Forex analysis review |
- Hot forecast and trading signals for GBP/USD on October 16. COT report. Traders panic, keeps 1.2873-1.2888 from falling
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- Overview of the GBP/USD pair. October 16. The "storm" continues. New COVID-2019 anti-record. Possible secession of Scotland
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- October 15, 2020 : EUR/USD daily technical review and trade recommendations.
- October 15, 2020 : EUR/USD Intraday technical analysis and trade recommendations.
- October 15, 2020 : GBP/USD Intraday technical analysis and trade recommendations.
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| Posted: 15 Oct 2020 06:49 PM PDT GBP/USD 1H After being able to quickly and easily recover to the downward trend line, the GBP/USD pair rebounded from it and resumed an equally strong downward movement on October 15, on track to breaking the Kijun-sen and Senkou Span B lines. However, the bears failed to overcome the important support area of 1.2873-1.2888 in the last two days, therefore, falling even deeper is also in question. It looks strange or doubtful when the US dollar strengthens against the euro, but the greenback's rise against the pound appears to be quite reasonable and logical. Therefore, if sellers succeed in pushing the pair below 1.2873-1.2888, then the chances of continuing the downward movement will increase many times. GBP/USD 15M The lower linear regression channel turned to the downside again on the 15-minute timeframe, but the movements from the last three trading days have been such that it is time to talk about panic, and 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 Thursday, October 15. The report on applications for unemployment benefits was published in the United States, which showed another decrease in the total number of repeated applications to 10.018 million. Thus, the US unemployment rate continues to decline. The EU summit also began on this day, which should initially have been extremely important for the UK and the British pound, but later ceased to be such, since no one expects any decisions on a trade deal. Moreover, we received reports that the head of the European Commission, Ursula von der Leyen, was allegedly in contact with an employee of her office who is infected with the coronavirus and therefore could also become infected. The head of the European Commission left the EU summit and went into self-isolation. Thus, the chances that the summit will take any important decisions regarding the UK are further diminished. The US is set to publish reports on September retail sales, manufacturing, and the University of Michigan Consumer Confidence Index. Traders might ignore all three reports. We have two trading ideas for October 16: 1) Buyers for the pound/dollar pair have released the initiative from their hands. Thus, long positions are not relevant now, however, if the new trend line is overcome, they can be considered with the targets of 1.3105 and 1.3177. Take Profit in this case will be from 50 to 120 points. However, take note of very frequent changes in the direction of movement, so we recommend trading in small lots. 2) Sellers keep the initiative in their hands, but at the same time they cannot overcome the 1.2873 - 1.2888 area. If they manage to settle below this area, then we will recommend new sell positions on the pair while aiming for the support level at 1.2773. Take Profit in this case can be up to 80 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: 15 Oct 2020 06:46 PM PDT EUR/USD 1H The euro/dollar pair resumed its downward movement and quite easily overcame the support area of 1.1701-1.1725 on the hourly timeframe on October 15, and with it the Senkou Span B line, which is considered to be quite strong resistance. However, the bears have been active recently and are confidently pulling down the pair. Therefore, the pair may continue to move down with targets at 1.1664 and 1.1620. As for the bulls' prospects, they are put aside for now. However, at the same time, please be reminded that when the US dollar strengthens when the pair falls. And the current fundamental background does not imply strong dollar growth. Thus, it is possible that the quotes will stop falling soon. EUR/USD 15M Both linear regression channels are still directed to the downside on the 15-minute timeframe, which is fully consistent with 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 1-hour 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 Thursday, October 15. No important news from the European Union, while the dollar continued to rise. However, the problem is that there was no important news from America either, and there were no important macroeconomic publications. Thus, we can conclude that the US dollar did not grow due to the fundamental background or macroeconomic reports. Or at least due to an event. Therefore, we continue to give preference to technical factors, since it is very difficult to predict anything based on fundamental events right now. We have already said that the main conflict lies in the fact that the bulls are afraid to buy the euro around its two-year highs, and the bears do not have sufficient grounds to sell the pair, which means buying the dollar, since the level of uncertainty in the US is just going through the roof. And with the elections approaching, the situation on the foreign exchange market can only escalate. Quite often, when an important event is approaching, which may carry consequences of extreme importance (not only for the United States, but for the whole world), panic begins in the markets. And it is not at all necessary that the US dollar will fall in price. An example is the pound/dollar pair, which has been moving from side to side for two weeks. We have two trading ideas for October 16: 1) The pair has left the ascending channel, so buyers are not dominant in the forex market now. You can only consider to take new long positions if the quotes return to the area above the critical line (1.1775) and then you can aim for the resistance level of 1.1868 and even then, only in small lots. Take Profit in this case will be up to 80 points. This scenario is not expected to come true in the near future. 2) Bears overcame the important support area of 1.1701-1.1725 on the second try. Thus, sellers have an opportunity to trade short with targets at the support levels of 1.1664 and 1.1620. The potential Take Profit in this case is from 30 to 70 points. Not much, but the current volatility remains low. 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: 15 Oct 2020 05:16 PM PDT 4-hour timeframe
Technical details Higher linear regression channel: direction - downward. Lower linear regression channel: direction - upward. Moving average (20; smoothed) - downward. CCI: -106.1767 The British pound sterling, paired with the US currency, collapsed by almost 200 points on October 13, recovered by 180 points on October 14, and again collapsed by 150 points on October 15. Thus, the "storm" for the pound/dollar pair continues and the pair has fallen by about 200 points over the past 2 weeks. This suggests that the market has developed a kind of panic and confusion. Traders are nervous and the reasons for these nerves lie in the UK, as the euro/dollar pair is trading very calmly, so the reasons are not based in the EU or the US. Well, what could be the case in the UK that traders started to panic so much? Of course, Brexit. Brexit and the second wave of "coronavirus", which makes you worry about the future of the country. And the first thing we want to note is the number of new cases of "coronavirus" infection, which was detected on October 14. This number is 19,751 cases. This is the absolute maximum for the entire period of the pandemic, except for October 4, when 23 thousand cases were recorded, but then it turned out that the real number of diseases on this day was