The markets breathed a sigh of relief, but for how long? (the probability of correction of the EUR/USD pair and the resumption

On Monday, the tension in the market has somewhat subsided after a report by economic adviser of D. Trump, Larry Kudlow that trade negotiations between the US and China are going well and that duties that will be effective in December can be canceled.

This news caused a surge of optimism and an increase in demand for risky assets. In turn, equity markets in Europe and North America received support as well as government bond yields in economically strong countries. The yield on benchmark of 10-year-old treasuries jumped 0.6% from opening at 1.740% to 1.803%. Against this background, the American dollar also received local support, however, it should be recognized that its increase was only temporary.

After some time, following Kudlow, the Secretary of Commerce of the United States, W. Ross, commented on Fox Business, saying that there is a priority to the quality of the trade deal between Washington and Beijing over the terms of its conclusion. At the same time, he added that the agreement may not necessarily be signed in November at the APEC summit, which will be held in Chile on November 16-17, as it should reflect the "right deal".

At present, given the skepticism of Ross, the dollar was under pressure again and its ICE index corrected down, having lost virtually all of its growth.

Moreover, the events yesterday vividly demonstrated how important the events for the market around the US-China trade negotiations and the fermentation process associated with Brexit.

The quotes of gold, which have been stomping on the spot for the second week, have come under pressure in the wake of Kudlow's message, but the lack of details of the negotiation process, as well as Ross' pessimistic words regarding the prospects of the negotiations themselves, have stopped the process of quotation reduction and even at Asian trading led to their local growth.

In general, assessing the current situation in the markets, we believe that the tension in the markets will remain at least until the end of this month, when the Fed will hold a meeting on monetary policy and at least somehow resolve the issue on Brexit.

Forecast of the day:

EUR/USD is trading below the level of 1.1170. We believe that if the price does not rise above this level, there is a possibility of its correction by 1.1100 before the ECB meeting on monetary policy this week.

Gold on the spot continues to remain in the range 1476.80-1496.85 in the wake of the uncertainty surrounding the developments around Brexit and the US-Chinese trade negotiations. However, if the dollar receives support amid rising US Treasuries, and quotes of the "yellow" metal fall below the lower boundary of the range, then the likelihood of falling quotes will increase, first to 1473.50, and then to 1461.90.

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Analysis of EUR / USD and GBP / USD for October 22. European currencies feel great when Boris Johnson suffers defeat.

EUR / USD

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Monday, October 21, ended for the pair EUR / USD with a decrease of 40 basis points. There are new reasons to assume the completion of the construction of the alleged first wave as part of a new upward trend section. If this assumption is true, then the instrument will begin to decline from current positions with targets located near the 23.6% Fibonacci level.

Fundamental component:

The news background for the EUR / USD pair remains weak and ambiguous. On the one hand, the latest Brexit news was supported along with the pound and the euro, but on the other hand, Brexit is more important for the UK, and not for the EU. Thus, an increase in the Euro currency can be regarded as a reaction of the currency market to a whole set of factors, including Brexit, a double reduction of the Fed's key rate, and worsening economic statistics in America. However, this Thursday, the news background may put pressure on the currency of the European Union, as it is difficult to expect actions from the ECB in the current environment aimed at tightening monetary policy. Thus, this moment can coincide with the construction of the correctional wave b. Until Thursday, the market may be completely calm, as the economic calendar news calendar is completely devoid of.

Purchase goals:

1.1208 - 61.8% Fibonacci

1.1286 - 76.4% Fibonacci

Sales goals:

1.0879 - 0.0% Fibonacci

General conclusions and recommendations:

The euro-dollar pair continues to build a new upward set of waves and is supposedly ready to complete wave a, despite a successful attempt to break through the 50.0% Fibonacci level. The breakdown of the level of 50.0% in the opposite direction will indicate the readiness of the instrument to build the wave b.

GBP / USD

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On October 21, the GBP / USD pair gained several basis points, which keeps the current wave marking intact. The proposed wave 3 or C continues its construction, but also has a high chance of completion near the level of 127.2% Fibonacci. At the same time, the news background continues to force the markets to buy exactly the pound, although it would be hard to believe a few months ago. It is the news background that can continue to have a beneficial effect not on the pound-dollar instrument. A successful attempt to break through the level of 127.2% will lead to a new increase in the pair with targets near the Fibonacci level of 161.8%.

Fundamental component:

The news background for the pound-dollar pair continues to remain favorable, since the prospect of a tough Brexit looming on the horizon for a long time is slowly disappearing. Yesterday, the British Parliament inflicted another defeat on Boris Johnson, without even considering considering his option of an agreement with the European Union. According to the Speaker of the House of Commons, Bercow, the deputies "already said everything on Saturday," so it makes no sense to hold a second vote, essentially on the same issue. Thus, it turns out that the markets will now wait for Brussels to respond to Boris Johnson's request to postpone Brexit to January 2020. Most likely, the EU will approve the request, and it's even hard to imagine what will happen next. There may be re-elections to Parliament, if the deputies themselves agree with this proposal of Johnson, a second referendum is also possible as well as a vote of no confidence in Johnson. There are a lot of options. For the pound, only one point matters - the further Brexit without a deal, the more British currency is in demand.

Sales goals:

1.2191 - 0.0% Fibonacci

Purchase goals:

1.2986 - 127.2% Fibonacci

1.3202 - 161.8% Fibonacci

General conclusions and recommendations:

The pound / dollar instrument continues to build an upward trend. However, an unsuccessful attempt to break the level of 1.2986 indicates that the instrument is ready to decline. Since the news background is now at its most importance, the continuation or completion of the construction of wave 3 or B will depend on it. On the contrary, a breakdown of the level of 1.2986 can be regarded as a signal to buy.

