Trading plan for US Dollar Index for October 22, 2020

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Technical outlook:

US Dollar Index had dropped through 92.35/40 potential support zone yesterday, before pulling back. The end of the day chart has been presented here and it is seen to be trading around 92.72 at this point in writing. Please note that the indice had dropped through 92.35/40, which is also fibonacci 0.786 retracement of the rally between 91.75 and 94.75 respectively. Bulls are expected to remain in control until prices stay above 91.75 levels, going forward. Immediate support is seen at 91.75, while resistance is fixed around 94.75 levels respectively. The upside potential remains towards 96.00 and 98.00 respectively and a push above 94.75 will accelerate. Also note that 98.00 is fibonacci 0.618 retracement of the entire drop between 103.00 and 91.75 respectively, hence high probability remains for a bearish bounce.

Trading plan:

Remain long, stop @ 91.75, target is 96.00 and 98.00

Good luck!

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

Elliott wave analysis of EUR/JPY for October 22, 2020

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To our surprise, the correction from 125.00 has been larger than expected. EUR/JPY has re-tested the former support at 123.93. This support is holding up well and will likely prove to be the low of this correction. We need a break back above minor resistance at 124.18 and more importantly above resistance at 124.59 to confirm the next rally higher towards 128.44 and likely above.

A solid support is seen in the 123.86 - 123.93 area. If support at 123.49 is broken, we will have to revise our bullish outlook.

R3: 124.59

R2: 124.38

R1: 124.18

Pivot: 124.05

S1: 123.86

S2: 123.71

S3: 123.49

Trading recommendation:

Our stop at 123.90 was hit for a nice little profit and we will re-buy EUR at 123.90 or upon a break above 124.18 and place our stop at 123.45.

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

GBP/USD: plan for the European session on October 22. COT reports. UK ready to make concessions on the Brexit trade deal.

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

The news that the UK wants to resume negotiations and is ready to make concessions in the trade deal has supported the British pound and caused it to sharply grow yesterday afternoon. Let's take a look at the 5-minute chart and talk about where you can and should buy and sell the pound. In my review for the afternoon, I paid attention to resistance at 1.3080 and to buy above this level. The chart shows how the bulls are trying to break out and settle in this range, which forms a good entry point into long positions, and also brings around 70 points of profit. Selling on the rebound from 1.3154 (which I also recommended to do) was not good, but the bears also managed to wait for their correction.

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I have revised the nearest levels. The main task of the bulls during the first half of the day is to form a breakout and to settle above resistance of 1.3144, similar to yesterday's purchase, which I analyzed a little higher. This forms a good signal to open long positions as the pound continues to rise to 1.3192. The next target will be resistance at 1.3234, where I recommend taking profits. However, do not rush to buy the pound and add long positions from the high of 1.3192, since divergence is forming on the MACD indicator, this could limit the upward potential of the pair. The bull market will only be able to progress further if we receive more specific news about what kind of concessions the UK is ready to make. A more optimal scenario for opening long positions will be a downward correction from the GBP/USD pair to the support area of 1.3096, which is where moving averages will meet, playing on the side of buyers. However, you can only buy the pound if a false breakout appears, afterwards the pair could rapidly rise to weekly highs. If it is not there, and in case bulls are not active at 1.3096, then I recommend postponing buy positions until a larger low of 1.3044 has been updated, where you can open long positions immediately on a rebound, counting on a correction of 30-40 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:

Pound sellers were clearly taken aback by such news from the UK government, which led to their abrupt withdrawal from the market. At the moment, bears can only hope to form a false breakout in the resistance area of 1.3144, which will be the first signal to open short positions in the pound. A more important task is to break and settle below support at 1.3096, which will raise the pressure on the pair and lead to removing the buyers' stop orders, causing the pair to fall to a low of 1.3044, where I recommend taking profits. In case the pound grows further, according to the newly formed trend and the breakdown of resistance at 1.3144, one can count on divergence, which is now being formed on the MACD indicator. However, it is better not to rush to sell, but to wait until weekly highs have been updated and to test the 1.3192 level, where you can open short positions immediately on a rebound, counting on a correction of 30-40 points within the day. If the pound does not rapidly fall from this level, then it is best to postpone short positions until a high of 1.3234 has been updated.

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Indicator signals:

Moving averages

Trading is carried out above 30 and 50 moving averages, which indicates a resumption of the bull market.

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

Bollinger Bands

The pound's growth may be limited by the upper level of the indicator in the 1.3190 area. In case the pair falls, support will be provided by the lower border of the indicator at 1.3070.

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

Trading plan for the EUR/USD pair on October 22. Continued rise of COVID-19 cases and growth of the European currency.

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There is a lull in the US market, which suggests that growth has a low chance of occurring any time soon. Instead, look forward to price rebounds and then sell, as such will happen before and after the US presidential elections.

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As of the moment, the total figure of COVID-19 cases around the world is 437 thousand.

