Trading plan for GBP/USD for week of November 2-6. New COT (Commitments of Traders). GBP prospects getting worse day after

GBP/USD 24H

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For the whole week, GBP/USD was trading lower like EUR/USD. Nevertheless, for GBP/USD the crucial move was a 61.8% fibo bounce. After this had happened, the odds for a further downtrend increased sharply. At the end of the week, GBP/USD slipped to the Kijun-sen line. If broken, the pair is likely to continue a further bearish trajectory. Thus, the US currency is winning favor with investors for the nearest weeks especially against the pound sterling. This scenario could be disrupted by the presidential election in the US and unexpected news on the talks between London and Brussels. From the technical viewpoint, the buyers could enter the market again if the price fails to fix below the critical level.

COT report

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Over the week of October 20-26, GBP/USD surged nearly 70 pips. However, the pair reversed downwards in the following 4 days and plunged 90 pips. In essence, such losses are not so heavy, especially for the pound sterling. According to the latest COT report, non-commercial traders closed almost 8,300 buy-contracts and 3,400 sell-contracts. Thus, the market sentiment of the non-commercial group is turning more bearish because the net position decreased by nearly 5,000 contracts. During 3 previous weeks, traders were puzzled, trying to figure out whether it makes sense to sell EUR. The second indicator shows that sentiment of non-commercial traders was turning more bullish for three weeks in a row. However, on the reporting week traders resumed selling GBP. Please be aware that minus 5,000 of the net position is too much for the pound sterling. The overall number contracts opened by the non-commercial group equals 90,000. In this context, I expect a deeper fall of the pound sterling.

The fundamental background for GBP/USD can be described briefly: Brexit, the talks on the trade deal, and the presidential election in the US. This trading week, there has been no news on each of the issues. Last weekend, Brexit negotiators Michel Barnier and David Frost started a new round of the talks which should have been finished early this week. So, the talks were extended until Thursday. As a result, the parties have not unveiled any news. So, traders are at a loss about the ongoing developments and any progress. This is wrong to make any conclusions on the grounds of rumors. So, it would be better to wait for any official information from the negotiators or the UK and EU authorities. Meanwhile, they are keeping silence.

What information is available is the prospects of a new lockdown in the UK. British Premier Boris Johnson warned about it this week. Restrictive measures could come into force starting from November 4 for one month. According to surveys by Johns Hopkins University, the UK is dealing with rampant coronavirus rates. The UK reported almost 25,000 new daily cases over the last three days. So, the UK could be the third country like France and Germany to tighten restrictions. Earlier, Boris Johnson said that a new lockdown was out of the question because it would trigger a severe economic downturn. As we see, the Prime Minister promptly revised his viewpoint not for the first time. Well, a new lockdown will raise the likelihood of another nosedive in the British currency because this would entail another contraction of the national output. The UK GDP could have expanded 15.1% in Q3 2020, but the economy incurred heavier losses in Q2 2020. Experts say that the UK could enter the new 2021 year on the pessimistic note, extending losses in the wake of Brexit which would be officially over on December 31.

Trading plan for week of November 2-6

1)The buyers could lose any chance for the price to move upwards in the short term if the pair drops below the critical level. In case the price rebounds from the KIjun-sen line, the pair might resume the upward bias with a target at 1.3375. Meanwhile, there is a slim chance for a bounce. Moreover, don't forget about an important 61.8% fibo bounce.

2)The sellers still have more chances for developing the downtrend. They need to push the price down below the Kijun-sen line (1.2929) on the 24-hour time frame. In this case, there will be more chances for the price to go down with the first target at 1.2568. From the fundamental viewpoint, the sterling is set to extend weakness.

Notes for the pictures

The resistance/support levels are the target levels when opening long/short positions. You can place take profit levels next to them.

Indicators Ishimoku, Bollinger bands, MACD

Areas of support and resistance are the ones from where the price has rebounded or has been rejected a few times.

Indicator 1 in the COT charts is a size of net positions for each category of traders.

Indicator 2 in the COT charts is a size of net positions for the non-commercial group.

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

Trading plan for EUR/USD for week of November 2-6. New COT report (Commitments of Traders). Christine Lagarde and COVID-19

EUR/USD 24H

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According to the 24-hour timeframe, EUR/USD eventually made some efforts to quit a sideways trading. The currency pair was closing in the red for 5 days in a row. It looks a bit strange because the presidential election will take place on Tuesday. Nevertheless, market participants decided to buy USD selling EUR. Earlier last week, EUR had just few reasons for weakness. In the middle of the week, EUR came under strong selling pressure. Meanwhile, we can draw a conclusion that the currency pair left the Ishimoku cloud that increases the odds for the development of a new downtrend. If the election in the US does not spring any surprises, the US currency will have a solid excuse for a further reinforcement. The euro has advanced 13% over the recent six months. Interestingly, the euro has not gone through a standard correction afterwards.

COT report

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For the week of October 20-26, EUR/USD climbed almost 40 pips. After its rise, the pair sharply reversed downwards and dropped 160 pips in the following 4 days. A new COT report revealed that professional traders rushed to close buy contracts on the reported week. The number of buy-contracts with the non-commercial group decreased by nearly 12,000. At the same time, non-commercial traders closed 1,000 sell-contracts. So, the net position for this group fell instantly by 11,000. Thus, the decrease of the net positions means that market sentiment for the group of large market players is turning bearish. In fact, I told you about this sentiment change analyzing previous COT reports. Besides, I told you that the level of 1.2000 is likely to remain the high for EUR/USD. After this level had been reached, non-commercial traders decided to close buy-contracts. This is clearly seen with the first indicator in the picture (the green line). Actually, this is what is happening for two months. The green and red lines which are the net positions of both commercial and non-commercial traders are getting narrower. So, I still believe that the uptrend is over. For this reason, professional traders pushed EUR down last week. EUR is set to extend its weakness in the long term.

What about the fundamental background this trading week? First, traders got to know GDP data for the US and the EU. The US national output rebounded 33.1% sequentially in Q3 2020 following a 31.4% slump. Thus, the US economy incurred total losses of nearly 10% in Q2 and Q3. When it comes to the EU, the European economy tumbled 11.8% in Q2 and recovered 12.7% in Q3 2020. Hence, the eurozone's economy losses are measured at 1-2%. Nevertheless, traders were not impressed with the European resilience, so the US dollar carried on with its advance. Perhaps, EUR was hurt by the dovish rhetoric of Christine Lagarde. She said this week that new lockdowns in Europe could again deal a blow to the EU economy. The ECB President pointed out that a recovery in the summer was fragile, incomplete, and uneven. Now economic conditions could worsen again amid the second coronavirus wave. Business activity in the service sector which is especially vulnerable has been already in a tailspin. Meanwhile, the most advanced EU economies such as Germany and France have already imposed restrictions. In other words, the pandemic factor could have knocked down EUR. Indeed, the US is not considering a second lockdown and its economy is still gaining momentum. The US dollar is highly sensitive to developments in the presidential race. So, beware of extreme volatility and price gyrations next week. Let me remind you that the primaries in the US began a few weeks ago. As of now, almost 70 million Americans have voted for their candidates.

Trading plan for week of November 2-6

1)EUR/USD seems to have escapes from a trading range. However, the currency pair will greatly depend on the outcome of the major event next week. No one dares to predict what will happen in the wake of the election. Currently, the technical picture for EUR/USD suggests a further downtrend. So, a good trading idea would be to sell the pair with the target coinciding with support of 1.1551. Nevertheless, we should be ready for any twist next week.

