Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on October 23

Analysis of transactions in the EUR / USD pair

The euro collapsed yesterday amid the debates of US presidential candidates, as well as due to strong reports on the US economy. The downward movement to about 30 pips.

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Trading recommendations for October 23

Very important reports on the eurozone's services and manufacturing sectors are scheduled to be published. If data comes out bad or worse than economists' forecast, pressure on the euro will increase, which will result in a new wave of decline in the EUR / USD pair.

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  • Open a long position when the euro reaches a quote of 1.1813 (green line on the chart), and then take profit at the level of 1.1864. However, this option is possible only with very good data on the composite PMI.
  • Open a short position when the euro reaches a quote of 1.1784 (red line on the chart. If the indicators turn out to be worse than the forecasts, pressure on the European currency will return.

Analysis of transactions in the GBP / USD pair

Three sell signals emerged on the British pound yesterday, which resulted in a 40-pip downward movement in the GBP / USD pair.

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Trading recommendations for October 23

Very important reports on the UK services sector will be published today. If they come out better than the forecasts, a good increase shall be seen in the British pound.

At the same time, data on the manufacturing sector will also be released, and it would affect market sentiment as well.

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  • Open a long position when the pound reaches a quote of 1.3081 (green line on the chart), and then take profit around the level of 1.3144 (thicker green line on the chart).
  • Open a short position when the pound reaches a quote of 1.3047 (red line on the chart), and then take profit at least at the level of 1.2986. Bad news on Brexit, together with a weak report on the UK services sector, will resume the downward trend in the GBP/USD pair.
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Asian indices crash again

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The American market was trading volatile amid a delay in the adoption of the new stimulus package. Moreover, the relationships between Washington and Beijing became more difficult. Finally, on Thursday, the Asia-Pacific indices lost in value.

China's Shanghai Composite Index lost 0.66%, while the Shenzhen Component fell by 1.27%. The US Secretary of State Michael Pompeo on Wednesday said that some Chinese publications like the Economic Daily, Jiefang Daily etc are under control of Beijing. Also, he called them "foreign missions". This also exacerbated the tension.

Hong Kong airline Cathay Pacific Airways lost 8,500 jobs. Moreover, its subsidiary airline Cathay Dragon ceased operations. As a result, the Hong Kong Hang Seng Index fell by 0.25%.

Japan's Nikkei 225 declined by 0.75% and South Korea's KOSPI dropped by 0.70% as well.

Australia's ASX 200 decreased by 0.56%.

The hopes for the adoption of the next package of stimulating measures by the US Congress before the elections are dwindling. As a result, the US market closed with a decline. Senate Republicans are strongly opposed to the new stimulus. However, the House Speaker and the Treasury Secretary continue to discuss the issue. The Chief Executive, in turn, said that the White House will make a decision this week. Sounds unconvincing.

Experts believe that it will be difficult to agree on a deal, because the stimulus in the amount of $1.88 trillion is about 9% of GDP, and $2.2 trillion is about 10% of GDP. Let us assume that the parties succeed in reaching a compromise, but such a proposal will hardly be passed by the Senate.

Experts also note that regional investors had a difficult day, according to the Futures Indices.

Meanwhile, Donald Trump and Joe Biden took part in the latest presidential debate in Nashville, Tennessee.

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Indicator Analysis. Daily review for EUR/USD 10/23/20

Trend Analysis (Fig. 1).

Today, the market may continue to move downward from the level of 1.1820 (closing of yesterday's daily candle) with the target at 1.1780 - the retracement level of 38.2% (blue dotted line). In case of testing this level, there will be a work going down to the level of 1.1748 - the 50% retracement level (blue dashed line).

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Figure: 1 (daily chart).

Comprehensive Analysis:

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

General conclusion:

Today, the price from the level of 1.1820 (closing of yesterday's daily candle) may continue to move downward with the target of 1.1780 - the retracement level of 38.2% (blue dashed line). In case of testing this level, there will be a work going down to the level of 1.1748 - the 50% retracement level (blue dashed line). Then top work is possible.

Alternative scenario: from the level of 1.1820 (closing of yesterday's daily candle) may continue to move down with the target at 1.1780 - a retracement level of 38.2% (blue dashed line). In case of testing this level, there will be a work going up to the level of 1.1860 - the retracement level of 61.8% (red dashed line).

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Fractal analysis for major currency pairs on October 23

Outlook on October 23:

Analytical overview of major pairs on the H1 TF:

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The key levels for the euro/dollar pair are 1.1952, 1.1929, 1.1894, 1.1867, 1.1829, 1.1785, 1.1759, 1.1741 and 1.1716. The development of the upward cycle from October 15 is still being monitored here. At the moment, the price is in a deep correction. Now, the growth of the pair is expected to continue after breaking through the level of 1.1829. In this case, the target is 1.1867. In turn, there is a short-term upward movement and consolidation is in the range of 1.1867 - 1.1894. If the last value breaks down, it should be accompanied by a strong rise to the level of 1.1929.

The key support for the top is the level of 1.1785. The price passing this level will lead to the development of a downward trend on the H1 scale. In this case, the target is 1.1759. Moreover, there is a short-term decline as well as consolidation in the range of 1.1759 - 1.1741. For the potential value for the downward trend, we consider the level of 1.1716.