Europe continues to observe record high incidence rates, so now, the UK and France have more than 26 thousand new patients a day. Spain, Italy and the Czech Republic, meanwhile, have recorded more or less 16 thousand.

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EUR / USD - growth continues in the European currency.

Thus, long positions may be opened from 1.1840, while stop loss may be placed at 1.1790.

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

EUR/USD: plan for the European session on October 22. COT reports. Bullish momentum is fading, but there is still a chance

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

Buyers of the euro did not try to sustain the upward trend in the afternoon, nothing came of it. Let's take a look at the 5-minute chart and break down yesterday's trades. Bulls failed to go beyond 1.1868 during the first half of the day, which led to forming a false breakout and a signal to sell the euro. However, this did not lead to a large sale, as a result of which, the bulls took resistance at 1.1868 in the afternoon and formed a good entry point for long positions, however, a powerful upward moment did not occur, which resulted in extinguishing hopes for further growth.

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At the moment, the bulls need to think about how they can protect support at 1.1836. Forming a false breakout at this level in the first half of the day will be a signal to open long positions in euros during the weekly bullish trend. The primary goal is to return to resistance at 1.1875. Forming a breakout on this range and settling on it, similar to yesterday, will serve as a new signal for you to open long positions in order to test the highs of 1.1915 and 1.1964, where I recommend taking profits. In case bulls are not active at 1.1836 in the first half of the day, and since we do not have important fundamental reports today, we can expect a downward correction in EUR/USD, down to the area of a large support at 1.1802, where you can consider buy positions on the euro. I recommend opening long positions immediately on a rebound, but only from a low of 1.1765, 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:

In order for sellers to be able to take control of the market and continue the downward correction, it is necessary to settle below support at 1.1836, testing it on the reverse side forms a good signal to sell the euro, in hopes to update of the low of 1.1802, where I recommend taking profit. The next target is support at 1.1765. If EUR/USD increases in the first half of the day, then it is best not to rush to sell, but to wait until a false breakout forms in the resistance area of 1.1875. You can open short positions immediately on a rebound from the high of 1.1915, counting on a correction of 15-20 points within the day.

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Indicator signals:

Moving averages

Trading is carried out in the area of 30 and 50 moving averages, which indicates uncertainty regarding the direction and that the bullish momentum is fading.

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

Bollinger Bands

A breakout of the upper border of the indicator in the 1.1875 area will lead to an increase in EUR/USD. A breakout of the lower border of the indicator in the 1.1836 area will increase pressure on the pair.

Description of indicators

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

Analytics and trading signals for beginners. How to trade EUR/USD on October 22? Plan for opening and closing trades on Thursday

Hourly chart of the EUR/USD pair

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The EUR/USD pair started a downward correction last Wednesday night, which only made the technical picture even more confusing. Now several scenarios are possible at once. First, the correction, which is why the price settled below the upward trend line, can really only be a correction. In this case, you will have to rebuild the trend line, since it initially had a very strong slope and almost any pullback took the pair below it. Secondly, the trend could change to a downward one, since the euro/dollar pair approached the 1.1900 level once again, which for a long time acted as the upper border of the 1.17-1.19 horizontal channel. We mentioned last night that the likelihood of a downward reversal near the 1.1900 level is quite high. However, quotes did not reach this level, nevertheless, a reversal may occur on the way to it. Moreover, if the trend changes to a downward one and now we are waiting for it to move to 1.1700, then the pair may correct upward before continuing to move down, therefore, in the near future, the MACD indicator may turn up. In general, the situation is complex.

The fundamental background for the EUR/USD pair remains unchanged. The euro has significantly grown in recent days, but, as we have already said, there is a high likelihood that its quotes will remain within 1.17-1.19. Traders continue to ignore all macroeconomic reports, and the fundamental background is quite contradictory, since there is essentially no new, important information and messages on key topics for the pair. For example, today the calendar of macroeconomic events does not contain anything interesting at all. There will only be a report on claims for unemployment benefits in America, which traders mostly brush off (except for force majeure cases). Therefore, they will either have to trade again exclusively on technical factors and signals, or else look for news on the European Union and the United States and try to understand whether they can have any influence on the course of trading. It would seem that an epidemic is raging in both the US and the EU, America is approaching the presidential elections.

The last round of televised debates between Donald Trump and Joe Biden will take place in the United States, Democrats and Republicans still cannot agree on an aid package for the American economy. However, all these topics only create a general background, and the daily trades are not based on them. As we mentioned earlier, it will be difficult for the dollar to rise before the elections. Therefore, we do not expect the pair below the 1.1700 level.

Possible scenarios for October 22:

1) Buy positions on the EUR/USD pair have ceased to be relevant at the moment, since the price has settled below the rising trend line. At the same time, the upward trend may still resume. However, we do not recommend novice traders to make complex trading decisions, but instead they should rely on clearer and simpler signals. Thus, it is best to resume bull trading after a new upward trend or downward trend refracts.