2)If you want to buy EUR/USD, you should wait at least for the price to fix above the Kijun-sen and Senkou span B lines. Meanwhile, neither the technical charts nor the COT report nor the fundamental background indicate the prospects of an uptrend. In this context, we consider a further bearish trend as the most plausible scenario.

Notes for the pictures

The resistance/support levels are the target levels when opening long/short positions. You can place take profit levels next to them.

Indicators Ishimoku, Bollinger bands, MACD

Areas of support and resistance are the ones from where the price has rebounded or has been rejected a few times.

Indicator 1 in the COT charts is a size of net positions for each category of traders.

Indicator 2 in the COT charts is a size of net positions for the non-commercial group.

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

Technical Analysis of EUR/USD for October 30, 2020

Technical Market Outlook:

The EUR/USD pair has hit the level of 1.1648, which is the short-term key technical support, together with the level of 1.1655. The momentum is still weak and negative despite the oversold market conditions at the H4 time frame chart. The nearest intraday resistance is seen at the level of 1.1696. The weekly candle is down and it is bigger than last week up candle, so the bears are still in control of the market. The next target for bears is seen at the level of 1.1612.

Weekly Pivot Points:

WR3 - 1.2123

WR2 - 1.1991

WR1 - 1.1943

Weekly Pivot - 1.1823

WS1 - 1.1766

WS2 - 1.1638

WS3 - 1.1589

Trading Recommendations:

Since the middle of March 2020 the main trend is on EUR/USD pair has been up, which can be confirmed by almost 10 weekly up candles on the weekly time frame chart and 4 monthly up candles on the monthly time frame chart. The recent correction towards the level of 1.1612 seems to be completed and now market is ready for another wave up. This means any local corrections should be used to buy the dips until the key technical support is broken. The key long-term technical support is seen at the level of 1.1445. The key long-term technical resistance is seen at the level of 1.2555.

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Hot forecast and trading recommendations for EUR/USD on 10/30/2020

Formally, the European Central Bank has not changed anything in its monetary policy at all. However, the single European currency suddenly slumped. This is due to the context in which the ECB meeting was held. For example, the traditional formulation that interest rates will remain at current levels, or even lower, until inflation approaches the target level of 2.0%, in a deflationary environment, begins to play in completely different colors. After all, this means that since consumer prices continue to decline, then interest rates can also be reduced. At least the ECB reserves this opportunity for itself. In addition, the text of the accompanying statement says that the emergency asset repurchase program that was introduced due to the coronavirus pandemic, if necessary, can be extended until the end of 2022. German Chancellor Angela Merkel's calls to introduce a new quarantine throughout Europe as soon as possible are quite suitable for the role of that very need. It is obvious to everyone that businesses have not yet managed to recover from the spring quarantine, and new, small and medium-sized businesses simply will not survive. So the ECB will have to make a lot of efforts to prevent a complete collapse of the economy. In other words, just due to everything that is happening in Europe now, all formulations regarding the ECB's possible actions are perceived as concrete plans for the near future.

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To be fair, take note that the latest US report came out much better than forecasts. Which in itself contributes to the dollar's appreciation. Of course, the number of initial claims for unemployment benefits fell slightly less than expected. A decline was predicted from 791,00 to 750,000. In fact, their number decreased to 751,000. Nevertheless, this is still a reduction. But more importantly, the number of repeated applications for unemployment benefits is falling rapidly. And so it should have decreased from 8,465,000 to 7,900,000. But their number dropped to 7,756,000. And although the previous data, both for primary and repeated applications, were revised upwards, the very fact of the ongoing reduction in unemployment , especially much faster than forecasts, completely eliminates this trouble. In addition, the first estimate of GDP for the third quarter showed that the rate of economic decline in the United States slowed from -9.0% to -2.9%. So the economy is clearly showing a solid recovery.

Repetitive Unemployment Insurance Claims (United States):

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At first glance, the euro can get an excellent reason to rise today. However, this is a misleading impression. For example, a preliminary estimate of GDP may show a slowdown in the rate of economic decline from -14.7% to -8.0%. Everything seems to be good. But it looks more like a disaster compared to the United States, as the scale of the recession is much larger. Also, a preliminary estimate of the dynamics of consumer prices should show a slowdown in deflation from -0.3% to -0.2%. But it is worth noting that this is still deflation, which has been going on for the third consecutive month. So both of these metrics don't look so good. In addition, the unemployment rate, not according to preliminary estimates, but in fact, may rise from 8.1% to 8.6%. And this looks horrifying, as unemployment falls in the United States. Therefore, European statistics are likely to further undermine the position of the euro.

Inflation (Europe):

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The EUR/USD currency pair managed to maintain the previously set downward sentiment, as a result, the support level of 1.1700 was broken, and the quote rushed to the next pivot point at 1.1650, where a pullback occurred.

Based on the quote's current location, you can see that short positions are still held in the market, which may lead to completing the process of a pullback and could also update the local low.

Acceleration is recorded relative to the market dynamics, which is confirmed by the high speculative interest in the market.

Looking at the trading chart in general terms (daily period), we can see that the upward tick from 1.1612 is almost complete, where the recovery scale is 84%.

We can assume that when the price does not settle above 1.1695, this will lead to bringing back the downward movement, where the previous day's low of 1.1650 will be the first point for sellers. A breakdown of the 1.1650 coordinate will indicate a subsequent movement towards the September 25 low of 1.1612.

From the point of view of a comprehensive indicator analysis, we see that the indicators of technical instruments on the hourly and daily periods signal a sell due to a rapid downward movement.

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Technical Analysis of GBP/USD for October 30, 2020

Technical Market Outlook:

The GBP/USD pair has hit the main channel lower line located at the level of 1.2880. The bounce from this level was rather shallow, the price hit 1.2938 and reversed again. The momentum is still weak and negative, so lower levels are in view. The next target for bears is seen at the level of 1.2868 and 1.2848. The nearest technical resisance is seen at the level of 1.2982. The weekly time frame candle is now down and engulfs the previous up candle, so the bears are in control of the market.

Weekly Pivot Points:

WR3 - 1.3465

WR2 - 1.3320

WR1 - 1.3185

Weekly Pivot - 1.3039

WS1 - 1.2902

WS2 - 1.2757

WS3 - 1.2620

Trading Recommendations:

The GBP/USD pair is in the down trend on the monthly time frame, but the recent bounce from the low at 1.1411 made in the middle of March 2020 loos very strong and might be a reversal swing. In order to confirm the trend change, the bulls have to break through the technical resistance seen at the level of 1.3518. All the local corrections should be used to enter a buy orders as long as the level of 1.2674 is not broken.

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Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on October 30

Analysis of transactions in the EUR / USD pair

The euro collapsed in the market yesterday after the ECB hinted of a possible softer monetary policy in December. It led to the quote moving 70 pips down from 1.1738.

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Trading recommendations for October 30

A number of economic reports are scheduled for release today, however, they will most likely reveal negative data for Europe. Because of this, short positions are expected to be more profitable in the EUR / USD in the morning.

But then in the afternoon, reports on the US economy may lead to the closure of short positions in the market, and such will limit the downward potential of the European currency.

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  • Open a long position when the euro reaches a quote of 1.1706 (green line on the chart), and then take profit at the level of 1.1668.
  • Open a short position when the euro reaches a quote of 1.1671 (red line on the chart, and then take profit around the level of 1.1598. A slowdown in economic growth and inflation will put pressure on the European currency.

Analysis of transactions in the GBP / USD pair

The uncertainty over the UK-EU trade agreement continues to jiggle the market. Thus, long positions encountered losses yesterday. As for short positions, selling from 1.2982 compensated for the defeat, as the pair moved 60 pips down because of it.