The main trend is the upward cycle from October 15, the deep correction stage

Trading recommendations:

Buy: 1.1830 Take profit: 1.1866

Buy: 1.1868 Take profit: 1.1893

Sell: 1.1785 Take profit: 1.1760

Sell: 1.1740 Take profit: 1.1720

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The key levels for the pound/dollar pair are 1.3282, 1.3247, 1.3186, 1.3121, 1.3021 and 1.2982. Here, we are following the development of the upward cycle from October 16. The pair is expected to continue rising after breaking through the level of 1.3121. In this case, the first target is 1.3186. The breakdown of which, in turn, will allow us to rely on a strong growth to the level of 1.3247. In the meantime, we consider the level 1.3282 as a potential value for the growth. We expect consolidation around this level.

A short-term decline is possible in the range of 1.3021 - 1.2982, If the last value breaks down, it will encourage the development of a downward trend. In this case, the potential target is 1.2925.

The main trend is the upward cycle from October 16, deep correction

Trading recommendations:

Buy: 1.3122 Take profit: 1.3184

Buy: 1.3186 Take profit: 1.3245

Sell: 1.3020 Take profit: 1.2984

Sell: 1.2980 Take profit: 1.2925

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The key levels for the dollar/franc pair are 0.9126, 0.9098, 0.9075, 0.9052, 0.9033, 0.9013, 0.8982 and 0.8966. The development of the downward cycle from October 19 is being followed here. At the moment, the price is in a correction. Here, the decline is expected to continue after breaking through the level of 0.9052. In this case, the first target is 0.9033. Meanwhile, a short-term decline is possible in the range of 0.9033 - 0.9013. If the last value breaks down, it will lead to a strong decline. Here, the target is 0.8982. For the potential value for the bottom, we consider the level of 0.8966. Upon reaching which, an upward pullback is expected.

A short-term growth is possible in the range of 0.9075 - 0.9098, breaking through the last value will encourage the formation of a larger pattern for an upward cycle. Here, the potential target is 0.9126.

The main trend is the downward cycle from October 19, the correction stage

Trading recommendations:

Buy : 0.9077 Take profit: 0.9098

Buy : 0.9100 Take profit: 0.9124

Sell: 0.9052 Take profit: 0.9034

Sell: 0.9032 Take profit: 0.9014

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The key levels for the dollar/yen are 105.24, 104.97, 104.81, 104.36, 104.04 and 103.84. Here, we consider the downward trend structure from October 20 as the local initial conditions for the downward trend. The downward movement is expected to continue after breaking through the level of 104.36. In this case, the target is 104.04. For the potential value for the bottom, we consider the level of 103.84. Upon reaching which, we expect consolidation and upward pullback.

A short-term growth is expected in the range of 104.81 - 104.97. If the last value breaks down, it will lead to a deep correction. Here, the target is 105.24, which is the key support for the downward structure.

The main trend is the local descending structure from October 20

Trading recommendations:

Buy: 104.81 Take profit: 104.96

Buy : 104.98 Take profit: 105.24

Sell: 104.36 Take profit: 104.05

Sell: 104.03 Take profit: 103.86

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The key levels for the USD/CAD pair are 1.3259, 1.3206, 1.3176, 1.3114, 1.3076, 1.3044, 1.3023 and 1.2983. The development of the downward trend on October 15 is being followed. At the moment, the price is in a correction. The decline of the pair is expected to continue after the level of 1.3114 breaks down. In this case, the first target is 1.3076. If this target breaks down, we can continue to the level of 1.3044. On the other hand, price consolidation is in the range of 1.3044 - 1.3023. For the potential value for the bottom, we consider the level of 1.2983. Upon reaching which, an upward pullback can be expected.

A short-term growth is expected in the range of 1.3176 - 1.3206. If the last value breaks down, it will lead to the development of an upward trend. In this case, the potential target is 1.3259.

The main trend is the downward cycle from October 15, the correction stage

Trading recommendations:

Buy: 1.3176 Take profit: 1.3204

Buy : 1.3208 Take profit: 1.3259

Sell: 1.3114 Take profit: 1.3076

Sell: 1.3074 Take profit: 1.3045

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The key levels for the AUD/USD pair are 0.7259, 0.7228, 0.7183, 0.7147, 0.7083, 0.7066, 0.7045 and 0.7022. Here, the price forms the strong initial conditions for the upward cycle of October 20. The growth is expected to continue after breaking through the level of 0.7147. In this case, the target is 0.7183. There is consolidation near this level. If this target breaks down, it should be accompanied by a strong growth. Here, the target is 0.7228. We consider the level 0.7259 as a potential value for the top. Upon reaching which, a downward pullback can be expected.

A short-term decline is expected in the range of 0.7083 - 0.7066. If the last value breaks down, it will lead to a deep correction. Here, the target is 0.7045, which is the key support for the top. Now, the price pasing this level will lead to the development of a downward trend. In this case, the first potential target is 0.7022.

The main trend is the formation of initial conditions for the upward cycle of October 20

Trading recommendations:

Buy: 0.7147 Take profit: 0.7180

Buy: 0.7184 Take profit: 0.7228

Sell : 0.7083 Take profit : 0.7067

Sell: 0.7065 Take profit: 0.7047

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The key levels for the euro/yen pair are 124.87, 124.37, 124.00, 123.31, 122.97, 122.72 and 122.30. The price entered an equilibrium state today. We follow the upward structure from October 15 and downward structure from October 20. Now, the decline is expected to continue after breaking through the level of 123.31. In this case, the target is 122.97. On the other hand, there is a short-term decline and consolidation in the range of 122.97 - 122.72. For the potential value for the bottom, we consider the level of 122.30. Upon reaching which, we expect an upward pullback.

A short-term growth is possible in the range of 124.00 - 124.37. In case of breakdown of the last value, it will lead to the resumption of an upward trend on the H1 scale. In this case, the first potential target is 124.87.

