. Bulls are trying to push the pound to the maximum of this month in
- EUR/USD: plan for the American session on October 31st. Data on the eurozone puts pressure on the euro
- Trading strategy for EUR / USD on October 31. Inflation and GDP in the Eurozone will determine the tone of trading on Thursday
- Trading strategy for GBP / USD on October 31. The next "transformation" awaits Britain after December 12, 2019
- Trading plan for EURUSD for October 30, 2019
- EUR/USD: Fed supported the markets and euro, while the dollar weakened
- Technical analysis of GBP/USD for October 31, 2019
- Trading recommendations for the EURUSD currency pair - placement of trade orders (October 31)
- USDCHF to reach 1st support at 0.9866, potential to bounce!
- What the Fed said 10/30/2019 (Text)
- Unsinkable dollar: USD can turn around 360 degrees
- Trading plan for EUR / USD and GBP / USD on 10/31/2019
- Powell "helped" speculators to play against the market (we expect a correction of EUR/USD and AUD/USD pairs)
| EURUSD approaching resistance, potential big drop coming up! Posted: 31 Oct 2019 06:54 PM PDT Entry: 1.11657 Why is it good: Horizontal swing high resistance Stop Loss: 1.12300 Why is it good: Horizontal swing high resistance, 61.8% fibonacci retracement Take profit: 1.10670 Why is it good: Horizontal overlap support, 38.2% fibonacci retracement, 100% fibonacci extension The material has been provided by InstaForex Company - www.instaforex.com |
| October 31, 2019 : EUR/USD Intraday technical analysis and trade recommendations. Posted: 31 Oct 2019 09:21 AM PDT
Since September 13, the EUR/USD has been trending-down within the previous short-term bearish channel until an Inverted Head & Shoulders Pattern was demonstrated around 1.0880. Shortly After, a bullish breakout above 1.0940 confirmed the mentioned reversal Pattern which opened the way for further bullish advancement towards (1.1000 -1.1020) maintaining bullish movement above the recent bullish trend. On October 7, a sideway consolidation range was demonstrated around the price zone of (1.1000 -1.1020) before another bullish swing could be initiated towards 1.1175 where the previous bearish movement was recently originated. Earlier this week, the short-term technical outlook has temporarily turned into bearish after breakdown below 1.1090 was achieved (the depicted uptrend line and 50% Fibonacci Retracement Level). However, recent bullish spikes have been demonstrated above (1.1090 - 1.1100) advancing towards 1.1175. Thus, hindering further bearish decline. Intraday destination remains unclear until bearish breakout below 1.1090 is re-established again. On the other hand, the current price zone around 1.1175 - 1.1190 should be watched for early bearish rejection and a possible Intraday SELL entry. Hence, a Double-Top pattern may be in progress with neckline located around 1.1070. Bearish Projection target would be located around 1.1000. Quick bearish decline should be expected towards 1.1025 and 1.0995 provided that early bearish breakout below 1.1090-1.1070(neckline of reversal pattern) is re-established again. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 31 Oct 2019 09:10 AM PDT
Few weeks ago, the neckline of the depicted Double-Bottom pattern (1.2400-1.2415) was breached to the upside allowing further bullish advancement to occur towards 1.2800 then 1.3000 where the GBP/USD pair looked OVERBOUGHT. Earlier last week, the GBP/USD pair has failed to achieve a persistent bullish breakout above the depicted SUPPLY-zone (1.2980-1.3000) which corresponds to a previous Prominent-TOP that goes back to May 2019. Moreover, the depicted ascending wedge reversal pattern has been confirmed indicating a high probability of bearish reversal around the price levels of 1.2950-1.2970. That's why, a quick bearish movement was initiated towards 1.2780 (Key-Level) where the current bullish recovery was recently initiated. The recent Bullish rejection around the price levels of 1.2780, indicated another temporary bullish movement towards 1.2980-1.3000 where another long-term bearish swing can be initiated. On the other hand, quick bearish breakout below 1.2780 should be achieved to enable further bearish decline towards 1.2600-1.2650 where some bullish recovery should be anticipated. Trade Recommendations: Risky traders were advised to have a valid BUY entry around 1.2780 which is running in profits now. S/L should be advanced to 1.2880 to secure more profits. On the other hand, Intraday traders can look for bearish rejection around 1.2980-1.3000 as a valid SELL signal with T/P levels projected towards 1.2780 and 1.2650. The material has been provided by InstaForex Company - www.instaforex.com |
| GBP/USD: Britain remains in the EU for another 3 months, the pound is preparing for early elections Posted: 31 Oct 2019 08:57 AM PDT
On October 31, the United Kingdom was due to leave the European Union. The promise to withdraw the country from the alliance on the appointed date at any cost made Boris Johnson the prime minister, but he failed to implement his plan. Misty Albion will remain part of the EU until at least January 31, 2020. Of course, the UK may leave the bloc earlier if the House of Commons finally approves the "divorce" agreement. However, this issue will be decided by the new composition of the British Parliament. In less than a month and a half, early elections should be held in the country. On the eve, the House of Lords supported the relevant bill of the government. Taking into account the fact that the bill was approved by the House of Commons on Tuesday, the document passed all stages of parliamentary consideration. It will acquire the status of a law after it is signed by Queen Elizabeth II, which is a formal procedure. Parliament is expected to be dissolved on November 6. After that, the UK is waiting for the election campaign, which promises to be no less fierce than before the referendum in 2016. It is easy to assume that it is on Brexit that the participants in the race for parliamentary seats will put the main emphasis on their programs and promises, but the goals they will pursue seem to be different. The head of the Cabinet, B. Johnson, hopes that the vote will help him get rid of intractable deputies and their place will be taken by lawmakers who will help or at least do not interfere with the UK's withdrawal from the EU. As for the Laborites, they will try to play on the promises of a second referendum, draw up a new deal that is more profitable for everyone, or switch from Brexit to other equally important topics, for example, to the national health care system, which immediately comes after the list of the most exciting British problems country exit from the EU. Smaller parties are also very predictable in their intentions. Thus, the Brexit party led by Nigel Farage will insist on the UK leaving the EU without a deal, and the Liberal Democrats will try to withdraw part of the electorate from the Labor Party, promising to leave Misty Albion in the alliance at all costs. Thus, the fate of Brexit will depend on the party that wins. However, it is extremely difficult to say unequivocally what the results of the upcoming early elections will be. Also, according to the Financial Times, the upcoming elections can further strengthen the already deep divisions in British society caused by the Brexit theme. "The December elections may not be the last shortly. If no party receives enough deputy mandates to single-handedly form a government, the situation of a "suspended parliament" will arise, and it will be possible to try to resolve it only through a new expression of will," the Sky News television channel reports. The GBP/USD pair has gained significantly over the past four days. The pound is strengthening thanks to the reduced likelihood of a disordered Brexit. According to experts, while stable demand for the British currency remains, however, for the GBP/USD to grow steadily, it is necessary to pass strong resistance in the area of 1.2950 – 1.3020. An increase in political risks may lead to a rollback on GBP/USD. At the same time, in the medium term, there remains a high probability of the formation of a wide "side" (1.2800–1.3000). The material has been provided by InstaForex Company - www.instaforex.com |
| GBP/USD. Results of the month. The pound rose in October amid another postponement of Brexit Posted: 31 Oct 2019 08:57 AM PDT 24-hour timeframe Exactly 1 month ago, we wrote that for the pound, any option other than a "hard" Brexit is positive. We did not expect such a strong growth of the British currency and still believe that it was not fully justified by macroeconomic data and events. To begin with, macroeconomic reports in the UK continue to be frustrating, and it can't be otherwise since the country is on the verge of – it is not even clear what kind of Brexit. And is it on the verge of a "divorce" from the European Union? Yes, that is precisely the question that is being posted on October 31, when Britain was supposed to officially withdraw from the EU, which Boris Johnson promised in any case. Brexit did not happen, re-elections to the Parliament were appointed, but they were scheduled for December, which means that in November traders will receive very little information regarding Brexit since all political parties will be engaged in campaigning. Well, if the Laborites win the election, which cannot be ruled out either, then Jeremy Corbin promises to hold a second referendum to provide the British people with the opportunity to speak out again for and against Brexit. Thus, three years after the decision to leave the EU, Brexit can be canceled and postponed indefinitely (since the two members of the Parliament have not been able to come to a common denominator and agree on an agreement with the European Union). Well, let's end with the fact that, from our point of view, for the pound, postponing Brexit or reducing the chances of a "hard" Brexit is positive news, but for the UK as