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Trading recommendations for October 30

Of great importance is still the ongoing Brexit negotiations, to which good news will lead to a new wave of growth in the GBP/USD pair, while bad news will lead to another decline in the British pound.

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  • Open a long position when the quote reaches the level of 1.2920 (green line on the chart), and then take profit around the level of 1.2982 (thicker green line on the chart).
  • Open a short position when the quote reaches the level of 1.2896 (red line on the chart), and then take profit at least at the level of 1.2852. Bad news on Brexit will continue the downward trend in the GBP / USD pair.
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Fractal analysis for major currency pairs on October 30

Outlook on October 30:

Analytical overview of major pairs on the H1 scale:

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The key levels for the euro/dollar pair are 1.1751, 1.1715, 1.1694, 1.1654, 1.1633, 1.1594 and 1.1558. The development of the downward trend cycle from October 21 is being followed here. Now, a short-term decline is expected in the range of 1.1654 - 1.1633. If the last value breaks down, it will lead to a strong movement. In this case, the goal is 1.1594. On the other hand, we consider the level 1.1558 as a potential value for the bottom. Upon reaching which, an upward pullback is expected.

A short-term growth is expected in the range of 1.1694 - 1.1715. Breaking through the last value will lead to a deep correction. The potential goal here is 1.1751, which is the key support for the downward structure.

The main trend is the downward cycle from October 21

Trading recommendations:

Buy: 1.1694 Take profit: 1.1715

Buy: 1.1717 Take profit: 1.1750

Sell: 1.1654 Take profit: 1.1634

Sell: 1.1631 Take profit: 1.1595

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The key levels for the pound/dollar pair are 1.3005, 1.2955, 1.2923, 1.2875, 1.2850, 1.2794 and 1.2751. Here, we are following the development of the downward pattern from October 21st. A short-term decline is expected in the range of 1.2875 - 1.2850. If the last value breaks down, it should be accompanied by a strong decline. The goal here will be 1.2794. For the potential value for the bottom, we consider the level 1.2751. Upon reaching which, an upward pullback can be expected.

A short-term growth is possible in the range of 1.2923 - 1.2955. If the last value breaks down, it will lead to a deep correction. Here, the potential target is 1.3005, which is the key support for the downward structure.

The main trend is the downward cycle from October 21

Trading recommendations:

Buy: 1.2923 Take profit: 1.2953

Buy: 1.2956 Take profit: 1.3005

Sell: 1.2875 Take profit: 1.2850

Sell: 1.2848 Take profit: 1.2796

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The key levels for the dollar/franc pair are 0.9208, 0.9191, 0.9174, 0.9127, 0.9114 and 0.9096. The development of the upward pattern from October 23 is followed. Now, growth is expected to continue after the level of 0.9174 breaks down. In this case, the target is 0.9191. Price consolidation is near this level. If the target breaks down, it will lead us to the potential target of 0.9208. Upon reaching which, a downward pullback is expected.

A short-term decline, in turn, is possible in the range of 0.9127 - 0.9114. In case of breaking through the last value, it will lead to a deep correction. The goal is 0.9096, which is the key support for the top.

The main trend is the upward cycle of October 23

Trading recommendations:

Buy : 0.9174 Take profit: 0.9190

Buy : 0.9192 Take profit: 0.9206

Sell: 0.9127 Take profit: 0.9115

Sell: 0.9112 Take profit: 0.9096

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The key levels for the dollar/yen are 105.08, 104.70, 104.49, 104.04, 103.84, 103.30 and 102.94. Here, we are following the development of the downward structure from October 20. The decline is expected to continue after the price passes the noise range 104.04 - 103.84. In this case, the target is 103.30. We consider the level 102.94 as a potential value for the downward trend. Upon reaching which, an upward pullback can be expected.

A short-term growth is possible in the range of 104.49 - 104.70. If the last value breaks down, it will lead to a deep correction. Here, the potential target is 105.08, which is the key support for the downward cycle.

The main trend is the local descending structure from October 20

Trading recommendations:

Buy: 104.50 Take profit: 104.70

Buy : 104.72 Take profit: 105.08

Sell: 103.84 Take profit: 103.33

Sell: 103.29 Take profit: 102.96

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The key levels for the USD/CAD pair are 1.3451, 1.3413, 1.3378, 1.3275, 1.3251 and 1.3216. The development of the upward cycle of October 21 is being monitored here. The growth of the pair is expected to continue after the level of 1.3378 breaks down. In this case, the goal is 1.3413. There is consolidation near this level. As a potential value for the upward trend, we consider the level 1.3451. Upon reaching which, a downward pullback can be expected.

A short-term decline is possible in the range of 1.3275 - 1.3251. Now, breaking through the last value will lead to a deep correction. Here, the target is 1.3216, which is a key support for the top.

The main trend is the upward cycle of October 21

Trading recommendations:

Buy: 1.3378 Take profit: 1.3413

Buy : 1.3415 Take profit: 1.3450

Sell: 1.3275 Take profit: 1.3251

Sell: 1.3249 Take profit: 1.3216

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The key levels for the AUD/USD pair are 0.7161, 0.7115, 0.7086, 0.7062, 0.7013, 0.6995, 0.6950, 0.6919 and 0.6875. Here we are watching the formation of potential for the downward cycle of October 28. The price is expected to continue to decline after the price passes the noise range 0.7012 - 0.6995. In this case, the goal is 0.6950. Meanwhile, price consolidation is in the range of 0.6950 - 0.6919. For the potential value for the bottom, we consider the level of 0.6875. Upon reaching which, an upward pullback can be expected.

A short-term growth, in turn, is expected in the range of 0.7062 - 0.7086. If the last value breaks down, it will lead to a deep correction. In this case, the potential target is 0.7115, which is the key support for the bottom.

The main trend is the formation of a descending structure from October 28

Trading recommendations:

Buy: 0.7062 Take profit: 0.7084

Buy: 0.7087 Take profit: 0.7115

Sell : 0.6993 Take profit : 0.6950

Sell: 0.6948 Take profit: 0.6920

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The key levels for the euro/yen pair are 123.61, 123.03, 122.69, 122.30. 121.57, 121.16 and 120.77. The development of the downward trend cycle from October 20 is being followed here. Now, the downward movement is expected to continue after breaking through the level of 121.57. In this case, the target is 121.16. For the potential value for the bottom, we consider the level of 120.77. Upon reaching which, consolidation and upward pullback can be expected.

On the other hand, a short-term growth is possible in the range of 122.30 - 122.69. In case that the last value breaks down, it will lead to a deep correction. Here, the target is 123.03, which is a key support for a downward cycle. The price passing this level will encourage the formation of strong initial conditions for an upward cycle.

The main trend is the downward cycle from October 20

Trading recommendations:

Buy: 122.30 Take profit: 122.67

Buy: 122.70 Take profit: 123.01

Sell: 121.55 Take profit: 121.18

Sell: 121.14 Take profit: 120.80

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The key levels for the pound/yen pair are 135.64, 135.05, 134.79, 134.29, 133.86 and 133.43. We are currently following the development of the downward structure from October 21. The pair is expected to continue to decline after it breaks down the level of 134.29. In this case, the target is 133.86. For the potential value for the bottom, we consider the level of 133.43. Upon reaching which, an upward pullback can be expected.

A short-term growth is possible in the range of 134.79 - 135.05. If the last value breaks down, it will lead to a deep correction. Here, the potential target is 135.64, which is the key support for the downward trend.