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Indicator analysis. Daily review on October 22, 2019 for the EUR / USD currency pair

Trend analysis (Fig. 1).

On Tuesday, the main lower target is to test the support line - 1.1125 (red bold line), although breaking down is unlikely. From this level, there is a good opportunity to work up with the target of 1.1181 - the upper fractal (red dashed line).

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Fig. 1 (daily chart).

Comprehensive analysis:

- indicator analysis - down;

- Fibonacci levels - down;

- volumes - down;

- candlestick analysis - down;

- trend analysis - up;

- Bollinger Lines - up;

- weekly schedule - up.

General conclusion:

On Tuesday, a downward movement is possible.

The first lower target of 1.1125 is the support line (red bold line).

From this level, you can work up with the target of 1.1186 - the upper fractal (red dashed line).

An unlikely scenario is to break down the support line 1.1125 (red bold line) and move down with the target of 1.1066 - a pullback level of 38.2% (red dashed line).

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Trading plan for EUR/USD for October 22, 2019

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Technical outlook:

The EUR/USD pair rallied to yet another peak yesterday (1.1180), taking out another resistance at 1.1165 levels. Looking at the wave structure and a rally between 1.0879 through 1.1180 levels, a meaningful retracement could be on the horizon soon. We have considered the entire boundary that can be retraced since upside seems to be limited to 1.1200 for now. A corrective drop towards the fibonacci support levels is seen as a high probable direction for now. The support zone begins from 1.1064 and extends up to 1.0994, which is between fibonacci 0.382 and 0.618 levels respectively. Further upside from the current price action always remains a possibility but it is safe to remain aside and wait for a corrective drop, before initiating long positions again. The corrective drop could be a flat or zigzag and the first leg is expected to find support around 1.1064 levels at least. We shall update the wave structure as the price action unfolds accordingly.

Trading plan:

Remain flat for now and await for a meaningful corrective drop.

Good luck!

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Technical analysis of ETH/USD for 22/10/2019

Crypto Industry News:

In a recent press release, Bitmain management confirmed that Bitcoin's latest mining farm was launched in Rochdale, Texas. The 33,000-acre site will initially house a 50-megawatt farm, but its total capacity may increase to six-fold to 300 megawatts in the future, says Bitmain. If it reaches these levels, the Texas facility would become the largest mining farm in the world.

"We are excited to launch this facility, which is essential for Bitmain's global expansion plans. Stable and efficient energy resources in Texas are fundamental to the inevitable growth of the cryptocurrency mining industry," said Clinton Brow.

Work began in 2018 on a 25-megawatt project. The operations will be a joint Bitmain and DMG program that will provide hosting and management services on a daily basis.

The announcement occurs at a crucial moment for Bitmain, which is still implementing its IPO in the United States. In 2019, the overall share of Bitmain in the Bitcoin hash rate also decreased. As noted by Christopher Walken, co-founder of the HASHR8 mining startup, Bitmain pools currently account for about 27% of the total. In January this figure was close to 42%.

Technical Market Overview:

After the recent bullish breakout above the short-term trendline resistance, the ETH/USD pair has made a local high at the level of $177.10. Nevertheless, the bears have increased the activity immediately and now are trying to test the breakout from above. Will that be enough to continue a rally higher or is it just another false breakout? The next few hours might give the answer to market participants. Please keep an eye at the level of $163.98 because it is the key short term technical support for bulls.

Weekly Pivot Points:

WR3 - $203.55

WR2 - $195.01

WR1 - $184.09

Weekly Pivot - $175.68

WS1 - $163.10

WS2 - $154.16

WS3 - $142.73

Trading Recommendations:

The best strategy in the current market conditions is to trade with the larger timeframe trend, which is still up. All the shorter timeframe moves are still being treated as a counter-trend correction inside of the uptrend. When the wave 2 corrective cycles are completed, the market might will ready for another impulsive wave up of a higher degree and uptrend continuation.

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Technical analysis of BTC/USD for 22/10/2019

Crypto Industry News:

Binance, one of the world's largest crypto exchanges, will soon add fiat trading support, starting with the Russian ruble. The news was publicly announced by Binance president Changpeng Zhao during an event organized by the Russian government in Moscow, the Open Innovations Forum. By adding Russian cryptocurrency to its platform, Binance will allow users from Russia to buy cryptocurrencies directly using rubles, Zhao explained:

"In about two weeks we should get support for direct trading of Russian rubles. So you can buy cryptocurrencies on Binance.com using rubles," says Zhao in a recording posted on Twitter.

The news comes at a time when the crypto industry in Russia is still not officially regulated, because the government has again delayed the adoption of the main cryptographic bill 'On digital financial assets', as reported in mid-October.

In January 2019, Binance announced for the first time expansion plans to eight new countries, including Singapore, Malta, South Korea, Liechtenstein, Argentina, Russia, Turkey and Bermuda. Binance has already launched four international cryptocurrency exchanges, including Binance Uganda, the Binance Jersey European trading platform, Binance Singapore and Binance US.

Technical Market Overview:

The BTC/USD pair has made a new local high at the level of $8,295 and then the bullish rally had been capped at this level due to the Pin Bar candlestick pattern made. There is still a chance for the rally to continue, but Bitcoin has been dangerously close to the key technical support and wave (A) bottom after the failed rally above the 61% Fibonacci retracement, but now the bulls are regaining the control over the market. The immediate support is seen at the level of $8,048 and the next technical resistance is seen at the level of $8,474.