added to the cases that had not yet been taken into account. Thus, we can assume that it was on October 14 that a new anti-record was set in the Foggy Albion and this anti-record is almost 4 times higher than the maximum levels of morbidity that were recorded in March-May when the UK health system was already bursting at the seams. Thus, the first reason for yesterday's fall in the British currency is "coronavirus". The second reason is the EU summit, during which issues related to the Brexit deal were to be discussed once again. However, it is not forbidden to discuss Brexit, however, traders are not interested in the next discussion, but the final results of the negotiations. But there are no results yet and they are unlikely to appear on October 16. The fact is that even before the start of the summit, many EU and UK officials, as well as political experts, noted that the parties will declare insufficient progress in the negotiations and continue them. Thus, in fact, at the end of the summit, its participants will have nothing to tell the markets. As for the prospects of signing a free trade agreement, they remain extremely doubtful, and we give no more than a 5% probability of success. In fairness, it should be noted that we believe that it will be almost impossible to reach an agreement. The vast majority of media and publications also wrote on the eve of the summit that there will probably be no trade deal, and the Kingdom and the Alliance will trade with each other from 2021 on WTO terms. And this is the second reason for the fall of the pound yesterday and its possible further fall. It also emerged yesterday that the Organisation for Economic Co-operation and Development expects UK GDP to shrink by 10% or more by the end of 2020. It is only necessary to compare this figure with the one that the Fed predicts for its economy – minus 6.5% in 2020. The figure from the Fed may be slightly overstated, but in the worst case, it is -7%. Although in the second quarter, the US economy lost 32% and the British – 20%. If the OECD forecast is accurate, it turns out that the British economy is recovering much slower than the American one, which is another reason for the further fall in the British pound. Also, we have repeatedly stated that in 2021, if the pandemic is brought under control, many of the world's economies (almost all of them) will begin or continue to recover, depending on how strong the second wave of the epidemic. All or many, but not the British economy, which may start to shrink again due to Brexit and new trade conditions with the European Union. And this is the fourth reason for the very likely further fall in the British currency quotes. The fifth reason is political. We continue to believe that Boris Johnson as Prime Minister of the United Kingdom has not achieved a single victory, except for Brexit, which, by the way, is not even completed yet. And if the head of state does not win, does not lead the country to development and growth, cannot agree with international partners, then it is unlikely that in this case, it makes sense to talk about economic growth. The sixth reason is the possible loss of Scotland. According to the latest sociological research, about 58% of people in Scotland support the country's exit from the United Kingdom. Over the past 6 years (this is how much has passed since the last independence referendum), the number of supporters of leaving the Kingdom has increased by 15%. Recall that the head of state and the Scottish National Party, Nicola Sturgeon, promised voters that a new date for the independence referendum will be chosen before May 2021. The main dissatisfaction of Scots is because the UK has left the EU, and about 62% of Scots are against severing ties with the EU. Thus, there is no doubt that Edinburgh will continue to push for a new referendum and will try to enlist the support of the European Union, which will not mind at all if Scotland returns to its membership. And the situation is quite difficult for Edinburgh because London not only has the full right to refuse to hold a new referendum but also has very strong justification for its refusal. This was stated by Boris Johnson in a letter to Nicola Sturgeon: "You and your predecessor personally promised that the 2014 independence referendum would be the only one in this generation. The people of Scotland voted strongly to remain in the United Kingdom." The argument is ironclad, otherwise, Scotland will want to hold a referendum every year. However, many experts believe that Scotland can follow the path of legal proceedings or stop obeying London to continue pushing for a second referendum. Thus, the prospects for the British pound remain dim against almost all major currencies, and we believe that in 2020 and 2021, the long-term decline in its quotations will resume.
The average volatility of the GBP/USD pair is currently 139 points per day. For the pound/dollar pair, this value is "high". On Friday, October 16, therefore, we expect movement inside the channel, limited by the levels of 1.2773 and 1.3051. A reversal of the Heiken Ashi indicator up signals a new round of upward correction or upward movement. Nearest support levels: S1 – 1.2909 S2 – 1.2878 S3 – 1.2848 Nearest resistance levels: R1 – 1.2939 R2 – 1.2970 R3 – 1.3000 Trading recommendations: The GBP/USD pair started a new strong movement on the 4-hour timeframe. Thus, today it is recommended to stay in short positions with targets of 1.2878, 1.2848, and 1.2817 as long as the Heiken Ashi indicator is directed down. It is recommended to trade the pair for an increase with targets of 1.3000 and 1.3031 if the price returns to the area above the moving average line. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 15 Oct 2020 05:15 PM PDT 4-hour timeframe
Technical details Higher linear regression channel: direction - sideways. Lower linear regression channel: direction - upward. Moving average (20; smoothed) - downward. CCI: -140.0310 For the EUR/USD pair, the fourth trading day of the week was more active than the previous few days. The US currency continued to strengthen against the euro, however, it still does not give the impression of a stronger currency, which could become more expensive in the long term. All movements of the last weeks and months still fall best under the meaning of the word "flat". Even if this "flat "is not accurate and clear, nevertheless, the euro/dollar pair has been trading mostly sideways for the past almost three months, thus, the current drop in the euro currency quotes by "as much as" 140 points may be a simple noise inside the very side channel that we have already mentioned several times. And if so, it makes no sense to look for the reasons for the fall or growth of the US currency now. It should be clearly understood that if there is no news or traders ignore them, this does not mean that the pair will not trade at all. In any case, there are commercial transactions in the foreign exchange market for the purchase and sale of all currencies for the current needs of commercial banks, central banks, large companies, and enterprises. This means that in any case, the pair will not move sideways in the 20-point range. However, is it possible to conclude that the growth of dollar quotes by 100 points is a consequence of some political or macroeconomic process or event? At this time, this is exactly the situation in the foreign exchange market. All macroeconomic statistics are ignored, and market participants who trade for profit simply do not know what to expect from the US dollar and what the future holds for the US economy. This is why the pair has been trading in a very narrow price range in recent months. If the second currency was, for example, the pound, then trading would be much more trending, since the UK now has its factors that have a significant impact on the mood of traders. That is why we believe that the