The main trend is the descending structure from October 21

Trading recommendations:

Buy: 134.80 Take profit: 135.05

Buy: 135.07 Take profit: 135.64

Sell: 134.29 Take profit: 133.88

Sell: 133.84 Take profit: 133.45

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EUR/USD Deeper Drop Signaled

EUR/USD should develop a significant corrective phase after the recent developments. Is traded under 1.17 psychological level signaling more declines after retesting this broken downside obstacle.

The pair is expected to drop as the USDX approaches fresh new highs in the upcoming period. USDX's up reversal should force the greenback to dominate the currency market. The dovish ECB and better than expected US Advance GDP, Unemployment Claims, and the Advance GDP Price Index data has forced the pair to fall into the seller's territory.

Today, the economic calendar is filled with important US and eurozone data. EUR/USD could react aggressively in the upcoming hours.

EUR/USD On A Declining Path!

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EUR/USD has escaped from the up channel, it has dropped as much as 1.1648 level, and now is retesting the 1.17 psychological level. A new lower low will confirm a deeper drop.

Its failure to stabilize above 1.18 signaled exhausted buyers. The bearish scenario could be invalidated only by a potential come back above 1.19. If EUR/USD continues to drop, the 1.1495 is seen as a potential downside target.

  • EUR/USD Trading Tips

Sell a bearish closure under 1.1648 and below the S2 (1.1636) level. Also, a false breakout with great separation above 1.17 or a bearish engulfing represents a selling signal. 1.1495 is seen as a short-term downside target.

A valid breakdown through this level suggests a broader corrective phase in the medium to the long term.

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Demand for defensive assets is supported by Europe's reintroduction of quarantine and likely uncertainty in the US after

Yesterday's economic statistics from Europe and the US exceeded the forecast, however, it failed to change the market situation, which remains very pessimistic.

Against this background, Germany and the United States published statistics yesterday, while the ECB made their final decision on monetary policy. These things were able to temporarily stop the global sell-off in the stock and commodity markets. However, investors basically ignored them, as they fully focused on the issue of reintroducing restrictive measures in Europe, cases of COVID-19, and the risk of riot outbreak in the US following the results of presidential elections.

Based on the presented data, the number of unemployed in Germany declined by 35,000 this month, against the forecasted decline of 5,000. The unemployment rate fell from 6.3% to 6.2%, although it was expected to remain at the same level. On the other hand, the number of consumer and business confidence in the eurozone were also positive. The indicator retained its previous value of 90.9 points against the expected decline to 89.5 points.

In the United States, all attention was focused on the publication of GDP figures for the 3rd quarter, which exceeded expectations. The growth rate amounted to 33.1% against the forecasted 31.0% and the previous value for the 2nd quarter of -31.4%. The GDP deflator has also grown significantly. The growth amounted to 3.7% against the expected growth of 2.7% against the decline by 2.1% in the previous period under review. In addition, we have positive data on the number of applications for unemployment benefits last week, which fell to 751,000 against 791,000 a week earlier.

On another note, ECB's final decision on monetary policy was not surprising. The parameters of monetary policy were left unchanged. C. Lagarde, the head of the ECB, also noted that the soft monetary rate will remain at least until the middle of next year.

The overall negative sentiment was fully reflected in the currency market. The US dollar received significant support again as well as the Japanese yen. All this happened amid a strong sale of American treasuries. However, its demand is rising again today.

The dynamics of global markets in general and the currency market in particular indicates the growing expectations of re-tightening quarantine measures around the world, which affects the demand for risky assets and pushes up the dollar and yen as safe haven currencies. The increasing fears of uncertainty in the United States also added pessimism. Therefore, we expect the overall negative trend to continue today.

Forecast of the day:

The EUR/USD pair is under pressure again and is trading below the level of 1.1690. We expect it to further decline to 1.1615.

The USD/JPY pair is also declining due to the demand for defensive assets. It is likely to continue to decline if it remains below 104.35 and continues to fall first to 104.00, and then to 103.65.

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Trading plan for US Dollar Index for October 30, 2020

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Technical outlook:

The US dollar index continued its rally to print a 94.10 high before pulling back lower. The index is seen to be trading around the 93.85 level at this point in writing and is expected to continue higher towards 94.50 in the short term. Immediate support is seen at 92.40 and 91.75, while resistance is fixed around 94.75 respectively. Any pullback lower should remain well capped above 92.40 level and ideally the US dollar index should find some support around 93.50 today. A push above 94.75 would be considered encouraging to bulls to push higher towards 95.00. Only a drop below 92.40 would threaten the above bullish setup and push prices lower towards 91.75 and further.

Trading plan:

Remain long, stop @ 91.75 target @ 96.00

Good luck!

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

Elliott wave analysis of GBP/JPY for October 30, 2020

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The risk-off sentiment continued to dominate the market yesterday as the coronavirus is raging in Europe. Versus GBP, JPY is gaining momentum amid risk aversion. Therefore, GBP/JPY fell to 134.50. After a deeper decline, the pair may dip to the 78.6% corrective target of red wave i at 134.11 before red wave ii finally is complete.

In the short-term, we need a break above minor resistance at 135.38 and more importantly a break above resistance at 136.30 to confirm that red wave ii is completed and red wave iii is in motion but until that the corrective trend lower will remain in force.

R3: 136.30

R2: 135.38

R1: 134.87

Pivot: 134.63

S1: 134.50

S2: 134.34

S3: 134.11

Trading recommendation:

We are long GBP from 135.45

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

Elliott wave analysis of EUR/JPY for October 30, 2020

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The risk-off sentiment continued to dominate the market yesterday as the coronavirus is raging in Europe. Versus EUR, JPY is gaining momentum amid risk aversion. Therefore, EUR/JPY decreased to 121.75. After a deeper decline, the pair may fall to the 78.6% corrective target of wave 1/ at 120.94 before wave 2/ is completed.

In the short-term, we need a break above minor resistance at 122.25 and more importantly, a break above resistance at 123.39 to confirm that wave 2/ is completed and wave 3/ is in motion but until that the corrective trend lower will remain in force.

R3: 123.39

R2: 122.72

R1: 122.25

Pivot: 121.92

S1: 121.75

S2: 121.45

S3: 120.94

Trading recommendation:

Our stop at 121.75 was hit for a 50 pips loss. We will re-buy EUR at 121.00 or upon a break above 122.25

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Trading plan for the EUR/USD pair on October 30. New peak of COVID-19 incidence - around 545 thousand new cases a day.

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A new peak in coronavirus incidence was recorded recently- around 545 thousand new cases a day worldwide. 91 thousand of it came from the United States, which further decreases the chance of Donald Trump winning in the upcoming US elections. Infections continue to increase as well in many parts of Europe.

Against this background, everyone is advised to follow health protocols and, if possible, avoid crowded places, especially in enclosed spaces.

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EUR/USD - The euro fell sharply on Thursday after very strong economic data from the United States. According to a report, US GDP grew 33% in the 3rd quarter, covering the 30% drop observed in the last quarter. The US Department of Commerce said the US economy has fully recovered from the downturn caused by the lockdown.

At the same time, employment in the US also increased by 700 thousand.

Keep short positions from 1.1785, however, there is a very strong support at 1.1645 ahead, so a rebound is possible.

Open long positions from 1.1760.

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

GBP/USD: plan for the European session on October 30. COT reports. Pound continues to update weekly lows

To open long positions on GBP/USD, you need:

Buyers of the British pound were desperately fighting for support at 1.2919 and they even managed to form a signal to buy the pound from it in the afternoon. Take a look at the 5-minute chart. You can see how several false breakouts of the 1.2919 support formed a good entry point into long positions, the growth was worth around 25 points, after which the bulls fizzled out. Falling under the 1.2919 level closer to the middle of the US session and testing this level from the bottom up formed a signal to sell the pound, afterwards the pair fell by around 40 points.

