Technical Analysis of ETH/USD for October 28, 2020

Crypto Industry Outlook:

The Chinese central bank, the People's Bank of China (PBOC), has released a bill that aims to provide a regulatory framework and legitimacy for the central bank's future digital currency (CBDC), the digital yuan.

The bill stipulates that the yuan is the official currency of the People's Republic of China, in both physical and digital form.

The bill also appears to address third party efforts to target yuan-based digital currencies by stating that individuals and institutions are not allowed to produce and issue a currency that is intended to 'replace' the digital yuan circulation. This move is likely to criminalize all non-state sanctioned yuan-based stablecoins.

Criminal measures against violators of this proposed law are strict: first of all, confiscating all profits, destroying all tokens and imposing a fine of no less than five times the illegal amount, and the possibility of criminal prosecution and imprisonment.

The People's Bank of China explained that the draft of the new law is open for public consultation until November 23, 2020.

Previous reports indicated that China hopes to start officially issuing digital yuan ahead of the Beijing Winter Olympics in February 2022. In addition, earlier this month, China conducted a major digital payment system test in Shenzhen, with nearly 47,500 residents taking away 200 yuan ($ 30). ) in digital currency, which they then spent in 3,389 stores across the city.

Technical Market Outlook:

After the ETH/USD pair had broken below the support at the level of $394.85 and hit the 61% Fibonacci retracement seen at the level of $385.68, the bulls reacted quickly and managed to bounce back above $400. The local high was made at the level of $408.45, just above the key short-term technical resistance seen at the level of $407.03. The trend line resistance is still a problem for bulls, but if it is finally broken, then the next target for bulls is seen at the level of $414.11 and $416.71. The intraday technical support is located at $400.

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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GBP/USD: plan for the European session on October 28. COT reports. Peace of mind for the pound. The pair cannot leave the

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

The pound formed an excellent sell signal yesterday afternoon, and I drew attention to the high probability of its appearance in my review. Let's take a look at the 5-minute chart and break down the trade. You can see how the bulls are approaching resistance at 1.3072 in the afternoon, and it is difficult to go above it. Each attempt to cling to this level leads to a quick return to the area below it. After some time, testing this area from the bottom up and closing below it led to forming a good entry point for short positions. The pound lost more than 40 points by the end of the day.

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Everyone is waiting for decisions on the trade deal and any news related to it. Any insider information will lead to a sharp movement for the pound in one direction or another. Buyers still need to protect support at 1.2997, and forming a false breakout on it will be a signal to open long positions in order to return to yesterday's resistance at 1.3072. However, only a breakout and being able to settle at this level will result in producing 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 1.2997 level, it is best not to rush into long deals, but to wait until the 1.2919 low has been updated, where you can open long positions only if a false breakout is formed. I recommend buying GBP/USD immediately on a rebound, but only in the area of large support at 1.2865, counting on a correction of 20-30 points within the day. You need to understand that in case we receive negative news on Brexit, trading against the newly formed trend even for a rebound from the mentioned levels will not be a completely correct decision.

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 under the support of 1.2997, since this will increase the pressure on the pair and pull it down to the 1.2919 level, where I recommend taking profits. A stronger bearish momentum will only emerge if disagreements persist in the UK-EU trade deal. A break and being able to settle below 1.2919 forms a good entry point for short positions while expecting to update the lows of 1.2919 and 1.2865, where I recommend taking profits. If the pound is still in demand in the morning, then, just like yesterday, 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, similar to yesterday, or sell GBP/USD immediately on 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 1.3072 area will lead to a new wave of growth for the pound. A breakout of the lower border at 1.3010 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

EUR/USD: plan for the European session on October 28. COT reports. Euro under pressure, several objective reasons for this

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

Sell positions for the euro collapsed yesterday, and the bulls tried to regain resistance at 1.1826 and they even managed to form a good entry point from it. Let's take a look at the 5-minute chart. You can see how testing the 1.1826 level from top to bottom, which was supposed to be a confirmation and a signal to open long positions in EUR/USD, turned out to be unsuccessful and the pair quickly returned below the 1.1826 area. After that, the bears formed a fairly convenient entry point into short positions, which led to a new wave of short positions. However, the euro did not continue to fall and buyers still managed to gain a foothold above 1.1826 in the afternoon, but they did not wait for a good growth from this level. US President Donald Trump's statements and the spread of the coronavirus continued to put pressure on the euro, as did weak fundamental reports on the American economy, scaring away investors who are betting on risky assets.

