Trading plan for the EUR/USD pair on October 14. Second pandemic wave in Europe.

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The situation is persistently turning bad in Europe, as many states continue to record high levels of incidence rate with coronavirus. The most notable of which is the United Kingdom, which recorded 17 thousand new cases, followed by France, which listed around 13 thousand. Meanwhile, the Czech Republic, Holland, Spain, Italy, Poland and Ukraine all recorded more than 5 thousand new infections per day.

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US stocks are set to remain in a bull market for a long period of time, undoubtedly repeating all the highs recorded last September. Nonetheless, sales can still be made, but as long as it has a small stop.

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EUR/USD: The euro dropped sharply yesterday, halting its upward impulsive wave.

Regardless, its further direction is still unclear, so perhaps, the upcoming Beige Book report of the Fed will determine what movement it will take.

Set up short positions from 1.1730 or 1.1720, and then place stop loss at about 45 pips.

Open long positions from 1.1830.

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

GBP/USD: plan for the European session on October 14. COT reports. Buyers of the pound could not withstand the pressure from

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

Buyers of the pound could not withstand the pressure from negative news, which are published almost daily in the UK. And so they retreated under the pressure of sellers, which led to a breakthrough of a rather important support level. The sharp rise in the unemployment rate, even with all the support measures provided by the government, is an extremely bad sign for the economic outlook in the UK. Hope for a trade deal is clearly not enough to keep the British pound at current highs.

The bulls currently need to defend support at 1.2924, since a lot depends on this level. It is unlikely for us to count on a divergence in these conditions, therefore, only a false breakout in the 1.2924 area can produce the first signal to buy the British pound. An equally important task will be to return resistance at 1.2991, where the moving averages are, which is playing on the side of the pound sellers. Settling above this range will open a direct way for the pound to reach the weekly high of 1.3056, where I recommend taking profits. In case GBP/USD falls further, and bulls are not active at the 1.2924 level, and this is more likely, it is better not to rush to buy, but to wait for an update on the next low in the 1.2848 area and then you can buy the pound there immediately on a rebound, counting on a 30-40 points within the day.

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The Commitment of Traders (COT) report for October 6 showed a minimal increase in short non-commercial positions from 51,961 to 51,996. Long non-commercial positions slightly rose from 39,216 to 40,698. As a result, non-commercial net position remained negative and reached -11,298 against -12,745, which indicates that sellers of the pound retain control and also shows their slight advantage in the current situation. The higher the pair grows, the more attractive it is to sell.

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

Sellers still have the market under their control, but in order for bulls to completely surrender, we need a breakout and have the pair settle below support at 1.2924 by today. Testing this level from the bottom up in the first half of the day forms a good entry point for short positions in order for the downward trend to continue falling to the support area of 1.2848. The long term goal at the end of the week will be lows of 1.2807 and 1.2749, where I recommend taking profits. There is no need to rush to sell in case the pair recovers in the European session. The optimal scenario for entering short positions is when a false breakout has formed in the resistance area of 1.2991. You can sell the pound immediately on a rebound from the weekly resistance of 1.3056, counting on a correction of 30-40 points within the day.

Indicator signals:

Moving averages

Trading is carried out below 30 and 50 moving averages, which indicates a gradual return of the market under the bears' control.

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

Bollinger Bands

If the pair grows, the upper border of the indicator at 1.3055 will act as resistance. The pair will be supported by the lower border of the indicator in the 1.2875 area.

Description of indicators

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

EUR/USD: plan for the European session on October 14. COT reports. Bears are pulling the market over to their side. Aim for

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

The bears did an excellent job yesterday and went beyond the area below a very large support level, while good US inflation data and a very sharp decline in business sentiment in the eurozone countries only strengthened the demand for the US dollar.

The bulls' task for the first half of the day is to prevent a breakout of support at 1.1737, the area where the euro stopped falling yesterday. Forming a false breakout there will be a signal to buy EUR/USD. An additional moment, which will confirm that buyers have returned to the market, is when divergence has formed on the MACD indicator after yesterday's low has been updated. In such a scenario, the buyer should return the euro to the resistance area of 1.1783, where the moving averages are, which is now playing on the side of the sellers. Getting the price to settle at this level will return the market to a bullish position and also lead to updating the weekly high around 1.1824, where I recommend taking profits. In case bulls are not active in the 1.1737 area in the morning, I recommend abandoning long positions until support at 1.1688 has been updated, from which you can buy EUR/USD immediately on a rebound, counting on a correction of 20-30 points within the day. Since we do not expect today's eurozone industrial production data to bring great news, it is best to buy the euro as low as possible from much larger lows.

