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The best broker in Asia www.instaforex.com Daily analysts mail subscription Elliott wave analysis of GBP/JPY for October 26, 2020 2020-10-26 We continue to expecte short-term key support at 136.26 will be able to protect the downside for a new rally above 137.33 and more importantly a break above resistance at 137.83 for a rally towards the former peak at 142.72 and ultimately above here too. A break below 136.26 will call for a re-test of support at 135.59 and likely even lower towards 135.07. R3: 137.33 R2: 136.85 R1: 136.77 Pivot: 136.26 S1: 135.92 S2: 135.59 S3: 135.37 Trading recommendation: We are long GBP from 135.45 with our stop at 136.25 Analytics and trading signals for beginners. How to trade EUR/USD on October 26? Plan for opening and closing trades on Monday 2020-10-26 Hourly chart of the EUR/USD pair The EUR/USD currency pair began a new round of corrective movement within a new (old) upward trend in the evening. As a reminder to novice traders, the upward trend line has been rebuilt and is now supporting bull traders again. However, we also recall a couple of other important factors that can greatly affect the pair's movement. First, the price continues to trade within the horizontal channel of $1.17-1.19. Since it has spent the last few days near its upper border, a downward reversal is highly probable and it could fall to the lower border of this channel. Secondly, although the trend line was rebuilt, the price failed to update the previous local high of October 22 at 1.1867. And this indirectly indicates the cancellation of the upward movement. Thus, we would say that the EUR/USD pair might return to the updated trend line in the near future and try to overcome it. Nevertheless, the upward trend remains, therefore, in the event of an upward reversal of the MACD indicator or an eloquent rebound from the trend line, you are still advised to trade upward. The fundamental background for the EUR/USD pair in the new week can be downright boring, and it can also be quite interesting. There are few macroeconomic reports for the week. But traders ignore most of it anyway. There is not a single significant event scheduled for Monday. On the other hand, such an important event as the presidential elections in the United States is approaching. We have already mentioned why this is important. And most importantly, the markets can actively trade all pairs containing the dollar. That is, with the approaching elections, the volatility of the EUR/USD pair may significantly increase. Of course, this is not 100% certain. This is just a guess. But you need to be ready for this. Also, in the near future, we expect the pair to leave the horizontal channel, in which it has been trading for three months. Most likely, this will not happen before the end of the elections. However, we also remind novice traders that the 2020 US presidential elections can be fraught with fraud, litigation, and vote counting can take up to several weeks, as many Americans will vote by mail due to the difficult situation with COVID-2019. Therefore, it is impossible to predict how the markets will react to all these unusual events and what will happen if Donald Trump loses the election. As for the eurozone, the second wave of coronavirus continues to gain momentum, but so far the euro does not react too strongly to this news. Perhaps because the situation with COVID isn't any better in America? Possible scenarios for October 26: 1) Buy positions on the EUR/USD pair remain relevant at the moment, since the upward trend line has been rebuilt and it supports buyers again. However, as we expected last night, a new correction has begun. Therefore, we recommend waiting the downward correction to be completed, a reversal of the MACD indicator to the upside and afterwards you can finally open new longs while aiming for 1.1888 and 1.1903. 2) It is not advised to trade for a fall at this time, since the upward trend line is in action again. Thus, in order to sell the pair, novice traders need to wait until the price settles below the trend line. In this case, shorts will become relevant while aiming for 1.1759. On the chart: Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now. Up/down arrows show where you should sell or buy after reaching or breaking through particular levels. The MACD indicator (14,22,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines). Important announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal. Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time. EUR/USD. Coronavirus anti-records and shaky growth of the US currency 2020-10-26 Today, the US dollar index demonstrates a slight increase at the start of trading. Greenback is strengthening its position against the backdrop of strengthening anti-risk sentiment. Traders are again using the dollar as their primary defensive tool, despite the political instability in the US and another failure in negotiations over a new aid package for the US economy. A similar situation was observed last week. For five trading days, traders could not decide on what factors to focus their attention on. Coronavirus and political battles in the United States have become mainstream themes, alternating one after another. Initially, investors were alarmed by the news flow from Europe: the surge in the incidence of COVID-19 forced the key countries of the European Union to again resort to tightening quarantine restrictions. This fact provoked an increase in anti-risk sentiment, after which the dollar again won the laurels of the favorite in the foreign exchange market. However, on Friday, the greenback once again demonstrated its vulnerability amid the pre-election battles in the United States. On the last day of the trading week, a final televised debate between Trump and Biden took place, bringing back fears of a prolonged period of post-election political instability in the United States. According to most observers, the verbal duel ended in Biden's favor - but with a minimal margin. This is also indicated by the results of several polls. But the minimum percentage advantage does not play any role here. In fact, there was no clear winner among the candidates: the debate ended in a draw, while Biden made a serious mistake by mentioning the name of the Nazi leader in an incorrect context. This fact suggested that Donald Trump at the finish line of the pre-election race will narrow the gap with his main rival (before the last debate, the gap was 11%), increasing his chances of re-election. By the way, 4 years ago, at the same stage of the election campaign, Hillary Clinton also predicted the highest chances of winning. Everyone knows what the final result was. In addition, it is necessary here to take into account the specifics of the American electoral system - for example, the results of nationwide surveys