Huge wave of negativity supports the USD rate. AUDUSD and NZDUSD pairs will continue to locally decline

The US dollar continues to receive support, although there are still no results in the negotiations between S. Mnuchin and N. Pelosi, which also does not contribute to the rising optimism in the markets, following the COVID-19 outbreak in the world.

It was reported earlier that Congress' Lower House Speaker, N. Pelosi delivered an ultimatum to the White House, in which she stated that a decision on incentives is needed in the next 48 hours. Her words seemed like a threat, although she explained that it was a metaphor indicating the necessary urgency to make a decision. Therefore, investors expected that an agreement could be concluded between Mnuchin and Pelosi yesterday, but this did not happen, which resulted in the decline in US stock indices and dollar's growth.

On the other hand, there are also similar problems in Europe that have turned local equity markets down and pushed the single currency rate higher. The second wave of the COVID-19 pandemic, which has already led to new partial restrictions in a number of European countries, still plays an important role there. Moreover, the growing likelihood of Brexit without a deal between the EU and Britain is also contributing negatively.

Given this condition and the market's complete disregard of the incoming economic data, we believe that the current situation will remain until the US presidential elections. It is unlikely that S. Mnuchin and N. Pelosi will successfully agree on new measures to help the country's economy before November 3, when the election is held. Under these conditions, the dynamics on the stock markets will remain sideways at best, while stock indices will decline at worst. At the same time, the US dollar is expected to strengthen against all major currencies, except for the euro, franc and yen. The pound, in turn, is likely to stay sideways until it is finally clear that Britain is leaving the EU without a deal.

Commodity and commodity currencies will remain under pressure, as the global pandemic situation does not contribute to the growth of economic activity in countries, which certainly leads to weak demand for commodity assets.

Forecast of the day:

The AUD/USD is declining after breaking through the level of 0.7060. It is very likely that it will continue to decline first to 0.7000, and then to 0.6970.

The NZD/USD pair implements the "rising flag"trend continuation pattern. We expect it to decline to the level of 0.6540, and then to 0.6510.

analytics5f8e8378b43fa.jpg

analytics5f8e83927501b.jpg

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

Hot forecast and trading recommendations for GBP/USD on 10/20/2020

Prime Minister Boris Johnson made another statement that contradicted everything he had said before. And oddly enough, if his previous statements negatively affected the pound, then on the contrary, it supported the British currency yesterday. After all, despite all his previous statements, Johnson suddenly announced that in order to reach a compromise on a trade deal with the European Union, London is ready to amend the law on protecting the UK internal market. The same law that, in fact, became the reason why negotiations were terminated, because of which Johnson had to beat out another delay. Indeed, only for a month, but nonetheless. Of course, so far there is no specifics as to what changes can be made to this controversial law, which, by the way, contradicts all norms of international law. But even that was enough to give the pound a noticeable dose of optimism. However, towards the end of the trading day, the pound began to show a tendency to move backwards. The reason was reports that the British government is considering an action plan to counter the possibility of organizing a second referendum on Scottish independence. Allegedly, there is a whole document that somehow got into the media. The official authorities have not yet commented on this issue. Nevertheless, the prospect of a complete collapse of the United Kingdom and the fact that the government is seriously considering this issue, somehow cooled interest in the pound.

analytics5f8e8daab23e0.jpg

It is clear that today the markets will wait for some details on both of these issues. Macroeconomic statistics, which are practically nonexistent today, are unlikely to have a significant impact. After all, only construction data in the United States will be published. And this data has a rather limited impact on the markets. Nevertheless, the number of new construction projects may increase by 2.8%, and the number of issued building permits by another 1.8%.

New Construction (United States):

analytics5f8e8dad9f447.jpg

The GBPUSD pair showed high activity, as a result of which an inertial move was formed in the direction of the psychological level of 1.3000, where a slowdown occurred, followed by the restoration of short positions.

If we proceed from the quote's current location, we can see that the recovery process has an impulsive form, where the 1.2935 coordinate serves as a variable support, relative to which a deceleration of 1.2935/1.2955 occurred.

As for volatility, we have high dynamics on a stable basis, which indicates the prevailing speculative mood of the market.

Looking at the trading chart in general terms, the daily period, we can see a corrective move from the local low of 1.2674, where there is a recovery of more than half at the moment.

We can assume that the stagnation in the borders of 1.2935/1.2955 will end during the European session, where the best trading strategy is the method of breaking a particular border, working for a local surge in activity.

From the point of view of complex indicator analysis, we see that the indicators of technical instruments at minute intervals have a neutral signal due to the stagnation of 1.2935/1.2955. Hourly periods indicate a sell signal due to the downward momentum from yesterday.

analytics5f8e8e15d9436.jpg

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

Technical Analysis of ETH/USD for October 20, 2020

Crypto Industry News:

The Korean Blockchain Association has called for the government's plan to introduce a 20% tax on cryptocurrency trading to be delayed for another two years.

According to a media report, the Korea Blockchain Association, or KBA, is asking regulators to postpone the South Korean government's implementation of its long-awaited new tax strategy by January 1, 2023.

The KBA does not explicitly state that this is against a 20% tax rate, but has said cryptocurrency exchanges and industry companies need a "reasonable period" to prepare for the Income Tax Act.

One of the reasons for the delay is the short period between the regulations of the old tax system and the start of the new one. Cryptocurrency exchanges will be able to report transactions covered by the previous tax code by the end of September 2021. However, KBA argues that since the Ministry of Economy and Finance of Korea has specified a revised code to be enforced from October 1, 2021, it would be difficult to comply with the new regulations in potentially less than 24 hours.

The chairman of the Korea Blockchain Association, Oh Gap-soo, suggested that since the government has become involved in taxing digital assets for the first time, a temporary tax code suspension may be necessary. Regulators may not immediately accept reports from crypto companies, leading to uncertainty as to whether they will be able to continue operating in October.