The main trend is an equilibrium situation

Trading recommendations:

Buy: 124.00 Take profit: 124.34

Buy: 124.40 Take profit: 124.85

Sell: 123.30 Take profit: 123.00

Sell: 122.95 Take profit: 122.72

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The key levels for the pound/yen pair are 139.70, 139.04, 138.58, 137.88, 137.36, 136.72 and 136.32. Here, we are following the development of the upward cycle on October 16. The continuation of the development of the upward trend is expected after the level of 137.36 breaks down. In this case, the first target is 137.88. We expect consolidation near this level. Given that the target breaks down, it will lead to a strong growth. Here, the target is 138.58. Now, there is a short-term rise and consolidation in the range of 138.58 - 139.04. We consider the level 139.70 as a potential value for the top. Upon reaching which, a downward pullback can be expected.

A short-term decline is expected in the range of 136.72 - 136.32. If the last value breaks down, it will favor the development of a downward trend. In this case, the first potential target is 135.95.

The main trend is the upward cycle from October 16, the correction stage

Trading recommendations:

Buy: 137.36 Take profit: 137.85

Buy: 137.90 Take profit: 138.50

Sell: 136.70 Take profit: 136.35

Sell: 136.30 Take profit: 135.95

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Brief trading recommendations for GBP/USD on 10/23/20

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The GBP/USD pair became overbought after an active growth last October 21, which resulted in a technical correction and led to the consolidation of buy deals.

Overbought happens in the market after a strong upward movement, which has led to a significant change in quotes.

Taking a closer look at the dynamics on October 21, you will see that the value of the pound strengthened by 239 points, which is considered very fast and a lot. This led to an overbought status and a corrective movement.

Regarding the quote's current location, you can see that market participants have already managed to pull back the pound's rate below 1.3080, which indicates the prevailing downward interest in the market.

Here, trading forecasts can be drawn from a number of possible market development scenarios.

First scenario: Continuation of the correction

The quote is holding below 1.3080, which was followed by the formation of a corrective move in the direction of the main support level of 1.3000.

Second scenario: Market goes into a side fluctuation mode

The correction is already completed, but the upward move does not return in the market, which leads to a variable turn in the sideways move. So, the values of 1.3000//1.3080 can serve as the fluctuation limits.

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USD/JPY. Risk-off sentiment barometer: the yen may update the weekly low again

Japan published the key data on the growth of inflation in the country, as well as PMI indices, during the Asian session today. However, the yen ignored these releases, once again demonstrating its "attachment" only to the events of the external fundamental background. Considering the general vulnerability of the US currency, the Japanese has again become the main protective tool in the foreign exchange market. Therefore, it is necessary to assess the future prospects of the USD/JPY pair through the prism of the current demand for safe haven currencies.

Let's start with the Japanese macroeconomic reports. The key statistics play an important role in determining the prospects for monetary policy. The next meeting of the Bank of Japan will be held next week — the results of the October meeting will be announced on the 29th.

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Overall, Japanese inflation presented a weak result. The general consumer price index continued its downward movement, falling this time to zero. This is by far the weakest result in the last four years — the situation was worse only in the fall of 2016, when this indicator fell below zero. The consumer price index excluding prices for fresh food continued to be in the negative area, where it remains for the second month in a row. Another component — the consumer price index excluding food and energy prices — "tried" to leave the negative area. However, it could only rise to zero.

To put it simply, the growth rate of inflation in Japan leaves much to be desired. In spite of the fact that the above indicators were at the forecast level, they reflected negative economic processes. Last week, the head of the Japanese regulator Haruhiko Kuroda admitted that the coronavirus pandemic has significantly suppressed consumer demand. Thus, the country's inflation rate is likely to be negative; at least until the end of this year. Today's release confirmed the Central Bank Governor's concerns that inflation remains a "weak link" in the Japanese economy. Kuroda also added that the Bank of Japan has not exhausted all the tools and is able to counter the consequences of the pandemic. He once again repeated his phrase that "if necessary, he will not hesitate to take additional mitigation measures." Considering the inflation dynamics, the Japanese controller can actually move from words to deeds in the next week. According to Reuters, the Central Bank will at least revise down its forecasts for the economy and inflation at the October meeting, which will be presented in the quarterly report of the Central Bank.

Despite such dovish prospects, the USD/JPY pair "is living its own life." In response to the frankly weak inflation reports, the yen not only refused to fall in price, but even strengthened, retreating from the borders of the 105th figure. In general, nothing is surprising here: the Japanese currency, as a rule, ignores "internal" fundamental factors. Only in the case of any drastic political changes in the country (for example, as the recent resignation of Prime Minister Abe) or in the case of unexpected decisions by the Bank of Japan, the yen shows a more or less clear reaction. In other cases, the USD/JPY pair is focused on events of the external fundamental background. Therefore, today's release only increased the likelihood of easing the monetary policy of the Japanese regulator, but it did not affect the general sentiment of traders.

Considering this disposition, it can be assumed that the southern trend of USD/JPY may soon strengthen — primarily due to the growth of risk-off sentiment. The TV debate between Donald Trump and Joe Biden ended a few hours ago. The market reaction is cautious and somewhat restrained, since it is difficult to objectively determine the clear favorite of the verbal duel. In the case of the September debate, the reaction of traders will follow a little later — when the first results of the TV audience surveys become known. It will become clear in which direction the pendulum swung — either Biden will strengthen his position and increase the gap from the head of the White House, or the intrigue of the presidential election will continue if the advantage is in the direction of Trump. The second option will strengthen risk-off sentiment in the market, since in the absence of a clear winner in the election, the current President will start fighting for every vote, calling into question the "postal vote." But this option is not excluded in the case of a failed loss, given his statements during the election race. He repeatedly voiced the idea that the election may be rigged in favor of Biden, and that the final word on the results of the vote will be said not by the election Commission, but by the US Supreme court.