need to be correlated with indicators in each individual state. Otherwise, the nationwide survey can be compared to the "average body temperature in the hospital". Many analysts view the reaction of the American currency to political battles in the United States in the context of a simple question - which candidate is better for the dollar: Trump or Biden. But in my opinion, the market estimates (for now) only the likelihood of a political crisis after the announcement of the preliminary election results. That is why the dollar index lost ground on Friday: following the televised debates, it became clear that Trump's loss was no longer so obvious. This means that the Republican team will fight for every vote, including in court, especially given the "coronavirus" remote voting (which has repeatedly succumbed to criticism from Trump). In other words, the absence of a clear winner in the election is a negative factor for the dollar, Nevertheless, during the Asian session today, the dollar index slightly recovered its positions: if on Friday, the trading closed at 92.77, then on the first trading day the indicator went up to the borders of the 93rd figure. The growth is minimal, but the trend itself is important here, which indicates a weakening of pressure on the greenback. The market switched to coronavirus again. Traders could not ignore the negative news flow from Europe, indicating an increase in the disease in almost all EU countries. For example, there's almost 20 thousand new cases of COVID-19 detected in Italy over the past day. The authorities of this country announced that in the near future they will announce further tightening of measures. In Germany, the anti-record was updated for the second time in a week: the number of confirmed cases increased by 15 thousand per day. Berlin is also preparing to significantly tighten quarantine restrictions. Earlier, the curfew was introduced in metropolitan areas and large cities in France, as well as in the Netherlands, the Czech Republic, in several regions of Greece and in some cities in Spain. In Poland, the President of the country Andrzej Duda became infected with the coronavirus. In other words, the rate of spread of coronavirus in European countries is growing, even despite the restrictive measures being taken. The anti-rating leaders in terms of the number of new cases of COVID-19 are France, Spain, Italy and the Czech Republic. At the weekend, the situation only worsened, so the reaction of traders at the start of trading is predictable. But in my opinion, the "coronavirus factor" will not be able to strengthen the position of the greenback, even if we consider the medium-term prospects. During the American session on Monday, the market will switch to political events in the US, especially since another deadline for negotiations on the fate of the new stimulus package expires today (spoiler: the parties with a 95% probability will not find a compromise again). In general, the dollar is still a vulnerable currency, and even the coronavirus factor is no longer helping it dominate the market. The situation cannot be compared with the spring one (at least at the moment), since, firstly, the EU countries still do not dare to lockdown, and secondly, there is no shortage of dollar liquidity on the market (as was the case in March). Plus to everything - the pre-election period in the United States, which does not allow dollar bulls to fully show their character even when the fundamental background disposes to this. All this suggests that investing in the dollar now is a risky business. Speaking directly about the euro-dollar pair, we can see that the price moved away from Friday's highs, but at the same time did not update the low of the last week. In other words, the pair is still trading in a flat, in the price range of 1.1815 up to 1.1875, in which it has been since last Wednesday. From current positions or when approaching the base of the 18th figure, you can enter longs with the first target of 1.1875. The next resistance level is located just above the 1.1900 mark. Trading plan for the EUR/USD pair on October 26. New peak in COVID-19. Big news from Europe and the United States. 2020-10-26 Infection rate surged again in the United States yesterday, having recorded a new peak of 80 thousand new cases a day. At the same time, France overtook India on having the second highest incidence rate, after it listed 52 thousand new cases yesterday. Overall, the total number of new cases in the world is almost half a million per day. With regards to medicine, vaccinations will finally begin at the end of November. But until then, people should take care of themselves and wear protective masks when coming outside of their homes. According to experts, wearing masks in public places reduces the likelihood of contracting the virus by a huge 80%. The US market is ready for a new round of growth. However, it would depend on the upcoming US elections. If the market peaks before the elections, sell stocks. EUR/USD: The euro is consolidating. Keep setting up long positions, but place the stops at 1.1700 or 1.1770 Meanwhile, open short positions from 1.1770. Longs may also be opened from 1.1865 News on US GDP, as well as the statements from the ECB, could turn the direction of the market. EUR/USD: plan for the European session on October 26. COT reports. Market continues to balance. Bulls have a chance to update their monthly high 2020-10-26 To open long positions on EUR/USD, you need: Two long entry points appeared last Friday. Let's take a look at the 5 minute chart and break down the trades. The first buy signal appeared at the beginning of the European session after a false breakout at the 1.1797 level. You can see how the bears are trying to catch on to this level, but nothing came of it. The euro starts to rise as a result of a false breakout. Then the bulls manage to catch on the resistance of 1.1836, which already forms the second entry point. However, the movement was about 20 points, after which the bullish impulse faded. Before talking about today's prospects for the pair's movement, let's take a look at the situation in the futures market, which has not changed much. This once again confirms the fact that the pair has been in the horizontal channel lately. Recent reports on activity in the eurozone indicated weak prospects for the recovery of the European economy due to the risk of a second wave of Covid-19. This forces traders to take a wait-and-see attitude. Expectations of further monetary stimulus from the European Central Bank also limit the euro's growth potential. The Commitment of Traders (COT) report for October 20 recorded an increase in long positions and short ones. However, there were more of the latter, which led to an even greater decrease in the positive delta. Despite this, the buyers of risky assets believe in the continuation