Forex analysis review |
- Forecast for Gold on October 21, 2020
- Forecast for EUR/USD on October 21, 2020
- Forecast for AUD/USD on October 21, 2020
- Forecast for USD/JPY on October 21, 2020
- Hot forecast and trading signals for GBP/USD on October 21. COT report. Pound's problems persist. Bears have a slight edge
- Hot forecast and trading signals for EUR/USD on October 21. COT report. Bulls take another step forward, aiming for 1.1882
- Overview of the GBP/USD pair. October 21. Boris Johnson wanted to get a trade "deal" with the European Union in 6 months.
- Overview of the EUR/USD pair. October 21. Rules for TV debates between Trump and Biden changed.
- GBP/USD. Buying the Pound on decline
- Analytics and trading signals for beginners. How to trade EUR/USD on October 21? Getting ready for Wednesday session
- October 20, 2020 : EUR/USD Intraday technical analysis and trade recommendations.
- October 20, 2020 : EUR/USD daily technical review and trade recommendations.
- October 20, 2020 : GBP/USD Intraday technical analysis and trade recommendations.
- Short-term technical view on EURUSD
- Ichimoku cloud indicator Daily analysis of Gold
- NZDUSD to test major short-term support
- US dollar plunges deeper amid multiple crises in the US
- Mysterious stimulus package. How USD may react?
- Evening review for EUR/USD on October 10. First target located at 1.1860.
- Donald Trump urges Congress to pass stimulus deal. EUR/USD bulls under pressure from US political uncertainty
- Shake Markets: Procter & Gamble and Netflix Reports
- Recovery of global economy from COVID-19 not to be easy
- GBPUSD: what is wrong with the pound and what prevents bulls from realizing their potential
- Digital currencies: Future of the financial world
- EUR / USD: Deadline of negotiations on the coronavirus relief bill. Positive news on COVID-19 vaccine.
| Forecast for Gold on October 21, 2020 Posted: 20 Oct 2020 08:34 PM PDT GOLD Gold confirmed the initial signals for growth this morning. The confirmation was the sharp exit of the price over the balance indicator line on the daily chart.
Earlier, the Marlin Oscillator turned up from the border with the territory of the "bears" at the same time that the price turned from the lower border of the price channel. Now, the nearest target is the MACD line at 1945.00. Overcoming the MACD line opens the second goal of 1960.00 - the resistance of the nested line of the price channel. The third goal is 1992.00 - the next line of the price channel and the top on September 1 (checkmark).
On the four-hour chart, the price was fixed above both indicator lines - the balance line and the MACD line. Meanwhile, the Marlin Oscillator strengthened in the positive zone. We are anticipating the continued growth of the gold's price. The material has been provided by InstaForex Company - www.instaforex.com |
| Forecast for EUR/USD on October 21, 2020 Posted: 20 Oct 2020 08:18 PM PDT EUR/USD The speculative growth of the euro continued on Tuesday. The price broke the October 9 peak, now it is aiming for the highs on October 10 and on August 6, near the MACD line on the daily chart - 1.1915/20. The Marlin oscillator is growing in the zone of positive values, the upward trend continues. The Marlin signal line began to turn to the downside on the four-hour chart, which indicates a slowdown in price growth. The price will probably settle in a particular area for a day before it rises to 1.1915.  |
| Forecast for AUD/USD on October 21, 2020 Posted: 20 Oct 2020 08:18 PM PDT AUD/USD The Australian dollar tried to gain a foothold below the 0.7058 level yesterday, but the dollar's weakness prevented it from doing so. The price is already rising above this level in today's Asian session. The Marlin oscillator is moving up, and the price could rise to 0.7120, the high on October 19. The price has formed a convergence with the oscillator on the four-hour chart. A third reversal of the signal line from the border of the growth trend, but most likely, it won't. We are waiting for the correctional price growth to reach the designated target of 0.7120.  |
| Forecast for USD/JPY on October 21, 2020 Posted: 20 Oct 2020 08:18 PM PDT USD/JPY The USD/JPY pair gained yesterday, it even tried to overcome the resistance of the MACD line on the daily timeframe, but the technical resistance turned out to be stronger and the price rolled back from it even with the support of the growing stock market. Today we expect the yen to attack 105.76 again, but there are resistances from another plan. This is the Marlin oscillator's weakness, which has not been able to move into the zone of positive values in the last four days, its signal line is moving sideways along the neutral line. But there are also positive signs. Marlin is retreating from the decline area on the 4-hour chart. The price is also supported by the balance indicator line. The stock market also provides support - the Japanese stock index Nikkei 225 is currently growing by 0.37%, while 24-hour quoted futures on the S&P 500 are adding 0.45%. As a result, we are waiting for the price to overcome yesterday's peak, which automatically means an exit above the MACD line on the daily chart, and further growth to the embedded line of the price channel in the area of 106.20. A negative scenario will unfold after the price drops below the signal level of 105.20, in which case the price will continue to fall to 104.93. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 20 Oct 2020 06:59 PM PDT GBP/USD 1H The GBP/USD pair continued to trade in its own style on Tuesday, October 20 - in different directions. Therefore, it is still very difficult to say what kind of trend has developed for the pound/dollar pair. We have slightly rebuilt the descending trend line, which now signals a downward trend again. However, this trend line is no longer strong, and the pair, as we can see, rebounded from the resistance area of 1.3006-1.3024 in the first place. Thus, we believe that there are still good chances of continuing the downward movement. And from a fundamental point of view, these chances are quite high. Nevertheless, if buyers manage to gain a foothold above the 1.3006-1.3024 area and the trend line, then chances of a new upward trend will increase many times over. GBP/USD 15M Both linear regression channels are more sideways than up or down on the 15-minute timeframe. Such an arrangement perfectly reflects the nature of the pair's movement on the hourly chart. COT report The latest Commitments of Traders (COT) report on the pound showed that from October 6-12, non-commercial traders continued to mostly close contracts for the British currency, rather than open new ones. The pound sterling increased by around 60 points during this period, which is very small, despite the rather volatile trading within each individual day. During this time, the "non-commercial" group of traders opened 149 Buy-contracts (longs) and closed 6,144 Sell-contracts (shorts). Thus, the net position of professional traders has grown again, by 6,000 contracts. However, as with price changes, these changes in the mindset of professional traders are purely formal. Moreover, the net position of non-commercial traders is growing for the third consecutive week, which casts doubt on the pound's succeeding decline, which is much more expected than growth. Even more interesting is the fact that the total number of contracts for the "non-commercial" group has been decreasing in recent months. That is, large traders do not believe in the pound and do not want to deal with it, whether it is about buying or selling it. The same case with the "commercial" group, which also mainly closes any contracts for the pound. In such circumstances, we would not make a long-term forecast based on