Trader's Diary: Trump is to blame. EURUSD 06.11

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US elections: while the counting situation has changed little in a day, Biden holds a margin of almost 1% in Nevada with 84% of the vote counted. See the sign at the bottom of the picture above. If he wins Nevada, Biden will be President. Trump has almost no chance.

Trump is to blame. As we can see, Trump did not have enough votes in key States to win. This is his own fault for his rudeness and intolerance. Trump, pursuing a generally quite reasonable policy, managed to turn many prominent Republicans against him. They even created a special committee against Trump called the "Lincoln Project".

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EUR / USD: We are waiting for the growth to continue.

We hold purchases from 1.1750.

We are ready to buy from a pullback from 1.1780.

We are ready to buy after fixing above 1.1860.

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Fractal analysis for major pairs on November 6

Outlook on November 6:

Analytical overview of major pairs on the H1 TF:

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The key levels for the euro/dollar pair are 1.1975, 1.1945, 1.1894, 1.1854, 1.1780, 1.1753 and 1.1711. We are following the development of the upward pattern from November 4 here. A short-term growth is expected in the range of 1.1854 - 1.1894. If the last value breaks down, it will lead to the development of a strong movement. In this case, the potential goal is 1.1945. For the potential value for the top, we consider the level of 1.1975. Price consolidation and downward pullback are expected upon reaching this level.

A short-term decline is expected in the range of 1.1780 - 1.1753. If the last value breaks down, it will lead to a deep correction. Here, the goal is 1.1711, which is a key support for the top.

The main trend is the upward structure from November 4

Trading recommendations:

Buy: 1.1855 Take profit: 1.1892

Buy: 1.1895 Take profit: 1.1945

Sell: 1.1780 Take profit: 1.1754

Sell: 1.1751 Take profit: 1.1713

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The key levels for the pound/dollar pair are 1.3389, 1.3307, 1.3246, 1.3162, 1.3088, 1.3052 and 1.2992. Here, we are following the formation of the rising pattern from November 2. The pair here is expected to continue rising after the level of 1.3162 breaks down. In this case, the goal is 1.3246. On the other hand, there is a short-term growth and consolidation in the range of 1.3246 - 1.3307. For the potential value for the top, we consider the level of 1.3389. Upon reaching which, a downward pullback is expected.

A short-term decline is expected in the range of 1.3088 - 1.3052. In case of breaking through the last value, it will lead to a deep correction. The target here is 1.2992, which is a key support for the top.

The main trend is the formation of an upward potential from November 2

Trading recommendations:

Buy: 1.3162 Take profit: 1.3244

Buy: 1.3247 Take profit: 1.3306

Sell: 1.3088 Take profit: 1.3053

Sell: 1.3050 Take profit: 1.2994

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The key levels for the dollar/franc pair are 0.9093, 0.9067, 0.9048, 0.9024, 0.9007, 0.8977 and 0.8935. The formation of the descending structure from November 2 is being monitored. Here, the decline is expected to continue after the price passes the noise range of 0.9024 - 0.9007. In this case, the target is 0.8977 and there is consolidation near this level. For the potential value for the bottom, we have the level of 0.8935. Upon reaching which, an upward pullback is expected.

A short-term upward movement is possible in the range of 0.9048 - 0.9067 and breaking through the last value will lead to a deep correction. The goal here is 0.9093, which is the key support for the downward structure.

The main trend is the descending structure from November 2

Trading recommendations:

Buy : 0.9048 Take profit: 0.9066

Buy : 0.9068 Take profit: 0.9093

Sell: 0.9024 Take profit: 0.9008

Sell: 0.9005 Take profit: 0.8978

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The key levels for the dollar/yen are 104.20, 103.94, 103.78, 103.33, 103.05 and 102.63. The development of the descending pattern from November 4 is being followed here. Now, the decline is expected to continue after breaking through the level of 103.33. In this case, the goal is 103.05. Price consolidation, in turn, is near this level. If the goal breaks down, it will lead to a strong decline. Here, the potential target is 102.63.

A short-term rise is likely in the range of 103.78 - 103.94. In case that the last value breaks down, it will lead to a deep correction. The goal is 104.20, which is the key support for the downward structure.

The main trend is the downward trend from November 4

Trading recommendations:

Buy: 103.78 Take profit: 103.93

Buy : 103.96 Take profit: 104.20

Sell: 103.33 Take profit: 103.07

Sell: 103.03 Take profit: 102.65

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The key levels for the USD/CAD pair are 1.3197, 1.3146, 1.3107, 1.3033, 1.2971, 1.2938 and 1.2869. Here, we are following the development of the descending structure from November 2. The pair is expected to decline after the level of 1.3033 breaks down. In this case, the goal is 1.2971. On the other hand, there is a short-term decline and consolidation in the range of 1.2971 - 1.2938. As a potential value for the bottom, we consider the level 1.2869. Upon reaching which, an upward pullback is possible.

In turn, a short-term growth is possible in the range of 1.3107 - 1.3146, breaking through the last value will lead to a deep correction. The goal here is 1.3197, which is a key support for the downward structure.

The main trend is the descending structure from November 2

Trading recommendations:

Buy: 1.3107 Take profit: 1.3144

Buy : 1.3147 Take profit: 1.3195

Sell: 1.3031 Take profit: 1.2971

Sell: 1.2936 Take profit: 1.2873

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The key levels for the AUD/USD pair are 0.7432, 0.7366, 0.7317, 0.7289, 0.7248, 0.7214 and 0.7178. We continue to monitor the formation of the rising pattern from November 2. Now, a short-term rise is expected in the range of 0.7289 - 0.7317. If the last value breaks down, it will lead to a strong rise. Here, the target is 0.7366 and price consolidation is near this level. For the potential value for the top, we consider the level 0.7432. A downward pullback is likely upon reaching this level.

