Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on October 21

Analysis of transactions in the EUR / USD pair

Euro bulls were encouraged by the speech of ECB head Christine Lagarde yesterday, thereby maintaining the bullish momentum in the market. Long positions from the level of 1.1801 got about 35 pips of profit, while those who are keen to reach the target level of 1.1850 could gain 50 pips of profit today during the Asian trading session.

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Trading recommendations for October 21

Representatives from the Fed and the ECB will deliver speeches this week, which could inevitably affect market demand. But since there are no economic statistics scheduled to be published, demand is expected to increase for the European currency.

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  • Open a long position when the euro reaches a quote of 1.1863 (green line on the chart), and then take profit at the level of 1.1915.
  • Open a short position when the euro reaches a quote of 1.1828 (red line on the chart), and then take profit at the level of 1.1762. Weak EU statistics would put pressure on the European currency

Analysis of transactions in the GBP / USD pair

Yesterday was not the best day for the pound, as the pair did not move in any direction, thereby bringing loss to both long and short positions in the morning. Fortunately in the afternoon, the quote moved down from 1.2930, however, it was only by about 20 pips.

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Trading recommendations for October 21

A report indicating the UK's inflation rate will be released today, and if it came out with good figures, an increase would be seen in the GBP / USD pair. But if the data turns out to be disappointing, the bears will try to take control of the market again.

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  • Open a long position when the pound reaches a quote of 1.2985 (green line on the chart), and then take profit around the level of 1.3017 (thicker green line on the chart).
  • Open a short position when the pound reaches a quote of 1.2966 (red line on the chart), and then take profit at least at the level of 1.2932. Bad news on Brexit, as well as low inflation rate in the UK, will continue the downward trend in the GBP / USD pair.
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Indicator analysis. Daily review on GBP/USD for October 21, 2020

Trend analysis (Fig. 1).

Today, the market will attempt to resume its upward movement from the level of 1.2950 (closing of yesterday's daily candle) in order to reach the pullback level of 50% - 1.3078 (blue dotted line). If this level is tested, work downward with the target of 1.3023, which is a pullback level of 14.6% (red dotted line).

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Figure 1 (Daily chart).

Complex analysis:

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

General conclusion:

Today, the price from the level of 1.2950 (closing of yesterday's daily candle) will attempt to continue moving up in order to reach the pullback level of 50% - 1.3078 (blue dotted line). If this level is tested, work downward to the target of 1.3023, which is a pullback level of 14.6% (red dotted line).

Alternative scenario: the price from the level of 1.2937 (closing of yesterday's daily candle) works up to reach the 50% pullback level - 1.3078 (blue dotted line). In case of testing this level, work up to the target of 1.3173, which is a retracement level of 61.8% (blue dotted line).

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Forex forecast 10/21/2020 from Sebastian Seliga

Let's take a look at the GBP/USD and USD/CAD technical picture ahead of Consumer Price Index data releases from the UK and Canada. The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.

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Indicator analysis. Daily review for the EUR/USD currency pair 21/10/2020

Trend analysis (Fig. 1).

Today, from the level of 1.1824 (the closing of yesterday's daily candle), the market can continue to move up with the goal of 1.1860 which is a pullback level of 61.8% (red dotted line). If this level is tested, further work up with the goal of 1.1912 which is the historical resistance level (blue dotted line). From this level, you can work downwards.

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Figure 1 (daily chart).

Complex Analysis:

  • indicator Analysis – up
  • Fibonacci Levels – up
  • Volumes – up
  • Technical Analysis – down
  • Trend Analysis – up
  • Bollinger Bands – up
  • Weekly Chart - the up

General conclusion:

today the price may continue to move up with the target of 1.1860 which is a pullback level of 61.8% (red dotted line). If this level is tested, further work up with the goal of 1.1912 which is the historical resistance level (blue dotted line).

Alternative scenario: when moving up and reaching the pullback level of 61.8% - 1.1860 (red dotted line), the price may start moving down to the historical support level - 1.1819 (blue dotted line).

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EUR/USD - Inverted S/H/S bottom signals more upside

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Since early September inverted S/H/S formation has been building in EUR/USD. This bottom formation calls for a continuation of the underlying uptrend towards the target level at 1.2076. The way to establish the target of a Shoulder/Head/Shoulder pattern is to measure the distance for the top or bottom of the head to the neckline and add that distance to the breaking-point of the neckline - In the above chart shown with the blue straight line.

We have to stress that this is the measured target and not necessarily the final upside target. We often see larger moves than the measured targets but they are a good guideline of what to expect next and they give us a reference point into the future.

Remember the trend and patience are your friends in the financial markets.

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Elliott wave analysis of GBP/JPY for October 21, 2020

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We continue to look for key-support at 136.41 to be able to protect the donwiside for a clear break above the next resistance at 137.20 for the next impulsive rally higher towards 137.88 and 140.20 as the next upside targets.