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Today's focus will be on the resistance at 1.1796, which transformed from 1.1787. In order to talk about the resumption of the bull market, buyers need to settle above this range. Testing the 1.1796 area from top to bottom generates a signal to buy EUR/USD in order to return to yesterday's high at 1.1835, where I recommend taking profit. The 1.1864 level will be the next target. Buyers of the euro are unlikely to be as active since important fundamental data will not be released in the first half of the day. If the euro is still under pressure, I recommend waiting for EUR/USD to fall to the support area of 1.1761 and open long positions there if a false breakout is formed. You can buy the pair immediately on a rebound after the next low at 1.1732 has been tested, 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:

Sellers should protect resistance at 1.1796, just above which the moving averages pass. Considering that we have a downward trend, it is better to expect that it would continue today. Therefore, forming a false breakout in the 1.1796 area forms a new entry point for short positions, and the main target will be a breakout and the pair will need to settle below the 1.1761 level. Testing it from the bottom up forms another signal to sell the euro, which will lead to a larger sale in the area of a low of 1.1732. The 1.1704 level will be the next target, where I recommend taking profits. If we don't hear positive news on Brexit today, it will keep the pressure on the euro even more. If the pair rises above 1.1796 and bears are not active there, I recommend postponing short positions and sell the euro immediately on a rebound from yesterday's high of 1.1835, counting on a correction of 15-20 points within the day.

Indicator signals:

Moving averages

Trading is under the 30 and 50 moving averages, indicating a resumption of the bear market.

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

Bollinger Bands

A breakout of the lower border of the indicator around 1.1761 will increase pressure on the euro. Growth will be limited by the upper level of the indicator in the 1.1840 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

Trading plan for the EUR/USD pair on October 28. Persistent rise of COVID-19 incidence in Europe; Low demand for the European

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COVID-19 cases continue to surge in Europe. At the moment, France has already risen third place on the largest incident rate around the world, having recorded 33 thousand new infections a day. Next is Italy and Spain with about 20 thousand, followed by Poland and Czech Republic at 16 thousand. Lastly, Germany and Belgium has a record of 13 thousand

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EUR/USD - Demand for the euro has fallen sharply in the market. As a result, the quote has dropped below the level of 1.1785, emitting a strong bearish signal. However, this could also turn out to be just a false breakout again.

Open short positions from 1.1785 to 1.1830

In case of an upward reversal, open long positions from 1.1840 to 1.1795.

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

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

Technical Analysis of BTC/USD for October 28, 2020

Crypto Industry Outlook:

Mining data aggregators attribute the decline in Bitcoin's hash rate to the end of the rainy season in Sichuan. This time causes many miners in China to migrate to other jurisdictions.

Thomas Heller of Hashr8 reported on Twitter that around 22 EH / s of mining capacity left the Bitcoin network on October 26. Heller noted that the decline coincided with the end of the rainy season in China.

Kevin Zhang of Digital Currency Group, a bitcoin mining company, also estimated a decline of 20 EH / s. He noted that Bitcoin's seven-day average hash rate was 132.9 EH / s. On a daily basis, the ratio was 112.9 EH / s.

Blockchain.com estimates that Bitcoin's hash rate dropped from 151.1 EH / s on October 24 to 116.3 EH / s the next day. At the time of preparing this publication, the decline is even more visible - to 109.3 EH / s yesterday.

Sichuan Province is one of the world's largest mining centers. Miners gather there to take advantage of cheap hydropower during the rainy season, and then leave just as quickly.

The latest data from the Bitcoin Electricity Consumption Index (BECI) of the University of Cambridge estimate that the province represented 18.5% of the global hash rate in April 2020. This was twice the rate before the rainy season.

Technical Market Outlook:

The up trend on Bitcoin continues, so the BTC/USD pair has made a new yearly high at the level of $13,788 and since then is trading in a horizontal trend, consolidating the recent gains. The local lows are shallow, so the bulls are still in control of this market. If the level of $13,698 is clearly violated, then the next target is seen at the level of $14,000. 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. The intraday supports are seen at the levels of $13,296 and $13,116.

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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Growing tensions in favor of defensive assets. Overview of USD, CAD, JPY

Orders for durable goods increased by 1.9% in September, which significantly exceeded forecasts and indicates a still stable capacity utilization.

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There is growth in regional indices of industrial activity (Kansas FRB in October +23p against +18p a month earlier, Dallas Fed +19.8p against +13.6p, Richmond Fed +29p against +21p), so the recovery is likely to continue in October.

The published statistics are in favor of Trump, since it deprives the Democrats to claim that the economic program of the Republicans is collapsing against the background of the COVID-19 crisis. This is why Republicans are pushing for a smaller economic aid package than Democrats, since they see no reason to increase spending beyond what is necessary.

It was proven that there is a narrow gap between Mr. Biden and Mr. Trump in view of the election. Thus, we should expect a rising tension, since the chances of challenging the election results by any losing party will only increase. By the end of the week, demand for defensive assets is likely to increase, while commodity currencies will decline.

USD/CAD

Canadian dollar's net short position declined by 323 million over the reporting week, stopping at -1.032 billion. The advantage is still clearly visible. The reversal of the yield spread in favor of the dollar, which has become more strong in the last two weeks, contributes to the growth of the settlement price.