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The technical picture has not changed much compared to yesterday. The lack of Brexit news weighs on both buyers and sellers. Buyers have a chance for a market reversal, and for this they need to prevent a breakout of support at 1.2917. Forming a false breakout on it will be the first signal to open long positions. If there is no activity there, I recommend postponing long deals until the 1.2865 low has been updated, which we did not reach yesterday. From there, you can open buy positions immediately on a rebound, counting on a correction of 20-30 points within the day. But it is possible to speak of a more probable recovery and a change in the trend once the pair has settled above the resistance of 1.2991, slightly below which the moving averages passes, playing on the side of the sellers of the pound.Testing the 1.2991 area on the reverse side forms a new entry point for long deals with the goal of updating highs of 1.3058 and 1.3120, where I recommend taking profits.

The Commitment of Traders (COT) report for October 20 showed a reduction in short positions and a sharp increase in long positions. Long non-commercial positions rose from 36,195 to 39,836. At the same time, short non-commercial positions fell from 45,997 to 41,836. As a result, the negative value of the non-commercial net position slightly increased and reached -2,000, against - 9,802 a week earlier, which indicates that the sellers of the pound retain control and also shows their minimal advantage in the current situation.

To open short positions on GBP/USD, you need:

Bears aim to regain control of support at 1.2917. A breakout and being able to settle below this level will be a signal to open new short positions in sustaining the downward trend and with the main goal of updating a fairly large low of 1.2865, which has already been tested four times this month. A breakthrough of this range will cause GBP/USD to drop and reach a low of 1.2807 and 1.2749, where I recommend taking profits. Negative Brexit news and the absence of a trade deal could increase the pressure on the pair. In case of an upward correction, you can pay attention to forming a false breakout in the resistance area of 1.2991, which will be a signal to sell the pound in order to continue the current trend.

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Indicator signals:

Moving averages

Trading is carried out slightly below the 30 and 50 moving averages, which indicates that the pair is still under pressure.

Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart.

Bollinger Bands

A breakout of the upper border of the indicator in the 1.2965 area will lead to a new wave of growth of the pound. A breakout of the lower border of the indicator in the 1.2885 area will increase the pressure on the pair.

Description of indicators

  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart.
  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart.
  • MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
  • Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
  • Long non-commercial positions represent the total long open position of non-commercial traders.
  • Short non-commercial positions represent the total short open position of non-commercial traders.
  • Total non-commercial net position is the difference between short and long positions of non-commercial traders.
The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD: plan for the European session on October 30. COT reports. Euro drops on expectations of ECB easing of monetary policy

To open long positions on EUR/USD, you need:

The euro continued to fall against the US dollar yesterday, reaching another local low. A signal to sell the euro from the 1.1723 level appeared in the first half of the day. If you look at the 5-minute chart, you will see how the bulls protected this area in its first test, however, sellers actively returned the pair to the 1.1723 level, forming an entry point into short positions further along the trend. They are trying to buy on a rebound from the 1.1688 area, where I also recommended opening long positions. A signal appeared to sell the euro below the 1.1688 area, following European Central Bank President Christine Lagarde's press conference, the test of which is on the reverse side, which leads to selling EUR/USD. I marked all entry points on the chart.

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Bulls need to defend support at 1.1680 in the first half of the day, but there is little hope for it, since a rather large number of fundamental statistics for the eurozone countries will be released. The reports are expected to be bad, so the euro will be under pressure. You can buy from 1.1680 only if a false breakout is formed in order to go beyond and settle above the resistance of 1.1713, where the moving averages pass, playing on the side of sellers. Only a breakout of this level will strengthen the upward trend in EUR/USD and open a direct road to the high of 1.1754, where I recommend taking profits. If the bulls are not active in the support area of 1.1680, then it is best to postpone long positions until we have tested a low of 1.1651, subject to forming a false breakout there, or buy EUR/USD only for a rebound from the new local low of 1.1617, counting on an upward correction of 15 -20 points within the day.

The Commitment of Traders (COT) report for October 20 recorded an increase in long positions and short ones. However, there were more of the latter, which led to an even greater decrease in the positive delta. Despite this, the buyers of risky assets believe in the continuation of the bull market, but prefer to act with caution, as there is no good news for the eurozone yet. Thus, long non-commercial positions increased from 228,295 to 229,878, while short non-commercial positions increased from 59,658 to 63,935. The total non-commercial net position decreased to 165,943, against 168,637 a week earlier.... However, the bullish sentiment for the euro remains rather high in the medium term. The more the euro falls against the US dollar at the end of this year, the more attractive it is for new investors.

To open short positions on EUR/USD, you need:

Sellers should protect resistance at 1.1713, just above which the moving averages pass, playing on the side of the bears. Considering that the trend is downward, it is better to expect that it will continue today, since there isn't much to expect from today's eurozone fundamental reports. Forming a false breakout in the 1.1713 area produces a new entry point for short positions, and the main target will be a breakout and being able to settle below the 1.1680 level. Testing it from the bottom up, similar to yesterday, creates an additional signal to open short positions in euros, which will lead to a larger sale in the area of a low of 1.1651. A breakthrough of this area and testing it from the bottom up will form a new sell signal and will open a direct road to the next target area of 1.1617, which is where I recommend taking profits. However, before opening short positions at the lows, make sure that there is no divergence on the MACD indicator, since it's the end of the month and sellers can take profits, which could cause the euro to grow. If the pair rises above 1.1713 and bears are not active, I recommend postponing short positions and selling the euro immediately on a rebound from the resistance of 1.1754, counting on a correction of 15-20 points within the day.

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Indicator signals:

Moving averages

Trading is carried out below 30 and 50 moving averages, which indicates the presence of the bear market.

Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart.

Bollinger Bands

In case the euro falls, the lower border of the indicator in the 1.1640 area will act as a support. Growth will be limited by the upper level of the indicator in the 1.1715 area.

Description of indicators

  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart.
  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart.
  • MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
  • Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
  • Long non-commercial positions represent the total long open position of non-commercial traders.
  • Short non-commercial positions represent the total short open position of non-commercial traders.
  • Total non-commercial net position is the difference between short and long positions of non-commercial traders.
The material has been provided by InstaForex Company - www.instaforex.com

Analytics and trading signals for beginners. How to trade EUR/USD on October 30? Plan for opening and closing trades on Friday

Hourly chart of the EUR/USD pair

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The EUR/USD pair began an upward correction last night, as we expected. Unfortunately, the movement that preceded it was so strong that even after a whole night of correction, the MACD indicator failed to recover to zero. Thus, if the euro/dollar pair wants to go back to moving down, the MACD indicator might respond late to this. However, in order to help traders, we also built a descending channel. We can say that the channel is just "one-time". It has too strong an angle of inclination, and such channels do not last for a long time. Therefore, at best, the pair will rebound off its upper border once, which will serve as a signal for new sell positions. We have two potential sell signals at once for the day. Take note that there is a third potential signal. As part of the correction, the price recovered to the 1.1696 level, which acted as the lower border of the horizontal channel for a long time. Thus, rebounding from this level can also provoke a resumption of downward movement.