of the bull market, but prefer to act with caution, as there is no good news for the eurozone yet. Thus, long non-commercial positions increased from 228,295 to 229,878, while short non-commercial positions increased from 59,658 to 63,935. The total non-commercial net position decreased to 165,943, against 168,637 a week earlier.... However, the bullish sentiment for the euro remains rather high in the medium term. The more the euro falls against the US dollar at the end of this year, the more attractive it is for new investors. As for the pair's technical picture, bulls are now focused on the 1.1826 level, and its direction for the week will depend on their actions in this range. Now the bulls need to defend this support level, but only a false breakout in that area can produce a signal to open long positions while expecting an upward correction to the resistance area of 1.1864, where I recommend taking profits. The main task of buyers is to go beyond and settle above this range, which will form another entry point to long positions, similar to Friday's buy positions, and will open a direct road for EUR/USD to the highs of 1.1915 and 1.1964. If the bears turn out to be stronger and they manage to pull down the euro below 1.1826, then it is best to postpone long positions and wait until the weekly low at 1.1792 has been updated, where a false breakout will be a signal to open longs. Otherwise, I recommend buying EUR/USD only for a rebound from the new low of 1.1762, counting on a correction of 15-20 points within the day. To open short positions on EUR/USD, you need: Sellers will try to push through the 1.1826 support, and today's IFO report which can turn out to be weak can provide some help. Settling below 1.1826 forms a good entry point for short positions, which will open a direct road to the low of 1.1792, where I recommend taking profits. However, bears need a breakout for this range, which will open a direct path for EUR/USD to lows in the 1.1762 and 1.1732 areas. An equally important task for the bulls is to protect resistance at 1.1864, which may be tested today in case of higher economic expectations for Germany. Forming a false breakout at this level will be a signal to sell the euro, in hopes for it to fall to support at 1.1792. I recommend opening short positions immediately on a rebound from a new high of 1.1915, counting on a correction of 15-20 points within the day. Indicator signals: Moving averages Trading is carried out in the area of 30 and 50 moving averages, which indicates market uncertainty regarding the long term direction, but with a slight advantage of euro buyers. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands A breakout of the lower border of the indicator around 1.1826 will increase pressure on the euro. The breakout of the upper border in the 1.1864 area will lead to another attempt to strengthen the pair. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders. GBP/USD: plan for the European session on October 26. COT reports. Pound more attractive as traders' faith in Brexit trade deal grows 2020-10-26 To open long positions on GBP/USD, you need: Last Friday, the bulls made several unsuccessful attempts to continue pushing the pound after the PMI data, but then the pair was under pressure again, which resulted in its sell-off. However, judging by the latest data, the pound's appeal is gradually recovering, and this week we may see a new wave of growth in the pair, provided that the parties manage to agree. Significant changes are visible in the futures market, which play on the side of the buyers of the pound. The fact that traders are closing short positions indicates the likelihood of a new wave of growth in the medium term. And although bears still have control of the situation, their preponderance is at a minimum. The only thing that holds buyers back is the uncertainty about Brexit and the prospects for a recovery in the UK economy. Problems with the risk of introducing negative interest rates and the introduction of restrictive and quarantine measures due to the surge in the number of coronavirus infections have so far faded into the background. The Commitment of Traders (COT) report for October 20 showed a reduction in short positions and a sharp increase in long positions. Long non-commercial positions rose from 36,195 to 39,836. At the same time, short non-commercial positions fell from 45,997 to 41,836. As a result, the negative value of the non-commercial net position slightly increased and reached -2,000, against - 9,802 a week earlier, which indicates that the sellers of the pound retain control and also shows their minimal advantage in the current situation. Buyers of the pound need to take the resistance of 1.3053 as soon as possible, because the succeeding correction will depend on it. Settling at this level forms a signal to open long positions in GBP/USD and will open up the opportunity for a new wave of growth in the area of Friday's high at 1.3120, but much will depend on how Brexit will progress. A compromise will provide good support for the pound. Therefore, settling above 1.3120 will lead to a test of the highs of 1.3174 and 1.3234, where I recommend taking profits. An equally important task is to protect support at 1.2977. You can open long positions from this level immediately on a rebound, counting on a correction of 20-30 points within the day. In case bulls are not active in this range, it is better not to rush to buy, but to wait for the test of the next major support level in the 1.2919 area. To open short positions on GBP/USD, you need: Sellers need to defend the resistance of 1.3053, but much will depend on news on the Brexit trade deal, since we do not have any UK fundamental reports at our disposal. Forming a false breakout at 1.3053 generates a signal to sell the pound, but we need bad news on Brexit for a large bearish pressure. The nearest target of the bears is support at 1.2977, but the pound can only fall if the pair settles below this level, and then it might return to the area of 1.2919 and 1.2865, which is where I recommend taking profits. If the pair grows in the first half of the day and there is no activity in the resistance area of 1.3053, it is best to postpone short positions until last Friday's high at 1.3120 has been tested, afterwards you can sell the pound immediately on a rebound, counting on a correction of 20-30 points within the day. Indicator signals: Moving averages Trading is carried out just below the 30 and 50 moving averages, which indicates a slight advantage for sellers of the pound. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands A breakout of the lower border of the indicator in the 1.3010 area will increase pressure on the pair. Growth will be limited by the upper level of the indicator in the 1.3100 area. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders. Analysis and forecast for EUR/USD on October 26, 2020 2020-10-26 As usual, on Mondays, we will summarize the results of the five-day trading period and consider the prospects for the price movement of the main currency pair of the Forex market. So, at the auction on October 19-23, the US dollar was under selling pressure and weakened against all major competitors. In particular, the single European currency showed a strengthening of 1.26%, as a result, there were some changes in the technical picture for the euro/dollar, which we will return to later. In the meantime, let's talk about what dictated the last week's trading, and about the main events of this week that can affect the price dynamics of EUR/USD. In the run-up to the US presidential election on November 3, investors are very concerned about whether the White House administration will be able to agree with Democrats in the House of Representatives on the adoption of a new fiscal stimulus package just before the election. The new program of assistance to the world's leading economy should and will be adopted, however, when exactly this will happen is still shrouded in mystery. Let me remind you that the main contradictions between the parties are the size of the new aid package. Democrats are demanding more stimulus than their Republican opponents are offering. Another important reminder is the fact that in the United States, the first outbreak of the COVID-19 pandemic began somewhat later than in European countries, and since Europe is covering (or has already covered) the second wave of coronavirus, it will inevitably reach the United States. This is a matter of time, but about 2-3 weeks. Meanwhile, the first and second European economies, German and French, respectively, as a result of the invasion of the second wave of COVID-19, risk incurring significant losses that will negate the recovery that was started. Now about the most important and main events, which without any doubt are the election of the President of the United States of America. Let me remind you that Joe Biden is leading the race, and the current President Trump will have to make incredible efforts to change the situation. Most market participants believe that a Biden victory will significantly increase risk appetite in global financial markets, which means that it will weaken the US dollar. However, the US election will be held next week, and this week the main event will be the decision of the European Central Bank (ECB) on interest rates and the subsequent press conference of ECB President Christine Lagarde. Since the ECB is likely to keep the main interest rate at zero, the main attention of market participants will be focused on the speech of the head of the European Central Bank. Now it's time to look at the technical picture for EUR/USD. Weekly As a result of the rather impressive growth, the euro bulls managed to break through the strong resistance of sellers at 1.1830 and end the weekly session above this mark. The red line of the Tenkan indicator Ichimoku was also confidently passed up. As you can see, at the auction of the previous two weeks, it was the level of 1.1830 and Tenkan that did not allow the quote to go higher. However, at this point, the problems for players to increase can not be considered solved. A very important test is waiting for them in the price zone of 1.1880-1.1917, where there is a fairly strong resistance of sellers, which can be judged by the long upper shadows of several candles and the previous inability to overcome the designated area. I believe that only a true breakout of 1.1917 with the week closing above this level will open the way to 1.1965, and then to the significant psychological level of 1.2000 and the August highs on 1.2010. As has been noted many times, the bearish scenario will gain chances for its implementation only after a true breakdown of the key support level of 1.1700. Judging by the weekly timeframe, I am more inclined to expect the continuation of the upward trend. Daily The daily chart clearly shows the hard struggle for the pair to exit the Ichimoku indicator cloud. Once again, I would like to draw your attention to the fact that a single candle that closes above the upper border of the cloud is not enough to consider the exit from it as true. Friday's attempts by the bears to continue the pressure on the pair ended at 1.1786, from where the pair began an active recovery and ended trading on October 23 at 1.1859. Judging by the technical picture on the two timeframes considered, the main trading recommendation will be considered purchases that are best opened at lower prices. As an option, I recommend considering opening long positions on EUR/USD after a corrective pullback to the price zone of 1.1840-1.1825. In tomorrow's article, we'll take a closer look at the four-hour and one-hour charts. Technical Analysis of EUR/USD for October 26, 2020 2020-10-26 Technical Market Outlook: The EUR/USD pair has been trying to rally towards the level of 1.1880, but failed and made the lower high at the level of 1.1864. In early Monday trading hours the price moved lower towards the technical support seen at the level of 1.1822. This level is a 61% Fibonacci retracement on the weekly tome frame chart as well and had been tested many times during the last month. The market is coming off the overbought conditions and the momentum is neutral to positive, so there are still a chance for bulls for another wave up. Only a sustained violation of the level of 1.1761 will trigger more aggressive sell off towards 1.1724 and below. Weekly Pivot Points: WR3 - 1.2123 WR2 - 1.1991 WR1 - 1.1943 Weekly Pivot - 1.1823 WS1 - 1.1766 WS2 - 1.1638 WS3 - 1.1589 Trading Recommendations: Since the middle of March 2020 the main trend is on EUR/USD pair has been up, which can be confirmed by almost 10 weekly up candles on the weekly time frame chart and 4 monthly up candles on the monthly time frame chart. The recent correction towards the level of 1.1612 seems to be completed and now market is ready for another wave up. This means any local corrections should be used to buy the dips until the key technical support is broken. The key long-term technical support is seen at the level of 1.1445. The key long-term technical resistance is seen at the level of 1.2555. Simplified wave analysis and forecast for EUR/USD and AUD/USD on October 26 2020-10-26 EUR/USD Analysis: The trend of the European currency since March is directed to the north of the price chart. The last incomplete wave on the main course started on September 25. Its structure shows a clear zigzag (A-B-C). In the last section, an intermediate pullback has been developing since the middle of last week. Forecast: In the next trading session, you can expect a decline in the area of settlement support. By the end of the day, a reversal and return to the upward movement vector are