Forex analysis review |
- Forecast for AUD/USD on October 15, 2020
- Forecast for USD/JPY on October 15, 2020
- Hot forecast and trading signals for GBP/USD on October 15. COT report. Traders wait and panic over uncertainty surrounding
- Hot forecast and trading signals for EUR/USD on October 15. COT report. Bears attack when there is no fundamental background
- Overview of the GBP/USD pair. October 15. The EU summit is not an "X-hour" for the pound. Negotiations on the "deal" can
- Overview of the EUR/USD pair. October 15. Republicans could lose their majority in the Senate.
- The moment of truth for EUR/USD. The Central Bank is ready to continue the euro's growth
- We continue to hold the Medium-term purchases of GBP USD
- Main currency instruments EUR/USD & GBP/USD - H4. Comprehensive analysis of APLs & ZUP traffic options from October
- Oil prices fall due to frightening forecasts for COVID-19
- Analytics and trading signals for beginners. How to trade EUR/USD on October 15? Getting ready for Thursday session
- Gold price respects support and bounces as expected.
- Ichimoku cloud indicator Daily analysis of EURUSD
- USDJPY forming another lower high
- October 14, 2020 : EUR/USD Intraday technical analysis and trade recommendations.
- October 14, 2020 : GBP/USD Intraday technical analysis and trade recommendations.
- October 14, 2020 : EUR/USD daily technical review and trade recommendations.
- Gold's growth is restored
- GBP/USD: turbulence triggered by rumors, gossip, and leaked insider information
- Investment in shares of Walmart, China Southern Airlines, Nestle still profitable
- GBP/USD analysis for October 14. EU leaders meeting tomorrow to discuss Brexit
- EUR/USD analysis on October 14. The wave pattern becomes more complex and the instrument may resume its decline to the 15th
- Dollar strengthens, while euro and pound risks further fall
- Evening review on October 14, 2020
- US stock market remains unstable
| Forecast for AUD/USD on October 15, 2020 Posted: 14 Oct 2020 08:02 PM PDT AUD/USD The Australian dollar retested the 0.7190 level from below on Wednesday, and immediately retreated from it. The signal line of the Marlin oscillator continues to decline in the negative area. The 0.7055 target, which we previously defined, has become even closer. The MACD line is turning down, this is a sign of an emerging medium-term (up to six months) decline. The price went under the MACD line on the four-hour chart, the Marlin signal line turned downward from the border of the growth territory, the downward trend is strengthening. We are waiting for the price at the first target of 0.7055.  |
| Forecast for USD/JPY on October 15, 2020 Posted: 14 Oct 2020 08:01 PM PDT USD/JPY The Japanese yen strengthened by 30 points yesterday, slightly falling short of the support of the embedded price channel line (104.98). The price is currently trying to go back to the area above 105.30. But it is not enough for the price to only gain a foothold above this level; at present, the balance line (red indicator line) is acquiring a strong value, which kept the price from growing for the last week. The MACD line has been holding back growth since September. All this poses a difficult task for the price to overcome both of these indicator lines and also gain a foothold above them. And this is so that we could reach the relatively near target of 106.25, formed by the embedded price channel line. The Marlin oscillator is still in a depressed mood; it has not yet returned to the positive zone. If the price goes beyond the area below the 104.98 level, the price may continue to decline to the target of 103.75 formed by the high of May 2013.  |
| Posted: 14 Oct 2020 07:07 PM PDT GBP/USD 1H The GBP/USD pair quickly and sharply recovered all the losses of the previous day on October 14. Thus, the pair passed a total of 400 points during the last two trading days. This is a very high volatility even for the pound/dollar pair. The price managed to get out of the rising channel, so the upward trend was canceled. Instead of a channel, a new descending trend line has been formed, which is where the price is staying at this time. A rebound from this trendline will significantly increase the likelihood of a resumption of the downward trend. Bears need this to rebound off the trend line, and at the same time from the 1.3004-1.3024 area. If the rebound is executed, we will expect quotes to fall to the support area of 1.2873-1.2888. At the same time, the Kijun-sen and Senkou Span B lines may not offer any resistance to the price. GBP/USD 15M The lower linear regression channel began to turn to the upside on the 15-minute timeframe, but the movements of the last two trading days are such that it is time to talk about panic, but not about calm, measured trading. COT report A new Commitments of Traders (COT) report on the British pound showed that non-commercial traders were practically resting between September 29 and October 5. The pound increased by about 140 points in this period, which, in principle, is not so much, a little more than the average daily volatility of this currency. The "non-commercial" group of traders opened 1,093 Buy-contracts (longs) and closed 435 Sell-contracts (shorts) during this time. Thus, the net position of professional traders slightly increased by 1,500 contracts. However, as with price changes, these changes in the mindset of professional traders are purely formal. It is impossible to draw any conclusions or predictions about the pair's future movement based on them. In general, the "non-commercial" group has been decreasing its net position since the beginning of September, which means that their bearish mood is strengthening. In principle, this particular behavior from large traders completely coincides with what is happening on the market during this period of time, but despite the pound's growth in the last few trading days, it still goes back to falling. Nonprofit traders have more sell contracts, and UK fundamentals remain extremely weak and dangerous for the pound in terms of the outlook for the rest of 2020 and all of 2021. No news from the UK on Wednesday, October 14. Markets continue to wait for accurate and clear information on the negotiations between London and Brussels, however, on the eve of the EU summit, which starts today, things have frankly begun to get tense. And when the markets are nervous, there is no question of any calm movements. According to the results of the summit, absolutely different results may be announced by today or tomorrow. Further trading of the British pound will be conducted depending on these results. Accordingly, now there is no point in guessing how the summit might end and what decisions will be made. Even EU and British officials themselves do not know if the deal will end up or not. Accordingly, the pound, even from the current positions, can suddenly move up and down again. In addition to the EU summit, no macroeconomic events are scheduled in the United States or Great Britain today. However, do not forget that topics such as coronavirus in the UK or US elections can also have an impact on the pair's movement. However, no one can predict what the next news will be on one of these topics, which means that the degree of uncertainty of further price movement increases. We have two trading ideas for October 15: 1) Buyers for the pound/dollar pair have released the initiative from their hands. Therefore, long positions are not relevant right now, however, if the new trend line is overcome, you can consider them and aim for 1.3105 and 1.3177. Take Profit in this case will be from 50 to 120 points. However, we draw the attention of traders to very frequent changes in the direction of movement, so we recommend trading in small lots. 2) Sellers tried to seize the initiative again, but today they released the pair up again. If they manage to stay below the trend line and a rebound follows from it, then it will be possible to open new short positions in small lots with the targets of the Kijun-sen line (1.2972) and Senkou Span B (1.2925), support level of 1.2903 and the support area of 1.2873-1.2888. Take Profit in this case can be up to 140 points. Explanations for illustrations: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 14 Oct 2020 07:05 PM PDT EUR/USD 1H The euro/dollar pair "crawled" to the support area of 1.1701-1.1725 and, barely touching it, immediately rebounded on the hourly timeframe on October 14. Thus, on the one hand, we see that the price has settled below the ascending channel, which indicates a change to a downward trend, on the other hand, traders failed to overcome the first obstacle on their way. Accordingly, current prospects for a succeeding downward movement appear rather vague. Bears need to tighten up and overcome the area of 1.1701-1.1725, within which the Senkou Span B line also lies, which is also quite strong support. At the same time, buyers released the initiative, and there is no question of returning to an upward trend either unless the price settles above the Kijun-sen line. EUR/USD 15M Both linear regression channels turned down on the 15-minute timeframe, which fully corresponds to the picture of what is happening on the hourly timeframe. The lower charts do not provide any signs of completing the correction cycle on the hourly timeframe. COT report The EUR/USD pair has risen in price by about 120 points during the last reporting week (September 29 - October 5). But in general, there are still no significant price changes for the pair. In fact, all trades are held in a horizontal range of 250-300 