EUR/USD: plan for the European session on October 13. COT reports. Bulls' optimism is gradually fading away. Bears aim for

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

There were no signals for entering the market in the afternoon given the low volatility of the market, and Columbus Day in the US, although it is already obvious that Friday's bullish momentum is gradually fading away, and the pressure on the euro is returning.

Nothing has changed from a technical point of view since none of the levels that we mentioned yesterday were tested. The only way for the euro to grow is if a breakout appears and the price settles above the resistance of 1.1824, which will open a direct road to new highs in the 1.1868 and 1.1915 areas, where I recommend taking profits. However, we can expect such a strong bullish momentum in the beginning only if the latest inflation indicators in Germany turn out to be good, as well as if we receive a high assessment of the sentiment of the eurozone business environment. The reports are scheduled for release in the first half of the day. If the pressure on the pair persists further, and this option is more realistic, testing support at 1.1783, where the moving averages pass, playing on the side of buyers, will become a more optimal buying scenario. However, it is possible to open long positions from this level only if a false breakout is formed there. If bulls are not active, I advise you to hold back from buying the euro to a larger support area of 1.1737, from where you can enter the market immediately on a rebound, counting on a correction of 30-40 points.

analytics5f854a4c03b6f.jpg

The Commitment of Traders (COT) report for October 6 showed a reduction in long positions and an increase in short positions, which led to an even greater decrease in the delta. Buyers of risky assets believe in sustaining the bull market, but prefer to proceed with caution, as there is no good news about the eurozone and the pace of economic recovery so far. Thus, long non-commercial positions decreased from 241,967 to 231,369, while short non-commercial positions increased from 53,851 to 57,061. The total non-commercial net position decreased to 174,308, against 188,116 a week earlier. which indicates a wait-and-see attitude of new players. However, bullish sentiments for the euro remain rather high in the medium term.

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

The bears failed to emerge in the afternoon, since they did not reach resistance at 1.1828, and also failed to test support at 1.1783. An important task for the sellers of the euro is to form a breakout and settle below the 1.1783 area, which forms a new entry point for short positions with the goal of falling to a low of 1.1737, where I recommend taking profits. If the pair rises in the afternoon, one can expect a rebuff from the bears at the 1.1824 level. However, I recommend opening short positions from it only if a false breakout is formed there. In case bears are not active, as well as quite good data on German inflation, it is best not to rush to sell, but to wait until a larger resistance at 1.1868 has been updated, from where you can sell the euro immediately on a rebound, counting on a correction of 20-30 points within the day...

Indicator signals:

Moving averages

Trading is carried out in the area of 30 and 50 moving averages, which indicates a slowdown in bullish momentum.

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 classic daily moving averages on the D1 daily chart.

Bollinger Bands

A breakout of the upper border of the indicator in the 1.1824 area will lead to a new wave growth for the euro. A breakout of the lower border of the indicator around 1.1794 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

Analytics and trading signals for beginners. How to trade EUR/USD on October 13? Plan for opening and closing trades on Tuesday

Hourly chart of the EUR/USD pair

analytics5f8546993425f.jpg

The EUR/USD pair began a new round of corrective movement last Monday night, as we expected in yesterday's evening article. Thus, at the moment we conclude that the correction continues, and the price may fall to the lower line of the ascending channel. Take note that the price has reached the support level of 1.1791, the level from which it rebounded yesterday. Thus, it is quite possible that the correction will be completed in the near future. The MACD indicator has discharged to the zero level, as we wanted, so now we can look for new entry points to the market and wait for buy signals. In general, the trend for the euro/dollar pair remains moderately upward. Not too large a channel slope and frequent corrections indicate that buyers are not rushing to the market at breakneck speed. However, the sellers' positions are even weaker.

The fundamental background for the EUR/USD pair, in principle, remains the same, as can be seen from the nature of the pair's movement, which does not change. To date, we will only receive minor reports from the European Union today, which are unlikely to pique the interest of traders. You can pay attention to these reports, but you should not wait for the market reaction to them. First of all, we are talking about inflation in Germany, which, like in the entire European Union, is already in deflation (negative inflation = falling prices instead of rising). According to experts' forecasts, deflation in Germany will remain so until the end of September. However, as we mentioned in yesterday's article, you should not attach too much importance to this factor. The euro has significantly grown in the past six months, which also affects inflation due to import-export operations. The same goes for US inflation, which is scheduled to be published this afternoon. In annual terms, this figure may be +1.4%. Inflation excluding food and energy products (more precise inflation) may be +1.7% y/y. However, the same thing - due to the strong decline in the dollar in recent months, this value can be misleading. In general, we believe that there will be no reaction today even to such important indicators as inflation. The whole world continues to recover from the coronavirus crisis, and is also preparing for its second wave. Therefore, almost all macroeconomic indicators, except for the most important ones, such as GDP, remain a formality at this time. Political and epidemiological factors remain in the first place in terms of importance.

Possible scenarios for October 13:

1) Buy positions on the EUR/USD pair remain relevant at the moment due to the fact that the price continues to move inside the ascending channel. The downward correction may end near the support level of 1.1791. If the price overcomes this level before the MACD indicator turns up, forming a new buy signal, then the correction will continue to the lower border of the rising channel. When forming a buy signal, the targets will be the resistance levels 1.1830 and 1.1847.