2) Novice traders are advised to return to selling the pair, since the price has settled below the trend line. For sell positions that are already open, we recommend keeping them with targets at 1.1826 and 1.1794 until the MACD turns up. For new short positions, you should wait for an upward correction and a new MACD sell signal. The goals are the same.

On the chart:

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

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

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

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

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

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

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

Technical Analysis of EUR/USD for October 22, 2020

Technical Market Outlook:

The EUR/USD made a new local high at the level of 1.1880 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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The material has been provided by InstaForex Company - www.instaforex.com

Technical Analysis of GBP/USD for October 22, 2020

Technical Market Outlook:

The GBP/USD pair has hit the level of 1.3169 after the rally from the base level seen at 1.2925. All the technical resistance levels had been violated and now they will act as a support: 1.3121, 1,3081 and 1.3059. The momentum is strong and positive, but the market conditions are now overbought on the H4 time frame chart, so a pull-back towards the support is expected before another wave up will unfold. The next target for bulls is seen at the level of 1.3264.

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

Technical Analysis of ETH/USD for October 22, 2020

Crypto Industry News:

Line, a Tokyo-based subsidiary of South Korean company Naver, is building a platform to expand central banks' digital currencies, South Korean news agency Chosun Ilbo said. Sources familiar with the case have reportedly told Chosun Ilbo that Line aims to support the development of so-called "adapted CBDC".

According to the report, the communications company is discussing the application of its blockchain-based CBDC platform with several central banks in major Asian countries. Line directors said they could not reveal which countries are considering using the platform.

A Line spokesman said the company's goal is:

: (...) To provide a blockchain platform that is suitable for CBDC based on Line Blockchain. "

Line is actively exploring the cryptocurrency and blockchain industry. In August 2020, it launched a blockchain development platform for decentralized applications and services, and a digital asset portfolio called Bitmax. Earlier this year, Line's cryptocurrency subsidiary, LVC Corporation, began trading its proprietary cryptocurrency (LN) link in Japan.

A number of Asian countries are planning to introduce CBDC. On October 9, Japan's central bank officially announced that it will begin reviewing the CBDC concept in 2021. On October 7, the South Korean central bank reportedly announced that it would begin the distribution phase of its CBDC pilot program next year.

Technical Market Outlook:

The ETH/USD pair has been seen rallying to the level of $400 and this is the new swing high. The nearest technical resistance is seen at the level of $407.70 and at the swing top at $414.11. On the other hand, the nearest technical support is seen at the level of $389.90. If this level is clearly violated, then the correction might extend towards the level of $383.32 and below. Please notice the overbought market conditions.

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

Technical Analysis of BTC/USD for October 22, 2020

Crypto Industry News:

One of the world's leading online payment processors, PayPal, will enable US customers to buy bitcoin and other cryptocurrencies in the coming weeks. Availability of the service for customers from other countries is expected to appear in the first half of 2021.

PayPal has joined the cryptocurrency market and will enable its customers to store, buy and sell bitcoin and other cryptocurrencies using fiat currency. PayPal customers will be able to spend BTC on purchases from over 26 million vendors who have already been on its network since early 2021, reports Reuters.

The company said it "works with central banks and thinks of all forms of digital currencies, and PayPal can play a role." The president of PayPal also hopes that this service will encourage the continued use of virtual currencies, as well as prepare its network for central bank digital currencies (CBDC).

US customers will be able to buy, sell, and store cryptocurrencies via their PayPal wallets in the coming weeks. PayPal also plans to expand this offer to Venmo and other countries in the first half of next year.

Technical Market Outlook:

The BTC/USD pair has hit the level of $13,000 after the PayPal news had been released. The new swing high had been made at the level of $13,159 and a Pin Bar candlestick pattern was made at the end of the rally. 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 $12,621 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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The material has been provided by InstaForex Company - www.instaforex.com

Trading plan for GBPUSD for October 22, 2020

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Technical outlook:

GBPUSD hit 1.3170/75 yesterday as we forecast. The euro is seen to be trading around 1.3139 level at this point in writing and is expected to turn lower soon. It needs to find resistance around Fibonacci 0.618 retracement of the recent drop between 1.3488 and 1.2675 levels respectively. Immediate resistance is seen at 1.3500, while support is fixed around 1.2675 level respectively. Downside potential remains towards 1.2200 level. The pair may break below 1.2675. Also note that Fibonacci 0.618 retracement of the entire rally between 1.1414 and 1.3500 is seen through 1.2200 level. A bullish reversal looks possible if the pair is able to reach there.

Trading plan:

Remain short, stop @ 1.3500, target @ 1.2200.

Good luck!

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

Elliott wave analysis of GBP/JPY for October 22, 2020

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GBP/JPY moved above short-term key-resistance at 137.25. It calls for more upside pressure towards 137.88 on the way higher to 140.20 as the next target. The former resistance at 137.25 will now act as support. GBP/JPY continues to move higher.