Technical Market Outlook:

The ETH/USD pair has extended the retracement towards the level of 61% located at $381.85. The target for bulls is still seen at the level of $400, but for now the market pulled back towards the intraday support at $375.52 and is consolidating the recent gains. The nearest technical resistance is seen at the level of $389.90 and at the swing top at $394.95. On the other hand, the target for bears is seen at the level of $360.60 and $355.60 and the nearest technical support is seen at the level of $369.37.

Weekly Pivot Points:

WR3 - $424.52

WR2 - $408.88

WR1 - $391.97

Weekly Pivot - $376.47

WS1 - $357.63

WS2 - $341.22

WS3 - $328.22

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.

analytics5f8e8cb1dbf2e.jpg

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

Technical Analysis of BTC/USD for October 20, 2020

Bitcoin continues the uptrend towards $12k

Crypto Industry News:

Rothschild Investment Corporation bought 27 Bitcoin stocks via GBTC Grayscale. The corporation is estimated to have $ 1.4 billion in assets (as part of its official structure), of which $ 235,000 is currently in Bitcoin.

This makes this fund one of the best known to buy Bitcoin. The purchase is likely to be finalized for one of their private clients, which is just one of the many private banks owned by Rotschild Investment.

Recently, the world has been circulating more and more new information on how various corporations or investment funds are entering the world of cryptocurrencies. The richest are increasingly favoring Bitcoin and altcoins. And it's not just about hedge funds, but whole clans of the wealthiest.

Already in 2018, the global media reported that the Rockefeller family, known for its dominance in the fuel sector, was investing in start-ups in the blockchain industry.

Technical Market Outlook:

The BTC/USD pair keeps trying to enter into the supply zone located between the levels of $11,646 - $11,785, so some kind of the bearish pressure might be seen. If bulls fail to break through to the next target seen at the level of $11,855 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 - $12,229

WR2 - $11,973

WR1 - $11,678

Weekly Pivot - 11,375

WS1 - $11,077

WS2 - $10,755

WS3 - $10,461

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.

analytics5f8e8b39deda5.jpg

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

Technical Analysis of EUR/USD for October 20, 2020

Technical Market Outlook:

The EUR/USD made a local lower low at the level of 1.1688, just below the technical support seen at the level of 1.1696 and then bounced higher in order to break through the local trend line resistance. The local high was made at the level of 1.1792, which is a part of the old Supply Zone. The next target for bulls is seen at the level of 1.1822, which is the 61% Fibonacci retracement level from the weekly time frame. The price had been testing this level many times before, but is still unable to leave it alone. The nearest intraday support is seen at the level of 1.1764.

Weekly Pivot Points:

WR3 - 1.1924

WR2 - 1.1873

WR1 - 1.1783

Weekly Pivot - 1.1733

WS1 - 1.1641

WS2 - 1.1593

WS3 - 1.1509

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.

analytics5f8e8a1e1880d.jpg

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

Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on October 20

Analysis of transactions in the EUR / USD pair

The euro moved 40 pips up from the level of 1.1731 yesterday, bringing quite large profit to bullish traders in the market.

analytics5f8e6ce617dc7.jpg

Trading recommendations for October 20

The most important event today is the scheduled speeches of Fed representatives. If such fails to support the euro in rising in the markets this morning, pressure could come back in the EUR / USD pair during the US trading session, which would quickly cover all the growth the pair had yesterday.

analytics5f8e6ced84b29.jpg

  • Open a long position when the euro reaches a quote of 1.1800 (green line on the chart), and then take profit at the level of 1.1850. However, there is a low chance that demand will be at the same level today as it had yesterday.
  • Open a short position when the euro reaches a quote of 1.1760 (red line on the chart), and then take profit at the level of 1.1709.

Analysis of transactions in the GBP / USD pair

The pound climbed up in the market again, rising 50 pips from the level of 1.2947. Then, afterwards, a correction began to emerge, and it started from the level of 1.2975.

analytics5f8e6cf64561f.jpg

Trading recommendations for October 20

Since there are no important statistics scheduled for release today, the attention of traders will be focused on Brexit negotiations, which, until, has not been settled yet. A bad news will resume the downward trend in the pair, while a good news, or even lack of any at all, will raise the pound against the US dollar in the market.

analytics5f8e6cfe946a2.jpg

  • Open a long position when the pound reaches a quote of 1.2962 (green line on the chart), and then take profit around the level of 1.3014 (thicker green line on the chart).
  • Open a short position when the pound reaches a quote of 1.2930 (red line on the chart), and then take profit at least at the level of 1.2877. Bad news on Brexit will resume the downward trend in the GBP/USD pair.
The material has been provided by InstaForex Company - www.instaforex.com

Technical Analysis of GBP/USD for October 20, 2020

Technical Market Outlook:

The GBP/USD bounced towards the level of 1.3017 but was capped at this level and reversed back down towards the upper channel line after the market had been rejected from the supply zone located between the levels of 1.3059 - 1.3081. 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.

Weekly Pivot Points:

WR3 - 1.3222

WR2 - 1.3147

WR1 - 1.3005

Weekly Pivot - 1.2924

WS1 - 1.2790

WS2 - 1.2718

WS3 - 1.2567

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).

analytics5f8e88e75632d.jpg

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

EUR/USD: Will the US national debt put a lot of pressure on the USD?

analytics5f8e7bb8d87ff.jpg

The US dollar is confused by the imbalance issue, being a victim of the upcoming elections and national debt. The lack of balance in the EUR/USD pair hinders its further growth, which makes the market very worried.

Today, there was a formation of an unfavorable external background for the US currency, which can trigger a lot of problems. Experts consider Fed's increasing purchases of securities to be one of them. This so-called "paper takeover" has tripled which puts a lot of pressure on the dollar. The regulator acquired mortgage and treasury securities for $ 29.97 billion last week, which is more than the amount recorded a week earlier – $ 11.16 billion. Experts also emphasized that the yield of US government bonds remains very low.