A short-term decline, in turn, is expected in the range of 0.7248 - 0.7214. If the last value breaks down, a deep correction will occur. Here, the target is 0.7178, which is the key support for the top.

The main trend is the upward cycle from November 2

Trading recommendations:

Buy: 0.7289 Take profit: 0.7317

Buy: 0.7319 Take profit: 0.7365

Sell : 0.7246 Take profit : 0.7216

Sell: 0.7212 Take profit: 0.7180

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The key levels for the euro/yen pair are 123.61, 123.03, 122.69, 121.57, 121.16 and 120.77. The development of the downward trend cycle from October 20 is being followed here and the price is also forming a potential for the October 30 high. At the moment, a short-term increase is possible in the range of 122.69 - 123.03. In case that the last value breaks down, it will lead to the development of an upward structure from October 30. In this case, the goal is 123.60.

On the other hand, we expect the decline to continue after the breakdown of 121.57. In this case, the target is 121.16. For the potential value for the bottom, we consider the level of 120.77. Upon reaching which, price consolidation and upward pullback is possible.

The main trend is the downward cycle from October 20, the correction stage

Trading recommendations:

Buy: 122.70 Take profit: 123.02

Buy: 123.05 Take profit: 123.60

Sell: 121.55 Take profit: 121.18

Sell: 121.14 Take profit: 120.80

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The key levels for the pound/yen pair are 139.01, 138.40. 137.54, 137.19, 136.70, 136.27, 135.22, 134.81 and 134.35. Here, we follow the formation of the potential for the top from October 30. A short-term growth is possible in the range of 136.27 - 136.70. Now, we expect the upward trend to continue after the level of 136.70 breakdown. In this case, the target is 137.19. On the other hand, there is a short-term rise and consolidation in the range of 137.19 - 137.54. If the level of 137.55 breaks down, it will lead to a strong growth. The target here is 138.40. As a potential value for the top, we consider the level of 139.01. Upon reaching which, price consolidation and downward pullback is possible.

A short-term decline is possible in the range of 135.22 - 134.81. If the last value breaks down, it will lead to the development of a downward trend. In this case, the goal is 134.35.

The main trend is the upward structure from October 30

Trading recommendations:

Buy: 136.27 Take profit: 136.68

Buy: 136.72 Take profit: 137.19

Sell: 135.20 Take profit: 134.81

Sell: 134.78 Take profit: 134.35

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Daily Video Analysis: CADJPY (Playing the long term trend!)

Today we take a look at CADJPY. Combining advanced technical analysis methods such as Fibonacci confluence, correlation, market structure, oscillators and demand/supply zones, we identify high probability trading setups.

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Trading plan for the EUR/USD pair on November 6. New record highs in COVID-19 incidence, growth in the European currency.

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A new peak in COVID-19 incidence is recorded, around 608 thousand a day. About 118 thousand from it were from the United States, while 58 thousand were from France.

As for the fatality rate of the virus, about 9 thousand deaths are recorded every day.

Because of this, new lockdowns were imposed in Europe, however, it did not negatively affect the position of the European currency in the market.

US elections: The counting of votes is ongoing. Joe Biden now only needs to win in Nevada in order to ultimately win the presidential race. As of this moment, Biden is leading by 0.9%, but if he really wins, Trump will most likely appeal in court.

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EUR / USD - The euro is showing a consistent growth in the market. However, this will be limited by the strong resistance at 1.1850 - 1.1900.

Open long positions from 1.1750, or on a pullback from 1.1780.

Longs can be opened as well at 1.1860.

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Indicator analysis. Daily review on GBP/USD for November 6, 2020

Trend analysis (Fig. 1).

Today, the market from the level of 1.3148 (closing of yesterday's daily candlestick) will make an attempt to start moving down with the goal of 1.3104 - a pullback level of 14.6% (red dotted line). Upon reaching this level, the price can continue to move up with the goal of 1.3177 - the upper fractal (candle from 21.10.2020).

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Figure 1 (Daily chart).

Comprehensive analysis:

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

General conclusion:

Today, the price from the pullback level of 14.6% - 1.3104 (red dotted line) will try to continue moving up with the goal of 1.3177 - the upper fractal (candle from 21.10.2020).

Upon reaching this level, work upward to the goal of 1.3310 - the historical resistance level (blue dotted line).

Unlikely scenario: from the level of 1.2929 (closing of yesterday's daily candlestick), the price will start moving down to reach the pullback level of 23.6% - 1.3058 (red dotted line). When testing this level, the price will continue moving down to the next target of 1.2985 - a pullback level of 38.2% (red dotted line).

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Technical Analysis of ETH/USD for November 6, 2020

Crypto Industry Outlook:

According to yesterday's blog post on the Ethereum Foundation, the first version of Ethereum 2.0 is expected to launch on December 1. The start will take place provided that certain criteria are met.

Blockchain modernization, which puts the network on the proof-of-stake consensus mechanism, will allow Ethereum holders to stack their coins. In this way, they will be helping to run the net instead of mining as is the case today.

Ethereum 2.0 will start operating on December 1 at 12:00 UTC if there are 16,384 validations on the network. Each validator will have to stake 32 ETH, currently worth $ 12,700. This amounts to $ 209 million in total.

The Ethereum Foundation also released version 1.0 of the specification for Ethereum 2.0 today. It reveals the Launch Pad where users can volunteer to become an Ethereum 2.0 validator (someone who stacks on the network) and the main Ethereum contract address - where the funds will be deposited.

