US stock indices rose sharply following the auction

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After the election, most analysts agreed with the fact that neither Republicans nor Democrats received the clear advantage that would have been a precursor to large-scale political change. Even though the votes have not yet been counted in important states such as Georgia, Michigan and Pennsylvania.

By the close of trading, the S&P 500 was up 2.2%. This was the strongest increase on the day after the presidential election. The Dow Jones Industrial Average rose 367 points, or 1.3%. The Nasdaq Composite jumped 3.9%.

So far, there is such a forecast: the Republicans are likely to retain control in the Senate, while the likelihood of Joe Biden's victory over Donald Trump increases. Such an outcome would definitely prevent Democrats from promoting policies such as changing taxes, health care systems, and regulation of technology companies.

Even with market volatility, traders note the order in the markets, adding that investors have largely avoided large bets ahead of the election. Many have tried to avoid the 2016 scenario in which investors were caught off guard by Trump's victory.

Leading tech companies are pulling the market up. Apple, Amazon.com and Alphabet rose in price. Uber Technologies rose 13% and Lyft rose about 11% after California residents voted to treat its drivers as independent contractors rather than full-time employees. Biogen shares are up 40%.

Banks and industrial stocks have come under pressure as they are highly dependent on the outlook for the economy.

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Trading plan for EUR/USD and GBP/USD on 11/05/2020

Let's not give in to general panic and set aside our emotions. In short, we should let the Americans figure out their own elections. It is no longer so important whether there are falsifications and frauds or not. Due to this chaotic process of election, serious conclusions will be drawn. First, we should focus on how the market behaves, especially in the currency market. As soon as the counting began, Mr. D. Trump was leading in a number of key states, and theoretically gained enough electoral votes to maintain his residence in the White House for another four years. The US dollar was steadily rising at this moment, but as soon as the favor shifted towards Mr. J Biden, the same currency began to lose its position. There is a clear reason for this behavior – from the point of view of investors, Biden's victory is ambiguous. If everything is quite clear with the economic policy of Donald Trump, then we don't know what to expect from Joseph Biden. During the election campaign, he was so carried away by the current President's accusations of working for foreign intelligence services and a complete failure in the fight against COVID-19, that he simply did not have time to tell about his economic program. Thus, the market's reaction to a possible victory for Joseph Biden is largely understandable, but this is only what lies on the surface.

The whole point here is that during the entire post-war history, the United States acted as a kind of last refuge. That is, during any global crisis, capital from all over the world flocked to America. In view of this, investors fled from ever-increasing risks. Therefore it is not surprising if American banks and investment funds are considered to be the ones who control the bulk of capital in the world. Due to the current situation, each of us tries to find the safest and most peaceful place. So, this whole political circus, which is now happening in the United States, undermines the dollar's positions, with serious long-term consequences. Over the next two days, the market will be pushed from side to side, due to consecutive information flow. In this regard, the FOMC meeting will be entirely ignored and the Fed, in turn, will not take any steps as everyone is waiting for the final results of the elections.

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The EUR/USD pair is focused on chaotic surges, depending on the incoming information. We can assume that speculative hype will continue in the market, where the information flow will remain as the main lever, and the variable levels will be the levels of 1.1700 and 1.1765.

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The GBP/USD pair is very active, working on the speculators' account, where the range of 1.2930/1.2980 became a temporary stop. The range will be broken soon, where the primary trading tactic is considered to be the method of breaking through the established boundaries.

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Technical Analysis of GBP/USD for November 5, 2020

Technical Market Outlook:

Not much has changed since yesterday as the GBP/USD pair keeps making the up and down swings as the votes of the presidential elections in the USA are still being collected. The price has broken out of the acceleration channel and made a local high at the level of 1.3136, but the four hour candle closed way below the top, at the level of 1.3027. Currently, it looks like the US Dollar is getting stronger again and the Pound continues the move to the downside towards the short -term trend line support. Any sustained violation of this trend line will indicate more bearish pressure that can push the prices to the level of 1.2868, 1.2848 or even 1.2816. The weak and negative momentum supports the short-term bearish outlook despite the oversold market conditions. Only a sustained breakout above the level of 1.2982 would change the intraday outlook to bullish.

Weekly Pivot Points:

WR3 - 1.3236

WR2 - 1.3153

WR1 - 1.3037

Weekly Pivot - 1.2956

WS1 - 1.2835

WS2 - 1.2757

WS3 - 1.2653

Trading Recommendations:

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

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Technical Analysis of EUR/USD for November 5, 2020

Technical Market Outlook:

The US presidential elections result is still uncertain and the volatility on all US Dollar pairs has increased. After the EUR/USD pair had made another local low at the level of 1.1602, the price bounced towards the new local high seen at the level of 1.1744 which is inside of the main descending channel. The momentum is positive and the market conditions at the H4 time frame chart are bouncing from the extremely oversold levels, so please keep an eye on a temporary rebound. The nearest technical resistance is seen at the level of 1.1790. Bears are in full control of the market and the weekly outlook is bearish despite the election night in the USA.

Weekly Pivot Points:

WR3 - 1.1974

WR2 - 1.1916

WR1 - 1.1756

Weekly Pivot - 1.1698

WS1 - 1.1531

WS2 - 1.1471

WS3 - 1.1314

Trading Recommendations:

Since the middle of March 2020 the main trend is on EUR/USD pair has been up, which can be confirmed by almost 10 weekly up candles on the weekly time frame chart and 4 monthly up candles on the monthly time frame chart. The recent correction towards the level of 1.1612 seems to be completed and now market is ready for another wave up. This means any local corrections should be used to buy the dips until the key technical support is broken. The key long-term technical support is seen at the level of 1.1445. The key long-term technical resistance is seen at the level of 1.2555.

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Indicator analysis. Daily review on EUR/USD on November 5, 2020

Trend analysis (Fig. 1).

Today, the market from the level of 1.1726 (closing of yesterday's daily candlestick) may continue to move up with the goal of 1.1751 – a pullback level of 50.0% (blue dotted line). When testing this level, further work upward with the goal of 1.1781 – a pullback level of 61.8% (blue dotted line).

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Figure 1 (Daily chart).

Comprehensive analysis:

  • Indicator analysis - up;
  • Fibonacci levels - up;
  • Volumes - down;
  • Candlestick analysis - up;
  • Trend analysis - up;
  • Bollinger bands - down;
  • Weekly chart - down.

