Fractal analysis for major currency pairs on October 26

Outlook on October 26:

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, 1.1818, 1.1798 and 1.1769. The development of the upward cycle from October 15 is still being monitored here. At the moment, the price has formed a local potential for the top of October 23. Now, the growth is expected to continue after breaking through the level of 1.1867. In this case, the target is 1.1894. If the target breaks down, it should be accompanied by a strong growth to the level of 1.1929. For the potential value for the top, we consider the level 1.1952. Upon reaching which, a downward pullback can be expected.

A short-term decline is expected in the range of 1.1818 - 1.1798. If the last value will break down, it will lead to a deep correction. Here, the potential target is 1.1769, which is the key support for the top.

The main trend is an upward cycle from October 15, local potential from October 23

Trading recommendations:

Buy: 1.1868 Take profit: 1.1893

Buy: 1.1895 Take profit: 1.1927

Sell: 1.1818 Take profit: 1.1798

Sell: 1.1796 Take profit: 1.1770

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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, 0.9033, 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. On the other hand, a short-term decline is likely 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 can be expected.

A short-term growth is possible in the range of 0.9075 - 0.9098. In case of breakdown of the last value, it will encourage the formation of a larger structure 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 are monitoring the formation of the descending structure from October 20. Currently, the price is in the zone of initial conditions. The decline is expected to continue after breaking through the level of 104.36. In this case, the target is 104.04. We consider the level of 103.84 as a potential value for the bottom for the time being. Upon reaching which, we expect consolidation and upward pullback.

Now, a short-term rise as well as consolidation, is expected in the range 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 a key support for the downward structure.

The main trend is the local descending structure from October 20

Trading recommendations:

Buy: 104.98 Take profit: 105.24

Buy : 105.30 Take profit: 105.70

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. Now, the growth of the pair 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 the 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. Here, a short-term rise is possible in the range 124.00 - 124.37. In case of breakdown of the last value, it will lead to the continuation of an upward trend. In this case, the first potential target is 124.87.

The decline is expected to continue after breaking through the level of 123.31. In this case, the target is 122.97. There is a short-term downward movement, as well as 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, an upward pullback can be expected.

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 consolidated movement is expected in the range of 136.72 - 136.32, hence the key upward reversal is expected. Breaking through the last value will encourage 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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Hot forecast and trading recommendations for EUR/USD on 10/26/2020

At first glance, it seems that the euro was exclusively declining on Friday, but this is not entirely true. At first, it showed some effort to grow. But its decline was much more obvious. The single currency grew due to preliminary data on business activity indices, which, to some extent, turned out to be slightly better than forecasts. Largely due to the index of business activity in the manufacturing sector, which increased from 53.7 to 54.4. Although expectations were for it to fall to 52.9. The rise in the manufacturing index came as a complete surprise and investors were pleasantly surprised. Due to this very growth, the composite business activity index fell only to 49.4, while its decline was predicted from 50.4 to 48.5. However, we are still talking about a decline. Moreover, the index of business activity in the service sector, which was supposed to drop from 48.0 to 47.2, actually fell from 46.2. That is, the decline is much larger than expected. So it is not surprising that the euro has shown attempts at modest growth.

Manufacturing PMI (Europe):

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If the European indices came out largely mixed, and only slightly better than forecasts, then in the United States they turned out to be much better than forecasts. The worst result was shown by the PMI in the manufacturing sector, which, instead of remaining unchanged, actually rose from 53.2 to 53.3. The index of business activity in the service sector, instead of falling from 54.6 to 54.1, increased to 56.0. This all made it possible for the composite PMI to rise from 54.3 to 55.5. But initially it was predicted to decrease to 54.0. US data were clearly positive.

Composite PMI (United States):

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The macroeconomic calendar is essentially empty today. The only thing to watch out for is new home sales in the United States, which are expected to grow 3.5%. However, this data is not that significant and does not have such an impact on the market. In addition, it is published quite late, which also does not help market participants so they don't rely on it. So, most likely, the market will wait for something more substantial.

New Home Sales (United States):

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The euro/dollar pair showed a local upward interest last Friday, as a result the quote returned to the 1.1860 area, where it slowed down on a systematic basis.

If we proceed from the quote's current location, we can see that trading began with a small gap, which set a downward pace in the form of a pullback from the 1.1860 area.

Acceleration is recorded in relation to the market dynamics, which is confirmed by the candles, as well as a high coefficient of speculative transactions.

Considering the trading chart in general terms (daily period), one can see price fluctuations at the conditional peak of the corrective course of 1.1612 -> 1.1880.

We can assume that if the price settles lower than 1.1825, the quote will move towards the value of 1.1800-1.1790. Otherwise, an oscillation in a narrow range of 1.1825/1.1860 may occur.

From the point of view of complex indicator analysis, we see that the indicators of technical instruments on hourly and daily intervals tend to indicate a buy signal, which is due to the fact that the quote is at the conditional peak of the corrective course. Minute intervals signal a sell due to a pullback from the 1.1860 area.

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Technical Analysis of ETH/USD for October 26, 2020

Crypto Industry Outlook:

The decentralized finance (DeFi) boom has caused the Ethereum network (ETH) to process more than twice the daily volume of bitcoin transactions per day.

According to the cryptocurrency market data aggregator Messari, the 30-day moving average for Ethereum's transaction volume is currently $ 7 billion. Bitcoin processes less than $ 3 billion. Messari predicts that if the current trend continues, Ethereum has a real chance of becoming the first public blockchain to account for $ 1 trillion in transfers in a calendar year. The previous, "best" calendar year of Ethereum compared to Bitcoin was 2018. At that time, the ETH network processed a volume of half a billion dollars. It was then 59% of the 849 million BTC volume.

Bitcoin is heading towards the second largest year in transaction volume after 2018. It is expected to process $ 800 million by the end of 2020.

Technical Market Outlook:

The ETH/USD pair keeps trading under the local trend line around the level of $407. There were three Bearish Engulfing candlestick patterns around the last swing high made every time the bulls tried to rally. This market behaviour indicates the developing bearish pressure, but so far the results from it are very poor. Only if the market break below the level of $389.90 the bulls will have a problem to control the price. The local technical support is seen at the level of $400, $394.85 and $389.90.

Weekly Pivot Points:

WR3 - $490.39

WR2 - $455.51

WR1 - $435.03

Weekly Pivot - $398.88

WS1 - $379.21

WS2 - $342.87

WS3 - $323.39

Trading Recommendations:

The up trend on the Ethereum continues and the next long term target for ETH/USD is seen at the level of $500, so any correction or local pull-back should be used to open the buy orders. This scenario is valid as long as the level of $309.61 is broken.