points. Thus, data from any Commitment of Traders (COT) report can only be used for long-term forecasting. The latest COT report showed that non-commercial traders, which we recall, are the most important group of traders in the forex market, closed 10,784 Buy-contracts (longs) and opened 2,078 Sell-contracts (shorts). Take note that two weeks earlier, the "non-commercial" group was relatively active in building up long positions, but now it is decreasing its net position for the second consecutive week. This may indicate that the upward trend for the pair is over. Or it is about to end. We have already said that the lines of the net positions of the "commercial" and "non-commercial" groups (upper indicator, green and red lines) diverge strongly when a trend change occurs. If this is the case, the peak point of the upward trend will remain at $1.20. The net position of non-commercial traders was at its highest (green line) at this point. After reaching this level, it falls steadily. Thus, the pair may try to make another upward breakthrough as a final assault on the bulls, but you should hardly expect the pair to go much higher than the 20 figure. No macroeconomic background for EUR/USD on Wednesday, October 14. The only report of the day that could attract the attention of traders is the eurozone industrial production data for August. However, this report showed that the growth was only 0.7% in monthly terms, while the forecast was +0.8%. Thus, the fact that it nearly coincided with the forecast does not always provoke traders to react strongly to it. Therefore, from a fundamental point of view, it was inexplicable when the US dollar strengthened (the dollar gew against the pound) the day before yesterday. In addition to this is when the greenback fell yesterday (it also fell against the pound). Consequently, the reasons, if any, lie either in the United States, or are precisely connected with the US currency. However, the only report that was published in the US on Tuesday was the inflation report, which could not cause a strong rise in the dollar. Because its values were not optimistic or strong. Moreover, traders have been ignoring most of the macroeconomic reports lately. There is no reason to believe that the recent US inflation report was an exception. But there was no more general news on Wednesday at all. Not from US President Donald Trump, not from Democrats, not from Republicans, not from Federal Reserve Chairman Jerome Powell, not from US Treasury Secretary Stephen Mnuchin, not from US presidential candidate Joe Biden. We have two trading ideas for October 15: 1) The pair has left the ascending channel, so buyers are not dominant in the market right now. You can consider taking new long positions only if the quotes return above the critical line (1.1775) and then you can aim for the resistance level of 1.1868 and even then, you should only take them in small lots. Take Profit in this case will be up to 80 points. 2) Bears have now made another attempt to start forming a downward trend, but immediately failed around 1.1720. So now sellers need to pressure the area of 1.1701-1.1725 and only after that should you open new sell positions while aiming for the support level of 1.1664. In this case, the potential Take Profit is up to 30 points. Not much, but the current volatility is not too high. You can also try to trigger a rebound from the Kijun-sen line, but in small lots while aiming for 1.1720. Explanations for illustrations: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 14 Oct 2020 05:23 PM PDT 4-hour timeframe
Technical details: Higher linear regression channel: direction - downward. Lower linear regression channel: direction - upward. Moving average (20; smoothed) - upward. CCI: 55.2764 The British pound sterling paired with the US currency collapsed by almost 200 points on October 13. However, on October 14, it began to recover. The pullback of the GBP/USD pair quotes to the top looks quite logical, since the drop itself was quite strong, and most importantly – groundless. First, it is worth noting that the reasons for the fall of the British currency on the 13th do not lie in Brexit or negotiations between Brussels and London. Simply because there was no news on these topics, and especially no disappointing news. Secondly, the pound/dollar pair continues to be tossed from side to side, and this can be seen even with a cursory glance at the 4-hour timeframe. Over the past two weeks, the pair has fallen sharply by more than 100 points at least 3 times (before the last drop). Thus, the upward movement may resume today. How does this upward movement fit in with the current fundamental background? Simple. The fundamental background from the UK is now simply ignored. Otherwise, we would not have seen the strengthening of the British currency in principle. Moreover, this background has remained unchanged in recent weeks. Participants in the negotiation process, all as one, regularly report that there is not enough progress on key issues. Today, on October 15, the EU summit begins, during which any decision can be made. Of course, it would be just fine if the summit participants clearly stated: "There will be no deal." Or Vice versa. "The deal is done!". However, we do not expect this option, if only because the negotiations were extended for 1 month with the consent of both sides. In other words, the final results of the negotiations should be expected by November 15, not October. Today, all participants in the summit can again discuss issues related to the future relationship between the Alliance and the Kingdom but do not make any decisions. Moreover, what prevents London and Brussels from continuing negotiations later on November 15? Boris Johnson, of course, can set new deadlines at least every month, however, they are well aware that without a free trade agreement, it will be bad for both the British and Europeans. And everyone understood from the very beginning that in 9 months (and even 6 or 7 months), it is impossible to agree on such a large transaction. Thus, nothing will prevent the parties from continuing negotiations, for example, in 2021. Moreover, in 2021, both sides will have additional motivation to make concessions and not delay negotiations, as both sides will begin to feel the charms of trade under WTO rules with each other. Thus, with a high probability, today will not be another "X-day" for the UK and the British pound. And negotiations on the "deal" can safely continue for several years, becoming a full-fledged separate season of the series called "Brexit", which has not left the TV screens for 4 years. As for the American fundamental background, it is now more acute on the agenda. Simply put, the Brexit situation has been going on for 4 years. So one or two months doesn't solve anything. But elections in America take place every 4 years and they are now only three weeks away. Therefore, the markets pay more attention to the elections and political "gestures" in the United States. Although even this conclusion does not look completely unambiguous. For example, since the beginning of the "coronavirus crisis", the US dollar has become cheaper and paired with the pound sterling. This was followed by a very impressive pullback (from September 1 to September 23). That is, the pound sterling fell significantly at a time when the information was received about the next failures in the negotiations on the "deal" and the "Johnson bill". The current upward movement can generally be regarded as a purely technical correction against the fall between September 1 and 23. If this is the case, then in the near future, the fall in the British currency quotes may resume. Now, in general, there is an ambiguous situation, when both in the United States and in the UK, the fundamental background is so bad that it is impossible to make a clear conclusion that any of the currency should become cheaper. Therefore, we still recommend paying more attention to technical factors and using foundation analysis only as a supplement to technical analysis. Meanwhile, in the UK, not only the incidence of "coronavirus" is growing, but also the death rate. It is reported that more than 17 thousand new cases were recorded yesterday, which is almost 3 times higher than the peak values at the height of the first "wave" of the epidemic this spring. Also, 143 people died, which is also a very high figure. Amid the spread of the epidemic in the foggy Albion, the Labor Party is calling for a "lockdown". Labor leader Keir Starmer said that "The UK government has lost control of the coronavirus and is no longer following scientific advice and has no reliable plan to reduce disease rates." Keir Starmer called on the government to impose a two or three-week quarantine. The same opinion is shared by healthcare professionals. Yvonne Doyle, Director of the Public Health Service, believes that "the number of infections among older people is increasing, which leads to an increase in the number of hospitalizations". Andrew Hayward, Professor of Infectious Disease Epidemiology at University College London, says it is not surprising that the number of cases continues to rise, as "the British authorities have not introduced tougher measures to counter COVID-2019". Thus, the epidemiological situation continues to heat up in the UK, which may also put pressure on the pound in the near future. Even now, it is clear that traders of the pound/dollar pair are quite nervous and may even panic. Thus, each new negative news from the Foggy Albion clearly will not add to their calm and confidence.