General conclusion:

The market from the level of 1.1726 (closing yesterday's daily candlestick) can continue to move up with the goal of 1.1751 - a pullback level of 50.0% (blue dotted line) today. When testing this level, further work upward with the goal of 1.1781 – a rollback level of 61.8% (blue dotted line).

Unlikely scenario: from the level of 1.1726 (closing of yesterday's daily candlestick), the price may continue to move up with the goal of 1.1751 – a pullback level of 50.0% (blue dotted line). When testing this level, further work downward with the goal of 1.1714 – a pullback level of 61.8% (red dotted line).

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GBP/USD: plan for the European session on November 5. COT reports. Pound falls ahead of Bank of England monetary policy meeting

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

The British pound drew quite a lot of entry points yesterday, both in buying and selling. Let's try to deal with them all. The bears began to actively defend support at 1.2914 after the pair fell in the first half of the day, where a false breakout produced a fairly good signal to buy the pound, which was fully implemented. Towards lunchtime, the bulls regained resistance at 1.2967 and settled on it, which produced another signal to buy the pound in order to continue the upward trend. And this signal worked and brought about 70 points of profit, as the price reached the target level of 1.3043. Forming a false breakout on it brought back sellers to the market and quickly dumped the pound back to the support of 1.2967, testing it from top to bottom, after the bears' unsuccessful attempt to go even lower, led to producing a buy signal. However, it was less successful, although the upward movement was more than 40 points. I marked all entry points on the chart.

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The picture has slightly changed at the moment, although the key levels have remained in place. Bulls are focused on getting control of resistance at 1.2978, which is also the middle of the horizontal channel. Moving averages also pass above this level, playing on the side of the pound sellers. A confident breakout and being able to test this level from top to bottom forms a good entry point into long positions in hopes to continue the upward movement and updating the 1.3043 high, where I recommend taking profits. You can count on going beyond this range following the Bank of England meeting on monetary policy. If the rate is shifted towards stimulating the economy, it will support the pound and lead to updating a new high of 1.3136. In case the pair falls in the first half of the day, it is best to wait for a false breakout near the lower border of the horizontal channel at 1.2914, similar to yesterday, and buy the pound afterwards, in hopes to bring back the pair's growth. Lack of activity in this area could pull down GBP/USD to a low of 1.2856, on which the further major upward movement of the pair depends. You can open long positions from it, counting on a rebound of 30-40 points within the day.

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

Pound sellers are aiming for support at 1.2914. A breakout and getting the pair to settle below this range will form a new entry point for short positions, which will cause the pound to fall to a low of 1.2856, on which the current bull market depends. A breakout and being able to settle below this range will lead to removing a number of buy stop orders, which will pull down the pound to the 1.2807 and 1.2749 areas, where you can observe a slight upward correction. However, such a scenario will only be realized if Donald Trump wins the US presidential election, or if the Bank of England announces the introduction of negative interest rates. In case bears are not active and the pair grows in the first half of the day, it is best to think about selling only when a false breakout forms in the resistance area of 1.2978. You can open short positions in GBP/USD immediately for a rebound only from a high of 1.3043, counting on a correction of 20-30 points within the day.

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The Commitment of Traders (COT) reports for October 27 showed a reduction in both short and long positions. Long non-commercial positions fell from 39,836 to 31,799. At the same time, short non-commercial positions fell from 41,836 to 38,459. As a result, the negative non-commercial net position was at -6,660, against -2,000 a week earlier, which indicates that the sellers of the British pound retained control and also shows their minimal advantage in the current situation.

Indicator signals:

Moving averages

Trading is carried out below 30 and 50 moving averages, which indicates an attempt by the bears to control the 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 D1 daily chart.

Bollinger Bands

A break of the lower border of the indicator in the 1.2935 area will increase the pressure on the pound. Growth will be limited in the area of the upper level of the indicator at 1.3040.

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.
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EUR/USD: plan for the European session on November 5. COT reports. Biden lacks 6 electoral votes or one state of Nevada

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

In yesterday's afternoon forecast, I told buyers to go beyond the 1.1701 level, which happened. Let's take a look at the 5-minute chart and talk about where you could have entered long positions yesterday. The euro did not significantly rise when the 1.1701 level was tested from top to bottom, but it did produce a signal to buy the euro further along the trend, afterwards the bears tried to regain control of the market, but nothing happened. Returning to the 1.1701 level and testing it from top to bottom confirmed the presence of large buyers in the market, betting on the euro's growth.

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A buy signal will be processed as long as trading is carried out above 1.1701. The nearest target of the bulls is resistance at 1.1765, its breakout will powerfully push the pair upwards. However, this will happen most likely after the news that Biden is about to become the new president of the United States. Getting the pair to settle above 1.1765 and testing it from top to bottom, similar to yesterday's purchase, will lead to a new wave of EUR/USD growth in the area of highs of 1.1814 and 1.1864, where I recommend taking profit. In case the pair falls in the first half of the day, you can count on a false breakout in the support area of 1.1701, where the moving averages also pass, playing on the side of the euro buyers. If there is no activity at this level, I recommend opening long positions only on a rebound from the low of 1.1655, or from the lower border of the wide horizontal channel at 1.1604, counting on a 15-20 point correction within the day.

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

Sellers have one simple task - to keep resistance at 1.1765, where a false breakout will be a signal to open short positions in the euro. A breakout of this range will lead to removing the bears' stop-orders, therefore, before selling the euro, make sure that a false breakout is taking place. Any advantage towards Trump in Nevada, while on Biden's side, could increase demand for the US dollar. The primary task of the bears in these conditions is to return and settle below support at 1.1701, testing it from the bottom up forms a good entry point for short positions, in hopes to bring back the bear market and for the pair to fall to the 1.1655 support. The 1.1604 level will be the next target, where I recommend taking profits. A breakthrough will take place only if Trump wins the US presidential election. In case bears are not active at 1.1765, I recommend postponing short positions until the 1.1814 high has been updated, or sell EUR/USD immediately upon a rebound from the 1.1864 resistance, counting on a 15-20 point correction within the day.