Technical Market Outlook:

The ETH/USD pair has finally started to rally higher and the last resistance from the level of $430.71 had been violated. The local high was made at the level of $439.44 (at the time of writing the article), but the next target is seen at the level of $447.29 and $450.00. The level of $420.11 will now provide the intraday support and the level of $400 will now act as a key 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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Worst possible scenario in the US election. Overview of USD, EUR, GBP

The US Federal Reserve refrained from any action at the end of the meeting. Most comments on the results of the meeting come down to the fact that they do not want to change anything in the current situation until there is a clearer political outlook. Nevertheless, economic indicators are quite confident, despite the rising cases of COVID-19. Here, the Fed has the ability to buy assets worth at least $ 80 billion a month, balances in the accounts of the Treasury, which lowered its emission targets earlier this week just because of the overall increase in the current account. If the political impasse drags on and Congress does not approve a new economic aid package, then the Fed will return to the issue of new incentives, which is expected to happen in December.

The political situation became more complicated on the third day after the elections. US President Donald Trump, during a press conference at the White House, announced that he won the elections when counting "legal votes." It's not hard to see what Trump means if you look at FOX news' county voting map. So, are we dealing with a color revolution in the United States?

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Thus, neither of the two political parties gained an advantage. Both presidential candidates refuse to admit defeat, so there is a high probability that the mechanisms provided for by the legislation to break the political dilemma will not work, which will lead to anarchy.

We are in the early phase of the largest political crisis in US history since the Civil War. The markets traded a day ago, considering that Biden won the presidency and the Republican led the Senate. This order is expected to lead to fewer tax changes, which pleases the markets. However, everything changed again this morning. Oil is losing more than 2%, which is a sign of a high probability of a "blue wave" scenario, that is, a sign of a Democratic majority in the Senate. At the same time, bond yields have sharply declined, which indicates increased risks. It is also significant that the Shanghai Composite has gone into a negative zone, and it is China that is considered to be more interested in Biden and the Democrats in general, since this will stop the trade war with the US.

EUR/USD

The second wave of COVID-19 spread in Europe, and thus, restrictions on economic activity are tightened. Despite the fact that GDP growth rebounded in the third quarter quite sharply, business activity indicators began to lose impulse. In view of this, retail sales went into negative zone in September, inflation was negative, and the dynamics of consumer activity indicated the approaching recession.

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If we look at the worsening economic outlook, the ECB has temporarily announced additional stimulus, but details will be revealed during the December meeting. We can assume that the PEP program will be extended, but a rate cut in the negative zone still looks unlikely.

At the same time, the EUR/USD upward pullback amid high probability of Biden's victory was not so strong. Technically, the local top 1.1860 is below the previous 1.1881, which means that a downward impulse is very likely. The movement will exactly correspond to the news from the pre-election front: either a breakdown of 1.1882 and then a test of 1.20, or a pullback to 1.16, with a goal of 1.15. From an economic point of view, the EUR/USD decline is certainly more justified.

GBP/USD

The market was slightly surprised by the Bank of England, which increased its asset repurchase program by £150 billion, and not the forecasted £100 billion. The Bank of England currently predicts that the UK economy will sink by 2% in the fourth quarter, but assumes that a trade agreement between the EU and the UK will still be signed, although the EU is pessimistic.

On another note, negative rates were not mentioned in the minutes or the accompanying statements of Cabinet members. Therefore, the pound failed to gain strong impulse and will fluctuate synchronously with other currencies, monitoring the situation in the United States. The local high of 1.3474 held. The alignment is the same as for the Euro. This currency will rise if Mr. Trump admits defeat and will decline if the winner moves into the Judicial court.

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Technical Analysis of BTC/USD for November 6, 2020

Crypto Industry Outlook:

According to analytical company Glassnode, the number of BTC addresses holding at least one Bitcoin has reached the new ATH.

As of today, there are 824,193 BTC addresses with at least one Bitcoin. This result surpasses the previous ATH of 824,160, observed on September 17. The number of addresses holding at least one bitcoin has been growing steadily since its inception in 2008. Even though the price of BTC has risen by thousands of percent since then.

The new record may have something to do with the BTC price, which has risen by around $ 3,500 last month and by around $ 10,000 since the March crash. The high price of Bitcoin makes it an even more successful coin. The number of BTC addresses storing 1 BTC is growing, even though it is getting more and more expensive.

According to Glassnode's data, more records are being prepared on the blockchain. Yesterday, the BTC mining difficulty fell by 16%, which is the second largest correction in history. The previous record was set in October 2011, when the digging difficulty decreased by 18%.

Technical Market Outlook:

The BTC/USD pair has made another yearly high at the level of $15,827 (at the time of writing the article) as the presidential election in the USA are still not finished and the COVID pandemic fears are still present. The level of $15.648 is the last 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 $15,000 and $14,000. 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 $16,000, so any correction or local pull-back should be used to open the buy orders. This scenario is valid as long as the level of $10,000 is broken.

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Technical Analysis of EUR/USD for November 6, 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, broke this level and went higher towards the next target at 1.1822. This level was violated as well and the new local high was made at 1.1859. The market is now consolidating the recent gains in a Triangle pattern. 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 the up trend continuation after the Triangle breakout. The next technical resistance is seen at the level of 1.1879.

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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Technical Analysis of GBP/USD for November 6, 2020

Technical Market Outlook:

The GBP/USD pair keeps making the up and down swings inside of the trading range as the votes of the presidential elections in the USA are still being collected. Nevertheless, the outlook is now leaning towards bullish side as the recent local top was made at the level of 1.3155, just below the technical resistance located at 1.3169. The momentum is strong and positive, so it supports the short term bullish outlook. On the other hand, only a sustained violation of the long-term trend line will indicate more bearish pressure that can push the prices to the level of 1.2868, 1.2848 or even 1.2816.

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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Indicator analysis Daily review for the EUR / USD currency pair 06/11/2020

Trend analysis (Fig. 1).

Today, the market will try to start moving down from the level of 1.1823 (the closing of yesterday's daily candle) with the goal of 1.1798 which is a pullback level of 23.6% (red dotted line). In the case of testing this level, work up to the level of 1.1860 which is the resistance line (white bold line). If successful, further work up to 1.1880 is the upper fractal (candle from 21.10.2020).