a whole, it's not a solution to the problem, but simply its next transfer. The country has been in limbo for three years. Companies, businesses, ordinary workers and residents panic, do not know what to expect, prepare for the worst. And the worst thing is that no one still knows whether to leave the EU Kingdom at all or "hang up". After all, if it comes to a second referendum, the advantage of those who voted for the exit (4%) in 2016 can be easily leveled out at the expense of voters who are simply tired of being in limbo and who want clarity and stability. And there are many. It's not even about the conservatives or labor or the other parties. Voters will choose the deputies of certain parties not by their views on the development of the country, but by the views of the deputies themselves regarding Brexit. Now let's ask ourselves a question: on what basis can the British currency continue to grow if the growth it showed in October was based solely on the expectations of the signing of a "deal" with the European Union (which is currently completely useless) and the transfer of Brexit? In November, Brexit will not be rescheduled again, Parliament will not ratify Johnson's "deal", Johnson will not resign. The macroeconomic performance of the UK is unlikely to begin to improve out of the blue. Thus, we believe that the downward trend will resume, but, of course, to work out this option, you need to wait for technical signals and confirmation of this hypothesis. Trading recommendations: On the 24-hour timeframe, the pound/dollar pair maintains an upward trend, but the MACD indicator has turned down and so far indicates a possible resumption of the downward correction, which, from our point of view, is justified by the fundamental background. Thus, new purchases are associated with increased risks, and it is recommended to return to sales not earlier than the pair's decline to the area below 1.2800. In addition to the technical picture, fundamental data and the time of their release should also be taken into account. Explanation of the illustration: Ichimoku Indicator: Tenkan-Sen – red line. Kijun-Sen – blue line. Senkou Span A – light brown dotted line. Senkou Span B – light purple dotted line. Chinkou Span – green line. Bollinger Bands Indicator: 3 yellow lines. MACD: The red line and the histogram with white bars in the indicators' window. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 31 Oct 2019 08:57 AM PDT 24-hour timeframe October is possible to record the euro in positive. On October 1, the EUR/USD pair opened at 1.0898, and the quotes are located at 1.1156, and it is likely that around this level the month will close. Thus, the euro managed to rise in price for the month by about 250 points. Well, quite a decent result, given the two-year downward trend in which the pair was until this month. At the moment, traders for the second time came out of the Ichimoku cloud on the 24-hour timeframe, which gives reason to assume an upward movement in the next month. However, we believe that the bulls still have very little strength to continue to move the euro up. The previous local maximum of 1.1180 can easily keep the pair below itself, which can subsequently trigger the formation of a new downward trend. As for the foundation, it is still more interesting. In recent months, we regularly draw the attention of traders that all the hopes of the euro currency for growth are connected exclusively with the US economy. That is, in the European Union, the economic situation does not change for the better so that you can count on the strengthening of the euro currency. Moreover, economic indicators continue to fall, and inflation in recent months has slipped to a record of 0.7% y/y. Indices of business activity (especially in the industrial sector) continue to cause enormous fears, industrial production volumes continue to fall, only risks grow that the "epidemic" will spread to other areas of the EU economy. The situation is fundamentally opposite in the States. Overseas, macroeconomic statistics also continue to deteriorate, inflation falls short of target values, business activity falls, and the Fed softened monetary policy three times in a row. However, this is what can play into the hands of the US dollar. The Fed has eased monetary policy three times, and this may be enough to stabilize the decline in the growth rate of economic indicators. Rates are lowered and inflation may start to accelerate again. The labor market is in good shape, there is no cause for concern. That is, the overall picture is as follows: the US economy is also experiencing some problems, but so far it is coping with them, and the space for active actions of the Fed should be enough to stabilize the situation and negate the possible stagnation and recession. So it turns out that the economic situation in America remains much more stable, and the economy – stronger than in the EU. The gap between ECB and Fed rates has narrowed, but this is unlikely to be enough for the euro currency to continue to rise in price. Thus, we believe that now either a "wide flat" is very likely, approximately in the channel between the levels of 1.13 - 1.10, or the resumption of the downtrend, which can be determined by fixing the price below the critical Kijun-Sen line. Trading recommendations: The trend for the euro/dollar pair is currently upward. Thus, we recommend now to wait for the update of the previous maximum and only, in this case, to consider new purchases of the euro currency following the signals on the 4-hour timeframe. We recommend that you return to selling the pair not before fixing the price below the Kijun-Sen line. In addition to the technical picture, fundamental data and the time of their release should also be taken into account. Explanation of the illustration: Ichimoku Indicator: Tenkan-Sen – red line. Kijun-Sen – blue line. Senkou Span A – light brown dotted line. Senkou Span B – light purple dotted line. Chinkou Span – green line. Bollinger Bands Indicator: 3 yellow lines. MACD: The red line and the histogram with white bars in the indicators' window. The material has been provided by InstaForex Company - www.instaforex.com |
| BTC 10.31.2019 - Broken falling wednge and new momentum up on MACD, watch for buyhing opportunities Posted: 31 Oct 2019 07:55 AM PDT BTC did break the falling wedge in the background and confirmed more upside. There is potential for the test of $9.500 and even re-test of the $9.900. Watch for buying opportunities on the dips.
Yellow rectangles – Resistance levels and upward objectives Falling purple lines – Broken falling wedge pattern Rising purple line – Expected path MACD is showing new momentum up and potential for more upside in the next period. Resistance levels to watch and potential upward targets are set at $9.430 and $9.500. Anyway, if the BTC start going downside and break the support at $9.200, there is chance for more downside towards the level of $8.950. The material has been provided by InstaForex Company - www.instaforex.com |
| Gold 10.31.2019 - Gold near multi pivot resistance at $1.520, big decision level Posted: 31 Oct 2019 07:35 AM PDT Gold has been trading upward in the past 24 hours and the price did test the level of $1.512. Gold is approaching important multi pivot resistance level at $1.517-$1.520. This level is go-no go level and you should watch careful the price action around it.
Breakout of the resistance will lead us for potential test of $1.535 and buying opportunities would be preferable on the dips. Rejection of the resistance may lead us for potential re-test of the $1.496. To confirm potential rejection you would need any kind of topping pattern near the resistance. MACD is showing increased momentum on the upside and buyers in control today. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 31 Oct 2019 07:25 AM PDT EUR price had a strong upward swing yesterday and successful rejection of the main resistance at 1.1174. I would watch for intraday selling opportunities due to potential exhaustion from buyers and rejection of the 10-day high at 1.1174. Based on the market profile chart, the value for the current week is still moving lower and the price is trading above the value, which is potential chance for sellers to move back into the current week value range.
Important levels to watch based on the Profile: Support level : 1.1111 – Current week POC 1.1094 – Current week node Resistance levels: 1.1153 – Current week node 1.1175 – Current week high Watch for selling opportunities on the rallies.
4H time-frame is telling the same story and potential rejection of the 10day high at 1.1175. There is also bearish engulfing pattern in the background, which is another sign of the weakness. The material has been provided by InstaForex Company - www.instaforex.com |
| Trading recommendations for the GBPUSD currency pair – placement of trade orders (October 31) Posted: 31 Oct 2019 07:07 AM PDT The pound/dollar currency pair has been showing low volatility for the fourth day in a row, having not just an indecisive upward move, but a certain detachment from the dynamics of the entire market. So what is the reason for such indecisive hesitation, we will analyze this question in our article. From technical analysis (TA), we see that the process of pseudo-recovery concerning the inertial course is postponed indefinitely. After the quote touched the range level of 1.2770 (1.2750/1.2770/1.2800), there was a slowdown followed by a rebound, returning us almost to the resistance level (1.3000), which is where it all started. In this confusing denouement, I was interested in one noteworthy point, and so, pay attention to the fluctuation of the quote in the period from October 21 to October 30. What you see, apart from a small rollback, is correct, distinct indecision in the plan of action. So, indecision, in this case, is a kind of reflection of two phenomena at once, which leads to such an ambiguous course of the market.
