Trading plan EURUSD 11/05/2019

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Monday passed quietly.

The euro continues to meet serious resistance on the way up in the zone of 1.1180 – 1.1200.

This creates the possibility that the euro will not be able to overcome this obstacle and perhaps the upward trend will stop and turn into a range.

We keep purchases from the levels of 1.0945 – 1.1005 with a stop at 1.1070.

At the level of 1.1070, we are making a downward turn.

Today, important news on the US economy – ISM services sector index at 16:00 London time.

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Technical analysis of GBP/USD for 05/11/2019

Technical Overview:

The GBP/USD pair made a false breakout from the Flag pattern and made a new local high at the level of 1.2974. Nevertheless, after a few tryouts, the bulls were not strong enough to push the prices higher towards the key technical resistance level at 1.3012 and reversed. The price moved back down towards the Flag pattern zone again and currently is trading inside of this zone, just in the middle of it. The next important technical support is seen at the level of 1.2783, which is the lower boundary of the Flag pattern.

Weekly Pivot Points:

WR3 - 1.3169

WR2 - 1.3078

WR1 - 1.3005

Weekly Pivot - 1.2910

WS1 - 1.2842

WS2 - 1.2734

WS3 - 1.2668

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.

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Elliott wave analysis of GBP/JPY for November 5 - 2019

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The trading range has become even smaller in the last trading day and is now between 139.58 and 140.06, We continue to look for a move closer to at least 137.74 as long as resistance at 140.74 is able to cap the upside.

If, however, resistance at 140.74 is broken, it will open up the upside for a continuation towards 144.98 and longer-term much higher levels.

R3: 141.15

R2: 140.74

R1: 140.35

Pivot: 140.21

S1: 139.74

S2: 139.26

S3: 139.07

Trading recommendation:

WE will buy 50% GBP at 137.85 and 50% at 135.87 or we will buy 100% upon a break above 140.74

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Elliott wave analysis of EUR/JPY for November 5 - 2019

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A break above minor resistance at 121.26 will confirm that red wave ii has been completed with the test of 120.26 and red wave iii towards 123.55 is in motion. Short-term support is seen at 120.70. This level will ideally protect the downside for a break above 121.26 and set the stage for more upside progress towards 123.55 and longer-term much higher levels.

Only an unexpected break below 120.26 will delay the expected rally and call for a dip to 119.87 before moving higher again.

R3: 121.78

R2: 121.48

R1: 121.26

Pivot: 121.00

S1: 120.83

S2: 120.70

S3: 120.26

Trading recommendation:

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

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Technical analysis of EUR/USD for 05/11/2019

Technical Overview:

Despite the positive momentum, the technical resistance at the level of 1.1179 was too strong for bulls and the EUR/USD pair is now pulling back from this zone. The market conditions are now overbought and the momentum is below its fifty levels, which indicated the bears are in charge, at least for the short-term. The nearest technical support is seen at the level of 1.1126, 1.1109 and 1.1091. Only a clear breakout below the level of 1.1075 would put bears in the control of the price.

Weekly Pivot Points:

WR3 - 1.1310

WR2 - 1.1242

WR1 - 1.1209

Weekly Pivot - 1.1144

WS1 - 1.1116

WS2 - 1.1042

WS3 - 1.1010

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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GBP/USD: plan for the European session on November 5. Pound to remain under pressure in case of weak report on the UK service

To open long positions on GBP/USD you need:

Even with a decline, buyers do not show activity, which gradually returns the British pound to the area of larger support levels. Today there is a report on activity in the UK services sector, which may put pressure on the pair, as there has been a decrease in it recently. Only the formation of a false breakout in the support area of 1.2875 will be the first signal to open long positions. Otherwise, it is best to purchase around after updating the 1.2845 support, and it's better to immediately rebound from the major low of last week at 1.2807. If the data turn out to be better than economists' forecasts, the bulls will try to return to a resistance of 1.2925, where I recommend profit taking.

To open short positions on GBP/USD you need:

Sellers will expect to consolidate the pair below the support of 1.2875 and weak data on activity in the service sector, which could push the pound further to the area of larger lows at 1.2845 and 1.2807, where I recommend profit taking. The further upward trend will depend on how the bears show themselves in the support area of 1.2807. If the report leads to an increase in GBP/USD in the morning, you can consider new short positions after updating the resistance of 1.2925, or sell immediately for a rebound from a high of 1.2971.

Signals of indicators:

Moving averages

Trade is conducted below 30 and 50 moving averages, which indicates a possible decline in the pound in the short term.

Bollinger bands

A break of the lower boundary of the indicator at 1.2865 will increase pressure on the pound. Growth will be limited by the upper level of the indicator at 1.2925.

