Analysis and forecast for EUR/USD on October 12, 2020

In today's review of EUR/USD, we will summarize the results of last week and outline the future prospects for the price movement of the main currency pair of the Forex market.

Thus, at the auction on October 5-9, the US dollar weakened against all major competitors, except the Japanese yen. In particular, the euro/dollar currency pair showed strong growth and strengthened by 0.93%. The course of trading over the past five days was influenced by reports on the daily dynamics of COVID-19 infections, the struggle of the US President Donald Trump's administration with the Democrats over the adoption of fiscal incentives to combat the pandemic, and macroeconomic statistics. Thus, the minutes of the last meeting of the Federal Reserve System (FRS) did not have a decisive impact on the course of trading last week, although they led to the weakening of the US currency. Further, this is unlikely to happen, since the Fed has already placed all the emphasis, the main of which was the new approach of the regulator to assess inflation and unemployment in the United States.

As for the coronavirus epidemic, the second wave is slowly but surely covering more and more European states that are trying to counter the spread of the COVID-19 pandemic by tightening restrictive sanitary measures. At the same time, India, the United States, and Brazil are still the leaders in the daily growth of infected countries in the world.

If we identify the main macroeconomic events that may have an impact on trading in EUR/USD, then we can consider the US consumer price index, which in the light of the Fed's new approach to inflation indicators will be taken with special attention by the market participants. Important statistics are expected, which will be mentioned directly on the day of its release. It is also worth noting that this week two speeches are planned by the President of the European Central Bank (ECB) Christine Lagarde, the first of which will take place today, at 12:00 London time.

Weekly

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Well, it's time to move on to the technical part of the review, and, as usual, on Mondays, we'll start with the corresponding charts. As already noted at the beginning of the article, the euro/dollar currency pair showed an upward trend last week. And, the last weekly candle actually has no upper shadow. This factor indicates a fairly strong bullish sentiment that was observed at the auction for the main currency pair, and the closing price of 1.1830 only confirms this conclusion. You should also note that the previous weekly trading closed above the Tenkan line of the Ichimoku indicator. All this taken together suggests a further strengthening of the exchange rate. If this happens, then the next targets for the euro bulls will be a strong technical level of 1.1860 and the mark of 1.1917, where the maximum trading values were shown on September 10 this year. In the event of a change in market sentiment in favor of the US dollar, the pair will again fall to the important level of 1.1700, a true breakdown of which will send the quote to a strong support zone of 1.1620-1.1600. These are the immediate prospects for the EUR/USD price movement on the weekly timeframe.

Daily

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The daily chart also shows the instrument's tendency to grow. This can be seen by the pair passing up the Kijun line of the Ichimoku indicator and the 50 simple moving average. At the same time, please note that the euro/dollar is still trading within the daily cloud of the Ichimoku indicator, the exit from which will only increase the bullish mood for the main currency pair. It is important to note that the upper limit of the cloud passes at 1.1870, which is slightly higher than the previously mentioned strong technical level of 1.1860. This factor once again confirms the importance and significance of the price zone of 1.1860-1.1870, the passage of which will largely determine the future prospects for the direction of the EUR/USD exchange rate.

If we go to the trading recommendations, then taking into account the previous weekly growth and the closing price above the important and significant level of 1.1800, I think the main trading idea is to buy after declines to the broken resistance of 1.1807 or after a short-term price flight to the area of 1.1770/60. At the same time, as long as the pair has not fixed three consecutive daily candles above 1.1807 and has not come out of the daily cloud, it is impossible to exclude movement in the south direction. If bearish candlestick signals appear in the price zones of 1.1860-1.1870 and 1.1900-1.1917 on the daily four-hour or hourly timeframes, this will be a signal to open sales. This is all for today, and we will consider smaller time intervals in tomorrow's review of the main currency pair.

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Fractal analysis for major currency pairs for October 12

Outlook on October 12:

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 1.1939, 1.1904, 1.1878, 1.1835, 1.1797, 1.1774, 1.1748 and 1.1696. The local bullish structure from October 2 is being monitored here. Moreover, the growth of the pair is expected to continue after breaking through the level of 1.1835. In this case, the target is 1.1878. There is a short-term decline and consolidation in the range of 1.1878 - 1.1904. For the potential value for the top, we consider the level 1.1939; upon reaching which, a downward pullback is expected.