Support is seen at 137.25 and then at 137.02.

R3: 139.17

R2: 138.40

R1: 137.68

Pivot: 137.46

S1: 137.25

S2: 137.02

S3: 136.81

Trading recommendation:

We are long GBP from 135.45 and we will raise our stop to 136.25.

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

Trading plan for EURUSD for October 22, 2020

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Technical outlook:

EURUSD retreated after hitting the 1.1870 level yesterday. EUR/USD is seen to be trading around 1.1844 level at this point in writing and is expected to reverse lower from here. The potential downside target is the 1.1100 level in the next several weeks. Immediate resistance is seen towards 1.2010 while interim support is at 1.1610 level. A drop below 1.1610 would confirm thw downward movement to 1.1870 and 1.1350. Also note that EURUSD has found resistance around the Fibonacci 0.618 retracement between 1.2010 and 1.1610 levels respectively. A bearish reversal from here remains a high probability.

Trading plan:

Remain short, stop @ 1.2010, target @ 1.1350 and 1.1100

Good luck!

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

Forecast for EUR/USD on October 22, 2020

EUR/USD

Yesterday, the effect of good expectations worked on the markets - according to Michel Barnier, investors sensed the possibility of an EU-UK deal and began to buy both the euro and the pound. As a result, the euro grew by 39 points, the pound by 198 points. The euro did not reach the target level of 1.1915 by around 35 points, which raises a difficult question, will it work out at all or not? The signal line of the Marlin oscillator has already begun to reverse.

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The Marlin is also turning around on the 4-hour timeline, but there are no actual reversal signals yet. It is very likely that the price will still reach the designated target, slightly going beyond it in order to reach the MACD line on the daily scale, and this will form a divergence reversal with Marlin.

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So, we are waiting for the price to grow to the previously indicated level in the area of the MACD line on the daily chart at 1.191520.

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

Forecast for AUD/USD on October 22, 2020

AUD/USD

Against the background of the general weakening of the US dollar, the Australian dollar gained 68 points yesterday, exceeding the target level of 0.7120, stopping at the balance indicator line on the daily chart. The Marlin oscillator did not enter the growth zone, there is a possibility that the price will also begin to reverse from the levels it reached. Getting the pair to settle below 0.7058 will make the pair fall to 0.6950.

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The four-hour shows that the price has exactly reached the MACD line (blue), but Marlin is still in the zone of positive values, which warns us of the continuing risk of another attack on the MACD line. Getting the price to settle above it (yesterday's high at 0.7138) will push the price to continue rising to the second target of 0.7190.

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The first sign that a reversal has taken place is when the signal line of the Marlin oscillator leaves the zone of negative values, which will roughly correspond to the price falling below 0.7080.

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

Forecast for USD/JPY on October 22, 2020

USD/JPY

US stock indices are in disarray - on the one hand, they want to grow on the strengthened hopes that the White House and Congress will accept a very large package of second aid to the markets, on the other hand, investors doubt that this bill will be passed before the elections.

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The S&P 500 stock index lost 0.22% yesterday, the yen strengthened (decreased on the chart) by 90 points, unable to overcome the resistance of the MACD line on the daily chart a day earlier. The price has broken through the support of the embedded price channel line at 104.93, and now it is aiming for the nearest target at 103.75. The price will probably retest 104.93 before this target is reached.

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The price is completely in a downward trend on the four-hour chart, with all indicators pointing to a decline. The Marlin reversal is of a short-term nature - easing before declining further.

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

Hot forecast and trading signals for GBP/USD on October 22. COT report. Bailey might mention negative rates again

GBP/USD 1H

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The GBP/USD currency pair continued to rise on October 21, as it easily crossed the Kijun-sen line, the resistance level of 1.3044 and by the end of the day, it even reached the resistance area of 1.3161-1.3185. Thus, after overcoming the descending trend line that was rebuilt, we can say that the upward trend prevails in the market. However, at the same time, traders should take note of the fact that quotes have often been changing their direction in recent weeks. Thus, the option is not excluded, in which after a rebound from the 1.3161-1.3185 area, a downward correction will begin no weaker than the upward movement itself. Overcoming this area will allow the bulls to look forward to further growth.

GBP/USD 15M

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Both linear regression channels turned to the upside on the 15-minute timeframe, which 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.

The UK published September CPI on Wednesday. Inflation has risen by 0.5% this month compared to September last year and 0.4% compared to August. Market participants expected to see approximately the same values. These values cannot be called either failures or strong, since in general they are weak, but at the same time correspond to forecasts. Thus, it is unlikely that the pound gained 200 points during the day thanks to this report. Bank of England Governor Andrew Bailey is scheduled to speak on October 22 in the UK. And this event is interesting because he can touch on the topic of stimulating the British economy. Recall that traders have long been waiting for the central bank to reduce the key rate to the negative area. However, the central bank continues to delay this moment with its last bit of strength. True, no one in the market doubts that this moment will come anyway, since the prospects for the British economy remain extremely dim. Also this year, the BoE may expand the quantitative incentive program. Traders expect this kind of information, regarding the plans and timing of innovations, from the head of the Bank of England.

