GBP/USD: Is Brexit an ally or an opponent for the pound?

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The pound is facing a problem again – will Brexit be an opponent that will hinder its growth or will it be an ally that can help discover new opportunities? Experts believe that the role of Brexit is not only limited to the pound's negativity. Rather, it could also be an impulse for its positive dynamics.

The Brexit deadline had a controversial impact on the pound. It should be noted that the deadline for agreeing on a transitional period between London and Brussels ended yesterday. The pound was growing steadily up to this point and even took the lead in trading during the middle of the week. However, it lost the majority of its share yesterday, being in a state of uncertainty ahead of trade negotiations with European leaders. An additional negative factor was the introduced tightening measures of the British authorities, relative to the second wave of COVID-19.

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A pause in trade negotiations also worsened the situation, which affected the pound again. Today, it continues to suffer losses due to the growing cases of COVID-19, and against the background of stalled negotiations with Brussels. Thus, European leaders are seriously concerned about the lack of progress on critical issues related to economic engagement with the UK.

The strengthening of the conflicting issues hindered the growth of the pound: it fell to 0.4% to 1.2961 on Wednesday and to - 0.7%, to a critical low of 1.2910 on Thursday. Moreover, the decline of the GBP/USD pair continues today, entering a downward spiral which hasn't stopped yet. It started at the level of 1.2890 this morning and currently moves around the range of 1.2893-1.2894, making traders hopeful for a small upward movement.

On the other hand, analysts are worried for a potential negative scenario given that both parties will not manage to reach an agreement. In such circumstances, the UK has to talk to other countries of the Eurobloc under the rules of the WTO, and this will cause a significant blow to the European and British economies. Such a result will be disastrous for the GBP: the national currency will be under the pressure of a strongly negative impact.

A stumbling block for London and Brussels is still the point related to the regulation of fishing. The market expects concessions from the EU on this issue, and the UK is expected to compromise on a number of trade positions. Many experts are optimistic and believe that the parties will be able to reach an agreement in the near future. According to them, the continuation of negotiations is a good sign for the pound, but in order for the pound to strongly rise, their successful completion is necessary.

Yet, some analysts say that Brexit may be the next step for the price of the pound to conquer new peaks. Despite the number of contradictions between the UK and the EU, it does not prevent the pound from choosing a favorable direction. Experts believe that Brexit may take on an unusual role – to become a driver of the pound's growth in the medium and long term.

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Hot forecast and trading recommendations for EUR/USD on 10/16/2020

Although there was talk about a significant increase in the number of new cases of coronavirus infection in France and Spain, the market was not especially bothered by this information. Even if French President Emmanuel Macron was forced to introduce some kind of restrictive measures, it was more reminiscent of a lighter version of those that were in force this spring. At most, it only tickled nerves. But the market did not significantly react to this. However, as soon as Germany reported a record number of daily infections in the entire pandemic, after which German Chancellor Angela Merkel announced the possibility of re-introducing quarantine measures, panic gripped the markets, and the euro plunged. To be honest, this clearly demonstrates a simple truth - Germany determines what happens in Europe. More precisely, by the way things are in the largest economy of the EU. After all, if Germany reintroduces quarantine, then other countries of the bloc will follow. Let's just say they have no other choice. And there is no need to say why this threatens business. Everyone understands perfectly well that small and medium-sized businesses simply will not survive the second quarantine in a year. So investors, not wanting to incur losses, urgently flee from European assets, including the euro.

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At the same time, even if this whole coronavirus pandemic had not happened, the dollar still strengthened yesterday. The problem is the state of the US labor market, which continues to improve. The number of initial applications for unemployment benefits increased from 845,000 to 898,000. But repeated applications are much more important, the number of which decreased from 11,183,000 to 10,018,000. The duration of unemployment continues to decrease. And this is nothing more than the restoration of the labor market, which will pull the entire economy with it.

Repetitive Unemployment Insurance Claims (United States):

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Although today everyone is waiting for confirmation for this, since there was another record increase in the number of new cases of coronavirus infection yesterday in France. Therefore, the euro has no reason to grow even without this. The final data on inflation in the euro area should confirm the fact that the rate of decline in consumer prices is accelerating. Deflation could accelerate from -0.2% to -0.3%. This leaves the European Central Bank with little choice but to expand its stimulus measures. And this is nothing more than a softening of monetary policy. It is quite possible that the option of reducing the refinancing rate to negative values might be considered at the next ECB meeting. So the euro will continue to be under pressure.

Inflation (Europe):

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Nevertheless, no matter how strange it may sound, US data will limit the potential for the euro's decline. US retail sales are expected to slow from 2.6% to 2.2%. A certain decrease in consumer activity is a negative factor. Although to some extent this fact will be somewhat offset by industrial production, the rate of decline of which should slow down from -7.7% to -6.6%.

Retail Sales (United States):

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The euro/dollar pair is gradually returning to the sellers' market, as a result of which the important support level of 1.1700 was reached, where a slight slowdown occurred, followed by a pullback. Based on the sequence of descending ticks during the current week, there is a clear signal that the 1.1700 level may soon be broken.

If we proceed from the quote's current location, we can see the same pullback from the level of 1.1700 (1.1690/1.1700), which locally puts pressure on sellers.

Acceleration is recorded in relation to market dynamics, which is considered a justified phenomenon against the backdrop of wide speculative interest in the market.

Looking at the trading chart in general terms (daily period), you can see the recovery process relative to the depth of the correctional course 1.1612 -> 1.1830.

We can assume that the 1.1690/1.1700 area will continue to put pressure on short positions, where we don't rule out that a pullback towards 1.1735 might be prolonged, but as soon as the quote manages to settle lower than 1.1685, everything can change radically.

From the point of view of a comprehensive indicator analysis, we see that the indicators of technical instruments on the minute and hour intervals indicate a sell signal due to the recovery process. The daily period is on the verge of changing the signal from buy to sell.

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Trading plan for the EUR/USD pair on October 16. Second pandemic wave and the US elections.

