GBP/USD: Brexit without a deal won't stop the pound

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The British currency was in the shadows this week against the background of the activation of the US currency. However, the pound continues to struggle for its rightful place in the global financial system, but this is not hindered even by the potential danger associated with the high probability of a "hard" Brexit.

Based on the observations of analysts, the situation with the United Kingdom's exit from the EU has worsened again. A statement by Boris Johnson, the British Prime Minister, contributed to the nervous tension around the Brexit negotiations. He emphasized once again that the country does not need a trade agreement with the European Union. At the same time, negotiation problems between London and Brussels arose over the coordination of such points as the end of the transition period and further economic interaction. The parties cannot find a compromise, which negatively affects the pound's dynamics.

The current dynamics of the GBP/USD pair is very similar to the "up and down" of the classic pair EUR/USD. Experts said that the pound can only be distinguished by its high oversold status, caused by concerns about a possible chaotic Brexit. At the moment, the market is tired from the seemingly endless negotiations over Brexit, which does not add optimism to the national currency.

Today, the GBP/USD pair is trading near the range of 1.2901-1.2902. According to analysts' observations, the pound made a strong surge amid flared hopes for a deal, breaking the strong resistance level of 1.2850 and rising to the current values. Experts say that this is not the limit, the pound is likely to move to the "round" level of 1.3000.

Moreover, revised macroeconomic data provided significant support to the pound. According to economists, Britain's latest indicators of business activity have been revised upward. However, the so-called economic growth was not much of a help to the indicated currency. From the current observations, positive macro statistics did not become a strong impulse for the growth of the pound.

Last week, the pound did well as it led the trading. Against this background, the market expected its continued activity, however, this did not happen. The imbalance in the performance of the pound is worsened by issues around Brexit. For example, Uk say that the main points on leaving the EU are already present in the draft agreement, but Brussels has not confirmed this information. Moreover, European leaders have expressed doubts about the so-called progress in the negotiations. Michel Barnier, EU's chief negotiator, who noted a number of disagreements between London and Brussels, partly agrees with this. The high probability of further easing of monetary policy by the Bank of England worsened the situation. Experts believe that changes from the regulator are likely before this year ends.

Nevertheless, the pound expects good news after negotiations on the end of the transition period and building new trade relations with the EU. If such a scenario is implemented, economists are confident that the pound will rapidly grow. However, its potential rise may be hindered by the current economic difficulties and structural budget deficits. These factors will become an obstruction for the long-term growth of the pound, although we cannot rule out its opportunities to start once Brexit is over.

It is difficult for experts to forecast the pound's medium-term and long-term prospects, as there is an uncertainty factor in connection with Brexit. However, they are confident that the curved paths in the process of Britain's exit from the EU will not confuse the pound. They believe that it is supported by self-confidence, with the ability to resist political issues.

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Forex forecast 10/07/2020 from Sebastian Seliga

The most important event today is the FOMC Meeting Minutes data release scheduled for 6:00 PM GMT. This data release might impact mainly USD and related pairs, so today's video analysis include EUR/USD, USD/JPY and GOLD markets.

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

Fractal analysis for major currency pairs on October 7

Outlook on October 7:

Analytical overview of major pairs on the H1 TF:

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The key levels for the euro/dollar pair on the H1 chart are 1.1904, 1.1878, 1.1835, 1.1805, 1.1774, 1.1720, 1.1696 and 1.1663. The following targets are determined from the local upward structure on October 2. Here, the growth of the pair is expected to continue after breaking through the level of 1.1774. In this case, the first target is 1.1805. If this value breaks down, we can continue moving to the level of 1.1835. Price consolidation is near this level. The breakdown of the indicated level will lead to a strong movement. Here, the target is 1.1878. For the potential value for the top, we consider the level 1.1904. Upon reaching which, we expect a downward pullback.

The level of 1.1720 is a key support and its breakdown will lead to the cancellation of the upward pattern. The first target is 1.1696, the breakout of which, in turn, will lead to the development of a downward trend. The next target will then be the level of 1.1663.

The main trend is the local structure of October 2

Trading recommendations:

Buy: 1.1774 Take profit: 1.1805

Buy: 1.1807 Take profit: 1.1833

Sell: 1.1720 Take profit: 1.1697

Sell: 1.1694 Take profit: 1.1665

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The key levels for the pound/dollar pair are 1.3250, 1.3170, 1.3107, 1.3016, 1.2882 and 1.2814. Here, we are following the development of the top-bottom structure from September 25. The upward movement is expected to continue after breaking through the level of 1.3016. In this case, the target is 1.3107. There is a short-term downward movement and consolidation in the range of 1.3107 - 1.3170. For the potential value for the top, we consider the level of 1.3250. Upon reaching which, we expect a consolidated movement and downward pullback.

A short-term downward movement is expected in the range of 1.2882 - 1.2814. If the last value breaks down, it will lead to the cancellation of the upward trend. In this case, we expect the formation of initial conditions for the downward direction.

The main trend is the upward structure from September 25

Trading recommendations:

Buy: 1.3016 Take profit: 1.3107

Buy: 1.3109 Take profit: 1.3168

Sell: Take profit:

Sell: 1.2880 Take profit: 1.2815

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The key levels for the dollar/franc pair are 0.9243, 0.9211, 0.9180, 0.9145, 0.9103, 0.9075 and 0.9033. We are following the development of the top-down structure from September 25. Now, the decline is expected to continue after the breakdown of the level of 0.9145. In this case, the target is 0.9103. On the other hand, there is a short-term downward movement in the range of 0.9103 - 0.9075. In turn, price consolidation is near the level of 0.9075. For the potential value for the bottom, we consider the level 0.9033. Upon reaching which, we expect an upward pullback.

A short-term upward movement is expected in the range of 0.9180 - 0.9211. If the last value breaks down, it will lead to a deep correction. Here, the potential target is 0.9243, which is the key support for the bottom.

The main trend is the descending structure from September 25

Trading recommendations:

Buy : 0.9180 Take profit: 0.9210

Buy : 0.9213 Take profit: 0.9240

Sell: 0.9143 Take profit: 0.9105

Sell: 0.9101 Take profit: 0.9077

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The key levels for the dollar/yen are 106.45, 106.26, 105.97, 105.84, 105.52, 105.41 and 105.22. An upward structure from October 2 is being formed by the price here. Moreover, the growth of the pair is expected to continue after the price passes the noise range 105.84 - 105.97. In this case, the target is 106.26. On the other hand, we consider the level of 106.45 as a potential value for the top. Upon reaching which, we expect consolidation.

A short-term downward movement is possible in the range of 105.52 - 105.41. In case of breakdown of the last value, it will lead to a deep correction. Here, the target is 105.22, which is the key support for the top.

The main trend is the upward structure from October 2

Trading recommendations:

Buy: 105.98 Take profit: 106.25

Buy : 106.27 Take profit: 106.45

Sell: 105.40 Take profit: 105.24

Sell: 105.21 Take profit: 105.00

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The key levels for the USD/CAD pair are 1.3360, 1.3328, 1.3293, 1.3252, 1.3210, 1.3180 and 1.3135. Here, we are following the development of the downtrend cycle from September 29. At the moment, the price is in correction. The decline is expected to continue after the breakdown of 1.3252. In this case, the target is 1.3210. On the other hand, there is a short-term downward movement and consolidation in the range of 1.3210 - 1.3180. We consider the level of 1.3135 to be a potential value for the downward trend, from which an upward pullback is expected.