The confusing up and down movement of the USD creates the question of another stimulus in the US, which is currently undecided. The market is tensely waiting for the appropriate decision from the monetary authorities, and during this waiting period, the US currency is experiencing the strongest volatility. Thus far, traders and investors are counting on an agreement between the US Democratic and Republican parties to provide additional assistance to citizens and businesses.

This issue has become a hindrance between leading politicians. Many Republicans who previously supported current US President D. Trump disagrees with him, while other policymakers are questioning the need for another major stimulus package. Although there are a lot of contradictions on key issues, the market is optimistic. Specialists believe that the US currency can still grow moderately and this is confirmed by the current trend. Today, the EUR/USD pair is trading around the level of 1.7777, which could bring luck to this pair.

The rising US national debt is also another factor that puts pressure to the US dollar according to the experts. The money supply has no space for the US dollar to grow, creating a surplus in the international market. However, some analysts disagree. According to Lawrence Summers, the former US Treasury Secretary, monetary authorities can borrow the amount of money they need without much damage to the economy. At the same time, zero rates and the time-tested status of a global defensive asset is on the dollar's side. L. Summers is sure that this will not allow the dollar to collapse even in the event of an excess of money supply.

Experts believe that the US dollar will cope with the burden of the national debt. The unsteady volume of loans will not be able to push down the dollar, but its sustainability has a limit. Therefore, experts do not suggest testing the USD for strength in the future, as the financial consequences of such manipulations are unpredictable.

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

Indicator analysis. Daily review on GBP/USD for October 20, 2020

Trend analysis (Fig. 1).

On Tuesday, the market will attempt to continue moving up from the level of 1.2948 (the closing of yesterday's daily candle) with the goal of 1.2983 - a pullback level of 38.2% (blue dotted line). If this level is reached, keep on working up with the goal of 1.3078 - a pullback level of 50.0% (blue dotted line).

analytics5f8e8577c76e7.jpg

Figure 1 (Daily chart).

Complex Analysis:

  • Indicator analysis - up
  • Fibonacci levels - up
  • Volumes - up
  • Candle analysis - up
  • Trend analysis - up
  • Bollinger bands - up
  • Weekly chart - up

General conclusion:

Today, the price from the level of 1.2948 (the closing of yesterday's daily candle) will try to continue moving up with the goal of 1.2983 - a pullback level of 38.2% (blue dotted line). If this level is reached, keep on working up with the goal of 1.3078 to roll back the level of 50.0% (blue dotted line).

Unlikely scenario: an upward movement with a target of 1.2983 - a pullback level of 38.2% (blue dotted line). If this level is reached, work down with the target 1.2881 - support line (red bold line).

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

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

analytics5f8e84b55e211.jpg

Yesterday, the EUR/USD pair failed to break through the pivot point – the support level of 1.1700 (1.1685/1.1700), and this resulted in a reversal movement, which led to the quote's pullback to the area of 1.1765/1.1793.

In this case, several technical factors acted as a support to strengthen the European currency. I suggest that you consider them.

1. A technical price rebound from the important price level 1.1700, where the quote was held for a long time without updating the low - 1.1685. This is the so-called natural basis associated with the repetition of important price levels in terms of price rebound.

2. The relationship of trading instruments, in this case the GBP/USD and EUR/USD pairs, where the pound set an upward pace in view of Brexit information, and it was picked up by the European currency, drawing almost the same inertia.

Regarding the quote's current location, you can see that there was a slowdown in the form of a pullback followed by a range of 1.1765/1.1793, after a sharp growth of 1.1705 -> 1.1795.

Trading forecasts can be made from several possible market scenarios based on the location of the quote and the range.

First scenario: Working on the breakdown of the specified boundaries

This is considered to be the best trading strategy, where work is carried out on a breakdown of a particular boundary of the variable stagnation 1.1765/1.1793. The prospect has quite good return, since it will lead to new inertial changes in the market.

- Buy deals is made above the level of 1.1795, in the direction of 1.1815-1.1825.

- Sell delas is made below the level of 1.1765, in the direction of 1.1745-1.1700.

Second scenario: Prolonging stagnation

In this case, the boundaries of fluctuations 1.1765/1.1793 turned out to be stronger than expected. This leads to a delay in the amplitude process, but we will still return to the first scenario in the end.

analytics5f8e84d5a6f43.jpg

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

GBP/USD: plan for the European session on October 20. COT reports. Pound's bullish momentum under threat. Bears focus on

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

Yesterday's bullish momentum did not receive support in the afternoon, as expected, since buyers of the pound have very little reason for optimism. If you look at the 5-minute chart, you will see how the signal for selling GBP/USD, which I analyzed in detail in yesterday's afternoon review, and where I also recommended opening short positions, was confirmed several more times. Another false breakout of the 1.3007 level occurred at the beginning and middle of the US session, which only increased pressure on the pound and caused it to fall to the support area of 1.2945. As a result, the profit reached more than 50 points.

analytics5f8e8540f0e02.jpg

From a technical point of view, nothing has changed much at the moment, since the pair did not go beyond the horizontal channel. However, buyers are no longer fighting for 1.3013, but defending 1.2936 instead. On the hourly chart, you can see how trading is now being carried out in the 1.2936 area and the bulls will have to put in a lot of effort to achieve a false breakout at this level, which will be a signal to open long positions in the pair. In this case, the goal is to return to the upper border of the horizontal channel at 1.3013, which also serves as yesterday's high. Forming a breakout on it will resume the bull market and open a direct path to the 1.3080 area, where I recommend taking profits. In the absence of activity at the 1.2936 level during the first half of the day, it is best not to rush into buy positions, since important fundamental statistics will not be published today, and there is no particular reason for the pound to rise. The closest support level will be the lower border of the horizontal channel at 1.2865, from which you can buy the pound immediately on a rebound, counting on a correction of 20-30 points within the day.

The Commitment of Traders (COT) reports for October 13 showed that both long and short non-commercial positions have decreased. Long non-commercial positions declined from 40,698 to 36,195. At the same time, short non-commercial positions significantly dropped from 51,996 to 45,997. As a result, the negative value of the non-commercial net position slightly increased to -9 802 , against -11,298 a week earlier, which indicates that sellers of the British pound retain control and also shows their slight advantage in the current situation.