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The situation is still bad in Europe. As of the moment, France has recorded 30 thousand new coronavirus patients, much higher than the figure it listed a day ago.

Meanwhile, the United Kingdom has observed a slight decrease in new cases to 19 thousand, while in Spain, it increased to 13 thousand.

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The S&P 500 index shows that the US market has bounced up sharply. However, it is unlikely to move further before the November elections.

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EUR/USD: The euro declined after a strong US employment report yesterday.

Open short positions from 1.1715.

Open long positions from 1.1760.

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EUR/USD. The dollar is "stuck" between COVID-19 and Trump

The US currency is caught in the grip of conflicting fundamental factors: the increase in risk-off sentiment due to the coronavirus surge in Europe and the political uncertainty in the United States, which restricts the dollar bulls to fully show their character. The dollar index came close to the 94th figure yesterday, but at the end of the day it retreated from the reached highs. And during the Asian session on Friday it was trading flat — in the range of 92.77-92.82.

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Bear in mind that France, which imposed a state of emergency and declared a curfew in the country's largest cities, including Paris, was the trigger for the strengthening of the US currency. Quarantine measures were also tightened in many other EU countries that recorded a sharp spike in the incidence of COVID-19. This relatively reminded the market of the spring events when the European economy experienced the main coronavirus blow. The negative fundamental picture was supplemented by China, which published weak macroeconomic reports (reflecting a slowdown in the consumer price index and the producer price index) yesterday. The reaction of traders was immediate: the dollar, as the main protective asset, began to enjoy increased demand. Panicked investor sentiment allowed the greenback to regain lost positions, although the overall negative background for the dollar remains negative.

This is not the first time that such a situation occurred on the market. Recall that not so long ago, the dollar served as almost the only protective tool for several months. During almost the entire spring, traders found refuge in the US currency when anti-risk sentiment surged. Dollar bulls were then the main beneficiaries of the pandemic in the context of the currency market, even despite the record slowdown in the US economy. Since about mid-summer, the topic of coronavirus has narrowed to the borders of one country – the United States – so the former excitement around the greenback has come to naught. The increase in the number of infected people was observed in many other countries of the world, but the States here were out of the competition – instead they led in the number of infected people, the number of deaths, and the number of daily increases in cases. Therefore, the coronavirus factor ceased to be an "ally" of the greenback, and bursts of anti-risk sentiment played in favor of other instruments, primarily in favor of gold.

But today, the situation is changing once again in favor of the dollar. The only difference is that there are no liquidity problems in the market, and the dollar itself is under the background pressure of political events in the United States. As a result, dollar bulls cannot take full advantage of the current situation.

Last day was somewhat indicative in this context. So, throughout Thursday, the dollar index grew steadily, changing the configuration of the main currency pairs along the way. At the end of the trading day, however, the dollar was reminded that the States are in a state of pre-election race, and in two weeks the fierce struggle for the Oval Office will reach the finish line.

It is important to note that Joe Biden is currently considered as the favored one in the race – according to the latest poll conducted by The Wall Street Journal, the democratic leader is ahead of Trump by 11 percentage points (53% vs. 42%). And before the TV debate, the former Vice President of the United States was ahead of the current President in the polls by 8%. To win the presidential election, a candidate must get 270 votes out of 538. Analysts believe that Trump will get 205 college votes. In other words, Biden is highly possible to be declared as the winner of the presidential election – the only question is whether Donald Trump will recognize this result. In an interview, he said that he "does not guarantee a peaceful transfer of power," which alarmed investors. Yesterday, the US President raised this issue again at a meeting with voters, saying that he would hand over power to Biden, but only if "he is sure of a fair election result." For several months, Trump has been criticizing remote voting (due to the pandemic, Americans were allowed not to visit the polling station), stating that such voting is "not controlled."

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Considering the current US President's disposition, it can be assumed that the process of transferring power will be accompanied by numerous lawsuits from the Republican team. The "pre-election factor" is an anchor for the dollar that does not allow it to develop large-scale growth throughout the market.

If we talk directly about the euro-dollar pair, the southern momentum has not exhausted itself. The EUR/USD bears have overcome the support level of 1.1750, and from a technical point of view, they are on their way to the main support level of 1.1630 (the lower border of the Kumo cloud coincides with the lower line of the BB indicator on the daily chart). Despite the certain vulnerability of the US currency, the euro looks much weaker, taking into account the recent happenings in European countries. If quarantine measures in the EU countries continue to tighten, the EUR/USD pair will reach 1.1630, not even due to the strengthening of the dollar, but due to the weakening of the European currency. Therefore, short positions are still a priority for the pair.

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Brief trading recommendations for EUR/USD on 10/16/20

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The EUR/USD pair showed an active downward interest yesterday. As a result, the important support level of 1.1700 was reached, where it is possible for sellers to weaken the Euro even more than expected.

In this case, we should focus our attention to two factors that indicate a weakening of the European currency:

1. The completion of the corrective move from the local low of 1.1612 (1.1612 -> 1.1830), where a recovery relative to the correction is already more than 64%. If there is a recovery by more than 50%, we can expect that the initial interest will continue, and in this case, the downward path set in the market last month.

2. The support level of 1.1700. Regarding the recent fluctuations, the quote is seen to be concentrated within the 1.1690/1.1700 area, which indicates its breakdown in the future. This will lead to the further weakening of the euro.

Meanwhile, for the quote's current location, you can see a variable price fluctuation relative to the support level of 1.1700, where there was a slight pullback. Nevertheless, the downward interest still remains on the market.

Based on the location of the quote and the reference support level, you can make a trading forecast from several possible market development scenarios.

First, the natural basis.

The level of 1.1700 acted as a support in the market for a long time, where traders naturally feel pressure, affecting the volume of short positions *(sell positions). The price's current correlation with this level may not be an exception, as the quote will rebound from it again.

In this case, we consider the prolongation of the existing pullback towards the range of 1.1735-1.1750, if the price consolidates above 1.1715.

Second, a decline is held in the market.