the COT report. No important information from the UK on Tuesday. Traders could focus on the ever-worsening numbers of COVID-19 spreading in Great Britain. The numbers are really scary, but they are not the highest among the EU countries. We would say the values are "average", but this spring the British healthcare system has been unable to cope with a much smaller influx of patients. Plus, the more the number of cases becomes, the more likely it is that Prime Minister Boris Johnson will introduce total quarantine. In principle, this applies to almost any country. If the healthcare system cannot cope, then a total lockdown will have to be introduced. The UK is slated to publish the September CPI on Wednesday. Inflation is expected to accelerate to 0.6% y/y, although this figure is still very low. No more important events are planned either in the United States or in Britain, however, it is possible that new important data on Brexit topics, negotiations between London and Brussels, negotiations between Democrats and Republicans on a new stimulus package for the US economy are possible. We have two trading ideas for October 21: 1) Buyers for the pound/dollar pair met an insurmountable obstacle on their way in the form of 1.3006-1.3024 and rebounded from it. Therefore, you can consider long positions while aiming for 1.3173, if this area is overcome, not earlier. Take Profit in this case will be up to 100 points. However, take note of very frequent changes in the direction of movement and relatively high volatility, so we recommend trading in small lots. 2) Sellers could not keep the pair below the downward trend line, however, this line is now rebuilt, and the bulls have not yet managed to gain a foothold above 1.3006-1.3024. Therefore, we recommend taking new sell positions below the Kijun-sen (1.2963) and Senkou Span B (1.2962) lines, and aiming for the support area of 1.2857-1.2872 and the 1.2823 level. Take Profit in this case can range from 60 to 100 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: 20 Oct 2020 06:57 PM PDT EUR/USD 1H The euro/dollar pair continued to rise on the hourly timeframe on October 20. From a fundamental point of view, it is still impossible to substantiate this movement. Nevertheless, the pair's quotes rebounded from the Senkou Span B line in the morning and began a new upward movement, breaking the Senkou Span B line along the way. We also managed to form a new rising channel that supports growth, and getting the price to settle below it indicates that the trend could change into a downward one in the short term. Buyers have a real chance of bringing the pair to the 1.1882 level. Moving further up is still in doubt, since the price as a whole continues to remain within the long-term horizontal channel, approximately at 1.1640-1.1920. EUR/USD 15M Both linear regression channels are directed to the upside on the 15-minute timeframe, signaling an upward movement after an unsuccessful attempt to overcome the 1.1692-1.1699 area. COT report The EUR/USD pair has risen in price by around 30 points during the last reporting week (October 6-12). This is very small and, as a whole, the price has not significantly changed. Trades are held in a horizontal range of 250-300 points. Therefore, data from any COT report can only be used for long-term forecasting. Nonetheless, pro traders continue to become more and more bearish. We remind you that the most important group of traders is called "non-commercial". This group closed 2,500 Buy-contracts (longs) and opened 5,300 Sell-contracts (shorts) during the reporting week. Thus, the net position for this group immediately fell by 7,800. At the same time, the "commercial" group, which almost always trades in the opposite direction, has become more bullish. This group of traders increased their net position by 10,000 contracts at once. The first indicator continues to signal the convergence of the lines of net positions of these two groups of traders. We remind you that when the green and red lines diverge strongly, this is a signal of an impending reversal of the trend globally. Now these lines have begun to narrow, so we can assume that the high around the 1.20 level will remain the peak of the entire uptrend. The macroeconomic background for the pair was essentially absent on Tuesday despite the fact that the euro continued to rise. However, not a single important report was published during the day, not even an important speech. It's just that the euro is getting more expensive at this time and that's it. We remind you that everything in the foreign exchange market depends solely on supply and demand for a particular currency, and technical, fundamental and other types of analysis are only tools that allow you to predict the future price movement. Therefore, if some central bank urgently needed to buy the euro, then the demand for the single currency is growing, and accordingly, its rate will increase, and the fundamental background is completely empty or unchanged. Moreover, we remind you that all trades of the last three months continue to take place in a horizontal channel, so now we have witnessed just a new round of upward movement within this very channel. European Central Bank President Christine Lagarde is set to deliver another speech on Wednesday, who continues to speak almost every two days. We can also expect a speech from ECB Vice President Luis de Guindos. There are no major events scheduled in the United States for today. We have two trading ideas for October 21: 1) The pair continues to rise, now inside the upward channel. Thus, traders are advised to continue to trade up with targets at the resistance level of 1.1882 as long as the price is within the trend channel. Take Profit in this case will be up to 50 points. Also, the Kijun-sen line can be used as a reference point for maintaining the upward trend. 2) Bears have let go of the initiative, having failed to overcome the support area of 1.1692-1.1699. Thus, now sellers can only wait for the bulls to take a break. You can consider the possibility of opening short positions after breaking the Kijun-sen line (1.1763) while aiming for the support area of 1.1692-1.1699 and the level of 1.1663. The potential Take Profit in this case is from 30 to 70 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: 20 Oct 2020 05:12 PM PDT 4-hour timeframe
Technical details: Higher linear regression channel: direction - downward. Lower linear regression channel: direction - upward. Moving average (20; smoothed) - sideways. CCI: -14.9232 The British pound sterling paired with the US currency continues to trade in a "storm mode". Over the past day, the pound/dollar pair changed its direction several times, and each time the market was nervous. Thus, based on the results of the past day, no conclusions can be drawn at all except that the "swing" continues, the trend continues to be absent, and it is extremely difficult to trade the pair now. Therefore, we recommend that you trade the pair very carefully at this time. We have repeatedly written that the fundamental background for the GBP/USD pair is very complex and multifaceted. The position of the British pound is under pressure from Brexit, which will take place in 10 weeks, the lack of a deal with the European Union, the high probability of no trade deal with the United States, as well as a lot of other "pleasant" moments related to the "divorce" with the EU. The position of the US currency is under pressure from the upcoming US elections and the uncertainty associated with the American future and its economy. Also, the Democrats and Republicans still cannot agree on a new package of the economy, respectively, the economy does not receive incentives, and may start to slow down