Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on October 27

Analysis of transactions in the EUR / USD pair

The market drew a sell signal in the euro yesterday, however, the downward movement only to 15-20 pips. Nevertheless, demand for the currency remains low, mainly due to the continued attack of COVID-19 in Europe, as well as on the decreasing business confidence in Germany.

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Trading recommendations for October 27

Today, a number of reports on lending in the eurozone, as well as on consumer confidence in the United States will be published, and they could put significant pressure on the euro, especially if the indicators came out above the forecasts of economists. To add to that, the deteriorating situation with the coronavirus will also discourage investors from betting on the strengthening of the euro in the short term.

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  • Open a long position when the euro reaches a quote of 1.1836 (green line on the chart), and then take profit at the level of 1.1884. Good lending data in Europe is unlikely to provide support to the euro, so look for good news on Brexit.
  • Open a short position when the euro reaches a quote of 1.1806 (red line on the chart, and then take profit around the level of 1.1762. 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 pound traded in a sideways channel yesterday, so as a result, no profit was obtained both on long and short positions in the market. Only repeated sales from the level of 1.3016 were quite successful, however, it only covered the capital of traders.

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Trading recommendations for October 27

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 1.3140 (thicker green line on the chart).
  • Open a short position when the pound reaches a quote of 1.3011 (red line on the chart), and then take profit at least at the level of 1.2935. Bad news on Brexit will resume the downward trend in the GBP/USD pair.
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Indicator analysis. Daily review on EUR/USD for October 27, 2020

Trend Analysis (Figure 1)

Today, the market may begin moving up from the level of 1.1808 (closing of yesterday's daily candle) with the goal of 1.1853, which is a pullback level of 61.8% (blue dotted line). Upon testing this level, the price will further work up, with the goal of 1.1876 - the resistance line (blue dotted line).

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Figure 1 (Daily chart)

Comprehensive analysis:

  • Indicator analysis - up
  • Fibonacci levels - up
  • Volumes - up
  • Candlestick analysis - up
  • Trend analysis - up
  • Bollinger Bands - up
  • Weekly chart - down

General conclusion:

Today, the price from the level of 1.1808 (closing of yesterday's daily candle) may continue to move up with the goal of 1.1853, which is a pullback level of 61.8% (blue dotted line). Upon testing this level, the price will further work up, with the goal of 1.1876 - the resistance line (blue dotted line).

Unlikely scenario: when working up to reach the pullback level of 61.8%, which is 1.1853 (blue dotted line), work down with the goal of 1.1777, which is a pullback level of 38.2% (red dotted line).

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GBP/USD: plan for the European session on October 27. COT reports. High volatility to continue for the pound

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

In yesterday's afternoon review, I drew attention to the struggle for the 1.3052 level and recommended to act from it. It was not possible to wait for a buy signal, because after the breakout of 1.3052, the bulls failed to protect this level, allowing the pair to return to the area below this range. But testing 1.3052 from the bottom up formed a good entry point into short positions, afterwards the pound retreated by more than 50 points.

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The situation is quite delicate at the moment, since it is not very clear whether the parties will be able to agree in the next few days or not. Any insider information will lead to a sharp movement of the pound in one direction or another. Buyers need to protect support at 1.3021, and forming a false breakout on it will be a signal to open long positions with the goal of returning to the area of yesterday's resistance at 1.3072. However, only a breakout and being able to settle at this level will lead to forming a good additional entry point into long positions, and could also lead the pound to highs of 1.3120 and 1.3174, where I recommend taking profits. In case GBP/USD falls below the 1.3021 level, it is best not to rush to buy, but to wait until the 1.2974 low has been updated, where you can open long positions only if a false breakout appears. I recommend buying GBP/USD immediately on a rebound in a large support at 1.2919, counting on a correction of 20-30 points within the day.

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.

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

Sellers of the pound will focus on the breakout and settle below the intermediate support at 1.3021, as only this can increase the pressure on the pair and push it even lower to the 1.2974 level, where I recommend taking profits. A stronger bearish momentum will only emerge if disagreements persist in the UK-EU trade deal. Going beyond and settling below 1.2974 forms a good entry point for short positions in anticipation of updating the lows of 1.2919 and 1.2865, where I recommend taking profits. If the demand for the pound persists in the morning, then I do not recommend rushing with sell positions. It is best to open short positions from the resistance of 1.3072, subject to forming a false breakout there, or sell GBP/USD immediately after a rebound from the 1.3120 high, counting on a correction of 20-30 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 some market uncertainty.

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 upper border of the indicator in the area of 1.3055 will lead to a new wave of growth of the pound. A breakout of the lower boundary at 1.3005 will increase pressure on the pair.

Description of indicators

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

Trading plan for the EUR/USD pair on October 27. Continued attack of COVID-19 in Europe.

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The situation remains bad in Europe, especially in France, whose daily incidence reached 27 thousand. As a result, the government is forced to impose curfew in order to control the spread of the virus.

Meanwhile, in Switzerland, cases are rising at an alarming rate, already reaching 17 thousand new infections a day. To add to that, the authorities have reported that hospitals were now experiencing difficulties due to the lack of space.

Nonetheless, despite this grave situation, the euro bulls are trying to keep the currency's growth:

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EUR/USD: Set up long positions after a breakout from 1.1865. Place stop loss at 1.1770

Open short positions from 1.1785

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EUR/USD: plan for the European session on October 27. COT reports. Euro under pressure amid rising coronavirus infections

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

In my forecast for the afternoon, I paid attention to the signal for opening short positions in the EUR/USD pair. If you read my review and look at the 5-minute chart, you will see how the bears defended the 1.1826 resistance, which resulted in a good sell entry point. They did the same in the middle of the US session, which caused it to fall by another 20 points.