expected. A breakout of the upper limit of the nearest resistance is not excluded today. Potential reversal zones Resistance: - 1.1960/1.1990 - 1.1870/1.1900 Support: - 1.1810/1.1780 Recommendations: Euro sales are risky today. It is recommended to refrain from entering the pair's market during the pullback and look for buy signals at its end. AUD/USD Analysis: Since March, the Australian dollar market has been forming an upward momentum on a daily scale. Its last section counts down from September 25. During the entire current month, the price formed a correction (B). The bullish segment of the chart from October 20 has a reversal potential. This may be the beginning of the final part (C). Forecast: A general flat mood is expected in the near future. In the European session, you can expect a price decline up to the support zone. By the end of the day, the probability of a reversal and re-ascent to the resistance area increases. Potential reversal zones Resistance: - 0.7140/0.7170 Support: - 0.7080/0.7050 Recommendations: Trading the pair today is only possible within the intraday with a reduced lot. When selling, you should be prepared for counter price outliers. After the reversal signals appear, purchases of the instrument will become a priority. Explanation: In the simplified wave analysis (UVA), waves consist of 3 parts (A-B-C). The last incomplete wave is analyzed. The solid background of the arrows shows the formed structure, and the dotted background shows the expected movements. Note: The wave algorithm does not take into account the duration of the instrument's movements in time! Technical Analysis of GBP/USD for October 26, 2020 2020-10-26 Technical Market Outlook: The GBP/USD pair had made a swing high at the level of 1.3175, but since then it has been moving lower in a local correction. Recently the price has hit the level of 1.3021 which is a technical support, but it looks like the bears want to push it lower towards the level of 1.3011. This is the 61% Fibonacci retracement and if broken, then the marekt will slide lower towards the next technical support seen at 1.2982. Please notice, the price is back into the local ascending channel again, so the bears are now in control of the market. Weekly Pivot Points: WR3 - 1.3465 WR2 - 1.3320 WR1 - 1.3185 Weekly Pivot - 1.3039 WS1 - 1.2902 WS2 - 1.2757 WS3 - 1.2620 Trading Recommendations: The GPB/USD pair is in the down trend on the monthly time frame, but the recent bounce from the low at 1.1411 made in the middle of March 2020 loos very strong and might be a reversal swing. In order to confirm the trend change, the bulls have to break through the technical resistance seen at the level of 1.3518. All the local corrections should be used to enter a buy orders as long as the level of 1.2674 is not broken. Analysis and forecast for GBP/USD 26/10/2020 2020-10-26 Despite the 0.98% increase shown by GBP/USD at the auction on October 19-23, further strengthening of the Pound against the US Dollar remains questionable. Why? We will discuss this in more detail in the technical part of this review. In the meantime, let's touch on the COVID-19 issue and note the most important macroeconomic events that can have a significant impact on the price dynamics of the Pound/Dollar currency pair at the current five-day trading session. In a number of European countries and in the UK, the situation with the spread of the COVID-19 pandemic remains extremely difficult. There is no doubt that there is a second wave of the Coronavirus epidemic. In Wales, United Kingdom, very strict restrictions have been imposed. Bars and restaurants are closed; as well as most of the shops. Residents are not allowed to leave their homes after 17:00 local time. Let me remind you that the UK holds the lead in Europe in terms of the death rate from COVID-19 which is a very sad indicator. This week is expected to have extremely small volume of statistics from the UK, and the most important indicators will not be tackled at all. In this regard, the fundamental background for the GBP/USD pair will be determined by macroeconomic reports from the United States. First of all, it is worth highlighting the orders for durable goods as well as preliminary data on the GDP of the United States for the third quarter. Moving on to the GBP/USD price charts and taking into account the results of the past week, let's start with the corresponding timeframe. Weekly Despite the growth shown, the last weekly candle formed a fairly long upper shadow and the closing price of the previous week's trading was below the orange 200 exponential moving average and the red Tenkan line of the Ichimoku indicator. It is characteristic that in last week's review, these two indicators were designated as targets for possible growth and were defined as potentially strong resistances. At the same time, the rebound from the maximum values of 1.3175 was so significant that the Pound's bulls failed to close weekly trading above the important technical levels of 1.3047 and 1.3050. After such long upper shadows, questions were brought up about the ability of the quote to continue growing. In our case, to continue the upward trend, it is necessary to update the previous highs at 1.3175 and pass the difficult technical level of 1.3200. If this is done, the next target for the Pound's bulls will be a strong resistance zone of 1.3265-1.3282. However, the implementation of a bearish scenario also does not seem to be easy. To control the pair, players on the downside need to return the price not only to the psychological level of 1.3000, but also to go below 1.2900. However, even if these conditions are met, it is impossible to give an unambiguous answer about the bear market for the GBP/USD pair. In my personal opinion, the key support zone is 1.2811-1.2767. First, the previously broken resistance of 1.2811 passes here. Second, the 89 exponential moving average, the Kijun line of the Ichimoku indicator, and the 50 simple moving average are located slightly lower. The true breakdown of which signals the bearish nature of subsequent trades on the GBP/USD pair. Daily On the daily chart, the current situation looks more bearish. As you can see, the exit from the Ichimoku indicator cloud and the breakdown of the 1.3081 resistance level turned out to be false. The price returned to the limits of the daily cloud and under the mark of 1.3081. This factor signals the weakness of the bulls for this instrument, which most likely makes selling the main trading idea for the Pound-Dollar pair. However, there are two points to note here. The first is the Tenkan red line, which stopped Friday's decline and could potentially return the pair to an upward trend. The second point is a likely pullback to the broken resistance line 1.3479-1.3063, which runs near the lower border of the cloud and together with it can provide strong support. Trading recommendations for GBP / USD Given the ambiguous technical picture and frequently changing market sentiment, effective positioning in both directions is possible. Sales should be considered after the rise in the price area of 1.3050-1.3090 and the appearance of bearish candle patterns there. It is better to look at purchases after short-term declines in the area of 1.3017-1.2967 and the appearance of bullish candlestick analysis models there. GBP/USD. October 26. COT report: major players are confused. Bear traders need to close at 1.3010, then a new fall is possible. 