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

Sellers clearly do not intend to give up the market and they will focus on support at 1.2936 in the morning. Settling below this range forms a good entry point for short positions in anticipation of returning the pound to the lower border of the horizontal channel at 1.2865, where I recommend taking profits. Going beyond it will lead to forming a bearish trend that can pull down the pound to the lows of 1.2807 and 1.2749. If the bulls manage to seize the initiative, then it is better not to rush to sell. The most optimal scenario for opening short positions will be forming a false breakout in the area of the upper border of the horizontal channel at 1.3013. I recommend selling GBP/USD immediately on a rebound after testing a new high of 1.3080, counting on a correction of 20-30 points within the day.

analytics5f8e8543f0fe1.jpg

Indicator signals:

Moving averages

Trading is carried out in the area of 30 and 50 moving averages, which indicates another market uncertainty with direction.

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

Bollinger Bands

Growth will be limited by the upper level of the indicator around 1.3013. A breakout of the lower border of the indicator in the 1.2920 area will increase the pressure on the pair.

Description of indicators

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

EUR/USD: plan for the European session on October 20. COT reports. Bulls need a breakout of 1.1793 to maintain growth potential

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

Buyers of the euro coped with resistance at 1.1770 without any problems in the afternoon, however, they failed to wait for a convenient entry point even from this level. Let's take a look at the 5-minute chart. You can clearly see how the bulls are attacking 1.1770 and continue to push the euro up to the resistance area of 1.1797, from which I recommended selling EUR/USD immediately on a rebound. But we did not even reach five points to this level, so whoever did not enter the market in short positions and missed this entry point did the right thing, since there was no signal to sell.

analytics5f8e84ede5afa.jpg

Today a lot will depend on how buyers appear in the resistance area at 1.1793. If the bulls immediately test this range and try to gain an even higher foothold there, then wait until this level has been updated from top to bottom before buying the euro, since the probability of forming a false breakout there is quite high. This is all due to the divergence that is currently forming on the MACD indicator. If bears do not exceed the 1.1793 level, then you can buy and wait until the euro recovers and reaches a high of 1.1824, as well as for the renewal of the larger resistance at 1.1868, where I recommend taking profit. An equally important task for the bulls, in the absence of fundamental statistics, will be to protect support at 1.1765, slightly below which there are now moving averages playing on the side of the euro buyers. Forming a false breakout there and rebounding from the averages will be a signal to buy EUR/USD. If there is no rapid upward movement from this range, then it is best to postpone buy positions until the intermediate support at 1.1739 has been tested, or open long positions immediately on a rebound from the low of 1.1704, counting on a correction of 15-20 points within the day.

The Commitment of Traders (COT) report for October 13 showed a decrease in long positions and an increase in short ones, which led to an even greater decline in the delta. Despite this, buyers of risky assets believe that the bull market will continue, but they prefer to act with caution, as there is no good news for the eurozone yet. Thus, long non-commercial positions decreased from 231,369 to 228,295, while short non-commercial positions increased from 57,061 to 59,658. The total non-commercial net position decreased to 168,637, against 174,308 a week earlier. which indicates a wait-and-see attitude from new players, however, bullish sentiments for the euro remain rather high in the medium term. The more the euro will decline against the US dollar at the end of this year, the more attractive it will be for new investors.

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

Sellers need to defend resistance at 1.1793, since a lot depends on it. Forming a false breakout at this level in the first half of the day, which may occur after updating Monday's high, together with the confirmation of the divergence, which is now visible on the MACD indicator, will be an excellent signal to open short positions in euro with the goal of breaking and settling below the support of 1.1765 , slightly below which the moving averages pass. However, it will be possible to talk about gradually returning control to the bears after settling below 1.1765, which forms a good signal to sell the euro to the 1.1739 area, but the next target will be the low of 1.1704, where I recommend taking profit. In case EUR/USD grows further along the trend and a breakout is formed on resistance at 1.1793, I recommend not to rush to sell, but to wait until a new high at 1.1824 has been updated, or open short positions immediately on a rebound from the resistance of 1.1868, counting on a correction of 15-20 points within the day.

analytics5f8e84f0efd67.jpg

Indicator signals:

Moving averages

Trading is carried out above 30 and 50 moving averages, which indicates the continued bullish sentiment in the market.

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

Bollinger Bands

A breakout of the lower border of the indicator around 1.17550 will increase pressure on the euro and lead to a larger downward movement of the pair. A breakout of the upper border of the indicator in the 1.1790 area will lead to an increase in EUR/USD.

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

Indicator Analysis. Daily review for EUR / USD currency pair 10/20/2020

Trend analysis (Fig. 1)

Today, the market may continue to move upward from the level of 1.1772 (closing of yesterday's daily candle) with the target of 1.1813, a retracement level of 50.0% (red dotted line). The price, having tested this line, will continue to work upward with the target at 1.1833 - the upper fractal (blue dotted line). The upward trend continues.

analytics5f8e8b6faa37d.jpg

Figure: 1 (daily chart).

Comprehensive analysis:

  • Indicator Analysis - up
  • Fibonacci Levels - up
  • Volumes - up
  • Candlestick Analysis - up
  • Trend Analysis - up
  • Bollinger Lines - up
  • Weekly Chart - up

General conclusion:

Today, the price from the level of 1.1772 (closing of yesterday's daily candle) may continue to move upward with the target of 1.1813, the retracement level of 50.0% (red dotted line). The price, having tested this line, will continue to work upward with the target at 1.1833 - the upper fractal (blue dotted line).

Unlikely scenario: when working upwards, upon reaching the upper fractal - 1.1795 (candle from 19.10.2020) - working downwards, with the target at 1.1718 - the support line (red bold line).

