Elliott wave analysis of EUR/JPY for October 30 - 2019

analytics5db92591ccc00.png

EUR/JPY remains locked inside a trading range between 120.33 to 121.48. A dip below 120.33 as a false break is likely to occur. If it comes true, it will quickly revert to the upside as the next impulsive rally will go towards 124.64 and 129.50 as the next larger targets.

Only a direct break above 121.39 will confirm that the correction has completed and the next impulsive rally is developing.

R3: 121.47

R2: 121.30

R1: 121.15

Pivot: 120.81

S1: 120.57

S2: 120.32

S3: 119.87

Trading recommendation:

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

The material has been provided by InstaForex Company - www.instaforex.com

Indicator analysis. Daily review on October 30, 2019, on the GBP / USD currency pair.

Trend analysis (Fig. 1).

On Wednesday, the price may move up to the upper fractal - 1.2950. From this level, it is possible to continue moving up to the next upper fractal - 1.3013 (blue dashed line).

analytics5db92fb58eaed.png

Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - up;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

On Wednesday, the price may continue to move up.

The first upper target is the upper fractal - 1.2950, then in case of breakdown of this level, the movement up to the next upper fractal is 1.3013 (blue dashed line).

An unlikely scenario is to work down to the lower fractal 1.2789.

The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of GBP/USD for 30/10/2019

Technical Market Overview:

The volatility on the GBP/USD market has clearly dried up and Cable is still being locked in a narrow horizontal range located between the levels of 1.2783 - 1.2865 as no major breakout occurred yet. The market participants await a breakout in any direction, but on the other hand, the market might be making the Bullish Flag or Pennant pattern as well. Despite the neutral momentum, the bears are getting more active and try to push the prices lower towards the next technical support located at the level of 1.2783. The key technical support is still located at the level of 1.2561. The larger timeframe trend remains bearish.

Weekly Pivot Points:

WR3 - 1.3149

WR2 - 1.3068

WR1 - 1.2923

Weekly Pivot - 1.2842

WS1 - 1.2710

WS2 - 1.2624

WS3 - 1.2478

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 1.3000 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.

analytics5db9312c46a87.jpg

The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis of EUR/USD for 30/10/2019

Technical Market Overview:

The bounce from the level of 1.1075 was successful and bulls are trying again to get back into the ascending channel. Currently, the price is testing the level of 1.1109 which is a local technical resistnace. The volatility has slightly increased and the overall market participants' activity is more visible. The momentum is now slightly positive, but there is still a chance for another leg up after the breakout, the next target for bulls is seen at the level of 1.1160.

Weekly Pivot Points:

WR3 - 1.1242

WR2 - 1.1207

WR1 - 1.1134

Weekly Pivot - 1.1103

WS1 - 1.1028

WS2 - 1.0992

WS3 - 1.0922

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.

analytics5db9300227ac1.jpg

The material has been provided by InstaForex Company - www.instaforex.com
The material has been provided by InstaForex Company - www.instaforex.com

Indicator analysis. Daily review on October 30, 2019, on the EUR / USD currency pair.

Trend analysis (Fig. 1).

On Wednesday, the price, from the level of 1.1113, may make a move up with the target of 1.1164 - the upper fractal. In case of breaking through, continuing to work upwards with the target of 1.1209 is a retracement level of 61.8% (blue dashed line).

analytics5db92c9ccdf79.png

Fig. 1 (daily chart).

Comprehensive analysis:

- Indicator analysis - down;

- Fibonacci levels - up;

- Volumes - up;

- Candlestick analysis - up;

- Trend analysis - up;

- Bollinger Lines - up;

- Weekly schedule - up.

General conclusion:

On Wednesday, an upward movement is possible.

The first upper target 1.1164 is the upper fractal.

The next upper target 1.1209 is the retracement level of 61.8% (blue dashed line).

An unlikely scenario - from the level of 1.1113, work down with the target of 1.1066 - pullback level of 32.8% (red dashed line).

The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis recommendations for the EUR/USD and GBP/USD on October 30

Fundamental component (Universal release time of the news)

Today, the statistics from the Eurozone is quite mediocre. You can only pay attention to the publication of data on the change in the number of unemployed in Germany (8:55 UTC+00). Furthermore, indicators from the USA may have their value. At 12:30 UTC+00, GDP data are expected, at 14:30 UTC+00 on crude oil reserves, and at 18:00 UTC+00, the Fed will make a decision on the interest rate.

EUR / USD

analytics5db92ae7aba88.jpg

In the last days of the month, the upward players are trying to hold positions and remain optimistic for the monthly result. The role of support and attraction in the current conditions is played by the weekly Fibo Kijun (1.1083) and the daily cloud, while the support for the daily short-term trend, which has moved into the resistance category and is now located at 1.1126. In addition, the previous resistances 1.1146 - 1.1185 - 1.1206 continue to remain in place. The inability of the players to increase their departure from the zone of attraction indicates their weakness at the moment, so that the opponent, when consolidating under the support (1.1083), can begin to actively strengthen its mood. In this case, reference points will be the final levels of the daily cross (1.1030 - 1.0994), weekly Tenkan (1.1030) and the lower border of the daily cloud.

analytics5db9336ec8bb1.jpg

In the lower halves, key levels (central pivot-level of the day 1.1101 + weekly long-term trend 1.1106) form a fairly narrow support zone, located almost horizontally for a long time. All of these indicates a lack of directional movement and uncertainty. The location of the pair above the key support (1.1101-06), as of the moment, gives the current advantage to the players to increase. In turn, reference points within the day can be designated the resistance of the classic pivot levels - 1.1130 (R1) - 1.1147 (R2) - 1.1176 (R3). Consolidation under 1.1101-06 will give the current advantage to the players for a decline, while the classic pivot levels will also act as bearish signs - support 1.1084 (S1) - 1.1055 (S2) - 1.1038 (S3).