again. Meanwhile, Brexit negotiations may finally fail in the near future. Both sides do not see progress in the negotiations and also continue to accuse the opposite side of a lack of desire to concede. London, for example, believes that the European Union is not ready to compromise and sees no point in resuming negotiations at all. "There is no point in resuming the negotiation process as long as the EU adheres to the current position. Such negotiations will be meaningless and will not bring us closer to a workable solution," said Michael Gove. But Michel Barnier, who is responsible for negotiations on the EU side, believes that the parties need to intensify negotiations. However, we have heard and seen all these beautiful statements more than once. Or more than a dozen times. The fact remains that no one wants to give in, but no one wants to complete the "divorce" without a "deal". Thus, both sides pretend that they are ready for a "hard" Brexit, but at the same time negotiations continue, deadlines are postponed. Both London and Brussels have also repeatedly stated that they have begun preparing their territories for a "no-deal" regime. However, this should have been expected from the very beginning of the negotiations. The "smart" position of Boris Johnson is that he wanted to get an agreement with the EU in 6 months of negotiations, with the one that London wants to get, and not fulfill any requirements from the EU. The fact that the "Canadian" version of the agreement was discussed with Canada itself for 7 years, Johnson does not care. He refused to extend the "transition period" and is now reaping the benefits of his "genius" foreign policy. No matter what anyone says, it is the British economy that will suffer the most from the lack of a free trade agreement. This is logical since the UK enjoys a huge European market consisting of several hundred million consumers. But it will stop using it duty-free and without restrictions from January 1, 2021. The European Union will lose only 66 million consumers. Also, there will be financial and logistical problems. First, many groups of goods that will be transported across the British-European border may be in short supply or seriously rise in price. Secondly, the number of trucks that will be sent from Europe to England and back will not increase, but the time spent on cargo inspections will increase, which will cause serious congestion of ports and roads leading to them. It was calculated that on average, each truck will spend several days not crossing the border. Also, do not forget about the "Scottish question". We have repeatedly reported that Nicola Sturgeon is not going to back down and let the issue of a new independence referendum take its course. So, potentially over the next few years, Britain could also lose Scotland. The UK, accordingly, already has a lot of problems. And there will be even more. The British and their government wanted to get rid of dependence on the EU and trade as they please with the whole world, but so far the Kingdom is moving at full speed into a financial hole. And the situation is further aggravated by the "coronavirus" epidemic, which continues to gain momentum in the Foggy Albion. It is hardly necessary to say once again that the stronger the second "wave" in Britain, the more the British economy will shrink, the more dissatisfaction British citizens will be with the policy of Boris Johnson. Thus, the issue of Boris Johnson's resignation may be on the agenda next year, and the Prime Minister's party members may initiate it. All this potentially means a new pile of problems for Britain. Consequently, the British pound will live without fundamental support. In the near future, trading in different directions is likely to continue. Therefore, traders should clearly understand the current picture of things before opening any trades. As for expediency, it is not the worst option now to refuse to enter the market before the onset of calm and measured trading.
The average volatility of the GBP/USD pair is currently 128 points per day. For the pound/dollar pair, this value is "high". On Wednesday, October 21, therefore, we expect movement inside the channel, limited by the levels of 1.2815 and 1.3071. A reversal of the Heiken Ashi indicator to the top signals a new round of upward movement. Nearest support levels: S1 – 1.2939 S2 – 1.2909 S3 – 1.2878 Nearest resistance levels: R1 – 1.2970 R2 – 1.3000 R3 – 1.3031 Trading recommendations: The GBP/USD pair started a new round of downward movement on the 4-hour timeframe. Thus, today it is recommended to trade lower with the targets of 1.2909, 1.2878, and 1.2848 until the Heiken Ashi indicator turns up. It is recommended to trade the pair for an increase with targets of 1.3000, 1.3031, and 1.3062 if the price returns to the area above the moving average line. The material has been provided by InstaForex Company - www.instaforex.com |
| Overview of the EUR/USD pair. October 21. Rules for TV debates between Trump and Biden changed. Posted: 20 Oct 2020 05:12 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: 204.9763 During the second trading day of the week, the EUR/USD pair resumed its upward movement. However, in general, trading continues inside the side channel, which we have repeatedly written about. Thus, in the long term, nothing changes for the euro/dollar pair, and the 50-60 points that the pair passes every day do not have any effect on the technical picture at all. By and large, the trend continues to reverse every few days. Thus, now, in principle, it is impossible to talk about any trend. Why is this situation now? Because America continues to prepare for the elections, which have already begun. Meanwhile, in Europe, a strong second "wave" of COVID-2019 has begun, which is unclear and unknown what impact it will have on the EU economy. Therefore, traders are cautious and they are waiting for the fundamental background to become a little simpler and clearer. In particular, we have repeatedly noted that before the end of the presidential election in the United States, it is unlikely to expect a strong strengthening of the US currency, because market participants simply will not risk investing in the dollar without knowing the name of the next president of the country. As for the European currency, its traders do not want to buy since it has already risen in price over the past six months by 13 cents and continues to trade near two-year highs. Meanwhile, the third and final round of televised debates between Donald Trump and Joe Biden is scheduled for October 22. This will be the last face-to-face meeting of presidential contenders before election day. However, the new round will be supplemented with new rules, according to the decision of the commission on presidential debates. After the first round turned into utter chaos and was called a "disgrace" by many American media, the rules of TV debates changed. Now the microphone of one of the candidates will be turned off while the second candidate is speaking. However, only for a two-minute time slot at the beginning of each 15-minute round. The remaining thirteen minutes will be the debate when the microphones of both contenders will be turned on. According to media estimates, Trump interrupted Biden 71 times during the first debate. However, it is unlikely that the new rules will deter Trump from new attacks and provocations because this is part of his strategy in a face-to-face confrontation with Biden. The topics that the participants of the debate will have to discuss also became known. These are the fight against coronavirus, race issues, climate change, national security, and American families. It should be noted at once that the Trump campaign headquarters opposed any changes