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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:

Bears are in control of the market and are set to break support at 1.1737. Most likely, we will still see a downward momentum from the pair, therefore, forming a breakout and settling below 1.1737 along with testing this level from the bottom up forms a good entry point to sell while aiming for the price to fall towards a low of 1.1688. A more distant task for the bears is to update support at 1.1644 at the end of the week, where I recommend taking profits. In case a divergence forms on the MACD indicator and sellers are not active at the 1.1737 level, it is best to postpone short positions until a larger resistance at 1.1783 has been updated, where the upper border of the new descending price channel also passes. It is also possible to sell the euro immediately on a rebound from the week's high in the 1.1824 area with the goal of correcting by 20-30 points within the day.

Indicator signals:

Moving averages

Trading is conducted below 30 and 50 moving averages, which indicates a shift in market sentiment in favor of sellers.

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

Bollinger Bands

If the pair grows, the movement will be limited by the upper border of the indicator around 1.1790. The first test of the lower border of the indicator in the 1.1715 area may limit the pressure on the euro, but its break will lead to a larger sale.

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

Johnson & Johnson suspends COVID-19 vaccine trials

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The company said it has temporarily halted the provision of doses of the coronavirus candidate vaccine, including a third phase of global trials, due to illness in a volunteer.It is worth noting that the patient's condition is now being studied. Research on his health is being carried out by the independent Data and Safety Monitoring Board (DSMB), as well as by the company's doctors.As a rule, any news about vaccine trials leads to a movement in the market, but so far Johnson & Johnson shares do not show a decline - they are growing weakly in the premarket.It is also worth recalling that the pharmacological holding began the third stage of vaccine trials on 23 September. Up to 60 thousand volunteers from Argentina, Brazil, Colombia, Mexico, Peru, USA, Chile and South Africa were supposed to take part in it. The company expected the first batch of the vaccine to be available in early 2021.In total, more than 200 vaccines are being developed in the world, six of which have entered the third stage of trials.

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

Analytics and trading signals for beginners. How to trade EUR/USD on October 14? Plan for opening and closing trades on Wednesday

Hourly chart of the EUR/USD pair

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The EUR/USD pair began a weak round of corrective movement last night after it fell by 100 points the day before. Unfortunately, the current size of the correction is not enough to call it a correction in principle, as well as for the MACD indicator to be sufficiently discharged. The indicator is still at its lowest positions, so it will be extremely difficult for it to generate sell signals. This is the specificity of this indicator. Therefore, like last night, we advise beginners to continue waiting for an upward correction to develop and move upward by at least 40-50 points. Not only will such a movement allow us to expect new sell signals, but also a trend line. As for the long-term prospects for the pair's movement, we should not expect it to fall below the $1.16 level in the coming weeks. The problem is that the US dollar has hardly been in demand in recent months. And now - even more so, since the presidential elections in the United States are approaching, and elections are always uncertain. At least in democratic countries. Thus, traders can expect it to fall by another 100-120 points.

The fundamental background for the EUR/USD pair remains the same. All the same factors that worked in recent weeks continue to work today. If you look at the higher timeframes (daily, for example), it is obvious that the pair has been trading in a narrow horizontal channel in recent months, no more than 300 points wide. However, we identified a horizontal channel of $1.17-1.19 by even studying the hourly timeframe, which lasted for a long time. European Central Bank President Christine Lagarde is set to deliver another speech in the European Union on Wednesday. However, Lagarde has recently been indulging the markets with her regular speeches, so one should hardly expect any fundamentally new information from her. Moreover, in her last speech, Lagarde considered the possibilities and benefits of creating a digital euro and did not touch on the issues of monetary policy, the economy and the pandemic. Thus, from the point of view of the fundamental background, it is difficult to explain why quotes fell yesterday, and today it is impossible to predict anything.

Possible scenarios for October 14:

1) Buy positions on the EUR/USD pair have ceased to be relevant at the moment, since the pair has left the ascending channel and will now form a new downward trend. Thus, in order to consider new long positions, one should wait until new technical patterns appear, such as trend lines or channels, which would support the upward movement.