As for the fundamental background, we have quite important reports to wait for. In Europe, the most important indicator of GDP (Gross Domestic Product) will be released today, which, in fact, reflects the size of the economy. Yesterday's US GDP report was very strong, which led to a sharp rise in the dollar. Traders might significantly react to today's reports as well. However, the GDP indicator itself may not be as strong as the euro buyers would like. The European economy is expected to grow 9.4% q/q in the third quarter. And in the second quarter, it lost 11.8%. But even if the third quarter's forecast was equal to the losses in the second, it still would not mean that the economy has fully recovered. This is somewhat a mathematical paradox. Take any number and subtract 31% and then add 33%. Therefore, a result of + 9.4% in the third quarter may not impress market participants. If the forecast value is exceeded by at least a few percent (which is unlikely), then the euro could rise today.The eurozone will also release its inflation rate for October, which is forecast to remain unchanged at -0.3% y/y. If this report does not turn out to be much stronger than forecasts, then it will not provide any support for the euro. Only minor reports will be published today in the US, which are unlikely to attract the attention of most traders.

Possible scenarios for October 30:

1) Buy positions on the EUR/USD pair are currently irrelevant. However, thanks to the new downward trend channel, buyers have more realistic opportunities to trade bullish in the near future. If the pair settles above the channel, then you can place buy positions while aiming for 1.1739 and 1.1803.

2) Trading for a fall remains relevant at this time, although the pair dropped 180 points in two days and corrected minimally. And so we expect a new sell signal from MACD, with which it may be quite late. Therefore, if novice traders see that MACD is very late, then you are advised to act at your own discretion. Rebounding from the 1.1696 level or the upper border of the channel can also be interpreted as a sell signal with targets at 1.1630 and 1.1585.

On the chart:

Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now.

Up/down arrows show where you should sell or buy after reaching or breaking through particular levels.

The MACD indicator (14,22,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).

Important announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal.

Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.

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

Trading plan for EURUSD for October 30, 2020

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Technical outlook:

EURUSD continued to collapse yesterday and managed to print fresh lows around 1.1650 levels before finding some support. The single currency pair is seen to be trading around 1.1679 levels at this point in writing and is expected to drop towards 1.1600 levels in the near term. Immediate resistance is now seen at .1.1880, followed by 1.2010, while intermediary support is seen through 1.1610 levels respectively. Please note that any intraday pullback should remain well capped below 1.1880 levels, going forward. The recent pullback might find resistance around 1.1720/30 levels before reversing lower towards 1.1600. Overall structure continues to remain bearish until prices stay below 1.2010, and might be turning lower towards 1.1400 at least. Also note that the fibonacci 0.618 retracement of the previous rally between 1.0636 and 1.2010 is seen through 1.1150 levels and a bullish turn remains probable around that region.

Trading plan:

Remain short stop @ 1.2010, target @ 1.1400 and 1.1150

Good luck!

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

USD/JPY Forecast for October 30, 2020

USD/JPY

The USD/JPY pair went up by 30 points yesterday following the growth of the US stock market but this morning it is again declining. This decline will probably be not so deep in the near future as the Marlin oscillator on the daily scale chart is consolidating in a narrow range (marked with a gray rectangle). A sign of the completion of consolidation will be the exit of the signal line of the oscillator from the range down (according to the main scenario), which approximately corresponds to the price of 104.20, which coincides with the minimum on July 31. The nearest target in this case will be the level of 103.75. For the development of an upward movement, the oscillator's exit from the range up will not be enough as the price must also go above the price channel line above the 104.83 mark.

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According to the four-hour chart, yesterday's growth was delayed by the Kruzenshtern line. In order to form a signal to decrease, the Marlin must go below the line forming the double convergence. Visually, this transition will correspond to a price decrease also below the level of 104.20. so, in the corridor 104.20/83, the price will determine its further strategy.

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Forecast for AUD/USD on October 30, 2020

AUD/USD

The Australian dollar consolidated below the broken level of 0.7058 yesterday. The Marlin oscillator's signal line is turning up, being in the territory of bearish players. In the Asian session today, the growth of the Australian dollar blocked yesterday's decline in the body of the candlestick. Consolidation is likely to occur after the previous two-day drop. Today and possibly on Monday, consolidation approximately in the range of extremes of yesterday is highly anticipated. With its completion, there is a possibility of a further decline to the targets of 0.6970 and 0.6938.

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On the four-hour (H4) chart, the price is trying to return above the level of 0.7058, but the indicators are not helping it very much. Marlin is moving up with a slowdown, while the balance line is turning up, trying to move away from the price, which indicates that it remains in a stable downward trend. The completion of consolidation and then the decline to the designated goals of 0.6970 and 0.6938 are anticipated.

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

Hot forecast and trading signals for GBP/USD on October 30. COT report. Perfect rebound, perfect signal, perfect target level

GBP/USD 1H

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The GBP/USD pair was also trading lower for most of the day on Thursday, October 29. The pair perfectly rebounded from the Senkou Span B line in the morning, thereby forming a sell signal. It fell to the support level of 1.2897 during the day. Therefore, the downward trend remains in effect despite the fact that the price left the descending trend channel earlier. Now bears need to overcome the support area of 1.2854-1.2874 to build on their own success. In this case, they will be able to pull down the pair by another 100 points. Buyers only have to wait until they return to the important Kijun-sen and Senkou Span B lines. We can only expect the pair to return to the upward channel above these lines. However, according to fundamental analysis, this option is unlikely in the near future.

GBP/USD 15M

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Both linear regression channels are directed downward on the 15-minute timeframe, which reflects the trend of the last two days. There are no signs of starting an upward correction at the moment.

COT report

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The new Commitments of Traders (COT) report for the pound showed that non-commercial traders were quite active during October 13 to 19. However, at the same time, the last few reports have completely made the situation complicated. The "non-commercial" group of traders opened 4,485 Buy-contracts (longs) and closed 4,072 Sell-contracts (shorts). Thus, the net position of professional traders immediately grew by 8,500 contracts, which is quite a lot for the pound. However, the problem is that non-commercial traders have been building up their net position (strengthening the bullish sentiment) over the past few weeks, and before that they have reduced their net position for several weeks (strengthening the bearish sentiment). Thus, over the past months, professional players have not even been able to decide in which direction to trade. The fundamental background continues to be very difficult and ambiguous for the pound/dollar pair, which is why the trades are so confusing. The pound sterling lost approximately 110 points during the reporting period. And the net positions of commercial and non-commercial traders are now practically zero. In other words, both the most important and largest groups of traders have approximately the same number of Buy and Sell contracts open. Naturally, such data from the COT report does not allow any conclusions, either short-term or long-term.

Fundamental background for GBP/USD remained unchanged on Thursday. Traders were forced to pay attention to US reports, since London did not provide any data. Either Michelle Barnier and David Frost decided to extend the next round of negotiations even further, or there is no progress and there is simply nothing to announce. However, US reports were enough to pull down the pound. We already warned you that the GDP report is an important report, and if the forecast value is exceeded, then the reaction is almost inevitable. And so it happened. The forecast was exceeded by 2.1% and this report was enough for the pound to tumble by100 points. But if we receive information about the lack of progress in negotiations between London and Brussels, this could cause the pound to fall by another 100 points. Minor reports will be released in the United States on Friday, such as changes in the level of income and expenses or consumer confidence index. Not a single publication planned for the UK, therefore, the reports on inflation and GDP in the European Union will cause the greatest interest among traders.

We have two trading ideas for October 30:

1) Buyers for the pound/dollar pair failed to gain a foothold above the Senkou Span B line. Therefore, the initiative remains in the hands of the bears, and long positions are irrelevant. You are advised to consider long deals in case the price settles above the Senkou Span B (1.3018) and Kijun-sen (1.3002) lines while aiming for the resistance area of 1.3160 -1.3184. Take Profit in this case will be up to 110 points. However, this is unlikely to happen today.