The downward move set at the beginning of the trading week is held, which leads to a breakdown of the control level of 1.1700 and a full recovery of the quote relative to the scale of the corrective move 1.1612 -> 1.1830. The level of 1.1685 will be considered as the best entry point, with a prospect of moving to 1.1650-1.1615.

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US dollar is supported by the situation with COVID-19 and US elections

Investors are paying their full attention to the two most important things that dominate the market recently – COVID-19 and US presidential elections. It is possible that this will continue to take the lead until this month ends.

The first factor includes the ongoing problem with COVID-19. The second wave of which is observed in Europe, while the first outbreak is not yet done in the US. On the other hand, we have the US presidential elections as the second factor. Against the backdrop of these events, markets have almost stopped responding to the emerging economic data, and continue to point out the weak prospects for the global economic recovery in general, and the US and European in particular.

Yesterday, the published consumer inflation data in China came below the forecasted values, which only rose by only 0.2% (monthly terms) in September against August values of 0.4% y/y, which means that 1.7% growth was only added against a year earlier - 2.4%. The figures fully reflect the effects of COVID-19 on the Chinese economy and the world generally, since China is the largest producer of goods in the world.

On the other hand, US investors just ignored the negative data from the labor market, weak values of the NY Empire State manufacturing activity index for October, and perhaps, they also did not notice FRS Philadelphia's great values on the manufacturing activity index.

Here, the values of the number of applications for unemployment benefits, which showed their growth again over the past week, increased to 898,000 against 845,000 a week earlier. At the same time, NY Empire State manufacturing activity index declined from 17.0 points to 10.5 point, while on the contrary, FRS Philadelphia's index of manufacturing activity soared from 15.0 points to 32.3 points. However, we should recall that investors did not react to this data in any way.

Important economic statistics from Europe will also be published today such as the values of consumer inflation in the euro area, which is expected to keep its dynamics and trade balance of the euro area. In addition, we have the values of the basic index of US retail sales, which is forecasted to decline from 0.7% to 0.5%, the volume of retail sales with forecasted growth to 0.7% and more statistics from the University of Michigan.

However, it seems that this will only have a small impact on the mood of investors. In this regard, the US dollar can continue to rise, since the market is still dominated by COVID-19 and US elections.

Forecast of the day:

The EUR/USD pair is likely to continue declining to 1.1650 after breaking through the level of 1.1700.

The AUD/USD pair also seems to be more likely to decline to 0.7015 after breaking through the level of 0.7065.

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Forex forecast 10/16/2020 from Sebastian Seliga

Let's take a look at the event calendar for the last day of the trading week and make some review video of all the technical analysis that was made during the week.

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Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on October 16

Analysis of transactions in the EUR / USD pair

News that Germany is on the road to introducing another strict social distancing measures has led to a new wave of decline in the European currency. It supported the euro to move 40 pips down from the level of 1.1739, reaching the target level, which is 1.1700

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Trading recommendations for October 16

A report on the eurozone's inflation rate will be released today. It is expected to come out rather weak, so the euro has a low chance of growing today in the market.

At the same time, in the afternoon, data on US retail sales will be published, and its figures are expected to fan growth in the US dollar.

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  • Open a long position when the euro reaches a quote of 1.1719 (green line on the chart), and then take profit at the level of 1.1769.
  • Open a short position when the euro reaches a quote of 1.1678 (red line on the chart), and then take profit at the level of 1.1625.

Analysis of transactions in the GBP / USD pair

Hopes of getting a post-Brexit deal has faded, so the pound collapsed and moved 90 pips down from the level of 1.2905. It made short positions gain large profits from the market yesterday.

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Trading recommendations for October 16

Brexit negotiations will continue today, and if the EU still does not make any concessions, the risk of Brexit not having any trade deal will become as high as possible. Such will lead to a collapse in the British pound.

But if good news comes out, that is, finally reaching an agreement with regards to a trade deal, the pound will rise against the US dollar.

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  • Open a long position when the pound reaches a quote of 1.2916 (green line on the chart), and then take profit around the level of 1.2974 (thicker green line on the chart).
  • Open a short position when the pound reaches a quote of 1.2883 (red line on the chart), and then take profit at least at the level of 1.2824. Bad news on Brexit, as well as the continuation of the downward trend, will lead to a sharp decline in the British pound.
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Analytics and trading signals for beginners. How to trade EUR/USD on October 16? Plan for opening and closing trades on Friday

Hourly chart of the EUR/USD pair

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The EUR/USD pair failed to overcome the 1.1696 level last Thursday night, which served as the lower border of the horizontal channel for a long time. Thus, at the moment, we can conclude that there was a rebound and a correction began. That's exactly what we need. As long as the price is below the trend line, the downward trend is maintained. Therefore, we need a round of correction so that the MACD indicator discharges to the zero level, afterwards we can expect a sell signal to appear. Also, as a sell signal, you can consider that the price could rebound from the trend line, which already has four reference points. However, take note that in the near future it will be difficult for the MACD indicator to turn down if the downward movement resumes. The correction is too weak and the indicator failed to even approach the zero level. On the other hand, if the downward trend line is overcome, then novice traders can consider long options on the foreign exchange market.

The fundamental background for the EUR/USD pair remains unchanged. The consumer price index (inflation) will be released in the European Union today, which we consider the most significant report of the day. The headline inflation is expected to remain at -0.3% y/y, while core inflation is expected to rise to 0.2% y/y. If today's results do not exceed forecasts, then the euro will not receive support due to such values. Deflation has a very negative effect on the economic growth of any country. And the European economy is now recovering from the coronavirus crisis, and is just entering the stage of the second wave of the epidemic. Therefore, anything that can stop economic growth only adds to the headaches of the European Central Bank and the EU government. A relatively important retail sales report will be released in America. However, forecasts for this indicator are as neutral as possible. The same goes for the US industrial production report. We believe that traders will not react to such US reports or reaction would be minimal. Based on this, we continue to recommend that traders pay more attention to technical factors. As for the general fundamental background, such as the elections in America or the new aid package for the US economy, there is no new information on them. Consequently, market participants have nothing to react to.