2) Sell positions have become relevant at the moment. However, following the results of the last few days, the EUR/USD pair lost 100 points in total. Therefore, now we still advise you to wait for an upward correction, as the MACD indicator needs to be discharged after sharply falling to the zero level. At the time of this writing, the price has not gone up enough, therefore, we expect the quotes to grow during the day. You should only open short positions on 1.1711 and 1.1679 after this growth and when the MACD indicator has reversed to the downside.

On the chart:

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

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

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

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

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

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

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

Technical Analysis of ETH/USD for October 14, 2020

Crypto Industry News:

The Russian financial authorities have confirmed the government's plans to issue a digital currency of the central bank, i.e. the CBDC.

The Bank of Russia released yesterday a consultation document on the digital development of the Russian ruble. In a press release, the central bank said the digital ruble could become "an additional form of money alongside cash and non-cash". The bank said the creation of the Russian CBDC project will require the creation of additional payment infrastructure.

The bank also said the digital ruble will have "all the properties necessary to perform the functions of money." In addition, he noted that the project schedule will be determined by the authorities in the near future.

According to the document, the digital ruble aims to speed up, simplify and make payments more secure. The bank also noted that a CBDC such as the digital ruble will reduce the risk of capital outflow, stating:

"The domestic digital currency will also reduce the risk of reallocation of funds to foreign digital currencies, contributing to macroeconomic and financial stability."

The bank further claims that users will be able to access the digital ruble on their e-wallets and mobile devices and be able to use it both online and offline.

The digital ruble will be available to "all actors in the economy" such as citizens, businesses, financial market participants and the government. The bank added that the digital ruble will have three functions of money, including a custody, unit of account and medium of exchange.

Technical Market Outlook:

The ETH/USD pair has bounced from the technical support seen at $375.52 and got back to the middle of the range. It has been consolidating in a narrow range for some time now as the market participants await for the important breakout. The target for bulls is still seen at the level of $400 and due to the strong and positive momentum they might hit this level soon. The nearest technical resistance is seen at the level of $389.90 and at the swing top at $394.95.

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.

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

Technical Analysis of BTC/USD for October 14, 2020

Crypto Industry News:

Blocktower Capital co-founder Ari Paul believes PayPal will show support for Bitcoin before the end of this year. This follows the recent investment by Jack Dorsey and MicroStrategy's Square, who bought Tens of millions of dollars in BTC.

PayPal has repeatedly emphasized that it is closely monitoring what is happening in the cryptocurrency sector. The first signals regarding the interest of the online payment giant in blockchain technology date back to 2018. We recently informed you that PayPal is very actively looking for blockchain and cryptocurrency specialists to join its ranks.

Ari Paul comments on the matter as follows:

"The news of Square's buying BTC is great, but PayPal has ten times as many users. I think PayPal will announce bitcoin support by the end of this year."

Tyler Raynolds, who once worked with Google Payments, seems to share a similar attitude. He believes that Paypal is most geared to becoming a pillar of retail BTC payments:

It is estimated that nearly 325 million users around the world use PayPal's services. If the American payment giant really decided to fully enter cryptocurrency retail, bitcoin would be immediately available to an extremely wide range of investors.

It can also be assumed that such a move by PayPal would have a significant impact on the liquidity and trading volume of BTC. This, in turn, with a high degree of certainty, could have a significant impact on accelerating the global adoption of the cryptocurrency.

Technical Market Outlook:

After the BTC/USD pair had made a new local high at the level of $11,679, just above the technical resistance seen at $11,646, the bears took temporary control over the market and push it back towards the technical support located at $11,223. The BTC/USD pair has been consolidating in the narrow zone for the last 24h, still below the supply zone. Please notice, Bitcoin is now trying to enter 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 $11,223 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.

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

Technical Analysis of EUR/USD for October 14, 2020

Technical Market Outlook:

The EUR/USD pair has hit the level of 1.1822 again, made a new local high at 1.1830 and the reversed all the wave up. This is the 61% Fibonacci retracement level on the weekly time frame chart and had been tested many times in the past and even this time the bears were stronger than bulls again. The market is currently trading at the daily lows around the level of 1.1746. The nearest technical support is seen at the level of 1.1724, 1.1710 and 1.1696. Weak an negative momentum supports the short-term bearish outlook.

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.