2) Sellers continue to pull down the pair and so they reached 1.2897, now a correction may take place for some time. If the correction is strong, that is, to the Kijun-sen line, then you are advised to resume trading down in case the price rebounds from this line, and you can aim for 1.2897 and the support area of 1.2854-1.2874. Otherwise, we recommend waiting for the price to settle below the 1.2854-1.2874 area and trade while aiming for the 1.2754 level. Take Profit in the first case will be 90-110 points, in the second - up to 80.

Hot forecast and trading signals for EUR/USD

Explanations for illustrations:

Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one.

Support and resistance areas are areas from which the price has repeatedly rebounded off.

Yellow lines are trend lines, trend channels and any other technical patterns.

Indicator 1 on the COT charts is the size of the net position of each category of traders.

Indicator 2 on the COT charts is the size of the net position for the "non-commercial" group.

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

Hot forecast and trading signals for EUR/USD on October 30. COT report. Lagarde pulled down the euro. Will the downward momentum

EUR/USD 1H

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The EUR/USD pair has sharply resumed its downward movement on the hourly timeframe on Thursday, October 29, practically without any correction. The support area of 1.1693-1.1700 was overcome, which was the lower line of the horizontal channel at 1.17-1.19, in which the pair has been trading for three months. On the one hand, everything is clear: the lower boundary of the channel has been overcome, which means the downward movement will continue. However, on the other hand, if you look at the higher charts, you can see that the pair had already crossed this area once before, but the bears then managed to pull down the pair by only 80 points, after which the quotes quickly returned to the horizontal channel. So something like this could happen now. Take note that the fundamental background for both the euro and the dollar remains very diverse and complex, as well as ambiguous. Therefore, the pair could grow again at any moment.

EUR/USD 15M

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Both linear regression channels are directed to the downside on the 15-minute timeframe, which eloquently indicates the current trend on the hourly chart and shows that there are no signs of completing the downward movement.

COT report

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The EUR/USD pair fell by around 40 points during the last reporting week (October 13-19). But in general, no significant price changes have been observed for the pair in recent months. Therefore, data from any Commitment of Traders (COT) report can only be used for long-term forecasting. The new COT report showed even fewer changes in the mood of professional traders than the previous one. Non-commercial traders, who, we recall, are the most important group of traders in the foreign exchange market, opened 1,081 Buy-contracts (longs) and 673 Sell-contracts (shorts). Take note that the "non-commercial" group decreased its net position in the last two weeks, which may indicate the end of the upward trend. However, the data provided by the latest COT report does not tell us anything at all. There are no changes, since non-commercial traders have opened almost 300,000 euro contracts. Thus, opening or closing of 1,000-2.000 contracts does not indicate anything. The lines of net positions of the "non-commercial" and "commercial" groups (upper indicator, green and red lines) continue to barely narrow, while the pair itself continues to trade in a horizontal channel. Therefore, we stick to our opinion - the upward trend is completed or is about to be completed, and the high reached near the 1.2000 level may remain the peak of this trend.

The US just released its third-quarter GDP report in its first estimate. Recall that the American economy contracted by 31% in the second quarter, but in the third quarter it grew by 33%. Traders received the news with a bang and actively bought the dollar. Also, the results of the European Central Bank meeting were summed up yesterday. As expected, the rates remained unchanged, but ECB President Christine Lagarde's rhetoric during the press conference, as they say, finished off the euro. Lagarde said: "The data signals that the economic recovery in the eurozone is losing momentum faster than expected, after a strong, albeit partial recovery in economic activity during the summer months." Lagarde believes that the increase in the number of cases of coronavirus represents a new serious threat to the European economy. Lagarde also noted that business activity in the service sector is declining, and significantly. Inflation, according to Lagarde, will also experience negative pressure for a long time to come. Such rhetoric caused a sell-off in the euro currency.

We have two trading ideas for October 30:

1) The EUR/USD pair went down. Thus, buyers are advised to resume trading upward while aiming for the resistance area of 1.1887-1.1912 but not before the quotes have settled above the descending channel, below which the price has already gone very far. Take Profit in this case can be up to 70 points. Thus, we do not expect this scenario to come true in the near future. The price is too far away even from the Kijun-sen line.

2) Bears continue to actively pull down the pair. Thus, sellers are advised to continue trading down while aiming for the support levels of 1.1637 and 1.1570. A price rebound from any target can trigger a round of corrective movement. Take Profit in this case can be up to 70 points.

Hot forecast and trading signals for GBP/USD

Explanations for illustrations:

Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one.

Support and resistance areas are areas from which the price has repeatedly rebounded off.

Yellow lines are trend lines, trend channels and any other technical patterns.

Indicator 1 on the COT charts is the size of the net position of each category of traders.

Indicator 2 on the COT charts is the size of the net position for the "non-commercial" group.

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

Overview of the GBP/USD pair. October 30. Brexit: no news. Markets continue to sit "on a powder keg" and wait for the results

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - downward.

CCI: -203.3117

The British pound sterling was also trading lower against the US currency on Thursday. However, if in the case of the European currency, the decline may be within a sideways trend, then in the case of the pound sterling – the beginning of a new long downward trend. However, the situation for both major pairs is now so complex and confusing, and there are so many factors that can influence the mood of market participants, that it is extremely difficult to make any more or less accurate conclusion and forecast. Traders of the British pound continue to wait. They continue to wait for the US presidential election, as the future of the country, its domestic and foreign policy, as well as methods of fighting the "coronavirus", which the US authorities have simply "scored" on now, depends on it. This led to almost a record economic recovery in the third quarter (+33% of GDP), however, we are talking about human lives. Traders are also waiting for the results of the next round of negotiations between the groups of Michel Barnier and David Frost. Unfortunately, at the time of writing, no new information has been received. And when it will arrive is unknown. The talks were supposed to end yesterday, Thursday, but there were no speeches from top UK and EU officials in the press.

Meanwhile, the pound is fed up with everything. During this week alone, there were reports in the press that the parties allegedly managed to reach a compromise in the negotiations and "the negotiations broke the deadlock". Such reports appeared in the press when Britain was just agreeing on a deal on "divorce" with the EU, when Theresa May went to Brussels almost every week, then came to London, where the Parliament successfully blocked each new version of her agreement. Such optimistic rumors were constantly appearing, and they are still appearing now. But they have nothing to do with reality in 90% of cases. Because Brexit will be "tough" unless London and Brussels somehow manage to reach an agreement. For the parties to reach a consensus, we believe that it is Brussels that should concede, which needs it much less than London. But it was Brussels that insisted in recent weeks on intensifying negotiations. His desire to negotiate with Boris Johnson is visible to the naked eye, but a similar desire in London is not observed. Maybe we don't know anything about the whole situation? Maybe Boris Johnson has a trump card up his sleeve, with which he manipulates the European Union and diligently pushes through his version of the agreement? In any case, sooner or later, we will know the answer to this question. In the meantime, the British currency has started to become cheaper and is likely to continue to do so in the coming days. We recommend that traders conduct extremely cautious trading since the factor of the US election has not been canceled either. In terms of the fundamental background, the entire market is now sitting "on a powder keg". Any news from the US or the UK can have the status of "extremely important" and the markets will significantly increase volatility.