Short-term key support is seen at 136.41 which should continue to protect the downside. We might see short-term penetation below this support.

R3: 137.88

R2: 137.20

R1: 136.78

Pivot: 136.54

S1: 136.41

S2: 136.22

S3: 135.82

Trading recommendation;

We are long GBP from 135.45 and we have our stop placed at 135.45.

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Elliott wave analysis of EUR/JPY for October 21, 2020

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EUR/JPY is now testing resistance at 125.09 and a break above here calls for a rally towards the former top at 127.02. The former peak at 127.02 should only prove to be a temporary top before the next push higher towards at least 128.43 and likely even closer to 129.24.

Support is now seen at 124.36 and again at 124.14.

R3: 125.68

R2: 125..35

S1: 125.09

Pivot: 124.70

S1: 124.58

S2: 124.36

S3: 124.14

Trading recommendation:

We are long EUR from 123.48 and we will raise our stop to 123.90

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Analytics and trading signals for beginners. How to trade EUR/USD on October 21? Plan for opening and closing trades on Wednesday

Hourly chart of the EUR/USD pair

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The EUR/USD pair corrected by only 16 points last Tuesday night and immediately moved up. Therefore, novice traders did not receive a clear buy signal, despite the upward trend. The MACD indicator did not discharge to the zero level and did not even come close to it. So in our opinion, the technical picture does not justify the new longs, especially for beginners. Of course, the market will not generate perfect signals every day. However, novice traders are advised to look for such signals or something close to it. The upward trend line is currently relevant, but the price can still settle below it at any moment, since it has a fairly strong slope. The pair's quotes continue to move confidently in the direction of the upper border of the horizontal channel at 1.1903. We do not see the pair above this level yet. Getting the price to settle below the trend line will make it possible for sellers to enter the market, since the pair will start aiming for the lower border of the 1.1696 horizontal channel.

The fundamental background for the EUR/USD pair remains unchanged. We did not receive much news from the European Union and the United States in the last two days. If you try to link the euro's upward movement and the fundamental background, you will hardly be able to do so. There was no macroeconomic statistics and there won't be any today as well. Speeches by Federal Reserve Chairman Jerome Powell and European Central Bank President Christine Lagarde happen almost every day and, of course, the heads of central banks find it very difficult to surprise the markets and provide us with new information. Thus, in the overwhelming majority of cases, no reaction to these events follows. Today, for example, Lagarde is set to deliver another speech. There is also some news coming from the US. The topic of the presidential election is still the most important, but the markets are already tired of the flow of information related to the candidates and their confrontation. And it seems that investors are no longer interested in the topic of coronavirus in the United States, since high incidence rates continue to be reported in this country, but there is no news in the media about this. A strong second wave of the pandemic began in Europe, but the euro is still growing. Thus, it is absolutely unrealistic to figure out what exactly market participants are reacting to and what kind of news they are interested in. We are inclined to the option that the macroeconomic and fundamental backgrounds are not important at all now, and trading proceeds exclusively on technical factors.

Possible scenarios for October 21:

1) Buy positions on the EUR/USD pair remain relevant at the moment, since the price continues to trade above the rising trend line. Novice traders are advised to wait for a new round of downward correction, discharge of the MACD indicator and a new buy signal in order to open new long positions while aiming for 1.1855 and 1.1888. Also, if one of the traders has opened longs, then they can keep them until the MACD indicator turns down.

2) You are advised to return to taking sell positions on the currency pair, but first the price should settle below the rising trend line. In this case, the price could tumble with the first targets at the support levels 1.1774 and 1.1726, and in general it will aim for the lower border of the horizontal channel at 1.1696, from which it has rebounded several times.

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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Trading plan for the EUR/USD pair on October 21. Continued rise of COVID-19 cases in Europe and growth of the European currency.

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Europe continues to observe record high incidence rates of coronavirus. The most notable of which are the statistics in Britain and France, which are above 20 thousand a day.

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The US market is currently preparing for the win of Democrat candidate, Joe Biden, which would result in a change in economic course.

Sell when stocks move up again.

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EUR/USD - the euro is moving upwards in the market.

Keep opening long positions from 1.1710 and 1.1750

You may also buy after a strong pullback, from the level of 1.1790.

News from the Fed, which will come out late at night, may influence market demand.

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Technical Analysis of ETH/USD for October 21, 2020

Crypto Industry News:

Speculation about Ethereum 2.0 continues, and there are newer and newer leaks from insiders. One recent speculation is where the developer of Ethereum 2.0 predicts that a smart protocol contract allowing their Ethers to be deposited on 2.0 networks will be released in a matter of days. The staking process itself would start later this year.

ConsenSys developer Ben Edgington posted an entry that predicts the genesis of the ETH 2.0 beacon chain will take place in the next six to eight weeks.

