Forex analysis review |
- Forecast for EUR/USD on November 4, 2020
- AUD/USD Forecast for November 4, 2020
- USD/JPY Forecast for November 4, 2020
- Hot forecast and trading signals for GBP/USD on November 4. COT report. Pound awaits results of negotiations between Michel
- Hot forecast and trading signals for EUR/USD on November 4. COT report. Elections coming to an end, but results will not
- Overview of the GBP/USD pair. November 4. Negotiations are negotiations, and trials are scheduled. Boris Johnson defends
- Overview of the EUR/USD pair. November 4. The most important election in the history of the United States. Six major differences
- USD will resume its downward trend after elections
- US elections takes place today
- GBP/USD. Too early for the market to write off the dollar
- Analytics and trading signals for beginners. How to trade EUR/USD on November 4? Getting ready for Wednesday session
- Ichimoku cloud indicator Daily analysis of EURUSD
- AUDUSD approaches key resistance
- Gold price challenges key resistance trend line
- November 3, 2020 : EUR/USD daily technical review and trade recommendations.
- Several scenarios of the election outcome and the expected reaction of currencies
- November 3, 2020 : EUR/USD Intraday technical analysis and trade recommendations.
- November 3, 2020 : GBP/USD Intraday technical analysis and trade recommendations.
- Analysis for GBP/USD on November 3. The White House is counting on a "silent majority" and reminds of errors in most forecasts
- EUR / USD: Prospects for dollar and euro on possible US elections outcome
- Precious metals, Gold and Silver, H4. Comprehensive analysis for November 4, 2020
- What will bury US dollar?
- GBP/USD: plan for the American session on November 3 (analysis of morning deals)
- Analysis of EUR/USD on November 3. America gets ready for Joe Biden's victory, while the US dollar prepares to fall
- EUR/USD: plan for the American session on November 3 (analysis of morning deals)
| Forecast for EUR/USD on November 4, 2020 Posted: 03 Nov 2020 07:57 PM PST EUR/USD The euro gained 75 points on Tuesday due to below average trading volumes. Undoubtedly, this was a speculative growth in anticipation of the start of the national vote in the United States. The price has reached the target level of 1.1754 today. Getting the price to settle above 1.1754 may lead to rising towards 1.1880, but we consider this scenario as an alternative, since Biden is ahead of Trump at the moment with a score of 89 voters against 72. To win, you need to get 270 conditional voters, that is, a certain number of them depending on the victory in a specific state. We believe that Joe Biden's victory will lead to a stronger dollar. Also, the Senate is leaving the Republicans' control - 35% versus 49% of the Democrats. The daily chart shows that the signal line of the Marlin oscillator reverses from the border of the growth area. We are waiting for the price to go under 1.1590, then it will continue to fall to 1.1495. The four-hour chart shows that the price did not break any of the indicator lines above, it only punctured the MACD line. For high volatility, this is a typical case for large players to control the situation. Getting the price to settle below 1.1590 will be an important sign of the euro's succeeding decline. The material has been provided by InstaForex Company - www.instaforex.com |
| AUD/USD Forecast for November 4, 2020 Posted: 03 Nov 2020 07:12 PM PST AUD/USD Yesterday, the Australian dollar picked up the speculative game of European currencies and showed an increase of 105 points overcoming even the Euro. This morning, the target level of 0.7190 was punctured, after which the price returned to the intermediate level of 0.7058. The downward trend will allow the Aussie to fall at 0.6935 and fixing under it will already mean fixing the medium-term fall of the Australian currency. Based on the four-hour chart, the signal line of the Marlin oscillator went down. The level of 0.7120 is quite strong, the consolidation is based on October 23-28 and the consolidation under it was the first sign of the price's intention to go down further. Leaving the price below 0.7058 will automatically mean a decrease under the Kruzenshtern line. Accordingly, this will be the start of a mid-term decline in the Australian dollar, which will be set by the results of the US election.  |
| USD/JPY Forecast for November 4, 2020 Posted: 03 Nov 2020 07:10 PM PST USD/JPY On Tuesday, the USD/JPY pair fell by 26 points despite the growth of stock indexes. The S&P500 added 1.78%. Today in the Asian session, the Nikkei225 is up 1.52%, but the Australian S&P/ASX 200 is losing -0.54% and Chinese stock indexes are trading mixed. It is best to wait for the opening of the American session so that they can give a more objective assessment of the vote taking place in the United States. This morning, the price broke through the resistance of the price channel and approached the target level of 104.20 along the Kruzenshtern line. The output above it will open a second target 106.10. On the H4 chart, the price has turned sharply from the Kruzenshtern line and the Marlin is rushing to the overbought zone. But we need to wait for the opening of the US session for optimism in the stock market to be confirmed. Biden is also not a bad winner for stock speculators. If this result does not happen, the price will turn back to the target of 103.73. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 03 Nov 2020 05:25 PM PST GBP/USD 1H After rebounding from the support area of 1.2856 - 1.2874, the GBP/USD pair did not attempt to continue its downward movement on Tuesday, November 3. A strong upward movement began, which had a sufficient number of fundamental bases today. The price broke through the Kijun-sen and Senkou Span B lines and reached the resistance level of 1.3054. However, take note that with a 90% probability, the current movement was the result of the US elections. Consequently, today it can continue or end, but in any case it cannot be considered a normal movement, from which trends are formed. It is impossible to predict the mood and behavior of traders now. Therefore, we recommend trading with extreme caution in any case. From a purely technical point of view, breaking the 1.3054 level will open the way to the 1.3166 resistance level. GBP/USD 15M Both linear regression channels turned to the upside on the 15-minute timeframe, which fully corresponds to the nature of the pair's movement on the hourly chart. There are no signs of starting a downward pullback. COT report The latest Commitments of Traders (COT) report on the British pound showed that non-commercial traders were quite active in the period from October 20-26. However, their sentiment changed again, as can be seen from the green line of the first indicator in the chart. The mood of the "non-commercial" group of traders became more bullish for three consecutive weeks, but the net position decreased by 5,000 contracts over the last reporting week, so we can conclude that professional traders are again inclined to sell off the pound. However, if you look at the COT reports over the past few weeks or look at the first indicator, it becomes clear that commercial and non-commercial traders do not have a clear trading strategy right now. Perhaps this is due to an extremely unstable and complex fundamental background. The fact remains. The pound lost 90 points in recent trading days, and we believe that it will continue to fall. However, in the near future, we might receive important information about the progress of negotiations on the UK-EU trade deal, and the results of the vote for the US president will also become known. This information can change the mindset of professional traders. You need to be prepared for this. No fundamental background for GBP/USD on Tuesday, at least from the UK. No new information on the progress of talks on the trade deal. No important information from overseas either. However, traders were still active all day, which caused the dollar to fall by 160 points. There can be only one reason - the US elections. Moreover, not some specific results or factors, but the very fact of elections. A few days before the elections, the US dollar rose in price, and it began to fall on the day of elections. Today, a similar nature of the pair's movement may persist, and focus will be on the US elections, which will come to an end and then the counting of votes will begin. In addition, Michelle Barnier and David Frost will have to speak and report on the results of their more than a week round of negotiations today. Recall that in recent days, we have repeatedly received information that "the parties have agreed" or at least "have made significant progress." However, yesterday a representative of the European Commission expressed doubt that the parties were able to reach an agreement on the issue of fishing quotas in British waters. Therefore, from our point of view, it is too early to consider if the deal has been signed. If there is indeed progress, then the pound may rise even more on this news. We have two trading ideas for November 4: 1) Buyers for the pound/dollar pair managed to take a big step towards the new upward trend. Therefore, if the bulls manage to keep the pair above the Senkou Span B line (1.3028), then you are advised to trade up while aiming for the resistance level of 1.3166. Take Profit in this case will be up to 110 points. If the price leaves the area below the Senkou Span B line, then buyers will need to wait for a new signal, for example, a price rebound from the Kijun-sen line. 2) Sellers have let go of the initiative. Therefore, it is recommended to open new sell orders while aiming for the 1.2855-1.2874 area if the price settles below the Kijun-sen line (1.2965). Take Profit in the first case will be up to 80 points. We remind you that today there might be highly volatile trades and sharp price reversals again. Hot forecast and trading signals for EUR/USD 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. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the "non-commercial" group. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 03 Nov 2020 05:24 PM PST EUR/USD 1H The EUR/USD pair traded quite volatile, but was also calm on the hourly timeframe on Tuesday, November 3. No sharp turns, changes in direction of movement and an outright storm with swings during the day. The pair ideally, from a technical point of view, reached the support area of 1.1612-1.1624 twice, rebounded off it and started a strong upward movement. The downward trend line was also broken, so there were plenty of signals to move up. Also, during its upward movement, the quotes of the pair crossed the critical Kijun-sen line, so the likelihood of a further growth in the pair increased even more. At the same time, the situation may change to a more turbulent one today, since the US elections will come to an end and the voting results will begin to be slowly summed up. EUR/USD 15M Both linear regression channels turned to the upside on the 15-minute timeframe, which accurately reflected the trend of the hourly chart, where an upward movement began after rebounding from the 1.1612-1.1624 area. COT report The EUR/USD pair rose quite a bit during the last reporting week (October 20-26). Therefore, we can conclude that professional market participants did not make any extremely large purchases and sales of the European currency. However, the new Commitment of Traders (COT) report showed that non-commercial traders were actively closing Buy-contracts (longs) during the reporting week. In total, 12,000 of them were closed. But professional traders were in no hurry to get rid of Sell-contracts (shorts), having closed only 1,000. Thus, the net position of this group of traders decreased by 11,000 contracts at once. It is possible that the main closing of the Buy-contracts took place at the end of the reporting week, because in the following days a more tangible drop in euro's quotes began. Within its framework, the euro/dollar pair lost about 160 points. We remind you that if the net position decreases, it means that the traders' sentiment becomes more bearish. Thus, so far, our forecast is coming true. In the analysis of previous COT reports, we said that the high around the 1.2000 level could remain as the peak for the entire upward trend. The first indicator and its green line clearly show that non-commercial traders have been cutting back on long deals on the euro for two months now. And non-commercial traders are the most important group of large traders in the foreign exchange market. It is believed that it is the one responsible for driving the market. The presidential elections began in the United States on Tuesday. To be more precise, they began a few weeks ago, and by November 3, about 100 million people had already voted in America. A record turnout over the past 100 years for sure. However, despite the fact that polling stations will close in the United States literally within a few hours, this does not mean that we will find out the name of the new US President this morning. The vote count is likely to take anywhere from a few days to several weeks, as many Americans have chosen to vote safely this year by mail. Therefore, in the coming days, and maybe weeks, the markets will again be filled with rumors as to who won the election. In addition, the indexes of business activity in the service sectors will be released today, similar data will be released overseas. The most important report of the day is the ADP report on changes in the level of employment in the US private sector, however, it is unlikely for traders to focus on it. We will miss more important news today. We have two trading ideas for November 4: 1) The EUR/USD pair failed to overcome the 1.1612-1.1624 area and began a sharp upward movement. Therefore, buyers are advised to trade to the upside while aiming for the Senkou Span B line (1.1792). Take Profit in this case can be up to 80 points. Take note that sharp price reversals and changes in the mood of market participants are still possible today. 2) Bears have let go of the initiative since they missed the pair above the downward trend line. Therefore, sellers are advised to return to trading downward with targets at 1.1612-1.1624 and the support level at 1.1571, if the price settles below the Kijun-sen line (1.1693). Take Profit in this case can range from 50 to 110 points. You should also be careful with short positions as volatility can be high throughout the day. Hot forecast and trading signals for GBP/USD 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. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the "non-commercial" group. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 03 Nov 2020 04:35 PM PST 4-hour timeframe
Technical details: Higher linear regression channel: direction - downward. Lower linear regression channel: direction - upward. Moving average (20; smoothed) - upward. CCI: 134.5058 The British pound sterling paired with the US currency on the second trading day of the week also traded higher and broke the moving average line. Thus, in the case of the pound/dollar pair, it was a matter of falling US currency quotes on the eve of the US presidential election, and not a sharp increase in demand for the British currency. News slowly continues to come to the disposal of traders, but among them, none could overshadow the importance of the US presidential election or the still ongoing negotiations on a trade deal on Brexit. By the way, no new messages were received on the second topic. Thus, yesterday (and most likely today), traders will be fully focused on any information related specifically to the elections in America. The only thing that I would like to note now on the undying topic of "Brexit" is that representatives of the European Commission said on Monday that there was no response from the UK to the official notification of a violation of the provisions on the Northern Ireland border of the agreement on Britain's withdrawal from the EU. A month ago, the European Commission sent an official letter to London, to which, after the deadline, it did not receive a response. Thus, said the representative of the European Commission Daniel Ferrie, the European Union will now study the possibility of taking further legal measures. Ferrie also said that there are still differences in the negotiations regarding the "fish issue", and on Wednesday the chief negotiator from the European Union, Michel Barnier, will have to make a statement on the current situation in the negotiations. From our point of view, all the optimism that traders could absorb thanks to the latest "insider" messages has disappeared. We will remind that earlier there were reports that the parties reached a consensus on some controversial issues, and are also close to agreeing on the "fish issue". As you can see, European Commission officials are not aware of what is happening in London. Thus, we believe that the chances of reaching an agreement have increased recently, but not so much that we can talk about an agreement as a fait accompli. We still recommend waiting for official information from Michel Barnier or David Frost. It is also clear from the statement of the representative of the European Commission that the European Union is not going to let go of the issue of London's violation of previous agreements on the Northern Ireland border. If the "Boris Johnson bill" comes into force, it will mean that London and Brussels will enter a new phase of confrontation. How, then, the issue of a trade agreement and any relations between the Bloc and the Kingdom will be resolved is unclear. As we can see, there are still a lot of uncertainties regarding the future coexistence of the Alliance and Foggy Albion. Meanwhile, the British, according to surveys conducted by the well-known company YouGov, are beginning to regret their decision in the 2016 independence referendum. According to the latest survey, the number of British adults who believe that the decision to leave the EU was right is only 38%, while the number of those who believe this decision was wrong is 50% of those surveyed. It is also reported that this is the largest gap between the first and second in favor of the second over the past 4 years. At the same time, British Prime Minister Boris Johnson said that his government had no choice whether or not to introduce a "lockdown". "According to the models created, if we were inactive, twice as many people could die this winter as during the first wave. In light of this information, we had no choice but to impose strict quarantine measures across the country. I think it was right to first try all the ways to contain the virus at the local level. I strongly disagree with the claims that we are not acting as quickly as our European partners," the British Prime Minister said in a speech to the House of Commons on Monday. During the regular session of the British Parliament, many members of Parliament and even the Conservative Party criticized Johnson for introducing a new "hard" quarantine in the country. What does this all mean for the pound? First, that you should not "run ahead of the engine". If Barnier and Frost can reach a consensus, then it will be necessary to open champagne to all fans of the British pound. In this case, the pound can add to the price. However, its long-term prospects will continue to be extremely dim. We have already said that the negative effect of Brexit on the UK economy will be all the same, in any case. A trade deal can only smooth it out a little, make the destructive impact less weak. In general, the prospects for the pound/dollar pair in the near future and the long term depend more on the results of the US election. In the coming days, markets may be under the impression of the election process, and a little later – under the impression of their results, and a little later – under the impression of the actions of the losing side. As for the long-term prospects, there is reason to assume that under Joe Biden, the US dollar will be inclined to fall over the next four years, which naturally plays into the hands of the British pound. Otherwise, we believe that the pound will continue to fall in price in 2021, especially if Donald Trump wins the election. Well, from a technical point of view, the situation is now extremely confusing. In the last three weeks, the pair have often been fixed above and below the moving average line. Given the strong fundamental background, such a "swing" may continue for some time. In the coming days, the market situation is unlikely to become calmer. Thus, it is recommended to trade very carefully.
