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Wave Analysis by InstaForex
USD/CAD - Heading downwards

Greetings, dear traders. This time, I will show you a long-term recommendation on an instrument such as USD / CAD.

What is interesting in this instrument now? First of all, the data on unemployment from Canada came out last Friday. Typically, these reports come out simultaneously with American Non-farm (NFP), but this time, the publication was separate. With this impulse, the Canadian dollar strengthened strongly against the US dollar, completely absorbing the abnormal growth a week earlier. At the moment, this indicates a very strong seller in the market.

Since the plan is long-term, its implementation can take from several days to several weeks. Thus, it makes sense to wait for a rollback and consider selling on smaller TFs.

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It's important to understand that a lot of data will be released on Wednesday, such as the base index of retail sales for the American dollar and inflation for the Canadian one. Moreover, regular oil reserves will also affect the Canadian dollar. What is more reasonable here would be to expect the continuation of decline precisely after the release of all these news on Wednesday.

I wish you success in trading and big profits!

Analysis are provided byInstaForex.
Best regards, PR Manager
Learn more about InstaForex Company at http://instaforex.com

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EUR/USD - through thorns to the stars!

Greetings, dear traders. It is time to remember about EUR/USD, which has successfully fulfilled our previous plans. Following GBP/USD, the European currency is now demonstrating a strong bullish direction. It's easy to guess that all these movements are connected with the next portion of news regarding Brexit. If you omit all the fundamental details and focus on how to make money from it, the answer is simple. To take a neat positions in the purchases with a pullback. At the same time, wherever you try to buy, the extreme point of the scenario cancellation is today's minimum at the quote of 1.0991. Therefore, you can limit losses to this level. It is recommended to holding purchases (at least partially) at the level of 1.1064, since this is an important level for sellers over the past few days.

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I wish you success in trading and big profits!

Analysis are provided byInstaForex.
Best regards, PR Manager
Learn more about InstaForex Company at http://instaforex.com

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GBPUSD: The evening promised to be hot. Michel Barnier was optimistic about the agreement on Brexit, but the main move for the Unionist party. The risk of extending the UK's exit

The British pound continues to storm, and after the morning "stuffing" that the deal could be disrupted due to a number of disagreements, the pound resumed its growth on statements from representatives of the EU and the UK. As it became known, according to representatives of the parties, negotiations between the UK and the EU are coming to an end, but the key problems have not yet been resolved. On Wednesday afternoon, EU chief negotiator Michel Barnier is due to meet with diplomatic representatives of the bloc countries. However, the meeting has been postponed to a later time.

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This was done so that the British prime minister could manage to negotiate an agreement with the Democratic Union Party, since it is precisely its leaders who are still threatening to disrupt Downing Street's plans. Let me remind you that the deal will include the establishment of a regulatory and customs border for the Irish Sea.

Barnier's meeting with European leaders will give an assessment and recommendations on whether to sign an agreement at the EU summit scheduled for late this week or not. European Commissioner Dimitris Avramopoulos has already stated that significant unresolved issues remain in the negotiations on Brexit, noting that Barnier has already submitted his report to the European Commission. In it, the chief negotiator described the negotiations as constructive. Barnier was also optimistic that a deal with Brexit could be reached before the end of this week, but, according to some sources, the report also contains information on the need to extend the UK term for EU membership, which is scheduled for October 31. An extension is necessary even if a deal is reached.

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The market completely ignored the data that the inflation rate in the UK remained stable in September this year. Most of the growth was maintained due to higher prices for hotel services and furniture. According to a report by the National Bureau of Statistics, CPI increased by 1.7% in September compared with the same period last year. In August of this year, the UK CPI was also 1.7%. Let me remind you that the target level of the Bank of England is 2%.

Slowing inflation will help the regulator resort to lower interest rates and stimulate the economy, which is seriously affected by the situation with Brexit and trade conflicts.

As for the technical picture of the GBPUSD pair, only a breakthrough of the resistance of 1.2840 can lead to the continuation of the upward rally to the area of highs at 1.2920 and 1.2980. In case the pound declines on the evening news, which I mentioned above. Support will be provided by levels 1.2680 and 1.2560.