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The buyers' primary task for the first half of the day is to regain control over the resistance at 1.1826. Settling at this level and testing it from top to bottom forms a good signal to open long positions, counting on the upward trend to continue, which happened last week. The bulls aim to return to the high of 1.1864, where I recommend taking profits, since this level is the upper border of the horizontal channel and it will not be so easy to pass it from the first test. But even if the euro continues to fall, it is too early to panic, since the pair could remain in a horizontal channel with the lower border at 1.1788. However, I recommend opening long positions from this area only if a false breakout is formed. It is possible to buy EUR/USD immediately on a rebound but only from a low of 1.1762, counting on a correction of 15-20 points within the day.

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.

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

The sellers are doing their job so far and are not letting the pair go above the 1.1826 level, which acts as a resistance. We can expect the euro to succeedingly fall as long as trading is carried out below this range. Forming a false breakout at 1.1826 after the release of weak fundamental data on lending in the eurozone will be another signal to open short positions, as, apparently, the bullish momentum will gradually end against the background of an increase in the number of Covid-19 infections in the world. The EUR/USD bears will aim to return to support at 1.1788, settling below it will only increase the pressure on the pair, which will lead to updating the next low at 1.1761, where I recommend taking profits. If the EUR/USD grows above 1.1826 and there is no activity among sellers at this level, it is best not to rush to open short positions, but wait until the upper border of the 1.1864 horizontal channel is updated and sell the euro there for a rebound, counting on a 15-20 point correction.

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Indicator signals:

Moving averages

Trading is carried out in the area of 30 and 50 moving averages, which shows that the pair is still in a horizontal channel.

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 upper border of the indicator around 1.1826 will lead to a new wave of euro growth. A breakout of the lower border of the indicator in the 1.1800 area will increase the pressure on the pair.

Description of indicators

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

Growing demand for defensive assets. Overview of USD, NZD, and AUD

The new trading week began with the European and US stock markets being under pressure amid rising concerns about the second wave of COVID-19 and the risk of new restrictive measures, as several European countries and the US hit a record daily with its new coronavirus cases recently.

Meanwhile, hopes on a new economic stimulus package in the US even before the elections are fading rapidly, as both the White House and Democrats accuse each other of failing to compromise. In view of this, US stock indices lost more than 2% during the session, while oil prices were under pressure, since the lack of new incentives automatically threatens the recovery pace of the global economy, which is already unable to find positive results.

The growth of the fear index provokes demand for defensive assets.

NZD/USD

The prices of New Zealand dollar rose by 0.7% in September, while annual inflation rose to 1.4%. However, the price growth is not entirely positive, which was previously thought, since the current situation is much more complicated.

On another note, the level of quarantine measures reached stages 3 and 4 last April, which resulted in the closing of restaurants and cafes. Therefore, many farmers cut back on their crops during this time, because they were not sure about a demand recovery, which led to a supply shortage in September. AAccordingly, inflation rise is not a consequence of the recovery in demand.

Gasoline prices can also be noted as one of the examples. Its prices declined by 12% in the Q2, but grew by 1.7% in Q3, which does not compensate for the huge decline in April-June and indirectly indicates a decline in consumption; hence, the industry is recovering at a slower pace.

At the same time, there are also clearly positive signals. New Zealand's trade balance is rising and looks much better than before the pandemic. As a result, the current account deficit narrowed to 1.9% of GDP, which is the maximum in 10 years.

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This leads to one important conclusion for the prospects for the NZD in the coming weeks. The RBNZ ensured to lower its key rate at a meeting in April 2021, relying on forecasts for economic recovery. It seems that the government does not need additional funding, which is not urgently necessary. Thus, this may lead to a reassessment of the RBNZ's future measures. Accordingly, NZD is starting to look more advantageous against most G10 currencies.

At the same time, the net long position for the reporting week slightly changed, amounting to 434 million. We have a positive trend and the dollar dominates in the debt market. In any case, the demand for government bonds has the opposite dynamics, but the relative changes in the inflow of funds to the New Zealand stock market show growing confidence in the approaching recovery of the country's economy, while the US stock markets directly react only to rumors about the likely expansion of QE. Thus, the estimated fair price made an upturn.

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There is a chance for the NZD to get out of the range up. If this happens, we can expect a trend change to the zone of 0.6750/6800, followed by an attempt to update the high. However, this option will be cancelled if investors will dismiss the scenario of Mr. J. Biden's victory on the election.

AUD/USD

The Australian dollar is trading near the upper limit of the downward corrective channel, which is around 0.7140/50. There is no internal justification on attempts to rise, as they are only a response to forecasts of Biden's upcoming victory in the US elections. Therefore, we can expect the dollar to weaken sharply after this.

The net long position rose by 200 million over the week and reached 476 million. Although there is an advantage, it is insignificant. The estimated price is still directed down, so growth attempts are naturally corrective.

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The most likely scenario for the AUD is the formation of a local high in the level of 0.750. There is a decline to the wide support zone of 0.7000/50, after which a downward impulse will develop with the goal of 0.6750/6800.

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

Brief trading recommendations for GBP/USD on 10/27/20

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The GBP/USD pair managed to approach the psychological level of 1.3000 yesterday, where there was a regular stop and, as a result, the price rebounded in the opposite direction.