The average volatility of the GBP/USD pair is currently 127 points per day. For the pound/dollar pair, this value is "high". On Thursday, October 15, therefore, we expect movement inside the channel, limited by the levels of 1.2899 and 1.3153. A reversal of the Heiken Ashi indicator downwards signals a new round of downward correction or downward movement. Nearest support levels: S1 – 1.3000 S2 – 1.2970 S3 – 1.2939 Nearest resistance levels: R1 – 1.3031 R2 – 1.3062 R3 – 1.3092 Trading recommendations: The GBP/USD pair has started a new strong upward movement on the 4-hour timeframe. Thus, today it is recommended to stay in long positions with targets of 1.3062, 1.3092, and 1.3123 as long as the Heiken Ashi indicator is directed upwards. It is recommended to trade the pair down with targets of 1.2909 and 1.2899 if the price returns to the area below the moving average line. The material has been provided by InstaForex Company - www.instaforex.com |
| Overview of the EUR/USD pair. October 15. Republicans could lose their majority in the Senate. Posted: 14 Oct 2020 05:23 PM PDT 4-hour timeframe
Technical details: Higher linear regression channel: direction - sideways. Lower linear regression channel: direction - sideways. Moving average (20; smoothed) - downward. CCI: -67.4180 For the EUR/USD pair, the third day of the week was again held in relatively calm trading, although the pair was losing its positions quite cheerfully a few days earlier. The US dollar took the initiative from the European currency, however, there are big doubts about that for a long time. After all, the fundamental background for the US currency remains quite strong and not in its favor. As before, things are moving smoothly towards elections, the results of which cannot be predicted with a 100% probability. Still, Democrats and Republicans cannot agree on a new package of stimulus measures, which slows down the recovery of the American economy. Thus, the strengthening of the dollar may be only corrective and temporary. Even though the European currency has risen in price by 1,300 points in the last six months, it remains the leader in the pair with the US currency. Thus, despite overcoming the resistance, the price may stop falling soon and resume its bullish trend. All conversations concerning America are still connected with the presidential election. Maybe someone has already had enough of this topic, and someone considers it not the most important for the currency market, however, there is no denying the fact that the new president will determine the country's recovery and development in the next four years. Its foreign and domestic policy will depend on it. And thanks to Donald Trump, the whole world realized how important it is to be able to negotiate with your partners and competitors, and not just put pressure on them, and then declare that everyone in this world "treats America unfairly". Trump's political ratings continue to fall, and we talked about this a few months ago. They said that it is impossible to remove responsibility from Trump for what is happening now in America and shift it to China. We believe that everything in this world is interconnected, thus, the results of the government that Trump has now are fully deserved results. After all, isn't it surprising that the "coronavirus" that escaped from China dealt the most severe blow to the States that provoked the trade war with China? We are not saying that a trade war could have been avoided if Trump had not been president. Probably not. But perhaps it would have been more civilized? As we have already said, the political ratings of the current US President continue to fall, and Joe Biden – to grow. Although Biden himself does almost nothing to increase his popularity. But since there are only two candidates, if the popularity of one falls, the popularity of the second increases. Thus, Biden owes his popularity primarily to Trump. Such is the paradox. And along with this paradox, there is another very interesting fact. If Trump suffers not just a few "electoral votes" in the election, but a major defeat (and this is what the results of most opinion polls and research now indicate), this may mean that the Republicans will lose not only the president but also the majority of seats in the US Senate. How does it work? On November 3, not only presidential elections will be held, but also elections to the Senate and the House of Representatives. Of the 100 senators who are represented in the Senate, 33 will be re-elected. Thus, the Democrats, who are currently several votes behind in the Upper House, can also overtake the Republicans. Research shows that over the past 10 years, Senate elections in all states of the country were held a total of 139 times, and in 88% of cases, the winners of the elections were the candidates of the same party who won the last presidential election. There is even a forecast that according to the results of the Senate and presidential elections, the number of seats in the Senate for Democrats will be 51, that is, in any case, more than for Republicans. And this is almost total control over the country, as Boris Johnson has in the UK, who managed to form a "majority government". If in the UK, people voted for Johnson and the Conservatives "just to finish Brexit faster" (which they may regret now) last year, then Americans can vote for Biden and Democratic senators "just not to vote for Trump". All the latest social studies and statistical simulations show that Biden will not just win, but will win by a significant margin. It is expected that he will get 370-400 "electoral votes" with the necessary 270. Well, Donald Trump, in our opinion, is currently trying to "catch up with the outgoing train". Throughout 2020, the most important year in terms of future elections, the US president made absurd statements, made mistakes and miscalculations, and did not inspire any confidence either by his actions or by his statements. Therefore, his last sluggish attempts to prove that the "coronavirus" is not so terrible, that the Americans are waiting for a new "Golden era" with him, and so on, are already of very little importance. We also support the general opinion that Joe Biden will win, and even the appointment of another Republican chief justice will not help Donald Trump since the case is unlikely to reach the courts if the Democrat wins by a large margin. And for the US currency, all this means that times are changing from dark to light. Of course, it is impossible, especially now, to say unequivocally that the country will flourish under Biden. However, there was a rise under Barack Obama (a Democrat), and Joe Biden was the Vice President under Obama. Therefore, we can assume that the economic, epidemiological, and foreign policy situation will improve under a Democrat. Thus, the US currency may even begin to be in demand if the probability of a Biden victory continues to remain high. It should be noted that even the first round of TV debates did not help Trump increase his ratings. Most likely, the same thing will happen in the third round (second = canceled). Trump simply does not have any trump cards that he could use in the fight against Biden. Therefore, he can only exert moral pressure, interrupt, threaten, in general, do everything that he has done over the past 4 years.
The volatility of the euro/dollar currency pair as of October 15 is 60 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1691 and 1.1811. A reversal of the Heiken Ashi indicator back down may signal the resumption of a downward movement. Nearest support levels: S1 – 1.1719 S2 – 1.1658 S3 – 1.1597 Nearest resistance levels: R1 – 1.1780 R2 – 1.1841 R3 – 1.1902 Trading recommendations: The EUR/USD pair fixed below the moving average, changing the trend to a downward one. Thus, today it is recommended to open new sell orders with targets of 1.1719 and 1.1691 after the Heiken Ashi indicator turns down. It is recommended to consider buy orders if the pair returns to the area above the moving average with the first targets of 1.1811 and 1.1841. The material has been provided by InstaForex Company - www.instaforex.com |
| The moment of truth for EUR/USD. The Central Bank is ready to continue the euro's growth Posted: 14 Oct 2020 04:51 PM PDT A support area at the level of 1.1735 was built yesterday. This is the zone where the future of EUR/USD will be determined in the first half of October. The closing of trading last day occurred above the specified mark, which may become the reason for the formation of an upward pattern in the coming days. The first growth target will be the maximum of the current week, ergo some purchases must be closed if it is retested or renewed.