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Today, the Bank of Canada will hold a regular meeting on monetary policy; however, most observers do not expect any changes, as there is no reason to do so. The indicated bank recently decided to scale back some of its liquidity support programs, suggesting that policy makers are much more comfortable operating in the market, and there was no desire to raise asset repurchases from any BoC officials.

The only significant factor that can be considered amid strong uncertainty is the correlation between the CAD rate and the fluctuations in the US stock market. The growth of stock indices contributed to the decline in USD/CAD pair relative to the estimated fair level. This movement was caused by massive cash injections into the US economy in March-April. At the current stage, we should expect USD/CAD to grow, since the issue of additional incentives is fading, which deprives the stock indices of the driving force.

The nearest target is 1.3260, while the next one is 1.3380/90.

USD/JPY

The net long position declined to 1.68 billion, with a weekly decline of 687 million. This is the highest among all G10 currencies. Despite this, investors are still not selling the yen, which indicates the most obvious explanation for what is happening – COVID-19 crisis is strengthening and the Fed took a break against the background of the inability of Republicans and Democrats to agree on a new stimulus package.

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Analyzing the dynamics of the yield spread, Bank Mizuho insists that the curve has shifted towards US bonds since July, which should lead to a growth in demand for the US dollar. Mizuho suggests that it is necessary to focus on the fact that US monetary institutions will promote reflation after the elections, the Fed will help move inflation towards the previously set targets, and the structural rationale for the yield spread will become clearer after the elections.

These are all arguments in favor of the dollar's growth, which sharply declined in February. The fair level of the dollar is growing, and there is a chance to finally see this growth on the spot after the elections, as the gap between the current and fair prices has become suggestively high.

Technically, the USD/JPY pair will try to find support at 104, which is the local low of September 21 and at the same time, the middle of the downward medium-term channel. Moreover, everything indicates that this level will be broken downwards, after which there will be a rapid decline. However, fundamental grounds suggest that an upturn will still take place after the elections.

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

Bitcoin rose again, overcoming the high from two years ago

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The owners of the main cryptocurrency are pleased as it breaks the 16-month high. The price of Bitcoin approached the indicators of 2018, breaking through the dullness of the previous months.

Based on the observations of analysts, Bitcoin's price has risen by more than 25%, to $ 13,580 since this month began. The next target of the leading digital asset will be the $14,000 mark. It should be recalled that this cryptocurrency reached a multi-month high of $13,850 last year in June. At the moment, crypto market experts believe that not only repetition is possible, but also breaking through this high. Today, Bitcoin is trading in the range of $13,660- $13,700. If one of the levels from this range breaks down, it will be simple for Bitcoin to break the records reached last January 2018..

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The message of the PayPal company management about the launch of its own cryptocurrency service is the main driver of the strong growth of Bitcoin's price since last week. According to the developers' statement, customers will be able to buy, store and sell digital currencies on the site and in PayPal applications with their support. Experts said that the innovation of the payment company is an important step towards the extensive implementation of virtual currencies.

An additional factor in the bitcoin's growth was a series of events that increased its attractiveness to investors. These include the opening by Fidelity Investments of a cryptocurrency fund focused on BTC, as well as Square and MicroStrategy's major investments in the main digital asset.

On the other hand, there are different opinions regarding the correlation of Bitcoin with global stock indices, as well as securing the status of a defensive asset for it. Anthony Pompliano, Co-founder of Morgan Creek Digital, denies linking BTC with leading stock indices. He is confident that Bitcoin's status as a safe haven asset is beyond question. However, Pompliano is in the minority, since many investors do not plan to preserve their capital by investing in the first cryptocurrency, as market participants consider Bitcoin to be an unreliable asset, while being subject to excessive volatility.

At the moment, the prospects for the main digital asset inspire optimism. Most investors pay attention towards the crypto market, but experts advise not to be very optimistic. Currency strategists at JPMorgan investment Bank do not suggest buying Bitcoin right now, despite its growth. Experts believe that this cryptocurrency is overbought and may decline in price in the near future if investors begin to fix profits. As for the long-term period, the situation is much better here. JPMorgan believes that the price of BTC may rise by 100-200% in the long term.

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

Brief trading recommendations for EUR/USD on 10/28/20

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The EUR/USD pair showed an active downward interest yesterday, As a result, the quote broke through the support level of 1.1810, and then declined entirely below the low (1.1787) on October 23.

Looking at the general scale of fluctuations, there are no significant changes, but if we proceed from market ticks, then a correction can be seen.

It should be noted that there was a four-week growth in the market from the local low of 1.1612, where buyers managed to return the euro rate to the level of 1.1880. After that, buyers' eagerness subsided and there was a consistent recovery process from short positions (sell positions). Yesterday, sellers managed to resume the recovery process, breaking through the low (1.1787) on October 23. Thus, the market still has a chance to let the euro decline further.

Regarding the quote's current location, it can be seen that market participants are consolidating below 1.1787, where stagnation formed within the level of 1.1770, followed by a pullback.