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The Commitment of Traders (COT) report for October 27 showed a reduction in both long and short positions. Despite this, buyers of risky assets believe that the bull market will continue and so they prefer to act with caution. Thus, long non-commercial positions fell from 229,878 to 217,443, while short non-commercial positions also fell to 61,888 from 63,935. The total non-commercial net position decreased to 155,555 from 165,943 a week earlier. However, the bullish sentiments for the euro remains rather high in the medium term. The more the euro will decline against the US dollar at the end of this year, the more attractive it will be for new investors, especially following the US presidential elections, when additional pressure on the market on this issue eases.

Indicator signals:

Moving averages

Trading is carried out just above 30 and 50 moving averages, which indicates an attempt by the bulls to take the initiative.

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 1.1745 will lead to a new wave of euro growth. A breakout of the lower boundary of the indicator around 1.1695 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

Technical Analysis of ETH/USD for November 5, 2020

Crypto Industry Outlook:

The Associated Press news agency publishes the results of the November 3 presidential election in the United States on the Ethereum and EOS blockchains.

As noted on the developer's page detailing how to access the AP Elections API, the results are chained by Everipedia's OraQle software. While the results are of course also posted on the AP website, the use of blockchain-based Everipedia ensures an undisturbed, permanent and unchangeable record of the results for each state. The AP also shared the Ethereum smart contract address, allowing readers to use block explorers like Etherscan to track upcoming results. However, a more accessible version of the results, comparing the results from all states called up so far, is available through the EOS AP account on Bloks.io.

The 2020 US elections are one of the most controversial in decades, with results going head to head in key states. Due to the coronavirus pandemic, to the disappointment of incumbent President Donald Trump, nearly 100 million votes were previously cast, either by mail or in person.

Technical Market Outlook:

The ETH/USD pair has been trying to break out of the channel and a new local high was made at the level of $407.03. Nevertheless, there are candles with log upper shadows, which indicate the bearish pressure. Any sustained violation of the level of $407.03 will result in a rally towards the yearly highs seen at the level of $420.11. The level of $400 will now act as a intraday technical support. Only if a daily candle closes below $360 level, then the bears will have full control of the market.

Weekly Pivot Points:

WR3 - $456.03

WR2 - $431.91

WR1 - $415.05

Weekly Pivot - $393.33

WS1 - $376.79

WS2 - $355.02

WS3 - $337.80

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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Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on November 5

Analysis of transactions in the EUR / USD pair

At first, the euro dropped sharply amid Trump's lead over Biden in the US elections. Then, afterwards, the euro managed to get back its positions, thanks to the wave of long positions from the level of 1.1661, which brought about 50 pips of profit from the market. Biden's take over in the elections resumed growth immediately.

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Trading recommendations for November 5

Of great importance is the results of the US presidential elections, as it will determine whether the US dollar will maintain its position in the market, or weaken against other currencies such as the euro. If Joe Biden wins, the US dollar will weaken sharply. In that case, long positions will be a more correct decision for trading.

Aside from that, the US Federal Reserve has a scheduled meeting today, however, many do not expect dramatic changes in the monetary policy. Nevertheless, the central bank's indecision will have a positive effect on the euro's position against the dollar.

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  • Open a long position when the euro reaches a quote of 1.1765 (green line on the chart), and then take profit at the level of 1.1845. However, growth will only occur if Joe Biden wins the US presidential elections.
  • Open a short position when the euro reaches a quote of 1.1717 (red line on the chart, and then take profit around the level of 1.1611. However, a decline will only occur if Donald Trump wins the US presidential elections, as such will give the markets strong confidence in a stable future.

Analysis of transactions in the GBP / USD pair

Short positions from the level of 1.2959 moved the pound down by only 35 pips yesterday, after which it reversed and went back up in the market. The pressure was mainly generated by weak data on activity in the UK services sector, which continued to decline in October this year. Then, after the weakening of the US dollar amid Biden's lead in the US presidential elections, long positions arose around the level of 1.3023. However, the growth was limited by the Bank of England's scheduled meeting today.

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Trading recommendations for November 5

Of great importance is the results of the US presidential elections, as it will determine whether the US dollar will maintain its position in the market, or weaken against other currencies such as the British pound. Aside from that, the meeting of the Bank of England today, at which the bank's asset purchase program may be expanded and key interest rates may be changed, will also affect the direction in which the GBP / USD pair will go in the market.

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  • Open a long position when the quote reaches the level of 1.2986 (green line on the chart), and then take profit around the level of 1.3129 (thicker green line on the chart). If the Bank of England does not expand its asset purchase program nor change its key interest rates, the pound will rise sharply in the market.
  • Open a short position when the quote reaches the level of 1.2954 (red line on the chart), and then take profit at least at the level of 1.2801. Bad news on Brexit, as well as Trump's victory on the US presidential elections, will continue the downward trend in the GBP/USD pair.
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Chaos should be expected in the United States. Overview of USD, CAD, JPY

A day before the election, Biden had an 80% chance of winning. Yesterday, the situation completely turned in Trump's favor, but as night time came, there was a reversal in favor of Biden. Due to this, Trump accused the Democrats of casting votes and demanded a recount. It is highly likely that the new US president, whoever wins, will have incomplete legitimacy, and the country will be in chaos caused by the decentralization of government.

Following Trump's victory in several states, there were strange changes in the vote count. In Virginia, 100 thousand extra votes were allegedly mistakenly added to Biden's vote, while in Wisconsin, the chances of Democrats' victory remained purely mathematical, but in Michigan, there is no doubt that it will go down in history.

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As a result, a recount in several states is inevitable. This recount may drag on, and it is quite possible that the Supreme Court, in which the Republicans have a majority, will decide whether it is correct or not.

It should also be noted that the Democrats failed to take control of the Senate. The predicted "blue wave" scenario did not take place, so the victory of Biden or Trump will not give a decisive advantage on either side, which means that the uncertainty period will continue for a long time.

USD/CAD

The CAD net short position is still significant, as there are only small weekly changes. The fair price is significantly higher than the spot price, but so far, financial flows are neutral and do not show directions.

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The demand for CAD directly depends on the election results, and the high level of uncertainty does not allow us to form a reasonable forecast. Against this background, the USD/CAD pair is likely to return to the level of 1.34.

USD/JPY

The situation in the futures market of the yen is immediately changing. The previous report showed a significant reduction in the long position, which suggested changes in investor sentiment in favor of the dollar, but the latest report is exactly the opposite – in the election week, the net long position for the yen increased by 462 million to 2.142 billion. As a result, the estimated price declined again.