to the rules of the debate and demanded to change the list of questions to be answered by both candidates. Also, Donald Trump got involved in a new conflict with the country's chief epidemiologist Anthony Fauci. However, the word "conflict" is not quite appropriate to describe what is happening. Trump simply insulted Fauci in his usual way, calling him an "idiot". According to the US President, if he listened to the advice of Fauci, the total death rate from the "coronavirus" would already be 700 or 800 thousand. Thus, Trump once again puts himself above the country's chief epidemiologist on an epidemiological issue in which he was most often misled. Recall that it was Dr. Fauci who repeatedly refuted the words of the US President. Fauci predicted 200,000 deaths in the country from COVID-2019 this spring. It recently changed its forecast to 400,000 deaths. At the same time, the pre-election process in America is quite active. According to polling stations, about 28 million Americans have already voted, and in some states, there are even queues to go to the polls, despite the bad weather. Meanwhile, Trump himself continues to repeat the words about election fraud by Democrats. According to the current US President, fraud has already begun in some states, although Trump did not provide any evidence of his words. Meanwhile, a new batch of various sociological studies has arrived, which again showed that Biden leads by a margin of at least 11%. Thus, nothing changes in the balance of power before the election between the candidates. However, traders are more interested in an agreement between Democrats and Republicans that will allow them to agree on a new package of stimulus measures for the American economy. Earlier, House Speaker Nancy Pelosi set a deadline for negotiations that expired just a couple of hours ago. Since there is no new information on this issue, it can be assumed that the Democrats and Republicans did not manage to reach an agreement. However, all US political forces have long been focused on the elections, which are two weeks away, and not on issues related to the country's governance. And market participants themselves also continue to ignore most of the macroeconomic and fundamental information. Otherwise, how can we explain the almost three-month movement of the pair in the 250-300-point side channel? We can only assume that traders are waiting. They are waiting for either the US election and the name of the next president, or any actions of major market players that can move the pair off the ground. One way or another, there is no trend in the long term. From intraday trading, the upward trend is now maintained, as the price continues to be above the moving average line. However, we once again warn traders that it will be extremely difficult for quotes to leave above the level of 1.1900. And the level of 1.2000 now looks completely unattainable. Thus, we should not expect a strong strengthening of the European currency now. As for the US dollar, traders overcome the level of 1.1700, but even in this case, the bears' strength is not enough for further movement to the south.
The volatility of the euro/dollar currency pair as of October 21 is 69 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1764 and 1.1902. A downward reversal of the Heiken Ashi indicator may signal a downward correction. Nearest support levels: S1 – 1.1780 S2 – 1.1719 S3 – 1.1658 Nearest resistance levels: R1 – 1.1841 R2 – 1.1902 R3 – 1.1963 Trading recommendations: The EUR/USD pair continues its upward movement. Thus, today it is recommended to stay in buy orders with a target of 1.1902 until the Heiken Ashi indicator turns down. It is recommended to consider sell orders if the pair returns to the area below the moving average line with targets of 1.1719 and 1.1658. The material has been provided by InstaForex Company - www.instaforex.com |
| GBP/USD. Buying the Pound on decline Posted: 20 Oct 2020 04:50 PM PDT Despite the negative signals that released earlier this week, the Pound held its positions. The fundamental background received an optimistic color, after which the GBP/USD pair once again turned towards the 30th figure. If we consider a broader time period, we can conclude that the Pound has not always reacted so calmly to such a negative news flow concerning the topic of Brexit. At the end of last week, the EU summit ended in Brussels. The summit was devoted to further relations between the UK and the European Union. During the meeting, not only did the members not reach a trade deal but they also exchanged harsh words, ending the summit on a sour note. Both the EU and UK said that businesses should prepare for a negative scenario, according to which London will leave the single market and interact with European enterprises under WTO rules. Further negotiations on the deal were in doubt. Just yesterday, Downing street said that they did not expect a visit from the EU's chief negotiator, Michel Barnier, as "such a trip does not make sense,". Europe, in turn, remained silent, thus exerting additional pressure on the Pound. The Pound withstood the pressure, its pair with the USD falling only to the base of the 29th figure. This is not the first failed summit over the past 4 years. But previously, the Pound reacted more drastically to disappointing signals; in just a few hours, the GBP/USD pair could collapse by several hundred points. Therefore, the current stress tolerance says a lot. First of all, it lets us know that the market is actually confident that the parties will eventually find a common denominator. Thus, the market estimates the probability of implementing a hard scenario at 40%, while the probability of concluding a deal (in one form or another) is estimated at 60%, respectively. This is evidenced by the results of a survey of almost a hundred economists of leading banking conglomerates conducted by Reuters. Today, in the afternoon, the European Commission declared its readiness to continue negotiations with Britain and that they can resume tomorrow. This signal served as another confirmation that there is a kind of game of nerves between the negotiators, but in the end a deal will either be concluded or the parties will extend the transition period. The fact is that for several weeks the market has been actively discussing the question – will the Bank of England lower the interest rate or not? And we are talking about a decline in the negative area. This was discussed directly by the Governor of the Bank of England, Andrew Bailey, who quite transparently hinted at such a scenario. Then a press release from the central bank was published, according to which the bank's economists study this issue and model possible consequences, weighing all the pros and cons. A little later, a member of the monetary policy committee, Jonathan Hassel, said that he was ready to consider using negative rates (although he admitted that such a move could harm banks' profits). In other words, the corresponding signals are piling on, putting pressure on the pound. However, today another representative of the Bank of England, Gertjan Vliege, said that according to most of his colleagues, the central bank "has not yet reached the stage at which it is possible to draw conclusions about negative rates." At the same time, the prospects for monetary policy, according to him, "tend to add new incentives." This rhetoric offset the concerns of GBP/USD traders about lowering the rate to zero. Thus, the British pound retains the potential for further growth. It is worth noting that tomorrow in the UK, key data on the growth of inflation will be published. This data can provoke volatility for the pair, especially if it comes out worse than the fairly optimistic forecasts. So, according