2020-10-26 GBP/USD – 1H. According to the hourly chart, the quotes of the GBP/USD pair performed a rebound from the corrective level of 127.2% (1.3096), a reversal in favor of the US currency, and a resumption of the fall in the direction of the Fibo level of 100.0% (1.30060. Thus, the rebound of quotes from this level will allow traders to expect a return to the level of 1.3096, and fixing under it will increase the chances of a further fall in the direction of the next corrective level of 76.4% (1.2928). At the same time, negotiations on a trade deal between the UK and the European Union resumed. Last Thursday, Michel Barnier arrived in London again and was supposed to leave on Sunday, but then unexpectedly extended the time of his visit to the British capital for several days. It's hard to say what this means. That some progress has been made and the parties want to intensify negotiations while it is still hot? Or that London and Brussels are still at an impasse and need more time to get out of it? Anyway, there was no official information about this. The British pound is still falling, which in my opinion is logical since there is still no positive news for it. However, they may appear in the next two or three days. In any case, at the beginning of this week, it should become clear whether there is progress in the negotiations and if so, then the chances of reaching an agreement will increase, which may support the British in the currency market. Without this, it is likely to continue the process of falling. GBP/USD – 4H. On the 4-hour chart, the GBP/USD pair performed a reversal in favor of the US dollar near the corrective level of 23.6% (1.3191). Thus, the process of falling quotes continues in the direction of the Fibo level of 38.2% (1.3010). The pair's rebound from this level will again work in favor of the British dollar and resume the growth process. Fixing under this level will work in favor of a further fall in the direction of the corrective level of 50.0% (1.2867). GBP/USD – Daily. On the daily chart, the pair's quotes consolidated above the corrective level of 76.4% (1.3016), however, the reversal in favor of the US currency has already been completed and the fall has begun. The 4-hour chart is more important now. GBP/USD – Weekly. On the weekly chart, the pound/dollar pair closed under the lower downward trend line, thus, a false breakout of this line followed earlier. However, in recent weeks, it has made new attempts to gain a foothold over both trend lines. Overview of fundamentals: On Friday, the UK released business activity indices in the services and manufacturing sectors, which fell slightly compared to the previous month. However, both remained above the 50.0 level, in contrast to the European indices. The economic calendar for the US and the UK: On October 26, the news calendar of the UK and US is empty, thus, the background information will be virtually absent. Hope only for news related to the negotiation process between Britain and the EU. COT (Commitments of Traders) report: The latest COT report on the British pound that was released last Friday showed that the mood of the "Non-commercial" category of traders has become more "bullish". Speculators immediately increased by 4.5 thousand long-contracts and got rid of 4 thousand short-contracts. Thus, after three weeks of "bearish" advantage, speculators are again inclined to buy the British. However, I believe that such a change in mood does not mean anything specific. In a week or two, major players can start building up short contracts again. And the total number of long and short contracts focused on their hands is almost the same. Thus, I would conclude that the major players are now in disarray. Forecast for GBP/USD and recommendations for traders: Today, I recommend selling the GBP/USD pair with a target of 1.2867, if the consolidation is made under the corrective level of 38.2% (1.3010) on the 4-hour chart. I recommend buying the British dollar with a target of 1.3191 if the rebound from the level of 38.2% on the 4-hour chart is completed. Terms: "Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors. "Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency not for speculative profit, but for current activities or export-import operations. "Non-reportable positions" - small traders who do not have a significant impact on the price. Indicator analysis. Daily review on EUR/USD for October 26, 2020 2020-10-26 Trend analysis (Fig. 1) Today, the market may start moving down from the level of 1.1860 (closing of Friday's daily candlestick) in order to reach the pullback level of 23.6% - 1.1817 (red dotted line). If this line is tested, there is a possibility that the downward movement will resume with the target of 1.1786-21 average EMA (black thin line). Figure 1 (daily chart). Comprehensive analysis: Indicator analysis - down Fibonacci levels - down Volumes - down Technical analysis - down Trend analysis - down Bollinger bands - up Weekly chart - down General conclusion: Today, the price might make a downward movement in order to reach the pullback level of 23.6% - 1.1817 (red dotted line). If this line is tested, it is possible for the downward movement to continue with the target of 1.1786-21 average EMA (black thin line). Unlikely scenario: from the level of 1.1860 (closing of the Friday day candle) - work down with the target of 1.1817, which is a pullback level of 23.6% (red dotted line). Upon testing this level, work up with the goal of 1.1880 upper fractal (red dotted line), from which the upper work is possible. Indicator Analysis. Daily review for the GBP/USD 10/26/20 2020-10-26 Trend analysis (Fig. 1). Today, the market may continue to go down from the level of 1.3044 (closing of the Friday's daily candle) with the target of 1.2985 - the retracement level of 38.2% (red dotted line). When testing this level, it is possible that the work will continue going down with the target of 1.2926 - the retracement level of 50.0% (red dashed line). Figure: 1 (daily chart). Comprehensive Analysis: Indicator Analysis - down Fibonacci levels - down Volumes - down Candlestick Analysis - down Trend Analysis - down Bollinger Lines - up Weekly Chart - down General conclusion: Today, the price will try to continue going down with the target at 