We can assume that market participants, particularly sellers, will need some time for the new levels to settle, which will lead to a local slowdown within 1.1760/1.1795. This process will be regarded in the market as an accumulation, which is highly likely to lead to acceleration.

Sellers' greatest activity will occur after the price is consolidated below 1.1760, which will lead to the next recovery stage, that is, towards the level of 1.1700.

An alternative scenario of the market development will be considered if the price returns above the level of 1.1840, which may interrupt the recovery process.

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Elliott wave analysis of GBP/JPY for October 28, 2020

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GBP/JPY broke below short-term key-support at 136.26 indicating that red wave ii is in motion. This call for a dip to at least 135.37 and likely even lower to 135.18 before red wave 2 finally comes to its end and a new impulsive rally can take hold.

The former support now acts as resistance at 136.26 for the dip to 135.37 and maybe even lower.

R3: 136.50

R2: 136.26

R1: 136.12

Pivot: 136.05

S1: 135.88

S2: 135.75

S3: 135.37

Trading recommendation:

Our stop+revers was hit at 136.20 for a nice little 65 pip profit. We have placed our new stop at 136.70 and we will take 50% profit at 135.45.

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

Elliott wave analysis of EUR/JPY for October 28, 2020

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The correction in wave 2/ took us by surprise and broke below short-term key support at 123.38, which invalidated the possible triangle consolidation. It calls for more downside pressure towards 122.38 and maybe even closer to 120.39 before wave 2/ finally comes to an end. This is exactly what makes correction so annoying. They can shift shape from day to day and the options are endless.

Resistance is now seen at 123.19 which should be able to act as a cap for the decline to 122.38.

R3: 123.38

R2: 123.19

R1: 123.00

Pivot: 122.82

S1: 122.52

S2: 122.38

S3: 121.83

Trading recommendation: Our stop at 123.35 was hit for a 20 pips loss. We will sideline for now.

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

Trading plan for US Dollar Index for October 28, 2020

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Technical outlook:

The US dollar index has hit a 93.20 high today before pulling back lower again. The index is seen to be trading around the 93.10 level at this point in writing. It is expected to push higher towards the 93.30 level before finding resistance again. Immediate resistance is seen at 93.90 followed by 94.75, while support is intact around 91.75 respectively. The index may either rally higher from the current levels or after printing one more low around 92.35. Also note that 92.35 is the Fibonacci 0.786 retracement of previous rally between 91.75 and 94.75. The overall structure remains constructive for bulls until prices stay above a 91.75 low. Also note that a break above 93.90 would confirm that a meaningful low is in place and that bulls are back in control.

Trading plan:

Remain long, add more @ 92.35, target @ 96.00

Good luck!

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

Trading plan for GBPUSD for October 28, 2020

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Technical outlook:

GBP/USD has reversed lower after hitting a 1.3175 high last week. GPB/USD is seen to be trading around the 1.3039 level at this point in writing and could rally through the 1.3200 handle. Please note that GBPUSD had hit Fibonacci 0.618 retracement around the 1.3175 level last week before turning lower. Probability remains that a meaningful top is in place. Until price stays above the 1.2870 level, probability also remains for a push towards 1.3200 before reversing lower. The overall structure remains bearish until prices stay below a 1.3500 high as GBPUSD has broken below its March 2020 trend line support. Immediate resistance is seen at 1.3500, while support comes in around 1.2675 respectively. In any case, GBP/USD is poised to turn lower from here or around the 1.3200 handle.

Trading plan:

Remain short, add more @ 1.3200/50, stop W 1.3500

Good luck!

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

AUD/USD forecast for 28/10/2020

The Australian Dollar cannot break away from the level of 0.7120 in any direction. The Marlin oscillator moves horizontally exactly along the neutral zero line. A similar pattern happened recently in mid-September (gray rectangle), after which the price sharply and deeply went down. Obviously, the market is waiting for the results of the American elections and is preparing to follow the major currencies. Our main scenario assumes that the price reaches the lower line of the price channel in the area of 0.6938 on November 4-5. Intermediate targets are 0.7058 and 0.6970.

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On a four-hour scale, the price continues to develop along the horizontal Kruzenshtern line. The Marlin oscillator has reached the border with the territory of a declining trend. Fixing the price above the Kruzenshtern line and turning the Marlin oscillator up may trigger the growth of the Australian Dollar to the target level of 0.7190. At the initial stage, we will take it as a premature market movement.

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

Analytics and trading signals for beginners. How to trade EUR/USD on October 28? Plan for opening and closing trades on Wednesday

Hourly chart of the EUR/USD pair

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The EUR/USD pair began a new round of downward movement last Tuesday night, which we talked about and waited for last night. The MACD indicator generated a sell signal after the article was written and, accordingly, novice traders could open short positions while aiming for the lower border of the new descending channel. In this case, they made profit by around 30 points. And the price has almost reached the lower border of the channel, so an upward reversal is very likely now. Therefore, we recommend closing short positions and waiting for new sell signals to appear. The pair will likely attempt to return to the upper border of the channel or, at least, to correct slightly upward. Take note that the pair continues to trade within the $1.17-1.19 channel all this time (for about three months already). Therefore, we do not expect strong trend movements right now. Basically, what we are doing now is catching short-term trends inside the horizontal channel.