GBP / USD

analytics5db92b106d5be.jpg

The daily short-term trend served as a reason for braking, but so far, it (1.2900) has combined its efforts with the monthly Fibo Kijun (1.2882) and forms the nearest resistance zone. If the players on the rise will not be able to gain a foothold above in the near future, then they are unlikely to be able to avoid the continuation of the decline. The following benchmarks for the decline today remain in the area of 1.2669 - 1.2712 (weekly Fibo Kijun + monthly Tenkan + daily Fibo Kijun).

analytics5db933b074a86.jpg

The recent uncertainties have led to the merger of key levels of the lower halves - 1.2857 (central pivot level) and 1.2858 (weekly long-term trend). To change the current situation, reliable consolidating outside the extremes of the current corrective movement is necessary - above a maximum of 1.3201 and a minimum of 1.2788. At the same time, intermediate resistance within the day can serve as 1.2908 (R1) - 1.2955 (R2) - 1.3006 (R3) today, while support for the classic pivot levels are located at 1.2810 (S1) - 1.2759 (S2) - 1.2712 (S3).

Divergences EUR / USD and GBP / USD (daily timeframe)

There are no new divergences.

Ichimoku Kinko Hyo (9.26.52), Pivot Points (classic), Moving Average (120)

The material has been provided by InstaForex Company - www.instaforex.com

GBP/USD: plan for the European session on October 30. Another intrigue for the UK and Brexit. General elections will be held

To open long positions on GBP/USD you need:

Yesterday's support for the Laborites made it possible to get a majority on the issue of holding general elections in Great Britain, which will be held on December 12 this year. On the one hand, this is good news for the pound, and on the other, further uncertainty may lead to a downward correction of the pair. Yesterday's attempt by the bulls to break above the resistance of 1.2870 was again unsuccessful. Only real consolidation above this level will be a signal to open new long positions capable of updating the highs of 1.2943 and 1.3012, where I recommend profit taking. If pressure on the pound remains in the first half of the day, then only the formation of a false breakout in the support area of 1.2807 will be a signal to buy the pound. Otherwise, it is best to open long positions in GBP/USD by bouncing from a low of 1.2735 or even lower, in the area of 1.2664.

To open short positions on GBP/USD you need:

Yesterday, I noted that the pound is no longer responding to good news, which indicates the absence of major players in the market who want to continue to buy the pound. The next formation of a false breakdout in the resistance area of 1.2870 will be a signal to open short positions in order to break the support of 1.2807, which was formed last Friday. However, a further target will be the level of 1.2735, a breakthrough of which will very quickly pull down GBP/USD to a low of 1.2664, where I recommend profit taking. In the event of a breakthrough of resistance at 1.2870, for example, after the Federal Reserve's decision to leave interest rates unchanged or a weak report on GDP, it is best to consider short positions in GBP/USD from larger highs around 1.2943 and 1.3012.

Signals of indicators:

Moving averages

Trade is conducted in the region of 30 and 50 moving average, which indicates the lateral nature of the market.

Bollinger bands

A break of the lower boundary of the indicator at 1.2845 will raise the pressure on the pound. A break of the upper boundary at 1.2880 will lead to a new wave of pound growth.

analytics5db927d9767d4.png

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
The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD: plan for the European session on October 30. The expectation of the Fed interest rate cut puts pressure on the US

To open long positions on EURUSD you need:

A weak report on the US consumer confidence index, which fell last month, led to a weakening of the US dollar against the euro yesterday afternoon. However, whether the pair will continue to grow today, it will be clear after the publication of the report on US GDP and the decision of the Federal Reserve on interest rates. With lower rates, the bulls will try to break above the large high of 1.1120, which will lead to the resumption of the upward trend in EUR/USD and to update levels in the areas of 1.1149 and 1.1178, where I recommend profit taking. However, weak data on Germany may put pressure on the euro in the morning. In this scenario, it is best to consider long positions on a false breakout in the region of the middle of the side channel - 1.1097, or either buy on a rebound from its lower boundary of 1.1075.

To open short positions on EURUSD you need:

Euro sellers will be concentrated in a false breakout in the resistance area of 1.1120, which will be the first signal to open short positions in EUR/USD, the purpose of which will be to support 1.1097, but attention should be paid to the report on Germany, as well as consumer sentiment in the eurozone. Data on US GDP growth could lead to a breakdown of support of 1.1097 and further sale of the pair to the lower boundary of the side channel at 1.1075, where I recommend profit taking until the Fed's decision on interest rates. Only the scenario of maintaining rates at the same level will return demand for the US dollar, which will lead to a breakthrough of 1.1075 and a fall in the region of the lows of 1.1050 and 1.1026. In case of growth above the resistance of 1.1120, for sales, you can consider the levels of 1.1149 and 1.1178.

Signals of indicators:

Moving averages

Trading is slightly above 30 and 50 moving averages, which indicates a slight advantage to buyers of the euro.

Bollinger bands

Growth will be limited by the upper indicator level at 1.1125, while the lower boundary of 1.1090 will provide support.

analytics5db9262e29d5f.png

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
The material has been provided by InstaForex Company - www.instaforex.com

Between London and Tokyo: the future of the yen depends on the fate of the British elections and the Bank of Japan meeting

The Japanese currency has gradually lost ground against the US dollar since the beginning of October: the yen has fallen in price by 200 points since October 7, reaching the boundaries of the 109th figure. But here the upward impulse has faded: the USD/JPY pair pair has been trading in a narrow-band flat since the beginning of the week, waiting for news drivers.