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If the issue regarding the US election persists, the yen will be in demand as a protective asset, no matter how the domestic economic situation will help it to strengthen. Meanwhile, things are frankly bad – exporters are almost not buying yen, since export volumes have not recovered. The manufacturing sector did not also enter the growth zone. According to Jibun Bank, PMI amounted to 47.7p in October, while the composite index including the services sector amounted to 48p.

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Tomorrow, there will be a published report on the dynamics of average wages and household expenditures for September, from which deterioration is expected. An additional reserve of 10 trillion yen was planned in Japan's budget, and it was expected that this would be enough until recently. However, after Abe leaves, it turns out that the government is preparing another additional item of expenditure in the amount of 10 to 15 trillion yen, which will be used for two purposes – for subsidies for employment, which will begin to be used after December and the Japanese version of import substitution – companies will be encouraged to relocate their entire production and supply chain to Japan.

These measures will help lower the quotes of yen. To sum up, we can assume the following: Both the Cabinet of Ministers and the Bank of Japan will soon make efforts to weaken the yen, which is possible if external demand increases. This will be primarily associated with a possible victory of Trump. Biden's victory, in turn, will lead to a sell-off of defensive assets, so the yen is likely to weaken as a result. The transition of the confrontation to the court will lead to increased uncertainty, and in this case, yen's price will be forced to increase.

Technically, the support zone 104.00/20 can still hold, although everything seems that it is preparing to be broken. The Bank of Japan will hold its rate through interventions. So in case that this support breaks down, buying will be considered with the goal of returning to the levels of 105.00/50.

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Technical Analysis of BTC/USD for November 5, 2020

Crypto Industry Outlook:

On November 3, Whale Alert signaled huge BTC transfers. Someone has moved 69,369 BTC worth more than $ 1 billion towards an unknown address.

Soon after these reports, Elliptic analysts conducted a study on the bitcoin flow. It soon turned out that the transfers were most likely related to the infamous, now closed Silk Road marketplace. The fact that these BTCs haven't been touched since 2012 adds fuel to the fire.

The address from which the funds came out is quite known in the cryptocurrency environment. At the time BTC was taken from it, it was the fourth largest bitcoin address in history in terms of balance. Cyber criminals have repeatedly tried to get to this address - so far unsuccessfully. The wallet has remained dormant until today. The exception to the rule was only one case, when from this address, in 2015, 101 BTC was sent to the address docked on the BTC-e exchange.

Silk Road was founded by Ross Ulbricht. He was arrested as early as 2013. 174,000 BTC were confiscated by the FBI in this case. The fate of the remaining 614,000 BTC remained shrouded in secrecy.

Technical Market Outlook:

The BTC/USD pair has made another yearly high at the level of $14,317 (at the time of writing the article) as the presidential election in the USA are still not finished. The level of $14,351 is the Weekly Pivot Resistance. It is worth to notice, that the market conditions are extremely overbought on H4 and daily time frame, so a pull-back or correction might occur any time now. The nearest technical support is seen at the levels of $13,296 and $13,116. The key technical support is located at $12,625.

Weekly Pivot Points:

WR3 - $15,648

WR2 - $14,723

WR1 - $14,351

Weekly Pivot - $13,475

WS1 - $13,116

WS2 - $12,252

WS3 - $11,845

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

Which side will the US dollar choose?

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The US currency is nowhere to be found before the summed up results of the US presidential election was released. At the moment, it is experiencing a serious volatility, as it awaits where the scales of popular confidence will head to – in favor of the Democrat or the Republican?

In view of this, the indicated currency is at the crossroads, not knowing where its dynamics will move in the near future. Yesterday, it acted as if D. Trump is still the president, while a general vote was happening in America. The US dollar steadily rose, inspiring the markets, but it turned out to be deceiving. As a result, the EUR/USD pair could not hold above the level of 1.1735, causing it to decline. Nevertheless, it gained confidence today. This classic pair is currently moving around the level of 1.1738-1.1739, not going to stop there.

The reason why it strengthened yesterday is due to the possible adoption of a new stimulus package, risks of renewed trade conflicts, the traditional attractiveness of US assets and the high probability of tax cuts. However, it is believed that such a favorable situation will not last long. According to Mark Haefele, investment director of UBS Global Wealth Management, the USD is on top at the moment, but it will clearly plummet in the medium term. The growing demand for the assets of the "safe haven" contributes to the strengthening of the US currency, but this will end soon. In this situation, he suggests selling USD on growth attempts.

Moreover, analysts consider possible socio-political unrest in the United States as another factor that can put pressure to the US dollar. Jane Foley, head of currency strategy at Rabobank, said that even a slight social unrest is enough for the EUR/USD pair to decline to the level of 1.1400.

An additional pressure for this currency may be exerted by a long vote count in a number of states. It should be recalled that the EUR/USD pair showed an unusual volatility yesterday: the price soared to the level of 1.1770, followed by a decline to 1.1600, which is the low recorded at the end of July 2020. The reason for this "swing" was a hint of the rising possibility that Trump will win.

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According to experts, the US currency will not stay afloat for long. It will soon determine its direction in the near future and the new President will be the driver for this. After that, it will be clear which side the USD will be on – Democrats or Republicans. In any case, the victory of Joe Biden, and a small probability of retaining the presidential chair for D. Trump will not leave the dollar indifferent. Experts sum up that its dynamics will follow the new national leader.

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

Analytics and trading signals for beginners. How to trade EUR/USD on November 5? Plan for opening and closing trades on Thursday

Hourly chart of the EUR/USD pair

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The EUR/USD pair continued a rather calm upward movement last night, however, we believe that the "storm" in the currency market is not over yet. We will discuss the foundation below. From a technical point of view, quotes will continue to rise, but it can be replaced by a downward pullback or correction at any time. There is still no clear trend, so we cannot advise you to trade for an increase (or, conversely, a decrease) right now. Consequently, the uncertainty factor is much higher than usual. Theoretically, you can try to catch a sell signal from the MACD indicator, since this will be absolutely normal for the process of calming down (a turn of a downward movement). We believe that the pair can go down by points today. At the same time, advise you to wait until a clear trend appears.