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, November 4, thus, we expect movement inside the channel, limited by the levels of 1.2909 and 1.3165. The reversal of the Heiken Ashi indicator down may signal a possible resumption of the downward movement. Nearest support levels: S1 – 1.3000 S2 – 1.2939 S3 – 1.2878 Nearest resistance levels: R1 – 1.3062 R2 – 1.3123 R3 – 1.3184 Trading recommendations: The GBP/USD pair started a new round of upward movement on the 4-hour timeframe. Thus, today it is recommended to keep open long positions with targets of 1.3123 and 1.3165 as long as the Heiken Ashi indicator is directed upwards. It is recommended to trade the pair down with the targets of 1.2909 and 1.2878 if the price is fixed back below the moving average line. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 03 Nov 2020 04:35 PM PST 4-hour timeframe
Technical details: Higher linear regression channel: direction - downward. Lower linear regression channel: direction - downward. Moving average (20; smoothed) - sideways. CCI: 21.8927 During the second trading day of the new week, the EUR/USD pair was trading higher for most of the day. In previous articles, we have already said that the fall in the pair's quotes in recent days (that is, the strengthening of the US dollar) may not be related to the elections at all. We remind you that the euro/dollar pair spent the last three months mainly between the levels of 1.1700-1.1900, that is, in the side channel. Thus, there was no "pre-election movement" all this time. Traders were just waiting for really important information that would allow them to trade the pair more reasonably. And for three months they did not wait for it. The euro could not continue to grow in any way, as it had already risen in price by 13 cents over the past six months, and there was no noticeable correction after this growth. The US dollar could not rise in price first because of the "four American crises", which we wrote about repeatedly, and later – because of the impending elections. After all, what are elections for traders and investors? This is a possible change of power. A possible change of government means possible changes in foreign and domestic policy. Therefore, it doesn't matter whether you are a trader or an investor, the environment in which you work may change in the near future. Naturally, the dollar, even after a significant fall, could not form a more or less strong correction. Thus, the election is just an important event for the participants, however, we can not say that if Biden wins (for example), the US dollar will immediately start a new fall. Yes, there is a tendency that during the rule of Republicans, the dollar tends to become more expensive, and during the rule of democratic presidents, it tends to become cheaper. However, this pattern should not be taken literally. It should be remembered that many potentially important decisions for the US economy and politics can be blocked by the lower or upper house of the US Congress, where the majority may not be with the President's party members. A vivid example of this is now the lower house of Congress, where the majority is in the hands of Democrats, who block the White House's attempts to adopt an insufficient package of economic stimulus measures. Thus, much will also depend on who will control the lower and upper houses of Congress, since the elections in America are not only for the President but also for senators and congressmen. Meanwhile, most experts continue to believe that the current elections are the most important for the country in almost its entire history. There are a huge number of things that distinguish this election from any other. Let's consider them. 1) The current elections are taking place in a pandemic environment. Perhaps never before have elections been held in a mass epidemic. However, for the US and its current President, COVID-2019 is not just a virus that threatens the country and the people. This is an epidemic that has had the worst impact on the United States. The country has already recorded about 240 thousand deaths and more than 9 million cases of the disease. According to most Americans, the White House failed to fight the "coronavirus", and President Trump's actions were wrong. Not surprisingly, Trump's current approval ratings are low and leave him with very little chance of re-election. The most interesting thing is that Trump continues to say that the "coronavirus" is not as dangerous as doctors believe, accuses the doctors themselves of profiting from the pandemic, and also fiercely criticizes those countries that have introduced new "lockdowns". 2) The infamous televised debates. The TV debates that preceded the election were called "shameful" by the absolute majority of Western media. According to journalists, none of the candidates showed their best side, but Donald Trump especially "distinguished himself" again. During the first round of TV debates, when the current President had not yet turned off the microphone, he constantly interrupted and provoked Joe Biden, was rude and did not allow him to speak on a particular issue. This led to the fact that in the next round of televised debates, the performance rules for each candidate were tightened. Joe Biden was forced to adapt to Trump and also did not show his best side. 3) The third distinguishing feature is the age of both presidential candidates. At the moment, it is Donald Trump who is the oldest President in the history of the country. If Joe Biden is elected as the new President, he will break Trump's record, as the Democrat will turn 78 this month. 4) Scandals and "dark stories" of Trump. Perhaps never in four years has a US President had time to fall out with so many countries, international organizations, journalists, opposition forces, and so on. The list is endless. Trump fought with journalists, criticized Democrats, insulted women (in particular, the speaker of the lower house Nancy Pelosi), went into conflict with the European Union and China (as well as several other countries against which he also imposed duties), criticized Jerome Powell, and was constantly in a confrontation with Anthony Fauci. Thus, it is not surprising that after four years of his rule, he has made a huge number of enemies (or just people who do not support the idea of his re-election). Thus, we even believe that the US presidential election now looks like "Donald Trump – not Donald Trump" and not "Donald Trump – Joe Biden". 5) The fifth point just follows from the fourth. Joe Biden's ratings are unprecedented. Never before in the history of sociological research (since 1936) have the approval ratings of one of the presidential candidates been so high (more than 50%). Biden has consistently outperformed Trump by 8-13% in recent months, which gives him an extremely high chance of winning. 6) Mass riots and electoral fraud. A couple of days before the election in major US cities, companies and firms that have facades on main streets began to Board them up with plywood sheets, fearing riots and clashes between supporters of Democrats and Republicans. Biden and Trump started talking about election fraud a few months before the election itself. Well, immediately after the announcement of the results, any of the candidates are almost guaranteed to challenge the results of the vote through the Supreme Court. Donald Trump has already hedged his bets by appointing "his" man, judge Amy Barrett, to replace the prematurely deceased Ruth Ginsburg. Thus, yesterday's trading still was quite calm. The most interesting thing will be waiting for us today.
The volatility of the euro/dollar currency pair as of November 4 is 77 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1629 and 1.1783. A reversal of the Heiken Ashi indicator down may signal the resumption of a downward movement. Nearest support levels: S1 – 1.1658 S2 – 1.1597 Nearest resistance levels: R1 – 1.1719 R2 – 1.1780 R3 – 1.1841 Trading recommendations: The EUR/USD pair started a strong upward correction and worked out the moving average. Thus, today it is recommended to open new sell orders with targets of 1.1658 and 1.1629 if there is a rebound from the moving average line. It is recommended to consider buy orders if the pair is fixed above the moving average with the first target of 1.1780. The material has been provided by InstaForex Company - www.instaforex.com |
| USD will resume its downward trend after elections Posted: 03 Nov 2020 01:56 PM PST
The US dollar increased to a 4-week high last Friday, while it traded mostly in narrow ranges in October. Investors move quickly to defensive assets, since they are worried that the results of the election would eventually be challenged in court. The situation with the development of the pandemic, which threatens new economic damage, has added pressure. Today, the dollar index declined again. It is expected that short positions in the US currency will remain, and may increase immediately after the presidential elections. In a Reuters poll conducted from October 27 to November 2, nearly 70% of respondents said that net short dollar positions would remain the same or that the number would rise immediately after the election, while a few of the respondents shared the opposite opinion. In another poll, more than 50% of survey participants (39 out of 50 analysts) said the election result in the next few weeks will be the greatest impulse of the dollar's growth. In this regard, the spread of COVID-19 will fade into the background. The re-election of the current president with the preservation of the Republican Senate is unlikely, but this could lead to a significant strengthening of the dollar. Experts believe that the dollar's oversold condition suggests that President Trump's surprising victory could easily have a significant effect of reducing short positions on the USD. However, the most extensive poll, involving more than 70 analysts, pointed out that the dollar will weaken next year. In turn, if Biden wins the election, the US dollar is expected to decline, which is partly because of the rising expectations of a large aid package for the US economy under the Democrat's presidency.