We have two trading ideas for October 22:

1) Buyers for the pound/dollar pair easily overcame the 1.3006-1.3024 area, which they could not take a day earlier, but immediately ran into the next resistance area of 1.3161-1.3185. Therefore, you can consider long positions while aiming for 1.3265, if this area is overcome. Take Profit in this case will be up to 70 points. However, take note of very frequent changes in direction of movement and relatively high volatility, so we advise trading carefully.

2) Sellers were unable to keep the pair below the downward trend line. Thus, you can only consider sell orders below the Kijun-sen (1.3016) and Senkou Span B (1.2962) lines while aiming for the support area of 1.2857-1.2872 and the 1.2823 level. Take Profit in this case can range from 80 to 120 points. This variation is not expected today, although the pair may drop to the Senkou Span B.

Explanations for illustrations:

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

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

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

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

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Hot forecast and trading signals for EUR/USD on October 22. COT report. Biden's and Trump's headquarters continue to dig

EUR/USD 1H

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The EUR/USD pair continued to move up on the hourly timeframe on Wednesday, October 21, without any sign of starting a correction. The price continued to trade within the rising channel throughout the day and did not make any attempt to leave it. The resistance level of 1.1882 was reached by the end of the day. Thus, buyers have not let go of the initiative for the third day now, which made it possible for the euro to sharply rise against the US dollar. Now the bulls need to break through an important resistance area of 1.1887-1.1912 in order to expect stronger gains. However, take note that the 1.1900 area has been the upper line of the horizontal channel for a long time. And even the 1.1940 level is also the upper line of the horizontal channel, only different. Thus, there are several important and strong resistances above 1.1900 and buyers will need a really strong desire to overcome them.

EUR/USD 15M

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Both linear regression channels are directed upward on the 15-minute timeframe, indicating that the upward movement will continue after a failed 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.

No macroeconomic background for the pair on Wednesday, despite the fact that the euro continued to rise for the third consecutive day. There was little news of a macroeconomic nature; European Central Bank President Christine Lagarde and Vice President Luis de Guindos did not disclose anything interesting during their speeches. But new, funny information from America appeared. So the American media found out that US President Donald Trump's company has an account opened in one of the Chinese banks. Moreover, between 2013 and 2015, Trump's company paid nearly $200,000 in taxes to the Chinese treasury. And while Trump has been repeatedly accused of concealing the real income of his companies and tax evasion. However, Trump himself did not remain in debt and said that the FBI should start an investigation into the business of Joe Biden and Hunter Biden. According to Trump, "this is a very large corruption case." Trump continues to insist that in Ukraine, China and the Bidens were involved in many "dark" deals and insists on their investigation. This probe is unlikely to begin and end before Election Day.

We have two trading ideas for October 22:

1) The pair continues to move up within the rising channel. Thus, traders are advised to continue to trade bullish while aiming for the 1.1939 resistance level as long as the price is within the trend channel. Take Profit in this case will be up to 50 points. However, one should take into account the 1.1887-1.1912 area, which the bulls may not be able to overcome.

2) Bears remain in the shadows. Thus, now the bears can only wait for the bulls to take a break. The opportunity to open short positions will appear after breaking the Kijun-sen (1.1783) and Senkou Span B (1.1759) lines with the targets of the support area of 1.1692-1.1699 and the 1.1663 level. The potential Take Profit in this case is from 50 to 80 points. You can also consider shorts in small lots while aiming for the Kijun-sen line, if the bears get the pair to settle below the rising channel.

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

We trade with the Bank of England

The new reference level for the upward impulse for the GBP/USD pair is 1.2987. This mark became the starting point of strong growth of the instrument yesterday. The close of trading occurred above the banking resistance zone. This indicates that there is a great interest in buying the British currency both from large players and speculators. Holding on to purchases opened last week is the main strategy today. For repeated purchases, the price will need to be held above the level of 1.3119 for several days.

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If today's close will go above the banking zone, then any decline in the next five days will become corrective. The probability of a return to the banking level of 1.2987 is not high, however, the most favorable prices for buying the instrument are located at this mark.

An alternative pattern will look like a fall in the pair to the starting point of yesterday's impulse 1.2987. This will allow you to buy the British pound at the best possible price. This model should be considered as an auxiliary one because the probability of such a deep correction formation is below 50%.

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

European Central Bank levels for trading

The 1.1859 level is the starting point for making trading decisions this week and in the first half of the next. Today's consolidation above this level will allow you to continue to hold purchases that were opened earlier. Any decline can be considered as a correction, as the Bank's recent actions indicate support for the growth of the Euro exchange rate. The formation of a buy pattern should be considered below the level of 1.1859. This will allow you to open a profitable long position. The growth target may be a zone with an upper limit at 1.1986.