to most experts, the overall consumer price index (on a monthly basis) should come out of the negative area and reach 0.4%. The core index should also show positive dynamics after the decline to a record low of 0.9%. If the release is released in the red zone, the pair may again sink a little. This drawdown can be used as a reason to open long positions. The goal of the upward movement in the medium term is 1.3080 (the upper border of the Kumo cloud coincides with the upper line of the Bollinger Bands indicator on the daily chart). The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 20 Oct 2020 02:09 PM PDT Hourly chart of the EUR/USD pair The EUR/USD pair, without a proper correction in terms of size, went back to moving up on Tuesday, October 20, and it was quite strong. In the morning, we advised you to consider options for opening new long positions if the MACD indicator discharges to zero and the price corrects sufficiently. However, the MACD did not discharge to the zero level and, as a result, was late with producing a new buy signal. Thus, formally, this signal could be processed, however, when it appeared, the price had already passed about half way up. Thus, novice traders could earn a maximum of 25 points of profit on this trade. Also, a new upward trend line appeared today, which now supports bull traders. Unfortunately, it has a large tinted angle, so it cannot be considered strong. Nevertheless, getting the pair to settle below it can be considered the first signal to change the trend back to a downward trend. Take note that trades are still held between the levels of $1.17-1.19, that is, in a horizontal channel. No macroeconomic publications in either the European Union or the United States on Tuesday. Therefore, novice traders had nothing to pay attention to during the trading day. You can, of course, pay attention to the coronavirus epidemic that is now developing in Europe, however, firstly, COVID-19 also persists in the United States, and the infection rates are high there, and secondly, traders do not significantly react to epidemiological news right now. As well as news of an economic nature. Thus, technical factors remain the most important now. The calendar of macroeconomic events in the United States is empty again on Wednesday, and we can expect European Central Bank President Christine Lagarde to deliver another speech in the European Union. Since she has appeared more often in recent weeks than the news is shown on TV, we do not expect to receive new and important information. Moreover, Lagarde's latest statement that the EU economy will lose from 8% to 12% in 2020 was ignored. Her words about the fact that the second wave of coronavirus in Europe may again have a negative impact on the economy, was also ignored. The euro rose in price quietly on these reports. Thus, we do not believe that fundamental factors will be able to affect the movement of the EUR/USD pair tomorrow. Based on this, we advise you to be aware of everything that happens in the world, but pay more attention to the technique. Possible scenarios for October 21: 1) Buy positions on the EUR/USD pair remain relevant at the moment, since the downward trend line has been crossed, and now there is also an ascending line. Novice traders are advised to wait for a new round of downward correction, discharge of the MACD indicator and a new buy signal in order to open new long positions with targets at 1.1846 and 1.1899. Also, if one of the traders has opened longs, then they can keep them open until the MACD indicator turns down. Most likely, a new buy signal will not be generated before tomorrow morning. 2) You are advised to return to taking sell positions on the currency pair, but first the price should settle below the rising trend line. In this case, the price could fall with targets located above the level of 1.1696, from which the price has repeatedly rebounded off and which also is the lower border of the horizontal channel. 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 |
| October 20, 2020 : EUR/USD Intraday technical analysis and trade recommendations. Posted: 20 Oct 2020 09:16 AM PDT
In July, the EURUSD pair has failed to maintain bearish momentum strong enough to move below 1.1150 (consolidation range lower zone). 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. Moreover, Intraday traders should have noticed the recent bearish closure below 1.1700 - 1.1750 as an indicator for possible bearish continuation towards 1.1624. However, the pair has failed to maintain enough bearish momentum below 1.1750. Instead, another bullish breakout is being demonstrated towards 1.1840. As mentioned in previous articles, the price zone of 1.1850 - 1.1870 stands as a solid SUPPLY Zone providing considerable bearish pressure if the current bullish pullback pursues towards it. The material has been provided by InstaForex Company - www.instaforex.com |
| October 20, 2020 : EUR/USD daily technical review and trade recommendations. Posted: 20 Oct 2020 08:54 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 last 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. Currently, the price zone around 1.1750-1.1780 remains a Prominent Key-Zone to be watched by Intraday traders. The current Bullish breakout above 1.1780 has enabled upside movement towards the price levels around 1.1880-1.1900 where bearish pressure and a valid SELL Entry should be anticipated. Initial bearish target would be located around 1.1780. The material has been provided by InstaForex Company - www.instaforex.com |
| October 20, 2020 : GBP/USD Intraday technical analysis and trade recommendations. Posted: 20 Oct 2020 08:02 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. 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. That's why, Bullish Persistence above the depicted price zone of 1.2975 -1.3000 is needed to allow bullish pullback to pursue towards higher price levels. Until then, the GBP/USD remains trapped between the price levels of 1.2840 - 1.3000 until breakout occurs in either directions. The material has been provided by InstaForex Company - www.instaforex.com |
| Short-term technical view on EURUSD Posted: 20 Oct 2020 08:01 AM PDT EURUSD is moving higher as bulls recapture 1.18-1.1830 level. Price has formed a higher low and is showing signs of strength. EURUSD is now expected to move towards 1.19 as long as price holds above 1.18.
Green rectangle -support and higher high Blue lines -size of expected upward move EURUSD target remains at 1.19 as price has formed a higher high at 1.17 where price back tested the broken trend line resistance. Support remains key at 1.17. Bulls need to hold the break out above 1.1820. Inability to hold above 1.18-1.1820 will be a sign of weakness. So far bulls remain in control. 1.1760 is short-term support. Bulls need to defend this. The material has been provided by InstaForex Company - www.instaforex.com |
| Ichimoku cloud indicator Daily analysis of Gold Posted: 20 Oct 2020 07:48 AM PDT Gold price remains below key resistance according to the Ichimoku cloud indicator. Price is vulnerable to a move lower as long as price is below $1,940. Gold bulls have a lot of work to do. Bulls need to be cautious if price gets rejected at current levels and pushes below $1,900 again.
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| NZDUSD to test major short-term support Posted: 20 Oct 2020 07:45 AM PDT As we have explained in previous analysis, NZDUSD could very possibly be forming a head and shoulders pattern with the neckline at 0.6520 and the target at 0.63 if the pattern is activated. Today price is pushing lower towards the short-term support of 0.6570. Breaking below this level will increase chances of testing and breaking below 0.6520.