The same type of patterns for holding the ECB (European Central Bank) zone is being formed for about three weeks in a row now. The strengthening of the euro exchange rate is supported by the national bank, which indicates the need to find favorable prices for the purchase of the instrument as long as the banking zones act as supports. In order to change the medium-term direction of trade, it is necessary to close today's trading below the level of 1.1735. This will allow us to consider the formation of a local zone of accumulation and adjustment to a downward impulse. Work towards the weakening of the Euro will take place until the lower banking zone 1.1639, where full fixation of sales will be required. The descending pattern is auxiliary as long as the pair is trading above the 1.1735 level.
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| We continue to hold the Medium-term purchases of GBP USD Posted: 14 Oct 2020 04:51 PM PDT The pair has been forming an upward trend for the past three weeks. The growth yesterday was another confirmation of the impulsive nature of growth. Any decline in the pair should be considered as an opportunity to buy the instrument. The 50% correction level becomes an interesting level for opening a long position after yesterday's growth. Compensation for half of the upward movement will allow you to enter the purchase with minimal risks. The first growth target remains the weekly CZ 1.3202-1.3154, which was determined three weeks earlier and still remains the center of attraction for the price. After testing the specified zone, the probability of a large offer will increase, so you need to close most of the purchases after testing this zone. An important factor for continued growth will be the closing of one of the US sessions above the level of 1.3202. This will allow you to keep some of your purchases. The medium-term growth target is the opening level of last month's trading. At this point, you need to set a take profit to fix all possible purchases.  |
| Posted: 14 Oct 2020 04:51 PM PDT Operational scale Minute (H4 time frame ) What's next? Will there be growth in the value of the US Dollar? Overview of EUR/USD & GBP/USD movement options in the h4 timeframe from October 15, 2020. ____________________ Euro vs US Dollar The development of the movement of the single Euro in the EUR/USD pair from October 15, 2020 will continue depending on the development and direction of the breakdown of the range:
The breakdown of the support level of 1.1750 on the initial SSL Minute line is an option to continue the downward movement of EUR/USD to the borders of the channel 1/2 Median Line Minuette (1.1730 - 1.1700 - 1.1670). This has a prospect of reaching the equilibrium zone (1.1625 - 1.1575 - 1.1525) of the Minuette operational scale. The breakdown of the resistance level of 1.1785 on the starting line of the SSL Minuette operational scale pitchfork will make it relevant to develop the upward movement of the Euro towards these goals:
with the prospect of reaching the borders of the 1/2 Median Line channel (1.1895 - 1.1960 - 1.2020) of the Minute operational scale. ____________________ Great British Pound vs US Dollar The development of the movement of the Pound in the GBP/USD pair, from October 15, 2020, will also occur depending on the development and direction of the breakdown of the range:
If the support level 1.3027 on the starting line SSL Minuette will direct the movement of the Pound downward to the initial line SSL Minute operational scale fork (1.2915), the breakdown will be the actual achievement price of the channel borders 1/2 Median Line (1.2820 - 1.2745 - 1.2675) and equilibrium zone (1.2710 - 1.2615 - 1.2515) of the Minuette operational scale forks. The breakdown of the resistance level at 1.3055 to the control line UTL Minuette operational scale fork will subsequently update the local maximum to 1.3082. This will make it possible for the Pound to achieve borders of the channel 1/2 Median Line (1.3135 - 1.3240 - 1.3355) of the Minute operational scale pitchfork. ____________________ The review is compiled without taking into account news background and the opening of trading sessions of the main financial centers. This is not a guide to action (placing "sell" or "buy" orders). The formula for calculating the dollar index: USDX = 50.14348112 * USDEUR 0.576 * USDJPY 0.136 * USDGBP 0.119 * USDCAD 0.091 * USDSEK 0.042 * USDCHF 0.036. where the power coefficients correspond to the weights of currencies in the basket: Euro — 57.6 % Yen — 13.6 % Pound sterling — 11.9 % Canadian dollar — 9.1 % Swedish Krona — 4.2 V % Swiss franc — 3.6 %. The first coefficient in the formula brings the index value to 100 on the start date (March 1973), when the main currencies began to be freely quoted relative to each other. The material has been provided by InstaForex Company - www.instaforex.com |
| Oil prices fall due to frightening forecasts for COVID-19 Posted: 14 Oct 2020 04:51 PM PDT Throughout the day, the news about the rapid fall in oil prices is seen in major media today. This negative trend is due to concerns that a new wave of COVID-19 will hinder the recovery of demand. The price of December futures for Brent North sea oil mix fell by 0.49% and reached the level of $42.24 per barrel. Remember that at the close of trading on Tuesday, these contracts rose by 1.8%. The price of November WTI futures decreased by 0.62% and is worth $39.95 per barrel today. On Tuesday, the futures have risen in price for 1.95%. This decline was the result of investor concerns that an uncontrolled increase in Coronavirus cases in the United States and Europe could greatly reduce fuel demand and quarantine restrictions will slow the economic recovery. Today, oil prices look more vulnerable than ever. News states that COVID-19 continues to spread across Europe at an unimaginable speed and shows a positive trend towards growth in America. The main question here is how to effectively control the spread of the virus and how negatively the larger restrictions will affect economic activity. Investors' concerns can hardly be called groundless because OPEC also expressed its concern about demand in the October report. The organization announced a forecast for a drop in global oil demand in 2020. It will decrease by 9.5 million barrels per day compared to last year. In addition, a long-term forecast for 2021 was made, where the figures slightly decreased in comparison with the organization's earlier statements. OPEC now expects demand to increase by 6.5 million barrels per day next year, instead of 6.6 million in the previous possible scenario. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 14 Oct 2020 02:25 PM PDT Hourly chart of the EUR/USD pair The EUR/USD currency pair started an upward correction on Wednesday, October 14, as we expected in the morning. However, before doing so, the pair's quotes tried to continue the downward movement. A very interesting and remarkable situation has developed in which the MACD indicator has discharged at a non-rising price, and then it moved down again after a small downward impulse. In the morning, we warned novice traders that they should wait for the MACD indicator to discharge to zero. Since this did not happen, there was no need to open short positions on a new sell signal. Moreover, the signal, as expected, turned out to be false. After quotes slightly fell, the price immediately turned to the upside and began an upward correction, which could end near the 1.1764 level. If this is the case, then a new reversal of the MACD indicator can be regarded as a sell signal that can be worked out. The nearest targets for sell positions are the levels of 1.1711 and 1.1696. No macroeconomic background for the pair today. Traders had nothing to pay attention to during the day. There was a fairly important sign, but secondary in fact - a report on industrial production in the eurozone, but its real value almost coincided with the forecast, so no reaction followed. In addition, European Central Bank President Christine Lagarde delivered a speech today, however, she did not mention anything important, as we expected. The price jumped 30 points in the afternoon, which can hardly be considered a reaction to any event. We are inclined to believe that today's trading was held on pure technique. By the way, volatility has not been very high in recent days. Lagarde is scheduled to speak again on Thursday, October 15. Recently, the ECB president speaks almost every day. And it is clear that she does not provide traders with new and important information. Thus, most likely, Lagarde will not report anything important tomorrow as well. Data on the number of applications for jobless benefits in the United States is also set to be released on Thursday, which many consider an absolute indicator of unemployment. The number of secondary applications may be reduced from 10.976 million to 10.7 million. So in any case, the reduction is good for the US economy and the dollar. However, markets are unlikely to process this report. Most likely, technical and political factors will remain in first place. Recall that the presidential election is approaching in America, and Democrats and Republicans still can not agree on a new package of assistance to US citizens, unemployment and the most affected by the coronavirus crisis sectors of the economy. Possible scenarios for October 15: 1) Buy positions on the EUR/USD pair have ceased to be relevant at the moment, since the pair has left the ascending channel and will now form a new downward trend. Thus, in order to consider long deals, one should wait for new technical patterns, such as trend lines or channels, that would support the upward movement. 2) Sell positions are current at the moment. An upward correction (albeit a small one) has taken place, so now you should wait for the MACD indicator to turn to the downside to open short positions with targets at 1.1711 and 1.1696. If the reversal does not follow in the next few hours, then it will be much more difficult to track it further, since it is already at night for many traders. Nevertheless, in the morning we will conduct a new analysis of the situation and make new recommendations. On the chart: Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now. Up/down arrows show where you should sell or buy after reaching or breaking through particular levels. The MACD indicator (14,22,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines). Important announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time. The material has been provided by InstaForex Company - www.instaforex.com |
| Gold price respects support and bounces as expected. Posted: 14 Oct 2020 01:04 PM PDT Gold price today tested the key support and stop level at $1,882. Price bounced off the support area and is now back above $1,900. However bulls will need to continue to support price and show more strength by breaking above $1,912. If we do not see any sign of strength soon, I expect price to break below $1,882.