Possible scenarios for October 16:

1) Buy positions on the EUR/USD pair have ceased to be relevant at the moment, since the pair left the ascending channel. However, if the price settles above the new trendline, then novice traders can try to open long positions while aiming for resistance levels of 1.1747 and 1.1787, since a new round of upward movement will most likely begin in this case. Especially if the 1.1696 level remains unbroken.

2) Sell positions are still relevant at the moment. However, traders failed to overcome the 1.1696 level on their first attempt. Therefore, we recommend opening new sell orders if the 1.1696 level is overcome or after a new round of correction to the trend line, afterwards the MACD indicator will form a sell signal. The targets will be the support levels 1.1677 and 1.1647. The ultimate goal is 1.1607.

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.

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Technical Analysis of ETH/USD for October 16, 2020

Crypto Industry News:

More than half of all Ethereum in circulation has not been transferred between addresses for over a year. In the last 12 months, only 39.6% of all ETH coins changed hands.

According to Glassnode's hodlwaves, which provides a chronological breakdown of the transaction speed along the chain, approximately 28% of Ethereum has moved between the last 12 and 24 months. This is the largest business segment in the chain.

The data suggests that many whales in 2019 focused on accumulation of ETH, due to the ETH 2.0 project fast approaching. Phase 0 of Ethereum 2.0 is set to begin in the coming months and will allow users to stack ETH for the first time.

About 20% of the tokens have not made any moves since before October 2017. Analysts are monitoring whether some of these coins will be staked with the introduction of phase 0.

The impending launch of Phase 0 appears to have started the recent increase in the short-term speed of transfers in the chain. The 24-hour share of the Ethereum network increased from less than 0.5% in January and February to an average of over 1% in early September.

The weekly speed also increased from 1.5% at the beginning of the year to 5% in both July and September. A similar steady increase since June, also recorded monthly and quarterly transfers.

Technical Market Outlook:

The ETH/USD pair has made a new local low at the level of $363.41 as the bearish pressure intensify. The makret keep moving below the short-term trend line resistance with negative and weak momentum. The target for bears is seen at the level of $360.60 and $355.60. On the other hand, 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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Technical Analysis of BTC/USD for October 16, 2020

Crypto Industry News:

According to data published by Chain.info, approximately 10.6% of the bitcoin supply currently in circulation is in the hands of just five centralized exchanges.

More than 1.96 million BTC is currently between the major exchanges Coinbase, Huobi, Binance, OKEx and Kraken.

Probably thanks to fiduciary services, Coinbase has by far the most, 944,904 BTC scattered around 4.39 million different wallet addresses.

Huobi ranks second with 323,665 BTC stored in approximately 901,600 unique wallets, followed by Binance with 289,961 BTC for nearly 2.7 million addresses. OKEx has 276,184 BTC in 339,000 wallets, while Kraken has 126,510 Bitcoins at 672,000 addresses.

The next seven exchanges in the list include - Bitflyer, BIttrex, Bitfinex, Poloniex, Coincheck, Gate.io and Bitstamp. They keep another 210,000 Bitcoins among themselves.

The data shows that many users still prefer to accept the risk of holding a significant portion of their assets on centralized exchanges, all despite the cryptocurrency's fundamental ethos of decentralization and the mantra-repeated slogan "not your keys, not your Bitcoin."

The percentage of the supply of BTC stored on five centralized exchanges may actually exceed 10%. Chainalysis estimates 3.7 million BTC, which has not changed in over five years, is likely to be lost. If this is true, then almost 15% of Bitcoin resources are currently stored on five centralized platforms.

Technical Market Outlook:

The bears took temporary control over the market and push BTC/USD back towards the technical support located at $11,223. Since then the BTC/USD pair has been consolidating in the narrow zone located between the levels of $11,439 - $11,250, 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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Technical Analysis of EUR/USD for October 16, 2020

Technical Market Outlook:

The EUR/USD pair has made another lower low after it was rejected from the level of 1.1822. 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 has made the lower low at the level of 1.1692, just below the technical support seen at the level of 1.1696. Despite the oversold conditions, the momentum remains weak and negative, which support 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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Elliott wave analysis of GBP/JPY for October 16, 2020

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GBP/JPY resumed the downward movement and broke slightly below the low at 135.64 keeping red wave ii alive. After a break below 135.64, GBP/JPY moves closer to support at 135.38 but we see a clear loss of downside momentum and the possibility of a low is high. The first strong indication of a low being in place is seen upon a break above 136.25, while a break above resistance at 136.70 will confirm red wave ii being complete and red wave iii is in motion for a rally to above 142.72.

R3: 136.25

R2: 135.93

R1: 135.74

Pivot: 135.64

S1: 135.57

S2: 135.38

S3: 135.05

Trading recommendation:

Our long GBP-position from 135.71 was stopped at 135.60 for a small loss. We will re-buy GBP at 135.45 or upon a break above 136.13

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Elliott wave analysis of EUR/JPY for October 16, 2020

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EUR/JPY failed to break back above minor resistance at 123.99 to confirm the wave ii had completed. Instead, the correction in wave ii took a second deeper dip to a low of 123.02. Until we see a break above minor resistance at 123.49 and more importantly a break above resistance at 123.99 we cannot exclude another dip to test the 78.6% corrective target at 122.95. It is not necessary that we see another dip but at this point in time, it cannot be excluded. Only a break above minor resistance at 123.49 will indicate that wave ii has been completed and wave iii may develop a rally to 128.02

R3: 123.99

R2: 123.49

R1: 123.21

Pivot: 123.10

S1: 123.02

S2: 122.95

S3: 122.71

Trading recommendation:

We are long EUR from 123.48 with our stop placed at 123.00. If our stop is triggered, we will re-buy EUR upon a break above 123.49

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Technical Analysis of GBP/USD for October 16, 2020

Technical Market Outlook:

The GBP/USD pair has been rejected from the supply zone located between the levels of 1.3059 - 1.3081. It looks like this zone will be the key short-term zone for both bulls and bears and only a clear and sustained breakout will show the traders the next direction for Pound. In a case of a bullish scenario, the next target would be 1.3121 and the next target for bears is seen at the level of 1.2868 and 1.2848. Currently, the market is traidng around the upper channel line seen at the level of 1.2868.