EURUSD

Eurozone data today did not cause major changes in the EURUSD pair. According to a Eurostat statistics agency report, annual inflation in the eurozone slowed again, which is bad news for the European Central Bank, which in September announced the start of a new phase of stimulating the economy. Thus, the CPI Eurozone CPI in September rose by 0.8% compared to the same period last year.

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Meanwhile, the positive balance of foreign trade in the eurozone increased and amounted to 14.7 billion euros in August 2019 against 11.9 billion euros in August 2018. However, trade conflicts, for which there are no solutions, continue to negatively affect the indicator.

As for the technical picture of the EURUSD pair, it remained unchanged. Bulls will continue to fight for the resistance of 1.1060, consolidation above which can provide risky assets to new buyers. If pressure on the euro returns, and this can happen after another unsuccessful attempt to break the resistance at 1.1060, then you can still return to long positions from support in the area of 1.1020, but larger long positions are best postponed until the low of 1.0990 is updated.

Analysis are provided byInstaForex.
Best regards, PR Manager
Learn more about InstaForex Company at http://instaforex.com

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GBP/USD. Turns of the British currency: Johnson repeats the path of Theresa May

Passion for Brexit reaches its zenith. In the afternoon, the pound paired with the dollar soared to the borders of the 30th figure (that is, to 5-month highs), responding to a statement by European Commission President Juncker that the deal between London and Brussels is "ready." But literally an hour later, the pair collapsed 200 points down after the first comments by representatives of the British Parliament. The opposition did not skimp on epithets: in particular, Jeremy Corbyn called the draft deal "corrupt", adding that Johnson's dealings were "even worse than Theresa May". However, despite such harsh comments, the market still expects the British prime minister to submit the draft deal to the House of Commons on Saturday.

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For the sixth consecutive day, the pound is subject to strong volatility, showing unprecedented price fluctuations, both in the direction of growth and a downward course. The last time such powerful price spurts were observed in October 2018, when the parties were one step away from signing the deal. The pair jumped from the 34th to the 42nd figure in a few weeks. But then the events did not unfold so rapidly, although in general, the situations are of a similar nature.

At that time, Michel Barnier, the chief negotiator from the European Union, was the main newsmaker. Exactly a year ago, he said that the deal could already be concluded during the EU summit, which, like this year, was held on October 17-18. Brussels and London then were able to find a common denominator in many key issues, moreover, within the framework of Theresa May's Chequers plan, which the future Prime Minister Boris Johnson so eagerly criticized. May proposed to solve the Irish question in a different way: she agreed to establish checkpoints on the border and introduce "certain administrative procedures". EU representatives refused to consider other options, and interpreted the proposed conditions as a compromise. As you know, the deputies of the House of Commons categorically rejected the proposed conditions, failing the vote three times.

The Irish question is still a central issue today. On the one hand, Johnson made more significant concessions from the European Union: the customs border will pass through the Irish Sea, and the same customs rules will apply in Northern Ireland as in the rest of the UK. But on the other hand, such concessions did not satisfy the Northern Irish Unionists. After a two-day political bidding, the DUP issued an official statement declining the deal. In their opinion, the proposed agreement "does not meet the long-term interests of Northern Ireland", and in the short term, residents of this region may face a significant increase in prices.

As mentioned above, Labour also criticized Johnson's deal. And not just because of the Irish border. According to Jeremy Corbyn, the economic part of the agreement threatens the food security of Great Britain, and can also lead to "violation of the rights of workers and environmental standards." Also, according to the Labour leader, the deal will be a blow to the British health care system. Representatives of the Scottish National Party (which has 35 members of the British Parliament) have joined Johnson's critics, adding that they will not vote for the deal.

Thus, at the moment it is not clear how the prime minister plans to "push through" the deal through the millstones of Parliament. Without the support of the Youth Democratic Party, the Labour Party and the Scottish nationalists, he will have to rely on the consolidation of Conservative deputies (20 of whom he expelled from the party for indiscipline) and representatives of other political forces.