Weekly Pivot Points:

WR3 - $9,074

WR2 - $8,707

WR1 - $8,444

Weekly Pivot - $8,103

WS1 - $7,849

WS2 - $7,474

WS3 - $7,245

Trading Recommendations:

Due to the short-term impulsive scenario invalidation, the best strategy in the current market conditions is to trade with the larger timeframe trend, which is still up. All the shorter timeframe moves are still being treated as a counter-trend correction inside of the uptrend. When the wave 2 corrective cycles are completed, the market might will ready for another impulsive wave up of a higher degree and uptrend continuation.

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GBP/USD: plan for the European session on October 22. Another postponement of the Brexit vote for today. The pound is ready

To open long positions on GBP/USD you need:

Boris Johnson's attempt last Saturday to hold a vote in the House of Commons over his deal failed. Yesterday's attempt was blocked. Everything has been postponed to today. Therefore, the volatility of the pound is unlikely to be high until any news in this direction appears. A break and consolidation above the resistance of 1.3037 will be possible only after the news that the deal has been approved. In this scenario, we can expect further strengthening of the pound to the highs of 1.3074, 1.3167 and 1.3227. Any negative background will put pressure on GBP/USD, so only the formation of a false breakout in the support area of 1.2946 will be a signal to buy the pound. In a different scenario, the pair will decline for this support, and long positions can be returned to the rebound from lows of 1.2842 and 1.2664.

To open short positions on GBP/USD you need:

Sellers need bad Brexit news, and the formation of a false breakout in the resistance area of 1.3037 will be the first signal to sell the pound. Without specifics on Brexit, I do not recommend opening short positions on the pound, because if the deal is approved, the pair can strengthen by another 300-400 points. The more important task of the bears today is to return and consolidate the pair below the support of 1.2946, which will push the pound to lows of 1.2842 and 1.2664, where I recommend profit taking. However, such a downward movement will be possible only if the opponents of the current Brexit in Parliament again do not allow Johnson to vote by his deal, and even worse - if the vote turns out to be a failure. In case the pound further grows above the resistance of 1.3037, you can look at short positions after testing the highs of 1.3167 and 1.3265.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 moving averages, which indicates the maintenance of a bullish trend.

Bollinger bands

Volatility has greatly decreased, which does not provide signals for entering the market.

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Description of indicators

  • MA (moving average) 50 days - yellow
  • MA (moving average) 30 days - green
  • MACD: Fast EMA 12, Slow EMA 26, SMA 9
  • Bollinger Bands 20
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Technical analysis of GBP/USD for 22/10/2019

Technical Market Overview:

The GBP/USD pair has made a marginally higher high at the level of 1.3012 and is still trading above the short-term ascending trendline. Please notice, that the recent higher high was made after the big Pin Bar candlestick pattern was made last week in overbought market conditions and the global investors can see a negative divergence between the price and the momentum as indicated by the RSI. Any violation of the level of 1.2865 will likely lead to another leg down to the level of 1.2783 again and even a slide towards the level of 1.2705. The key technical support is still located at the level of 1.2561. The larger timeframe trend remains bearish.

Weekly Pivot Points:

WR3 - 1.3651

WR2 - 1.3325

WR1 - 1.3193

Weekly Pivot - 1.2842

WS1 - 1.2723

WS2 - 1.2355

WS3 - 1.2252

Trading Recommendations:

The best strategy for current market conditions is to trade with the larger timeframe trend, which is down. All upward moves will be treated as local corrections in the downtrend. In order to reverse the trend from down to up, the key level for bulls is seen at 1.2999 and it must be clearly violated. The key long-term technical support is seen at the level of 1.2231 - 1.2224 and the key long-term technical resistance is located at the level of 1.3509. As long as the price is trading below this level, the downtrend continues towards the level of 1.1957 and below.

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EUR/USD: plan for the European session on October 22. Only positive Brexit news will return euro buyers to the market and

To open long positions on EURUSD you need:

Saturday's vote on Brexit failed. An attempt to vote was blocked yesterday. As a result, everything is postponed to today. The absence of important fundamental statistics will maintain low volatility in the market until the voting results appear. To continue the euro's growth, it is required to maintain the level of 1.1147 in the first half of the day, as well as the formation of a false breakdown on it, which will update the highs in the areas of 1.1188 and 1.1226, where I recommend profit taking. However, without good news, this is unlikely to succeed. Johnson's next unsuccessful attempt to advance his deal could put pressure on the pair. Therefore, in the scenario of a decline to the level of 1.1148 in the morning, it is best to count on purchases from a low of 1.1116, subject to the formation of a false breakout, as well as a rebound from a larger support of 1.1090.

To open short positions on EURUSD you need:

The main task of the bears today will be the return of the pair to the support level of 1.1148, which yesterday could not be done. Only in this scenario can we expect to increase pressure on the euro, which will lead to lows in the areas of 1.1116 and 1.1090, where I recommend profit taking. However, a larger downward movement can be expected only after news of the next failure of Boris Johnson or the failure of the vote on the deal. With a EUR/USD growth scenario above the resistance of 1.1188, and approval of the Brexit deal, it is best to consider new short positions from the highs of 1.1226 and 1.1263.

Signals of indicators:

Moving averages

Trade is conducted in the region of 30 and 50 moving average, which indicates market uncertainty and the brewing downward correction.

Bollinger bands

Volatility is very low, which does not provide signals on entering the market.