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Technical Analysis of BTC/USD for October 26, 2020

Crypto Industry Outlook:

A Russian official argued that the country should have started researching the central bank's digital currency four years ago to gain a leadership position in this field. However, according to Dmitry Peskov, special representative of the President of the Russian Federation for Digital and Technological Development, the advantage of priority also carries a number of threats to financial stability.

According to the media, Peskov said a quick second strategy in developing CBDC could be more efficient than becoming the world's first issuer, stating:

"The financial risk is so great that I think a quick second strategy is much more effective than trying to be the first. Let's see what a leader can do and what obstacles they will encounter."

Peskov stated that the Russian CBDC - the digital ruble - could become a reality in three to seven years if development starts now.

Anatoly Aksakov, a member of the Russian Duma and representative of key cryptographic projects related to Russian legislation, argued that the digital currency would enter a pilot phase in the first half of 2021. Aksakov is convinced that the upcoming digital ruble "is the future", while decentralized crypto tokens like Bitcoin have no future.

Financial experts from other countries are also cautious about CBDC. On October 19, Jerome Powell of the US Federal Reserve said it was better to do it right than to be first. New Zealand's central bank has made a similar statement, saying there is "much work to do" in the CBDC area before releasing the national digital currency.

Technical Market Outlook:

The BTC/USD pair had made a new yearly high at the level of $13,300 and keeps trading around this level. The local lows are shallow, so the bulls are still in control of this market. If the level of $13,300 is clearly violated, then the next target is seen at the level of $13,698. The key short-term technical support is seen at the level of $12,625 and as long as is not broken the odds for another wave up are high.

Weekly Pivot Points:

WR3 - $15,886

WR2 - $14,555

WR1 - $13,946

Weekly Pivot - $12,537

WS1 - $11,955

WS2 - $10,713

WS3 - $10,093

Trading Recommendations:

Bitcoin is trading at the yearly highs and bulls are in control of the market. The up trend continues and the next long term target for Bitcoin is seen at the level of $14,000, so any correction or local pull-back should be used to open the buy orders. This scenario is valid as long as the level of $10,000 is broken.

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Technical Analysis of GBP/USD for October 26, 2020

Technical Market Outlook:

The GBP/USD pair had made a swing high at the level of 1.3175, but since then it has been moving lower in a local correction. Recently the price has hit the level of 1.3021 which is a technical support, but it looks like the bears want to push it lower towards the level of 1.3011. This is the 61% Fibonacci retracement and if broken, then the marekt will slide lower towards the next technical support seen at 1.2982. Please notice, the price is back into the local ascending channel again, so the bears are now in control of the market.

Weekly Pivot Points:

WR3 - 1.3465

WR2 - 1.3320

WR1 - 1.3185

Weekly Pivot - 1.3039

WS1 - 1.2902

WS2 - 1.2757

WS3 - 1.2620

Trading Recommendations:

The GPB/USD pair is in the down trend on the monthly time frame, but the recent bounce from the low at 1.1411 made in the middle of March 2020 loos very strong and might be a reversal swing. In order to confirm the trend change, the bulls have to break through the technical resistance seen at the level of 1.3518. All the local corrections should be used to enter a buy orders as long as the level of 1.2674 is not broken.

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Simplified wave analysis and forecast for EUR/USD and AUD/USD on October 26

EUR/USD

Analysis:

The trend of the European currency since March is directed to the north of the price chart. The last incomplete wave on the main course started on September 25. Its structure shows a clear zigzag (A-B-C). In the last section, an intermediate pullback has been developing since the middle of last week.

Forecast:

In the next trading session, you can expect a decline in the area of settlement support. By the end of the day, a reversal and return to the upward movement vector are expected. A breakout of the upper limit of the nearest resistance is not excluded today.

Potential reversal zones

Resistance:

- 1.1960/1.1990

- 1.1870/1.1900

Support:

- 1.1810/1.1780

Recommendations:

Euro sales are risky today. It is recommended to refrain from entering the pair's market during the pullback and look for buy signals at its end.

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AUD/USD

Analysis:

Since March, the Australian dollar market has been forming an upward momentum on a daily scale. Its last section counts down from September 25. During the entire current month, the price formed a correction (B). The bullish segment of the chart from October 20 has a reversal potential. This may be the beginning of the final part (C).

Forecast:

A general flat mood is expected in the near future. In the European session, you can expect a price decline up to the support zone. By the end of the day, the probability of a reversal and re-ascent to the resistance area increases.

Potential reversal zones

Resistance:

- 0.7140/0.7170

Support:

- 0.7080/0.7050

Recommendations:

Trading the pair today is only possible within the intraday with a reduced lot. When selling, you should be prepared for counter price outliers. After the reversal signals appear, purchases of the instrument will become a priority.

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Explanation: In the simplified wave analysis (UVA), waves consist of 3 parts (A-B-C). The last incomplete wave is analyzed. The solid background of the arrows shows the formed structure, and the dotted background shows the expected movements.

Note: The wave algorithm does not take into account the duration of the instrument's movements in time!

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Technical Analysis of EUR/USD for October 26, 2020

Technical Market Outlook:

The EUR/USD pair has been trying to rally towards the level of 1.1880, but failed and made the lower high at the level of 1.1864. In early Monday trading hours the price moved lower towards the technical support seen at the level of 1.1822. This level is a 61% Fibonacci retracement on the weekly tome frame chart as well and had been tested many times during the last month. The market is coming off the overbought conditions and the momentum is neutral to positive, so there are still a chance for bulls for another wave up. Only a sustained violation of the level of 1.1761 will trigger more aggressive sell off towards 1.1724 and below.

Weekly Pivot Points:

WR3 - 1.2123

WR2 - 1.1991

WR1 - 1.1943

Weekly Pivot - 1.1823

WS1 - 1.1766

WS2 - 1.1638

WS3 - 1.1589

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. The recent correction towards the level of 1.1612 seems to be completed and now market is ready for another wave up. This means any local 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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Analysis and forecast for EUR/USD on October 26, 2020

As usual, on Mondays, we will summarize the results of the five-day trading period and consider the prospects for the price movement of the main currency pair of the Forex market.

So, at the auction on October 19-23, the US dollar was under selling pressure and weakened against all major competitors. In particular, the single European currency showed a strengthening of 1.26%, as a result, there were some changes in the technical picture for the euro/dollar, which we will return to later. In the meantime, let's talk about what dictated the last week's trading, and about the main events of this week that can affect the price dynamics of EUR/USD.