A short-term upward movement is possible in the range of 1.3328 - 1.3360. In case of breakdown of the last value, it will lead to the development of an upward trend. In this case, the potential target is 1.3419.

The main trend is the descending structure from September 29, the correction stage

Trading recommendations:

Buy: 1.3330 Take profit: 1.3360

Buy : 1.3362 Take profit: 1.3417

Sell: 1.3250 Take profit: 1.3210

Sell: 1.3208 Take profit: 1.3182

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The key levels for the AUD/USD pair are 0.7326, 0.7277, 0.7243, 0.7190, 0.7164, 0.7092, 0.7059 and 0.7009. Here, we are following the upward structure from September 25. Now, the price is in a correction. The upward movement is expected to continue after the price passes the noise range 0.7164 - 0.7190. In this case, the target is 0.724. Meanwhile, there is a short-term upward movement and consolidation in the range of 0.7243 - 0.7277. For the potential value for the top, we consider the level 0.7326. Upon reaching which, we expect a downward pullback.

A short-term downward movement is expected in the range of 0.7092 - 0.7059; hence, an upward reversal is very likely. The breakdown of the last value will lead to the development of a downward trend. In this case, the first potential target is 0.7009.

The main trend is the upward structure from September 25, the correction stage

Trading recommendations:

Buy: 0.7164 Take profit: 0.7190

Buy: 0.7192 Take profit: 0.7243

Sell : 0.7092 Take profit : 0.7061

Sell: 0.7057 Take profit: 0.7012

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The key levels for the euro/yen pair are 126.17, 125.70, 124.94, 124.68, 124.20, 123.77 and 123.26. Here we are following the development of the ascending structure from 28 September, the local structure to clarify the targets from 2 October. The upward movement is expected to continue after the price passes the noise range 124.68 - 124.94. In this case, the target is 125.70. Meanwhile, we consider the level 126.17 as a potential value for the top. Upon reaching which, we expect consolidation and downward pullback.

A short-term downward movement is possible in the range of 124.20 - 123.77. If the last value breaks down, it will lead to a deep correction. Here, the target is 123.26.

The main trend is the upward structure from September 28 and local structure from October 2

Trading recommendations:

Buy: 124.95 Take profit: 125.70

Buy: 125.72 Take profit: 126.15

Sell: 124.20 Take profit: 123.80

Sell: 123.75 Take profit: 123.30

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The key levels for the pound/yen pair are 140.44, 139.31, 138.51, 137.32, 136.15, 135.39 and 134.67. Here, we are following the development of the upward cycle of September 23. Now, the pair is expected to continue rising after breaking through the level of 137.40. In this case, the target is 138.50. On the other hand, there is a short-term upward movement, as well as consolidation in the range of 138.51 - 139.31. For the potential value for the top, we consider the level 140.44; upon reaching which, a downward pullback is expected.

A short-term downward movement is expected in the range of 136.15 - 135.39. If the last value breaks down, it will lead to a deep correction. Here, the target is 134.67, which is the key support for the top.

The main trend is the medium-term upward structure of September 23

Trading recommendations:

Buy: 137.40 Take profit: 138.50

Buy: 138.55 Take profit: 139.30

Sell: 136.12 Take profit: 135.40

Sell: 135.37 Take profit: 134.70

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GBP/USD: plan for the European session on October 7. COT reports. Bullish momentum is dying out

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

Yesterday was a rather difficult day for trading the British pound, as there were no clear signals to enter the market, except for the buy signal in the morning, which did not bring the expected result. If you look at the 5 minute chart, you can see how the bulls tried to regain resistance at 1.2965 in the afternoon, and seemed to be quite successful. Testing this area from top to bottom formed a comfortable entry point for long positions, but, unfortunately, the upward movement did not take place.

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Now an important task for the pound buyers is to protect support at 1.2863, which was tested today in the Asian session. Forming a false breakout at this level will be a signal to open long positions while expecting the pound to recover to the resistance area of 1.2929, where the main struggle for the pair's succeeding direction will unfold. A breakout and settling above 1.2929 will indicate buyers' advantage and form an additional entry point into long positions with the main goal of renewing this week's high at 1.3001, where I recommend taking profits. If the bulls are not active in the support area of 1.2863, then it is best not to rush to buy, but to wait until a larger low at 1.2807 has been updated, where it is best to open long positions if a false breakout appears. You can act immediately on a rebound from the 1.2749 area counting on a correction of 30-40 points within the day.

The Commitment of Traders (COT) reports for September 29 recorded a sharp rise in short positions and a reduction in long positions, which affected the net position and led to its larger negative value. This once again confirms the desire of traders to build up short positions with any growth in the level, counting on uncertainty over Brexit and the prospects for the recovery of the British economy. The pressure on the pound will gradually increase as the second wave of coronavirus spreads. Short non-commercial positions increased from 40,523 to 51,961 during the reporting week. Long non-commercial positions decreased from 43,487 to 39,216. As a result, the non-commercial net position became negative and reached -12,745, against 2,964 a week earlier, which indicates that control over the market is gradually returning to large sellers.

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

Sellers of the pound have a simple goal. To maintain control of the market. And in order to do this, they need to pull down GBP/USD below the 1.2863 level. Testing this area from the bottom-up forms a good entry point for short positions. In this case, the 1.2807 area is the nearest target, forming a breakout on it will increase pressure on the pound, which will open a direct road to the low of 1.2749, where I recommend taking profits. In case the pair grows in the first half of the day, it is best not to rush to sell, but to wait until resistance at 1.2929 has been updated, slightly above which is the area where the moving averages playing on the side of the bears also pass. You can sell the pound from this level immediately on the rebound. If bears are not active during the first test of this area, it is best to postpone short positions until the high of 1.3001 has been updated, counting on a correction of 30-40 points within the day.

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Indicator signals:

Moving averages

Trading is carried out below 30 and 50 moving averages, which implies that control over the market is returning to the bears' side.

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

Growth will be limited by the upper level of the indicator in the 1.2970 area. A breakout of the lower border of the indicator in the 1.2840 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 7. COT reports. Trump rejected another package of economic assistance measures

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

Yesterday afternoon I paid attention to selling after forming a false breakout from the 1.1796 level, which happened. If you look at the 5-minute chart, you will see how the bears started to be more active after trying to get out of this resistance, afterwards the pair returned to the area below 1.1796. Another signal for continuing the downward trend in the euro appeared yesterday afternoon. You can see how the bulls are testing the 1.1796 area from the bottom up, forming an excellent entry point for short positions, afterwards the price fell to the target level of 1.1749.

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Buyers of the euro need to reclaim that range, which they missed at the beginning of the Asian session. Forming a breakout and settling on the 1.1749 level, and testing it on the reverse side, forms a good entry point into long positions, the main goal of which will be to return to the weekly highs of 1.1796, where I recommend taking profits. Resistance at 1.1833 will be a distant target, and it requires good fundamental support, which is not yet available. If the euro is still under pressure, and we still have all the conditions for that, then it is best not to rush to buy, but to wait until the 1.1701 area has been updated and buy EUR/USD there only if a false breakout appears. If there is no bullish activity there, I recommend postponing buy positions until we test the low of 1.1656, where you can open long positions immediately on a rebound, counting on a correction of 20-30 points within the day.