2) Sell positions are currently not relevant. Traders could have earned several tens of points on a signal of a price rebound from the upper channel line, but we do not recommend opening new short positions at this time. To do this, you need to wait until the current upward trend has been cancelled, that is, for the price to settle below the upward 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

Elliott wave analysis of GBP/JPY for October 13, 2020

analytics5f8543d7168d1.jpg

GBP/JPY has not yet broken below minor support at 136.77 to confirm that the rally from 133.08 has been a leading diagonal. Taking into consideration that this is the case for EUR/JPY the odds for GBP/JPY to produce a similar pattern is rather high. Therefore, GBP/JPY could break below minor support at 136.77 as red wave ii is moving towards the 38.2% corrective target ar 136.04 which is close to the low of red wave iv/ of one lessor degree at 135.78. So, red wave ii may hit 135.78 - 136.04.

Once red wave ii is complete, a new rally to 147.72 and above is expected.

R3: 138.36

R2: 137.87

R1: 137.68

Pivot: 137.42

S1: 137.19

S2: 136.84

S3: 136.38

Trading recommendation:

We will take profit for 50% of our long GBP-position from 135.27 here at 137.47 and we will re-buy GBP at 136.15 or upon a break above 138.31.

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

Technical Analysis of ETH/USD for October 13, 2020

Crypto Industry News:

Asic Jungle has launched a beta version of what it calls "the first ever mining market." Company president Artem Bespaloff said he has created a trusted platform for used mining equipment that works without intermediaries:

"[This is] the first and only online marketplace where buyers can interact directly with sellers through the platform, and they don't need to use Telegram brokerage services or channels as so many different things are happening there. We set out to create this ecosystem where buyers and sellers trade with each other. "

The company's solution to these problems is a two-way marketplace that connects ASIC buyers and sellers in a safe and transparent environment. According to Bespaloff, ASIC brokers currently charge high premiums that take advantage of the lack of price sensing mechanisms on the market. He believes that these brokers create an information asymmetry by concealing relevant information.

Bespaloff said Asic Jungle maintains a number of security features to ensure that transactions take place in a trusted environment, including an emphasis on AML compliance. As the Canadian-based company will serve global customers, it intends to comply with both local laws and regulations and the compliance regulations of the United States.

Although mining equipment becomes progressively less efficient over time, Bespaloff ensured that there is a great demand for equipment used in locations with very cheap or free energy sources, such as some areas of Canada and Venezuela - although residents of the latter may be excluded from participating in an effort to comply with US sanctions.

Both Bitcoin and Ethereum have experienced a large increase in hashrate recently, indicating there will be plenty of interest in mining hardware in the near future.

Technical Market Outlook:

The ETH/USD pair has broken out of the Triangle pattern and made a new local high at the level of $394.75. The momentum is still strong and positive, so there is still a chance that after the pull back is terminated, the level of $400 will be hit again. So far the market had made the Pin Bar candlestick pattern at the top of the breakout and is slowly coming off the highs. The nearest technical support is seen at the level of $369.37 and $375.52.

Weekly Pivot Points:

WR3 - $440.56

WR2 - $409.44

WR1 - $39440

Weekly Pivot - $363.37

WS1 - $349.03

WS2 - $317.19

WS3 - $302.61

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. Moreover, bulls had bounced from the weekly trend line support last week and now are away from it. 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.

analytics5f85435324dd2.jpg

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

Elliott wave analysis of EUR/JPY for October 13, 2020

analytics5f8541b4c9d03.jpg

With the break below minor support at 124.33, it is clear that the rally from 122.34 has taken the shape of a leading diagonal, that completed with the test of 125.09 in wave i and wave ii is now in motion. The first corrective decline from 125.09 to 124.16 is in five waves indicating a zig-zag is in motion. After a minor rally to 124.73, we expect the second decline in wave c closer to the 50% corrective target at 123.71. Wave iv/ of one lessor degree completed at 123.80. Wave ii may well hit 123.71 - 123.80 wave ii to set the stage for the next impulsive rally higher to 127.02 and above.

R3: 124.73

R2: 124.62

R1: 124.51

Pivot: 124.47

S1: 124.29

S2: 124.04

S3: 123.80

Trading recommendation:

We have closed 50% of our long position from 123.10 at 124.35. We will re-buy EUR at 123.85 or upon a break above 125.09.

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

Technical Analysis of BTC/USD for October 13, 2020

Crypto Industry News:

Members of the lower house of the Spanish Congress saw a surprise in their inbox, the equivalent of 1 Euro in crypto.

As reported by the Spanish news agency ABC, the plan is spearheaded by Tutellus, a decentralized platform to tokenize educational technology, and the Blockchain Observatory. The project aims to promote the use of cryptocurrencies in the country.

All 350 members of the lower house of Spain, i.e. the Congress of Deputies, received the equivalent of 1 Euro in cryptocurrency in their e-mails. Miguel Caballero, founder of Tutellus, said the goal is to raise awareness of the future role of cryptocurrencies in society:

"We have explained to your esteemed members that we are in a time of profound changes in the use of money, and we also highlighted the important role cryptocurrencies play today."