A regular meeting of the Bank of Japan will be held on Thursday, October 31st. On the eve of this event, an insider appeared on the market - obviously not in favor of the Japanese currency. According to Bloomberg news agency, the central bank will release a quarterly report tomorrow that will lower forecasts of economic growth and inflation. According to informed sources, this will be done in view of lower energy prices, and also taking into account the negative consequences of the global trade war, which affected the dynamics of global economic growth.

tPcyHuZibQ1GdrYtQ-wd4f_Bhtr6Bia1NJodHRH3

The worsening economic forecasts does not mean that the Bank of Japan will immediately begin to soften the parameters of monetary policy: at the September meeting, the central bank announced that it would keep the rate at the current level "at least until the end of February next year". At the same time, Haruhiko Kuroda warned that the regulator may soon consider the issue of increasing incentives. According to him, his colleagues are "close to this like never before this year."

It is also worth recalling that back in July last year, the Bank of Japan expanded the range, or rather, the limits of long-term interest rates: as a result of this correction, the regulator shifted not only the "ceiling", but also the lower limit, to -0.2%. In other words, Kuroda even then paved the way for a possible reduction in interest rates further into the negative area. In addition to a direct reduction in interest rates, the central bank may warn of a decrease in the target for long-term rates, as well as intensify asset purchases, while accelerating the expansion of the monetary base. The above scenarios can be combined.

In general, traders of the USD/JPY pair have a difficult time: the yen is forced to respond not only to the internal fundamental background, but also to the external. Currency is a defensive asset, therefore, the external fundamental background plays a significant role, and the USD/JPY pair traditionally depends on the degree of anti-risk sentiment in the market. This means that significant global changes can overshadow the outcome of the October meeting of the Bank of Japan.

At the moment, traders have two main topics on the agenda - this is Brexit and the trade war between the United States and China. The general fundamental background in the foreign exchange market depends on the prospects for their development, and, accordingly, the "health" of the yen. Any more or less large-scale breakthrough or failure in the negotiations will inevitably affect the dynamics of the USD/JPY pair. By coincidence, the October meeting of the Bank of Japan will take place amid high-profile political battles in London, the outcome of which will be of crucial importance for Brexit.

Yesterday, the House of Commons of the British Parliament nevertheless agreed with the proposal of Prime Minister Boris Johnson to hold early elections in mid-December. Labour could not convince their colleagues to postpone the election from December 12 to 9, and the Parliament simply voted for a re-election by a simple majority. But the foreign exchange market actually ignored this fact. The fact is that the deputies of the Lower House have not yet put an end to this issue - there is still a decisive, third reading of the bill. Today, that is, on Wednesday, the House of Lords (Upper House of Parliament) will consider the draft re-election law, after which it will return to the House of Commons. A decisive vote will take place at this stage.

Amendments will be presented to the bill before the third reading. Yesterday, Deputy Speaker Lindsay Hoyle did not allow deputies to vote on amendments unacceptable to the government (the chairperson has the right to select amendments and put them to a vote). At the same time, the House of Commons voted so that the deputies had the opportunity to introduce additional amendments to the draft law, which will be discussed during the third reading. Traders fear that Johnson's unacceptable amendments to the law will block re-election. Downing Street has already announced a possible revocation of the bill if such amendments are approved, in particular to reduce the age limit for voting in elections to 16 years.

RAc9F7fBNEKZMXoPPnpvft8siHDVd3LfUbqupddI

It is worth noting that in this case, it is not so much a re-election to the British Parliament as the fate of Brexit is at stake: given the current ratings of Conservatives, they will be able to form their own majority in the House of Commons in December and, accordingly, coordinate Johnson's deal. Thus, in the coming days in the foreign exchange market we can expect increased volatility, and not only in pairs with the participation of the pound. If early elections are agreed, interest in risk in the market will increase, and the demand for defensive assets, including the yen, will decrease.

Thus, if the Bank of Japan takes an extremely soft position tomorrow (which is likely), and the British deputies finally come out for re-election (here the probability is 50/50), then the yen will continue to become cheaper, including paired with the dollar. In this case, the pair will reach the first resistance level at 109.50 in a matter of hours - this is the upper line of the Bollinger Bands indicator, which coincides on the weekly chart with the lower boundary of the Kumo cloud.

The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Important Intraday Levels For EUR/USD, October 30, 2019

analytics5db8f8101e187.jpg

When the European market opens, some economic reports will be released such as Italian 10-y Bond Auction, German Unemployment Change, Spanish Flash CPI y/y, French Consumer Spending m/m, German Prelim CPI m/m, and French Flash GDP q/q. The US will also publish the economic data such as Federal Funds Rate, Crude Oil Inventories, Advance GDP Price Index q/q, Advance GDP q/q, and ADP Non-Farm Employment Change, so amid the reports, the EUR/USD pair will move with medium to high volatility during this day. TODAY'S TECHNICAL LEVELS: Breakout BUY Level: 1.1164. Strong Resistance: 1.1158. Original Resistance: 1.1147. Inner Sell Area: 1.1136. Target Inner Area: 1.1110. Inner Buy Area: 1.1084. Original Support: 1.1073. Strong Support: 1.1062. Breakout SELL Level: 1.1056. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Technical analysis: Important Intraday Levels for USD/JPY, October 30, 2019

analytics5db8f7ae53d96.jpg

In Asia, Japan will release the Retail Sales y/y and the US will also publish some economic data such as Federal Funds Rate, Crude Oil Inventories, Advance GDP Price Index q/q, Advance GDP q/q, and ADP Non-Farm Employment Change. So there is a probability the USD/JPY pair will move with medium to high volatility during this day. TODAY'S TECHNICAL LEVELS: Resistance. 3: 109.42. Resistance. 2: 109.22. Resistance. 1: 109.00. Support. 1: 108.74. Support. 2: 108.53. Support. 3: 108.31. (Disclaimer)The material has been provided by InstaForex Company - www.instaforex.com