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

AUD/USD. RBA's minutes left more questions than answers

The Australian Dollar is under pressure again. This time, the catalyst for the downwards momentum for the AUD/USD pair was the minutes of the Reserve Bank of Australia's last meeting. At the end of last week, the head of the RBA, Philip Lowe, announced that the regulator is ready to consider the option of reducing the rate to 0.1% which is 15 basis points. This statement put a lot of pressure on the Dollar, which, paired with the greenback, fell to the middle of the 70th figure. No surprises were expected from the minutes of the October meeting. But, as is often the case in the foreign exchange market, the release still presented as a small surprise, aggravating the situation of the Australian currency.

During the October meeting, the members came to a unanimous opinion that further easing of monetary policy is an appropriate solution. This is primarily to support the labor market and the economy as a whole. In the opinion of the majority of the members of the RBA, easing monetary policy will also help to reduce risks to financial stability. Therefore, the central bank is ready to apply a whole range of measures, including expanding the volume of purchases of government bonds and reducing the interest rate to zero.

analytics5f8e8632275ae.jpg

The last thesis caused a certain response among AUD/USD traders. The head of the RBA said a few days ago that the rate could be reduced by 15 basis points. Now it turns out that the rest of his colleagues allow a reduction of 25 points, that is, to zero.

According to most experts, the Reserve Bank of Australia will move from words to action at the next meeting, which will be held on November 3. And now traders have a dilemma: which scenario will come to life. Based on the general mood of the RBA, it became clear that the probability of an interest rate cut is almost 100%. The only question is how much it will be reduced.

Another important point of the minutes published today is that RBA members have decided to pay more attention to actual, rather than projected, inflation when making decisions. Expectations for consumer inflation improved significantly in October. Whereas the actual inflation showed a negative trend. According to the latest data, the consumer price index in quarterly terms, for the first time since the spring of 2016, collapsed into a negative area. However, it did not fall to the forecasted -2% but to -1.9%. In annual terms, the indicator was also below zero. The indicator came out at -0.3%. Inflation in Australia remains a weak link, so the above thesis, voiced at the October meeting, is of particular importance for AUD/USD traders.

Thus, the minutes of the RBA, contrary to numerous forecasts, did not turn out to be passable. The minutes of the last meeting left more questions than answers. We can only say one thing with confidence: in the foreseeable future, the regulator will not reduce the interest rate to zero. The central bank will exclude the option of negative territory. At least at this stage of the Coronavirus crisis, there is no need to worry about it.

But in General, the document published today is dovish in nature, so the reaction of the Australian dollar is quite justified.

analytics5f8e86351e13e.jpg

From a technical point of view, the downwards dynamics of the pair has priority. On the daily chart, the price is under the Kumo cloud, under all the lines of the Ichimoku indicator, and between the middle and lower lines of the Bollinger Bands trend indicator. All this suggests that from the current positions, we can consider sales to the nearest support level of 0.7000. This is the lower line of the Bollinger Bands on the same timeframe. In addition, this target is a kind of a safe area for AUD/USD. Therefore, it is better to close short positions in this area, as the key support level may be too much for the pair's bears.

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

Elliott wave analysis of GBP/JPY for October 20, 2020

analytics5f8e6a0a72192.jpg

GBP/JPY has broken above short-term key- resistance at 136.40 which is a strong indication that red wave ii has completed and red wave iii now is in motion for a rally towards 143.18 and possibly even higher.

Short-term support is now seen at 136.40 with key-support at 135.82. The late must be able to protect the downside or a re-test of the former low at 135.38 will be seen.

R3: 137.25

R2: 137.06

R1: 136.78

Pivot: 136.67

S1: 136.52

S2: 136.41

S3: 136.19

Trading recommendation:

We are long GBP from 135.45 and we will raise our stop to 135.80

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

Elliott wave analysis of EUR/JPY for October 20, 2020

analytics5f8e68b2369ff.jpg

EUR/JPY rallied as we expected. With the break above minor resistance at 123.77, we have seen a strong indication that wave ii has been completed and wave iii higher now is in motion. Ultimately we are looking for wave iii to break above the former peak at 127.02. On the way higher the next obstacle to overcome is seen at 125.09 and a break above here will call for a re-test of the former peak at 127.02 on the way higher to at least 128.04.

Short-term support is now seen in the 123.71 - 123.93 area.

R3: 124.78

R2: 124.53

R1: 124.35

Pivot: 124.13

S1: 123.93

S2: 123.71

S3: 123.49

Trading recommendation:

We are long EUR from 123.48 and we will raise our stop to 123.30

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

Forecast for EUR/USD on October 20, 2020

EUR/USD

The euro has grown by 50 points on Monday. News agencies attribute the growth to hopes for a stimulus package in the United States before the presidential election and the imminent appearance of a coronavirus vaccine. As a rule, there are two cases why the media releases information: to cover up speculative operations, and when no one knows the reason. At the moment, we do not see any sense in speculative operations, respectively, this is how large players operate. Appetite for risk in the market has not increased, as US stock indexes lost around one and a half percent yesterday.

analytics5f8e62c3d7797.jpg

Nevertheless, the momentum is set, the price could slightly rise a little more before it decisively falls. The growth target could be the October 6 high at 1.1808. The price crossed the balance indicator line on the daily chart, while Marlin entered the growth zone. A delay above the levels will strengthen the bulls' position and the pair could grow to 1.1915 in the near future - to the MACD line on the daily timeframe. If the pair closes below 1.1754, which will also correspond to the close below the balance line, then a deeper movement down to the target levels 1.1650 and 1.1550 will begin tomorrow.

analytics5f8e62c6c6c8d.jpg

The price settled above both indicator lines on the four-hour chart, Marlin is in the positive zone, indicating a short-term downward reversal. Here the situation repeats the daily scenarios - the price settling below 1.1754, respectively, and below the MACD line, will become a platform for reaching 1.1650. Settling in the area above 1.1808 will not yet be a condition for rising to 1.1915 just yet, as there are other resistances along this speculative and volatile path. For example, 1.1831 is the peak on October 9.