The fundamental background for the EUR/USD pair is still the same. This means that the very background that contributed to the strengthening of the euro currency by 13 cents in the last six months is still present to this day. Thus, traders simply have no reason to buy the US dollar at this time. Especially until the stage of the presidential elections is over. After all, elections are always uncertain. Therefore, the euro/dollar pair can continue to trade in a horizontal channel, at least until November 3, and even until the time when all votes are counted and the new president is announced, who will take office on January 20, 2021. Macroeconomic reports do not have any particular influence. Yesterday's relatively important report on durable goods orders was completely ignored. And as of today, not a single macroeconomic report or event is included in the news calendar. Therefore, novice traders, like all other traders, will continue to be hungry for news rations. In principle, we can not even say that some other topics have an impact on the euro or dollar. For example, the epidemiological situation in the European Union continues to deteriorate, which inevitably threatens to slow down the European economy. However, the markets are not paying attention to this either, since the euro has not depreciated much in recent days or weeks.

Possible scenarios for October 28:

1) Buy positions on the EUR/USD pair are currently irrelevant, since the ascending trend line has been overcome, and the price is currently trading within the descending channel. Therefore, you may consider long deals, but the price should settle above the descending channel first, and even then, you have to be very careful, with targets of 1.1878 and 1.1903.

2) Trading for a fall at this time is more relevant, since the price is inside the descending channel. However, at the moment we are waiting for a new round of correction. Therefore, novice traders are advised to wait for an upward pullback, form a new sell signal from the MACD, and then resume trading downward with targets at 1.1766 and 1.1747.

On the chart:

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

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

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

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

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

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

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AUD/USD. Sales are still trending: Australian inflation won't save the Aussies

Australian inflation did not disappoint: the main indicators came out either at the level of forecasts or exceeded the forecast values. Aussie received a reason for its corrective growth, although this growth is quite modest. The AUD/USD pair is still trading within the 71st figure, without leaving the boundaries of the established price range of 0.7100 - 0.7170. The ceiling of the specified range coincides with the lower boundary of the Kumo cloud on the daily chart and the resistance level. The lower border of the corridor (support level) coincides with the Tenkan-sen line on the same timeframe Aussie alternately pushes off from the boundaries of this range showing a wide-range flat. Given the first reaction of traders for today's release, we can assume that the pair will not leave the flat corridor this time.

The AUD/USD pair grew by only 50 points, reaching the middle of the 71st figure according to today's release result. This relatively calm market reaction is explained by the fact that the published indicators mostly coincided with the forecast values. Thus, the overall consumer price index in quarterly terms went up to 1.6% (the forecast was slightly lower-1.5%). On an annual basis, the indicator came out of the negative area and reached 0.7% (fully coinciding with forecasts). The core inflation index also did not surprise the market with a breakthrough growth – the components as a whole came out at the level of General expectations.

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In other words, the key indicators of today's release did not let traders down – thanks to this factor because the Aussie did not remain afloat, but also showed corrective growth. But this is clearly not enough to break the trend, so investors are not in a hurry to invest in the Australian, given the array of negative fundamental factors. And it's not just about the "dovish" intentions of the RBA, whose members plan to lower the interest rate next week. The commodity market is also causing concern. First of all, we are talking about iron ore. As we all know, this is a strategically important raw material product for Australia, while China is the world's largest consumer of raw materials. It is worth noting that despite the prolonged political conflict between Australia and China, Australians continued to actively export iron ore to the Chinese throughout the year. However, at the moment there were problems of a non-political nature wherein the supply began to exceed the demand.

However, the price of iron ore in China fell significantly against the background of a record increase in stocks in seaports since February according to Reuters. At the beginning of this week, the price of iron ore futures on the Dalian commodity exchange fell by three percent to $ 113 per ton – the lowest figure for the past month. On the Singapore exchange, futures for this commodity also fell by 1.3% to 111 dollars per ton. This trend is due to the fact that stocks of imported iron ore in Chinese ports are growing for the fifth week in a row. As per the experts from ANZ,, this is due to a decrease in the volume of smelting at steel mills against the background of pressure on the margins of enterprises.

It is also worth Recalling that at the beginning of October, steel mills in China received an official verbal notification to stop importing Australian coal, which led to a drop in prices for marine coking coal. According to relevant media, Mongolia has replaced Australia as the leading supplier of coking coal to China. In this case, the motives of the Chinese are political in nature, but this does not change the essence.

