Cable Market

Technical Market Outlook: The GBP/USD pair had collapsed over 1000 pips over the weekend and a new swing low was made at the level of 1.0352, which is the lowest level since 1985. The market conditions are extremely oversold on the H4,Daily, Weekly and Monthly time frames, so there is a chance for a pull-back soon. Nevertheless, before the pull-back is made, the next target for bears is located at the parity level of 1.0000, so please keep an eye on this level. Local pull-back might test the technical resistance located at the level of 1.0890, but this resistance looks very weak. The next technical resistance is located at 1.1210 and 1.1410 and only a sustained breakout above this level would change the outlook to bullish. Weekly Pivot Points: WR3 - 1.16907 WR2 - 1.11401 WR1 - 1.08850 Weekly Pivot - 1.05895 WS1 - 1.03344 WS2 - 1.00389 WS3 - 0.94883 Trading Outlook: The bears are still in charge of Cable market and the next target for them is the parity level. The level of 1.0351 has not been seen since 1985, so the down trend is strong, however, the market is extremely oversold on longer time frames already. On the other hand, in order to terminate the down trend, bulls need to break above the level of 1.2275 (swing high from August 10th).   Relevance up to 09:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294175

Pound has already lost nearly 400 pips on Friday, then this morning sank further by 5%. The reason was the new Chancellor of the Exchequer Kwasi Kwarteng's vow to continue cutting taxes, which raised fears of another sharp increase in inflation and public debt. The decline was the biggest intraday drop since March 2020, when investors panicked over the emerging Covid-19 pandemic. A number of economists have urged the Bank of England to take actions, but this will only exacerbate the fears in global financial markets and put the administration of Liz Truss at risk as the UK continues to grapple with the cost-of-living crisis. Nevertheless, the collapse of the pound indicates that markets do not trust the new UK government, especially since the national currency is rapidly moving towards parity and there is a huge chance that the situation will only worsen further. Kwarteng laid out the UK's most drastic tax relief package since 1972 yesterday, cutting fees on both workers' and companies' wages in an effort to boost the long-term potential of the economy. He also lowered stamp duty on property purchases, lifted a cap on bank bonuses and reaffirmed support for households and businesses on rising electricity bills over the next six months. Although pound bounced up earlier, traders are set to further decline as the options market is currently showing a 60% chance of it weakening to parity against dollar this year. A massive sell-off is sure to force the Bank of England to act more aggressively, and if the situation continues to go downhill, there will be an extraordinary increase in interest rates between meetings. Pound has so far collapsed to an unprecedented level - 1.0360, which creates quite a few problems. A correction will occur only when buyers become more active this week. It will surely open a direct path to the highs of 1.0700, 1.0760 and even 1.0805. But if pressure continues, GBP/USD will fall to 1.0500 and 1.0430. In terms of EUR/USD, a lot depends on 0.9605 because a drop below it will push quotes lower to 0.9560, 0.9510 and 0.9455. Price will increase only when buyers manage to bring the pair to 0.9710, then push it to 0.9770, 0.9810 and 0.9860.   Relevance up to 09:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322632

Yesterday, the pound fell on Friday's example, but this time, after a decline of 487 points, there was a strong rebound of 570 points. The day was still closed with a black candle. The lower shadow still did not reach the target level of 1.0310. Now there is a consolidation under the level of 1.0830. Upon completion of the consolidation, we are waiting for a new wave of decline to 1.0310. Intermediate level of 1.0535. On the four-hour chart, the price reverses before the resistance level of 1.0830, and the Marlin Oscillator also reverses. If the price does not change its mind and decreases from the current levels (without re-working out 1.0830), then we are waiting for it at the first target of 1.0535.       Relevance up to 04:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322726

GBP/USD 5M The GBP/USD currency pair showed a volatility of almost 600 points on Monday. During the day, the pair managed to cover such a distance both up and down. Thus, there was no talk of any adequate movement on Monday. In our fundamental articles, we tried to figure out what exactly provoked such a strong movement, and came to the conclusion that the panic in the market, which was caused by a combination of factors, played the greatest role. Thus, a similar market sentiment may remain this week. The price continues to settle below the trend line, which now lies at a fairly long distance from it. Therefore, in the near future we should hardly expect a consolidation above it. Otherwise, we will not understand that the downward trend is over (according to the current trading system). Individual macroeconomic and fundamental events may not matter to traders this week. Despite the fact that the volatility went off scale, and there were no levels at the current price levels, one trading signal was still formed. At the beginning of the US session, the price rebounded from the critical line, which was a sell signal. Traders could open short positions. Since there was not a single level or line below, the position had to be closed manually in the late afternoon. Profit on it amounted to about 185 points. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group closed 11,600 long positions and opened 6,000 short positions. Thus, the net position of non-commercial traders decreased by another 17,600, which is a lot for the pound. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And now it has begun a new decline, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its decline has completely resumed and multi-year lows are updated almost every day, so the bearish mood of major players can only intensify in the near future. The non-commercial group now has a total of 109,000 shorts and 41,000 longs open. The difference is again almost threefold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, one should not forget about the high demand for the US dollar, which also plays a role in the fall of the pound/dollar pair. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 27. The euro continues to fall by inertia. The results of the elections in Italy have nothing to do with it. Overview of the GBP/USD pair. September 27. The pound finally has a real chance of completing a long downtrend. Forecast and trading signals for EUR/USD on September 27. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair continues its downward trend on the hourly timeframe, which is already in fact a collapse. What else do we call an 800-point move in two days? In the coming days, the pair can fly from side to side for mind-boggling distances, and the fundamentals and macroeconomics are unlikely to have any significance for the market. We highlight the following important levels on September 27: 1.0357, 1.0930, 1.1212, 1.1354, 1.1442. Senkou Span B (1.1475) and Kijun-sen (1.0909) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. No major events scheduled in the UK on Tuesday, and we will only receive an ordinary report on orders for durable goods in America. It is unlikely that with the volatility of 600 points a day earlier, this report will have at least some impact on the pair's movement. Explanations for 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. 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.       Relevance up to 02:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322718

Technical Market Outlook: The GBP/USD pair had collapsed towards the new swing low at the level of 1.0352, which is the lowest level since 1985. The market conditions are extremely oversold on the H4,Daily, Weekly and Monthly time frames, so the bulls are trying to extend the bounce to over 500 pips. Local pull-back had tested the technical resistance located at the level of 1.0890, but this resistance looks very weak, so the Bearish Engulfing candlestick pattern was made at the level of 1.0929. The next technical resistance is located at 1.1210 and 1.1410 and only a sustained breakout above this level would change the outlook to bullish. On the other hand, the next target for bears is located at the parity level of 1.0000, so please keep an eye on this level. Weekly Pivot Points: WR3 - 1.16907 WR2 - 1.11401 WR1 - 1.08850 Weekly Pivot - 1.05895 WS1 - 1.03344 WS2 - 1.00389 WS3 - 0.94883 Trading Outlook: The bears are still in charge of Cable market and the next target for them is the parity level. The level of 1.0351 has not been seen since 1985, so the down trend is strong, however, the market is extremely oversold on longer time frames already. On the other hand, in order to terminate the down trend, bulls need to break above the level of 1.2275 (swing high from August 10th).   Relevance up to 08:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294350

Pound tumbled to a record low on Monday due to concerns over the stability of the UK's financial position. It followed a strong decline last Friday, which occurred because of the widespread demand for the dollar in the context of the global crisis and geopolitical tensions, as well as the new UK Treasury Chief Kwasi Kwarteng's announcement that the government will implement the biggest tax cut in 50 years while increasing government borrowing and spending despite high inflation. The measures have raised expectations that the Bank of England may go for an emergency increase in the discount rate to strengthen market confidence and the national currency. In addition to the problems mentioned above, the UK is facing weak economic statistics. Business activity in the manufacturing sector reportedly fell below 50 points, which is bad for the economy. If the situation does not change, the pound will fall to parity with the dollar. Perhaps, there may be a local rebound in GBP/USD, but the main trend will be downward until the Bank of England decides on a sharp increase in rates. Forecasts for today: USD/CAD The pair is trading below the support level of 1.3675. A decrease in negative sentiment, local rebound in stock indices and strong rise in oil prices may prompt a further fall to 1.3575. USD/JPY The pair faced resistance at 144.80. But if market sentiment improves, it will bounce back to 143.15.   Relevance up to 08:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322744

The macroeconomic calendar was empty; no important statistics were published. Investors and speculators worked out the information flow of the past week. The UK Treasury yesterday commented on everything that is happening in the country's economy, the main theses: - The medium-term financial plan will be presented on November 23. - The budget plan will set out additional details, including ensuring that the share of UK debt to GDP falls in the medium term. At the same time, the Bank of England made its comments: - We closely monitor the market for significant revaluation of financial assets; - We will not hesitate to raise the interest rate to bring inflation back to the target level of 2.0%. According to media reports, traders are waiting for an unscheduled rate hike by the Bank of England amid the collapse of the national currency. Perhaps this was the reason for such a significant pullback. There is no confirmation of rumors regarding an unscheduled rate hike. If the regulator does not take any drastic action, the pound will continue to decline. Analysis of trading charts from September 26 The EUR/USD currency pair opened a new trading week with an update of the low of the downward trend. As a result, the quote reached the levels of June 2002, at 0.9553, relative to which the stage of technical pullback occurred. The GBP/USD currency pair has set several records at once. The absolute low was updated, the quote overcame the level of 1985, eventually reaching the value of 1.0345. The scale of the pound's collapse from last Friday to the beginning of Monday's trading amounted to almost 1,000 points, while the pullback caused by the fatal overheating of short positions on the pound was about 550 points. Economic calendar for September 27 Today, data on orders for durable goods in the United States will be published, which may decrease by 0.9%. This is a fairly strong reduction, which foreshadows a noticeable decline in consumer activity, which is the locomotive of the American economy. As a result, these negative data, if confirmed, can put pressure on dollar positions. Also, U.S. Federal Reserve Chairman Jerome Powell and ECB President Christine Lagarde are scheduled to give a speech. It is worth listening to what they will say, although everything has already been said before. Time targeting: Fed Chairman Jerome Powell Speech – 11:30 UTC ECB President Christine Lagarde Speech – 11:30 UTC U.S. Durable Goods Orders (August) – 12:30 UTC Trading plan for EUR/USD on September 27 At the moment, there is a characteristic stagnation, where the pullback stage has slowed down its formation despite the continuing technical signal about the oversold euro. In order for the pullback to be prolonged and become the starting point for a full-size correction, the quote first needs to stay above the value of 0.9700 for at least a four-hour period. At the same time, the downward scenario will become relevant again as soon as the current low is updated. Trading plan for GBP/USD on September 27 In this situation, there is still a speculative rush on the market, which allows new price jumps. In order to prolong the current pullback, the quote needs to stay above the high of the previous day at 1.0928. At the same time, the scenario of further decline will be considered by traders if the price holds below 1.0630. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.   Relevance up to 10:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/322762

The main event in the foreign exchange market on Monday was another steep peak of the sterling. The pound's approach to parity has caused a wave of speculation about an unscheduled rate hike by the Bank of England. Yesterday, the British currency continued its loud fall, which began last week. Paired with the dollar, sterling fell by 1.6% and tested a record low of 1.0327. Thus, since last Thursday, the pound has fallen by 5% against its American counterpart, and since the beginning of the year, the GBP/USD pair has already fallen by 21%. The reason for the current weakening of sterling is Britain's economic gambit to reduce taxes, initiated by the country's new prime Minister Liz Truss. Recall that on Friday, British Finance Minister Kwasi Kwarteng unveiled a mini-budget aimed at stimulating the economy by cutting taxes by 45 billion pounds. The financial plan had the effect of an exploding bomb. Markets are concerned that the largest tax cut program since 1972 will further spur inflation in the country. That is why the British currency did not receive any benefit from the next rate hike that occurred last week. Like most major central banks, the BoE continues to actively fight high price growth by raising interest rates. At its September meeting, the central bank increased the indicator by 50 bps, to the highest level since 2008 at 2.25%. But now that inflation expectations have jumped again, this increase is clearly not enough to curb record price growth. On the wave of pessimism, the pound set a new anti-record on Monday. However, active speculation about an unscheduled rate hike by the BoE brought it back to life a bit. This morning, the GBP/USD pair recovered to 1.0770, which was facilitated by BoE Governor Andrew Bailey's comment from the day before. Last night, the official said that the central bank is closely monitoring what is happening in the financial markets. If necessary, the MPC can change interest rates without hesitation. – As much as it is necessary for a steady return of inflation to the target of 2% in the medium term, – he stressed. In addition, the pound received support amid an incredible surge in the yield of 2-year and 5-year British government bonds. The indicator increased by 100 bps for two trading days. This suggests that in the light of recent events, the market has revised its forecasts for the future monetary policy of the BoE. There was an opinion that the British central bank could urgently raise rates without waiting for its next meeting, which is scheduled for November 3. – The Bank of England will have no choice but to raise interest rates if Truss and Kwarteng do not retreat, – said economist Mohamed El-Erian. – Moreover, it will be necessary to increase the indicator by a full percentage point in order to try to stabilize the situation. Today's speech by Huw Pill, Chief Economist of the BoE can shed light on the future plans of British politicians. If his comment turns out to be more hawkish, it will help the GBP/USD pair to move further away from the parity line. Otherwise, the asset may tickle the nerves of pound bulls again. – Without timely political action this week, sterling risks quickly falling below parity, – analyst Lee Hardman predicts. Also, do not forget that the GBP/USD pair is under strong pressure from any news indicating the Federal Reserve's determination regarding interest rates. One of the powerful triggers is expected just today. Fed Chairman Jerome Powell will deliver a speech on Tuesday. If he again hints at a more aggressive policy of the US central bank, this will give the dollar a new growth impulse, which means that the pound will have to retreat. But be that as it may, most analysts are inclined to believe that the British currency will remain in the zone of increased volatility this week. Now we can expect strong jumps both in one direction and in the other.   Relevance up to 09:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/322746

Overview : The British pound has weakened against the US dollar since the beginning of this week. That's the British pound (GBP) has fallen over 2.5% against the US dollar (USD) since the start of the week, which is significant, especially since these are the two major currencies of the world. The drop has also concentrated in this week. The GBP/USD pair continues to move downwards from the level of 1.1589. Yesterday, the pair dropped from the level of 1.1589 (this level of 1.1589 coincides with the ratio of 61.8%) to the bottom around 1.1349. The GBP/USD pair is part of a very strong bearish trend. Traders may consider trading only short positions (for sale) as long as the price remains well below 1.1497. The next support located at 1.1349 is the next bearish objective to target. A bearish break of this support would revive the bearish momentum. The bearish movement could then continue towards the next support located at 1.1349. Below this support, sellers could then target 1.1349. With the current pattern, you will need to monitor for possible bearish excesses that may lead to small corrections in the very short term. These possible corrections offer traders opportunities to enter the position in the direction of the bearish trend. Trying to profit from the purchase of these possible corrections may seem risky. Today, the first resistance level is seen at 1.1497 followed by 1.1543, while daily support 1 is found at 1.1349. Also, the level of 1.1497 represents a weekly pivot point for that it is acting as major resistance/support this week. Support becomes a resistance at the level of 1.1497. The GBP/USD pair fell with UK inflation elevated and still rising, the cost of living crisis taking hold, growth slowing and ongoing Brexit woes, the outlook for the pound is deteriorating. Meanwhile, the USD is supported by safe-haven flows and hawkish Federal Reserve (Fed) bets. Amid the previous events, the pair is still in a downtrend, because the GBP/USD pair is trading in a bearish trend from the new resistance line of 1.1380 towards the first support level at 1.1349 in order to test it. If the pair succeeds to pass through the level of 1.1349, the market will indicate a bearish opportunity below the level of 1.1349. The trend is still bearish as long as the price of 1.1497 is not broken. On the day, this instrument gained +0.94% with the lowest point at 1.1349 and the highest point at 1.1400. The deviation from the price is +0.95% for the low point and -0.05% for the high point. Thereupon, it would be wise to sell below the price of at 1.1497 with the primary target at 1.1349. Then, the GBP/USD pair will continue towards the second target at 1.1300. The market is indicating a bearish opportunity below the above-mentioned support levels, for that the bearish outlook remains the same as long as the 100 EMA is headed to the downside. However, the price spot of 1.1497 remains a significant resistance zone. Thus, the trend will probably be rebounded again from the second support as long as the level of 1.1497 is not breached. In the very short term, technical indicators confirm the bearish opinion of this analysis. It is appropriate to continue watching any excessive bearish movements or scanner detections which might lead to a small bullish correction. Forecast : Today, resistance is seen at the levels of 1.1497 and 1.1300. So, we expect the price to set below the strong resistance at the levels of 1.1497 and 1.1400; because the price is in a bearish channel now. The RSI starts signaling a downward trend. Consequently, the market is likely to show signs of a bearish trend. Thus, it will be good to sell below the level of 1.1497 or 1.1400 with the first target at 1.1349 and further to 1.1300 in order to test the daily support. If the GBP/USD pair is able to break out the daily support at 1.1300, the market will decline further to 1.1250 to approach support 3 in coming hours or days. On the other hand, the price spot of 1.1497 remains a significant resistance zone. Therefore, the trend is still bearish as long as the level of 1.1497 is not breached.   Relevance up to 01:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294504

The British pound showed moderate growth on Tuesday. The upper shadow of the daily candle tested the strong level of 1.0830, after which the price moved down. On Wednesday morning, the price covered the white candle of the previous day. The price is now faced with a second task - to work out the level of 1.0310. On this path, the price has an intermediate target - 1.0535, there may be a slight delay here. The Marlin Oscillator has slightly discharged, although it still remains in the oversold zone. As a result, we expect a medium (1.0535) or strong correction (not higher than 1.0830) from the support at 1.0310. On the H4 chart, the price is gathering strength before an attack at 1.0535. Consolidation below the level opens the way to 1.0310. The Marlin Oscillator is turning down in front of the zero line.   Relevance up to 05:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322846

GBP/JPY rallied to our expected target at 154.41 and then to a peak of 157.20. This is more than enough to fulfill the corrective target and see the final wave lower towards the 61.8% corrective target at 145.76 to complete the corrective decline from 168.43. Once this correction is complete we should see another impulsive rally above the peak at 168.43 for a run towards 180.50. In the short term, a break below 153.45 confirms renewed downside pressure towards the expected corrective target at 145.76.     Relevance up to 06:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294516

The GBP/USD currency pair also traded more calmly on Tuesday than on Monday. Some recovery has begun, but it is still very difficult to call this upward movement even a "correction." Rather, it is not even a rollback but a rebound. The market faced a serious level of support several hundred points from the price parity, so stop orders and take profit worked, which led to a sharp departure of quotes. Recall that the collapse occurred after the new Finance Minister, Kwasi Kwarteng, presented a plan for economic recovery in Parliament, which implied a reduction in several tax rates and the abolition of some tax increases. After that, the yield of UK Treasury bonds shot up, which means a drop in demand for this type of security. And along with this, massive sales of the pound followed, which were observed before the statements of Kwarteng. Thus, the pound fell before the presentation of the recovery plan, the Bank of England meeting, and the Fed meeting. What has changed, other than that the fall has just accelerated? Accordingly, we can conclude that there are plenty of reasons for the market to get rid of the pound as soon as possible, not just one or two. After all, do not forget about geopolitics, which puts pressure on risky currencies. Do not forget about the British recession, which can last two years, if not more. Do not forget about Brexit, which continues to harm the GDP. It is even difficult for us now to guess where the pound may fall. On the one hand, a strong rebound of quotations from the level of 1.0358, now the new absolute minimum of the pair, may mean a transition to forming a new upward trend. But it will take a week or two to determine whether this is true. After all, given the geopolitical or fundamental background, the market may decide to resume sales! A couple of weeks ago, we jokingly said that the pound would also go below parity at this rate. As you can see, now it's not a joke. The pound has set a record. Meanwhile, Britain continues to show that it cannot live without scandals and controversial political decisions and cannot help but create problems for itself. Liz Truss took office as Prime Minister on September 6. On September 27, it became known that some conservatives had begun sending letters to a special committee that could begin the procedure for issuing a vote of no confidence. That is, 21 days after the Conservatives chose Liz Truss as their leader, they have already begun voting to remove her from office. This is a political pun. Naturally, it all started with that notorious recovery plan, which implies tax cuts. It is reported that some parliamentarians seriously believe this plan could destroy the British economy, which is already on the verge of recession. Although it is not clear to us personally, what exactly is the problem with Liz Truss, who, even at the first stages of voting, clearly spoke about her desire to lower taxes? And for the UK, such a measure is by no means an apocalypse, and taxes have been reduced before, in difficult times for the country and its citizens. However, there is a feeling that the tax cuts affect the interests of those conservatives who did not want to see Truss at the helm of the country but voted for Rishi Sunak, who was just against lowering tax rates. There is no unity within the Conservative Party now, not to mention the entire British government. If this is true, opponents will not succeed since the number of conservatives who voted for her is greater than those who voted for Sunak. And if it comes out, Liz Truss will set a record for short-term tenure as prime minister. This event is remarkable, and we will have something to watch for in the near future while the pound sterling is going to the bottom. The average volatility of the GBP/USD pair over the last five trading days is 299 points. For the pound/dollar pair, this value is "very high." On Wednesday, September 28, thus, we expect movement inside the channel, limited by the levels of 1.0477 and 1.1077. The reversal of the Heiken Ashi indicator downwards signals the resumption of the downward movement. Nearest support levels: S1 – 1.0498 S2 – 1.0254 S3 – 1.0010 Nearest resistance levels: R1 – 1.0742 R2 – 1.0986 R3 – 1.1230 Trading Recommendations: The GBP/USD pair is still being adjusted in the 4-hour timeframe. Therefore, at the moment, new sell orders with targets of 1.0498 and 1.0477 should be considered if the Heiken Ashi indicator turns down. Buy orders should be opened when fixed above the moving average with targets of 1.1230 and 1.1475. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction to trade now. Murray levels are target levels for movements and corrections. Based on current volatility indicators, volatility levels (red lines) are the likely price channel in which the pair will spend the next day. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.   Relevance up to 02:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322842

GBP/USD 5M The GBP/USD currency pair was trading more calmly on Tuesday, but the volatility still remained very high, almost 200 points. Late in the evening, a new powerful fall began, which may well turn out to be a new round of the collapse of the British currency. No important statistics published in the UK on Monday or Tuesday, and there were no important events or news. Thus, we believe that the market continues to be in a panic state due to recent geopolitical events. We said that the euro may well continue its decline in the near future. And if the euro can, then the pound even more so... Therefore, a lot depends on what news of a geopolitical nature will come from Russia, Ukraine, NATO countries and the European Union. Unfortunately, the forecasts are not optimistic yet. Everything is going to the fact that the geopolitical conflict will continue to grow. Not a single trading signal was formed on Tuesday. The price was only getting close to the critical line, but could not work it out. It's a pity, because a strong sell signal could be formed. However, the nature of the movements now is such that it may be better not to really enter the market for a while. Or trade on a higher TF, which we also analyze every day. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group closed 11,600 long positions and opened 6,000 short positions. Thus, the net position of non-commercial traders decreased by another 17,600, which is a lot for the pound. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And now it has begun a new decline, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its decline has completely resumed and multi-year lows are updated almost every day, so the bearish mood of major players can only intensify in the near future. The non-commercial group now has a total of 109,000 shorts and 41,000 longs open. The difference is again almost threefold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, one should not forget about the high demand for the US dollar, which also plays a role in the fall of the pound/dollar pair. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 28. The euro still does not understand how to start growing. Geopolitics may still put pressure on the pair for a long time. Overview of the GBP/USD pair. September 28. Theresa May is out, Boris Johnson is out, now Liz Truss is out? How much longer will the political turmoil in Britain continue? Forecast and trading signals for EUR/USD on September 28. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H. The pound/dollar pair continues its downward trend on the hourly timeframe, which is already in fact a collapse. For some time the market was in a state of pause, but now it is already clear that the fall can resume with renewed vigor. We do not believe that the reasons for this fall lie in Great Britain or on the sidelines of the Federal Reserve. We believe that geopolitics is pushing the pound down and may continue to do so for a very long time. Any trend ends sooner or later, but it is very difficult to say when this one will end. We highlight the following important levels: 1.0357, 1.0930, 1.1212, 1.1354, 1.1442. Senkou Span B (1.1475) and Kijun-sen (1.0858) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. No major events scheduled for Wednesday in the UK and the US. However, the pair does not need new economic data now to keep moving ultra-volatile. We believe that high volatility may persist today, as well as in the next few days. Explanations for 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. 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.       Relevance up to 02:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322838

Summary:  Market sentiment tipped sharply lower late yesterday after an earlier rally attempt in the US session on the news of sabotage of the Nord Stream pipelines in the Baltic sea. Elsewhere, the US 10-year treasury benchmark rose again and is pushing on the major 4.00% level, taking the USD higher and pressuring global liquidity. Adding further to weak sentiment overnight, the Chinese yuan slipped sharply lower as USDCNH broke above its longer term range highs of 7.20 established back in 2019 and 2020.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities jumped higher out of the gates in early trading yesterday, but the action faded all day and the market closed back near the key cycle support, with the S&P 500 index even posting a minor new bear market low intraday below the prior 3637 mark on the cash index, as the news of the Nord Stream pipeline sabotage (see below) weighed, and US yields and the US dollar continued their ascent. Pivotal levels here for equities as we await further developments and consider end-of-quarter flows into Friday. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Stocks traded in the Hong Kong bourse notably underperformed those in Shanghai and Shenzhen. Shares of public utilities fell from 3% to 5%.  U.K. headquartered HSBC (00005:xhkg) and Standard Chartered (02888:xhkg) continued their slide, falling 3% to 4% for the day and 9% to 11% since last Friday’s post-mini-budget turmoil in the Pound Sterling and U.K. Gilts.  Both Hong Kong and China developers plunged across the board,  mostly by 1% to 5%, with CIFI (00884:xhkg) falling over 27% and being the largest casualty in the property space.  CIFI, the 13th largest property developer in mainland China was said to have missed a payment on a project-related debt.  CSI300 fell 1%, dragged by ferrous metal, electric equipment and defence industries while banks, textiles, food and beverage stocks outperformed. Strong USD continues to rage. We have witnessed an historic move in the USD this month, with month-end and quarter-end drawing into view on Friday. Besides the massive, more than 8% meltdown in GBPUSD this month (trading sub-1.0700 this morning), a pair like AUDUSD has lost over 6.5% as of this morning’s exchange rate. The question soon has to be: when does this strong USD finally “break something” and bring an official response, whether coordinated or unilaterally from the Fed or the US Treasury? So far, there seems no sense of emergency, judging from comments yesterday by US National Economic Council director Brian Deese, who pushed back against the idea that the a Plaza Accord-like deal is under consideration. USDCNH reaches all-time highs, intensifying strong USD story. The strong US dollar finally took USDCNH above the 7.20 area that defined major tops on two prior occasions in 2019 and 2020. The exchange rate traded as high as 7.239 overnight, the highest in the history of the offshore CNH currency. USDCNY has not traded this high since early 2008. The move comes ahead of a major holiday next week in China, with markets closed for the entire week, which will leave markets in limbo next week as USDCNY won’t trade. Gold (XAUUSD) remain under pressure from the stronger US dollar and rising US treasury yields, perhaps showing resilience at the margin given that the precious metal failed to post new lows for the cycle yesterday or today even as the USD surges to new highs elsewhere. The next focus is perhaps the round 1,600 level if the selling continues. Crude oil (CLU2 & LCOV2) recovers, European natural gas surges. Crude oil shifted focus back on supply worries with curbs in the U.S. Gulf of Mexico ahead of Hurricane Ian and with reports that Russia is pushing for the OPEC+ alliance to cut production. The group of oil producing nations is due to meet early next month to discuss its production plans. They already announced a cut to output for October by 100kb/d and have warned of further reductions amid falling prices. There has been reports that Russia is pushing for a cut to output of at least 1mb/d. Meanwhile, a pause in USD rally also helped to put a floor to the declines in commodity prices. WTI futures rose but still remained below $80/barrel while Brent futures were above $86. US treasuries (TLT, IEF) US treasury yields rose once again after a brief and relatively sharp stumble yesterday, taking the 10-year yield to the symbolic 4.00% yield. It is worth noting that large round numbers on the yield often provide sticking points – for example, the 3.50% defined the top in June. Is this an important cycle top in yields or can they continue to power higher. The 4.00% level was also the stop for much of late 2008 and 2009. Yesterday saw a weak 5-year treasury auction despite the high yields. What is going on? Nord Stream pipelines severed, presumably an act of sabotage. Enormous upwellings of gas in the Baltic along the Nord Stream 1 and Nord Stream 2 pipelines in the Baltic Sea and detection of seismic activity that resembled explosions rather than earthquakes suggest that the pipelines were sabotaged to prevent the delivery of gas to Germany from Russia. The Nord Stream 2 pipeline was never operational, and the Nord Stream 1 deliveries had recently ceased. EU commissioner joined others in pointing the finger at Russia for the action, promising “the strongest possible response” if it is confirmed that Russia is behind the action. The development saw European natural gas jumping more than 22%, with Gazprom also issuing sanction warnings for Ukraine’s Naftogaz, which would prevent it from being able to pay transit fees, and therefore put at risk whatever little gas is still flowing to Europe via Ukraine. Fed officials continue with a united hawkish voice. While inflation and higher-for-longer interest rates remain a key theme in all Fed commentary these days, there is also another common theme emerging. All three officials on the wires yesterday – Kashkari, Bullard and Evans – suggested that the US may avoid a recession. Kashkari (2023 voter), in an interview with WSJ, said he’s unsure if the policy is tight enough suggesting more rate hikes will be needed to bring down inflation. Bullard (2022 voter) said the US has a serious inflation problem and the credibility of the inflation targeting regime is at risk. Evans (non-voter) is optimistic the terminal rate the Fed has set out (4.6% median in Dot Plot) will be restrictive enough. France releases ‘rosy’ economic forecasts for 2023. Yesterday, the French government published its economic forecast for 2022-23 as part of the parliamentary debate on the 2023 debate. The forecasts are overly optimistic. The Ministry of Finance expects that household investment (which mainly consists of the purchase and renovation of dwellings) will increase by 0.6 point over 2022-23 despite a jump of 250 basis points in the 10-year government bond yield and falling (or at best stagnant) purchasing power. We are a bit skeptical. We think that a sharp decrease in real estate prices is one of the less mentioned risks in France for 2023. This will be something to monitor very closely. It could seriously deepen the expected recession. USDJPY testing 145, but yen crosses lower. Bank of Japan released the meeting minutes from the July meeting, understandably stale, but continuing to signal that easing intentions remain prevalent. Despite a further run higher in US Treasury yields with the 10-year touching the 4% mark, USDJPY has still remained capped below 145. More importantly, the yen is stronger against the EUR, GBP and AUD since the intervention on 22 September, and the contrast with the struggling CNH is particularly notable. The World Bank downgraded its growth forecasts for China while upgrading the growth of Vietnam. The World Bank published its latest economic forecasts on Tuesday, cutting the 2022 growth rate of China to 2.8% from its previous forecast of 5%, and the 2023 growth rate to 4.5% from 4.8%.  On the other hand, the supra-national bank raised Vietnam’s growth rate in 2022 to 7.2% from the 5.3% forecast released in April. It also raised the 2022 growth forecasts for the Philippines to 6.5% from 5.7% and Malaysia to 6.4% from 5.5%. Excluding China, the East Asia, Pacific region is forecasted to grow 5.3% in 2022 and 6.0% in 2023, which will be, for the first time over the past three decades, higher than the growth rates in China. BHP takes advantage of sterling slump and redeems notes more than half a century early. Despite the iron ore (SCOA) price falling 1.4%, to its equal lowest level this year (US$95.90), BHP shares in Australia rallied to a three-day high after the mining giant paid off debts earlier than expected. BHP took advantage of the slump in the sterling against the USD, and used its record profits to redeem pound-denominated notes (due in 2077). This resulted in BHP effectively paying down $643 million of notes early. Last month BHP reported net debt of just $333 million. BHP also announced mining expansion plans. From exploring options to mine copper at Cerro Colorado beyond 2023, with Chilean regulation easing, to also seeing huge commodity upside in Peru, and spending $12m on exploration there over 10 months. Meanwhile, BHP also affirmed it’s working toward bringing forward production for its new potash (fertilizer) business to 2026. BOE Chief Economist Pill also pushed back on inter-meeting rate hike. Huw Pill said the UK’s government’s fiscal announcement and the market reaction that followed it requires a significant monetary policy response, but the best time to assess and react to their impact is at the institution’s next meeting in November. He acknowledged the challenge to the bank’s inflation goal arising from the loose fiscal policy, while also saying that the bank’s program of government bond sales should go ahead as planned next week if the market repricing stays orderly, as has been the case in recent days. However, it is worth noting that BOE’s November 3 meeting is still before the medium-term fiscal strategy is announced, and if that contains significant spending cuts, the budget may prove contractionary, especially given the rise in yields. US consumer confidence beats expectations. Lower petrol prices and a tight labor market possibly aided a rebound in sentiment, but high inflation and interest rates will continue to constrain consumer spending in the fourth quarter. Meanwhile, 1yr consumer inflation expectations declined to 6.8% (prev. 7.0%), but still remaining significantly higher than the Fed’s 2% goal. In other data, US durable goods order fell 0.2% in August, still coming in better than expected while new home sales rose to the strongest pace of sales since March to 685k in August, above the expected 500K and prior 532k (revised up from 511k). What are we watching next? End of quarter rebalancing? We have seen aggressive moves across markets this quarter, to say the least, which brings the question of whether significant rebalancing flows are set for the quarter end this Friday. The relative bond performance has been perhaps worse than that for equities, while in FX the focus may be on possible rebalancing after a tremendous USD upsurge in Q3. Earnings calendar this week The chief action this week is up tomorrow as H&M, Nike, and Micron Technology deliver earnings reports, with the earnings from Micron the most interesting to watch as we already know H&M and Nike are seeing weak demand. Micron has exposure to the consumer electronics industry and manufactures memory chips in Asia which means that the company sits in at the intersection of many interesting trends. Today: Paychex, Cintas Thursday: Polestar Automotive, H&M, Nike, Micron Technology, CarMax Friday: Carnival (postponed from last week), Nitori Economic calendar highlights for today (times GMT) 0715 – ECB President Lagarde to speak 0815 – UK BoE Deputy Governor Cunliffe to speak 0830 – ECB’s Holzmann to speak 1230 – US Aug. Pending Home Sales 1230 – US Aug. Advance Goods Trade Balance 1235 – US Fed’s Bostic (non-Voter) to speak 1400 – US Aug. Pending Home Sales 1410 – US Fed’s Bullard (voter 2022) to speak 1415 – US Fed Chair Powell to speak (opening remarks at conference) 1430 – US DoE Weekly Crude Oil and Product Inventories 1500 – US Fed’s Bowman (voter) to speak 1700 – US 7-year Treasury Auction 0000 – New Zealand Sep. ANZ Business Confidence survey   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-28-2022-28092022

Hello, dear colleagues. The main event in September was an increase in the federal funds rate by 0.75%. Commenting on this decision, adopted unanimously, Federal Reserve Chairman Jerome Powell said that the US central bank is ready to continue raising rates until inflation starts to decline and the Committee receives data on the sustainability of the decline in inflation expectations. A few days later it became clear that the decision taken by the Open Market Committee could lead to serious, if not catastrophic, consequences for the entire global financial system and its most important element — the FOREX market. Before discussing the prospects of foreign currencies against the US dollar, let's discuss why a rate hike leads to a rise in the dollar and a decrease in the rates of its competitors? The answer to this question lies in one of the fundamental laws of the foreign exchange market — the Interest Rate Parity Theorem. The essence of the theorem is that assets with the same credit risk will be more attractive in the currency of the state where the rate is higher. In this case, investors will sell the currency with lower rates and buy the currency with higher rates in order to receive a large premium for their investment. Figure 1: The US dollar exchange rate against a basket of foreign currencies The increase in the dollar rate primarily hit currencies with low rates, including, first of all, the euro, the yen and the British pound, and this is the flip side of the US dollar. Moreover, if the yen and the pound have limited influence, then the euro is the second most important reserve currency in the world. The economic problems associated with rising energy prices have further aggravated the situation in the eurozone economy, and the slowness of the European Central Bank has led to the fact that the difference in interest rates has become large enough for a massive outflow of capital from Europe. This has become especially relevant for energy-dependent industries, such as metallurgical companies and aluminum production. At the same time, the situation in the British pound and the Japanese yen is no better than that of the euro, and even worse in some ways. The British pound updated the historical low on September 26. The yen updated the 30-year low a little earlier. There is another circumstance that puts pressure on exchange rates, this is the decline of the US stock market, which adds an additional growth driver to the dollar. Thus, the dollar is at the peak of its power in relation to the currencies of the bloc. The Chinese yuan is also under pressure, although much less than the nearest US satellites. This week, the yuan has updated the low and is now trading at 7.14 yuan per dollar, but the level of 8 yuan per dollar, the low from 2006, is still far away. The depreciation of the yuan is rather a forced measure in response to the decline in the currency of the main competitor in the Asia-Pacific region — the Japanese yen. Further narration requires answering the question of how high the US dollar can grow, and whether it is worth selling it against other currencies now. First of all, it should be noted that the dollar's growth is not over yet, although it has achieved its initial goals. At the same time, it should be remembered that the movement never develops in a straight line, and the dollar has now turned out to be sufficiently overbought to make a correction to its rising trend from a technical point of view, which will give us the opportunity to consider buying it, if, of course, there is a desire and, most importantly, a signal from the trading system. However, in the context of what is happening, a very significant reservation should be made. Even if we assume that the US dollar has reached its high, it will take at least three months to reverse it. Now the ECB and the Bank of England have rushed after the Fed, trying to somehow stop the inflationary spiral. However, it is not so easy to do this, given the pace set by the US Fed, and it takes time. The chronology of events can be presented as follows. The Fed will raise the rate at least once more at its next meeting, which will be held on November 1 and 2, by 0.75% points. Before this event, the ECB will also raise the rate by 0.75% at the end of October, thereby keeping the difference in rates between the euro and the dollar at the current value. Of course, the ECB may surprise and raise the rate by 1% at once, but then we will know about it in advance from the comments of officials, but now such an increase looks unlikely. Based on the logic of this assumption, it is safe to say that at least until the end of October 2022, the euro's exchange rate will not change its direction and may continue to decline. Fig.2: Technical picture of the euro/US dollar exchange rate The technical picture of the EURUSD exchange rate assumes a similar dynamics and now completely coincides with the fundamental calculations (Fig.2). The euro is in a downward trend. At the same time, the exchange rate reached the first target, located at 0.96, which was determined by the width of the previous range of 0.99-1.02, 300 points. It is logical to assume that after achieving the first goal, the course will grow a bit, or, in other words, go into correction. The main postulate of technical analysis is the rule: the movement will continue until we get the opposite. This means that we need to assume that the exchange rate of the euro will decline until the condition of a trend change is met. For the current situation, the condition for a trend change is an increase above the 1.02 level, before that, any increase in the EURUSD rate should be considered as a correction to the current downward trend. Fig.3: Technical picture of the USDJPY course In my subjective opinion, the situation in the Japanese yen is even sadder than with the euro. The Bank of Japan remains the only key central bank that has abandoned the policy of raising rates. This has a rather serious impact on the yen exchange rate, which leads to the fact that the BOJ, under pressure from allies dissatisfied with the devaluation, is even forced to intervene. However, this does not help much and may lead to the fact that the Japanese currency will test the level of 150 and even 155 yen per US dollar (Fig.3). Therefore, if any feeling that you take for intuition suggests that you sell the USDJPY pair here and now, then throw this thought out of your head. It will not lead to anything good. It will be possible to do this no earlier than the pair drops below the 140 level, and even then with great caution and a minimum lot size. With the British pound, everything is somewhat more complicated. The fact is that the BoE began to raise the rate earlier than the ECB began to do it, besides, the maintenance of the national currency rate is written in its charter. Previously, if necessary, the central bank did not disdain to resort to interventions, including not only verbal ones. Therefore, I wouldn't guess the depths at the level of parity of the pound and the dollar, although such a decline looks quite likely. Summing up, it should be noted that the US dollar continues to remain in an upward trend, supported by high interest rates and a decline in stock indices. The S&P 500 index updated the local low on Tuesday, September 27. The previous level was at 3631. If the month, quarter and fiscal year are closed below the 3600 mark, the fate of the US market in the 4th quarter will be very sad. With a high degree of probability, of course. Be careful, cautious and most importantly — follow the rules of money management!   Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322832

Details of the economic calendar for September 27 Orders for durable goods in the United States decreased by 0.2% during the period of August. This is not the best indicator, but they expected a reduction of 0.9%. The divergence of expectations served as a stimulus for the growth of dollar positions. At the same time, data on new home sales in the US were also published, which recorded a strong growth of 28.8% in August. In addition to macroeconomic statistics, there were quite a lot of comments from the Fed, where everyone unanimously talks about the risks associated with inflation. Chicago Fed President Charles Evans: - The average forecast for the interest rate at the end of the year is between 4.25%–4.5% and 4.6% by the end of next year. - For us, task number 1 is to bring inflation under control. - The tightening of monetary policy will continue for some time. - 4.5% unemployment in the United States is still a good level. - At some point in time there will be a need to reduce the rate of interest rate increases. But now it needs to be further improved. - This year, our forecasts for an objective increase in interest rates by another 100–125 basis points. - We see long-term inflation expectations at acceptable levels. - I expect that the level of inflation will noticeably decrease within two years. - I expect a slight increase in GDP this year. Former New York Fed President William Dudley: - The Fed has made it clear that it intends to fight inflation. - During the September meeting, the regulator clearly indicated that they are ready to raise the interest rate in order to return inflation to an acceptable level. - Based on the forecasts of the Fed, GDP growth is expected in the coming years. - It looks like there is no clear consensus among the Fed representatives on how long they will continue to fight inflation. St. Louis Fed President James Bullard: - We have serious problems with inflation in the country. - The credibility of the inflation targeting regime is under threat. - The labor market is very strong, which gives us the opportunity to fully focus on inflation. - We must correctly and timely respond to inflation. - At subsequent meetings, we certainly must continue to raise the interest rate. - The possible maximum interest rate is about 4.5%. - We'll probably have to stick with the high stakes for a while. Minneapolis Fed President Neel Kashkari: - We believe that the markets understand what the Fed is doing. - Representatives of the Fed are united and committed to reducing inflation. - We are moving at a fast pace, it is dangerous. - The Fed is working to bring inflation back to 2%. We need to keep raising interest rates. - We need to further tighten monetary policy to see evidence that we are succeeding in reducing inflation, and move on to slow down. - I'm not sure that the current monetary policy is tight enough. Philadelphia Fed President Patrick Harker: - We are working to achieve an acceptable level of inflation in the country. - The housing market is a key segment in the growth of inflation - Inflation in the country is very high in many categories San Francisco Fed President Mary Daly: - Our goal is to return inflation to the level of 2.0%. - The level of inflation is very high, we must properly assess the current situation. Conclusion based on the comments of the Fed representatives Based on the above material, a clear "hawkish" approach is visible. The regulator intends to fight high inflation by all possible means, which they point out in their statements. For this reason, we see a further decline in the US stock market, as well as an increase in the value of the dollar against other currencies. Analysis of trading charts from September 27 The EUR/USD currency pair resumed its decline after a short pullback. As a result, the local low of the downward cycle at 0.9553 was updated, which indicates the prolongation of the main trend. The GBP/USD currency pair ignores the fact that it is treading water at historical lows. In fact, the technical signal of oversold is covered by a high rush for short positions on the part of speculators. Economic calendar for September 28 Today the macroeconomic calendar is empty, all hope is for the information flow, where speeches by the Fed and ECB representatives are expected again. Trading plan for EUR/USD on September 28 Stable price retention below 0.9550 will lead to a subsequent decline. In this case, the technical signal about overheating of short positions can be ignored by market participants. A possible prospect of a move is a decline towards the lows of 2001 and 2000. An alternative scenario of market development is considered by traders in the form of another price rebound from the 0.9550 value area, as it happened at the beginning of the trading week. Trading plan for GBP/USD on September 28 In this situation, keeping the price below the 1.0600/1.0630 area in a four-hour period may well lead to a subsequent decline towards the recent local low. It is worth noting that with such overheating of short positions, spontaneous consolidations may occur, which, in turn, will lead to a technical pullback. Until the quote is stable below the control area, the risk of the subsequent formation of the amplitude of 1.0630/1.0930 remains. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.   Relevance up to 10:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322890