The psychological level is a price level that ends at zero or several zeros. For example, if we are talking about the pound/dollar currency pair, then round levels are considered to be: 1.3100; 1.3000; 1.0000.

Traders pay more attention to the level with more zeros at the end of the quote. This, in turn, leads to a natural basis in the form of a stop, pullback, or correction.

In our case, the psychological level of 1.3000 acted as a support, stopping the pound to decline.

Regarding the quote's current location, you can see that although sellers have lowered the volume of sell positions, they are still available on the market; otherwise, the quote was not near the level of 1.3000.

We can assume that the risk of next rebounds from the level of 1.3000 will remain in the market, which will cause the volume of short positions to decline, as long as the quote does not consolidate below 1.2990 in the H4 time frame.

A price consolidation below 1.2990 level activates sellers to take action, which will lead to an increase in the volume of positions and movement along a downward course.

Trading forecasts can be made based on the above information:

  • Buy deals can be considered if the price is kept above the level of 1.3000, with the prospect of moving to 1.3065.
  • Sell deals are considered below the level of 1.2990, with the prospect of moving to 1.2920-1.2870.

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

Analytics and trading signals for beginners. How to trade EUR/USD on October 27? Plan for opening and closing trades on Tuesday

Hourly chart of the EUR/USD pair

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The EUR/USD pair tried to start an upward correction several times after the rising trend line was broken last Monday night. Recall that yesterday evening we warned traders that it is risky to open short positions right away and it is better to wait for the upward correction and discharge of the MACD indicator. The downward movement did not continue last night, and the correction did not start. Thus, the situation is becoming more and more ambiguous day by day. On the one hand, the price crossed the upward trend line twice, so the pair should start forming a downward trend inside the horizontal channel of $1.17-1.19. On the other hand, the pair can neither correct nor continue falling. The MACD indicator managed to slightly discharge to the zero mark, so when new sell signals are formed, they can still be worked out. But take note that the pair is unlikely to fall below the 1.1696 level. And, of course, the fundamental background...

The fundamental background for the EUR/USD pair remains the same and does not change. What does this mean? This means that the background that brought the pair to the current levels from $1.07-1.08 is still present. That is why the US dollar cannot even correct normally and will settle below 1.1700. Traders are simply afraid to make strong purchases of the US currency, since there is no reason for this. However, it is difficult for the euro to grow further, as it has risen in price by more than 10 cents over the past six months. Thus, a stalemate has developed, from which the quotes have not been able to get out for three months. Well, market participants should only continue to trade within the horizontal channel and in parallel wait for the flat to end (in the long term). Perhaps this problem will be resolved as early as next Tuesday, when Election Day is held in America. Perhaps a little later, when the votes are counted. Perhaps even later, when the election results become known. One way or another, some kind of factor is necessary for force traders to withdraw the pair from the annoying 1.17-1.19 channel. The US is set to release one macroeconomic report today, which theoretically could have an impact on the pair's movement. Durable goods orders are considered a fairly important report. However, last month the real values of four of its indicators turned out to be extremely boring and neutral, fixing minimal changes. The same can be true today. Forecasts for four indicators (general indicator, indicator excluding defense and aviation orders, indicator excluding defense and indicator excluding transport) expect growth by 0.7%. Therefore, if these forecasts are greatly exceeded, the US dollar will have the opportunity to go back to rising (= fall of the euro/dollar pair). And vice versa.

Possible scenarios for October 27:

1) Buy positions on the EUR/USD pair are no longer relevant at the moment, since the upward trend line did not resist the onslaught of bears. Therefore, in the near future the pair should continue to move down, and you can only consider long deals after a new upward trend or an eloquent cancellation of the downward trend has occurred.

2) Trading for a fall at this time has become relevant, since the price has not stayed above the trend line. Novice traders are advised to wait until the correction has been completed, afterwards you can open short positions while aiming for 1.1788 and 1.1767 on the MACD sell signal. If this signal is quickly canceled and the downward movement does not continue, you are advised to leave the market until the next recommendations.

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 27, 2020

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We continue to look for short-term key-support at 136.26 to be able to protect the downside for a new impulsive rally higher towards 137.67 and ultimately higher to and above the former peak at 142.72. That said, we have to be aware, that an unexpected break below 136.26 will delay the expected upside pressure and call for a new dip closer to 135.33 and possibly even closer to 135.03 before the next wave higher can begin.

R3: 137.32

R2: 137.04

R1: 136.74

Pivot: 136.80

S1: 136.26

S2: 136.04

S3: 135.58

Trading recommendation:

We are long GBP from 135.55 with our stop + revers placed at 136.20

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

Trading plan for US Dollar Index for October 27, 2020

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Technical outlook:

US Dollar Index might have carved a meaningful bottom around 92.40/50 levels last week. The index is seen to be trading around 92.90 levels at this point in writing and is expected to rally towards 96.00 levels in the next several weeks. Bottom line is that prices should stay above 91.75 levels going forward. Immediate support is seen at 91.75, while resistance stands intact around 94.75 levels respectively. A push above 93.80 would be encouraging to bulls and confirm that they are back in control. Also note that prices have managed to bounce back from around fibonacci 0.618 retracement of the previous rally between 91.75 and 94.75 levels respectively. Only a break below 91.75 will change the near term bullish outlook for the US Dollar Index.

Trade plan:

Remain long, stop @ 91.75, target @ 96.00

Good luck!