most important thing for the dollar right now is the presidential election, which is less than three weeks away. Moreover, there is a lot of news about the US election. First, it should be noted that the presidential election has already begun, as more than 15 million people in America have already voted early. These people have already decided on their choice and do not want to wait for November 3. This is quite possible, however, never before has such a large number of voters voted ahead of schedule. The American newspaper The Washington Post reports that the majority of those who voted chose Joe Biden. Thus, if you count the votes now, Biden is already the leader. It is reported that a disproportionately large number of women and black citizens, who make up the majority of Joe Biden's electorate, came to the polls. However, these preliminary voting results should not be misleading, as most Trump supporters will be voting on November 3. It is even possible that Biden decided to play it safe and asked his voters to vote in advance to avoid possible trials and falsification of the vote count. Also, Trump has repeatedly stated that voting by mail can take a very long time due to the long counting of votes. Thus, Biden makes the task of election commissions somewhat easier, since his supporters began voting three weeks before election day. Meanwhile, new results of opinion polls conducted by major magazines and TV companies have arrived. So, according to various data, the advantage of Joe Biden over Donald Trump is now from 11% to 17%. Thus, according to the results of various opinion polls, it can still be concluded that the Democrat's advantage continues to grow. Experts also calculated that Biden has almost the biggest advantage over his competitor three weeks before the election in the history of opinion polls, that is, since 1936. As you can see, Trump's position is not the most enviable and is not improving. Meanwhile, Trump himself began to use campaign slogans that perfectly show his current low support. "People are fleeing California. Too high taxes, too high crime, too many failures, too strict quarantine. Vote for Trump, what the hell do you have to lose!", Trump wrote on Twitter, referring to the residents of California. Well, of course, now, three weeks before election day, it is not without "tricky tricks" from the Republicans. Many experts and the candidates themselves believe that the key to the vote will be the state of California, which gives 55 "electoral votes" at once - the largest number among all the states of America. Thus, figuratively speaking, Biden can win in a dozen states with the number of "electoral votes" from 3 to 7, and Trump, having won in California, will cover ten "Biden" states with one state. Thus, the fight for California will not be a joke. Moreover, California is one of the controversial states, that is, where there is no unequivocal support for Biden or Trump. Thus, it is in it that plus or minus 100 thousand voters can change the result of all elections. And in this state, the Republicans have begun to place their bins for the collection of the ballots. No article in state law prohibits a particular party from placing additional ballot boxes. There is only a ban on forging ballots. However, California Secretary of State Alex Padilla believes that only officials who are responsible for the election process have the right to place additional boxes. The essence of the entire Republican game is clear as day. Under the pretext of accusing the Democrats of possible fraud and because of distrust of them, they want to bring chaos to the states and cities that are governed by the Democrats. To confuse them as much as possible. However, this is not even news. Trump has hailed states and cities run by Democrats throughout his presidential term. And the Democrats themselves said a few months ago that Trump and his team would try to disrupt elections in those cities and states that are not "Republican". In general, the ballot boxes and boxes from the Republicans are only the first steps on the way to November 3.
The volatility of the euro/dollar currency pair as of October 16 is 65 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1635 and 1.1765. A reversal of the Heiken Ashi indicator upward may signal a round of upward correction. Nearest support levels: S1 – 1.1658 S2 – 1.1597 Nearest resistance levels: R1 – 1.1719 R2 – 1.1780 R3 – 1.1841 Trading recommendations: the The EUR/USD pair continues its downward movement. Thus, today it is recommended to leave open sell orders with targets of 1.1658 and 1.1635 until the Heiken Ashi indicator turns up. It is recommended to consider buy orders if the pair returns to the area above the moving average with the first target of 1.1841. The material has been provided by InstaForex Company - www.instaforex.com |
| EUR/USD: Coronavirus again. Europe is being quarantined Posted: 15 Oct 2020 04:56 PM PDT The Euro-Dollar took a dive downwards, updating two-week price lows. The Coronavirus has come to the fore again, only this time it is playing against the European currency, not against the greenback. The rate of spread of Covid-19 on the European continent is growing every day and many EU countries are forced to tighten quarantine restrictions. Meanwhile, the news from the front of pharmacology is not good. Leading companies in this field say that mass production of the vaccine will not begin until next year in the spring of 2021. "Coronavirus factor" has become the main leitmotif of today's trading, but not the only one. Still, Covid-19 is the cause of today's EUR/USD decline. The catalyst for the downwards impulse was France, where over the past day more than 20 thousand cases of infection were registered (with a population of 65 million). Reacting to such abnormally high numbers, the government decided to introduce a state of emergency sanitary situation in the country. A little later, President Emmanuel Macron imposed a curfew in the capital and major Metropolitan areas – in particular, in Marseille, Lyon, Toulouse, Lille, Grenoble, Montpellier, Rouen and Saint-Etienne. In total, the updated quarantine measures will affect about 20 million citizens of the country. So far, we are not talking about a full lockdown: cities will "freeze" from 21:00 to 6 am. During this time period, all cafes and any commercial activities (except hospitals and pharmacies) will be closed. Without a valid and confirmed reason, you will not even be able to leave the house (a fine of 135 euros for the first time and 1500 euros in case of repeated violations). The "semi-lockdown" mode will start on October 17 and last for four weeks. At the same time, Macron warned that the special measures may be extended by law until December 1. A state of emergency was also imposed in Portugal, though only for two weeks for the time being. Over the past day, 2,070 infected people were registered there. This is the highest figure for the entire period of the pandemic. It is not yet known what restrictions will be tightened but according to the country's Prime Minister, these measures will allow the authorities to "restrict the movement of citizens and public life." Disappointing news also comes from Germany, which is known to be the locomotive of the European economy. The Germans decided not to introduce a state of emergency yet, tightening only the rules on wearing masks. In some regions, bars, restaurants and other public catering establishments will be restricted until 23:00. Also, there is a limit of 10 people at private gatherings. Additional quarantine measures are also being introduced in the Netherlands. Food establishments will be closed there. Only take-out orders are allowed. Quite strict restrictions were also introduced in the Czech Republic, where not only cafes were closed, but sports events were also halted. At the same time, the country's Prime Minister Andrei