Yesterday's trading range for the pound was 380 points. The lower shadow worked out the support at 1.0535, the upper part of the candle, on the occasion of such a high volatility, went above the strong resistance at 1.0830. But this morning the market returns to its previous state - below this level and towards 1.0535. The rate of decline may now slow down, but its targets remain: 1.0535, 1.0310. On the four-hour chart, the price returns below the level of 1.0830. Consolidation below it will strengthen the attraction of the target level of 1.0535. By this time, the Marlin Oscillator should move into negative territory to help the price in this difficult matter.   Relevance up to 04:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322980

Early in the European session, the British Pound (GBP/USD) is trading at around 1.0795. A reversal is going on after the price reached the high of 1.0914 in the American section. On the 4-hour chart, we can see the break of the pennant pattern that was formed after the drop on September 26. The US dollar fell very sharply in the American session yesterday from all-time highs of 114.71 and dropped to a low of 112.50. This technical correction encourages the recovery of the GBP/USD pair. For the outlook to remain positive, the pound must consolidate above 1.0740. If a technical bounce around 6/8 Murray (1.0742) occurs in the next few hours, GBP/USD could resume the bullish bias and could reach the top of the downtrend channel around 1.1025. The rally seen yesterday from the low of 1.0538 to the high of 1.0914 could be a sign that the bearish trend has ended and the pound could start recovery in a few days. Our trading plan for the next few hours is to wait for a technical bounce around the 21 SMA located at 1.0742. This area has become a strong support for the British pound which could suggest a buying opportunity, with targets at 1.0930 and at the psychological level of 1.1000. The price could even reach the resistance of 1.1050 (top of the bearish channel). On the contrary, in case the British pound makes a close below 1.0740 on the daily chart, it could mean the resumption of the bearish movement and GBP/USD could reach the level of 1.0538 printed yesterday in the European session and could fall to the low of the month at 1.0324.     Relevance up to 06:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294731

Technical Market Outlook: The GBP/USD pair has bounced 5.66% from the lowest level since 1985 located at 1.0352, however the bears had capped the bounce at the level of 1.0929 (first bounce) and 1.0914 (second bounce). The next technical resistance is located at 1.1210 and 1.1410 and only a sustained breakout above this level would change the outlook to bullish. On the other hand, the next target for bears is located at the parity level of 1.0000, so please keep an eye on this level. The intraday technical support is seen at the level of 1.0632 and 1.0538. Weekly Pivot Points: WR3 - 1.16907 WR2 - 1.11401 WR1 - 1.08850 Weekly Pivot - 1.05895 WS1 - 1.03344 WS2 - 1.00389 WS3 - 0.94883 Trading Outlook: The bears are still in charge of Cable market and the next target for them is the parity level. The level of 1.0351 has not been seen since 1985, so the down trend is strong, however, the market is extremely oversold on longer time frames already. On the other hand, in order to terminate the down trend, bulls need to break above the level of 1.2275 (swing high from August 10th).   Relevance up to 08:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294765

Analysis of transactions in the GBP / USD pair The price test of 1.0653 occurred at the moment when the MACD line was just starting to move below zero, which was a good signal to sell. This led to a decrease of over 90 pips and a test of 1.0567. Then, buying after a rebound from that level gave at least 40 pips of profit. There are no statistics on the UK today, so count on a further growth in GBP/USD. Yesterday's intervention of the Bank of England in the bond market definitely helped pound recover a bit, but the situation is still shaky, in which another massive sell-off may occur once the positive effect dries up. The upcoming US data on jobless claims and GDP may also raise dollar demand if the figures exceed expectations. For long positions: Buy pound when the quote reaches 1.0818 (green line on the chart) and take profit at the price of 1.0907 (thicker green line on the chart). Although growth is unlikely, a correction may occur if the Bank of England continues to interfere in the markets. In that case, traders could buy as long as the MACD line is above zero or is starting to rise from it. Pound can also be bought at 1.0764, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0818 and 1.0907. For short positions: Sell pound when the quote reaches 1.0764 (red line on the chart) and take profit at the price of 1.0697. Pressure could return at any moment, but take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.0818, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0764 and 1.0697. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 09:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322998

UK Prime Minister Liz Truss and Finance Minister Kwasi Kwarteng's plan to support the economy met with an unexpected rebuff not only from British banks, but also from the Bank of England itself. The International Monetary Fund (IMF) also expressed concern that its implementation could trigger the onset of a global financial crisis, similar to what happened in 2008. In the end, even the House of Commons, where the majority of seats belong to the conservative party headed by Liz Truss, subjected this plan to the most severe criticism and demanded its total revision. All of these convinced investors that it will not be implemented in the version it is now, which somewhat calmed the markets and became a reason for a local rebound. But if the Cabinet of Ministers insists on going with the plan, the situation will quickly develop into another political crisis, which will have a negative impact on pound. If the plan is revised, then a correction may continue. The scale of what is happening with pound is so huge that it continues to affect other currencies, such as euro. EUR/USD hit a new local low, but sellers failed to hold on to this new value, prompting a rebound of about 200 pips. Nevertheless, the trend remains bearish, moreso since short positions surged after the recent price movement. Volatility was high in GBP/USD. It first fell below 1.0600, then returned to weekly highs. Even so, market mood is bearish, and there is a huge chance that it will remain trading within 1.0600/1.0900.   Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322988  

The roller-coaster continues for the British pound, which is down sharply today. In the European session, GBP/USD is trading at 1.0774, down 1.05%. It has been a remarkable week for the British pound, which has exhibited sharp volatility since Friday, when Chancellor Kwarteng unveiled his mini-budget. The package included unfunded tax cuts, despite weak a weak economy and inflation hovering at 9.9%. The financial package was criticised at home as well as abroad; the International Monetary Fund and US Commerce Secretary Gina Raimondo also panned the plan. Former US Treasury Secretary Lawrence Summers had perhaps the most unkind cut of all, saying that the UK had the worst economic policy of any major country. The British pound fell 3.6% on Friday and kept falling on Monday, hitting a record low of 1.0359. Bond prices tumbled and the turmoil became so acute that the Bank of England intervened on Wednesday in order to avoid a possible crash in the bond market. The BoE said that the crisis threatened financial stability and purchased just over one billion pounds in securities and will continue purchasing securities every day until October 14th. The bailout could hit over 60 billion pounds. The BoE’s announcement sent bond prices higher and stabilized the bond market. The pound shot up 1.45% on Wednesday, but has reversed directions and is down sharply today. Prime Minister Truss is under heavy pressure to shelve the financial plan which has caused chaos in the markets, but for now, the government is standing firm and says it won’t back down. Truss and Kwarteng will have to face the music at the Conservative Party’s annual conference next week, and it’s likely we haven’t heard the last word on the mini-budget which has triggered a major financial crisis. . GBP/USD Technical GBP/USD is testing support at 1.0782. Next, there is support at 1.0644 There is resistance at 1.1052 and 1.1184 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

The Canadian dollar continues to show sharp volatility this week. USD/CAD has jumped 0.65% today and is trading at 1.3693. We are seeing significant volatility in the currency markets this week, with weaker risk appetite propelling the US dollar higher. The Canadian dollar been hit by the double whammy of an aggressive Federal Reserve and an escalation in the war in Ukraine which has dampened risk appetite. It has been a miserable September for the Canadian dollar, as USD/CAD has climbed 4.5%. There are additional headwinds for the Canadian dollar. The Bank of Canada has led the way with a fast pace of tightening, raising its benchmark rate to 3.25%. The Federal Reserve has caught up with last week’s 0.75% hike, and the markets are pricing in a higher terminal rate for the US than for Canada (4.60% vs. 4.10%). This means that the Canadian dollar will not benefit from a higher interest rate differential, and Canadian bond yields have fallen below US Treasuries. As well, Canada is a major oil exporter and the drop in the price of oil is weighing on the Canadian dollar. We are already seeing a sharp drop in long positions in the Canadian dollar, and that trend could continue. Markets brace for decline in GDP Canada releases the July GDP report later today. The economy is showing little movement and gained a negligible 0.1% in June. The consensus for July is a decline of 0.1%. A sharper drop than expected could sour investors on the Canadian economy and extend the Canadian dollar’s losses. . USD/CAD Technical USD is testing resistance at 1.3725. The next resistance line is 1.3862 There is support at 1.3477 and 1.3340 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

In my morning forecast, I paid attention to the level of 1.0818 and recommended making decisions on entering the market. Let's look at the 5-minute chart and figure out what happened. After a slight Asian correction, buyers of the pound returned to the market, counting on more global support from the Bank of England. The breakthrough and the reverse test of 1.0818 led to a good buy signal, which increased by more than 80 points. Then a resistance test of 1.0899 took place, from which it was possible to get a good sell signal. At the time of writing, the pound has already gone down more than 50 points. To open long positions on GBP/USD, you need: The pound buyers are counting on a dash up - they need to do something with the resistance of 1.0876, which they hit in the first half of the day. Let's see how the market reacts to the data on the number of initial applications for unemployment benefits in the United States and the change in GDP for the second quarter of this year. The fundamental background is not serious, so the bulls may be able to pull themselves together and break through to the weekly maximum. Statements by FOMC representatives James Bullard, Loretta Mester, and Mary Daly may slightly cool their ardor in the afternoon. In the case of a decline in GBP/USD, the optimal scenario for buying will be the formation of a false breakdown in the 1.0800 area, where the moving averages are playing on the buyers' side. This will give an excellent entry point to return to 1.0876. Only after getting above this range will it be possible to talk about building a further upward correction for the pair to move to 1.0958, where it will become more difficult for buyers to control the market. A more distant target will be the 1.1018 area, leading to a fairly large market capitulation of sellers. I recommend fixing profits there. In the event of a fall in GBP/USD against the background of hawkish statements by representatives of the Federal Reserve System and the absence of buyers at 1.0800, the pressure on the pound will return. If this happens, I recommend postponing long positions to 1.0738 and 1.0676. I advise you to buy there only on a false breakdown. You can open long positions on GBP/USD immediately on a rebound from 1.0617 or in the minimum of 1.0545 to correct 30-35 points within a day. To open short positions on GBP/USD, you need: Protecting the nearest resistance at 1.0876 remains an important task for the second half of the day. Yes, the bears showed themselves for the first time, and while trading will be conducted below this range, we may reach the support of 1.0800 – we need a good fundamental reason or another news about problems in the UK markets. In case of a re-growth of the pair, only the formation of a false breakdown at 1.0876 will confirm the presence of buyers in the market and return pressure on the pound, which forms a sell signal based on the development of a bearish trend and a decline to the nearest support of 1.0800. A breakthrough and a reverse test from the bottom up of this range, which was formed at the end of the first half of the day, will give an entry point for sale with a fall to a minimum of 1.0738, but a much more interesting target will be the 1.0676 area, where I recommend fixing profits. With the option of GBP/USD growth and the absence of bears at 1.0876, the situation will return to the control of buyers, albeit only for a while, which will lead to an update of the next weekly maximum in the area of 1.0958. Only a false breakout at this level forms an entry point into short positions in the expectation of a downward correction. If there is no activity, there may be a jump up to the maximum of 1.1018. I advise you to sell GBP/USD immediately for a rebound, counting on the pair's rebound down by 30-35 points within a day. The COT report (Commitment of Traders) for September 20 recorded an increase in long positions and a reduction in short ones. However, this report does not consider what is currently happening in the market, so you do not need to pay much attention to it. The changes that have taken place in just a few days in the UK are now dictating the pair's direction. Last week, the Bank of England raised interest rates by only 0.5%. And they already regret it since, after that, the Ministry of Finance announced that they were ready to provide unprecedented assistance to households to cope with high energy prices. They also announced a large tax cut to support and stimulate the economy. However, they forgot to mention that this will further accelerate inflation, which the Bank of England is not very good at coping with. This provoked a pound sell-off by almost 1,000 points in two days. Investors took advantage of this moment and the well-depreciated pound and bought it off, but it is difficult to say that the market eventually found the bottom. There are a lot of statistics out of the US this week, which could put pressure on the GBP/USD pair. The latest COT report indicates that long non-commercial positions increased by 160 to 41,289. In contrast, short non-commercial positions decreased by 13,083 to the level of 96,132, which led to a slight reduction in the negative value of the non-commercial net position to the level of -54,843 versus – 68,086. The weekly closing price collapsed from 1.1392 to 1.1504. Signals of indicators: Moving Averages Trading is conducted above the 30 and 50-day moving averages, indicating the bulls' attempt to build a correction. 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 In case of growth, the upper limit of the indicator around 1.0900 will act as resistance. Description of indicators Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow. Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green. MACD indicator (Moving Average Convergence / Divergence - moving average convergence/divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-profit speculative traders, such as individual traders, hedge funds, and large institutions use the futures market for speculative purposes and to 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 the short and long positions of non-commercial traders.   Relevance up to 13:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323036

The British pound continues to be in a fever on the news of the start of a softening operation by the Bank of England, which decided to buy long-term government bonds worth just over 1 billion pounds on its balance sheet. The amount of short-term QE is not large, rather, it is the market's psychological reaction to the signal from the central bank that the rate hike may slow down, as inflation issues are already receding into the background. Data on British GDP for the 2nd quarter will be released today. A decline of 0.1% is expected, or contraction of growth from 8.7% y/y to 2.9% y/y. The volume of mortgage lending in September is expected to decrease from 5.05 billion pounds to 4.90 billion, the volume of consumer lending may decrease from 1.42 billion to 1.40 billion. In the US, there will be data on income and expenses of individuals. The forecast for income in August is 0.3%, expenses are expected to grow by 0.2%. We believe that the market should have already calmed down from the BoE's "hints", as the debt market has already done, where yields on 10-year government bonds are now held at the level of September 26 (4.23%), and again turn to the overall economic picture Europe and England. Yesterday the pound rose by more than 220 points, and this morning the price reached the target level of 1.1170. The daily Marlin Oscillator slowed down in growth. It may very well be that from the level reached, the price will start to turn back to 1.0830. To reach 1.1305, it is necessary to get the price to settle above 1.1170, since the volatility is still decreasing. But in this case, it will happen next week. The limit of corrective growth seems to be the resistance of the MACD line (1.1460). On a four-hour scale, the price consolidated above both indicator lines, but growth slowed down at the target level of 1.1170. The Marlin Oscillator is turning down. A sign of the completion of the correction and a reversal of the trend will be the departure of the price under the MACD indicator line. The first target is 1.0830.   Relevance up to 04:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323080

The British pound is trading around 1.1144. We can see three consecutive days of recovery and now it is facing the zone of 7/8 Murray (1.1230) which represents a likely technical reversal. A pullback towards the 1.1310 area (200 EMA) or towards the 1.1230 level (7/8) could be considered as a signal to resume selling. According to the daily chart, we can see that the British pound has three days of strong recovery and could now face overbought levels. This recovery could be momentary, as the main trend is still bearish and its rise higher will be seen by the bears as a good opportunity to sell. The intervention of the Bank of England caused strong volatility in the GBP/USD pair, which led to a recovery of almost 900 points. The BoE announced that it will make temporary purchases of UK bonds. This intervention will only relieve downward pressure momentarily, as the Fed is determined to raise its interest rate in the coming months. Therefore, we can sell the pound below the area of 7/8 Murray or the 200 EMA with targets at 6/8 around 1.0742. Additionally, the psychological level of 1.10 will be the key level for the British pound. We expect the British pound to trade around this area in the coming days and it could be seen as a pivot point in the event of a bullish or bearish move. Relevance up to 06:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294921

GBP/USD 5M The GBP/USD currency pair traded almost identical to the EUR/USD pair again on Thursday. Thus, the British currency has been growing for a whole week. With what exactly is growing, and not pretending to grow. From the lows of the current week (and at the same time the absolute lows), the pound has already managed to rise in price by 800 points. We spoke about such a movement in the context of the question of the beginning of a new upward trend. Now we can only hope that in the near future the market will not face a new portion of disappointing statistics or news. There was practically no important data yesterday. It is unlikely that a strong move up, which lasts four full days, can be linked to the US GDP report in the second quarter in the third assessment. GDP fell by 0.6%, but traders already knew that this would be the case. The American economy has been in recession for two quarters, but the dollar has already won back all conceivable and unimaginable factors of its own growth. Now the dollar's growth can only happen in case we receive new shocking news of a geopolitical nature. There were no problems with yesterday's trading signals. The first two signals in the form of rebounds from the Kijun-sen line were false. In both cases, the price went down by about 20 points, so Stop Loss should have been placed at breakeven on both short positions. At the same time, some of them might not work. In any case, the third buy signal should have been worked out. Perhaps it was risky, but the risk was worth it, given that for the first time in a long time, the pound began to rise. The pair then broke through the 1.0930 level and the Senkou Span B, moving up about 230 points in total through Thursday evening. This is the level of profit that traders could get by working out this signal. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group closed 11,600 long positions and opened 6,000 short positions. Thus, the net position of non-commercial traders decreased by another 17,600, which is a lot for the pound. The net position indicator has been growing for several months, but the mood of the big players still remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And now it has begun a new decline, so the British pound still cannot count on a strong growth. How can you count on it if the market sells the pound more than it buys? And now its decline has completely resumed and multi-year lows are updated almost every day, so the bearish mood of major players can only intensify in the near future. The non-commercial group now has a total of 109,000 shorts and 41,000 longs open. The difference is again almost threefold. The net position will have to show growth for a long time to at least equalize these figures. Moreover, one should not forget about the high demand for the US dollar, which also plays a role in the fall of the pound/dollar pair. We recommend to familiarize yourself with: Overview of the EUR/USD pair. September 30. We understand the reasons why the euro can resume its fall. Overview of the GBP/USD pair. September 30. The British pound, as usual, has a lot of problems. Forecast and trading signals for EUR/USD on September 30. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair, as we see it now, has broken the downward trend on the hourly timeframe, as all key levels and lines have been overcome. We can only hope that now the pound will consolidate above the Senkou Span B line at least for a week. In this case, we can expect the formation of a new upward trend. Reasons for it are no longer required, since the pound is heavily oversold. For September 30, we highlight the following important levels: 1.0538, 1.0930, 1.1212, 1.1354, 1.1442. Senkou Span B (1.0972) and Kijun-sen (1.0778) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. The UK will publish a report on GDP for the second quarter, but given how briskly the pound is currently trading, we believe that this report will not affect the pair's movement in any way. In the US, we only have secondary reports, such as personal income and expenses of the American population and the consumer confidence index from the University of Michigan. Explanations for 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. 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.   Relevance up to 06:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323086

Technical Market Outlook: The GBP/USD pair has bounced 8.36% from the lowest level since 1985 located at 1.0352 and is approaching the technical resistance located at 1.1210. The next technical resistance is located at 1.1410 and only a sustained breakout above this level would change the outlook to bullish. On the other hand, the next target for bears is located at the parity level of 1.0000, so please keep an eye on this level. The intraday technical support is seen at the level of 1.0929. The momentum remains strong and positive, so the short-term outlook is bullish. Weekly Pivot Points: WR3 - 1.16907 WR2 - 1.11401 WR1 - 1.08850 Weekly Pivot - 1.05895 WS1 - 1.03344 WS2 - 1.00389 WS3 - 0.94883 Trading Outlook: The bears are still in charge of Cable market and the next target for them is the parity level. The level of 1.0351 has not been seen since 1985, so the down trend is strong, however, the market is extremely oversold on longer time frames already. On the other hand, in order to terminate the down trend, bulls need to break above the level of 1.2275 (swing high from August 10th). Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294955

Fast and furious tightening by the Federal Reserve risks plunging the economy into recession, and economists fear the central bank is making another mistake after a recent slow response to runaway inflation. A string of massive interest rate hikes of 75 basis points, with at least one more expected in November, according to experts, means that officials are not going to wait for the effect of their actions before acting again. The risk of an aggressive policy without analysis of the actions of Fed officials could drive the economy into a much deeper recession than expected. Given the lag of some inflation data, this is already a concern for many politicians. Let me remind you that Fed officials started raising rates from almost zero only in March, after the price pressure had already reached a significant level. After their delay, they are now ramping up the burden on the economy at a record pace to catch up, with the price of a mistake being the future economic pain caused by inflation-suppressing actions. The Fed has already raised rates by 3 percentage points this year, with the bulk of the increase coming in the summer, and has vowed to keep raising rates until it sees clear signs of lower inflation. According to the latest reports, inflation in the US resumed its growth in August, which forced the Fed to return to discussions on the topic of maintaining a further aggressive policy. The Fed's current actions have already pushed up the cost of borrowing on everything from home loans to cars, but the full impact of these moves on the economy will only be known in the next few months, given the time it takes for current changes to take hold across all areas. Experts say that without creating the respite that many traders and investors hoped for in the early fall of this year, politicians risk causing a larger slowdown in the economy than necessary, as well as potentially damaging the labor market more than anticipated. At their meeting later this month, Fed officials said they would raise rates by another 1.25 percentage points this year, which could mean another 75 basis point hike in November and a half-percentage increase in December. According to the Fed's median forecast, next year rates will rise by another quarter of a point. All this supports the dollar and puts pressure on risky assets, especially in the face of a deteriorating geopolitical situation. As for the technical picture of EURUSD, the bulls have regained their advantage and the market under their control, which they lost at the beginning of the week, and now they are aiming to break through the nearest resistance at 0.9840. This is necessary if they expect a continuation of the upward correction at the end of this month. The breakdown of 0.9840 will take the trading instrument even higher to the area of 0.9890 and 0.9950. But despite the good upward prospects, the bulls' main task is to protect the immediate support of 0.9780. Its breakthrough will push the euro to a low of 0.9730, but in this situation there will be nothing critical, since the lower border of the new rising channel passes there. You can start to get nervous only if you miss 0.9730, as the pair will easily fall to the area of 0.9680 and 0.9640. The pound continues to win back positions one by one thanks to the support of the Bank of England. Now the bulls are focused on the resistance at 1.1200, the breakthrough of which will open the prospects for further recovery in the area of 1.1260 and 1.1320. It will be possible to talk about the return of pressure on the trading instrument only after the bears take control of 1.1070, but this will not cause serious damage to the bull market observed since the middle of the week. Only a breakthrough of 1.1070 will push the GBPUSD back to 1.1010 and 1.0950.   Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323102

And while the euro is gaining ground against the US dollar, and the British pound is making its way to another weekly highs amid increased optimism, supported by the actions of the Bank of England, the president of the Federal Reserve Bank of Atlanta, Rafael Bostic, said he supports raising rates by another 1.25 percentage points by the end of this year to counter inflation, which turned out to be worse, than he expected. "The lack of progress so far makes me think much more that we should take a moderately restrictive position," he told reporters during a conference call. "For me, acceptable rates are in the range from 4.25% to 4.5%. I prefer that we get to this level by the end of the year." Such aggressive statements by representatives of the Fed are not news this week. Fed officials raised interest rates by 75 basis points at the September 21 meeting, bringing the federal funds rate target from 3% to 3.25%. Immediately after that, policymakers continued to prepare the markets for further changes in the cost of borrowing, and median forecasts already show that Fed officials are laying on a rate of 4.5% by the end of this year. "Inflation is still high and too high and not moving fast enough back towards our 2% target," Bostic said, adding that he expected to see an improvement in supply chain imbalances in early summer that would help ease price pressures. "The forecasts did not come true, and the situation on the energy market has not changed, which forced me to adjust my political thinking," he said. The head of the Federal Reserve Bank of Atlanta still hopes that the US economy will be able to avoid a recession or a much higher unemployment rate. According to his forecasts, unemployment will rise to about 4.1% from 3.7% — a small increase that will continue to keep the labor market at a fairly strong level. "I still don't think the recession is a settled issue. Yes, we may have some weakening in the economy, but I don't think that at this stage it will lead us to a historical crisis." Despite such hawkish statements by other American politicians, the euro and the British pound continue to strengthen their positions against the US dollar, taking advantage of sufficient optimism after the recent intervention of the BoE in the situation on the currency and bond market. As for the technical picture of EURUSD, the bulls have regained their advantage and the market under their control, which they lost at the beginning of the week, and are now aiming to break through the nearest resistance of 0.9840. It is necessary to do this if they expect the upward correction to continue at the end of this month. A breakdown of 0.9840 will take the trading instrument even higher to the area of 0.9890 and 0.9950. But despite the good upward prospects, protecting the nearest support of 0.9780 is still an important task for the bulls. Its breakthrough will push the euro to a low of 0.9730, but there will be nothing critical in this situation either, since there is the lower boundary of the new ascending channel. Only after missing 0.9730 will it be possible to start getting nervous, as the pair will easily fall into the area of 0.9680 and 0.9640. The pound continues to win back positions one by one thanks to the BoE's support. Now bulls are focused on the 1.1200 resistance, the breakthrough of which will open up prospects for further recovery in the area of 1.1260 and 1.1320. It will be possible to talk about the return of pressure on the trading instrument only after the bears take control of 1.1070, but this will not cause serious damage to the bull market observed since the middle of the week. Only a breakthrough of 1.1070 will push GBPUSD back to 1.1010 and 1.0950.       Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323104

The rebound in financial markets was short-lived due to unstable support from statistics. Also, market sentiment noticeably worsened as the UK bond market collapsed amid the government's plan to launch a new program to stimulate the economy. This caused pound to fall to 1985 lows, while bond yields jumped to 2008 levels as fears of a more vigorous rate hike increased. Now, with the potential rate hike, GBP/USD rose above 1.1000 and traded at 1.1140. EUR/USD also increased as rising inflation in Germany point to more aggressive climb of ECB rates. Reportedly, the consumer price index in the country rose to 10% y/y and 1.9% m/m. The expected rate hike may intensify if consumer inflation in the whole Euro area rises to 9.7%. But growth will be limited as the economic situation in both Europe and the UK are not good. Although the energy crisis, decline in production and incomes of citizens could develop a decrease in inflation, these regions are poorly attractive for investment. As such, demand for dollar will continue, while risk appetite will go down, which is negative for euro and pound. Forecasts for today: GBP/USD Although demand rose because of potential rate hikes by the Bank of England, growth will be limited, especially if the pair does not rise above 1.1180. And if it falls below 1.1070, the price will collapse to 1.0915. EUR/USD Demand surged because of the potential rate hike by the ECB. If inflation in the Euro area turns out to be higher than expected, the pair will hit 0.9875, then fall to 0.9700.   Relevance up to 08:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323108

It was a terribly ugly day across the equity and bond markets yesterday. Despite the financial calamity, Porsche had a successful IPO and secured the valuation it was looking for, but the S&P500 plunged another 2% yesterday and wiped out the summer gains entirely. The same is true for Nasdaq. Nothing is left from the summer rally in the US stocks. Job cuts Apple dived more than 6% and closed the session almost 5% lower yesterday, after Bank of America downgraded the stock on worries of weaker consumer demand. Facebook’s Meta joined the others in announcing job cuts. But *unfortunately* for the Federal Reserve (Fed), the US jobless claims came below 200’000 last week. There are not enough people losing their jobs to stop the financial bleeding in the world. One interesting thing about yesterday’s price action was that... the US dollar sharply eased despite the hawkish messages thrown to our faces by the pitiless Fed members. The British pound recovered above the 1.11 mark against the US dollar yesterday. Could the pound rebound sustainably, or is this just a fake alert? Watch the full episode to find out more! 0:00 Intro 0:32 Porsche IPO went well, but… 4:20 Apple nosedived amid BoFA downgrade 6:47 Why did the US dollar ease? 8:42 Could sterling recover sustainably? Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #BoE #intervention #UK #gilt #GBP #EUR #USD #Fed #Apple #Meta #Porsche #IPO #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH    

The pound closed up 49 points on Friday. Taking into account the general weakening of other world currencies (euro -12 points, aussie -95 points, loonie -146 points), this growth looks strong. On the technical side, the growth kept the resistance level of 1.1170. The daily Marlin Oscillator is growing - the price is still able to grow to 1.1305 or to 1.1455 - to the MACD indicator line, which is still less likely, since the Marlin Oscillator is approaching the zero line and may turn down from it. On the four-hour chart, the price has consolidated above the MACD indicator line, the Marlin Oscillator is consolidating in the area of a growing trend. Bulls are clearly not going to give up positions. A reversal signal will be the price consolidating under the MACD line, below 1.0990.   Relevance up to 04:00 2022-10-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323208

GBP/USD 5M The GBP/USD currency pair continued to remain above the Senkou Span B line on Friday, which is very good for its prospects. It did not surpass the 1.1212 level, but not all levels are overcome the first time, so there is nothing wrong with that. The pound may continue rising this week, as it has overcome the descending trend line and the Ichimoku indicator line. Last Friday, the UK released a report on GDP for the second quarter, which caused a very restrained market reaction. It completely ignored US secondary statistics. The pound continues to trade in a very volatile manner, and the main factors that influence it are geopolitics and the "foundation". More precisely, it would be better to say that now they have weakened their influence on the pound, as they imply a further fall in the British currency. However, this is where the danger lies for traders. Now they may decide that the global downward trend is over, and now they can buy the pound "with all the money." However, on the 24-hour timeframe it is perfectly clear that the pound has not really overcome any important resistance yet, therefore, the fall may resume. Only one trading signal was formed on Friday - the price rebounded from the extreme level of 1.1212, after which it went down at a high of about 167 points. Unfortunately, it failed to reach the nearest target level of 1.0969, but the position could still be closed in profit, manually in the late afternoon. Then the profit on it would be about 60 points, which is also not bad. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group opened 18,500 long positions and 10,100 short positions. Thus, the net position of non-commercial traders increased by another 8,400, which is quite a lot for the pound. We could assume that the actions of the big players and the movement of the pound have finally begun to coincide, only the report is released with a three-day delay and simply does not include the last three days of trading, when the pound showed growth. The net position indicator has been actively falling again in recent weeks, and the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). Now it has begun a new growth, so the British pound can formally count on growth. But, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 106,000 shorts and 59,000 longs open. The difference, as we can see, is still large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 3. Geopolitics can bring down the euro with renewed vigor. Overview of the GBP/USD pair. October 3. The clouds are gathering over Liz Truss. Will she follow in the footsteps of Boris Johnson or become the new "Margaret Thatcher"? Forecast and trading signals for EUR/USD on October 3. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair, as we see it now, has broken the downward trend on the hourly timeframe, as all key levels and lines have been overcome. But this is in the short term, since similar levels and lines on the higher time frames have not been overcome. Obviously, sooner or later the price will be able to surpass them, why not now? However, we still fear for the further prospects of the pound, so we call for caution when opening any positions. At least, do not forget about Stop Loss. We highlight the following important levels for October 3: 1.0538, 1.0930, 1.1212, 1.1354, 1.1442. Senkou Span B (1.0969) and Kijun-sen (1.0884) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. Only manufacturing PMIs for September will be published in the UK and the US on Monday. The US index is more important, and the market may react to it. Explanations for 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. 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.       Relevance up to 02:00 2022-10-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323200

UK Finance Minister Kwasi Kwarteng confirmed earlier reports, noting that his government will not go ahead with a plan to scrap a 45% rate of income tax. Additional quotes   Our growth plan is a strong package. The 45p rate was drowning out a strong package of intervention. Along with PM, I decided best course was not to proceed with abolishing 45p rate. Asked if he has considered resigning, he said, not at all. We are focussed on getting away from a high tax route. It has become clear the abolition of the 45p rate is a distraction from our mission to tackle the challenges facing the country. We get it, we listened. This will allow us to focus on delivering the major parts of our growth package. It was an ambitious plan. We have made lots of tough decisions. Our medium term plan is going to come out towards the end of November. I am very pleased we have decided not to proceed with scrapping the 45p tax rate. I take responsibility for it.   Market reaction GBP/USD has given away a part of the latest gains on Kwarteng’s confirmation, currently trading at 1.1200, still up 0.35% on the day.

The end of September was a complete disaster for the global markets. Traders hoped that the US Federal Reserve would at least ease the pace of rate hikes. But this never happened. On the contrary, the Fed officials and its chairman reiterated that they see a further rate increase as their priority aimed at slowing down galloping inflation. All hopes were destroyed last month, resulting in the biggest decline in the stock market and the surge in demand for safe-haven assets. Over the past decades, the US dollar has been traditionally viewed as a reliable store of value in times of economic turmoil. The already serious economic crisis is aggravated by high geopolitical tensions which is the main reason why the capital from Europe and other regions goes to the US. Notably, the US has again benefited from military conflicts in other parts of the world just as it happened 80 years ago. The Fed's recent forecast for GDP, inflation, and unemployment as well as its plan to hike rates that were announced at its latest September meeting signaled that the regulator braces for more headwinds next year. This means that the stock market will largely depend on high rates while the US dollar will continue to strengthen despite the process of monetary tightening launched by other global central banks. So, what to expect in the market today and in the week ahead? Most likely, stock markets will still be focused on rate hikes and geopolitical tensions between Russia and the Western coalition led by the US. The broad-based S&P 500 index is expected to decline to the level of 3,000.00 after passing the interim support of 3,300.00. The European and Russian stock markets are likely to follow a similar trajectory. On Forex, we may observe a short-term consolidation phase ahead of the RBA and RBNZ monetary policy meetings this week as well as an important jobs report in the US. Any negative news, especially from the US, will boost the demand for the US dollar. So, after a quick fall, USD may recover again, being a preferred safe-haven asset in these uncertain times. As for today, the weak data on Manufacturing PPI in the US may serve as a signal to buy the US dollar after its short decline in the Asian and European sessions. Daily forecast: GBP/USD The pair is going through a consolidation phase under 1.1225 ahead of the Manufacturing PPI data release in the UK and US. The downbeat data in both countries may stop the pair from a breakout. Instead, it may reverse and move down to 1.0915. USD/JPY The pair is testing the level of 145.00. Consolidation above this range will open the way towards the upper target of 145.90, the recent high formed on September 22.   Relevance up to 09:00 2022-10-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323222

December futures for both Brent and WTI continue to trade below $90 per barrel. Several factors are to blame, and all of them are related to the current global economic slowdown. In addition, world central banks are competing to see who can raise rates faster, while demand is declining very rapidly. The record growth in US oil inventories also prevents any possible price increase. To address this, OPEC members are having a meeting on October 5. They will likely discuss the issue of cutting production by 1 million barrels per day, which, if approved, will make everyone realize that a recession may come much earlier than expected. In terms of dollar, the current environment will provoke high volatility, which will maintain the stability of the currency. Any decline will be a correction rather than a development of a new trend. EUR/USD Inflation in the Euro area has reached a record high. A number of countries said theirs exceeded 20%, while Germany reported that theirs has come close to 11%. Considering that measures to support the economy are being completed, and the energy crisis is gaining momentum, there is every reason to believe that the current level will be updated several times during the winter months. In terms of positioning, net long positions of euro slightly corrected, which is surprising given the high inflation, gas crisis and geopolitical tensions on the region. Even so, demand remains strong, and it is likely that the recent decline below parity is just short-term. This means that a correction is not long in coming, and bullish momentum may develop amid any positive news from Europe. The settlement price is above the long-term average. Euro is in a stable channel and there is no reason to expect a reversal. But if a correction develops, then 0.9863 will be the nearest target, and rising above it will open the way towards the border of the channel at 0.9960/80. There is little chance of hitting the low, but growth will also be limited. GBP/USD UK markets were highly volatile last week due to the government's plan to cut taxes in order to offset households' electricity bills. Pound hit a new record low, while bond yields soared. The Bank of England was also forced to intervene in the stock market to avert a liquidity crunch among local pension funds. There is growing pressure on the government to adjust its fiscal plans, but so far there is no sign of a change in policy. On the bright side, latest economic data looks very decent as the final estimate of GDP for the 2nd quarter was raised to 4.4% y / y. The housing price index slowed down from 10% to 9.5% y / y, while the number of applications for mortgages significantly exceeded the forecast. Consumer lending does not decrease. In terms of positioning, net short positions in pound slightly decreased, and it seems that sell-offs in the currency are about to stop. The settlement price is well above the long-term average, which indicates that last week's fall is not supported by the changes in the futures market. There is a high chance of a reversal. Most likely, pound will trade around 1.0345 for some time, then go for a rebound. The nearest targets are the 23.6% retracement level at 1.1264 and the upper limit of the channel at 1.1670/1720. There is little chance of a decline below 1.0345, but if it happens, buying pressure will surge, which will continue the correction.   Relevance up to 09:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323220

Markets need to be prepared. Otherwise, hysteria will happen to them. The Fed knows this very well, which, looking at the "taper tantrum" of 2013, began to gradually introduced investors the QE curtailment in 2021. But governments communicate with the markets less often. Unless they have to. UK Prime Minister Liz Truss, amid a sharp decline in the ratings of her Conservative Party, was forced to admit a mistake. More attention should have been paid to preparing investors for tax cuts. However, the help of the Bank of England smoothed out this oversight: the GBPUSD pair, after sinking to a new anti-record, completely regained the lost ground. The worst month for sterling since 2008 and the best week since 2020. It is rare to find such a breathtaking roller coaster in Forex. The presentation of the fiscal stimulus package to the general public turned into a large-scale sale of British bonds and the fall of the GBPUSD to a new historical bottom. Only the suspension of the quantitative tightening (QT) program and the resuscitation of quantitative easing (QE) allowed the bulls to recover. The reaction of the debt market to the actions of the government and the Central Bank With the BoE's intention to spend £65bn to stabilize financial markets, many thought the worst was over. The panic is over. But what will happen after October 14, when the program ends? The Bank of England will return to QT again and continue the cycle of raising the repo rate. Its policy will be contrary to the actions of the government. In addition, the reputation of the regulator was dealt a blow. Rumors began to circulate in Forex that Andrew Bailey and his colleagues are on the sidelines of the Cabinet of Ministers and are ready to finance the embarrassed government of Liz Truss by printing money. Indeed, due to the fiscal stimulus package and the associated S&P downgrade of the UK's credit rating outlook to "negative" and panic in the financial markets, the gap in the popularity of Labor and the Conservatives has widened to 33 points. Elections will be held in 2024. Contradictions in monetary and fiscal policy and shaken confidence in the Bank of England and the Cabinet of Ministers are far from the only problems of the pound. Britain remains the only G7 economy still smaller than it was before the pandemic. Due to the energy crisis, the country is on the verge of recession. Dynamics of the G7 economies Thus, the markets managed to calm down. And this is good news for sterling. But is it enough to continue the GBPUSD rally? Personally, I doubt it. The pound has many unresolved issues, including the echoes of Brexit. It is unlikely that this currency is capable of a long rally. On the contrary, the US dollar continues to be in high demand as a safe-haven asset, and the Fed is able to bring the federal funds rate up to 5%. Technically, there is a consolidation in the 1.105–1.1265 range on the 4-hour GBPUSD chart. An unsuccessful test of its upper border with a subsequent return to 1.115 is a reason for selling within the false breakout pattern.   Relevance up to 09:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323226

Details of the economic calendar for September 30 The final data on UK GDP for the second quarter brought a pleasant surprise. GDP for the second quarter grew by 0.2% compared to the previous forecast of -0.1%, and in annual terms increased to +4.4% against the previous estimate of 2.9%. Surprisingly, Britain is not in a technical recession based on GDP data. The publication of data on Eurozone inflation was considered the main event, which reached a double-digit record. Eurozone consumer prices rose by 10% in September, a new all-time high, according to the European Union Statistical Office. The reason for such unprecedented performance lies in the sharp rise in energy prices. As inflation rises, the ECB will continue to tighten monetary policy, which will lead to a sustained rise in interest rates. Analysis of trading charts from September 30 The EURUSD currency pair, during the corrective movement, reached the resistance level of 0.9850, relative to which there was a reduction in the volume of long positions on the euro. As a result, there was a price rebound in the market. The GBPUSD currency pair ended last week in the stage of lateral amplitude, while the price range was quite wide, about 200 points. Economic calendar for October 3 Today, data on the business activity index in the manufacturing sector in Europe and the UK have already been published, where the indicators came out worse than the preliminary estimate. Details: Eurozone manufacturing PMI fell from 49.6 to 48.4 in September. UK's manufacturing PMI in September rose from 47.3 to 48.4 against the forecast of 48.5. There was practically no reaction due to the fact that the market played out the information noise. During the American trading session, the United States manufacturing PMI is also expected for publication, which may rise from 51.5 to 51.8. As for the information flow, the Fed will hold a closed meeting. Expect news from the media regarding what the board of governors discussed. Time targeting: US Manufacturing PMI (Sept.) – 13:45 UTC Trading plan for EUR/USD on October 3 To prolong the current correction on the market, the quote must be kept above the resistance level for at least a four-hour period. In this case, buyers of the euro will have high chances to return the quote to the parity area. An alternative scenario considers the completion of a corrective move, where holding the price below 0.9750 in a four-hour period could lead to a phased decline. Trading plan for GBP/USD on October 3 Since the opening of the new trading week, the sideways formation has been broken in an upward trajectory. The movement was accompanied by high speculative interest, during which there was inertia on a scale of more than 180 points. The reason for such a heavy movement was the rumor that the UK plans to cancel the plan to reduce the tax rate from 45% to 40%. Subsequently, this rumor was officially confirmed by the British government. UK Finance Minister Kwasi Kwarteng confirmed the change on Twitter. "We get it, and we have listened," he wrote. Returning to the technical analysis, a stable holding of the price above the high of the last week at 1.1233 may well lead to the subsequent strengthening of the pound towards the price range of 1.1410/1.1525. Otherwise, the quote will continue to move within the previously passed amplitude of 1.1050/1.1200. What is shown in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.       Relevance up to 10:00 2022-10-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323236

The British pound showed a strong growth yesterday, winning back a new local wave of risk appetite, following the growth of stock indices, raw materials, and a halt in the growth of yields on British government bonds. The price went above the target level of 1.1305, the Marlin Oscillator moved into the area of positive values - into the area of the growing trend. The way to the next target - 1.1480 - to the MACD indicator line on a daily scale has opened. A reversal may occur after the price returns to the level of 1.1170. On a four-hour timescale, the signal line of the Marlin Oscillator is consolidating above the zero line, creating tension for a breakout of the oscillator to the upside. The price settled above the level of 1.1305. After reaching the 1.1480 target, the price is likely to turn either into a new correction or into a new wave of medium-term decline.   Relevance up to 04:00 2022-10-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323300