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

Elliott wave analysis of EUR/JPY for October 27, 2020

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We continue to track the triangle consolidation in wave Y/ of 2/. Within the triangle we have seen wave A/, B/ and C and is currently tracing out wave D/ towards the 124.65 - 124.75 area from where the final E/ is expected to take over for a dip close to 123.75. This should complete the complex wave 2/ correction from 127.08 and set the stage for a new impulsive rally in wave 3/ towards at least 129.82.

Ideally support at 123.66 will be able to protect the donwisde for a break above minor resistance at 124.15 indicating the next rally higher to the 124.64 - 124.75 area to complete wave D/.

R3: 124.65

R2: 124.38

R1: 124.14

Pivot: 124.00

S1: 123.85

S2: 123.66

S3: 123.60

Trading recommendation:

We are long EUR from 123.55 with our stop placed at 123.35. We will take 50% at 124.55.

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

AUD/USD. "Beware of inflation," tomorrow's release may trigger price turbulence

The Australian dollar paired with the US currency has been trading in a fairly narrow price range since last Thursday. The Aussie is not leaving the 50-point corridor, which is limited to 0.7100-0.7150. Bears avoid entering the 70th figure (and even more so to test the key support level of 0.7000), while buyers fail to develop a northern offensive, due to numerous fundamental factors of a negative nature. At the same time, the pair is dominated by bearish sentiment—at least because of the "dovish" intentions of the Reserve Bank of Australia, which is likely to lower the interest rate at the November meeting. But the very fact of monetary policy easing, AUD/USD traders have already won back, falling by 250 points – from 0.7245 to the base of the 70th figure. After the correction, the pair floated within the above-mentioned price range, waiting for the next information driver.

This driver may be tomorrow's release on the growth of Australian inflation. Recall that, earlier this month, the head of the RBA stated that the interest rate could be reduced by 15 basis points. However, according to the RBA meeting minutes that was published last week, members of the regulator allow the option of reducing the interest rate by 25 points, that is, to zero, while increasing the volume of bonds being bought.

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To put it simply, the very fact of a rate cut has already been factored into prices, but the open question is exactly how much the RBA will cut it. In this context, tomorrow's inflation data may cause increased volatility, especially if they are in the "red zone." In the run-up to the release, it is also worth recalling another important point made at the October meeting. The members of the regulator have now decided to pay more attention to actual, rather than projected, inflation when making decisions. At the last meeting, the Australian Central Bank operated with very outdated data for the second quarter, which updated the multi-month anti-records. Thus, the consumer price index in quarterly terms for the first time since the spring of 2016 collapsed into a negative area, not to the forecast -2%, but to -1.9%. In annual terms, the indicator was also below zero: the indicator came out at -0.3%.

Since inflation in Australia remains a "weak link," the above thesis, voiced at the October meeting, is of particular importance for AUD/USD traders. And if tomorrow's release also turns out to be worse than expected, the bears of the pair will get a reason for a southern breakout.

Despite this, most experts are optimistic. According to preliminary forecasts, the overall consumer price index in the third quarter should come out of the negative area—both on an annual and quarterly basis. It is expected that the indicator will grow to 0.7% in annual terms, and to 1.5% in quarterly terms. According to the RBA (using the truncated average method), the core inflation index should also show positive dynamics, reflecting the recovery processes.

If the above figures come out in the "red zone," the market is likely to resume talks that the Australian regulator may resort to a more extensive easing of monetary policy parameters.

The current correction of the AUD/USD pair is becasue of two factors. First, no new cases of coronavirus have been detected in the Australian 5-million-strong metropolis of Melbourne. Because of this fact, curfews are being lifted and quarantine restrictions are almost completely relaxed. Starting today, all shops, restaurants, cafes, and bars in the country's second most populous city will be able to work again.

Furthermore, the Australian dollar was supported today by Reserve Bank of Australia representative Guy Debelle, who spoke in the country's Parliament during the Asian session on Tuesday. He was surprisingly optimistic about the prospects for the Australian economy to recover in the third quarter. Debelle said that reducing the unemployment rate below the 6 percent mark is a "reasonable goal" that is quite achievable in the foreseeable future. In spite of the fact that his phrases were general, he was able to provide little support for the Australian dollar. The representative did not talk about the RBA's plans to ease monetary policy. According to him, this issue will be discussed at the November meeting, ergo making any announcements in this context is incorrect.

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Thus, the Australian dollar is showing a correction quite justifiably. However, in such cases. it is not advisable to enter purchases of AUD/USD. In my opinion, trading decisions should be made based on the results of tomorrow's release, as inflationary indicators will provoke quite strong volatility. Moreover, it is difficult to predict the price movement vector at the moment, considering the rather optimistic forecasts. Inflated market expectations are a "time bomb." If the real numbers do not meet expectations, the pair will be within the 70th figure again.

Technically, there is also no certainty in regard to this matter. On the daily chart, the AUD/USD pair is located on the middle line of the Bollinger Bands indicator, between the Tenkan-sen and Kijun-sen lines, and under the Kumo cloud. The nearest support level is 0.7050, which is the lower BB line on the same timeframe. The key support level is still 0.7000.

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

Trading plan for GBPUSD for October 27, 2020

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Technical outlook:

GBPUSD might push higher to test 1.3175/1.3200 handle, before reversing lower again. The Cable currency pair is seen to be trading around 1.3035 at this point in writing and is expected to push higher. Also note that the back side of broken trend line support is also seen around 1.3200 levels. We can expect a bearish reversal from those levels. Immediate resistance is seen towards 1.3488 while intermediary support is intact around 1.2675 levels respectively. GBPUSD might be preparing to retrace the entire previous rally between 1.1414 and 1.3488 levels, ad drop towards 1.2200 respectively. Also note that 1.2200 is close to fibonacci 0.618 retracement of the above rally, and hence high probability remains for a bullish reversal, if prices manage to drop there.