In the run-up to the US presidential election on November 3, investors are very concerned about whether the White House administration will be able to agree with Democrats in the House of Representatives on the adoption of a new fiscal stimulus package just before the election. The new program of assistance to the world's leading economy should and will be adopted, however, when exactly this will happen is still shrouded in mystery. Let me remind you that the main contradictions between the parties are the size of the new aid package. Democrats are demanding more stimulus than their Republican opponents are offering. Another important reminder is the fact that in the United States, the first outbreak of the COVID-19 pandemic began somewhat later than in European countries, and since Europe is covering (or has already covered) the second wave of coronavirus, it will inevitably reach the United States. This is a matter of time, but about 2-3 weeks. Meanwhile, the first and second European economies, German and French, respectively, as a result of the invasion of the second wave of COVID-19, risk incurring significant losses that will negate the recovery that was started.

Now about the most important and main events, which without any doubt are the election of the President of the United States of America. Let me remind you that Joe Biden is leading the race, and the current President Trump will have to make incredible efforts to change the situation. Most market participants believe that a Biden victory will significantly increase risk appetite in global financial markets, which means that it will weaken the US dollar. However, the US election will be held next week, and this week the main event will be the decision of the European Central Bank (ECB) on interest rates and the subsequent press conference of ECB President Christine Lagarde. Since the ECB is likely to keep the main interest rate at zero, the main attention of market participants will be focused on the speech of the head of the European Central Bank. Now it's time to look at the technical picture for EUR/USD.

Weekly

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As a result of the rather impressive growth, the euro bulls managed to break through the strong resistance of sellers at 1.1830 and end the weekly session above this mark. The red line of the Tenkan indicator Ichimoku was also confidently passed up. As you can see, at the auction of the previous two weeks, it was the level of 1.1830 and Tenkan that did not allow the quote to go higher. However, at this point, the problems for players to increase can not be considered solved. A very important test is waiting for them in the price zone of 1.1880-1.1917, where there is a fairly strong resistance of sellers, which can be judged by the long upper shadows of several candles and the previous inability to overcome the designated area. I believe that only a true breakout of 1.1917 with the week closing above this level will open the way to 1.1965, and then to the significant psychological level of 1.2000 and the August highs on 1.2010. As has been noted many times, the bearish scenario will gain chances for its implementation only after a true breakdown of the key support level of 1.1700. Judging by the weekly timeframe, I am more inclined to expect the continuation of the upward trend.

Daily

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The daily chart clearly shows the hard struggle for the pair to exit the Ichimoku indicator cloud. Once again, I would like to draw your attention to the fact that a single candle that closes above the upper border of the cloud is not enough to consider the exit from it as true. Friday's attempts by the bears to continue the pressure on the pair ended at 1.1786, from where the pair began an active recovery and ended trading on October 23 at 1.1859.

Judging by the technical picture on the two timeframes considered, the main trading recommendation will be considered purchases that are best opened at lower prices. As an option, I recommend considering opening long positions on EUR/USD after a corrective pullback to the price zone of 1.1840-1.1825. In tomorrow's article, we'll take a closer look at the four-hour and one-hour charts.

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Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on October 26

Analysis of transactions in the EUR / USD pair

Strong manufacturing activity in the largest eurozone countries has restored traders' confidence on Europe's economic recovery. As a result, the euro moved 50 pips up from 1.1813, reaching the target price level of 1.1864.

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Trading recommendations for October 26

Ifo will release economic assessments on Germany today, which may affect the direction of the euro in the market. If the reports turn out to be better than the forecasts of economists, the recovery and upward movement of the EUR / USD pair will continue.

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  • Open a long position when the euro reaches a quote of 1.1860 (green line on the chart), and then take profit at the level of 1.1915. However, this will only be possible if the Ifo releases very good economic assessments.
  • Open a short position when the euro reaches a quote of 1.1824 (red line on the chart, and then take profit around the level of 1.1765. 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

The bulls tried to raise the rate of the pound last Friday morning, however, the quote was only able to move 20-25 pips upward. At the same time, short positions were unprofitable as well in the afternoon, since the quote only moved 20 pips down in the market.

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Trading recommendations for October 26

Since there are no economic reports scheduled for release today, the attention of traders will be shifted on the next round of negotiations between the UK and the EU over the long-disputed post-Brexit trade deal. Good news about it will lead to a new wave of growth on the British pound, whereas a bad news could lead to another decline in the GBP / USD pair.

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  • Open a long position when the pound reaches a quote of 1.3045 (green line on the chart), and then take profit around the level of 1.3104 (thicker green line on the chart).
  • Open a short position when the pound reaches a quote of 1.3016 (red line on the chart), and then take profit at least at the level of 1.2967. Bad news on Brexit will resume the downward trend in the GBP/USD pair.
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GBP/USD: plan for the European session on October 26. COT reports. Pound more attractive as traders' faith in Brexit trade

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

Last Friday, the bulls made several unsuccessful attempts to continue pushing the pound after the PMI data, but then the pair was under pressure again, which resulted in its sell-off. However, judging by the latest data, the pound's appeal is gradually recovering, and this week we may see a new wave of growth in the pair, provided that the parties manage to agree.

Significant changes are visible in the futures market, which play on the side of the buyers of the pound. The fact that traders are closing short positions indicates the likelihood of a new wave of growth in the medium term. And although bears still have control of the situation, their preponderance is at a minimum. The only thing that holds buyers back is the uncertainty about Brexit and the prospects for a recovery in the UK economy. Problems with the risk of introducing negative interest rates and the introduction of restrictive and quarantine measures due to the surge in the number of coronavirus infections have so far faded into the background. The Commitment of Traders (COT) report for October 20 showed a reduction in short positions and a sharp increase in long positions. Long non-commercial positions rose from 36,195 to 39,836. At the same time, short non-commercial positions fell from 45,997 to 41,836. As a result, the negative value of the non-commercial net position slightly increased and reached -2,000, against - 9,802 a week earlier, which indicates that the sellers of the pound retain control and also shows their minimal advantage in the current situation.

Buyers of the pound need to take the resistance of 1.3053 as soon as possible, because the succeeding correction will depend on it. Settling at this level forms a signal to open long positions in GBP/USD and will open up the opportunity for a new wave of growth in the area of Friday's high at 1.3120, but much will depend on how Brexit will progress. A compromise will provide good support for the pound. Therefore, settling above 1.3120 will lead to a test of the highs of 1.3174 and 1.3234, where I recommend taking profits. An equally important task is to protect support at 1.2977. You can open long positions from this level immediately on a rebound, counting on a correction of 20-30 points within the day. In case bulls are not active in this range, it is better not to rush to buy, but to wait for the test of the next major support level in the 1.2919 area.

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

Sellers need to defend the resistance of 1.3053, but much will depend on news on the Brexit trade deal, since we do not have any UK fundamental reports at our disposal. Forming a false breakout at 1.3053 generates a signal to sell the pound, but we need bad news on Brexit for a large bearish pressure. The nearest target of the bears is support at 1.2977, but the pound can only fall if the pair settles below this level, and then it might return to the area of 1.2919 and 1.2865, which is where I recommend taking profits. If the pair grows in the first half of the day and there is no activity in the resistance area of 1.3053, it is best to postpone short positions until last Friday's high at 1.3120 has been tested, afterwards you can sell the pound immediately on a rebound, counting on a correction of 20-30 points within the day.