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Figure 1 (daily chart).

Complex analysis:

  • Indicator Analysis – up
  • Fibonacci Levels – up
  • Volumes – up
  • Candle Analysis – up
  • Trend Analysis – up
  • Bollinger Bands – up
  • Weekly Chart – up

General conclusion:

The price, from the level of 1.1673 (the closing of yesterday's daily candle), will try to start moving down with the goal of 1.1798 which is a pullback level of 23.6% (red dotted line). In the case of testing this level, work up to the level of 1.1860 which is the resistance line (white bold line). If successful, further work up to 1.1880 upper fractal (candle from 21.10.2020).

Alternative scenario: From the pullback level of 14.6% - 1.1823 (red dotted line), the upward movement may continue with the target of 1.1860 which is the resistance line (white bold line). In the case of testing this line, work down to the level of 1.1798 which is a pullback level of 23.6% (red dotted line).

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Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on November 6

Analysis of transactions in the EUR / USD pair

The euro showed a fairly large increase yesterday amid expectations of Joe Biden's victory over the US elections. It also ignored the weak statistics on the eurozone economy, as well as rather negative forecasts from the European Commission. Thus, long positions from 1.1765 to 1.1845 brought about 80 pips of profit from the market, which is very good, especially at the end of the week.

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Trading recommendations for November 6

Today, everything will depend on the final results of the US presidential elections. However, Trump has also declared that he will appeal everything in court if he loses the race.

Aside from that, Biden's victory will ultimately weaken the US dollar against other world currencies, particularly on the risky assets. In this case, buying the European currency will be a more correct decision.

But then, it is also worth remembering that a number of important reports on the US labor market are coming out today. Good indicators may temporarily restore demand for the US dollar and weaken the position of the European currency.

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  • Open a long position when the euro reaches a quote of 1.1845 (green line on the chart), and then take profit at the level of 1.1932. However, growth will only occur if Joe Biden wins the US presidential elections.
  • Open a short position when the euro reaches a quote of 1.1792 (red line on the chart, and then take profit around the level of 1.1687. 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

There was a good buy signal in the GBP / USD pair yesterday, around the level of 1.2986. Those who managed to wait until the quote reached the target level (1.3129) earned more than 140 profit pips. The huge growth was mainly due on the decision of the Bank of England regarding its monetary policy, as well as on the expectation that Joe Biden, who continues to lead in terms of votes, will become the future US president.

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Trading recommendations for November 6

Before buying the pound, it is necessary to pay attention to the data on the US labor market, as it will set the tone for the entire market today. The lack of economic reports from the United Kingdom will keep the bullish trend in the GBP / USD pair. However, the main movement will still be based on who will win the US elections.

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  • Open a long position when the quote reaches the level of 1.3158 (green line on the chart), and then take profit around the level of 1.3254 (thicker green line on the chart). Only Biden's victory in the elections will strengthen the pound's position in the market.
  • Open a short position when the quote reaches the level of 1.3107 (red line on the chart), and then take profit at least at the level of 1.3009. 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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GBP/USD: plan for the European session on November 6. COT reports. Pound buyers go beyond 1.3154 resistance and resume the

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

Buy positions on the pound continued in the afternoon. In yesterday's review, I mentioned that the pair should settle above the resistance of 1.3043 and recommended buying the British pound from there in hopes of sustaining growth, which happened. On the 5-minute chart, you can clearly see how the bears tried to return to support at 1.3043 several times, but they met resistance from buyers every time, afterwards the pound grew to the next resistance at 1.3136. The movement was around 90 points. Sell positions from resistance at 1.3136, which I highlighted, also brought about 30 points of profit, and the whole movement reached 50 points.

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Today the bulls are one step away from bringing back the bull market, and for this they need to go above the resistance of 1.3154. Getting the pair to settle at this level will open a direct road to the highs of 1.3234, and the next target will be the 1.3315 level, where I recommend taking profits. However, such a strong growth will only occur if Biden wins the US presidential election. In case the pair falls in the first half of the day, support can be expected in the 1.3093 area, where the moving averages are gradually moving up. Forming a false breakout at this level will be a signal to open long positions. If sellers are not active, it is best to postpone buy positions until the larger area of 1.3034 has been updated or even from a low of 1.2976, counting on a rebound of 20-30 points within the day.

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

Pound sellers are now aiming for support at 1.3093. A breakout and getting the pair to settle below this range forms a new entry point for short positions, which will cause the pound to fall to a low of 1.3034, where I recommend taking profits. It will be possible to go beyond the 1.3034 area in case we receive very good statistics on the US labor market, which will pull down the pound to support at 1.2976. The bears should also keep in mind that the market is not on their side and to contain the bullish momentum, they need to protect resistance at 1.3154. Forming a false breakout on it will be a signal to sell the pound. If sellers are not active, I recommend waiting for the test of a new, more recent high of 1.3234 and selling GBP/USD immediately on a rebound, 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 conducted above the 30 and 50 moving averages, which indicates the pair's succeeding growth.

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

Bollinger Bands

A break of the upper limit in the 1.3154 area will lead to a new wave of growth for the pound. A break in the lower limit of the indicator around 1.3080 will increase the pressure on the pound.

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 November 6. COT reports. Euro buyers have reached very important levels

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

I mentioned placing buy positions above 1.1814 and selling from a large high yesterday afternoon, which is what happened. Let's take a look at the 5-minute chart and break down the entry points. After the pair began to slowly exert pressure on the 1.1814 level in the afternoon, its breakdown took place, which caused EUR/USD to rise by 60 points. We had the same signal in the morning after the breakout of 1.1765. Short positions immediately on the rebound from the resistance of 1.1864 were also absolutely correct. But the pair was just a couple of points short of reaching this high, so I personally missed this deal.