Caballero said the cryptocurrency "is not a donation" and admitted that some members of congress may be more familiar with cryptocurrencies. But for those who are not yet experienced with them, this is an opportunity to learn more, said Caballero.

Spain isn't the first country to send cryptocurrencies to lawmakers. The Political Action Committee (PAC) of the Chamber of Digital Commerce sent $ 50 worth of Bitcoin to all 541 members of Congress in early October.

Technical Market Outlook:

The BTC/USD pair has broken out from the Triangle pattern and made a new local high at the level of $11,679, just above the technical resistance seen at $11,646. Please notice, Bitcoin is now entering the supply zone located between the levels of $11,646 - $11,785, so some kind of the bearish pressure might be seen. In that case, the price might pull-back towards the technical support seen at the level of $11,233 or $11,062. Any violation of the last one will likely result in a further correction towards the level of $10,940 or below.

Weekly Pivot Points:

WR3 - $12,712

WR2 - $12,078

WR1 - $11,737

Weekly Pivot - $11,125

WS1 - $10,786

WS2 - $10,156

WS3 - $9,820

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.

analytics5f85417259137.jpg

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

Technical Analysis of EUR/USD for October 13, 2020

Technical Market Outlook:

The EUR/USD pair has hit the level of 1.1822 again. This is the 61% Fibonacci retracement level on the weekly time frame chart and had been tested many times in the past. The momentum is still strong and positive, so bulls can break higher and hit the next target seen at the level of 1.1908. In a case of a failure here, the nearest technical support is seen at the level of 1.1790 and it being tested by bears. Any violation of this support will lead to another leg down towards the level of 1.1724.

Weekly Pivot Points:

WR3 - 1.2004

WR2 - 1.1916

WR1 - 1.1875

Weekly Pivot - 1.1792

WS1 - 1.1756

WS2 - 1.1665

WS3 - 1.1629

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 seen at the level of 1.2004. 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.

analytics5f853f4ec03d8.jpg

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

Technical Analysis of GBP/USD for October 13, 2020

Technical Market Outlook:

The GBP/USD pair has broken out of the channel zone and now is trading around the technical resistance located at the level of 1.3059. The local high was made at the level of 1.3081. If the momentum still be strong and positive, the next target for bulls is seen at the level of 1.3121 and 1.3169. The nearest intraday support is located at the level of 1.3006. There is no sign of up trend reversal at the H4 time frame chart yet, but please notice the market conditions are starting to become overbought.

Weekly Pivot Points:

WR3 - 1.3328

WR2 - 1.3191

WR1 - 1.3137

Weekly Pivot - 1.2992

WS1 - 1.2933

WS2 - 1.2792

WS3 - 1.2730

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).

analytics5f853e7b419e1.jpg

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

EUR / USD. All attention is on American inflation

The US dollar index continues to trade flat in anticipation of today's release. Mainly, the "full-fledged mode" of the currency market started working only on Tuesday as the States celebrated yesterday their Columbus day while Thanksgiving day in Canada. Accordingly, American and Canadian trading platforms were closed. Major currency pairs showed weak price fluctuations taking advantage of the "semi-exit".

Nevertheless, the dollar index slightly strengthened its position throughout the market although it remained in the flat corridor at the end of Monday. The bears were unable to lower the indicator below 93.00, after which the greenback showed a corrective growth. The formal reason for this growth was the information that the White house is ready to compromise on the issue of agreeing on a new package of incentives. The trump administration raised the bar to $1.8 trillion, while the previously allowed maximum was at the level of one and a half trillion dollars. Greenback's reaction was weak because the amount proposed by the White house is still 400 billion less than the one that the Democrats insist on and the Republican senators oppose such an expensive bill. As of this moment, the situation is up in the air: Treasury Secretary Steven Mnuchin will discuss the proposal with House speaker Nancy Pelosi this coming Friday. Until then, the market will be guided in this matter only by backstage rumors.

analytics5f85497c2a5da.jpg

Therefore, the dollar index could only move away from the support level of 93.00, but did not go up above 93.22. The currency pairs of the "major group" showed approximately the same trajectory. The dollar to some extent demonstrated its superiority, although against the background of low volatility and this superiority was expressed in minimal volumes.

By the way, the support for the greenback (this time as a protective tool) was also provided by the IMF report, which turned out to be very pessimistic. The international monetary Fund is concerned not only about the coronavirus pandemic but also about climate change. The head of the organization Kristalina Georgieva called on the authorities of countries with the largest amount of emissions to the environment to set a minimum cost of carbon quotas. According to the Foundation's experts, "climate change possesses a serious threat to global economic growth and prosperity."

All of the above factors had only an indirect and/or short-term impact on the dynamics of the US currency. Now we can not talk about a clear advantage of the dollar but in my opinion, the greenback will remain vulnerable for several more weeks – at least until the beginning of November, when the presidential election will be held. Investors fear a political clinch and lengthy legal proceedings if Trump does not recognize the results of the vote. According to all polls, Biden is currently in the lead but the current head of the state has already recovered from the coronavirus and is now going on an election tour in which his position may significantly strengthen. In other words, the intrigue of the upcoming elections persists, so traders are likely to be wary of the dollar until the end of this epic.