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In any case, the dollar will have to go through a rough period of political uncertainty. The results of today's debate may increase concerns about this, provoking a surge in risk-off sentiment in the market, and therefore, increasing demand for the yen. It is also worth noting that the next deadline for negotiations on the fate of a new package of assistance to the US economy will expire today. Yesterday, the speaker of the House of representatives, Democrat Nancy Palosi, said that "negotiations are going well enough," assuring journalists that the long-suffering bill can be agreed and put to a vote before the presidential election. And should the negotiators disappoint investors again today, the southern trend of USD/JPY will get a significant boost.

Therefore, short positions on the pair are still relevant, including from a technical point of view. The dollar/yen pair on the daily chart is located between the middle and lower lines of the Bollinger Bands indicator, as well as under all the lines of the Ichimoku indicator. This configuration allows the USD/JPY bears to at least update this week's low (which is marked at 104.35, heading towards the key support level of 104.00).

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Trading plan for USDX for October 23, 2020

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Technical outlook:

The US dollar Index might have carved a low around 92.48 level yesterday. The index had dropped through Fibonacci 0.618 retracement of the earlier rally between 91.75 and 94.75 levels respectively before reversing higher again. The end of the day chart has been presented here while spot is seen to be trading around 92.92 level at this point in writing. Immediate support is seen through 91.75 level, while resistance is intact around 94.75 respectively. A push through 94.75 would confirm that a meaningful bottom is in place around 92.47 and that bulls are back in control. They are poised to push through 96.00 and 98.00 levels over the next several weeks. Also note that 98.00 is close to the Fibonacci 0.618 retracement of the earlier drop between 103.00 and 91.75. Bulls are in control until 91.75 lows remain intact.

Trading plan:

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

Good luck!

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Trading plan for EURUSD for October 23, 2020

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Technical outlook:

EURUSD may resume the downward movement after having hit 1.1870/80 high early this week. The single currency had dropped through the 1.1786 level yesterday before pulling back to 1.1800 handle. It is expected to decline after a shallow pullback towards the 1.1830/50 levels. The euro had reached Fibonacci 0.618 retracement of the entire drop between 1.2010 and 1.1610 levels respectively; and reversed lower from there. Looking at the wave structure, EURUSD should continue to push lower and drop below 1.1610 over the near term. Immediate resistance is intact around 1.2010, while interim support is seen towards 1.1610. EURUSD bears might be looking to drag lower through 1.1100 levels, which is Fibonacci 0.618 retracement of the entire rally between 1.0636 and 1.2010 respectively.

Trading plan:

Remain short, stop @ 1.2010, target is 1.1100/50

Good luck!

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Elliott wave analysis of EUR/JPY for October 23. 2020

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The break below short-term key support at 123.49 forced us to review the entire correction in wave 2/. With the break below support at 123.49, the odds of wave 2/ being completed is low. It is likely to unfold in a very complex correction. We first saw an expanded flat correction in wave W/. Now the most likely correction type in wave Y/ of 2/ is a triangle. If this is correct, then we should expect a wave higher to 124.70 and a final dip close to 123.65 before wave 2/ finally completes and wave 3/ rises.

Only a direct break above 125.00 will eliminate the triangle option and indicate wave 3/ higher already is in motion towards at least 129.82.

R3: 125.00

R2: 124.70

R1: 124.11

Pivot: 123.80

S1: 123.65

S2: 123.35

S3: 123.00

Trading recommendation: Our stop at 123.45 was hit for a small loss. We will re-buy EUR here at 123.55 and place our at 122.90

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Analytics and trading signals for beginners. How to trade EUR/USD on October 23? Plan for opening and closing trades on Friday

Hourly chart of the EUR/USD pair

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The EUR/USD pair continued to move down last Thursday night after the quotes settled below the upward trend line. Over the past day, novice traders received two sell signals at their disposal, and our fears that the upward movement would resume and the trend line would have to be rebuilt did not come true. The pair, as we warned, fell to the 1.1900 level, which was the upper line of the horizontal channel for a long time and also seems to be a strong resistance. Thus, the quotes of the pair remain in the same horizontal channel of 1.17-1.19. At first they fought off its lower border, now they turned around near the upper one. This means that flat remains in the long term. Let's go back to signals. The first signal could and should have been reached, since the MACD indicator moved near the zero level, as it should be. Traders could get around 30 points of profit on this signal. The second sell signal was weaker, since it was not preceded by a correction round, and the MACD indicator failed to discharge normally. Moreover, the euro fell and it happened on this night, that is, at a time when most of the market participants are still sleeping. Thus, the second signal did not need to be processed. Now, since the trend has changed to a downward one, you need to wait for a new sell signal from MACD and, accordingly, a correction round.

The fundamental background for the EUR/USD pair was completely empty yesterday. The only macroeconomic report - claims for unemployment benefits - turned out to be in favor of the US dollar, as it showed a rather noticeable decrease in their total number. This means that the unemployment rate continues to decline in America. However, this report did not affect the course of trading in any way, and no other statistics were published that day. Also, there were no important speeches from the European Union and the United States. But that night, the last round of televised debates between Donald Trump and Joseph Biden took place and as a result, the quotes fell by 30 points. However, the fall did not last long, which means that there was nothing extraordinary in the debate. The European Union and Germany will release business activity indices in the manufacturing and services sectors on Friday, October 23. According to experts, all indicators may deteriorate in October, which is not surprising, given the scale of the second wave of the coronavirus epidemic in the EU. If forecasts come true, then the US dollar may rise by several dozen points. Similar indexes of business activity will be published today in America. We are still leaning towards the correctional scenario for Friday. Although, in general, we expect the quotes to fall to the lower border of the horizontal channel at 1.1700.