A separate topic for the British pound is the "coronavirus" epidemic. We all witnessed how Angela Merkel and Emmanuel Macron officially announced new "lockdowns" in Germany and France yesterday. This is approximately the same situation in the UK. According to Johns Hopkins University, the total number of cases of "coronavirus" in Britain is approaching one million. On October 28, about 25,000 new cases of infection were recorded, which is not much lower than in France or Germany. To be more precise, this is the same as in Germany or Italy. Only Spain and France are solidly ahead of other European countries in this terrible ranking. Thus, Boris Johnson may soon have to introduce a "lockdown" or again tighten quarantine measures, which, in principle, is the same thing. The US economy contracted by 31% during the first "wave", but grew by 33% in the third quarter. The British economy lost 20% in the second quarter and may grow by 15% in the third quarter. Thus, even preliminary forecasts suggest that the pace of recovery in the British economy is much weaker than in the US. This means that the British currency is even more inclined to a new prolonged fall. Its economy is not only recovering worse but may also be closed for a second "lockdown". The Bank of England may switch to negative rates in the near future. There may not be a deal with the European Union, and even if it is, the blow to the economy due to Brexit in 2021 will still be inflicted. Therefore, we continue to insist that the prospects for the British economy remain very negative, and the prospects for the British pound are vague.

From a technical point of view, the pound/dollar pair has fixed below the moving average line, so the trend has changed to a downward one. Thus, in the short term, we expect the downward movement to continue. The downward movement is also supported by the senior linear regression channel and the downward-pointing Heiken Ashi indicator. The main problems now are still uncertainty. We hope that after November 3, it will become more or less known about the results of the US elections, as well as the results of the next round of negotiations in London. This information can relax the markets a bit and allow them to trade more freely. If you look at the chart carefully, you can see that in the last month, the pound/dollar pair very often changed the direction of its movement, fixed above the moving average, then below it, which only complicated the trading process. We also remind traders about the important level of 1.3170, which is 61.8% of the Fibonacci from the fall of quotes from September 1. The price bounced back from it, "like a textbook", and we believe that this is a very strong signal for further movement to the south in the long term.

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The average volatility of the GBP/USD pair is currently 112 points per day. For the pound/dollar pair, this value is "high". On Friday, October 30, therefore, we expect movement inside the channel, limited by the levels of 1.2818 and 1.3043. A reversal of the Heiken Ashi indicator-up signals a round of corrective movement within a likely new downward trend.

Nearest support levels:

S1 – 1.2878

S2 – 1.2817

S3 – 1.2756

Nearest resistance levels:

R1 – 1.2939

R2 – 1.3000

R3 – 1.3062

Trading recommendations:

The GBP/USD pair started a new round of downward movement on the 4-hour timeframe. Thus, today it is recommended to stay in short positions with targets of 1.2878 and 1.2817 as long as the Heiken Ashi indicator is directed down. It is recommended to trade the pair for an increase with targets of 1.3062 and 1.3123 if the price is fixed back above the moving average line.

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

Overview of the EUR/USD pair. October 30. The highest turnout of Americans in the election indirectly indicates the nation's

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - downward.

CCI: -189.8880

During the fourth trading day of the new week, the EUR/USD pair resumed its downward movement without any correction or upward pullback. It resumed and fell to 1.1700 during the day while remaining inside the same side channel of 1.17-1.19, in which it has been trading for about 3 months. So, by and large, nothing extraordinary happened again. The euro/dollar pair dropped to the lower line of the side channel. Now, it has an excellent chance of breaking this line, however, even now, when the pair has gone below 50 points, this does not mean an unambiguous end to the sideways trend. Earlier, the pair went below 1.1700, but then returned to the channel. Thus, it is possible that now the pair is waiting for something similar.

The main reason for the fall in the pair's quotes on Thursday was the US GDP report, which showed that the economy recovered by 33.1% in the third quarter, which is more than the losses of the second quarter. In real terms, the results of the second and third quarters still have a "minus", however, the pace of economic recovery impressed traders. Thus, the US currency forgot about the elections and the uncertainty factor of the future.

The second reason for the fall of the European currency on the penultimate trading day of the week was the statements of German Chancellor Angela Merkel and French President Emmanuel Macron about the introduction of new "lockdowns". Thus, the authorities of European countries did not wait for the health systems of their countries to collapse and introduced "strict" quarantines. However, as many experts note, "lockdowns" are still not as severe as in the spring. However, these are almost total quarantines, so the European economy may start experiencing problems in the near future.

In general, according to the results of Thursday, we can say the following: the American economy showed a really serious recovery rate, although the country remains the first in the world in the number of cases of "coronavirus" and the number of deaths from it. However, the European economy, thanks to the new "lockdown", will decrease almost 100% in the third quarter. Therefore, in just one day, the euro currency turned from a currency with good prospects for the coming months into outsiders. Of course, we should not forget that the American presidential election is still ahead, which is only a few days away. This is the topic that has kept market participants on their toes in recent weeks and even months, so it can hardly be said that now the markets have lost interest in this topic and it is no longer important and significant. Therefore, in the coming days, everything may still change. Do not put an end to the European currency in advance.

Meanwhile, Americans are showing how important the 2020 election is to them. At the moment, that is, four days before the official Election Day, 76 million people have already voted ahead of schedule, which is more than half of the total number of those who voted in 2016. As we have repeatedly said, there is a reason for this behavior of Americans. Judge for yourself, if it were "just another election", why such a sharp increase in voters? If Donald Trump had done a great job like Barack Obama did in his first four years, would there have been such a rush for re-election? We believe that Americans have become more active precisely because they understand that if they ignore the election, then Donald Trump may stay for a second term. We don't see any other explanation. That is why amid the second "wave" of the pandemic in the United States, when 70-80 thousand people fall ill every day, people are not afraid to leave their homes, go to the polls, stand in queues for several hours, and vote. Because unlike the Europeans, who began to introduce new "lockdowns" in their countries as soon as the "smell of fried", Trump is not interested in the health and lives of people. At least, all his actions and statements say exactly this. The US President is interested in the economy and business, his own business, which will begin to suffer serious losses if the country plunges into a second "lockdown". That is why the US President is doing everything he can to show that the "coronavirus" is not so terrible. What is the story with the "infection" of Trump himself and a miraculous cure in 10 days? We do not claim that the US President was not ill at all, however, we assume that this option is quite possible. Recall that, when Britain ended the first "wave" COVID-2019, the authorities even made timid attempts to motivate a healthy way of life of the British people. America is famous all over the world as "the nation with obesity". However, no steps were taken in this direction either. What is the output? The US President did not take into account the "coronavirus" from the very beginning. All the last 7 or 8 months, he shocked doctors and epidemiologists with his statements concerning COVID-2019, then offering to "enlighten the sick with a strong light source", then "pour a strong disinfectant inside", then simply stating that "the virus will magically disappear in April". Maybe in April 2021? And now Americans are going to the polls to "pay Trump in his coin". Of course, we are not saying that the outcome of the election is already a foregone conclusion, but from our point of view, the probability that Biden will become the new President is extremely high.

For the US currency, this factor does not mean anything. For the US dollar, elections, as well as all the possible problems that are associated with them (for example, legal proceedings that can be initiated by one of the candidates in case of defeat), are just a factor of uncertainty. Market participants do not want to invest in the dollar until it becomes clear and clear what is waiting for America in the next four years.

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The volatility of the euro/dollar currency pair as of October 30 is 74 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1600 and 1.1748. A reversal of the Heiken Ashi indicator to the top may signal a round of upward correction.

Nearest support levels:

S1 – 1.1658

S2 – 1.1597

Nearest resistance levels:

R1 – 1.1719

R2 – 1.1780

R3 – 1.1841

Trading recommendations:

The EUR/USD pair continues its downward movement and seems to have even overcome the important level of 1.1700. Thus, today it is recommended to support open sell orders with targets of 1.1658 and 1.1600, while the Heiken Ashi indicator is directed down. It is recommended to consider buy orders if the pair is fixed above the moving average line with a target of 1.1841.

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