GBP/USD. The battle for the US presidential seat 2020. Part two.

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In the first part of the euro/dollar, we found out that Donald Trump has almost no trumps left on his hands that could help him get re-elected for a second term. Thus, if his support rating (according to regularly conducted social research) is really 40-45%, then this is a very high value for the current American reality. However, this is not enough to defeat Joe Biden.

The election campaigns of both candidates run differently. Trump, as usual, is active. In the sense that he is actively throwing mud at Joe Biden, the Democrats, Nancy Pelosi, China, and everyone who does not support him. Biden is less active, and rarely responds to Trump's attacks. However, now all these verbal skirmishes are not particularly important and interesting. Americans have become accustomed for almost 4 years to the fact that Trump's statements need to be "divided by 8". Accordingly, few people really believe everything that Trump says. And the current head of the White House predicts almost an apocalypse if Joe Biden comes to power. Trump believes that China will rule America if Biden becomes President and the country's energy sector collapses. In principle, Trump can now only promise the fall of a meteorite on America if "sleepy Joe" becomes President. In general, all this is demagogy and most sane people do not pay attention to it. But what you really need to pay attention to is the method of voting in elections. Due to the fact that the country was engulfed by an epidemic, the elections will also be held using remote voting, that is, by mail. This does not mean that there will be no polling stations and Americans will not be able to attend them in person. However, many Americans will not want to go to places of mass congestion, they will not want to risk their health, so voting will be possible with the help of mail. Now imagine how much easier it is to falsify any vote if people do not come to the polling stations in person. With the help of mail, you can "wind up" as many votes as you want, since the turnout in elections is never 100%. Moreover, there may be cases of outright fraud, destruction of ballots in which the vote was given to the "wrong" candidate, loss of certain ballots or "computer errors". So, in fact, in the November 2020 election, how Republicans and Democrats control the post office will make a huge difference. The outcome of the vote will depend on the mail, on how honest or dishonest the calculations and the vote itself will be. And here the scope for various maneuvers is huge for both candidates. Interestingly, at the current stage, it is Donald Trump who says that the election can be "rigged". Biden, on the contrary, believes that voting by mail is a great idea at a time when the entire country is gripped by a pandemic.

Let's move on. The next important aspect is that almost any election result can be declared dishonest, falsified, or twisted by any candidate. That is, nothing prevents Joe Biden, for example, to say that Trump has won votes in some states, which led to his victory in the election. Recall that the peculiarity of the American voting system is that it is not necessary to set the maximum number of votes across the country. That is, for example, in total, Trump can get 55% of the vote, and Biden - 45%, but it is Biden who wins, because the so-called "electoral votes" are important. Each state in the country has its own number of "electoral votes", which is determined depending on the size of the state's population. Thus, one state can have 4 such votes, and the other – 54. There can only be one winner in each state, and it is to him that all "electoral votes" are given. It does not matter what the percentage of voters will be. Trump may get 90% support in some state, or he may get 51% support. In both cases, all "electoral votes" will be given to him. Therefore, it is extremely important for both candidates to win in the states with the maximum fixed number of "electoral votes". Now let's imagine a situation where, for example, in California, Biden's support is now 52%, and Trump's support is 48%. This means that Trump needs to win only a few percent of the vote, or that a certain number of ballots in which the vote is given to Biden are "lost" in this state. And then all 55 "electoral votes" will go to him, and not to his opponent. And there are about 10 such "disputed states", where the difference in support for both candidates is only a few percent.

This is the situation before the presidential election in 2020. And the most interesting thing is that despite all the social research, if we take into account everything written above, the chances of candidates are now 50/50, and everything will depend on how well the post office will work on November 3 and how fair the elections will be. In normal voting, when voters come to the polling stations, there is usually a clear control system that virtually eliminates the possibility of fraud. It is still impossible to say what will happen in the "postal vote".

For the US dollar, all these issues are extremely important. We believe that until election day, the US currency may continue to remain under market pressure. It is unlikely that the US economy will begin to recover at a rapid pace in the near future, given that Democrats and Republicans have not been able to agree on a new package of economic assistance to unemployed Americans, as well as businesses. Accordingly, macroeconomic reasons for growth for the US currency are unlikely to appear in the coming months. The US dollar now has to rely only on technical factors. After all, this currency has been falling for several months in a row, thanks to the "four crises" in the US. However, this process can not be eternal. Sooner or later, the bulls will reduce long-term long positions, which should lead to a noticeable correction of both major currency pairs, and not to a downward movement of 150-200 points.

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Trading recommendations for the GBP/USD pair:

The pound/dollar pair, in contrast to the European currency, which continues to trade in a side channel, resumed its upward movement last week and worked out the resistance level of 1.3346. Thus, traders continue to ignore the fact that the economic situation in the UK is not much better than in the United States. We can once again note that traders attach great importance to the "four American crises". So strong that even all the negative consequences of Brexit and the lack of a deal between Brussels and London, now do not interest market participants.