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At the same time, according to information from the British press, Johnson in Parliament may express his readiness to violate the law, obliging him to ask Brussels to postpone Brexit. This information may be the usual "bluff" on the part of the current prime minister, but, given the odiousness of his personality, such a scenario cannot be ruled out.

In general, according to most experts, if Johnson fails to agree on a deal in Parliament, he will initiate early parliamentary elections to bring the draft deal back to the new House of Commons.

Thus, Johnson will have a difficult battle in the walls of Parliament. Judging by the dynamics of the pound, traders do not lose hope of agreeing on a deal this Saturday: otherwise, the GBP/USD pair will return first to the middle of the 24th figure, and then (less impulsive) to the levels of annual lows, that is, to the bottom of the 20th figure. If a "miracle" happens and the prime minister finds votes in Parliament, the pound paired with the dollar will fly up to 1.35-1.37, up to the 40th figure, after the deal between London and Brussels is officially agreed. And although these price values look abnormally high, it is worth recalling that on the eve of the 2016 referendum, the GBP/USD pair was trading in the area of 1.43-1.46, and after the announcement of the results, the plebiscite plunged to 1.25-1.27 in a few weeks, followed by a decline to the bottom of 20- x figures. "The return trip to an upward direction" may not be so impulsive, but at the same time, the resolution of many years of intrigue will allow the pair to grow by at least 500-600 points. As the saying goes, The Show Must Go On ...

Analysis are provided byInstaForex.
Best regards, PR Manager
Learn more about InstaForex Company at http://instaforex.com

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Pound rushes to the clouds

Despite the almost bare economic calendar, all the attention of investors on forex is focused on the British pound. According to Mark Carney, Great Britain marked the beginning of global uncertainty in 2016, which slowed business activity and GDP in most countries of the world. It can put an end to this by voting for a draft dissolution agreement with the EU. Boris Johnson also called for support of the document, arguing that any delay would harm the interests of the United Kingdom, its EU partners and relations between them. However, the British Parliament may have a different opinion.

The sterling has not responded to macro statistics for a long time and is calling for political news. In this regard, an increase in unemployment from 3.8% to 3.9% and disappointing inflation statistics (fact +1.7%, forecast + 1.8% YOY) remained almost unnoticed by investors. All their attention has shifted to Brexit. The prime minister of Great Britain managed to find a common language with the EU. Now he needs 320 votes in Parliament to enter, and not get into the story. In fact, the head of the Cabinet of Ministers needs to lure 61 opponents to his side, which does not seem unrealistic.

According to Goldman Sachs, the chance of a disorderly Brexit dropped to 5%. This circumstance makes the correction potential of GBP/USD limited. MUFG expects the pound to find haven in the range of $1.3-1.35 if lawmakers approve the deal. UBS Global Wealth Management also talks about the $1.35 level. TD-Bank believes that the pair is able to rewrite the May high near 1.3185, however, the contract rejected by the Parliament will trigger a wave of correction to 1.264-1.266. Robobank sees an even deeper low at around 1.22.

Pound Forecasts

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The fact that the bulls continue to dominate the market was shown by the sterling reaction to the decision of MPs to vote for the proposal to postpone the approval of the deal. As a result, Boris Johnson, in order to obey the law, was forced to write a letter to the EU asking that they prolong the transition period. The prime minister did not sign this document and sent another to Donald Tusk, in which he expressed confidence that Britain would leave the EU on October 31. The opposition party believes that the head of the Cabinet of Ministers behaves childishly and threatens him with court in the event of a disorderly Brexit.

In my opinion, everything goes to the point that the deal will be approved by the British Parliament on the falling flag. The bulls on GBP/USD believe this, pushing the pair to the psychologically important mark of 1.3. The fact that they managed to gain a foothold above 1.29 indicates the seriousness of the intentions of sterling buyers.

Technically, after a clear combination of patterns "Shark" and 5-0, the upward trend of the analyzed pair is directed to the target of 261.8% on the AB = CD model. It is located near 1.309. A necessary condition for maintaining control over the pound by the bulls and continuing the rally is to consolidate GBP/USD quotes above the Pivot level of 1.29.

Analysis are provided byInstaForex.
Best regards, PR Manager
Learn more about InstaForex Company at http://instaforex.com

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