In terms of volatility, we have the lowest mark in four trading days (58 – 65 – 97 – 62 point), which reflects the slowdown (indecision) and at the same time signals the possible preparation of the market for the next jump. Analyzing hourly last day, we see a swing in the conditional framework of 1.2860/1.2904, were the most remarkable candle at 20:00 (time on the trading terminal), which reflects the local surge against the background of the results of the Fed meeting. An interesting point is that the market did not manage to overcome the mark of 1.2904 in terms of price-fixing at the end of the day. As discussed in the previous review, traders are divided into several categories: 1) Waiting for the recovery of the main move relative to the inertial movement. Short positions have been laid at the time of working out the psychological level of 1.3000, having a conservative method of capital management, with quite long stops (stop loss); 2) Speculators who worked on the outcome of the Fed meeting and perhaps some still managed to jump into this small momentum prices; 3) Ordinary traders considered the entry relative to the framework of 1.2800 (-50p.) and 1.2880 (+40p.), which did not happen yesterday. Looking at the trading chart in general terms (daily period), we see that the price is extremely close to the psychological level of 1.3000, which means that the recovery stage is under threat. At the moment, special attention is paid to the values of 1.2770 and 1.3000, since major decisions will be made regarding them. At the same time, in the form of a theory, we consider a hang in these values (1.2770/1.3000), having lateral fluctuations as a result, but this will reflect the growing uncertainty in the market. The news background of the last day contained a package of important statistics for the United States. So, the first estimate of GDP for the third quarter was published, where expectations coincided in terms of a further slowdown in economic growth from 2.3% to 2.0%. At the same time, the ADP report on the level of employment in the US private sector was released, where they expected an increase of 120 thousand but received even more interesting indicators. So, employment growth was not 120 thousand, and 125 thousand, and the previous figures revised for the worse – 135 thousand to 93 thousand. The market reaction to the statistics was almost imperceptible, thus it was clear that everyone was waiting for a slightly different event. As you may have guessed, the key event of the last day was the outcome of the meeting of the US Federal Open Market Committee, where the expectations without exception of all analytical agencies coincided in terms of further reduction of the refinancing rate (from 2.0% to 1.75%). The most important point in the event was the subsequent press conference, where Jerome Powell expressed the need for ongoing regulatory action to help keep the US economy strong in the face of global change. Further actions of the Fed will again depend on the level of inflation and its approximation to the target level of 2%, as well as on external factors. At the same time, the head of the Fed did not lose sight of such a burning topic as Brexit, saying that the risk of Britain leaving the European Union without a deal has significantly decreased. "I would say that it appears that the risk of a no-deal Brexit appears to have decreased substantially. I think in any case, there are quite a lot of risks, but I have to say that the risks seem to have eased," Jerome Powell said. By tradition, we conclude our column of information and news background with an excursion from the United Kingdom. So, early parliamentary elections in Britain can be said to be approved on December 12. On Tuesday, the Lower House approved the bill for early elections, and on Wednesday, it was approved by the Upper House, leaving only the formal signing of the bill by Queen Elizabeth II. Now comes the battle of politicians, where the leader of the opposition Labor Party, Jeremy Corbyn, intends to clean up the "corrupt system" at the root. "These elections are a unique chance to transform our country, to take on key interests, supporting the people and not leaving anyone behind," Jeremy Corbyn said. Naturally, against such a background, slogans calling for a vote were already showered. "When the Laborites win, the nurse wins, the pensioner wins, the student wins, the office worker wins, the engineer wins," Corbyn says, according to the excerpts. "We all win." Let's sum up in terms of market reaction to such a saturated background. The pound/dollar pair still showed local upward interest with a little more than 60 points of primary growth, which cannot be said about its counterpart in the euro/dollar market, which behaved more actively, but this is a different story and you can familiarize yourself with it. Today, in terms of the economic calendar, we had only data on applications for unemployment benefits in the United States, where there is their growth: Primary applications +5 thousand; Repeated +7 thousand. Further development Analyzing the current trading chart, we see how the quote is getting closer to the psychological level of 1.3000 as if signaling to us that soon everything will resume again in terms of an inertial-emotional upward move. I would not be so critical in such high-profile statements, and who knows, FOMO sometimes works wonders with the market quote. Of course, it is not necessary to hurry and it is better to see a distinct price fixation higher than 1.3000 while maintaining the inertial course since the tightening of the quotation into a lateral oscillation of 1.2770/1.3000 is also one of the theories that we are considering. In terms of volatility, there is still restraint, but there are also prerequisites for acceleration. So, in terms of considering the daily candle, there are prerequisites for the formation of a candle model "Marubozu", which can give the current movement expressed in acceleration. We follow the current day, as confirmation of the formation of "Marubozu" is still incomplete. Detailing the available movement per minute, we see that from the very beginning of the trading day (00:00 hours) the movement is steadily ascending, has an average hourly candle in the area of 7 points. In turn, traders who have opened their trading positions relative to the framework of 1.2800 (-50p.) and 1.2880 (+40p.), are already in the black, which may not please. The exit from these transactions is planned near the psychological level of 1.3000. It is possible to assume that on the hype the quote will still be able to get closer to the psychological level of 1.3000, but whether we go further, that's the question. The first thing that is seen is a rebound from the level of 1.3000, unless, of course, at the time of approaching the level of 1.3000, market participants will not cover FOMO (lost profits syndrome), then, in this case, we can expect everything. Based on the above information, we derive trading recommendations:
Indicator analysis Analyzing a different sector of timeframes (TF), we see that indicators at all major time intervals signal an upward interest, which in this case reflects the reality. Volatility per week / Measurement of volatility: Month; Quarter; Year. Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year. (October 31 was built taking into account the time of publication of the article) The volatility of the current time is 75 points, which is quite good but still below the daily average. Now the question is raised, if the psychological level of 1.3000 plays the role of resistance again, then the volatility will be limited and we will not be able to overcome the daily average. If the level of 1.3000 nevertheless falls, then the probability of accelerating volatility will increase adversely. Key levels Resistance zones: 1.3000; 1.3170**; 1.3300**. Support zones: 1.2770**; 1.2700*; 1.2620; 1.2580*; 1.2500**; 1.2350**; 1.2205(+/-10p)*; 1.2150**; 1.2000***; 1.1700; 1.1475**. * Periodic level ** Range level *** The article is based on the principle of conducting transactions, with daily adjustments. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 31 Oct 2019 07:07 AM PDT Data in the first half of the day on slowing inflation in the eurozone continue to indicate the need for intervention by the European Central Bank, which in the early autumn of this year went to lower deposit rates, announcing the launch of a bond redemption program on November 1 this year. The main problems are low inflation and weak economic growth, which will only get worse if the European regulator does not take more drastic measures. Lowering deposit rates is already a problem for the banking sector, which is still showing healthy dynamics. However, supporters of a soft monetary policy within the ECB have active opponents of this approach. We are talking about Germany and France. From tomorrow, Christine Lagarde will take over as head of the European Central Bank. She will have to solve problems in the conditions of a split in the leadership. Current ECB President Mario Draghi has repeatedly called for support for national economies through increased public spending or lower taxes, but few agree. As for today's fundamental statistics, the data on GDP growth in Italy did not please economists much. According to the report, Italy's preliminary GDP in the 3rd quarter of this year grew by only 0.1%, barely surviving a recession, and by 0.3% compared to the same period in 2018. The data completely coincided with economists' forecasts. As for inflation in Italy, in October it remained unchanged compared to September and grew by only 0.3% year-on-year. Growth was projected at 0.1% and 0.4%, respectively. A disappointing report on the change in German retail trade volume put pressure on the euro. According to the data, retail sales in September increased by only 0.1% compared to August, where there was a decrease in sales by 0.1%. Economists had expected growth of 0.3%. Compared to the same period in 2018, sales increased by 3.4%. The weak report once again confirms the fact that the German economy slowed in the second half of the year. Today's data on the growth of the eurozone economy for the 3rd quarter of this year were ignored. The report