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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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EUR/USD: plan for the European session on November 5. Weak manufacturing sector and Lagarde's mediocre speech put pressure

To open long positions on EURUSD you need:

The new European Central Bank Chief, Christine Lagarde's speech yesterday in the afternoon was mediocre, which put pressure on the euro, which in the morning was experiencing growth problems after declining activity in the manufacturing sector of the eurozone. Today, bulls need a return to the resistance of 1.1130, which will make it possible for them to build a new upward trend and return to the level of 1.1155, where I recommend profit taking. In the event of a weak report on producer prices in the eurozone, pressure on EUR/USD may return, in such a scenario it is best to open long positions on a false breakout from a support of 1.110

To open short positions on EURUSD you need:

Sellers are gradually building a downward correction, and a return under the moving average indicates a further decline in the pair in the short term. The main task for the first half of the day will be the formation of a false breakout in the resistance area of 1.1129, which can be formed after a weak report on producer prices of the eurozone, which will be a clear signal for the further sale of the euro in order to update the lows of 1.1104 and 1.1082, where I recommend profit taking. If the bulls find the strength in themselves and return the level of 1.1129, you can sell immediately for a rebound in the area of a high of 1.1155, where the moving averages are concentrated.

Signals of indicators:

Moving averages

Trading is conducted below 30 and 50 moving averages, which indicates a bearish nature of the market.

Bollinger bands

In case of growth, the average boundary of the indicator at 1.1135 will act as resistance, and a break of the lower boundary at 1.1110 will increase pressure on the euro.

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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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Overview of GBP/USD on November 5th. Forecast according to the "Regression Channels". Boris Johnson is preparing to win the

4-hour timeframe

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Technical data:

The upper channel of linear regression: direction – upward.

Junior channel of linear regression: direction – upward.

The moving average (20; smoothed) – sideways.

CCI: -54.2849

On Monday, November 4th, the British pound showed its inability and unwillingness to continue the upward movement. We have repeatedly said that the growth of the pound by more than 800 points, and its two-week stay near local highs without a strong downward correction is not fully justified, from a fundamental point of view. As we have repeatedly reported, the growth of 800 points occurred after the foreign exchange market received information from the Prime Minister of Ireland Leo Varadkar and Prime Minister of Great Britain Boris Johnson about the high probability of signing a "deal" between the European Union and Britain. However, what is the practical use of this "deal" if it is blocked by the Parliament for the fourth time? Now, a month later, elections will be held, which is far from the fact that they will bring an unambiguous victory to Boris Johnson, which will allow him, bypassing the Labor and other opposition forces, to implement his Brexit. Moreover, the Labor Party can cooperate with other parties to again prevent the conservatives from the possibility of implementing a "divorce" from the European Union. Thus, if the pound resumes falling now, simply against the background of the absence of favorable changes in the political sphere of Great Britain, not to mention the economic, this will not be at all surprising.

Meanwhile, Boris Johnson is confident of winning the election on December 12. If his expectations are met, he will immediately put to a vote the draft agreement on leaving the EU. This is what he told Labor leader Jeremy Corbyn in a letter. "We will leave the European Union by the end of January on a deal that has already been agreed with Brussels," the letter said. Johnson also asked Corbyn whether the Labor leader would have attempted to sign a new agreement with the EU if he had won the election and whether it would have been put to a national referendum? Also, Johnson is interested in the question of whether the Labor party will support the abolition of Brexit if none of the parties receives the necessary majority in Parliament? Interesting questions, since they are traced precisely to the Prime Minister's uncertainty about the outcome of the December vote.

While the leaders of the Conservatives and the Labor Party have a nice conversation with each other, the new Speaker of the House of Commons elected the representative of the Labor Party, Sir Lindsay Hoyle, who previously served as Deputy Speaker. A rather interesting reshuffle ahead of the new Brexit parliamentary vote. Now the "lead the process" will be the laborer. However, already on November 6, that is tomorrow, the Parliament will be dissolved (the necessary five weeks before the election), so the new speaker will fulfill his duties only two days with the current composition and convocation of the Parliament.

In the UK, the index of business activity in the services sector will be published today. And when we wrote a little above that the economic component is even less likely to support the pound, we had in mind the macroeconomic statistics from the UK. In most countries experiencing problems with business activity in the manufacturing sector, the services sector is fine. This applies to the European Union and America. However, in the UK even this index was in the "red zone" last month, and this, according to experts, is likely to remain there. The forecast is 49.7. Thus, it is not necessary to count on the fundamental support of the British currency today, and the technical picture indicates a change in the direction of the trend to a downward one. However, in recent days, volatility in the pound is frankly weak, so we do not expect a strong decline in the pound/dollar pair today either. Both channels of linear regression retain the likelihood of a resumption of the upward trend.

Nearest support levels:

S1 – 1.2878

S2 – 1.2848

S3 – 1.2817

Nearest resistance levels:

R1 – 1.2909

R2 – 1.2939

R3 – 1.2970

Trading recommendations:

The GBP/USD currency pair settled below the moving average line. So traders can now consider selling the pound with targets of 1.2848, 1.2817, and 1.2787. We would not recommend doing this in large volumes, as both trend channels of linear regression remain directed upwards. At the same time, we believe it is more preferable to the downward movement of the pair in the coming days.

In addition to the technical picture, fundamental data and the time of their release should also be taken into account.

Explanation of the illustrations:

The upper channel of linear regression – the blue lines of the unidirectional movement.

The lower channel of linear regression – the purple line of the unidirectional movement.

CCI – the blue line in the regression window of the indicator.

The moving average (20; smoothed) – blue line on the price chart.