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Technical Analysis of GBP/USD for October 14, 2020

Technical Market Outlook:

After the local high was made at the level of 1.3081, the GBP/USD pair has reversed all the gains and moved down sharply. The bears has broken below the local technical support located at 1.3017 and 1.2979 and are heading towards the upper main channel line seen around the level of 1.2900. The market is still coming off the overbought levels and the momentum is now negative. The next target for bears is seen at the level of 1.2868 and 1.2848.

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).

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AUD/USD. China's coal front and Australian Non-Farm Payrolls report expectations

The Australian dollar paired with the US currency is showing a downward trend this week. During the two trading days of this week, the AUD / USD pair lost almost 100 points, falling to the middle of the 71st figure. However, the bears could not overcome the support level of 0.7160 (the average line of the Bollinger Bands indicator coincides with the Tenkan-sen line on the daily chart) and retreated from local lows during the Asian session on Wednesday. At the moment, the pair is displaying a rather sluggish corrective growth.

The publication of the consumer confidence index from Westpac (one of the four largest banks in Australia) was the immediate reason behind this correction. This indicator exceeded the forecast estimates, after rising to 105 points. It rose to the highest annual value but due to its secondary importance, this indicator could not become a catalyst for the growth of the Aussie - traders only retreated from the support level and fluttered at the borders of the 72nd figure.

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All in all, the Australian dollar is going through some tough times. Australia and China's rough relationship has resurfaced once again. This time, the Chinese decided to suspend imports of Australian coal. The political conflict between the two countries has long moved to the economic plane - in late spring when China increased duties on some types of Australian goods, while refusing to import beef. In August, the Chinese authorities announced that Australian wines are being sold in China at below-market prices and exports are subsidized. In this regard, the Chinese Ministry of Commerce announced the launch of an anti-dumping investigation.

The Australian dollar put up with all these blows from China since they do not have any concern for commodities, which play a strategically important role for the Australian economy. But this time, Beijing decided to raise the stakes: the Chinese authorities issued an unspoken order banning the country's state-owned companies from buying coal in Australia. According to Australian press sources, utility companies and steel mills have been verbally notified to immediately stop importing Australian coal this year.

In consequence to this news, the Aussie broke its three-day growth without recoil and collapsed by almost 100 points. Recall that China is the main consumer of coal and the largest importer (about 20% of world imports) in the world. At the same time, Australia is its main supplier. Due to the coronavirus crisis, such decisions by the Chinese look like, figuratively speaking, a "stranglehold." However, this is not the first time Beijing has made such decisions. Australian companies have previously experienced difficulties with the supply of coal to China. The last time this situation occurred was in February last year, when the Chinese authorities delayed customs clearance of goods. But at that time, Australians were the victims of the unofficial system of quotas for coal supplies, which has been used by China since 2018.

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Despite this, many experts urge everyone not to panic. In their perspective, not only does Australia depend on exports to China, but Beijing also depends on better-quality coal and iron ore from Australia. The Chinese, according to the experts, can easily change the supplier of thermal coal for power plants, but it is quite difficult to change the supplier of coking coal for steel plants. Thus, the measures taken by China may be temporary.

Judging by the behavior of the Australian dollar, most traders have a similar opinion that the AUD / USD pair has suspended its decline, frozen in anticipation of tomorrow's release.

On Thursday, the key data on the Australian labor market will be published. According to preliminary forecasts, tomorrow's release will disappoint investors. So, the unemployment rate in September should rise to 7.1% after a decline to the level of 6.8%. The rate of growth in the number of employees for the first time since May this year is probably going to fall into the negative area. It is predicted by experts that both full-time and part-time employment will decline. The share of the economically active population should also decrease.

In conclusion, the Australian will have to go through a difficult test tomorrow. If the announcement is released in the "red zone," then the AUD / USD pair will continue its southern path - up to the base of the 70th figure. A southern impulse for the pair will be provoked by a slowdown in the labor market amid the escalation of the Australian-Chinese political conflict. If the Australian Non-Farm Payrolls report turns out to be better than expected, the Aussie will return to the range of 0.7200-0.7250.

Therefore, tomorrow's news release is highly anticipated.

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

Elliott wave analysis of GBP/JPY for October 14, 2020

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GBP/JPY has almost reached the expected target-zone between 135.78 - 136.04 (the low has been seen at 136.11 till now). As long as minor resistance at 136.54 is able to cap the upside, we could see a final dip into the target-zone to complete red wave ii and set the stage for a new impulsive rally in red wave iii towards the 161.8% extension-target of red wave i seen at 143.93.