Forecast for EUR/USD on October 30, 2019

EUR/USD

On Tuesday, the euro once again went down to support the Fibonacci level of 123.6% (1.1074), after which it hit the resistance of the price channel line on the daily chart where it closed the day. Today is a very important day for the dollar (respectively, the euro) - economic data on employment and GDP are published and the Federal Reserve announces a decision on monetary policy. All events are closely related. The economic indicator of new jobs in the private sector and GDP for the 3rd quarter (coming out with a difference of 15 minutes) can already suggest the tone of Jerome Powell's comments after the decision on the rate. Investors are inclined to believe that today's, third consecutive rate cut will be the last in this short-term softening cycle, then the Fed may take a six-month pause. Good economic data will strengthen this expectation and we can see a neutral reaction of the markets immediately after the announcement of the FOMC. ADP Non-Farm Employment Change is expected to be 125 thousand in October against 135 thousand in September, the consensus forecast for GDP is 1.6%, which is below 2.0% in a preliminary estimate. But after the release of investment and export data on Monday, the Atlanta Federal Reserve Bank lowered its own forecast from 1.8% to 1.7%, so today's release of 1.7%, remaining above the average of 1.6%, can greatly affect investors. and the Fed itself, which already knows the data. In addition, we do not exclude the option indicated in yesterday's review (see) to keep rates unchanged even if market expectations are 90%. In this case, Powell may "promise" a decline in December. Thus, with any development of events, we expect the euro to fall.

analytics5db912bd5b81e.png

The first target will be a Fibonacci level of 123.6% at a price of 1.1074. Actually, this is not so much a goal as a signal level, overcoming of which opens the way to support the MACD line on daily 1.1025.

analytics5db912d2d7a52.png

On a four-hour chart, the price is held by the line of balance, Marlin may have made a false exit into the growth zone. We are waiting for the development of events. The price exit above the MACD line (1.1139) during the development of an alternative scenario will make it possible for the price to rise to 1.1154 (Fibo level 110.0%), consolidating above it will allow the price to grow even higher, to 1.1215 (Fibo level 100.0%).

The material has been provided by InstaForex Company - www.instaforex.com

Forecast for GBP/USD on October 30, 2019

GBP/USD

The British Labour Party did not torment Prime Minister Boris Johnson for too long, as yesterday it agreed to hold early elections in December. On this news, the falling pound returned to the opening level of the day, where it ended the trading session. This morning the price is at the Fibonacci level of 100.0%, the Marlin oscillator continues to decline. The tension has subsided for at least a month, now investors can focus on the economy and the general situation in the world.

analytics5db9113d1d529.png

On the four-hour chart, Marlin entered the growth zone, but the price remains below the balance line (indicator red) and the MACD line, which is even higher. Without risk for a downward trend, the price can still grow to this line (1.2955), but going above it will create a risk of further growth to the Fibonacci level of 61.8% at 1.3063.

analytics5db91151f2aa3.png

The main scenario remains unchanged - the British pound's fall to the Fibonacci level of 123.6% at the price of 1.2744, consolidation under which will open the way to the Fibonacci level of 161.8% at the price of 1.2548.

The material has been provided by InstaForex Company - www.instaforex.com

Forecast for USD/JPY on October 30, 2019

USD / JPY

Yesterday, the dollar consolidated above the trend line of the red price channel (the day closed above the line), but the Marlin oscillator showed a risk of double divergence on the daily scale. For its final breakdown, the price should consolidate itself as fast as possible above the top of yesterday. In this case, the growth will continue to the nearest target with the formed line of the falling green price channel (109.77). The negative scenario suggests a decrease in prices to support the red price channel to the area of 107.92.

analytics5db9104a012ee.png

The situation is more positive on the four-hour chart. The price is below the MACD line, but Marlin is in the growth zone and the balance of power is on the buyer's side - the price is above the balance line - the red indicator line. A signal for further growth (and purchases) will be the price exit above yesterday's high of 109.08.

analytics5db9105faace8.png

The material has been provided by InstaForex Company - www.instaforex.com

GBPUSD approaching resistance, potential for big drop!

Entry: 1.2903

Why is it good: Horizontal swing high resistance, 100% fibonacci extension, 50% fiboancci retracement

Take Profit : 1.2800

Why is it good: Horizontal swing low support, 100% fibonacci extension, 23.6% fibonacci retracement

Stop loss: 1.2700

Why is it good: horizontal overlap support, 38.2% fibonacci retracement

The material has been provided by InstaForex Company - www.instaforex.com

AUDUSD pullback below resistance

analytics5db8ef2675580.png

Entry: 0.68715

78.6% Fibonacci retracement

Take Profit : 0.68363

Why it's good : 61.8% Fibonacci retracementThe material has been provided by InstaForex Company - www.instaforex.com

Fractal analysis of the main currency pairs as of October 30

Forecast for October 30:

Analytical review of currency pairs on the scale of H1:

analytics5db8c88a44a78.png

For the euro / dollar pair, the key levels on the H1 scale are: 1.1138, 1.1119, 1.1103, 1.1083, 1.1068, 1.1049, 1.1038 and 1.1013. Here, we are following the development of the descending structure of October 21. Short-term downward movement is expected in the range of 1.1083 - 1.1068. The breakdown of the latter value will lead to a pronounced movement. In this case, the target is 1.1049. Price consolidation is in the range of 1.1049 - 1.1038. For the potential value for the bottom, we consider the level of 1.1013. Upon reaching which, we expect a pullback to the top.