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Description of indicators

  • MA (moving average) 50 days - yellow
  • MA (moving average) 30 days - green
  • MACD: Fast EMA 12, Slow EMA 26, SMA 9
  • Bollinger Bands 20
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Technical analysis of EUR/USD for 22/10/2019

Technical Market Overview:

After making the higher high at the level of 1.1179, the market pulled-back towards the level of 1.1139. The bulls have managed to test the upper channel line at the level of 1.1139 from above and are currently trying to continue the rally in very overbought market conditions. The momentum remains strong and positive, so there is still a chance for another leg up after the correction is completed. The nearest technical support is seen at the level of 1.1109 and the key technical support is still located at the level of 1.1091.

Weekly Pivot Points:

WR3 - 1.1435

WR2 - 1.1300

WR1 - 1.1250

Weekly Pivot - 1.1120

WS1 - 1.1063

WS2 - 1.0981

WS3 - 1.0893

Trading Recommendations:

The best strategy for current market conditions is to trade with the larger timeframe trend, which is down. All upward moves will be treated as local corrections in the downtrend. The downtrend is valid as long as it is terminated or the level of 1.1445 clearly violated. There is an Ending Diagonal price pattern visible on the larget timeframes that indicate a possible downtrend termination soon. The key short-term levels are technical support at the level of 1.0999 and the technical resistance at the level of 1.1267.

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EUR/USD: Clarida's dovish rhetoric, Mnuchin's threats and long-playing Brexit

The euro-dollar pair began the trading week rather slurred: the bulls lost momentum to continue the price growth, while the bears cannot return the price even within the 10th figure due to the general weakness of the US currency. As a result, the pair got stuck in a flat, waiting for the key events of this week. The fundamental picture for EUR/USD is currently too controversial, so traders are in no hurry to open large positions - neither buy nor sell.

Both the euro and the dollar are now under the yoke of their problems, so the general weakness of the US currency in this pair is not as pronounced as, say, in the AUD/USD or USD/CAD. Nevertheless, a consistent decline in the dollar index makes it possible for EUR/USD to "stay afloat", despite the fact that the upward momentum for the pair faded even at the beginning of the trading week. The pair's growth at the end of last week was primarily due to Brexit - the euro responds to the main and most important stages of the "divorce proceedings".

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But even at the weekend it became clear that Johnson's "blitzkrieg" had failed, and the deputies would not blindly ratify the draft deal in a single burst of solidarity. The Brexit issue moved into a longer-lasting phase, after which this fundamental factor ceased to support the growth of EUR/USD. The current political battles in the UK have an indirect effect on the dynamics of the pair (unlike the GBP/USD pair, where any news regarding the possible prospects of Brexit is still an unconditional priority), so at the moment this topic has faded into the background. But not for long: as soon as Johnson returns to the House of Commons with the necessary bills (in accordance with the requirements of the Letwin amendment), the dynamics of the pound will again affect the general position of the euro - and this will be until Thursday, when the October meeting of the European Central Bank takes place.

But the situation is more complicated with the dollar. Amid the almost empty economic calendar, traders assess the likelihood of a Federal Reserve interest rate cut at the next meeting, building on the latest published releases. In turn, these releases leave much to be desired. Industrial production indicators come out in the red zone, significantly not reaching the forecast values, and in some cases, indicating new multi-year anti-records.

Obviously, this dynamics is primarily due to "military operations" on the front of the trade war between the United States and China. Recent talks between Washington and Beijing have not resolved the overall situation. By and large, the parties just did not allow further escalation of the trade conflict, while the most complex and fundamental issues were not even discussed by the negotiators. Therefore, after a slight surge of optimism regarding the outcome of the 13th round of negotiations, dollar bulls came to the reasonable conclusion that the prospects for the development of a trade war are still vague, while key US macroeconomic indicators (especially in the field of industrial production) are already declining. In other words, the issue of easing monetary policy by the Fed is on the agenda again, especially after the latest signals from the US Treasury Secretary and some Fed officials.

Stephen Mnuchin said last week that Washington would nevertheless introduce additional duties on Chinese goods (which were scheduled for December 15) - if at that time the parties did not sign a trade deal. He, of course, expressed hope for a compromise, but recalled the consequences of the opposite result. Apparently, the fate of the trade deal will be decided in November: over the course of several weeks of the penultimate month of this year, the parties will negotiate at various levels - both within the working group, at the ministerial level, and at the level of senior officials of the states. According to unofficial information, the Chinese side has already expressed its intention to "clarify some points" of the first phase of the deal before proceeding to the second stage. Given this fact, it can be assumed that the parties are facing difficult negotiations, and the probability of a deal by November is quite small.

All this suggests that the Federal Reserve in October can either lower the interest rate or warn the markets about the corresponding intentions that will be realized at the December meeting. In this context, the rhetoric of the Fed representative Richard Clarida looks significant. Yesterday, he negatively assessed the trends in the US economy, and secondly, did not rule out a rate cut already at the October meeting. He said that US inflation remains weak, and economic growth has clearly slowed in the second half of the year. Against the background of such comments, the dollar index continued its downward movement, while the euro-dollar pair continued to drift within the 11th figure.

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Thus, in the short term, the prospects for the euro-dollar pair depend on the prospects of Brexit and the outcome of the ECB meeting. If we consider a longer-term time frame, then the US-Chinese trade negotiations and the results of the October meeting of the Fed come to the fore. From a technical point of view, the EUR/USD bulls need to overcome the nearest resistance - the upper line of the Bollinger Bands indicator on the daily chart (which corresponds to the mark of 1.1180) to indicate the priority of the upward direction. The support level is the 1.1010 price (the middle line of Bollinger Bands on the same timeframe). If the bears overcome this target, then the bullish scenario will finally lose its relevance.