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

Forecast for GBP/USD on October 20, 2020

GBP/USD

The pound gained 27 points on Monday, it increased by 110 points at one point, but the price failed to gain a foothold above the daily balance line. Today, the price has just opened above this line, but you need to consolidate for steady growth, which means to close the day with it.

analytics5f8e5fa88b5de.jpg

The Marlin oscillator is growing in the zone of positive values and this gives a slightly stronger signal for further short-term growth. The signal is weakened by the MACD line, which is turning down (blue indicator). If the local growing sentiment wins, then the pound may rise to October's peak at the 1.3082 level.

analytics5f8e5fab838ea.jpg

To win the local growth, the price needs to go beyond the MACD line on the four-hour chart, which the price could not overcome yesterday - the 1.3024 level. The price falling below the signal level of 1.2861 opens the prospect of a significant fall to 1.2674.

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

Forecast for AUD/USD on October 20, 2020

AUD/USD

The Australian dollar tested the target support of 0.7058 yesterday, and overcame it this morning. The Marlin oscillator continues to decline in the negative area, now it is aiming for the support of the embedded price channel line in the 0.6955 area.

analytics5f8e5c53537bc.jpg

The four-hour chart shows that the signal line of the Marlin oscillator has moved down for the second time from the border of the growth area. The oscillator has a solid potential path for declining further ahead. We are waiting for the price at the indicated level of 0.6955.

analytics5f8e5c568c01a.jpg

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

Forecast for USD/JPY on October 20, 2020

USD/JPY

The dollar strengthened against the yen by 4 points on Monday, which, with the overall fall of the US stock market by 1.63% (S&P 500), demonstrates the dollar's strong position (or, rather, the weak position of the yen, since the dollar index lost 0.30% yesterday). Today we expect the market to recover, as the forecast for US new home construction for September is expected to rise from $1.416 million to $1.457 million.

analytics5f8e5ae686098.jpg

At the moment, the signal line of the Marlin oscillator has entered the growing trend zone on the daily chart. The price also tends to go above the balance indicator line, afterwards the growth potential will increase by 20%. The price is facing resistance from the MACD line at 105.78. Overcoming it opens the way to 106.23. Leaving the area above 106.23 opens the next target at 106.96.

analytics5f8e5ae967239.jpg

The price is struggling with the resistance of the MACD line (105.64) on the four-hour chart. Settling in the area above it will become a prerequisite for successfully breaking through the daily line (105.78). The price chooses a growth scenario. Make sure that reserve forces for the USD/JPY pair are available for its execution.

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

Commodity currency pairs AUD/USD & USD/CAD & NZD/USD on 4-hour charts. Comprehensive analysis of APLs & ZUP

The Minute operating scale (H4)

Is the US Dollar continuing to dominate commodity currencies? Overview of AUD/USD & USD/CAD & NZD/USD H4 possibilities from October 20, 2020

____________________

Australian Dollar vs US Dollar

The development of the movement of the Australian Dollar in the AUD/USD pair from October 20, 2020 will be determined by the development and direction of the breakdown of the range:

  • The resistance level of 0.7110 at the lower border of the channel 1/2 Median Line of the Minuette operating scale pitchfork
  • The support level of 0.7085 on the initial SSL line of the Minuette operational scale pitchfork

In case of a breakdown of the support level [B] 0.7085 / B] on the initial SSL line of the Minuette operational scale pitchfork, the downward movement of AUD / USD can be directed towards these targets:

  • LTL control line for Minute operational scale pitchforks (0.7057)
  • The control line at LTL Minuette operational scale pitchforks 0.7045
  • Warning line at LWL38.2 (0.7017) of the Minute operational scale pitchfork
  • The local minimum of 0.7007
  • Warning line at LWL 61.8 Minute (0.6955)

A breakout of the 0.7110 resistance level will make it important to develop the movement of the Australian Dollar inside the 1/2 Median Line Minuette channel (0.7110 - 0.7127 - 0.7145) with the possibility of reaching the equilibrium zone (0.7175 - 0.7205 - 0.7235) of the Minuette operational scale pitchforks and channel boundaries 1/2 Median Line (0.7235 - 0.7290 - 0.7350) which is a fork of the Minute operational scale.

analytics5f8e54966cc8d.jpg

____________________

US Dollar vs Canadian Dollar

The movement of the Canadian Dollar in the USD/CAD pair from October 20, 2020 will also depend on the development and direction of the breakdown of the range:

  • The resistance level of 1.3185 on the RL38.2 reaction line of the Minuette operational scale pitchfork
  • The support level of 1.3100 on the initial SSL line of the Minuette operational scale pitchfork

Breakdown of the reaction line RL38.2 Minuette: there will be a resistance level of 1.3185 and the resumption of the development of the USD / CAD upward movement to the boundaries of the 1/2 Median Line channel (1.3210 - 1.3245 - 1.3280) and to the equilibrium zone (1.3300 - 1.3350 - 1.3400) of the Minuette operating scale pitchfork.

In case of a breakdown of the support level 1.3140 on the initial SSL line of the Minuette operational scale, the development of the Canadian Dollar's movement may continue to the boundaries of the 1/2 Median Line channel (1.3090 - 1.3030 - 1.2980) of the Minute operational scale pitchfork.

analytics5f8e549957dbf.jpg

____________________

New Zealand Dollar vs US Dollar

The New Zealand Dollar in the NZD/USD pair from October 20, 2020, as in the first two cases, will continue to move depending on the development and direction of the breakdown of the range:

  • The resistance level of 0.6660 on the UTL control line of the Minuette operational scale pitchfork
  • The support level of 0.6625 on the initial SSL line of the Minuette operational scale pitchfork

If the initial SSL line of the Minuette operational scale pitchfork is broken down to the support of level 0.6625, the development of the NZD/USD pair's movement may continue to the targets:

  • Initial SSL line (0.6607) of the Minute operational scale pitchfork
  • Local minimum of 0.6573

with the prospect of reaching the borders of the 1/2 Median Line channel (0.6555 - 0.6525 - 0.6495) which is a fork of the Minuette operational scale.