Support and resistance – red horizontal lines.

Heiken Ashi – an indicator that colors bars in blue or purple.

Possible variants of the price movement:

Red and green arrows.

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EUR/USD. Mediocre speech from Lagarde and Matolcsy's resonant statement

The first speech of the new chairman of the European Central Bank, Christine Lagarde, was without sensations. Her rhetoric was more of a political and ceremonial character, since the speech was devoted to Wolfgang Schauble, the speaker of the lower house of the German Parliament and the country's former finance minister. He is the architect of strict fiscal policy while completely ignoring requests from other EU countries to increase government spending (the so-called "black zero" policy). At the same time, the European Central Bank has recently increased pressure on politicians to take appropriate steps with fiscal measures and structural reforms.

Schauble, in turn, is a consistent critic of the policies of the ECB (or rather, Mario Draghi), blaming the regulator, in particular for the fact that soft monetary policy provides indirect support for the growth of right-wing populism in Germany. On the whole, Berlin is a key opponent of unprecedented stimulus measures by the ECB - according to the majority of German economists and politicians, record low interest rates and cheap loans harm German investors.

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Therefore, Lagarde's first speech as the head of the ECB before a German audience a priori could not be too "soft": after all, the new head of the central bank needs to build constructive relations with the main European players, and Germany plays a key role in this regard. That is why Lagarde yesterday chose not to talk about the prospects for monetary policy of the central bank. In her rather lengthy speech, she called on Europe to "show courage" and "overcome indecision" in the context of overcoming the economic crisis in the eurozone. However, behind the pathos and veiled phrases lay quite tangible subtext. Just a few days before taking office, Christine Lagarde lamented the "lack of solidarity" among the eurozone countries. In particular, she called on Germany and the Netherlands, with their "chronic budget surpluses"to increase investment and government spending.

By the way, in early September, rumors appeared in the market that Germany could create the so-called "shadow budget" to increase government spending. According to Reuters, the German government is considering the possibility of creating this mechanism, given the slowdown in the growth of the national economy. The main objective of the mechanism under discussion is to increase government spending in such a way as to circumvent restrictions on the growth of public debt, thereby observing the rules of the European "Stability and Growth Pact." At the end of last year, it was for violating this pact that Brussels was going to hold Italy accountable - Rome was facing a fine of several billion euros for exceeding the "ceiling" of the budget deficit. If Berlin succeeds in creating a "shadow mechanism" that will allow legally increasing government spending, then these funds will be directed to infrastructure and other projects.

Germany officially denies the existence of such intentions - the representative of the German Ministry of Finance said that the government still adheres to the position of "fiscal rationality." But talk about this still remains because the financial impulse from Germany is especially important in the context of the subsequent actions of the European regulator. According to some experts, this step on the part of the Germans will allow members of the European regulator not to resort to further aggressive measures to mitigate the parameters of monetary policy.

Given the current split in the ECB, yesterday's rhetoric of Lagarde was indicative: apparently, it will continue to exert verbal pressure on Germany and the Netherlands, urging them to use the surplus of their budgets.

Despite the neutral-political speech of the head of the European regulator, the EUR/USD pair still fell to the bottom of the 11th figure by the end of Monday. But this dynamics was determined by Lagarde's rhetoric, and by the statement of another European official, Gyorgy Matolcsy, who holds the post of head of the Hungarian National Bank. In an interview with the Financial Times, he said that the eurozone countries should be able to stop using the single currency "in the next ten years." In his opinion, the countries of the EU did not and do not need the euro, and most countries of the eurozone did not benefit from the introduction of a single currency. The head of the Hungarian regulator called the idea of the euro a "French trap", which essentially does not serve the common interests of the European Union.

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Such an unexpected statement put pressure on the euro, but the decline in the single currency was limited. Firstly, Hungarian politicians very often criticize the European integration processes in general and the actions of Brussels in particular. Secondly, the "dissident" position of the head of the Hungarian central bank does not have support among his colleagues, so traders should not be afraid of any practical steps in this direction in the foreseeable future.

Thus, according to the results of Monday, the EUR/USD pair remained within the 11th figure, that is, in fact, remained at its former positions. To develop the downward movement, the bears of the pair need to gain a foothold below 1.1090 (the middle line of the Bollinger Bands indicator, which coincides with the upper boundary of the Kumo cloud on the daily chart). Whereas for bulls the opposite task is to gain a foothold above 1.1210 (the upper line of the Bollinger Bands is on the same timeframe). As you can see, both sellers and buyers of EUR/USD were not able to implement their "minimum program": the pair is still waiting for more powerful information drivers.

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Overview of EUR/USD on November 5th. Forecast according to the "Regression Channels". Donald Trump continues to resent the

4-hour timeframe

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Technical data:

The upper channel of linear regression: direction – sideways.

The lower channel of linear regression: direction – upward.

The moving average (20; smoothed) – sideways.