Blue line- neckline support Black lines - head and shoulders pattern Red line -size of decline if head and shoulders pattern activated NZDUSD is still above the neckline support. Bears need to break below this support blue line in order for the selling pressures to rise and a move towards 0.63 to start. Price is below key resistance at 0.67. The scenario that this is a topping formation are high. Confirmation of this bearish idea will come with the break below 0.65. The material has been provided by InstaForex Company - www.instaforex.com |
| US dollar plunges deeper amid multiple crises in the US Posted: 20 Oct 2020 07:10 AM PDT
No serious movements were noted on the USD index against the euro and the Japanese yen on Tuesday morning. Market participants are mainly pressured against the background of the unsettled negotiations on the stimulus package in the US. The complexity of the situation is that the parties cannot reach a consensus on the overall scope of the incentive package, and the differences in views are quite large. Despite the call of congressional representatives to speed up the decision-making process, the issue is still open, and it is likely that the agreement will not be signed before the presidential election. Thus, investors are beginning to realize that the next appointed U.S. President will take incentive measures. In this situation, the tension is only growing, and uncertainties are growing. This would naturally put significant pressure on the greenback. In addition, it became known that the People's Bank of China decided not to change the base interest rate on loans, as analysts had suggested. For the past six months, the rate has remained the same (at the level of 3.85% per annum). Recall that the last change occurred in April of this year. All this indicates growing confidence and a planned recovery of the country's economy after the consequences of the coronavirus pandemic. The aussie also showed negative dynamics on Tuesday. The state's chief regulator held a meeting on the ratification of a new additional stimulus related to the easing of monetary policy in order to maintain a weak economy, as well as the labor market, which continues to experience particular difficulties amid the crisis. Meanwhile, the value of the euro moved to $1.1772 in the morning while the previous value was at $1.1769. The value of the USD against the Japanese yen also changed but not so significant with an increase of 0.08%, that is, from the mark of £105.43, it moved to the area of £105.51. The euro against the yen rose by 0.09%, which moved it to the level of £124.21 per euro, and yesterday's rate was £124.10 per euro. The sterling against the US dollar remains almost unchanged with an exchange rate of $1.2945 per pound. On Monday, the value consolidated at around $1.2948 per pound. A stable rate was also recorded against the euro, on Tuesday, it is worth €1.0998 per pound, while on Monday it was trading at €1.1000 per pound. The US dollar has grown well against the Australian dollar. An increase of 0.55% was noted, and the current rate is $0.7035 per aussie. The USD index in relation to a basket of six major world currencies reduced by 0.04% on Tuesday. And against a basket of sixteen major world currencies, it went up by 0.7%. The initial estimates regarding the further movement of the greenback look extremely disappointing. According to most experts, the greenback will not be able to overcome negative pressure from the outside in the coming year and will intensively reduce its positions. Moreover, the rate drop can be sharp and rapid, without the possibility of a reverse rollback. In this regard, the long-term outlook for the US dollar does not look attractive at all. The material has been provided by InstaForex Company - www.instaforex.com |
| Mysterious stimulus package. How USD may react? Posted: 20 Oct 2020 06:32 AM PDT The current weakness of the US dollar could be explained by uncertainties around the new large stimulus package. The main question is when it will be approved, before or after the upcoming elections. Some analysts from Wall Street suppose that the US congressmen will hardly come to an agreement on the package. They are likely to cut the sum significantly At the same time, experts at Goldman Sachs suppose that there could be a small stimulus package for small businesses. There are no reasons to provide significant support by the end of the year. US fiscal policy for next year should be determined by the results of the US Senate elections regardless of the results of presidential elections. The Trump administration is offering $ 1.8 trillion whereas Nancy Pelosi is offering $ 2.2 trillion. These two initiatives are much closer to each other than the proposal of the leaders of the Republican majority in the Senate ($500 billion). If the Senate remains under Republican control next year, Congress is likely to agree on a package of measures close to the Republicans. Representatives of AGF Investments, which manages $35 billion, are also not sure that the parties will reach a political consensus. They believe that this week the leader of the Republican majority in the Senate, Mitch McConnell, can hold a vote on the allocation of $500 billion. In this case, Democrats will not sign an agreement. There are too many disagreements and only few opportunities for an agreement, according to Height Capital Markets. As soon as the Treasury Secretary concedes to Nancy Pelosi, Republican senators will immediately seek to toughen their position. And vice versa, once there is a discussion of a smaller amount of incentives, Pelosi gets too emotional. Pelosi set a deadline Yesterday, speaker of the House of Representatives Nancy Pelosi said that Tuesday would be a deadline for an agreement. On Tuesday, Steven Mnuchin and Nancy Pelosi, who periodically negotiate a new bailout plan for the US economy, should continue the debate. Meanwhile, on Monday, Republican Senator John Thune expressed doubt that there would be enough Republican votes to pass a bill providing $1.8 trillion in aid. Instead, Republicans are planning to come out with a new proposal. The package will be aimed at funding the salary protection program, which was launched earlier with bipartisan support to provide loans to small businesses. However, Democrats had previously said that they would not approve such ideas because they considered such measures insufficient. Meanwhile, the negative background continues to form for the US dollar. The Fed is increasing purchases of securities, capping the rise in the yield of treasuries. The regulator bought $29.97 billion worth of mortgage and Treasury securities over the past week, compared with $ 11.16 billion in the previous week. Thus, we can state that the growth rate has accelerated by almost three times. Of course, this does not play on the side of the US currency. In addition, falling interest rates indicate an excess of dollars in the banking system. This factor will also contribute to the depreciation of the greenback. Yesterday, the long-term trend of the US dollar index reversed. Today, the US currency continued to trade in the negative territory. If the currency breaks the 93.35 level, the medium-term downward trend will confidently recover. This will allow sellers to bet even more enthusiastically on the fall of the US currency. The material has been provided by InstaForex Company - www.instaforex.com |