The euro should support this scenario. The single currency has collapsed recently due to the rally in the dollar and the re-introduction of quarantine in some parts of Europe. In October, the euro sank by 0.6% against the dollar. However, the exchange rate increased by almost 4% over the year. The nearest target for buyers of the EUR / USD pair is 1.18. Over the course of the year, the rate should increase by at least 4%. Thus, the forecasted growth above the level of 1.20 is still relevant.
Analysts say that the euro, which is fairly the story of COVID-19, has not been affected as much as expected. As for the current realities, a positive background is being formed. The upward trend in the commodity market should support the Euro, since the Eurobloc currency is correlated with metals and energy carriers. On another note, the US Financial Department seized $ 73.7 billion through the placement of Treasury securities the day before. This is the highest number in the last month. It was known that large-scale operations of the Ministry of Finance lead to the growth of the US currency, but operations of a similar scale are not expected in the coming week. Yesterday, the volume of repayments exceeded the volume of placements by $ 9.9 billion, which will slightly put pressure on the position of the US dollar. The material has been provided by InstaForex Company - www.instaforex.com |
| US elections takes place today Posted: 03 Nov 2020 01:56 PM PST US presidential elections are taking place today: some polling stations have already been working for several hours, while some have recently opened, depending on the state and time zone. It is difficult to overestimate the importance of this event, including in the context of the currency market. The head of the American state, in particular, has broad powers in determining foreign policy, and also submits to Congress for approval the candidacy of the Fed Chairman. That is, the curve of the development of the trade war with China will be determined and ministers and key advisers including on economic issues will be appointed or reassigned, depending on who will take the White House. In addition, Federal Reserves' Chairman, Jerome Powell, whom Trump so persistently wanted to remove last year, ends in 2022. In other words, America is on the verge of political changes, which will clearly affect the US dollar.
Much speculation roams around in the press about how the dollar will behave if Biden wins or Trump wins – figuratively speaking, which candidate is "more profitable" for the dollar bulls. However, this reason is too unclear: as a rule, experts discuss a long-term time period. But if we consider the medium-term prospects of the US currency, in the context of the EUR/USD pair, then several other fundamental factors come to the fore. Traders will not discuss global issues, but rather more common issues in the coming days (and possibly weeks). Moreover, the fundamental background for the EUR/USD pair will depend on simpler things: a) whether the clear winner of the election will be determined based on the results of the vote; b) whether the losing candidate recognizes his loss. The news stream will revolve around these two common questions, while the market will discuss the foreign policy and other intentions of the 46th US President much later. Therefore, today's attention of EUR/USD traders should be focused not on macroeconomic news, but on American news feeds. As you know, the results of elections in the United States are determined not by the majority of votes, but by their distribution in the electoral college, the number of which for a particular candidate depends on the voting in specific states. There have been cases where a candidate won a nationwide majority but lost an election, such as Al Gore in 2000 and Hillary Clinton in 2016. That is why the objects of "increased attention" are traditionally the so-called "wavering States". In most cases, the election results will depend on voting results in eight fluctuating states: Florida (29 electors), Pennsylvania (20 electors), Ohio, Georgia, Michigan, North Carolina, Arizona and Wisconsin. Generally, these states will give 135 electoral college votes. The key states to watch out for on election night are Pennsylvania and Florida. If Trump's victory in these states is not confident (not to mention losing), then the chances for an overall victory will decline and vice versa – if he stalked these key regions of the country, the intrigue of the elections will continue. According to polls that were conducted before the election, the above States recorded around the same level of support for candidates from both parties (with a slight margin in favor of Biden).
In view of this, experts advise to be patient and not to jump to conclusions before counting all the votes. According to statistics, Biden voters are more likely to vote by mail, whereas supporters of the Republicans prefer to personally drop the ballot into the ballot box. Therefore, at the beginning of the counting of votes, it may seem that one of the candidates is gaining a landslide victory, depending on which ballots are processed faster. However, we should not trust the dollar's fluctuations during the counting of votes, as there is a very high risk of running into false currency movements. Usually, the name of the next president in the United States is known on election night, but this year's announcement of the winner may be postponed for several days. The fact is that many Americans voted early this year due to COVID-19 and approximately two thirds of all early votes are mail. It is their calculation that can delay the whole process and the moment of declaring the winner. It is also worth considering that different states of America have different laws. For example, in Florida and North Carolina, it is allowed to start counting ballots in the mail before Election Day. Local officials promise to deal with this quickly. But in Pennsylvania, Wisconsin and Michigan, you can start counting votes only on election day. Therefore, in these states, the publication of official results may have to wait.
It is also worth recalling that in addition to the US presidential elections, elections for the Senate, House of Representatives and governors in 11 American states are also held today. The Americans will decide the fate of 35 Senate seats. This election could change control of the Upper House of the US Congress, where the majority belonged to the Republican Party until today. If the Democrats can change the situation with Biden's victory, then the Democratic Party could then "lobby" a new $ 2.2 trillion stimulus package (the document was already approved in the House of Representatives last month). However, it will be difficult to predict the first reaction of the US dollar to this win. In this case, everything will depend on Trump's behavior. If he does not admit a loss, then the electoral process will actually continue in the courts. As a result, the next day will be at least very stressful for traders of the EUR/USD pair (in fact, as for all traders of dollar pairs). A clear and unambiguous election result will put pressure on the US currency (which is used as a defensive asset), which will lead to a sharp rise in the EUR/USD pair. In particular, this explains the current correctional upward pullback of the EUR/USD to the 17th figure. According to American journalists, Biden was still able to turn the situation in his favor in the wavering States during the last days of the election campaign. However, these assumptions may not be confirmed, so long positions as well as short ones do not look reliable. Before the voting and counting process is complete, trading dollar pairs is more like a game of roulette, since the election results (as well as Trump/Biden's reaction) is impossible to predict. The material has been provided by InstaForex Company - www.instaforex.com |