GBP/USD 5M The GBP/USD currency pair continued its upward movement on Monday, although there were no objective reasons for this. During the past day, only two relatively important reports were published. Manufacturing PMI in the US and similar in the UK. The British index rose unexpectedly, but remained below the 50.0 level, so we are surprised that traders positively reacted to this report. The US ISM business activity index turned out to be weaker than forecasts, but remained above 50.0, so we are also surprised by such a strong fall in the dollar in the afternoon. As a result, we come to the conclusion that at this time the market is set to buy the British currency, which, coupled with the strong growth last week, still indicates a very high probability of the end of the downward trend. Moreover, on the 24-hour timeframe the Kijun-sen line has been overcome and now the pair can move with the target of the Senkou Span B line, which lies at the level of 1.1836. Also, the pound has overcome all the lines of the Ichimoku indicator and the downward trend line on the hourly timeframe. Such a movement is what we talked about when we spoke of the signs of the beginning of a new trend. Unfortunately, yesterday there was also a problem with trading signals for the pound. Most of the daytime, the pair was in an open flat, so the signals were mostly false. Traders also failed to work out the morning spurt upwards, as few people expected an increase of 185 points amid one business activity index, which also turned out to be below the level of 50.0. However, the pound volatility remains very high, and one can expect both high losses and high profits on transactions. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group opened 18,500 long positions and 10,100 short positions. Thus, the net position of non-commercial traders increased by another 8,400, which is quite a lot for the pound. We could assume that the actions of the big players and the pound's movement have finally begun to coincide, only the report is released with a three-day delay and simply does not include the last three days of trading, when the pound showed growth. The net position indicator has been actively falling again in recent weeks, and the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). Now it has begun a new growth, so the British pound can formally count on growth. But, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 106,000 shorts and 59,000 longs open. The difference, as we can see, is still large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 4. It is still very difficult to wait for a strong growth from the euro. Overview of the GBP/USD pair. October 4. The political absurdity in the UK persists. Forecast and trading signals for EUR/USD on October 4. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair, as we see it now, has broken the downward trend on the hourly timeframe, as all key levels and lines have been overcome. Important lines and levels are also slowly being overcome on the higher TFs, so the pound is getting closer and closer every day to completing a disastrous period for itself. So far, the fundamental and geopolitical backgrounds do not imply a new fall for the pound. We highlight the following important levels for October 4: 1.0538, 1.0930, 1.1212, 1.1354, 1.1442. Senkou Span B (1.0905) and Kijun-sen (1.0932) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. There are no important events planned for Tuesday in the UK and the US, so traders will have nothing to react to during the day. However, the pair moves 200-300 points every day, so it clearly doesn't need the help of news and reports to move very volatilely. Explanations for 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. 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.       Relevance up to 02:00 2022-10-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323292

Overview : The GBP/USD pair is trading sharply higher against the U.S. Dollar at the mid-session on the heels of the last month jobs report that missed expectations. The single currency soared, and the greenback weakened after the U.S. Labor Department said non-farm payrolls rose by 1.1337 last month, well short of the 1.1033 estimate. Moving averages continue to give a very strong buy signal with all of the 50 and 100 EMAs successively above slower lines and below the price. The 50 SMA has extended further above the 100 this week. Support from MAs comes initially from the value area between the 50 and 100 EMAs. The GBP/USD pair rose to 1.1033 at the start of Sept. 2022 before taking another leg higher to 1.1337. The pair briefly breached parity on 04 October, as markets reacted to US inflation figures. That was followed by an immediate rebound that sent the GBP/USD pair back above the 1.1214 level. An alternative scenario is fixing above MA 100 H1 (1.1214), followed by growth to 1.1300 (high of the American session). The GBP/USD pair broke resistance which turned to strong support at the level of 1.1033 yesterday. The level of 1.1033 coincides with a golden ratio (61.8% of Fibonacci), which is expected to act as major support today. The Relative Strength Index (RSI) is considered overbought because it is above 50. The RSI is still signaling that the trend is upward as it is still strong above the moving average (100). Additionally, the RSI is still signaling that the trend is upward as it remains strong above the moving average (100). For now, outlook will stay bullish as long as 1.13033 resistance turned support holds, even in case of another drop. This suggests the pair will probably go up in coming hours. Accordingly, the market is likely to show signs of a bullish trend. This suggests the pair will probably go up in coming hours. Accordingly, the market is likely to show signs of a bullish trend. Buy orders are recommended above the golden ratio 1.1033 with the first target at the level of 1.1459. Furthermore, if the trend is able to breakout through the first resistance level of 1.1459. We should see the pair climbing towards the double top (1.1459) to test it. The pair will move upwards continuing the development of the bullish trend to the level 1.1500. It might be noted that the level of 1.1500 is a good place to take profit because it will form a new double top in coming hours.   Relevance up to 14:00 2022-10-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/295407

The pound has almost reached the MACD indicator line on the daily timescale. The Marlin Oscillator is starting to turn down. This is probably still the limit of the pound's correctional growth, and now it needs to think about how to settle under the nearest level of 1.1305. After that, the task of developing a medium-term decline will be greatly facilitated. An exit above 1.1500 with a consolidation above the MACD indicator line of the daily timeframe can once again push the price up to the level of 1.1760. On the four-hour chart, despite the strong three-day growth, the Marlin Oscillator refuses to grow, it continues to move sideways just above the zero line. This circumstance increases the chances of a price reversal from current levels. The start of the medium-term decline can push the price to consolidate at 1.1305.   Relevance up to 04:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323437

GBP/USD 5M Yesterday, the GBP/USD currency pair continued its upward movement at about the same pace as it had recently fallen. That's how quickly everything changes in the foreign exchange market. Just a week ago, the pound was near the 1.0400 level, which is its all-time low, and now it is already 1100 points higher. We said that the downward trend should end quickly and sharply, it seems that this happened a week ago. Now it is very important for the pound that geopolitics and the "foundation" do not return the bears to the market. If from the foundation it is approximately clear what to expect in the coming months, then with geopolitics it is a big question. We assume that the military conflict in Ukraine may escalate more than once and definitely will not end in the coming months. Therefore, on each subsequent escalation, the dollar can rise again, because this is a normal defensive reaction of the market. Thus, the pound is still taking advantage of the fact that bears have taken profits on their transactions, but its long-term growth prospects still remain vague. There were several trading signals on Tuesday, and the volatility was again high. The first three signals formed near the level of 1.1354. The first buy signal cannot be considered false, as the price went up 55 points and just barely reached the target level. The next sell signal turned out to be false, as the price went in the right direction by only 35 points. Therefore, most likely, traders did not receive any profit on the first two transactions. But the third buy signal made it possible to earn. The price reached the level of 1.1442 this time and overcame it. Therefore, the position had to be closed manually above this level, and the profit was at least 80-90 points. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group opened 18,500 long positions and 10,100 short positions. Thus, the net position of non-commercial traders increased by another 8,400, which is quite a lot for the pound. We could assume that the actions of the big players and the pound's movement have finally begun to coincide, only the report is released with a three-day delay and simply does not include the last three days of trading, when the pound showed growth. The net position indicator has been actively falling again in recent weeks, and the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). Now it has begun a new growth, so the British pound can formally count on growth. But, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 106,000 shorts and 59,000 longs open. The difference, as we can see, is still large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 5. The world is on the brink of a nuclear catastrophe. The stakes are going up. Overview of the GBP/USD pair. October 5. There are opportunities to restore the work of Nord Stream. Forecast and trading signals for EUR/USD on October 5. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair has broken the downward trend on the hourly timeframe, as all key levels and lines have been overcome. Important lines and levels are also slowly overcome on the higher timeframes, so the pound is getting closer and closer every day to completing a long-term downward trend. So far, the fundamental and geopolitical backgrounds do not prevent the pound from growing, but in the future the situation may change more than once in favor of the dollar. We highlight the following important levels on October 5: 1.0930, 1.1212, 1.1354, 1.1442, 1.1649. Senkou Span B (1.0905) and Kijun-sen (1.0993) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. The UK and the US will publish indexes of business activity in the services sectors, and we have another ADP report in the US. This data may affect the pair's movement, but the market is now buying the pound and just fine for no reason. Explanations for 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. 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. Relevance up to 02:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323429

Analysis of transactions in the GBP / USD pair The price test of 1.1343 occurred at the moment when the MACD line was far from zero, so the upside potential was limited. Sales, meanwhile, brought more than 50 points of profit. No other signals appeared for the rest of the day. The UK's abandonment of the tax cut plan calmed investors' nerves over the government's financial health, but doubts about the pound's outlook remained. And although the active intervention of the Bank of England continues to support the currency, demand may decrease at any moment, so be careful when buying at current levels. A lot of reports are scheduled to be released today, such as business activity index in the services sector and composite PMI in the UK. Weak data could hurt bullish sentiment, which will lead to a fall in the pound in the morning. By afternoon, similar reports from the US will be published, followed by employment data from the ADP, report on foreign trade balance and a speech from FOMC member Raphael Bostic. If all these are better than expected, demand for the dollar will climb further, which will offset the recent losses against the pound. For long positions: Buy pound when the quote reaches 1.1473 (green line on the chart) and take profit at the price of 1.1546 (thicker green line on the chart). Growth will occur, but it will stop as soon as negative data appears. Nevertheless, traders could buy as long as the MACD line is above zero or is starting to rise from it. Pound can also be bought at 1.1420, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1473 and 1.1546. For short positions: Sell pound when the quote reaches 1.1420 (red line on the chart) and take profit at the price of 1.1335. Pressure will return in case of weak statistics and a decrease in risk appetite. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1473, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1420 and 1.1335. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 09:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323469

Euro continues to rise even though Fed officials said they are not going to change their stance on interest rates. Clearly, the bar for a less aggressive policy remains high in spite of the central bank already getting the signals it has long been counting on from the economy. On the other hand, the Reserve Bank of Australia surprised investors yesterday when it raised rates by less than half of what was forecasted. This fueled a rally in equity markets, as well as in risky assets such as euro and pound. Although senior Fed officials warned that the fight against inflation will take longer than originally planned and did not give any hint that a similar RBA-like adjustment could happen at the next meeting on November, market participants continue to bet on a less aggressive policy next year. They said the decisions will be influenced by two key indicators: the US Nonfarm Payrolls Report and the Consumer Prices Report due October 13th. These data can change the mood of market participants, which improve every day. Even so, most Fed members support a hawkish scenario, saying that the restoration of price stability could take some time and likely entail a period of below-trend gains. High inflation could also fuel household inflationary expectations. To continue the growth of EUR/USD, it is necessary to break through 1.0000, as only by that will the quotes climb to 1.0040 and 1.0085. Meanwhile, a drop below 0.9900 will push the pair to 0.9850, then to 0.9800 and 0.9760. In GBP/USD, a lot depends on 1.1500 because its breakdown will lead to a rise to 1.1540 and 1.1590. On the other hand, a fall below 1.1420 will push the pair to 1.1360, then to 1.1300 and 1.1230.   Relevance up to 10:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323477

Yesterday, the British pound indicated its goal, which it has been striving so hard for the last 7 days - the MACD indicator line of a daily scale. This meeting took place at the level of 1.1500, after which the price turned down. Support at 1.1305 did not allow the price to continue to decline at the first attempt, at the moment the price is consolidating at this level. Moving below it opens up the 1.1170 target, then, when the Marlin Oscillator of the daily scale goes into the negative area, the price will continue to move to the 1.0830 target. On the four-hour chart, the consolidation of the Marlin Oscillator ended with the exit of the signal line downwards. The price is correcting from the first movement from 1.1500. Consolidating under the support opens the 1.1170 target. Further, after overcoming the support of the MACD line (1.1060), the price will continue to decline to the target level of 1.0830. Relevance up to 04:00 2022-10-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323551

GBP/USD 5M The GBP/USD currency pair again traded almost identically to the EUR/USD pair on Wednesday, which further assures us that the reasons for the fall were technical and again covered in the US or specifically related to the dollar. Formally, traders also had reasons to sell the pound on Wednesday, because in the morning a weak index of business activity in the service sector came out in the UK. However, the time of release of this report and the start of the pair's fall do not coincide, and the report itself was not so important and resonant as to provoke such a strong downward movement (250 points). The pound continues to be traded in a very volatile way, which many could already get used to. The pound as a whole rose by more than 1100 points, so a downward rollback is logical. The pair also remains above the key lines of the Ichimoku indicator, so the upward trend continues. We believe that little depends on the macroeconomic background now, global fundamental events and geopolitics are of greater importance. In regards to Wednesday's trading signals, everything was very good. The first buy signal near the 1.1442 level turned out to be false, but the price went in the right direction after its formation of 20 points, so traders had to set Stop Loss to breakeven. The next sell signal near the same level was already correct. After its formation, the pair went down about 200 points and just fell short of reaching the target level of 1.1212. Thus, this position should have been closed manually in the late afternoon. Profit on it amounted to at least 140 points, with which we congratulate everyone. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group opened 18,500 long positions and 10,100 short positions. Thus, the net position of non-commercial traders increased by another 8,400, which is quite a lot for the pound. We could assume that the actions of the big players and the pound's movement have finally begun to coincide, only the report is released with a three-day delay and simply does not include the last three days of trading, when the pound showed growth. The net position indicator has been actively falling again in recent weeks, and the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). Now it has begun a new growth, so the British pound can formally count on growth. But, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 106,000 shorts and 59,000 longs open. The difference, as we can see, is still large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 6. Washington may be behind the Nord Stream bombing. Overview of the GBP/USD pair. October 6. The Bank of England is finally confused: to stimulate or tighten? Forecast and trading signals for EUR/USD on October 6. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H On the hourly timeframe, the pound/dollar pair has rolled back down by 250 points, but maintains a new upward trend. Unfortunately, in the long term, the downward trend may well resume, as the Ichimoku indicator line on the 24-hour time frame is above the price and can provide strong resistance to it. However, the chances that the downtrend is still completed are very high. If geopolitics does not spoil everything, the pound may show growth for many months. For October 6, we highlight the following important levels: 1.0930, 1.1212, 1.1354, 1.1442, 1.1649. Senkou Span B (1.0905) and Kijun-sen (1.1138) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. Only minor data will be published in the UK and the US on Thursday. UK Construction PMI and US Unemployment Claims. The situation may be similar to yesterday: there will be formal grounds for a certain behavior of the market, but it is far from certain that they will cause a new strong movement. Explanations for 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. 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. Relevance up to 02:00 2022-10-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323543

The euro and the pound were declining throughout yesterday's trading day. At first, this was a banal rebound after the previous rapid growth. But then this trend was reinforced and strengthened by unexpectedly good employment data in the United States. Firstly, the previous data was revised upwards from 132,000 to 185,000. Secondly, employment increased by 208,000 against the forecast of 135,000. It seems that the American labor market does not intend to lose momentum and continues to grow. Which, of course, is an extremely positive factor contributing to the further strengthening of the dollar. Employment change (United States): Today, the dollar can continue to strengthen its positions—this time at the expense of European statistics. The rate of decline in retail sales in the euro area should accelerate from -0.9% to -2.2%. And this is a drop in consumer activity, which is the locomotive of the economy. Consequently, the European economy is steadily slipping into a recession, which may well turn out to be quite deep, and most importantly, prolonged. Naturally, against this background, the dollar looks much more attractive than the euro. Well, the pound will simply follow the euro. Retail sales (Europe): The EUR/USD currency pair was actively losing its positions during the past day. As a result, the price rebounded from the parity level, where the quote had recently approached. The pullback lasted until the previously passed level 0.9850, where a stop occurred. For the subsequent decline, the quote needs to stay below 0.9850 for at least a four-hour period. Otherwise, we will continue to move at the peak of the current corrective move. The GBPUSD currency pair, following the euro, entered the pullback stage, returning the quote below the level of 1.1410. At the moment, the pullback has slowed down the formation, but in order for sellers to get further incentive to decline, it is enough to stay below 1.1200. Until then, fluctuation along the level of 1.1410 is possible.   Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323573

The Bank of England’s (BOE) Decision Maker Panel survey of chief financial officers showed on Thursday, British businesses' expectations for consumer price inflation continued its rise in September. Key takeaways “British businesses' expectations for consumer price inflation in one year's time rose to 9.5% last month, up from 8.4% in August.” “Businesses expected output prices to rise by 6.6% in the year ahead, up from expectations of 6.5% in August.” Market reaction GBP/USD remains vulnerable near 1.1300 amid risk-aversion, US dollar rebound and UK financial woes. The spot is down 0.19% on the day.

The pound fell 167 points yesterday. The 1.1170 target level was worked out, and the pound started today below it, the price is set to continue the decline to the deep target of 1.0828 – to the green price channel line. The signal line of the Marlin Oscillator returned to the territory of the downward trend. Ratings agency Fitch downgraded the UK's AA rating outlook from stable to negative. Consulting companies have already begun to more closely predict the value of the pound at parity with the dollar, which is being spread by the media. The price is consolidating under the level of 1.1170 on the four-hour chart. An intermediate target on the way to 1.0828 is created by the MACD line (1.1058). Consolidating below it will raise the price's determination to reach 1.0828. The Marlin Oscillator looks stable in the negative area.   Relevance up to 04:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323668

GBP/USD 5M The GBP/USD currency pair also continued its downward movement on Thursday and consolidated below the critical line. Thus, the euro and the pound again traded almost identically, which no longer surprises anyone. The only difference is that the pound managed to rise by 1100 points in recent weeks, but before that it had fallen by the same amount. So the status quo has been restored. Only the index of business activity in the UK construction sector can be distinguished among the macroeconomic statistics on Thursday, but it is unlikely that it was the reason for the pound's fall by 250 points from the high of the day. The pair remains above the important Senkou Span B line on the hourly timeframe, and above the critical Kijun-sen line on the 24-hour timeframe. Therefore, at the moment, it retains good chances for the resumption of the upward movement, followed by the formation of a global upward trend. However, strong Nonfarms on Friday and the general negative geopolitical background may return the bears to the market, and the pair to its absolute lows. From a technical point of view, the probability of the end of the global downward trend is high, but geopolitics can ruin everything. In regards to Thursday's trading signals, everything was fine. Two good sell signals were formed at the beginning of the European trading session, which should be worked out. In the future, the Kijun-sen line could spoil everything, but the fall still continued and ended much below the level of 1.1212. Therefore, traders could get at least 145 points of profit on the second short position. The first one closed at breakeven by Stop Loss. COT report: The latest Commitment of Traders (COT) report on the British pound was again very eloquent. During the week, the non-commercial group opened 18,500 long positions and 10,100 short positions. Thus, the net position of non-commercial traders increased by another 8,400, which is quite a lot for the pound. We could assume that the actions of the big players and the pound's movement have finally begun to coincide, only the report is released with a three-day delay and simply does not include the last three days of trading, when the pound showed growth. The net position indicator has been actively falling again in recent weeks, and the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). Now it has begun a new growth, so the British pound can formally count on growth. But, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 106,000 shorts and 59,000 longs open. The difference, as we can see, is still large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 7. The European Union has introduced the eighth package of sanctions against the Russian Federation. We are waiting for a new fall of the euro? Overview of the GBP/USD pair. October 7. Moscow is ready to resume gas supplies via the surviving Nord Stream line, Germany is against it. Forecast and trading signals for EUR/USD on October 7. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair rolled back down by 350 points on the hourly timeframe, but at the same time maintains an upward trend. Unfortunately, in the long term, the downward trend may well resume, as the Senkou Span B line of the Ichimoku indicator on the 24-hour timeframe is above the price and can provide strong resistance to it. Nevertheless, the chances that the downward trend is still completed are very high, but now it is vital for the pound to stay above the critical line on the 24-hour timeframe. If geopolitics does not spoil everything, the pound may show growth for a long period of time. We highlight the following important levels on October 7: 1.0538, 1.0930, 1.1212, 1.1354, 1.1442, 1.1649. Senkou Span B (1.0905) and Kijun-sen (1.1258) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. No important events are scheduled for Friday in the UK, while the most important reports on unemployment and Nonfarm will be released in the US. A reaction to them must follow and could turn out to be very strong. Explanations for 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. 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.       Relevance up to 02:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323660

Irish Foreign Minister Simon Coveney said on Friday, “I had a very good meeting with the UK foreign secretary cleverly on (Northern Ireland) protocol.” Additional quotes “A new air of positivity has created a flicker of optimism.” “We do not think we should get carried away with warm language, but the new UK government up for serious discussion.” Earlier this week, Coveney said: "It remains to be seen whether this new look British government is willing to make compromises to get a deal done but certainly the mood music has changed quite fundamentally, we welcome that and we will work on not only relationships to rebuild trust but also work on solutions in a practical way." Market reaction GBP/USD is catching a fresh bid on the renewed Brexit optimism, with the pair closing in on the 1.1200 barrier. The spot is up 0.24% on the day.  

US Treasury Secretary Janet Yellen called on key central banks to continue the fight against inflation, pointing out the problems that await the global economy in the future. Fed members statement Yellen previously headed the Federal Reserve and was forced to change the course of policy in response to global changes in the world economy. Her comments now coincide with the proposed reforms by the World Bank and regional development banks, as well as with the views of several Fed representatives. Fed Vice Chair Lael Brainard also said recently that they won't shy away from tighter policy, but warned that there is a need to look at the spillovers that could have a negative impact on the financial system as interest rates rise. These words were perceived by investors as a signal for a softer policy next year, which provoked the weakening of dollar and a rally in the stock markets. In the futures market, expectations were revised even though most politicians tried to convince market participants that no one is going to loosen their grip and only the most effective fight against inflation is ahead. EUR/USD Talking about EUR/USD, a lot depends on 0.9810 because a break above it will lead to a rise to 0.9840 and 0.9880. Meanwhile, a fall below 0.9760 will ramp up pressure, which will result in a further decline to 0.9725, 0.9680 and 0.9640. GBP/USD In GBP/USD, a lot depends on 1.1190 because its breakdown will lead to a rise to 1.1250 and 1.1310. A fall below 1.1115, meanwhile, will result in a drop to 1.1030 and 1.0950.   Relevance up to 09:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323700

On Friday, the British pound opened and closed below the technical level of 1.1170. Now the 1.0828 target is available. The signal line of the Marlin Oscillator also looks fixed below the zero line, in the downward trend zone. Consolidation under 1.0828 will open the second target at 1.0535. A factor that could postpone the pound's decline is tomorrow's employment data in the UK, which, with the expected maintenance of the unemployment rate at 3.6%, may show an improvement in the employment structure, including wage growth. The price reached the MACD line and stayed there on the four-hour timescale. The technical price level (1.1170) is pressing on the price from above, so the lateral price movement is unlikely to be long. With the departure of the quote under Friday's low at 1.1055, the movement to 1.0828 will begin.   Relevance up to 05:00 2022-10-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323788

  Early in the European session, the British pound (GBP/USD) is trading at around 1.1068, bouncing above strong support at 1.1060. The pair is expected to recover in the next few hours and it may reach the top of the downtrend channel formed on September 30. In case the British pound fails to break out of the downtrend channel, it is likely to resume its bearish cycle. GBP/USD could fall towards the critical support at 1.1060 and could beat and fall towards the bottom of the downtrend channel around 1.0850. On the other hand, a sharp break of the secondary downtrend channel could continue to rise and the instrument could reach the 21 SMA and 7/8 Murray zone located around 1.1230 - 1.1265. The uptrend channel formed on September 23 crosses around 1.1270. A pullback to this area and could be a good sign to sell GBP. The currency pair could fall in the next few days towards 6/8 Murray located at 1.0742. In the medium term, as long as GBP/USD consolidates below the psychological level of 1.15 and below the 200 EMA located at 1.1380, the British pound will remain under bearish pressure. Any attempts to break the area of 1.14 and a failure to consolidate above it will be seen as a selling opportunity. It is likely that in the medium term the British pound could fall towards 5/8 Murray at 1.0253. Short-term technical indicators support a bearish continuation. On October 5, the eagle indicator reached the extremely overbought zone. For now, we can see a bullish signal but it could again show overbought signs and GBP/USD could resume the main bearish movement. Relevance up to 06:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/296027

GBP/USD 5M The GBP/USD currency pair also continued its downward movement on Friday, although it was weaker than in the previous two days. Nevertheless, the fall continues, but the pound is still above the critical line, therefore, formally, it still retains chances for the resumption of the upward movement. The price is also above the important Kijun-sen line on the 24-hour TF. Thus, either in the coming days, the pound will resume growth, or it will suffer the fate of the euro. On Friday, the reasons for the fall of the pair were the same as those of the euro/dollar pair. Unfortunately, geopolitics remains so complicated that it is very difficult to expect risky currencies to rise against the dollar. Next week, everyone will be waiting for Moscow's reaction to the Nord Stream and Crimean Bridge bombings. As usual, there are a huge number of versions of who is behind these attacks, and each of the parties to the conflict sees what happened from its own angle. One way or another, it is hardly worth expecting that these events will remain without consequences. Thus, we can only expect a worsening of the geopolitical tension in the world, which is very bad for the pound and the euro. Only one trading signal was formed on Friday. The price traded along the 1.1212 level for several hours and eventually bounced off it. True, the rebound occurred exactly at the time when important statistics were published in America, but it unequivocally supported the growth of the dollar, so a short position could be opened. We also managed to earn on this position, as there was no upward correction. It had to be closed manually in the late afternoon, and the profit on it was at least 60 points. COT report: The latest Commitment of Traders (COT) report on the British pound showed minimal changes. During the week, the non-commercial group closed 17,700 long positions and 14,600 short positions. Thus, the net position of non-commercial traders decreased by 3,100, which is not very much for the pound. We could assume that the actions of major players and the movement of the pound have finally begun to coincide, but the pound has already begun a new round of decline, which risks transforming into a continuation of the global downward trend. The net position indicator has been growing slightly over the past weeks, but the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = "bearish" mood). And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 42,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 10. The key report for the coming week is US inflation. Overview of the GBP/USD pair. October 10. Liz Truss's ratings are falling, not having time to grow. Forecast and trading signals for EUR/USD on October 10. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair has already rolled back down by 420 points on the hourly timeframe, but at the same time it still maintains an upward trend. Unfortunately, in the long term, the downward trend may well resume as geopolitics remain very complex. And the foundation - at least such that does not allow counting on the support of the British currency. Now all the attention is on geopolitics and Senkou Span B on the 4-hour timeframe and Kijun-sen on the 24-hour timeframe. Overcoming them will increase the probability of a new fall of the pound to its absolute lows around the level of 1.3057. We highlight the following important levels on Monday: 1.0538, 1.0930, 1.1212, 1.1354, 1.1442, 1.1649. Senkou Span B (1.0923) and Kijun-sen (1.1292) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. There are no exciting events planned for Monday in either the UK or the US. Therefore, we can even observe a flat, but it is unlikely that it will last for a long time or even take place. The market is not set for sluggish trades. Explanations for 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. 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.     Relevance up to 02:00 2022-10-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323780

The Bank of England said it managed to avert a financial crisis with £65bn of temporary QE. Based on its calculations, pension funds would need to sell bonds worth £50 billion to obtain the liquidity necessary to maintain positions, which would look very problematic at the current trading volumes of £12 billion per day. Investors and the pound have calmed down for a while, but who knows if GBPUSD is waiting for new shocks? The main problem of Britain is the colossal negative balance of the current account. Because of the energy crisis, it has become even more inflated. It is necessary to patch up the holes by attracting capital from foreign investors, reducing domestic savings, or a fall in the sterling exchange rate. The fiscal stimulus package from Liz Truss suggests that in 2023–2024 Britain will have to sell bonds worth £226 billion on a net basis. If we add to this figure the scale of the BoE's QT, we get £390 billion, which is three times more than the previous record of £130 billion in 2010–2011. The question is, who will take all this? How to attract foreign investors? High yield? To do this, the Bank of England should significantly accelerate the process of tightening monetary policy. The futures market expects it to raise the repo rate by as much as 100 bps from 2.25% to 3.25% in November. And this is not the biggest figure. Amid the financial markets' shock, after the announcement of the terms of the tax cut program, there were significantly more. Dynamics of expected changes in the REPO rate One of the MPC's top hawks, BoE deputy governor Dave Ramsden, who voted in a previous meeting for a bigger rate hike than actually happened, argues that the government's mini-budget has a huge impact on the economy. But the Bank of England must stay on course to fight inflation. At the next meeting, a lot will depend on how strong the "hawks" turn out to be. In my opinion, if in late September and early October BoE became the one who extinguished the panic in the country's financial markets, then in November it may become its initiator. Borrowing costs should not rise too high, but they should not be too low, so as not to excite investors. Despite the stabilization of the pound, you need to understand how strong its opponent is in the face of the US dollar. Positive statistics on employment outside the agricultural sector and the fall in unemployment to 3.5% hint that the work of the Fed is far from done. The federal funds rate is likely to rise to 4.5–4.75% in 2023. In addition, aggressive monetary restrictions, a slowdown in the economy and the worst forecast for corporate profits for the quarter since 2020 contribute to lower stock indices and increase demand for safe-haven assets. Technically, on the GBPUSD daily chart, the fall of the pair below the moving averages increases the risks of a downward trend recovery. As long as the pound is trading below the 1.1085 pivot point, the recommendation is to sell.

The pound settled below the level of 1.1170, but is trying to return to it with the support of the Marlin Oscillator, which turned into negative territory and is approaching the border with the growth territory. It is possible for the price and the oscillator to work out their resistances simultaneously and turn down. The first target at 1.0820 is the green line of the monthly price channel. On the H4 chart, the price moves sideways directly along the MACD indicator line. Marlin also moves in a horizontal direction. The potential is more downward than upward. In any case, either with the development of 1.1170 or without it, we are waiting for the price at the target level of 1.0820.   Relevance up to 04:00 2022-10-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323919

Early in the European session, the British pound (GBP/USD) is trading at around 1.1061 above the 21 SMA. On the 1-hour chart, we can see the sharp break of the symmetrical triangle. Only if GBP/USD settles above the psychological level of 1.10, a recovery could occur. According to the 1-hour chart, we can see that since October 4, the British pound has been trading within a downtrend channel. A sharp break of this channel could mean recovery for the pair and it could reach the 200 EMA located at 1.1150 and could even reach the resistance zone of 7/8 Murray at 1.1230. GBP/USD is defending the psychological level of 1.10. Yesterday in the American session, it reached a low of 1.1018. In the coming hours, the British pound is expected to trade above this level and could reach the resistance zone of 1.1348. On the 4-hour chart, there is the 200 EMA and it will be an immediate target. The non-farm payrolls report was better than expected, which supports the Fed's plan for further tightening. In addition, the unemployment rate fell from an estimated 3.7% to 3.5%. This information creates pressure on GBP/USD. In case of a drop below 1.10, the pair could fall towards the support of 1.0742 (0/8 Murray). The area of 1.1000 - 1.1020 has become a strong support for the British pound. In case of a technical bounce around this level in the next few hours, it will be seen as a buying opportunity with targets at 1.1150 (200 EMA) and 1.1362. The eagle indicator is giving a positive signal. It is likely that if the British pound recovers above 1.1020, the outlook will be positive. If GBP/USD consolidates above 1.1150, the signal will clearly suggest buying with targets at 1.1230 (7/8 Murray) and 1.1362.   Relevance up to 07:00 2022-10-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/296240

GBP/USD 5M The GBP/USD currency pair continued to trade lower on Monday, but at the same time, volatility fell sharply compared to previous days, and the downward movement slowed down. Thus, while the pound still retains chances for the resumption of upward movement, as it continues to be located above the Senkou Span B line on the hourly timeframe. It also remains above the Kijun-sen line on the 24-hour timeframe. It is these two lines that still allow us to count on the resumption of the pound's growth. Unfortunately, these lines are opposed by the geopolitical and fundamental factors that have been pushing the pound down for a long time, so it is not clear why they would suddenly cease to exert their destructive influence on it. We believe that while the pound may continue to fall, and if such lines are overcome, then the fall will continue with 1.0357 as the target. Although the pound managed to grow significantly recently, traders are selling it again, which means that the global downward trend may continue this time. The situation with trading signals for the pound is the same as for the euro. There was no signal on Monday. Thus, it was not necessary to open trading positions yesterday. In fairness, it should be noted that the downward movement, although it took place, was very weak and looked more like a flat. Therefore, in any case, trading on Monday would be extremely inconvenient and you could get more losses than profits. COT report: The latest Commitment of Traders (COT) report on the British pound showed minimal changes. During the week, the non-commercial group closed 17,700 long positions and 14,600 short positions. Thus, the net position of non-commercial traders decreased by 3,100, which is not a lot for the pound. We could assume that the actions of major players and the movement of the pound have finally begun to coincide, but the pound has already begun a new round of decline, which risks transforming into a continuation of the global downward trend. The net position indicator has been growing slightly over the past weeks, but the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 42,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 11. This has never happened - and here you are, again! Overview of the GBP/USD pair. October 11. "Anti-British" sentiment continues to grow in Scotland. Forecast and trading signals for EUR/USD on October 11. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair has already rolled back down by 470 points on the hourly timeframe, but at the same time it still retains theoretical chances for a resumption of the upward trend. Unfortunately, in the long term, the downward trend may well resume as geopolitics remain very complex. And the foundation - at least such that does not allow counting on the support of the British currency. Traders should now focus on geopolitics and Senkou Span B on the 4-hour timeframe and Kijun-sen on the 24-hour time frame. Overcoming them will increase the probability of a new fall of the pound to its absolute lows around the level of 1.3057. On October 11, we highlight the following important levels: 1.0538, 1.0930, 1.1212, 1.1354, 1.1442, 1.1649. Senkou Span B (1.0923) and Kijun-sen (1.1258) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on trades. Data on wages, unemployment will be published in the UK, and in the evening there will be a speech by Bank of England Governor Andrew Bailey. We believe that Bailey's speech will be the most important event of the day, as the BoE may raise rates by more than 0.5% next month (according to rumors). Explanations for 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. 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.       Relevance up to 02:00 2022-10-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323911

There will be few reports today, but they are important. We are also awaiting the speeches of many bank representatives. Reports form United Kingdom UK reports showed positive results and were higher than expected. The results for August with Average Earnings ex Bonus reached 5.4% and were 0.1% higher than expected, and increased compared to the previous reading. The unemployment rate also turned out to be positive and was lower than expected. The current reading of the unemployment rate was at 3.5% and it was expected to keep the previous level of 3.6%. Despite positive results, the change in the number of unemployed people in the U.K. during the reported month turned out to be much higher than expected. The current Claimant Count Change reading is 25.5K. The last reading was at the level of 1.1K, which means a significant increase in jobseekers. Read more: UK Results Higher Than Expected And The Day Is Full Of Speeches| FXMAG.COM The Brazilian Consumer Price Index (CPI) Today Brazil publishes inflation data for September. YoY's CPI is expected to hit 7.10%, a decline from the previous reading of 8.73%. If the forecast is correct, it means that the index has been falling since July. As for the MoM CPI, it is also expected to decline from -0.36% to -0.34%. And just like CPI YoY will decline from July. Speeches of the day In addition to UK earnings data and Brazilian inflation data, we expect a lot of speeches. We are waiting for two speeches from a German bank. The first at 14:00 CET, which also starts with all the speeches today. The speaker will be Burkhard Balz Member of the Executive Board of the Deutsche Bundesbank. The next speech will be German Buba Wuermeling Speaks which is set at 17:00 CET, traders may see the immediate global market impact. There will also be speeches by representatives of the European Central Bank (ECB) today. The first is scheduled for 14:45 CET. The speaker will be Philip R. Lane, member of the Executive Board of the European Central Bank. The next one will take place a quarter of an hour later, with a speech by Andrea Enria, Chair of Supervisory Board of the European Central Bank. The last speakers from the old continent will be representatives of a British bank. Bank of England (BOE) Monetary Policy Committee (MPC) Member Sir Jon Cunliffe will speak at 17:00 CET. Andrew Bailey, head of the BOE's Monetary Policy Committee will speak at 20:35 CET. This speech will be the most important of the day because it will have the greatest impact on the currency of the country (British Pound, GBP) and thus on the entire currency market. Today also FOMC members will take the floor. Federal Reserve Bank of Philadelphia President Patrick Harker is set to speak at 17:30 CET. His public engagements are often used to drop subtle clues regarding future monetary policy. Another speech will be made half an hour after this with Loretta J. Mester. Summary 8:00 CET UK Average Earnings Index +Bonus (Aug) 8:00 CET UK Claimant Count Change (Sep) 8:00 CET UK Unemployment Rate (Aug) 14:00 CET German Buba Balz Speaks 14: 00 CET Brazilian CPI (YoY) (Sep) 14:45 CET ECB's Lane Speaks 15:00 CET ECB's Enria Speaks 17:00 CET BoE MPC Member Cunliffe Speaks 17:00 CET German Buba Wuermeling Speaks 17:30 CET FOMC Member Harker Speaks 18:00 CET FOMC Member Mester Speaks 20:00 CET ECB's Lane Speaks 20:35 CET BoE Gov Bailey Speaks Source: https://www.investing.com/economic-calendar/

The Bank of England (BOE) announced in a statement on Tuesday, it will temporarily pause corporate bond sale operations this week. Additional takeaways   Intends to purchase index-linked gilts Purchase of linkers will take effect from Oct 11 to Oct 14 Linker purchases will act as backstop to restore orderly market conditions Linker purchases are time-limited, indemnified by treasury Has consulted with debt management office Repeats that it stands ready to purchase up to 10 bln stg of gilts each day Purchase of long-dated conventional gilts unaffected by latest announcement on linkers Size of each linker purchase operation will be up to GBP5 bln. Will set minimum yield that will be applied to temporary purchases of linkers. Will not allocate offers for linkers at real yields below levels observed at close on Monday. Would be likely to accept most offers above market mid-yields at close of linker purchase operation. Purchase of linkers to take place at 1315-1345 GMT, conventional long-dated 1415 GMT to 1445 GMT. Intends to purchase linkers with residual maturity of three years and above.   Market reaction GBP/USD is fading its bounce, battling 1.1000 on the BOE headlines. The cable jumped to near 1.1040 after the mixed UK jobs report. The spot is down 0.43% on the day.