1.2985 - the 38.2% retracement level (red dotted line). When testing this level, it is possible that the work will continue downwards with the target at 1.2926 - the retracement level of 50.0% (red dashed line). Unlikely scenario: from the level of 1.3044 (closing of the Friday's daily candlestick) the price may continue to move downward with the target at 1.2983 - the retracement level of 38.2% (blue dotted line). When testing this level, further work will go up with the target of 1.3078 - the retracement level of 50% (blue dashed line). EUR/USD: Euro to grow ahead of the ECB meeting 2020-10-26 Although activity in the US manufacturing sector is growing at a good pace, it did not support the US dollar in recovering its position in the market. As a result, the currency continued to decline against the euro on Friday. As for the euro, it remained rising amid good reports on the state of the eurozone's manufacturing and services sectors, even though the data turned out to be quite ambiguous. Traders still decided to open long positions, ignoring the current coronavirus situation in Europe. Instead, what they focused on is the increasing hopes of a post-Brexit trade deal. In addition, it seems that the bulls have already coped with the emerging downward correction in the EUR / USD pair, but still, there is a long way before the bullish trend resumes. Such will only occur if the quote breaks out and consolidates above the resistance level of 1.1870, which will make it easier to move the pair towards the 19th figure. A breakout will then deliver the pair towards price levels 1.1915 and 1.1970. But if the bulls are less active around the level of 1.1870, pressure could return on the euro, which will push the quote to decline in the direction of support level 1.1790. A breakout from it will make it easier to achieve lows 1.1760 and 1.1705. About economic stimulus, no matter how many expect new measures from the regulator, the ECB is unlikely to adopt one at its upcoming meeting. On several occasions, Chairman Christine Lagarde did point to the possibility of increasing the central bank's bond buyback program, however, much research is needed first before a decision will be made. The ECB has to more clearly analyze the state of the eurozone economy, thus, no additional incentive measures will be introduced before the end of this year. At the same time, the upside potential of the European currency will be limited, since it is still unclear whether the regulator will go for more decisive stimulating measures such as negative interest rate, or limit itself to expanding emergency programs to support the economy. With regards to statistics, IHS Markit published a preliminary data on US Manufacturing PMI for October, reporting it at 53.3 points, which indicates an increase in company optimism. The composite PMI, meanwhile, was at 55.5 points against 54.3 points in September, which also suggests growth in activity. Markit economists expect the US economy to start the fourth quarter in a strong note. Unfortunately, the same cannot be said in Europe, as things are not going well in many parts of the eurozone. The growth of activity in the manufacturing sector was offset by a sharp decline in the service sector. According to IHS Markit, the eurozone's Manufacturing PMI came out 54.4 points for October, higher than its 53.7 points in September. Service PMI, on the other hand, decreased from 48.0 points to 46.2 points. Economists had expected the manufacturing PMI to be 52.6 points and the Services PMI to be 46.7 points. The largest growth in the indicator was recorded in Germany, as there, the index for the manufacturing sector rose to 58.0 points, against a forecast of only 54.8 points. Its Service PMI, meanwhile, fell from 50.6 to 48.9, against a forecast of 49.0. In France, the Manufacturing PMI came out 51.0 points for October, while the Service PMI came out at - 46.5 points. Trading idea for gold 2020-10-26 The US presidential election is ahead, and many traders can use this as an impetus for growth in gold. For example, today, during the Asian trading session, gold made a false breakout in last week's low, after which long positions surged for the entire session. This is a good sign for the bulls, especially to those who want to increase the asset towards the level 1932. Opening a long position has a risk/reward ratio of 5:1. But since traders have already tried to reach 1932 twice, those who already have existing longs can get a net profit of about 3:1. Of course, controlling and monitoring the risk is still needed to avoid losing profit. Trading in this market is very precarious and uncertain, but also very profitable as long as you use the right strategy. Good luck! Technical analysis of USD/JPY for October 26, 2020 2020-10-26 Overview : The trend is still trading around the key level of 104.89 which represents with the daily pivot point on the H1 chart. Bullish outlook : The USD/JPY pair is continuing in a bullish market from the supports of 104.68 and 104.89. Also, it should be noted that the current price is in a bullish channel. Equally important, the RSI is still signaling that the trend is upward as it is still strong above the moving average (100) since yesterday. Immediate support is seen at 104.89 which coincides with a ratio (23.6% of Fibonacci). Consequently, the first support sets at the level of 104.89. So, the market is likely to show signs of a bullish trend around the spot of 104.89. In other words, buy orders are recommended above the pivot point (104.89) with the first target at the level of 105.22. Furthermore, if the trend is able to break through the first resistance of 105.06. The movement is likely to resume to the point 105.22 and further to the point 105.22. As a result, the pair will climb towards the double top (105.76) to test it. Bearish outlook : The USD/JPY pair will drop sharply from the 104.89 level towards 104.68 in case a breakout at the 0.9915 (daily pivot point). It should be noted that the volatility is very high for that the price of the USD/JPY pair is still moving between 104.89 and 104.35 in the coming hours. Additionally, currently the price is in a bearish channel. According to the previous events, the pair is still in a downtrend. From this point, the USD/JPY pair is continuing in a bearish trend from the new resistance of 104.89. Thereupon, the price spot of 104.89 remains a significant resistance zone. Therefore, the possibility that the Yen will have a downside momentum is rather convincing and the structure of the fall does not look corrective. In order to indicate a bearish opportunity below 104.89, it will be a good signal to sell below 104.89 with the first target of 104.68. It is equally important that it will call for downtrend in order to continue bearish trend towards 104.35. Make money Deposit funds Author's today's articles: Torben Melsted