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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Forecast for EUR/USD on October 16, 2020

EUR/USD

The euro opened and ended Thursday at 1.1754, the area which is below the key level of the lower boundary of the monthly range of the second half of August and the first half of September. This means that the initial condition for the medium-term downward trend has been met. We are waiting for the price to fall to 1.1315. But the euro's first target is the 1.1650 level, followed by the second target at 1.1550 - the November 2017 low. The Marlin oscillator has strengthened in the territory of the downward trend zone.

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According to the indicators, the trend is downward on the four-hour chart, but the signal line of the Marlin oscillator sharply turned upwards, which may indicate a deepening correction. The limit for the corrective growth is the 1.1754 level . The price will give a new downward momentum if the price moves below yesterday's low of 1.1688.

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USD/JPY Forecast for October 16, 2020

USD/JPY

On Thursday, the USD/JPY pair went up by 27 points and the growth was once again stopped by the resistance of the balance line on the daily scale chart. The price will swing now from the Kruzenshtern line at 105.80 to the price channel line at 104.96, and where it will move in case of overcoming resistance and support, it is impossible to determine now and in this situation.

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The signal line of the Marlin oscillator moves sideways under the border with the territory of growth, although this is a harbinger of a strong movement in one direction. But it can also be short-term with a sharp reversal to the initial positions, as it was on July 24 - 30 on a similar behavior of the oscillator. From the current levels, the price can work out any designated target at 105.80 and 104.96 with equal probability. The situation is not commercial. However, if the price goes down to 104.96, the price will fall to the level of 103.75 from which a quick reverse correction is possible. The upward movement is noticeably more difficult for the price, here only a consolidation above 106.25 opens the way to 106.96.

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The duality of the situation is seen in more contrast based on the 4 - hour chart. The price may decline to the first "bearish" target of 104.96 and go up with the formation of a double convergence on the Marlin oscillator. Also, the price can continue to implement the existing convergence with working out the nearest resistance of 105.70 along the Kruzenshtern line or it will be working out the Kruzenshtern line of the daily timeframe at the price of 105.80. We are waiting for clarification of the situation for a few more days.

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Forecast for AUD/USD on October 16, 2020

AUD/USD

The Australian dollar carried on with its steady decline, yesterday it hit the first target of 0.7055. Lowering in the price below this target level opens a subsequent target of 0.6960 near the support of the nested line of the monthly chart price channel (blue line). The Marlin Oscillator is declining in the negative zone and we are anticipating further development of the downward movement.

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On the four-hour chart, the price is reduced under both of the indicator lines. The Marlin Oscillator is declining in the zone of dominance of the bears. We are anticipating the Australian dollar at the price of 0.6960.

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Hot forecast and trading signals for GBP/USD on October 16. COT report. Traders panic, keeps 1.2873-1.2888 from falling

GBP/USD 1H

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After being able to quickly and easily recover to the downward trend line, the GBP/USD pair rebounded from it and resumed an equally strong downward movement on October 15, on track to breaking the Kijun-sen and Senkou Span B lines. However, the bears failed to overcome the important support area of 1.2873-1.2888 in the last two days, therefore, falling even deeper is also in question. It looks strange or doubtful when the US dollar strengthens against the euro, but the greenback's rise against the pound appears to be quite reasonable and logical. Therefore, if sellers succeed in pushing the pair below 1.2873-1.2888, then the chances of continuing the downward movement will increase many times.

GBP/USD 15M

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The lower linear regression channel turned to the downside again on the 15-minute timeframe, but the movements from the last three trading days have been such that it is time to talk about panic, and not about calm, measured trading.

COT report

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A new Commitments of Traders (COT) report on the British pound showed that non-commercial traders were practically resting between September 29 and October 5. The pound increased by about 140 points in this period, which, in principle, is not so much, a little more than the average daily volatility of this currency. The "non-commercial" group of traders opened 1,093 Buy-contracts (longs) and closed 435 Sell-contracts (shorts) during this time. Thus, the net position of professional traders slightly increased by 1,500 contracts. However, as with price changes, these changes in the mindset of professional traders are purely formal. It is impossible to draw any conclusions or predictions about the pair's future movement based on them. In general, the "non-commercial" group has been decreasing its net position since the beginning of September, which means that their bearish mood is strengthening. In principle, this particular behavior from large traders completely coincides with what is happening on the market during this period of time, but despite the pound's growth in the last few trading days, it still goes back to falling. Nonprofit traders have more sell contracts, and UK fundamentals remain extremely weak and dangerous for the pound in terms of the outlook for the rest of 2020 and all of 2021.

No news from the UK on Thursday, October 15. The report on applications for unemployment benefits was published in the United States, which showed another decrease in the total number of repeated applications to 10.018 million. Thus, the US unemployment rate continues to decline. The EU summit also began on this day, which should initially have been extremely important for the UK and the British pound, but later ceased to be such, since no one expects any decisions on a trade deal. Moreover, we received reports that the head of the European Commission, Ursula von der Leyen, was allegedly in contact with an employee of her office who is infected with the coronavirus and therefore could also become infected. The head of the European Commission left the EU summit and went into self-isolation. Thus, the chances that the summit will take any important decisions regarding the UK are further diminished. The US is set to publish reports on September retail sales, manufacturing, and the University of Michigan Consumer Confidence Index. Traders might ignore all three reports.

We have two trading ideas for October 16:

1) Buyers for the pound/dollar pair have released the initiative from their hands. Thus, long positions are not relevant now, however, if the new trend line is overcome, they can be considered with the targets of 1.3105 and 1.3177. Take Profit in this case will be from 50 to 120 points. However, take note of very frequent changes in the direction of movement, so we recommend trading in small lots.

2) Sellers keep the initiative in their hands, but at the same time they cannot overcome the 1.2873 - 1.2888 area. If they manage to settle below this area, then we will recommend new sell positions on the pair while aiming for the support level at 1.2773. Take Profit in this case can be up to 80 points.