The Commitment of Traders (COT) report for September 29 recorded a reduction in both long and short positions, which led to a decrease in the delta. Apparently, the lack of guidelines and a surge in the incidence of coronavirus in Europe discouraged major players from building up long positions in the euro, but no one is in a hurry to buy the US dollar either because of the upcoming presidential elections in the United States. Thus, long non-commercial positions decreased from 247,049 to 241,967, while short non-commercial positions decreased from 56,227 to 53,851. The total non-commercial net position also decreased to 188,116, against 190,822 a week earlier. which implies that new players are taking a wait-and-see approach, however, bullish sentiments for the euro remain rather high in the medium term. The more the euro falls against the US dollar, the more attractive it is for new investors.

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

Bears worked well in regards to yesterday's scenario for selling, and US President Donald Trump's statement that he once again refuses to accept the US $2.4 trillion aid package offered by the Democrats increased the pressure on the pair. Now the bears need to protect resistance at 1.1749, where forming a false breakout along with testing the moving averages, which are now playing on the side of the euro sellers, will lead to producing a good entry point to short positions while aiming to pull down EUR/USD to the area of the low of 1.1701. A more important task will be to break through and settle below this range, which will only pull down the euro to a low of 1.1656, where I recommend taking profit. In case bears are not active at the 1.1749 area in the morning, it is best not to rush to sell, but to wait until 1.1796 has been updated and open short positions from there immediately for a rebound, counting on a correction of 20-30 points within the day.

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Indicator signals:

Moving averages

Trading is carried out below 30 and 50 moving averages, which implies that the euro might be under pressure again.

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 D1 daily chart.

Bollinger Bands

If the euro grows in the first half of the day, the upper border of the indicator at 1.1805 will act as resistance. To continue the bearish sellers market, a breakout of the lower boundary of the indicator in the 1.1705 area will be required.

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

Brief trading recommendations for EUR/USD and GBP/USD on 10/07/20

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The EUR/USD pair, moving along the correction course from the local low of 1.1612, found a resistance point near the middle level of the side channel 1.1700//1.1810//1.1910, where there was a slowdown and as a result, a price reversal.

The level of 1.1810 has repeatedly played the role of resistance, as well as the support level, where traders could prepare in advance for a stop and a possible rebound.

Another interaction between the price coordinate (1.1810) and market participants occurred yesterday, where it was possible to earn profit on the euro's weakening.

In the previous analytical review, we considered the option of short positions* (sell positions*), where the entrance is below 1.1770, with the prospect of moving to 1.1730-1.1700.

Relative to the current price fluctuation, a slight slowdown is recorded after an active decline, where the quote has already reached the coordinate level of 1.1730. We can assume that the level of 1.1700 will be the center of special attention, since the next movement will be determined depending on the behavior of the market participants. This judgment provides a rebound/breakout trading tactic relative to the level of 1.1700.

- Buying a pair is recommended at a price above 1.1745, with the prospect of moving to the level of 1.1775.

- Selling a pair is recommended at a price below 1.1700, with the prospect of moving to the level of 1.1650.

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On the other hand, the GBP/USD pair, which is in a correction stage from the local low of 1.2674, reached an important price level of 1.3000, where a natural slowdown occurred in the market.

In turn, the price levels that end in three zeros (1.3000, 1.2000, 1.1000), are considered psychological in the market, they are given special attention by traders, which leads to a natural slowdown and a possible rebound from it.

In the previous analytical review, the logical basis of the level of 1.3000 was pointed out, where the price rebound is predicted in the direction of 1.2900, which occurred as a result in the market.

Regarding the current price fluctuation, there was a slowdown in activity within the level of 1.2885, where the quote must consolidate below 1.2865 in order to resume the downward interest, which will lead to the next move in the direction of 1.2820-1.2805.

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

Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on October 7

Analysis of transactions in the EUR / USD pair

Trump's reluctance to adopt a new aid package led to a sharp drop in risky assets, including the European currency. However, throughout the day, a sufficient number of signals, both buy and sell, appeared on the euro, the first of which, sales, turned into losses. It was only at the end of the day that the quote dropped to the target level of 1.1724, which compensated all the losses realized the entire day.

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Trading recommendations for October 7

Christine Lagarde will conduct an important speech today, during which she may reveal the details of the ECB's plan in stimulating growth to the European economy. Hints of an expansion in the PEPP emergency buyback program may lead to another fall in the euro, so it is best to trade short positions in the market today. Important macroeconomic statistics are not scheduled for release today.

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  • Buy a position only when the euro reaches a quote of 1.1752 (green line on the chart), and then take profit at the level of 1.1800. However, a bullish move will only occur if the report on Germany's industrial production comes out good today.
  • Sell after the euro reaches a quote of 1.1727 (red line on the chart), as such will increase pressure on the EUR / USD pair, thereby forcing speculative players to leave the market. Afterwards, take profit at the level of 1.1684.

Analysis of transactions in the GBP / USD pair

Pressure continues to appear on the pound, so as a result, two good sell signals arose, which brought about 40 pips of profit to the GBP/USD pair.

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Trading recommendations for October 7

Since important macroeconomic statistics are not scheduled for release today, the entire focus will be shifted to the protocols of the Federal Reserve System, which may further increase the pressure on the pound.

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  • Buy a position when the pound reaches a quote of 1.2904 (green line on the chart), and then take profit around the level of 1.2955 (thicker green line on the chart).
  • Sell a position after the pound reaches a quote of 1.2879 (red line on the chart), and then take profit at least at the level of 1.2818.
The material has been provided by InstaForex Company - www.instaforex.com

Trump cancels stimulus package negotiations. EURUSD and GBPUSD pair are expected to grow

Investors were so hopeful that the US president would hear the actual call for help from J. Powell, that he, despite the political pre-election conflicts, would allow his representative, Finance Minister S. Mnuchin, to negotiate with the Speaker of the Lower House of Congress N. Pelosi regarding the stimulus package, in which American citizens and businesses need. However, that did not happen.

The second day of negotiations ended in nothing. If last Monday, Mnuchin and Pelosi simply did not agree, then yesterday, Trump simply canceled the possibility of continuing negotiations. Against this background, there was a sharp reversal of stock indices, and the US dollar, which has been firmly paired with the demand for risky assets over the past months, received support.

The President said on Twitter that the Democrats did not allow his $1.6 trillion bailout program to come true, so why should he help pass the $ 2.4 trillion proposal from his political opponents? In general, he made it clear that he continues to fight politically for the opportunity to be re-elected as president despite his COVID-19 illness. In addition, he said that after things are settled, he would certainly resolve the issue on incentives.

Assessing the intensifying emotions that accompany this presidential race, we believe that the state of tension in the markets will be present.