Born in November 1962. Graduated from CBS, got Diploma in Finance. Began trading on Forex in 1986 and since that time held various positions such as advising clients, hedging client flows on FX and commodity markets. Also worked for major corporations as Financial Risk Manager. Uses Elliott wave analysis in combination with classic technical analysis, and has been using a Calmar Ratio of 5.0 for over 3 years. Has his own blog, where he uses Elliott wave and technical analysis on all financial markets. Stanislav Polyanskiy Graduated from Odessa State Economic University. On Forex since 2006. Writes analytical reviews about international financial markets for more than 3 years. Worked as a currency analyst in different finance companies for a long time including the biggest companies of Russia and Ukraine. Irina Manzenko Irina Manzenko Mihail Makarov - Maxim Magdalinin In 2005 graduated from the Academy of the Ministry of Internal Affairs of the Republic of Belarus, law faculty. Worked as a lawyer for three years in one of the biggest country's company. Besides the trading, he develops trading systems, writes articles and analytical reviews. Works at stock and commodity markets explorations. On Forex since 2006. Ivan Aleksandrov Ivan Aleksandrov Sebastian Seliga Sebastian Seliga was born on 13th Oсtober 1978 in Poland. He graduated in 2005 with MA in Social Psychology. He has worked for leading financial companies in Poland where he actively traded on NYSE, AMEX and NASDAQ exchanges. Sebastian started Forex trading in 2009 and mastered Elliott Wave Principle approach to the markets by developing and implementing his own trading strategies of Forex analysis.  Since 2012, he has been writing analitical reviews based on EWP for blogs and for Forex websites and forums. He has developed several on-line projects devoted to Forex trading and investments. He is interested in slow cooking, stand-up comedy, guitar playing, reading and swimming. "Every battle is won before it is ever fought", Sun Tzu Vyacheslav Ognev Vyacheslav was born on August 24, 1971. In 1993, he graduated from Urals State University of Economics in the Russian city of Ekaterinburg holding a degree in Commerce and Economics of Trade. In 2007, he started concentrating on the Russian stock market, trading stocks on the RTS Stock Exchange and futures contracts on FORTS. Since 2008 he has been engaged in analyzing Forex market and trading currencies. He is an author of a simplified wave analysis method. He has also developed a trading strategy. At present, Vyacheslav is a co-author of training materials on two web portals dedicated to Forex trading education. Interests: fitness, F1 "Experience is the best of schoolmasters, only the school fees are heavy." - Thomas Carlyle Grigory Sokolov Born 1 January, 1986. In 2008 graduated from Kiev Institute of Business and Technology with "Finance and Credit" as a major. Since 2008 has studied the behavior of various currency pairs and their correlation on Forex. In his works and trading practice he uses candlestick analysis and Fibonacci technique. Since 2009 has written analytical reviews and articles which are published on popular Internet resources. Interests: music, computers and cookery. "Out of five deadly sins of business and as a rule, the most widespread, excessive striving to get profit is the worst". P. Drucker Sergey Belyaev Born December 1, 1955. In 1993 graduated from Air Force Engineering Academy. In September 1999 started to study Forex markets. Since 2002 has been reading lectures on the technical analysis . Is fond of research work. Created a personal trading system based on the indicator analysis. Authored the book on technical analysis "Calculation of the next candlestick". At present the next book is being prepared for publishing "Indicator Analysis of Forex Market. Trading System Encyclopedia". Has created eleven courses on indicator analysis. Uses classical indicators. Works as a public lecturer. Held numerous seminars and workshops presented at international exhibitions of financial markets industry. Is known as one of the best specialists in the Russian Federation researching indicator analysis. Pavel Vlasov No data Andrey Shevchenko Andrey Shevchenko Mourad El Keddani Was born in Oujda, Morocco. Currently lives in Belgium. In 2003 obtained B.S. in Experimental Sciences. In 2007 obtained a graduate diploma at Institut Marocain Specialise en Informatique Applique (IMSIA), specialty – Software Engineering Analyst. In 2007–2009 worked as teacher of computer services and trainer in a professional school specializing in computer technologies and accounting. In 2005 started Forex trading. Authored articles and analytical reviews on Forex market on Forex websites and forums. Since 2008 performs Forex market research, and develops and implements his own trading strategies of Forex analysis (especially in Forex Research & Analysis, Currency Forecast, and Recommendations and Analysis) that lies in: Numerical analysis: Probabilities, equations and techniques of applying Fibonacci levels. Classical analysis: Breakout strategy and trend indicators. Uses obtained skills to manage traders' accounts since 2009. In April 2009 was certified Financial Technician by the International Federation of Technical Analysts. Winner of several social work awards: Education Literacy and Non-Formal Education (in Literacy and Adult Education in The National Initiative for Human Development). Languages: Arabic, English, French and Dutch. Interests: Algorithm, Graphics, Social work, Psychology and Philosophy. Subscription's options management Theme's: Fundamental analysis, Fractal analysis, Wave analysis, Technical analysis, Stock Markets Author's : A Zotova, Aleksey Almazov, Alexander Dneprovskiy, Alexandr Davidov, Alexandros Yfantis, Andrey Shevchenko, Arief Makmur, Dean Leo, Evgeny Klimov, Fedor Pavlov, Grigory Sokolov, I Belozerov, Igor Kovalyov, Irina Manzenko, Ivan Aleksandrov, l Kolesnikova, Maxim Magdalinin, Mihail Makarov, Mohamed Samy, Mourad El Keddani, Oleg Khmelevskiy, Oscar Ton, Pavel Vlasov, Petar Jacimovic, R Agafonov, S Doronina, Sebastian Seliga, Sergey Belyaev, Sergey Mityukov, Stanislav Polyanskiy, T Strelkova, Torben Melsted, V Isakov, Viktor Vasilevsky, Vladislav Tukhmenev, Vyacheslav Ognev, Yuriy Zaycev, Zhizhko Nadezhda Edit data of subscription settings Unsubscribe from the mailing list Sincerely, Analysts Service If you have any questions, you can make a phone call using one of the InstaForex Toll free numbers right now: 1 866 8000 719 0 8000 51 88 99 0 800 898 548 1 800 882 528 001 803 017 910 0 800 500 329 822 140 799 8 800 080 5553 Other countries +7 (499) 7042343, +7 (812) 4580351 E-mail: support@instaforex.com InstaForex Group is an international brand providing online trading services to the clients all over the world. 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