Explanations for illustrations:

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

Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one.

Support and resistance areas are areas from which the price has repeatedly rebounded off.

Yellow lines are trend lines, trend channels and any other technical patterns.

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Hot forecast and trading signals for EUR/USD on October 16. COT report. Buyers failed to renew their interest in the euro

EUR/USD 1H

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The euro/dollar pair resumed its downward movement and quite easily overcame the support area of 1.1701-1.1725 on the hourly timeframe on October 15, and with it the Senkou Span B line, which is considered to be quite strong resistance. However, the bears have been active recently and are confidently pulling down the pair. Therefore, the pair may continue to move down with targets at 1.1664 and 1.1620. As for the bulls' prospects, they are put aside for now. However, at the same time, please be reminded that when the US dollar strengthens when the pair falls. And the current fundamental background does not imply strong dollar growth. Thus, it is possible that the quotes will stop falling soon.

EUR/USD 15M

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Both linear regression channels are still directed to the downside on the 15-minute timeframe, which is fully consistent with the picture of what is happening on the hourly timeframe. The lower charts do not provide any signs of completing the correction cycle on the 1-hour timeframe.

COT report

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

No macroeconomic background for EUR/USD on Thursday, October 15. No important news from the European Union, while the dollar continued to rise. However, the problem is that there was no important news from America either, and there were no important macroeconomic publications. Thus, we can conclude that the US dollar did not grow due to the fundamental background or macroeconomic reports. Or at least due to an event. Therefore, we continue to give preference to technical factors, since it is very difficult to predict anything based on fundamental events right now. We have already said that the main conflict lies in the fact that the bulls are afraid to buy the euro around its two-year highs, and the bears do not have sufficient grounds to sell the pair, which means buying the dollar, since the level of uncertainty in the US is just going through the roof. And with the elections approaching, the situation on the foreign exchange market can only escalate. Quite often, when an important event is approaching, which may carry consequences of extreme importance (not only for the United States, but for the whole world), panic begins in the markets. And it is not at all necessary that the US dollar will fall in price. An example is the pound/dollar pair, which has been moving from side to side for two weeks.

We have two trading ideas for October 16:

1) The pair has left the ascending channel, so buyers are not dominant in the forex market now. You can only consider to take new long positions if the quotes return to the area above the critical line (1.1775) and then you can aim for the resistance level of 1.1868 and even then, only in small lots. Take Profit in this case will be up to 80 points. This scenario is not expected to come true in the near future.

2) Bears overcame the important support area of 1.1701-1.1725 on the second try. Thus, sellers have an opportunity to trade short with targets at the support levels of 1.1664 and 1.1620. The potential Take Profit in this case is from 30 to 70 points. Not much, but the current volatility remains low.

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

EUR/USD: Coronavirus again. Europe is being quarantined

The Euro-Dollar took a dive downwards, updating two-week price lows. The Coronavirus has come to the fore again, only this time it is playing against the European currency, not against the greenback. The rate of spread of Covid-19 on the European continent is growing every day and many EU countries are forced to tighten quarantine restrictions. Meanwhile, the news from the front of pharmacology is not good. Leading companies in this field say that mass production of the vaccine will not begin until next year in the spring of 2021. "Coronavirus factor" has become the main leitmotif of today's trading, but not the only one.

Still, Covid-19 is the cause of today's EUR/USD decline. The catalyst for the downwards impulse was France, where over the past day more than 20 thousand cases of infection were registered (with a population of 65 million). Reacting to such abnormally high numbers, the government decided to introduce a state of emergency sanitary situation in the country. A little later, President Emmanuel Macron imposed a curfew in the capital and major Metropolitan areas – in particular, in Marseille, Lyon, Toulouse, Lille, Grenoble, Montpellier, Rouen and Saint-Etienne. In total, the updated quarantine measures will affect about 20 million citizens of the country. So far, we are not talking about a full lockdown: cities will "freeze" from 21:00 to 6 am. During this time period, all cafes and any commercial activities (except hospitals and pharmacies) will be closed. Without a valid and confirmed reason, you will not even be able to leave the house (a fine of 135 euros for the first time and 1500 euros in case of repeated violations). The "semi-lockdown" mode will start on October 17 and last for four weeks. At the same time, Macron warned that the special measures may be extended by law until December 1.

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A state of emergency was also imposed in Portugal, though only for two weeks for the time being. Over the past day, 2,070 infected people were registered there. This is the highest figure for the entire period of the pandemic. It is not yet known what restrictions will be tightened but according to the country's Prime Minister, these measures will allow the authorities to "restrict the movement of citizens and public life."

Disappointing news also comes from Germany, which is known to be the locomotive of the European economy. The Germans decided not to introduce a state of emergency yet, tightening only the rules on wearing masks. In some regions, bars, restaurants and other public catering establishments will be restricted until 23:00. Also, there is a limit of 10 people at private gatherings. Additional quarantine measures are also being introduced in the Netherlands. Food establishments will be closed there. Only take-out orders are allowed. Quite strict restrictions were also introduced in the Czech Republic, where not only cafes were closed, but sports events were also halted. At the same time, the country's Prime Minister Andrei Babish said that he does not rule out the introduction of a complete lockdown if the rate of growth of the disease does not slow down.

In other words, almost every EU country is now feeling the effects of the second wave of the pandemic. Each state reacts in its own way, but the trends are quite obvious: quarantine restrictions are being tightened to some extent everywhere. Once again, tourism, services, and air transportation are at the forefront of the attack. The Euro could not stay away from such a news flow, especially against the background of weak macroeconomic reports that indicate a slowdown in recovery processes (take at least the latest data on the growth of European inflation).

The dollar index, in turn, is showing growth today, although this growth is due solely to the external fundamental background. A surge in anti-risk sentiment in the currency market has increased demand for a safe greenback. Figuratively speaking, the Dollar has again become the beneficiary of troubled times, even despite the array of its own problems. For example, today the US Treasury Secretary said that the bill on additional assistance to the economy is unlikely to be agreed before the presidential election. A similar position was voiced by the leader of the Democrats in the House of representatives, Nancy Pelosi.