| GBP/USD. Too early for the market to write off the dollar Posted: 03 Nov 2020 01:20 PM PST The pound shows increased volatility against the dollar. The GBP/USD pair was at the bottom of the 28th figure yesterday, that is, at 5-week price lows, while the bulls are approaching the 31st price level today. Nearly 300-point price swings are relatively rare even for a pair like the pound-dollar. Therefore, it is necessary to understand the reasons for such volatility in order to assess the future prospects for GBP/USD. As a rule, the British currency reacts so sharply to news related to Brexit. Negotiations between London and Brussels are ongoing, so positive signals from this front could well provoke a growth impulse on the pair. But this time the dollar was the main culprit in the GBP/USD volatility. Presidential elections are taking place in the United States today, so all of the greenback's hesitations should be viewed through the prism of this fateful event. In the context of the presidential election, the US currency is seen as a defensive asset. And the higher Biden's chances of an unambiguous and undeniable victory, the lower the market's interest in the dollar, as well as in other protective instruments. This explains the current dynamics of dollar pairs - the greenback is losing ground (to one degree or another) in almost all of them, and most actively it concerns the GBP/USD pair. The fact is that the first news from the polling stations speaks of the advantage of the leader of the Democrats. According to the American press, Trump is ahead of Biden in several key states, but Joe Biden remains in the lead. Thus, the current US president is slightly ahead of his opponent in three key states. The head of the White House is leading in Ohio (47.4% versus 46% for Biden), North Carolina (47.8% versus 47.6%) and Iowa (47.6% versus 45.6%). However, Biden is ahead of Trump in Pennsylvania (48.7% versus 47.5%), Florida (47.9% versus 47.0%), Michigan (50% versus 45.8%), Arizona (47.9% versus 47 .0%) and Wisconsin (51% vs. 44.3%). According to the majority of experts, the most important victory is in two states - Pennsylvania and Florida - therefore the market reacted to the above news with a sell-off of the dollar. The defensive asset turned out to be unclaimed, while the interest in risk increased. The market regards Biden's victory as a signal for more significant fiscal stimulus and better international relations (primarily with China), so the US stock market is growing, while the greenback's status as a safe-haven is decreasing. But traders should be warned against premature trading decisions, especially against the US currency. The current situation is fraught with many pitfalls, many of which can radically change the mood of investors. Firstly, the above figures are not the results of the vote count, but the results of a poll conducted by the RealClearPolitics resource literally on the eve of voting day. Second, nearly 60 million American voters chose to vote by mail. The process of counting mail ballots is slower (compared to live ballots from polling stations), while according to statistics, remote voting is more preferred by supporters of Democrats. This means that on the night of the counting of votes (the period of the European session on Wednesday), Trump may take the lead. Accordingly, the dollar will strengthen again - also against the pound. Thirdly, the very fact of Biden's victory does not guarantee further growth of GBP/USD. In this case, everything will depend, firstly, on how far the Democrat will defeat the Republican, and secondly, on the position of Trump himself. The greenback will be under pressure if Trump admits his loss and quietly, peacefully, nobly prepares for the transfer of power. But if Biden's victory is not convincing, the incumbent president may get involved in a legal battle, challenging, in particular, the results of the mail vote (earlier he had more than once this method of voting, pointing out possible falsifications). It is worth recalling here that in 2000, when George W. Bush and Al Gore were contenders for the presidency, the country lived in limbo for several weeks. The elections were held on November 7, and the name of the new president was determined only on December 12. Moreover, it was not the election commission that said the decisive word, but the US Supreme Court. According to a number of American experts, Trump may repeat this path, plunging the country into a regime of political uncertainty. In other words, if Trump's reaction to Biden's victory is belligerent, then the dollar could once again regain its status as a favorite in the foreign exchange market. Thus, the growth of the GBP/USD pair is fragile and should not be trusted. The dollar is in limbo, while many investors make hasty conclusions, getting rid of the greenback. History knows several examples when pre-election polls did not justify themselves. For example, this happened in 2016, when Hillary Clinton was leading at the national level, but in the end she lost to Donald Trump. Such is the specificity of the electoral system in the United States. Whether Trump will be able to repeat such a somersault is an open question. Therefore, it is too early to write off the US currency. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 03 Nov 2020 01:20 PM PST Hourly chart of the EUR/USD pair After leaving the descending channel, the EUR/USD pair immediately started a strong upward movement on Tuesday, November 3, and was in it all day. Therefore, those novice traders who followed our morning recommendations, namely to trade up, are currently in profit from around 40 to 70 points. The MACD indicator did not turn down during the entire day, so traders could either take profits near the target levels, or wait for the MACD indicator to turn down. In any case, novice traders have profit, and we congratulate them on this. As for the future prospects for the euro/dollar pair, after such a strong growth it would be nice to correct a bit to the downside. However, we remind traders that the elections in America are not over yet, for another 5-6 hours, Americans will continue to come to the polls, respectively, and the markets can continue to trade quite actively. The same applies to tomorrow, when volatility can be very high, and there can also be sharp reversals in the pair. You can leave long positions on the MACD downward signal if traders want to try to extract the maximum profit from open trades. No major macroeconomic publications or other events scheduled in the US or the EU on Tuesday. Markets were entirely focused on the elections. Actually, this event alone was enough for the pair to trade actively all day. So far, no riots or clashes have been reported among the US population. Recall that many media outlets predicted riots on election day. However, at the moment everything is going on in the most cultural and civilized way. Nearly 100 million Americans voted early or by mail. The European Union and America will publish business activity indices for the services sector on Wednesday, November 4. The index is forecast at a fairly high level in the United States - 56 (Markit) and 57.5 (ISM). But the situation with business activity in the service sector is much worse in the European Union. It began to fall back in July this year, and it went below 50.0 in September, below which, we recall, it is believed that the industry is contracting. Well, with the introduction of the new lockdown in many European countries, the service sector suffered the most once again. Therefore, based on these publications, the euro is unlikely to receive market support. In addition, the ADP report on the change in the number of employees in the private sector will be published in the United States, which is similar to the NonFarm Payrolls indicator. The forecast is +650,000. However, whatever the real value, we believe that tomorrow traders will also make decisions based on data from the American elections. Possible scenarios for November 4: 1) Buy positions on the EUR/USD pair are still relevant at the moment, since the price has settled above the descending channel. However, in order to open new long positions, it is necessary for the pair to correct to the downside now, and the MACD indicator discharges slightly downward, preferably to the zero level. As for long deals that are still open, they can be closed by the MACD signal down or you can do it right now. 2) Trading for a fall at this time has ceased to be relevant, since the price failed to overcome the 1.1623 level and left the descending channel. Therefore, now it is necessary to expect a new downward trend or an eloquent completion of an upward trend, and only after that should you consider the options for opening short positions. In general, not in the near future. 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 |
| Ichimoku cloud indicator Daily analysis of EURUSD Posted: 03 Nov 2020 07:57 AM PST EURUSD is back testing cloud resistance after breaking below it. Price is showing signs of strength as we have moved back inside the Kumo (cloud) and we see bulls challenge the tenkan- and kijun-sen indicators).
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| AUDUSD approaches key resistance Posted: 03 Nov 2020 07:52 AM PST AUDUSD is trading at 0.7150 where we find the key resistance trend line coming all the way down from 0.74. So far price got rejected three times when approached this trend line resistance. Will we see a fourth? The US elections will surely play an important role to the volatility of the market and affect at least short-term price movement.
AUDUSD is below the resistance trend line. Normally at current levels we would prefer to turn bearish as price is very close to resistance and the risk is low. But with US election results on the way, any involvement with the markets is considered high risk. It is better to watch closely and be patient and let the dust settle after the results. It is time to focus on weekly closing prices. Medium-term trend remains bearish as price has most probably topped at 0.74 and is now in the process of a pull back. The material has been provided by InstaForex Company - www.instaforex.com |
| Gold price challenges key resistance trend line Posted: 03 Nov 2020 07:44 AM PST Gold price is once again above $1,900 but the advance has stopped right at the downward sloping resistance trend line. With US election results just around the corner, market action is expected to be erratic and many fake signals and break outs could be in play. Volatility is expected to rise. Traders need to be extra cautious.