We continue to receive reports on the counting of votes in the presidential elections. As of Thursday morning, Joe Biden is in the lead by 50 "electoral votes" and is 6 votes short of winning. Therefore, with a high degree of probability, it can be stated that Biden has won the election. However, firstly, there are no final results yet, and secondly, protests, rallies and riots (in most cases against Trump) have already begun in many US cities, and thirdly, the most interesting thing can begin after the final results are announced. Despite the fact that the gap between Trump and Biden is large enough, this does not mean that Donald Trump will calmly step down and hand over power to a Democrat. Yesterday, Trump said he would demand a review of the results in some states. That is, litigation is unlikely to be avoided. And all these events can be extremely important for the US dollar. Simply put, nothing is over yet. And traders need to be prepared for a new round of volatile market movements. In addition to the elections, the US will also sum up the results of the Federal Reserve meeting today. Although no one expects the US central bank to change the monetary policy in November, nevertheless, we might receive important and interesting information. Fed Chairman Jerome Powell can share his vision of the current state of the American economy, and there is something to say on this topic. Take note of the package of financial assistance that has not been adopted to all the unemployed and the sectors of the economy most affected by the pandemic and crisis. Democrats and Republicans have never been able to come to a common denominator on this issue. In general, Powell will have something to say.

Possible scenarios for November 5:

1) Buy positions on the EUR/USD pair became relevant after the price settled above the descending channel. However, at this time, the pair tends to often change direction, and each turn of movement can be very strong. Over the past hours, the pair has already increased by more than 130 points, so the upward movement is unlikely to continue. In general, it will be extremely difficult to receive buy signals by today or tomorrow, and the fundamental background may continue to have a strong impact on the mood of the markets.

2) Trading for a fall at this time is irrelevant, despite the fact that trading down has more chances and probability right now. Theoretically, novice traders can try to work out a new sell signal from the MACD with a target of 1.1627, but then one should not forget about Stop Loss. We advise you to wait until the markets calm down.

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

The Bank of England kept the pound from falling

In the second half of this week, the GBP/USD pair has support in the form of the Bank level of 1.2932. As long as the pair is trading above this level, any buy pattern will have a good probability of working out. The target for fixing purchases is the upper zone of Bank liquidity 1.3068. When testing this zone, you will need to commit purchases. If a sell pattern is formed when testing the 1.3068 mark or going beyond it, it is necessary to consider selling the instrument. The main target for the downward movement will be the banking level of 1.2932.

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Increased market volatility can lead to rapid implementation of ascending and descending models. Do not discount the possibility of changing the medium-term momentum to an upward one. This will happen if the closing of the next trading session occurs above the level of 1.3068. This will indicate support for growth from the Bank of England and will allow you to keep some of the purchases.

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

European Central Bank Supports Euro Growth

Yesterday's trading closed above the level of 1.1674. This indicates support for growth from the European Central Bank (ECB). The first growth target is the upper limit of the bank volatility zone of 1.1796. When this level is reached, you need to record most of the purchases. In the case of the pattern for sale, you can consider a short trade. The target of the decline will be the banking level of 1.1674.

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Work in the range between the levels of 1.1796-1.1674 will be the main one until November 11. There is a possibility of a breakout and consolidation above the level of 1.1796 due to the fact that volatility in the currency market has increased. This was due to equalizing the size of the daily margin with the proactive one on the Chicago stock exchange. As soon as the values return to normal parameters, the volatility will return to its corridor. Working between banking zones involves using any entry patterns when testing support and resistance levels. Sales are profitable when testing the upper zone while purchases are profitable when testing the level of 1.1674.

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

Hot forecast and trading signals for GBP/USD on November 5. COT report. Two central bank meetings and speeches by the heads

GBP/USD 1H

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The GBP/USD currency pair also traded in different directions all day on November 4. Therefore, it is also extremely difficult to predict the pound/dollar pair's movement. The technical picture for this pair looks much more ambiguous than for the euro/dollar. In fact, trading is now taking place in the area of the Kijun-sen, Senkou Span B lines and the resistance level of 1.3054. In theory, if the price settles above all three lines, then buyers can become active and try to pull the pair towards the 1.3166 resistance level. And if they settle below all three lines, sellers may try to direct the pair to the support area of 1.2855-1.2875. However, recent attempts by bulls and bears to achieve their goals have not been crowned with success. Thus, today's attempts to reach these goals might not be successful. Therefore, you should be very careful with any position. The markets are still overly agitated.

GBP/USD 15M

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The linear regression channels are directed in different directions on the 15-minute timeframe, which fully corresponds to the nature of the pair's movement on the hourly chart. For now, we recommend waiting for the markets to calm down.

COT report

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The latest Commitments of Traders (COT) report on the British pound showed that non-commercial traders were quite active in the period from October 20-26. However, their sentiment changed again, as can be seen from the green line of the first indicator in the chart. The mood of the "non-commercial" group of traders became more bullish for three consecutive weeks, but the net position decreased by 5,000 contracts over the last reporting week, so we can conclude that professional traders are again inclined to sell off the pound. However, if you look at the COT reports over the past few weeks or look at the first indicator, it becomes clear that commercial and non-commercial traders do not have a clear trading strategy right now. Perhaps this is due to an extremely unstable and complex fundamental background. The fact remains. The pound lost 90 points in recent trading days, and we believe that it will continue to fall. However, in the near future, we might receive important information about the progress of negotiations on the UK-EU trade deal, and the results of the vote for the US president will also become known. This information can change the mindset of professional traders. You need to be prepared for this.

No fundamental background for GBP/USD on Wednesday, except for the data on the US elections, on the basis of which the pair was trading all day. Again, no important information from the UK about the progress of the negotiation process between Michel Barnier and David Frost, although talks have been underway for almost two weeks, and they should have ended last week. Yesterday, too, the parties were supposed to make statements about the progress achieved (or about another failure), but they did not provide any information. Meanwhile, the deadline for November 15 is approaching... The index of business activity in the service sector was published in the UK, which fell (to 51.4), but remained above the 50.0 level. The Bank of England is set to hold a meeting today, at which it may decide to expand the quantitative stimulus program by 100 billion pounds. At the same time, the rates are likely to remain unchanged. And late in the evening, the Federal Reserve will sum up the results of its two-day meeting, but everything is easier here, since no changes in monetary policy are expected. Speeches by Andrew Bailey and Jerome Powell may provide the markets with a lot of new information, and in addition to these important events, we might receive information on the US presidential elections or (finally !!!) on the negotiations on the EU-Britain trade deal. In general, the fundamental background can be extremely strong in certain scenarios. This means that the volatility of the pair can also be high.