In a post announcing the launch of the zero version for client 1.0, Edgington revealed that the protocol's smart contract feature should be announced this week. A smart escrow contract that allows ETH sending between Network 1.0 and Network 2.0 and is one of the few remaining updates needed to facilitate Ethereum 2.0 rollout in Phase 0. To complete Phase 0 launch, 500,000 Ethers will need to be staked once the beacon chain has started. After that, the network will prepare for the official launch for several weeks.

Technical Market Outlook:

The ETH/USD pair has extended the retracement towards the level of 61% located at $381.85, then the market pulled back towards the intraday support at $375.52 and bounced to the $381.85 again. The target for bulls is still seen at the level of $400 and the bulls are 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.

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EUR/USD. They did not agree again: American politicians knocked down the dollar

The US currency is declining in all aspects: the dollar index fell to monthly lows settling in the 92nd figure. The key dollar pairs similarly changed their configuration reflecting the General weakening of the greenback.

The main reason is the political differences over the new economic aid package. Last night, another deadline set by representatives of the Democratic party expired. The speaker of the house of representatives drew a "red line" last week while delivering an ultimatum: either the parties come to a compromise solution by Tuesday and go to a vote within the next week and a half, or negotiations will resume after the presidential election. It is worth noting that the next session of the Congress will be held only at the end of November and it is very fast, since the Christmas and New Year period begins in the second half of December. Therefore, the market placed high hopes on American politicians to reach a compromise because otherwise the new stimulus package will not be adopted until January or February.

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But congressmen and representatives of the White house did not meet the expectations of traders. The parties did not come to a common opinion but voiced only formal and contradictory statements. So, Nancy Pelosi reported that the negotiating groups have made some progress in determining agreement and disagreement. She also added that she had a phone conversation with Treasury Secretary Steven Mnuchin, which they managed to achieve more clarity and understanding. According to her, it demonstrates that both sides are serious about finding a compromise.

At the same time, representatives of the Republican Camp voiced tougher, and, in my opinion, more plausible messages. In particular, Senate majority leader Mitch McConnell said that the Democrats are only dragging their feet until the presidential election. On the one hand, they do not refuse to negotiate (since this decision will affect their political positions), but they also do not show flexibility in negotiations.

By the way, journalists reminded Nancy Pelosi that Tuesday was the last day to conclude a deal between the White house and Congress before the election. In response, she softened her position, pointing out that before that day, the parties had to come to a common understanding in order to move on to the next stage of negotiations.

It is worth remembering that the negotiations on this issue have been going on for five months – since the end of May and traders have already heard similar rhetoric many times. Therefore, the market participants yesterday, did not believe in Pelosi's encouraging statements. The probability of another failure has increased again, which means that the probability of a crisis in the US labor market has increased also. By the way, the number of new applications for unemployment benefits last week jumped to 890 thousand – this is the highest value since mid August. It is obvious that if a negative scenario is implemented, the labor market will pull other macroeconomic indicators that have just begun to show signs of recovery.

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In other words, the US events of yesterday put pressure on the dollar, which in response fell in price throughout the market. At the same time, traders ignored the macroeconomic reports that were published yesterday in the States. So, the number of construction permits issued last month increased by more than five percent, while the overall forecast was at the level of 3.2%. At the same time, the number of construction starts in September increased by only 1.9%, while the forecast growth of 3.8%. The published release did not affect the mood of traders – market participants are focused on the future prospects of the American economy and these prospects largely depend on the "ability to negotiate" of congressmen and representatives of the White house.

Against the background of such a fundamental picture, the Euro-dollar pair updated its monthly highs and approached the resistance level of 1.1850 – at this price point, the upper line of the Bollinger Bands indicator coincides with the upper boundary of the Kumo cloud. If buyers of EUR/USD overcome this level and gain a foothold above it, they will open their way to the annual maximum – to the 20th figure. Such a price break is sure to cause righteous anger on the part of the ECB, whose representatives will hold their next meeting next week. But if we consider the short-term time period, when overcoming the resistance level of 1.1850, we can consider longs at least to the level of 1.1900 or higher – to the intermediate resistance level of 1.1950. This is the last price Outpost before the key, psychologically important resistance of 1.2000.

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Technical Analysis of BTC/USD for October 21, 2020

Crypto Industry News:

The United States Financial Crimes Enforcement Network has just dealt another blow to Bitcoin privacy enthusiasts. According to FinCEN in an official announcement, it imposed a $ 60 million civil penalty on Larry Dean Harmon, the man responsible for several Bitcoin privacy services. Larry Dean Harmon was the brain behind the Lightning Network Wallet Dropbit and the Bitcoin anonymization services (known as Tumblers, Blenders or Mixers) Coin Ninja and Helix.

According to FinCEN, the Bitcoin Helix and Coin Ninja mixers operated as unregistered money services business (MSB) companies. Accordingly, FinCEN concluded that Harmon acted in breach of US law. Thus, he was to avoid paying taxes and act without the relevant regulations that would apply to his activity if it were registered.