| Evening review for EUR/USD on October 10. First target located at 1.1860. Posted: 20 Oct 2020 06:10 AM PDT The euro/dollar pair is still rising. Buy deals could be opened from the levels of 1.1707 and 1.1745. Stop is at 1.1700. The first target is located at 1.1860. A pullback could take place from this level. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 20 Oct 2020 06:08 AM PDT The euro advanced against the US dollar to almost weekly highs amid renewed hopes that the US lawmakers will finally agree on a new stimulus package for the US economy. At the same time, fears about the ongoing COVID-19 pandemic and political uncertainty in the United States are holding back the EUR/ USD rise. Two weeks are left before the US presidential election, and US President Donald Trump is urging the Congress to reach a deal. A preliminary agreement on new stimulus measures could be a winning card in his campaign. At the same time, most experts think that a decision on the next stimulus package will be made only after the election. "President Trump would love to have a stimulus package before the election. But there's no political upside for Pelosi to sign anything before the election," Michael Mullaney from Boston Partners said. What will happen to the stimulus package after November 3? Two options are possible: 1. Democrats and Republicans will never agree over it. This will definitely hurt US economic growth, leading to a decline in risk appetite and a stronger US dollar this year. 2. Democrats will realize that it is impossible go on without the support of the national economy, and will urgently find a compromise with Republicans by adopting a small emergency aid package of $0.5 trillion, for example. Perhaps this amount will be enough to support the economy until the end of the year. Then, the EUR/USD pair will continue to trade in the current range. In this case, however, Democrats will have to admit that they did not want to compromise with Republicans solely for political reasons, thus threatening the country's economy. This will definitely hurt their political image. However, at the moment, the tactics used by Democrats are bringing them political advantages. Analysts say that one of the reasons for the decline in Trump's rating is the inability of the White House to adopt at least some kind of aid package for the American economy in recent months. The euro was one of the strongest currencies on Monday. But the news from the EU is discouraging. France, Italy, and Spain are facing a record surge in the number of new COVID-19 cases. ECB President Christine Lagarde expressed concern about the slowdown in the European economy amid the second wave of the pandemic. Next week, the regulator will announce another decision on its monetary policy. While no new measures are expected from the ECB at the moment, COVID-19 statistics and new lockdowns could stir the regulator into action. "Yesterday, the EUR/USD pair jumped to 1.1793 and closed the day at 1.1766. The bullish momentum has slightly increased. The pair may test the level of 1.1805 from the current levels, but then a more stable pullback is expected. The next resistance is located at 1.1830, while the support is found at 1.1730 and 1.1710. For some time, the pair can trade in the range of 1.1690-1.1830," specialists at UOB noted. The material has been provided by InstaForex Company - www.instaforex.com |
| Shake Markets: Procter & Gamble and Netflix Reports Posted: 20 Oct 2020 05:48 AM PDT
The Dow Jones fell more than 400 points in the afternoon session after it became clear that Tuesday's deadline for reaching an agreement would likely not make steady progress. With only a few weeks left until the elections, it looks like an agreement won't be reached until late fall. Also on Tuesday, Procter & Gamble and Netflix will provide reports, and housing start data for September is due to be released. Here are three events that could affect the market on Tuesday. 1. Demand for cleaning products is likely to drive P&G growth. Procter & Gamble will provide an income statement ahead of the stock exchange, and analysts expect the company's earnings per share to be $ 1.41 on revenue of $ 18.3 billion. The giant consumer goods manufacturer is capitalizing on the demand for household cleaning products from brands like Swiffer, Mr. Clean and Comet, as they are especially relevant during quarantine and lockdown. 2. Streaming video is one of the biggest "winners" of the pandemic period Netflix, the popular video streaming service, will also report on Tuesday after the market close. According to analysts, its earnings per share will be $ 2.13 on revenue of $ 6.4 billion. This is another company whose shares rose during the lockdown, which led to a significant increase in the number of subscribers. 3. The volume of new housing in September will grow One of the established trends during the pandemic period is that people are moving from cities to suburbs or rural areas, which increases the number of existing real estate as well as new construction. US housing start data for September is due out at 08:30 am ET (12:30 GMT). Profit is expected at 1.457 million, slightly up from 1.416 million in August. In the summer, after the spring calm, housing construction recovered strongly. The material has been provided by InstaForex Company - www.instaforex.com |
| Recovery of global economy from COVID-19 not to be easy Posted: 20 Oct 2020 05:41 AM PDT
COVID-19 has caused an unprecedented downturn in the global economy, which has already been partially overcome. However, recovery remains weak and unstable. Most likely, this will continue for several years. However, global trade rose sharply amid a pickup in demand that was logged in many countries despite restrictions. Financial markets were also able to overcome difficulties, and stock markets in many countries reached pre-crisis levels and even managed to beat them. Despite the near-zero interest rates, the banking and financial systems appear to be stable. Oil prices also advanced after a sharp crash. In many countries, economic growth has practically stalled or even started to fall. The second wave of the coronavirus could lead to long-term and more serious consequences.
A similar situation has developed even in economies where growth has resumed, for example, in the United States. At first glance, it seems that America has overcome the crisis. Unemployment is falling and employment is rising. However, the unemployment rate remains significantly higher and employment is significantly lower than before the pandemic. Rising long-term unemployment is undercutting a sustainable recovery. Moreover, the fiscal stimulus in the US is coming to an end, and a new aid package has not been adopted yet. As a result, the growth of consumer spending slowed down. In addition, production investments are declining. In other words, this situation is unlikely to contribute to confident growth. There are also political uncertainties in the United States due to the upcoming presidential elections. As a result, stock markets are not performing well. At the same time, in Europe, the situation is even worse. The eurozone economy has been hit hard by the pandemic. The second wave of coronavirus disrupted short-term economic growth. Moreover, deflation is starting now. This speaks of a prolonged economic downturn despite production revival in some countries such as Germany. The UK continues to solve the Brexit issue. Lingering uncertainty also contributes to a protracted economic downturn, despite a recovery in the service sector. Perhaps the only country that has a strong economic recovery is China. The virus was defeated along with the restoration of industrial production and services. Many economic indicators now exceed pre-crisis levels. However, China's strong economic performance will not be able to strengthen the global economy. Governments now have only one option that is to continue aggressive fiscal stimulus in the form of targeted government spending that could stimulate private investment. Otherwise, many countries will face serious economic problems. The material has been provided by InstaForex Company - www.instaforex.com |
| GBPUSD: what is wrong with the pound and what prevents bulls from realizing their potential Posted: 20 Oct 2020 05:24 AM PDT The British pound is gradually losing its bullish momentum, which was formed earlier this week, and there are a number of objective reasons for this. Due to the resumption of strict restrictive measures, it is likely that the economic momentum that was gained during the summer period will quickly slow down. However, the authorities have no choice, as all measures are aimed at curbing the spread of coronavirus in the UK. Most likely, it will negatively affect the overall figure for the 4th quarter of this year. There is little doubt that the British economy will start to stagnate again by the end of this year. Due to the likelihood of a lockdown and a hard Brexit, the pound will continue to remain under pressure from other world currencies, especially the US dollar, as the aggravation of the situation with COVID-19 will again return demand for safe-haven assets.