More turmoil in the UK bond market has seen the Bank of England step in with another emergency measure, this time to support battered inflation-linked bonds. Today's 30Y linker auction and speech by Governor Andrew Bailey will be key to watch, but GBP/USD looks too strong at 1.10 considering the fragility of the bond market. USD to stay bid across the board In this article USD: Dismissing slightly less hawkish tone by Brainard EUR: Assessing implications of EU joint debt issuance GBP: Heading lower on more UK bond carnage AUD: The China proxy trade We have published the October edition of FX Talking: No margin for error USD: Dismissing slightly less hawkish tone by Brainard Despite reduced volatility due to the US markets’ closure yesterday, the generalised risk-off environment saw the dollar start the week on the front foot. The worst performers since the weekend are the Antipodeans and the Swedish krona, which is a testament to how the two poles of the market's economic and geopolitical concerns – China and Europe – are affecting proxy trades in G10. US fresh trade restrictions on Chinese chip exporters and an escalation in missile strikes in Ukraine following the Crimean bridge blast look set to keep such proxy trades unattractive for now. In the US, we heard some slightly less hawkish comments by Fed officials yesterday. Admittedly, they did come from two of the most “dovish” members of the FOMC – Lael Brainard and Charles Evans – who both seemed to suggest a higher caution over excessive tightening, while still reiterating the commitment to fight inflation. There is still little doubt among market participants that the overall consensus within the FOMC is firmly hawkish, and that a 75bp hike in November should not be particularly challenged by doves. The US calendar includes the NFIB Small Business Optimism survey and a speech by the Fed’s Loretta Mester (expect more hawkish remarks here). We continue to see the general market narrative as predominantly dollar-positive for now, and expect the 114.76 DXY late-September highs to be tested in the coming days. Francesco Pesole EUR: Assessing implications of EU joint debt issuance The euro received negligible help yesterday from the (unconfirmed) news that German Chancellor Olaf Scholz has ultimately given support to a joint issuance of EU debt to fund measures against the energy crisis, with the condition that funds are distributed as loans and not grants. The market impact should be quite straightforward: positive for peripheral spreads (Italian bonds rallied yesterday), negative for EZ core rates, and potentially fuelling speculation of more ECB tightening if the Bank views these measures as inflationary. For the euro, the net impact may well be neutral in the near term, potentially positive in the longer run. Today, the eurozone’s calendar is quite light, but some interest will be on speeches by ECB’s Chief Economist Philip Lane and Governing Council Member Francois Villeroy. We still see EUR/USD declining into the 0.9540 September lows over the coming days, and target 0.9200 as a year-end level. Francesco Pesole GBP: Heading lower on more UK bond carnage The UK debt market faced a fresh round of turmoil yesterday, with 10-year inflation-linked yields rising by 64bp, signalling how the British bond market remains highly dysfunctional. Those securities were likely at the epicentre of the sell-off as large parts of the holders were pension funds who are running liability-driven investment strategies following the post-Mini Budget market meltdown. This morning, the Bank of England delivered another pre-market attempt to calm investors, by announcing it will widen the scope of daily gilt purchase operations, including inflation-linked bonds. This follows yesterday’s increase of the upper limit of daily purchases of long-term bonds from £5bn to £10bn as well as the deployment of a temporary repo facility. All eyes today will be on how the gilt market will receive the new emergency measures by the BoE, with a specific focus on the results of a 30-year linker auction. The other major event to keep an eye on are the speeches by Jon Cunliffe and above all from BoE Governor Andrew Bailey at the IIF annual meeting in Washington. On the data side, UK jobs data came in quite solid this morning, with average weekly earnings touching 6.0% YoY, ultimately offering no reasons for the BoE to turn less hawkish. We continue to see downside risks for the pound, as levels around 1.10 do not mirror the fragility of the UK bond market. Cable is pressing the 1.1000 support as we speak: we expect a decisive break below this level today or in the coming days, and currently target the 1.00-1.05 area for the pair into year-end. Francesco Pesole AUD: The China proxy trade The Aussie dollar has slumped by around 1.8% since the start of the week, underperforming compared to all its G10 peers. As highlighted in the USD section above, AUD is a quintessential proxy trade for China’s economic outlook, and has historically been highly sensitive to any US-China trade relationship developments. Despite domestic monetary policy not being a primary driver for AUD in the past months, the Reserve Bank of Australia's lower-than-expected rate hike last week – especially when compared to the Reserve Bank of New Zealand's larger move – may be exacerbating the bearish sentiment on the currency. We’ll see whether there is any tilt in the message in tonight’s speech by Assistant Governor Luci Ellis, but the downside risks for AUD/USD remain quite elevated anyway. We currently forecast 0.6100 as a year-end value, but chances of a break below the key 0.6000 level have risen substantially. Francesco Pesole TagsFX Dollar Bank of England Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

GBP/USD is trading quietly for a second straight day. In the North European session, GBP/USD is trading at 1.1035, down 0.18%. The pound has not posted a winning day since October 12th and has lost 400 points during that time. GBP/USD dropped below the symbolic 1.10 line earlier today, and a break below 1.10 will likely increase talk of the pound following the euro and dropping to parity with the dollar. UK labour market remains robust The UK labour market is one of the few bright spots in the economy, and today’s employment report reaffirmed that the job market remains tight. Unemployment in the three months to August dipped to 3.5%, down from 3.6%, while average earnings jumped to 6.0%, up from 5.5% and ahead of the consensus of 5.9%. These rosy numbers are dampened by an inflation rate of 9.9%, which has badly hurt real UK incomes. The strong job market bolsters the likelihood of the Bank of England will deliver some tough medicine at its November meeting, perhaps a super-size rate hike of 1.0%. The BoE was forced to intervene on an emergency basis after the mini-budget almost caused a bond market crash, and investors have circled October 14th, which is the expiry date of the BoE’s gilt-buying intervention. There are concerns that if the BoE does not renew its bond-buying, the result could be another exodus from UK government bonds. On Wednesday, the UK releases GDP for August, which is expected at 0% MoM, down from 0.2% in July. In the US, inflation will be in focus this week, with PPI data on Wednesday and CPI a day later. Headline inflation is expected to fall to 8.1% in September, down from 8.3% in August, but core CPI is expected to rise to 6.5%, up from 6.3%. Unless inflation surprises sharply to the downside, the release will not cause the Fed to rethink its hawkish policy. . GBP/USD Technical GBP/USD faces resistance at 1.1085 and 1.1214 There is resistance at 1.0935 and 1.0776 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Yesterday, the pound marked the upper shadow of the daily candle at the resistance level of 1.1170, after which it sharply went down. The price is already approaching the target level of 1.0820. Consolidation below the level opens the second target at 1.0535. The Marlin Oscillator is developing in negative territory. A block of important economic indicators will be released in the UK today, the forecasts for them are negative. GDP for August is expected to remain unchanged, the annual indicator may show a decline in growth from 4.4% to 2.4% y/y, industrial production for the same period is expected to decline by 0.2% (0.6% y/y vs. 1.1% y/y in July). The trade balance is projected to deteriorate from -19.36 billion pounds to -20.40 billion pounds. The price settled under the MACD indicator line on the H4 chart. The Marlin Oscillator is moving sideways in the downward trend area. The overall situation is declining.   Relevance up to 04:00 2022-10-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324035

GBP/USD 5M The GBP/USD currency pair also slightly corrected upwards on Tuesday, but, unlike the euro, it continues to be above the Senkou Span B line on the hourly TF and above the Kijun-sen line on the 24-hour timeframe. Therefore, certain chances for the resumption of the upward movement remain. There were no special reasons for the pound to grow. The euro and the pound rose in sync, so, as usual, the matter concerned only the US dollar, which continues to rule the ball in the foreign exchange market. Most likely, the bears once again took part of the profit on short positions, which is why an upward rollback followed. Morning statistics in the UK was quite good for the British pound, and it provoked some growth. However, it is too early to talk about the resumption of the upward trend. To do this, you need to at least wait for the price to settle above the critical line. Trading signals were boring on Tuesday, since none were formed during the day. The pair did not even approach important levels and lines, so there was not even a hypothetical moment of formation. Thus, traders on our system were not supposed to open positions on Tuesday. COT report: The latest Commitment of Traders (COT) report on the British pound showed minimal changes. During the week, the non-commercial group closed 17,700 long positions and 14,600 short positions. Thus, the net position of non-commercial traders decreased by 3,100, which is not a lot for the pound. We could assume that the actions of major players and the movement of the pound have finally begun to coincide, but the pound has already begun a new round of decline, which risks transforming into a continuation of the global downward trend. The net position indicator has been growing slightly over the past weeks, but the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 42,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 12. Sweden refuses to provide Russia with the results of the investigation into the Nord Stream explosions. Overview of the GBP/USD pair. October 12. The Liz Truss government is teetering on the brink. Forecast and trading signals for EUR/USD on October 12. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair tried to roll back up on the hourly timeframe, but so far this rollback is just a pullback, and not a resumption of the upward trend. It is still very difficult for the pound to count on growth, although it has a little more chances than the euro due to technique. If you look at the "foundation" and geopolitics, then both European currencies may be in a downward direction for several more months. We highlight the following important levels for today: 1.0538, 1.0930, 1.1212, 1.1354, 1.1442, 1.1649. Senkou Span B (1.0923) and Kijun-sen (1.1218) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. The UK will publish reports on GDP and industrial production. We do not believe that such data can provoke a strong reaction from the market, but a day earlier, it still followed the less important statistics, so it could be the same case today. Nothing interesting planned in America. Explanations for 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. 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.       Relevance up to 06:00 2022-10-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324041

The UK has recently stepped up efforts to prevent financial market chaos from spreading beyond the $1 trillion part of the pension industry after the government of Prime Minister Liz Truss alarmed investors with its proposals. In his speech, Finance Minister Kwasi Kwarteng said he would present his fiscal strategy, along with economic forecasts approved by the budget oversight body, on October 31, almost a month earlier than planned. This led to a surge in volatility in the markets, especially after the Bank of England seemed to be going to extend emergency measures to support the bond market until early next month. These moves were expected to be part of the government's efforts to restore investor confidence. Last month, the finance minister sparked a collapse in pound by announcing a £45 billion unfunded stimulus package that undermined the Bank of England's inflation-fighting program. Kwarteng obviously acted under increasing pressure from politicians and the government, as everyone expected more effective action to stabilize public finances. The proposals, including economic forecasts, were also supposed to be released on November 23, but the finance ministry said on Twitter earlier this week that they would come out sooner, which led to another spike in market volatility. Against this news, 30-year yields rose 17 basis points to 4.56%, especially since the market doubts that the BoE will deliver on its promises to extend its temporary bond purchases during an aggressive rate hike. pension funds exposed to liability-based investment risks can clear their positions after the UK government triggered a market crash by announcing the allocation of £45 billion ($50 billion), which they wanted to receive due to tax cuts. After yesterday's statements, pound continued to lose positions one by one, so now buyers are focused on defending the support level of 1.0930 and resistance level of 1.1050. Only the breakdown of the latter will open the path to 1.1120, 1.1180 and 1.1215. Meanwhile, a return of pressure and decline below 1.0930 will push GBP/USD down to 1.0870 and 1.0800.   Relevance up to 08:00 2022-10-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324069

Risk appetite continues to fall as expectations for softer policy are decreasing more and more. Cleveland Fed President Loretta Mester has recently said that the bank has a lot of work to do to curb inflation, so it currently sees no reason to slow the pace of interest rate hikes. Fight fed with inflation Fed officials are now raising interest rates at the fastest pace seen in decades. In this way, they are trying to suppress stubbornly high inflation, which continues to grow and is in the region of a forty-year high. And since the Fed raised rates by 75 basis points last month to a target range of 3.25%, most likely, it will hit 4.4% by the end of this year, which means that there will be 1.25% increase at the November and December meetings. Mester reiterated that the US central bank will have to raise rates slightly higher than expected as high inflation continues despite efforts. It is difficult to doubt this, especially after the recent report on the state of the labor market, where the unemployment rate has fallen to almost historical lows, and new jobs have been created and continue to be created. Nevertheless, lowering inflation is the top priority as many are now suffering from having to spend more money on necessities like gasoline and food. The Fed also stressed that they will do everything possible to curb inflation even if their efforts hurt the economy. So far, this is not so noticeable yet as retail sales remain at a fairly high level. Fed officials predict that the unemployment rate could rise to 4.4% from the current level of 3.5%. In addition to raising rates, the Fed is also getting rid of its bloated balance sheet. Mester thinks the process is going smoothly. EUR/USD Talking about EUR/USD, quotes have reached the support level of 0.9680, but now there is a slight correction ahead of an important inflation report in the US. To resume growth, it is necessary to break above 0.9730, as only that will push the quotes to 0.9775 and 0.9810. Meanwhile, a break of 0.9680 will restore pressure on the pair and push it to 0.9640, 0.9590 and 0.9540. GBP/USD As for GBP/USD, it continues to decline, so buyers are focused on defending the support level of 1.0930 and resistance level of 1.1050. Only the breakdown of the latter will open the path to 1.1120, 1.1180 and 1.1215. Meanwhile, a return of pressure and move under 1.0930 will push GBP/USD down to 1.0870 and 1.0800.   Relevance up to 09:00 2022-10-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324075

Chicago Fed President Charles Evans has recently said that the central bank is sticking to its mandate to bring inflation down even if it means people will lose their jobs. This means that interest rates will remain at the highest possible level for a long time regardless of the economy slipping into recession, or the labor market deterioration. According to the data presented by the US Department of Labor, the number of non-farm payrolls increased by 263,000 in September, while the unemployment rate fell to 3.5%. This is quite good data, but Fed officials, including Chairman Jerome Powell, warned that the end result of the central bank's efforts to curb inflation could lead to the deterioration of the labor market. Most likely, unemployment will surge amid tight monetary policy. EUR/USD Talking about EUR/USD, quotes have reached the support level of 0.9680, but now there is a slight correction ahead of an important inflation report in the US. To resume growth, it is necessary to break above 0.9730, as only that will push the quotes to 0.9775 and 0.9810. Meanwhile, a break of 0.9680 will restore pressure on the pair and push it to 0.9640, 0.9590 and 0.9540. GBP/USD As for GBP/USD, it continues to decline, so buyers are focused on defending the support level of 1.0930 and resistance level of 1.1050. Only the breakdown of the latter will open the path to 1.1120, 1.1180 and 1.1215. Meanwhile, a return of pressure and move under 1.0930 will push GBP/USD down to 1.0870 and 1.0800.

Yesterday, the pound gained 130 points, returning to Monday's range. The price did not reach resistance at 1.1170, which was prevented by the Marlin Oscillator, which turned down from the zero line (daily). Following the price of the oscillator indicates the price's weakness. As a result, the price may quickly decline to the nearest support (1.0820) and even try to gain a foothold under it. On a four-hour scale, the price is winding up on the MACD line, which in general looks like a consolidation under the resistance of 1.1170. The signal line of the Marlin Oscillator is turning down from the zero line. The subsequent consolidation under the MACD line, with the support of Marlin, may turn out to be more effective than it was yesterday and the day before yesterday.   Relevance up to 04:00 2022-10-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324163

The British pound is running away with increased energy from critical supports, the transition to which from the technical side prescribes it to fall into the abyss (under parity with the dollar). Expectations of a rate hike by the Bank of England at a meeting on November 3 served as an incentive for the pound. Yesterday the price overcame two levels of resistance and is now approaching the daily MACD line and the target level of 1.1500. Consolidation above it opens the target at 1.1760 (July low). The Marlin Oscillator is growing in the positive area. The price settled above the level of 1.1305 on a four-hour scale. The price is above both indicator lines, the Marlin Oscillator is growing in the upward trend area. We are waiting for the price at the nearest target level of 1.1500.   Relevance up to 04:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324286

GBP/USD 5M The GBP/USD currency pair showed a powerful upward movement on Thursday, which was absolutely illogical in terms of the fundamental and macroeconomic background. However, this may be the main point - traders are finally ready to buy the pound, despite the disappointing "foundation" and geopolitics. If so, then the growth can continue at least another 400-500 points up. As for the illogicality of the movement, in the morning there was not a single important event or report in either the UK or the US. That is, the pound immediately began to grow, it is not clear why. Further, the US inflation report was published during the US trading session, which was supposed to provoke, rather, the fall of the pair and the growth of the dollar, and not vice versa. Therefore, it is difficult for us to even say how the market interpreted US inflation, what conclusions it made. The pound, thus, once again showed a fairly strong will to win and came one step closer to completing the global downward trend. But at the same time, we are not sure that the fall will end there, after all, there are many factors that can pull the pound back down. Quite a lot of trading signals were generated yesterday, but some of them were blatantly false or it was impossible to work them out. The first buy signal near the Kijun-sen line could be worked out. The price went up about 130 points, and it had to be closed manually before the release of the inflation report. The next signal is a consolidation below 1.1212 – we would be wary of working it out, as a "gap" has formed on the chart. The last buy signal in the form of overcoming 1.1212 could theoretically be worked out, however, it was still formed quite late in time. A strong upward movement made it possible to reach the level of 1.1354 and pass another 130 points in just an hour. COT report: The latest Commitment of Traders (COT) report on the British pound showed minimal changes. During the week, the non-commercial group closed 17,700 long positions and 14,600 short positions. Thus, the net position of non-commercial traders decreased by 3,100, which is not a lot for the pound. We could assume that the actions of major players and the movement of the pound have finally begun to coincide, but the pound has already begun a new round of decline, which risks transforming into a continuation of the global downward trend. The net position indicator has been growing slightly over the past weeks, but the mood of the big players remains "pronounced bearish", which is clearly seen in the second indicator in the chart above (purple bars below zero = bearish mood). And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth of the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 42,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 14. "That's all folks". US inflation fell to 8.2%. Overview of the GBP/USD pair. October 14. The Bank of England is preparing for a new powerful rate hike. The pound rushed right off the bat without waiting for US inflation data. Forecast and trading signals for EUR/USD on October 14. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair once again left the downward channel on the hourly timeframe, and at the same time overcame the lines of the Ichimoku indicator. On the 24-hour TF, the price still managed to stay above the critical line, so the pair can now go up another 400-600 points. However, we remind you that the foundation and geopolitics remain complex, which means that long positions should be treated carefully. On October 14, we highlight the following important levels: 1.0538, 1.0930, 1.1212, 1.1354, 1.1442, 1.1649. Senkou Span B (1.1016) and Kijun-sen (1.1141) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. There will be no interesting events in the UK on Friday, and only a report on retail sales and consumer sentiment index from the University of Michigan in America. The reaction to these reports is unlikely to be strong, but strong movements may persist at night and in the morning, as the Europeans can also work out the US inflation report. Explanations for 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. 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.       Relevance up to 02:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324274

Although the Federal Reserve is sure to extend its aggressive interest rate hike even longer than expected, the European currency and the British pound have regained their positions against the US dollar after yesterday's inflation report in the US. It overshadowed hopes for a rate cut by the end of next year. Initially, investors reacted to higher-than-expected consumer price levels by buying the US dollar. It emphasized that the Fed would raise rates by 75 basis points at its meeting next month, but then the pressure on risky assets decreased sharply. Nevertheless, futures prices show that the markets expect interest rates to be around 5% next year, which increases the pressure on the Fed even more. Despite the risk of a recession and a sharp spike in unemployment, the Federal Reserve System will continue to act aggressively. The measures it has taken since the spring of this year have not yet brought the desired result – the maximum that has been achieved is a slowdown in inflation growth around a 40-year high. According to a report by the Ministry of Labor published on Thursday, base prices, excluding food and electricity, rose in September by 6.6% compared to last year, which is the highest level since 1982. This continues to cause concern among politicians, as the index also accelerated in August. Yesterday's report also means that the regulator will raise rates by three-quarters of a percentage point at the last two meetings of this year. Several Fed officials have recently pointed to the August spike in core inflation as a sign of alarming rigidity, even among less volatile price categories. Nevertheless, even the most hawkish officials opposed the idea of raising rates by a whole percentage point or more at one meeting. It would be more difficult for the Fed to track the effects of its policy tightening on the economy, increasing the risk of triggering a more serious recession. "Observing how the economy reacts allows us to measure the dosage of future policy changes somewhat while simultaneously continuing to move aggressively," said Neel Kashkari, president of the Federal Reserve of Minneapolis. "If we just raised rates by 2%, 3%, or 4% at a time, it may well be that it would be too much, which would eventually lead to a financial crisis." As noted above, the Fed has been raising rates from zero since March of this year, and now the federal funds rate is at 3.25% – the highest level since 2008. As a result of the slowdown in inflation, albeit not as strong as economists predicted, demand for risky assets has returned, which leaves the same euro buyers to return to parity. EUR/USD As for the technical picture of EURUSD, the bears retreated a little, and the bulls reached the resistance of 0.9800. Before the important data on retail sales in the US, the upward correction of the pair may continue. To continue the growth, it is necessary to break above 0.9800, which will take the trading instrument to the areas of 0.9840 and 0.9880. However, the upward prospects will depend entirely on the US data. A break of 0.9755 will put pressure on the trading instrument and push the euro to a minimum of 0.9713, which will only worsen the situation of buyers of risky assets in the market. Having missed 0.9713, it will be possible to wait for the update of the lows in the area of 0.9680 and 0.9640. GBP/USD The pound continues to recover, but its further direction has not yet been determined. Buyers will focus on protecting the support of 1.1260 and the resistance of 1.1350, limiting the upward potential of the pair. Only a breakthrough of 1.1350 will open prospects for recovery to the area of 1.1420, after which it will be possible to talk about a sharper jerk of the pound up to the area of 1.1480 – the maximum of this month. It is possible to talk about the return of pressure on the trading instrument after the bears take control of 1.1260, which can happen quite quickly in the case of strong US statistics. This will blow the bulls' positions and completely negate the prospects of the bull market observed since September 28. A breakout of 1.1260 will push GBPUSD back to 1.1180 and 1.1100.   Relevance up to 09:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324322

All the attention today is on the British pound, which could repeat the path of the end of September this year, when daily drops were 400-500 points. Yes, such a gloomy scenario is no longer worth counting on, but the chances of another collapse of the national currency of Great Britain are great again. No comment Yesterday, Andrew Bailey arrived at a meeting in Washington after the British government was refused a further extension of the emergency bond purchase program conducted by the Bank of England to save the financial market. When asked by reporters whether the government's rejection of plans for a large-scale tax cut package would end the turmoil in the UK financial markets, the governor of the Bank of England declined to comment but smiled broadly. However, the fact that the Chancellor of the Exchequer, Kwasi Kwarteng, has returned to London indicates that the Bank of England no longer intends to make concessions to the Ministry of Finance. Many experts said they did not remember the last time the British Chancellor left an early meeting of the International Monetary Fund. This again confirms the complexity of the situation in which Kvarteng is currently drawing up the annual budget. Complete an emergency credit The 63-year-old governor of the Bank of England, Andrew Bailey, said that the regulator would complete an emergency credit line for 65 billion pounds as predicted this Friday. Traders expected its extension and expect it to continue since there is no serious closure of short positions in the British pound yet. The British Finance Minister warned that if Bailey does not help the government, it will be on his conscience since the financial markets will be paralyzed again next week. Many analysts also predicted that Bailey would be forced to change course, which, as a result, would deal a serious blow to his credibility. Criticism of the Kvarteng plan Despite Kwarteng's bravado, officials formed a protective barrier around Bailey at the IMF meeting, squarely placing the blame for the market turmoil on the Chancellor and British Prime Minister Liz Truss. IMF Managing Director Kristalina Georgieva praised the Bank of England's support for bond purchases, saying that the actions were appropriate and timely, eliminating the risk to financial stability. She also stressed the need for coherence in the new policy, veiling criticism of the Kvarteng plan for tax cuts of 45 billion pounds, which was announced three weeks ago and the government abandoned. GBP/USD Against this background, the pound continues to recover, but its further direction has not yet been determined. Buyers will focus on protecting the 1.1260 support and the 1.1350 resistance, which limits the upward potential of the pair. Only a breakthrough of 1.1350 will open prospects for recovery to the area of 1.1420, after which it will be possible to talk about a sharper jerk of the pound up to the area of 1.1480 – the maximum of this month. It is possible to talk about the return of pressure on the trading instrument after the bears take control of 1.1260, which can happen quite quickly in the case of strong statistics in the United States. This will blow the bulls' positions and completely negate the prospects of the bull market observed since September 28. A breakout of 1.1260 will push GBPUSD back to 1.1180 and 1.1100. EUR/USD As for the technical picture of EURUSD, the bears retreated a little, and the bulls reached the resistance of 0.9800. Before the important data on retail sales in the US, the upward correction of the pair may continue. To continue the growth, it is necessary to break above 0.9800, which will take the trading instrument to 0.9840 and 0.9880. However, the upward prospects will depend entirely on the US data. A break of 0.9755 will put pressure on the trading instrument and push the euro to a minimum of 0.9713, which will only worsen the situation of buyers of risky assets in the market. Having missed 0.9713, it will be possible to wait for the update of the lows in the area of 0.9680 and 0.9640.     Relevance up to 09:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324312

Throughout all the months of this year, inflation remains in the candlestick. Every month we notice a change in the consumer price index (CPI), which informs about the annual or monthly change the price of a weighted average market basket of consumer goods and services purchased by households. Why are prices rising so fast? Once again our eyes will be on the UK reports. Other countries are also experiencing a cost of living squeeze. Many of the reasons are the same: increased energy costs, shortages of goods and materials and the fallout from Covid. According to the Governor of the Bank of England Andrew Bailey, the cause of inflation in the UK is "a shock in Russia" After all, as stated by the Governor of the Bank of England, there are many other factors, such as: energy bills that have risen sharply due to high oil and gas prices. gasoline and diesel prices, partly because the war in Ukraine has increased the price of crude oil. food prices as the war in Ukraine reduces grain production and costs increased drastically Not all prices behave the same way. The cost of some other goods and services have increased only slightly or stayed the same. What inflation looked like and what can it look like in the UK? As we can see from the horse of last year, inflation in Great Britain continues the upward trend. There was a sharp increase in April as it rose from 2%, from 7.0% to 9.0%. In the collections it grew slowly, only by a tenth of a percent. In July, it exceeded the 10% threshold, amounting to 10.1%. Then it unexpectedly fell to 9.9% in August. It is projected to rise from this level to 10.0% in September. Investment bank Goldman Sachs now says inflation could peak at 10.8% in October, and slow to 2.4% by December 2023. Lower inflation does not mean prices will go down. It just means they will stop rising at their recent faster pace. Source: investing.com Inflation in the last reading depending on the sector The annual inflation rate for transport was 12.4% in August 2022, down from 15.1% in July. Food and non-alcoholic beverage prices rose by 13.1% in the 12 months to August 2022, up from 12.7% in July. The annual rate for the miscellaneous goods and services category was 4.6% in August 2022, up from 4.0% in July. The rate is the highest recorded since September 2005. The annual rate for clothing and footwear was 7.6% in the year to August 2022, up from 6.6% in July. And this time, in the September post office, we can expect growth in these sectors. The actions of the British central bank in the fight against inflation The Bank is under pressure to put rates up because it has a target to keep inflation at 2%, but prices are currently rising at about five times that level. The Bank of England's traditional response, as other cental banks, to rising inflation is to raise interest rates. On 22 September, the Bank of England raised rates by 0.5 percentage points to 2.25% - the highest level for 14 years. This can encourage people to save, but means some people with mortgages see their monthly payments go up. How it affects ? When interest rates rise, about two million people on tracker and variable rate deals see an immediate increase in their monthly payments. Their monthly payments may not change immediately, but with lenders now anticipating higher rates, any new deals will be more expensive. That means new house buyers - or anyone seeking to remortgage - will also have to pay more. Raising interest rates also makes borrowing more expensive and - it is hoped - people have less money to spend. As a result, they will buy fewer things and prices will stop rising as fast. Bank of England interest rates also influence the interest charged on things like credit cards, bank loans and car loans It also has negative effects on savings because the value of cash savings is falling in real terms. Source: investing.com, ons.gov.uk

Strong dollar pressure tests the system One of the most important market developments over the last month has been the Bank of England intervening in the UK Gilt market on grounds of financial stability. That Gilts and sterling had to fall so far on UK fiscal concerns owed in part to the restrictive Federal Reserve conditions and the strong dollar. The hawkish Fed will increase pressure in the system still further into year-end – a move that will undoubtedly punish any poor policy choices. The Fed’s relentless and most aggressive tightening cycle since the early 1980s is starting to create a few casualties. Though the wounds in UK asset markets were selfinflicted, the occasion did show that the tighter liquidity conditions being created by the Fed are leaving no margin for error. There are still few signs of any ‘pivot’ in Fed policy coming through this year and we do not see that until 1Q23 at the earliest. As the Fed tightens into a recession and yield curves invert further, expect the dollar to stay bid. We could easily see further gains of 5-7% across the board. With the eurozone likely entering three quarters of negative growth, dollar strength can probably see EUR/USD building a new 0.90-0.95 trading range. Again, we would say the euro is not especially undervalued – having been damaged by the negative terms of trade adjustment. In Europe, heightened scrutiny on policy choices can see GBP/USD nearing parity later this year. The high beta Scandinavian currencies also look vulnerable as do some of those in Central and Eastern Europe (including the Polish zloty) where hiking cycles have been curtailed. In Asia, we think USD/CNY can rally further to 7.40, taking most of the region with it. And the commodity-centric Latam currencies also remain vulnerable as investors shun Emerging Market asset markets. EUR/USD Current spot: 0.9705 • EUR/USD realised volatility is now back to levels last seen in the early days of the pandemic. Tighter liquidity conditions as central banks raise rates and sell bonds typically do see volatility levels increase. This should be the story for this autumn. • Is the dollar about to top? From a risk management perspective, we would say ‘no’. The Fed looks set to push ahead with tightening into a recession (rates peaking 4.25-4.50% early next year), which should keep the dollar broadly bid. • The eurozone is just entering three consecutive quarters of negative growth. As a pro-cyclical currency, this is not the time for the euro to shine. We see a 0.90-0.95 trading range developing. USD/JPY Current spot: 145.44 • In late September, Tokyo confirmed that it had intervened to sell USD/JPY (seemingly from the 145.70 area). The amounts were a large $20bn and show that Tokyo means business. Importantly, the US Treasury said it ‘understood’ the need for intervention. Does the G20 FX Communique get altered on 12 October? • We doubt the Bank of Japan’s FX intervention will define the exact top for USD/JPY. The macro factors driving the rally – hawkish Fed/energy crisis are still with us. And we see intervention as more of a campaign that might slow a move towards 150. • Talk of a Plaza accord to reverse the dollar look premature, too. The BoJ will need to hike to support this – unlikely before 2Q23. This article is a part of a report by ING Economics available here. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Long-term perspective. The GBP/USD currency pair showed an increase of 100 points during the current week, but it still ended two days out of five in a serious minus. A few weeks ago, the price was fixed above the critical line, and this week – first lower, and then higher again. As a result, it continues to be located just above Kijun-sen, which preserves certain chances for a new upward trend. However, at the same time, after the turn of the upward movement by 1100 points, which happened immediately after the next drop of 1000 points, the pound did not show anything special. Recall that the last "flights" of the pound were associated with the tax initiatives of Liz Truss and Kwasi Kwarteng, the latter of whom has already been dismissed. Clouds are also "gathering" over Liz Truss herself. She is accused of a large-scale depreciation of the British currency as well as a sharp drop in demand for Treasury bonds. Some of the tax initiatives have already been removed from the current "plan", but the market is still in a state of shock. The Bank of England has tried to stabilize the debt market, but we cannot say that it has succeeded well. Thus, the fundamental background for the British pound is now expressed not only by the process of tightening the Fed's monetary policy (traders still pay much less attention to the Bank of England) but also by problems with the financial market in the UK and another political crisis, which may end with a vote of no confidence. Therefore, the pound might be happy to grow, but most factors, including geopolitics, remain on the side of the US dollar. On Thursday, the US inflation report also had a bombshell effect on the market. The US dollar first rose sharply, then fell heavily, and on Friday it rose again. Traders have been working out a slowdown in inflation by 0.1% in annual terms for more than a day. And the 0.1% decline itself means that the Fed is simply obliged to raise the rate very aggressively because inflation has already shown that it will not slow down without support in the form of tightening monetary policy. COT analysis. The latest COT report on the British pound showed a new weakening of the "bearish" mood. During the week, the non-commercial group opened 6,900 buy contracts and closed 3,400 sell contracts. Thus, the net position of non-commercial traders increased by 10.3 thousand, which is quite a lot for the pound. It could be assumed that the actions of major players and the movement of the pound have finally begun to coincide since the pound has grown over the last period of net position growth. However, we are worried that this may once again be a "false alarm." The net position indicator has been growing slightly in recent weeks, but this is not the first time it has been growing, the mood of major players remains "pronounced bearish," and the pound sterling continues to fall in the medium term. And, if we recall the situation with the euro, there are serious doubts that, based on COT reports, we can expect the pair to grow significantly. How can you count on it if the market buys the dollar more than the pound? The non-commercial group has now opened a total of 88 thousand sales contracts and 49 thousand purchase contracts. The difference, as we can see, is still very big. The euro cannot show growth in the "bullish" mood of major players, and the pound will suddenly be able to grow in a "bearish" mood. We remain skeptical about the long-term growth of the British currency, although there are certain technical reasons for this. Analysis of fundamental events. During the current week, quite a lot of different statistical information has been published in the UK, but at the same time, we cannot conclude that it somehow helped the pound. The unemployment rate dropped to 3.5%, which is good, but at the same time, GDP fell by 0.3% in August, and industrial production lost 1.8%. Well, at the end of the week it became known about the dismissal of British Finance Minister Kwasi Kwarteng, who had spent a little more than a month in his position. Thus, Britain continues to be in a fever, and we believe that the overall fundamental background remains negative for the pound. The American statistics were not much better this week. Retail sales showed zero growth in September, and the consumer sentiment index from the University of Michigan rose slightly. Inflation has decreased by only 0.1%, but this factor just works in favor of the US currency. Trading plan for the week of October 17–21: 1) The pound/dollar pair as a whole maintains a long-term downward trend but is already located above the critical line. Therefore, small purchases can now be considered as long as the pair is located above the Kijun-sen. The target is the Senkou Span B line, which runs at 1.1843. There are some reasons for the pair's growth, but there are still a lot of reasons for a new fall. Be careful with your purchases. 2) The pound sterling has made a significant step forward but remains in a position where it is quite difficult to wait for strong growth. If the price fixes back below the Kijun-sen line, then the pair's fall can quickly and cheerfully resume with targets in the area of 1.0632–1.0357. Explanations of the illustrations: Price levels of support and resistance (resistance/support), Fibonacci levels – target levels when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators(standard settings), Bollinger Bands(standard settings), MACD(5, 34, 5). Indicator 1 on the COT charts is the net position size of each category of traders. Indicator 2 on the COT charts is the net position size for the "Non-commercial" group.   Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324399

The GBP/USD currency pair was trading down again on Friday, ending the week near the moving average. Now it seems that the entire movement of the pair after its growth by 1100 points is just a calming of the market because we see how each subsequent turn of the movement is smaller than the previous one. Most likely, the price will "settle down" around 1.1100, after which the market will need new grounds for certain movements. Recall that, from a technical point of view, there is a probability of the end of a long–term downward trend since there was a sharp drop in quotes to absolute lows and then a sharp increase. Such "injections" often end strong trends. However, nothing has changed from a geopolitical point of view. From a fundamental point of view, the British pound has become more problematic. Last week, it became known about the resignation of Kwasi Kwarteng, the British Finance minister, who had been in his position for a little more than a month. Such high-profile layoffs against the background of a new tax reduction plan do not add calmness to buyers of the British pound. The government of Liz Truss is under the strongest pressure. If her geopolitical worldviews in the UK do not bother anyone, then her ability to stabilize the economy and the financial sector raises concerns. Recall that her main opponent in the fight for the prime minister's chair was Rishi Sunak, the former head of the Treasury. He is a talented economist and probably would have handled the economy much better than Truss. But the problem was that Sunak was not experienced in international politics and did not enjoy strong support among the British themselves. It does not matter what Sunak would do as the head of state. A vote of no confidence in Liz Truss may be "launched" but is unlikely to be announced. Most likely, in this way, parliamentarians make it clear to Truss that her plans to reduce taxes, which will inevitably lead to a huge budget deficit and have already led to the collapse of the pound and the debt market, are unacceptable. Apart from the inflation report, Britain will have no interesting events. There will be frankly few macroeconomic statistics this week. The week's most important report is British inflation, which fell from 10.1% to 9.9% last month. This is not surprising since the Bank of England has already raised the rate seven times in a row. At the same time, we draw attention to the fact that the BA rate remains below the Fed rate. And in America, inflation slowed down by less than 1% of the maximum value, which is considered its mission accomplished. Therefore, most likely, inflation in the UK will not show a serious slowdown in the near future, which means that the regulator will continue to tighten monetary policy. At the same time, we are already talking about aggressive tightening and not a formal increase in the rate by 0.25-0.5%. However, this is still a very weak consolation for the British pound, which is unlikely to lead to its strong strengthening. Traders are much more attentive to the actions of the Fed than the BA or the ECB. Therefore, by and large, the inflation report will not change anything for the pound. We may see a strong market reaction to this report, but at the same time, it will not affect the balance of power dramatically. Also, on Friday, a report on retail sales will be published in Britain. Reports on industrial production, the real estate market, and applications for unemployment benefits will be published in the States this week, and several speeches by members of the Fed monetary committee will also take place. All three reports cannot be considered important; their market reaction will likely be weak. As for the speeches of Bowman, Bullard, Jefferson, and others, their rhetoric is now unambiguous – an aggressive rate hike until inflation begins to slow down significantly. Therefore, the pound remains in a twofold situation when technology allows its medium-term growth, but the foundation and macroeconomics continue to support the dollar. The average volatility of the GBP/USD pair over the last five trading days is 206 points. For the pound/dollar pair, this value is "very high." On Monday, October 17, thus, we expect movement inside the channel, limited by the levels of 1.0975 and 1.1381. A reversal of the Heiken Ashi indicator upwards will signal a new round of upward movement. Nearest support levels: S1 – 1.1169 S2 – 1.1108 S3 – 1.1047 Nearest resistance levels: R1 – 1.1230 R2 – 1.1292 R3 – 1.1353 Trading Recommendations: The GBP/USD pair has started a new round of correction in the 4-hour timeframe. Therefore, at the moment, new buy orders with targets of 1.1292 and 1.1353 should be considered in the event of a price rebound from the moving average line. Open sell orders should be fixed below the moving average with targets of 1.1047 and 1.0986. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.   Relevance up to 02:00 2022-10-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324419

The pound returned to the support of 1.1170 on Friday after British Prime Minister Liz Truss sacked Treasury Secretary Kwasi Kwarteng, who had been in office for just 38 days. And since the sell-off of the pound was emotional (-148 points), today's opening was with a rising gap. The gap tells us that the market will try to close it, which will mean that the price will go under the support level of 1.1170, and then it may continue to decline to the support of 1.0815 - to the green price channel line. On the four-hour chart, the price is thinking in the range of levels 1.1170 and 1.1305 on how to close the window - either from current levels, or with a preliminary test of resistance at 1.1305. Today there are no important data for the UK and the US, and tomorrow for the US there will be data on industrial production for September, which is forecast at 0.1% after a 0.2% decline in August. Until this moment, the price can feel quite freely in the range of 1.1170-1.1305. Next, we are waiting for the decline of the British currency.     Relevance up to 04:00 2022-10-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324423

The political crisis in the UK is gaining momentum, which cannot but put pressure on the British pound. After the instrument has moved away from its low by more than 1000 basis points, the British pound is in danger again. But this time, political problems have also been added to the economic problems. On Friday, it became known that British Finance Minister Kwasi Kwarteng was dismissed. He spent only 38 days in his position. The reason for the resignation was the shock in the UK's financial markets caused by tax amendments to the legislation. These amendments have not even been adopted yet, and it is unknown whether they will be adopted. They concerned several tax rates, which, according to the British government, should be lowered to reduce the pressure from rising energy prices on households and businesses. However, the tax reduction plan was criticized by economists, and it immediately became known that its implementation would lead to a huge budget deficit. Even the conservatives themselves spoke out against this plan, so the Liz Truss government had to urgently make a statement that the plan was still "raw" and needed improvements. It has already become known that the maximum tax rate of 45% will not be canceled, and the proposed changes may also be canceled for other taxes. Since someone had to "take over" responsibility for the shock in the financial and currency markets, most likely, this role was performed by Kwasi Kwarteng, who personally developed this plan. The media noted the importance of this event because Kwarteng was not just the Minister of Finance but also a close friend and colleague of Truss. Former Foreign Minister Jeremy Hunt may become the new finance minister. However, this is not all the upheaval in Parliament. Yesterday, it became known that Defense Secretary Ben Wallace may resign if Liz Truss reneges on her promise to increase defense spending. Earlier, during the election campaign, Truss promised to increase defense spending to 2.5% of GDP by 2026 and 3% of GDP by 2030. It is reported that this promise prompted Wallace to support the candidacy of Truss and not Rishi Sunak, who refrained from such statements. Jeremy Hunt, who may now take up his new position, has already stated that spending on many items will have to be cut amid the developing recession and the energy crisis in Europe. At this time, there was talk about the possible departure of Wallace, who believed that the defense budget needed to be increased. It is also reported that NATO recommended that all member countries of the union increase their defense budgets to 2.5% of GDP, and the UK was supposed to be one of the first to do so. The Bank of England somehow restored stability in the financial markets through an emergency program of buying bonds for 65 billion pounds. Still, political problems remain very serious, and the recession and the energy crisis may continue to pressure the pound and the UK economy. The wave pattern of the pound/dollar instrument implies the construction of a new upward trend segment. Thus, now I advise buying a tool for MACD reversals "up" with targets located above the peak of wave 1. Buy and sell should be careful since it is unclear which wave markings (euro or pound) will require adjustments, and the news background may negatively affect both the euro and the pound. Corrective wave 2 may already be completed.   Relevance up to 06:00 2022-10-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324427

GBP/USD jumped on Monday amid news from the UK that the economic course presented by Prime Minister Liz Truss would be stopped. This was after Finance Minister Kwasi Kwarteng announced his resignation last Friday, as well as on the inability of Truss to convince markets that the decision to significantly ease fiscal policy will have a beneficial effect on the local economy. Pound got off to a solid start after it was revealed that the new finance minister, John Hunt, will present excerpts from his medium-term budget plan this afternoon. It seems that the market is hoping for some kind of compromise between the need to save the economy with regular infusions of unsecured money, and the need to take a tough course of savings. What is currently observed in the market can be explained by the closing of a large number of short positions in pound. And with the uncertainty factor looming ahead, as well as the significant deterioration in the economic situation in the UK, it is highly likely that prices will continue to collapse, especially if new measures from the new finance minister are unlikely to provide significant and long-term support for the local currency. Dollar also has a huge advantage being a strong safe-haven currency. Summing up, it is likely that the growth of pound will be limited. Forecasts for today: GBPUSD The pair is highly likely to be volatile today and would trade in the range of 1.1060-1.1370. AUD/USD The pair is also consolidating in the range of 0.6200-0.6350. But in the future, it will exit this range and go down to the level of 0.6150.   Relevance up to 08:00 2022-10-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324437

As British government officials lined up on the road of shame, the pound managed to bounce back after the weekend sell-off by October 14th. They were caused by the termination of the Bank of England's £65bn quantitative easing program. Markets are so accustomed to something temporary from the central bank becoming semi-permanent that they were sorely disappointed that this time everything went wrong. As the BoE tries to replace QE with a bond buying and selling repo program, knowing full well that it is impossible to tighten and loosen monetary policy at the same time for a long time, members of the cabinet ministers stubbornly repeat the same mantra. Taxes will not fall as quickly as many would like, and there is no fiscal stimulus without more borrowing and debt. Tax cuts should be done in such a way that people see that the government can afford it. The last drops in the sea of financial market turmoil were the change of the Chancellor of the Exchequer and Liz Truss' announcement that corporate tax in 2023 will increase from 19% to 25%. Investors realized that the new government, after an erroneous mini-budget, decided to synchronize monetary and fiscal policy. This had a positive effect on the debt market and GBPUSD. However, the stabilization of the pair is likely to be a temporary phenomenon. Goldman Sachs notes that as soon as the dust settles, that is to say, the markets will calm down, there will be talk that the repo rate will not rise as fast as it is currently expected, which will drop the sterling to $1.05. Moreover, Goldman Sachs, citing an increase in corporate tax, cut its UK GDP growth forecast for 2023 from -0.4% to -1%. Core inflation at the end of next year is expected at 3.1%, not 3.3%. UK GDP dynamics According to 47% of the 452 investors participating in the MLIV Pulse survey, it is the UK that has the greatest chance of facing a recession. The probability that the eurozone will be the first to fall into recession is 45%, and the US is 7%. In terms of inflation, the release of consumer price data will be the highlight of the UK economic calendar in the week leading up to October 21st. Bloomberg experts expect CPI to accelerate from 9.9% to 10% in September. Core inflation will rise from 6.3% to 6.4%, the highest since 1992. Such dynamics of indicators on paper should increase the aggression of the Bank of England, and with it, the chances of a 100 bps increase in the REPO rate in November, which could theoretically support the GBPUSD. However, given the confusion on the financial markets and rumors about the resignation of Liz Truss, the strengthening of the sterling on macro statistics looks unlikely. Technically, there is an inverted 1-2-3 pattern on the GBPUSD daily chart. A break of the diagonal resistance near 1.136 could be a buying opportunity. Until this happens, we keep the focus on sales. Including in case of a successful assault on support at 1.116.   Relevance up to 09:00 2022-10-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324467

The pound rose by 184 points on Monday, but a significant part of this growth fell on the gap (67 points) and after the unsuccessful attack on the strong resistance of the two indicator lines of the daily scale, the price risks returning to 1.1170 and even going under support in the process of closing the week formed at the opening gap. The rise in the pound was based on the psychological factor of Jeremy Hunt's cancellation of Kwasi Kwarteng's "mini-budget". In fact, nothing happened in the UK economy. Even the question of Liz Truss's resignation is coming to naught. A decline below 1.1305 will signal that the price will still head towards 1.1170. Reaching the target level of 1.1500 will further accelerate the reversal momentum. The price has already managed to form a weak divergence with Marlin on the H4 chart. In this situation, it is not indicative, but is also consistent with the option of closing the gap soon. Moreover, the MACD line is already waiting for the price at the target level of 1.1170.   Relevance up to 02:00 2022-10-19 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324558

GBP/USD 5M The GBP/USD currency pair again showed high volatility on Monday and, just like the EUR/USD pair, grew out of the blue by the end of the day. So, now the British pound is very close to its last local high, and at the same time above the Senkou Span B and Kijun-sen lines, which opens up very good prospects for further growth. We have said before that the pound is more likely to show growth than the euro, thanks to the "technique". As long as the price is above the lines of the Ichimoku indicator, there are high chances for the continuation of the upward movement. But you should be careful! Since the fundamental and geopolitical backgrounds remain very unfavorable for the pound, we may witness a new powerful fall. These movements can look like a wide flat on a 4-hour or 24-hour timeframe. Since it is very difficult to say on the basis of what the pound has grown in recent days, there are two options: either the market still refused further short positions, or we will see a flat on the higher timeframes. Yesterday's trading signals on the 5-minute timeframe were not ideal, but still they were and they should have been worked out. The first signal was formed literally 15 minutes before the opening of the European session. At this time, the price did not have time to move far from the entry point, so a long position could be opened. Subsequently, the price went to the level of 1.1354, and then to the level of 1.1442, where a sell signal was formed with a small error. Consequently, it was there that longs should have been closed in profit of at least 180 points. The sell signal could also be worked out, it was also profitable, but still it formed quite late, so it could also be ignored. COT report: The latest Commitment of Traders (COT) report on the British pound showed a new weakening of the bearish mood. During the week, the non-commercial group opened 6,900 long positions and closed 3,400 short positions. Thus, the net position of non-commercial traders increased by 10,300, which is quite a lot for the pound. One might assume that the actions of the big players and the movement of the pound are finally starting to coincide, as the pound has generally gained over the last period of net growth, but we are worried that this may be another "false alarm". The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound continues to fall in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 88,000 shorts and 49,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 18. The ECB will not be able to fight inflation effectively. Overview of the GBP/USD pair. October 18. The political pun in the UK persists. Forecast and trading signals for EUR/USD on October 18. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair once again left the downward channel on the hourly timeframe, and at the same time overcame the lines of the Ichimoku indicator. The price still managed to stay above the critical line on the 24-hour TF, so the pair can continue its upward movement, as we said earlier. However, we remind you that the foundation and geopolitics remain complex, which means that long-term purchases should be treated carefully. On October 18, we highlight the following important levels: 1.1212, 1.1354, 1.1486, 1.1649. Senkou Span B (1.1207) and Kijun-sen (1.1179) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. There are no major events planned for Tuesday in the UK, but the pound continues to trade in a very volatile manner, so it simply does not need a strong background now. A single report on industrial production in the US is unlikely to "make the weather" on the market. Explanations for 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. 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.       Relevance up to 00:00 2022-10-19 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324550

Here is what you need to know on Tuesday, October 18: The US dollar resumes its bearish momentum on Tuesday, having lost the recovery momentum in the Asian session, as risk flows extend into the second straight day following the UK's dramatic U-turn over the tax-slashing mini-budget. The US S&P 500 futures, the risk barometer, is gaining roughly 1.70% so far while the Asian indices rally 1.20% to 1.80%, led by the rebound in the Chinese stocks. In early dealing, China’s stocks turned south after the country’s junk dollar bonds dropped to a record low, as a property market crisis sparked by a crackdown on excessive borrowing. Meanwhile, Chinese traders digested comments from US Secretary of State Antony Blinken. The US official said on Monday, China has made a decision to seize Taiwan on a “much faster timeline” than previously thought. Across the fx board, the Kiwi dollar emerges as the strongest heading into the European open, followed by its Antipodean partner, the aussie. Meanwhile, the yen pulled away from 32-year highs above 149.05 against the US dollar, dragged lower by weaker Treasury yields and Japanese verbal intervention. Top Japanese officials continued their jawboning, reiterating that they are ready to take necessary steps to avoid undesirable, as they watch the FX price action with a sense of urgency. USD/JPY was last seen trading around 148.85, consolidating the upside before the next push higher. NZD/USD surges over 1% to challenge 0.5700, as hotter New Zealand’s Q3 Consumer Price Index (CPI) ramped up bigger RBNZ rate hike expectations. NZ inflation rose by 2.2% QoQ in the third quarter, beating expectations of a 1.6% increase. Meanwhile, the annualized inflation eased from a 32-year high of 7.3% to 7.2%, although outpaced expectations of +6.6%. Hawkish comments from RBA Assistant Governor Michele Bullock and RBA minutes underpin the sentiment around the AUD/USD pair, as they suggest the need for more rate increases in the coming months. EUR/USD also capitalized on retreating Treasury yields and a renewed broad-based US dollar selling, having recaptured the 0.9850 barrier. Although bulls remain cautious ahead of the German and Eurozone ZEW sentiment surveys. Germany’s Economy Minister Robert Habeck said on Monday that “with fiscal policy in place, they can avoid deep recession in Europe without fuelling inflation.” GBP/USD is fading an uptick above 1.1400, as investors assess the Financial Times (FT) report that stated the Bank of England (BOE) is set to delay quantitative tightening (QT) worth £838bn until bond markets calm. The report comes after the new UK Chancellor Jeremy Hunt ditched almost all of the mini-budget announced by PM Liz Truss on September 23. The gains in cable appear short-lived, as PM Truss braces for political challenges, with Tory backbenchers preparing to oust her. Gold is holding its recovery momentum above the $1,650 barrier but is likely to remain in a defined range until buyers reclaim the critical $1,670 hurdle. The softer dollar keeps lending support to the metal. Bitcoin price is gradually pushing higher while above $19,500 but bulls stay cautious amid a wall fall of healthy resistance levels on a daily timeframe.