For shorter-term periods, the reaction of dollar pairs depends on the dynamics of the key economic indicators. So, the growth of US inflation can provoke quite strong volatility especially if they come out in the "red zone". According to preliminary data, the overall consumer price index in monthly terms should grow in September by only 0.2% on a monthly basis and by 1.2% on an annual basis. The core index excluding food and energy prices should show similar dynamics: (+0.2 m/m; +1.6% y/y). In other words, experts expect a slowdown in inflationary growth, which is fraught with a weakening of the dollar. Although in my opinion, the greenback will significantly decrease throughout the market only in the case of a "red zone" if the published figures does not reach the forecast values.

analytics5f85497fa7483.jpg

For the Euro-dollar pair, there is a possible price increase for other reasons. Reuters reported yesterday that representatives of the ECB do not intend to follow the example of the Federal reserve and are not going to introduce a policy of targeting average inflation. As an unnamed source of the news Agency noted, "there are concerns that such a policy will lead to unrealistic expectations." Unfortunately, Reuters journalists did not specify exactly how many members of the regulator hold this opinion. But the very fact of such doubts may support the Euro, especially if in the future one of the ECB members voices a similar position.

Thus, the dynamics of the EUR/USD currency pair today will largely depend on the dynamics of the American inflation. If you trust the preliminary forecasts, you can open longs from current positions with the first Northern target at 1.1880 (the upper boundary of the Kumo cloud coinciding with the upper line of the Bollinger Bands indicator). But the option of opening trading positions based on the result of today's release looks more reliable. If inflation turns out to be on the side of the dollar, this will allow you to open long positions of EUR/USD on the decline at a more favorable price.

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

AUD/USD forecast for October 13, 2020

AUD/USD

The Australian dollar did not close the gap at the opening of the week, so the current decline of 65 points from Friday's close may only be a correction from the growth of the previous days. According to Monday's review, the possible growth will also have the character of a correction from the movement starting September 1 and may end before reaching any of the target levels even at the nearest 0.7270.

analytics5f85262ba566e.jpg

The Marlin oscillator went into a downward trend zone. Formally, this means that the price is moving towards the first target level of 0.7055, but let's look at the situation on a smaller chart.

analytics5f85262eef02c.jpg

On the H4 chart, there is currently no price fixing under the level of 0.7190. The next candle should open under this level to achieve this. Also, the price remains above the Kruzenshtern indicator line at 0.7143 and even above the balance indicator line, i.e. the observed decline occurs within the growing short-term trend. Only the Marlin oscillator reminds the price that it is time to finish with growth but is still weak.

So, for the development of a downward scenario in the short term up to two weeks, the price should be fixed under the Kruzenshtern line below 0.7143. In the case of a medium-term decline in the AUD/USD currency pair, the impact of the gap (especially insignificant) can be ignored, sometimes they are closed only after a few years.

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

Forecast for EUR/USD on October 13, 2020

EUR/USD

The euro traded in a small range on Monday, closing the day near the opening, but still below the balance indicator line on the daily chart. The signal line of the Marlin oscillator is turning down; there is not much left before it transitions into the downward trend zone. A condition for a steady decline, to a low of 1.1650, is when Marlin transitions to the zone of negative values and the price falls below the 1.1754 level (low on August 21 and September 9).

analytics5f8527c6d9f3e.jpg

The price is still above the balance indicator line and the MACD indicator line on the four-hour chart. Of course, the price must also overcome it in order to create a stable signal for declining further. This transition may take place around the first target level of 1.1754.

analytics5f8527c9d554f.jpg

The triple divergence on the Marlin oscillator began to affect the technical behavior of the price. This morning, the signal line of the oscillator has penetrated the zone of negative values, which increases the probability of the price overcoming the first support of 1.1754.

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

Forecast for USD/JPY on October 13, 2020

USD/JPY

The price hit the first target level of 105.30 on Monday. Getting the price to settle below the lower timeframe on the chart will lead to an attack on the significant support at 105.00, overcoming it may cause the quote to fall to 103.75 (high on May 2013).

analytics5f85277083941.jpg

But the price could also move up from the current level, to leave the area above 106.26 and rise further to 106.96 and above. A sign of this is the Marlin oscillator's readiness to return to the zone of positive values on the daily chart.

analytics5f852773dffba.jpg

The four-hour chart shows that the price fell to the target level and is choosing its next direction The Marlin oscillator does not provide any clues, although it is in a downward trend, it already outlines a reversal, but the main thing is that Marlin is now in a leading position, following the price, not ahead of it. The price must go above the MACD line (105.77) to create a condition for growth. At the same time, Marlin will enter the positive zone. We are waiting for the development of events.

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

Hot forecast and trading signals for EUR/USD on October 13. COT report. Lagarde is thinking about introducing a digital euro

EUR/USD 1H

analytics5f85063a5762b.jpg

The EUR/USD pair began to correct on the hourly timeframe on October 12, rebounding off the upper line of the ascending channel. Thus, the pair's quotes have an excellent opportunity to go down to the Kijun-sen line or even to the lower channel line. This option is absolutely possible given the nature of the pair's movement last week. At the same time, as long as the price continues to move within the channel, the upward trend remains. It is not too strong, we have already said that traders are afraid of making new critical longs on the euro around its two-year highs and they are also cautious due to the words of the European Central Bank representatives about the "too high rate". Bears see no reason or reason to sell the currency pair, given the fundamental backdrop from America.