A break above minor resistance at 136.54 will be the first serious warning that red wave ii has completed, while a break above resistance at 137.13 will confirm the completion of red wave ii and red wave iii being in motion.

R3: 137.13

R2: 136.78

R1: 136.54

Pivot: 136.33

S1: 136.11

S2: 135.78

S3: 135.47

Trading recommendation:

We are long 50% GBP from 135.27 and re-bought 50% at 136.15 which gives us an average of 135.71 and we have placed our stop at 135.00

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

Elliott wave analysis of EUR/JPY for October 14, 2020

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EUR/JPY has already the expected target-zone between 123.71 - 123.80 (the low has been seen at 123.60) this is enough to complete wave ii and we will now be looking for a break above minor resistance at 123.99 and more importantly a break above resistance at 124.46 to confirm that wave ii has completed and wave iii towards the 161.8% extension-target of wave i seen at 128.02.

Support is now seen at 123.60 and then at 123.39. A break below 123.60 will call for a slightly deeper correction to 123.39 before wave ii finally is complete.

R3: 124.46

R2: 124.10

R1: 123.99

Pivot: 123.85

S1: 123.60

S2: 123.39

S3: 123.00

Trading recommendation:

We are long EUR from 50% 123.10 and re-bought 50% at 123.85, which gives us an average of 123.48. We will place our stop at 123.00.

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

Forecast for EUR/USD on October 14, 2020

EUR/USD

The S&P 500 lost 0.63% on Tuesday, on the news that Johnson & Johnson's anti-skin vaccine trial was suspended due to severe side effects, and so the euro fell by 66 points. This, as we see it, stopped the speculative growth over the euro that has been ongoing for the past two weeks. The price moved below the target level of 1.1754, having reversed from the resistance of the balance line on the daily chart. The Marlin oscillator is back in the negative territory. Now we are waiting for the price to drop to the target level of 1.1650, then to 1.1550 (November 2017 low).

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The price settled under the MACD line on the four-hour chart, while Marlin is in the negative zone. Conditions for a further decline have been formed, we are waiting for the price at the indicated levels.

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

Forecast for GBP/USD on October 14, 2020

GBP/USD

The pound sterling was down more than 120 points yesterday, almost hitting the first decline target at 76.4% Fibonacci 1.2912. Take note that the Fibonacci grid, built according to the base branch of the movement on December 13, 2019-February 28, 2020, loses its accuracy in determining the target levels. It will be replaced by other technical tools.

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But the price still needs to settle below the level of 76.4% (1.2912) in order for it to advance further towards the target of 1.2674 - to the low on September 23. Getting the price to settle below 1.2912 will also allow the Marlin oscillator to move into a negative trend zone, which will become a confirmation signal for a decline.

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

Forecast for AUD/USD on October 14, 2020

AUD/USD

The Australian dollar broke the target level and support at 0.7190 yesterday, identified by the extremes of September 9, August 13 and July 22. The level is strong, overcoming it, obviously, will cause the price to decrease further. The nearest target is 0.7055. It will be helped by the Marlin oscillator, which has moved into the downward trend zone on the daily chart.

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The decline stopped before the support of the MACD line on the four-hour chart. If the price moves below yesterday's low of 0.7151, it will also correspond to the price moving below this indicator line. This will be a signal for the price to decline further to the designated level of 0.7055.

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Forecast for USD/JPY on October 14, 2020

USD/JPY

The USD/JPY pair failed to grow yesterday, as the US stock market fell by an average of 0.45% on indices. The yen has not been able to break away from support at 105.30 for three weeks now. This becomes dangerous in the sense that the market may fall to a rather low target level of 103.75. But before that, the price needs to settle below the embedded price channel line, below the 104.98 level. But even the probability of such an event cannot be determined, the situation has become even more uncertain than it was yesterday. The signal line of the Marlin oscillator is also in the dark at the border of the growth territory.

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The trend is completely downward on the four-hour chart: the price falls below both indicator lines, while Marlin is directed to the downside in the negative zone. Getting the price to settle below the 105.30 level will enable it to fall to the support of 104.98, but the price may also increase from this level. As before, we are waiting for the development of events. We can only talk about growth when the price goes beyond the MACD line (105.78).

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Overview of the GBP/USD pair. October 14. The EU's position in the negotiations with London is softening, despite the opposite

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - sideways.