A reversal in UK fiscal policies, some stability in equity markets, and a dip in European energy prices point to a further corrective period in FX markets. The dollar could weaken a little further, but the core bull trend should remain intact In this article USD: Corrective forces may dominate short term EUR: Terms of trade go into reverse GBP: Don’t chase sterling higher MXN: Interesting carry USD: Corrective forces may dominate short term Measures of the trade-weighted dollar index are around 2.5% off their highs of the year. The correction has nothing to do with any softening of Federal Reserve tightening expectations. Here the market firmly expects the Fed to hike 75bp on 2 November and prices a terminal rate as high as 4.90% next spring. Instead, we would say three factors are behind this current dollar correction. The first is the reversal in UK fiscal policy. The much-maligned policy that garnered criticism at the IMF meetings has been largely reversed. This has brought some calm to global bond markets (Gilt instability had been dragging US Treasuries lower). Our rates strategy team does not see UK 10-year Gilt yields racing a lot further under 4.00%, though reports of the Bank of England delaying the start of its quantitative tightening Gilt sales programme should be helpful. Equally, it may be too early to expect US 10-year Treasury yields to drop back to the 3.75% or 3.50% area if the market is still searching for the top in Fed funds near 5%. The second factor is global equity markets. It is very early days, but the MSCI world equity index is now 5% above last week's lows, with the S&P 500 rallying another 2.6% yesterday. Global asset managers, positioned very underweight equities and overweight cash, could be putting money to work and are wary of the seasonal factors, where the S&P 500 index has rallied in nine of the last ten Novembers. How far the equity rally continues remains to be seen - but so far 3Q US earnings have been encouraging (only 29% of those reporting so far have missed on expected sales numbers, with only 24% missing on earnings). And the third factor is energy. European gas prices continue to sink on warmer weather and European gas storage facilities being largely full. Lower gas prices are allowing a drop in electricity prices, where German one-month forward power prices are just 50% above early June levels, compared to being three times higher in late August. The drop in energy prices is reversing the negative income shock that hit energy importers over the summer and reduces the dollar's advantage. A quiet week for US data could see the dollar correction extend a little. High beta currencies which trade on higher implied volatilities, eg AUD, NZD, NOK, SEK and possibly GBP may outperform during this period. And the case could be made for DXY heading back to 110 (another 2% drop). But a core view of not just the Fed, but other central banks hiking into a looming recession should mean that the core dollar bull trend remains intact. Chris Turner  EUR: Terms of trade go into reverse EUR/USD went under parity in late August largely driven by the negative terms of trade shock of higher energy prices. That energy shock is temporarily going into reverse as European gas prices drop sharply on the warmer weather and European governments having largely achieved their gas storage targets. It would thus be churlish of us to suggest that EUR/USD does not need to rally. A quiet week for US data (just soft US housing) and the conditions we outlined above, therefore, create a corrective window for EUR/USD, where an obvious target is the top of this year's bear channel at around the 0.9980/1.0000 area. We would assume that this continues to hold the correction.  Elsewhere today we have the German ZEW investor survey, which should continue to decline.  And we also have some ECB speakers in Gabriel Makhlouf (1540CET) and Isabel Schnabel (1900CET). The core ECB message at the moment seems to be the need to get the policy rate (deposit rate now 0.75%) as quickly as possible to 2% and then take stock from there. Chris Turner GBP: Don’t chase sterling higher As new UK Chancellor Jeremy Hunt carefully claws back all the fiscal giveaways offered in late September, the question is how far should sterling now rally? Taking the UK sovereign credit default swap as a benchmark for levels of UK fiscal anxiety, one could mark out dates around mid-September (GBP/USD at 1.15) and the third week in August (1.18) as possible targets – representing brief periods of stability before Trussonomics hits home. While there may be some more fiscal positives to come were the Conservatives to look at a windfall tax on the energy companies, we suspect cable will struggle to sustain gains over 1.15 this month. News that the UK government is shortening the period of the Energy Price Guarantee to six months from two years may not be greeted well by the consumer and also raises the prospect of UK inflation staying higher for longer. Equally, the Fed terminal rate has been priced close to 100bp higher over the last month. We think higher US real rates have contributed to the size of the sell-off in UK asset markets. There are no signs that the Fed wants to reverse this rise in real interest rates anytime soon. And one month GBP/USD implied volatility (now at 16% versus a peak near 22% in late September) may struggle to return to pre-crisis levels of 12% - confirming that trust is hard won and easily lost. Chris Turner MXN: Interesting carry Given the prospects of a brief corrective period in the dollar, interest may return to the carry trade. The highest available carry in the FX space can be found in Eastern Europe (Hungarian forint one month implied yields pay a staggering 16.5% per annum) and also the Latam currencies. However, we think Central and Eastern European FX still carries a lot of risks currently. The Mexican peso also has an attractive carry, with one-month implied yields are 10.2%. Banxico continues to move in lock-step with the Fed. Whilst investors could miss out on some larger nominal appreciation elsewhere, Mexican peso positions may have lower draw-downs if things went wrong. Spot USD/MXN could even make a run to 19.80 as well. Chris Turner Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

GBPUSD is once again testing long term pivot around 1.14. Seems like it has trouble breaking above.EURGBP is set to rebound from supports and has 0.90 in sight  GBPUSD is touching the Pivot at around 1.14 as mentioned in earlier analysis: https://www.home.saxo/content/articles/forex/ta-gbpusd-multi-decade-cycles-30092022  If GBPUSD breaks above 1.15 there is room up to around 1.1738. However, 55 SMA is coming down indicating underlying sentiment is declining and RSI is still below 60 threshold and must close above to reverse that. . GBPUSD slides back and RSI drops back below 40 last week’s lows at around 1.0922 is likely to be tested but lower levels are quite likely to be seen . EURGBP is bouncing off 100 SMA around 0.8571 support, now back above 55 SMA. RSI has bounced off its 40 Threshold and sentiment is still positive indicating EURGBP could rebound further from here. If EURGBP breaks above the steep falling trendline minor resistance at 0.8867 is likely to be tested.First sign of this scenario to play out is likely to be RSI breaking above its falling trendline. Keep an eye on that to occur.If EURGBP on the other hand, breaks below 0.8570 and RSI closes below 40 it is likely to reverse the scenario and EURGBP to drop further to 0.8450-0.8350. Source: https://www.home.saxo/content/articles/forex/ta-gbpusd-eurgbp-18102022

Yesterday, the British pound rolled back slightly from the resistance reached on Monday, formed by the balance (red) and MACD (blue) indicator lines on a daily timescale. Now the price is between the target level of 1.1305 and the MACD line. Accordingly, consolidating above 1.1380 will allow the price to overcome the immediate resistance at 1.1500 and continue to rise to 1.1760. Consolidating under 1.1305 opens the first and weak target at 1.1170, leaving the area under which will open the 1.0810 target. Today, it turns out, is the day we wait for the price's direction. A weak divergence has formed on the four-hour chart, which increases the likelihood of the price consolidating under the support of 1.1305. Consolidating below the level will show its intention to close the gap, that is, reaching the level of 1.1170. Consolidating above 1.1380 may extend the corrective growth to 1.1500. We are waiting for the development of events.     Relevance up to 02:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324680

GBP/USD 5M The GBP/USD currency pair corrected down quite a lot on Tuesday, but this "strength" was only due to the pair's high volatility, which has been observed in the past few weeks. The price remained above the lines of the Ichimoku indicator at the end of the day, which means that the upward movement may resume. If in the coming days the pound goes below these lines, then we can expect a new round of decline to the level of 1.0930. In general, the pound retains good growth prospects, as it is located above the critical line on the 24-hour time frame. At the same time, one should not forget about weak geopolitical and fundamental backgrounds. There will be few macroeconomic statistics this week, but in general, these two backgrounds continue to have a devastating effect on the pound. Take note that the pair has not yet managed to reach the last high - the level of 1.1486. Yesterday, there were no important events and reports in Great Britain, and there was only a report on industrial production in the United States, to which no market reaction followed. There were few trading signals on Tuesday, but this may be for the best, since the movement was still not the best during the day. Both sell signals formed near the level of 1.1354. The first short position was closed by Stop Loss at breakeven, the second position had to be closed manually. The price after the formation of the second signal did not reach the level of 1.1212, but did not return back to 1.1354 either. Consequently, the position had to be closed in the late afternoon on its own. Profit on it could be about 30 points. COT report: The latest Commitment of Traders (COT) report on the British pound showed a new weakening of the bearish mood. During the week, the non-commercial group opened 6,900 long positions and closed 3,400 short positions. Thus, the net position of non-commercial traders increased by 10,300, which is quite a lot for the pound. One might assume that the actions of the big players and the movement of the pound are finally starting to coincide, as the pound has generally gained over the last period of net growth, but we are worried that this may be another "false alarm". The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound continues to fall in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 88,000 shorts and 49,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 19. Luis de Guindos believes that the euro/dollar pair will stabilize in the coming months. Overview of the GBP/USD pair. October 19. Liz Truss will not voluntarily step down. Forecast and trading signals for EUR/USD on October 19. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair is trying to develop an upward movement on the hourly timeframe, but so far it is not doing very well. No, the growth of the last 2-3 weeks is impressive, but it is more due to the previous collapse by the same value than the strength of the British pound. Despite the fact that the British currency has more chances than the euro, we believe that the global downward trend may resume its formation. For October 19, we highlight the following important levels: 1.0930, 1.1212, 1.1354, 1.1486, 1.1649. Senkou Span B (1.1207) and Kijun-sen (1.1224) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. The release of the inflation report is scheduled for Wednesday in the UK, which may provoke a strong market reaction. If it turns out that inflation is growing again, the reaction may be very strong. Recall that the reaction of the market to the latest report on US inflation was inadequate, that is, in different directions. Therefore, we do not undertake to predict the pair's movement after the release of British inflation. Explanations for 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. 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.       Relevance up to 00:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324672

The euro and the pound sterling are trying to resist the pressure exerted by the stronger US dollar. In the last several days, both currencies managed to score some gains, which means they may well start to form the ascending section of the trend. At the same time, traders should closely monitor headlines in the media and attempt to foresee how the market might react to certain events. Alas, the events taking place in the world could potentially have any outcome. When the pandemic broke and countries started to introduce lockdowns, the whole world stopped. Almost nothing worked, except, perhaps, large enterprises and industries. Planes stopped flying, trains stopped running, people stopped traveling, and restaurants and cinemas closed. It still remains to be seen how this pandemic ends because the virus hasn't gone anywhere. Moreover, the pandemic showed people that viruses can spread fast even today when the medicine is so advanced. In 2022, a conflict in Ukraine started. Actually, it began in 2014. All those years, there were still hopes for its peaceful resolution. However, the year 2022 showed the whole world that it stands on the verge of a new world war. Today, countries openly threaten each other with nuclear weapons. In light of all those events, a recession in the United States seems unavoidable. According to Bloomberg analysts, the chance of a recession in the United States within 12 months has reached 100%. Based on the latest outlooks from large analytical agencies and banks, the American economy is expected to rise by 2% in 2022 and 0.6% in 2023. Bloomberg believes US President Biden misleads Americans, reassuring them that a recession could be avoided, and the economy is stable. Macroeconomic indicators keep deteriorating, and the economy risks collapsing. In my view, the economy won't collapse. Meanwhile, a recession is unavoidable in many countries, given the events of the last 2-3 years. A recession is also inevitable in the European Union or in the United Kingdom where Governor Andrew Bailey speaks openly about it. On the chart, the formation of the descending section of the trend continues but may end at any time. It is possible that a new impulse wave is now building up. Therefore, consider selling the instrument at around 0.9397, in line with the 423.6% Fibonacci level, when the MACD reverses to the downside. It is important to trade cautiously right now, as it is unclear how long the instrument will stay in the downtrend and whether the current wave structure transforms into the ascending one.   Relevance up to 04:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324684

The dollar remains strong despite the recent rally in stock markets. The reason is the continued pressure from rising treasury yields, as well as the talks of an impending global recession. This morning, the yield of 10-year bonds exceeded 4%, and Fed members continuously hint at a further aggressive rate hike aimed at curb inflation. Yesterday, Minneapolis Fed President Neel Kashkari said the Fed is not ready to announce a pause in raising interest rates as inflation is still high and there are no clear signals that it is ready to decrease. Atlanta Fed President Raphael Bostic echoed this, adding that inflation needs to be brought under control. Existing factors that support dollar also remain effective, which means that pressure will most likely ease. Locally, there may be a price decrease amid rising risk appetite, but in the long term the scenario will be in favor of the US currency. A decline will also be perceived by market players as an invitation to purchases on the eve of the Fed meeting, and even more so after the central bank raises rates by another 0.75%. The upcoming consumer inflation report in the Euro area, which is expected to show growth to 10% y/y/ and 1.2% m/m, may tempt traders to buy euro, but the existing economic problems in the region, aggravated by the geopolitical crisis in Ukraine, will put downward pressure on the currency. Thus, after a slight rebound, EUR/USD should be sold again. Forecasts for today: EUR/USD The pair is trading above the level of 0.9820. Decline and consolidation below this mark may lead to a fall to 0.9720 GBP/USD The pair has not been able to consolidate above the level of 1.1370. This may lead to a decline to 1.1135.   Relevance up to 06:00 2022-10-21 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324698

GBP/USD is in negative territory today. In the European session, the pound is trading at 1.1261, down 0.48%. Inflation rises to double-digits UK inflation rose to 10.1% in September, up from 9.9% in August and above the consensus of 10.0%. It was a similar story from Core CPI, which edged up to 6.5%, up from 6.4% and higher than the forecast of 6.3%. A return to double-digit inflation is certainly not something the Bank of England wanted to see. Inflation is not showing any signs of peaking, which leaves no doubt that the BoE will have to continue to raise interest rates. The cash rate remains relatively low at 2.25% in comparison with the Federal Reserve (3.25%) and other major central banks. The cash rate will likely hit 4% or even higher by mid-2023, which means some oversize rate hikes are on the way. The BoE meets next on November 3rd and policy makers will need to deliver a hike of 0.75% or a full point in order to maintain credibility. The recent political maelstrom, in which Chancellor Hunt has abolished most of the planned tax cuts and signalled spending cuts instead, means that the BoE may not have to act as aggressively as anticipated just a few weeks ago. A key point in the fiscal U-turn provided by Hunt is the energy cap plan. The cap, which was supposed to remain in place for two years, has been scaled down to just six months. Higher energy bills for households will mean higher inflation unless energy falls substantially in the winter. The economic outlook for the UK does not look all that bright, which will likely be reflected in a weaker British pound. Goldman Sachs has downgraded its UK growth outlook, with the economy expected to decline by 1% in 2023, worse than the previous estimate of -0.4%. . GBP/USD Technical GBP/USD faces resistance at 1.1373 and 1.1455 There is support at 1.1214 and 1.1085 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

According to the UK inflation figures released yesterday, it became clear that the record high inflation of the last 40 years at 10.1% is not going to decrease. The pound lost 0.94% during the day. On the daily chart, the price turned down from the point where the balance and MACD indicator lines coincide. Now the price is approaching the support at 1.1170, overcoming which opens the target at 1.0810 – the nearest green price channel line from the monthly timeframe. The price settled below the MACD line on the four-hour chart. The signal line of the Marlin Oscillator below the zero line - in the downward trend area. The price is preparing to overcome the support of 1.1170.     Relevance up to 04:00 2022-10-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324787

GBP/USD 5M The GBP/USD currency pair continued to fall on Wednesday, although there were no special reasons for this. But we remember that the pair does not often stay in one place, especially the pound in recent weeks with its hyper volatility. The UK inflation report for September was published yesterday. The consumer price index rose to 10.1%, although a decrease of 0.2% y/y was recorded a month ago. As you can see, one decrease in inflation does not mean anything at all. The trend in this indicator remains upward, despite seven rate hikes by the Bank of England. Formally, the new rise in inflation was supposed to support the pound, as it means that the BoE will continue to raise the rate. However, traders are not interested in this moment at all. The pound fell due to the general fundamental, geopolitical and macroeconomic background. The British currency has grown enough over the past few weeks, the euro intends to fall again, so the bulls began to leave the market. In regards to Wednesday's trading signals, the situation was sad. The first signal was formed almost at the very end of the daily movement near the critical line. A rebound from this line could have been worked out with a long position, but the price managed to go up only 22 points. Thanks to this traders were able to set Stop Loss to breakeven, at which the position was closed. There was also one or two bounces from the 1.1207-1.1246 area, but with the same success. Most likely, a small loss was received on the second transaction. Not the most positive day. COT report: The latest Commitment of Traders (COT) report on the British pound showed a new weakening of the bearish mood. During the week, the non-commercial group opened 6,900 long positions and closed 3,400 short positions. Thus, the net position of non-commercial traders increased by 10,300, which is quite a lot for the pound. One might assume that the actions of the big players and the movement of the pound are finally starting to coincide, as the pound has generally gained over the last period of net growth, but we are worried that this may be another "false alarm". The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound continues to fall in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 88,000 shorts and 49,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 20. The euro has ignored the inflation report and is preparing for a new fall. Overview of the GBP/USD pair. October 20. The pound sterling is losing its winning pace. The new finance minister announced the cancellation of the tax cut plan. Forecast and trading signals for EUR/USD on October 20. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair has overcome the critical line on the hourly timeframe and may go below the Senkou Span B line in the coming hours. If this happens, then the chances for a new round of downward movement in the global plan will increase dramatically. A rebound from the lower border of the Ichimoku cloud may provoke a new growth for the pair. For October 20, we highlight the following important levels: 1.0930, 1.1212, 1.1354, 1.1486, 1.1649. Senkou Span B (1.1207) and Kijun-sen (1.1270) lines can also be sources of signals. Signals can be "rebounds" and "breakthroughs" of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. There are no major events or reports scheduled for Thursday in the UK and US. However, the pound continues to trade in a very volatile manner and does not stand still. Therefore, you can trade at least by levels and lines. You can make good money in case we witness a trend during the day. Explanations for 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. 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.       Relevance up to 06:00 2022-10-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324793

The market mood was rather bearish yesterday, as the major US indices gave back a part of the early week gains. The S&P500 slid 0.67%, Nasdaq gave back 0.85%, and the Dow Jones eased 0.33%. Mixed earnings didn’t really help improve sentiment. One of the biggest gainers was Netflix which jumped 13%, but other FANG stocks, or MAMAA stocks did poorly on hawkish Federal Reserve (Fed) expectations. Better than expected Procter & Gamble did better than the earnings and revenue expectations, Nestle reported its strongest 9-month sales growth in 14 years, IBM beat analyst expectations, and boosted its full year profit forecast, and Tesla announced a better-than-expected earnings per share, but slightly missed on revenue expectations. Tesla shares slipped more than 6% in the afterhours trading. Philip Morris and Dow are due to announce earnings today, American Express and Barclay on Friday. Crude Oil In energy, the barrel of American crude rebounded yesterday, after falling toward $82 earlier this week. Politics In politics, Liz Truss is really in a hot seat, as the chaos among the Tories got worse yesterday, after Home Secretary Braverman got fired for sharing confidential information. Forex Market In the FX, Cable continued falling, the EURUSD remains sold below the 50-DMA and the Japanese yen continues diving against the US dollar. The situation of turkey In central banks, Turkey is expected to cut its policy rate by another 100bp to 11%, which would push the Turkish inflation-adjusted rate down to -71.5%. But tell that to Mr. Erdogan! Watch the full episode to find out more! 0:00 Intro 0:33 Market update 2:08 Mixed earnings: Tesla, Nestle, P&G, IBM 3:48 Growing EV competition 5:05 US crude rebounds, Exxon revised to Buy at Jefferies 5:52 ASML reports strong results, jumps 6% 7:06 Liz Truss in deep trouble 8:59 FX update: USDJPY tests 150 resistance, Turkey to cut Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Netflix #Tesla #Nestle #P&G #IBM #ASLM #earnings #hawkish #Fed #expectations #USD #EUR #JPY #GBP #TRY #gilt #sovereign #crisis #Bailey #BoE #Liz #Truss #Jeremy #crude #oil #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH      

Deputies quarrel, ministers are leaving, Truss' chair is shaking, inflation is rising. The pound has started a black streak again, although the presence of a white one can be questioned. The burden of problems hangs over the British currency and it does not get better, on the contrary, there are new reasons to think about the potential achievement of parity for the GBP/USD pair. The dollar gaining strength, the equally rapidly growing inflation in the UK, which the Bank of England continues to ignore, the specter of a recession. All this is happening during a possible change of power in Britain. The new prime minister has not had time to settle in the chair, as MPs want to send her after Boris Johnson. The government's twists and turns are not at the right time, but apparently there is no other way out. Inflation The pound fell for a moment after the release of inflation data. The new indicator turned out to be disappointing, the price index in the UK continued to accelerate, reflecting, among other things, the passivity of the local central bank. In September, inflation moved to double digits, increasing from 9.9% to 10.1% against the consensus of economists of 10%. More importantly, the core inflation rate rose just as quickly, amounting to 6.5% compared to 6.3% in the previous month. The highest figure in four decades, but succeeding figures are expected to be higher. "The overall inflation rate will rise to almost 11% in October, primarily due to a 27% increase in energy prices. But in the first quarter, the overall figure should decrease to 9%, since the peak of growth in food and motor fuel prices has probably been reached," Pantheon Macroeconomics economists comment. High inflation could be made an argument for strengthening the pound due to the aggressive rhetoric of the BoE, which, in theory, should have followed after another record price increase. Now nothing is keeping the central bank from raising the rate sharply at the November meeting, which was raised to 2.25% in September and is expected to rise to about 4% by the first months of the new year. In practice, things may be different. However, some economists say this may now be less likely after recent scenes in the government. Most of the September budget plan was canceled this week in favor of a return to "austerity." This leaves the economy on the path to a barely mitigated recession, which, according to the August monetary policy report, could last for about a quarter. Everything is too complicated, and the authors of this confusion are British politicians. Downing Street The inflationary picture in the UK has been erased by reports of new layoffs in the ranks of high-ranking political officials. Following the sudden departure of former Chancellor Kwasi Kwarteng, who was forced to resign on October 14, Interior Minister Sewelluella Braverman left her post. The pound tried to grow amid large-scale losses on Wednesday. This movement, apparently, was a reaction to the departure of another high-ranking member of the government, followed by a decline in the yield of UK government bonds, which did not correspond to the internal inflationary picture. Braverman was replaced by Grant Shapps, whom the prime minister had previously pushed to the back of the government. Who's next? What other reshuffles are waiting for Britain and will this save the country from collapse? Anyway, the pound likes what is happening with the change of the main characters. The drop in yields on Wednesday did not correspond to the global background against which US bond yields were pushing other countries higher. Dollar Government reshuffles have a short-term impact on the pound. The reality is that the British currency lags behind not only the strong dollar, but also the weak euro. The pound continued its downward trend, despite extremely high inflation and the rates of the financial markets on the increase in US bond yields after even more hawkish comments from the Federal Reserve representatives. The pound's illogical reaction to the consumer price index data highlights that the currency is "trading in a structural, not cyclical way. In a cyclical world, higher inflation will be accompanied by higher yields and a stronger currency," HSBC noted. When markets are most concerned about structural risks, "higher inflation and higher yields are seen as symptoms of a broader problem," the economists explain. The pound is likely to continue trading structurally until the country's authorities make more efforts to contain the domestic budget deficit or until inflation reaches a peak. In this case, stabilization of the bond market and the pound is possible. In the meantime, the downward trend is the main one. Sterling is waiting for a difficult few months, during which the GBP/USD exchange rate risks falling to 1.0800 and below. The dollar rally, fueled by even more aggressive Fed rhetoric, will put more pressure on the lifeless pound. Traders are revisiting US interest rate hikes closer to 5%. In November, the rate can be raised immediately by 100 bps. The dollar rally in the middle of the week followed statements from Minneapolis Fed chief Neel Kashkari. The official signaled that he had "very little confidence in what inflation will be in six months" and argued that the central bank should keep raising rates until there was "convincing evidence" that the inflationary peak had passed. As for rates, September forecasts suggested an upper limit of 4.5% by the end of the year. Concerns were also raised about a rise to 4.75% early next year. Core inflation rose from 6.3% to 6.6% y/y in September, while the official or headline inflation rate remained stubbornly elevated at 8.2%. After the reversal of the dollar index, expectations about reaching new highs again became more active. The current range is 112.00-114.00. These notes will remain relevant until the next FOMC meeting. If bulls manage to break above 114.00, gains will accelerate to a 2022 peak at 114.80.   Relevance up to 09:00 2022-10-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/324821

On Thursday, Liz Truss announced her resignation as chairman of the Conservative Party of England. As a consequence, with the selection of a new head, she will leave the post of prime minister. But even such an event did not have much effect on the course of trading the British pound. The price failed to overcome the support at 1.1170, rebounded from it by more than 160 points and just as quickly began to approach back to 1.1170. All this is happening under the balance and MACD indicator lines on a daily time frame. Overcoming the support opens the 1.0805 target – the price channel line of the monthly green time frame. On the H4 chart, the price settled again under the MACD line, which confirmed the falsity of yesterday's upward shot above this line. The Marlin Oscillator maintains its positions in the downward trend. We are waiting for the price to fall further.   Relevance up to 04:00 2022-10-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324917

GBP/USD 5M Yesterday, the GBP/USD currency pair also had time to thoroughly "fly" from side to side. A rather strong upward movement began, within which the pound added 150 points, but in the afternoon it lost about the same amount. As in the case of the euro, macroeconomic statistics were not the reason for such movements. Most likely, even the news of Liz Truss' resignation was not the reason. Or, at least, it is impossible to logically explain why the movements were the way they were. We can even say that the market reacted, but it is very difficult to explain why it reacted this way. And even if it is difficult to explain, it is even more difficult to predict. As a result, the day ended between the Senkou Span B and Kijun-sen lines. Consolidating below the Senkou Span B will return the pound to the downside. In principle, we fully assume that the euro and the pound will resume their decline in the medium term. There are too many "buts'' preventing their succeeding growth. In regards to trading signals, there was no deficit on Thursday. The pair frequently changed direction and moved in a volatile manner. The first buy signal near the level of 1.1212 turned out to be false. The price failed to go up even 20 points, so the position closed at a loss. This was followed by a signal to sell near the same level, after which the coveted 20 points down had been reached. The second position was closed by Stop Loss at breakeven. The third signal near the same level should no longer be worked out. But it was possible to work out two signals near the Kijun-sen line. True, they also did not bring any profit, and both transactions were also closed by Stop Loss at breakeven. COT report: The latest Commitment of Traders (COT) report on the British pound showed a new weakening of the bearish mood. During the week, the non-commercial group opened 6,900 long positions and closed 3,400 short positions. Thus, the net position of non-commercial traders increased by 10,300, which is quite a lot for the pound. One might assume that the actions of the big players and the movement of the pound are finally starting to coincide, as the pound has generally gained over the last period of net growth, but we are worried that this may be another "false alarm". The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound continues to fall in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 88,000 shorts and 49,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 21. Every day is the same! The market is consolidating around the 98th level. Overview of the GBP/USD pair. October 21.The "pendulum" is slowing down, the political absurdity in the UK is gaining momentum. Forecast and trading signals for EUR/USD on October 21. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair may go below the Senkou Span B line on the one-hour chart in the coming hours. If this happens, then the chances for a new round of downward movement will increase dramatically. A rebound from the Ichimoku cloud may provoke a new growth for the pair. On Friday, trading could be performed at the following levels: 1.0930, 1.1212, 1.1354, 1.1486, 1.1649. Senkou Span B (1.1207) and Kijun-sen (1.1291) lines can also be sources of signals. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. The UK retail sales report will be released, which is not important. On the other hand, we have nothing scheduled for the US. However, let us recall that the pound continues to trade in a very volatile manner, which means that strong movements with frequent reversals can be observed today as well. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 02:00 2022-10-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324909

British finance minister Jeremy Hunt reiterated on Friday, “we will put public finances on a sustainable path as we grow the economy.” Additional quotes "Strong public finances are the foundation of a strong economy. To stabilize markets.” “We will do whatever is necessary to get drive down debt in the medium term and to ensure that taxpayers’ money is well spent." Market reaction The pound finds little respite from Hunt’s comments, as GBP/USD drops 0.38% on the day at 1.1188, as of writing.

The pound sterling is finishing this week with wild gyrations in an immediate response to the resignation of Liz Truss as a Prime Minister. As a result, GBP's rapid rally was disrupted by a slump, thus causing a roller coaster in the GBP/USD pair. The GBP's reaction The first GBP's reaction to the news on Liz Truss stepping down was a rally. In light of the news, the sterling climbed to 1.1300. On Thursday evening, October 20, GBP/USD printed a high at about 1.1336. Analysts spoke about an active rebound of the sterling and a decline in the US dollar in parallel. Decision of Liz Truss  Yesterday, the British Premier announced her decision. She remains at the helm of the government until her successor is elected. A lot of market participants suppose that former Prime Minister Boris Johnson could return to the top job. Another contender is Rishi Sunak who is now seen a favorite to replace her. Interestingly, Liz Truss acted as the British Prime Minister for only 44 days, making her the shortest serving-leader in UK history. The financial aid package suggested by Liz Truss was roasted by MPs and recognized as inefficient. Eventually, her mini-budget was terminated because it triggered turmoil across financial markets and undermined Great Britain's reputation in terms of financial stability. Paul Dales, Chief UK Economist at Capital Economics, thinks that "Whoever takes over at Prime Minister from Liz Truss will probably have to tighten fiscal policy in the Medium-Term Fiscal Plan on 31st October (rather than just reverse the previous loosening) to prove their fiscal restraint to the financial markets. As such, it's possible that the recession will be deeper." Due to this policy on the back of rampant inflation, the recession challenge is likely to worsen with GBP contracting at a fast pace. "Weaker GDP will contribute to an easing in domestic price pressures, but just not soon enough to prevent the Bank of England from raising interest rates from 2.25% now to 5.00%," the economist said. Market expectations In this environment, market participants expect the Bank of England to soften its stance on rate hikes. However, some experts don't recommend that the market should rely on significant softening by the monetary authorities. William Mersters, senior UK sales trader and analyst at Saxo Bank reckons that "Sterling's game of snakes and ladders is far from over, yet it's unlikely GBP will show many signs of long-term recovery." "The economy is likely to continue to suffer at the hands of rising inflation, which has led to crippling everyday costs affecting households and businesses up and down the UK, reiterated by yesterday's stubbornly high CPI announcement," the experts explains.  GBP/USD On Friday morning, October 21, the pound sterling dipped 0.21% to 1.1215 against the US dollar following a spike to 1.1338 recorded yesterday. Earlier, following the announcement by Liz Truss, the sterling loosened its grip over the greenback. As a result, GBP/USD declined to 1.1187 and got stuck in this area with minor upticks. Citing Joel Kruger, market strategist at LMAX Group, "The event does not come as a surprise as the pressure for this inevitability was building in recent days. We don't expect to see much downside risk to the Pound from the event, and if anything, wouldn't be surprised to see some demand as the market looks to find comfort in the alternative." Analysts share the viewpoint that the resignation of Liz Truss is to blame for short-term chaos in financial markets. Nevertheless, the stock market is on the path to recovery. Ongoing political jitters have been bullish both the pound sterling and for British government bonds. Experts are betting on the sterling's strength in the long term, even though its dynamic is currently marked by strong gyrations.   Relevance up to 08:00 2022-10-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/324941

It is unlikely that UK politicians are going to regain market confidence any time soon. Therefore, the British pound is set to remain under pressure, economists at Commerzbank report.  UK political developments to keep investors on tenterhooks “All the issues like high inflation, the looming recession and the effects of Brexit, which were in place prior to the government crisis and constitute a considerable challenge for the politicians are likely to ensure that markets remain cautious.”  “Against the background of a struggling economy, the BoE is likely to fight high inflation levels comparatively cautiously so that monetary policy will continue to put pressure on sterling. The fact that the BoE has intervened on the markets with bond purchases, thus threatening its credibility, is not likely to be forgotten easily by the markets either.”

Summary:  Barring a sudden resumption of Russian natural gas flows to Europe in the coming quarter, an economic winter is coming for Europe and the euro, as well as satellite currencies sterling and the Swedish krona. Despite the ECB and other central banks - with the extremely notable exception of the Bank of Japan - playing some catchup with the Fed in delivering policy tightening in Q3, the Fed remains the central bank that "rules them all". We will need to see the Fed easing again before we can be sure that the US dollar is finally set to roll over. USD: after the Fed tried to get cute on a policy deceleration, it found religion again.  The US dollar found a temporary peak in the wake of the June 16 FOMC press conference as the market figured that the first 0.75 percent hike since 1994 would prove a peak in Fed hawkishness for the cycle. For its part, the equity market bear market low of the cycle at the time of writing was posted on the day after that FOMC meeting. Risk sentiment found further fuel and the USD dipped slightly heading into the late July FOMC meeting as Powell offered insufficient pushback against the market, which was beginning to price that the Fed policy rate would peak by as early as December 2022 and begin rolling over in the first half of 2023. However, beginning in early August Fed members quickly moved to push back explicitly against the notion of forecasting any Fed easing with consistently hawkish rhetoric almost across the board. The USD rallied anew, even as a number of other central banks moved even more aggressively with their own rate tightening moves and guidance. The ECB even hiked 75 basis points at its September 8 meeting, the largest hike in the central bank’s history, with another 75 basis points priced for the October meeting. After the remarkable thaw in financial conditions since the June FOMC meeting, despite that meeting delivering the first “super-size” rate hike of 75 basis points, the Fed clearly decided that it had more to gain by maintaining a hawkish tone than in trying to guide for the possibility of any imminent policy pivot due to some abstract notion like the neutral rate. The Fed probably can see now that that it is easier to back down from accidents created by excessively tight policy than to risk aggravating inflation risks with easing financial conditions in the middle of a tightening cycle by trying to play cute with guidance. One factor that has added to the potential for a bounce-back in the US economy fairly deep into Q4 is the steep decline in petrol prices after their remarkable peak at record prices north of $5/gallon in early June. The decline to well below $4.00 already in August could have a significant real and psychological impact on the legendary US consumer and keep the economy and wage pressures humming a bit longer than expected for this cycle, requiring that the Fed maintain course and continue its attempt to achieve the full pace of quantitative tightening, promised to reach $95 billion in balance sheet reductions per month in September. Hence our Steen Jakobsen’s anticipation of “peak tightness” in the coming quarter. Tail risk alert for USD in Q4: the mid-term elections. The mid-terms are an important tail-risk event in Q4 for the longer-term outlook for likely US policy responses in the next recession or soft patch. The pundits and oddsmakers assure us that, while the Democrats are very likely to solidify their majority in the Senate, they are nearly certain to lose control of the House. That may well be, but the last two election cycles have taught us to treat election polls with more than a grain of salt, and two developments have dramatically raised the potential for surprises in our view: the Trump-packed US Supreme Court overturning of the Roe v. Wade case from the 1970s that guaranteed access to abortion services at a federal level, and a couple of special elections in Trump country in recent months falling to Democrats—particularly the election for Alaska’s US House representative in which the pro-Trump Sarah Palin lost to a Democrat. This was a state that voted for Trump in 2020 by a margin of 10 points and for the Republican House member by nine points over an independent challenger in the same election. With a deeply divided partisan political environment, the US is only able to make policy at the margin on the fiscal side when one party does not control both houses of Congress and the Presidency. There are important exceptions, including bipartisan issues like reducing supply chain vulnerabilities with China and limiting Chinese access to military and advanced technology. In any case, if the Democrats surprise and maintain control of the House, together with a stronger control of the Senate, it could completely flip the script on fiscal policy potential ahead of the 2024 US presidential election, generally increasing the risks of far higher inflationary outcomes. Had Biden enjoyed a mere seat or two more in the Senate over the last two years, his party might have passed a package some $2 trillion larger than what actually made it through in the so-called Inflation Reduction Act. Graphic: The jaws are widening perilously! The story since mid-2021 has been of a widening performance divergence between the soaring US dollar and weakening euro and even weaker JPY. Note that the indices are CPI-adjusted, and Japan’s retail CPI measures have likely been suppressed, meaning that the picture would look even worse than it does here. Something could give in Q4 on the Bank of Japan’s commitment to containing yields. Note that the euro weakness looks pedestrian in comparison, even after trading below parity at times in Q3. EUR, GBP and a winter of discontent. The euro fell to below parity against the US dollar on the intense and excessive pressure on inflation in the EU from soaring energy and power prices, which also presented risks to output volumes and had a seismic impact on external balances. Europe went from being the world’s largest surplus bloc on trade to a deficit bloc in a world heading into a slowdown and likely recession in Q4 and early next year.  Much has been made of the EU’s heroic efforts to build natural gas storage ahead of the heating season beginning in the autumn, but this will not cover the additional supply needed unless Russian gas flows resume over the winter—unless EU demand drops further. If Russian leader Putin, or anyone of his ilk, remains in power in Russia, the longer-term energy supply picture for Europe will remain difficult as the EU will have to continue bidding up for shipments of LNG in a tight global market. New sources of gas could be in the wings, possibly in the long run from Algeria and already in coming months from the newly-arrived-on-the-scene LNG from Mozambique. But the EU energy outlook will likely never again prove as bad as it does for the coming winter of discontent, so some major low in the euro may emerge in the coming quarter or early next year. The EU plans to cap prices may help nominal EU inflation readings to begin rolling over in coming months, but this won’t kill demand. Physical limits to natural gas supply, possibly aggravated by risks that French nuclear power is not fully back on line until late in the winter, might force power rationing and real GDP output drops. Europe will be hoping that a mild winter lies ahead, and daily and weekly weather forecasts will receive more attention than perhaps at any time in the continent’s history. Ditto for the UK with the cherry on top that the UK lacks strategic gas storage facilities even if it is scrambling on that front. Again: winter is coming and will continue to come every year, but the EU will move with existential haste to address its vulnerabilities.  The UK bears extra close watching as a country capable of a more nimble and forceful policy response than any other major country, given the combination of tremendous pressures on the UK economy from its external deficits and cost of living crisis on the one hand, and a new Prime Minister Liz Truss and her nothing-to-lose mentality on the other. Her instinct will be to move fast and move big to keep the lights on and to keep her country warm this winter for starters, but also to ensure that policy moves the UK away from its current predicament and vulnerabilities. The UK simply must find a new path toward balancing its external deficits and decreasing energy vulnerabilities if she is to enjoy more than a brief stint as PM. Her approach of populist price controls on the one hand together with tax cuts on the other are a risky gambit for sterling on the implications for the national deficit. Sterling may see an aggravated further drop this winter as long as energy prices remain divergently high for Europe (natural gas is the critical factor in particular). Further out, policy will have to show traction in attracting investment, bringing rising UK domestic energy output (UK shale gas potential unleashed?) and improving productivity to see sterling rising from the ashes. And for perspective, sterling isn’t even fully in the ashes yet anyway, as we note that in CPI-adjusted real-effective-exchange-rate terms, it is actually only mid-range since the 2016 Brexit referendum collapse. Continued tension among the Asian giants CNH and JPY: Q4 to deliver a big bang? We have highlighted the still very stretched CNYJPY exchange rate in both of the last two outlooks. The CNH has loosely tracked the USD higher, while the JPY has remained the weakling of G10 currencies on the Bank of Japan’s stick-in-the-mud refusal to shift to a tightening stance and away from its yield-curve-control policy. In Q3, the CNYJPY exchange rate reached new multi-decade highs well north of 20.00. Could Q4 finally be when something “breaks” here? On the CNY side of the equation (and closely linked, the tradeable offshore CNH), China might decide that it is simply no longer in its interest to maintain a strong currency, especially if commodity prices begin to fret at the economic outlook souring. But more likely, the capitulation could come from the Bank of Japan via a stronger JPY as discussed in our Q3 outlook. Significant further downside pressure on the yen may simply force the Bank of Japan to surrender after it held out so long in the hope of seeing wage gains rising sufficiently to suggest a sustainably positive inflation outlook. But there may also be a chicken-and-egg problem in the Bank of Japan’s measures of inflation and inflationary risks from here: the policy by Japan’s supermarket chains to keep food prices capped even as wholesale and import prices have soared, the latter aggravated by the tanking JPY. October 1st is meant to see a reset of retail prices for retail shoppers overnight, which could lead to soaring official inflation readings and a growing sense of popular outrage as the cost-of-living rises. Fiscal attempts to shield lower income households will do nothing for the JPY or alleviate the concern for medium-wage and higher income earners. Will Q4 finally be the quarter that sees the Kuroda BoJ surrender and shift its guidance, and at least shift the goal posts on yield-curve control? There is tremendous two-way volatility potential for JPY crosses, particularly if the USDJPY rips to new aggressive multi-decade highs before the BoJ finally then capitulates. The rest of G-10 FX. In this case, the “rest of G-10” would be the Swiss franc (CHF) and the “G-10 smalls” that include the AUD, CAD, NZD, SEK and NOK. Regarding CHF, with cost-of-living pressures at a maximum over the coming winter, the Swiss National Bank will be happy to continue its tightening policy and encouraging a stronger franc, which has helped materially in dampening inflation pressures for Switzerland. For the G-10 smalls, the “peak tightness” we anticipate in Q4 will likely not be kind to these less liquid currencies. For the Antipodeans AUD and NZD, we’re curious whether AUDNZD can break above the multi-year range capped by 1.1300 that stretches back over seven years, as we consider Australia’s formidable commodities portfolio and its newfound status as a current account surplus country while New Zealand is reliant on energy imports. New Zealand was also quick to tighten rates and is therefore likely at the leading edge of countries set to roll over into a slow-down and an eventual pause of its rate-tightening regime. In Europe, Norway will have to play ball to some degree with Europe’s move to cap energy prices after the country has reaped enormous windfall profits from soaring natural gas prices in particular. The Swedish krona looks cheap, but may need to see a major market bottom before its prospects can brighten sustainably, given its history as one of the more sensitive currencies to the economic outlook and risk sentiment.     Source: https://www.home.saxo/content/articles/quarterly-outlook/a-fed-thaw-needed-to-deliver-a-sustained-usd-turn-lower-04102022