Trading plan:

Remain short, stop @ 1.3500, target is open.

Good luck!

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

Trading plan for EURUSD for October 27, 2020

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Technical outlook:

EURUSD has been drifting sideways since hitting 1.1880 highs last week. The single currency pair is seen to be trading around 1.1824 levels at this point in writing and is expected to break lower towards 1.1400 and 1.1150 levels respectively. Immediate resistance stays at 1.2010, while support is seen around 1.1610 levels respectively. After having produced a multi-month rally between 1.0636 and 1.2010, EURUSD might be preparing to correct lower. Also note that fibonacci 0.618 support is seen towards 1.1100 levels, which remains high probable bullish reversal zone. Furthermore, the support trend line since 1.0636 lows in March 2020 would be passing through the same levels and provide enough support. Bears remain poised to push lower until 1.2010 is intact.

Trading plan:

Remain short, stop @ 1.2010, target is 1.1300 and beyond.

Good luck!

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

Forecast for EUR/USD on October 27, 2020

EUR/USD

The euro fell yesterday. Consolidation begins before the day of the US presidential election, the range of which can still expand using data on US GDP and the ECB meeting on Thursday. Today there are data on orders for durable goods in the US for September, the forecast is 0.5% as in August, but we believe that the data will come out worse, as the September business plans already lacked budgetary stimulus. In particular, this was reflected in the weak growth of Manufacturing PMI in September and October (53.2 and 53.3, respectively).

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The price is above the balance indicator line on the daily EUR/USD chart, while the Marlin oscillator is turning in the direction of growth. The price is likely to rise to the highs of the last three days (1.1863). Getting the price to go beyond this level will allow it to reach the first target of 1.1917 or slightly higher, having touched the MACD line. Furthermore, the price is facing the symbolic target of 1.1955 (the upper border of the price channel), overcoming it can change the course of the current history for a long time.

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The price has settled below the MACD line on the four-hour chart, but the price is still supported by the balance line (red indicator), which may cause it to return to the area above the MACD line with consolidation above the 1.1824 level, again within the framework of forming a consolidation.

A fall in the price to 1.1754 and even going under it with the intention of reaching 1.1650 is not excluded, but this is an emergency scenario in the current short-term situation.

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

Forecast for AUD/USD on October 27, 2020

AUD/USD

The aussie lost 14 points yesterday, staying within Friday's boundaries and target support at 0.7120. As we suspected yesterday, the aussie was thwarted by commodity markets; oil -1.50%, iron ore -0.6%, copper -1.42%. But the price goes up.

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The Marlin oscillator is trying to enter the growth zone for the second day, the balance indicator line sets the price to maneuver to 0.7190.

Growth is constrained by the MACD line on the four-hour chart. Getting the price to settle above it will bring the aussie to the target level of 0.7190. Also, the price can continue rising when it leaves the area above yesterday's high.

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This plan can be crossed out when the price falls below Friday's low of 0.7102, then the target will be 0.7058.

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

Forecast for USD/JPY on October 27, 2020

USD/JPY

Yesterday's attempt to cross over the price channel line failed, the yen only pierced it, and it closed the day under the trend line. Today, the yen also opened the day under the price channel line. The signal line of the Marlin oscillator began to reverse downward. The intention to move down to the figure becomes more definite.

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The price is falling below the descending balance and MACD lines on the four-hour chart, the Marlin oscillator has invaded the bear territory this morning. If the price moves below the signal level of 104.56, it will signal a further decline to the previously determined target of 103.75.

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

Prospects for GBPUSD. The accumulation phase continues.

Last week, another flat pattern was formed, which continued the medium-term phase. The implementation of the priority ascending pattern has been completed and the weekly CZ 1.3202 - 1.3154 has been tested. This allows us to view the decline as an opportunity to find favorable purchase prices. Today the pair continues to trade within the upward movement that took place on October 21. While the instrument is trading within the specified range, the probability of a retest of last week's high is 75%. This should be used when determining the priority direction of trade.

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The most favorable purchase prices are within the WCZ 1/2 1.2936-1.2912. A decline to this zone will allow entering purchases with a favorable risk-reward ratio. The first target of growth remains the high of the last week, which is also the monthly extreme.

Working in a flat implies partial fixing of profits when the boundaries of the weekly movement are reached. Part of the position can be transferred to breakeven and left in case the upward movement continues. To break the bullish movement, today's trading will need to close below the WCZ 1/2.

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

EURUSD. Calm before growth

The upward movement of the previous week sets the direction for trading for the current week. The probability of a retest of the October maximum is at 75%. This allows you to use a decline for finding the best prices on the purchase. The main support is the Weekly Control Zone of 1/2 1.1765-1.1754. Testing this zone will allow you to enter a long position with a favorable risk-to-profit ratio. Updating the monthly maximum is only the first goal on the way to strengthening the Euro. The next target level will be the WCZ 1/2 1.1959-1.1948, which is located near the weekly average move.

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Growth may continue from the current levels. To enter the opposition, you will need to form the absorption pattern on a timeframe not lower than M30.