indicates that the GDP of the eurozone in the 3rd quarter of this year grew by 0.2%, as in the 2nd. On an annualized basis, growth was 1.1%. The data was slightly better than economists' forecasts, which had expected growth of 0.1%. Trade problems, the decline in exports and investment of companies, the general slowdown in the world economy are the main reasons for such a weak indicator that pushes the eurozone into recession. Inflation in the eurozone is far from the level set by the European Central Bank. According to a preliminary report, the consumer price index (CPI) of the eurozone in October this year rose by only 0.7%, while in September the indicator showed an increase of 0.8%. Slowing inflation is a big concern for the European Central Bank, which is aiming for a level just below 2.0%. The data completely coincided with economists' forecasts. The unemployment rate in the eurozone in September remained unchanged compared to August and amounted to 7.5%. Unemployment in the eurozone for September was forecast at 7.4%. As for the technical picture of the EURUSD pair, it remained unchanged compared to the morning forecast. After buyers of risky assets failed to find the strength and get beyond the monthly maximum of 1.1180, the market began to observe profit-taking at the end of the month. Only the breakdown of the range of 1.1180 will lead to new purchases of the euro, and the target will be highs in the area of 1.1220 and 1.1260. Good macroeconomic indicators for the US can support buyers of the dollar, which will lead to a downward correction and a breakdown of the support of 1.1140, opening a direct road to the area of lows of 1.1110 and 1.1080. USDJPY Demand for the Japanese yen as a safe-haven asset is gradually returning amid uncertainty with further talks between the US and China. Although the US President expresses some optimism, few people seriously believe in his statements. Today, he can talk about good relations with Xi, and tomorrow he will introduce new trade duties. The current decision of the Bank of Japan, which left the deposit rate at -0.1% and kept the target yield of 10-year bonds at about 0%, did not deter the purchases of the Japanese yen. The regulator has also adjusted the leading indicator for the target level of bids. Bank of Japan Governor Kuroda said he would not hesitate to ease policy if necessary as external risks intensify. According to Kuroda, rates will remain low after the spring of 2020, as uncertainty around the trade conflict between the US and China persists. As for the technical picture of the USDJPY pair, further growth above 109 seems unlikely. The current downward correction, which was formed after today's decision of the Bank of Japan, may continue to update the lows around 106.50. The intermediate target will be 107.50. The material has been provided by InstaForex Company - www.instaforex.com |
| EUR/USD. Inflation in the European Union slowed to 0.7%, GDP – also decreased Posted: 31 Oct 2019 06:29 AM PDT Yesterday, the Federal Reserve announced its third consecutive key rate cut. Thus, the difference between the rates of the ECB and the Fed has decreased again, which gives some advantages to the European currency. However, this difference in the rigidity of the monetary policies of the European Union and America remains unequivocally in favor of the latter and favor of the US currency. Perhaps, now there are not enough fundamental reasons for the pair to update its lows every month, but this is also not enough for a confident strengthening of the euro currency. We even tend to believe that the euro/dollar pair in the coming months will be inclined to a wide "sideways" since now neither the Fed nor the ECB is no longer waiting for changes in monetary policy in the coming months. And the next meetings of the central banks will be held only in December. Today, the euro could continue to grow if macroeconomic statistics from the European Union for the first time in a long time were encouraging, and start to fall, in the opposite case. As a result, the two most interesting reports turned out to be quite contradictory and can be interpreted as you like. Unexpectedly, for many, inflation accelerated in October (non-final value) to 1.1% y/y, but this is the so-called base value. "Normal" inflation, which everyone pays attention to in the first place, fell to 0.7% y/y. In the case of GDP in the third quarter, compared to the same period last year, the increase was 1.1% y/y, which is less than the previous value of +1.2%. In quarterly terms, the increase was +0.2% with a lower forecast of +1.1%. And both of these values are also preliminary. Thus, formally, we can state the continued deterioration of the macroeconomic indicators of the eurozone. And if so, then the chances of the euro currency to continue to grow against the US dollar are reduced again. In the afternoon, data on changes in the volume of spending and income of the American population for September will be published, but these indicators, like the Chicago PMI, are secondary. For the euro, the level of 1.1180 (the previous local maximum) is now extremely important. If the bulls manage to overcome it, it will be a good help to continue the upward movement, which, however, again, is unlikely to continue for too long if traders are not supported by a positive fundamental background from Europe or a negative one from overseas. If the bulls fail to overcome this level, even from a technical point of view, it will be more preferable for the pair to move downward. Recall that most of the macroeconomic reports yesterday were ignored by the market, although overall macroeconomic statistics from the States yesterday was quite good. Thus, the reason for the pair's growth last night is only one – the Fed's rate cut. Now that the markets have worked out this information, it is time to return to the original trading strategy and the initial location of the pair. And this is being inside the Ichimoku cloud with the prospect of forming a downward trend. However, even if traders do return to this plan, we recommend to seriously consider selling the pair not earlier than crossing the Senkou Span B line. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 31 Oct 2019 06:29 AM PDT To open long positions on GBP/USD, you need: Buyers of the pound are trying to get above the resistance of 1.2943 and push the pair to the maximum of this month in the area of 1.3012, and the lack of news on the UK and Brexit economies contributes to this. At the moment, while trading is above the support of 1.2943, we can expect continued strengthening of the GBP/USD pair in the area of the maximum of 1.3012, above which it will be difficult to breakthrough. Therefore, I recommend fixing the profits there. If the US data is better than economists' forecasts, the pair will quickly return to the support of 1.2943. In this scenario, it is best to consider new long positions on the rebound from the larger level of 1.2875, which acts as the average boundary of the current side channel. To open short positions on GBP/USD, you need: Bears are not yet active after yesterday's lowering of interest rates in the United States. All the focus is on today's data on the incomes and expenditures of Americans, as well as the report on the labor market. Good indicators will quickly return GBP/USD under the support level of 1.2943, which will increase the pressure on the pair and push it back to the middle border of the side channel of 1.2875, where I recommend taking the profits. If the bulls continue to bend their line, in this case, you can look for short positions only after the update of this month's highs in the area of 1.3012 or sell immediately on the rebound from the new resistance level of 1.3074. Indicator signals: Moving Averages Trading is above the 30 and 50 daily averages, indicating the bullish nature of the market. Bollinger Bands In the case of a decline in the pound, the support will be provided by the average border of the indicator in the area of 1.2915, and you can buy a rebound from the lower border in the area of 1.2875.
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| Posted: 31 Oct 2019 06:29 AM PDT To open long positions on EURUSD, you need: It is expected that the data on the euro area, which came out today in the morning, put pressure on the euro. The report on slowing inflation and rising unemployment goes against the plans of the European Central Bank, which will be forced to lower interest rates further. Bulls have already tried to keep the pair in the support area of 1.1149, but the test of this level did not lead to a larger increase, which suggests a further decline in the euro in the second half of the day. At the moment, it is best to consider new long positions only after the formation of a false breakdown in the support area of 1.1149, which may occur after the release of data on the US economy. However, a more acceptable level for purchases will be the area of 1.1116, from where you can open long positions immediately on the rebound. The main task of the bulls is to break the resistance of 1.1178, which will lead to further growth of EUR/USD near the highs of 1.1226 and 1.1263, where I recommend taking the profits. To open short positions on EURUSD, you need: Sellers coped with the morning task and did not let the pair above the resistance of 1.1178, and weak fundamental data on the eurozone did their job and returned the euro to the support of 1.1149. A further drop will depend on the breakthrough of this range and macroeconomic statistics for the United States. Good data will increase the pressure on EUR/USD, which will lead to an update of the lows in the area of 1.1116 and 1.1082, where I recommend taking the profits. If the bulls try to return to the market in the afternoon, the next formation of a false breakdown near the maximum of 1.1178 will be a signal to sell the euro. Otherwise, you can open short positions immediately on the rebound from the resistance of 1.1226. Indicator signals: Moving Averages Trading is above the 30 and 50 moving averages, which indicates the advantage of buyers of the euro. Bollinger Bands The further downward movement in the pair will be restrained by the lower border of the indicator in the area of 1.1130.