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Over the past four days, the pair has been growing. This indicates a large number of market buyers who are ready to enter transactions at unfavorable prices. Until the absorption pattern is formed on the daily period, it is unnecessary to talk about the cancellation of the upward momentum.

We will see an alternative option if today's trading closes below yesterday's opening. This will allow us to consider a decline to the lower banking zone, located above the level of 1.1732.

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Overview of the GBP/USD pair. October 22. Brussels insists and will continue to insist that European fishermen have access

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: 276.9621

The British pound sterling paired with the US currency continues to fling from side to side. After several days of relatively quiet trading, the pound/dollar pair again plowed more than 200 points for the day yesterday. As usual, there was no good reason for the British pound to do this. During the day, there were no important statistics or important speeches by Boris Johnson or any of the EU authorities who could claim that some progress had been made in the Brexit negotiations, which would have caused the pound to strengthen. No, there was nothing like that, however, the pound has risen again, and we can only wait for the "storm" to end since it is extremely difficult to predict the movement of the pair now. Moreover, there is no influence on the fundamental background of the pair at the moment. The pound is growing despite the highest probability of a "divorce "of the UK from the European Union without a "deal". And if we were talking about the euro/pound pair, then the pound could theoretically strengthen since the lack of a deal is also a blow to the Eurozone economy. However, we are talking about the pound/dollar pair.

The "coronavirus" in the UK is of no small importance now, which will also leave its mark on the already weakened economy in any case. In the Foggy Albion, the second "wave" began, which is already four times stronger than the first. But this is only the beginning. According to the Johns Hopkins Institute, more than 20,000 people have been infected in Britain over the past day. Thus, firstly, the number of diseases continues to grow, and secondly, the current levels of morbidity are four times higher than those recorded in the spring. And, as we said, this is just the beginning. The cold season (when there is a sharp increase in diseases of various viruses, flu, colds) is still ahead, which means that the number of diseases may continue to grow.

Meanwhile, UK business and manufacturing continue to sound the alarm. It is reported that the absence of a deal with the European Union for the automotive industry in Britain will be much more terrible and dangerous than the "coronavirus crisis" and its consequences. It is reported that the British car industry exports more than 50% of all its products to the European Union. Accordingly, if there is no "deal" between the parties, then exports to the EU countries will be greatly reduced due to the banal rise in the price of cars produced in Britain. The same applies to many international car manufacturers. For example, Japanese or German companies that also actively exported their products to Britain.

At the same time, the President of the European Council, Charles Michel, does not see the point in principle to continue negotiations on a Brexit deal. According to Michel, it was not the European Union that initiated the "divorce", it was not the European fishermen who decided on Brexit. Thus, he does not understand why it is the Europeans who should go along with London and try to please them with a trade agreement? According to Michel, European fleets will be irreparably damaged if access to British waters is closed. The head of the European Council also believes that the UK wants to maintain access to a huge and diversified European market, just as the European Union wants to maintain access to its fishermen in British waters. Charles Michel also added that there is no point in discussing, signing, and ratifying the agreement with London if it is incomplete. Thus, Charles Michel once again showed that Britain will not get access to the European market if it does not also agree to make concessions and demands from Brussels. Given the fact that the final divorce between the parties is less than 10 weeks away, and there is still no progress, we would also recommend that market participants prepare for the absence of an agreement. Perhaps it will be signed later because no one forbids the parties to continue negotiations in 2021. However, you can not count on it until the New Year.

And despite all this news, the British currency continues to strengthen. However, the European currency continues to grow, but only within the side channel. Both major currency pairs have been very poorly correlated with each other in recent months, however, it can now be assumed that both euro currencies are growing due to the US dollar and falling demand for it. Still, election day is approaching in the United States, which means that the tension and uncertainty associated with the future of the country and its economy are growing. Thus, theoretically, the growth of the pound and the euro can be associated with the same elections in America. However, the probability of this is not too high.

Meanwhile, Speaker of the House of Representatives Nancy Pelosi "forgot" about her deadline in negotiations with Republicans and expressed hope that the parties will still be able to reach an agreement on a new stimulus package for the American economy before this weekend in a conversation with Treasury Secretary Steven Mnuchin. The White House also expressed hope for an agreement and said "both sides are working hard". However, the markets are already tired of receiving information in the form of "parties continue to work hard". Traders need concrete results of these negotiations or their completion to draw clear conclusions and build new trading strategies based on them. Until then, the pound/dollar pair may remain a "storm". After yesterday's strong growth, today we may see an equally strong drop in quotes.

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The average volatility of the GBP/USD pair is currently 136 points per day. For the pound/dollar pair, this value is "high". On Thursday, October 22, thus, we expect movement inside the channel, limited by the levels of 1.3021 and 1.3293. A reversal of the Heiken Ashi indicator downwards signals a round of downward correction.