Now, let's assess the likely prospects of the US dollar and the general dynamics of the currency market. In our opinion, the USD will continue to move sideways against major currencies until November 3, when the election takes place. The reason for this is that investors in the stock markets still believe, and most likely justifiably, that any of the winning candidates – J. Biden or D. Trump, will try to implement the aid program. In turn, this will be a strong factor in the growth of demand for company shares with a simultaneous weakening of the US currency. In addition, it is possible that the last trials of the vaccines will end by winter, which should strongly support the growth of economic activity in the US, accompanied by demand for company shares.

In terms of information background, we have the publication of the minutes of the Fed's last meeting, the statement of the US Central Bank, as well as the speeches of FRS members Kashkari, Williams and Evans.

Forecast of the day:

The EUR/USD pair found support at the level of 1.1725. If it holds above this level, it will resume to rise towards 1.1810.

The GBP/USD pair also found support, but only at 1.2865, and may turn around and continue to grow to 1.2935, and then to 1.3000.

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

The farce is over: Trump calls a halt to long-drawn-out negotiations with the Democrats

The US dollar index rose impulsively at the end of Tuesday's trading, reacting to the current situation in the markets. During the Asian session on Wednesday, the greenback showed an upward movement, but by the beginning of the European session, the momentum began to fade - traders quickly "played back" the events of yesterday.

The catalyst for the growth of the index was none other than Donald Trump. The US president has put an end to negotiations between the White House and the Democrats regarding the new package of fiscal stimulus for the US economy. In response to this statement, the stock market noticeably sank, while the unexpected beneficiary of the situation was the dollar, which began to be in high demand as a protective asset. Trump's decision came just hours after a speech by the head of the Federal Reserve, in which Powell called on congressmen to pass the relevant bill. He warned that without more help, the US economy would plunge back into recession.

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However, the head of the White House did not heed the pleas of the head of the Federal Reserve and suddenly canceled negotiations with Democratic congressmen. He says that the relevant law will be signed by him only after the presidential election, which he assumes that he "will undoubtedly win." And although the latest polls suggest the opposite, the fact remains that the head of the White House reasonably decided that any compromise with representatives of the Democratic party would hit his already shaky rating. At the same time, he said that Republicans were ready to support the 1.5-trillion bill, but the Democrats refused "such a generous offer." Nancy Palosi, the Speaker of the House of Representatives, pushed for approval of a larger $ 2.2 trillion stimulus package.

To put it simply, the long-drawn-out negotiation saga that has been going on since the end of May, ended in complete failure. On one hand, this news was somewhat expected: the negotiators have repeatedly "slammed the door," but then again sat down at the negotiating table. There were no prerequisites for the outcome to be different this time, especially after the Democrats introduced a $ 2.2-trillion-bill in the lower house of Congress. While on the other hand, representatives of the parties actively "inflated" the markets with their optimistic estimates. The Treasury Secretary, the White House Chief of Staff, and even representatives of the Democratic party said that the negotiation process is "at the finish line," and the deal is about to take place. Therefore, the statement by Donald Trump that was made with the help of Twitter, has puzzled investors. The reaction was not long in coming - stock indexes updated local lows, reflecting the growth of panic sentiment. So, the S&P 500 index fell 47.6 points (1.4%) to 3,360.97, the Dow Jones index fell 375.8 points (ie up 1.3%) to 27,772. 76, while the Nasdaq declined 177.88 points (1.6%) to 11,154. 60.

In turn, the dollar index jumped from 93.49 points to a multi-day high of 93.96 points in just a few hours. But despite the impulse growth, dollar bulls were unable to enter the 94th figure, after which the upward dynamics gradually began to fade.

The decision of Trump was criticized not only by Democrats (which is expected), but also by some Republicans. In particular, Republican Senator Susan Collins called the act of the Head of the White House "a huge mistake." The American leader's remark that after his election victory, his administration will adopt a "large incentive package" to support working American citizens and small businesses did not arouse much enthusiasm among investors.

Given the latest sociological measurements, Trump's optimism about the "100 percent re-election" looks very doubtful. According to the results of a CNN poll, US presidential candidate Joe Biden increased the margin over Donald Trump to 16 percentage points. The Democrat's indicators were the highest for the entire time of his confrontation with the Head of the White House. Based on the latest data, 57% of Americans surveyed are ready to vote for the leader of the Democratic party, while 41% of respondents are ready to vote for the current President. By the way, Trump's position swayed not only because of the failed (for him) debate, but also due to the fact that many Americans negatively perceived his attitude to the coronavirus. His calls to "not be afraid of COVID" look quite ridiculous, given that the number of deaths from coronavirus infection in the States has already exceeded the 200,000 mark.

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Consequently, the dollar received unexpected support from Donald Trump, who again surprised the markets with his unpredictable behavior. However, this fundamental factor will only have a short-term impact, since the surge in volatility was mainly due to the "surprise effect." Today, emotions about this will come to naught, and traders will switch to other signals of a fundamental nature. In particular, we are talking about the Fed protocol, which will be published at 21:00 (Moscow time).

If we talk directly about the EUR / USD pair, we can say that the bears did not actually take advantage of the temporary strengthening of the greenback. The pair remained within the flat corridor and dropped only a few dozen points (1.1725). This suggests that traders are still waiting for a powerful information impulse, while the US events were perceived as a mere "market noise." In my opinion, the potential for a downward movement is not yet exhausted, even within the flat range. ECB Head Christine Lagarde's speech today may put additional pressure on the euro, so short positions with the first target at 1.1700 are still relevant for the EUR / USD pair. The support level (the main southern target) is located below - at 1.1630 (the lower line of the Bollinger Bands indicator on the daily chart).

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

Technical Analysis of ETH/USD for October 7, 2020

Crypto Industry News:

According to a recent SEC disclosure by the Greyscale Ethereum Trust, or ETHE, Ethereum's impending shift to proof-of-stake consensus is a risk that could have a "material adverse effect" on its stock.

ETHE has recently applied to the regulator to become a SEC reporting company. Such companies are required to discuss risk factors that may adversely affect their results in all quarterly and annual reports.

In one section, which aims to outline the potential threats to the fund's future, it was noted that upgrading to ETH 2.0 may cause some difficulties for investors:

"The digital asset network's consensus mechanism is an essential aspect of its source code, and any failure to properly implement such a change could have a significant negative impact on the ETH value."

The report mentions that the inability to properly implement these changes may result in a temporary or permanent bifurcation which could have a negative impact on ETHE's stock.

It seems that the upcoming modernization so far does not diminish investors' interest in the fund. On the contrary, the assets of the Trust it manages have grown exponentially over the past year, from $ 67 million to over $ 800 million at the time of publication.

Technical Market Outlook:

The ETH/USD pair had failed to break through the 61% Fibonacci retracement of the last wave down and suddenly reversed all the previous gains. The local trend line support had been violated as well and the pair made a new local low seen at the level of $332.46. There was some Pin Bar candlestick made at the end of the move down, so a small bounce is possible up to the level of $345.20. If this local technical resistance is not clearly broken, then the down move should resume and head towards the next target seen at the level of $322.87 - $321.95.

Weekly Pivot Points:

WR3 - $403.75

WR2 - $387.38

WR1 - $368.10

Weekly Pivot - $351.05

WS1 - $333.15

WS2 - $315.51

WS3 - $296.13

Trading Recommendations:

The weekly and monthly time frame trend on the ETH/USD pair remains up and there are no signs of trend reversal, so buy orders are preferred in the mid-term. The key mid-term technical support is currently seen at the level of $305.20 - $321.95, so all the dynamic corrections are still being used to buy the dips. The next mid-term target for bulls is seen at the level of $500.