Babish said that he does not rule out the introduction of a complete lockdown if the rate of growth of the disease does not slow down. In other words, almost every EU country is now feeling the effects of the second wave of the pandemic. Each state reacts in its own way, but the trends are quite obvious: quarantine restrictions are being tightened to some extent everywhere. Once again, tourism, services, and air transportation are at the forefront of the attack. The Euro could not stay away from such a news flow, especially against the background of weak macroeconomic reports that indicate a slowdown in recovery processes (take at least the latest data on the growth of European inflation). The dollar index, in turn, is showing growth today, although this growth is due solely to the external fundamental background. A surge in anti-risk sentiment in the currency market has increased demand for a safe greenback. Figuratively speaking, the Dollar has again become the beneficiary of troubled times, even despite the array of its own problems. For example, today the US Treasury Secretary said that the bill on additional assistance to the economy is unlikely to be agreed before the presidential election. A similar position was voiced by the leader of the Democrats in the House of representatives, Nancy Pelosi. But the growth of anti-risk sentiment leveled this fundamental factor. After all, in addition to the growing number of infected people and the tightening of quarantine restrictions in Europe, traders have other reasons to worry. In particular, this morning came negative statistics from China. According to published data, the consumer price index in China in September increased by only 1.7%. This is the weakest rate of inflation growth since March last year. The producer price index, which is an early signal of changes in inflationary trends, also disappointed the market. This indicator, firstly, remained in the negative area, and secondly, it was in the "red zone", falling short of the weak forecast values (-2.1% instead of -1.9%). In addition, the head of the Reserve Bank of Australia, Philip Lowe, who announced a reduction in the RBA's interest rate, also contributed to the general negative mood. Similar intentions were recently expressed by the head of the Bank of England, Andrew Bailey, and the head of The Reserve Bank of New Zealand. Some experts have already assumed that the second wave of the coronavirus epidemic will be followed by a wave of dovish decisions by central banks. At the moment there are all prerequisites for a further decline in the EUR/USD pair. The nearest support level (the lower target) is located at 1.1620 (the lower border of the Kumo cloud coincides with the lower line of the Bollinger Bands on the daily chart). On the weekly chart, this price level coincides with the average line of the Bollinger Bands. The material has been provided by InstaForex Company - www.instaforex.com |
| October 15, 2020 : EUR/USD daily technical review and trade recommendations. Posted: 15 Oct 2020 09:02 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. Projection Target levels are located around 1.1720, 1.1685 and 1.160. Exit level (Stop Loss) should be lowered to 1.1750 to secure some profits. The material has been provided by InstaForex Company - www.instaforex.com |
| October 15, 2020 : EUR/USD Intraday technical analysis and trade recommendations. Posted: 15 Oct 2020 08:57 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. As expected in previous articles, the price zone of 1.1850 - 1.1870 stood as a solid SUPPLY Zone providing significant bearish pressure as well as a valid SELL Entry. Further bearish decline should be expected towards the next Fibonacci Level at1.1625 where price action should be watched again for a possible bearish continuation below it. The material has been provided by InstaForex Company - www.instaforex.com |
| October 15, 2020 : GBP/USD Intraday technical analysis and trade recommendations. Posted: 15 Oct 2020 08:51 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 is needed to allow bullish pullback to pursue towards higher price levels. However, the GBPUSD pair has been showing lack of sufficient bullish momentum to pursue above the price level of 1.3000 upon the last few bullish trials. Hence, another bearish decline towards the price level of 1.2780 can be expected to gather sufficien bullish momentum. Otherwise, the GBP/USD remains trapped around the current price zone of 1.3000 further bullish advancement is achieved towards 1.3100 and 1.3150. The material has been provided by InstaForex Company - www.instaforex.com |
| Will the dollar's growth continue? Posted: 15 Oct 2020 07:53 AM PDT
The dollar index broke through the mark of 93.45 on Thursday, now there is a consensus of trends. Both of them are directed upwards, which means that traders ' interest in buying the US dollar is being restored. Nevertheless, the indicator remains below 94.00 points. The dollar rose due to the influx of investments in safe-haven assets. Meanwhile, the number of coronavirus cases is reaching serious levels, and the idea of introducing incentives before the US election has been officially rejected. Who knows what else will happen ahead?
Meanwhile, major US banks are pessimistic about the dollar and bets against the greenback. According to Goldman Sachs forecasts, the national currency exchange rate will decline against the basket of major competitors. This is primarily due to the unstable political situation in the country and delays in vaccine testing. The dollar will certainly strengthen if Trump wins the election and the country discovers an effective cure for the virus. The chances are good but too low. Goldman recommends that you pay attention to other world currencies that are more resistant to political factors. Banks in the US have a reason not to believe in the dollar, it is difficult to argue with this. The world is gripped by the second wave of coronavirus, and America still does not have their own vaccine. At the same time, the use of someone else's – the one that other countries have developed for Americans – is hindered by pride, which is fueled by political considerations. The US economy has not yet recovered from the first wave of the pandemic, the second can bring disastrous consequences. Many US businesses are now on the verge of bankruptcy, and it's scary to think what will happen to them next, given the second wave of the pandemic and possible lockdowns. Problems in the economy, taking into account global support measures, create high risks of the hyperinflation of the US dollar. The pandemic and its consequences are the first arguments against the dollar, and the second is the US Presidential elections. According to the polls, Joe Biden is in the lead. Biden, on behalf of the Democratic party, has a standard program – the injection of huge funds into the economy. If the Democrats win, they will immediately start raising corporate taxes, which will bring down the US stock market. Emerging markets will be next. Meanwhile, the re-introduction of quarantine measures continues in Europe, which means that a new wave of decline in economic activity is not far off. On Thursday, the euro moved to a noticeable decline against the dollar and the yen. Bars and restaurants have closed in some regions of Germany, while point restrictions are introduced in France.
The euro fell below the support of 1.1734 against the dollar. A breakdown of this level may indicate a bearish signal. The material has been provided by InstaForex Company - www.instaforex.com |
| Ichimoku cloud indicator Daily analysis of EURUSD Posted: 15 Oct 2020 07:40 AM PDT EURUSD as we explained in our previous analysis is in neutral trend as price is inside the Daily Kumo. However we also mentioned that price is vulnerable to a pull back and move lower as long as price is below both the tenkan-sen and kijun-sen.