Red line - resistance Technically as long as Gold price is below $1,910 we expect Gold price to move lower. Resistance is strong here at $1,910 and a rejection could lead to another test of $1,850. Recapturing $1,910-20 area would be the first step for a bigger move higher. Traders should be looking at the weekly close for more information for the coming trend rather than the intraday charts, as volatility due to the USA elections is expected to rise. The material has been provided by InstaForex Company - www.instaforex.com |
| November 3, 2020 : EUR/USD daily technical review and trade recommendations. Posted: 03 Nov 2020 07:17 AM PST
Three weeks ago, temporary breakout above 1.1750 was demonstrated within the depicted ascending channel. This indicated high probability of bullish continuation towards 1.1880. However, downside pressure pushed the EUR/USD pair towards 1.1700 where significant BUYING Pressure Existed. This was followed by another quick upside movement towards 1.1880-1.1900. The price zone around 1.1880-1.1900 constituted a KEY Price-Zone as it corresponded to the backside of the depicted broken ascending channel where significant bearish pressure and a reversal Head & Shoulders pattern were demonstrated. Recently, Two opportunities for SELL Entries were offered upon the recent upside movement towards 1.1880-1.1900. Suggested SELLING positions are already running in profits. Early signs of bullish reversal are being demonstrated around the current price levels of 1.1630. Exit level around 1.1720 was already reached. Trade Recommendations :- Currently, the price zone of 1.1740-1.1780 stands as a significant Resistance-Zone to be watched during the current upside pullback for a valid SELL Position. Initial bearish target would be located around 1.1720 and 1.1690. The material has been provided by InstaForex Company - www.instaforex.com |
| Several scenarios of the election outcome and the expected reaction of currencies Posted: 03 Nov 2020 07:11 AM PST
On Monday, trading in America ended with an increase of more than 1%, this positive trend was maintained on Tuesday. In ordinary times, such a rise could be called a rally. However, we are now dealing with a corrective pullback after a deep fall last week. After the fall from the highs and the pullback have occurred, the markets are ready for any move. In this regard, the most reasonable decision would be to wait for the results of the voting in the US, which, in principle, many players do. It is almost impossible to predict the next step now. But judging by the sentiment of the markets, they are hoping for a victory for Joe Biden, whose presidency will be a testament that the economy will receive a lot of aid. Against this background, the dollar went on the defensive. There are several scenarios for the outcome of the elections. Let's consider the main ones. Donald Trump's victory If Trump wins the race, then, it will come as a surprise to the markets as in the previous elections. The chances of a decline in the US dollar will be reduced. The dollar is likely to go higher as demand for defensive assets grows. Together with it, other currencies of the safe haven will rise in price - the Japanese yen and the Swiss franc. Democratic Party's unconditional victory Markets should take this news as positively as possible, as the likelihood of approving a large stimulus package and a return to multilateral diplomacy will skyrocket. At the same time, long-term bond rates will rise amid expectations of higher inflation. This is the outcome of events that will appeal to traders of the Australian, New Zealand, and Canadian dollars. These currencies will have the opportunity to grow well in the medium term against the US dollar and the Japanese yen. Victory for Biden, but Republican control of the Senate Things will become less predictable here. Perhaps there will be no active confrontation in trade and sanctions pressure on China. Meanwhile, the chances of a larger package of measures will diminish, which will hit market sentiment. The trends, of course, will be similar to the scenario of an unconditional victory for the Democrats, but they will be more restrained. The pressure on the dollar will increase, but not as pronounced as with the complete victory of the Democratic Party. The losing side does not accept the election results The most negative outcome for the markets is the scenario of contesting elections. The downward correction will be deep. Defensive currencies such as the Japanese yen, Swiss franc, and the US dollar will show strong upward gains versus cycle-dependent currencies. The dollar index on election day moved away from a monthly high on Monday and held around 93.50. The yen also appreciated in recent weeks, and on Tuesday it remained stable at 104.64 per dollar. The euro consolidated at around 1.17 against the US dollar. In general, the trading volume decreased, the rates remained almost unchanged, as the majority of investors took a wait and see attitude before the elections. Implied volatility for the euro and yen was above 11% over the week. This is the highest value since the beginning of April. Biden takes the lead in opinion polls. Note that early voting results in Texas and Florida may indicate a shift in market positioning. This is expected to happen between 23:00 and 01:00 UTC on Wednesday. Currencies like the yen and the franc will be more attractive if Trump has a chance to win. The material has been provided by InstaForex Company - www.instaforex.com |
| November 3, 2020 : EUR/USD Intraday technical analysis and trade recommendations. Posted: 03 Nov 2020 06:57 AM PST
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 as well. Bullish persistence above 1.1700 - 1.1760 favored further bullish advancement towards 1.1975 - 1.2000 ( the upper limit of the technical channel ) which constituted a Solid SUPPLY-Zone offering bearish pressure. Moreover, Intraday traders should have noticed the recent bearish closure below 1.1700. This indicates bearish domination on the short-term. On the other hand, the EURUSD pair has failed to maintain sufficient bearish momentum below 1.1750. Instead, another bullish breakout was being demonstrated towards 1.1870 which corresponds to 76% Fibonacci Level. As mentioned in previous articles, the price zone of 1.1870-1.1900 stood as a solid SUPPLY Zone corresponding to the backside of the broken channel. Intraday Trend-Traders could have considered the recent bearish H4 candlestick closure below 1.1770 as a valid short-term SELL Signal with bearish targets reached around 1.1700 and 1.1630. Any bullish pullback towards the price zone of 1.1770 should be considered for signs of bearish rejection and a valid SELL Entry. S/L should be placed just above 1.1810. The material has been provided by InstaForex Company - www.instaforex.com |
| November 3, 2020 : GBP/USD Intraday technical analysis and trade recommendations. Posted: 03 Nov 2020 06:55 AM PST
Short-term bearish outlook was expected especially after bearish persistence was achieved below the lower limit of the newly-established ascending-channel around 1.3100. A quick bearish decline took place towards 1.2780 and 1.2700 where considerable bullish rejection brought the pair back towards 1.3000 and 1.3100 during the past few weeks. The price zone of 1.3100-1.3150 (the depicted channel upper limit) constituted an Intraday Key-Zone to offering considerable bearish pressure on the GBPUSD Pair. Bullish Persistence above the mentioned price zone of 1.3100-1.3150 was supposed to allow bullish pullback to pursue towards 1.3400 as a final projection target for the suggested bullish pattern. However, the GBP/USD pair failed to do so, Instead, another bearish movement was targeting the price level of 1.2840 where bullish SUPPORT existed allowing another bullish movement initially towards 1.3000. On the other hand, please note that any bullish breakout above 1.3000 will probably enable further bullish advancement towards 1.3150-1.3170 to gather sufficient bearish pressure. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 03 Nov 2020 06:51 AM PST In the most global terms, the construction of the upward section of the trend, which begins on September 23, may already be completed. At this time, the wave patterns of the EUR/USD and GBP/USD instruments are very similar. For the euro currency, I assume that the construction of a new downward section of the trend will begin, possibly a three-wave one. The same can be said about the pound/dollar instrument. At the same time, I recommend waiting a couple of days for the US election to end and the markets to calm down after a fairly strong and important news background. After that, you will need to make additions to the wave markup and draw new conclusions. The wave markup on the lower chart does not look more convincing. The rising wave 3 or C looks as if it has already completed its construction. At the same time, an unsuccessful attempt to break through the 50.0% Fibonacci level suggests that the increase in the instrument's quotes will resume. Thus, if the current wave markup is correct, the instrument will have to pass through the 50.0% level to continue building a new downward trend section. There is still little good news for the British currency. More precisely, there is no news for the pound at all right now. Negotiations in London seem to be continuing, and markets continue to wait for information about their results. But there is no information, and this is beginning to frighten. On the other hand, if the negotiations had failed, they would not have lasted so long. The parties may actually be able to conclude a trade agreement before December 31, 2020, which will be a strong growth factor for the British pound. But there is still no news yet, so the markets are invited to pay more attention to the events in America on November 3 and 4. We can expect strong market movements on these dates. The White House, meanwhile, commented on the results of opinion polls that predict a victory for Joe Biden. According to the White House Director of Strategic Communications, Alyssa Farah, most polls and forecasts are wrong, as they were in 2016 when everyone was betting on Hillary Clinton. "The silent majority, which in 2016 showed all its strength, again confidently supports President Trump," Farah said. Thus, Republicans are counting on the fact that the majority of Trump supporters simply did not participate in various opinion polls. But they will come to the polls on November 3 and re-elect Donald. General conclusions and recommendations: The pound/dollar instrument presumably completed the construction of an upward trend section. However, I do not recommend selling the instrument until a successful attempt to break the 1.2860 mark, which corresponds to 50.0% of the Fibonacci level. If a successful breakout attempt takes place, I recommend selling with targets located near the calculated marks of 1.2719 and 1.2543, which is equal to 61.8% and 76.4% for Fibonacci. The material has been provided by InstaForex Company - www.instaforex.com |
| EUR / USD: Prospects for dollar and euro on possible US elections outcome Posted: 03 Nov 2020 06:13 AM PST