A short-term decline is expected in the range of 1.1797 - 1.1774. If the last value breaks down, it will lead to a deep correction. Here, the target is 1.1748, which is the key support for the top.

The main trend is the local structure of October 2

Trading recommendations:

Buy: 1.1835 Take profit: 1.1878

Buy: 1.1879 Take profit: 1.1904

Sell: 1.1797 Take profit: 1.1775

Sell: 1.1773 Take profit: 1.1750

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The key levels for the pound/dollar pair are 1.3250, 1.3170, 1.3107, 1.3064, 1.3016, 1.2976 and 1.2908. Here, we are following the development of the upward structure from September 25. Now, a short-term growth is expected in the range of 1.3064 - 1.3107. If the last value breaks down, we can continue to the next level of 1.3170. Price consolidation is near this level. On the other hand, we consider the level of 1.3250 as a potential level for the top. Upon reaching which, we expect a downward pullback.

A short-term decline is expected in the range of 1.3016 - 1.2976. If the last value breaks down, it will lead to a deep correction. Here, the potential target is 1.2908, which is the key support for the top.

The main trend is the upward structure from September 25

Trading recommendations:

Buy: 1.3064 Take profit: 1.3106

Buy: 1.3109 Take profit: 1.3168

Sell: 1.3016 Take profit: 1.2977

Sell: 1.2975 Take profit: 1.2908

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The key levels for the dollar/franc pair are 0.9211, 0.9174, 0.9145, 0.9103, 0.9075, 0.9033, 0.9009 and 0.8960. The development of the descending structure from September 25 is being followed here. Moreover, a short-term decline and consolidation is expected in the range of 0.9103 - 0.9075. Breaking through the last value will lead to the development of a strong decline. Here, the target is 0.9033 and price consolidation is in the range of 0.9033 - 0.9009. For the potential value for the bottom, we consider the level of 0.8960. The movement to which is expected after breaking through the level of 0.9009.

A short-term growth is possible in the range of 0.9145 - 0.9174. In case of breakdown of the last value, it will lead to a deep correction. The potential target here is 0.9211, which is a key support for the bottom.

The main trend is the descending structure from September 25

Trading recommendations:

Buy : 0.9145 Take profit: 0.9174

Buy : 0.9176 Take profit: 0.9210

Sell: 0.9075 Take profit: 0.9035

Sell: 0.9031 Take profit: 0.9010

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The key levels for the dollar/yen are 106.91, 106.73, 106.45, 106.26, 105.94, 105.74, 105.41, 105.19 and 105.05. The development of the upward cycle from October 2 is being followed here. At the moment, the price is in correction. Moreover, a short-term growth is expected in the range of 105.74 - 105.94, breaking through the last value will lead to a strong rise. Here, the first target is 106.26. On the other hand, there is a short-term upward movement and consolidation in the range of 106.26 - 106.45. As a potential value for the top, we consider the level 106.91. We can move to this level after breaking through the level of 106.45.

A key support for the upward structure of October 2 is the level of 105.41 and its breakdown will encourage the development of a downward trend. Here, the potential target is 105.19. Meanwhile, there is consolidation in the range of 105.19 - 105.05.

The main trend is the upward structure from October 2, correction stage

Trading recommendations:

Buy: 105.75 Take profit: 105.90

Buy : 105.95 Take profit: 106.25

Sell: 105.40 Take profit: 105.20

Sell: 105.17 Take profit: 105.05

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The key levels for the USD/CAD pair are 1.3274, 1.3232, 1.3210, 1.3179, 1.3110, 1.3057 and 1.3017. Here, we are following the development of the downtrend cycle from September 29. The decline is expected to continue after breaking through the level of 1.3110. In this case, the next target is 1.3057. For the potential value for the downward trend, we consider the level of 1.3017. Upon reaching which, consolidation and upward pullback is expected.

On the other hand, correction is expected to end after breaking through the level of 1.3180. The next target is 1.3210. On the other hand, the range of 1.3210 - 1.3232 is the key support for the downward structure and the price passing this level will lead to the formation of initial conditions for the upward cycle. In this case, the first target is 1.3274.