Resistance is at 1.1765 where we find both the tenkan-sen (red line indicator) and the kijun-sen (yellow line indicator). Price is below this level and this is what makes us see thinks ready for a move lower towards the lower cloud boundary at 1.16. We warned bulls that entering the cloud and breaking below the tenkan-sen and kijun-sen would push price towards the lower cloud boundary. This is what is happening now. Bulls still have hopes as long as price is inside the cloud. Breaking out and below the cloud would be a very bearish sign for EURUSD. The material has been provided by InstaForex Company - www.instaforex.com |
| Ichimoku cloud indicator Daily analysis of Gold Posted: 15 Oct 2020 07:35 AM PDT The Ichimoku cloud indicator in the Daily chart warns Gold bulls that unless they step in soon, we should expect a strong pull back. Gold price has broken below the Daily Kumo (cloud) support and despite the efforts by bulls to recapture key levels, we see failure to do so.
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| GBP/USD: plan for the American session on October 15 (analysis of morning deals) Posted: 15 Oct 2020 07:33 AM PDT To open long positions on GBP/USD, you need: In my morning forecast, I paid attention to purchases from the support level of 1.2988 when forming a false breakout on it. On the 5-minute chart, the bulls are quite successfully defending the area of 1.2988, which leads to the formation of a buy signal. However, there was no active upward growth further along with yesterday's trend and the pair returned to the minimum of 1.2988 after some time. Unfortunately, it was not possible to wait for a good entry point into sales on the test from the bottom up at the level of 1.2988 (I marked this area on the chart). The level of 1.2923 also did not show itself, as it turned out to be incorrect, as a result of which trade began to develop around it closer to the beginning of US trading.
Now the technical picture has changed slightly, and the bulls need to hold the pair above the support of 1.2911. Only the formation of a false breakout at this level will be a signal to open long positions in the expectation of a return to the resistance of 1.2970, where I recommend fixing the profits. In the scenario of a lack of activity at the level of 1.2911, it is best not to rush with purchases, as the pound will have all the chances to return to the support of 1.2865, from which I recommend buying the pair immediately for a rebound in the expectation of correction of 20-30 points within the day. To open short positions on GBP/USD, you need: As expected, the rumors about the trade agreement remained rumors, and the pound began to return to its usual level in the support area of 1.2911. Now the bears need to consolidate below this range, the test of which from the bottom up forms a new entry point into short positions with the main goal of returning to the minimum of 1.2865, where I recommend fixing the profits. If the bulls are stronger in the second half of the day, it is best to postpone sales until the correction to the resistance area of 1.2970. I recommend opening short positions immediately for a rebound only from the maximum of 1.3024, based on a correction of 20-30 points within the day.
Let me remind you that in the COT reports (Commitment of Traders) for October 6, there was a minimal increase in short non-commercial positions from the level of 51,961 to the level of 51,996. Non-commercial long positions have increased slightly from the level of 216 39 to level 40 698. As a result, the non-commercial net position remained negative and amounted to -11,298 against -12,745, which indicates that sellers of the British pound remain in control and have a minimal advantage in the current situation. The higher the pair grows, the more attractive it will be for sale. Signals of indicators: Moving averages Trading moved below 30 and 50 daily averages, which indicates a possible return to the market of sellers of the pound. Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1. Bollinger Bands If the pair grows, the upper limit of the indicator will act as a resistance in the area of 1.3065, from where you can sell the pair immediately for a rebound. Description of indicators
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| NZDUSD head and shoulders pattern still possible Posted: 15 Oct 2020 07:31 AM PDT NZDUSD is trading at 0.6580 and our previous analysis for a head and shoulders pattern still holds. Price could still be forming the right hand shoulder and as long as price is below 0.6690-0.67 we prefer this bearish scenario.
Black lines - head and shoulders pattern Blue line -neckline support NZDUSD has support at 0.6510 area. Failure to stay above this area will trigger the head and shoulders pattern and will give us target of 0.63. If price breaks above 0.67 we should then expect price to move for a higher high towards 0.68-0.69 area. The material has been provided by InstaForex Company - www.instaforex.com |
| EUR/USD: plan for the American session on October 15 (analysis of morning deals) Posted: 15 Oct 2020 07:08 AM PDT To open long positions on EURUSD, you need: In my morning forecast, I paid attention to several levels, from which I recommended opening short positions. Let's look at the 5-minute chart and analyze the resulting entry points. At the very beginning of the European session, the bears formed a false breakout in the resistance area of 1.1756, from which the entire fall began. However, even if you are not able to enter these sales, then you could do it without any problems after the breakout and consolidation below the level of 1.1722, the test of which from the bottom up formed an excellent entry point to further reduce the pair. As a result, the next support level of 1.1688 was reached, from which there is now a rebound. It is from 1.1688 that I recommended opening long positions in the expectation of correction of 20-25 points within the day.
While trading is above 1.1688, it will work out a signal to buy the euro. The main goal of this signal will be to return to the resistance of 1.1722, where I recommend taking the profit. If the pair falls back to the support of 1.1688, I recommend that you exit long positions and not trade against the trend until the new local minimum of 1.1644 is updated, from which you can also watch purchases based on a correction of 20-30 points within the day. If the bulls manage to pick up the resistance of 1.1722, then after its top-down test, you can try to buy the euro in the expectation of a return to the opening level of the day in the area of 1.1756, where I recommend fixing the profits. To open short positions on EURUSD, you need to: Sellers coped with all the tasks set in the first half of the day and now all attention will be on the support of 1.1688. Only fixing below this level will be a signal to open new short positions in the continuation of the current trend and to reach a new minimum of 1.1644, where I recommend fixing the profits. If the bulls are more active in the second half of the day, then you can consider new short positions only after forming a false breakout at 1.1722. However, I recommend selling the pair immediately for a rebound only after testing the morning high of 1.1756, counting on correction of 15-20 points.