FinCEN claimed that between 2014 and 2020, Harmon's bitcoin mixers facilitated the anonymization of at least $ 311 million in the pending over 1 million different BTC transactions.

Technical Market Outlook:

The BTC/USD pair has finally broken above the $12,000 level (third time this year) and made a new swig high at the level of $12,255, so just above the WR3 located at $12,229 (at the time of writing the article). The momentum is still strong and positive, but the market conditions on the H4 time frame are clearly overbought. This situation might indicate a possible temporary pull back towards the level of $12,035 before another wave up will develop. The old supply zone seen between the levels of $11,646 - $11,785 will now act as a demand zone for bulls.

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.

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Technical Analysis of EUR/USD for October 21, 2020

Technical Market Outlook:

The EUR/USD made a new local high at the level of 1.1849 (at the time of writing the analysis) after the level of 1.1822 was violated again. The next target for bulls is seen at the level of 1.1908 - 1.1914, but please notice the overbought market conditions on the H4 time frame that might result in a temporary pull-back towards the nearest technical support seen at 1.1790 - 1.1822 zone. The momentum remains strong and positive, so it supports the short-term bullish outlook for this pair.

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.

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Technical Analysis of GBP/USD for October 21, 2020

Technical Market Outlook:

The GBP/USD has been trading sideways since the beginning of the week and so far there is no indication this will change soon. The recent rally did not break through the supply zone located between the levels of 1.2982 - 1.3017 and the bears pushed the price towards the main channel upper line again. 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).

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Forecast for Gold on October 21, 2020

GOLD

Gold confirmed the initial signals for growth this morning. The confirmation was the sharp exit of the price over the balance indicator line on the daily chart.

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Earlier, the Marlin Oscillator turned up from the border with the territory of the "bears" at the same time that the price turned from the lower border of the price channel. Now, the nearest target is the MACD line at 1945.00. Overcoming the MACD line opens the second goal of 1960.00 - the resistance of the nested line of the price channel. The third goal is 1992.00 - the next line of the price channel and the top on September 1 (checkmark).

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On the four-hour chart, the price was fixed above both indicator lines - the balance line and the MACD line. Meanwhile, the Marlin Oscillator strengthened in the positive zone. We are anticipating the continued growth of the gold's price.

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Forecast for EUR/USD on October 21, 2020

EUR/USD

The speculative growth of the euro continued on Tuesday. The price broke the October 9 peak, now it is aiming for the highs on October 10 and on August 6, near the MACD line on the daily chart - 1.1915/20. The Marlin oscillator is growing in the zone of positive values, the upward trend continues.

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The Marlin signal line began to turn to the downside on the four-hour chart, which indicates a slowdown in price growth. The price will probably settle in a particular area for a day before it rises to 1.1915.

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Forecast for AUD/USD on October 21, 2020

AUD/USD

The Australian dollar tried to gain a foothold below the 0.7058 level yesterday, but the dollar's weakness prevented it from doing so. The price is already rising above this level in today's Asian session. The Marlin oscillator is moving up, and the price could rise to 0.7120, the high on October 19.

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The price has formed a convergence with the oscillator on the four-hour chart. A third reversal of the signal line from the border of the growth trend, but most likely, it won't. We are waiting for the correctional price growth to reach the designated target of 0.7120.

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Forecast for USD/JPY on October 21, 2020

USD/JPY

The USD/JPY pair gained yesterday, it even tried to overcome the resistance of the MACD line on the daily timeframe, but the technical resistance turned out to be stronger and the price rolled back from it even with the support of the growing stock market. Today we expect the yen to attack 105.76 again, but there are resistances from another plan. This is the Marlin oscillator's weakness, which has not been able to move into the zone of positive values in the last four days, its signal line is moving sideways along the neutral line.

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But there are also positive signs. Marlin is retreating from the decline area on the 4-hour chart. The price is also supported by the balance indicator line.

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The stock market also provides support - the Japanese stock index Nikkei 225 is currently growing by 0.37%, while 24-hour quoted futures on the S&P 500 are adding 0.45%. As a result, we are waiting for the price to overcome yesterday's peak, which automatically means an exit above the MACD line on the daily chart, and further growth to the embedded line of the price channel in the area of 106.20.

A negative scenario will unfold after the price drops below the signal level of 105.20, in which case the price will continue to fall to 104.93.

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Hot forecast and trading signals for GBP/USD on October 21. COT report. Pound's problems persist. Bears have a slight edge

GBP/USD 1H

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The GBP/USD pair continued to trade in its own style on Tuesday, October 20 - in different directions. Therefore, it is still very difficult to say what kind of trend has developed for the pound/dollar pair. We have slightly rebuilt the descending trend line, which now signals a downward trend again. However, this trend line is no longer strong, and the pair, as we can see, rebounded from the resistance area of 1.3006-1.3024 in the first place. Thus, we believe that there are still good chances of continuing the downward movement. And from a fundamental point of view, these chances are quite high. Nevertheless, if buyers manage to gain a foothold above the 1.3006-1.3024 area and the trend line, then chances of a new upward trend will increase many times over.