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| Posted: 31 Oct 2019 05:16 AM PDT EUR / USD - 4 H. On October 4, the EUR / USD pair on the 4-hour chart consolidated above the correction level of 100.0% - 1.1106 and increased to the level peak of August 26 - 1.1164. The reason for the new growth of the Euro currency lies solely in the Fed meeting. The results of which were announced last night. That is, it was the information background that became the basis for the growth of the EU currency. Now, when the Fed and ECB meeting is behind, bull traders have to prove their strength and desire to continue to push the euro-dollar pair up. Meanwhile, quotes from the level of 1.1164 will work in favor of the US dollar and the beginning of the decline in the direction of the Fibo level of 100.0% - 1.1106. In turn, rising divergence is not observed today. The third consecutive reduction in the Fed's key rate took place, chairman Jerome Powell said yesterday. At the same time, many traders agree that the Fed will now take a break, although there were no concrete hints in this in yesterday's speech by Jerome Powell. He stated that the adjustment of the key rate after a cycle of systematic increases was completed, but this does not mean that it will not be lowered again at the next or one meeting. Thus, everything will depend on economic reports, the state of the US economy and the global economy, the escalation or de-escalation of the trade conflict between China and the USA, as well as inflation and the labor market. As you can see, there are a lot of factors that the Fed will take into account at future meetings, and Jerome Powell's wording and rhetoric, in principle, is repeated from meeting to meeting. However, there is another factor which Jerome Powell doesn't like to talk about, but he still has a place. This is the President of the United States of America, Donald Trump, who continues to criticize the Fed, believe that the rate is too high, which inhibits US economic growth. And that is precisely the main disagreement between Trump and Powell. Trump needs a cheap dollar, economic growth, a victory in a trade war with China, and all this as quickly as possible, since the presidential election in America will be held in less than a year. Moreover, Trump really wants to be re-elected for a second term while Powell is more interested in inflation, which is stably below the target of 2.0% and the state of the labor market. At each meeting, Powell says that he is "moderate" about economic growth, and it seems that the Fed is completely satisfied with this. This time, by the way, Donald Trump refrained from criticizing Jerome Powell, however, it is unlikely that the latter will avoid it in the future, since Trump wants to see the rates at zero or "even lower". In just an hour, preliminary data on GDP for the third quarter and inflation for October will be released in the European Union. Let me remind you that US GDP unexpectedly significantly exceeded the expectations of the market (also by preliminary value), and inflation remains much higher than European. If the Fed also takes a break and stops lowering the rate, which is very likely, then the euro currency with its weak reports may become very difficult to compete with the US dollar again. What to expect today from the euro-dollar currency pair? On October 31, traders will have to solve the problem with the level of 1.1164. If bull traders sell this level, which is also the previous local peak, then the probability of continued growth will increase. Quotes, in turn, rebound from the level of 1.1164 will work in favor of the US currency. Much will depend on reports from the eurozone and there is little chance that they will be positive. The Fibo grid was built at the extremes of May 23, 2019 and June 25, 2019. Forecast on EUR / USD and recommendations to traders: I recommend selling the pair with a target of 1.1024 if closing is completed at the level of 1.1106 (100.0% Fibonacci). Stop Loss - Above 1.1106. I recommend buying a pair with a target of 1.1232 and a Stop Loss level of 1.1164 if closing is performed above the level of 1.1164. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 31 Oct 2019 04:47 AM PDT GBP / USD - 4 H. On October 4, the GBP / USD pair pushed off the correction level of 61.8% - 1.2836 on the 4-hour chart and resumed the growth process in the direction of the next correctional level of 76.4% - 1.3044. The softening of the Fed's policy, which traders learned last night, slightly increased demand for the British pound, and the main theme for which remains "on pause". However, how long will the pound continue to grow, given the fact that Brexit, by and large, does not approach its final stage, which is the UK's exit from the EU? Today, let's start with economic reports. In Britain, complete information silence remains. No news, except on the topic of Brexit, is received by traders. In America, the situation is slightly better. Yesterday, the third quarter GDP came out in a preliminary estimate, and these figures were significantly higher than negative forecasts. The final value of US GDP in the third quarter is expected to be no lower than 1.9%, while the forecast was only 1.6% y / y. This is good news for the dollar and for bear traders. If the US economy continues to show its resilience and stability, the Fed will no longer need to resort to lowering the key rate. Accordingly, the American currency will be able to climb to the throne once again. And for the British pound, everything still depends on the Brexit outcome. Now, traders are waiting for the election results on December 12. If you consider the last three years in detail, then traders are constantly waiting for something, since Brexit is constantly being postponed, there is no consensus in the Parliament, constant political changes, re-elections, votes of no confidence, and resignations of high-ranking officials. In general, chaos. Therefore, the next chapter of this series should be completed in December, when it will become clear how many deputy mandates the conservatives will receive and how many Labor. It will depend on this whether Boris Johnson succeeds in realizing what he became Prime Minister for, or whether Brexit ends in the most miserable way for himself - a second referendum and cancellation. By the way, it is the repeated referendum that is being talked about more and more often by the media, political scientists, and residents of Great Britain. In turn, Labor leader Jeremy Corbyn sees future elections as a great springboard to transform the country. Brexit, according to Corbyn, can still be canceled, respectively, to avoid a severe blow to the economy of the kingdom. The effect of which will continue for many years to come. In addition, Corbyn believes that the era of conservative rule should end. "For many years, conservatives have reduced funding for vital services and provided tax incentives for the super-rich, it's time for real change," said Jeremy Corbyn. The opposition leader also said: "We will complete Brexit within six months, giving people the right to make a choice between leaving on reasonable terms and maintaining membership." His idea is to follow the will of the people, who, perhaps, within three years have already changed their minds to leave the EU. On the contrary, Johnson insists on the need to exit the EU, according to the 2016 referendum. What to expect today from the pound-dollar currency pair? The pound-dollar pair continues the growth process in the direction of the correctional level of 76.4% - 1.3044. Today, I am expecting just the continuation of moderate growth, since the information background will be extremely weak again. That is, it will not be able to prevent bull traders from buying a pair. At the same time, going above 1.3044 will be extremely difficult. The Fibo grid was built at the extremes of March 13, 2019 and September 3, 2019. GBP / USD Forecast and recommendations for traders: I recommend buying a pair with a target of 1.3044, since it closed at 61.8% with a Stop Loss of 1.2836. I recommend considering the sales of the pair with the target of 1.2668 if consolidation under the last low of bullish divergence is completed. The material has been provided by InstaForex Company - www.instaforex.com |
| Trading plan for EURUSD for October 30, 2019 Posted: 31 Oct 2019 04:02 AM PDT
Technical outlook: The EUR/USD pair inched up closer to the level of 1.1179 level but could not break it today. We are presenting al alternate scenario here. It is quite possible that EURUSD bulls will complete a major boundary on the higher side from 1.0879 through 1.1180 as seen here. With prices failing to break past 1.1180, it remains possible that a flat correction might be underway and drag prices lower towards 1.1000 levels before turning bullish again. Please note that price resistance is at the 1.1250 level while strong support is at the 1.0879 level respectively. A counter trend drop will enable the pair to resume rally much higher. Thus, please take short-term profits on long positions for now and remain flat. Trading plan: Take profit on long positions for now and remain flat. Aggressive traders might want to go short against 1.0879 with target at 1.1000. Then long again. Good luck! The material has been provided by InstaForex Company - www.instaforex.com |