Let me remind you that the COT report (Commitment of Traders) for October 6 recorded a reduction in long positions and an increase in short ones, which led to an even greater decrease in the delta. Buyers of risky assets believe in the continuation of the bull market, however, they prefer to proceed cautiously, as there is no good news on the Eurozone and the pace of economic recovery yet. Thus, long non-commercial positions decreased from the level of 241,967 to the level of 231,369, while short non-commercial positions increased from the level of 53,851 to the level of 57,061. The total non-commercial net position fell to 174,308, against 188,116 a week earlier, which indicates a wait-and-see attitude of new players. However, bullish sentiment for the Euro remains quite high in the medium term. Signals of indicators: Moving averages Trading is conducted below 30 and 50 daily moving averages, which keeps the chance of a further decline in the pair. Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1. Bollinger Bands In the case of an upward correction, the upper limit of the indicator in the area of 1.1770 will act as a resistance. Description of indicators
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| New QE Program. How the Australian Government is saving its economy Posted: 15 Oct 2020 06:44 AM PDT
According to the latest data, the Reserve Bank of Australia may soon make a bond purchase in the amount of 100 billion Australian dollars, which corresponds to 71 billion US dollars. The need to support the country's economy, which continues to experience serious difficulties against the background of the second wave of coronavirus infection, pushes the regulator to take such a step. The financial institution also plans to reduce rates. Today, the head of the Reserve Bank of Australia made a statement that the yield of Australian bonds with a ten-year maturity has become higher than that of other bonds in the world. This means that the regulator has more prerequisites for buying back securities. According to experts, the Australian government is likely to take this step in the very near future. At least, its probability is approximately 80%. At the same time, the launch of the buyout program may take place at the next meeting of the country's main regulator, which is scheduled in early November of this year. Moreover, the head of the RBA has announced that he is least interested in short-term securities. All the regulator's attention is focused on the long-term period, on the dynamics of the growth of long-term bonds, and on the impact of their rise on the restoration of the economic balance in the state. However, Philip Lowy's speech itself has already had a negative impact on the value of Australian securities. Their profitability almost immediately rushed down, while the fall was noted across the entire spectrum of the market. The regulator began to control the yield curve in the early spring of this year, but until recently, the main focus was on securities with a three-year repurchase period. To date, three-year bonds have stopped moving at the target level adopted by the Reserve Bank of Australia. Recall that it is 0.25%. This contributes to the fact that the financial organization does not make their redemption sometimes for the entire week. However, the new purchase program could force the government to spend an estimated AU $1.4–2 billion a week on sovereign and municipal bond purchases. Recall that since the beginning of this year, the RBA has already spent a total of approximately 63 billion Australian dollars on the buyback program. The Reserve Bank will not be limiting itself to just a new QE program. It also plans to adjust the key rate, which can be sent to the level of 0.1%. The material has been provided by InstaForex Company - www.instaforex.com |
| Ford shares should rise by 30% Posted: 15 Oct 2020 06:40 AM PDT
Analyst Mike Ward set the highest bar for wall street automaker Ford Motor's stock, predicting a $ 10 or as much as a 30% rise in the company's stock price. The reason for this should be the high volume of production in North America and, consequently, a higher profit for the third quarter, which should exceed the indicator expected by experts. Changes in the company's organization and improved data on the car loan market play an important role in the rise of shares. It is worth noting that the company started the week with significant growth. Morning trading on October 13 in the US showed a 7.6% rise in the company's shares. Today, Ford Motor shares are at $ 7.57 per share.
Ford's flagship model, the F-150 pickup truck, has always been wildly popular with American consumers and has generated above-average revenue per unit. According to analysts, the inventory of cars at dealers by the end of the year will be lower by about 100 thousand units compared to the plan. This kind of phenomenon should support Ford Motor's profit growth in the second half of 2021. The company's management gets new faces and at the same time new opportunities. Jim Farley took over as Ford's chief executive in October, and John Lawler was appointed chief financial officer. According to experts, new people at the head of the company should offer new ways to develop the business, ensure product improvement, and take the necessary measures to reduce costs, which will ultimately have a positive impact on the share price. Moreover, the company plans to launch many new car models in the near future. The third quarter in financial terms promises to be very positive for the concern, which in turn will not only stimulate the growth of securities in the short term but also provide a significant profit in 2021. The Benchmark Company expert says without a shadow of a doubt that for the year, Ford Motor shares should end up almost ten times higher than the profit forecast for 2021. Ford is scheduled to report its third-quarter results on October 28. However, despite such bold statements by Mike Ward regarding the securities of the Ford concern, most analysts still advise you to look at the shares of a competitor – the largest automobile Corporation General Motors. Experts of the global data provider and financial market infrastructure Refinitiv predict a 27% increase in the value of General Motors shares compared to current indicators. Ward agrees with his colleagues and also advises investors to include General Motors securities in their portfolios. In general, both competitors are in the same position. Ford, like General Motors, has seen a significant decline in value since the beginning of this year. General Motors shares sank 12%, while Ford shares fell 22%. The material has been provided by InstaForex Company - www.instaforex.com |
| Evening review on October 15, 2020 Posted: 15 Oct 2020 06:13 AM PDT
The US jobs report for the week showed that long-term unemployment fell by 950,000. That is, from 11 million to 10.01 million. Sellers are trying to push the euro towards 1.1600. You may keep selling from 1.1715. Reverse purchases from 1.1760. The material has been provided by InstaForex Company - www.instaforex.com |
| BTC analysis for October 15,.2020 - Bull flag pattern in creation and potential for test of $12.000 Posted: 15 Oct 2020 06:09 AM PDT Further Development
Analyzing the current trading chart of BTC, I found that there is the potential completion of the bull flag pattern in the background based on the 4H time-frame. Key Levels: Resistance levels: $11,675, $12,035 and $12,460 Support level: $11,115 The material has been provided by InstaForex Company - www.instaforex.com |
| Pound fails to maintain 1.30 mark, struggles amid dollar growth and Brexit Posted: 15 Oct 2020 05:56 AM PDT
It is difficult for the pound sterling to stay maintain the 1.30 mark against the dollar due to several factors. First, the dollar is trying to grow, and there is information that it will no longer fall. If you look closely at the dollar swap operations of the world's Central Banks with the Fed, you can see that Central Banks will have almost no obligations to the Fed. The USD index began to rise in August and has now gained just over 1.5%. It turns out that no matter what the US regulator does in the process of ultra-soft monetary policy, the devaluation of the dollar is impossible. This, at least, will not happen until the Central Bank itself pumps dollars to other Central Banks. Perhaps the bet on a falling dollar is not winning at present. Secondly, the meeting started in Brussels. As part of the EU summit, investors may get signals of any progress in the painful Brexit negotiations with the UK. The stumbling block is fishing. However, France is rumored to be ready to soften its demands in this direction. The deadline for completing the negotiation process set by the British Prime Minister is due on Thursday, October 15. According to Europe, this date is October 31. Market observers are confident that the end of October is more relevant today, and the negotiation process will last until November at least. So the next few weeks will be crucial. In recent sessions, the pound rose as market players bet that a deal between Britain and the EU will be concluded before the end of 2020. However, sterling is still below the current year's peaks, at around 1.35. Buyers pushed the sterling to this level in early September, but it is unlikely to reach this level again, even if a trade deal is concluded.