CCI: -51.6646

The first trading day of the week for the currency pair ended with a minimal downward movement, but even it was enough for the pair to consolidate below the moving average line and, thus, change the trend to a downward movement. Those macroeconomic reports that took place on Monday could not support the euro, but also could not create additional pressure on it. Indices of business activity in the manufacturing sectors of the countries with the largest economies in the European Union almost all showed weak growth and continuing declines in their industries. Thus, in the illustration, we see three rebounds from the Murray level of "7/8" – 1.1169, which at the moment did not let traders above themselves. Potentially, this means the end of the upward trend. In favor of this option, there is also a fundamental background, in which there are no news and events that can support the single European currency.

As for the speech of the new head of the ECB Christine Lagarde, there is absolutely nothing to tell traders. As we warned yesterday, it is unlikely that Christine would have started her reign at the Central Bank with the disclosure of all the cards and plans relating to monetary policy. Moreover, the first speech of Lagarde had to be welcome, that is, it was not originally planned to consider the issues of monetary policy. However, now that Lagarde has welcomed everyone, we can already expect the first steps from the new ECB Chairman, or at least speeches related to her immediate duties.

The topic with the possible impeachment of Donald Trump is overgrown with new scandalous details, not least of all that Trump himself delivers. For example, yesterday the President of the United States, through his favorite medium of communication with the people, Twitter, spoke out again about the Congress investigation against himself. He stated: "The scammer gave false information and dealt with a corrupt politician Schiff. He must appear to testify. Written answers are not suitable! Where is the second scammer? It disappeared after I posted the transcript. Did he even exist? Where is the informant? Scam! " As you can see, Trump managed to pour out all his anger in such a short message, but at the same time, he could not do without a new portion of the accusations. This message was a response to the information that the Informant, who had informed about the conversation between Trump and Zelensky, was ready to give written answers to all the questions of the Republicans.

Tuesday, November 5th, will be one of those boring days when nothing interesting happens for currency traders. Before the US trading session, no macroeconomic report will be published. During it – indexes of business activity in the US services sector from Markit and ISM, as well as a composite index of business activity. According to experts, all three indices will remain in the "green zone", that is, safe. The ISM index should even rise to 53.4. However, the composite index may suffer, as business activity in the industrial sector has been showing negative dynamics for several months in a row. Most importantly, now traders should understand the question, who will hold the initiative in their hands soon? So far, it comes down to bears. But they also need to overcome Murray's level of "6/8" to confirm their intentions to "come into play." The technical picture of the euro/dollar currency pair looks ambiguous now, as there is no pronounced trend in recent days. Thus, overcoming Murray's level of "6/8", from our point of view, will open the way for the bears to new sales of the pair, and from a fundamental point of view, this will be a more logical scenario.

Nearest support levels:

S1 – 1.1108

S2 – 1.1047

S3 – 1.0986

Nearest resistance levels:

R1 – 1.1169

R2 – 1.1230

R3 – 1.1292

Trading recommendations:

The euro/dollar pair overcame the moving, thus, short positions have become relevant now. However, before overcoming Murray's level of "6/8", we would treat sales with caution. In the case of overcoming the level of 1.1108, it will be possible to buy the US dollar with the target of 1.1047. It is recommended to re-consider purchases not earlier than the reverse consolidation of the pair above the moving average line.

In addition to the technical picture, fundamental data and the time of their release should also be taken into account.

Explanation of the illustrations:

The upper channel of linear regression – the blue line of the unidirectional movement.

The lower channel of linear regression – the purple line of the unidirectional movement.

CCI – the blue line in the indicator window.

The moving average (20; smoothed) – the blue line on the price chart.

Support and resistance – red horizontal lines.

Heiken Ashi – an indicator that colors bars in blue or purple.

Possible variants of the price movement:

Red and green arrows.

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Technical analysis: Important intraday Level For EUR/USD, November 05,2019

analytics5dc0f51747708.jpgWhen the European market opens, some Economic Data will be released such as During the European session, traders will take notice of Monetary Base y/y report. The US will unveil data on the IBD/TIPP Economic Optimism, Mortgage Delinquencies, JOLTS Job Openings, ISM Non-Manufacturing PMI, Final Services PMI,and Trade 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: 1.1185. Strong Resistance: 1.1179. Original Resistance: 1.1168. Inner Sell Area: 1.1157.Target Inner Area: 1.1131. Inner Buy Area: 1.1105. Original Support: 1.1094. Strong Support: 1.1083. Breakout SELL Level: 1.1077. (Disclaimer)

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EUR/USD approaching support, potential for strong bounce!

Entry: 1.11120

61.8% Fibonacci retracement, 61.8% Fibonacci extension

Take Profit : 1.11657

Why it's good : Horizontal Swing high

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Technical analysis: Important intraday Level for USD/JPY, November 05,2019

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Japan will release such economic data as the PPI m/m, Spanish Unemployment Change, and French Gov Budget Balance. Data on The IBD/TIPP Economic Optimism, Mortgage Delinquencies, JOLTS Job Openings, ISM Non-Manufacturing PMI, Final Services PMI, and Trade Balance from the US are due today. 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.3:109.32. Resistance. 2:109.12. Resistance. 1:108.90. Support. 1:108.63. Support. 2:108.42. Support. 3:108.20. (Disclaimer)

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NZD/USD reacting above support

USDNZD bounce above support at 0.63960

Entry: 0.63960

23.6% and 50% Fibonacci retracement, 78.6% Fibonacci extension

Take Profit : 0.64460

Why it's good : Horizontal Swing high

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NZDUSD reacting above support

USDNZD bounce above support at 0.63960

Entry: 0.63960

23.6% and 50% Fibonacci retracement, 78.6% Fibonacci extension

Take Profit : 0.64460

Why it's good : Horizontal Swing high

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USD/JPY to reach 1st resistance at 109.39, potential to drop!