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Indicator signals:

Moving averages

Trading is carried out just below the 30 and 50 moving averages, which indicates a slight advantage for sellers of the pound.

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

Bollinger Bands

A breakout of the lower border of the indicator in the 1.3010 area will increase pressure on the pair. Growth will be limited by the upper level of the indicator in the 1.3100 area.

Description of indicators

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

EUR/USD: plan for the European session on October 26. COT reports. Market continues to balance. Bulls have a chance to update

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

Two long entry points appeared last Friday. Let's take a look at the 5 minute chart and break down the trades. The first buy signal appeared at the beginning of the European session after a false breakout at the 1.1797 level. You can see how the bears are trying to catch on to this level, but nothing came of it. The euro starts to rise as a result of a false breakout. Then the bulls manage to catch on the resistance of 1.1836, which already forms the second entry point. However, the movement was about 20 points, after which the bullish impulse faded.

Before talking about today's prospects for the pair's movement, let's take a look at the situation in the futures market, which has not changed much. This once again confirms the fact that the pair has been in the horizontal channel lately. Recent reports on activity in the eurozone indicated weak prospects for the recovery of the European economy due to the risk of a second wave of Covid-19. This forces traders to take a wait-and-see attitude. Expectations of further monetary stimulus from the European Central Bank also limit the euro's growth potential. The Commitment of Traders (COT) report for October 20 recorded an increase in long positions and short ones. However, there were more of the latter, which led to an even greater decrease in the positive delta. Despite this, the buyers of risky assets believe in the continuation of the bull market, but prefer to act with caution, as there is no good news for the eurozone yet. Thus, long non-commercial positions increased from 228,295 to 229,878, while short non-commercial positions increased from 59,658 to 63,935. The total non-commercial net position decreased to 165,943, against 168,637 a week earlier.... However, the bullish sentiment for the euro remains rather high in the medium term. The more the euro falls against the US dollar at the end of this year, the more attractive it is for new investors.

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As for the pair's technical picture, bulls are now focused on the 1.1826 level, and its direction for the week will depend on their actions in this range. Now the bulls need to defend this support level, but only a false breakout in that area can produce a signal to open long positions while expecting an upward correction to the resistance area of 1.1864, where I recommend taking profits. The main task of buyers is to go beyond and settle above this range, which will form another entry point to long positions, similar to Friday's buy positions, and will open a direct road for EUR/USD to the highs of 1.1915 and 1.1964. If the bears turn out to be stronger and they manage to pull down the euro below 1.1826, then it is best to postpone long positions and wait until the weekly low at 1.1792 has been updated, where a false breakout will be a signal to open longs. Otherwise, I recommend buying EUR/USD only for a rebound from the new low of 1.1762, counting on a correction of 15-20 points within the day.

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

Sellers will try to push through the 1.1826 support, and today's IFO report which can turn out to be weak can provide some help. Settling below 1.1826 forms a good entry point for short positions, which will open a direct road to the low of 1.1792, where I recommend taking profits. However, bears need a breakout for this range, which will open a direct path for EUR/USD to lows in the 1.1762 and 1.1732 areas. An equally important task for the bulls is to protect resistance at 1.1864, which may be tested today in case of higher economic expectations for Germany. Forming a false breakout at this level will be a signal to sell the euro, in hopes for it to fall to support at 1.1792. I recommend opening short positions immediately on a rebound from a new 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 market uncertainty regarding the long term direction, but with a slight advantage of euro buyers.

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

Bollinger Bands

A breakout of the lower border of the indicator around 1.1826 will increase pressure on the euro. The breakout of the upper border in the 1.1864 area will lead to another attempt to strengthen 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

Trading plan for the EUR/USD pair on October 26. New peak in COVID-19. Big news from Europe and the United States.

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Infection rate surged again in the United States yesterday, having recorded a new peak of 80 thousand new cases a day. At the same time, France overtook India on having the second highest incidence rate, after it listed 52 thousand new cases yesterday.

Overall, the total number of new cases in the world is almost half a million per day.

With regards to medicine, vaccinations will finally begin at the end of November. But until then, people should take care of themselves and wear protective masks when coming outside of their homes. According to experts, wearing masks in public places reduces the likelihood of contracting the virus by a huge 80%.

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The US market is ready for a new round of growth. However, it would depend on the upcoming US elections. If the market peaks before the elections, sell stocks.

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EUR/USD: The euro is consolidating.

Keep setting up long positions, but place the stops at 1.1700 or 1.1770

Meanwhile, open short positions from 1.1770.

Longs may also be opened from 1.1865

News on US GDP, as well as the statements from the ECB, could turn the direction of the market.

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

EUR/USD. Coronavirus anti-records and shaky growth of the US currency

Today, the US dollar index demonstrates a slight increase at the start of trading. Greenback is strengthening its position against the backdrop of strengthening anti-risk sentiment. Traders are again using the dollar as their primary defensive tool, despite the political instability in the US and another failure in negotiations over a new aid package for the US economy.

A similar situation was observed last week. For five trading days, traders could not decide on what factors to focus their attention on. Coronavirus and political battles in the United States have become mainstream themes, alternating one after another. Initially, investors were alarmed by the news flow from Europe: the surge in the incidence of COVID-19 forced the key countries of the European Union to again resort to tightening quarantine restrictions. This fact provoked an increase in anti-risk sentiment, after which the dollar again won the laurels of the favorite in the foreign exchange market.

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However, on Friday, the greenback once again demonstrated its vulnerability amid the pre-election battles in the United States. On the last day of the trading week, a final televised debate between Trump and Biden took place, bringing back fears of a prolonged period of post-election political instability in the United States. According to most observers, the verbal duel ended in Biden's favor - but with a minimal margin. This is also indicated by the results of several polls.

But the minimum percentage advantage does not play any role here. In fact, there was no clear winner among the candidates: the debate ended in a draw, while Biden made a serious mistake by mentioning the name of the Nazi leader in an incorrect context. This fact suggested that Donald Trump at the finish line of the pre-election race will narrow the gap with his main rival (before the last debate, the gap was 11%), increasing his chances of re-election. By the way, 4 years ago, at the same stage of the election campaign, Hillary Clinton also predicted the highest chances of winning. Everyone knows what the final result was. In addition, it is necessary here to take into account the specifics of the American electoral system - for example, the results of nationwide surveys need to be correlated with indicators in each individual state. Otherwise, the nationwide survey can be compared to the "average body temperature in the hospital".