The US dollar was gradually regaining its positions after Thursday's unsuccessful attempt by buyers of risky assets to continue growing. Yes, investors took advantage of the resignation of Prime Minister Liz Truss, but this did not last long. Good statistics on the US labor market and the speech of the President of the Federal Reserve Bank of Philadelphia Patrick Harker - all this strengthened the confidence that the Fed will continue to act quite aggressively, actively fighting inflation. Harker statement  Harker said on Thursday that the committee is likely to raise interest rates well above the planned 4% this year and will keep them at this level for quite some time to combat inflation. At the same time, the official did not rule out taking additional measures, if necessary. "We're going to keep raising rates for a while. Given our outright disappointment at the lack of progress in reducing inflation, I expect that by the end of the year we will exceed the 4% ceiling," Harker said during a speech at the Greater Vineland Chamber of Commerce in Vineland, New Jersey.   Expectations Policymakers are expected to commit to a fourth consecutive 75 basis point rate hike when they meet in early November this year. Many economists also expect that the Fed will go for a similar increase in December of this year, after which rates will reach their peak of about 5% in early 2023. Harker, who does not vote on monetary policy decisions this year, said the Fed will base its decisions on economic data and will remain flexible on policy, tightening next year if necessary. "If we need to, we can continue tightening policy based on new data," Harker said. "But these are extreme measures, because we have to let the system work itself, which will take time." Harker said he expected the unemployment rate to rise to 4.5% next year and then fall to 4% in 2024. According to the Ministry of Labor, it was 3.5% in September. As for inflation, Harker believes that the price index of personal consumption expenditures, the Fed's preferred indicator, will be about 6% this year, 4% next year and will drop to 2.5% only in 2024. "We really need to see a steady decline in a number of inflation indicators before we stop tightening monetary policy," he said. Lisa Cook The head of the Fed, Lisa Cook, in a separate speech, also said that high inflation would probably require a constant increase in rates, and then maintaining a restrictive policy for some time. EUR/USD As for the technical picture of EURUSD, the bears actively piled on the euro and managed to return everything to the framework of the horizontal channel observed recently. To resume growth, it is necessary to return the pair above 0.9800, which will take the trading instrument to the area of 0.9840 and 0.9870. However, the upward prospects will depend entirely on the new US data and the decisions taken by the Fed. A breakthrough of 0.9760 will return pressure on the trading instrument and push the euro to a low of 0.9720, which will only worsen the situation of buyers of risky assets in the market. Having missed 0.9720, it will be possible to wait for the lows to update around 0.9680 and 0.9640. GBP/USD As for the technical picture of GBPUSD, the growth and reaction to Truss' retirement quickly ended, which by the end of Thursday led the pound to the area of the opening level. Now bulls will focus on protecting the support of 1.1170 and the breakdown of the resistance of 1.1240, limiting the pair's growth potential. Only a breakthrough of 1.1240 will return the prospects for recovery to the 1.1290 area, after which it will be possible to talk about a sharper jerk of the pound up to the 1.1330 area – Thursday's high. We can talk about the trading instrument being under pressure again after the bears take control of 1.1170. This will deal a blow to the bulls' positions and completely negate the prospects of the bull market observed since September 28. A breakthrough of 1.1170 will push GBPUSD back to 1.1120 and 1.1070.   Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324949

Long-term perspective. The GBP/USD currency pair has increased by 40 points during the current week and remained above the critical line on the 24-hour TF. Thus, certain chances of a new upward trend are also preserved. We have already said earlier that the pound has more reasons for growth - technical. At least because it overcame the Kijun-sen line sharply and strongly moved away from its absolute lows. However, this is a double-edged sword. The last fall in the pound sterling might not have happened if not for the tax initiatives of former British Prime Minister Liz Truss. In general, her resignation turned out to be very unexpected since, at the beginning of the week, in an interview with Bloomberg, she said she was going to fight and did not intend to leave her post. We did not believe that she would leave voluntarily, and even so quickly, and we still could not announce a vote of no confidence in her in the near future. Thus, most likely, political pressure was exerted on her. However, all this is history and generally not interesting. Now I wonder who will become the new prime minister. And good old Boris Johnson can become one, as he is currently leading in the amount of support from the Conservatives, according to opinion polls. From the same conservatives who dismissed him a few months ago. The political pun in the Kingdom continues. We need to wait for new elections, but the situation will not change dramatically for the pound sterling. Politics is, of course, interesting and important. As we have seen, the Prime Minister's short-sighted decision can collapse the financial markets. However, Johnson is unlikely to make the same mistake as Truss. And even more so, Rishi Sunak, who served as finance minister under Johnson, will not allow it. But in any case, the pound still has big problems with the grounds for growth. Technically, it can show an upward movement, but will one "technique" be enough for market participants? COT analysis. The latest COT report on the British pound showed a new strengthening of the "bearish" mood. During the week, the non-commercial group closed 8,600 buy contracts and opened 3,400 sell contracts. Thus, the net position of non-commercial traders fell by 12.9 thousand, which is quite a lot for the pound. The net position indicator has been growing slightly in recent weeks, but this is not the first time it has been growing. Still, the mood of major players remains "pronounced bearish," and the pound sterling maintains a downward trend in the medium term. And, if we recall the situation with the euro currency, there are big doubts that, based on COT reports, we can expect strong pair growth. How can you count on it if the market buys the dollar more than the pound? The non-commercial group has now opened a total of 91 thousand contracts for sale and 40 thousand for purchase. The difference, as we can see, is still very big. The euro cannot show growth in the "bullish" mood of major players, and the pound will suddenly be able to grow in a "bearish" mood. As for the total number of open buy and sell orders, the bulls have an advantage of over 25 thousand. But, as we can see, this indicator also does not help the pound much. We remain skeptical about the long-term growth of the British currency, although there are certain technical reasons for this. Analysis of fundamental events. During the current week, only one really important report was published in the UK - on inflation. The consumer price index rose by 10.1% y/y and, as we can see, continues to grow, despite the seven increases in the key rate. Many experts suggest that the rate in the UK should be raised to at least 5% to count on a significant reduction in inflation. But is there an opportunity for BA to raise the rate so high with the current financial and economic problems? From our point of view, no, and the ECB, together with BA, will stop tightening monetary policy in the near future. Or they will greatly slow down its pace. Both can create additional pressure on the pound, as the Fed will continue to accelerate its pace at the same time. In general, the prospects for the pound are bad as usual, and rising inflation does not mean that the British regulator will increase the aggressiveness of the monetary approach. Trading plan for the week of October 24–28: 1) The pound/dollar pair as a whole maintains a long-term downward trend but is located above the critical line. Therefore, small purchases can now be considered as long as they are located above the Kijun-sen. The target is the Senkou Span B line, which runs at 1.1843. There are some reasons for the pair's growth, but there are still many reasons for a new fall. Be careful with your purchases. 2) The pound has made a significant step forward but remains in a position where it is difficult to wait for strong growth. If the price fixes below the Kijun-sen line, the pair's fall can quickly and cheerfully resume with targets of 1.0632–1.0357. Explanations of the illustrations: Price levels of support and resistance (resistance /support), Fibonacci levels – target levels when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators (standard settings), Bollinger Bands (standard settings), MACD (5, 34, 5). Indicator 1 on the COT charts is the net position size of each category of traders. Indicator 2 on the COT charts is the net position size for the "Non-commercial" group.     Relevance up to 10:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325030

The British pound opens the week with an increasing gap for the second consecutive week. This is a negative sign for the pound. The price met resistance from the MACD indicator line of the daily scale. If in the process of closing the gap the price falls below 1.1170, then further advance to 1.0805 may already be more successful than it happened on Friday. To consolidate the growing short-term trend, the price needs to go above the resistance of 1.1500. Growth can continue in this case up to 1.1760. At this level, short-term growth may end and the price will still return to closing today's gap. The UK October PMI will be released today. The forecast for Manufacturing PMI suggests a decline from 48.4 to 48.0 points, for Services PMI from 50.0 to 49.6. The gap is likely to close sooner rather than later. On the four-hour chart, the price looks fixed above the MACD line, an open window creates a sign of false consolidation. A decline under the MACD line, below the level of 1.1282, will return the mood to overcome the support of 1.1170. The Marlin Oscillator will already be in the negative area by this time.   Relevance up to 04:00 2022-10-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325064

Early in the European session, the British pound was trading around 1.1310. A technical correction was observed after a weekly opening with a bullish GAP. GBP/USD reached the top of the downtrend channel formed on September 30. The pound opened with a bullish GAP that reached a high of 1.1406. Currently, we can see a technical correction that could fall to cover the gap at 1.1285. According to the 4-hour chart, the British pound is above the 200 EMA and above the 21 SMA. The outlook could remain positive if it trades above 1.1280 and reaches the key area of 1.1400. With a sharp break of the strong resistance of the downtrend channel and a daily close above 1.14, we could expect an acceleration to the upside and the price could even reach 8/8 Murray at 1.1718. Conversely, in the event that the British pound breaks below the downtrend channel formed on October 13, we would expect a daily close below the 21 SMA located at 1.1240 to occur. If this happens, we could expect a bearish acceleration towards the bottom of the trend channel around 1.0970 and the pair could even drop to 6/8 Murray at 1.0742. Our trading plan for the next few hours is to buy above the downtrend channel around 1.1280 with targets at 1.1400 and 1.1718. The eagle indicator is giving a positive signal which supports our bullish strategy.       Relevance up to 06:00 2022-10-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/297954

GBP/USD 5M The GBP/USD currency pair also managed to thoroughly "fly" from side to side on Friday, as it did the day before. A rather strong decline in quotes began in the morning, which could be connected with the British statistics purely theoretically, because at the same time the euro was also falling. And an even stronger upward movement began in the US trading session, in which the pound added 260 points. We cannot conclude that this is how traders reacted to any news, because the movements during the day were multidirectional and not tied in time to any point. However, the apparently heightened volatility may indicate that the news of Liz Truss's resignation was received with a bang by the market. By the way, one cannot say that Truss's resignation is good news for the pound. Of course, we can assume that all its succeeding actions could be as disastrous as the "plan to save the economy." But still, this is unlikely, and in any case, traders managed to win back both the Truss initiative to reduce taxes, and the abolition of this plan, and the stabilization measures of the Bank of England. Truss may leave, but another Premier will come in her place and face the same economic problems. In regards to Friday's trading signals, it was a little easier for the pound than the euro. The first sell signal turned out to be false and closed on Stop Loss at breakeven. The second sell signal was already correct, and the price moved in the right direction by 130 points. Unfortunately, it was too far from the target level, so the position should have been planned to be closed manually from the very beginning. Points 70-80 on it could be taken completely freely. This was followed by the third sell signal near the Senkou Span B line, which also turned out to be false, but also closed by Stop Loss. All subsequent signals near this line should have been ignored. COT report: The latest Commitment of Traders (COT) report on the British pound showed a new growth in bearish sentiment. In the given period, the non-commercial group closed 8,600 long positions and opened 3,400 short positions. Thus, the net position of non-commercial traders fell by 12,900, which is quite a lot for the pound. The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 40,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? As for the total number of open longs and shorts, here the bulls have an advantage of 25,000. But, as we can see, this indicator does not help the pound too much either. We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 24. ECB meeting: how much will the central bank raise the rate? Overview of the GBP/USD pair. October 24. This week - the election of the prime minister in the UK! Forecast and trading signals for EUR/USD on October 24. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair is trading very volatile and very inadequately on the hourly timeframe. The price often changes direction and travels impressive distances in each. The lines of the Ichimoku indicator are also ignored, which speaks of the same "swing". On Monday, trading could be performed at the following levels: 1.0930, 1.1060, 1.1212, 1.1354, 1.1486, 1.1649. Senkou Span B (1.1179) and Kijun-sen (1.1248) lines can also be sources of signals. Signals can be bounces and breakouts of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. The UK and the US are set to release reports on business activity in the services and manufacturing sectors. The reaction of traders to them may follow in case of a strong deviation from the forecast values. And the pound now, in principle, does not really need statistics in order to trade volatilely. Plus, the election of a new British prime minister will take place this week, which could add even more volatility. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 02:00 2022-10-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325056

Here is what you need to know on Monday, October 24: As investors prepare for the highly-anticipated central bank decisions later this week, major currencies stay relatively quiet at the start of the new week except for the Japanese yen. The US Dollar Index moves sideways at around 112.00 and US stock index futures trade flat on the day. S&P Global will release the preliminary October Manufacturing and Services PMI data for Germany, the euro area, the UK and the US. Federal Reserve Bank of Chicago's National Activity Index will also be looked upon for fresh impetus later in the day. During the Asian trading hours, the data from China revealed that the Gross Domestic Product grew at an annualized rate of 3.9% in the third quarter. This reading came in better than the market expectation for an expansion of 3.4%. Retail Sales in China, however, rose by 2.5% on a yearly basis, falling short of analysts' estimate of 3.3%. The Shanghai Composite fell sharply following mixed data and was last seen losing more than 2% on a daily basis. USD/JPY The USD/JPY pair climbed toward 150.00 in the first hours of trading early Monday but lost over 400 pips in a matter of 10 minutes. Japan’s top currency diplomat Masato Kanda refrained from clarifying whether they intervened in the market but reiterated that they will continue to take appropriate action against excessive, disorderly market moves. Following the sharp decline witnessed in the Asian session, the pair recovered to the 149.00 area, where it's up around 1% on the day. EUR/USD EUR/USD trades in a relatively tight range near mid-0.9800s following Friday's rebound. Business activity in the euro area's and Germany's manufacturing sectors are expected to continue to contract in early October.  GBP/USD GBP/USD trades in positive territory and continues to edge higher toward 1.1400 in the early European morning on Monday. Former British Prime Minister Boris Johnson announced that he ended his big to replace Liz Truss. Meanwhile, former chancellor Rishi Sunak has reportedly 165 supporters ahead of Monday's nomination deadline and remains the clear favourite to become the next PM. Gold Following Friday's impressive upsurge, gold climbed to a fresh 10-day high near $1,670 early Monday but struggled to preserve its bullish momentum. At the time of press, XAU/USD was little changed on the day at $1,657. Meanwhile, the 10-year US Treasury bond yield is down nearly 2% on the day, helping gold hold its ground for the time being. BTC Bitcoin climbed toward $20,000 on Sunday but lost its traction before reaching that level. As of writing, BTC/USD was down 1% on the day at $19,350. Ethereum ended up gaining more than 4% last week and seems to have gone into a consolidation phase above $1,300 early Monday.

History is written by the winners. After the resignation of Liz Truss, who lasted 45 days as Prime Minister of Britain, investors feel omnipotent. It was the turmoil in the financial markets that forced the head of government to leave. And now they are demanding that she be replaced by a person who is worth trusting. The most likely candidate is Rishi Sunak, and his experience allows us to hope that there will be no new shock. So much the better for GBPUSD. For decades, with low interest rates, governments have been able to afford to accumulate debt without disturbing the financial markets. However, when the Bank of England raises the cost of borrowing, financial stability issues come to the fore. Large-scale fiscal stimulus in such conditions does not work and ends with the resignations of prime ministers. At the same time, the chances of aggressive monetary restriction of the BoE are decreasing. Derivatives give out only an 8% probability of an increase in the repo rate by 100 bps at the November 3 meeting. The chances of borrowing costs rising by 75 bps jumped to 92%. At the same time, Bank of England Deputy Governor Ben Broadbent said that market expectations of a 5% rate ceiling are incorrect. It should be lower. On paper, political uncertainty over the upcoming election of a new prime minister, a slowdown in BoE monetary tightening, and a lower implied ceiling on the repo rate should push GBPUSD down. Moreover, rumors are circulating in the market that whoever becomes the new head of government, the pound will remain under pressure. In particular, CIBC predicts that it will fall to $1.09 by the end of the year. The pressure on the sterling is also indicated by the presence of reversal risks, an indicator that reflects the demand for options to buy and sell the British currency, near the minimum levels for several months. GBP reversal risk dynamics At the same time, recall how quickly the pound flew into the abyss when the new government announced a mini-budget. A lot of negativity was embedded in the GBPUSD quotes, and at the moment this negativity is being recouped. As a result, sterling is strengthening against major world currencies. And the US dollar is no exception. In my opinion, peace of mind costs money. The British currency realized that a repeat of the recent history of chaos in the financial markets should not be expected in the near future, and the price is rising. Another thing is that it does not solve the fundamental problems of the UK economy. High taxes and gas prices are exacerbating the most serious cost-of-living crisis in 10 years. As, however, high inflation and rate hikes by the central bank. The country risks being the first of the world's largest economies to plunge into recession, and this circumstance will surely clip the wings of the pound. Technically, the inability of the GBPUSD bears to win back the 1-2-3 reversal pattern indicates their weakness. The exit from the triangle in the form of a break of resistance at 1.14 is a reason for short-term purchases.     Relevance up to 10:00 2022-10-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325104

Yesterday, the pound completed a task - closed the gap at the opening of the week. At the moment, the price is between the balance and MACD (daily) indicator lines, and the Marlin Oscillator is set to grow. The MACD line has lowered its slope, just as the price is consolidating. In such a situation, the entire range of 330 points between the levels of 1.1170 and 1.1500 is an area of uncertainty for the pound, a range of wide consolidation, although a triangle is visually formed. The uncertainty is likely to be resolved on Thursday when the European Central Bank makes its decision on monetary policy. On a four-hour time scale, the price lingered on the MACD line, the Marlin Oscillator clearly indicates the neutrality of the current situation. We have to wait for which direction the price will choose on Thursday.   Relevance up to 05:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325185

GBP/USD 5M The GBP/USD currency pair was also being difficult on Monday. Moreover, if the euro/dollar pair rose slightly in the afternoon on the basis of weak macroeconomic statistics from overseas, the pound/dollar grew without it, which once again proves the fact that both pairs are now traded inadequately. Do not be frightened by the word "inadequate", we just want to say that at this time the movements are such that they are more difficult to win back than at normal times. Remember when the pound was trading 200 points a day, how nice it was to open any positions! But those days are gone. Now both pairs are likely to consolidate, and traders are developing new trading tactics. Both the euro and the pound are now in a position where further decline is no longer obvious, and there is no reason to buy. In the meantime, this morning it became known that Rishi Sunak will become the new prime minister even without any elections. Penny Mordaunt withdrew her candidacy from the election, so Sunak was the only candidate and automatically won. Let's see what this man can do as prime minister. There were fewer trading signals for the pound on Monday than for the euro, which is even good. However, the first two trading signals near the level of 1.1354 also turned out to be false and did not even allow traders to set Stop Loss on open positions. Both closed at a loss. The third signal should not have been worked out, since the first two turned out to be false. Once again, we remind you that this week's movements can be as "torn" and complex as possible, which should be taken into account when entering the market. The nature of the movement of the pair is best seen on the 4-hour TF - a flat. COT report: The latest Commitment of Traders (COT) report on the British pound showed a new growth in bearish sentiment. In the given period, the non-commercial group closed 8,600 long positions and opened 3,400 short positions. Thus, the net position of non-commercial traders fell by 12,900, which is quite a lot for the pound. The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 40,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? As for the total number of open longs and shorts, here the bulls have an advantage of 25,000. But, as we can see, this indicator does not help the pound too much either. We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 25. Boring Monday without bright splashes at the US session. Overview of the GBP/USD pair. October 25. Elections, elections... Forecast and trading signals for EUR/USD on October 25. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair is trading very inadequately on the hourly timeframe. The price often changes the direction of movement and travels impressive distances in each of them. The lines of the Ichimoku indicator are also ignored, which speaks of the same "swing". On Tuesday, trading could be performed at the following levels: 1.0930, 1.1060, 1.1212, 1.1354, 1.1486, 1.1649. The Senkou Span B (1.1179) and Kijun-sen (1.1231) lines can also be sources of signals. Signals can be bounces and breakouts of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. There are no major events or reports scheduled for today in the UK and US. Thus, it is even more likely that we will see a new "swing". There are practically no important macroeconomic events left for the pound and the dollar this week, so until the end of the week, traders will have practically nothing to pay attention to. The probability of a flat is also growing. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.         Relevance up to 06:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325197

The pound has been evaluating political news in a positive light since the morning. How will the mood of traders of the British currency develop in the near future and is it worth counting on the growth of the exchange rate in the future? Political twists  Today, investors are assessing the news about the appearance of a new British prime minister. Rishi Sunak was elected head of the ruling Conservative Party of Great Britain, and will also take the post of prime minister of the country. England has surpassed itself in political twists and turns. Sunak will be Britain's third prime minister this year. In July, Boris Johnson announced his intention to resign. Liz Truss, who was elected in his place, was able to stay in the prime minister's chair for 44 days and also resigned due to an avalanche of criticism against her. Many see the new prime minister as a source of stability. Perhaps there really is some truth in this, when compared with the chaotic rule of the Truss, during which serious volatility was observed in the markets. Time will tell what kind of ruler Rishi Sunak will be, but for now market players are breathing a sigh of relief and are in a cautiously positive frame of mind. GBP/USD Today, the GBP/USD pair rose to 1.1293 from the previous closing level of 1.1275. As expected, the pound may continue to rise in the short term, but it risks failing during the week. Economic data is ahead, and they are likely to show an even greater divergence from the US economy for the worse.  Britain's economic prospects While the market has welcomed the recent developments surrounding the election of a new prime minister, they alone can do little to improve Britain's economic prospects. The GBP/USD pair may continue to rise, but estimates regarding the extent of the rate hike are already declining. If the 1.1500-1.1700 range becomes a reality in the very near future, this does not mean that the quote will fly further and higher. Such a scenario is more like a decent short entry point. The target range for the end of the year is still 1.0800-1.1200. Britain released a disappointing PMI on Monday. Indices of activity in the manufacturing sector and the service sector collapsed, falling below market expectations. The composite index in October was 47.2, which is two points lower than in September. Its value has become the lowest in the last two years. In addition, the business activity indicator has been below 50 points for three consecutive months. The reason for the sharp decline in the index in October is called political instability in the country, which caused turmoil in the financial markets. The current situation  Anyway, the current situation points to the recession that has formed in the country. A reduction in economic growth may occur as early as the third quarter, and in the fourth negative trends will only intensify. The Fed's hawkish attitude The prospects of the pound, among other things, depend on the positioning of the US dollar and its further strength. Will the decline in the dollar index last until the end of the week? Much will depend on how traders react to the upcoming economic reports in connection with the forecast of the Federal Reserve's policy. The focus is on the GDP report for the third quarter and the employment cost index for the same period. Data on wages and inflation will strengthen the hawkish attitude of the Fed. One of the most significant risks for the pound this week will be the US GDP report. It can show that America is emerging from a technical recession, while the UK is entering an active phase of recession. Divergence in economic prospects will undermine the pound's recovery. A serious obstacle is the core PCE price index's release this Friday, the Fed's preferred inflation indicator. The inflation rate is expected to increase from 4.9% year-on-year to 5.2%. If so, it will be more than enough to guarantee the Fed's hawkish attitude, which has helped the dollar reach new heights against many currencies in the weeks since the bank set course to raise the benchmark interest rate to 4.5% by the end of the year and 4.75% at the beginning of the next. In general, the dollar index is forecast to rise to 114.00 this week.     Relevance up to 10:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/325237

Yesterday, along with the rest of the market, the pound sterling rose. The target level of 1.1500 was reached (taking into account fluctuations), a rollback from resistance is observed this morning. Consolidating above 1.1500 opens the way for further growth with the first target at 1.1760. Returning to the area under the MACD line of the daily scale (1.1336) will return the pound to the positions of October 20, to support 1.1170, leaving under which opens the target along the price channel line at 1.0800. The price divergence with the oscillator holds the growth on a four-hour timeframe, at least allowing the price to consolidate below the 1.1500 resistance. The lower boundary of the consolidation is the MACD indicator line (1.1350). Together with the MACD line of the daily period, a support range of 1.1336/50 is created.   Relevance up to 04:00 2022-10-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325321

Early in the European session, the British pound is likely to trade around 1.1438. A slight technical correction can be seen after reaching the maximum at 1.1498, yesterday in the American session. The British pound received strong support due to the speech of the Prime Minister of the United Kingdom, Rishi Sunak, where, in his first speech, he reiterated that economic stability and confidence would be at the center of his agenda. Yesterday, the US dollar also (USDX) lost strength against its main crosses, and US Treasury bonds fell sharply. The 10-year yield fell from 4.25% to 4.03%. The British pound formed a double-top pattern around 1.1498. This level represents a key level and above this area, we would expect the pound to continue its rise. In this case, it could reach the 1.1718 level. The 7/8 Murray level (1.1474) became a strong resistance. In the event that the British pound continues to trade above this level, we would expect it to continue to rise. It may also reach 8/8 Murray at 1.1718. Conversely, GBP/USD is expected to find support around 1.1380, which represents the daily pivot point. If the technical correction continues we could expect a technical bounce around the 200 EMA located at 1.1310. According to the 4-hour chart, we can see that the British pound has an uptrend channel formed on October 11. The top of the bullish channel coincides with the high of October 5. A strong break above 1.1510 is likely to occur and we could expect a bullish acceleration. On the other hand, if the British pound falls below 1.1310 (200 EMA - 21 SMA) the bearish bias is expected to continue. The price could reach 1.1230 and even fall towards the bottom of the uptrend channel at 1.1162. Our trading plan for the next few hours is to wait for a technical bounce at 1.1380 to buy or wait for a technical correction around 1.1310 (200 EMA) to buy with targets at 1.1476 and 1.1718.   Relevance up to 05:00 2022-10-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298325

GBP/USD 5M The GBP/USD currency pair traded identically to the euro/dollar pair on Tuesday, which once again proves the similarity of these two pairs, as well as the fact that a lot of the currency market now depends on America and the US dollar. However, the British pound traded upward in the European trading session, unlike the euro, but in the US it was followed by a powerful jump, which took a little more than an hour. Thus, the pound/dollar again showed super volatility over 200 points on a completely empty day. We have already said earlier that the pound, from a technical point of view, it has a better chance of growth than the euro. However, now, when the pairs move almost identically every day, there is an assumption that either everything really depends only on the dollar, which the market buys or sells, which leads to almost identical movements of both pairs, or one European currency pulls the other. Either up or down. However, we still recall that when the pound fell by 1000 points, and then grew by 1100 points, the euro did without similar jerks. Only two trading signals were formed on the 5-minute time frame yesterday. The first one is when the 1.1354 level is overcome. You should have traded with a long position. The price rose to the level of 1.1442, overcame it and stopped. It was after overcoming this level, in the late afternoon that it was necessary to close longs manually. Profit amounted to at least 100 points. COT report: The latest Commitment of Traders (COT) report on the British pound showed a new growth in bearish sentiment. In the given period, the non-commercial group closed 8,600 long positions and opened 3,400 short positions. Thus, the net position of non-commercial traders fell by 12,900, which is quite a lot for the pound. The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 40,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? As for the total number of open longs and shorts, here the bulls have an advantage of 25,000. But, as we can see, this indicator does not help the pound too much either. We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 26. Four more explosions occurred in the area of the Nord Stream pipelines. Overview of the GBP/USD pair. October 26. The British prime ministerial election ended dull and prosaic. Forecast and trading signals for EUR/USD on October 26. Detailed analysis of the movement of the pair and trading transactions. GBP/USD 1H The pound/dollar pair is trading very inadequately on the hourly timeframe. The price often changes the direction of movement and travels impressive distances in each of them. However, the upward trend still recovered, although it also does not look quite clear. We believe that the upward bias may persist, but the pair may regularly show strong declines. On Wednesday, trading could be performed at the following levels: 1.1212, 1.1354, 1.1486, 1.1649, 1.1760. The Senkou Span B (1.1179) and Kijun-sen (1.1265) lines can also be sources of signals. Signals can be bounces and breakouts of these levels and lines. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. The chart also contains support and resistance levels that can be used to take profits on positions. There are no major events or reports scheduled for today in the UK and US. Thus, there is a possibility that we will see a "swing" again. There are practically no important macroeconomic events left for the pound and the dollar this week, so until the end of the week, traders will have practically nothing to pay attention to. The probability of a flat is also growing. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 02:00 2022-10-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325313

Yesterday wasn’t not a good day for the US Big Tech. Google dived almost 10% after reporting disappointing results, while Microsoft sank almost 8%. Nasdaq bounced 2% lower after having tested the major 38.2% Fibonacci retracement, a touch below the 11700. Meta And don’t expect the things to look better today. Meta dived another 20% in the afterhours trading, after announcing disappointed results. Softer-than-expected  On the macro front, however, the Bank of Canada (BoC) surprised with a softer-than-expected rate hike, and US home sales fell almost 11% in September.   EUR/USD The US dollar index dived below its 50-DMA yesterday. The EURUSD rallied above parity, as Cable advanced past 1.16. Focun On Focus shifts to US GDP dat, the European Central Bank (ECB) decision, Apple & Amazon earnings today. Watch the full episode to find out more! 0:00 Intro 0:33 US Big Tech selloff intensifies. Meta down 20% post-market 1:55 What to expect from Apple & Amazon?7 4:05 Policy pivot? 5:20 US GDP to rebound despite sluggish economy 6:52 US dollar softer, EURUSD rallies above parity, Cable past 1.16 7:52 ECB to hike by 75bp, discuss QT 9:19 Gold, oil up on soft dollar Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Apple #Amazon #Meta #Google #Microsoft #earnings #USD #GDP #ECB #rate #decision #EUR #XAU #crudeoil #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH      

The British pound slightly fell on Thursday due to the euro's sharp drop and the pound itself clearly does not intend to continue the decline, because other counter-dollar currencies did not react strongly to the fall of the "big brother" due to the increase in the European Central Bank rate. The upward trend continues on the GBP/USD daily chart, the target of 1.1760 is still relevant. The Marlin Oscillator is growing in the positive area, it is still far from the overbought zone. If the price settles below 1.1500, it is possible to further fall to 1.1330 (MACD line) and further, if it is overcome, to move to 1.1170. On a four-hour scale, yesterday's decline was also due to a divergence with the Marlin Oscillator. The price is approaching the critical level of 1.1500, the Marlin Oscillator is approaching the zero line. Synchronous overcoming by the price and the oscillator of their supports will give an impulsive character to a short-term decline (target 1.1330). If the price and the oscillator do not overcome the supports, the pound will continue to grow.     Relevance up to 05:00 2022-10-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325584

Early in the European session, the British pound (GBP/USD) is trading around 1.1584, above the 21 SMA, and above the 200 EMA. The bias remains bullish but GBP is showing exhaustion levels and there could be a technical correction in the next few hours if it falls below 1.1560. GBP/USD is trading sideways between the 1.1645 and 1.1550 levels. This happens while the market awaits the Fed's policy decision that will be unveiled next week regarding the key interest rate. The dollar continued to weaken against all its rival currencies, pressured by falling US Treasury yields. This was the main factor that gave GBP/USD a strong bullish momentum. Given that the market is pricing in a 0.75% interest rate hike by the Fed, it is likely to see a technical correction in the British pound next week and it could resume its bullish cycle again. The psychological level of 1.1500 has become the initial support. A close below this level on the 4-hour chart could be considered a bearish development and will open the door for another decline towards 1.1343 (200 EMA) and 1.1230 (7/8 Murray). On the contrary, 1.1645 (top of the bullish channel) acts as an initial resistance. If it is broken and GBP/USD makes a daily close above this level, it could reach 8/8 Murray at 1.1718. Our trading plan for the next few hours is to sell below the daily pivot point around 1.1565 with targets at 1.1499 (200 EMA). On the other hand, in case there is a pullback towards 1.1610 - 1.1635, it will be considered an opportunity to sell, only if it trades below the top of the uptrend channel. In case the British pound breaks below the 1.15 psychological level, it will be a clear signal to sell with targets at 1.1343 (200 EMA) and 1.1230 (7/8 Murray). The trading instrument could even drop towards the bottom of the uptrend channel around 1.1120.   Relevance up to 05:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298717

For the pound/dollar instrument, the wave marking looks quite complicated at the moment but still does not require any clarification. We have a supposedly completed downward trend segment consisting of five waves a-b-c-d-e. If this is indeed the case, then the construction of a new upward trend section has begun. Its first and second waves are presumably completed, and the third wave is being built, which can be both 3 and C. Since the European wave marking has changed, both wave markings now coincide. As I have already said, the upward structure can be limited to only three waves. In this case, the completion of the third wave may occur at any time, after which the construction of a new downward trend section may begin since the peak of this wave is already above the peak of the first wave. And if this wave is c, and not 3, then it should not be extended; just a small approach above the last peak is enough. Thus, we finally managed to sort out the wave markings, which have recently left many unanswered questions, but there are still huge doubts that the demand for the British will grow for a long time now. The instrument retains the possibility of resuming a downward trend segment. The market is approaching the meeting of the Bank of England on a positive note. The exchange rate of the pound/dollar instrument increased by 55 basis points on October 28. Thus, the construction of the current wave continues, unlike the upward wave for the euro/dollar instrument, where it may already be completed. The British pound approaches the meeting of the Bank of England in a good mood, and the fact that it continues to increase and the euro does not lead me to think that the market is waiting for the most "hawkish" decision from the Bank of England. In my opinion, this may increase the interest rate by at least 75 basis points. At the last meeting, several members of the PEPP committee supported the option with an increase of 75 points, but the number of those who voted for a 50-point increase turned out to be more. Then came the report on inflation in the UK, which again witnessed an increase. Therefore, the Bank of England has no other option but to increase the pace of tightening the PREP. Until Wednesday, the demand for the British dollar may increase, and then it may suffer the fate of the euro, which began to lose demand on the day of the ECB meeting as the market played out the rate increase in advance. But the very next day, the Fed will hold a meeting, at which we should also expect a rate increase of 75 points. We are waiting for a very busy week, and the wave marking may undergo significant changes based on its results. I believe that other actions of both central banks, besides raising rates by 75 points, as everyone expects, are also not excluded. In this case, the instrument's dynamics will depend on which bank and in which direction it will deviate from the value that is now generally accepted. General conclusions. The wave pattern of the pound/dollar instrument assumes the construction of a new upward trend segment. Thus, I advise buying the instrument on the MACD reversals "up" with targets near the estimated mark of 1.1705, equating to 161.8% Fibonacci. You should buy cautiously, as the trend's downward section may resume construction. The picture is similar to the euro/dollar instrument at the higher wave scale. The same ascending wave does not fit the current wave pattern, the same five waves down after it. The downward section of the trend can turn out to be almost any length, but it may already be completed.   Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325698

Early in the European session, the British pound is trading around the 21 SMA located at 1.1464. We can see a recovery in the British pound. If it continues to trade above 1.1550, it is likely to reach 4/8 Murray located at 1.1718. Last week, the British pound managed to test the psychological level of 1.1500. After showing how strong this support is, the pound started a technical bounce and is now showing signs of a bullish continuation. On the other hand, market expectations that the Federal Reserve could begin to ease its pace of monetary tightening in the coming months assure investors to turn to risky assets, leaving the dollar aside. In case investors find some proof of such prospects, assets trading against the dollar could resume or recover from downward pressure and we could detect a bullish cycle in the coming days and weeks. This week, the Federal Reserve will increase its interest rate by 0.75% on November 2nd. In the meantime, the markets are looking forward to the Fed's policy decision and we could see some calm in the market until the exact rate hike is known. Then, we could expect a change in GBP/USD's trend or a resumption of the bullish cycle. On the other hand, the Bank of England is expected to increase its interest rate by 0.50% on November 3rd. In case both regulators raise interest rates as expected, a technical correction could occur and GBP/USD could fall towards the 1.1435 level where the 200 EMA is located. As long as the British Pound trades above 1.1564 (21 SMA), we can expect it to continue rising towards 1.1718 and could even hit 5/8 Murray at 1.1962 As long as the British pound trades above 1.1564, we can expect it to continue to rise towards 1.1718 (4/8 Murray) and could even reach 5/8 Murray at 1.1962. Finally, a psychological level of 1.2000 is in the cards. Our trading plan for the next few hours is to buy the British pound above 1.1564 with targets at 1.1718. On the other hand, a close below 1.1550 (21 SMA) on the 4-hour chart will be a signal to sell, with targets at 1.1474 and 1.1357 (200 EMA).     Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/298929

On Friday, the price support of 1.1500 proved to be insurmountable for the pound. Turning away from it, the pound closed the day with a white candle. The Marlin Oscillator is turning down, but the price has enough potential to reach the nearest resistance level of 1.1760. If the dollar rises today, the data on lending in the UK for September should come out worse than forecasts, and forecasts already suggest a decline, then the pound may go under 1.1500, and there the target of 1.1330 will become available - the MACD line of the daily scale. Breaking this support opens the 1.1170 target as the first target in the medium-term decline. If the appetite for risk continues, once a high like 1.1644 has been surpassed, the price will continue to rise to the target resistance of 1.1760. On a four-hour scale, the price is consolidating above the support line of 1.1500. The Marlin Oscillator has approached the zero line, which inclines the price towards a downward scenario. The MACD indicator line is approaching the level of 1.1500, strengthening it. Accordingly, after breaking 1.1500, the price may get a strong downward momentum.     Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325724

The GBP/USD currency pair continued to grow during the last trading week, although it had no good reasons for this. Recall that last Monday, it became known about the appointment of a new British Prime Minister, Rishi Sunak. We do not believe that the very fact of the change of Prime Minister was so optimistic for the British pound. However, we have already said earlier that the pound has more chances to grow than the euro. Despite some randomness of its last collapse by 1000 points and subsequent recovery by 1100 points, it still collapsed to absolute lows in its entire history. It then quickly moved away from them, indicating a likely end of the global downward trend. After that, the pound grew with and without reason, and last week it overtook the euro, which had reasons for growth. However, this week there will be a crazy fundamental background for the pound/dollar pair. On Wednesday – the Fed meeting, and on Thursday – the meeting of the Bank of England. Both central banks are 100% likely to raise their key rates, so there is no doubt that a very volatile week awaits us. Unfortunately, it is impossible to predict in advance where the currency pair will move. The market can start working out the results of both meetings in advance; the general mood of the market is of great importance. In general, we would not guess the answer to this question. Formally, the pound sterling retains the chances of a new fall. On the 24-hour TF, the key Senkou Span B line has not yet been overcome, so there may be a rebound from it with the resumption of the fall. Wednesday, Thursday, and Friday will force traders to trade actively. Next week will start for the British pound with an insignificant index of business activity in the manufacturing sector for October. According to experts, the indicator will fall to 45.8 points, below the key mark of 50.0. On Thursday, the index of business activity in the service sector and the meeting of the Bank of England. On Friday, the index of business activity in the construction sector. Naturally, the main attention of traders will be focused on the Bank of England, which can raise its rate by 0.75%. In the US, in addition to the Fed meeting, with which absolutely everything is already clear, business activity indices in all areas, including important ISM indices, will be published. ADP report on changes in the number of employees in the private sector. Well, on Friday, if someone decides to take a break after the meetings of the Fed and the BA, they will not be able to do this since Nonfarmes, the unemployment rate, and wages will be published on this day. Therefore, we are waiting for a crazy week, and hardly anyone can say where the pound will be by the end of it. The unemployment rate in the United States is very important now, as it indicates the onset of the "right recession." Recall that the Fed does not consider a slowdown in economic growth a recession if increased unemployment and layoffs of Americans do not accompany it. Thus, reports on unemployment and the labor market are very important. The US economy showed solid growth in the third quarter. Unemployment will either remain at 3.5% or rise to 3.6%. The number of new jobs outside the agricultural sector can range from 200 to 240 thousand, which, from our point of view, is a normal value. Therefore, if it were not for the BA meeting, we would say that the week should turn out to be "absolutely American." However, the market can interpret all the data, so the pair can "fly" from side to side thoroughly. From a technical point of view, it will be possible to expect a fall not earlier than fixing the price below the moving average. This may happen as early as Monday or Tuesday, and at this point, we will understand how the market is set up for upcoming events. The average volatility of the GBP/USD pair over the last five trading days is 161 points. For the pound/dollar pair, this value is "very high." On Monday, October 31, thus, we expect movement inside the channel, limited by the levels of 1.1453 and 1.1775. The reversal of the Heiken Ashi indicator downwards signals a new round of downward correction. Nearest support levels: S1 – 1.1475 S2 – 1.1353 S3 – 1.1230 Nearest resistance levels: R1 – 1.1597 R2 – 1.1719 R3 – 1.1841 Trading Recommendations: The GBP/USD pair remains at its local highs in the 4-hour timeframe. Therefore, at the moment, you should stay in buy orders with targets of 1.1719 and 1.1775 until the Heiken Ashi indicator turns down. Open sell orders should be fixed below the moving average with targets of 1.1353 and 1.1230. Explanations of the illustrations: Linear regression channels – help to determine the current trend. The trend is strong if both are directed in the same direction. Moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which you should trade now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.     Relevance up to 01:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325720

Analysis of GBP/USD, 5-minute chart The GBP/USD currency pair also tried to correct on Friday, but failed to even reach the Kijun-sen line. The pound retains excellent chances for continuing the upward movement, as we have said more than once. Technical analysis speaks in favor of the pound now. Its rapid and powerful growth from the lows of the year suggests that we are dealing not with a banal upward correction, but with a new trend. Friday showed us that the market is ready to buy the pound, however, as in the case of the euro, this week the mood of traders can change dramatically. If the Federal Reserve meeting will be interesting for the euro, then in the pound's case, it has the Bank of England meeting. And we also have the NonFarm Payrolls report to look forward to on Friday, so this week almost every day can bring surprise and extra volatility. The British currency on the 24-hour timeframe has not yet managed to overcome the Senkou Span B line, but if anyone is able to continue to grow now, it is the pound. The situation with Friday's trading signals on the 5-minute timeframe was as simple as possible. The price never approached any level or line for the entire day, therefore, not a single signal was formed. It was not necessary to open positions, and this week you need to be cautious, as strong movements and sharp price reversals are possible as a result of a strong fundamental background. COT report: The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group opened 3,200 long positions and closed 200 short positions. Thus, the net position of non-commercial traders increased by 3,400, which is very small for the pound. The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 43,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? As for the total number of open longs and shorts, the bulls have an advantage of 18,000 here. But, as we can see, this indicator does not help the pound too much either. We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 31. Crazy start of the week for the euro. Overview of the GBP/USD pair. October 31. Crazy week for the British pound! Outlook and trading signals for EUR/USD on October 31. Analysis of market situation. Analysis of GBP/USD, 1-hour chart The pound/dollar pair maintains an upward trend on the hourly timeframe, which so far looks quite convincing. The price is located above all important lines, and the upward movement is supported by the trend line. However, there are so many important events and reports this week that it is impossible to predict where the pair will end up by the end of the week. We do not rule out the dollar's growth, but it needs to be very strong to break the current trend. On October 31, trading could be performed at the following levels: 1.1212, 1.1354, 1.1486, 1.1649, 1.1760, 1.1874. Senkou Span B (1.1277) and Kijun-sen (1.1450) lines can also give signals if the price rebounds or breaks these levels. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. No major events are scheduled for Monday in the UK and the US, so traders will have nothing to react to today. But still, the market may start to move very volatilely today, as two meetings of central banks may prompt it to react in advance. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325732