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Technical analysis: Important intraday Level For EUR/USD, October 22,2019

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When the European market opens, no economic data will be released.The US will publish such economic data as Richmond Manufacturing Index, Existing Home Sales, and Federal Budget Balance. So, amid the reports, EUR/USD will move in a low to medium volatility during this day.TODAY'S TECHNICAL LEVEL: Breakout BUY Level: 1.1205. Strong Resistance: 1.1199. Original Resistance: 1.1188. Inner Sell Area: 1.1177.Target Inner Area: 1.1151. Inner Buy Area: 1.1125.Original Support: 1.1114. Strong Support: 1.1103. Breakout SELL Level: 1.1097.(Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Important intraday Level for USD/JPY, October 22,2019

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Today Japan will not release any economic reports but the US will publish such economic data as Richmond Manufacturing Index, Existing Home Sales, and Federal Budget Balance. So, there is a probability that the USD/JPY pair will move with low to medium volatility during this day.TODAY'S TECHNICAL LEVEL: Resistance. 3:109.25. Resistance. 2:109.04. Resistance. 1:108.82. Support. 1:108.56. Support. 2:108.35. Support. 3:108.13. (Disclaimer)

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Elliott wave analysis of GBP/JPY for October 22 - 2019

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Voting for Prime Minister Boris Johnson's Brexit deal was rejected for the second time. Nevertheless, soon or late the British parliament will have to vote on the proposal. A yes to the deal will likely be favorable to the GBP, while a no-vote will hurt GBP in the short-term. It is hard to predict the outcome but the loss of upside momentum indicates the likelihood of a no-vote. Additionally, correction in GBP/JPY towards 135.67 before renewed strength may push GBP/JPY higher again towards 144.98 and above in the longer-term.

R3: 142.26

R2: 141.50

R1: 141.00

Pivot: 140.56

S1: 139.46

S2: 138.60

S3: 137.84

Trading recommendation:

We are looking for a new GBP buying opportunity near 135.75

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Elliott wave analysis of EUR/JPY for October 22 - 2019

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EUR/JPY remains locked in a narrow trading-band near the peak at 121.47. We continue to look for a short-term correction towards 119.87 before the next impulsive rally higher towards the next minor target at 124.64.

In the short-term, a break below 120.64 will confirm the correction towards 119.87 and then higher from there again.

R3: 122.01

R2: 121.50

R1: 121.00

Pivot: 120.64

S1: 120.25

S2: 119.87

S3: 119.10

Trading recommendation:

We are long EUR from 117.25 with our stop placed at 119.00

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Forecast for EUR/USD on October 22, 2019

EUR/USD

The Brexit situation has stalled since the beginning of the new week, and the currency market along with it. The British Parliament refused to vote on the same version of the deal several times. The euro stopped at a Fibonacci level of 110.0%, on a wider story this is the resistance zone of the end of April-the first half of early May, the first half of June 2017, September 2016, etc. The indicators are growing on the daily chart.

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The main scenario for further events is the euro's fall to the price channel line to the area of 1.1120 and the resumption of growth to the Fibonacci level of 100.0% at the price of 1.1215. Here it is possible to ease the indicators and prepare the market for a decline in the phase of accurate profit taking. Profit-taking will be the main sign of a turnaround, as the volume of purchases has been the largest since the beginning of September.

Forecasts on economic indicators are also not in favor of the dollar: home sales in the US secondary real estate market in September are expected to be 5.45 million compared to 5.49 million a month earlier, European PMIs for October will come out on Thursday, which are projected to increase.

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On the four-hour chart, the Marlin oscillator went down sharply, but it still remains in the growing trend zone.

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Forecast for GBP/USD on October 22, 2019

GBP/USD

The pound traded in a wide range of 140 points on Monday, but against the background of the last two weeks, such dynamics can be called moderate. The situation around Brexit calmed down, the British Parliament refused to vote on the same Johnson proposal several times, work is underway on the changes.

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Technically, the probability of a reversal has increased - the leading indicator Marlin is turning down from the overbought zone. The growth potential is seen at the Fibonacci level of 61.8% at the price of 1.3062.

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On the four-hour chart, multiple divergence according to Marlin continues to form, the signal line of the indicator has almost reached the boundary of the transition to the decline zone. Leaving the line in this zone may not allow the pound to grow to a promising target of 1.3062. Consolidating the price under the level of 1.2864 (coincides with the low of yesterday) opens the subsequent targets 1.2814 and 1.2744. The current situation is neutral.

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Forecast for USD/JPY on October 22, 2019

USD/JPY

Yesterday, the dollar against the yen once again showed approximate stability in the market. External support for the pair still came from the stock market (S&P 500 0.69%), which, in turn, grew due to optimism regarding trade negotiations between the US and China.

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The risk of further development of a reversal divergence remains on the daily chart. Only a price move above the resistance of the red price channel 108.90 can remove this risk.

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GBPUSD approaching resistance, potential for big drop!

1st resistance level: 1.3406Why is it good: 61.8%, 100% fibonacci extension, 76.4% fibonacci retracement

1st support level: 1.2788Why is it good: horizontal overlap support, 100% fibonacci extension, 23.6% Fibonacci retracement

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USDNOK pull back below resistance

analytics5dae6789a6c6e.pngEntry: 9.13967

50% Fibonacci retracement and 100% Fibonacci extension

Take Profit :9.09081

76.4% Fibonacci Retracement

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#USDX vs EUR / USD vs GBP / USD vs USD / JPY (H4). Comprehensive analysis of movement options from October 21, 2019 APLs

What did Monday, October 21, 2019 prepared for us in the market? Here's a comprehensive analysis of movement options of #USDX, EUR / USD, GBP / USD and USD / JPY (H4)

Minuette (H4 time frame)

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US dollar Index

From October 21, 2019 the movement of the dollar index #USDX will continue depending on the direction of the breakdown of the range :

  • resistance level of 97.55 (the initial line of SSL Minuette operating scale fork);
  • support level of 97.45 (control line LTL Minuette operating scale fork).