GBP/USD 15M

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Both linear regression channels are more sideways than up or down on the 15-minute timeframe. Such an arrangement perfectly reflects the nature of the pair's movement on the hourly chart.

COT report

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The latest Commitments of Traders (COT) report on the pound showed that from October 6-12, non-commercial traders continued to mostly close contracts for the British currency, rather than open new ones. The pound sterling increased by around 60 points during this period, which is very small, despite the rather volatile trading within each individual day. During this time, the "non-commercial" group of traders opened 149 Buy-contracts (longs) and closed 6,144 Sell-contracts (shorts). Thus, the net position of professional traders has grown again, by 6,000 contracts. However, as with price changes, these changes in the mindset of professional traders are purely formal. Moreover, the net position of non-commercial traders is growing for the third consecutive week, which casts doubt on the pound's succeeding decline, which is much more expected than growth. Even more interesting is the fact that the total number of contracts for the "non-commercial" group has been decreasing in recent months. That is, large traders do not believe in the pound and do not want to deal with it, whether it is about buying or selling it. The same case with the "commercial" group, which also mainly closes any contracts for the pound. In such circumstances, we would not make a long-term forecast based on the COT report.

No important information from the UK on Tuesday. Traders could focus on the ever-worsening numbers of COVID-19 spreading in Great Britain. The numbers are really scary, but they are not the highest among the EU countries. We would say the values are "average", but this spring the British healthcare system has been unable to cope with a much smaller influx of patients. Plus, the more the number of cases becomes, the more likely it is that Prime Minister Boris Johnson will introduce total quarantine. In principle, this applies to almost any country. If the healthcare system cannot cope, then a total lockdown will have to be introduced. The UK is slated to publish the September CPI on Wednesday. Inflation is expected to accelerate to 0.6% y/y, although this figure is still very low. No more important events are planned either in the United States or in Britain, however, it is possible that new important data on Brexit topics, negotiations between London and Brussels, negotiations between Democrats and Republicans on a new stimulus package for the US economy are possible.

We have two trading ideas for October 21:

1) Buyers for the pound/dollar pair met an insurmountable obstacle on their way in the form of 1.3006-1.3024 and rebounded from it. Therefore, you can consider long positions while aiming for 1.3173, if this area is overcome, not earlier. Take Profit in this case will be up to 100 points. However, take note of very frequent changes in the direction of movement and relatively high volatility, so we recommend trading in small lots.

2) Sellers could not keep the pair below the downward trend line, however, this line is now rebuilt, and the bulls have not yet managed to gain a foothold above 1.3006-1.3024. Therefore, we recommend taking new sell positions below the Kijun-sen (1.2963) and Senkou Span B (1.2962) lines, and aiming for the support area of 1.2857-1.2872 and the 1.2823 level. Take Profit in this case can range from 60 to 100 points.

Explanations for illustrations:

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

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

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

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

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

Hot forecast and trading signals for EUR/USD on October 21. COT report. Bulls take another step forward, aiming for 1.1882

EUR/USD 1H

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The euro/dollar pair continued to rise on the hourly timeframe on October 20. From a fundamental point of view, it is still impossible to substantiate this movement. Nevertheless, the pair's quotes rebounded from the Senkou Span B line in the morning and began a new upward movement, breaking the Senkou Span B line along the way. We also managed to form a new rising channel that supports growth, and getting the price to settle below it indicates that the trend could change into a downward one in the short term. Buyers have a real chance of bringing the pair to the 1.1882 level. Moving further up is still in doubt, since the price as a whole continues to remain within the long-term horizontal channel, approximately at 1.1640-1.1920.

EUR/USD 15M

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Both linear regression channels are directed to the upside on the 15-minute timeframe, signaling an upward movement after an unsuccessful attempt to overcome the 1.1692-1.1699 area.

COT report

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The EUR/USD pair has risen in price by around 30 points during the last reporting week (October 6-12). This is very small and, as a whole, the price has not significantly changed. Trades are held in a horizontal range of 250-300 points. Therefore, data from any COT report can only be used for long-term forecasting. Nonetheless, pro traders continue to become more and more bearish. We remind you that the most important group of traders is called "non-commercial". This group closed 2,500 Buy-contracts (longs) and opened 5,300 Sell-contracts (shorts) during the reporting week. Thus, the net position for this group immediately fell by 7,800. At the same time, the "commercial" group, which almost always trades in the opposite direction, has become more bullish. This group of traders increased their net position by 10,000 contracts at once. The first indicator continues to signal the convergence of the lines of net positions of these two groups of traders. We remind you that when the green and red lines diverge strongly, this is a signal of an impending reversal of the trend globally. Now these lines have begun to narrow, so we can assume that the high around the 1.20 level will remain the peak of the entire uptrend.