We have two trading ideas for November 5:

1) Buyers of the pound/dollar pair failed to develop their success, and in principle, now none of the market participants has an advantage. Thus, if the bulls manage to gain a foothold above the 1.3054 level, then you can try to buy in small lots while aiming for the resistance level of 1.3166, but be careful. Take Profit in this case will be up to 90 points.

2) Sellers also don't own the market right now. Thus, you can try to open new sell orders while aiming for 1.2855–1.2874 if the price settles below the Kijun-sen line (1.2996), but also in small lots and be careful. Take Profit in this case can be up to 100 points. Take note that we should brace for highly volatile trading and sharp price reversals for today just in case.

Hot forecast and trading signals for EUR/USD

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 November 5. COT report. No election results yet, markets on alert

EUR/USD 1H

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The EUR/USD pair was trading quite volatile once again on the hourly timeframe of November 4, which is not at all surprising given the fundamental background. For the last two days, the pair dropped to the support area of 1.1612-1.1624, rebounded off it and started a new round of upward movement, going beyond the resistance area of 1.1692-1.1699. Thus, formally, there is even an upward trend now, and the prospects for the pair boil down to another development of the Senkou Span B line. We will not make a long term forecast right now, since the markets are in an excited state and no one knows how long it will continue. If the price settles below the Kijun-sen line, a fall to the support area of 1.1612-1.1624 is possible.

EUR/USD 15M

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The linear regression channels turned to the upside on the 15-minute timeframe, which reflects the nature of the movement on the hourly chart in the last few hours. Multi-directional movements may continue in the coming days.

COT report

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The EUR/USD pair rose quite a bit during the last reporting week (October 20-26). Therefore, we can conclude that professional market participants did not make any extremely large purchases and sales of the European currency. However, the new Commitment of Traders (COT) report showed that non-commercial traders were actively closing Buy-contracts (longs) during the reporting week. In total, 12,000 of them were closed. But professional traders were in no hurry to get rid of Sell-contracts (shorts), having closed only 1,000. Thus, the net position of this group of traders decreased by 11,000 contracts at once. It is possible that the main closing of the Buy-contracts took place at the end of the reporting week, because in the following days a more tangible drop in euro's quotes began. Within its framework, the euro/dollar pair lost about 160 points. We remind you that if the net position decreases, it means that the traders' sentiment becomes more bearish. Thus, so far, our forecast is coming true. In the analysis of previous COT reports, we said that the high around the 1.2000 level could remain as the peak for the entire upward trend. The first indicator and its green line clearly show that non-commercial traders have been cutting back on long deals on the euro for two months now. And non-commercial traders are the most important group of large traders in the foreign exchange market. It is believed that it is the one responsible for driving the market.

Several more or less important macroeconomic reports were published in the European Union and the United States on Wednesday. The index of business activity in the service sector was released in the EU, which exceeded the forecast value and reached 46.9, but still remained below the key level of 50.0, which indicates a decline in the region. The ISM index of business activity in the US services sector was 56.6, which is below the forecast and the previous value, but above the key level of 50.0. The most important ADP report on changes in the level of employment in the private sector was much weaker than forecasts and reached only 365,000 (forecast +650,000). Therefore, we can say that the dollar's fall was in some way justified by macroeconomic statistics. But just after lunch, the euro/dollar pair mostly stood in one place. Thus, rather, traders completely ignored all reports. Well, they did not ignore the results of the (preliminary) presidential elections in the United States. Latest figures say Joe Biden is in the lead, but not all votes have been counted yet. The publication of the report on retail sales in the European Union will take place tomorrow. Traders will likely ignore this report and continue to wait for more information about the elections.

We have two trading ideas for November 5:

1) The EUR/USD pair managed to settle above the Kijun-sen line and in the area of 1.1692-1.1697 yesterday. Thus, buyers are now advised to trade upward with the target of the Senkou Span B line (1.1765), and in case we go beyond it, you should aim for 1.1791. Take Profit in this case can be up to 70 points. Take note that sharp price reversals are possible and market participants can change their mood.

2) Bears let go of the initiative, since they missed the area above the critical line. Thus, sellers are advised to go back to trading bearish with targets at 1.1612-1.1624 and the support level at 1.1571, if the price settles below the Kijun-sen line (1.1685). Take Profit in this case can range from 50 to 110 points. You should also be careful with short positions.

Hot forecast and trading signals for GBP/USD

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. November 5. 11 days before the deadline for negotiating a trade deal. Some interesting aspects

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - sideways.

Moving average (20; smoothed) - sideways.

CCI: 55.2381

The British pound sterling paired with the US currency also spends the third trading day of the week in a "storm". The movements of the two main pairs are almost identical. And this says only one thing: the US dollar remains the catalyst for the movement. It is its market participants who sell and buy, which leads to the movements of both currency pairs. As in the case of the European currency, it makes no sense to try to predict the future movement of the pair even one day ahead. We believe that the markets should first calm down, and only after that, it will be possible to return to trading. And the "storm" should end only when all the votes are fully counted and the winner is announced. However, even in this case, the US dollar may continue to "storm", as well as the whole of America. The fact is that in many American cities, opponents of Donald Trump took to the streets, who are rallying against the current President, who has already declared himself the winner. So, skirmishes with supporters of the Democrats, as well as with the police, are not excluded, not to mention simple hooliganism and pogroms, as was the case during the months of riots related to racist scandals in the United States. Thus, neither the further movement of the pair nor further events in the US can be predicted now. Therefore, first of all, we recommend that all market participants conduct as careful trading as possible.

Meanwhile, market participants for the pound/dollar pair are interested not only in the US elections. The fate of the UK and the pound sterling is also being decided. We are talking, of course, about the negotiations on a trade agreement between London and Brussels, which have been going on continuously for almost 2 weeks. And now we are talking only about the next round of negotiations. The parties agreed a couple of weeks ago that the negotiations need to be intensified, which was done. However, the markets already want to get at least some information about the progress of the negotiations. After all, this will be the last round. At least in the negotiations in 2020. The next deadline set by Boris Johnson expires on November 15. Thus, there is only a little time left. If at the beginning of the current round of negotiations, the markets received unverified information that the parties were allegedly able to agree on key issues and are "close to concluding a deal", now representatives of the European Commission say that there are still differences between the parties on key issues. In general, the situation here is the same as with the US elections: you need to wait for official information, statements by Michel Barnier, and David Frost.