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Thus, the fundamental background for the AUD/USD pair has not changed after today's release. The growth in inflation indicators suggests that the regulator will limit the rate cut by 15 basis points, rather than 25. The head of the RBA, Philip Lowe, said in one of his speeches that the regulator could lower the rate to 0.1%. At the same time, according to the minutes of the last meeting of the Central Bank, members of the regulator discussed the option of reducing the rate to zero. I believe that after the release of inflation data, the Central Bank will limit itself to the first option, which was voiced by Lowe.

But the very fact of monetary policy easing, the political conflict with China, the decline in the commodity market and the existing problems in the Australian labor market will continue to put pressure on the Australian dollar. This means that short positions are still a priority – especially when approaching the upper boundary of the flat corridor 0.7100-0.7170 (i.e., the lower boundary of the Kumo cloud on D1). The stop loss can be placed slightly higher at 0.7230 - this is the upper line of the Bollinger Bands indicator on the same timeframe. If buyers can overcome this target (this scenario is possible only with a large-scale weakening of the US dollar throughout the market), the southern scenario will lose its relevance. However, if we exclude the option of such unforeseeable circumstances, then selling AUD/USD will look like the most optimal trading solution.

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Trading plan for EURUSD for October 28, 2020

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Technical outlook:

EURUSD has reversed lower after hitting a 1.1880 high last week and managed to print a 1.1770 low today. It might form potential support around 1.1760/65. EUR/USD is seen to be trading around the 1.1777 level at this point in writing. It might be preparing to print another low at 1.1760 before turning higher. Please note that a bullish turn from the 1.1760 level could possibly push higher towards the resistance level at 1.1900. Also note that Fibonacci 0.786 retracement of the entire drop between 1.2010 and 1.1610 is seen to be passing through 1.1920/25. High probability remains for a bearish reversal from there if EURUSD manages to reach there. On the flip side, a drop towards the 1.1700 level will confirm that the pair may rise to 1.1880 and that trend has reversed lower towards 1.1400 and further.

Trading plan:

Remain short, add more @ 1.1900, target @ 1.1150

Good luck!

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Forecast for EUR/USD on October 28, 2020

EUR/USD

The dollar has been strengthening since the beginning of the week. Investors are starting to invest in Biden's victory in the US presidential election, as well as in obtaining a democratic majority in both houses of Congress. To strengthen the euro's downward movement, the price needs to settle below the target level of 1.1754. When this task is completed, the signal line of the Marlin oscillator will move into the negative zone, which will strengthen the trend. The first target after that will be the 1.1650 level. To consolidate the trend, the price also needs to gain a foothold below the red balance indicator line.

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The four-hour chart shows that the situation is completely decreasing, the price has settled below the balance and MACD lines, while Marlin is declining in the negative zone. We look forward to a decline in prices and reinforcement of the fall on the daily chart.

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Forecast for GBP/USD on October 28, 2020

GBP/USD

Yesterday, the pound sterling traded almost within Monday's framework, making an attempt to test 1.3082. The level has confirmed its stability, the price is slightly decreasing this morning. The Marlin oscillator is declining on the daily chart. The price is most likely to fall to the target level of 1.2860.

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Intending to test the 1.3082 level, the price made a false exit above the MACD line on the four-hour chart, however, it did not settle above the line, which nevertheless indicates the pound's weakness. The signal line of the Marlin oscillator reverses from the border of the growth area, this is a sign of its succeeding decline. The signal level for moving to 1.2960 is 1.3000, which the price overcomes as a condition for opening short positions.

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Forecast for USD/JPY on October 28, 2020

USD/JPY

The USD/JPY pair received a powerful impetus on Tuesday from previously reversing from the price channel line, the movement was 37 points. Now we are waiting for the pair at the target level of 103.75. Price indicators and the Marlin oscillator of the daily timeframe indicate that it would continue to fall.

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The four-hour chart shows that Marlin is in the negative zone, the price settled below the signal level of 104.56. We are waiting for the price to fall to 103.75.

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Analysis on EUR/USD on 27/10/2020: Interest in the US presidential election is the highest since 1908

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The wave marking of the EUR/USD instrument still looks quite convincing and has not changed recently. I still expect to build wave 5 of the upward section of the trend, which dates back to March. At the moment, waves 1 and 2 are viewed inside this wave. If the current wave markup is correct, then the price increase will continue from the current values with targets located near the peak of wave 3 or C. So far, there are no prerequisites for revising the current wave pattern.

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The smaller-scale wave marking still shows that the intended wave 4 has assumed a three-wave form and is complete. If this is true, then the price increase will continue within the 3-in-5 wave. At the same time, a slightly inactive increase in quotations suggests that the entire section of the trend that begins on September 25 may take a three-wave form and the entire section of the trend that begins on September 1 will take a corrective form. In this case, after completing the top three, you can start building the bottom three. But for now, this is a fallback.