The macroeconomic background for the pair was essentially absent on Tuesday despite the fact that the euro continued to rise. However, not a single important report was published during the day, not even an important speech. It's just that the euro is getting more expensive at this time and that's it. We remind you that everything in the foreign exchange market depends solely on supply and demand for a particular currency, and technical, fundamental and other types of analysis are only tools that allow you to predict the future price movement. Therefore, if some central bank urgently needed to buy the euro, then the demand for the single currency is growing, and accordingly, its rate will increase, and the fundamental background is completely empty or unchanged. Moreover, we remind you that all trades of the last three months continue to take place in a horizontal channel, so now we have witnessed just a new round of upward movement within this very channel. European Central Bank President Christine Lagarde is set to deliver another speech on Wednesday, who continues to speak almost every two days. We can also expect a speech from ECB Vice President Luis de Guindos. There are no major events scheduled in the United States for today.

We have two trading ideas for October 21:

1) The pair continues to rise, now inside the upward channel. Thus, traders are advised to continue to trade up with targets at the resistance level of 1.1882 as long as the price is within the trend channel. Take Profit in this case will be up to 50 points. Also, the Kijun-sen line can be used as a reference point for maintaining the upward trend.

2) Bears have let go of the initiative, having failed to overcome the support area of 1.1692-1.1699. Thus, now sellers can only wait for the bulls to take a break. You can consider the possibility of opening short positions after breaking the Kijun-sen line (1.1763) while aiming for the support area of 1.1692-1.1699 and the level of 1.1663. The potential Take Profit in this case is from 30 to 70 points.

Explanations for illustrations:

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

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

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

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

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

GBP/USD. Buying the Pound on decline

Despite the negative signals that released earlier this week, the Pound held its positions. The fundamental background received an optimistic color, after which the GBP/USD pair once again turned towards the 30th figure. If we consider a broader time period, we can conclude that the Pound has not always reacted so calmly to such a negative news flow concerning the topic of Brexit.

At the end of last week, the EU summit ended in Brussels. The summit was devoted to further relations between the UK and the European Union. During the meeting, not only did the members not reach a trade deal but they also exchanged harsh words, ending the summit on a sour note. Both the EU and UK said that businesses should prepare for a negative scenario, according to which London will leave the single market and interact with European enterprises under WTO rules. Further negotiations on the deal were in doubt. Just yesterday, Downing street said that they did not expect a visit from the EU's chief negotiator, Michel Barnier, as "such a trip does not make sense,". Europe, in turn, remained silent, thus exerting additional pressure on the Pound.

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The Pound withstood the pressure, its pair with the USD falling only to the base of the 29th figure. This is not the first failed summit over the past 4 years. But previously, the Pound reacted more drastically to disappointing signals; in just a few hours, the GBP/USD pair could collapse by several hundred points. Therefore, the current stress tolerance says a lot. First of all, it lets us know that the market is actually confident that the parties will eventually find a common denominator. Thus, the market estimates the probability of implementing a hard scenario at 40%, while the probability of concluding a deal (in one form or another) is estimated at 60%, respectively. This is evidenced by the results of a survey of almost a hundred economists of leading banking conglomerates conducted by Reuters.

Today, in the afternoon, the European Commission declared its readiness to continue negotiations with Britain and that they can resume tomorrow. This signal served as another confirmation that there is a kind of game of nerves between the negotiators, but in the end a deal will either be concluded or the parties will extend the transition period.

The fact is that for several weeks the market has been actively discussing the question – will the Bank of England lower the interest rate or not? And we are talking about a decline in the negative area. This was discussed directly by the Governor of the Bank of England, Andrew Bailey, who quite transparently hinted at such a scenario. Then a press release from the central bank was published, according to which the bank's economists study this issue and model possible consequences, weighing all the pros and cons. A little later, a member of the monetary policy committee, Jonathan Hassel, said that he was ready to consider using negative rates (although he admitted that such a move could harm banks' profits). In other words, the corresponding signals are piling on, putting pressure on the pound.

However, today another representative of the Bank of England, Gertjan Vliege, said that according to most of his colleagues, the central bank "has not yet reached the stage at which it is possible to draw conclusions about negative rates." At the same time, the prospects for monetary policy, according to him, "tend to add new incentives." This rhetoric offset the concerns of GBP/USD traders about lowering the rate to zero.

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Thus, the British pound retains the potential for further growth. It is worth noting that tomorrow in the UK, key data on the growth of inflation will be published. This data can provoke volatility for the pair, especially if it comes out worse than the fairly optimistic forecasts. So, according to most experts, the overall consumer price index (on a monthly basis) should come out of the negative area and reach 0.4%. The core index should also show positive dynamics after the decline to a record low of 0.9%. If the release is released in the red zone, the pair may again sink a little. This drawdown can be used as a reason to open long positions. The goal of the upward movement in the medium term is 1.3080 (the upper border of the Kumo cloud coincides with the upper line of the Bollinger Bands indicator on the daily chart).