For now, we will return to the most pressing topic – the elections in America. And we would like to note right away that in fact, the current elections are not even elections. This is the will of the people. We have repeatedly used the term "electoral vote". It's time to clearly understand what this voice is, who has it, and what this "someone" can do. Each US state has a certain number of these "electoral votes". These are electoral colleges that will elect the President of the United States. According to the original idea, the electoral college, which in each state consists of a different number, should take into account the opinion of the residents of the state and vote unanimously for the candidate chosen by the state. In other words, the electoral college must give all its votes to the candidate who won the popular vote. And this board vote will take place in 41 days (December 14). That is, it is impossible to say with 100% probability that a candidate will win after the final count of all votes in all states because the President will be chosen not by Americans, but by electors. And the most interesting thing: electors are not required by law to cast their votes to the candidate who was chosen by the residents of the state. In other words, there is no single article in US law that would force electors to vote for the candidate chosen by the people. However, this behavior of "disillusioned electors" (as they call those electors who do not want to vote for their candidate) is usually suppressed by the governments of each state. The options may be different. Votes given to the "wrong" candidate can be canceled, and the electors themselves can be fined. However, the fact remains that electors can vote as they please. And when the gap between candidates is large enough, then it doesn't make any sense how many electors decide to be "disappointed". This was the case in 2016 when 10 electors out of 538 tried to cast their votes for the "wrong" candidate. Seven managed to do it. But if the gap between the candidates is not large, then these votes may even play a decisive role.

Moreover, if the number of votes is equal (this can also happen), the Congress and the Senate will decide who will become President of the United States. Recall that Congress is controlled by Democrats, and the Senate is controlled by Republicans. Also, if the attempt to change the results of the vote is too long (court proceedings, review of results in different states, proceedings with "disappointed electors"), then the Congress and the Senate may again intervene.

Well, the "cherry on the cake" is a postal vote. Figuratively speaking, any American could send their newsletter by mail on November 3. A letter will be sent to the polling station on November 6. And by law, this American's vote must be counted. This year, about 60 million Americans voted by mail. Some did it in advance, some did not. Thus, now there are no enhanced counting of postal ballots, and the election services are just waiting for all the missing letters. And they can wait for several days. Therefore, the results of the vote in America may have to wait a few more days, during which Donald Trump will continue to insist on the falsification of the Democrats' "postal" vote. Well, the euro/dollar pair may continue to remain in limbo for a few more days.

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The average volatility of the GBP/USD pair is currently 144 points per day. For the pound/dollar pair, this value is "high". On Thursday, November 5, therefore, we expect movement inside the channel, limited by the levels of 1.2845 and 1.3133. The reversal of the Heiken Ashi indicator up may signal a possible turn upward movement.

Nearest support levels:

S1 – 1.2939

S2 – 1.2878

S3 – 1.2817

Nearest resistance levels:

R1 – 1.3000

R2 – 1.3062

R3 – 1.3123

Trading recommendations:

The GBP/USD pair started a new round of downward movement on the 4-hour timeframe. Thus, today it is recommended to open short positions with targets of 1.2939 and 1.2878 if the price is fixed below the moving average line. It is recommended to trade the pair for an increase with targets of 1.3062 and 1.3123 if the price is fixed and bounces off the moving average line.

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

Overview of the EUR/USD pair. November 5. Donald Trump declared himself the winner of the election

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - sideways.

CCI: 80.9164

During the third trading day of the week, the EUR/USD pair first fell by 150 points and it again traded higher, rising by about the same 150 points. By and large, this is called a "storm", and we warned market participants that this is exactly what will happen. Now you can't even tell where is the main movement and where the correction is against it. Traders are panicking because the election is over and there are still no results. Anyone can win, respectively, and the panic in the market persists. In such conditions, it is naturally impossible to make forecasts for the further movement of the pair, even in the very short term. The pair overcame the moving average line several times over the last trading day. Therefore, the best option is to wait for the markets to calm down completely, and only then will it be possible to re-evaluate the technical picture and build new trading strategies.

Over the past three months, the currency market has been talking about the upcoming US elections and their possible results. Even though half of America seems to be against Donald Trump, the second half still supported him in the election (according to current data). There are no official and final voting results yet, although in most states the winner has already been determined. Still, not all votes have been counted yet. This means that whatever the results of the ballots that have not yet been counted, they will not affect the overall result in the state. Thus, the currently undecided states are Wisconsin, Georgia, Michigan, Nevada, Pennsylvania, North Carolina, Iowa, Arizona, New Hampshire, Ohio, Texas, and Florida. Biden leads in four of these states, and Trump leads in all the others. On the other hand, the gap between Trump and Biden is very small, with only 25 "electoral" votes. This means that any state can decide the fate of all elections in the United States. As you can see, so far there is no question of Joe Biden winning with a 91% probability. Moreover, most of the markets were also set up for the victory of the Democrats in the elections to the Senate and the Lower House of Congress, which will allow them to form the majority necessary for total control. However, the Senate and Congressional elections have not yet been finalized. Therefore, the victory of one or the other is still ambiguous here. The most interesting thing is that if some forecasts may not come true, then the second – come true with a vengeance. If Joe Biden's victory does not look clear even now but may turn out to be minimal, then the forecast that the fate of the election will be decided in the Supreme Court is already coming true. Before the vote count is over, Donald Trump has already declared that he won in most states and even where he did not expect to win. Trump is not confused by the fact that the vote count has not yet been completed and the situation may change five more times. He congratulated his staff on their victory and thanked everyone for their votes. Also, the current US President said that "they may try to steal his victory", naturally alluding to the Democrats. Trump immediately said that in case of defeat, he would not recognize it and would go to court. The same speech broke out, where Joe Biden urged not to rush to conclusions and wait for the final results of the election. The fact is that in 2020, the counting of votes is much slower than usual, because about 60 million Americans voted by mail. And counting postal ballots is more difficult and time-consuming. Many people voted for Biden by mail. Thus, all the unrecorded votes are most likely "Biden". However, it is impossible to say this with certainty. It is better, indeed, to wait for the final results and then draw conclusions. However, both candidates do not want to wait. Trump has already called for stopping further vote counting, hinting at fraud on the part of the Biden team. How this works is unclear. How Trump can stop the vote-counting is unclear. It is unclear what rights he has to interfere in the election process. Moreover, it is Biden who is currently winning, not Trump. And throughout the counting process, it was Joe Biden who was consistently the winner. Thus, as usual, it is extremely difficult to understand what exactly Donald Trump is talking about and what "victory" he means. Maybe his team is counting the votes themselves? In general, so far all the next insinuations of Trump look like a new portion of populism and unsubstantiated statements. Biden's staff has already responded that the vote count will not stop, and the legal team is ready to confront Trump in the Supreme Court.