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Buyers are currently focused on going beyond the 1.1842 high and there are plenty of reasons for that today. The intrigue of winning the US presidential election remains, but Biden has an advantage, so a breakout and getting the pair to settle above 1.1842 is a signal to open long positions in hopes of reaching highs of 1.1878 and 1.1915, where I recommend taking profits. The US labor market report will be released in the afternoon, which could return the demand for the US dollar. Therefore, in case the pair falls, a false breakout in the support area of 1.1797, where the moving averages pass playing on the side of buyers, will be a signal to open long positions. I advise you to buy EUR/USD immediately on a rebound only from a low of 1.1757, counting on a rebound of 15-20 points within a day.

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

Sellers need to protect resistance at 1.1842, as well as the larger level of 1.1878, when tested, a divergence may form on the MACD indicator, which will lead to forming a downward correction for the pair. Forming a false breakout at 1.1842 will also be a signal to open short positions. A more important task for euro sellers is to go beyond and settle below support at 1.1797. Testing it from the other side forms a fairly good sell signal in hopes to fall to a low of 1.1757. Support at 1.1701 will be the next goal, which is where I recommend taking profit. Many important fundamental reports will be released today, including the data that everyone is waiting for - the results of the US elections, so volatility promises to be very large. So don't forget to place stop orders.

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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 above 30 and 50 moving averages, which indicates continued growth in the euro.

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 breakout of the upper border of the indicator around 1.1845 will lead to a new wave of euro growth. A breakout of the lower border of the indicator around 1.1797 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

Forecast for EUR/USD on November 6, 2020

EUR/USD

The final results of the US presidential election have not yet been determined. But Joe Biden needs to confirm his advantage in two states in order to win, while Donald Trump needs to confirm an advantage in four. Artificial difficulties that Trump created in regards to the counting of votes, the demand for US government bonds and the lack of only one place for the Republicans in the Senate to obtain a majority made it possible for the euro to rise by 100 points. The Federal Reserve meeting was a passing one yesterday, it had no effect on the market.

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The price has powerfully reached the target level of 1.1830 and has settled below it on the daily chart. The signal line of the Marlin oscillator began to show a reversal, there is a chance that the price will fall below the target level of 1.1770, settle below it, and this will then confirm the reversal. In this case, the 1.1620 level will be the target, that is, the initial position before the market starts working out the American elections. The level is very strong and ideologically significant, so the price moving below it will be a sign of starting a medium-term downward trend. But this is still far away (two figures), and in the current situation, the 1.1770-1.1830 range is an area of uncertainty. Getting the price to settle above it will mean it could also rise to 1.1880 or even higher, to the MACD line (1.1920).

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The four-hour chart shows that there is support for the MAD line (1.1728 area) below the 1.1770 level, therefore, in order to confirm the downward movement, it is not enough for the price to just settle below the 1.1770 level, it should go beyond this support. As a result, the probability of price reversal from the current levels is 55-60%.

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

Forecast for GBP/USD on November 6, 2020

GBP/USD

The pound fell slightly short of the MACD line (1.3180) on the daily chart. It is possible to reach the level, and then a reversal divergence will form according to the Marlin oscillator. A reversal from the current levels will be confirmed when the price settles below the 1.3050 level. In this case, the price will return to 1.2930.

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There is no strong reversal signal on the 4-hour chart. When forming, say, a divergence, the price will need to go even lower and reach 1.3180. US employment data for October will be released today, so speculative action is likely to a high degree. The unemployment rate is forecast to decline from 7.9% to 7.7%. We are waiting for the development of events.

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

AUD/USD Forecast for November 6, 2020

AUD/USD

Yesterday, the Australian dollar showed a rare side of high dynamics as its growth was just over a hundred points ahead of the Euro. The growth stopped at the daily Kruzenshtern line and this morning the price started to reverse. Leaving the price with a consolidation under 0.7222 will mean a reversal of this dynamics in the opposite direction, the first goal will be 0.7120, then 0.7058. Growth is possible with a 35% probability. To do this, the price needs to overcome yesterday's high and the target will be the upper limit of the price channel at 0.7335.

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Based on the four-hour scale chart, the reversal is not yet pronounced, the indicators only show its possible beginning, albeit with a high probability. To confirm it, you need to wait for the price to fall below the nearest level of 0.7222.

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

Forecast for USD/JPY on November 6, 2020

USD/JPY

Upon the general fall of the dollar, the yen strengthened yesterday by 100 points. The yen strengthened its correlation with the stock market, which rose by almost 2% on Thursday. It seems that the pair will continue to decline regardless of external circumstances, and this decline does not happen without the participation of the Bank of Japan. The strategic goals of this are still vague, but the nearest goal is clearly visible - 102.75, which is followed by 101.95.

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On the four-hour chart (H4), the price has consolidated below the target level of 103.75 and is consolidating below it. The Marlin oscillator shows a reversal, however, not confidently. It is possible that the price will resume to consolidate, after which it will continue to decline.

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

Hot forecast and trading signals for GBP/USD on November 6. COT report. Will traders pay attention to US statistics?

GBP/USD 1H

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The GBP/USD pair also traded up all day on Thursday, November 5, repeating the dynamics of the EUR/USD pair. Buyers managed to bring quotes to the previous local high, but failed to go beyond it. Therefore, since the fundamental background is not on the side of the British pound, quotes may sharply fall to a new ascending trend line today, which so far supports those trading upward, but at the same time it is not strong. The problem is that the recent upward trend is purely fundamental. This means that when the current fundamental background weakens, the mood of market participants may completely change, and the current trend will be broken in a matter of hours. Moreover, the British currency has no market support, since the UK has not provided any positive news. This indicates that this currency continues to balance on the brink of an abyss, and only the political crisis in the United States keeps it from falling again.