Despite the fact that the markets have been quite calm lately, things are approaching the most significant day in the second half of a completely crazy 2020. The topic of presidential elections in the United States has been the talk for several months in a row. However, now there is nothing to write or talk about this topic. Both candidates did everything they could in the fight for election ratings and most Americans have already decided on the candidate they will vote for. Moreover, more than 60 million Americans have already voted, including Donald Trump himself. All statistics now indicate that the current elections will be one of the largest not only in recent decades, but also since 1908. Forecasts suggest that more than 65% of Americans may vote this year, which are 150 million people. Experts have recently become more and more afraid that the scenario of 2016 will not be repeated, when Trump also, according to all pre-election opinion polls and ratings, was behind Hillary Clinton but won in the end. Now it's hard to even imagine what must happen for Trump to win. However, there is no doubt that he has a few tricks up his sleeve. Thus, the markets can only stock up and closely monitor events in the next week or two. Today, you can also pay attention to the report on orders for long-term goods in the United States but it seems that the markets are already fully focused on the presidential election and do not want to pay attention to other news.

General conclusions and recommendations:

The Euro-Dollar pair is expected to continue building a 3-in-5 wave. Thus, at this time, I still recommend buying with targets located near the estimated 1.2012 mark (which corresponds to 0.0% Fibonacci) for each MACD signal up, in the expectation of building an upward wave. The variant with a possible complication of the internal wave structure of wave 4 has not yet been confirmed.

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Hot forecast and trading signals for GBP/USD on October 28. COT report. Traders waiting for information on the progress of

GBP/USD 1H

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The GBP/USD pair also traded mostly sideways on Tuesday, October 27, between the Senkou Span B and Kijun-sen lines. Therefore, the technical picture for this pair has practically not changed. The only thing that you should take note of is that the pair left the descending channel, which appeared recently, showing the bears' weakness at this time. Traders of the pound/dollar pair are also frankly cautious at this time and do not regret trading more or less actively. Volatility was only about 80 points yesterday, which is not very little, but not much as well. Therefore, buyers need to overcome the critical line in order to bring the pair back to the rising channel and be able to take it back to the resistance area of 1.3160-1.3184. After several attempts, sellers failed to overcome the support area of 1.3004 - 1.3024, so their prospects look even worse now.

GBP/USD 15M

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The major linear regression channel is directed horizontally on the 15-minute timeframe, and the minor channel is directed upward. However, in general, the situation is approximately the same as for the EUR/USD pair - there is no trend movement.

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 important news from the UK on Tuesday. Not a single macroeconomic report was published, no speeches by Prime Minister Boris Johnson, no comments from persons associated with the negotiations on the Brexit trade deal. Therefore, traders simply had nothing to react to, and they had no desire to trade exclusively on technique. The situation is even more difficult for the pound, because in addition to the elections in the United States, which are very stressful for the markets, the situation with Brexit, the trade deal, and the prospects for the British economy remains completely incomprehensible in the UK. Thus, you need to wait for either new, important information that will force traders to make trading decisions, or the entry into the forefront of major players who will be able to move the pair from a dead center. Again, no macroeconomic report or other important event scheduled for Wednesday. All hope for at least some information about the course of negotiations between Brussels and London. It may appear unexpectedly, and is also impossible to predict. One should trade in such conditions now.

We have two trading ideas for October 28:

1) Buyers for the pound/dollar pair failed to stay above the Kijun-Sen line. Thus, long positions are no longer relevant. You are advised to re-consider options for longs in case the price settles higher. However, the pair managed to leave the descending channel, so in case the price settles above the critical line (1.3084), you may open new longs while aiming for the resistance area of 1.3160 -1.3184. Take Profit in this case will be up to 70 points.

2) Sellers took several steps towards the new downward trend, but gave up very quickly and failed to overcome the Senkou Span B line (1.3018) and the support area of 1.3004-1.3024. You may consider options for opening sell orders, but only below this area while aiming for the support level at 1.2897. Take Profit in this case can be up to 90 points. It is extremely difficult to count on more now.

Hot forecast and trading signals for the EUR/USD pair

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 28. COT report. Complete flat and hopes for it to finish

EUR/USD 1H

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The euro/dollar pair was absolutely flat on the hourly timeframe on Tuesday, October 27. The pair could not even approach the Senkou Span B line during the day, so the bears could not form a favorable situation for themselves. Also, traders failed to overcome the Kijun-sen line, so buyers were also out of work all day. The technical picture has not changed at all. Formally, we now have a descending channel, but it is so blurred and directed more sideways than down. Take note that globally, the pair continues to trade within the $1.17-1.19 horizontal channel. Therefore, it is absolutely flat in all time frames. Accordingly, you need to wait for it to end.

EUR/USD 15M

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The lower linear regression channel turned to the upside on the 15-minute timeframe, indicating a new round of upward movement on the hourly chart. However, in fact, all channel reversals on the current chart have no value, since we still have a flat.