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

Technical Analysis of BTC/USD for October 7, 2020

Crypto Industry News:

More than 45,000 Bitcoins have been withdrawn from BitMex since the U.S. government filed allegations against the stock exchange and its management. October 1 brought two devastating blows from BitMex. First, the CFTC and DOJ brought charges against the stock exchange. Soon after, its founders (including CEO Arthur Hayes) were indicted by the US government. The market reacted to this news with a sharp drop in many of its largest assets.

This is not the first time in recent months that BitMex has contributed to a downward return. The stock market began to lose trust of its participants after the Black Thursday crash that prevented users from trading or recovering their assets. While users have withdrawn more than 100,000 Bitcoins in the six months between this episode and the latest allegations, the effects of the past two days appear to be unprecedented in scale.

According to Crystal Blockchain data, in less than 48 hours the net outflows from the exchange exceeded 45,000 Bitcoins. Meanwhile, Gemini and Binance appear to be the biggest beneficiaries of these outflows, which OKEx and Huobi are following. Over 20,000 BTC have been transferred from BitMex to these four exchanges.

It is unclear whether BitMex will disappear into the abyss of time like many previous failed exchanges, or whether the company will survive. Lance Morginn, CEO of Blockchain Intelligence Group and former Specialist Oversight Agent of the Department of Homeland Security, said the most likely outcome would be fines and a promise from BitMex management not to engage in illegal activities in the future.

Technical Market Outlook:

The BTC/USD pair has broke below the short-term trend line support at the H4 time frame chart around the level of $10,701 and made a local low at the level of $10,490. The next technical support is seen at the level of $10,430 and $10,344. If the yesterday's low is violated, then the sell-off might accelerate again. The level of $10,758 is now the local high and it is the key level for bulls and the level of $10,093 is the key level for bears.

Weekly Pivot Points:

WR3 - $11,471

WR2 - $11,178

WR1 - $10,858

Weekly Pivot - $10,602

WS1 - $10,300

WS2 - $10,024

WS3 - $9,715

Trading Recommendations:

The weekly trend on the BTC/USD pair remains up and there are no signs of trend reversal, so buy orders are preferred in the mid-term. All the dynamic corrections are still being used to buy the dips. The next mid-term target for bulls is seen at the level of $13,712. The key mid-term technical support is seen at the level of $10,000.

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

Elliott wave analysis of GBP/JPY for October 7, 2020

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GBP/JPY broke back below key-resistance at 136.66, which is a bit disappointing. It moved to a low of 135.74 to test the ascending support-line from the 133.11 low. This support-line should be able to protect the downside for the next push higher through resistance at 136.66 and 137.44 for a continuation higher to 138.61 and 144.08 as the next resistance level.

Only an unexpected break below the support-line and more importantly a break below support at 135.03 will invalidate our immediately bullish outlook. We think this is a low-risk possibility but it should be taken into account.

R3: 136.83

R2: 136.52

R1: 136.25

Pivot: 136.10

S1: 135.95

S2: 135.72

S3: 135.32

Trading recommendation:

We are long GBP from 135.27 and we will raise our stop to 135.65

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

Elliott wave analysis of EUR/JPY for October 7, 2020

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EUR/JPY first made a minor correction to 124.23 ( we expected a dip from here to 124.39) and the pushed higher to peak at 124.73 just below our ideal target at 124.87. This completed sub-wave red wave i/ and we are now in sub-wave red wave ii// The pair may bottom at the 61.8% corrective target of red wave i/ at 123.66 from where a new impulsive rally is expected in red wave iii/ of red wave iii. This wave may become the strongest and easily rally to 126.03 and above the former peak at 127.02.

R3: 124.87

R2: 124.27

R1: 124.10

Pivot: 124.01

S1: 123.66

S2: 123.38

S3: 123.17

Trading recommendation:

We are long EUR from 123.10 with our stop placed at 123.45. Buying near 123.66 with a stop at 123.45 or more conservativly at 123.05 should prove to be a low-risk buying opportunity.

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

Technical Analysis of GBP/USD for October 7, 2020

Technical Market Outlook:

After the GBP/USD pair had hit the target located at the level of 1.2979 (high was made at the level of 1.3006) in overbought market conditions, the market reversed and dropped towards the level of 1.2866, which was the nearest technical support. If the price will enter the old main channel zone, then the sell-off might accelerate, so the key technical support is currently seen at the level of 1.2848. Overbought market conditions and weak momentum support the short-term bearish outlook.

Weekly Pivot Points:

WR3 - 1.3265

WR2 - 1.3116

WR1 - 1.3034

Weekly Pivot - 1.2892

WS1 - 1.2811

WS2 - 1.2658

WS3 - 1.2571

Trading Recommendations:

On the GBP/USD pair the main, multi-year trend is down, which can be confirmed by the down candles on the monthly time frame chart. The key long-term technical resistance is still seen at the level of 1.3518. Only if one of these levels is clearly violated, the main trend might reverse (1.3518 is the reversal level) or accelerate towards the key long-term technical support is seen at the level of 1.1903 (1.2589 is the key technical support for this scenario).

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Technical Analysis of EUR/USD for October 7, 2020

Technical Market Outlook:

The EUR/USD pair has reversed the recent gains after the level of 1.1803 had been hit. The bears have managed to push the price lower towards the technical support located at the level of 1.1753 - 1.1738 and are getting closer to the trend line support. The next target is seen as well at the level of 1.1710 - 1.1696. The overbought market conditions and weak momentum support the short-term bearish outlook.

Weekly Pivot Points:

WR3 - 1.1938

WR2 - 1.1852

WR1 - 1.1782

Weekly Pivot - 1.1691

WS1 - 1.1632

WS2 - 1.1548

WS3 - 1.1473

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. Nevertheless, weekly chart is recently showing some weakness in form of a several Pin Bar candlestick patterns at the recent top. This means any 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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The material has been provided by InstaForex Company - www.instaforex.com

Forecast for EUR/USD on October 7, 2020

EUR/USD

The euro fell by 50 points on Tuesday, returning to the area below the signal level of 1.1754. The reversal occurred from the resistance of the balance indicator line on the daily chart. This is a good sign of the impending decline - the market has remained in a downward mood throughout its correction since September 28. The signal line of the Marlin oscillator reversed exactly from the border of the growth territory. It looks like the euro has decided that it will decline further, now we are waiting for the price at the first target level of 1.1650, then at 1.1550 (November 7, 2017 low).

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The Marlin divergence worked on the four-hour chart, while the signal line of the oscillator is already in the negative zone. After the price moves below the MACD indicator line (1.1695), the euro will move down in the short term (up to two weeks).

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

Forecast for AUD/USD on October 7, 2020

AUD/USD

The Reserve Bank of Australia held a meeting on Tuesday, afterwards it announced a possible rate cut in the coming months to support the economy. Australia's trade balance reached $2.64 billion in August against expectations of $5.05 billion, and as a result, AUD/USD fell by 77 points.