A breakout of the resistance level 0.6660 on the UTL control line for the Minuette operational scale is an option to continue the development of the upward movement of the New Zealand Dollar towards these goals:

  • Local maximum of 0.6679
  • The lower limit ISL38.2 (0.6727) of the equilibrium zone of the pitchfork of the Minute operational scale
  • The median Line (0.6767) of the Minute operational scale pitchfork

analytics5f8e549c667f8.jpg

____________________

The review is compiled without taking into account the news background and the opening of trading sessions of the main financial centers and is not a guide to action (placing buy or sell orders).

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

Overview of the GBP/USD pair. October 20. Possible resignation of Boris Johnson. What will be the relationship between the

4-hour timeframe

analytics5f8e29dadebab.jpg

Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - sideways.

CCI: 36.5842

The British pound sterling paired with the US currency on Monday returned to a "stormy" state. During the day, the pair rose by more than 120 points, although there were no special reasons for this. However, over the past two weeks, the British currency has repeatedly demonstrated high volatility and frequent changes in direction. This still indicates that the market is in a panic or something like it. And market participants really have something to panic about right now. We have listed more than once the problems that the UK has already faced and will definitely face in 2021. In short, the British economy may continue to experience serious problems, even if the "coronavirus" epidemic is defeated. There is likely to be no trade deal with the EU. A trade deal with the US is even more questionable. Brexit itself will deal a new blow to British businesses and consumers. And thanks to the bill "on the internal market of Great Britain", London can not only remain in strained relations with Brussels but also finally quarrel with it. Recall that Johnson wants his bill, which violates the agreements with the EU reached last year, to come into force if it is not possible to agree on a free trade agreement before a certain deadline, which he sets himself. Thus, if this is not another attempt at the bluff, the bill will come into force, since it has already been approved twice by the Parliament, where the majority of votes are concentrated in the hands of conservatives. In addition, do not forget about the "Scottish question". Scottish First Minister Nicola Sturgeon will seek new permission from London to hold a referendum on independence in 2021. And even if a positive response is not received (and it will not be received), it will mean a heating up of relations between London and Edinburgh. Thus, the nervousness of market participants for the pound/dollar pair is quite understandable.

In addition, a change of power in 2021 in the UK is not completely excluded. If a deal with the EU is not reached, it will be Johnson's biggest defeat as Prime Minister, where he was so eager and in a hurry to get. The British, the Parliament, and its own party members may not forgive Johnson for this blunder. Already, some British media are spreading rumors that there is already a candidate to replace Johnson – Rishi Sunak, who currently holds the post of Finance Minister. Also yesterday, it was reported that Boris Johnson is not happy with his salary as Prime Minister, which is about 150,000 pounds a year. The British tabloid Daily Mirror writes that his predecessor Theresa May earned more than 1 million pounds during the time after her resignation, giving lectures. Boris Johnson has six children and also has to pay alimony to his ex-wife. Therefore, the British media believe that Johnson may leave his post on financial issues. It's hard to tell if this is true or not. But, as they say, there is no smoke without fire. This rumor can only be launched to justify the future resignation of Johnson, who as Prime Minister has not achieved any significant victories and is still leading the UK and its economy into the abyss.

At the same time, the future cooperation between the United States and the United Kingdom, which Johnson now has high hopes for, is in question. The fact is that it is Donald Trump who considers Johnson a friend and promises him a trade agreement. But Joe Biden, who is likely to become the next US President, does not have such warm feelings for the British Prime Minister. Moreover, Biden has Irish roots and highly honors the Belfast Agreement of 1998. Therefore, any possible conflicts on the island of Ireland that may arise due to the new regime that will operate after Brexit can only further distance Washington and London from each other. Moreover, Biden believes that London should clearly adhere to any agreements with the European Union, especially the Brexit agreement of 2019, and especially the protocol on the Northern Irish border, which Johnson intends to violate with his "internal market" bill.

Well, how can we not remember that any new financial and economic problems will inevitably lead to a new easing of the Bank of England's monetary policy? And this is an absolutely bearish factor for the British currency. BA has been exploring the possibility of introducing negative rates for several months and has already started consulting with commercial banks on whether they can withstand a new rate cut. Thus, the vast majority of experts believe that lowering the rate is just a matter of time. As early as 2020, the Bank of England may expand its quantitative easing program by another 50 or 100 billion pounds, which will also be a "bearish" factor for the pound.

Well, at the same time, do not forget about the "coronavirus" epidemic, which caused the greatest damage among all EU countries to the UK, and the current situation in the Foggy Albion also leaves much to be desired. According to the Johns Hopkins University website, about 15,000 new cases are reported in Britain every day. Recall that in the spring, already with 5 thousand diseases a day, the British health system was experiencing serious problems. Thus, given the range of current and potential problems that London has, we do not expect a strong strengthening of the British currency in 2020-2021. One gets the impression that the pound is now walking on a knife's edge and can go down at any moment. The uncertainty about the future of the United States and its economy somehow keeps the British pound afloat. From a technical point of view, the pound/dollar pair changes the direction of movement every day, so it is impossible to state any trend now. You can trade using lower timeframes, and even then very carefully. You should also take into account the high volatility of the pair in recent days. Four of the last six trading days ended with a passage of more than 126 points.

analytics5f8e29e52bae3.jpg

The average volatility of the GBP/USD pair is currently 134 points per day. For the pound/dollar pair, this value is "high". On Tuesday, October 20, therefore, we expect movement inside the channel, limited by the levels of 1.2854 and 1.3139. A reversal of the Heiken Ashi indicator downwards signals a new round of downward movement.

Nearest support levels:

S1 – 1.2970

S2 – 1.2939

S3 – 1.2909

Nearest resistance levels:

R1 – 1.3000

R2 – 1.3031

R3 – 1.3062

Trading recommendations:

The GBP/USD pair has started a new strong upward movement on the 4-hour timeframe, however, it is difficult to say how long it will last. Thus, today it is recommended to trade for an increase with the targets of 1.3031, 1.3062, and 1.3092 before the Heiken Ashi indicator turns down. It is recommended to trade the pair down with targets of 1.2909, 1.2878, and 1.2854 if the price returns to the area below the moving average line.