In case of breakdown of the LTL control line Minuette operational scale fork (support level of 97.45) together with the lower boundary of the ISL61.8 (support level of 97.35) equilibrium zone of the Minuette operational scale fork, the downward movement of the dollar index can continue to the FSL Minuette end line (96.05).

The breakdown of the SSL Minuette initial line (resistance level of 97.55) will determine the development of movement towards the goals - the Median Line Minuette channel (97.75) - the upper boundary of the ISL38.2 (98.10) equilibrium zone of the Minuette operational scale fork with the prospect of reaching #USDX of the boundaries of the equilibrium zone (98.55 - 98.85 - 99.20) of the Minuette operational scale fork.

The details of the #USDX movement are presented in the animated chart.

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Euro vs US dollar

The single European currency EUR / USD from October 21, 2019 will begin to develop its movement depending on mining and the direction of breakdown of the range :

  • resistance level of 1.1152 (control line UTL Minuette operational scale fork - local maximum);
  • support level of 1.1125 (reaction line RL100.0 Minuette operational scale fork)

Updating the local maximum - breakdown of the UTL control line (resistance level of 1.1152) of the Minuette operational scale fork - continuation of the upward movement of the single European currency towards the targets - lower boundary of the ISL38.2 (1.1180) equilibrium zone of the Minuette operational scale fork - final Schiff Line Minuette (1.1205) - the median line channel of the Minuette (1.1245).

The breakdown of the reaction line RL100.0 (support level of 1.1125) of the Minuette operational scale fork will direct the development of the EUR / USD movement towards the goals - the boundary of the red zone (1.1065) Minuette operational scale fork - the boundaries of the 1/2 Median Line channel (1.1055 - 1.1030 - 1.1000) and the equilibrium zone (1.1020 - 1.0975 - 1.0935) of the Minuette operational scale fork.

The details of the EUR / USD movement options are shown in the animated chart.

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Great Britain pound vs US dollar

Her Majesty's GBP / USD currency from Monday, October 21, 2019, will begin to develop its movement depending on the development and direction of the breakdown range :

  • resistance level of 1.2910 (reaction line RL161.8 Minuette operational scale fork);
  • support level of 1.2765 (the upper boundary of the 1/2 Median Line channel of Minuette operational scale fork).

The breakdown of the reaction line RL161.8 (resistance level of 1.2190) of the Minuette operational scale with a consistent breakdown of the initial SSL (1.2989 - local maximum) and control UTL (1.3020) of the lines of the Minuette operational scale fork will determine the continuation of the development of the upward movement of Her Majesty's currency to the final FSL (1.3180) and the warning UWL38.2 (1.3420) lines of the Minuette operational scale fork.

The breakdown of the support level of 1.2765 - continuation of the development of the GBP / USD movement within the 1/2 Median Line Minuette (1.2765 - 1.2695 - 1.2625) and equilibrium zones of the Minuette operational scales fork (1.2695 - 1.2595 - 1.2500) and Minuette (1.2695 - 1.2550 - 1.2400) with the prospect of reaching the final line FSL Minuette (1.2205).

The details of the GBP / USD movement can be seen in the animated chart.

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US dollar vs Japanese yen

As in previous cases, the movement of the currency of the "country of the rising sun" USD / JPY from October 21, 2019 will also be determined by the direction of the breakdown of the range :

  • resistance level of 108.55 (starting line SSL Minuette operational scale fork);
  • support level of 108.25 (the upper boundary of the 1/2 Median Line channel of Minuette operational scale fork).

The breakdown of the support level of 108.25 - the development of the currency of the "country of the rising sun" will begin to occur in the 1/2 channel Median Line Minuette (108.25 - 108.00 - 107.75) with the prospect of reaching the boundaries of the equilibrium zones of the Minuette operational scale fork (107.65 - 107.05 - 106.50) and Minuette (107.20 - 106.75 - 106.30).

The breakdown of the SSL start line (resistance level of 108.55) of the Minuette operational scale fork will make the development of the USD / JPY upward movement towards the targets relevant - local maximum 108.95 - UTL Minuette control line (109.05) - final line FSL (109.50) of the Minuette operational scale fork - warning line UWL38.2 Minuette (110.45).

We look at the details of the USD / JPY movement in the animated chart.

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The review is made without taking into account the news background. Thus, the opening of trading sessions of the main financial centers does not serve as a guide to action (placing orders "sell" or "buy").

The formula for calculating the dollar index :

USDX = 50.14348112 * USDEUR0.576 * USDJPY0.136 * USDGBP0.119 * USDCAD0.091 * USDSEK0.042 * USDCHF0.036.

where power factors correspond to the weights of the currencies in the basket:

Euro - 57.6% ;

Yen - 13.6% ;

Pound Sterling - 11.9% ;

Canadian dollar - 9.1%;

Swedish Krona - 4.2%;

Swiss franc - 3.6%.

The first coefficient in the formula leads the index to 100 at the start date of the countdown - March 1973, when the main currencies began to be freely quoted relative to each other.