The option of testing the support zone of the WCZ 1/2 will be more likely, as this will lead to the end of the correction phase that began in the second half of last week. Sales of the instrument are not profitable yet due to the formation of an upward cycle. To break the bullish momentum, you will need to close today's trading below the WCZ 1/2 in today's US session.

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If this model is implemented, you will have to give up attempts to buy the instrument. Sales will come to the forefront through the end of October.

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

Hot forecast and trading signals for GBP/USD on October 27. COT report. Sellers will try to form a new downward trend

GBP/USD 1H

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The GBP/USD pair also continued to correct on Monday, October 26. The pair reached the support area of 1.3004-1.3024 several times during the day, as well as the Kijun-sen line. Thus, the bears continued to put pressure on the pair, but they still have the Senkou Span B line on their way. In general, the Senkou Span B line is still the last obstacle for the bears on the way to forming a new downward trend under these conditions. Trading on Monday was rather sluggish, however, this is not surprising, given the lack of important news. Moreover, if sellers manage to overcome the Senkou Span B line, we will consider that this is absolutely logical, since the overall fundamental background for the pound remains extremely weak. A descending channel also appeared today, above which it will be possible to conclude that the bulls are taking over the initiative.

GBP/USD 15M

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Both linear regression channels are directed downward on the 15-minute timeframe, which indicates a continuing downward correction on the hourly chart and there are no signs of its completion.

COT report

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The new Commitments of Traders (COT) report for the pound showed that non-commercial traders were quite active during October 13 to 19. However, at the same time, the last few reports have completely made the situation complicated. The "non-commercial" group of traders opened 4,485 Buy-contracts (longs) and closed 4,072 Sell-contracts (shorts). Thus, the net position of professional traders immediately grew by 8,500 contracts, which is quite a lot for the pound. However, the problem is that non-commercial traders have been building up their net position (strengthening the bullish sentiment) over the past few weeks, and before that they have reduced their net position for several weeks (strengthening the bearish sentiment). Thus, over the past months, professional players have not even been able to decide in which direction to trade. The fundamental background continues to be very difficult and ambiguous for the pound/dollar pair, which is why the trades are so confusing. The pound sterling lost approximately 110 points during the reporting period. And the net positions of commercial and non-commercial traders are now practically zero. In other words, both the most important and largest groups of traders have approximately the same number of Buy and Sell contracts open. Naturally, such data from the COT report does not allow any conclusions, either short-term or long-term.

No major publications in the UK on Monday. Moreover, traders did not receive any important information regarding the progress of Brexit negotiations. There was no confirmation that any progress was made in these very talks. There was only news about the coronavirus that continues to overwhelm the UK. Accordingly, traders continued a moderate sell-off of the pound, based on the technical overbought currency and the absence (so far) of the prospects for signing a free trade deal. We might receive positive news about the London-Brussels talks this week, and the pound could grow in this case. But there are none as of the moment. The UK will publish a secondary report on retail sales on Tuesday, which market participants have always ignored. They might also brush off the US report on durable goods orders. Accordingly, we do not expect strong movements in the pound/dollar pair on Tuesday.

We have two trading ideas for October 27:

1) Buyers for the pound/dollar pair failed to stay above the Kijun-sen line. Thus, long positions have ceased to be relevant, as the entire upward trend is called into question. You are advised to re-consider the option of longs in case the price settles above the critical line (1.3043) and a descending channel appears with the target on the resistance area of 1.3160 -1.3184. Take Profit in this case will be up to 110 points.

2) Sellers have made several steps towards the new downward trend, but now they need to confidently overcome the Senkou Span B line (1.2971). You can consider options for opening sell orders, but only below this line while aiming for 1.2897 and the support area of 1.2857-1.2872. Take Profit in this case can range from 50 to 80 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

Hot forecast and trading signals for EUR/USD on October 27. COT report. Sellers need to take the 1.1784 level

EUR/USD 1H

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The EUR/USD pair began to correct again on the hourly timeframe on Monday, October 26, but now everything looks as if a new stage of horizontal movement is starting. First, it is now impossible to build a more or less convincing trendline or trend channel. It is impossible to thoroughly determine the current trend (it is also not visible to the naked eye). Secondly, we continue to remind traders that the pair remains within the 1.17-1.19 horizontal channel (or its alternative 1.1640-1.1920), thus, in the long term, the flat remains. Thirdly, the fundamental background now is such that it is impossible to draw a conclusion about the advisability of buying or selling. Even the Kijun-sen and Senkou Span B lines, which are strong lines, now do not make much sense, since it is also impossible to trade against them.

EUR/USD 15M

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The lower linear regression channel turned to the downside on the 15-minute timeframe, indicating a new round of corrective movement on the hourly chart. However, sellers need to break the 1.1784 level to have a chance of falling further.

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.

No macroeconomic reports from the European Union or America on Monday. Therefore, it is easy to explain why trading was very calm during the day, and it is also logical. Several minor reports from Germany had no effect on the mood of traders. In general, the fundamental background has not changed at all lately, and so the fact that the euro/dollar pair has been standing in one place for three months is also quite logical. Market participants continue to wait for the US elections and their results. Coronavirus in the eurozone causes great concern, but one should not forget that the epidemic is also present in the United States, no weaker than in Europe. The EU is set to publish a report on orders for durable goods on Tuesday. In normal times, this is a fairly important report, since the category of durable goods is distinguished by its high cost. However, the latest report showed minimal changes in indicators, and forecasts for the upcoming data are equally neutral. Therefore, we believe that this report will not have any impact on the pair, unless the numbers turn out to be over-optimistic or overly disappointing.