EUR/USD 15M

analytics5f85063da7114.jpg

The lower linear regression channel turned to the downside on the 15-minute timeframe, which fully corresponds to the picture of what is happening on the hourly timeframe. Thus, there are signs of starting a downward correction, respectively, on the hourly timeframe, the pair may go down to the two designated targets.

COT report

analytics5f8506535c2e0.jpg

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 Monday, October 12, although ECB President Christine Lagarde delivered a speech. However, this time her speech at the video conference was not devoted to the monetary policy of the ECB, but to the possible creation of a digital euro. According to Lagarde, a final decision on this issue has not yet been made, and the digital euro is in no way seen as a replacement for fiat money, but only as an addition to it. Lagarde believes that the process of creating an electronic state currency will be very laborious and slow, but in the end, the electronic euro will be much more profitable than printed money, and at the same time it will be much faster, cheaper and safer. There were no other important messages and macroeconomic reports that day. Thus, quiet trading with volatility of no more than 40 points is absolutely logical and easy to explain.

We have two trading ideas for October 13:

1) The pair continues to trade within the ascending channel, which has a small slope. In other words, the upward trend is not strong and with frequent corrections. Thus, buyers can continue to trade the pair upward while aiming for 1.1868 and the resistance area at 1.1888-1.1912 as long as the price is above the Kijun-sen line (1.1778). Take Profit in this case will be up to 80 points. You can open new longs in case the price rebounds from the critical line.

2) Bears are not in control of the market at the moment. Thus, sellers need to wait for the next chance and get the price to settle below the rising channel to be able 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. Further downward movement will entirely depend on overcoming the Senkou Span B.

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

Commodity currencies AUD/USD & USD/CAD & NZD/USD on 4-hour charts: Comprehensive analysis of APLs & ZUP traffic

Has the US Dollar reclaimed its positions from commodity currencies? Review of options for the development of the AUD/USD & USD/CAD & NZD/USD H4 movement from October 13, 2020

---------------------------

Australian Dollar vs US Dollar

The movement of the Australian dollar AUD/USD from October 13, 2020 will be due to the development and direction of the breakdown of the boundaries of the 1/2 Median Line channel (0.7205 - 0.7225 - 0.7245) of the Minuette Operational Scale Fork.

If the support level of 0.7120 is broken at the lower border of the 1/2 Median Line channel in the Minuette Operational Scale Fork, the downward movement of AUD/USD can be continued to the targets:

  • Median Line Minute (0.7160)
  • local minimum 0.7097
  • lower limit of ISL61.8 (0.7090) of the Minute operational scale forks equilibrium zone.

The breakdown of the resistance level 0.7245 at the upper border of the 1/2 Median Line Minuette will make it relevant to continue the development of the upward movement of the Australian Dollar to the equilibrium zone (0.7286 - 0.7316 - 0.7346) of the Minuette operational scale fork.

analytics5f851d96303a3.jpg

---------------------------

US Dollar vs Canadian Dollar

The movement of the Canadian Dollar with the USD/CAD pair from October 12, 2020 will depend on the development and direction of the breakdown of the range:

  • Resistance level of 1.3120 at the upper border of the channel 1/2 Median Line of the Minute operational scale forks
  • Support level of 1.3100 at the upper border of ISL38.2 of the Minuette Operational Scale fork equilibrium zone

Breakdown of the upper border of the channel 1/2 Median Line Minute (resistance level 1.3120) will be a variant of the upward movement of USD/CAD to the final Schiff Line Minute (1.3295) and the lower border of ISL38.2 (1.3330) of the equilibrium zone of the Minute Operational Scale forks.

In case of breaking the support level of 1.3100 at the upper boundary ISL38.2 Minuette Operational Scale fork equilibrium zone, the movement of the Canadian Dollar may continue to order:

  • 1/2 Median Line Minute (1.3065)
  • Median Line Minuette (1.3025)
  • lower limit of the channel 1/2 Median Line Minute (1.3005)
  • lower limit of ISL61.8 (1.2945) of the Minuette Operational Scale forks equilibrium zone.

analytics5f851d99761f3.jpg

---------------------------

New Zealand Dollar vs US Dollar

The Zew Zealand Dollar in the NZD/USD pair will continue to move from October 13, 2020, depending on the development and direction of the breakdown of the equilibrium zone (0.6640 - 0.6660 - 0.6680) of the Minuette Operational Scale forks.

When breaking the lower border ISL38.2 Minuette Operational Scale forks equilibrium zone (support level of 0.6640) the movement of NZD/USD may continue to the boundaries of the 1/2 Median Line Minuette channel (0.6633 - 0.6618 - 0.6603) the channel borders 1/2 Median Line (0.6565 - 0.6530 - 0.6495) of the Minute Operating Scale forks.

If the resistance level of 0.6680 at the upper boundary ISL38.2 of the Minuette Operational Scale forks equilibrium zone, there is an option to continue development of the upward movement of New Zealand dollar against the borders of the equilibrium zone (0.6700 - 0.6735 - 0.6775) of the Minute Operational Scale forks.

analytics5f851d9cd90ba.jpg

---------------------------

The review is compiled without taking into account the news background, the opening of trading sessions of the main financial centers,

and is not a guide to action.