USDJPY to reach 1st resistance at 109.39, potential to drop!

Take Profit 109.39

Why it's good: Horizontal swing high resistance

78.6% Fibonacci extension

Take Profit : 107.70

Why it's good : horizontal swing low support

50% Fibonacci retracement

61.8% Fibonacci extension

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Forecast for EUR/USD on November 5, 2019

EUR/USD

The fall of the euro on Monday from the technical side was due to a weak divergence on the Marlin oscillator. Strengthening the trend is possible after consolidating the price under the price channel line in the region of 1.1108. At this moment of transition, the signal line of the Marlin oscillator may be in the zone of negative values, in the territory of the bears. The 1.1030 goal will open - support for the MACD line, which is an adaptable trend line. Nevertheless, the trend is still growing, the target at 1.1215, as the Fibonacci level of 100.0%, remains relevant.

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Marlin divergence also formed on the H4 chart, the signal line of the oscillator is already in the declining trend zone. The price is below the MACD line, but the balance manages to adapt to the current situation and remains in the growth zone, which is the main warning about restoring growth. A signal to move towards the target of 1.1215 will be price consolidation above the MACD line (1.1165).

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Forecast for GBP/USD on November 5, 2019

GBP / USD

The pound fell 56 points under the general pressure of the US dollar on Monday. The signal line of the Marlin oscillator on a daily scale has already come close to the boundary with the territory of the bears. Its transition to the negative zone may coincide with the intersection of the signal level 1.2840, which opens the nearest target of 1.2748 (peak May 27 and a low of October 17).

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On a four-hour chart, the price is developing above the line of balance (red indicator), the Marlin oscillator is in the decline zone. To generate a downward signal when the signal level of 1.2840 is reached, the price should be below this balance line, otherwise a signal may turn upward with the prospect of growth to 1.3040. For the reversal option from current levels, the price is enough to overcome 1.2905, which opens up the prospect of 1.3000 (MACD line on H4). Formally, the pound is in a wide neutral range of 1.2840-1.3040.

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Forecast for USD/JPY on November 5, 2019

USD/JPY

After the Brexit topic receded into the shadows, markets with increased activity began to respond to the course of trade negotiations between the US and China. American representatives had information regarding the likely signing of the first part of the treaty in November. As a result, the S&P 500 grew by 0.37%, the Nikkei 225 is adding 1.43% to the Asian session today, and the USD/JPY currency pair has been growing by 60 points since the opening of the week. The price again met with the resistance of the embedded line of the price channel, above which it needs to gain a foothold in order to continue further growth to the nearest target of 109.80 - to the resistance of the green price channel. The signal line of the Marlin oscillator returns to the growth zone, but there is a risk of a reversal of this line from the boundary with the growth territory downwards.

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On the four-hour chart, the MACD line specifies the moment the price moves to further growth - 108.85 mark - consolidating above it opens the target of 109.80. Otherwise, the price will collapse to the embedded line of the price channel on a daily at 107.90. The second declining target may be the line of the green channel at the point of coincidence with the MACD line at 107.43.

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Fractal analysis of the main currency pairs for November 5

Forecast for November 5:

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: 1.1251, 1.1212, 1.1198, 1.1181, 1.1140, 1.1123, 1.1096 and 1.1072. Here, the price issued a pronounced medium-term initial conditions for the top of October 29. The continuation of the movement to the top is expected after the breakdown of the level of 1.1181. In this case, the target is 1.1198. Price consolidation is in the range of 1.1198 - 1.1212. For the potential value for the top, we consider the level of 1.1251, expressed movement to which, is expected after the breakdown of the level of 1.1212.

Consolidated movement is expected in the range 1.1140 - 1.1123. The breakdown of the latter value will lead to an in-depth correction. Here, the goal is 1.1096. This level is a key support for the ascending structure. Its breakdown will allow us to count on movement to the level of 1.1072.

The main trend is the initial conditions for the top of October 29.

Trading recommendations:

Buy: 1.1181 Take profit: 1.1198

Buy: 1.1212 Take profit: 1.1250

Sell: 1.1120 Take profit: 1.1098

Sell: 1.1094 Take profit: 1.1073

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For the pound / dollar pair, the key levels on the H1 scale are: 1.3148, 1.3102, 1.3037, 1.2986, 1.2910, 1.2868 and 1.2804. Here, we are following the initial conditions for the top of October 29. The continuation of the movement to the top is expected after the breakdown of the level of 1.2986. In this case, the target is 1.3037. Price consolidation is near this level. The breakdown of the level of 1.3040 should be accompanied by a pronounced upward movement. Here, the target is 1.3102. For the potential value for the top, we consider the level of 1.3148. Upon reaching which, we expect consolidation, as well as a pullback to the bottom.