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The price reversal occurred from the balance indicator line on the daily chart, which coincided with the reference level of 0.7210, a break above which could have provoked an increase to 0.7270. But the price is already below the lower reference level of 0.7132, so we wait until we reach the nearest target of 0.7065 and for it to also fall to the embedded line of the price channel in the 0.6970 area.

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The price lies on the MACD indicator line on the four-hour chart, it is possible that the price might slightly grow before falling to 0.7065, while the signal level of 0.7132 serves as a good reference for this corrective growth.

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

Forecast for USD/JPY on October 7, 2020

USD/JPY

Financial markets rejoiced in vain at Trump's quick recovery - yesterday he suddenly announced that he was suspending negotiations on a second stimulus package worth 1.6 to 2.2 trillion dollars before the presidential election, which led to a stock market crash of 1.4%. The Japanese yen, in its traditional relationship with the stock market, began to strengthen, but since the dollar was also strengthening (the USD index added 0.41%), this movement turned out to be insignificant (10 points).

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No major changes on the daily chart. The price is trying to overcome the resistance of the balance indicator line again and, if possible, reach the resistance - target of the MACD line at the price of 105.90. Going beyond the first target at 105.90 opens the second target at 106.34 - the embedded price channel line of the weekly chart.

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The price remains above both indicator lines on the four-hour chart - the balance line and the MACD line, the Marlin oscillator is in the growing trend zone. We expect the price to rise to 106.34.

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

Hot forecast and trading signals for the GBP/USD on October 7. COT report. Von der Leyen and Johnson: Disagreements persist

GBP/USD 1H

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The GBP/USD currency pair continued to trade within the ascending channel and corrected to its lower line on October 6. However, the price failed to settle below the channel, therefore, the upward movement may resume, according to the general trend. The correction began since the price rebounded from the resistance area of 1.3004-1.3024. Thus, the price can return to this area in the first place. We believe that the upward trend remains rather shaky, since the pound did not have any particular reasons for growth. The dollar does not have them either, so a flat is most likely now.

GBP/USD 15M

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The lower linear regression channel turned to the downside on the 15-minute timeframe, which is the first sign of starting a correction on the hourly timeframe. However, the price is supported by the channel line at the bottom of the hourly timeframe. Therefore, if it continues to move down, then the trend will change to a downward one again.

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The latest Commitments of Traders (COT) report for the British pound showed that non-commercial traders started to open high-volume sell contracts. In total, 12,000 Sell-contracts (shorts) were opened from September 23-29. At the same time, the "non-commercial" group of traders also closed around 4,000 Buy-contracts (longs). That is, the net position for this category of traders suddenly decreased by 16,000, which is a lot for the pound, given that there are about 100,000 contracts open at this time. The sentiment of non-commercial traders has become much more bearish. However, the pound only rose in price from September 23-29. It did not grow much, only 140 points, and continues to move up, very uncertainly if I may add. We tend to think that the pound will resume falling in the near future (based on the latest COT reports). As for the indicators, they do not show anything extraordinary now, according to the COT reports. They do not signal a possible global reversal of the pair. Only that non-commercial traders believe more in the dollar's growth rather than the pound (lower indicator).

No major macroeconomic reports from the UK or America on Tuesday, October 6. Therefore, traders were focused on the general fundamental background, which, we recall, remains extremely weak for both the British pound and the US dollar. We can't even call the pair's fall by 70 points as a "provoked foundation". It could have been a normal technical pullback in order to resume the trend later. Thus, although the pound continues to rise in price against the dollar, with each new day, more and more questions arise about the expediency and validity of such a movement. Even Saturday's negotiations between British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen, which resulted in the extension of the negotiation period by a month, cannot be credited to the pound, because the following statements after the talks were "significant differences of opinion remain, in fishing areas in particular, a level playing field (fair competition) and the management of the deal. " Thus, although the parties have announced some progress, it is still very difficult to understand what this progress is and on what issue has been achieved. This means that the buyers of the pound still have no particular reasons for optimism.

We have two trading ideas for October 7:

1) Buyers continue to push the pair upward and remain inside the ascending channel. Therefore, you are advised to stay in long positions (or open new ones) while aiming for the resistance area of 1.3004-1.3024 and the 1.3114 level as long as the pair is inside the channel. Take Profit in this case will be from 30 to 130 points. Bulls do not have excessive strength now, however, they are stronger than bears.

2) Sellers failed to seize the initiative on the market several times in a row. The last attempt was made yesterday, but the price failed to settle below the channel. Now they need to wait for the price to settle below the Kijun-sen line (1.2911) and under the ascending channel, and only after that should you resume trading downward while aiming for the Senkou Span B line (1.2825) and support level of 1.2794. Take Profit in this case can range from 70 to 100 points.

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.

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

Hot forecast and trading signals for the EUR/USD on October 7. COT report. Global reversal of the pair is approaching, but

EUR/USD 1H

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The EUR/USD pair continued to move up on the hourly timeframe on October 6, but it was not strong. Traders took the pair above the resistance level of 1.1786 several times, then below it, but in general we can not conclude that a correction has begun. On the other hand, the ascending trend line remains relevant, which continues to support the buyers of the euro. Hence, the general recommendation seems to be to "buy the pair". In general, the euro continues to trade quite actively, and most importantly with a trend. It is still very difficult for the US dollar to rise in price, as the fundamental background from overseas continues to come, at best, contradictory, and at worst, disastrous.

EUR/USD 15M

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Both linear regression channels are directed upwards on the 15-minute timeframe, which clearly shows that the upward trend will continue on the hourly timeframe. Thus, there are no signs of a downward reversal and the beginning of at least a downward correction, not to mention a change in the trend.

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The euro/dollar rose in price by around 30 or 40 points during the last reporting week (September 23-29). We cannot even call it growth, just a normal market noise. The previous Commitment of Traders (COT) report showed that non-commercial traders opened 15,500 new Buy-contracts (longs) and almost 6,000 Sell-contracts (shorts). Thus, the net position for this group of traders increased by around 9,000. The new report clearly reflects what is currently happening in the foreign exchange market. Professional traders closed 4,500 contracts for buy positions on the euro and 3,300 contracts for sell positions during the reporting week. That is, the net position for the "non-commercial" group has decreased by around a thousand contracts, which means that the mood of large traders has become a little more bearish. However, these are not changes that can be acknowledged as global. Therefore, we conclude that the situation has not changed dramatically. The EUR/USD pair generally stood in one place for the next three trading days (after September 29). Therefore, the next COT report may also show minimal changes in the mood of professional traders. Looking at the chart showing the net positions of all categories of traders, we can conclude that a major downward reversal is brewing for the euro. Usually, when the green and red lines are far away from each other, it is the harbingers of a global reversal.

No important macroeconomic statistics on Tuesday, October 6. And so traders were deprived of significant information in order to somehow adjust their strategies. Another speech from European Central Bank President Christine Lagarde, but its essence was rather bearish than bullish. Lagarde expressed her fears that the economic recovery of the eurozone will be delayed due to the second wave of the pandemic. "Instead of the V-shaped economic recovery that we all strive for and hope for, we believe that it can take a W-shape," says Lagarde. Agree that this information could not have caused the euro to strengthen. Nevertheless, the euro remains "on the horse". We can expect another speech from Lagarde on Wednesday, and the minutes of the last Federal Reserve meeting will also be published on this day in the United States. We believe that traders will ignore both of these events, as well as a huge number of previous reports and events of macroeconomic significance and nature. Thus, the upward trend continues for now, and the activity of traders will depend on other factors that cannot be predicted or expected.