And this is exactly what we have talked about and have repeatedly warned American experts and political scientists. Now the whole process can move to the courts, and no one knows what will be the results of these trials. Trump, of course, hedged in this case and appointed "his" judge to replace the untimely deceased Ruth Ginsburg. Thus, Trump will have the advantage in the Supreme Court. However, again, if Biden does win by a significant margin, it will no longer matter. Donald will not be able to accuse Democrats of fraud in several states or in all where he lost. It will be impossible to review the elections in the whole country. In general, it seemed that about 70-80% of the votes have already been counted, it remains to wait a day or two and everything will be over. But no, nothing will end, because everything is just beginning.

Well, for the US dollar, this news is not positive. First, market participants put Biden's unconditional victory in the price, as well as the Democrats' victory in the Senate and Congressional elections. Second, any further legal proceedings are a continuation of uncertainty for the US, for the US economy, and for the dollar itself. Thus, it will again be extremely difficult for the US currency to enjoy demand in the foreign exchange market until the election issue is finally closed, and one of the candidates admits defeat.

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The volatility of the euro/dollar currency pair as of November 5 is 97 points and is characterized as "high". Thus, we expect the pair to move today between the levels of 1.1621 and 1.1815. A downward reversal of the Heiken Ashi indicator may signal a downward movement.

Nearest support levels:

S1 – 1.1658

S2 – 1.1597

Nearest resistance levels:

R1 – 1.1719

R2 – 1.1780

R3 – 1.1841

Trading recommendations:

The EUR/USD pair started a new round of upward correction and again worked out the moving average. Thus, today it is recommended to open new sell orders with targets of 1.1658 and 1.1621 if there is a rebound from the moving average line. It is recommended to consider buy orders if the pair is fixed above the moving average with the first targets of 1.1780 and 1.1815.

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

Forecast for EUR/USD on November 5, 2020

EUR/USD

Yesterday the market spent a day in disputes and expectations on the US election results. Joe Biden, having seized the leadership from the very beginning, holding it until this morning, he now has 253 votes against Trump's 214, 71.471 million votes were cast for Biden against Trump's 67.968 million. To win for the presidency, a candidate needs to recruit 270 voters. The alignment in the Senate has slightly changed - the Democrats lost the leadership, they now have 47 seats against 48 for the Republicans (50 are needed to control the upper house), the House of Representatives remains with the Democrats: 197 seats against 186. Votes can be counted for a few more days, since many voters voted by mail.

Investors were worried - the trading volume for the euro was the highest in the last five months, the trading range was 168 points. The media wrote that Biden's victory will be followed by a weakening of the dollar, but we repeat: the Democratic establishment traditionally followed the policy of a strong dollar after some periods of exclusion, especially when it was necessary to pull the economy out of the crisis. In the current situation, the demand for dollars will be supported by the demand for US public debt (in connection with the new aid package) and the change of Trump's state paradigm "divide and conquer" to the "unite and conquer" paradigm, which will be expressed in the unfreezing of projects of transoceanic partnerships and an early agreement with Britain on its exit from the EU. In the long term, we expect the euro to be below parity.

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The daily chart shows that the euro returned to the area of the balance indicator line, while the signal line of the Marlin oscillator moves horizontally right along the border of the downward area. Perhaps the euro will reach the lower target level of 1.1620 by today or tomorrow.

The price needs to overcome yesterday's high (1.1770) in order to move up, and it also needs to take the nearest target at 1.1830, which is the peak on October 9.

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The price cannot go above the MACD indicator line on the four-hour chart, while the Marlin oscillator turns to the downside without waiting for it. There are no clear signals for a reversal yet, but there are no signals for succeeding growth either. So we should wait until the market reacts to the results of the presidential elections.

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

Forecast for GBP/USD on November 5, 2020

GBP/USD

As a result of yesterday, the British pound lost more than other currencies due to unrest associated with the US presidential election - by 70 points. The price continues to fall in the Asian session and breaking the signal level of 1.2930 may consistently pull down the pound to targets 1.2860 and 1.2770. The Marlin oscillator is decreasing on the daily chart, but it is still in the positive zone. If the price moves below 1.2930, the oscillator may also move into the negative zone.

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The four-hour chart shows that the price is below the MACD indicator line, while Marlin is preparing to enter the downward trendzone. Such a signal on this scale will cause quotes to fall below 1.2930. This is the main scenario. In order to develop growth, the price needs to gain a foothold above the strong level of 1.3050. Then the target will be the high on October 21 in the area of the MACD line on a daily scale (1.3180).

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

Forecast for AUD/USD on November 5, 2020

AUD/USD

On Wednesday, the Australian dollar traded in the range of 173 pips amid the excitement of the US election. However, the day closed not far from the opening. To resume the growth, the price needs to go above yesterday's high of 0.7222, the target will be the MACD line in the area of 0.7280. To resume the decline, the price needs to go below 0.7120, the nearest target will be 0.7058.

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Fixation under the level will return the Australian dollar interest in working out the lower line of the price channel in the area of 0.6930. The daily Marlin oscillator is turning down, giving priority to the price reversal from current levels.

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On the four-hour chart, Marlin has formed a double top, is turning around, and the price is targeting the nearest level of 0.7120.

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

USD/JPY Forecast for November 5, 2020

USD/JPY

Today, the USD/JPY pair worked out the Kruzenshtern line as the upper shadow on the daily scale chart and went down strongly. This morning, the decline continues with the help of the falling Marlin oscillator. Leaving the price under the signal target level of 104.20 will allow the price to take the lower target of 103.73 and fixing under it will open the target of 102.45. To restore the growth, the price needs to gain a foothold on the trend line above 104.78. The first goal will be the top of yesterday's 105.35. Furthermore, with strong optimism in the stock markets, the growth may continue to go up to 106.03.

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Based on the four-hour chart, the price went under the Kruzenshtern line and the Marlin oscillator is actively falling. The main option is a scenario with the price overcoming the level of 104.20 and developing a further downward trend movement.

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