Consolidated movement is expected in the range of 1.2910 - 1.2868. Hence, the high probability of a reversal to the top, as well as a breakdown of the level of 1.2868 will lead to the development of a downward trend. In this case, the potential target is 1.2804.

The main trend is the upward structure of October 29, the correction stage

Trading recommendations:

Buy: 1.2986 Take profit: 1.3035

Buy: 1.3040 Take profit: 1.3102

Sell: Take profit:

Sell: 1.2865 Take profit: 1.2805

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For the dollar / franc pair, the key levels on the H1 scale are: 0.9910, 0.9892, 0.9879, 0.9857, 0.9837, 0.9822 and 0.9798. Here, we are following the development of the descending structure of October 28. The continuation of the movement to the bottom is expected after the breakdown of the level of 0.9855. In this case, the target is 0.9837. Short-term downward movement, as well as consolidation is in the range of 0.9837 - 0.9822. For the potential value for the bottom, we consider the level of 0.9798. Upon reaching which, we expect a pullback to the top.

Short-term upward movement is possibly in the range of 0.9879 - 0.9892. The breakdown of the last value will lead to an in-depth correction. Here, the target is 0.9910. This level is a key support for the downward structure.

The main trend is the descending structure of October 28.

Trading recommendations:

Buy : 0.9879 Take profit: 0.9890

Buy : 0.9893 Take profit: 0.9910

Sell: 0.9855 Take profit: 0.9838

Sell: 0.9835 Take profit: 0.9822

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For the dollar / yen pair, the key levels on the scale are : 109.72, 109.42, 109.22, 108.93, 108.51, 108.34, 108.15 and 107.88. Here, the price forms an upward structure from November 1. The continuation of the movement to the top is expected after the breakdown of the level of 108.93. In this case, the goal is 109.22. Short-term movement, as well as consolidation is in the range of 109.22 - 109.42. For the potential value for the top, we consider the level of 109.72. Upon reaching which, we expect a pullback to the bottom.

Short-term downward movement is expected in the range of 108.51 - 108.34. The breakdown of the last value will lead to an in-depth correction. Here, the goal is 108.15. This level is a key support for the upward structure.

The main trend: the formation of the ascending structure of November 1.

Trading recommendations:

Buy: 108.93 Take profit: 109.22

Buy : 109.24 Take profit: 109.40

Sell: 108.50 Take profit: 108.35

Sell: 108.32 Take profit: 108.15

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For the Canadian dollar / US dollar pair, the key levels on the H1 scale are: 1.3268, 1.3246, 1.3208, 1.3185, 1.3143, 1.3124 and 1.3101. Here, the price forms the long-term initial conditions for the upward cycle of October 29. Short-term movement to the top is expected in the range of 1.3185 - 1.3208. The breakdown of the latter value will lead to a pronounced movement. Here, the target is 1.3246. For the potential value for the top, we consider the level of 1.3268. Upon reaching this level, we expect a pullback to the bottom.

Short-term downward movement is possibly in the range of 1.3143 - 1.3124. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 1.3101. This level is a key support for the upward structure.

The main trend is the formation of initial conditions for the top of October 29.

Trading recommendations:

Buy: 1.3185 Take profit: 1.3206

Buy : 1.3209 Take profit: 1.3246

Sell: 1.3143 Take profit: 1.3126

Sell: 1.3122 Take profit: 1.3101

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For the Australian dollar / US dollar pair, the key levels on the H1 scale are : 0.6959, 0.6938, 0.6928, 0.6910, 0.6888, 0.6874 and 0.6854. Here, we are following the development of the local upward cycle of October 28. At the moment, the price is in correction. The continuation of the movement to the top is expected after the breakdown of the level of 0.6910. In this case, the target is 0.6928. Price consolidation is in the range of 0.6928 - 0.6938. For the potential value for the top, we consider the level of 0.6959. Upon reaching this level, we expect a pullback to the bottom.

Consolidated movement is possibly in the range of 0.6888 - 0.6874. The breakdown of the latter value will lead to an in-depth correction. Here, the target is 0.6854. This level is a key support for the top.

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

Trading recommendations:

Buy: 0.6910 Take profit: 0.6928

Buy: 0.6938 Take profit: 0.6959

Sell : Take profit :

Sell: 0.6873 Take profit: 0.6855

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For the euro / yen pair, the key levels on the H1 scale are: 121.46, 121.17, 121.00, 120.74, 120.22, 119.83, 119.55 and 119.38. Here, we monitor the downward potential of October 30. At the moment, the price is in the correction zone. The continuation of movement to the bottom is expected after the breakdown of the level of 120.22. In this case, the first goal is 119.83, before this value, we expect expressed initial conditions for the downward cycle. The breakdown of the level of 119.80 will lead to the development of the cycle. In this case, the goal is 119.55. Price consolidation is in the range of 119.55 - 119.38.

Consolidated movement is expected in the range of 120.74 - 121.00, The range of 121.00 - 121.17 is the key support for the descending structure of October 30. Its passage at a price will lead to the development of an upward trend. Here, the goal is 121.46.

The main trend is the downward potential of October 30.