GBP/USD 15M

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The linear regression channels are directed to the upside on the 15-minute timeframe, which fully corresponds to the nature of the pair's movement on the hourly chart. At the same time, we expect the quotes to fall during the day.

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.

The fundamental background was very weak for the British currency on Thursday. This point here is the failure of the next round of talks on the EU-UK trade deal, as well as the dovish position of the Bank of England, which was summed up at the results of the latest meeting. However, this information did pull down the pound because the US elections are of much greater concern to traders. Therefore, the pound grew and even the summing up of the results of the Fed meeting did not really change the situation. Now traders can count on a downward correction. In general, we believe that the pound is simply obliged to start falling on Friday, as it is impossible for one fundamental background to be ignored and the other to be worked out. US macroeconomic reports will be released on Friday. NonFarm Payrolls, unemployment rate, average hourly wages. Naturally, the main focus of traders will be on the indicator of the number of new jobs created outside the agricultural sector. Forecast at +600,000. Any value below can exert more pressure on the dollar. The unemployment rate is expected to drop to 7.7%, but there is a suspicion that the market will not take these statistics into account due to the US presidential elections.

We have two trading ideas for November 6:

1) Buyers of the pound/dollar pair tried to get ahead again, but gave up before the 1.3130 level, but they still managed to form an upward trend. And so traders are advised to stick with buy positions while aiming for the resistance level of 1.3166, but be careful, as a downward reversal around the 1.3130 level is possible. Take Profit in this case will be up to 50 points.

2) Sellers do not currently own the initiative in the market. And so you are advised to open new sell orders while aiming for the 1.2855-1.2874 area in case the price settles below the Kijun-sen line (1.2996) and the trend line, but also in small lots and with extreme caution. Take Profit in this case can be up to 80 points. Take note there may be highly volatile trades and sharp price reversals today.

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 6. COT report. Adoption of stimulus package can be delayed indefinitely

EUR/USD 1H

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The EUR/USD pair was trading quite volatile again on the hourly timeframe on Thursday, November 5. The US dollar continued to depreciate. Buyers brought quotes above the resistance level of 1.1791, breaking the Kijun-sen and Senkou Span B lines along the way. Therefore, there are prospects for further growth for the EUR/USD pair, towards the resistance area of 1.1886-1.1912. However, take note that current market conditions are not entirely normal. High volatility is associated with the strongest fundamental background. This fundamental background can change, it can intensify, and the reaction of traders to it is unpredictable. Thus, you are advised to trade with extreme caution.

EUR/USD 15M

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The linear regression channels are directed to the upside on the 15-minute timeframe, which reflects the nature of the movement on the hourly chart during the past day. However, a downward reversal may follow and quotes could fall in the near future.

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.

The European Union released its September retail sales figure on Thursday. It turned out to be worse than the forecast values, however, the euro continued to rise during the day, regardless of European data. Meanwhile, a report on applications for unemployment benefits was released in the United States, which turned out to be slightly worse than forecasts, but was also ignored by market participants. There has been no global news in the European Union in recent days, and the coronavirus epidemic, as we see, does not hinder the euro's growth too much. The US elections is still the key topic in the foreign exchange. And it seems that it is pulling down the dollar (against the pound too). General uncertainty remains, and both Trump and Biden have a chance of winning. But this is not what makes traders get rid of the US dollar. The fact that a litigation between Democrats and Republicans will begin immediately after the final results are announced, makes us talk about a constitutional crisis. And a new potential confrontation between Trump and Biden significantly lowers the chances of reaching an agreement on a new stimulus package for the US economy in the near future.

We have two trading ideas for November 6:

1) The EUR/USD pair managed to maintain an upward trend yesterday. And so, buyers are advised to trade upward while aiming for the resistance area of 1.1886-1.1912, if the price manages to stay above the 1.1791 level. Take Profit in this case can be up to 80 points. Take note that sharp price reversals and high volatility are still possible today.

2) Bears still do not have the initiative in the market. Thus, sellers are advised to return to trading down while aiming for the 1.1692-1.1699 and 1.1612-1.1624 area, if the price settles below the Kijun-sen line (1.1730). Take Profit in this case can range from 20 to 90 points. The fundamental background is not on the side of the US dollar righ now.

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

The Dollar trap: the Fed won't help

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The Dollar extended its decline on Thursday, showing the biggest three-day decline. Demand for it has fallen as markets anticipate the victory of Joe Biden. In recent days-- even weeks-- investors have been in a state of uncertainty as Donald Trump has launched a multi-pronged attack; filing lawsuits to recount votes in several States. This is also seen as a negative factor for the greenback.

The Federal Reserve, which will announce its decision on the rate of monetary policy today, may worsen the already shaky position of the US Dollar. The regulator, as market players expect, hints at a possible adjustment to the asset purchase program either in an accompanying statement or during a press conference by Jerome Powell.

"The meeting of the Federal Reserve is a secondary issue but there is a chance that it may strengthen hints about a possible expansion of quantitative easing, and this will be an additional negative factor for the Dollar," experts write.

However, most market strategists still believe that now is not the time for any statements and hints. The Central Bank will wait until December. Since the winner of the election has not yet been announced, Fed members will strictly adhere to their latest statement. They will once again promise to do everything possible to help the economy overcome the downturn caused by the pandemic.

The dollar index sank 0.9% today to 92.64. Its lowest level in more than a week. Its weakness is also compounded by the widespread decline in Treasury yields. The spread between benchmark 10-year and 2-year debt narrowed to a 3-week low.

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Meanwhile, the European regulator published a new batch of statistics on changes in assets on its balance sheet. There was a decrease of 6.06 billion Euros against an increase of 38.3 billion Euros in the previous week. Financiers reduced the repurchase of securities by 17.49 billion Euros, which was the main reason for the decline in assets on the balance sheet. This is a positive signal for the Euro.