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

EUR/USD. The battle for the US presidential seat 2020. Part one.

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The topic of the presidential election remains the number one topic in the United States. We return to this topic again and again, which is of course extremely important for the US dollar, which has been falling against its main competitors in recent months. Thus, participants in the foreign exchange market are not just trying to understand who will become the new President of the United States. They are trying to understand what the country's foreign and domestic policy will be over the next four years. The United States, like many other countries in the world, is constantly in conflict mode with other countries. This is normal, this is how the world works. There are always those who are dissatisfied with other people's politicians and the way they conduct international affairs. However, it was under Trump that the trade war between the world's two largest economies began, which left its mark on global GDP. Thus, clarity is already required on this issue. If Trump remains President, the pressure on China will obviously continue, and even increase. Trump blames China not only for the "release of the coronavirus", but also for the record decline in the American economy, which was caused by the epidemic and "lockdown". Thus, there is no reason to expect that Trump will suddenly change his attitude to China to the opposite. China can respond with equivalent measures, sanctions and duties. Thus, under President Trump, it is almost certain that the trade war will continue, and may even develop into a full-fledged "cold war". In principle, Trump does not hide that he is going to continue to talk to China from a position of strength and pressure. But do the Americans need this confrontation with China? As we have said many times, most ordinary people, no matter what nationality, live a simple life and are not interested in politics. Such people are more interested in their well-being, the well-being of their families and the stable situation in the country. These people want to have a job, get paid, and have a weekend vacation, not "fight with China". So this moment could very much affect the number of Trump voters in November.

The second very important point is "coronavirus". The whole world has already realized that the "coronavirus" is not a runny nose and it needs to be fought. And the effectiveness of the measures taken by the government of any country directly depends on how many people will be infected and how many will die from the pandemic. Trump did not pay due attention to the "coronavirus" and now the States are in the first place in the world in terms of the number of cases and "fatal" outcomes. Despite the fact that in recent weeks, the spread of the COVID-2019 virus has slowed slightly in the United States, 40-50 thousand new cases of infection are still recorded every day. It is widely believed that the current government has failed to cope with the epidemic, as there are a huge number of examples when a country has managed to localize the virus with minimal losses (for example, the Scandinavian countries, Thailand, South Korea). In the States, the losses are maximum. Who is to blame? Trump and his administration. Thus, Biden confidently declares that the fight against the "coronavirus" will become almost the main goal of his government. Thus, Americans have a choice: believe Trump, who has already failed the fight against the pandemic or believe Biden, who has not yet managed to do anything like this. As a rule, if the government does not cope with its duties, it is changed. So we continue to believe that Trump will lose the election.

The third global problem faced by the United States in 2020 is mass riots, protests and rallies due to two cases of racial discrimination already. Twice within a few months, American police officers used weapons against black men in cases where it was absolutely not necessary. In the first case, George Floyd was killed by excessive police brutality during the arrest, although he did not offer any resistance. In the second case, the police opened fire in front of the young children of the victim, who eventually survived, but remained paralyzed. After the first incident, the entire country was engulfed by the mass movement "Black Lives Matter". People went out on the street, rallied, protested and demanded to take action against the police. The police, by the way, often supported the protesters themselves. The second case revived the desire of Americans to rally. And all this at the time of the epidemic in the country that was most affected by this very epidemic. Trump, who at that time already faced so many problems that significantly lowered his political ratings and chances of re-election, began to get nervous and freaked out. Instead of giving the protesters free rein (protests and rallies are not prohibited by American laws), he began trying to disperse people, and even tried to resort to the help of the American army. A little later, in some cities, the force of special units was still used. Naturally, Americans do not like this state of affairs, and Democrats continue to add fuel to the fire, saying that Trump destroyed democracy in the country.

And the worst thing for Trump is that his last trump card – the economy – has been destroyed. It is the US economy that lost the largest number of percent of GDP in the second quarter of 2020. Unemployment rose above 10%, and the Fed and the US Congress had to urgently inject trillions of dollars into the economy, which will now hang as government debt. Trump now can't even claim that the economy has flourished or reached a new level under him. Because under him, the economy collapsed to the maximum value for the last 100 years. So it turns out that Trump has no trumps left before the election. However, Trump has never succumbed to difficulties and has never shied away from not quite honest methods and ways to achieve his own goals. This is the main concern of experts. Now, a lot of people in the US believe that the 2020 election will be the most difficult in the country's history, and Trump will try to falsify them or simply refuse to recognize their results.

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Trading recommendations for the EUR/USD pair:

The technical picture of the EUR/USD pair shows that the price continues to trade in the side channel of $1.17-$1.19, occasionally making attempts to exit it. Unsuccessful. Thus, traders now have a flat at their disposal, and the Ichimoku indicator behaves very badly during a flat and generates a lot of false signals. Thus, you can now trade between the upper and lower borders of the side channel or wait for the price to leave it.

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