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Fractal analysis of the main currency pairs for October 22

Forecast for October 22 :

Analytical review of currency pairs on the scale of H1:

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For the euro / dollar pair, the key levels on the H1 scale are: 1.1223, 1.1179, 1.1161, 1.1140, 1.1123 and 1.1092. Here, we continue to monitor the development of the upward cycle of October 9. Short-term upward movement is expected in the range 1.1161 - 1.1179. The breakdown of the last value will lead to a movement to a potential target - 1.1223, when this level is reached, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range 1.1140 - 1.1123. The breakdown of the last value will lead to a long correction. Here, the goal is 1.1092. This level is a key support for the top.

The main trend is the local ascending structure of October 8.

Trading recommendations:

Buy: 1.1162 Take profit: 1.1175

Buy 1.1181 Take profit: 1.1220

Sell: 1.1140 Take profit: 1.1124

Sell: 1.1121 Take profit: 1.1093

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For the pound / dollar pair, the key levels on the H1 scale are: 1.3215, 1.3141, 1.3033, 1.2939, 1.2810, 1.2734 and 1.2625. Here, we are following the development of the upward cycle of October 9. The continuation of the movement to the top is expected after the breakdown of the level of 1.3035. Here, the potential target is 1.3141. Price consolidation is in the range of 1.3141 - 1.3215.

Short-term downward movement is expected in the range of 1.2877 - 1.2810. The breakdown of the last value will lead to an in-depth correction. Here, the target is 1.2715. This level is a key support for the top. Its breakdown will lead to the formation of potential for the downward cycle. Here, the target is 1.2625.

The main trend is the upward structure of October 9.

Trading recommendations:

Buy: 1.3035 Take profit: 1.3140

Buy: 1.3143 Take profit: 1.3215

Sell: 1.2877 Take profit: 1.2813

Sell: 1.2808 Take profit: 1.2717

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For the dollar / franc pair, the key levels on the H1 scale are: 0.9902, 0.9879, 0.9863, 0.9836, 0.9822 and 0.9794. Here, we are following the development of the local descending structure of October 15. Short-term downward movement is expected in the range 0.9836 - 0.9822. The breakdown of the latter value will lead to a pronounced movement to a potential target - 0.9794. We expect a pullback to the top from this level.

Short-term upward movement is possibly in the range of 0.9863 - 0.9879. The breakdown of the latter value will lead to an in-depth correction. Here, the goal is 0.9902. This level is a key support for the downward structure.

The main trend is the local descending structure of October 15.

Trading recommendations:

Buy : 0.9863 Take profit: 0.9875

Buy : 0.9881 Take profit: 0.9900

Sell: 0.9836 Take profit: 0.9822

Sell: 0.9820 Take profit: 0.9796

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For the dollar / yen pair, the key levels on the scale are : 109.66, 109.33, 108.90, 108.72, 108.24, 108.02 and 107.67. Here, we are following the development of the upward cycle of October 4. Short-term upward movement is expected in the range 108.72 - 108.90. The breakdown of the latter value will lead to a movement to the level of 109.33. Price consolidation is near this level. For the potential value for the top, we consider the level of 109.66. Upon reaching this level, we expect a consolidated movement, as well as a pullback to the bottom.

Short-term downward movement is expected in the range of 108.24 - 108.02. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 107.67. This level is a key support for the top.

The main trend: the upward cycle of October 4.

Trading recommendations:

Buy: 108.90 Take profit: 109.30

Buy : 109.34 Take profit: 109.65

Sell: 108.24 Take profit: 108.03

Sell: 108.00 Take profit: 107.70

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For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3160, 1.3128, 1.3101, 1.3073, 1.3036 and 1.2989. Here, we consider the descending structure of October 10 as a medium-term initial condition. The continuation of movement to the bottom is expected after the breakdown of the level of 1.3073. In this case, the target is 1.3036. Price consolidation is near this level. For the potential value for the bottom, we consider the level of 1.2989. Upon reaching this level, we expect a pullback to the top.

Short-term upward movement is possibly in the range of 1.3101 - 1.3128. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.3160. This level is a key support for the downward structure.

The main trend is the downward cycle of October 10.

Trading recommendations:

Buy: 1.3101 Take profit: 1.3126

Buy : 1.3130 Take profit: 1.3160

Sell: 1.3073 Take profit: 1.3038

Sell: 1.3034 Take profit: 1.3000

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For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6933, 0.6901, 0.6886, 0.6854, 0.6838, 0.6820 and 0.6805. Here, we are following the development of the ascending structure of October 16. Short-term upward movement is expected in the range of 0.6886 - 0.6901. The breakdown of the latter value will lead to the development of pronounced movement to a potential target - 0.6933. From this level, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 0.6854 - 0.6838. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 0.6820. The range of 0.6820 - 0.6805 is the key support for the upward structure.

The main trend is the upward structure of October 16.

Trading recommendations:

Buy: 0.6887 Take profit: 0.6900

Buy: 0.6904 Take profit: 0.6930

Sell : 0.6854 Take profit : 0.6840

Sell: 0.6836 Take profit: 0.6820

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For the euro / yen pair, the key levels on the H1 scale are: 121.95, 121.79, 121.34, 121.03, 120.61, 120.28, 119.92 and 119.64. Here, we are following the development of the local ascendant structure of October 15. Short-term upward movement is expected in the range 121.03 - 121.34. The breakdown of the level of 121.35 should be accompanied by a pronounced upward movement. Here, the target is 121.79. Price consolidation is in the range of 121.79 - 121.95. From here, we expect a correction.