We expect a consolidated movement in the range 1.1103 - 1.1119. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.1138. This level is a key support for the downward structure. Its passage at the price will lead to the development of an upward trend. In this case, the potential target is 1.1173.

The main trend is the descending structure of October 21, the correction stage.

Trading recommendations:

Buy: 1.1120 Take profit: 1.1137

Buy: 1.1142 Take profit: 1.1170

Sell: 1.1083 Take profit: 1.1070

Sell: 1.1068 Take profit: 1.1050

analytics5db8c8a6a0a70.png

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. At the moment, the price has expressed a pronounced potential for the downward movement of October 21. The continuation of the movement to the top is expected after the breakdown of the level of 1.2959. In this case, the first target is 1.3035. The breakdown of the level of 1.3035 will lead to a pronounced upward movement. Here, the potential target is 1.3141. Price consolidation is in the range of 1.3141 - 1.3215.

We expect consolidated movement 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 goal is 1.2625.

The main trend is the ascending structure of October 9, the formation of the descending structure of October 21.

Trading recommendations:

Buy: 1.2960 Take profit: 1.3031

Buy: 1.3035 Take profit: 1.3140

Sell: 1.2808 Take profit: 1.2717

Sell: 1.2713 Take profit: 1.2627

analytics5db8c8c37e7d4.png

For the dollar / franc pair, the key levels on the H1 scale are: 0.9999, 0.9976, 0.9963, 0.9940, 0.9929 and 0.9909. Here, we are following the development of the ascending structure of October 18. Short-term upward movement, we expect in the range 0.9963 - 0.9976. The breakdown of the last value will lead to a pronounced movement. Here, the target is a potential target - 0.9999, when this value is reached, we expect a pullback to the bottom.

Consolidated movement is possibly in the range of 0.9940 - 0.9929. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 0.9909. This level is a key support for the upward structure.

The main trend is the ascending structure of October 18, the correction stage.

Trading recommendations:

Buy : 0.9963 Take profit: 0.9974

Buy : 0.9978 Take profit: 0.9999

Sell: Take profit:

Sell: 0.9927 Take profit: 0.9912

analytics5db8c8de5b30f.png

For the dollar / yen pair, the key levels on the scale are : 109.58, 109.39, 109.29, 109.13, 108.85, 108.72 and 108.53. Here, we are following the development of the upward cycle of October 23. The continuation of the movement to the top is expected after the breakdown of the level of 109.13. In this case, the target is 109.29. Price consolidation is in the range of 109.29 - 109.39. For the potential value for the top, we consider the level of 109.58, upon reaching which, we expect a pullback to the bottom.

Short-term downward movement is expected in the range of 108.85 - 108.72. The breakdown of the last value will lead to an in-depth correction. Here, the target is 108.53. This level is a key support for the top.

Main trend: local structure for the top of October 23.

Trading recommendations:

Buy: 109.13 Take profit: 109.29

Buy : 109.40 Take profit: 109.56

Sell: 108.85 Take profit: 108.74

Sell: 108.70 Take profit: 108.55

analytics5db8c8f775c44.png

For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3160, 1.3128, 1.3101, 1.3036 and 1.2989. Here, we are following the development of the downward trend of October 10. At the moment, the price forms a small potential of October 29 for the movement in correction. The continuation of movement to the bottom is expected after the breakdown of the level of 1.3036. In this case, the target is the potential target 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, the correction stage.

Trading recommendations:

Buy: 1.3101 Take profit: 1.3126

Buy : 1.3130 Take profit: 1.3160

Sell: Take profit:

Sell: 1.3034 Take profit: 1.3000

analytics5db8c91235b21.png

For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6928, 0.6910, 0.6897, 0.6874, 0.6847, 0.6831 and 0.6810. Here, the price registered the local upward structure of October 28. The continuation of the movement to the top is expected after the breakdown of the level of 0.6874. In this case, the target is 0.6897. Price consolidation is in in the range of 0.6897 - 0.6910. For the potential value for the top, we consider the level of 0.6928. Upon reaching which, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 0.6847 - 0.6831. The breakdown of the latter value will lead to the formation of a downward structure. Here, the potential target is 0.6810.

The main trend is the local structure for the top of October 28.

Trading recommendations:

Buy: 0.6875 Take profit: 0.6896

Buy: 0.6910 Take profit: 0.6928

Sell : 0.6846 Take profit : 0.6831

Sell: 0.6828 Take profit: 0.6810

analytics5db8c9300dbbb.png

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, price has entered an equilibrium state. 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.

We expect consolidated movement 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 is 119.64.

The main trend is the rising structure of October 15 and the formation of potential for the bottom of October 21.

Trading recommendations:

Buy: 121.05 Take profit: 121.34

Buy: 121.36 Take profit: 121.76

Sell: 120.25 Take profit: 119.94

Sell: 119.90 Take profit: 119.66

analytics5db8c94bed030.png

For the pound / yen pair, the key levels on the H1 scale are : 142.82, 141.23, 139.53, 138.70, 137.79 and 137.08. Here, price has entered an equilibrium state. The continuation of movement to the top is expected after the breakdown of the level of 141.23. 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, as well as consolidation, are possible 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, the formation of potential for the downward movement of October 21.