We have two trading ideas for October 27:

1) The pair still maintains an upward trend. Thus, traders are advised to continue to trade upward while aiming for the resistance area of 1.1887-1.1912 and the 1.1926 level as long as the price is above the strongest line of Senkou Span B (1.1784). Take Profit in this case can be up to 100 points. However, the 1.1887-1.1912 and 1.1900-1.1920 areas are extremely strong and the bulls are unlikely to be able to overcome them.

2) Bears remain in the shadows. Thus, sellers need to wait for the price to break through the Senkou Span B line (1.1784) in order to have reasons to open sell positions while aiming for the 1.1748 level and the support area of 1.1692-1.1699. The potential Take Profit in this case is from 30 to 70 points.

Explanations for illustrations:

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

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

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

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

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

Overview of the GBP/USD pair. October 27. The second "wave" of COVID-2019 in the UK is already four times stronger than the

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - sideways.

CCI: -26.8672

The British pound sterling paired with the US currency on Monday also traded quite calmly and fell to the moving average line in the first half of the day. There was no "supersonic" reaction to Sunday's information that the next round of talks in London was extended since the parties allegedly came to a certain compromise. The pound has not grown and continues to balance between North and South, between growth and decline. Thus, most likely, for once, traders did not work out unverified information that gave another hope for the successful completion of Brexit and the "divorce" between the EU and the Kingdom. From our point of view, technical factors are in the first place in the pound/dollar pair. We have already talked about the Fibonacci level of 61.8% (1.3170), which was worked out just perfectly. After that, a new round of downward movement began, which may develop into a new downward trend. This is supported by a huge number of factors, ranging from the most negative fundamental background from the UK to technical factors that suggest that after a six-month growth of the British currency, it is time for the dollar to move to growth. However, it is a difficult political situation and the upcoming elections across the ocean that are keeping sellers from active actions. However, we still believe that the downward trend will resume in the near future.

Thus, the next round of negotiations continues, and so far there is no official information. If this information is received, then the pound may perk up for a while and try to continue forming an upward trend. However, we still believe that the downward trend will resume in any case. If not now, then in a week. The fact is that even if the negotiations are successful, it will not save the British economy from another contraction. A "deal" can only smooth out the negative impact of Brexit on the economy, but not completely neutralize it.

And while the markets are waiting for information from the negotiations, they can only pay attention to the growing numbers of the epidemic in the Foggy Albion. Even in the first "wave", Great Britain was one of the first places in Europe in terms of the number of infected people and deaths. There it remains during the second "wave". In recent days, at least 20,000 cases a day have been reported in Britain. And, most likely, this figure will continue to grow, as the coldest time of the year is still ahead. Several coronavirus vaccines are still being tested in the UK, but even if the clinical trials are completed successfully, mass production of the vaccine should not be expected until next spring, and mass vaccination of the population should not be expected until the summer of 2021.

Meanwhile, almost 60 million people have already voted in the US. It is reported that this is more than half of those who registered for early voting. At the moment, 43% of the total number of citizens who voted in 2016 have already voted in America, which once again confirms the judgment about the highest degree of importance of the 2020 elections, if not in the history of the United States, then in recent decades for sure. In principle, the same opinion is held by Donald Trump himself, who has already voted "for a guy named Donald". At the same time, the US President continues to ride with campaign speeches in the most "controversial" states, where he shines with radiant smiles and exudes tons of optimism and confidence in his victory. Experts believe that this is almost the last chance of Donald's re-election. The fact is that Trump has already lost all the stronger trumps. There is a strong economy, low unemployment, and a strong labor market. Now Trump is more remembered for the 200 thousand victims of the "coronavirus", the strongest fall in the economy, the highest unemployment, and the trade war with China, in which it is the United States that is losing so far. All recent polls continue to point to Biden's 11% lead. Thus, experts now call Trump's only chance almost "mysticism", similar to 2016, when opinion polls also indicated that Trump lost the election.

However, the pound is now more interested in the factors of Brexit and the presence/absence of a trade agreement with the European Union. Since there was no news on Monday, we continue to recommend that traders pay attention to this technique. The main problem is that on the 4-hour chart, the technical picture now also looks not quite clear. Over the past few weeks, the price has repeatedly fixed below the moving average line and each time very quickly returned to the area above the moving average. Thus, these signals were simply false. Therefore, something similar may happen again at this time, so we recommend taking into account more global signals, such as a rebound from the Fibonacci level of 61.8% (1.3170) as part of the correction against the fall in quotes from September 1. This level can be considered as a "critical" level, above which the price is unlikely to leave. And if it does go above it, then you should review the entire trading strategy for the near future. The fundamental background can also influence the mood of traders at any time and it is impossible to predict in advance.

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The average volatility of the GBP/USD pair is currently 115 points per day. For the pound/dollar pair, this value is "high". On Tuesday, October 27, therefore, we expect movement inside the channel, limited by the levels of 1.2908 and 1.3138. A reversal of the Heiken Ashi indicator-up signals a possible resumption of the upward movement. Please note that the last 4 out of 5 trading days ended with volatility lower than 104 points. So, the average volatility may be below 115 points per day.