| EUR/USD: Fed supported the markets and euro, while the dollar weakened Posted: 31 Oct 2019 03:26 AM PDT It would seem that what is the difference between the phrases "act according to circumstances" and "monitor the situation in order to determine the trajectory of the bet"? It turns out that significant. In the first case, the Federal Reserve needs only one disappointing report on the American labor market to weaken monetary policy, and in the second, the regulator will need a significant deterioration in macroeconomic indicators, which is difficult to determine by the only release on American employment. Apparently, Fed Chairman Jerome Powell was able to find the right words to calm markets. As a result, the S&P 500 updated historic highs, while Treasury yields and the US dollar fell. On Wednesday, the Fed lowered the interest rate by 25 basis points from 2% to 1.75% for the third time in a year. At the final press conference, the head of the American Central Bank, J. Powell, noted that the current rate is appropriate as long as the US economy is growing at a moderate pace and the country's labor market remains strong. At the same time, the Chairman of the Federal Reserve did not rule out neither monetary easing nor its tightening. Moreover, according to J. Powell, a significant and steady increase in inflation is needed to raise interest rates. Thus, market participants took the comments of the head of the Fed with optimism since managed to convince investors that the S&P 500 could move north not only against expectations of a cut in federal funds rates, but also in the conditions of a pause announced by the Fed. That is, the US economy is still strong, and demand for stocks remains high. In addition, the market believed that the Central Bank managed to save the United States from recession thanks to the preventive easing of monetary policy. Although US GDP growth in the third quarter slowed from 2% to 1.9%, consumer spending expanded 2.5% year by year. However, according to estimates by Bloomberg Economics, GDP of the Eurozone increased by only 0.1% in quarterly terms in the third quarter. Given the existing difference in the US and EU economic growth, the pair EUR / USD should decline, but on the contrary, it is growing. This factor, apparently, has already been put in quotes, that is, it has been won back. Now, reducing divergence leads to the closure of short positions on the euro and its strengthening. It is expected that due to the progress in the Washington-Beijing trade negotiations, as well as the weakening of the risks of disordered Brexit, the gap in the growth rate of US and European GDP will narrow. However, this will take some time. In addition, many problems of the currency block are still far from being resolved. Therefore, the growth potential of EUR / USD seems to be limited by the levels of 1.127-1.135. Therefore, it is possible that the main currency pair reached the bottom near 1.093-1.096 in early October. At the same time, the chances of seeing EUR / USD consolidating in the range of 1.104-1.135 by the end of the year are still quite high. The material has been provided by InstaForex Company - www.instaforex.com |
| Technical analysis of GBP/USD for October 31, 2019 Posted: 31 Oct 2019 03:16 AM PDT Overview: The USD/CHF pair faced strong resistances at the levels of 1.3012. So, the strong resistance has been already formed at the level of 1.3012 and the pair is likely to try to approach it in order to test it again. However, if the pair fails to pass through the level of 1.3012, the market will indicate a bearish opportunity below the new strong resistance level of 1.3012 (the level of 1.3012 coincides with double top). Moreover, the RSI starts signaling a downward trend (saturation around 70), as the trend is still showing strength above the moving average (100) and (50). On the other hand, the price spot of 1.3012 remains a significant resistance zone. Thus, the market is probably indicating a bearish opportunity below 1.3012 for that it will be good to sell at 1.3012 with the first target of 1.2901 in order to test thepivot point again. It will also call for a downtrend in order to continue towards 1.2788. The daily strong support is seen at 1.2788. However, the stop loss should always be taken into account, for that it will be reasonable to set your stop loss at the level of 1.3084. The material has been provided by InstaForex Company - www.instaforex.com |
| Trading recommendations for the EURUSD currency pair - placement of trade orders (October 31) Posted: 31 Oct 2019 02:17 AM PDT It was not an easy day, but we still managed to gain profit. Acceleration of volatility; Fed meeting; Convergence with a key resistance level and much more will be considered in our article. From the point of view of technical analysis, we see an uneasy everyday fluctuation, and a bright rally in the market, where there was a touch of the level of 1.1080 at first, after which a surge of buyers and a jump to 1.1153. In our case, the forecast coincided 100% and the starting point from 1.1120-1.1122 was an excellent platform for new deals for the purchase, as a result of excellent entry and profit on deposit. What do we have besides momentum? - the return of the price back to the resistance area [1.1150 / 1.1180], where the recovery process had previously started. In fact, the recovery process, which lasted seven trading days, fell into existence, and thus, the oblong correction had a new chance to continue moving. In terms of the emotional state of the market, the symptoms of FOMO [Lost Profit Syndrome] reappeared, but so far, these are only prerequisites; however, in the event of a breakdown of the level of 1.1180, an aggravation can occur. In terms of volatility, there is an acceleration that we were already waiting for, citing a three-day slowdown [49 ---> 30 ---> 45 points]. Let me remind you that the theory of slowing down volatility often helps traders to determine the stages of indecision / waiting and the future jump in the market. Analyzing the past hourly chart, we see that the main jump occurred at a time period of 17:00 - 21:00 hours [UTC+00 time at the trading terminal], which completely coincides with the results of the Fed meeting. The minimum value of the day is 1.1080 while the maximum value of the day is 1.1155. As discussed in the previous review, many market participants already had long positions in advance, but at the same time, the point 1.1120 (1.1122) as an opportunity to top up or open new deals can be considered. In this case, the prospect was in the region of 1.1150-1.11180, where the first value was worked out almost immediately. After which there was a partial and complete exit from transactions. Considering the trading chart in general terms [the daily period], we see that the first stage of recovery [1.1180 ---> 1.1080] was also the last. It is difficult to say now whether the oblong correction will continue its formation, since the restoration was unsuccessful. It is worthwhile to understand that the existing return to the limits of the resistance level [1.1180] was against the background of the information flow and emotions, thereby not the fact that we are still able to break through the 1.1180 level and maintain upward interest. First you need to see the formation of quotes within 1.1140 / 1.1180, since in the case of an upward turn of interests, we can see another return to the level of 1.1080. Regarding trends, there are no fundamental changes so far, and we are still in a downward trend. The news background of the past day had a large layer of statistical data, I propose to consider everything in order. In Europe, preliminary data were published on inflation in Germany [from 1.2% to 1.1%] and Spain [0.1%, with a forecast of 0.0%]. At the same time, Germany showed the unemployment rate, where everything is unchanged at 5.0%, with the exception that the number of unemployed in October increased. Moreover, the United States published its first estimate of GDP for the third quarter, where forecasts coincided in terms of a further slowdown in economic growth from 2.3% to 2.0%. At the same time, ADP released a report on the level of employment in the US private sector, where they expected growth of 120 thousand against 135 thousand, but they received data better than expected in the end. According to the ADP report, employment growth amounted to 125 thousand, and the previous indicators changed to 135 thousand ---> 93 thousand. The market reaction to the statistics package was rather sluggish due to a more important event that awaited us later. Thus, the two-day meeting of the Federal Open Market Committee came to an end, where it was announced without further surprise that the interest rate would be reduced from 2.0% to 1.75% again. What is more surprising is another, this is already the third consecutive rate cut this year, and this phenomenon, by the way, is infrequent, and here you will not know whether to rejoice or to be afraid. The decision to reduce the rate, as at previous meetings, was not unanimous: the head of the Federal Reserve Bank [FRB] Kansas Esther George and the head of the Boston Federal Reserve Eric Rosengren opposed. What everyone expected so much was this follow-up press conference with Jerome Powell, where he emphasized the need for rate cuts to help keep the US economy strong in the face of global change. "Today we decided to lower the interest rate for the third time this year. We have taken this step to help keep the US economy strong in the face of global change, as well as provide some sort of insurance against current risks, "a quote from a Jerome Powell press conference. According to the head of the Federal Reserve System [FRS], lowering the refinancing rate may help bring inflation closer to the target level of 2%. At the same time, uncertainty remains regarding the increase in the price growth rate. The Fed release also said that a weakening monetary policy will support the growth of economic activity in the United States and provide conditions for a strong labor market. It can be recalled that before the announcement of the results of the Fed meeting, many eminent media sources spread the rumor that a pause would be voiced in Jerome Powell's words regarding further actions of the regulator, but as we see from the results, this was not done. The reaction of the market to such a strong event was in terms of local weakening of the dollar. Today, in terms of the economic calendar, we have the first estimate of European GDP for the third quarter, where we expect a slowdown in economic growth from 1.2% to 1.1%. At the same time, preliminary data on EU inflation will be published, but everything is not so good there, a slowdown from 0.8% to 0.7%. In the afternoon, there will be data on applications for unemployment benefits: Primary +3 thousand; Repeated -2tys. Further development Analyzing the current trading chart, we see a characteristic stagnation of 1.1164 / 1.1170, where a local overbought formed in the pulse phase, coupled with the fact that the quote is still in the area of the resistance level, the question is ripe where the pullback is and why it is still no? In fact, what we got, the return of the price back, was this on emotions, or on data, time will judge, even though you already know my opinion - emotions and FOMO of pure water. Thus, if the plans include a further upward move. To begin with, formation should occur, and here, a pullback to the side of the level of 1.1140 is still necessary. If this is an