Hello, dear friends!
The end of last week turned out to be rich in events. First there was a breakthrough in the Brexit negotiations, then China and the United States announced a roadmap that could be the beginning of a path to compromise. Over the weekend, emotions subsided, and traders began to soberly assess the events of Thursday-Friday.
The U.S.-China agreement resembles a kind of temporary truce, not the beginning of a long-term deal. U.S. plans to raise fees on Chinese goods in mid-December have not gone away.
On Brexit, optimism is also beginning to give way to anxiety. Over the weekend, the breakthrough never happened, skeptics doubt the ability of the parties to agree terms of the deal this week. Against this background, the pound moves to the mark of 1.2500.
Today is a holiday in the U.S., Columbus Day is celebrated, so the activity will be low. The economic calendar is almost empty, for the rest of the day attention should be paid only to couples with the pound, any news on Brexit can cause a surge of volatility.
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According to EURUSD the main scenario is bullish
On H4 we see that the movement continues to the upper boundary of the zone 1.0884-1,1106. Entry points are searched on the lower timeframes.
At the time of the review, we are seeing an expansion of the lower boundary of the zone 1.1024-1.1031. If you retest the level of 1.1031 from above, you can open purchase trades with the first goal at 1.1039.
If the resistance at the level of 1.1059 fails to break through, a reversal pattern may form. When it is worked out, the target levels are 1.1012, 1.1000, 1.0967 and 1.0947. At 1.0947, you can close the remaining volume on short positions.
The pound is expected to fall in tandem with the US dollar
As part of the recent momentum, the upper boundary of the zone is 1.1970-1.2574. What happens on this currency pair resembles the completion of the extension pattern and can give a good entry point for sale.
On the lower timeframes, the most likely is a reduction to at least 1.2500 or lower, then an upward correction with the formation of a number of local trading zones and a retest of the level of 1.2574 from below can be sold. On the M15-M30 at this time we are interested in the true breakdown of the lower boundary of the next area of termination.
As part of the expected downward movement, we expect at least to win back the recent momentum and reach the level of 1.2210. A deeper drop is possible with the update of the historical low.
By USDCHF looking for entry points to buy
The situation on this currency pair has not changed dramatically. The chart moves in the zone 0.9921-1.0024, so far, the priority of bullish positions remains, after the failure of support has not reached the upper limit of the range.
On the M5-M15 you can look for bullish signals with narrow feet. At the time of the review, the upper boundary of the small local termination area is broken through. You can look for similar signals during the day.
USDJPY upward movement expected to continue
The graph took a rollback from the upper boundary of the area of 106.63-108.42. Since the outage occurred not on the impulse movement there is still a possibility of continued growth and achieving the main goal at 109.27.
As part of the break from the level of 108.42 there was a retest of the previously broken resistance at 108.07. You can open long positions after pinning the level of 108.29. The main target is at 109.27, on the way up estimate the movement of the chart in the area of previous local extremes.
On gold looking for a point of entry for sale
So far, the priority of bearish positions. In favor of sales says a couple of impulse bearish movements with shallow corrections after them.
At the time of the review, another correction is underway, the graph tested the lower boundary of the range 1490-1502. So far, we consider the growth as corrective.
On the M5-M15 we look for local trading zones and trade either a true breakdown of its lower boundary, or the expansion of the upper boundary. The bear scenario will be relevant as long as the chart remains below the level of 1502. The sales target is a recent local minimum of 1475.