Red rectangle - bounce target Gold price is still inside the bullish channel. Price bounced off the key support shown by the green rectangle in the chart above. Price needs to continue making higher highs and higher lows if we are going to achieve our target at the red rectangle. A break below $1,882 will open the way for a move towards recent lows at $1,850. The material has been provided by InstaForex Company - www.instaforex.com |
| Ichimoku cloud indicator Daily analysis of EURUSD Posted: 14 Oct 2020 01:00 PM PDT EURUSD yesterday broke below the tenkan-sen and kijun-sen indicators. Price is bouncing today but still below the key indicators. Current price action favors a deeper pull back. Bulls need to recapture the 1.1770 level.
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| USDJPY forming another lower high Posted: 14 Oct 2020 12:55 PM PDT USDJPY managed to rise all the way to 106.11 last week but this week JPY is stronger and pushing price lower. Technically the rejection at 106 and reversal are a bearish sign. USDJPY could continue lower towards the major support area of 104.70-104.50.
Red line- resistance Pink line - longer-term resistance USDJPY got rejected at the first trend line resistance and is pulling back down. The chances of breaking eventually below 104.50 are high. Such a break down will put pressure on price and we could see a fast decline towards 103. This week's high at 105.80 is key resistance. A weekly close above this level will be a bullish sign for the following week. The material has been provided by InstaForex Company - www.instaforex.com |
| October 14, 2020 : EUR/USD Intraday technical analysis and trade recommendations. Posted: 14 Oct 2020 09:19 AM PDT
The EURUSD pair has failed to maintain enough bearish momentum below 1.1150 (consolidation range lower zone) to enhance further bearish decline. Instead, bullish breakout above 1.1380-1.1400 has lead to a quick bullish spike directly towards 1.1750 which failed to offer sufficient bearish pressure. Bullish persistence above 1.1700-1.1760 favored further bullish advancement towards 1.1975 where some considerable bearish rejection has been demonstrated. The price zone around 1.1975-1.2000 ( upper limit of the technical channel ) constituted a SOLID SUPPLY-Zone which offered bearish pressure. Intraday traders should have noticed the recent bearish closure below 1.1700 - 1.1750 as an indicator for a possible bearish reversal. On the other hand, the price zone of 1.1850 - 1.1870 remains a solid SUPPLY Zone to be considered for bearish reversal upon any upcoming bullish pullback by Intermediate-term traders. Trade recommendations : Conservative traders should wait for the current bullish pullback to pursue towards the recently-broken Uptrend Line around 1.1850 for a valid SELL Entry. T/P levels to be located around 1.1770, 1.1645 and 1.1600 while S/L to be placed above 1.1900 to minimize the associated risk. The material has been provided by InstaForex Company - www.instaforex.com |
| October 14, 2020 : GBP/USD Intraday technical analysis and trade recommendations. Posted: 14 Oct 2020 09:17 AM PDT
Intermediate-term technical outlook for the GBP/USD pair has remained bullish since bullish persistence was achieved above 1.2780 (Depicted Key-Level) on the H4 Charts. On the other hand, the GBPUSD pair looked overbought after such a quick bullish movement while approaching the price level of 1.3475. That's why, short-term bearish reversal was expected especially after bearish persistence was achieved below the newly-established key-level of 1.3300. A quick bearish decline took place towards 1.2900 then 1.2780 where considerable bullish rejection has been expressed during the past few weeks. The price zone of 1.3130-1.3150 (the backside of the broken-trend) remains an Intraday Key-Zone to offer bearish pressure if retested again. Bullish Persistence above the depicted price zone of 1.2975 -1.3000 was needed to allow bullish pullback to pursue towards 1.3100. However, the GBPUSD pair has shown lack of sufficient bullish momentum to pursue above the price level of 1.3000 upon the past few bullish trials. Hence, another bearish decline towards the price level of 1.2780 was expected to gather enough bullish momentum. Instead, earlier signs of bullish rejection were expressed around 1.2850. Currently, the current bullish breakout above 1.2980-1.3000 should be maintained to enable further bullish advancement initially towards 1.3100 and 1.3150. The material has been provided by InstaForex Company - www.instaforex.com |
| October 14, 2020 : EUR/USD daily technical review and trade recommendations. Posted: 14 Oct 2020 09:03 AM PDT
On September 25, The EURUSD pair has failed to maintain enough bearish momentum to enhance further bearish decline. Instead, recent ascending movement has been established within the depicted movement channel leading to bullish advancement towards 1.1750-1.1780 which failed to offer sufficient bearish pressure in the first attempt. Earlier this week, temporary breakout above 1.1750 was demonstrated as an indicator for a possible bullish continuation towards 1.1880 where the upper limit of the movement channel comes to meet the pair. However, immediate bearish decline brought the pair back below 1.1750. Hence, the price zone around 1.1750-1.1780 remains a Prominent Resistance-Zone as long as bearish persistence is maintained below it. Any upside pullback towards the depicted zone (1.1750-1.1780) should be considered for a SELLING Opportunity, a valid Intraday SELL Entry. Initial target levels should be located around 1.1720 and 1.1685. Exit level (Stop Loss) should be placed above 1.1800 The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 14 Oct 2020 07:27 AM PDT