CCI: -39.4630

The British pound sterling paired with the US currency also fell down in the second half of the last day. It is difficult to say what caused a sharp rise in the US dollar. However, we would not recommend giving it too much importance. If you look at the chart of the pound/dollar pair carefully, there have been at least three such price collapses in the last two weeks alone. So, from our point of view, nothing extraordinary happened. Moreover, in the very near future, the pair may return to the area above the moving average line and resume the upward trend. The most interesting thing for the GBP/USD pair is the fundamental background. Because it is equally or almost equally bad for both the British pound and the US dollar. Thus, now it is simply impossible to draw a conclusion like: "The pound has a much better chance of growth due to a favorable background". This is why we recommend paying more attention to technical factors and keeping in mind that the fundamental background is equally weak for both currencies.

We have already talked about the United States. Most of their problems, which have put pressure on the dollar in recent months, may be resolved before the New Year. Elections will be held, election courts will be held, and Democrats and Republicans, presumably, will have already agreed on a new package of assistance to the American economy. And the situation for the US currency will become more calm and favorable. But for the pound, it's just getting started. We have repeatedly said that from 2021, Britain's GDP will be reduced again in any case, even with a deal with the EU, even without it. And no one can say what will be the consequences of a new outbreak of coronavirus for the British economy. The only mitigating factor for Britain is a free trade agreement with the European Union. And I must say that in recent weeks, everything in this issue has become confused and now it does not look as clear as before.

Recall that from the very beginning, the European Union has taken an exceptionally tough position on negotiations. EU leaders have repeatedly stated that London will not be able to enjoy all the preferences of EU membership without being in the EU itself. Alliance leaders have accused the UK of excessive desires and unwillingness to give in and have repeatedly stated that London will not achieve anything by using such a strategy in negotiations. After the "Johnson bill" became known in early September, the European Union reiterated that the negotiations could become even more complicated. However, despite all these statements, negotiations continue according to the scenario of Britain. First, Boris Johnson sets deadlines for these negotiations and graciously agrees to postpone them from time to time. Second, London's position is also notable for its steadfastness. Third, there is only one conclusion that can be drawn now. If negotiations continue, then there is still minimal progress. However, in what question? Recall that the key differences between the parties are issues of fishing in British waters, fair and transparent competition between European and British companies, the supremacy of the European Court of Justice and Law, as well as compliance with European rules and regulations. What is known for certain is that London refuses to grant the right to European countries to have unrestricted access to British waters for fishing. Thus, several EU countries may lose entire fishing industries at once, since they do not have their own waters.

One way or another, the negotiations continue and there may be either a breakthrough or a failure at the next EU summit, which will be held this week. We don't want to get so far ahead of ourselves and try to predict the results of the summit and the negotiations. We would just like to note that it seems that the European Union is ready to make big concessions in order to reach an agreement with London. It is difficult to judge now if this is true or not. However, not all EU countries are ready to be loyal and soft in the Kingdom. For example, France is also taking an extremely tough position in the negotiations, as it is its fishing industry that could be severely affected by the ban on fishing in British waters. According to rumors, it is Paris that can "hack" the deal if its interests are not taken into account or satisfied. It should be remembered that the European Union consists of 27 states and at least five of them have a significant voice in any issues discussed.

At the same time, Boris Johnson made another "reassuring and encouraging" statement regarding the COVID-2019 epidemic. The British Prime Minister said that there is no hope for an effective vaccine, at least in the near future. The British Prime Minister believes that the chances of getting a vaccine are very high, but "SARS/SARS (severe acute respiratory syndrome) appeared 18 years ago and we still do not have a vaccine against it". Meanwhile, the second "wave" of the pandemic in the UK continues to progress, with approximately 14-15 thousand new cases registered each. Quarantine measures have been tightened, but this does not yet affect the spread of the virus.

And of course, it is impossible not to note the possible reduction of key rates by The Bank of England in the negative area. Of all the inaccurate factors, this one is the least doubtful. Traders have little doubt that the BA will go to expand the quantitative easing program by another 50 or 100 billion pounds, as well as to reduce the key rate. It's just a question of timing. Most experts still believe that the regulator will resort to such serious measures only at the moment of greatest danger and threat. In other words, when the British economy suffers another setback. We don't know when that will happen. Many experts agree that at the beginning of 2021, BA will be forced to take such a step because of Brexit and the new reality in which Britain will now have to exist. Thus, after the month of November, we would say that the chances of growth are much higher for the US currency than for the pound sterling. Moreover, even now the pound looks somewhat overbought.