Trading recommendations:

Buy: 141.25 Take profit: 142.80

Sell: 139.50 Take profit: 138.75

Sell: 138.65 Take profit: 137.80

The material has been provided by InstaForex Company - www.instaforex.com

Pound - pawn in a big game called Brexit?

analytics5db8d60531219.jpg

The dynamics of the British currency amid heated debate around the least traumatic option for Britain to exit the EU left much to be desired. The pound experienced the strongest price fluctuations and hardly held the gained positions. He has a little respite now, but for how long?

A short pause in the dynamics of the pound is caused by a three-month delay by Brexit, to which European leaders agreed. Earlier it was reported that the European Union has ratified the flexible terms of the delay in relation to the British exit from the eurobloc. Recall that the country was supposed to leave the EU this Thursday, October 31, but now the deadline has been moved. It was announced that 27 participating countries agreed on a deferral of Brexit. The date of exit from the EU is now postponed to January 31, 2020. If the British Parliament ratifies the withdrawal agreement in November, the country will leave the bloc on December 1, 2019, and if it ratifies in December, the "divorce" will take place on January 1, 2020. Brussels is currently awaiting formal agreement from London regarding the postponement granted until the end of January.

According to experts, such conditions are favorable for the UK, since early parliamentary elections can be held in the country on December 12, 2019. In this case, British Prime Minister Boris Johnson can accelerate the ratification of the agreement with the European Union. According to the law, signed by the British Parliament, Johnson is obliged to accept the offer of deferment at the time of its receipt. Earlier, the prime minister said that the country will leave the eurobloc on October 31 in any case, with or without a deal. However, the politician had to reconsider his plans. He submitted to Parliament, counting on the approval of the new elections scheduled for December 12, in exchange for his postponement. According to Johnson, a new election is an urgent need and the best way to break the current impasse.

Monday's political debate around Brexit did not affect the pound too much. It stabilized within 1.2859–1.2861, pausing to vote on the issue of holding general elections.

analytics5db8d6181cbc0.jpg

The political clouds hanging over Britain for a long time have been a bit dispelled. This positively affected the dynamics of the pound, which gradually began to grow. On Tuesday, October 29, the GBP/USD pair rose to 1.2870. Subsequently, the pair traded in the range of 1.2855–1.2856, showing a downward trend.

analytics5db8d86dde5e3.png

According to analysts, the pound will be able to return to the 1.2950 area if the ratification processes in the House of Commons go more intensively. The GBP/USD pair is testing the 1.2841–1.2842 marks at the moment.

analytics5db8d8a36e7f0.png

According to currency strategists at Bank of America Merrill Lynch, relatively quiet times are coming for sterling. The risk of an uncontrolled exit from the EU, that is, the "hard" Brexit, tends to zero, and this is a very positive factor for the British currency. If Parliament approves the Brexit deal, the pound may rise above 1.3000, the bank believes. Experts are certain that the pound will test the level of 1.3500 in the near future, which is 5% higher than the current figures.

In general, experts assess the condition of the British currency as not very stable. This is not surprising: the pound, along with the European currency, was experiencing severe congestion due to difficulties with Britain's exit from the European Union. The long search for a compromise between London and Brussels negatively affected the currency of Great Britain. The pound involuntarily became a bargaining chip in a political game called Brexit, a pawn in the hands of financiers, and this does not suit anyone. Analysts are confident that, having received a respite, the pound will gather strength and again rush into the battle, which will be able to win.

The material has been provided by InstaForex Company - www.instaforex.com

Trading strategy for GBP/USD for October 29. The UK can leave the EU whenever it wants

GBP/USD - 4 H.

analytics5db85df43aaf3.png

On October 4, the GBP / USD pair completed consolidation above the Fibo level of 61.8% - 1.2836 on the 4-hour chart, and the bullish divergence of the CCI indicator has not been canceled. Thus, now, traders can expect some growth of quotations in the direction of the correctional level of 76.4% - 1.3044. On the other hand, new brewing divergences are not observed on October 29. The information background for the pair can be interpreted in different ways, and tomorrow, it can make big changes in the dynamics of the pound-dollar pair.

News of the Brexit delay agreement is good news for the British pound. The European Union has officially announced the granting of flexible postponement to London, which means a formal postponement of the new release date to January 31, but the UK may withdraw earlier as soon as Boris Johnson is able to agree with Parliament on ratification of the agreement. Meanwhile, the main opposition of Boris Johnson and the ruling Conservative Party, Jeremy Corbyn, whose party yesterday refused to accept the Prime Minister's proposal for early parliamentary elections on December 12, sharply changed his mind today. According to Jeremy Corbyn, his party has achieved the most important thing - the impossibility of holding Brexit's "No Deal", and is now ready to agree to hold early parliamentary elections. Let me remind you that it is through re-election that Boris Johnson will try to win more seats for his party than he currently has. This will be necessary in the future in order to freely adopt any bills that the conservatives or Boris Johnson will need. First of all, it concerns Brexit so with or without a deal, it doesn't matter. Moreover, Johnson is sorely lacking in parliament right now (thanks to the elections held by Theresa May), but where are the guarantees that there will be more after the new elections? The Labour party themselves also announced their readiness for the election, as well as for the largest and most ambitious election campaign. Corbyn and his party members understand that either they will get no less votes than they have now, or all efforts to prevent Brexit from "No Deal" can be considered in vain. At the same time, the people of Great Britain cannot but understand this, who, according to various sociological studies, is not so sure of the expediency and necessity of Brexit, especially without an agreement. In any case, we can witness some of the most interesting and fateful elections.

For the pound, it all now boils down to the fact that Brexit's "No Deal" will not be in the near future, which is good. Therefore, bull traders are happy to buy the British currency. If tomorrow it turns out that America's GDP will slow down and the Fed will lower its key refinancing rate, then there will be even more bullish factors for the pound-dollar pair.