But the growth of anti-risk sentiment leveled this fundamental factor. After all, in addition to the growing number of infected people and the tightening of quarantine restrictions in Europe, traders have other reasons to worry. In particular, this morning came negative statistics from China. According to published data, the consumer price index in China in September increased by only 1.7%. This is the weakest rate of inflation growth since March last year. The producer price index, which is an early signal of changes in inflationary trends, also disappointed the market. This indicator, firstly, remained in the negative area, and secondly, it was in the "red zone", falling short of the weak forecast values (-2.1% instead of -1.9%).

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In addition, the head of the Reserve Bank of Australia, Philip Lowe, who announced a reduction in the RBA's interest rate, also contributed to the general negative mood. Similar intentions were recently expressed by the head of the Bank of England, Andrew Bailey, and the head of The Reserve Bank of New Zealand. Some experts have already assumed that the second wave of the coronavirus epidemic will be followed by a wave of dovish decisions by central banks.

At the moment there are all prerequisites for a further decline in the EUR/USD pair. The nearest support level (the lower target) is located at 1.1620 (the lower border of the Kumo cloud coincides with the lower line of the Bollinger Bands on the daily chart). On the weekly chart, this price level coincides with the average line of the Bollinger Bands.

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Overview of the GBP/USD pair. October 16. The "storm" continues. New COVID-2019 anti-record. Possible secession of Scotland

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) - downward.

CCI: -106.1767

The British pound sterling, paired with the US currency, collapsed by almost 200 points on October 13, recovered by 180 points on October 14, and again collapsed by 150 points on October 15. Thus, the "storm" for the pound/dollar pair continues and the pair has fallen by about 200 points over the past 2 weeks. This suggests that the market has developed a kind of panic and confusion. Traders are nervous and the reasons for these nerves lie in the UK, as the euro/dollar pair is trading very calmly, so the reasons are not based in the EU or the US. Well, what could be the case in the UK that traders started to panic so much? Of course, Brexit. Brexit and the second wave of "coronavirus", which makes you worry about the future of the country.

And the first thing we want to note is the number of new cases of "coronavirus" infection, which was detected on October 14. This number is 19,751 cases. This is the absolute maximum for the entire period of the pandemic, except for October 4, when 23 thousand cases were recorded, but then it turned out that the real number of diseases on this day was added to the cases that had not yet been taken into account. Thus, we can assume that it was on October 14 that a new anti-record was set in the Foggy Albion and this anti-record is almost 4 times higher than the maximum levels of morbidity that were recorded in March-May when the UK health system was already bursting at the seams. Thus, the first reason for yesterday's fall in the British currency is "coronavirus".

The second reason is the EU summit, during which issues related to the Brexit deal were to be discussed once again. However, it is not forbidden to discuss Brexit, however, traders are not interested in the next discussion, but the final results of the negotiations. But there are no results yet and they are unlikely to appear on October 16. The fact is that even before the start of the summit, many EU and UK officials, as well as political experts, noted that the parties will declare insufficient progress in the negotiations and continue them. Thus, in fact, at the end of the summit, its participants will have nothing to tell the markets. As for the prospects of signing a free trade agreement, they remain extremely doubtful, and we give no more than a 5% probability of success. In fairness, it should be noted that we believe that it will be almost impossible to reach an agreement. The vast majority of media and publications also wrote on the eve of the summit that there will probably be no trade deal, and the Kingdom and the Alliance will trade with each other from 2021 on WTO terms. And this is the second reason for the fall of the pound yesterday and its possible further fall.

It also emerged yesterday that the Organisation for Economic Co-operation and Development expects UK GDP to shrink by 10% or more by the end of 2020. It is only necessary to compare this figure with the one that the Fed predicts for its economy – minus 6.5% in 2020. The figure from the Fed may be slightly overstated, but in the worst case, it is -7%. Although in the second quarter, the US economy lost 32% and the British – 20%. If the OECD forecast is accurate, it turns out that the British economy is recovering much slower than the American one, which is another reason for the further fall in the British pound. Also, we have repeatedly stated that in 2021, if the pandemic is brought under control, many of the world's economies (almost all of them) will begin or continue to recover, depending on how strong the second wave of the epidemic. All or many, but not the British economy, which may start to shrink again due to Brexit and new trade conditions with the European Union. And this is the fourth reason for the very likely further fall in the British currency quotes.

The fifth reason is political. We continue to believe that Boris Johnson as Prime Minister of the United Kingdom has not achieved a single victory, except for Brexit, which, by the way, is not even completed yet. And if the head of state does not win, does not lead the country to development and growth, cannot agree with international partners, then it is unlikely that in this case, it makes sense to talk about economic growth.

The sixth reason is the possible loss of Scotland. According to the latest sociological research, about 58% of people in Scotland support the country's exit from the United Kingdom. Over the past 6 years (this is how much has passed since the last independence referendum), the number of supporters of leaving the Kingdom has increased by 15%. Recall that the head of state and the Scottish National Party, Nicola Sturgeon, promised voters that a new date for the independence referendum will be chosen before May 2021. The main dissatisfaction of Scots is because the UK has left the EU, and about 62% of Scots are against severing ties with the EU. Thus, there is no doubt that Edinburgh will continue to push for a new referendum and will try to enlist the support of the European Union, which will not mind at all if Scotland returns to its membership. And the situation is quite difficult for Edinburgh because London not only has the full right to refuse to hold a new referendum but also has very strong justification for its refusal. This was stated by Boris Johnson in a letter to Nicola Sturgeon: "You and your predecessor personally promised that the 2014 independence referendum would be the only one in this generation. The people of Scotland voted strongly to remain in the United Kingdom." The argument is ironclad, otherwise, Scotland will want to hold a referendum every year. However, many experts believe that Scotland can follow the path of legal proceedings or stop obeying London to continue pushing for a second referendum.

Thus, the prospects for the British pound remain dim against almost all major currencies, and we believe that in 2020 and 2021, the long-term decline in its quotations will resume.