The main trend is the descending structure from September 29

Trading recommendations:

Buy: 1.3180 Take profit: 1.3210

Buy : 1.3233 Take profit: 1.3274

Sell: 1.3110 Take profit: 1.3060

Sell: 1.3055 Take profit: 1.3017

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The key levels for the AUD/USD pair are 0.7326, 0.7277, 0.7243, 0.7190, 0.7151, 0.7128 and 0.7092. The upward structure from September 25 is being followed here. Now, a short-term growth is expected in the range of 0.7243 - 0.7277. For the potential value for the top, we consider the level of 0.7326. Upon reaching which, we expect a downward pullback.

The level of 0.7190 is the key support for the top and the price passing this level will lead to the development of a deep correction. The next target is 0.7151. The range of 0.7151 - 0.7128 is the main support for the upward trend and the price passing this level will encourage the formation of initial conditions for a downward cycle. Here, the first potential target is 0.7092.

The main trend is the upward structure from September 25

Trading recommendations:

Buy: 0.7245 Take profit: 0.7275

Buy: 0.7278 Take profit: 0.7326

Sell : 0.7190 Take profit : 0.7154

Sell: 0.7126 Take profit: 0.7092

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The key levels for the euro/yen pair are 126.40, 125.96, 125.28, 124.88, 124.48, 124.22 and 123.80. Here, we are following the development of the rising structure from October 2. A short-term growth, in turn, is expected in the range of 124.88 - 125.28. If the last value breaks down, it will lead to the development of a strong movement. The target here is 125.96. As a potential value for the top, we consider the level of 126.40. Upon reaching which, we expect consolidation and downward pullback.

A short-term decline is possible in the range of 124.48 - 124.22. If the last value breaks down, it will lead to a deep correction. Here, the target is 123.80, which is a key support for the top.

The main trend is the local upward structure of October 2

Trading recommendations:

Buy: 124.88 Take profit: 125.27

Buy: 125.30 Take profit: 125.96

Sell: 124.22 Take profit: 123.80

Sell: 123.75 Take profit: 123.00

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The key levels for the pound/yen pair are 139.86, 139.26, 138.27, 137.88, 137.23, 136.70 and 135.94. The following targets from the local upward structure on October 2 are determined here. Meanwhile, a short-term upward movement is expected in the range of 137.88 - 138.27. If the last value breaks down, it will lead to a strong growth. Here, the target is 139.26. For the potential value for the top, we consider the level of 139.86. Upon reaching which, we expect consolidation and downward pullback.

A short-term downward movement is expected in the range of 137.23 - 136.70. In case of breakdown of the last value, it will lead to a deep correction. Here, the target is 135.94, which is the key support for the top.

The main trend is the medium-term upward structure from September 23, as well as the local structure for the top from October 2

Trading recommendations:

Buy: 137.88 Take profit: 138.26

Buy: 138.35 Take profit: 139.26

Sell: 137.23 Take profit: 136.72

Sell: 136.65 Take profit: 136.10

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EUR/USD. October 12. COT report. Trump is cured of the coronavirus and resumes the election race

EUR/USD – 1H.

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On October 9, the EUR/USD pair continued the growth process after rebounding from the upward trend line and completed consolidation above the corrective level of 50.0% (1.1812). Thus, the growth process of quotes can be continued in the direction of the next corrective level of 61.8% (1.1859). The mood of the majority of traders remained bullish. Meanwhile, news from America continues to arrive either strange or negative. The main thing to note is the strange recovery of Donald Trump from the coronavirus. The president has been suffering from this ailment for just over a week and all this time there have been no external signs that Trump is ill. In the end, Trump's doctor said that the president can leave the hospital, and his body began to produce antibodies against COVID-2019. It all ended with the fact that Trump said that he was completely cured of the coronavirus and that he might have immunity. Thus, the full-fledged work of Trump is resumed. He began to actively participate in the election race. This week, he will visit various American cities and events.

EUR/USD – 4H.

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On a 4-hour chart, the graphic picture remains very boring. The pair's quotes have returned to the side corridor and continue to trade inside it. A rebound was made from the lower border of this corridor, as well as from the corrective level of 127.2% (1.1729), thus, the growth of the pair's quotes has a good chance of continuing in the direction of the upper line of the side corridor.

EUR/USD – Daily.