Possible scenarios for October 23:

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. Thus, novice traders are advised to resume bull trading after forming a new upward trend or the refraction of a downward trend, which is not expected during the day.

2) Novice traders are advised to continue trading down, but now it is necessary that the pair slightly correct and the MACD indicator is discharged. After doing so we can finally recommend waiting for a new sell signal from MACD and then you can open short positions while aiming for 1.1776 and 1.1740. The price correction may take some time.

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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GBP/USD: plan for the European session on October 23. COT reports. Pound buyers not in a rush to return to the market, will

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

A rather excellent signal for selling the pound appeared yesterday morning. If you look at the 5-minute chart, you will see a false breakout at 1.3143, which led to producing a good entry point to short positions, afterwards the pair returned to support at 1.3096. There was a rather serious struggle for this level in the afternoon. Settling at 1.3096 caused the pound to slightly increase, but then the bears took the market under their control. Several tests of the 1.3096 level became a clear signal to open new short positions in order to sustain the downward correction. I marked all entry points on the chart.

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The bulls have the main task of forming a breakout and settling above the resistance of 1.3096 in the first half of the day, which they missed yesterday. Testing this level from top to bottom forms a good signal to open long positions in order for the British pound to rise to the high of 1.3143. The next target will be resistance at 1.3192, which is where I recommend taking profit, since it is unlikely for the price to go beyond the 32nd figure today. The bull market can only progress further if we receive specific news about what kind of concessions the UK is willing to make in the talks. A more optimal scenario for opening long positions would be a downward correction of the GBP/USD pair to the support area of 1.3035. You can buy the pound there on a rebound counting on a correction of 15-20 points. If there is no activity at this level, it is best to abandon buy positions until the 1.2977 low has been updated, testing it would jeopardize the pound's upward trend that was observed since the beginning of this week.

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 are recovering from yesterday's rally. At the moment, they are aiming for support at 1.3035, settling below it forms a good signal to open short positions in order to sustain the current downward trend, while also anticipating for the pound to return to a low of 1.2977, which is where I recommend taking profits. In case the pound rises after the release of reports on activity in the manufacturing sector and services in the UK, I advise you not to rush to sell, but wait until a false breakout forms in the resistance area of 1.3096 and then you can sell the pound there. In case bears are not active at this level, you can safely open short positions on a rebound from resistance 1.3143, counting on a correction of 30-40 points within the day.

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Indicator signals:

Moving averages

Trading is carried out below 30 and 50 moving averages, which indicates that the pressure on the pair remains.

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

Bollinger Bands

In case the pound rises, the upper border of the indicator at 1.3110 will act as a resistance.

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 23. New record high on COVID-19 incidence; Growth in the US dollar.

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Latest data indicates that the world saw a new record high on COVID-19 incidence, having listed almost 500 thousand new cases worldwide.

The most alarming situation is Europe's, as France recorded a massive figure of 41 thousand new infections a day. Britain and Spain then follows, with 21 thousand new cases a day.

A vaccine for the disease is expected to come out this November.

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EUR/USD - The euro declined slightly after demand for the dollar increased amid strong reports on the US labor market.

Set up long positions from 1.1710-1.1750 to 1.1700

1.700 is a support level for the euro, however, it's still unclear whether it will be strong enough to withstand pressure from the bears.

Good luck!

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Technical Analysis of ETH/USD for October 23, 2020

Crypto Industry News:

Russian public officials will be required to declare all private crypto assets from early 2021. These requirements were announced by Russian Attorney General Igor Krasnov, after a meeting with 15 other Attorney General representing member states of the Shanghai Cooperation Organization (SCO).

"From next year, government officials will have to declare [virtual] currencies on a par with other assets," Krasnov said.

In 2018, Russia's labor ministry announced that public officials would not be required to declare their virtual assets in their tax reports due to the unregulated status of cryptocurrencies. As such, concerns remain that crypto assets may be the financial instrument of choice for bribery and corruption.

The Attorney General's Office says it has confiscated more than $ 440 million in undisclosed assets from public officials in the past three years.

These requirements are in line with a new law signed by President Vladimir Putin in July that will classify crypto assets as similar to physical goods from 2021 - recognizing virtual currencies in the country for the first time.

While the regulations do not recognize cryptocurrencies as legal tender, they will legitimize cryptocurrency activities throughout Russia.

In addition to the SOW member states: Russia, India, Kazakhstan, China, Kyrgyzstan, Pakistan, Uzbekistan and Tajikistan, the prosecutors general of Afghanistan, Belarus, Mongolia, Iran, Azerbaijan, Cambodia and Armenia - which are non-member and observer partners of the SCO, were also present at the meeting. The main topic of the meeting was the fight against corruption.

A Russian cryptocurrency reporting announcement suggests similar laws could soon be passed across the Eurasian region.

Technical Market Outlook:

The ETH/USD pair has made another higher high at the level of $420.18, just above the technical resistance located at $414.11. The next target for bulls is seen at the level of $430.71 and might be hit soon. On the other hand, the key 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 bulls are making higher highs despite the overbought market conditions which might indicated the beginning of a new up trend.