US stock indices rallied ahead of the US presidential election, brushing off the negativity of recent weeks and betting that the results of the presidential election will be announced on Wednesday. Against this background, the greenback retreated from the monthly highs reached earlier in the region of 94.3 points. Recent opinion polls show that Democratic candidate Joe Biden continues to lead the race for the presidency, beating Republican Donald Trump by 10 percentage points. Although the basic scenario, according to experts, is a victory for Joe Biden, investors may be waiting for pitfalls, including delaying the announcement of the results due to early voting, as well as a potential challenge to the election results. At the same time, analysts do not exclude a repetition of the events of twenty years ago, when the winner was announced only on December 12. If Biden wins the race, the dollar is expected to weaken, while Trump's victory, on the other hand, will help strengthen the US dollar. If the case goes to court, it could increase the likelihood of a political crisis in the US. The market will react to this by increasing demand for a safe greenback and a depreciation of the EUR / USD rate. The focus of investors' attention this week is also the next Fed meeting, which will be held on November 4-5. Most likely, the regulator will refrain from announcing additional incentive measures, but will leave the door open for adjusting the bond purchase program later (possibly already in December). In addition, the Central Bank may once again declare that it is the fiscal policy that is now the most effective tool against the background of uneven economic recovery after the recession caused by the COVID-19 pandemic. After reaching its highest levels since 2002 after the outbreak of the coronavirus, the USD index then rallied down, in part due to expectations that ultra-low interest rates would persist in the US for an extended period. Recently, the dollar has managed to strengthen slightly, but it is still trading 9% below its previous peak. What will happen to the dollar next? The bearish scenario reflects the pressure from the US double deficit and the growing Fed balance sheet. Proponents of this point of view assume that the USD decline cycle has already started, and it doesn't matter who wins the upcoming elections. According to them, due to its weakening, the dollar serves as a kind of shock absorber for the national economy. The alternative scenario implies much higher-than-expected US domestic growth driven by additional fiscal stimulus and a rebound in consumer deferred spending. In particular, Longview Economics experts, argue that the greenback may surprise the bears given the size of the surplus savings of American households. The company estimates that this figure increased by more than $1 trillion during isolation. "The United States has the potential for sustainable recovery once the COVID-19 pandemic is over or a vaccine against the virus is available. Instead of worrying about a double deficit in the US, investors should pay attention to the more powerful factor supporting the dollar - a combination of sustained growth and higher yields," experts say. Troubled prospects for the euro: The euro corrected last week following a decline in other markets. The weakening of the single currency was also the result of the worsening epidemiological situation in the EU. Due to the next surge of COVID-19 in the region, more and more countries are forced to reintroduce restrictive measures. There are fears that the second wave of quarantine restrictions in the Eurozone will be followed by another economic downturn, which will call into question the solvency of the countries of the South and the willingness of the countries of the North to finance further support measures, as well as the viability of the currency bloc in the long term. However, in anticipation of the results of the presidential elections in the United States, investors seemed to have forgotten about the ongoing COVID-19 offensive and new lockdowns in European countries. After a six-day decline, the EUR / USD pair touched a monthly low on Monday at 1.1620. On Tuesday, the dollar came under pressure and the major currency pair was able to recover to 1.1700. Greenback ended the previous week with a rise of more than 1%, and players seem to have decided to take profits in anticipation of the first results of the US presidential elections, which will be announced on Wednesday. "EUR / USD has dropped to lows since late September, but support at 1.1612 held out. Growth attempts are likely to fade in the 1.1680-1.1715 area. Above is the 55-day moving average near 1.1783, and as long as the pair is trading below this level, its mood will remain bearish," strategists at Commerzbank said. The material has been provided by InstaForex Company - www.instaforex.com |
| Precious metals, Gold and Silver, H4. Comprehensive analysis for November 4, 2020 Posted: 03 Nov 2020 05:49 AM PST H4 time frame Outlook for gold and silver on 4 November 2020 Previous outlook for gold and silver on the four-hour time frame on October 27,2020 Spot Gold On November 4, 2020, the development of Spot Gold will be determined by a break of the range:
A break of 1/2 Median Line located at the resistance level of 1900.00 will push the gold price to the zone of (1910.00 - 1923.00 - 1937.00) considering testing the local high of 1932.77. The price may also reach Shiff Line (1940.00). A break of the 1/2 Median Line located at the support level of 1895.00 is another variant of the downward movement development. The main targets are the following: - lower border of the channel 1/2 Median Line (1891.00); - lower limit of the channel 1/2 Median Line (1880.80); - initial SSL line (1869.00); The price may again hit the local low of 1859.57 and reach the warning line LWL 61.8 Minute (1855.00). Details of Spot Gold movement on November 4, 2020 can be seen in the animated *. gif chart (opens in a separate tab). Spot Silver Spot Silver from November 4, 2020 will move depending on the direction of a break of the limits of the equilibrium zone (23.850 - 24.210 - 24.600) Movement inside this zone is shown in an animated *. gif graph (opens in a separate tab). If there is a break of the upper limit of ISL 61. 8 of the equilibrium zone located near the resistance level of 24.600, the upward movement of Spot Silver can be continued to the following targets: - Highs of 25.245 - 25.515; - the final line FSL (25.770); - the final Shiff Line (26.260). If the price breaks the lower limit of the ISL38.2 of the equilibrium zone located near the support level of 23.850, Spot Silver may continue dropping to the limits of the channel 1/2 Median Line (23.500 - 23.230 - 22.960) and even reach the initial SSL line (22.760) and then update the local low of 22.540. The review is prepared 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). More Analytics on the InstaForex website. ZUP and Andrews Pitchfork (terms, concepts, parameters). Materials for the study of Analysis ZUP & APL's. The material has been provided by InstaForex Company - www.instaforex.com |
| Posted: 03 Nov 2020 05:44 AM PST
According to DoubleLine Capital forecasts, thanks to the launch of digital currencies by global central banks, it will be possible to send the flow of liquidity directly into the consumer economy, bypassing commercial banks and parliaments. Moreover, it will greatly increase the speed of money circulation. Both of these factors will contribute to a sharp acceleration of inflation, which the world central banks did not even imagine. Bill Campbell, asset manager at DoubleLine Capital, says the World Central Banks and the Bank for International Settlements intend to create a network of multiple cross-border payment systems that will conduct direct bilateral transactions in multiple currencies. As a result, there will be no need for the US dollar. In other words, the American dollar and its status as a reserve currency may disappear. Experts remind that the US dollar is at the very center of the world's financial system due to the fact that it is the main means of payment in the international SWIFT system. But SWIFT is under the same pressure as the US dollar, because the world central banks are going to create their own digital currencies. Why are so many banks interested in digital currencies? They are cheaper, faster, and more transparent cross-border means of payment. This will support not only economic growth, but also international trade and global development. Russia and China have already created their own payment systems, which are competitors of SWIFT. These countries are looking for opportunities to increase mutual settlements with trading partners in national currencies. In other words, the US dollar is in big trouble. It should be borne in mind that the United States' imports exceed its exports. To stabilize the currency, the US needs as many foreigners as possible to invest their money in US assets. As soon as foreigners stop doing this, the US dollar will lose in value. Moreover, thanks to the CBDC system, many countries in the world may forget about the US dollar reserves. They will use the currencies of countries they are trading with. The US dollar has been the leading currency for 80 years, and the US has become overconfident as a result. It looks like the era of the greenback is coming to an end. Many countries of the world and their central banks suggest a future where the US dollar does not play a major role. Moreover, the result of the US presidential election held today plays an important role in the American currency exchange rate. Experts believe that Biden's victory does not bode well for the USD. By the way, today, the US dollar fell in value. The euro rose by 0.2% against the US dollar to hit 1.1662. At the same time, the US dollar went lower by 0.1% against the Japanese yen to settle at 104.56. AUD/USD gained 0.1% reaching the 0.7059 level. GBP/USD grew by 0.2% to trade at 1.2942. The US dollar index, which measures the US dollar against a basket of six other currencies, lost 0.2% to settle at 93.915. Despite the US dollar rally thanks to stimulus from the US government, the dollar index is still about 9% below its March high. What's more, the dollar is approaching its biggest annual drop since 2017. The material has been provided by InstaForex Company - www.instaforex.com |
| GBP/USD: plan for the American session on November 3 (analysis of morning deals) Posted: 03 Nov 2020 05:20 AM PST To open long positions on GBPUSD, you need: Unfortunately, I didn't see a false breakout at 1.2906. On the 5-minute chart, the pound rapidly went up and broke above the resistance of 1.2984, forming another entry point for long positions. As long as trading is conducted above this range, we can expect the continued growth of GBP/USD. The formation of another false breakout in the area of 1.2984 will confirm the signal to buy the pound. The main goal in this scenario will be to restore the pair to a new high of 1.3058, where I recommend taking the profit. If the pound returns to the support level of 1.2984 in the second half of the day, it is best not to rush to open long positions but wait for the results of the US presidential election, as well as the decline and test of the minimum of 1.2906, where the lower border of the new ascending channel may pass.