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

Overview of the GBP/USD pair. October 13. The European Union is going to tighten the provisions of the Brexit deal due to

4-hour timeframe

analytics5f84ef685f490.jpg

Technical details:

Higher linear regression channel: direction - sideways.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - upward.

CCI: 155.4216

The British pound spent Monday in a weak upward movement again. However, after another price rebound from the moving average line (as in the case of the euro), the upward movement resumed, and on Monday there was not even a significant correction. Thus, the British pound continues to stay afloat, although the fundamental background can bring it down at any time. The only thing that keeps the pound from falling again is the fact that traders do not want to buy the dollar in the run-up to the presidential election and against the background of all the uncertainty and crisis that is currently observed in America. If there were not so many problems in the United States now, there is no doubt that we would be catching the pound somewhere in the range of $ 1.10- $ 1.20.

However, we can still do this in the coming months. We have repeatedly said that there are so many economic problems in the UK now that we simply can't count on anything other than the fall of the pound in the long term. And the British economy may face even more problems next year, which the country will finally spend outside the European Union. Experts estimate that over the next 10 years, the negative effect of the termination of all ties and agreements with the EU will not reach the British economy 3-4% of GDP. Thus, the British economy will not start to recover next year. It will continue to fall. A long-term decline or a contraction. And if the "coronavirus" fails to curb the British government in the near future, the Kingdom risks getting another serious blow from the second "wave" of the epidemic. In recent days, the incidence rates in Britain have declined and do not exceed 13 thousand per day. However, this is still a lot.

Meanwhile, as we said earlier, any negotiations between London and the European Union or other international partners may become much tougher. All thanks to the "Johnson bill", which has already been passed by Parliament in the second reading and simply violates the previous agreements between London and Brussels on the border on the island of Ireland. It is reported that during the EU summit on October 15-16, EU leaders will insist on tightening the rules for compliance with any bilateral agreements with the UK, as well as on improving the mechanism of sanctions and penalties for non-compliance with them by one of the parties. Simply put, Brussels has realized that Boris Johnson can break any agreement at any time, so they want to prescribe clear rules on how to act in such cases. Naturally, these rules will mean tougher penalties for London. The European Union wants to get the right to take any unilateral temporary measures in response to London's non-compliance with the agreements. We believe that any international partners of the Kingdom will now want to prescribe similar mechanisms in any agreement with the British.

Boris Johnson also had two phone conversations over the weekend. With German Chancellor Angela Merkel and French President Emmanuel Macron. Naturally, Brexit was discussed, and the British Prime Minister told his European colleagues that his country is ready to return to the WTO trade regime with the European Union. "The Prime Minister stressed that while reaching a deal in the coming days would be in the interests of both sides, the United Kingdom is also ready to start trading with the EU on the same terms as Australia after the end of the transition period if an agreement is not possible," 10 Downing Street said in an official statement. Johnson also expressed hope that a trade deal will still be possible, but few people still believe this. For example, the head of the Ministry for Foreign Affairs of Ireland Simon Coveney doesn't believe this. Coveney said that there remain serious differences between the parties on all key issues, in particular the issue of fishing and the issue of fair competition. "It is obvious that we will not reach a comprehensive agreement on the relationship between the European Union and Britain, but serious differences also remain on the way to agreeing on a deal in its most basic version," Coveney said. The Irish Foreign Minister also called the possible entry into force of the "Johnson bill" "a colossal mistake of British diplomacy and a gross violation of legal norms".

At the same time, the UK is going to introduce a new three-level system of countering the "coronavirus". It is expected that the entire country will be divided into districts based on the risk of infection. The first one will be the safest, and the third one will be the most dangerous. In areas of the third level, a "hard" quarantine or even a complete "lockdown" can be introduced. Bans in such areas will even apply to the movement of citizens on the streets. The process of fighting the pandemic is complicated by the dissatisfaction of British citizens. It is reported that the British are not happy with the new quarantine measures, high fines, and overall results of the government's fight against the epidemic.

Meanwhile, Bank of England Governor Andrew Bailey once again spoke about "negative rates". The regulator still states that it collects information from the banking system about the readiness or unwillingness of commercial banks to take such a step on the part of the Central Bank. The head of the BA also states that collecting information on this issue does not mean that such measures will be taken in the near future. However, as they say, "there is no smoke without fire". Market participants are waiting until the end of the year, at least, to expand the quantitative easing program from the current 745 billion pounds to 795 or 845 billion. However, the key rate is likely to be lowered again, possibly even before the end of the year. Most experts agree that the rate will be lowered with a 95% probability until May 2021. Thus, the Bank of England shows that the fears of traders and investors in the future of the British economy are absolutely not in vain. 2021 may be even more negative for the British economy than 2020. Well, the British pound in such conditions is unlikely to show stable growth. Unless the flow of disappointing fundamental and macroeconomic information from the US does not stop. Or Donald Trump will remain president for a second term.

analytics5f84ef70ed676.jpg

The average volatility of the GBP/USD pair is currently 92 points per day. For the pound/dollar pair, this value is "average". On Tuesday, October 13, therefore, we expect movement inside the channel, limited by the levels of 1.2973 and 1.3157. A new reversal of the Heiken Ashi indicator downwards signals a new round of downward correction.