We have two trading ideas for October 7:

1) Buyers continue to own the initiative in the market and got the pair to withdraw from the horizontal channel of 1.1683-1.1756. The upward trend remains above the trend line. Thus, traders are advised to continue to trade for an increase while aiming for the resistance level of 1.1855. Take Profit in this case will be up to 60 points.

2) Bears continue to remain in the shadows, but they can return the euro/dollar pair to a downward trend if they manage to gain a foothold below the upward trend line, as well as below the Senkou span B (1.1742) and Kijun-sen (1.1746) lines. Ideally, we recommend waiting for the price to settle below the support area of 1.1700-1.1724. In this case, we recommend opening new short positions while aiming for 1.1631. The potential Take Profit in this case is up to 60 points.

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.

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

Overview of the GBP/USD pair. October 7. The ship "Great Britain" continues to sink in the financial abyss.

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - sideways.

Moving average (20; smoothed) - upward.

CCI: 42.4754

The British pound was trading as calmly as possible on Tuesday, October 6. It was only in the second half of the day that there was a rush down to the moving average line, which, however, did not completely disrupt the technical picture that has developed in recent days. The most important thing is that the pound/dollar pair worked out the level of 1.3000 during yesterday's trading, which we highlighted in recent articles and called it psychologically important. It was the price rebound from this level that triggered the downward movement. However, the price failed to gain a foothold below the moving average, which means that the fate of the pair remains in the hands of buyers. At the same time, we also note that the fundamental background remains extremely heavy for the British pound, and only an equally weak background from America continues to keep the British currency afloat.

The worst thing is the situation with the "coronavirus" in the Foggy Albion. In the last three days, almost 50 thousand cases of infection were recorded, that is, an average of 16-17 thousand per day. This indicator is already three times higher than the maximum daily value, which was recorded at the height of the first "wave" this spring. However, there is a certain encouraging explanation for such a sharp increase in infections. The fact is that the excel table, which keeps a list of infected Britons, is designed for 16 thousand columns and just over a million rows. It is reported that at some point in this table, the available rows simply ran out and the program simply "cut" all cases from the period from September 25 to October 2 that did not fit in it. It is reported that this is almost 16,000 cases, which were added to the reports for October 3, 4, and 5. Therefore, from 50 thousand cases during these days, you can safely take away 16 thousand "additional" and get about 34 thousand in three days, which is still very much. The worst thing in this situation is not the failure itself, but the fact that these 16 thousand who were not immediately included in the lists were also not taken into account when determining the circle of people to isolate. Thus, these 16 thousand infected could infect a fairly large number of other Britons within a week.

British Prime Minister Boris Johnson said, meanwhile: "I must say in all honesty that the path of the virus will continue to be bumpy until Christmas, and may continue after that." Johnson believes that the country will be in a "very difficult situation" until the spring, although the facts and concrete figures indicate that the country is already in this situation.

While the UK is trying to cope with a new outbreak of COVID, the European Union, despite the extension of the Brexit negotiations for one month and the seemingly deferred trial due to the "Johnson bill", continues to prepare for a "hard" option of "divorce" with the Kingdom. The European Commission sees extremely low chances of concluding a trade agreement. This was stated by Vice-President of the European Commission Maros Sefcovic. "We have less than 100 days until Brexit, and the negotiations are still far from over. European Commission chief Ursula von der Leyen had a phone conversation with Prime Minister Boris Johnson over the weekend. They stated that some progress has been made in the negotiations, but much more needs to be done to reach an agreement," Sefcovic said. The Vice-President also touched on the controversial draft law "on the internal market": "The implementation of international agreements is not only a legal obligation but also an issue of the UK's state prestige, which can be seriously damaged."

Meanwhile, analysts at the law firm Baker & McKenzie estimate that the UK will lose about 134 billion pounds each year starting in 2021 over a decade due to a combination of Brexit without an agreement with the European Union and COVID-2019. It is reported that the annual GDP is already 2.2% lower than predicted before the outbreak of the pandemic. Even if a trade agreement is eventually concluded with the European Union, Britain will still miss another 3.1% of GDP in the long run. Without a trade deal, the GDP will lose 3.9%.

In addition, it is reported that many financial and manufacturing companies continue to leave the UK without waiting for Brexit. It is already known about approximately 7,500 employees of various companies who were transferred to offices in the European Union. Companies have also withdrawn more than $ 1.6 trillion from Britain. The main problem is that British companies and offices will not be able to provide their services to companies from the EU from the beginning of 2021. Naturally, we are talking about the loss of a huge market and profit. So "the rats keep running from the ship" because the "ship" is actually sinking.

Well, the British pound sterling in this situation continues to hold its position against the US currency thanks to a miracle alone. However, as we said earlier, if the tension in America may subside in a month (especially if Joe Biden wins the election), then the UK is expected to have another "fun" year with another downturn in the economy, and a very impressive decline. If in 2020 the UK was covered by the "coronavirus epidemic", then in 2021 its second "wave", as well as the "divorce" with the EU and the consequences of the lack of a trade "deal" may have an even greater negative impact. Thus, we are inclined to believe that 2021 will be even more difficult for the Kingdom than the current one. Accordingly, the British pound will continue to experience problems in the foreign exchange market that have plagued it for several years. In the near future, the fall in quotes may resume, as traders failed to overcome the level of 1.3000. This will open the prospect of the pair falling to the level of 1.2700. If the disappointing fundamental background continues to come from the UK, then the pound can only accelerate its fall.

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The average volatility of the GBP/USD pair is currently 119 points per day. For the pound/dollar pair, this value is "high". On Wednesday, October 7, thus, we expect movement inside the channel, limited by the levels of 1.2819 and 1.3057. A new reversal of the Heiken Ashi indicator upward signals the resumption of the upward movement.

Nearest support levels:

S1 – 1.2939

S2 – 1.2878

S3 – 1.2817

Nearest resistance levels:

R1 – 1.3000

R2 – 1.3062

R3 – 1.3123

Trading recommendations:

The GBP/USD pair started to adjust to the moving average line on the 4-hour timeframe. Thus, today it is recommended to open new longs with targets of 1.3000 and 1.3062 as soon as the Heiken Ashi indicator turns up or there is a rebound from the moving average. It is recommended to trade the pair down with targets of 1.2817 and 1.2756 if the price returns to the area below the moving average line.

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

Overview of the EUR/USD pair. October 7. Is Trump really sick? Or is the White House hiding other facts about the US President's

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - upward.