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On the daily chart, the quotes of the EUR/USD pair performed an increase to the corrective level of 261.8% (1.1825). The pair's rebound from this level will allow us to expect a reversal in favor of the US currency and a resumption of the fall in the direction of the corrective level of 200.0% (1.1566). Closing above it will increase the chances of growth in the direction of the Fibo level of 323.6% (1.2084). However, the key now remains the side corridor on the 4-hour chart.

EUR/USD – Weekly.

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On the weekly chart, the EUR/USD pair has consolidated above the "narrowing triangle", which now allows us to count on further growth of the euro currency, which may be strong, but in the long term.

Overview of fundamentals:

On October 9, the European Union and America's economic event calendars were empty. Nevertheless, traders continued to actively get rid of the US currency.

News calendar of the US and EU:

ECB - ECB President Christine Lagarde will deliver a speech (11:00 GMT).

On October 12, another speech by ECB President Christine Lagarde is scheduled in the European Union, while in America the calendar of events is empty. However, traders may not need a lot of news to continue to get rid of the dollar.

COT (Commitments of Traders) report:

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The latest COT report was quite informative. The most significant and important category of "Non-commercial" traders continues to get rid of long contracts, closing them during the reporting week - almost 11 thousand. Also, about 2 thousand short-contacts were opened, thus, the mood of major players concerning the European currency has become much more "bearish". However, in general, I can't say that in recent months the major players have started to look in the direction of selling off the euro. Since the beginning of August, the total number of long contracts in the hands of speculators has been decreasing, however, the total number of short contracts is also decreasing. And in total, the hands of "Non-commercial" are concentrated four times more long-contracts than short. Thus, I would say that the chances of the continued growth of the European currency are still high.

Forecast for EUR/USD and recommendations for traders:

Today, I recommend selling the euro with a target of 1.1707 if the close is made under the trend line on the hourly chart. Purchases of the pair today are advisable with the goal of 1.1859 since a rebound was made from the trend line, and the quotes were fixed above the level of 50.0% (1.1812).

Terms:

"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.

"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency not for speculative profit, but for current activities or export-import operations.

"Non-reportable positions" - small traders who do not have a significant impact on the price.

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Prices decline in leading crude oil benchmarks

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The crude oil market saw a decline in the value of leading benchmark grades Monday morning. On Friday, a slight increase was recorded which gave investors hope for positive prospects.

Last week, the Norwegian Oil & Gas Association of Norway was able to make progress on the issue of signing an agreement on employee remuneration. Recall that due to earlier disagreements between the company's management and the Lederne trade union, a mass strike of workers took place, which lasted from September 30. Protest movements led to a drop in the level of raw material production in the country by 330,000 barrels per day. If all this was not stopped in time, the reduction could reach 1 million barrels per day.

Oil companies located along the Gulf of Mexico in the US can finally assess the damage caused by hurricanes. Last week, the weather condition did not allow them to work in full force which also caused a destructive effect on oil production plants. Now the main tasks of oil workers are to calculate the cost of repairs and gradually restore production of raw materials.

According to the Bureau of Safety and Environmental Management of the US Department of Interior, almost all production facilities in the Gulf of Mexico, or rather 91% of installations, stopped operating last Sunday. Of course, against this background, there was a slight recovery in the level of demand for raw materials, which has recently been under pressure.

Meanwhile, the Libyan oil company issued a statement on Sunday on the resumption of operation of the largest field for the production of raw materials ("Sharara"). According to experts, its capacity is approximately 300,000 barrels per day. The country's authorities intend to increase production to the maximum within ten days, which, of course, will be negatively perceived not only by experts and analysts, but also by market participants who understand the difficult situation of demand for black gold. The increase in the price of oil on the market is likely to remain under serious pressure. Moreover, this will be an additional problem for OPEC.

There is already enough negativity on the market. It became known last week that the number of oil production plants in the US increased by four units, which now totals to 193 units. And this is not the first growth in recent years. For three weeks in a row, there has been an increase in this sector, which also does not have a positive effect on investor sentiment.

The price of futures contracts for Brent crude oil for delivery in December on the trading floor in London fell 0.77% or $0.33, which moved it to $42.52 per barrel. Friday's trading session also ended with a decline of 1.1% or $0.49.

The price of futures contracts for WTI light crude oil for delivery in November on the electronic trading platform in New York also went down by 0.79% or $0.32, which moved it to $40.28 per barrel. This brought it close to the strategically important level of $40 per barrel. Friday's trading also ended with a decline in the price by 1.4% or $0.59.