Short-term downward movement is possibly in the range of 120.61 - 120.28. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 119.92. This level is a key support for the top. Its passage at the price will lead to the formation of initial conditions for the downward cycle. In this case, the first goal - 119.64.

The main trend is the upward structure of October 15.

Trading recommendations:

Buy: 121.05 Take profit: 121.34

Buy: 121.36 Take profit: 121.76

Sell: 120.60 Take profit: 120.33

Sell: 120.25 Take profit: 119.94

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For the pound / yen pair, the key levels on the H1 scale are : 142.82, 140.89, 139.53, 138.70, 137.79 and 137.08. Here, we are following the development of the upward cycle of October 8. The continuation of movement to the top is expected after the breakdown of the level of 140.90. In this case, the potential target is 142.82. Upon reaching which, we expect consolidation, as well as a pullback to the bottom.

Short-term downward movement is possibly in the range of 139.53 - 138.70. The breakdown of the last value will lead to a long correction. Here, the target is 137.79. The range of 137.79 - 137.08 is the key support for the top.

The main trend is the medium-term upward structure of October 8.

Trading recommendations:

Buy: 141.00 Take profit: 142.80

Sell: 139.50 Take profit: 138.75

Sell: 138.65 Take profit: 137.80

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Insidious dollar: easing, not weakening

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The US currency, despite many years of stability and high demand, is going through difficult times. It is under pressure due to both external factors and internal ones, to which the dollar stubbornly resists. Analysts are certain that a strong greenback will be weakened by force in the near future.

Among the reasons that weaken the position of the US dollar, analysts call negative trends in the US economy and the unstable political situation in Europe associated with Brexit. Such factors have a negative impact on the EUR/USD exchange rate, preventing it from stabilizing. Last week, the pair reached seven-week highs, approaching the impressive mark of 1.1170. The market's response was an increase in the number of "bullish" forecasts, which have not yet lost their relevance.

Many analysts doubt that the US dollar will retain its long-standing status as a safe haven currency in the near future. They are certain that it is actively on the heels of the European currency. However, a number of analysts urge not to rush to conclusions, as the situation around Brexit plays against the euro. At the end of last week, giving hope for a speedy resolution of this protracted issue, it left the market with its nose. It is possible that the topic of Brexit will be rebooted, which will negatively affect not only the British pound, but also the dollar against the euro.

In the last few weeks, experts have recorded a noticeable slump of the US currency. Some analysts put forward a version that the American elite is trying to artificially weaken the greenback. Experts came to such conclusions, observing the bickering of US President Donald Trump with the Federal Reserve and attempts to pressure the regulator. The head of the White House has repeatedly stated that it is the policy of the Fed that makes the national currency too strong.If the dollar strengthens its position, the market will have to artificially weaken it, analysts said.

One of the current key tasks, experts believe, is to prevent a possible collapse of the US stock market. In this regard, a slight weakening of the US currency plays an important role. To prevent a financial disaster, the Fed has taken to eliminate the deficit of dollar liquidity, filling the economy with "live" money with the help of quantitative easing (QE). Simply put, the Fed has turned on the printing press. Recall, the previous round of pumping the US economy with "fresh" money took place in 2013. At the same time, Fed Chairman Jerome Powell plays with words, not calling the current build-up of the balance sheet a program of QE, but the essence does not change: rates are reduced, dollars are printed, and the greenback gradually subsides.

According to Scotiabank, the US currency will continue to weaken until the beginning of next year. The reason for this, experts believe, is a decrease in investor interest in safe haven assets. Earlier, the US currency managed to maintain this status, but now the situation has changed. Progress in the US-China trade talks and small but positive developments regarding Brexit added to the dollar's negativity. Earlier, the escalation of conflicts provoked an increase in Treasury purchases by non-residents, contributing to the flow of capital to the United States. Currently, it's problems are exacerbated by negative macro statistics, as well as an excessive number of short positions in the euro and the pound, which market players intend to close. A similar situation provokes the EUR/USD rally, analysts said. The pair was trading in the range of 1.1177–1.1178 on Monday morning, October 21. Analysts warned of its fall in the near future.

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The calculation turned out to be correct: the further decline in the EUR/USD pair really took place. In the moment, the pair fell to 1.1156–1.1157. It later crossed that threshold.

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Currently, the EUR/USD pair is in the range 1.1168–1.1169. After a sharp subsidence, it gained momentum and successfully won back the lost positions. Last Friday, the euro strengthened amid a weakening US dollar, which came under pressure amid positive Brexit news.

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Experts associate the US currency with a persistent tin soldier who is not afraid of difficulties and is tempered in the fight against them. The greenback is really trying to maintain and strengthen its gains, despite opposing factors. Two ex-heads of the Commodity Futures Trading Commission (CFTC) tried to help the greenback. They were Christopher Giancarlo, chairman of CFTC, and Daniel Gorfine, head of LabCFTC. They proposed to the US authorities a plan to save the global hegemony of the national currency. It consists in introducing a digital dollar based on blockchain technology. According to financiers, the digital format will help the US currency maintain high competitiveness in the future.

According to the calculations of C. Giancarlo and D. Gorfine, the virtual dollar can be used for financial transactions both in the United States and abroad. Specialists note that the new payment system has several advantages over the existing one. These include an almost instantaneous transaction speed, the ability to conduct micropayments, a high level of security and transparency. The catalyst for this initiative was concern over the possible loss of the dominant role of the dollar in the global financial system. The loss of greenback leadership in the global economy will lead to disastrous consequences, C. Giancarlo and D. Gorfin said. If this scenario is realized, the financial and exchange markets may suffer, and the global demand for US debt will substantially subside, financiers conclude.

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