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The average volatility of the GBP/USD pair is currently 103 points per day. For the pound/dollar pair, this value is "high". On Wednesday, October 14, therefore, we expect movement inside the channel, limited by the levels of 1.2832 and 1.3038. A reversal of the Heiken Ashi indicator to the top signals a round of upward correction or a resumption of an upward trend.

Nearest support levels:

S1 – 1.2939

S2 – 1.2909

S3 – 1.2878

Nearest resistance levels:

R1 – 1.2970

R2 – 1.3000

R3 – 1.3031

Trading recommendations:

The GBP/USD pair started a strong downward movement on the 4-hour timeframe. Thus, today it is recommended to stay in short positions with targets of 1.2909, 1.2878, and 1.2848 as long as the Heiken Ashi indicator is directed down. It is recommended to trade the pair for an increase with targets of 1.3000 and 1.3031 if the price returns to the area above the moving average line.

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Gold & Silver - H4. Comprehensive Analysis of APLs & ZUP traffic options from October 13, 2020

Operational Scale Minute (H4 time frame)

Local US Dollar victory in the battle for metal? Review of options for the movement of Gold & Silver from 13 October 2020.

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Spot Gold

The movement of the Spot Gold from October 13 2020 was caused by the breakdown development and the direction of the breakout of the channel borders 1/2 Median Line (1888.00 - 1903.00 - 1917.00) of the Minuette Operational Scale Fork.

Joint breakdown the lower boundary of the 1/2 Median Line channel of the pitchfork of the Minute operating scale - the support level of 1888.00 and the upper boundary of the 1/2 ML Minuette ( 1885.00 ) channel will make the development of the Spot Gold movement within the boundaries of the 1/2 Median Line channel ( 1885.00 - 1872.00 - 1859.00 ) and the zone relevant equilibrium ( 1852.00 - 1828.00 - 1805.00 ) pitchfork operating scale Minuette.

A breakdown of the upper border of the channel 1/2 Median Line Minute - the resistance level of 1917.00 - will direct the development of the Spot Gold movement to the borders of the equilibrium zone (1923.00 - 1940.00 - 1955.00) of the Minuette Operational Scale Fork.

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Spot Silver

From October 13, 2020, the Spot Silver movement will develop depending on the development and direction of the range breakout:

  • Resistance level 24.500 at the border of the red zone of the pitchfork Minuette Operational Scale
  • Support level 23.800 on the starting line of the SSL pitchfork Minute

In the event of a breakout of the initial SSL line of the operating scale pitchfork - support level 23.800 - the downward movement of Spot Silver may continue to the boundaries of the 1/2 Median Line channel ( 23.380 - 22.700 - 22.050 ) and the equilibrium zone ( 22.050 - 21.050 - 20.050 ) of the operational scale pitchfork Minuette.

Sequential breakdown of the border red zone fork operational scale Minuette - resistance 24.500 - and the initial line SSL Minuette (25.050), and then updating the local maximum 25.515 will make the actual continuation of the upward movement of Spot Silver to the borders of the channel 1/2 Median Line (26.500 - 27.700 - 28.950) fork operational scale Minute.

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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 (placing "sell" or "buy" orders).

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Overview of the EUR/USD pair. October 14. Donald Trump wins the battle for the Supreme Court of the United States and Joe

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - sideways.

Lower linear regression channel: direction - sideways.

Moving average (20; smoothed) - sideways.

CCI: -106.2926

For the EUR/USD pair, the second trading day of the week again passed in fairly calm trading. On Tuesday, October 13, a new round of corrective movement began, which even turned into a collapse of quotes in the afternoon. However, in general, all trades in recent months continue to pass between the levels of 1.1620-1.1940. Of course, for a one-week cut, this is quite a lot, however, for two and a half months, it's not much. This is how much the pair's quotes are in the specified range. Thus, there is no formal flat at this time. Since there are no clear borders of the side channel. If you look at the 24-hour timeframe, you can even conclude that the downward trend is very weak. However, this does not change anything. The main thing is that trading takes place in a very narrow range, thus, there is no trend as such at this time.