According to the results of the week's work, oil brands still managed to trade in positive territory as Brent was able to grow 9.1%, while WTI increased by 9.6%.

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Trading recommendations for GBPUSD pair on October 12

The GBP/USD pair managed to break through the psychological level of 1.3000 last week and consolidated above it for the first time since the beginning of September. The breakdown of the level and the update of the local high of the corrective move puts the downward tact set in the market on September 1 at risk, but if we take into account the fact that the recent price fluctuation is considered speculative, then everything can change quickly.

We have a global weakening of the US dollar which started during the American session. The sale of the dollar may be associated with the upcoming elections in the United States, but if we change the information field to the UK, we will see that the prospect of a weakening pound is higher in the long term than the dollar. But before the US election, speculators can turn the scheme of local surges in favor of the dollar's weakening.

Thus, knowing in advance that there is a high degree of coefficient of speculative positions, we should not make hasty conclusions about the change in the clock component 1.3480 ---> 1.2674.

Analyzing Friday's trading day by the fifteen-minute, the inertial upward movement of the price can be seen, which arose from 12:30 UTC+00 and lasted until the very close.

In terms of daily dynamics, 123 points were recorded for October 9, which is 2% higher than the average. The acceleration was expected given the two-day deceleration between October 7 and 8.

As discussed in the previous analytical review, the coordinates 1.2970, which is the local high on October 8 is important for traders, since its breakdown automatically provoked a flow of long positions, which happened as a result in the market.

Considering the trading chart in general terms (daily period), we can see a corrective move from the local low of 1.2674, where the recovery relative to the downward tact of September is 47% for the current day.

Friday's news background had weak statistics on the UK, which had practically no effect on the pound's rate. Statistics showed some improvement in dynamics, in particular, the rate of decline in industrial production slowed down from -7.4% to -6.4%, but the data still turned out to be much worse than forecasts. The recession was expected to slow down to -4.6%, especially since the industrial recession has lasted for 17 consecutive months.

In fact, this proves speculators' manipulation of the GBP/USD rate once again.

In terms of the information background, we have a telephone conversation between the two leaders: British Prime Minister Boris Johnson and German Chancellor Angela Merkel, where they talked about Brexit.

Johnson said that Britain was ready to take the hard way out and return to the WTO if the negotiations did not lead to anything.

On Monday, the Financial Times, citing EU diplomats, reported that the EU leaders intend to insist on tightening the provisions of the deal with the UK, primarily with regard to the mechanism for implementing the provisions of bilateral agreements during the EU summit in Brussels on October 15-16.

If we look above, we can notice that the Brexit situation is not very simple, and this will put pressure on the pound sterling.

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In terms of the economic calendar, we do not have statistics in the UK and US today that are worthy of attention, thus, we should carefully observe the information flow, since this can trigger surges in the market.

Further development

Analyzing the current trading chart, the quote continues to be within the tolerance for deviation from the psychological level 1.2950/1.3050, which may affect the market in the form of stagnation. The main trading tactic, as before, will be local operations due to a high degree of speculative activity, where the information background can become the main motive for market changes. In terms of technical capabilities, it is worth looking at deviations from the psychological level, analyzing the price consolidating points beyond them.

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Indicator analysis

Analyzing different sectors of time frames (TF), we see that the indicators of technical instruments do not signal a buy, due to price fluctuations above the psychological level of 1.3000.

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Weekly volatility / Volatility measurement: Month; Quarter; Year

Measurement of volatility reflects the average daily fluctuation, calculated per Month / Quarter / Year.

(It was built considering the publication time of the article)

The dynamics of the current time is 39 points, which is 67% below the average. We can say that such a low volatility will be temporary, and even in case of stagnation, we will see growth relative to the current level by 100-150%.

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Key levels

Resistance zones: 1.3200; 1.3300 **; 1.3600; 1.3850; 1.4000 ***; 1.4350 **.

Support zones: 1.3000 ***; 1.2770 **; 1.2620; 1.2500; 1.2350 **; 1.2250; 1.2150 **; 1.2000 *** (1.1957); 1.1850; 1.1660; 1.1450 (1.1411).