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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Technical Analysis of BTC/USD for October 23, 2020

Crypto Industry News:

Changpeng Zhao, CEO Binance, believes a sufficiently well-designed central bank digital currency could become a threat to Bitcoin.

In a video interview with Jeff Roberts of Fortune, he was asked how the People's Bank of China's digital yuan initiative would impact the cryptocurrency industry. Zhao replied that any blockchain or digital currency would be good for the entire industry as it legitimizes digital assets and widens awareness. He added that although there is now a race between the largest countries to launch such a currency, most CBDCs will initially be more restrictive, but will evolve over time.

When asked directly about the threat to Bitcoin, CZ replied that very few CBDCs would have the same freedom as Bitcoin and be highly centralized and controlled. However, in the long run, he warned:

|If the government were to push for another cryptocurrency that is even more open, more free, has fewer restrictions than Bitcoin, and is faster and cheaper to use, it would put Bitcoin at risk. But it's good for the industry, it's just better than Bitcoin, and it could replace it".

Asked if Binance intends to release a yuan-anchored stablecoin in addition to existing stablecoins, CZ said nothing of the sort would come out any time soon. There are too many restrictions on capital flight from China, he added.

Technical Market Outlook:

The BTC/USD pair has made a new swing high at the level of $13,159 and a Pin Bar candlestick pattern was made at the end of the rally. The local correction that followed the high has hit the level of $12,648 and the market has started to consolidate. 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 below the level of $12,648 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 GBP/USD for October 23, 2020

Technical Market Outlook:

The GBP/USD pair keeps going lower as the corrective cycle from the local high at 1.3180 continues. The price has broken below the 38% Fibonacci retracement seen at 1.3074 and is heading towards the level of 50% located at 1.3041. The market is coming off the overbought levels, so the price might get below 1.3000 zome again. The key technical support is still seen at the level of 1.2982 - 1.3017. Moreover, it is worth to keep an eye on the upper channel line again for any indication of broken support.

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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Technical Analysis of EUR/USD for October 23, 2020

Technical Market Outlook:

The EUR/USD pair has been moving lower in a corrective cycle after the local high was made at the level of 1.1880. The bears have managed to push the price towards the 50% Fibonacci retracement level, but that might not be the end of the correction. There is one more Fibonacci level seen at 1.1761 which might be hit as well, because the market is coming off the overbought conditions and it is not even close to the bottom just yet. The nearest technical support is seen at the level of 1.1790.

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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Forecast for EUR/USD on October 23, 2020

EUR/USD

Yesterday, the euro fully won back the points it gained on Wednesday and now it continues to decline in the Asian session, as the markets hope for a compromise on the second package of economic aid to the US economy. The daily chart shows that the price is supported by the balance indicator line, while the Marlin oscillator maintains its positions in the growth zone. American politicians will have the last opportunity to reach a financial decision. In general, investors are pessimistic about such a "happy ending", but the S&P 500 grew by 0.52%, which shows hope.

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Fundamental factors are currently of primary importance for the exchange rate. Much will be revealed on Monday. From a formal technical standpoint, the price moving below the 1.1754 level spins a wave of decline with the first target at 1.1650. If the price surpasses the signal level of 1.1831, the euro will turn to the 1.1915 level.

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The four-hour chart shows that the price has already overcome the support of the MACD line, while Marlin is in the downward trend zone. This gives some advantage to the downward scenario, but these movements against the backdrop of political events may turn out to be false. In the end, we just have to wait for Monday.

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Forecast for AUD/USD on October 23, 2020

AUD/USD

The Australian dollar traded below 0.7120 on Thursday, closing the day at the opening level. The signal line of the Marlin oscillator is staying in the downward trend area on the daily chart. Getting the price to leave the area above Wednesday's high of 0.7138 will allow the price to continue to rise towards the 0.7190 target. Getting the price to settle below 0.7120, that is, today's closing and the opening of Monday, will set the movement to the downward target level of 0.7058.

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The MACD line restrains the price from rising. Getting the price to settle above Wednesday's high at 0.7138 opens the target at 0.7190 (September 9 low). The price should move below the signal level of 0.7086 in order for it to fall towards the bearish target of 0.7058.

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Forecast for USD/JPY on October 23, 2020

USD/JPY

The dollar strengthened by 22 points against the yen on Thursday, and the embedded price channel line restrained its growth on the daily chart. Getting the price to settle above this resistance may extend the growth to the MACD line towards the 105.65 area, but the main scenario is still downward.

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The price is completely in a downward trend even after yesterday's growth, which is corrective in nature, since the Marlin oscillator is in no hurry to follow the price. Declining further towards the 103.75 target level is still relevant.

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An alternative movement - growth is associated with the following difficulties: the first action on the four-hour chart, the price should settle above the 104.94 level. But this exit may turn out to be false if the price cannot overcome the MACD line at 105.33. Furthermore, the price faces resistance at 105.65 - the MACD line on the daily scale, above which it is also necessary to gain a foothold before growing further to 106.18.

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The end of the medium-term correction of GBPUSD. Everything is ready for sale.

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Last month's move formed a senior engulfing pattern. This indicated that the upward movement is a medium-term correction. Our task was to determine the maximum correction zone and two such zones were reached simultaneously this week. The main obstacle to growth was the weekly CZ 1.3202 - 1.3154. The zone of the average weekly course coincided with it. This confirms their importance and makes it possible to consider the sale of the instrument in the medium term. The fall may target the September minimum. This will take from two to three weeks, so there is no need to rush to fix sales.