Nearest support levels:

S1 – 1.3123

S2 – 1.3062

S3 – 1.3000

Nearest resistance levels:

R1 – 1.3184

R2 – 1.3245

R3 – 1.3306

Trading recommendations:

The GBP/USD pair started a new round of upward movement on the 4-hour timeframe. Thus, today it is recommended to trade for an increase with the targets of 1.3184, 1.3245, and 1.3293 before the Heiken Ashi indicator turns down. It is recommended to trade the pair down with targets of 1.2939 and 1.2878 if the price returns to the area below the moving average line.

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Overview of the EUR/USD pair. October 22. Is there a real chance that Donald Trump will stay in the White House for another

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: 143.9324

During the third trading day of the week, the EUR/USD pair continued its upward movement as if nothing had happened. Although the movement to the north continues for three consecutive days, there was no correction during this period, and the euro/dollar pair continues to trade inside the side channel. The only question is what are the boundaries of this channel. Perhaps this is 1.1700 and 1.1900 – the channel within which the pair has been trading for about a month and a half. It may be 1.1640-1.1920(1.1940). The pair's quotes have not been able to get out of this channel for almost three months. One way or another, however, the sideways movement is now visible to the naked eye. You only need to look at timeframes older than 4 hours. Thus, although at first glance the current upward movement is quite strong and pulls on the "trend", so far absolutely nothing has changed in the technical picture. At any moment, especially after reaching the level of 1.1900 or on the approach to it, the pair can turn down and start a new round of downward movement on the same side channel. The most important thing is that the fundamental and macroeconomic backgrounds do not have any influence on the pair's movement at the moment. Not for a long time. If the general fundamental background brought the euro to the current levels (two-year highs), then traders were not able to lead the pair over the past three months. Although there have been plenty of noteworthy events during this time. There is an opinion that most market participants simply do not want to take risks before the US presidential election. However, it should be understood that this is just an assumption. Therefore, we still recommend that you focus on technical factors when making trading decisions.

Most media and experts have already buried Trump's re-election chances. Support ratings have consistently pointed to at least a 10% gap between Biden and Trump for several months in a row. And the situation does not change. Moreover, various sociological models of respected publications and analysts also predict the victory of the Democrat, with a completely gigantic probability of at least 80-85%. A couple of weeks ago, some experts believed that Trump's only chance of winning was due to a lawsuit that could end the 2020 election. That is, Trump can freely appeal to the Supreme Court, saying that the election was rigged and demand an investigation. The laws do not prohibit this. Thus, purely hypothetically, the Supreme Court may side with Trump and declare the election invalid. However, first of all, it is unlikely that the court will recognize the elections as rigged by Democrats in all states of the country. That would be very strange and suspicious. Most likely, in our case, we will be talking about one or at most two states that give the largest number of "electoral votes". For example, Pennsylvania, Philadelphia, or California. However, the revision of the voting results in these states is enough to change the election results. For example, the number of electoral votes given by the state of Pennsylvania is 20, Philadelphia is 29, and California is 55. To win, a presidential candidate needs to get 270 votes. As you can see, if the gap in the election results between Biden and trump is less than 58 votes, then the revision of the results in just one state will lead to the opposite results in the election. And in this case, Trump needs the support of the Supreme Court. And he will have it because five of the nine Supreme Court Justices are Republicans, and Trump is going to appoint to the post the sixth judge before the election. Thus, 6 out of 9 judges can provide Trump with the necessary review of the results. Of course, it is not necessary that if the case goes to court, everything will turn out in favor of the current president. However, the probability of this is high, as in the case of impeachment, which was initiated by the Democrats, and which did not take place simply because the Republicans have a majority in the US Senate.

So far, the situation is not in favor of Trump. The situation with the" coronavirus", a huge number of false statements over 4 years, the trade war with China, in which it is the States that lose, the dark history of impeachment, constant wars with the Democrats, social unrest based on issues of racism, a record drop in the economy in 2020, a lost first round of debates with Joe Biden. It would seem that Trump has no chance of winning the election at all. Moreover, the elections have already begun, since in America it is allowed to vote early. Americans started voting early. And most of them are voting for Biden. And while Americans are voting for Biden, Republicans are placing their ballot boxes in the most important states, which is completely absurd. But Republicans and Trump understand that they can't win completely honestly and transparently, so they try to use any chance to win.

In principle, Trump has only one chance before the election to change the situation a little in his favor. Tomorrow in America, the last round of TV debates will take place, at which the president was advised by his campaign team not to interrupt Biden, to behave more politely, and to joke and smile more. Trump may be able to win back 1 or 2% of the electorate. However, we believe that it is unlikely. And it seems that the fate of the elections will be decided through the disputed states. And this is the only and main trump card of Trump. Biden needs a complete and unconditional victory so that the results of the largest states no longer matter. If he wins by more than 110 votes, then Trump is unlikely to help anything. If the margin in the most important and contested states is strong, then there will most likely be no review of the vote.