According to a preliminary estimate released by the Bureau of Economic Analysis, U.S. real GDP increased at an annualized rate of 2.6 percent in the third quarter of 2022, well above expectations. The main contribution to GDP growth was from data on foreign trade, other indicators turned out to be noticeably less positive. Take note that the US stock indexes were impressed by the strong reporting of companies, the S&P 500 index rose 2.5%, exceeding the cumulative fall of 1.35% over the previous two days, ending the week up 3.95%, which was the second consecutive weekly gain. In general, the US economy looks quite confident, which gives reason to expect that the Federal Reserve will not give clear signals about the slowdown in tightening, and the dollar may well win back the positive data, continuing to strengthen. In any case, the probability of a rate hike by the same 0.7% in December remains high. European stock indices showed mixed dynamics, high inflation and the threat of an energy crisis are still the main negative factors for the euro, which will prevent it from resuming growth. EURUSD As expected, the European Central bank raised interest rates by 0.75%, but did not give any signal that the pace of rate hikes will continue to be high. Most likely, the ECB is inclined to slow down the pace of rate hikes, as it noted "substantial progress" in the revision of monetary policy, plans for quantitative tightening will be determined at the December meeting, which came as a surprise to markets that were waiting for specifics. The insufficiently hawkish stance of the ECB provoked a decline in global bond yields, European ones suffered the most, and amid accelerating inflation. Germany's overall consumer price index reached an annualized rate of 11.6% in October, well above the 10.9% expected by economists, while Italy (11.9% vs. 9.5% experience) and France (7.1 % vs 6.5% experience) also exceeded expectations. The net long position on the euro increased during the reporting week by 3.4 billion to 9.3 billion, this is a very strong growth, indicating an increase in the positive relative to the euro. However, despite such a strong change, the settlement price turned down, the reason being that even the apparently hawkish decision of the ECB did not lead to an increase in European bond yields, and the yield differential between European and US bonds did not decrease, but even slightly increased. This discrepancy between the long-term positioning in the futures and options market, which is reflected in the CFTC report, and current yields does not yet allow us to break the trend towards the weakening of the euro. EURUSD, as we suggested a week earlier, made a successful attempt to corrective growth, it passed the resistance of 0.9920/40, however, short positions resumed in the area above parity. We assume that the euro will be under slight pressure ahead of the Federal Reserve meeting, growth above the local high of 1.0092 is unlikely, trading will go in a sideways range with a downward trend. The main target is the support zone of 0.9820/40. This scenario can be canceled if the Fed shows more pronounced weakness on Wednesday than the markets have been laying down so far. GBPUSD The Bank of England will hold a regular meeting on Thursday, and the rate is expected to rise by 0.75%. The government change has calmed the markets, yields have pulled back, and now the focus will be on inflation forecasts, as they directly affect the position of the BoE. The net short position on the pound slightly decreased during the reporting week by 0.2 billion to -3.4 billion, positioning, unlike the euro, remains confidently bearish. The yield differential widened sharply in favor of the dollar, resulting in a rapid decline in the settlement price. The pound on the wave of rumors about the easing of the Fed's position still went higher than we expected, and reached the upper limit of the long-term bearish channel. We assume that a high will be formed here, an attempt to test the strength of the local high of 1.1735 is not ruled out, but a downward reversal from current levels is much more likely. Technical support at 1.1336 and 1.1147 can also act as immediate targets. High volatility is unlikely before the announcement of the results of the Fed meeting.   Relevance up to 09:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325776

It is a busy week for FX markets, with key policy rate meetings on both sides of the Atlantic and some tier-one data releases. The question to be answered this week: is the Federal Reserve ready to pivot? We would argue that the Fed has less cause than many to pivot. And weak growth overseas should mean that it is too early to unwind long dollar positions In this article USD: Wednesday's FOMC will dominate EUR: Markets still price a 75bp ECB hike in December GBP: Thursday's BoE could do some damage CEE: Tough times are back USD: Wednesday's FOMC will dominate FX markets this week will be dominated by Wednesday's FOMC meeting and whether the Fed provides any oxygen to the idea of a pivot - or a shift to a slower pace of tightening. As we discuss in our FOMC preview, the Fed faces several challenges here, but we suspect the bar is quite high for a pivot and we feel it is too early to call time on the dollar's rally. After all, the market in effect already prices the pivot (pricing a 75bp hike this week and a 50bp hike in December) and we suspect the chances of another 75bp hike in December are under-priced. In addition, this week sees a whole raft of US data culminating in Friday's nonfarm employment data. We forecast 220k in job gains and an unemployment rate of 3.6% - still below the 3.8% the Fed forecast for year-end. Recall that even with the unemployment rate rising to 3.8%, the Fed's dot plots had assumed that a policy rate in the 4.25-4.50% area would be appropriate for the end of this year. As always there are two sides to the dollar story - what's going on at home and what's going on abroad. High beta currencies like the Norwegian krone, New Zealand dollar and British pound have been some of the best performers against the dollar over the last month. That has largely been due to the turnaround in sterling. But as my colleague James Smith discusses in his Bank of England (BoE) preview, the BoE may well disappoint with just a 50bp hike.  A weaker tone in sterling could undermine the recent renaissance in European currencies and push more wind back into the dollar's sails. At the same time, Chinese data continues to disappoint, with the October composite PMI dropping back into contraction territory for the first time since May. In short, it looks as though the dollar's month-long, 4.5% correction could have ended last Thursday and events this week could prove a catalyst to send the dollar back towards the highs. Our base case does see the dollar retesting the highs later this year. A break of 111.00/10 in DXY today could open up a move to the 111.80 area. Chris Turner EUR: Markets still price a 75bp ECB hike in December The eurozone continues to battle with inflation and today should see the release of a new cycle high in CPI at 10.3% year-on-year - and potentially even higher given the German CPI release. Today we will also get a first look at 3Q22 eurozone GDP, expected at 0.1% quarter-on-quarter. The news may temporarily push eurozone rates higher, even though a 75bp hike is virtually priced for the 15 December ECB meeting. Ultimately, however, our macro team believes the ECB will only hike 50bp in December and that the terminal rate for this cycle proves to be in the 2.25% area rather than the 2.80% currently priced by the markets. And bluntly, the ECB has far more cause than the Fed to pivot. With global growth under pressure from tighter rates and a misfiring Chinese economy, we think the eurozone and the euro will continue to struggle. That is why last Thursday's high of 1.0089 in EUR/USD could have been significant. A close back under the 0.9900/9910 area this week would support our preferred view of EUR/USD retesting the lows near 0.95. Chris Turner GBP: Thursday's BoE could do some damage GBP/USD is consolidating above the important 1.1500 level, holding onto recent gains. The highlight this week will be Thursday's Bank of England meeting. The market firmly prices 75bp, but we think the risk of a softer 50bp is under-priced as the BoE prepares for the coming recession. As we have argued previously - now that a lot of the fiscal risk premium has come out of sterling - the forthcoming tighter fiscal and more dovish than expected monetary policy could prove a bearish combination for sterling. We are dollar bulls and would thus favour GBP/USD breaking back under 1.1500 based on this week's confluence of events. This would also point to current EUR/GBP losses under 0.8600 proving short-lived. Chris Turner CEE: Tough times are back This week we have a busy calendar not only at the global level but also in Central and Eastern Europe. Today we start with Polish inflation, which will be crucial for next week's National Bank of Poland meeting. We expect a jump from 17.2% to 18.1% year-on-year, slightly above market expectations, mainly due to higher fuel, energy and food prices. Tomorrow in the Czech Republic, 3Q GDP data, October PMI and the state budget result will be released. The first GDP result in the region should show a contraction in the economy and confirm the start of a shallow recession. On Wednesday, we will see October PMIs in Poland and Hungary, which will confirm the downward trend in industrial sentiment. On Thursday, the highlight of this week is the Czech National Bank meeting. In line with the market, we expect interest rates to remain unchanged. A new forecast will be presented which will show lower inflation but higher wage growth, which together with the cost of FX intervention is the main risk for us in terms of a possible additional interest rate hike at the coming meetings. However, we consider the CNB hiking cycle to be finished. The FX market in the region will be dominated by global events in the coming days. Already last week, the positive trend in CEE was halted by the ECB meeting. This week will see a series of central bank meetings led by the Fed. Therefore, we see both support from high-interest rate differentials in the region and EUR/USD as being at risk. In addition, gas prices have been rising again in the last two days and many of the reasons for the strengthening trend in the CEE region over the past two weeks are now dissipating. Of course, at the local level, we will be watching the inflation numbers in Poland and the CNB meeting in particular but this week speaks strongly against CEE FX.  We see the Czech koruna as the most vulnerable at the moment, which will again be the focus of short positioning ahead of the central bank meeting. We will likely see a move towards the 24.60-24.70 EUR/CZK levels. The Hungarian forint is likely to look above 415 EUR/HUF again. On the other hand, the Polish zloty should be best positioned this week, supported by a high inflation number and an increase in NBP rate hike bets. Frantisek Taborsky Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Slow and steady wins the race? If at the time of the announcement of £45bn fiscal stimulus by the Liz Truss government, the derivatives market estimated the repo rate ceiling in the current monetary tightening cycle above 6%, then it has now decreased to 4.5% by May 2023. However, in September, the pound plunged to a historic low against the US dollar, and by the end of October it recovered by 12%. Will a small move by the Bank of England in November push GBPUSD even higher? If at the peak of the market turmoil the derivatives market believed in a giant 150 bps increase in the repo rate, then as the MPC meeting approaches, we are talking about 75 bps. The probability of such an outcome is estimated at 90%, and it should be noted that this is already so much. As a result, the cost of borrowing will rise to 3%, the highest level since 1989. Dynamics of expectations for the REPO rate According to Barclays, a larger move of 100 bps can be justified by a strong labor market, which accelerates inflation due to the rapid growth of wages. At the same time, 75 bps is the optimal solution, since there are no contradictions between fiscal and monetary policy in Britain now. On the contrary, ING and Citigroup believe that BoE Governor Andrew Bailey and his colleagues are able to surprise investors by raising the repo rate by 50 bps. This will potentially further ease the pressure on the bond market after the collapse caused by unjustified tax cuts from the Liz Truss government. In my opinion, the markets have already calmed down. The combination of Rishi Sunak as prime minister and Jeremy Hunt as Chancellor of the Exchequer is working in their favor. Britain needs foreign investment to finance its current account deficit, and the return of confidence in the government provides these flows, contributing to the growth of GBPUSD quotes. Another thing is that the fate of the pair does not entirely depend on the BoE. The day before its verdict, the Federal Reserve will announce its decision, and a day after the MPC meeting, a report on the US labor market will be released. The +200,000 expected by Bloomberg analysts for non-agricultural employment is a very decent figure, which will indicate the resilience of the US economy to monetary tightening and will allow the Fed to continue what they started. The position of the FOMC is of paramount importance. If it changes amid deteriorating macroeconomic statistics, the markets will smell a dovish turn, which will negatively affect the US dollar. I don't think falling Treasury yields, a weaker dollar and a rally in stocks are in the plans of Fed Chairman Jerome Powell and his colleagues. Surely the Fed will continue to talk about the determination that will support the US currency. Technically, the 1-2-3 reversal pattern continues to be realized on the GBPUSD daily chart, which can be transformed into a Dragon. This requires consolidation. If we consider this scenario as a baseline, a decline below 1.15 is a reason for short positions, followed by longs from 1.143 and 1.139.     Relevance up to 10:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325796

The British pound managed to break through the support level of 1.1500 yesterday. Just ahead, there is a target under the MACD line at 1.1330, but the pound may not rush and look at related currencies and external markets, since the Federal Reserve's meeting on monetary policy is tomorrow. Breaking 1.1330 will open the next target at 1.1170. The scenario with price delay, that is, with consolidation, supports the forecast for ISM Manufacturing PMI in October, which is expected to fall from 50.9 to 50.0. Construction spending in the US in September is also expected to decrease - forecast -0.5% after -0.7% in August. On the H4 chart, the price settled both under the level of 1.1500 and under the MACD indicator line. The Marlin Oscillator is in negative territory. The trend is mostly downward, but not quite mature yet, as the balance indicator line has not yet been overcome, which supports the version of the price delay before the Fed meeting.   Relevance up to 03:00 2022-11-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325856

Analysis of GBP/USD, 5-minute chart The GBP/USD currency pair also continued its downward movement on Monday after soaring to 1.1645 last week. We have said before that we expect the US dollar to rise ahead of the Fed meeting. As you can see, so far everything is going according to plan. Do not forget that this Thursday will be the announcement of the results of the meeting of the Bank of England, but it is only in second place in terms of importance after the meeting of the Fed. Thus, the market is still busy working out the rate increase in the US, which will be announced tomorrow. The pound still retains great chances for continued growth. It pulled back less and is well above the Senkou Span B, but it also failed to clear the Ichimoku cloud on the 24-hour timeframe. Given the fact that the euro and the pound should move at least approximately the same, we assume that the British currency will continue to fall, at least until Wednesday. On the 5-minute timeframe, the movement of the pair was almost perfect yesterday, as the quotes only declined throughout the day. Unfortunately, the beginning of this movement was not caught, and during the day not a single trading signal was formed at all. Therefore, it was not possible to make money yesterday, and transactions should not have been opened. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group opened 3,200 long positions and closed 200 short positions. Thus, the net position of non-commercial traders increased by 3,400, which is very small for the pound. The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 43,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? As for the total number of open longs and shorts, the bulls have an advantage of 18,000 here. But, as we can see, this indicator does not help the pound too much either. We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. We recommend to familiarize yourself with: Overview of the EUR/USD pair. November 1. The EU economy is in a tailspin. Overview of the GBP/USD pair. November 1. Elections in the UK will soon take on the character of an annual national tradition. Outlook and trading signals for EUR/USD on November 1. Analysis of market situation. Analysis of GBP/USD, 1-hour chart The pound/dollar pair is moving upwards on the one-hour chart, which so far looks quite convincing. The price went only slightly below the Kijun-sen line, which is not critical yet. However, Wednesday and Thursday can dramatically change the situation for the pair. Today we expect the dollar to rise, but it is rather difficult to say where the pound will end up on Friday. On Tuesday, the pair may trade at the following levels: 1.1060, 1.1212, 1.1354, 1.1486, 1.1649, 1.1760, 1.1874. Senkou Span B(1.1351) and Kijun-sen (1.1535) lines can also give signals if the price rebounds or breaks these levels. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. The UK is set to publish an index of business activity in the manufacturing sector S&P. The index is likely to remain below the level of 50.0, and the reaction to it may be, but weak. The more important ISM PMI will be released in the US in the afternoon. If the result significantly deviates from the predicted value, then the market reaction may be tangible. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 06:00 2022-11-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325872

Trend analysis GBP/USD will move up in November from the closing of the October monthly candle at 1.1828 to the 38.2% retracement level at 1.1828 (red dotted line). Upon reaching it, the quote will continue rising to the 50.0% retracement level at 1.2286 (red dotted line), then roll back downwards. Fig. 1 (monthly chart) Comprehensive analysis: Indicator analysis - uptrend Fibonacci levels - uptrend Volumes - uptrend Candlestick analysis - uptrend Trend analysis - uptrend Bollinger bands - uptrend All this points to an upward movement in GBP/USD. Conclusion: The pair will have a bullish trend with no first lower shadow on the monthly white candle (the first week of the month is white) and no second upper shadow (the last week is white). Throughout the month, quotes will climb from 1.1464 (closing of the October monthly candle) to the 38.2% retracement level at 1.1828 (red dotted line), go further to the 50.0% retracement level at 1.2286 (red dotted line), then turn downwards. Alternatively, pound could rise from 1.1464 (closing of the October monthly candle) to the 38.2% retracement level at 1.1828 (red dotted line), then bounce down to the historical support level of 1.1443 (blue dotted line). Upward movement may resume from this level.   Relevance up to 14:00 2022-11-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325952

Both EUR/USD and GBP/USD have been bearish lately, so it was not surprising that an upward correction is brewing. After that, another price decrease could occur. GBP/USD pulled back deeper, which creates more headroom for a decline. Since price movements form a three-wave pattern (ABC), where wave A represents the bearish pressure, traders could enter the market by selling up to the 50% retracement leel. Set stop loss at 1.16, then exit the market on the breakdown of 1.14271. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks.   Relevance up to 11:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325923

Yesterday, the British pound settled under the level of 1.1500. It is trying to get over it again this morning. There is a repetition of the situation on September 5-8, when the price was winding up to the same level of 1.1500. But then the Marlin Oscillator was in the downward trend area and the price was below the MACD line, but now everything is different. Today's Federal Reserve meeting can push the pound under the MACD line (1.1330) and give it a downward momentum, at which, with a probability of 89.2%, the rate will be raised by 0.75%. On the four-hour chart, the price is already winding up on the MACD indicator line and also on the balance indicator line. The Marlin Oscillator is in negative territory, but close to the zero neutral line. The situation as a whole and in particular is neutral. We can only wait for the Fed's announcement and the market's reaction. Our main scenario assumes a decline, but the alternative gives the price a chance to rise to 1.1760 (July 14 low).       Relevance up to 03:00 2022-11-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325988

Early in the European session, the British pound (GBP/USD) is trading around the psychological level of 1.1500. We can see on the 1-hour chart that the pair is trading inside the downtrend channel which has been underway since October 26. GBP/USD pulled back from the highs of 1.1565 seen yesterday in the opening of the American session. The pair has found buyers at 1.1450, allowing the pair to return to levels close to 1.1500. Amid the positive sentiment for the GBP, seen during the Asian and European sessions, the instrument rose to the 21 SMA on the 4-hour chart (1.1551). Positive sentiment faded during the American session due to some upbeat data released in the US. The British pound is likely to trade within a range between 1.1501 (21 SMA) and 1.1460 (200 EMA) in the coming hours. Due to the fact that the market is awaiting the decision of the US Federal Reserve regarding the increase in the interest rate, the market could enter a consolidation phase. The market has already priced in the rate hike of 0.75%. However, speculators will be attentive to the speech that will be given after this announcement. If the Central Bank is more determined to raise its interest rate in the coming months, it will be bullish for the dollar, so the British pound could fall towards 2/8 Murray at 1.1230. On the contrary, if the bank hints that it is time to soften the pace of monetary tightening or that the next increases are below 0.75%, it could favor the British pound. Hence, GBP/USD could reach 4/8 Murray at 1.1718 or even reach the psychological level of 1.20. According to the 1-hour chart, the British pound has strong resistance at 1.1550 and strong support at 1.1420 (bearish channel). In case there is a sharp break in any of these sides, it could be a clear signal to buy or to sell. The eagle indicator reached the extremely oversold zone. If the pound trades above the 21 SMA or the 200 EMA, we could expect a strong bullish move that could push the price up to 1.1718 (4/8 Murray).   Relevance up to 05:00 2022-11-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299308

Analysis of GBP/USD, 5-minute chart The GBP/USD currency pair tried to resume its upward movement on Tuesday, but after bouncing from the critical line, it fell. In general, we cannot say that the decline over the past few days has been strong. Rather, on the contrary, it was rather weak and with frequent rollbacks to the top. If you wish, it is quite easy to explain why the pair is moving this way, and at the same time why the euro is falling faster and stronger. The fact is that the European Central Bank meeting is already behind us, and the results of the Federal Reserve meeting will be announced today. Thus, the dollar already has good reasons to rise, which it does against the euro. In the case of the pound, the Fed meeting is not the only thing that is important, but also the Bank of England meeting, which will take place this Thursday, and at which the rate will also be raised. Therefore, the pound falls in general more slowly and weaker than the euro. We can only wait for both meetings of the central banks and see how the market reacts to them. A sufficient number of signals were formed on the 5-minute chart on Tuesday, but most of them turned out to be false. The pair moved without a definite direction during the European trading session, so three false signals were formed near the critical line. According to the rules of the trading system, traders could try to work out the first two. In the first case, the price went down 20 points, so Stop Loss should have been placed at breakeven. In the second case, it did not pass 20 points, so the position closed with a small loss when the price settled above the Kijun-sen line. A sell signal was also formed near the level of 1.1486, but it did not bring profit either, since the position was also closed by Stop Loss at breakeven. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group opened 3,200 long positions and closed 200 short positions. Thus, the net position of non-commercial traders increased by 3,400, which is very small for the pound. The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 43,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? As for the total number of open longs and shorts, the bulls have an advantage of 18,000 here. But, as we can see, this indicator does not help the pound too much either. We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. Analysis of GBP/USD, 1-hour chart The pound/dollar pair is moving upwards on the one-hour chart, which so far looks quite convincing. The price went only slightly below the Kijun-sen line, which is not critical yet. However, Wednesday and Thursday can dramatically change the situation for the pair. Today we expect the dollar to rise, but it is rather difficult to say where the pound will end up on Friday. On Wednesday, the pair may trade at the following levels: 1.1060, 1.1212, 1.1354, 1.1486, 1.1649, 1.1760, 1.1874. Senkou Span B (1.1351) and Kijun-sen (1.1543) lines can also give signals if the price rebounds or breaks these levels. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. No interesting reports planned in the UK, and we only have the ADP report in the US, which rarely provokes the market to react. Thus, the key event of the day will be the Fed meeting late in the evening. Traders will have to leave the market as soon as it starts. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 01:00 2022-11-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325980

The Fed should hike by 75bp today, but markets appear divided on the degree of openness to slower tightening by Chair Powell. We suspect that lingering data-dependency may put off pivot speculation to the next inflation report, leaving risk assets vulnerable and the dollar bid. In this scenario, we expect the high-beta pound to suffer more than the euro In this article USD: Is the Fed really a make-or-break event for the dollar? EUR: Eyeing 0.9800 GBP: More at risk than the euro CEE: Fed as party crasher Source: Shutterstock USD: Is the Fed really a make-or-break event for the dollar? It’s FOMC day, and the extreme sensitivity of global assets and the dollar to the theme of a dovish pivot has boosted the notion this will be a make-or-break event for market sentiment. With so much at stake, our approach has been to look at different scenarios for markets and the dollar in our FOMC preview. There, we also highlight our baseline scenario, which sees a 75bp hike (consensus view) being accompanied by some tentative openness to a slower pace of tightening. It does appear that there is a considerable heterogeneity of expectations on the Fed today, which indeed makes it harder than usual to draw a precise market reaction function. Still, it appears that investors have been swinging increasingly in favour of a dovish pivot, which in our view increases the chances of a hawkish surprise. In particular, any reference to a potential slowing of the pace of hikes may come with some strings attached, retaining a de-facto data dependency and making the next inflation report the real pivotal event for markets. Given the tendency of inflation to surprise on the upside, investors may be reluctant to fully price out a 75bp hike in December (currently, 60bp is embedded in the OIS curve). So, what does this mean for the dollar? We are inclined to think that Chair Jay Powell will need to drop a substantial chunk of his data-dependent approach, and emphasise the risks of recession over the risks of inflation, in order to drive a substantial dollar downtrend. However, it does seem too early for this, and a risky move given the lack of evidence that inflation is coming under control. With markets still left in limbo, we suspect the balance of risks for the dollar is skewed to the upside today. After all, recent price action has pointed to interest in rebuilding long-dollar positions after the late-October correction, a dynamic that remains supported by a heavily inverted yield curve, instability in the equity market and lack of alternatives to the dollar in FX given macroeconomic uncertainty (especially in Europe and China). While surely a close call, we see DXY closing the week above the 112.00 handle, and moving back to the 113.00+ highs in the coming weeks. There are also US ADP jobs figures to keep an eye on today, but the proximity to the FOMC announcement and the limited predictive power on actual payrolls (which are released on Friday) should limit market sensitivity to the release. Francesco Pesole EUR: Eyeing 0.9800 It’s all about the FOMC announcement today for EUR/USD, and we see downside risks for the pair into the weekend. The 0.9800 level may prove quite pivotal, as this was an important anchor before last week’s upside correction. A break below 0.9800 before the end of the week would likely imply markets defaulting to the pre-correction levels, and signal a return to a more structural bearish tone on the pair, which could unlock further downside room. The main development to follow in the eurozone at the moment is the rhetoric of European Central Bank speakers after the upside surprise in eurozone inflation numbers. Yesterday, Germany’s Joachim Nagel and Spain’s Pablo Hernández De Cos firmly reiterated that there is still a long way to go in tightening, and we’ll hear from Ireland’s Gabriel Makhlouf and France’s François Villeroy today. As discussed on multiple occasions, the euro remains unable to draw substantial benefits from the ECB’s hawkish tone. Francesco Pesole GBP: More at risk than the euro The pound bounced back yesterday, as it continued to display the kind of high beta to risk sentiment that would normally be associated with commodity currencies in the G10. This feature inevitably puts the pound at risk of a larger drop than other peers – like the euro – if the Fed fails to offer support to risk assets today. We continue to highlight the risk of a dovish surprise (50bp hike) by the Bank of England tomorrow: more details in our scenario analysis. The combination of a USD-positive FOMC and a GBP-negative Bank of England means cable could test 1.1300 by the of the week. EUR/GBP may climb back into the 0.8650-0.8700 area in the coming days. Francesco Pesole CEE: Fed as party crasher For today, we have PMIs in Poland and Hungary on the calendar. As already foreshadowed by the result in the Czech Republic, a negative surprise can be expected here as well. Special attention will be given to Poland, which is currently leading the decline in leading indicators in the region. Poland and Hungary are returning to the market after the holidays today. Meanwhile, conditions in Central and Eastern Europe are deteriorating and FX is heading into the Fed meeting without much support. The US dollar continues its rally, local rates are lower against core rates across the region and yesterday's jump in gas prices back above EUR100/MWh is not helping the situation either. Thus, we expect to see selling pressure in CEE markets return. Moreover, in the Czech Republic, we will see the Czech National Bank meeting on Thursday, which traditionally attracts short positioning with the prospect of an end or change to the central bank's FX intervention regime, which should take the koruna back to CNB intervention levels in the 24.60-24.70 EUR/CZK range. Despite strengthening over the past two days, we continue to think that the Polish zloty and Hungarian forint should trade higher as well. Just based on the current interest rate differential and FX relationship, we see the zloty closer to 4.75 EUR/PLN and the forint closer to 415 EUR/HUF. Moreover, with the Fed meeting today, we expect pressure on the CEE to increase during the day, which may lead to a painful end to the current rally in the region. Frantisek Taborsky   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Following the Federal Reserve's rate hike by 0.75%, the British pound lost more than 90 points. In today's Pacific session, the pound corrects a bit, without having time to reach any support. This is probably a sign that the price is preparing for an attack on the MACD indicator line of the daily scale at the price of 1.1330. If successful, the price may expect to reach the target level of 1.1170. The Bank of England is expected to raise rates by 0.75% today. If the meeting goes smoothly, without surprises like yesterday from the Fed, we can count on the pound to weaken. The price settled under both indicator lines on the four-hour chart – the balance line and the MACD line. The Marlin Oscillator is going down in the negative area. There are no signs of a reversal, we are waiting for the price to fall further.     Relevance up to 04:00 2022-11-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326106

In the next few hours, we could expect a technical bounce above the 200 EMA around 1.1378. So, the price could reach 3/8 Murray at 1.1474 and even 1.1550 (top bearish channel). Conversely, in case of a sharp break below the 200 EMA and a daily close on the 4-hour chart below 1.1370, the currency pair could continue the bearish bias and the price could reach 2/8 Murray around 1.1230. The eagle indicator is giving a negative signal and any bounce towards the psychological level of 1.15 will be considered a signal to continue selling. Our trading plan for the next few hours is to buy above the 200 EMA and above the bottom of the downtrend channel around 1.1378 with targets at 1.1474 and 1.1530. On the other hand, the signal to sell will be activated if there is a strong break below 1.1370 (200 EMA) with targets at 1.1230. As long as the GBP/USD pair trades within the downtrend channel formed since Oct 26, any technical bounce back towards the 21 SMA located at 1.14 98 will be seen as an opportunity to sell.       Relevance up to 05:00 2022-11-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299483

Analysis of GBP/USD, 5-minute chart The GBP/USD currency pair was trading with low volatility and a slight downward slope for most of the day on Wednesday. Approximately the same picture was observed in the last few days. Of course, after the results of the Federal Reserve meeting were announced, the pair first soared up and then collapsed. We warned that movements can be versatile and very strong. In principle, there is nothing more to consider yesterday. Any conclusions about the Fed meeting, its results and the market reaction to them can be made no earlier than Thursday afternoon. However, the results of the Bank of England meeting will be announced on Thursday afternoon. Therefore, it will be very difficult to even understand what exactly traders reacted to and at what time. Today you just need to survive, and tomorrow it will be possible to draw the first conclusions. But even Friday would not be a quiet day, as the most important reports on the labor market and unemployment will be published in America. The pair was absolutely flat during the entire Asian session, the entire European and half-US session. Therefore, it is not at all surprising that four false signals were formed - all around the same 1.1486 level. We want to note that the signals were not the worst yet, as the first three were buy signals. Consequently, traders could work out the first of them (the position was closed by Stop Loss at breakeven), the second one (it should have been closed manually when it became clear that the pair was in a flat) and that's it. All other signals should not be processed. Therefore, yesterday's flat could have been overcome without losses. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group opened 3,200 long positions and closed 200 short positions. Thus, the net position of non-commercial traders increased by 3,400, which is very small for the pound. The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 43,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? As for the total number of open longs and shorts, the bulls have an advantage of 18,000 here. But, as we can see, this indicator does not help the pound too much either. We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. Analysis of GBP/USD, 1-hour chart The pound/dollar pair is moving upwards on the one-hour chart, which so far looks quite convincing. The price went only slightly below the Kijun-sen line, which is not yet critical for the dollar's prospects. The dollar rose last night, but today the pound could also grow, because the BoE is also going to raise its rate. If this does not happen, then it will be possible to conclude that the bulls are no longer going to buy, and the pair may resume a long-term downward trend. On Thursday, the pair may trade at the following levels: 1.1060, 1.1212, 1.1354, 1.1486, 1.1649, 1.1760, 1.1874. Senkou Span B (1.1351) and Kijun-sen (1.1532) lines can also give signals if the price rebounds or breaks these levels. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. The results of the BoE meeting will be announced in the UK, and we will also receiva a report on business activity in the services sector. Meanwhile, indexes of business activity in the service sector S&P and ISM are scheduled in America. In general, today can also be a very volatile day. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.         Relevance up to 01:00 2022-11-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326098

Summary:  The market caught in a vicious whiplash yesterday by a dovish interpretation of the FOMC statement that was then followed by a Powell presser that delivered a hawkish blow as the Fed Chair managed to both indicate that coming hikes may pivot to a slower pace, but that the ultimate peak in Fed rates could prove higher, with the idea that the Fed is thinking about or talking about pausing rate hikes deemed “very premature”. FX Trading focus: Powell manages to pull off a hawkish pivot. The market reaction yesterday over the FOMC meeting was a whiplash-inducing one-two as the dovish interpretation of the new policy statement was brutally reversed by a hawkish Powell presser. The key new text inserted into the new FOMC statement that allowed some room for a dovish interpretation was the phrase: “The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. In determining the pace of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”  The market’s first read was dovish on the assumption that this means the anticipated downshift in Fed rate hikes is well on its way – and this phrase was a likely tip-off for a mere 50 bps increase at the December FOMC meeting. US yields dropped, risk sentiment rushed higher, and the USD sold off. In the press conference, however, Fed Chair Powell was unabashedly hawkish, saying there is a “ways to go”, and spelling out that the incoming data means that the “ultimate level” that the Fed funds reaches is likely to move to higher levels than was though at the September meeting (yes, the projection then was 4.6%, below current projections, but the implication was above current market projections). This had Fed expectations for the spring of next year edging back toward the cycle highs of 5.00% and then closing the day a full 10 basis points higher near 5.10% and trading higher still this morning. While Powell did say it may be possible that the Fed steps down to smaller hikes as soon as the December meeting, he felt that the speed of hikes Is becoming “less important” (leaving the market to infer that the Fed just keeps hiking at more meetings if incoming data supports doing so and that we could reach well beyond 5.00%). As well, we must remember that the Fed has cranked up the pace of quantitative tightening in the background, which provides its own tightening pressure on markets and arguably equates with several hundred basis points of rate tightening over the course of a year. All in all, the meeting firmly puts the USD bulls back in business, with only ugly data misses able to reign in the potential for the greenback to trade to new cycle highs against most other, if not all, of the other G-10 currencies. The next currency to get a test is sterling over today’s Bank of England meeting as discussed below. Norges bank only hiked 25 basis points this morning, with NOK somehow only getting an ugly sell-off and not a thorough thrashing. Chart: GBPUSDA very interesting test today for sterling over the Bank of England, which must preserve a hawkish tone despite signs of a weakening economy, one that will be made that much weaker by the fiscal austerity Sunak and Hunt are cooking up for the budget statement on November 16, otherwise, sterling risks an ugly melt-down again versus the US dollar that will aggravate inflation risks on a flailing currency. I wonder how long Governor Bailey will be able to maintain his position as Governor if he messes things up today by indicating caution on rate hikes beyond today’s (presumed) 75 basis point hike because of the risk of an incoming recession. An insufficiently hawkish message could see 1.1000 in GBPUSD trading in a heart-beat. The October UK Services PMI was revised higher to 48.8 vs. 47.5 originally. The US ISM Services survey later today is expected to drop to 55.3 from 56.7 in September, by contrast. Table: FX Board of G10 and CNH trend evolution and strength.The USD is coming roaring back here and will set the tone. Watching JPY as yields rise – the intervention will arrive again at some point – but not until new highs in USDJPY? NOK could be in for some further punishment after the small hike today and watching relative strength in sterling over the Bank of England today. Table: FX Board Trend Scoreboard for individual pairs.Fed Chair Powell has spoken and the USD has asserted a new up-trend, with many USD pairs showing a flip to USD-positive trend today – only sudden negative US data surprises are likely to change that development. Watching GBP pairs after today and a small sub-plot is the risk of NOKSEK tilting into a new negative trend after this Norges Bank meeting today, with EURNOK also risking a flip to a positive trend due to weak risk sentiment. Upcoming Economic Calendar Highlights 1130 – US Oct. Challenger Job Cuts 1200 – UK Bank of England Rate Announcement 1230 – UK Bank of England Governor Bailey press conference 1230 – US Sep. Trade Balance 1230 – Canada Sep. Building Permits 1230 – Canada Sep. International Merchandise Trade 1230 – US Q3 Nonfarm Productivity/Unit Labor Coasts 1230 – US Weekly Initial Jobless Claims 1330 – Czech Central Bank Rate Announcement 1400 – US Sep. Factory Orders 1400 – US Oct. ISM Services 0030 – Australia RBA Monetary Policy Statement 0030 – Australia Q3 Retail Sales Source: https://www.home.saxo/content/articles/forex/fx-update-powell-manages-to-pull-off-a-hawkish-pivot-03112022

In my morning forecast, I paid attention to the 1.1380 level and recommended deciding on entering the market there. Let's look at the 5-minute chart and figure out what happened. The bears did not keep waiting long and continued actively selling the pound. The breakthrough of 1.1380 took place without a reverse test, so I failed to enter short positions there and from 1.1307. In the afternoon, the technical picture was completely revised. To open long positions on GBP/USD, you need the following: It is difficult to say what the Bank of England should do to influence the situation somehow. Whatever decisions the regulator resorted to today, it is unlikely that the bulls will be able to buy off the morning fall. In the afternoon, I advise you to wait for Andrew Bailey's statement and only then look for convenient entry points into the market. I told you more about what the central bank governor can say in the morning forecast. In case of further fall of the pair, only a false breakdown in the area of 1.1210 will give a buy signal with a return to the resistance of 1.1276 formed by the results of European trading. Practically nothing depends on this area, so bulls can easily get above this range. A breakdown of 1.1276 and a reverse test from top to bottom will open the way to 1.1341. You can reach the resistance of 1.1416, where the moving averages are playing on the sellers' side. It will become more difficult for buyers to control the market there. A more distant target will be the 1.1489 area, which will lead to a fairly large capitulation of sellers - I recommend fixing profits there. If GBP/USD falls and there are no buyers at 1.1210, we may reach another low of 1.1137. Therefore, do not rush to enter the market. Only a false breakdown at 1.1137 will ensure the presence of major players. It is possible to open long positions on GBP/USD immediately for a rebound from 1.1066, or around the minimum of 1.1013, with the aim of correction of 30-35 points within a day. To open short positions on GBP/USD, you need the following: Bears keep everything under their control, which can only strengthen after the data is scheduled for the afternoon. Reports are expected on the number of initial applications for unemployment benefits and the balance of the US foreign trade balance. But much more important will be ISM's index of business activity in the service sector. If it grows, the pressure on the pound will likely only increase. At the moment, sellers need to defend the resistance of 1.1276 with all their might, where a false breakdown against the background of weak US statistics will give a sell signal based on the return of pressure on the pound and its downward movement to the next support of 1.1210. A breakout and a reverse test from the bottom up of this range will already give an entry point for sale with an update of the minimum of 1.1137. A more distant target will be the 1.1066 area, where I recommend fixing profits. The market will remain balanced with the option of GBP/USD growth and the absence of bears at 1.1276 in the afternoon. In this case, it will be possible to count on an upward movement to the maximum of 1.1341. Only a false breakout at this level forms an entry point into short positions in the expectation of a new downward movement of the pair. If there is no activity there, there may be a jerk up to the maximum of 1.1316, where I advise you to sell GBP/USD immediately for a rebound, counting on the pair moving down by 30-35 points inside the day. The COT report (Commitment of Traders) for October 25 recorded a reduction in short positions and an increase in long ones. Political changes in the UK are playing on the side of buyers of the pound. Still, many are waiting for how the Bank of England will behave about rates and a new economic program from British Prime Minister Rishi Sunak. Do not forget that the pound, as a risky asset, largely reacts to the decisions of the Federal Reserve System on interest rates. A committee meeting will be held this week, where the rate will be increased by 0.75%, which may weaken the position of GBP/USD and lead to a larger decline. However, only the Fed's commitment to maintaining a super-aggressive policy in the near future will be able to change the upward trend in the pound. Otherwise, observing the next pullback of the pound will be possible. The latest COT report indicates that long non-commercial positions increased by 3,183 to 43,511. In contrast, short non-commercial positions decreased by 223 to 91,316, which led to a slight decrease in the negative value of the non-commercial net position to -47,805 versus -51,211 a week earlier. The weekly closing price rose to 1.1489 against 1.1332. Signals of indicators: Moving Averages Trading is conducted below the 30 and 50-day moving averages, indicating a bear market's development. Note: The author considers the period and prices of moving averages on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1. Description of indicators Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow. Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green. MACD indicator (Moving Average Convergence / Divergence - moving average convergence/divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-profit speculative traders, such as individual traders, hedge funds, and large institutions, use the futures market for speculative purposes and to 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 the short and long positions of non-commercial traders.   Relevance up to 12:00 2022-11-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326174

BoE Monetary Policy Decision – Overview The Bank of England (BoE) is scheduled to announce its monetary policy decision this Thursday at 12:00 GMT. The UK central bank is widely expected to lift interest rates by 75 bps - the biggest hike since 1989. Meanwhile, the worsening outlook for the UK economy might have already set the stage for a dovish pivot. Hence, the market focus will be on the accompanying statement that provides the Monetary Policy Committee's (MPC) economic and inflation projections. Apart from this, investors will scrutinize BoE Governor Andrew Bailey's comments at the post-meeting press conference at 12:30 GMT. Analysts at TD Securities offer a brief preview of the key central bank event risk and write: “We look for a 75 bps hike from the BoE in November. While the labour market has tightened further, inflation has matched the MPC's forecasts. Moreover, the several fiscal U-turns and change of PM and Chancellor should lower the risk of a larger hike. The delay of the fiscal event shouldn't mean much for the decision as the broad characteristics of fiscal policy are already known.” How could it affect GBPUSD? Ahead of the BoE's Super Thursday, the GBPUSD pair tumbles to a two-week low, below mid-1.1200s on Wednesday amid post-FOMC strong follow-through US dollar buying interest. A dovish BoE tilt could exert additional downward pressure on the British Pound and set the stage for an extension of the pair's recent pullback from a multi-week high. Meanwhile, a decision to frontload the rate hike might do little to provide any respite to bulls amid looming recession risks, suggesting that the path of least resistance for the GBPUSD pair is to the downside. Eren Sengezer, European Session Lead Analyst at FXStreet, outlines important technical levels to trade the major: “GBPUSD trades within a touching distance of 1.1250, where the 200-period SMA on the four-hour is located. In case the pair falls below that level and starts using it as resistance, additional losses toward 1.1200 (psychological level) and 1.1100 (psychological level) could be witnessed.” “On the upside, 1.1300 (Fibonacci 61.8% retracement) aligns as first resistance ahead of 1.1350 (Fibonacci 50% retracement, 100-period SMA) and 1.1435 (Fibonacci 38.2% retracement),” Eren adds further. Key Notes   •  Bank of England Preview: Why Super-Thursday is set to sink sterling, even in case of a big hike   •  BoE Interest Rate Decision Preview: A close call between 50 bps and 75 bps, GBP/USD set to suffer   •  GBP/USD Forecast: Pound looks vulnerable as BoE decision looms About the BoE interest rate decision The BoE Interest Rate Decision is announced by the Bank of England. If the BoE is hawkish about the inflationary outlook of the economy and raises the interest rates it will be positive, or bullish, for the GBP. Likewise, if the BoE has a dovish view on the UK economy and keeps the ongoing interest rate, or cuts the interest rate it will be seen as negative, or bearish.    