Many analysts view the reaction of the American currency to political battles in the United States in the context of a simple question - which candidate is better for the dollar: Trump or Biden. But in my opinion, the market estimates (for now) only the likelihood of a political crisis after the announcement of the preliminary election results. That is why the dollar index lost ground on Friday: following the televised debates, it became clear that Trump's loss was no longer so obvious. This means that the Republican team will fight for every vote, including in court, especially given the "coronavirus" remote voting (which has repeatedly succumbed to criticism from Trump). In other words, the absence of a clear winner in the election is a negative factor for the dollar,

Nevertheless, during the Asian session today, the dollar index slightly recovered its positions: if on Friday, the trading closed at 92.77, then on the first trading day the indicator went up to the borders of the 93rd figure. The growth is minimal, but the trend itself is important here, which indicates a weakening of pressure on the greenback.

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The market switched to coronavirus again. Traders could not ignore the negative news flow from Europe, indicating an increase in the disease in almost all EU countries. For example, there's almost 20 thousand new cases of COVID-19 detected in Italy over the past day. The authorities of this country announced that in the near future they will announce further tightening of measures. In Germany, the anti-record was updated for the second time in a week: the number of confirmed cases increased by 15 thousand per day. Berlin is also preparing to significantly tighten quarantine restrictions. Earlier, the curfew was introduced in metropolitan areas and large cities in France, as well as in the Netherlands, the Czech Republic, in several regions of Greece and in some cities in Spain. In Poland, the President of the country Andrzej Duda became infected with the coronavirus.

In other words, the rate of spread of coronavirus in European countries is growing, even despite the restrictive measures being taken. The anti-rating leaders in terms of the number of new cases of COVID-19 are France, Spain, Italy and the Czech Republic. At the weekend, the situation only worsened, so the reaction of traders at the start of trading is predictable.

But in my opinion, the "coronavirus factor" will not be able to strengthen the position of the greenback, even if we consider the medium-term prospects. During the American session on Monday, the market will switch to political events in the US, especially since another deadline for negotiations on the fate of the new stimulus package expires today (spoiler: the parties with a 95% probability will not find a compromise again).

In general, the dollar is still a vulnerable currency, and even the coronavirus factor is no longer helping it dominate the market. The situation cannot be compared with the spring one (at least at the moment), since, firstly, the EU countries still do not dare to lockdown, and secondly, there is no shortage of dollar liquidity on the market (as was the case in March). Plus to everything - the pre-election period in the United States, which does not allow dollar bulls to fully show their character even when the fundamental background disposes to this.

All this suggests that investing in the dollar now is a risky business. Speaking directly about the euro-dollar pair, we can see that the price moved away from Friday's highs, but at the same time did not update the low of the last week. In other words, the pair is still trading in a flat, in the price range of 1.1815 up to 1.1875, in which it has been since last Wednesday. From current positions or when approaching the base of the 18th figure, you can enter longs with the first target of 1.1875. The next resistance level is located just above the 1.1900 mark.

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

Analytics and trading signals for beginners. How to trade EUR/USD on October 26? Plan for opening and closing trades on Monday

Hourly chart of the EUR/USD pair

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The EUR/USD currency pair began a new round of corrective movement within a new (old) upward trend in the evening. As a reminder to novice traders, the upward trend line has been rebuilt and is now supporting bull traders again. However, we also recall a couple of other important factors that can greatly affect the pair's movement. First, the price continues to trade within the horizontal channel of $1.17-1.19. Since it has spent the last few days near its upper border, a downward reversal is highly probable and it could fall to the lower border of this channel. Secondly, although the trend line was rebuilt, the price failed to update the previous local high of October 22 at 1.1867. And this indirectly indicates the cancellation of the upward movement. Thus, we would say that the EUR/USD pair might return to the updated trend line in the near future and try to overcome it. Nevertheless, the upward trend remains, therefore, in the event of an upward reversal of the MACD indicator or an eloquent rebound from the trend line, you are still advised to trade upward.

The fundamental background for the EUR/USD pair in the new week can be downright boring, and it can also be quite interesting. There are few macroeconomic reports for the week. But traders ignore most of it anyway. There is not a single significant event scheduled for Monday. On the other hand, such an important event as the presidential elections in the United States is approaching. We have already mentioned why this is important. And most importantly, the markets can actively trade all pairs containing the dollar. That is, with the approaching elections, the volatility of the EUR/USD pair may significantly increase. Of course, this is not 100% certain. This is just a guess. But you need to be ready for this. Also, in the near future, we expect the pair to leave the horizontal channel, in which it has been trading for three months. Most likely, this will not happen before the end of the elections. However, we also remind novice traders that the 2020 US presidential elections can be fraught with fraud, litigation, and vote counting can take up to several weeks, as many Americans will vote by mail due to the difficult situation with COVID-2019. Therefore, it is impossible to predict how the markets will react to all these unusual events and what will happen if Donald Trump loses the election. As for the eurozone, the second wave of coronavirus continues to gain momentum, but so far the euro does not react too strongly to this news. Perhaps because the situation with COVID isn't any better in America?

Possible scenarios for October 26:

1) Buy positions on the EUR/USD pair remain relevant at the moment, since the upward trend line has been rebuilt and it supports buyers again. However, as we expected last night, a new correction has begun. Therefore, we recommend waiting the downward correction to be completed, a reversal of the MACD indicator to the upside and afterwards you can finally open new longs while aiming for 1.1888 and 1.1903.

2) It is not advised to trade for a fall at this time, since the upward trend line is in action again. Thus, in order to sell the pair, novice traders need to wait until the price settles below the trend line. In this case, shorts will become relevant while aiming for 1.1759.

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

Elliott wave analysis of GBP/JPY for October 26, 2020

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We continue to expecte short-term key support at 136.26 will be able to protect the downside for a new rally above 137.33 and more importantly a break above resistance at 137.83 for a rally towards the former peak at 142.72 and ultimately above here too.

A break below 136.26 will call for a re-test of support at 135.59 and likely even lower towards 135.07.

R3: 137.33

R2: 136.85

R1: 136.77

Pivot: 136.26

S1: 135.92

S2: 135.59

S3: 135.37

Trading recommendation:

We are long GBP from 135.45 with our stop at 136.25

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

Elliott wave analysis of EUR/JPY for October 26, 2020

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EUR/JPY turned higher from the 123.38 low, which was a bit lower than the 123.65 low we expected, but non-the-less it follows the expected path of a trinagle consolidation in wave Y/ and is now in wave D/, which should rally close to 124.75 before turning lower in the final decline in wave E/ to complete wave Y/ and 2/ and set the stage for a strong rally in wave 3/ towards at least 129.82.

Short-term support is seen at 123.94 which ideally will protect the downside for the expected rally higher towards 124.75.