The US dollar continues to fall in price two weeks before the election, however, this may be completely unrelated to any fundamental data decline. We have already said that the pair simply continues to trade inside the side channel. The euro currency is growing now, and the dollar may start to grow in a couple of days.

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The volatility of the euro/dollar currency pair as of October 22 is 71 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1797 and 1.1939. A downward reversal of the Heiken Ashi indicator may signal a downward correction.

Nearest support levels:

S1 – 1.1841

S2 – 1.1780

S3 – 1.1719

Nearest resistance levels:

R1 – 1.1902

R2 – 1.1963

R3 – 1.2024

Trading recommendations:

The EUR/USD pair continues its upward movement. Thus, today it is recommended to stay in buy orders with targets of 1.1902 and 1.1939 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.

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EUR/USD. New stimulus package and old tricks of politicians: the dollar is under pressure again

Once again, the US dollar index is diving down: the indicator has reached almost two-month lows, reflecting the market's skeptical attitude to the US currency. Discussion of the long-suffering bill for a new incentive package continues to put pressure on the greenback.

The negotiation process resembles a multi-part melodrama, the storyline of which is noticeably delayed. Nevertheless, traders continue to react sharply to the news flow related to this topic, and the plot twists of recent days were not in favor of the US dollar. Representatives of the Democratic Party still cannot find a common language with representatives of the White House and the Republican Party. The deadline for negotiations expired yesterday, but the situation remained in limbo – the "deadline" was shifted again this time until the end of this week. Both Democrats and Republicans understand that the American economy needs more assistance, but they are all hostages of the pre-election period.

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Joe Biden is already ahead of his main rival, Donald Trump, by 11% based on the latest polls. While based on the results of the final televised debates, which will be held tomorrow, the leader of the Democrats can strengthen their electoral positions. At least the first television duel Biden won "dry." According to the American press, for this reason (including), Democratic congressmen are in no hurry to agree to the terms of the White House. After all, the country may be headed by their party member in only a few weeks. Therefore, the entire Ministerial staff will change. In this political scenario, only the Senate (the upper house of Congress) remains in the "opposition," where the majority is controlled by Republicans. On the other hand, the Democrats cannot "directly" refuse to negotiate, as such behavior can be played against their political strength (opponents will try to present this as a refusal to help Americans affected by the pandemic).

Thus, there is a sluggish political game in which representatives of the Democratic Party regularly declare "progress made," as well as "the need for further negotiations".

Since the difference in views regarding the amount of aid to the US economy is evident, the Democrats registered their version of the bill, the volume of which is $2.2 trillion. They were even able to vote for it in the House of Representatives (i.e., the lower house of Congress), where they have a majority. However, it is still necessary to have the approval of the Senate (where Republicans rule) and the US President's signature in order for the draft law to become law. In September, Senate Republicans failed to pass even a reduced $500 billion aid proposal. According to the Senate Majority Leader, his party members "do not see the need for a second round of targeted financial assistance in the amount of $1,200." In addition to this, Democratic opponents oppose a number of programs that are proposed by Democrats.

Representatives of a third party, the White House, agreed to raise the bar for the Bipartisan Bill under discussion to $1.8 trillion. But the proposal was called "unacceptable" by the Democratic Party.

According to a number of American political observers, even if representatives of the Trump administration and the Democratic Party were able to find a "common denominator," it still is far from a fact that their bill will eventually pass the millstone of Congress. Bloomberg reported that many Senate Republicans are strongly opposed to the scope of the stimulus package that is currently being discussed. In turn, Republican majority leader Mitch McConnell allegedly suggested to the White House not rush in concluding an agreement before the presidential election. Despite this information being unofficial (journalists refer to informed sources of the Agency), the market seems to be inclined to believe the press.

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If the entire information puzzle is put altogether, it can be assumed that American politicians (both on one hand and the other) will continue to make a "good face at a bad game," assuring that negotiations are carrying on. Another possibility is that the parties will start accusing each other of being counterproductive. In any case, the probability that the new package of incentives will be adopted before the presidential election is quite small. All this suggests that the US dollar will continue to be under pressure.

The greenback's weakness allows traders of the euro-dollar pair to conquer new price heights. Today, the EUR/USD pair broke through the resistance level of 1.1850 (the upper line of the BB indicator coincides with the upper border of the Kumo cloud on the D1 timeframe). The nearest resistance level is located at 1.1900 – the upper BB line on the four-hour chart. However, the key goals of the northern movement are located higher, and these are 1.1950 and 1.2000. Longs with targets of 1.1900-1.1950 can be considered at the moment. In the area of the 20th figure, special caution must be observed: a negative reaction from the European Central Bank, whose representatives have repeatedly criticized the overvalued Euro exchange rate, is quite likely.

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