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 has started a new 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 1.3138 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 1.2908 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 27. Americans have formed a collective immunity against Trump's remarks. The European

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: -31.6527

During the first trading day of the new week, the EUR/USD pair started correcting again and has been trading in different directions for the last few days. We have already repeatedly talked about the key technical factors (from our point of view). Naturally, the side channel $ 1.17-1.19 (alternative 1.1640-1.1920) continues to be in the first place. The pair's quotes have spent the lion's share of the last three months inside this channel, so if you approach one of its borders, you can immediately expect a reversal in the opposite direction. Secondly, in the area of $1.19-1.20, it is very difficult for buyers to find motivation and grounds for new purchases of the European currency. After all, there is a two-year high of the pair near the 1.2000 level, which was reached recently and after which the price could not form a normal correction. Thus, further growth is highly unlikely. Third, sellers are extremely wary of investing in the dollar, as it is completely unclear who will become the new President of the United States and what changes will follow in the country and its economy. Thus, the pair is not sold, simply fearing for the prospects of the American economy. And altogether, this gives us a "flat" when there is no reason for either serious purchases or serious sales. Therefore, the euro/dollar pair has been trading for three months in a range of plus or minus 250 points.

Nothing changed for the EUR/USD pair on Monday. First of all, there was no important news that day. Second, there were no macroeconomic statistics. Thus, even if traders wanted to react to an event, they would not be able to do so. Third, markets continue to ignore almost all macroeconomic statistics in any case. Thus, the volatility during the day was quite moderate, and market participants were forced to focus on the secondary fundamental background. The US presidential election is just over a week away, and Donald Trump, who, according to everyone, could not defeat Biden in the last round of debates, continues to sing his favorite song that "the coronavirus will soon be defeated". The US President started singing this song in the spring, when the epidemic was just gaining momentum in America and when, according to doctors and epidemiologists, it was still possible to turn the situation around and prevent a huge number of victims from COVID-2019 in the United States. However, in recent months, Trump has changed his rhetoric. Instead of the phrase "the virus will disappear on its own", the phrase "a vaccine will be invented soon" is now used. Trump is not interested in the fact that doctors from all over the world continue to say that creating a vaccine usually takes up to 10 years (meaning a safe, fully tested vaccine, and not a hastily put together one). He continues to promise a vaccine "soon", "before the election", "before the end of October", and so on. However, Americans who have not yet received collective immunity from the "coronavirus" have already acquired it against Trump's false statements and promises. If at the beginning of the presidential term, Donald was believed, now any of his words are carefully analyzed by the media and sorted out simply into components. Even if Trump is telling the truth now, his words are still broken down into atoms and they contain inaccuracies, omissions, tricks, and so on. The same media and periodicals regularly update statistics on the number of misleading statements from Trump. Recent studies have shown that Trump lies at least 15 times a day, and the number one person in the world in terms of the number of statements about COVID-2019 that do not correspond to reality is the American President. Thus, a new batch of promises in the form of "a vaccine will be found soon" does not calm the Americans a bit and does not add rating points to Trump himself before the election. In any case, even if the vaccine is invented tomorrow, it will take months to produce it on an industrial scale, so that the entire population of the United States, which has more than 330 million, can get it.

Meanwhile, the European Union is also full of "coronavirus" problems. The second "wave" of the pandemic began quite abruptly and quickly, and now many countries are covered by the epidemic and impose "strict" restrictions to somehow stop the spread of infection. The worst situation is in Italy (in recent days, there are 20 thousand infections daily), in Spain (20-30 thousand daily), in France (30-40 thousand daily), and in the UK (at least 20 thousand daily). Thus, curfews are being actively introduced in European countries and quarantine measures are being tightened as much as possible, which will inevitably lead to a new slowdown in the economy. So far, the consequences of the second "wave" are not yet visible, since it began no more than a month ago (only the indices of business activity in the services sectors of the EU countries fell below 50.0). However, there is no doubt that they will. And the worst thing is that the current levels of morbidity in the EU countries exceed the spring ones by 3-4 times. That is, theoretically, the health systems of European countries can no longer cope with the influx of patients (not only COVID), and then collapses will follow. Or total "lockdowns". In the spring, countries such as Italy, Spain, and the United Kingdom could no longer cope with the number of infected people, and then they had a maximum of 5-6 thousand diseases per day (up to a maximum of 10 thousand). Now the incidence rates are much higher.

As you can see, there are a huge number of factors that can and will affect the US and EU economies in the near future. If, for example, Biden wins the election, then there is no doubt that he will immediately begin to fight the "coronavirus" in his way. And the results of this struggle are unknown to the American economy. In the European Union, in the winter months, the incidence rates may be twice as high as the current ones, and what will happen then again is extremely difficult to predict now. So, theoretically, in a couple of months, we can see the euro/dollar pair anywhere. So far, the markets are responding very calmly to the epidemiological situation in the EU and are just waiting for the elections, showing that they do not intend to trade actively until the results of the vote are announced. But sooner or later, this period of inertia will be completed. And the pair will have to move in one direction. As long as the pair holds above the moving average line, weak upward prospects remain.

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The volatility of the euro/dollar currency pair as of October 27 is 67 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1753 and 1.1887. A reversal of the Heiken Ashi indicator to the top can signal a new round of upward movement if the price remains above the moving average.

Nearest support levels:

S1 – 1.1780

S2 – 1.1719

S3 – 1.1658

Nearest resistance levels:

R1 – 1.1841

R2 – 1.1902

R3 – 1.1963

Trading recommendations:

The EUR/USD pair again corrected to the moving average line. Thus, today it is recommended to open new buy orders with the target level of 1.1887 if the price bounces off the moving average. It is recommended to consider sell orders if the pair is fixed below the moving average line with targets of 1.1753 and 1.1719.

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