What to expect today from the pound-dollar currency pair?

The pound-dollar pair consolidated above the correction level of 61.8%. Today, I expect continued growth to resume, and tomorrow, increase in the activity of traders, as there will be much more news and reports on October 30. Only fixing the pair's exchange rate at the Fibo level of 61.8% can be interpreted in favor of the US currency and count on the resumption of the fall in the direction of the correction level of 50.0% - 1.2668.

The Fibo grid was built at the extremes of March 13, 2019 and September 3, 2019.

Forecast for GBP/USD and recommendations for traders:

I recommend buying a pair with a target of 1.3044, since it closed at 61.8% with a Stop Loss of 1.2836.

I recommend considering the sales of the pair with the target of 1.2668 if consolidation under the last low of bullish divergence is completed.

The material has been provided by InstaForex Company - www.instaforex.com

Trading strategy for EUR/USD on October 29. Traders believe in the Fed's third consecutive decline of the rate

EUR/USD - 4 H.

analytics5db85e2b86d3b.png

On October 4, the EUR/USD pair performed a return to the correction level of 100.0% - 1.1106 on the 4-hour chart, and rebounded from it; however, it could not resume the process of falling. At the moment, the euro-dollar pair has completed a return to this Fibo level again and is threatening to close it. If this happens, then I will state the reversal of the pair's quotes in favor of the European currency and expect some growth in the direction of the level of 1.1164, to which the pair has already approached twice. In addition, another rebound from the correction level of 100.0% will work again in favor of the US dollar.

Information background:

If you start the countdown from Monday last week, then only one day out of all the workers was really interesting in terms of news. All other days can be safely identified as half-days, as no economic reports were published. Nevertheless, the head of the European Central Bank, Mario Draghi, delivered a speech twice (once just last Thursday), both times his speech could not be called positive for the European currency, and his last speech was frankly just a farewell. This Thursday, Christine Lagarde will officially take over his post, and the ECB will turn over a page dedicated to the 8-year reign of Mario Draghi. But all this time, the Euro currency practically didn't respond at all, since most of the traders took their places "on the fence" and were waiting for news, and the news will only be tomorrow. However, today at the American session, signs of growth of the Euro currency were noticed, although there seemed to be no reason for this. On the other hand, a day before the Fed summarizes the results of the meeting, a dollar fall is a sign that traders believe in a third consecutive rate reduction and begin to get rid of the US currency. Burning, by the way, is not too strong. As a result, a day before the most important event of October, we have a rather blurry situation.

If we take into account the worsening economic statistics in the US - the Fed has reason to weaken monetary policy. If you take into account the ongoing trade war with China - the Fed has reason to lower rates. If you take into account the ongoing criticism of Jerome Powell by Donald Trump - the Fed has reason to weaken monetary control. Thus, traders are not in vain expecting a decrease in rates by another 0.25%. What will be the reaction of traders to this event? It is unlikely that the US dollar will fall too much, yet many forecasters predict this decision by the Fed, it will not come as a surprise.

What to expect today from the euro-dollar currency pair?

October 29, traders, most likely, will relatively calmly bring the day to an end, and the most interesting event will be tomorrow. If the euro-dollar pair closes above the correction level of 100.0% - 1.1106, I will expect continued growth of the pair. Meanwhile, weak GDP data in America, Fed rate cuts, a portion of dovish comments from Jerome Powell - all of these will support bull traders in their desire to buy European currency.

The Fibo grid was built at the extremes of May 23, 2019 and June 25, 2019.

Forecast on EUR/USD and recommendations to traders:

I recommend selling the pair with a target of 1.1024 if a new rebound from the level of 1.1106 (100.0% Fibonacci) is performed. Stop Loss - Above 1.1106.

I recommend buying a pair with targets 1.1164 and 1.1232 and Stop Loss level at 1.1106, if closing is performed above the Fibo level of 100.0%.

The material has been provided by InstaForex Company - www.instaforex.com

Yen stumbled on the strategy of leading central banks

analytics5db8d0187828e.jpg

The Japanese currency suspended the upward movement, which was not too intense, in anticipation of the decision to soften the monetary policy of the leading regulators - the Federal Reserve and the Bank of Japan. The decline was small, but noticeable, analysts said.

On Monday, October 28, the yen was trading in a narrow range of 108.67–108.72 after falling to its lowest level in the past week. Experts believe that the Fed's super soft position and a possible decision by the Bank of Japan to mitigate monetary policy have become the main drivers of this decline. This halted the growth of the USD/JPY pair, which climbed less than 0.1% to 108.74. Later, the pair reached the level of 108.79, which was the highest since October 17 this year.

Investors were very enthusiastic about the possible Fed rate cut this week. Usually, a reduction in rates is preceded by a weakening of the currency, but yesterday the USD/JPY pair reached a seven-week high, exceeding 109.00.

Earlier, the Federal Reserve announced the start of the purchase of treasury bonds at $60 billion per month to restore reserves. Experts consider this news favorable for the Japanese currency. However, analysts expect the USD/JPY pair to retreat before the announcement of the Fed decision on monetary policy. They believe that the yen will give up its positions, and the 200-day moving average, located near 109.00, will become a barrier to the Japanese currency's further growth. At the moment, the USD/JPY pair runs in the range of 108.91-108.92, having slightly risen from the low morning levels.

analytics5db8d41c2444f.png

On the morning of Tuesday, October 29, the pair dropped to the levels of 108.85–108.86, but subsequently managed to gain a foothold in the gained positions.

analytics5db8d4330fa33.png

Comparing the volatility of interest rates in the US and the volatility in the USD/JPY pair, the currency strategists of Citigroup Bank note that the US currency is the winner in this situation. The difference in interest rates will decrease if the Fed rates fall to zero, but this will not affect the volatility of the dollar, analysts said.