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Work in the direction of the fall of the GBPUSD pair may become the main one at the end of the current and the first half of the next month. It is important to note significant support levels. Rebuilding below them must be used to re-sell the instrument. This will allow the short position to build up and obtain a favorable risk to reward ratio in case of 100% realization of the bearish pattern.

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EUR/USD is ready to fall. Where to find a sale?

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This week, the pair tested two important resistance zones. First, the weekly CZ 1.1867-1.1844 was reached, and then the zone of the average weekly movement. The range test caused a sharp reaction and the closing of yesterday's trading led to the formation of the daily level's engulfing pattern. This means that the end of the current week is more likely to occur below yesterday's low. If the downward movement resumes, selling prices will be located above the 1.1840 mark. The medium-term target for the decline is the September low.

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Our mission is to enter a short position and fix it partially after coming back to last week's low, since its test assumes the appearance of demand. The level will be a strong support for the pair's fall. This will allow us to enter sales again in the next week after the formation of the corrective pattern. Due to the formed reversal pattern of the older period, it is not profitable to consider purchases, which is why your attention should be on earning opportunities within the bearish momentum.

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Overview of the GBP/USD pair. October 23. Boris Johnson complained about the EU for a week and finally decided to resume

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: 88.3625

The British pound sterling paired with the US currency also began to adjust, synchronously with the European currency. Thus, the conclusion is that the growth of the British currency in recent days was not triggered by the fundamental background from the UK. We have repeatedly drawn traders' attention to the fact that the fundamental background from the Foggy Albion cannot physically support the pound right now. Thus, we believe that the reason lies in the dollar, as the country continues to have a clear political, economic, and epidemiological crisis. Another thing is that the situation in the UK is no better, and the Kingdom can "boast" of its similar crises. However, if you look at the daily timeframe, you can still conclude that the British currency began to fall on September 1, when there was information about the failure of the next two rounds of Brexit negotiations, as well as information about the scandalous "Johnson bill". Since about September 23, the British currency has been strengthening, however, we can assume that this is a prolonged correction, after which the downward movement will resume. As we have repeatedly noted, the foundation from Britain overlaps with its negative Foundation from the United States. Thus, it is the resumption of the fall in the pound/dollar pair quotes that will be the logical development of events.

Meanwhile, the British statistical office published data showing that the country's national debt is approaching a sixty-year high. The office reports that in 1960, the high level of the national debt was justified by the consequences of the second world war and the loss of Britain's colonies. At the same time, the highest level of public debt and the budget deficit was caused by Brexit and the coronavirus pandemic. At the end of the first half of the current financial year, the net national debt is 2.06 trillion pounds, which is 260 billion more than a year earlier. The agency also predicts that this indicator will continue to grow, since Brexit is not yet complete, and it was not possible to cope with the pandemic. Thus, it is not for nothing that we have repeatedly warned that the problems of the British economy are just beginning and they will continue in 2021. It is very strange how, with all this news, the Bank of England continues to hold back from lowering the key rate and expanding the quantitative easing program. Although at the expense of the second, no one has any doubt that it will be applied at the next meeting of the British regulator.

Meanwhile, this article could be called "Not a day without Brexit". This time, the main news provider was Boris Johnson, whose strategy is extremely difficult to analyze. The British Prime Minister set an October 15 deadline for negotiations in September. Today is October 22 and, after a week of accusing the European Union of all deadly sins, Johnson decided to continue negotiations with Brussels. Thus, in the near future, the groups of Michel Barnier and David Frost will once again start discussing the most controversial issues. The office of the British government made an official written statement, which is full of theses that we have all heard a huge number of times. "It is quite possible that the negotiations will not be successful. If this happens, Britain will end the "transition period" and start trading with the European Union on the same terms as Australia did. It is now important that British businesses and all market participants actively prepare for the end of this "transition period", whether a trade agreement is concluded or not," the statement said. Thus, as we said earlier, the parties will continue negotiations, despite mutual accusations and reproaches, because it is not profitable for both sides to have no agreement and negotiations can be conducted for as long as necessary. What prevents the negotiating teams from continuing to work in 2021? Boris Johnson with his deadlines? Johnson can easily take back his words, but he does not want to trade with the EU on WTO terms for many years. Thus, the EU and the Kingdom can start 2021 without any agreement, but the negotiations will continue no matter what.

At the same time, the British media and periodicals are asking what has changed in the positions of both sides "fundamentally"? All right, negotiations have resumed or continued (the wording is unimportant), but what has changed if the previous rounds ended without tangible progress? Boris Johnson, for example, said that he sees no point in continuing negotiations at all if the European Union does not radically change its position. Approximately the same words were voiced by the head of the European Council, Charles Michel. But at the same time, the parties continue negotiations. Maybe "meaningless negotiations"?

In general, from our point of view, just as the fundamental background does not change in the United States, it does not change in the UK. Thus, from a fundamental point of view, we believe that the pound will resume falling in the near future unless the market receives fundamentally new and extremely important information. At the moment, after the fall in early September, the pair's quotes have already been corrected by 61.8%, which is an important Fibonacci level. Thus, a rebound from this level and a resumption of the downward movement with targets below 1.2700 is even more likely. How the election will affect this plan will be clear closer to the election itself. So far, the price continues to be located above the moving average line, so it is too early to speak out loud about changing the trend to a downward one.

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The average volatility of the GBP/USD pair is currently 124 points per day. For the pound/dollar pair, this value is "high". On Friday, October 23, thus, we expect movement inside the channel, limited by the levels of 1.2970 and 1.3218. A reversal of the Heiken Ashi indicator-up signals the end of the downward correction.