R3: 124.75

R2: 124.40

R1: 124.22

Pivot: 123.94

S1: 123.75

S2: 123.60

D3: 123.44

Trading recommendation:

We bought EUR at 123.55 and we will move our stop higher to 123.30 and take 50% profit at 124.55.

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

Forecast for EUR/USD on October 26, 2020

EUR/USD

The euro fully recovered on Friday after falling on Thursday, now the price intends to reach the target level of 1.1917 - the highs of September 10 and August 6. Perhaps growth will be slightly higher in order to reach the MACD line. The highest peak is seen at the upper border of the price channel at 1.1960. The Marlin oscillator is growing, the bullish trend of the corrective plan continues.

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The price rises after a false departure under the MACD line on the four-hour chart, which is its own sign of continuing the movement after a false price maneuver. The same maneuver was made by the Marlin oscillator, now the price is in a growing position for all indicators on this timeframe. We are waiting for the price to rise to the designated target of1.1917.

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

Forecast for GBP/USD on October 26, 2020

GBP/USD

After a strong growth on October 21st and a subsequent two-day decline, the pound settled in the range of uncertainty between the balance and MACD indicator lines. The price could continue rising within the range after it goes beyond the target level of 1.3082 - the goal is 1.3185, possibly 1.3255, which according to the main downward scenario will be nothing more than a false exit above the MACD line, then the price will find itself below the 1.3185 level. the Marlin oscillator is in the growth zone, this allows the price to make another growth branch. It is possible for the price to continue falling towards the target of 1.2860 after it settles below 1.3000 (resistance on September 16-18).

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The price settled below the MACD line on the four-hour chart, but it is above the balance line, that is, in the zone of uncertainty. The signal line of the Marlin oscillator in the territory where bears dominate is a sign of the price's intent to overcome the signal level of 1.3000. We will find out soon whether the price can do it.

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

Forecast for AUD/USD on October 26, 2020

AUD/USD

The Australian dollar rallied alongside other counter-dollar currencies last Friday. The movement started from the target level of 0.7120, but it is very difficult to determine where it will end, there are many strong levels on the way, the closest of which is 0.7190. Without the price breaking above the balance indicator line (red), the price can reach the target range of 0.7233/55, and this growth will still be considered corrective. The price must go beyond the balance line for a solid upward movement. The Marlin oscillator has moved into growth territory, which also gives the price some upside potential with overcoming the first target level.

The four-hour chart shows that the price went above the MACD line for the second time in the last 24 hours, and the price never fell below the balance line. Marlin is developing in a range, but it is in a positive trend zone and still has the potential to move up. We expect the Australian dollar to continue growing in the short term.

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

Hot forecast and trading signals for EUR/USD on October 26. COT report. EU service sector starts to face problems due to

EUR/USD 1H

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The euro/dollar pair abruptly moved up on the hourly timeframe on Friday, October 23, settling above the critical Kijun-sen line and then it rushed to the resistance level of 1.1882, which was already reached last week. Thus, the upward trend continues in spite of the fact that the pair previously left the ascending channel and the price was settling below the Kijun-sen line. It will be extremely difficult for traders to overcome the 1.1882 level, as well as the resistance area of 1.1887-1.1912. Take note that the euro/dollar continues to trade within a horizontal channel, even two, and the 1.1900-1.1920 level is the area of the upper boundaries of both channels. Therefore, a rebound from it is very likely. On the other hand, going beyond it will show the bulls' intentions to move up further.

EUR/USD 15M

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The lower linear regression channel turned to the upside on the 15-minute timeframe, displaying the resumption of the upward movement on Friday. But further growth prospects will entirely depend on the 1.1900-1.1920 area.

COT report

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The EUR/USD pair fell by around 40 points during the last reporting week (October 13-19). But in general, no significant price changes have been observed for the pair in recent months. Therefore, data from any Commitment of Traders (COT) report can only be used for long-term forecasting. The new COT report showed even fewer changes in the mood of professional traders than the previous one. Non-commercial traders, who, we recall, are the most important group of traders in the foreign exchange market, opened 1,081 Buy-contracts (longs) and 673 Sell-contracts (shorts). Take note that the "non-commercial" group decreased its net position in the last two weeks, which may indicate the end of the upward trend. However, the data provided by the latest COT report does not tell us anything at all. There are no changes, since non-commercial traders have opened almost 300,000 euro contracts. Thus, opening or closing of 1,000-2.000 contracts does not indicate anything. The lines of net positions of the "non-commercial" and "commercial" groups (upper indicator, green and red lines) continue to barely narrow, while the pair itself continues to trade in a horizontal channel. Therefore, we stick to our opinion - the upward trend is completed or is about to be completed, and the high reached near the 1.2000 level may remain the peak of this trend.

The European Union and Germany published indexes of business activity in the services and manufacturing sectors last Friday. Traders have not been reacting to macroeconomic statistics for quite some time now. However, they react to the general fundamental background. For example, the loss of 32% of GDP by the US economy in the second quarter cost the dollar approximately 13 cents paired with the euro. Thus, the deterioration in business activity may indicate serious consequences for the economy as a result of the second wave of coronavirus. In principle, this is exactly what we can say by looking at the indices. In Germany, the service sector continued to decline and reached 48.9, while it continued to decline and hit 46.2 in the European Union as a whole. The service sector, the industry that suffers the most from quarantines, epidemics and various kinds of restrictions, just began to suffer, as soon as high levels of COVID-2019 morbidity began to be recorded in Europe, compared to that of summer. Similar indices were published overseas, but they showed the exact opposite picture. The service sector is doing well and rose to 56, while the manufacturing PMI fell to 53.3.

We have two trading ideas for October 26:

1) The pair still maintains the prospects for an upward trend. And so traders are advised to continue trading up while aiming for the resistance levels of 1.1882 and 1.1939 as long as the price is above the Kijun-sen line. Take Profit in this case will be up to 70 points. However, one should take the 1.187-1.1912 area into account, which the bulls may not be able to overcome, as well as the 1.1900-1.1920 level.

2) Bears remain in the shadows. Thus, sellers need to wait for the price to break the Kijun-sen line (1.1820) in order to have reasons to open sell positions with the targets of the Senkou Span B line (1.1759) and the support area of 1.1692-1.1699. The potential Take Profit in this case is from 50 to 110 points.

Explanations for illustrations:

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

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

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

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

Indicator 1 on the COT charts is the size of the net position of each category of traders.

Indicator 2 on the COT charts is the size of the net position for the "non-commercial" group.

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

Forecast for USD/JPY on October 26, 2020

USD/JPY

The yen is in no hurry to strengthen (decline on the chart), since the situation on the stock markets has been mixed since Friday. The price is still developing below the line of the descending price channel on the daily chart, while the Marlin oscillator is growing weakly, the probability of a succeeding price fall remain, the target is 103.75. Getting the price to settle above Friday's high of 104.95 and automatically going beyond the price channel line will become a condition for further growth towards the MACD line at 105.55.