The fundamental background at the beginning of a new week also remains the same - without changes. There is no news on the topic of negotiations between Democrats and Republicans. There is also no new data on the topic of elections and the election race. In fact, traders receive the same news every day. The US dollar has risen in price over the past day, but nothing changes for it globally. And what can change if there is still no positive news from the US? According to the latest information from US news agencies and TV and radio companies, Joe Biden continues to increase the gap from Donald Trump three weeks before the election. The most interesting thing is that the Democrat does nothing special for such popularity among the people. Recent research shows that Biden has almost the highest ratings among all presidential candidates since 1936. What does this mean? About Biden being so good? Or Trump is so bad. Trump has lost almost every battle as President of the United States. At least, those that are known to the whole world. It is possible that Trump also worked for his own well-being, as a true businessman, however, we do not know this and it is not for us to judge. Most importantly, Trump lost the battle against the "coronavirus", the battle against China, and won the battle against the Democrats only at the expense of more Republicans in the Senate, which could turn into his impeachment. The most interesting thing is that Trump did not understand that in order to please the voters, you need to make the lives of these very voters better. Let's face it, in the first three years of Trump's presidency, the standard of living in America grew, macroeconomic indicators grew, however, Trump's policy was aimed primarily at making the rich richer, and not at the middle and lower class of Americans. Well, the epidemic and the crisis that happened in 2020 only finished off the results of Trump's presidency for four years. Perhaps, without the crisis and the pandemic, the results would not have been so bad. However, the most important thing that the current president has not yet understood is that not only the results are important, but also how you achieved them. Trump has been at war with anyone who refused to accept his point of view throughout his term as president. In the end, he turned half the country against him. He is criticized by the Democrats, disliked by the Pentagon, ignored by the Fed, denied by the country's chief epidemiologist, Anthony Fauci, criticized outside the United States, constantly quarrels with journalists, and constantly insults everyone who asks him uncomfortable questions and points out his mistakes. That is, even if there were no pandemic and crisis, half of America would still be against Trump.

And even now, with the election only three weeks away, Trump is directing his forces to populism (the story of the miraculous recovery from the "coronavirus") and the war for the US Supreme Court. We have repeatedly said that the elections will most likely not end at the polling stations. On November 3, chaos is possible, some sections may be disrupted, anything is possible. And almost no one doubts that Trump will appeal to the Supreme Court if he loses the election. That is why he is in such a hurry to appoint "his" judge to replace the untimely deceased Ruth Ginsburg. On Monday, the Senate select committee began hearings on the confirmation of a new member of the Supreme Court, Amy Coney Barrett, a protege of Trump. If she is appointed to the position despite all the efforts of Democrats to postpone this process to a later date, the position of Republicans on the Supreme Court will be strengthened many times. After all, six of the nine judges will be appointed to their posts by Republicans.

In this situation, Biden has only one choice. And this is not the hope of a fair trial. The 78-year-old Democrat needs to win the election by a wide margin. And this option now seems more likely and less difficult than trying to win the court from the Republicans. The fact is that if Trump loses several key and controversial states at once, no court can declare illegal or rigged elections in all these states. As practice shows, the court can consider claims for one to two states. And if a review of the vote in these states is enough for Trump to win in the end, then we have bad news for the Democrat. But if the revision of the results for one state is not enough to change the overall picture, then Trump will have nothing to hope for. Because even a court made up of nine Republicans cannot simply overturn the results of the voting in those states that Trump points the finger at.

This is all bad news for the US dollar paired with the euro. The more uncertainty, the worse. Yesterday the US dollar slightly strengthened its position, but in the overall picture of the situation, such growth is nothing more than market noise or just one turn inside the 320-point side channel. We do not put an end to the US currency, however, its prospects remain very vague.

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The volatility of the euro/dollar currency pair as of October 14 is 62 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1682 and 1.1806. A reversal of the Heiken Ashi indicator back to the top may signal a round of upward correction.

Nearest support levels:

S1 – 1.1719

S2 – 1.1658

S3 – 1.1597

Nearest resistance levels:

R1 – 1.1780

R2 – 1.1841

R3 – 1.1902

Trading recommendations:

The EUR/USD pair fixed below the moving average, changing the trend to a downward one. Thus, today it is recommended to stay in short positions with targets of 1.1719 and 1.1682 open on the signal of overcoming the moving average until the Heiken Ashi indicator turns up. It is recommended to consider purchase orders if the pair is fixed and returns to the area above the moving average with the first targets of 1.1806 and 1.1841.

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