CCI: 98.3057

For the EUR/USD pair, the second trading day of the week was fairly calm and the trend remained upward. Thus, there were no major changes in the technical picture, and the advantage (small) remains for the European currency and buyers. The situation on the currency market for the euro/dollar pair remains quite difficult. The problem is that the downward trend failed to develop and everything was limited to a very small correction, which ended around the level of 1.1600. However, buyers are also not too eager to fight and are not in a hurry to actively buy the European currency, which continues to trade near two-year highs. We have repeatedly stated that the European currency has become more expensive in recent months mainly due to the difficult situation in America and its "four types of crises". If earlier we were talking about a social, political, epidemiological, and economic crisis, now the social crisis seems to have been overcome, however, there are still three more. Most importantly, the country is slowly but surely approaching the presidential election, which is the main event of the end of 2020 in the United States. Did you notice how abruptly all the skirmishes between Washington and Beijing ended? Did you notice how Trump's "coronavirus briefings" ended again? Have you noticed that there is no information about possible new trade wars between the States and other countries? But a month ago, this kind of information was received almost every day. However, now the whole world is waiting for the election results and understands that it is not necessary to force events and make important decisions before this event. Have you noticed how abruptly Anthony Fauci, who was almost the main character in the country this spring, disappeared from the monitors? In general, the whole country is focused on the elections, thus, it will be extremely difficult for the US currency to show growth in the next month. And investors and traders are unlikely to risk investing in the US currency.

Meanwhile, Christine Lagarde, head of the ECB, gave an interview to The Wall Street Journal, in which she said that the regulator is ready to take any measures to support the economy, including a new reduction in the key rate, which is already in negative territory. Lagarde said that with the start of the second "wave" of the pandemic, the EU's economic recovery has slowed. The head of the ECB also believes that GDP is unlikely to return to pre-crisis levels before the end of 2022. Thus, the Central Bank of the European Union can go for even more easing of monetary policy, as the recovery is slowing down, and the euro has grown significantly in the last four months, which negatively affects inflation and slows down the economic recovery even more.

Meanwhile, something very difficult to explain is happening in the States. Donald Trump was discharged from the hospital after three days, and his doctor said that he is not against this option at all. It seems that Trump went to the hospital to be discharged from there in three days and, thus, prove that the "coronavirus" is not so dangerous. In fact, this is exactly what he said right after he returned to the White House. The US President said that America has developed good drugs against COVID-2019, and the disease itself is not so terrible, and also urged not to let the virus control the lives of Americans. However, Trump did not explain the 210,000 deaths from this virus in the United States. Also, if he is not yet cured of the "coronavirus", how does he manage to return to his duties? Will Trump be in bed at the White House? Then why did he leave the hospital at all? And if Trump had a mild illness, why did he need to be hospitalized at all? In general, all this is very similar to an election production. It seems that Trump fully realized that the Americans will not forgive him for more than 200 thousand deaths from the "coronavirus" and decided to show that he himself fell ill with this "Chinese disease", but does not make a tragedy out of it, and after being discharged from the hospital "feels even better than 20 years ago". Needless to say, not all US residents have the same level of medical care as the President?

Well, while Trump was in the hospital, he was posting messages to the social network Twitter. Many media outlets on Monday noted that the US President posted 19 messages, with each one printed in capital letters. The US President called for voting for him, promised that next year will be "the best in history", and also poured mud on the Democrats, who, in his words, "will kill the economy". Thus, the situation with Trump's illness is likely to remain a secret. The President spent three days in the hospital and managed to make a "circle of honor" by car around the hospital, "to send greetings to his well-wishers", while he was treated with the drug "dexamethasone", which is prescribed to patients with severe cases of pneumonia. Thus, it is completely unclear whether the severe or mild form of "coronavirus" was for Trump. Did he ever get the virus, and why did he return to the White House if he didn't fully recover?

And the most interesting thing is that many American doctors also question the illness of Donald Trump or, at least, condemn his behavior and his doctor, Sean Conley. Many medical experts point out that Sean Conley's briefings were more like "a publicist's speech, not a doctor's". Sometimes Conley refused to directly answer questions from reporters, then evaded the answers and spoke in general phrases. At a briefing on Saturday, Conley said 72 hours had passed since Trump's diagnosis was confirmed. Thus, it turns out that Trump, being sick with the "coronavirus", continued to hold meetings and contact other White House employees for some time. It is anyone's guess how many people were infected by Trump, who is an ardent opponent of wearing a medical mask. A little later, Conley said that "he was misunderstood and he meant something else". In addition, there were other signals from Trump's entourage that indicated that the President's condition was serious. And the most surprising thing is that no one in the White House started sounding the alarm, although the President continued to be in it for some time while he is infected. In general, from our point of view, all this is very strange. And quite unlike the standard COVID disease and treatment in the hospital. One has only to remember how much and how British Prime Minister Boris Johnson was treated for the same disease.

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The volatility of the euro/dollar currency pair as of October 7 is 62 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1718 and 1.1842. A reversal of the Heiken Ashi indicator down may signal a new round of corrective movement.

Nearest support levels:

S1 – 1.1780

S2 – 1.1719

S3 – 1.1658

Nearest resistance levels:

R1 – 1.1841

R2 – 1.1902

R3 – 1.1963

Trading recommendations:

The EUR/USD pair continues to be located above the moving average line. Thus, today it is recommended to continue to stay in long positions with a target of 1.1841 until the Heiken Ashi indicator turns down. It is recommended to consider sell orders again if the pair is fixed back below the moving average with the first target of 1.1658.

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

ECB will restrain the euro's growth

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Euro bulls played positive statistics, US President Donald Trump's recovery has already been taken into account in prices. However, it is worth noting that he has not completely recovered from the virus, which means that his condition may well deteriorate. This is not just an assumption, this is the warning issued by the chief infectious diseases specialist of the United States.

However, Trump is optimistic and is preparing to participate in the next debate, which is scheduled for October 15. Accordingly, there is a positive reaction from investors, and risk appetite is improving.

The main currency pair was close to 1.1800 today. Buyers have not yet managed to test this level, but the chances are quite real. Due to the current circumstances, we can consider the euro's growth to the value of 1.1830 against the dollar

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Traders who bet on the dollar's fall against the euro expect that America will launch a new flow of liquidity. This may happen at the last moment before the election, in the process of a deal between the White House and the Democrats. In the worst case, after the elections, which the Democrats are likely to win.

A pullback to the downside is also possible for the EUR/USD pair. The first target in this case will be 1.1750 and 1.1740. Speeches from the heads of two major central banks, Christine Lagarde and Jerome Powell, added uncertainty for euro buyers on Tuesday. It is important for markets whether they will affect monetary policy.

The ECB chief made it clear to markets that the economic recovery in the eurozone has lost momentum. The restrictive measures imposed in some countries, such as Spain, France and Germany, suggest a further deterioration of the macroeconomic climate in the coming weeks..

The European Central Bank may lower expectations for inflation and economic growth in December, when it releases updated forecasts. In the absence of a positive shift, that is, if there is no medicine or vaccine for the coronavirus, the regulator will have to act. Financial officials may take new measures to limit short-term deflationary risks.

All this will result in a revision of the inflation target or an increase in the volume of the asset purchase program. This scenario will become more justified when the EUR/USD pair returns to the 1.20 area. Earlier, when this happened, the ECB carried out verbal interventions in order to contain the euro's growth.

Meanwhile, currency strategists for the most part consider it unjustified that the euro has been rising in price in recent months. The current situation does not imply a strong weakening of the dollar and the growth of the single currency. The euro is expected to fall to 1.1300 by the end of the year. The ECB must take additional measures in response to dangerously low inflation, which continues to decline.

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