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

Overview of the EUR/USD pair. October 20. Christine Lagarde believes that the EU economy will shrink from 8% to 12% in 2020.

4-hour timeframe

analytics5f8e29a3e47e4.jpg

Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - sideways.

CCI: 104.3994

During the first trading day of the week, the EUR/USD pair started to grow sharply and unexpectedly for many. Although, from a technical point of view, this growth was even a little obvious. The fact is that if you look at the lower charts, you can clearly see that the pair once again failed to overcome the level of 1.1700, which for a long time was the lower line of the side channel of $ 1.17 - $ 1.19. Nothing else can explain the sharp rise of the European currency. Thus, the pair once again consolidated above the moving average line, and the trend changed to an upward one. However, over the past three months, this is an absolutely normal scenario. Recall that even if the quotes repeatedly go beyond the $ 1.17 - $ 1.19 channel, the main part of trading takes place in this range. Thus, formally, the flat is preserved in the long term.

The macroeconomic background has long been of no interest to market participants. We have repeatedly said why this is happening. The fact is that both the European and American economies suffered from the "coronavirus" and the subsequent "lockdown". When the "strict" quarantine measures were lifted, both economies began to recover synchronously. Thus, now all statistics are purely formal, as the economies of both countries continue to be in a state of shock. Yes, the US economy shrank three times as much in the second quarter as the European one, however, the euro has also grown by 13 cents against the dollar over the past six months. And reports like inflation or industrial production are now of no interest to anyone, because it is one thing to grow by 1% or decline by 1% in a quiet and peaceful time, but another thing – in times of crisis, when all reports show discouraging values.

On Monday, October 19, regular performances of Christine Lagarde and Jerome Powell, who have been performing very often lately, were scheduled. And most of their performances did not cause any market reaction. Here the situation is the same as with macroeconomic statistics. When the heads of central banks speak once a month and provide really important information about changing views on the economy or possible adjustments to monetary policy parameters, this information makes the markets worry and make trading decisions. When Christine Lagarde speaks with a frequency of once every two days and each time the rhetoric does not differ from the previous speech, then this news does not concern traders in any way. For example, yesterday Christine Lagarde said that new restrictions that are being introduced in all EU countries due to the second "wave" of the epidemic add uncertainty for businesses and households. In other words, Lagarde fears that the economy will start shrinking again and require an additional stimulus. However, just a couple of months ago, the EU agreed on a recovery fund for 750 billion euros, which has not even started functioning yet. Thus, a new downturn in the economy may cause new problems. However, Lagarde has previously stated that the probability of a second "wave" is high and the probability of new economic problems comes with it. So this is not news. The words of the head of the ECB that monetary policy should remain "soft" should not have come as a shock to traders either. And so it is clear that for a couple of years, the rates will at least remain at "ultra-low" values. Lagarde also said that by the end of 2020, the EU economy will lose from 8% to 12%. Given that Lagarde's rhetoric was negative for the euro, and the euro currency showed growth on Monday, it is unlikely that a parallel can be drawn between these two events.

Meanwhile, US President Donald Trump felt that he had not made loud statements about the "coronavirus" for a long time. Recall that many statistical agencies and media have estimated that it is Donald Trump who is the number one supplier in the world for improbable information about the COVID-2019 virus. This time, Trump said that listening to scientists on the issue of "coronavirus" does not make sense, since they will recommend introducing a full "lockdown" to stop the spread of the pandemic, which will "kill" the economy of any country. Trump is partly right. Indeed, it is because of the "lockdown", which was introduced in almost every country in the world in the spring, that the economy suffered the most. But also do not forget that we are talking about the lives of people, and the government of any country should take care of the most vulnerable segments of the population, who suffer the most from the crisis. This is why citizens pay taxes, and any state should have a reserve fund and a plan for such cases. So first of all, this is not the problem of American citizens and residents of the entire planet, but the problems of governments that were not ready for a pandemic either in the spring or in the fall. Also, Donald Trump said that Joe Biden becomes president, he will immediately close the country to quarantine, which will cause a powerful drop in the economy. "He will listen to scientists! If I listened to scientists, our country would be in a huge depression, and we are not a rocket ship," the US President said. He once again urged not to vote for Biden. The Democrats' headquarters immediately responded to Trump's new attack: "Donald Trump destroyed the economy inherited from Obama, ignoring the warnings of scientists and doctors who save lives around the clock."

Returning to the topic of the US election, The Economist magazine raised its forecasts for Joe Biden's victory. Earlier, after modeling the election, the magazine concluded that Biden would win the election with a 91% probability and gave him 341 "electoral votes" out of 538 possible. The new forecast suggests that Biden will get at least 347 votes with 270 needed to win. Also, all the latest research shows that Biden leads by a margin of at least 11% in the general vote. In addition, even most "contested" states tend to choose a Democrat. Thus, two weeks before Election Day, the balance of power between the two presidential contenders has not changed.

As for the prospects of the euro/dollar currency pair, we do not yet see how it can leave the approximate side channel with a width of 250-300 points. We believe that it will be extremely difficult for the US dollar to get more expensive before the election. The US currency had a chance to get ahead a little, taking advantage of the difficult epidemiological situation in the EU. However, trading on Monday already showed that buyers of the dollar are not particularly eager now.

analytics5f8e29ad20428.jpg

The volatility of the euro/dollar currency pair as of October 20 is 70 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1714 and 1.1854. A reversal of the Heiken Ashi indicator down may signal a new round of downward movement.

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 started a new round of upward movement and overcame the moving average. Thus, today it is recommended to stay in buy orders with a target of 1.1841 until the Heiken Ashi indicator turns down. It is recommended to consider sell orders if the pair returns to the area below the moving average line with targets of 1.1719 and 1.1658.

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