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

Overview of the GBP/USD pair. October 21. Boris Johnson wanted to get a trade "deal" with the European Union in 6 months.

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - sideways.

CCI: -14.9232

The British pound sterling paired with the US currency continues to trade in a "storm mode". Over the past day, the pound/dollar pair changed its direction several times, and each time the market was nervous. Thus, based on the results of the past day, no conclusions can be drawn at all except that the "swing" continues, the trend continues to be absent, and it is extremely difficult to trade the pair now. Therefore, we recommend that you trade the pair very carefully at this time. We have repeatedly written that the fundamental background for the GBP/USD pair is very complex and multifaceted. The position of the British pound is under pressure from Brexit, which will take place in 10 weeks, the lack of a deal with the European Union, the high probability of no trade deal with the United States, as well as a lot of other "pleasant" moments related to the "divorce" with the EU. The position of the US currency is under pressure from the upcoming US elections and the uncertainty associated with the American future and its economy. Also, the Democrats and Republicans still cannot agree on a new package of the economy, respectively, the economy does not receive incentives, and may start to slow down again.

Meanwhile, Brexit negotiations may finally fail in the near future. Both sides do not see progress in the negotiations and also continue to accuse the opposite side of a lack of desire to concede. London, for example, believes that the European Union is not ready to compromise and sees no point in resuming negotiations at all. "There is no point in resuming the negotiation process as long as the EU adheres to the current position. Such negotiations will be meaningless and will not bring us closer to a workable solution," said Michael Gove. But Michel Barnier, who is responsible for negotiations on the EU side, believes that the parties need to intensify negotiations. However, we have heard and seen all these beautiful statements more than once. Or more than a dozen times. The fact remains that no one wants to give in, but no one wants to complete the "divorce" without a "deal". Thus, both sides pretend that they are ready for a "hard" Brexit, but at the same time negotiations continue, deadlines are postponed. Both London and Brussels have also repeatedly stated that they have begun preparing their territories for a "no-deal" regime.

However, this should have been expected from the very beginning of the negotiations. The "smart" position of Boris Johnson is that he wanted to get an agreement with the EU in 6 months of negotiations, with the one that London wants to get, and not fulfill any requirements from the EU. The fact that the "Canadian" version of the agreement was discussed with Canada itself for 7 years, Johnson does not care. He refused to extend the "transition period" and is now reaping the benefits of his "genius" foreign policy. No matter what anyone says, it is the British economy that will suffer the most from the lack of a free trade agreement. This is logical since the UK enjoys a huge European market consisting of several hundred million consumers. But it will stop using it duty-free and without restrictions from January 1, 2021. The European Union will lose only 66 million consumers. Also, there will be financial and logistical problems. First, many groups of goods that will be transported across the British-European border may be in short supply or seriously rise in price. Secondly, the number of trucks that will be sent from Europe to England and back will not increase, but the time spent on cargo inspections will increase, which will cause serious congestion of ports and roads leading to them. It was calculated that on average, each truck will spend several days not crossing the border.

Also, do not forget about the "Scottish question". We have repeatedly reported that Nicola Sturgeon is not going to back down and let the issue of a new independence referendum take its course. So, potentially over the next few years, Britain could also lose Scotland. The UK, accordingly, already has a lot of problems. And there will be even more. The British and their government wanted to get rid of dependence on the EU and trade as they please with the whole world, but so far the Kingdom is moving at full speed into a financial hole. And the situation is further aggravated by the "coronavirus" epidemic, which continues to gain momentum in the Foggy Albion. It is hardly necessary to say once again that the stronger the second "wave" in Britain, the more the British economy will shrink, the more dissatisfaction British citizens will be with the policy of Boris Johnson. Thus, the issue of Boris Johnson's resignation may be on the agenda next year, and the Prime Minister's party members may initiate it. All this potentially means a new pile of problems for Britain. Consequently, the British pound will live without fundamental support.

In the near future, trading in different directions is likely to continue. Therefore, traders should clearly understand the current picture of things before opening any trades. As for expediency, it is not the worst option now to refuse to enter the market before the onset of calm and measured trading.

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The average volatility of the GBP/USD pair is currently 128 points per day. For the pound/dollar pair, this value is "high". On Wednesday, October 21, therefore, we expect movement inside the channel, limited by the levels of 1.2815 and 1.3071. A reversal of the Heiken Ashi indicator to the top signals a new round of upward movement.

Nearest support levels:

S1 – 1.2939

S2 – 1.2909

S3 – 1.2878

Nearest resistance levels:

R1 – 1.2970

R2 – 1.3000

R3 – 1.3031

Trading recommendations:

The GBP/USD pair started a new round of downward movement on the 4-hour timeframe. Thus, today it is recommended to trade lower with the targets of 1.2909, 1.2878, and 1.2848 until the Heiken Ashi indicator turns up. It is recommended to trade the pair for an increase with targets of 1.3000, 1.3031, and 1.3062 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 21. Rules for TV debates between Trump and Biden changed.