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As for the Pound, it was able to rise to the area of 1.30 in a pair with the Dollar today. The Pound certainly took advantage of the weakness of the US currency. Buyers also became more active after the results of the Bank of England meeting were summed up.

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The Central Bank kept the rate at the same level and announced an increase in the program for buying state bonds by $195 billion. The accompanying statement noted that the British economy will contract in the current quarter. Starting today, the country has declared a four-week quarantine. A little earlier, lockdown was introduced in Scotland, Wales, and Northern Ireland.

Despite attempts to recover, the overall negative background will restrain the growth of the British Pound in the future. The composite PMI in October fell short of the forecast 52.3, amounting to 52.1 points. The index of business activity in the service sector fell to 51.4 points. If you add national quarantine and Brexit, it turns out that the Pound has no chance of growth. The only consolation for him now is a weak Dollar.

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

Overview of the GBP/USD pair. November 6. The Bank of England is expanding its QE program and preparing for negative rates

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) - upward.

CCI: 179.5236

The British pound sterling paired with the US dollar also started a new round of upward movement, which was caused by the level of uncertainty that the US and the US economy are currently facing. However, as we have said many times before, the pound itself may now be under market pressure, as the fundamental background from the UK is also extremely unpleasant. Thus, the strengthening of the British currency may not be very long-term. Last time, the price bounced from the Murray level of "7/8" - 1.3123, now it has come close to it. A price rebound from this level may trigger a new round of downward movement. In principle, this is exactly the movement that has been going on for the pound for several weeks: frequent changes in the direction of movement, the frequent overcoming of the moving average. Thus, the technical picture of the GBP/USD pair remains extremely ambiguous.

The most important news of recent days for the British pound still concerns the negotiations on a trade deal between the EU and the UK. The next round of negotiations has finally ended, and the heads of the negotiating groups said again that the current progress is not enough to conclude a trade agreement. Michel Barnier said that there are still strong differences between the parties on several key issues. David Frost also confirmed his rhetoric, adding that there is still some progress. However, Britain, the British economy, and the pound do not need "some progress", they need a deal that will somehow mitigate the negative effect of the "divorce" from the European Union. And the "deal" at the moment still does not even "smell". In other words, the parties continue negotiations, which are classified, because market participants do not know in which areas progress has been made, which issues remain unresolved. Further, it is unclear how much longer they will continue. Boris Johnson said earlier that the new deadline for negotiations is November 15. However, before that, he said that the deadline is October 15. Thus, the negotiations may continue after November 15. We have repeatedly noted that London and Brussels have nothing to lose. They have a "great" prospect of trading with each other under the WTO rules, which are much less favorable than the rules of the free trade zone. Thus, from January 1, they will start trading according to the WTO rules, however, this does not mean that they will not be able to agree, for example, in February and April to start trading according to the agreement reached. It is better to trade without a deal for three months than for several decades.

Well, the Bank of England at this time began to ease monetary policy. More precisely, continued softening. This morning, the results of the next meeting of the Bank of England were summed up, at which it was decided to expand the quantitative easing program by 150 billion pounds. It should be noted that traders were waiting for an increase in the QE program by 100 billion. Thus, the Bank of England's actions were more "dovish" than expected. The discount rate remained unchanged at 0.1%. BA also updated its GDP forecasts for the coming years. The regulator now expects the British economy to fall by 11% this year and recover by 7.25% next year. The Bank of England fears a new negative impact on the economy of a repeated "lockdown", as well as a break with the EU without an agreement. As for inflation, the Bank of England said that monetary policy will not be tightened before reaching a stable level of 2.0% y/y, and this level may be reached within two years. A very optimistic forecast, from our point of view. The monetary committee also noted in a press release that it is still ready to use any available monetary policy tools to stimulate the economy and inflation. Earlier, the BA and its chief executive, Andrew Bailey, repeatedly hinted at the possible use of negative interest rates. And market participants are waiting for the introduction of these in the coming months.

Well, as for the Fed meeting, there was nothing overly important and overly interesting this time. It took place late in the evening when the European and American markets were either closed or were preparing to close. Moreover, in the first place in terms of importance for traders now are the elections, vote counting, and the political crisis in the United States, and not the next "passing" meeting of the Fed. And with the elections, the situation is extremely interesting. We have already said in the article on the euro/dollar that both Biden and Trump maintain the same chances of winning even though the Democrat is far ahead and only six votes short of winning. However, it should be recalled that in addition to the presidential elections in America, at the same time, there were also elections to the Senate and Congress. And at the moment, the Democrats and Republicans have received 48 seats in the Senate (for a majority, you need 50), and in the House of Representatives, the Democrats are still gaining 204 seats, and the Republicans - 190. However, to get a majority, you need to gain 218 seats. Thus, neither of them has a clear advantage and a clear victory yet.

As for the pound/dollar pair, it cheerfully ignored the results of the Bank of England meeting, because these results should have led to a fall in the pound. However, since it is the US dollar that is falling now, and both currencies cannot fall at the same time in this pair, today the British currency had the advantage. Market participants are still waiting for the final results of the vote in America, and are already preparing for any further events that may drive the States into a constitutional crisis. In any case, there are still a lot of extremely interesting events waiting for us before the end of the year. In addition to the American events, the issue of a trade deal between the EU and the Kingdom is still unresolved, but the point in their negotiations is not set. So we are waiting for new information on this issue.

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The average volatility of the GBP/USD pair is currently 156 points per day. For the pound/dollar pair, this value is "high". On Friday, November 6, thus, we expect movement inside the channel, limited by the levels of 1.2940 and 1.3252. A reversal of the Heiken Ashi indicator downwards signals a possible round of downward movement.