The high concern about the current situation was shown today during a speech by a member of the Monetary Policy Committee of the Bank of England, Gertjan Vlieghe, who signaled that the Central Bank will probably resort to monetary policy easing and strengthen stimulus measures in the near future. This will be done because of the sharp resurgence of coronavirus cases in the UK, which is negatively affecting the economy. Gertjan Vlieghe also noted that downside risks to the economic outlook, which have been so often discussed at the Bank of England recently, are beginning to materialize. This forces us to act ahead of the curve by expanding and extending quantitative easing programs. Vlieghe also reminded that the Bank of England is considering the possibility of introducing negative interest rates and such a decision will seriously affect the position of the British pound. And although the bank's management has not yet come to a decision on this issue, the market is always trading on expectations. Not so long ago, I spoke about three conditions under which the regulator can take such extreme measures. The first condition is the need for monetary stimulus. Here you can put a tick, because it is already clear how the pace of economic recovery is slowing down, which requires additional cash injections. The second condition is that the positive impact of negative rates should outweigh their negative impact. The Bank of England has recently asked commercial banks to provide specific answers to questions about the impact of negative interest rates on their operations. In Europe, for example, such measures have led to a sharp drop in bank profits. In order to meet the third condition, it is necessary to understand whether negative interest rates should be introduced or whether other monetary policy instruments can be used.
As for the current technical picture of the GBPUSD pair, the bears are focused on the breakdown of the 1.2920 support, from which a powerful rebound took place this morning. We can assume that the static buyer, which last week was at the level of 1.2865, moved there, and the further direction of the pound will depend on how the trading instrument behaves in this range. A break of this level will quickly lay siege to those buyers who were gaining long positions at the beginning of this week, which will lead to the demolition of stop orders and a quick return of GBPUSD to the area of the minimum of 1.2865. If the bulls ignore the next negative portion of news on the UK economy, and a large buyer manages to protect the support of 1.2920, then we can count on an attempt to return to the weekly maximum of 1.3015, with a breakdown of which problems may arise again. Only positive news on Brexit will be able to inspire the bulls to update the levels of 1.3080 and 1.3160. The material has been provided by InstaForex Company - www.instaforex.com |
| Digital currencies: Future of the financial world Posted: 20 Oct 2020 05:24 AM PDT
The field of digital means of payment is at the very beginning of its development. Experts are confident that virtual money will be a priority in the near future. It is possible that they will be in circulation along with fiat currencies. According to experts, digital means of payment will occupy a niche in the global financial market. In the long term, they are expected to be the undisputed leader among other currencies. At the moment, experts are recording a kind of rally of leading central banks seeking to introduce digital currencies into circulation. The US Federal Reserve, on the other hand, denies active participation in this race. The Fed head, Jerome Powell stressed that quality is more important to the department, and not primacy in this matter. Powell added that, for the effective functioning of the digital currency, it is necessary to protect it from cyber attacks and any fraudulent manipulations. For the Fed, the impact of the new virtual currency on monetary policy and the country's financial stability is paramount. Preventing financial fraud and maintaining user privacy and security are other key factors. Moreover, Powell also noted that they are on the verge of making a decision on the issue of the digital dollar. The regulator is currently studying the future prospects of the new currency together with other central banks. The Bank for International Settlements (BIS) is also involved in these operations. According to a survey conducted by BIS in January this year, the lion's share of central banks (80%) have been working on creating virtual currencies since last year. Most regulators (70%) started developing new payment methods two years ago. Experts are confident that by the end of this year, the number of departments involved in this process will grow significantly. According to analysts, virtual currencies issued by central banks will receive the status of traditional means of payment. However, they will remain only in electronic form, experts emphasize. At the same time, their development and further control will be carried out centrally. Experts of the cryptocurrency market pay attention to the fact that digital money should be distinguished from decentralized cryptocurrencies, such as bitcoin. Note that the current use of BTC in different countries of the world differs from the initial one when the main digital asset just entered circulation. Currently, the first cryptocurrency is on the way to gaining legal status and some control from supervisory agencies. This greatly worries crypto enthusiasts, but it is difficult for them to influence global financial processes. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 20 Oct 2020 05:12 AM PDT The euro has been trading within the 17th figure for three weeks already, failing to breakout from the current price range because of the limited upward and downward impulses. Euro bulls have tried to overcome the support level of 1.1630 (the lower border of the Kumo cloud, coinciding with the lower line of the Bollinger Bands on the daily chart), however, their attempts failed, and it formed a local "price bottom" in the EUR / USD pair instead. In addition, the quote has not returned to 1.1630 since then, and has touched the upper border, 1.1850, only once in the last three weeks. Clearly, both the bulls and the bears lack the needed strength to control the trend, and to add to that, both the euro and the dollar are subject to pressure from their own problems. As a result, the EUR / USD pair is floating in a fairly wide price range, but it may change soon because today's events can stir up the market and provoke increased volatility.
The first factor that could influence the market is the situation with the coronavirus. Any news about the re-implementation of strict quarantine restrictions in Europe could lead in the collapse of the euro in the market. Meanwhile, the second factor is the political situation in the United States, however, global issues such as the trade relationship between the US and China is not that significant because the US elections will be held in two weeks, and whoever wins the race would have complete control over this. It is actually the developments on the long-disputed coronavirus relief bill that would affect the market, especially since today is the deadline of its negotiations. If the Congress fails again to agree on a stimulus package, businesses would be affected, which could result in a new wave of layoffs, which would deal another blow not only to the labor market, but also to the US economy as a whole. The US will have to continue to rely only on stimulating monetary policy, and this fact will put pressure on the US dollar. So far, there are discouraging talks that say the Congress will never come to an agreement, which suggests that the key issue for the US economy will be postponed for several weeks, and possibly for several months. Back to the topic of coronavirus, the strong pressure exerted on the euro was partly offset by the positive news regarding a vaccine, as according to pharmaceutical company Moderna Inc, the interim results of its trials will come out as early as next month, while in December, the drug may receive official approval for use from the federal authorities. Such allowed the European currency to rise a bit, after declining sharply for many days. In the meantime, the euro bulls could hit the jackpot, because if the US fails again to settle on a stimulus package, the euro would be able to test the upper border of the price channel (1.1630-1.1850). Thus, long positions may be opened from current positions, targeting a rise towards price level 1.1850. However, if the upward impulse fades away, it is advisable to change into short positions, as a too-expensive European currency will prompt the ECB to take action. The material has been provided by InstaForex Company - www.instaforex.com |
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