* Periodic level

** Range level

*** Psychological level

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GBP/USD forecast for October 12, 2020

GBP/USD

The pound went up to 100 points and stopped at the Fibonacci level of 61.8% on Friday. The Marlin oscillator broke out in the zone of a growing trend after a long time of work. Now the price will have to work out at the next Fibonacci level of 50.0% with the price of 1.3120.

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On a four-hour scale, the price is fixed above the indicator lines. The Marlin oscillator develops in a positive zone and the price is preparing for further growth. However, in the short term, we are not sure that with the upper limit of consolidation in the first half of August (marked with a gray rectangle on the daily chart), the price will break higher. If only the EU and London suddenly agree on an amicable "divorce".

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Forecast for AUD/USD on October 12, 2020

AUD/USD

The Australian dollar significantly increased by 80 points last Friday. The price approached the target level of 0.7270. The signal line of the Marlin oscillator has entered the zone of positive numbers, into the growing trend zone. The price breakout above the 0.7270 level opens the way for the price to reach the target level of 0.7345, which is the peak on September 16, the 0.7365 target is located a little higher - this is the upper border of the price channel of the higher timeframe.

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But here comes an important feature. Since the ongoing growth is corrective in nature, a reversal can occur without reaching any designated target level, which forces us to be more careful and reduce the risk when opening long positions.

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The price has settled above the last highs of October 1 and 6 on the four-hour chart. Growth continues with the support of the Marlin oscillator, which has moved into the positive trend zone. We are waiting for the gap to close and the price to rise to 0.7270.

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Hot forecast and trading signals for EUR/USD on October 12. Buyers ready to rally towards 1.1855 and 1.1900, but bearish

EUR/USD 1H

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The EUR/USD pair resumed its upward movement quite unexpectedly on the hourly timeframe on October 9, although it had experienced obvious problems with this several days before. However, the Kijun-sen line was once again overcome and the upward movement continued. An ascending channel was also formed on Friday, which now supports bull traders. A price rebound from the upper line of this channel can trigger a downward correction. As we can see from the slope of the channel, the upward trend is not too strong, and corrections are quite frequent. Nevertheless, at a leisurely pace, the pair can reach the levels of $1.19 and $1.20 in the next two weeks.

EUR/USD 15M

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Both linear regression channels turned to the upside on the 15-minute timeframe, which fully corresponds to the picture of what is happening on the hourly timeframe. Thus, there are no signs of starting a new round of the downward correction on the 15-minute chart.

COT report.

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The EUR/USD pair has risen in price by about 120 points during the last reporting week (September 29 - October 5). But in general, there are still no significant price changes for the pair. In fact, all trades are held in a horizontal range of 250-300 points. Thus, data from any Commitment of Traders (COT) report can only be used for long-term forecasting. The latest COT report showed that non-commercial traders, which we recall, are the most important group of traders in the forex market, closed 10,784 Buy-contracts (longs) and opened 2,078 Sell-contracts (shorts). Take note that two weeks earlier, the "non-commercial" group was relatively active in building up long positions, but now it is decreasing its net position for the second consecutive week. This may indicate that the upward trend for the pair is over. Or it is about to end. We have already said that the lines of the net positions of the "commercial" and "non-commercial" groups (upper indicator, green and red lines) diverge strongly when a trend change occurs. If this is the case, the peak point of the upward trend will remain at $1.20. The net position of non-commercial traders was at its highest (green line) at this point. After reaching this level, it falls steadily. Thus, the pair may try to make another upward breakthrough as a final assault on the bulls, but you should hardly expect the pair to go much higher than the 20 figure.

No macroeconomic background for EUR/USD on Friday, October 9, while the fundamental background remained unchanged. We have already mentioned that the probability of strengthening the US dollar before the presidential elections in the United States is extremely low. Thus, by and large, news and reports, in principle, do not have a strong impact on the pair's movement. Traders simply do not risk serious dollar investments when they don't understand what will happen to the country in a month or two. A trade war with China, its development or de-escalation depends entirely on who will become the new owner of the White House. If it is Trump again, then there is no doubt that the war with China will continue. And, as we have already figured out in the previous articles, the results of the confrontation with China for America are very dubious. So the equation is extremely simple: Trump's election victory = de-escalation of the trade war = new challenges for the American economy. That is why the majority of market participants do not risk investing in the dollar at this time.