Nearest support levels:

S1 – 1.3031

S2 – 1.3000

S3 – 1.2970

nearest resistance levels:

R1 – 1.3062

R2 – 1.3092

R3 – 1.3123

Trading recommendations:

The GBP/USD pair continues its steady upward movement on the 4-hour timeframe. Thus, today it is recommended to stay in long positions with targets of 1.3123 and 1.3157 as long as the Heiken Ashi indicator is directed upwards. It is recommended to trade the pair down with targets of 1.2909 and 1.2848 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 13. Donald Trump is back in line and the US dollar is falling again. Democrats and

4-hour timeframe

analytics5f84ef2ac7d2d.jpg

Technical details:

Higher linear regression channel: direction - sideways.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - upward

CCI: 83.4164

For the EUR/USD pair, the first trading day of the week was fairly calm and corrective. We were worried that the pair might go up sharply on Monday, contrary to common sense and traders' expectations, however, nothing happened. A normal corrective Monday with a minimum of macroeconomic and fundamental information. The upward trend for the pair remains fully maintained, thus, after a small correction to the moving average, the movement to the north may resume. Recently, the pair's quotes are very fond of bouncing off the moving average line to resume growth later. In general, the euro/dollar pair continues to trade in a very narrow price channel in the long term, with a width of no more than 300 points. This is a big channel for intraday or medium-term trading, but not for long-term trading.

The fundamental background for the pair did not change on Monday and could not have changed if only Donald Trump had not done something new and discouraging. However, none of this has happened, and the US currency continues its slow decline against the euro. We have already talked about this many times. In Europe, the economic situation remains more or less stable. The authorities are afraid of the negative impact on the economy of the second "wave" of the COVID-2019 epidemic, however, the virus is still more or less under control. At least in many EU countries. As for politics, the European Union is doing well on this issue. There is unity. At the key moment, the EU countries show their unity and commitment to a common goal, which helps to make the necessary decisions (like the budget for 2021-2027 or the fund for economic recovery after a pandemic). However, in the United States, the exact opposite of European reality. The number of daily recorded cases of "coronavirus" is so large and stable from day to day that it has even ceased to surprise anyone. The media write about the huge growth rates of the disease in France or the UK, however, they don't even remember about the States, although 40-60 thousand new cases are still registered every day, and the total number of infections has already exceeded 7.7 million. However, in the near future, the States may be pushed back from the first place of this anti-rating by India, which already has 7.1 million diseases. However, this fact can hardly console the US and the US currency.

Politics in America is even worse. Many media outlets and experts are now wondering whether Donald trump's COVID-2019 infection was staged? There is an opinion that Trump understands that it is the issue of the epidemic and the fight against it that can cost him victory in the election and is trying to belittle the seriousness of the virus in the eyes of voters. At the very least, Trump's infection three weeks before the election and his easiest recovery in 10 days raise some doubts about this issue. Moreover, Trump is quite capable of anything from the category of not quite fair play. The US leader has done other things before. Therefore, Trump may not have any illness at all. With this false illness, the president probably wanted to show that he (a 74-year-old elderly man with a decent excess weight) was easily and calmly cured of the "coronavirus" using the usual medications available to everyone. Will Americans believe him or not? The result will be known after the election.

Also, the issue of providing a new package of assistance to the American economy and American citizens is not being resolved and is not moving forward. According to not fully confirmed information, Steven Mnuchin had a conversation with Nancy Pelosi, during which he proposed a package of $ 1.8 trillion. According to preliminary information, the Democrats will refuse this offer, however, negotiations are still ongoing between the parties, and the difference in views on the scale of assistance to the American economy is less and less different (the Democrats insist on $ 2.2 trillion). Thus, there is still hope for reaching an agreement, but quite unexpectedly, several dozen Republican senators criticized this new project, calling it "excessively expensive". Thus, this aid package can be blocked by the Senate. The meaning is completely different. There are about three weeks left until the elections, and if the parties do not agree in the near future, then a week before the elections, no one will deal with this issue. For Trump, this stimulus package is still a way to increase his popularity among voters (the president wants to give Americans $ 1,200 in checks with his signature), and for Democrats, it is a way to provide comprehensive assistance to the American economy. However, for example, White House economic adviser Larry Kudlow believes that the Senate will still approve the aid project if Democrats and Republicans eventually agree.

Well, the US dollar does not react to this information. Market participants do not need hopes to help the economy in the future. Market participants are waiting for the improvement of the epidemiological situation, resolution of the political crisis, completion of elections, and all processes related to them (for example, legal proceedings on the grounds of possible fraud). And while this is nothing, they simply do not see any reason to buy the dollar. The euro currency also becomes more expensive very reluctantly. But here everything is easily explained. The euro has grown by 1,300 points since April, so this is its strongest period of growth since 2017. Traders are simply wary of continuing to buy the European currency near its two-year highs. If the pair still corrected down by 500-600 points, buyers would cheer up and resume long positions at relatively low price values. However, there was no strong correction. There was a two-month flat, and the way the pair is currently trading cannot be called a trend movement. Thus, we continue to stand by our opinion, which was voiced a few weeks ago. The US currency is unlikely to be in demand before the election. It may remain inside the 1.1620-1.1940 channel, which, although not completely sideways, is still close to it.

analytics5f84ef32d4e8a.jpg

The volatility of the euro/dollar currency pair as of October 13 is 53 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1753 and 1.1859. A reversal of the Heiken Ashi indicator back to the top may signal the end of the next 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 has started a new round of corrective movement. Thus, today it is recommended to open new long positions with targets of 1.1841 and 1.1859 after the Heiken Ashi indicator turns up. It is recommended to consider sell orders if the pair is fixed below the moving average with the first targets of 1.1753 and 1.1719.