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The price is also under pressure from all indicators on the four-hour chart. There is a possibility that Marlin would enter the zone of positive values, but if this happens without the price settling above 104.95, then the signal will be weak and false. Also, the price needs to overcome the resistance of the MACD line in the 105.22 area. It will be difficult for the pair to rise. The first sign that the price would succeedingly fall is if the price moves below Friday's low of 104.56.

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

Overview of the GBP/USD pair. October 26. Progress has been made in negotiations between Brussels and London. A deal is still

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: 9.9393

The British pound sterling, paired with the US currency, corrected to the moving average line on Friday. However, in general, there is still an upward trend, which raises a lot of questions. The fundamental situation for the pound/dollar pair remains extremely difficult. On the one hand, the US dollar is under pressure from the election situation and general instability and uncertainty in the US. On the other hand, the British pound is under no less pressure from Brexit, the prospects for the British economy, and the extremely low probability of signing a trade agreement with the European Union. However, both currencies cannot be under pressure at the same time. Therefore, one has to become more expensive, the second - cheaper. However, in general, we believe that the British pound will continue to fall in the long term. It is the prospects for the British economy that cause the greatest concern. Moreover, the pound has grown quite strongly in recent months, so it's time for it to start forming a downward trend even for technical reasons. This process may have already started on September 1. After the first round of the downward movement, a long correction followed, which may be completed in the near future. Recall that within this correction, the pair worked out the level of 61.8% Fibonacci. Thus, if there is no consolidation above this level, we would say that the probability of a new fall is extremely high. However, first, the pair needs to be fixed below the moving average line.

Meanwhile, today the British pound may rise again as the well-known British newspaper Telegraph said on Sunday that the UK and the European Union still began to give in to each other in the negotiations and a deal can still be concluded in the near future. The EU's chief negotiator, Michel Barnier, is going to stay in London until October 28 and continue working on the agreement, despite the progress made in the negotiations. However, the publication also reports that excessive optimism is still not appropriate now, since the shifts in the negotiations are not very large yet. London and Brussels have until October 31 to decide whether there is any point in negotiating further. According to unconfirmed reports and sources close to the UK government, it has become known that there is indeed progress, however, we would recommend waiting for official statements from the parties. However, most traders may not wait for these statements. For the pound in the last four years, rumors and expectations of traders are almost the only opportunities to get more expensive at least from time to time. That is why we assume that this currency may grow on Monday.

At the same time, we remind you that the differences between the EU and the Kingdom in their views on the trade agreement are significant. Therefore, it is far from a fact that the parties will still be able to agree. We also remind you that the following questions remain key. First, of course, the "fish" question. The UK does not want to provide access to its waters to European fishermen, which is why the fishing industry in many countries of the Eurozone may suffer significantly. Second, there is the issue of dispute settlement at the international level. The European Union wants the European Court of Justice to always have the last word, which, of course, London wants to avoid. Third, it is a question of fair competition between British and European companies, which is what the European Union wants to achieve. Fourthly, these are European standards and norms that the EU wants to force Britain to adhere to. Besides, the future of the "Johnson bill" remains completely unclear, as well as the situation and regime on the Northern Ireland border after December 31, 2020. Thus, we would not recommend that traders open the champagne and prepare large purchases of the pound.

Unfortunately for the British economy, signing a free trade agreement will only smooth out the negative impact of Brexit. So even if a deal is struck, it is far from certain that the British economy will be doing well in 2021. Most likely, the Bank of England will still be forced to reduce the key rate, which will move to the negative area. Market participants are also waiting for the expansion of the quantitative stimulus program in 2020. And most importantly, an epidemic against which there is still no vaccine (100% safe and proven) and which, according to WHO and many governments around the world, will continue to terrorize people until at least the spring and summer of 2021. And no one can say what will be the levels of morbidity in a month. The UK is already breaking all the anti-records of the first "wave". In the last three days, at least 20,000 cases were recorded daily, which is four times higher than the maximum levels in the spring, when the health system was already experiencing certain problems. If the number of cases continues to grow, then a "hard" quarantine is inevitable.

From a technical point of view, the upward trend is still maintained since the pair still manages to stay above the moving average line. We also once again point out that in general, trading on the pound/dollar has been extremely "ragged" in recent weeks. Quotes can go one way 200 points, and the next day the same amount in the opposite direction. Thus, now is not the most favorable time for trading, and fixing the price below the moving average does not guarantee that the pair will not resume its upward movement the next day.

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The average volatility of the GBP/USD pair is currently 125 points per day. For the pound/dollar pair, this value is "high". On Monday, October 26, thus, we expect movement inside the channel, limited by the levels of 1.2914 and 1.3164. A reversal of the Heiken Ashi indicator upward signals a possible resumption of the upward movement.

Nearest support levels:

S1 – 1.3000

S2 – 1.2939

S3 – 1.2878

Nearest resistance levels:

R1 – 1.3062

R2 – 1.3123

R3 – 1.3184

Trading recommendations:

The GBP/USD pair 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 1.3164 if the Heiken Ashi indicator turns up or the price rebounds from the moving average. It is recommended to trade the pair down with targets of 1.2939 and 1.2914 if the price is fixed below the moving average line.

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

Overview of the EUR/USD pair. October 26. Americans don't vote for Joe Biden. They vote either for Trump or against Trump.

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: 81.2937

During the last trading day of the past week, the EUR/USD pair completed a correction near the moving average line, bounced off it, and resumed its upward movement. Thus, at the moment, we can say that the upward trend for the pair remains, but at the same time, we once again note that the price continues to move in the most long-term plan inside the side channel of $1.17-$1.19 (or 1.1640-1.1920). Thus, in the next few days, there may be a downward reversal and a resumption of the downward movement to the lower line of channel 1.1700. Accordingly, it is still impossible to talk about a full-scale trend now. Rather, these are micro-trends inside the side channel. Of course, the flat won't last forever. It will be completed sooner or later. If the pair's quotes manage to overcome the upper line of the channel, then a new full-fledged upward trend may begin to form. However, we still doubt that market participants will rush to buy the euro for no apparent fundamental reasons near its two-year highs. As for the US currency, we still do not consider its growth possible and probable before the elections on November 3.