The USD/JPY pair is quite sensitive to the differential of long-term rates, experts emphasize. An important role for the Japanese currency exchange rate is played by the current monetary policy, the instruments of which, in addition to the Fed rate, include a quantitative easing program (QE) and fiscal stimulus. These factors strongly affect the US dollar. As for the actions of the Bank of Japan, it has practically nothing to strive for, analysts said. They do not expect drastic decisions from the regulator at today's meeting. However, the current situation is extremely unfavorable for the yen, experts emphasize. At the same time, they doubt the further weakening of the Japanese currency, which always remains stable in difficult situations.

The material has been provided by InstaForex Company - www.instaforex.com

October meeting of the Fed: the results are a foregone conclusion, but the intrigue remains

The euro-dollar pair has been trading flat for the second day in anticipation of a key event of the current week. We are talking about the October meeting of the Federal Reserve, following which Jerome Powell will hold the next press conference. Let me remind you that earlier (before the beginning of 2019), the Fed chairman spoke with journalists only after four meetings out of eight scheduled for the year. Over the years, the market has become accustomed to the fact that key decisions or intentions were voiced precisely at extended meetings, when the head of the Fed could give relevant comments and further clarify a particular position. The rest of the meetings, as a rule, were obviously "passing" - traders did not expect anything unusual from them.

analytics5db8cf6a3a42f.jpg

But the situation has changed since January this year: Powell decided to hold briefings at the end of each meeting, so traders assess the likelihood of one or another regulator's move on the eve of each meeting of Fed members. However, there is little doubt about the outcome of tomorrow's meeting: with a 95% probability, the US central bank will lower its interest rate by 25 basis points. This fact will not surprise any participant from the market, and the dollar is unlikely to demonstrate high volatility. Over the past few weeks, there have been too many factors that indicate the feasibility of this step on the part of the Fed: conflicting Nonfarm, a weak increase in inflation indicators and a record low value of production ISM. The members of the Federal Reserve for the most part did not deny the presence of a high probability of easing monetary policy at the penultimate meeting this year.

Therefore, the main intrigue of tomorrow's meeting is different. Traders are interested in the further steps of the US regulator - both this year and early next. Here, the opinions of analysts are divided. According to some currency strategists, the Fed will take a break after the October rate cut. Others believe that at the beginning of next year, the central bank will once again lower the rate. Jerome Powell warned in the summer (on the eve of the first decline) that the regulator would adjust the interest rate "for preventive purposes" - that is, the long-term cycle was not discussed initially. The most sensitive areas of the US economy have already responded to the Fed's first steps in this direction. The results of the US-Chinese talks also speak in favor of the Fed's wait-and-see attitude. And although the parties could not conclude a deal, they took several steps towards each other and did not allow another escalation of the trade war.

In addition, lowering the interest rate further, the Federal Reserve risks narrowing the space for maneuver, which may come in handy in the future (for example, if the US and China resume a trade conflict with renewed vigor). Before the start of the trade war, the US regulator managed to reduce the balance sheet and raise the interest rate, so it "has room to retreat." In this regard, its position looks somewhat more profitable relative to many other central banks of the leading countries of the world.

In other words, Jerome Powell will certainly not be in a hurry with further decisions, at least in the context of the December meeting. However, according to some experts (in particular, ING), the regulator will still resort to another round of rate cuts at the beginning of next year, and then take a break until the end of 2020.

Proponents of this scenario primarily indicate the dynamics of US inflation. The consumer price index published in October was indeed very weak. The overall monthly index unexpectedly slowed to zero, contrary to growth forecasts to 0.1%. In annual terms, the CPI remained in place: in September, the indicator reached 2.4% YOY, although economists had expected growth to 2.5%. Core inflation was also disappointing. The core index, excluding food and energy prices, fell more than expected. In monthly terms, the index reached 0.1% last month, although experts predicted more substantial growth. Slowing core inflation is an alarming sign, especially amid slowing wage growth. Let me remind you that the inflationary component of Nonfarm also disappointed the market, being in the red zone. Now the negative picture was supplemented by an inflationary release.

analytics5db8cf7fccf0c.jpg

It is very likely that the "softness" of the Fed's rhetoric will also depend on preliminary data on the growth of the US economy in the third quarter (the release is expected tomorrow, October 30, at the start of the US session). According to general forecasts, US GDP growth will significantly slow - to 1.6% (after falling to 2% in the second quarter). If this forecast is true, it will be the weakest growth rate since the fourth quarter of 2015.

Thus, given the totality of fundamental factors, we can assume the following. After lowering the interest rate following the results of the October meeting, Jerome Powell, most likely, will not announce further steps in this direction. He will again remind reporters that the regulator does not make decisions "ahead of time", so everything will depend on current conditions. In addition, given the weak growth in inflation, Nonfarm and (possibly) US GDP in the third quarter, the tone of the accompanying statement will become more dovish (pessimistic).

The market may interpret this fact as a signal for further easing of monetary policy, after which the dollar will be under significant pressure. If Powell sufficiently clearly signals a long-term pause in this matter, then the demand for the US currency will sharply increase, despite the third rate cut this year. Therefore, it is advisable to make trading decisions on the EUR/USD pair not based on the results of the Fed meeting, but following the results of Jerome Powell's press conference, since the fundamental picture for the dollar can change significantly.

The material has been provided by InstaForex Company - www.instaforex.com