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The average volatility of the GBP/USD pair is currently 139 points per day. For the pound/dollar pair, this value is "high". On Friday, October 16, therefore, we expect movement inside the channel, limited by the levels of 1.2773 and 1.3051. A reversal of the Heiken Ashi indicator up signals a new round of upward correction or upward movement.

Nearest support levels:

S1 – 1.2909

S2 – 1.2878

S3 – 1.2848

Nearest resistance levels:

R1 – 1.2939

R2 – 1.2970

R3 – 1.3000

Trading recommendations:

The GBP/USD pair started a new strong movement on the 4-hour timeframe. Thus, today it is recommended to stay in short positions with targets of 1.2878, 1.2848, and 1.2817 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.

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

Overview of the EUR/USD pair. October 16. Biden increases the gap to Trump. Republicans are setting up their own voting boxes

4-hour timeframe

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Technical details

Higher linear regression channel: direction - sideways.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - downward.

CCI: -140.0310

For the EUR/USD pair, the fourth trading day of the week was more active than the previous few days. The US currency continued to strengthen against the euro, however, it still does not give the impression of a stronger currency, which could become more expensive in the long term. All movements of the last weeks and months still fall best under the meaning of the word "flat". Even if this "flat "is not accurate and clear, nevertheless, the euro/dollar pair has been trading mostly sideways for the past almost three months, thus, the current drop in the euro currency quotes by "as much as" 140 points may be a simple noise inside the very side channel that we have already mentioned several times. And if so, it makes no sense to look for the reasons for the fall or growth of the US currency now. It should be clearly understood that if there is no news or traders ignore them, this does not mean that the pair will not trade at all. In any case, there are commercial transactions in the foreign exchange market for the purchase and sale of all currencies for the current needs of commercial banks, central banks, large companies, and enterprises. This means that in any case, the pair will not move sideways in the 20-point range. However, is it possible to conclude that the growth of dollar quotes by 100 points is a consequence of some political or macroeconomic process or event? At this time, this is exactly the situation in the foreign exchange market. All macroeconomic statistics are ignored, and market participants who trade for profit simply do not know what to expect from the US dollar and what the future holds for the US economy. This is why the pair has been trading in a very narrow price range in recent months. If the second currency was, for example, the pound, then trading would be much more trending, since the UK now has its factors that have a significant impact on the mood of traders. That is why we believe that the most important thing for the dollar right now is the presidential election, which is less than three weeks away.

Moreover, there is a lot of news about the US election. First, it should be noted that the presidential election has already begun, as more than 15 million people in America have already voted early. These people have already decided on their choice and do not want to wait for November 3. This is quite possible, however, never before has such a large number of voters voted ahead of schedule. The American newspaper The Washington Post reports that the majority of those who voted chose Joe Biden. Thus, if you count the votes now, Biden is already the leader. It is reported that a disproportionately large number of women and black citizens, who make up the majority of Joe Biden's electorate, came to the polls. However, these preliminary voting results should not be misleading, as most Trump supporters will be voting on November 3. It is even possible that Biden decided to play it safe and asked his voters to vote in advance to avoid possible trials and falsification of the vote count. Also, Trump has repeatedly stated that voting by mail can take a very long time due to the long counting of votes. Thus, Biden makes the task of election commissions somewhat easier, since his supporters began voting three weeks before election day.

Meanwhile, new results of opinion polls conducted by major magazines and TV companies have arrived. So, according to various data, the advantage of Joe Biden over Donald Trump is now from 11% to 17%. Thus, according to the results of various opinion polls, it can still be concluded that the Democrat's advantage continues to grow. Experts also calculated that Biden has almost the biggest advantage over his competitor three weeks before the election in the history of opinion polls, that is, since 1936. As you can see, Trump's position is not the most enviable and is not improving. Meanwhile, Trump himself began to use campaign slogans that perfectly show his current low support. "People are fleeing California. Too high taxes, too high crime, too many failures, too strict quarantine. Vote for Trump, what the hell do you have to lose!", Trump wrote on Twitter, referring to the residents of California.

Well, of course, now, three weeks before election day, it is not without "tricky tricks" from the Republicans. Many experts and the candidates themselves believe that the key to the vote will be the state of California, which gives 55 "electoral votes" at once - the largest number among all the states of America. Thus, figuratively speaking, Biden can win in a dozen states with the number of "electoral votes" from 3 to 7, and Trump, having won in California, will cover ten "Biden" states with one state. Thus, the fight for California will not be a joke. Moreover, California is one of the controversial states, that is, where there is no unequivocal support for Biden or Trump. Thus, it is in it that plus or minus 100 thousand voters can change the result of all elections. And in this state, the Republicans have begun to place their bins for the collection of the ballots. No article in state law prohibits a particular party from placing additional ballot boxes. There is only a ban on forging ballots. However, California Secretary of State Alex Padilla believes that only officials who are responsible for the election process have the right to place additional boxes. The essence of the entire Republican game is clear as day. Under the pretext of accusing the Democrats of possible fraud and because of distrust of them, they want to bring chaos to the states and cities that are governed by the Democrats. To confuse them as much as possible. However, this is not even news. Trump has hailed states and cities run by Democrats throughout his presidential term. And the Democrats themselves said a few months ago that Trump and his team would try to disrupt elections in those cities and states that are not "Republican". In general, the ballot boxes and boxes from the Republicans are only the first steps on the way to November 3.

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The volatility of the euro/dollar currency pair as of October 16 is 65 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1635 and 1.1765. A reversal of the Heiken Ashi indicator upward may signal a round of upward correction.

Nearest support levels:

S1 – 1.1658

S2 – 1.1597

Nearest resistance levels:

R1 – 1.1719

R2 – 1.1780

R3 – 1.1841

Trading recommendations: the

The EUR/USD pair continues its downward movement. Thus, today it is recommended to leave open sell orders with targets of 1.1658 and 1.1635 until the Heiken Ashi indicator turns up. It is recommended to consider buy orders if the pair returns to the area above the moving average with the first target of 1.1841.

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