Goldman Sachs currently holds a neutral position on the pound, which can change at any time due to the flow of news on Brexit. By the beginning of November, the deal may be small, but it will be concluded, and this is a relief for the markets. You should also pay attention to the USD/JPY pair, which declined at the end of the trading session on Wednesday. The US statistics could provide local support to the dollar. The producer price index in September rose twice as high as the initial estimates. Despite the growth on Thursday, investors continue to believe in the weakening of the greenback against the Japanese yen with the potential for a decline below 105.00.
On Thursday, traders focus on data on the number of initial applications for unemployment benefits. Given that the second wave of coronavirus continues to hold back economic growth in the country, problems in the labor market will continue. Therefore, the recent reports are likely to disappoint the markets, which may lead to additional pressure on the dollar. The main market risk is the prospect of a repeated lockdown. If quarantine becomes the only way to stop the virus, investors will again start turning to protective assets such as the yen, which means that the decline in the USD/JPY pair may continue. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 15 Oct 2020 05:50 AM PDT
A slight revision lower in headline annual inflation is the only change relative to the initial report, but it doesn't tell us anything new. Inflation pressures are subdued in September across the region and that continues to keep the ECB on their toes as the threat of deflation starts to creep in ahead of the year-end. Further Development
Analyzing the current trading chart of Gold, I found that there is successful rejection of the rising trendline and potential running flat downside correction completion. 1-Day relative strength performance Finviz
Based on the graph above I found that on the top of the list we got VIX and Natural Gas today and on the bottom Crude Oil and Gasoline RBOB. Key Levels: Resistance: $1,912 and $1,930 Support level: $1,890 The material has been provided by InstaForex Company - www.instaforex.com |
| The dollar participates in the negotiations Posted: 15 Oct 2020 05:26 AM PDT
The political games in Washington around an additional fiscal stimulus package continue. The amount of funding is still being haggled over. Last Friday, Donald Trump proposed a $ 1.8 trillion aid package, however, House Speaker Nancy Pelosi said on Tuesday that this offer is significantly less than what is needed due to the pandemic and deep recession. The delay in the passage of the stimulus supported the dollar, putting pressure on the market sentiments and increasing demand for safe assets. The USD index started to grow in August and has gained about 1.5% so far. At the same time, investors still have a glimmer of hope for the victory of Democrat Joe Biden, who will offer a larger package of support than Trump. "If the new package is not approved before the election, then all hope remains for a confident victory for the Democrats. However, the probability of such an outcome at the moment is only 57%, thus, anything can happen," Evercore ISI strategists said. In turn, Morgan Stanley experts note that election promises are not kept by all. "To advocate for a new stimulus package while in opposition is one thing, however, to do the same while serving as President of the United States is quite another. Therefore, we would argue with forecasts for the growth of risky assets in the event of a Democratic victory in the upcoming elections," they said. Deutsche Bank analysts have a similar opinion. "The US Federal budget deficit, the national debt, and the country's credit rating are not the subjects of heated debates during the pre-election period. However, they become extremely important topics as soon as you lead the Federal government. In particular, bill Clinton's real economic policy after winning the 1992 election turned out to be the exact opposite of his campaign platform," they said. The greenback is strengthening against the backdrop of increasing global uncertainty around COVID-19, while the activation of the virus in the Old World and the threat of new restrictions across the continent adversely affect the euro.
Italy has set a new record for the daily increase in the number of infected people, and Germany is approaching peak values. France has imposed a state of emergency that includes curfews for major cities. Investors fear that the second wave of the pandemic will hit the Eurozone economy hard. The main currency pair sank to the lowest level since the beginning of October – around 1.1705. As the epidemiological situation in Europe rapidly worsens, the path of least resistance for the euro runs down. "It looks like the EUR/USD pair has formed a top at 1.1830 and is now heading for 1.1700," OCBC bank strategists said. The GBP/USD pair went below 1.3000 and updated local lows around 1.2910. Traders continue to monitor the fate of the trade deal between London and Brussels. Earlier, British Prime Minister Boris Johnson said that he sees no hope for a deal if an agreement is not reached before the start of the EU summit, which starts on October 15. However, according to The Guardian, the chief negotiator from the United Kingdom, David Frost, believes that an agreement is still possible in the coming weeks. "The probability that the Brexit negotiations will end without a trade deal has decreased to 20-25% against the previous estimate of 40%. A no-deal Brexit is still possible, however, it will only be an accident," TD Securities experts said. "If London and Brussels can reach an agreement, this will support the pound and cause it to rise to $ 1.35. However, there will be limits to such growth, as the market will eventually switch to other problems that the British economy has had to face," they added. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 15 Oct 2020 05:18 AM PDT This pretty much reaffirms the earlier report here, that there has been a slight change in language on the Brexit front by European leaders now that they expect the UK to also signal some intention to keep negotiations ongoing beyond this week. That said, just be mindful in case we get some 'drama' later today as the summit meeting is only scheduled for 1300 GMT. Further Development
Analyzing the current trading chart of EUR, I found that there is the bullish divergence on the 4H time-frame in creation, which is sign that there is potential for the upside rotation. 1-Day relative strength performance Finviz
Based on the graph above I found that on the top of the list we got VIX and Natural Gas today and on the bottom Crude Oil and Gasoline RBOB. Key Levels: Resistance: 1,1772 Support levels: 1,1700 and 1,1690 The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 15 Oct 2020 04:53 AM PDT