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) - upward.

CCI: 204.9763

During the second trading day of the week, the EUR/USD pair resumed its upward movement. However, in general, trading continues inside the side channel, which we have repeatedly written about. Thus, in the long term, nothing changes for the euro/dollar pair, and the 50-60 points that the pair passes every day do not have any effect on the technical picture at all. By and large, the trend continues to reverse every few days. Thus, now, in principle, it is impossible to talk about any trend. Why is this situation now? Because America continues to prepare for the elections, which have already begun. Meanwhile, in Europe, a strong second "wave" of COVID-2019 has begun, which is unclear and unknown what impact it will have on the EU economy. Therefore, traders are cautious and they are waiting for the fundamental background to become a little simpler and clearer. In particular, we have repeatedly noted that before the end of the presidential election in the United States, it is unlikely to expect a strong strengthening of the US currency, because market participants simply will not risk investing in the dollar without knowing the name of the next president of the country. As for the European currency, its traders do not want to buy since it has already risen in price over the past six months by 13 cents and continues to trade near two-year highs.

Meanwhile, the third and final round of televised debates between Donald Trump and Joe Biden is scheduled for October 22. This will be the last face-to-face meeting of presidential contenders before election day. However, the new round will be supplemented with new rules, according to the decision of the commission on presidential debates. After the first round turned into utter chaos and was called a "disgrace" by many American media, the rules of TV debates changed. Now the microphone of one of the candidates will be turned off while the second candidate is speaking. However, only for a two-minute time slot at the beginning of each 15-minute round. The remaining thirteen minutes will be the debate when the microphones of both contenders will be turned on. According to media estimates, Trump interrupted Biden 71 times during the first debate. However, it is unlikely that the new rules will deter Trump from new attacks and provocations because this is part of his strategy in a face-to-face confrontation with Biden. The topics that the participants of the debate will have to discuss also became known. These are the fight against coronavirus, race issues, climate change, national security, and American families. It should be noted at once that the Trump campaign headquarters opposed any changes to the rules of the debate and demanded to change the list of questions to be answered by both candidates.

Also, Donald Trump got involved in a new conflict with the country's chief epidemiologist Anthony Fauci. However, the word "conflict" is not quite appropriate to describe what is happening. Trump simply insulted Fauci in his usual way, calling him an "idiot". According to the US President, if he listened to the advice of Fauci, the total death rate from the "coronavirus" would already be 700 or 800 thousand. Thus, Trump once again puts himself above the country's chief epidemiologist on an epidemiological issue in which he was most often misled. Recall that it was Dr. Fauci who repeatedly refuted the words of the US President. Fauci predicted 200,000 deaths in the country from COVID-2019 this spring. It recently changed its forecast to 400,000 deaths.

At the same time, the pre-election process in America is quite active. According to polling stations, about 28 million Americans have already voted, and in some states, there are even queues to go to the polls, despite the bad weather. Meanwhile, Trump himself continues to repeat the words about election fraud by Democrats. According to the current US President, fraud has already begun in some states, although Trump did not provide any evidence of his words. Meanwhile, a new batch of various sociological studies has arrived, which again showed that Biden leads by a margin of at least 11%. Thus, nothing changes in the balance of power before the election between the candidates.

However, traders are more interested in an agreement between Democrats and Republicans that will allow them to agree on a new package of stimulus measures for the American economy. Earlier, House Speaker Nancy Pelosi set a deadline for negotiations that expired just a couple of hours ago. Since there is no new information on this issue, it can be assumed that the Democrats and Republicans did not manage to reach an agreement. However, all US political forces have long been focused on the elections, which are two weeks away, and not on issues related to the country's governance. And market participants themselves also continue to ignore most of the macroeconomic and fundamental information. Otherwise, how can we explain the almost three-month movement of the pair in the 250-300-point side channel? We can only assume that traders are waiting. They are waiting for either the US election and the name of the next president, or any actions of major market players that can move the pair off the ground. One way or another, there is no trend in the long term.

From intraday trading, the upward trend is now maintained, as the price continues to be above the moving average line. However, we once again warn traders that it will be extremely difficult for quotes to leave above the level of 1.1900. And the level of 1.2000 now looks completely unattainable. Thus, we should not expect a strong strengthening of the European currency now. As for the US dollar, traders overcome the level of 1.1700, but even in this case, the bears' strength is not enough for further movement to the south.

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The volatility of the euro/dollar currency pair as of October 21 is 69 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1764 and 1.1902. A downward reversal of the Heiken Ashi indicator may signal a downward correction.

Nearest support levels:

S1 – 1.1780

S2 – 1.1719

S3 – 1.1658

Nearest resistance levels:

R1 – 1.1841

R2 – 1.1902

R3 – 1.1963

Trading recommendations:

The EUR/USD pair continues its upward movement. Thus, today it is recommended to stay in buy orders with a target of 1.1902 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