We have two trading ideas for October 12:

1) The pair was in an open flat for several days, but now it is moving up. Thus, buyers can continue to trade the pair upward while aiming for 1.1855 and the resistance area at 1.1888-1.1912, as long as the price remains above the Kijun-sen line (1.1778). Take Profit in this case will be up to 80 points. We draw your attention to the fact that the price is often corrected.

2) Bears have not been able to build on their success and gain a foothold below the support area of 1.1701-1.1725. Thus, sellers need to wait for the next chance and to get the price to settle below the rising channel in order to open new short positions while aiming for the Senkou Span B line (1.1710). In this case, the potential Take Profit is up to 40 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 EUR/USD pair. October 12. Displeasure and constant criticism from the markets and the media, as the main

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: 194.8288

For the EUR/USD pair, the last trading day of the week was quite active. The European currency corrected to the moving average line once again, bounced off it, and resumed its upward movement. Given the fact that no macroeconomic reports were planned for this day in the US and the EU, we can draw a clear conclusion: the new growth of the euro currency was not related to statistics. There was also no news on Friday. Therefore, we tend to believe that the reason for the new fall in the US currency lies in the same factors that we have already listed repeatedly - the fundamental background. A few months ago, we started writing that the epidemiological, economic, social, and political situation in the United States is much worse than in the European Union. And it was these "four American crises" that "beat" the US dollar in the last six months. What has changed in recent weeks? Nothing. America has finally managed to suppress mass protests, rallies, and riots caused by two racist scandals at once. However, this was the least of the four problems. Economic – has not gone away. Moreover, due to the inability of Republicans and Democrats to work "in the same cart", the US economy cannot now receive an additional package of stimulus measures. The political problem is still there. Elections are approaching and all the top political circles are busy with this issue, not solving urgent problems. The epidemiological situation is also not improving. Every day in America, 40-45 thousand people are still infected. Therefore, why should the US currency suddenly start to be in demand in the foreign exchange market? This should also include the uncertainty factor also associated with the presidential election. Investors and traders simply don't want to invest in the US economy and the dollar for the long term until it's clear who will be the next president? The only chance to strengthen the US dollar is only a technical factor. But, as we can see, over the past few months, traders have not managed to correct the pair by more than 300-400 points after a 1300-point increase.

In principle, the activities of any manager can be evaluated quite easily. The more the president or the government as a whole is criticized, the higher the level of dissatisfaction with his actions among the population. Of course, we are talking only about democratic countries where there are opposition forces, and all power is not concentrated in the hands of one person. America is such a country, thus, the opinion of their media can be trusted. Also, there is the opposition, there are a huge number of high-ranking officials, and all of them are not afraid to express their opinions and criticize the government, because they do not dance to the tune of one person or a group of people. Let us go back to Donald Trump. In articles on the pound/dollar, we regularly "update" the "list of Boris Johnson's victories". In principle, if you want, you can make a similar "list of victories" of Donald Trump. Only in the case of the American president, this list will also include items that do not correspond to the statements and promises of the leader of the American nation. For example, about the fight against the "coronavirus", the confrontation with China, the situation with the impeachment, and blackmail of the President of Ukraine can be written down as a liability to Trump. And this is just the first thing that comes to mind. You can also recall Trump's repeated statements about "the maximum growth of the US economy in the entire history of the country" and "a brilliant new era". However, the US president naturally does not mention the fact that the growth of all economic indicators began under Barack Obama, and only continued under him. Therefore, the foundation was not laid by Trump. Well, Americans will remember the "brilliant new era" for a long time. And we are still deliberately not delving into more internal issues and problems, like health care reform, which, according to everyone, "flourished" under Barack Obama and "withered" under Donald Trump. The fight against the "coronavirus" has already resulted in the loss of more than 210 thousand Americans. Anthony Fauci, the chief epidemiologist of the United States, who warned from the very beginning about the highest danger of COVID-2019, predicts 400,000 deaths from this virus. And Donald Trump, meanwhile, continues to urge not to be afraid of the "Chinese virus" and compare it to the flu. At the same time, Trump continues to accuse China of "releasing this infection", and therefore contradicts himself. If "the virus is not to be feared", then why blame China so much if "the virus is not so dangerous"? However, contradictions are an integral part of the essence of the Trump administration.