Trading recommendations:

Buy: Take profit:

Buy: 121.18 Take profit: 121.44

Sell: 120.20 Take profit: 119.85

Sell: 119.80 Take profit: 119.55

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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, the price is still in the equilibrium. 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: Take profit:

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

Dollar resists pressure, EUR/USD tends to rise

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The current week has begun quite calmly for the main world currency. The ISM report on the US manufacturing sector only caused a slight drawback. However, experts are confident in the stability of the US currency and the strengthening of its position.

The ISM report, demonstrating the state of the manufacturing sector of the US economy, presented a real picture of what was happening, which did not please the experts too much. Although the ISM index was higher than the September 2019 indicator, it did not reach the expectations of analysts, remaining close to a ten-year low. According to statistics, US production, like imports, fell to 2009 lows. According to experts, these indicators indicate a high probability of further easing of the Federal Reserve policy.

Many experts expected a stronger market reaction to the publication of a key US employment report. According to data presented last Friday, job growth slowed down a bit, but remained at an acceptable level (128 thousand instead of the forecasted 85–90 thousand), while the unemployment rate rose from 3.5% to 3.6%. Analysts also recorded an increase in average hourly wages of 0.2% instead of the expected 0.3%. Current data has confirmed a slowdown in the US economy, which is under severe pressure from prolonged trade wars. An additional confirmation of this fact was the fall in business activity in the manufacturing sector (ISM index) below the critical level of 50.

The US dollar did not avoid the negative impact. In the chain of "American economy - US currency", it is a key link that accounts for the main blows. The greenback is actively opposing them, but remains under pressure, which intensifies with optimism in the markets. Note that trade disputes have always spurred the growth of the greenback, so the weakening of trade tension will contribute to the demand for other assets to the detriment of the US dollar.

The U.S. administration is currently seeking to soften rhetoric, declaring optimism regarding negotiations between America and China. The White House is talking about a possible cancellation of tariffs for European cars. In such a situation, the EUR/USD pair may begin to sag. On the morning of Monday, November 4, it already showed a similar trend, trading near 1.1151–1.1152 marks.

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The downward trend caused concern among market participants, as a day earlier the EUR/USD pair rose to 1.1169–1.1170, the highs of August 2019.

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According to analysts, the pair is one step away from the key level of 1.1200. Overcoming this milestone, as in the case of the dollar index (DXY), is assessed by the market as a prerequisite for further growth. If this level is overcome, the EUR/USD pair will occupy high positions and maintain them until the end of 2019, experts said. The implementation of such a scenario will raise the pair almost to an unattainable height - up to 1.1400 and above.

On Monday, before starting to rise, the EUR/USD pair fell to 1.1157–1.1158. Now the pair has slightly increased to 1,1159–1,1160.

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Experts rate high chances that the pair will continue the rally. To implement this scenario, a relatively calm external background is needed, that is, the absence of a hard Brexit, an escalation of the conflict between the US and the EU, as well as the stabilization of Washington-Beijing relations. In this case, the EUR/USD pair, having overcome the key barrier of 1,1200, may begin to move to 1.1260–1.1270. For this, the "bulls" will need to break through the resistance at the levels of 1.1175–1.1190. As for the current sentiment, analysts are confident that market players will seek to close long positions in the dollar.

Long-term observations show that the US currency can withstand even the most unfavorable factors. Apart from market volatility and an unstable external background, these include mixed economic data on the US economy and the Fed's attempts to weaken the national currency. Nevertheless, the greenback can cope with the situation. Its strength allows it not to sag under the pressure of negative circumstances, experts conclude.

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At the time, the EUR / USD pair reached the level of 1.1165–1.1166, trying to exceed what was achieved.

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

Pound moved to a tactical retreat

If someone thought that the British pound would return to normal after reducing the chances of a disorderly Brexit to a low, then the beginning of November showed that they are wrong. The leader of the Brexit party, Nigel Faraj, fundamentally disagreeing with the main provisions of the project of Boris Johnson, said he would fight for every seat in the renewed Parliament. This can seriously complicate the position of the Conservatives and increase the risks of the victory of the party of Jeremy Corbyn. Labour promises to nationalize enterprises, raise taxes and hold a second referendum on divorce from the EU. The political landscape in Great Britain remains shaky, which allows Goldman Sachs to recommend that its client close long sterling positions as part of a "tactical retreat".

The dynamics of popularity of the main parties in Britain

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Thanks to the almost zero chance of a disorderly Brexit, the pound climbed to second in the list of the best performers of G10 since the beginning of the year. Sterling's two-month volatility has fallen to September lows, however, the intensification of political struggle can lead to an increase in the indicator, which will adversely affect capital flows and the short-term prospects of the British currency.

Pound Volatility Dynamics

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The pound practically did not pay attention to the rapid growth of business activity in the manufacturing sector from 48.3 to 49.6 in October. Surveys of purchasing managers were conducted during a period of general euphoria about the fact that a disorderly Brexit was avoided. In addition, the PMI continues to be below the critical mark of 50, indicating a decline in the sector. I do not think that sterling will be very sensitive to the release of data on business activity in the construction and services sectors, but a meeting of the Bank of England can make it worry.