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 US published a macroeconomic report on Tuesday, which had no impact on the pair's movement. The data was for orders for durable goods. Yesterday we drew the attention of traders to the fact that the probability of market reaction to this report is negligible. And so it happened. Volatility during the day was "unreal", by 43 points, which is extremely low even on the smallest timeframes. In principle, all four derivatives of durable goods orders exceeded their forecasts. However, the dollar failed to extract any dividends for itself. Thus, we can only state what we have said many times. The markets on the eve of the 2020 US presidential elections, which are already exactly a week away, are not going to risk in vain. The global flat has been persistent for three months now, and a local flat has also begun. Thus, we can only wait until the elections in the US are held, the results will be announced and market participants will begin to behave more actively. Until then, trading the pair is extremely inconvenient.

We have two trading ideas for October 28:

1) The pair is trading in full flat, plus a descending channel has appeared. Thus, traders are advised to try to resume trading upward while aiming for the resistance area of 1.1887-1.1912 and the 1.1926 level, but not before the quotes have settled above this channel. Take Profit in this case can be up to 70 points. 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 in the current environment.

2) Bears continue to remain in the shadows and, despite the descending channel, there is no downward movement. Sellers still need to wait until the Senkou Span B line (1.1784) has been overcome in order to have reasons to open sell positions with targets at the 1.1748 level and the support area at 1.1692-1.1699. The potential Take Profit in this case is from 30 to 70 points.

Hot forecast and trading signals for the GBP/USD pair

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

USD/CAD. Preview of the Bank of Canada's October meeting

The penultimate meeting of the Bank of Canada this year will take place tomorrow. In the run-up to this event, the canadian dollar is behaving cautiously, trading within the 31st figure. On one hand, the market is not expecting any surprises from the canadian regulator: the monetary policy parameters should remain at the same values. While on the other hand, there is no consensus among experts about the general mood of the regulator's members and the tone of the accompanying statement. The current fundamental picture allows the Canadian Central Bank to take a different view of the situation. On one side of the scale is the growth of key macroeconomic indicators, while on the other side is the return of coronavirus in Canada.

In the context of macroeconomic indicators, they have not really disappointed investors recently. First of all, we are talking about the canadian labor market. So, the unemployment rate in the country in September fell immediately to 9%. Although this indicator was at the level of 10.8% in August and it should have decreased by only 0.4% according to general forecasts, the indicator dived down by 1.8% at once.

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In the green zone, there was also growth in the number of employment. Contrary to neutral forecasts, this indicator exceeded the forecast values more than twice, ending up at 378 thousand instead of the predicted 150 thousand. Note that this increase was mainly due to growth in the number of full-time employees (+334 thousand), while part-time employment rose only by 44 thousand. This is a positive signal, including for inflation indicators, since full-time positions imply a higher level of salaries and social security. The rate of wage growth accelerated to 4.3% from the previous value of 3.8%, signaling a strengthening of the wage scale.

The data on inflation growth published last week also turned out to be quite good. Although the growth rate is quite modest, the trend itself is important. Thus, the overall consumer price index rose to 0.5% in annual terms (after the previous value of 0.1%). Core inflation showed a stronger trend, rising to 1% with growth forecast to 0.6%. Retail sales also increased, especially excluding car sales.

Overall, the canadian economy is showing positive dynamics. Based on the latest data, Canada's GDP increased by 3% (on a monthly basis), while the all in all forecast was at 2.9%. At the same time, growth was recorded in all 20 industrial sectors. The "maple leaf" country's economy has been growing for the third month in a row now. Although, the pace of recovery has somewhat slowed down compared to the first "post-crisis" months.

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To put it simply, the Bank of Canada has every reason to maintain the status quo at the October meeting. But the tone of the regulator's members' rhetoric may be "dovish," even despite the macroeconomic successes. It's all because of the coronavirus. In recent weeks, the spread of COVID-19 in Canada has increased significantly. Local authorities were forced to resume some of the previously lifted quarantine restrictions in some regions. Just over the past day, Canadian doctors have identified 2531 cases of infection, which is another anti-record. Prime Minister Justin Trudeau said that the country has entered the second wave of the pandemic. If current trends continue, the government will resort to stricter quarantine restrictions. This step will primarily affect the labor market indicators and consumer activity of Canadians.

Thus, members of the Bank of Canada may well focus on the risks associated with the spread of coronavirus in the country. In this case, the Canadian regulator will be under significant pressure.

In my subjective opinion, loonie will get support from the Canadian regulator tomorrow. Central Bank members can note the growth of the main economic indicators while maintaining a wait-and-see attitude on one hand. While on the other hand, they can express "standard concern" about the future prospects of the country's economic recovery, as they did at the September meeting when the country already noted an increase in the number of COVID-19 cases. The text of the previous accompanying statement included the phrase that the Bank of Canada predicts "a long and unstable stage of economic recovery in the face of increased uncertainty and systemic problems." If the Canadian Central Bank confines itself to this phrase tomorrow, it is possible for traders to ignore it, focusing on the other aspects of the October meeting. All this suggests that from the current positions, we can consider sales to the support level of 1.3060, which is the lower line of the Bollinger Bands indicator on the daily chart.

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