To open short positions on GBPUSD, you need: However, the growth of the pound and the lack of activity in the area of 1.2984 indicates the uncertainty of sellers in the further decline of the pair. Now the bears need to regain the level of 1.2984. Fixing under it and testing it from the bottom up on the volume will signal the end of the upward correction, which will lead to a decrease in GBP/USD in the second half of the day. The main goal will be to update the major support of 1.2906, where I recommend fixing the profit. A longer-term goal will be the area of 1.2856, however, it will be possible to return to it only if Donald Trump completely wins the presidential election. In the scenario of growth of GBP/USD in the second half of the day, it is best to wait for the test of the maximum of 1.3058 and sell the pound immediately for a rebound in the expectation of a correction of 20-30 points within the day.
Let me remind you that in the COT reports (Commitment of Traders) for October 27, there was a reduction in both short and long positions. Long non-commercial positions fell from 39,836 to 31,799. At the same time, short non-commercial positions fell from 41,836 to 38,459. As a result, the negative non-commercial net position was at -6,660 against -2,000 a week earlier, which indicates that sellers of the British pound remain in control and have a minimal advantage in the current situation. Signals of indicators: Moving averages Trading is conducted above 30 and 50 daily averages, which indicates the beginning of an upward correction of 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 classic daily moving averages on the daily chart D1. Bollinger Bands If the pound declines in the second half of the day, you can open long positions immediately on the rebound after testing the lower limit of the indicator in the area of 1.2870. Description of indicators
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| Posted: 03 Nov 2020 05:03 AM PST On the global scale, the wave marking of the EUR/USD instrument has undergone certain changes after the quotes fell below the minimum of wave b. Thus, the entire section of the trend, which begins on September 23, now looks three-wave and completed. If this is true, then the decline in the instrument's quotes will continue with targets located around 15 figures and below. Perhaps another three-wave structure will be built down. However, trading today can be overactive and, as a result, can lead to a change in the entire wave picture. Wave markings on a smaller scale also indicate that markets are ready for new sales of the instrument. The option with a further increase in quotes is canceled at the moment, and now it is expected to build at least three waves down, the first of which may already be completed. Accordingly, the dollar has a good reason to increase in a pair with the euro currently. But it should be noted that the news background is superior to the wave analysis. In other words, it is the news background that can easily cause a new increase in the instrument's quotes and the wave markup will have to adjust. There were hardly any economic reports in both the US and the European Union in the first two days of the new week. Yesterday, only reports on business activity in the EU and US manufacturing sectors were released. All indexes were better than the markets' expectations and none of them caused any reaction. Since market activity yesterday was generally mega inert, the instrument has smoothly approached the US election day. And now, anything can happen. In general, there is little to no doubt that many instruments in the currency market will be in a state of "storm" today and tomorrow. Thus, the wave markings may be broken and in the future they will have to be revised or supplemented. Further actions of the markets when the elections are over are more important at this time. I am still counting on the option of Joe Biden's victory, since the absolute majority of ratings and opinion polls speak in favor of the Democrat. If he does win, demand for the US dollar is expected to decline. However, it will also be important who controls the Senate and Congress. Recall that not only the President will be elected in America today, but also senators and congressmen. So, Republicans may lose their advantage in the Senate or, on the contrary, win the Lower house of Congress. However, it is unlikely for the Republicans to be able to control both chambers. Considering the events of the past four years while Trump was President, it is safe to say that there are many more opponents of the Republican party in America. Thus, it is believed that the option of losing the Republicans on all fronts is quite likely. And in this case, the Democrats will have total control over the country. In particular, there will be no doubt that an additional 2 or 3 trillion package of financial assistance to the American economy will be adopted. General conclusions and recommendations: The euro-dollar pair has presumably completed the construction of a three-wave upward trend section. Thus, it is recommended to sell the instrument with targets located near the 1.1519 mark, which corresponds to 38.2% Fibonacci, for each MACD signal "down," based on the construction of a downward wave C (after the quotes go up within the b wave). The material has been provided by InstaForex Company - www.instaforex.com |
| EUR/USD: plan for the American session on November 3 (analysis of morning deals) Posted: 03 Nov 2020 04:50 AM PST To open long positions on EURUSD, you need: In the first half of the day, I paid attention to purchases from the level of 1.1663 after the breakout and consolidation on it, which happened. However, if you look at the 5-minute chart, things don't get so simple right away. There was a breakdown, however, there is no accentuated entry point on the test of the 1.1663 level from top to bottom. Therefore, I missed this signal and did not manage to earn anything on it.
In the second half of the day, the focus is shifted to the resistance of 1.1701. On the hourly chart, you can see that the bulls have fixed above this range and tested it from top to bottom, forming an additional entry point. But it's fair to say that buying on such a signal is quite risky, and be prepared for the fact that the market may turn around at any moment. However, as long as trading is conducted above the range of 1.1701, you can expect the pair to continue strengthening to the area of the maximum of 1.1754, where I recommend taking the profits. If trading returns to the level of 1.1701 and the bears gain a foothold under it, it is better to exit long positions and wait for the update of the larger support of 1.1663, from which you can re-open long positions immediately on the rebound. The formation of a false breakout at 1.1701 will be an additional signal to open long positions in EUR/USD in the expectation of continuing the upward correction. To open short positions on EURUSD, you need to: Sellers did not show any activity in the resistance area of 1.1701, and now their main task for the second half of the day will be to return the pair to this range. Its test on the reverse side will be a signal to open short positions to reduce the pair to the area of morning support of 1.1663, where I recommend fixing the profits. It will be possible to count on a larger fall in the euro only following the results of the US presidential election, provided that Trump wins. A break and consolidation below the support of 1.1663 will quickly push the euro to a weekly low of 1.1623, from which the downward movement will continue to the area of 1.1585 and 1.1541. If the demand for the euro continues in the second half of the day, I recommend opening short positions only after updating the maximum of 1.1754 or even higher from the resistance of 1.1796, based on a correction of 20-30 points within the day.
Let me remind you that the COT report (Commitment of Traders) for October 27 recorded a reduction in both long and short positions. But despite this, buyers of risky assets believe in the continuation of the bull market and prefer to act cautiously. Thus, long non-profit positions fell from 229,878 to 217,443, while short non-profit positions also fell to 61,888 from 63,935. The total non-commercial net position fell to 155,555 from 165,943 a week earlier. However, bullish sentiment on the euro remains quite high in the medium term. The stronger the euro declines against the US dollar at the end of this year, the more attractive it will be for new investors, especially after the US presidential election, when additional pressure on the market on this issue will ease. Signals of indicators: Moving averages Trading is conducted above 30 and 50 daily moving averages, which indicates a market break and the beginning of an upward correction. 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 classic daily moving averages on the daily chart D1. Bollinger Bands If the pair declines, the average border of the indicator around 1.1663 will provide support. Description of indicators
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