Nearest support levels:

S1 – 1.3062

S2 – 1.3000

S3 – 1.2939

Nearest resistance levels:

R1 – 1.3123

R2 – 1.3184

R3 – 1.3245

Trading recommendations:

The GBP/USD pair has started a round of corrective movement on the 4-hour timeframe. Thus, today it is recommended to trade for an increase with the targets of 1.3123 and 1.3184 if the Heiken Ashi indicator turns up. It is recommended to trade the pair down with targets of 1.2970 and 1.2939 if the price returns to the area below the moving average line.

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

Overview of the EUR / USD pair. October 23. TV debates between Biden and Trump will put an end to the pre-election distribution

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: 46.9940

During the fourth trading day of the week, the EUR/USD pair finally began to adjust towards the moving average line. Thus, the price again turned down on the approach to the level of 1.1900 and it continues to trade inside the side channel. After three days of growth, the correction was logical, however, the fact that the pair continues to trade between the levels of 1.17 and 1.19 is even more important. Or between the levels of 1.1640 and 1.1920. In the first case, the side channel is preserved in the second case. Thus, in the long term, the flat continues and traders are recommended to trade based on this. Simply put, few people in the market are now opening long-term positions. This is mainly due to the US dollar since it is the US currency that is currently causing the greatest concerns in a pair with the euro. Concerns about their prospects. No one can say for sure who will be the next President of the United States. Donald Trump himself has shown that a lot depends on the personality of the president, especially the president of the country with the largest economy in the world. Trump wanted to start a trade war with China, and this decision affected not only China and the United States but also many other countries in the world that depend on trade with America and China. Global GDP also suffered, although it would seem that Beijing and Washington were at war. Consequently, no one now can know what the foreign policy of the United States will be in the next four years, how the conflict with the Middle Kingdom will be resolved or aggravated, what will happen to the "coronavirus" and the fight against it, how the economy will recover and what will be the priorities of the White House in the next four years. Therefore, one can not even dream about the growth of the American currency, but at the same time, the majority of market participants, in principle, now do not want to take risks and are just waiting on November 3 to close this issue with the name of the new US president.

Meanwhile, this night will be the last round of televised debates between Donald Trump and Joe Biden. We have already said that the first round ended in complete chaos and was criticized by everyone, from the media and journalists to political scientists and experts in various fields. According to the absolute majority, both presidential candidates did not perform at their best, but Trump simply surpassed himself. The current president interrupted the former Vice President a record 71 times, constantly provoked Biden, and the debate host, interrupted, did not allow to speak. All this has led to the fact that specifically for the sake of Donald, the third round of TV debates will be held under adjusted rules. For example, at the beginning of each 15-minute segment that will be given to candidates to cover each of the six issues, both candidates will be able to speak without interference from the opposing party, since the microphone will be turned off. Six questions: "coronavirus", American families, climate change, racial issues, national security, features of the country's governance. It is on these issues that each candidate will have to speak out. Thus, tonight, American voters (those who have not yet voted or made a choice) will have the last chance to decide on a candidate. I hope that the last round of TV debates will be more constructive. Although, to be honest, it's hard to imagine what would have to happen for Joe Biden to lose this round. Before the first round, most experts gave the victory to Trump, naming as his advantages oratorical skills, arrogance, and a complete lack of respect for the opponent. Many experts believed that Trump would literally "smear" Biden, who was never famous for speeches and the ability to exert psychological pressure. However, in practice, it turned out exactly the opposite. Trump has shown himself to be a kind of boor who can't even allow his opponent to express his point of view, so most observers of the TV debates awarded the victory to the Democrat.

At the same time, former US President Barack Obama openly called on Americans to vote for Joseph Biden for the first time. According to the former US President, Trump treated his position as "a reality show with which you can attract attention and raise your popularity". "He caused irreparable damage to the United States, and the country's reputation in the world was trampled," Barack Obama said. Obama also blames Trump for the weak opposition to the pandemic and the economic damage caused to the country: "The economic damage he caused by softening the response to the pandemic means that he will be the first president since Herbert Hoover to lose his job."

Well, Joe Biden's team has already stopped hoping that Donald Trump will agree to peacefully transfer power in the event of an election defeat. The American edition of the Wall Street Journal reports that Biden's team has already begun to develop a strategy for action in case Trump refuses to transfer power. At the headquarters of the Democrats, they expect Trump not only to refuse to leave the White House but also to refuse to transfer all resources that are associated with the president's work. Simply put, the headquarters of the Democrats do not expect to play together with Trump, on the contrary, they expect all sorts of intrigues from him.

As we can all see, the fundamental background for the US currency remains extremely complex and ambiguous. The number one topic remains the US election, which does not have any immediate impact on the pair's movement, but at the same time, no one can say that it is not an important event for the US dollar, the economy, and the country. Thus, our forecast remains the same. We believe that until November 3, and possibly until the day when the final results of the vote count are known, it will be extremely difficult for the US currency to rise below the level of 1.1700. Thus, most likely, the movement inside the side channel will continue. This time, the pair's quotes worked out the mark of 1.1881, however, a downward turn may occur near it.

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The volatility of the euro/dollar currency pair as of October 23 is 68 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1757 and 1.1893. A reversal of the Heiken Ashi indicator to the top may signal the end of 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

The EUR/USD pair has started to adjust. Thus, today it is recommended to open new buy orders with targets of 1.1841 and 1.1893 as soon as the Heiken Ashi indicator turns up. It is recommended to consider sell orders if the pair returns to the area below the moving average line with targets of 1.1757 and 1.1719.

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