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

GBP/USD. Pound hopes for "fish compromise"

The first trading day of the week shows a low level of volatility: first, the macroeconomic calendar on Monday is almost empty for the main currency pairs, and secondly, the States celebrate Columbus day, ergo American trading platforms are closed today. The market is preparing for the main events of the "shortened" week, which promises to be quite eventful. The results of another national poll regarding the ranking of Trump and Biden will be announced, key data on inflation growth will be published in the US and China, and an EU summit will be held in Brussels, which could decide the fate of the trade deals between the UK and the European Union.

Anticipating the latest event is the British currency, which continues to ignore negative signals of a fundamental nature, including those related to the spread of coronavirus in Great Britain. Brexit is the most anticipated topic for the pound, so all the attention of traders of the GBP/USD pair (as well as other cross-pairs with the participation of the British) will be focused on the results of the meeting of EU leaders, which will be held on October 15-16.

analytics5f8476cf05c9b.jpg

Last week, the GBP/USD pair pushed off from the support level of 1.2860 (the middle line of the Bollinger Bands indicator coincides with the lower border of the Kumo cloud on the daily chart) and headed up. For three trading days, which is until the weekend, the pair moved almost without recoil, and on Friday it showed an impulse growth, breaking the resistance level of 1.3000. The immediate reason for this price movement was the general weakening of the greenback, against the background of political uncertainty in the United States and the next failure of negotiations on a package of stimulus measures. However, the growth of GBP/USD was not only due to the decline of the greenback. Traders reacted to another batch of rumors from the fields of negotiations on a trade deal.

It is worth recalling that another discourse between representatives of London and Brussels ended on Friday. The heads of the negotiating delegations were stingy with comments, but still managed to put together a general "puzzle" from the fragmentary information. It became clear that the so-called "fish issue" was almost the last, but the most difficult issue in the negotiations. If the parties fail to reach an agreement by the end of the transition period, Britain could theoretically block access to its waters for EU vessels. First of all, the fishing fleets of France, Denmark, and Belgium will suffer.

It was reported last week that the chief negotiator from the EU, Michel Barnier, is ready to back down on this issue – he proposed a model based on the principle of "zonal binding" – that is, the British quota shares will depend on the length of stay of fish populations in the waters of the Kingdom. However, following the last negotiations, it became clear that the British categorically rejected this option. There was another piece of information over the weekend, or rather, another compromise scenario. According to rumors, Brussels is offering to compensate fishermen from EU countries for the damage by redistributing catch quotas that were allocated to British fishermen. Moreover, ahead of a key EU summit, Barnier called on Europeans to "curb their appetites" about maintaining existing fishing quotas in British waters. Based on what he said, it is necessary to "really assess the current situation" in the context of mutual compromise concessions.

In conclusion, the ball is currently away from the British, but on the side of the Europeans – if representatives of those two countries whose fleets are fishing in British waters agree to the proposed scenario, it will be a big step towards concluding a trade deal by the end of November. Most importantly, the position of the French is quite interesting for it has always taken the toughest position towards London in the Brexit negotiations. The outcome of the EU summit, which will begin in a few days, largely depends on their position.

By and large, there is an optimistic mood among traders of the GBP/USD pair. A spokesman for Boris Johnson said that the British side "will do everything possible this week to conclude a trade deal" today. Earlier, it became known that during telephone conversations between Johnson and Macron, the British leader confirmed his desire to conclude a deal with the EU.

analytics5f8476c3beddf.jpg

There is also another piece of information that indicates the desire of the parties to find a compromise. According to the German press, Michel Barnier met with German Chancellor Angela Merkel, with whom he agreed on all the "red lines" and acceptable compromises, last Monday. In turn, the German leader took a conciliatory position – at the end of last week, she even called on the EU to show flexibility in negotiations with London. This is an important trump card in the hands of the British, not only because of Merkel's significant influence on European politics, but also from the point of view of the fact that Germany holds the presidency of the EU Council until the end of this year.

Therefore, the fundamental background for the British currency has significantly improved – primarily (and mainly) due to Brexit-related news. All other fundamental factors are negative for the currency – the situation with the coronavirus (quarantine measures are expected to be tightened in Britain) and macroeconomic reports (which indicate a slowdown in recovery processes) – play against the pound. But, as mentioned above, Brexit is the most relevant topic for GBP/USD traders so, on the eve of the EU summit, the pound paired with the dollar is holding above the key mark of 1.3000. The pair is testing the resistance level of 1.3070 (the average line of the Bollinger Bands on the daily chart) at the moment. If buyers can overcome and gain a foothold above it, then we can consider long positions to the next resistance level, which is located much higher, at 1.3220 – the upper limit of the Kumo cloud on the same time frame.

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