Nearest support levels:

S1 – 1.3062

S2 – 1.3000

S3 – 1.2939

Nearest resistance levels:

R1 – 1.3123

R2 – 1.3184

R3 – 1.3245

Trading recommendations:

The GBP/USD pair has started a new round of upward movement on the 4-hour timeframe. Thus, today it is recommended to keep open long positions with targets of 1.3184 and 1.3245 until the Heiken Ashi indicator turns down. It is recommended to trade the pair down with targets of 1.2940 and 1.2878 if the price is fixed below the moving average line.

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

Overview of the EUR/USD pair. November 6. Donald Trump starts attacking the states where he lost the election. The vote count

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) - upward.

CCI: 172.6574

During the fourth trading day of the week, the EUR/USD pair continued the upward movement that began the day before. From a technical point of view, it was hardly possible to predict a new round of growth of the European currency by more than 150 points. However, do not forget that in America, the counting of votes continues. And in the context of this event, the fall of the US currency now looks quite logical. The thing is that the elections will not end with elections, no matter how absurd it may sound. The counting of votes will end, but the elections themselves will continue. A few months before November 3, Donald Trump began to send non-ambiguous signals that there would be no simple and calm transfer of power in the event of his defeat. The current US President began to accuse the Democrats of election fraud long before the election itself. What does this mean? This suggests that Donald Trump understood from the very beginning that his chances of winning the election are small, to say the least. Thus, Trump immediately began to prepare Americans for the fact that the Biden team would allegedly try to cheat, especially with voting by mail. Trump declared his victory in the election without even waiting for the full vote count. And just when he was losing to Joe Biden. And he lost to Biden at any point in the vote count. Thus, market participants are now just preparing for the fact that multi-week trials, recounts of votes, a new confrontation between Democrats and Republicans with tons of mutual accusations of each other will begin. Naturally, such a political situation cannot contribute to the strengthening of the US dollar. We have previously said that the United States is experiencing a full-scale political crisis, and also warned that the country is on the edge of a constitutional crisis. Recall that under US law, Trump is not required to leave the White House on January 20, even if he is defeated. That is, Trump can stay in the White House, and Biden and his team will have to "smoke" him out of the presidential administration by any means or through the same courts. Also, Trump can challenge the results of the voting in almost any state. And any trial is time. We already wrote about the most interesting difference between the US electoral system and others yesterday. Whatever the outcome of the American vote, the electoral college has every right to vote for whomever it pleases. That is, it is now the election results are based on the "electoral votes" that each state must give to a particular candidate. The electors will vote on December 14 for a particular candidate. And until they vote, it is impossible to say that one or another candidate won. There were cases when up to 10 electors tried to cast their votes to the "wrong" candidate for whom the state voted.

The Trump team has already started working towards legal proceedings. The Trump campaign appealed to the courts of Georgia, Michigan, and Pennsylvania to stop the counting of votes. Trump's staff also said they would call for a recount in both Wisconsin and Philadelphia. Also, Trump's representatives named several other states where Trump has already lost by a narrow margin. In these states, Republicans will also demand a recount. Nothing is surprising about this. This is what we have repeatedly written about over the past months. And now attention – yesterday and today, we just saw the reaction of traders to the elections. The dollar started to fall due to complete confusion and may continue to be under pressure in the next few days. And further counting of votes may just last another 1 or 2 days. In Alaska, it is reported that the vote shall take another week. In Pennsylvania, you can assume the vote until Saturday. In Nevada – the vote count stopped, saying it will resume work in a day. In general, the situation is absurd, as well as everything that concerns the US elections, as well as the election campaigns and the confrontation between Trump and Biden, which began long before the elections themselves.

But the OSCE representatives believe that there were no special violations during the elections and counting of votes. Moreover, the OSCE says that Trump regularly made baseless statements about possible fraud on the part of the Democrats. "Baseless allegations of systematic violations, in particular by the incumbent President, including on election night, undermine public confidence in democratic institutions," said OSCE representative Michael Georg Link.

Well, the situation is even more interesting with the remaining states, for which it is still unknown exactly who will win them. That is, it is still quite possible that Trump will win the remaining states and get ahead of his opponent. In this case, the Republicans will get 271 votes with the necessary 270. Thus, despite the seemingly huge gap between Biden and Trump (both before the election and after), nothing has been decided yet. It is also possible that the margin of one candidate from another will be no more than 10 or 20 votes. In other words, changing the results in just one state can make a winner a loser and vice versa. Trump has already begun preparing for legal proceedings. There is no doubt that Biden's staff is also preparing for them.

Well, the euro/dollar pair may continue to remain in the "storm" over the next few days. We have already said that traders and investors do not like uncertainty very much. It is this uncertainty that has prevented the US currency from rising in price over the past few months, even as part of a correction. Now the situation in the United States has not changed. Even if all the votes are counted in the coming days, Trump will immediately announce that he will be sued and that he will not admit defeat. Therefore, the election results will not be considered final. Thus, the US currency may continue to be in limbo for another month or even more. Everything will depend on how far Donald Trump and his staff will go in the confrontation with Biden.

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The volatility of the euro/dollar currency pair as of November 6 is 105 points and is characterized as "high". Thus, we expect the pair to move today between the levels of 1.1698 and 1.1908. A reversal of the Heiken Ashi indicator down may signal a new round of downward movement.

Nearest support levels:

S1 – 1.1780

S2 – 1.1719

S3 – 1.1658

Nearest resistance levels:

R1 – 1.1841

R2 – 1.1902

R3 – 1.1963

Trading recommendations:

The EUR/USD pair continues to move up. Thus, today it is recommended to keep open buy orders with targets of 1.1841 and 1.1902 as long as the Heiken Ashi indicator is directed upwards. It is recommended to consider sell orders if the pair is fixed below the moving average with the first targets of 1.1658 and 1.1597.

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