The coronavirus is quickly spreading around the world, raising worries among investors. The virus suppresses economic activity. Besides, the chances of stimulating the economy before the US elections are zero. Amid this situation, European stock indexes moved sharply lower. Germany's DAX lost 2.4%, France's CAC 40 fell by 1.8%, and the UK's FTSE dropped by 2.2% as well. Investors fear that a spike in coronavirus cases will force governments across Europe to stop their economic activities again. Every day in Europe, around 100 thousand new people are infected with the coronavirus. In the UK, there are about 20 thousand new cases. France has declared a public health emergency. The number of hospitalizations is growing. In some countries, such as Germany, France, Great Britain and others, restrictive measures have already been reintroduced. Bars, restaurants, and other public institutions have been closed to stop the infection spread. Also, the countries intend to close educational institutions for quarantine. On Thursday, oil prices fell slightly. Futures for WTI crude fell by 0.6% to trade at $40.80 per barrel. Brent also lost 0.6% to settle at $43.06. The American Petroleum Institute said that US crude oil inventories fell by 5.4 million in a week, nearly double of what analysts had expected. Gold futures remained unchanged and traded at $1,907.50 per ounce, while EUR/USD fell by 0.1% to 1.1740. Indexes of the Asia-Pacific region also show negative dynamics due to the plobal pandemic. Moreover, the increase in tensions between the United States and China adds to the negative market sentiment. The Shanghai Composite lost 0.08% and the Shenzhen Component fell by 0.14%. However, in China, the consumer price index rose by 1.7% in September. The producer price index fell by 2.1% on an annual basis, beating the forecast of 1.8% decline and 2% fall in August. Japanese Nikkei 225 lost 0.69%, while South Korean KOSPI fell by 0.83%. The Hong Kong Hang Seng Index also lost 1.15%. Experts believe that a sell-off may soon begin in the market because it is unlikely that new stimulus measures will be taken before the US presidential election. Negotiations on this issue ended in a stalemate. In other words, there is no point of expecting a quick recovery of the world's economy, as there is not a single factor to contribute to this. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 15 Oct 2020 04:46 AM PDT Operational scale Minute (h4 timeframe ) Second half of October - the dollar index #USDX and the GBP in the h4 timeframe - What's next? - Review of traffic options from October 16, 2020 ____________________ US Dollar Index The development of the movement of the dollar index #USDX from October 16, 2020 will continue in the equilibrium zone (92.72 - 93.30 - 93.88) forks of the operational scale Minute, taking into account the development and direction of the breakdown of the range:
The breakdown of the resistance level of 93.75 - continued development of the movement #USDX within the boundaries of the channel 1/2 Median Line Minuette (93.75 - 94.00 - 94.25) with the prospect of reaching the lower border ISL38.2 (94.65) zone equilibrium fork operational scale Minuette and c, then updating the local maximum 94.71. A joint breakdown of the support level of 93.75 on the initial SSL fork line of the Minuette operational scale and the Median Line Minute (93.30) will make it relevant to develop the movement of the dollar index towards the goals: - LTL Minuette control line (93.05); - local minimum 92.98; - lower limit ISL61.8 (92.72) of the fork equilibrium zone of the operational scale Minute; - the ultimate Shiff Line Minuette (92.50). ___________________ Euro vs Great Britain Pound The movement of the "main" cross-instrument EUR/GBP from October 16, 2020 will also occur in the equilibrium zone (0.8965 - 0.9018 - 0.9070) forks of the operational scale Minute depending on the working out and direction of the range breakdown:
A breakdown of the Median Line Minute - support level 0.9018 - followed by a breakdown of the LTL control line (0.9010) of the Minuette operating scale forks - will determine the development of a downward movement of EUR/GBP to the lower border of ISL61.8 (0.8965) of the equilibrium zone of the Minute operating scale forks with the prospect of reaching the local minimum 0.8865. If the resistance level of 0.9060 is broken, the movement of the "main" cross-instrument will continue in the channel 1/2 Median Line Minuette (0.9060 - 0.9075 - 0.9090) with the possibility of reaching the boundaries of the equilibrium zone (0.9110 - 0.9135 - 0.9161) a fork of the Minuette operational scale. ____________________ The review is compiled without taking into account the news background, the opening of trading sessions of the main financial centers and is not a guide to action (placing "sell" or "buy" orders). The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 15 Oct 2020 04:44 AM PDT
On the global scale, the formation of a new area of the downward trend is likely to continue. However, it is getting clearer every day that everything will end with the waves a-b-c. If so, the quotes may increase from the current levels with the targets located near the peak of the Z wave. A successful attempt to break through the high of the b wave also indicates that markets are ready to buy the instrument. Yet, as in the case of EUR/USD, the internal structure of the upward wave that started on September 23 looks very unusual.
Taking a closer look, we can notice that the wave marking of the area between September 1 and September 23 took a three-wave shape and looks quite normal. An unsuccessful attempt to break through the Fibonacci retracement level of 61.8% indicates that the downward set of waves is complete. Meanwhile, a successful attempt to break through the Fibonacci retracement level 38.2% shows that markets are ready for another increase in the qoutes. For the previous day, the instrument gained around 70 basis points. Consequently, the instrument simply returned to its initial position. A failed attempt to break through the Fibonacci retracement level 50.0% only proves that the upward trend will continue. Donald Trump has always been the one who likes to change his point of view or deliver controversial statements, which are supported by neither facts nor experts. However, Boris Johnson, who has served as Prime Minister for over a year, often makes misleading statements as well. His cryptic messages are hard to decipher. First, Mr. Johnson announces that negotiations with the European Union will end on October 15. Later, he extends the deadline to November 15. At the same time, Johnson says he is ready to sign a withdrawal agreement with the EU. Then, the prime minister declares that the UK is ready for a no-deal Brexit. The Brexit deal will be discussed today on the EU summit. Nevertheless, market participants do not expect any drastic changes in the matter, as both the European and British officials have stressed multiple times that there has been no progress in talks. So, what can we expect from the summit? Plenty of issues remain unsolved, including fishing rights, borders between Northern Ireland and the Republic of Ireland, etc. I believe that the parties will not be able to come to an agreement even in a month. Therefore, I'd say that the informational background provides even greater support for the greenback. Apart from that, it is likely to lead to the formation of another downward wave which will only make the whole wave chart even more complex. General conclusions and recommendations: GBP/USD has supposedly finished the construction of the downtrend. A successful breakout attempt at the Fibonacci retracement level of 38.2% indicates that the instrument can be bought with the targets at 1.3191 and 1.3480, that is the 23.65 and 0.0% Fibonacci retracement levels. However, against the current information background, the wave chart is likely to become even more complex. The material has been provided by InstaForex Company - www.instaforex.com |
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