emotion, then we will return again to the limits of the first stage 1.1080 over time. Detailing the available time interval per minute, we saw a stretch with a slight upward stroke in the evening. After which comprehension and deceleration, this is what is already happening now. The third stage is restoration, something that has not yet begun. In turn, speculators, having a solid profit, from long positions, went into the fixation phase just at the time of the jump and already the night session. In addition, local deals are being considered at the pullback, but they are also carefully analyzing the level of 1.1180, with a view to further purchase transactions, if such a plot does happen on the market. It is likely to assume that this first pullback is in the direction of 1.1140, where stagnation with a rebound to 1.1180 is possible, as well as temporary accumulation, with a thorough analysis of fixation points, for further short positions. Alternative transactions, that is, to buy, are analyzed in two scenarios: first, the temporary formation of 1.1140 / 1.1180, where the border analysis is carried out; secondly, emotions that will not let the market go and give the opportunity to go higher than 1.1190. Based on the above information, we derive trading recommendations: - Buying positions are considered in case of a clear price fixing higher than 1.1180-1.1190, while maintaining the inertial-emotional course. - Selling positions are considered in terms of a pullback / recovery. If we don't have any deals yet, then you can go around 1.1155, with a prospect of 1.1140. A deeper move is considered according to the circumstances and in any case is lower than 1.1140. Indicator analysis Analyzing a different sector of timeframes (TF), we see that the indicators on the intraday and medium-term time intervals signal an upward trend, which is quite logical due to the current market sentiment. The short-term outlook fluctuates, but still confirms the pullback stage. Volatility per week / Measurement of volatility: Month; Quarter; Year Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year. (October 31 was built taking into account the time of publication of the article) The current time volatility is 19 points, which is the average for this time section. It is likely to assume that in the case of a decrease in the emotional component of the market and sluggish pullback, the volatility will be at low levels in the event of a breakdown of one of the coordinates 1.1140 / 1.1180, an acceleration of volatility may occur. Key levels Resistance Zones: 1.1180 *; 1.1300 **; 1.1450; 1.1550; 1.1650 *; 1.1720 **; 1.1850 **; 1,2100 Support Areas: 1,1080 **; 1,1000 ***; 1.0900 / 1.0950 **; 1.0850 **; 1,0500 ***; 1.0350 **; 1,0000 ***. * Periodic level ** Range Level *** Psychological level ***** The article is built on the principle of conducting a transaction, with daily adjustment The material has been provided by InstaForex Company - www.instaforex.com |
| USDCHF to reach 1st support at 0.9866, potential to bounce! Posted: 31 Oct 2019 02:17 AM PDT |
| What the Fed said 10/30/2019 (Text) Posted: 31 Oct 2019 01:47 AM PDT By lowering the base interest rate by 25 basis points to the target range of 1.50% -1.75%, the US Federal Open Market Committee commented on its decision and the current situation in the country: The Fed notes a moderate increase in economic activity and strong labor market positions due to steady average job growth in recent months and a low unemployment rate. The Fed notes that even though family expenses are growing significantly, the dynamics of the expansion of investments in business structures and export performance still look weak. The Fed continues to assess long-term inflation expectations as stable. At the same time, calculated on the basis of a 12-month period, total inflation and core inflation, which do not take into account energy and food prices, are below 2%. The compensatory effect on inflation from the markets continues to be carried out to a small extent. The Fed seeks, in accordance with its authority, to promote maximum employment and price stability. In light of the impact of global events on economic prospects, and also given the moderate inflationary pressure, the Fed decided to lower the target range of the interest rate for federal funds to 1.50% -1.75%. This action confirms the Fed's view that sustained expansion of economic activity, a stronger labor market and inflation close to the symmetric 2% target level indicated by the Fed are the most likely trends. However, uncertainty regarding the realization of these prospects remains. The Fed will continue to closely monitor incoming information and its economic consequences when designing the appropriate trajectory of the target interest rate range for federal funds. In determining the timing and scale of future regulation of the target interest rate range for federal funds, the Fed will be guided by both the achieved and expected economic progress in comparison with its goals of maximum employment and symmetric inflation at 2%. This approach will be based on a wide range of information, including the parameters of labor market conditions, indicators of inflationary pressures and inflationary expectations, financial and international events. The current monetary policy framework was adopted by a majority vote (8 vs. 2). The final decision was not supported by the President of the Federal Reserve Bank of Kansas City, Esther George and the President of the Federal Reserve Bank of Boston, Eric S. Rosengren, who proposed at this meeting to maintain the target range of interest rates for federal funds 1.75% -2.00%. The material has been provided by InstaForex Company - www.instaforex.com |
| Unsinkable dollar: USD can turn around 360 degrees Posted: 31 Oct 2019 01:45 AM PDT The American currency has recently been under the eye of both the whole world and the national regulator. The Fed has repeatedly tried to weaken it, but the leading asset, time-tested and with a strong global support, is still getting away with it. Thus, experts believe that the current weakening of the greenback, recorded after the third rate cut by the fed – is a temporary phenomenon, and in the future, a rise is worth expecting. Despite a number of negative forecasts related to the Fed rate cut, the dollar remains stable. On Wednesday, October 30, most analysts expected it to weaken. Indeed, the greenback sank significantly after the Fed reduced its rate by 25 basis points (bp). However, many experts also believe that the potential rate cut was laid down in the dynamics of the "American", so it did not come as a shock to them. In addition, the amazing inflexibility and superstability of the dollar causes the genuine amazement of currency strategists. Earlier, the greenback maintained its position, despite the July and September cuts in Fed rates. According to experts at Columbia Threadneedle Investments, the USD will further strengthen against the euro in the next three to six months. They do not exclude the possibility that the "American" will reach parity with the European currency for the first time since 2002. The current market situation, however, is in favor of the euro. On Wednesday, the pair EUR / USD recorded the growth of the European currency against the American one. On Thursday morning, October 31, the euro lost ground slightly. Now, the pair traded within the range of 1.1165–1.1166, demonstrating a tendency to a smooth decline. According to experts, a single European currency took steps to increase at the beginning of the week. This was facilitated by increased risk appetite on world markets and optimism associated with progress in US-Chinese negotiations. The "European" was supported by the current Fed rate cut, but, contrary to the gloomy forecasts of a number of analysts, it did not drown the dollar, but only slightly weakened the world's leading currency. On the other hand, at Columbia Threadneedle Investments, they are confident that three factors will support the greenback this quarter: the Fed's high rate, high inflation in the United States and significant economic growth in the country. Analyzing what was said, experts argue that the rate in the United States, despite yesterday's decrease, is still higher than in several countries. Secondly, domestic inflation in America is much more stable than in Europe. As for the third factor, against the backdrop of a slowdown in global economic growth, the US economy looks more full-blooded than other countries. According to analysts, the dollar usually moves in sync with the key rate, that is, falls when it decreases, but in reality, any options are possible. It happens that a greenback behaves unpredictably. Experts believe that this is exactly the case now, and the dollar can radically change its direction. Moreover, many experts, agreeing that the dollar is supposed to weaken along with the Fed rate cut, are adjusting for the current situation on the other side of the Atlantic. Currently, this theory is breaking down into economic and political instability in the rest of the planet. World central banks, in turn, make harsh and atypical decisions, and more often, negative rates and weakening currencies start to appear. Against this background, the US dollar looks like an island of calm and reliability, which is preferred by the lion's share of investors. Many people compare a greenback with an unshakable rock that is not afraid of financial storms - on the contrary, they temper it. Despite the fact that the "American" is overrated, support is provided by unresolved geopolitical crises. As long as they exist, the dollar will strengthen, analysts are sure. Some of them believe that the American currency is approaching its peak or has already overcome it. However, most currency strategists are sure that waiting for the weakening dollar is pointless, while the situation in Europe leaves much to be desired. At the moment, the "American" feels confident in relation to the Mexican and Colombian pesos, as well as to the Brazilian real, using the Swiss franc for financing along with the Australian and New Zealand dollars. Together with the European currency, the greenback still feels superior. On Thursday, the EUR / USD pair was trading in the range 1.1159–1.11160, having slightly lost its optimism during the morning. At the moment, the pair went on the offensive, returning lost ground. The pair EUR / USD quickly turn between 1.1163-1.1164. There is little that can prevent further strengthening of the dollar, experts are sure due to the fact that greenback is supported by strong economic growth in the United States. To ensure it in 2020, a combination of a number of factors will be required, analysts say. These include stable growth in consumer spending, low rates, a moderately strong dollar and a competent fiscal stimulus policy in the United States, Europe or China. As a result, the American currency can surprise even seasoned experts and market participants. Many expect surprises from it, and more often with a plus sign than a minus. This is largely due to the high growth rates of the American economy, which, despite the signs of a slowdown, are still ahead of other developed countries. Thus, this creates the prerequisites for maintaining demand for US assets and the dollar, experts conclude. At the same time, they are sure that the greenback will be able to turn 360 degrees at any moment, and its dynamics cannot go in the direction that most analysts predict. The material has been provided by InstaForex Company - www.instaforex.com |