There was very little news on Friday. By and large, the markets are already fully focused on the upcoming elections, as well as the candidates themselves and the entire country. At least, all other topics that worried traders and forced them to trade are put on pause. All three rounds of the debate between Donald Trump and Joe Biden have passed (except for the canceled second), so a week before the election, none of the candidates will be able to influence their political ratings. Although, by and large, none of the candidates has done anything in recent weeks to change these very ratings. We believe that if both presidential candidates had gone on vacation a couple of months ago, the balance of power a week before the election would have been the same as it is now. The fact is that Trump has already said everything he could say and do everything he could do. The "coronavirus" pandemic, which the US president treated from the very first day as a cold, constant statement about COVID-2019, which was criticized, refuted by all doctors, epidemiologists, and virologists. Yes, even ordinary Americans who do not have a medical education understand that more than 200,000 people do not die from cold in six months. Every American understands that the whole world is dealing with an epidemic. Only Donald Trump, who continues to make absurd statements with enviable regularity, does not understand this. For example, this weekend, he said at a campaign rally in Florida that "they (the government) are going to put a quick end to this pandemic". Earlier, Trump promised a vaccine. He also said that the virus will evaporate and disappear on its own, will not survive the summer, and so on. All of Trump's other "merits" stem from the pandemic. Record-breaking economic decline, record-high unemployment, total inability to work as a team with the Democrats. And also, a trade war with China, in which it is the United States that is losing. Thus, in four years, Trump has shown himself as president from all sides and most Americans do not even need new promises about the "Golden Age". They saw firsthand all of Trump's work and its consequences. As for Joe Biden, he didn't have to do anything at all. All he had to do was not make mistakes, not make unsubstantiated statements, and criticize Trump for a whole lot of mistakes he made. That's the whole recipe for winning the election. Of course, Biden hasn't won anything yet. However, all opinion polls continue to show record ratings for the Democratic presidential candidate.

Well, Trump can only continue to do what he did for four years. Criticize the media, try to blame others, or pretend that nothing terrible has happened, and a bright future awaits everyone, of course, with him at the head of the country. A week before the election, Trump recalled the activities of Hunter Biden and Joe Biden in Ukraine and China. Earlier, he failed to play the same card. No evidence of the Bidens' illegal activities was found, and there was not even a specific reason to launch an investigation. However, Trump continues to "trash" this card, trying to squeeze at least some dividends out of it. At first, he called on the FBI to launch an investigation against the presidential candidate and his son and to put both in prison. After that, he began to criticize the media for not covering the topic of Biden's corruption schemes enough and trying to hide them. At the same time, according to Trump, the media pays a lot of attention to the COVID pandemic, only scaring citizens.

Meanwhile, more and more foreign media support the view that the US election is not the election of Trump or Biden. This is the election of Trump or not Trump. In other words, the American people will decide whether they want Trump as the head of state, and if they don't, it doesn't matter who the other president is. We have repeatedly encountered this idea in one form or another. We have previously drawn parallels with the UK parliamentary elections that took place in December last year. Then the conservatives won by a large margin. We were and still believe that the British did not vote for the conservatives or labor. They voted for or against Brexit. Since it was the conservatives who proposed an early end to Brexit, that's why Boris Johnson's party won. It may be the same in America now. Biden can win, not because the Americans support him, but because they don't want new problems with Trump.

Well, for the US currency in terms of prospects, nothing has changed yet. Before the election, that is, at least a week, it is unlikely that the US dollar will become more expensive. It is possible, but only within the side channels that we discussed above. No one knows what will happen after the elections and when they will end at all. Therefore, any further plans and strategies should be made after the election is over and the results are announced.

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The volatility of the euro/dollar currency pair as of October 26 is 74 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1786 and 1.1934. A downward reversal of the Heiken Ashi indicator may signal a new round of 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 resumed its upward movement. Thus, today it is recommended to stay in buy orders with targets of 1.1902 and 1.1934 as long as the Heiken Ashi indicator is directed upwards. It is recommended to consider sell orders if the pair returns to the area below the moving average line with a target of 1.1719.

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

Analytics and trading signals for beginners. How to trade the GBP/USD currency pair on October 26? Analysis of Friday's deals.

The hourly chart of the GBP/USD pair.

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For the GBP/USD currency pair, trading during the last trading day of the week was quite difficult. However, by the end of Friday, the price still worked out an upward trend line, which is not strong and clear. However, a rebound from it can provoke a new upward movement. Moreover, the formal upward trend continues. But if this trend line is overcome, then the trend will change to a downward one and short positions will become relevant. Thus, on Monday, novice traders are advised to be very careful. We have repeatedly said that we are leaning towards the option with a downward movement of the pair since the pound sterling looks much weaker than the US dollar. However, until specific technical signals appear, this is just a hypothesis.

The fundamental background for the British currency remains an extremely important factor. Just today, it became known about some "progress" that seems to have been made in the negotiations on a trade agreement between Brussels and London. It is not known what specific progress or issues are being discussed. Sources are insider, so the information itself is rather unconfirmed. However, on Monday, this information may help the British currency resume its upward movement. Novice traders should know that in recent years, the pound is very fond of reacting to various kinds of rumors related to the positive and imminent outcome of Brexit, as well as the positive result of negotiations between the UK and the European Union regarding a trade deal. Thus, this time, with the opening of the foreign exchange market, traders can again rush to buy the pound, especially since this is justified from a technical point of view. Therefore, you need to be prepared for this scenario on Monday. As for the usual macroeconomic statistics, nothing is planned for Monday either in America or the UK. Throughout the trading week in America, there will be several important reports that can cause a market reaction, however, we also encourage you to remember the US presidential election, which will be held next Tuesday. Voting has already begun and is continuing. We also do not forget that in the next week or two, negotiations on the deal may end, so there may be a large amount of various and important information regarding the pound sterling.

On October 26, the following scenarios are possible:

1) We still recommend buying the pound/dollar pair, since the upward trend is still maintained. However, we do not recommend that novice traders do this with large lots, since the upward trend may well be canceled in the near future. However, an eloquent price rebound from the trend line will allow you to open buy orders with targets at the levels of 1.3100 and 1.3129.

2) Sales, from our point of view, are now much more appropriate, however, you should not rush to open them until the price is fixed below the ascending trend line. in this case, the targets will be the support level of 1.2969 and 1.2860. The dollar is now extremely difficult to get more expensive, however, the fundamental background for the British pound is "no sugar". If the information about the progress in negotiations with the EU is confirmed, then you can count on the growth of the pound.

What's on the chart:

Price support and resistance levels – target levels when opening purchases or sales. You can place Take Profit levels near them.

Red lines – channels or trend lines that display the current trend and indicate which direction is preferable to trade now.

Up/down arrows – show when you reach or overcome any obstacles to trade for a rise or fall.

MACD indicator – a histogram and a signal line, the intersection of which is a signal to enter the market. It is recommended to use it in combination with trend lines (channels, trend lines).

Important speeches and reports (always included in the news calendar) can greatly influence the movement of the currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market to avoid a sharp reversal of the price against the previous movement.

Beginners in the Forex market should remember that every trade cannot be profitable. Developing a clear strategy and money management is the key to success in trading over a long period.

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