Gold rises Wednesday morning in light of the growing concerns from market participants on the uncertainty of the recovery of the global economy. The tension on the US Presidential elections in November also played an important role. The price of gold went up 0.43% and reached $1,898. 86 per troy ounce. At the same time, the support level amounted to $1,885.15 per troy ounce, and the resistance moved to $1,939.4 per troy ounce. It is important to note that the recovery in the value of gold after Tuesday's unexpected fall is quite justified. This means that the positive background of gold has not gone away: in the medium and long term, gold will continue to strengthen significantly. And Tuesday's rebound only caused additional interest among investors to make purchases at a better price. Of course, market participants did not fail to take advantage of a good period to buy. It is due to the increase in demand for gold that its price is again recorded at present. There are plenty of factors for further support. Here are just the most obvious: low-interest rates, growing US government debt, the escalating situation around the presidential election, and uncertainty in monetary policy. This alone will be enough for the precious metal to remain a favorite among investors for a long period. In terms of technical analysis of the situation, the precious metal is now rapidly trying to build up its advantages in order to break through the strategically important mark of $1,920 per troy ounce, which will speed its advance to the next significant mark of $2,000 per troy ounce. However, even though the price of precious metals remains at such a high level as it is now, you should be prepared for unexpected pullbacks just like what happened on Tuesday. Because in this case, any little thing can be taken quite seriously at first glance. This means that corrections will occur from time to time, but they will only strengthen the growth trend. Silver gained 0.46%, which pushed it to $24,240 per troy ounce. Palladium has increased its value substantially by 1.83%, and its current price is $2,358.1 per ounce. Platinum rose 0.37% which left is at $868 an ounce. Copper futures contracts for December delivery also gained 0.35%, which left it at its current price level of $3.0507 per pound. The material has been provided by InstaForex Company - www.instaforex.com |
| GBP/USD: turbulence triggered by rumors, gossip, and leaked insider information Posted: 14 Oct 2020 07:24 AM PDT The pound sterling has got into a turbulence zone. Yesterday it went into a nosedive against major currencies, but today it is developing a stunning bullish run. The reason behind such gyrations is Brexit which is driving investors mad. The news creates the opposite market sentiment. Optimism is rapidly replaced with pessimism and vice versa. The British currency is making sharp price swings up and down. After a four-day climb, GBP/USD plummeted by more than 150 pips in just four hours. The sterling was displaying a similar dynamic in cross pairs. Today GBP/USD is following the upward trajectory. The currency pair spiked 100 pips, regaining previous losses. Traders are trying to puzzle out what comes next. To answer this question, let's figure out the reason behind this extreme volatility.
As you know, the UK and the European Union have been discussing the terms of a trade deal for six months (we must exclude the forced "coronavirus pause"). The parties must settle the trade agreement before January 1, 2021. This date is the end of the transition period after Britain leaves the EU. If by this date the negotiators do not come to a consensus and accordingly do not sign any agreement, London will automatically drop out of the single market and will continue to carry out foreign trade with European countries in accordance with the WTO rules. The risk of the so-called "hard scenario" is growing every day, as negotiators cannot reach a compromise on some vital issues. There is very little time left before the New Year, so the parties decided to draw a certain line at the EU summit, which kick off tomorrow. Based on the results of this meeting (which will end on Friday), one of three options will be implemented: 1) politicians in a "closed doors" format will agree on the most difficult issues (after which the negotiators will have to finalize agreements); 2) the participants in the summit will voice their stance but will not come to a common denominator - while the negotiations will continue until the next summit, which will be held in November; 3) the parties will come to the conclusion that no compromise will be reached, after which the policymakers prepare for the UK exit from the EU without a trade deal. If you look at the daily chart of GBP/USD, you can see that over the past two weeks, all the above-said options have been mirrored in the market one by one. Influential news agencies (such as Reuters or Bloomberg) published insider leaks that were subsequently confirmed or refuted by comments from officials. For example, last week the pound rose in price amid insider reports that German Chancellor Angela Merkel had taken a "conciliatory" stance towards the British, and chief negotiator Michel Barnier has proposed a compromise on fisheries (which is the most difficult to negotiate). However, yesterday, literally 2 days before the start of the summit, pessimistic ideas were voiced. German and French government officials said the negotiations were "in a critical state" and the "hard" scenario was the main option. Boris Johnson, in turn, warned that he would leave the negotiating table if there was no progress. The British reaction was not long in coming: the pound collapsed across the board. But today the fundamental background has changed again. First, according to Bloomberg, the British side is actually ready to continue negotiations after the October summit. Secondly, the parties have reached "some progress" in the negotiations today, according to Reuters sources. Third, according to the British press, London may eventually compromise on fisheries. As you can see, today's growth of the British currency rests only on unconfirmed rumors. This suggests that traders tend to believe in a positive outcome of the negotiating saga. Nevertheless, it is obvious that this saga will not end this month. In my opinion, following the results of the October summit, the parties will outline the "red lines" of acceptable compromises and extend the negotiation period for another month. Such a result will support the British currency, especially given the previous pessimism on the part of the Germans and the French.