Further, the trade war with China has failed. The American president wanted to achieve a reduction in the trade balance with China, but, as official statistics show, the trade deficit with China has not decreased much since the beginning of 2018. And if you take the overall US trade deficit, it has increased even more during the four years of the Trump administration. While China's trade surplus increased. Various analytical agencies and publications make various calculations and conduct analyses, according to which it is extremely difficult to find at least one point on which America would benefit from a confrontation with Beijing. About 300,000 Americans lost their jobs due to the trade war. China's purchases of American goods fell by 30%. Also, Trump continued to fight with China not only on the economic front. "The Hong Kong issue", "the Xinjiang issue", the fight against TikTok, the closure of Chinese consulates in the United States, and sanctions. What's the use of all this?

Well, there is no need to talk about politics at this time. The power struggle has always been and always will be in any country. However, in key issues and in the most difficult times, all the opposing forces must unite and help their country and their economy. What do we see in the US? The Democrats' four-year war against Trump. Not "against the Republicans," but "against Trump". Now there are three weeks left until the elections, and we can say with confidence that until the issue of power is resolved in the country, it makes no sense to expect a strengthening of the US currency. Just because Donald Trump in 2020 is personified with the fall of the American economy.

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The volatility of the euro/dollar currency pair as of October 12 is 64 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1761 and 1.1889. 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 and continues its upward movement. Thus, today it is recommended to keep open long positions with targets of 1.1841 and 1.1889 until the Heiken Ashi indicator turns down. It is recommended to consider sell orders if the pair is fixed below the moving average with the first targets of 1.1719 and 1.1658.

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

Analytics and trading signals for beginners. How to trade EUR/USD on October 12? Getting ready for Monday session

Hourly chart of the EUR/USD pair

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The EUR/USD pair continued to move up on Friday, October 9, instead of moving down after it broke the rising trend line. This is what we have been talking about recently. Trading the pair often takes place in a not quite standard way, which leads to such movements that are not quite logical. However, in any case, beginners should not have received any losses on Friday, since we recommended trading down, and not a single sell signal was generated that day. But now we have formed a new upward channel, which supports bull traders. However, there are problems with this channel. The price is already near its upper line and rose by 100 points on Friday. Thus, it is now absolutely necessary to wait for the downward correction if you are considering buy options for the EUR/USD pair.

There was absolutely nothing to take note of in terms of Friday's macroeconomic news. The news calendar was completely empty in both the European Union and the United States. However, as is often the case, strong movement happens exactly when you are not expecting it. Actually, this is what happened on Friday. The US dollar went back to depreciating against both the pound and the euro, based on the same factor which is the upcoming elections and the sheer political confusion that reigns in America right now. Therefore, market participants simply returned to placing sell positions on the dollar from time to time, which are based on a negative fundamental background. One could note the fact that Republicans and Democrats again failed to agree on a new package of financial assistance to the American economy, and US President Donald Trump ordered to suspend negotiations altogether until the elections are over, but then again they have not been able to come to an agreement since early August. Nothing new here.

We can expect speeches from European Central Bank President Chrisitine Lagarde, and ECB Vice President Luis de Guindos on Monday, October 12. These two figures have recently been speaking almost every other day. Nevertheless, we still do not expect any fundamentally new information from them. We also do not expect a change in the fundamental background for the euro/dollar pair. Thus, a not too strong upward movement with frequent pullbacks and corrections is likely to continue.

Possible scenarios for October 12:

1) Buy positions on the EUR/USD pair have suddenly and unexpectedly become relevant at the moment since the upward trend line was canceled, and an ascending channel was formed. However, first you need to wait for the price correction to the lower area of this channel, and the MACD indicator to discharge to zero. After doing so, you can finally open new long positions with targets around 1.1800 and above.

2) Selling has lost its relevance at the moment, but the most interesting thing is that the quotes will most likely begin to fall on Monday, since the price reached the resistance level of 1.1832 and the upper line of the ascending channel on Friday. Thus, the probability of a 50-60 point downward correction is extremely high. The most risky traders may even try to work out this pullback, but we advise you to take restrictive Stop Loss orders. In general, short positions will become more attractive when the price settles below the rising channel.

On the chart:

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

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

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

The MACD indicator (10,20,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).

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

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

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