| Trading plan for EUR / USD and GBP / USD on 10/31/2019 Posted: 31 Oct 2019 01:45 AM PDT For the third time in a row, the Federal Reserve reduces the refinancing rate, which in itself should be seriously frightening. However, the decision to reduce the refinancing rate from 2.00% to 1.75% did not lead to serious consequences. This is partly due to the predictability of the outcome of the meeting of the Federal Committee on Open Market Operations. Firstly, the decision was not unanimous, as two votes were cast to keep the refinancing rate at 2.00%. Secondly, external factors, such as increasing risks of a slowdown in the global economy, were named the reason for the decline, while the state of the US economy does not cause the Federal Reserve System any concern. On the contrary, it is noted that the labor market continues to be just in excellent condition. Although it is regretted that employment growth, and with it consumer spending, does not lead to a corresponding increase in investment in fixed assets. Moreover, concern was expressed once again that inflation was below the target level of 2.0%. However, it is worth paying attention to the fact that in the press release, the current level of inflation denotes the mark of 1.8%. Jerome Powell repeated exactly the same thing during his press conference. That's only inflation in the United States is 1.7%. In addition, it has been at this level for two months in a row. Given the extreme meticulousness of such structures as the Federal Reserve System, it is difficult to imagine that this is a banal reservation. Most likely, in this way, the Federal Reserve hints that it expects inflation to rise and it does it as if it had no doubts at all. Therefore, we should not wait for further easing of monetary policy. In addition to the meeting of the Federal Committee on Open Market Operations, there were other interesting events yesterday. Which, in many respects, had a beneficial effect on the dollar. Thus, ADP data showed an increase in employment from 93 thousand to 125 thousand, while they predicted growth by only 120 thousand. However, an increase in employment rates was made possible only by revising the previous results, from 135 thousand to 93 thousand. More so, the first estimate of GDP for the third quarter, although it showed a slowdown in economic growth, is still not as strong as expected. The economic growth slowed down from 2.3% to 2.0%, while it was feared that it would fall below 2.0% for the first time since 2016 . GDP growth rate (United States): In Europe, a lot of important data was also published. Thus, in Spain, which is the fourth economy of the euro area, inflation remained unchanged, although they expected it to drop from 0.1% to 0.0%. Meanwhile, in France, which is the second eurozone economy, reported a slowdown in economic growth from 1.4% to 1.3%. Although this is a preliminary estimate, but still, it indicates the extremely low economic growth rates of the Old World as a whole. The flagman of Europe, of which Germany is, reported on the stability of the unemployment rate, combined with a slowdown in inflation from 1.2% to 1.1%. To simply put it, you should not even hope for the possibility of rising inflation in Europe. Inflation (Germany): As you can see, the lack of desire of the dollar to weaken is not surprising, since the situation in Europe is clearly worse than in the United States. Therefore, the dollar may well resume its growth if an excellent opportunity appears, in the form of regular macroeconomic data. However, the statistics in America today do not please us with abundance. In fact, besides the data on applications for unemployment benefits, there is nothing interesting. The total number of these same applications should increase by 3 thousand. Due to this, the number of initial applications is expected to grow by 5 thousand, while the number of repeated ones will decrease by 2 thousand. On the other hand, data on personal income and expenses may increase by 0.3% and 0.2%, respectively. However, it is worth paying attention that income and expenses increased by 0.4% and 0.1% in the previous month, respectively. In other words, on the face of the acceleration of the growth rate of spending, which should lead to higher inflation. Thus, Jerome Powell did not dissemble when he made a reservation about inflation at 1.8%. On the contrary, a very, very many extremely important data will be published today in Europe. Some of which are already out. Thus, the growth rate of retail sales in Germany accelerated from 3.1% to 3.4%, which can be considered as a positive factor. However, they expected acceleration to 3.5%, and even reviewed the previous value for the worse, from 3.2% to 3.1%. Thus, the potential growth of inflation in Europe is decreasing every day. And in confirming this topic, France reported a slowdown in inflation from 0.9% to 0.7%, with a forecast of 0.8%. Now, they are waiting for data from Italy, which is the third economy in the euro area, where unemployment is expected to rise from 9.5% to 9.6%. In addition, Italy is forecasting a slowdown in inflation from 0.3% to 0.2%. But the most interesting are the pan-European data. Nevertheless, the only thing that doesn't bother is the unemployment rate, which should remain at the previous level of 7.4%, but everything else makes you tear the hair on your head. The first estimate of GDP for the third quarter may show a slowdown in economic growth from 1.2% to 1.1%, and preliminary data on inflation, its decline from 0.8% to 0.7%. At the same time, given what data are released for the largest countries in the euro area, there are concerns that the data will be worse than forecasts. Inflation (Europe): The euro / dollar currency pair, due to the general informational background, managed to draw a remarkable impulse candle, practically returning us to the limits of the previously found resistance level of 1.1180. The subsequent fluctuation reflects a slowdown, but most likely, it is an intermediate point before the pullback, which in this case is very possible. The pound / dollar currency pair was more measured in action, in comparison with the single currency, but here, there was an upward move. It is likely to suggest that a characteristic slowdown is possible in the absence of an explicit pass of the level of 1.2955. In addition, slowing down with variable boundaries is also possible relative to values.  |
| Posted: 31 Oct 2019 12:29 AM PDT The reaction of the market to the Fed's decision to cut the key interest rate by 0.25% with a decrease in the range to 1.50% -1.75% was expected by the markets. The regulator decided to lower rates and, most importantly, announced that it would "monitor the incoming information and its impact on the forecast for the economy." In fact, he also made it clear that he is stopping, at least for now, since the decline in rates and their dynamis will be fully influenced by the incoming economic data. At the same time, the market initially reacted to the published communique of the bank by a sharp increase in the US dollar, but then the comments of J. Powell, the head of the Federal Reserve, served as the basis for a sharp reversal of sentiment and the same rapid weakening of the US dollar. Today, as they say, after the fact, explanations of this appear as a slight change in the assessment of the situation by the markets in favor of the fact that now all attention will be fully focused on the emerging economic data and they just also can appear not strongly cheerful. In our opinion, there is one more explanation of yesterday's "meat grinder" in the currency exchange market. It can be attributed to conspiracy theological, but, unfortunately, this is not so rare. It is likely that on Wednesday, major players "played" against the market. It should be understood that everyone expects the Fed's decision to actually suspend the process of cutting rates, which could clearly support the dollar. On the other hand, at Powell's controversial performance, these "players" began to play against the market, reaping a bountiful harvest. In any case, the dynamics of the euro / dollar pair clearly demonstrates this. Thus, the single European currency has no reason for growth amid the expected broad incentives, a more noticeable slowdown in the European economy, and what else should be noted that the ratio of interest rates of the ECB and the Fed is not in favor of the euro, although it grew upwards. Now, after the "bloodbath", the attention of the market will be focused on the publication of data on employment in the United States, and if it turns out to be at least not much better, this could lead to a local reversal of the dollar and its active intraday growth in the currency exchange markets. Forecast of the day: The EUR/USD pair is trading above the level of 1.1150. If it does not grow above 1.1180, there is a risk of it falling below 1.1150, which could lead to its correction to 1.1120. In addition, on Friday, if the data on employment in the States are higher than expected, this fall may continue to 1.1070. The AUD/USD pair began to implement a double bottom reversal pattern. However, before price growth resumes, it can adjust to the level of 0.6885 and stay above this level.  |
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