To sum up, traders speculating on GBP/USD are likely to stick to the principle "the lack is a bad result means a good result." With this rule in view, GBP/USD buyers will be able to hit a fresh high of the week and also test the nearest resistance level of 1.3130 that is the upper border of the Kumo cloud. As for a short-term strategy, it is risky to open any deals on GBP/USD right now amid erratic intraday price moves. If we consider a medium-term strategy, long deals are preferable from my viewpoint. The first upward target is seen at 1.3130, the next one is 1.3200. The material has been provided by InstaForex Company - www.instaforex.com |
| Investment in shares of Walmart, China Southern Airlines, Nestle still profitable Posted: 14 Oct 2020 06:21 AM PDT Ivesting in shares of consumer companies is one of the investment strategies. Retailers, manufacturers of consumer goods and long-term goods, airlines and aircraft manufacturing companies have an investment appeal. Despite the fact that these industries are the most vulnerable in the conditions of the corona crisis, investments in them are still justified. Among such companies are Walmart, China Southern Airlines, and Nestle. Over the next few months, investors should focus on them. Walmart Walmart is the world's largest American chain of wholesale and retail stores of food products and consumer goods. In 2019, the trading giant's share price doubled on a yearly basis. Over the first half of 2020, the stock advanced by 42%. Despite the pandemic, by the beginning of October, the company's shares jumped by 20% in six months. Moreover, they are likely to rise further. Walmart management implements its business model taking into account the existing conditions during the coronavirus period and developing the e-commerce segment. In order to attract a young audience, the company is increasing its presence in various media and developing advertising and entertainment segments. The company's management is also planning to acquire a stake in the American part of the popular social network TikTok in order to increase loyalty among a young and financially promising audience. By the way, by August 2020, the number of TikTok users in the United States exceeded 100 million active users per month. Notably, not so long ago, the company bought a stake in developer of video technologies Eko. This step was necessary in order to gain a foothold in the entertainment segment, namely in the sphere of interactive videos. At the same time, last year, EKo developed an interactive catalog of toys named Walmart Toy Lab. By means of this catalog young consumers can test the most popular toys for free. China Southern Airlines China Southern Airlines is one of the largest Chinese air carriers, which ranks 7th in the world in terms of transportation of local passengers and passenger turnover of scheduled flights in passenger kilometers. China Southern Airlines operates flights to more than 200 destinations in 40 countries and carries the largest amount of cargo by local lines than other airlines. Given the quarantine restrictions in most countries, the noticeable decline in passenger traffic and the resulting losses, it can be noted that the shares of many major airlines and aircraft manufacturers have fallen significantly. China Southern Airlines is no exception: its share price dropped by 18% from the beginning of the year to early October. Despite the losses, there is still hope for recovery. Most part of China Southern Airlines' profit is generated by domestic traffic and Beijing authorities have eased restrictions in the country in recent months. Thus, China Southern Airlines will be able to surpass many of its competitors not only from China (their revenue depends largely on cross-border traffic), but also from other countries where domestic flights are still limited. According to the civil aviation administration of China, from October 1 to October 8, Chinese airlines made 117,000 flights, 110,000 of which were within the country. If we compare the average number of flights per day from October 1 to October 8 with the same period last year, when there was no pandemic, we will see positive figures. The number of flights decreased by only 10%. It is also important that in the second quarter, several large hedge funds increased their investments in China Southern Airlines shares. Thus, Jane Street Group LLC increased its investments by 35%, Bank of Montreal - by 19%, and UBS – by more than twice. Nestle which is very extensive: instant coffee, mineral water, chocolate, ice cream, clear soup, dairy products, baby food, pet food, pharmaceutical products, and cosmetics. The company's main brands are well–known all over the world. They are KitKat, Maggi, Nescafe, Nesquik, and Nestea. Nestle, in turn, has hundreds of famous brands that are known to consumers in both developed and developing countries. At the same time, developed countries provide the company with 58% of revenue, and developing countries - with 42% of revenue. The main market for products is the United States, which accounts for about a third of the company's turnover. It is worth noting that the product portfolio is mainly aimed at the production of packaged food, beverages as well as baby food and confectionery. However, during the last nine years, the company has focused on health problems in some parts of the population. For example, in 2011, the company created a division of Nestle Health Science. It is engaged in the production of food as well as medicines and food additives intended for people with diabetes or food allergies. In 2020, Nestle bought out Aimmune Therapeutics, a biopharmaceutical company focused on food allergy research. Aimmune Therapeutics has recently developed Palforzia, which is currently the first and only FDA-approved drug to help reduce the frequency and severity of allergic reactions to peanuts in children. Given the development of the Nestle supply chain in the largest retailers, the sales potential of the new Palforzia drug is really high. Thus, thanks to Aimmune Therapeutics, the range of Nestle Health Science products should significantly expand. This may lead to a jump in the revenue of the entire corporation. Nestle has always been known for its strong financial position in terms of profitability and relatively low debt levels. Nestle shares sank by more than 17% during the massive market crash this spring. This decrease is insignificant against the general background, but it is very significant for the company itself. Thanks to a competent business model, the company managed to restore its profit to its pre-crisis level. The strategic steps taken by the company's management to develop the business boosted demand for Nestle shares. The material has been provided by InstaForex Company - www.instaforex.com |
| GBP/USD analysis for October 14. EU leaders meeting tomorrow to discuss Brexit Posted: 14 Oct 2020 06:05 AM PDT On a large scale, the descending section of the trend is still being formed. However, the chances are growing that trend will stop with the completion of the a-b-c waves formation. If this is true, then the quotes will continue to rise from the current levels with targets located near the high of the wave Z. A successful attempt to break through the high of the wave b also indicates that the markets are ready to open new buy positions on the instrument. If we take a closer look at the chart, we will see that the wave pattern has indeed transformed into a three-wave formation that is looking quite convincing. A failed attempt to break through the 61.8% Fibonacci level confirms the completion of the downward phase. However, a successful attempt to break through the 38.2% Fibonacci level suggests that the markets are ready for a new rise in the pound. Over the past few days, the instrument has lost about 150 pips, but has regained almost the same amount today. Thus, an unsuccessful attempt to break above the 50.0% Fibonacci level assures us that the price will most likely continue to move upwards. Meanwhile, markets are showing a mixed trade without a certain direction. As I mentioned above, yesterday the pair fell by more than 150 pips, and today it has regained just the same amount. The conflicting news may have caused such a swing. Markets seem confused and do not know how to respond to various reports and rumors regarding Brexit and the trade negotiations between the UK and the EU. The EU summit begins tomorrow where the final decision regarding this issue should be made. However, it is already obvious that the final statement will not be ready tomorrow. Most likely, the parties will again declare the current progress insufficient and continue negotiations. Some experts believe that a trade deal can still be reached, but not until early November. Others think that the parties will fail to reach a consensus even until December. Besides, the officials from France, Ireland, Germany, and other EU countries prepare the markets for a no-deal outcome, regularly stating that there is no or little progress made. Thus, the markets often doubt how to trade the pair amid such a controversial background. This leads to sharp up-and-down movements of the price. Yesterday, a report on unemployment rate was released in the UK showing a 0.4% increase compared to July. However, the number of new jobless claims declined compared to the same period. On average, wages rose more than the markets had expected. In general, the statistical data was rather neutral. Anyway, the pair began to decline much later than the reports had been released. Conclusions and trading tips: The pound/dollar pair has supposedly completed the formation of the descending section. A successful breakthrough of the 38.2% level makes it possible to recommend buying the instrument with the targets at 1.3191 and 1.3480 which correspond to 23.6% and 0.0% Fibonacci levels for each new buy signal of the MACD indicator. However, the news background can cause a serious change in the current wave pattern. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 14 Oct 2020 05:48 AM PDT The wave marking of the EUR/USD instrument in global terms still looks quite convincing and wave 4 is quite complete. Thus, the main option remains to increase quotes from the current levels within the framework of building wave 5 with goals located above the maximum of the expected wave 3 or C. This means that the instrument will increase to at least 20 figures or even higher. There is no question of adopting a more complex form of wave 4 at this time. The smaller-scale wave markings still show that the proposed wave 4 has assumed a three-wave form and is probably complete. If this is true, then the price increase will continue within wave 5. However, doubts have begun to arise that the current price increase is really wave 5. It is quite possible that wave 4 becomes more complex and takes the form of a-b-c-d-e. This option is supported by the fact that the instrument failed to make a successful attempt to break the maximum of wave b at 4. If this assumption is correct, then the current positions will resume the decline in quotations. The US currency was quite unexpectedly in demand at the auction yesterday. The instrument lost about 80 basis points during the day. Thus, it is likely that it started building a new downward trend movement. The section of the trend from September 25 turned out to be very long, so there are doubts that it is part of the upward wave 5. The news background for the EUR/USD instrument remains extremely contradictory. According to the report of ZEW Institute yesterday, there's a marked deterioration in economic conditions, economic sentiment and business sentiment in Germany and the EU. Moreover, the second wave of COVID continues to develop in Europe, so the economic situation may actually worsen in the coming months. Christine Lagarde, the head of the ECB, has repeatedly expressed concerns about the coronavirus. Thus, they are clearly not groundless. But in America, the inflation report was released yesterday which did not show any major changes in the indicator. The consumer price index went up to 1.4% yoy and 0.2% mom in September. The consumer price index excluding food and energy prices remained at 1.7% yoy and went to 0.2% mom. Overall, these numbers are not strong or unexpected. Thus, I believe that they were not the reason for the strong decline in the instrument's quotes yesterday. Most likely, there are no reasons for the increase in US currency quotes on the eve of the day. If the markets continue to build a downward movement of the trend from September 1, then we just watched the construction of a prolonged wave d, and now the markets will move to new sales of the instrument within the wave e. If this assumption is correct, the decline in quotations will continue and the impact of future US presidential elections and the lack of agreement between Democrats and Republicans on a new aid package will be absent. General conclusions and recommendations: The Euro-Dollar pair has presumably completed the construction of a correctional wave 4. However, the absence of a break of the high of wave b in 4 suggests a possible complication of all of wave 4. Thus, at this time, I would still recommend purchasing the instrument with the objectives located about settlement marks 1,2012, which corresponds to 0.0% of Fibonacci on every MACD signal based on building a global wave 5. However, in the case of a successful attempt to break 23.6% level will come into force alternative – with the increasing complexity of wave 4. The material has been provided by InstaForex Company - www.instaforex.com |
| Dollar strengthens, while euro and pound risks further fall Posted: 14 Oct 2020 05:37 AM PDT
The greenback managed to strengthen and move away from three-week lows on Tuesday. Risk sentiment eased after U.S. companies Johnson & Johnson and Eli Lilly announced that they had suspended trials of the coronavirus vaccine. Meanwhile, House Speaker Nancy Pelosi said that President Donald Trump's proposal on the stimulus package was not able to meet expectations. Thus, against this background, the USD index gained almost 0.5% and reached 93.6 points. On Wednesday, the greenback managed to retain its previous advantage over its main competitors. At the moment, the hopes that politicians in Washington will reach a compromise on a new stimulus package before the presidential election slowly fades away. If the divisions in Congress continue, then it is most likely that negotiations on the stimulus package will once again lead to a dead end. This makes the Republicans keep a good chance of keeping the Senate. According to experts, such prospects and the associated uncertainty create excellent prerequisites for the decline in stock indices and support the USD. "Many factors point to the growth of the dollar. Incentives in the U.S. can appear only after the elections. At the same time, there is no reason to buy euros and there are many long positions in EUR that need to be closed, "- said strategists at Mizuho Securities. Analysts believe that in the short term, the dollar will strengthen as a safe asset. At the same time, a new wave of coronavirus and quarantine restrictions will hamper economic recovery in Europe, putting pressure on the euro.
"The euro closed in positive territory last Friday, but yesterday it surrendered most of the gained positions, sagging more than 0.5% to $ 1.1744. This was the strongest daily decline in nearly two months. If the bearish momentum intensifies, testing the $1.1680 level will not come as a surprise," said UOB specialists. The EUR / USD pair continued to decline on Wednesday and is already trading at new multi-day lows amid cautious market sentiment and continued demand for a protective greenback. OCBC bank believes, "The main currency pair has retreated from two-month highs and remains bearish. After the breakdown of the 1.1800 support, the pair may aim at 1.1700, and its breakdown will accelerate the fall." France is breaking records for the number of cases of COVID-19, which brings the issue of introducing a lockdown in the country back to the agenda. Germany again entered the top 15 in terms of daily increase in cases of coronavirus infection. In this regard, the U.S. no longer looks so unambiguously bad, which strengthens purchases of the dollar against the euro. Against the background of the strengthening of the greenback practically across the entire spectrum of the market, the pound fell to weekly lows near $1.2870. In addition, sterling also suffers from concerns about the lack of progress in trade negotiations between the UK and the European Union. "It is in the interests of both parties to conclude an agreement before the end of the transition period. However, this cannot happen at all costs. The coming days will be decisive, "said Charles Michel, President of the European Council on Tuesday. According to Bloomberg, the current position of EU leaders is that progress on key issues for the alliance is not enough to conclude an agreement. In addition, the heads of the EU countries plan to step up preparations for a tough Brexit. "The GBP / USD pair climbed to 1.3070 and then pulled back. It still risks falling to 1.2445 and further to 1.2250 and 1.2200. Only a rise above 1.3083 will neutralize the bearish outlook," said Commerzbank. The material has been provided by InstaForex Company - www.instaforex.com |
| Evening review on October 14, 2020 Posted: 14 Oct 2020 05:26 AM PDT
This is how the myths are born among traders that the market follows stops. Buyers prudently kept their stops at 1.1730 and then moved it at 1.1720 at night. However, this did not save buyers from the treacherous euro. After having hooked on sell orders from 1.1720, the vile euro immediately moved upward. Prepare to buy from 1.1830. Sell from 1.1715. The material has been provided by InstaForex Company - www.instaforex.com |
| US stock market remains unstable Posted: 14 Oct 2020 05:21 AM PDT
Tuesday turned out to be difficult for the US stock market. The sectors of finance, oil, gas and raw materials showed negative dynamics. As a result, the stock market plummeted. The Dow Jones lost 0.55%, the S&P 500 fell by 0.63%, and the NASDAQ Composite dropped by 0.10%. The leaders of the fall were the shares of The Travelers Companies Inc whose price fell by 3.13%. Apple Inc lost 2.65% to trade at 121.10. The leaders of growth among the Dow Jones components were Walt Disney Company shares that rose by 3.19% to settle at 128.96. The worst performing company was The Travelers Companies Inc with its shares falling by 3.13% to 112.89. The top performer among the S&P 500 index components was Waters Corporation which grew by 7.08% to trade at 216.45, while Royal Caribbean Cruises Ltd lost 13.20% to 60.61. The best growth among the NASDAQ components showed Medigus Ltd ADR which rose by 52.91% to 2.890. Loop Industries Inc, in turn, crushed by 32.56% to settle at 7.83. On the New York Stock Exchange, the number of securities that fell in price exceeded the number of those that showed growth which is 2,085 and 991 respectively. 94 shares remained practically unchanged. BlackRock Inc reached a historical high, rising by 3.91% to 638.96. Gulfport Energy Corporation shares, on the contrary, fell to historic lows. It lost 29.78% to trade at 0.359. Meanwhile, gold futures for December also lost 1.78% to trade at $1,894.55 per troy ounce. At the same time, WTI crude futures for November rose by 1.95% to $40.20 per barrel. Brent oil futures for December remained unchanged to trade at $42.42 per barrel. On the Forex market, EUR/USD rose by 0.03% to hit 1.1748, while USD/JPY rose by 0.01% to settle at 105.48. In total, the American economy, given the long-term impact, will lose more than $16 trillion due to the pandemic, according to the Treasury Department data. This is 90% of the annual US GDP. Half of this amount is the income lost during the recession caused by the pandemic. Keep in mind that this forecast is only relevant if coronavirus is taken under control in 2021. Economists are confident that the coronavirus infection is the biggest threat to the prosperity and well-being of the United States. Last time, the same situation happened during the Great Depression. They also say that the economic damage from the spread of the virus will be more severe than from a conventional war in Iraq. According to the latest data from Johns Hopkins University, more than 7.79 million cases of COVID-19 infection have been recorded in the United States. 215 thousand people died. The United States has a leading number of infected people and deaths. The material has been provided by InstaForex Company - www.instaforex.com |
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