Only one out of the 19 Bloomberg experts predicts that the BoE will lower the repo rate, the rest are confident that it will remain at the same level of 0.75%. At the same time, most experts believe that the central bank will lower forecasts for inflation and GDP and increase estimates of unemployment. This is a hint of monetary expansion, which will increase the risks of a GBP/USD correction. On the whole, it's a rather unexpected turn, given the fact that BoE's previous forecasts were based on the assumption that a disorderly Brexit could be avoided.

Assessment of changes in Bank of England forecasts

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If you add seasonal weakness to the growing political risks and potential dovish rhetoric of Mark Carney, then the immediate prospects for sterling can begin to be drawn in gray tones. According to the results of November in 1975-2018, it closed in the red zone in 28 out of 44 cases. Nevertheless, the bullish trend looks stable, so the correction at the end of autumn made it possible to buy a cheaper pound.

Technically, if the bulls on GBP/USD manage to keep the pair quotes above 1.29 and update the October high, then the chances of continuing the rally in the direction of the target by 88.6% according to the Bat pattern will increase. In the opposite case, we are waiting for a correction to 1.276 and 1.272.

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

GBP/USD. November 4. Results of the day. Even the second ardent supporter of Brexit, Nigel Farage, opposes Boris Johnson

4-hour timeframe

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Amplitude of the last 5 days (high-low): 64p - 98p - 63p - 76p - 46p.

Average volatility over the past 5 days: 69p (average).

Monday, November 4, was a very calm trading day for the GBP/USD currency pair. There were few macroeconomic publications today, only two. The index of business activity in the UK construction sector amounted to 44.2, exceeding both the forecast and the previous value. However, in fact, this increase does not change anything, since 44.2 is much lower than the key value of 50.0. We already wrote about the US manufacturing orders

in our review for the EUR/USD pair. Thus, the pound continued to move towards the critical line during the day with low volatility. Formally, the volatility over the past five days is characterized as average, but for the pound sterling 60-70 points from the low to the high of the day is very small. Especially against the background of those 800 points in literally a week that the pair recently went up. But now there is practically no news from the UK. But there is talk and discussion.

By and large, everyone now, from ordinary workers to billionaires, is discussing the possible results of the December 12 elections, all as one, note their extreme degree of significance. In fact, based on the results of these elections, it will be possible to say what the outcome of Brexit awaits Britain. By the way, it is not necessary that there will be any outcome at all, since a distribution of votes is possible in which no party will have the necessary majority, even taking into account friendly parties and deputies. Such a picture is now seen in Parliament. Meanwhile, most media outlets and periodicals insist that the Conservatives have the highest political ratings, and it is precisely their victory that needs to be prepared in the elections. In principle, this is expected, but the question is still the same: with what advantage will the Conservatives win? The Laborites are likely to get around 25-30% of the seat in Parliament, the party of Nigel Faraj, the initiator of Brexit, is not going to enter into a coalition with Conservatives and will take away another 10-10% of the vote. The Brexit party that supports the hard scenario deems Boris Johnson's current version of the deal as "treacherous".

Meanwhile, UK billionaires are preparing to leave the country if the Labour Party wins the election and Jeremy Corbyn becomes prime minister. It is expected that in the case of coming to power, Corbyn will significantly increase taxes for the rich and generally adhere to the opinion about the need for stronger government intervention in the country's economy. Well, Jeremy Corbyn himself already managed to "answer" to Donald Trump, who actively votes for Nigel Faraj and Boris Johnson in the elections, considering Corbyn himself a "second-class politician". Labour leader accused the American president of interfering in the British parliamentary elections with a view to electing his friend Boris Johnson. Earlier, US leader Trump criticized Boris Johnson's deal with the European Union, stressing that it could put an end to reaching a trade deal with the United States. In general, each side bends its line, even Donald Trump has his own interests in the UK and Brexit, and the UK itself remains now a theater of political battles and confrontations.

The technical picture of the pound now indicates an upward trend, however, it is definitely impossible to call it strong. Most likely, the bulls have exhausted their potential, and just as Brexit was paused, their desire to buy the British currency also disappeared amid new uncertainty, this time related to the new parliamentary elections. Bears are not active yet, but it seems that this will happen in the near future, since the hard Brexit, although removed from the near future and even Johnson stopped talking about it, nevertheless, the UK still has problems and its "divorce" with the EU can't be solved at all and it doesn't even move towards a solution.

Trading recommendations:

GBP/USD is in a downward correction. Thus, it is best now to wait for the situation to be clarified, the low volatility segment of the trend to complete, or at least to complete the current round of correction. Long positions still remain relevant with the target at a resistance level of 1,3005 if the pound/dollar pair stays above the Kijun-sen line of the Ichimoku indicator. It is recommended to consider buying the US currency in case of overcoming all the lines of the Ichimoku indicator and the level of 1.2836.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen is the red line.

Kijun-sen is the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dashed line.

Chikou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and bar graph with white bars in the indicators window.

Support / Resistance Classic Levels:

Red and gray dotted lines with price symbols.

Pivot Level:

Yellow solid line.

Volatility Support / Resistance Levels:

Gray dotted lines without price designations.

Possible price movement options:

Red and green arrows.

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