The Bank of England has hiked interest rates by 75 basis points for the first time. But its policy statement and new forecasts signal very plainly that the Bank rate is unlikely to rise as far as investors expect over coming months. We expect a 50bp hike in December, so it's unlikely to go above 4% next year The Bank of England has stepped up the pace of hikes The Bank of England faced a choice today between a ‘hawkish’ 50 basis-point rate hike and a ‘dovish’ 75bp – and in the event, it chose the latter path. Unlike the Fed and the European Central Bank, this is the first time the BoE has hiked by 75bp in this cycle. But there are no good options for the Bank, and the central message from its latest communications is clear: investors are expecting too much tightening at future meetings. We think today’s 75bp move is likely to be a one-off. The BoE’s new projections show that, if policymakers were to follow investor expectations and hike rates to 5%, the size of the economy would shrink by roughly 3 percentage points over several quarters. Inflation would be at zero in 2025. The Bank of England is forecasting a deep recession regardless of whether it hikes any further Source: Macrobond, ING, Bank of England   Curiously the message is similar – though far less extreme – in the Bank’s projections based on interest rates staying flat at 3% from now on. Not only does that suggest markets are overdoing tightening expectations, but at a pinch you could also say this hints at potential rate cuts somewhere down the line. Admittedly the Bank has been telling this story to a more limited extent for several months now in its forecasts. Governor Bailey also highlights that there’s an upward skew to its inflation forecasts, and policymakers are unsurprisingly nervous about putting too much weight on its models at a time of such uncertainty. A 75bp hike is likely to be a one-off Nevertheless, Andrew Bailey was very forthright in his press conference that rates are unlikely to rise as far as markets expect (currently just shy of 5%). What's more, the committee is very divided. One policymaker, Silvana Tenreyro, voted for just 25bp worth of tightening today. The Bank may have stepped up the pace this month, but central banks globally are having to assess whether ongoing aggressive rate hikes can be justified at a time when housing and corporate borrowing markets are beginning to creak. The choice the Bank faces at coming meetings is one of hiking aggressively to protect sterling, or moving more cautiously to allow mortgage rates to gradually fall. With around a third of UK mortgages fixed for just two years, we suspect the latter option will increasingly be seen as more palatable. The dovish messages littered throughout today’s statement and forecasts are a clear sign of that. We're pencilling in a 50bp rate hike in December and we think the Bank rate is unlikely to rise above 4% next year.   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  

The Bank of England raised the rate to the expected 0.75% and warned of two points: in the future, the pace of the rate hike will slow down, from the 3rd quarter the UK economy will enter a recession and it will last until mid-2024 with an increase in unemployment until the end of the 25th year to 6.4%. The pound fell by 230 points. Data on British GDP for the 3rd quarter will be released on November 11, the forecast of economists is -0.2%, obviously, the forecast coincides with the calculations of the central bank. The decline continued to the target level of 1.1170 on the daily chart. The signal line of the Marlin Oscillator went below the zero line into the area of the downtrend. After the price settles under 1.1170, we are waiting for the pound to fall further to 1.0785 - to the line of the price channel of the higher timeframe. On the four-hour chart, the price, together with the Marlin Oscillator, is turning into a slight correction. Perhaps the correction will last until the first noticeable resistance at 1.1260 - the former local support for October. After the end of the correction, we are waiting for a further fall towards the specified target.       Relevance up to 04:00 2022-11-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326228

Analysis of GBP/USD, 5-minute chart The GBP/USD currency pair continued to fall on Thursday. Most of it happened even before the announcement of the results of the Bank of England meeting, that is, it was a reaction to the results of the Federal Reserve meeting. A day earlier, we warned you that the market could work out Fed Chairman Jerome Powell's speech and the US rate hike within 24 hours. And so it happened. Thus, by the end of Thursday, the pair's quotes fell to the level of 1.1150 and settled below the rising trend line. Despite the fact that a tangible upward correction may now begin, the uptrend is broken, and the pound gets a new opportunity to fall to its absolute lows. Take note that the results of the BoE meeting were not dovish. The key rate rose by 0.75%, as expected by the majority. But the speech of BoE Governor Andrew Bailey, who described the prospects for the British economy in gloomy tones, turned out to be very pessimistic. In general, the British pound had few reasons to grow. Especially if we remember that the previous seven rate hikes had no positive effect on the pound. In regards to trading signals, the situation was quite good. Quotes settled below the level of 1.1354 at the beginning of the European trading session, so traders had to open a short position. Subsequently, the price fell to the level of 1.1212 and overcame it. There was no buy signal until the end of the day, so traders had to close the shorts manually. Profit on them amounted to at least 150 points, with which we congratulate everyone. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group opened 3,200 long positions and closed 200 short positions. Thus, the net position of non-commercial traders increased by 3,400, which is very small for the pound. The net position indicator has been growing slightly in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group now has a total of 91,000 shorts and 43,000 longs open. The difference, as we see, is still very large. The euro cannot show growth if the major players are bullish, and the pound will suddenly be able to grow if the mood is bearish? As for the total number of open longs and shorts, the bulls have an advantage of 18,000 here. But, as we can see, this indicator does not help the pound too much either. We remain skeptical about the long-term growth of the British currency, although there are still certain technical reasons for this. Analysis of GBP/USD, 1-hour chart The pound/dollar pair canceled the upward trend on the one-hour chart, but the pound may still rise in the next few days, as an upward correction is needed. The price is now below the Ichimoku indicator lines, so the probability of further decline is high. We also recall that today is the third "crazy" day in a row, as the most important reports on the labor market and unemployment will be published in the United States. You need to be ready for the pair's "flights" today. On Friday, the pair may trade at the following levels: 1.0538, 1.0930, 1.1060, 1.1212, 1.1354, 1.1486, 1.1649. Senkou Span B (1.1351) and Kijun-sen (1.1376) lines can also give signals if the price rebounds or breaks these levels. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. Today, the UK will release the index of business activity in the construction sector. But this report is unlikely to provoke a market reaction. But NonFarm Payrolls reports and unemployment in the US can and should do it. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.         Relevance up to 06:00 2022-11-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326234

Summary:  While the Fed surprised hawkish this week, most other central banks have been surprising dovish, with the latest being Bank of England which tried to cool down the aggressive market pricing for their terminal rate. Meanwhile, Norges Bank also took the less hawkish path, and this has made USD the king again with sterling suffering the heaviest blow. US stocks and bonds were lower, and oil prices, as well as precious metals, also suffered in the aftermath of Fed’s hawkish tilt. Focus turns to NFP today which should continue to suggest a tight labor market. What is happening in markets?   The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) continued to slide on hawkish Fed and weaker outlook U.S. stocks continued to adjust for the second day to the increased prospect of interest rates being higher for longer following Powell’s pushback to the market’s speculation for Fed pivot on Wednesday, with S&P falling 1.06% and Nasdaq 100 down 2%. For a discussion on the implication of Powell’s hawkish comments on equities, please refer to Peter Garnry’s article here. Information technology, falling 3%, was the worst-performing sector in the S&P 500 while energy, up 2%, and industrials, up 1% were the outperformers. Announcements of hiring or headcount freezes from Amazon (AMZN:xnas), Apple (AAPL:xnas), Lyft (LYFT:xnas), and Morgan Stanley stirred concerns among investors about the outlook of the economy and corporate earnings. After closing, Starbucks (SBUX:xnas) reported above expectations revenues and earnings while a number of software companies, including Atlassian (TEAM:xnas), Twilio (TWLO:xnys), Appian (APPN:xnas), missed revenues guidance. 10-year U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) The U.S. yield curve bear flattened as the 2-year yield jumped to as high as 4.74%, before finishing the session at 4.71%, the highest level since 2007. It brought the 2-10 year spread to was wide as -58 and close at -56, the most inverted level in 40 years. The market has brought another 75bp hike in December back to the table, pricing in a slightly more than 50-50 chance. Hong Kong’s Hang Seng (HSIX2) China’s CSI300 (03188:xhkg) Being hit by the double whammy of the reiteration from China’s National Health Commission that dynamic zero-Covid is the primary pandemic control strategy and a hawkish Fed Chair Powell hinting at higher terminal rates, Hang Seng Index tumbled 3.06% and the Hang Seng Tech Index (HSTECH.I) dropped 3.8% on Thursday. China Internet, EV, healthcare and property stocks dragged the benchmark indices lower. Following the hike by the U.S. Fed overnight, five leading commercial banks in Hong Kong raised their prime rates by 25bps. On the data front, Caixin China PMI Services came in at 48.4 in October (consensus: 49.0; Sep: 49.3), falling further into contractionary territory. CSI300 performed relatively more resilient and pared some losses in the afternoon to finish the day losing only 0.8%. Semiconductors, defence and basic chemicals gained. Buying emerged overnight in the U.S. hours, Nasdaq China Golden Dragon Index jumped more than 3% and Hang Seng futures were nearly 1.5% higher from Hong Kong closing. FX: GBPUSD suffered on BOE-Fed differential The USD is seeing another leg higher not just on the back of Powell’s hawkishness this week, but also with the other central banks taking the less hawkish path. Both Norges Bank and BOE surprised dovish yesterday, in continuation of the trend that we have seen from Reserve Bank of Australia, Bank of Canada and the ECB earlier. GBPUSD fell over 2% to sub-1.12 on the announcement that BOE thinks market’s current pricing is too aggressive. December pricing is still at another 50bps rate hike but it won’t be a surprise if it is pulled lower after we had two dovish dissenters on Thursday. NOK saw a selloff as well, while USDJPY continues to find trouble to overcome 148.50 despite the fresh surge in US yields. Crude oil (CLX2 & LCOZ2) worried about demand After a hawkish FOMC, commodity markets have once again started to focus on demand weakness that could come as a result of Fed’s rapid tightening pace. Meanwhile, any hopes of a recovery in Chinese demand have also been crushed for now with authorities still standing by their zero Covid strategy. WTI futures traded close to $88/barrel while Brent futures were below $95. Supply outlook remains challenged however going into the winter, with OPEC+ having announced production cuts followed by EU sanctions on Russian crude flows from December. Gold (XAUUSD) and Silver (XAGUSD) to face short-term pressures Our Head of Commodity Strategy Ole Hansen wrote yesterday on how gold and silver turned sharply lower yesterday after Fed Chair Powell delivered a hammer-blow to sentiment across markets as he managed to both pull off the idea of the Fed may indeed soon pivot to a slower pace of rate hikes, but that any talk of a pause is “very premature”. Gold touched sub-1620 levels yesterday before a slight recovery later in the session while Silver took a look below $19. There is likely to be more pressure in the short term, but as yields get closer to a peak or as the possibility of central bank policy mistake increases, while inflation continues to run higher, the outlook for the precious metals could revert to being positive.   What to consider? Bank of England’s dovish hike The BOE hiked by 75bps to 3%, as expected by the consensus, but strongly pushed back against expectations for the scale of future moves, saying that the terminal rate priced in currently by the markets would induce a two-year recession. There were also two dovish dissenters at the meeting, one calling for 50bps rate hike and another for a mere 25bps. New forecasts were also released, which gave a particularly grim outlook for the economy, looking for a GDP print of -0.5% QoQ in Q3 2022 vs -0.1% expected in September. The inflation forecast now shows a peak around 11% in Q4, which is marginally hotter than the prior meeting’s projection. US weekly jobless claims tick lower, ISM services softened There was a slight decline in initial jobless claims to 217k from previous 218k, coming in marginally below the expected at 220k. Still, labor market remains tight despite some signs of cooling and continues to provide room to the Fed to continue its tightening cycle. Meanwhile, the ISM services index fell more than expected to 54.4 in October from 56.7 previously, however the prices paid gauge increased by 2% pts to 70.7 and remains elevated. Norges Bank hiked by 25bps With expectations split between a 25 or 50bps rate hike, Norges Bank took the dovish path as well despite a deteriorating inflation outlook. However, the Committee continues to place emphasis on the growth situation writing "there are signs that some areas of the economy are cooling down" and acknowledging the tightening effect that the higher policy rate is beginning to have. For the December gathering, the Committee points to a further hike being likely. Australia to double its Royal Australian Airforce cargo fleet in a $10 billion US military deal US officials are looking to approve the sale of $10 billion of iconic cargo aircraft, including 24 Hercules planes, to Australia. The US Defence Security Co-operation Agency says Australia is one of its most important allies in the western Pacific and its location and economic power ‘contributes significantly to ensuring peace and economic stability in the region’. Australia has operated the Hercules aircraft for decades, with the aircraft playing a major role in moving troops and equipment in and out of war zones and evacuating civilians after the fall of Kabul last year. It has also performed countless missions flying humanitarian supplies to countries hit by natural disasters. Australia trade surplus swells on surging energy exports Australia’s trade surplus swelled to $12.4 billion in September, smashing expectation of a $8.75 billion surplus. It comes as exports rose far than expected, up 7% vs the 1% consensus expected thanks to greater demand for mineral fuels for energy, while iron ore exports also rose. Imports remained unchanged month on month. Multiple reports of hiring freezes emphasizing margin pressures Apple paused all hiring for roles outside research and development. Amazon will pause new incremental hires in its corporate workforce, citing an "uncertain" economy and its recent hiring boom. Lyft will eliminate 13% of staff, or around 683 people.   For a global look at markets – tune into our Podcast.     Source: https://www.home.saxo/content/articles/equities/market-insights-today-4-nov-04112022

Summary:  The FOMC meeting this week forced the market to adjust to the idea that the Fed could continue to take rates higher than had previously been priced. But clearly, to drive tightening expectations higher still, we’ll need to continue to see hotter than expected US data, with today’s US jobs report the next test on that. Elsewhere, sterling is in a world of hurt after BoE’s very dovish guidance. FX Trading focus: US incoming data focus after hawkish FOMC. BoE in dovish pushback against market hike expectations. The US dollar followed through stronger yesterday on the momentum off the back of the hawkish Powell presser Wednesday, but has come in for a chunky reversal overnight and today since a somewhat softer than expected ISM services survey yesterday (nudged lower to 54.4 vs. 55.3 expected and 56.7 in September, with the employment sub-index dipping back below 50 at 49.1 vs. 53.0 in September). Wouldn’t it be ironic if we also were to get a soft US jobs report today that takes US yields back to their starting point of the week, making Powell’s hawkish message so much noise, at least until the next incoming data point jerks the market the other way? Interestingly, the USD is selling off ahead of today’s US data releases even as short US yields are posting new highs for the cycle Specifically in today’s jobs report, in addition to any strong directional surprise in payrolls (multi-month grain of salt needed with this data series, as single releases require further corroborating evidence), we should keep both eyes on the average hourly earnings survey. Arguably, if we get the expected 0.3% month-to-month average hourly earnings print today after a couple of prior prints of a similar size, observers may begin to judge that the annualized rise in earnings is beginning to look far less threatening at sub-4.0%. The year-on-year is expected to drop to a 15-month low of 4.7% today. A significant upside surprise in earnings is perhaps could generate significant volatility. Chart: EURGBPWorth considering how the dovish Bank of England meeting yesterday (see more below) is weighing heavily on sterling, as it should, with the Bank of England reluctant to signal much tightening energy when it sees an incoming recession. Sterling is down sharply across the board, with EURGBP suddenly well backed up within the old range and now far away from the sub-0.8600 range support. The next area between the 0.8800 and pivot high of 0.8870 area looks key for whether sterling weakness is set to become a bit more unhinged, and the next key event-risk test is likely how the market greets an austere Autumn budget statement on November 17. Bank of England wrap. The BoE hiked by 75 bps to 3%, as most expected and as was mostly priced in, but Bailey and company strongly pushed back against expectations for the scale of future moves, saying that the terminal rate priced in currently by the markets would induce a two-year recession. There were also two dovish dissenters at the meeting, one calling for 50 bps rate hike and another for a mere 25 bps. New forecasts were also released, which gave a particularly grim outlook for the economy, looking for a GDP print of -0.5% QoQ in Q3 2022 vs -0.1% expected in September. The inflation forecast now shows a peak around 11% in Q4, which is marginally hotter than the prior meeting’s projection. Sterling was crushed lower, having already fallen heading into the meeting, and it speaks volumes that even though the BoE pushed back against the forward implied expectations for further tightening, which it said would trigger a 2-year UK recession, the market did not budge those expectations. In short: the market refuses to acknowledge what the BoE thinks it might do, probably figuring that the BoE will have no choice due to sterling weakness but to pursue the path to 4.50% or higher rates before mid-next year. I was surprised by the lack of discussion or journalist questioning in the press conference around the risk that currency weakness drives worse inflationary outcomes if the BoE fails to do as much as the market is pricing. Sterling remains in a heap of trouble. Table: FX Board of G10 and CNH trend evolution and strength.The USD needs to stick the move off the back of the FOMC meeting after the US jobs data today, otherwise we’ll suddenly be back to square one. The hottest movement in FX was clearly the sterling sell-off yesterday on a very clearly dovish Bank of England meeting. CNH is making waves on a lot of movement overnight and noise (unconfirmed) of an eventual opening up. Table: FX Board Trend Scoreboard for individual pairs.While the US dollar flipped to a positive trend in many places, we must still consider the risk that incoming data complicates the plot. GBP is already registering a negative trend in many new GBP pairs after yesterday’s BoE meeting. Interesting that the NOK failed to roll over to the downside in a couple of key pairs after the small hike from the Norges Bank yesterday. Upcoming Economic Calendar Highlights 1215 – UK Bank of England Chief Economist Huw Pill to speak 1230 – US Oct. Nonfarm Payrolls Change 1230 – US Oct. Unemployment Rate 1230 – US Oct. Average Hourly Earnings 1230 - Canada Oct. Unemployment Change/Rate 1400 – Canada Oct. Ivey PMI 1400 – US Fed’s Collins (Voter 2022) to speak Source: https://www.home.saxo/content/articles/forex/fx-update-us-incoming-data-sterling-pays-price-after-dovish-boe-04112022

OANDA Senior Market Analyst Craig Erlam discusses the latest developments in GBP/USD as the Federal Reserve and Bank of England hike interest rates by 0.75%. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Long-term perspective. The GBP/USD currency pair has fallen by 250 points during the current week. If we talk about a purely technical picture, such a movement was logical since traders once again failed to overcome the Ichimoku cloud on the 24-hour TF. Nevertheless, considering the fundamental background, the movement can be recognized as strange and illogical. As we have already said, the pair's fall until Wednesday evening is justified. The Fed had to raise the key rate, and the market worked out this increase in advance. However, the dollar continued to rise on Wednesday evening and Thursday morning. It continued to strengthen on Thursday afternoon when the Bank of England announced the results of its meeting and raised the rate for the eighth time in a row by a record value over the past 13 years – 0.75%. And this is already very strange because it turns out that it does not matter what actions the British regulator takes – the market still buys the dollar. However, the market diligently ignored the previous seven rate increases, which was also not entirely logical. But on Friday, when strong labor market statistics were published in the US, the US dollar was already falling. It seems that the market lost touch with reality on Wednesday evening, traded in the wrong direction, and on Thursday and Friday, just tried to correct this "mistake." Therefore, we have also seen movements that do not fit with the nature of the fundamental and macroeconomic background. At the end of the week, the pair managed to gain a foothold a little above the Ichimoku cloud, but this is still not the consolidation that would allow the British pound to look optimistically into the future. The "bullish" mood in the market persists, but too often, the pound rolls back down, growing with great difficulty. The long-term downward trend may still resume. COT analysis. The latest COT report on the British pound showed a slight weakening of the "bearish" mood. During the week, the Non-commercial group closed 8.5 thousand buy contracts and 11.5 thousand sell contracts. Thus, the net position of non-profit traders increased by 3 thousand, which is very small for the pound. The net position indicator has been gradually growing in recent weeks, but this is not the first time it has been growing. The mood of major players remains "pronounced bearish," and the pound sterling maintains a downward trend in the medium term. And, if we recall the situation with the euro currency, there are big doubts that, based on COT reports, we can expect a strong pair growth. How can you count on it if the market buys the dollar more than the pound? The Non-commercial group has opened 79 thousand sales contracts and 34 thousand purchase contracts. The difference, as we can see, is still very big. The euro cannot show growth in the "bullish" mood of major players, and the pound will suddenly be able to grow in a "bearish" mood. As for the total number of open buy and sell, the bulls have an advantage of 21 thousand. But, as we can see, this indicator also does not help the pound much. We remain skeptical about the long-term growth of the British currency, although there are certain technical reasons for this. Analysis of fundamental events. Only business activity indices were published in the UK during the current week. All the most significant indices (for the service sector, the manufacturing sector, and composite) expectedly continued to fall and remain below 50.0. Only IDA for the construction sector has grown. Business activity indices were also published in the States, and the most important ISM for the service sector fell to 50.2 in October. The ISM index for the manufacturing sector has also declined, but it is relatively safe at 54.4. However, who is surprised by the drop in business activity now? All three economies are racing toward recession at full speed, and the question now can only be posed as follows: how strong will each recession be? As you can see, inflation continues to grow steadily in the EU and the UK, and in the US, at a rate of 4%, it is not in a hurry to fall much. All this suggests that all three central banks will continue to raise rates and do everything to extinguish inflation. And this, in turn, will harm economic growth. Trading plan for the week of November 7-11: 1) The pound/dollar pair as a whole maintains a long-term downward trend but is located above the critical line. Therefore, small purchases can now be considered if the Senkou Span B line is confidently overcome, with targets of 1.1764 and 1.2064. There are some reasons for the growth of the British currency, but there are still many reasons for the resumption of the fall. Be careful with your purchases. 2) The pound sterling has made a significant step forward but remains in a position where it is difficult to wait for strong growth. If the price fixes below the Kijun-sen line, the pair's fall can quickly and cheerfully resume with targets in the area of 1.0632 – 1.0357. Explanations of the illustrations: Price levels of support and resistance (resistance /support), Fibonacci levels – targets when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators (standard settings), Bollinger Bands (standard settings), MACD (5, 34, 5). Indicator 1 on the COT charts is the net position size of each category of traders. Indicator 2 on the COT charts is the net position size for the "Non-commercial" group.         Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326324

The outlook for Britain’s economy is very challenging. Slowing economic growth and a changing fiscal policy are a major concern for the British. Previous data and expectations of downward Monthly GDP changes suggest a downward trend. After the reading in September, the GDP M/M index returned to the level of zero. It is expected to decline from -0.3% to -0.4%. As shown by the data, for a significant part of the year the monthly change was weak, even negative. Source: investing.com The quarterly change of the index, despite the fact that it is currently in a positive position, it is expected that the next reading will be negative. the downward trend in GDP q / q continues and has recently reached the level of 0.2%, the current expectations are at -0.5% The annual change is also in a downward trend. GDP Y / Y is expected to reach 2.1%. Since the end of 2021, it has been at a low level of less than 10%, but despite several positive and quite high readings this year, the British economy shows signs of weakening. The official data about the indicator will be announced on Friday, November 11. Source: investing.com Generla outlook The Bank of England's forecasts are particularly difficult to put together, given the government's as yet unclear fiscal strategy. The Bank of England forecast last month that Britain would slip into a recession at the end of 2022 and not come out of it until early 2024. Food and energy prices have jumped, in part because of the Ukraine war, which has left many households facing hardship and started to drag on the economy. A recession is defined as when a country's economy shrinks for two three-month periods - or quarters - in a row. Typically, companies make less money, pay falls and unemployment rises. This means the government receives less money in tax to use on public services such as health and education. The unemployment rate is now at its lowest in 50 years, but is expected to rise to almost 6.5%. The forecast predicts an increase in the unemployment rate and a decline in household income. It is a picture of a painful economic period in which the UK is doing worse than the US and the euro area. Recession For most people, economic growth is good. It usually means there are more jobs. Companies are more profitable and can pay employees and shareholders more. The higher wages and larger profits seen in a growing economy also generate more money for the government in taxes. When the economy shrinks, all these things go into reverse. This is signal that recession is coming. However, the pain of a recession is typically not felt equally across society, and inequality can increase. Some people may lose their jobs, and unemployment could rise. Graduates and school leavers could find it harder to get their first job. Others may find it harder to be promoted, or to get big enough pay rises to keep pace with price increases. The results are already visible after the recent decisions of the Bank of England. Higher loan costs are already affecting households. Home buyers with tracking or floating rate mortgages will immediately feel the pain of an interest rate hike. These are just a few simple examples, but a recession can have long-term consequences for the citizen and the economy as a whole. Source: investing.com

Early in the Asian session, the British pound (GBP/USD) is trading around 1.1325 below the 200 EMA and 21 SMA. We can note that the pair opened with a bearish gap of 67 pips at 1.1303. The pair is expected to cover this GAP in the next few hours. On Friday of last week, the British pound reached the 200 EMA (1.1365) followed by the high at 1.1381. This happened after the price had touched the bottom of the downtrend channel at 1.1143. In the next few hours, the bearish British pound is expected to reach 2/8 Murray located at 1.1230 on the condition it settles below 1.1365. The US dollar suffered a drop in favor of GBP/USD. Positive data was released on Friday. USD remains on the defensive despite the fact that the US economy created more jobs than expected in October (261,000), while the unemployment rate rose to 3.7%. According to the technical analysis, a daily close above 1.1365 -1.1380 will be a clear signal to buy with targets at 1.1474 and at the psychological level of 1.15, which coincides with the top of the bearish channel. The key level for the next few hours is to watch the area of 1.1365. Below, we will continue to sell, because the pair will be under downward pressure and could fall to 1.1150. According to the 4-hour chart, the British pound is trading within a downtrend channel. A daily close above 1.15 will be the start of a bullish cycle and the price could reach 4/8 Murray at 1.1718 and even to the psychological level of 1.20. The eagle indicator is giving a negative signal and approaching the oversold zone. So, we could expect a pullback in the pound and it could find strong support that will give it a technical rebound around the 1.1230 zone to resume the bullish cycle again. Our trading plan for the next few hours is to sell GBP/USD below 1.1381 and below 1.1365 (200 EMA) with targets at 1.1300 and 1.1230(2/8 Murray).     Relevance up to 03:00 2022-11-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299834

The pound showed good growth on Friday, having won back Thursday's fall. Monday opened with a downward gap – the price decided to take a break on the MACD line of the daily scale. Most likely the gap will be closed. It is possible that the price will even reach the resistance at 1.1500, but after that, our main scenario requires the price to reverse and return to the support of 1.1170. If the price manages to settle above 1.1500, then it may continue to rise to the next resistance at 1.1760. The Marlin Oscillator returned to the positive area on the daily chart, which increases the probability of at least a short-term growth (1.1500). On a four-hour chart, the signal line of the Marlin Oscillator is slightly turning down from the zero neutral line, which can provoke a slight price decrease before further local growt     Relevance up to 03:00 2022-11-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326352

Analysis of GBP/USD, 5-minute chart The GBP/USD currency pair rose sharply on Friday. From our point of view, such growth is most suitable for the definition of "correction". The pound has been falling against the dollar for a couple of weeks. Sometimes it is quite logical, sometimes groundless, but one way or another correction was required. And it happened on Friday. It happened when few people were expecting it, since the US statistics, in our humble opinion, were neither weak nor a failure. That is, the dollar fell when it should have continued to grow. On the other hand, on Thursday, when the Bank of England raised its rate by 0.75%, the pound fell when it should have risen. In general, absolute illogicality, which can persist for several more days. In principle, there is nothing more to talk about Friday's statistics, a lot has already been said about it. As for the movements and trading signals, everything was not easy here. It was absolutely flat during the European trading session, but this flat was quite difficult to recognize at first. Traders may have entered one or two trades on signals around the 1.1212 level that turned out to be false and unprofitable. At the US trading session, a strong signal to buy was already formed after the release of statistics on the labor market and unemployment. But in this case, it would be much more logical to expect the pair's fall, rather than its growth. In general, the situation was difficult. Traders could open longs only in hopes of completing the flat and increasing volatility. If they did this, they covered the morning losses and remained in profit. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group closed 8,500 long positions and 11,500 short positions. Thus, the net position of non-commercial traders increased by 3,000, which is very small for the pound. The net position indicator has been slowly rising in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The Non-commercial group has now opened a total of 79,000 shorts and 34,000 longs. The difference, as we can see, is still very big. The euro cannot rise even though major players are bullish, and the pound will suddenly be able to grow in a bearish mood? As for the total number of open longs and shorts, here the bulls have an advantage of 21,000. But, as we can see, this indicator also does not help the pound too much. We remain skeptical about the long-term growth of the British currency, although there are certain technical reasons for this. Analysis of GBP/USD, 1-hour chart The pound/dollar pair shows such movements on the one-hour chart that it is very difficult to say which trend it is in at all. At first, there was a landslide fall with consolidation below the key lines of the Ichimoku indicator, as well as the trend line. Now the pair has returned to the Kijun-sen and Senkou Span B lines and it is unclear whether it will bounce off them or overcome them? In general, there are clearly more questions than answers. On Monday, the pair may trade at the following levels: 1.0930, 1.1060, 1.1212, 1.1354, 1.1486, 1.1645. Senkou Span B(1.1351) and Kijun-sen (1.1364) lines can also give signals if the price rebounds or breaks these levels. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. There are no important events scheduled for Monday in the UK and the US, but the market can trade very volatile, continuing to work out the events and reports of the past week. Not all of them were worked out logically. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.         Relevance up to 01:00 2022-11-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326344

The previous week was rich in all sorts of events and economic statistics, which increased uncertainty in markets. First of all, there was the decision of the Federal Reserve regarding its monetary policy, which continued to be hawkish, as perceived from Jerome Powell's speech. The Fed chief once again broke expectations that the bank would begin to gradually ease the rate hikes in order to analyze its impact on the national economy. Another highlight was the data from the US labor market, which showed a steady increase in the number of new jobs at 261,000 in October against the forecast of 200,000. All these were very important as investors are monitoring the monetary policy in the US. They are trying to understand how the Fed will act in the near future, more specifically if the bank will continue its aggressive cycle of raising interest rates or not. The former will signal if rates will rise above 5%. This week, the data on US inflation will come out, which is expected to be 0.7% higher in October, against the September growth of 0.4%. Its year-on-year value, however, will correct from 8.2% to 8.0%. If the report coincides with expectations or come out higher, the Fed will continue its aggressive rate increase, which will push the value above 5%. This will keep markets bearish. But if the figure indicates a slowdown in the growth of consumer prices, stocks will rise, while dollar will weaken. Also ahead is the result of the midterm elections in the US. It is assumed that the unconditional victory of Republicans will change not only the current political course, but also the economic one. Even so, it is difficult to say how this will affect markets, so be cautious when trading. Summing this all up, negative sentiment prevails among Fed members and the market as a whole, which can put pressure on stocks, while raising up dollar. Investors are obviously not convinced that inflationary pressure in the US will end by the end of year, or show even a small but steady decline. In this situation, dollar may once again put pressure on major currencies, while treasury yields will resume growth. Forecasts for today: AUD/USD The pair shows weakening growth, influenced by the weak data on exports and imports, as well as the trade surplus in China. The Australian economy is closely linked to Chinese imports and if market sentiment is generally negative today, the pair could drop to 0.6290 after breaking 0.6400. GBP/USD The pair is trading above 1.1270. Deterioration of market sentiment ahead of the congressional election result in the US, as well as caution before the publication of inflation data, may put strong pressure on the pair. A price drop below 1.1270 will only exacerbate this likely fall.     Relevance up to 08:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326370

EUR/USD Higher timeframes Today, at the opening of the week, a fairly deep downward gap has formed. Now bulls are trying to close it and restore their positions to the closing point of last week. The main task for the bulls to gain new prospects in this area is to go beyond the resistances of 0.9952 - 1.0000 - 1.1014 (upper limit of the daily cloud + weekly and psychological level). The nearest most important supports today can be noted at 0.9912 (daily short-term trend) and 0.9863–68 (daily medium-term + weekly short-term trend). H4 – H1 Having worked out the last target for the breakout of the H4 cloud at the first target (0.9744), bulls managed to end the decline and, having seized the initiative, changed the current balance of power in the lower timeframes. As of writing, the main advantage belongs to the bulls, and their benchmarks for continued rise today can be noted at 1.0037 - 1.0114 - 1.0262 (resistance of the classic pivot points). Key levels form support now at 0.9862–89 (central pivot of the day + weekly long-term trend). Consolidation below will change the distribution in the preponderance of forces. *** GBP/USD Higher timeframes Today, the opening of the new week is marked by a downward gap. The market thought. We look forward to what will happen next. For bulls to continue recovering positions and moving towards the unification of monthly and weekly resistances (1.1781 - 1.1842 - 1.1895), they first need to reliably overcome the nearest zone 1.1411 - 1.1511, where bearish interests protect the historical level and weekly medium-term trend. At the same time, it should be noted that the upper limit of the daily cloud (1.1324) currently influences the situation, and the main supports today are at the boundaries of the weekly levels of 1.1238 and 1.1046. H4 – H1 The day before, bulls performed a fairly effective rise and captured the support of the central pivot point of the day (1.1302). The key resistance today is located at 1.1390 (weekly long-term trend). The breakdown and reversal of the moving average will change the current balance of power, giving the main advantage to the side of the bulls. The classic pivot points (1.1457 – 1.1537 – 1.1692 ) will become benchmarks for continuing the rise within the day. If the bulls decide to complete the ascent, then the support on their way today can be noted at 1.1222 – 1.1067 – 1.0987 (classic pivot points). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Relevance up to 08:00 2022-11-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326376

In early November, the Fed and the Bank of England sent clear statements to the markets. Don't underestimate the potential for higher federal funds rates. And there is no need to overestimate the peak values of the repo rate. Different rates of monetary tightening seemed to convince investors that the GBPUSD pair has decided on the direction of further movement. It must go down. Alas, the market reaction to the US employment data for October turned everything upside down. After Rishi Sunak replaced Liz Truss as prime minister, the risk of a mismatch between fiscal and monetary policies disappeared from the pound, causing the GBPUSD to soar from 1.04 to 1.16. Speculators significantly reduced their bearish rates on sterling, but after the Bank of England became the focus of investors' attention, the sellers got down to business again. Dynamics of speculative positions on the pound Despite the increase in the repo rate by 75 bps to 3%, which was the BoE's widest move since 1989, Governor Andrew Bailey, at a press conference, preferred "dovish" rhetoric. According to him, market expectations of the borrowing cost ceiling are too high, while the UK economy is already in the deepest recession since 1990. Chief Economist Huw Pill confirmed his opinion a little later. Pill noted that rates will certainly continue to rise, but not to 5.25%, as expected by the futures market. The BoE is obviously trying to slow down sterling fans by all means. And their statements about the recession have the same purpose. At first glance, rumors of a recession spread by the regulator are counterproductive because, in such conditions, households can restrain spending, and enterprises can slow down investments. On the other hand, if the recession finally makes itself felt, the Bank of England may pause in the process of tightening monetary policy, explaining this by implementing its own plans. Dynamics of recessions in the UK economy Thus, despite the decisiveness shown in November in the form of a 75 bps increase in the repo rate, Bailey and his colleagues are moving towards gradualism, which, on paper, should support the GBPUSD bears. Especially in conditions when the Fed is ready to raise the cost of borrowing to almost 5.25%. Monetary policy divergences allow large banks and investment firms to hold negative views on sterling. Thus, Mitsubishi UFJ, Deutsche Bank and Rabobank predict that it will fall to $1.1 or lower. To their dismay, the collapse of the US dollar in response to the seemingly strong statistics on the US labor market was a real blow to the plans. In the coming days, the market will decide what it was: a dead cat bounce or a change in trend. Technically, on the GBPUSD daily chart, the pair's inability to consolidate above the fair value at 1.135 and within the corrective ascending channel indicates the weakness of the bulls and gives rise to sales in the direction of 1.12 and 1.11.   Relevance up to 09:00 2022-11-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326384

The pound shows significant growth for the second consecutive day. Yesterday the quote reached the target level of 1.1500. Now the price has two traditional options: to consolidate the success and continue to grow towards the next target at 1.1760, or turn around from the resistance and return to 1.1170. On this path, the price has an intermediate support at 1.1315 – MACD's indicator line. Given the political elections in the US that started today, where both parties are in favor of strengthening the dollar, we give a high probability to a reversal scenario. Technically, only the Marlin Oscillator is leaning in this direction so far, which is turning down. We can only follow developments. On the four-hour chart, the price is trying to settle above the reached level of 1.1500. Consolidation is also taking place above the balance and MACD indicator lines, which shows the bulls' obvious interest in being active. The political factor is strong today and tomorrow, so if the pound falls, the current situation will be interpreted as false and reinforcing the subsequent fall of the British currency. The British establishment is determined to win the Democrats, since it is with them that the English Rothschild clan, which put Rishi Sunak as prime minister, is associated.   Relevance up to 03:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326460

Analysis of GBP/USD, 5-minute chart Yesterday, the GBP/USD currency pair continued its sharp and powerful growth, which began on Friday. We still believe that the pair's movement is absolutely illogical, but the market thinks otherwise, and the pound continues to grow. At the moment, the price has overcome all lines of the Ichimoku indicator on the one-hour timeframe and settled above the Ichimoku cloud on the 24-hour timeframe. Therefore, both the pound and the euro finally have concrete technical grounds to count on a new upward trend. It is still unclear how strong and long it will be. We would only like to note that the fundamental and macroeconomic background remains unchanged, so it is difficult for us to count on a strong upward movement. However, both European currencies have been falling for a long time, it may be time for a correction globally. The US and British news calendar did not contain anything interesting on Monday, so the growth of the euro and the pound was not associated with any specific reasons. In regards to Monday's trading signals, everything was as simple as possible. The first sell signal near the Senkou Span B line turned out to be false, the price still went in the right direction for 45 points, so traders at least managed to set Stop Loss to breakeven, on which the short position was closed. This was followed by the price surpassing the 1.1351-1.1364 range, which was a signal to buy, which also had to be worked out. Subsequently, the pair went up to the level of 1.1486, near which the position should have been closed. Profit amounted to at least 100 points. Although the pair spent most of the day in a flat, after all, two upward jerks provided traders with a decent profit. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group closed 8,500 long positions and 11,500 short positions. Thus, the net position of non-commercial traders increased by 3,000, which is very small for the pound. The net position indicator has been slowly rising in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group has now opened a total of 79,000 shorts and 34,000 longs. The difference, as we can see, is still very big. The euro cannot rise even though major players are bullish, and the pound will suddenly be able to grow in a bearish mood? As for the total number of open longs and shorts, here the bulls have an advantage of 21,000. But, as we can see, this indicator also does not help the pound too much. We remain skeptical about the long-term growth of the British currency, although there are certain technical reasons for this. Analysis of GBP/USD, 1-hour chart The pound/dollar pair shows such movements on the one-hour chart that it is very difficult to say which trend it is in at all. First, there was a sharp fall and then it settled below the key lines of the Ichimoku indicator, as well as the trend line. But now the pair has settled above the Kijun-sen and Senkou Span B lines. Grounds for growth that would last even longer have appeared on higher time frames, but the situation is still unsteady. On Tuesday, the pair may trade at the following levels: 1.1060, 1.1212, 1.1354, 1.1486, 1.1645, 1.1760. The Senkou Span B (1.1351) and Kijun-sen (1.1356) lines can also give signals if the price rebounds or breaks these levels. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. There are no major events scheduled in the UK and the US on Tuesday, but the market may continue to trade in a very volatile manner, continuing to work out the events and reports of the past week. Not all of them have been worked out logically, but market participants are not worried about this. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 01:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326452

Analysis of transactions in the GBP / USD pair The test of 1.1340 occurred at the time when the MACD line just starting to move up from zero, which was a good reason to buy. This led to a price increase of more than 50 pips. However, the upward movement was so rapid that after hitting 1.1395, no downward correction took place. That was why selling on a rebound from the level led to losses. The speech of Bank of England member Huw Pill did not affect pound, however, the initiatives proposed by the new UK Prime Minister to resolve problems with the country's budget, as well as the weakness of dollar after last week's labor market data, pushed GBP/USD up. There are no important statistics scheduled to be released in the UK today, which theoretically should help pound to make an attempt to return to the region of monthly highs. However, it appears that a decline may occur some time today. In the afternoon, FOMC member Loretta Mester is expected to speak, followed by the NFIB's report on small business optimism. The latter is unlikely to support dollar, so the pair will trade within the side channel. For long positions: Buy pound when the quote reaches 1.1513 (green line on the chart) and take profit at the price of 1.1558 (thicker green line on the chart). But growth is unlikely to occur today, so be careful when taking long positions. Also, remember that when buying, the MACD line should be above zero or is starting to rise from it. Pound can also be bought at 1.1464, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.1513 and 1.1585. For short positions: Sell pound when the quote reaches 1.1464 (red line on the chart) and take profit at the price of 1.1394. Pressure will return in the event of hawkish statements from the Fed. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1513, however, the MACD line should be in the overbought area as only by that will the market reverse to 1.1464 and 1.1394. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.       Relevance up to 07:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326478

Consumer activity is important as it is the main driver for economic growth. The best indicator of its condition is retail sales, so a slowdown in Europe, from -2.0% to -1.5%, could strengthen the demand for euro, as well as pound. However, the report does not matter today as dollar is already losing position amid increasing fears brought about by the midterm election results in the US. The Republican Party is likely to take control of both houses of Congress, leading to many decisions to be delayed. This does not bode well in the context of the growing economic crisis. The market will stand still all day, waiting for the first preliminary voting results. Retail sales (Europe): Euro has skyrocketed in value against dollar. Since last Friday, the growth amounted to almost 300 points, which returned the quote to the parity level. However, euro is now overbought, so there may be a rebound or stagnation in the market. GBP/USD also rushed up by about 400 points, hitting 1.1410/1.1525. Signals show that it is overbought, so it is likely that there will be a rebound in the market.   Relevance up to 20:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326486

Yesterday, despite the strong upward movement of the pound, there were no signals to enter the market. Let's take a look at the 5-minute chart and see what happened. Earlier, I asked you to pay attention to the 1.1348 level to decide when to enter the market. A breakout of this range took place without a reverse test downwards, so it was not possible to enter long positions from there. A similar story happened in the 1.1416 level. COT report: Before analyzing the technical picture of the pound, let's look at what happened in the futures market. The Commitment of Traders (COT) report for November 1 showed that both long and short positions decreased. Most likely, the upcoming meetings of the Federal Reserve and the Bank of England were to blame, after which the US dollar regained its appeal again, albeit only for a while. The current COT report does not yet take these decisions into account. The English central bank's decision to raise interest rates coincided with economists' forecasts, while BoE Governor Andrew Bailey said he was ready to slow down with further aggressive policies in favor of economic growth, which is declining rapidly. He also expressed concern about the crisis in the cost of living in the UK, which in the near future, due to a sharp increase in interest rates, may add to the crisis of the real estate market. Against this backdrop, the continued pace of interest rate hikes by the Fed and a more cautious position from the BoE led to a major sell-off of the pound. That all changed after data on the US labor market indicated a sharp contraction, becoming a serious reminder for the Fed at the end of the week that it needs to act more cautiously in the future. The latest COT report indicated that long non-commercial positions decreased by 8,532 to 34,979, while short non-commercial positions decreased by 11,501 to 79,815, resulting in a slight decline in the negative non-commercial net position to -44,836 against -47,805 a week earlier. The weekly closing price increased and amounted to 1.1499 against 1.1489. When to go long on GBP/USD: Today there are no statistics on the UK, which may keep the demand for the British pound in the short term. To maintain the upward potential, the bulls need to be active in the area of the nearest support at 1.1466, just below which there are moving averages, playing on their side. A false breakout at this level will lead to a buy signal with a re-exit at 1.1534, above which it was not possible to break through yesterday. Without this level, it will be difficult for the bulls to build a bullish market in the future. We can only talk about the continuation of the upward correction if the pair moves higher, and a breakout of 1.1534, together with a reverse downward test, will open the way to a high of 1.1603, where it will become more difficult for the bulls to control the market. The farthest target is located at 1.1666 and I recommend locking in profit there. However, we can only expect this kind of growth after the US inflation report is published, scheduled for the second half of this week. If the bulls do not cope with the tasks set and miss 1.1466, the level at the end of yesterday, then the pair will be under pressure. If this happens, I recommend postponing long positions to 1.1416. It will be wise to go long after a false breakout. It is also possible to buy the asset just after a bounce off from 1.1358, or even lower - around 1.1292, expecting a rise of 30-35 pips. When to go short on GBP/USD: The bears are in no hurry to return to the market after Friday's reports, but in order not to completely lose the initiative, you need to be active around 1.1534, otherwise you can hold out until the last month's high is updated. In case the pound rises, a false breakout at 1.1534 is a signal to sell, counting on a downward correction and a fall to the nearest support at 1.1466. A breakthrough and reverse test upwards of this range will be a signal for shorts with the update of the low at 1.1416. The farthest target is located at 1.1358 and I recommend locking in profit there. In case the pair grows and bears fail to protect 1.1534, the bulls will regain control of the situation, counting on building a new upward trend to the area of the weekly high at 1.1610. A false breakout at this level will provide an entry point into shorts with the goal of moving down. If bears are not active there, then we might see a surge up to the high of 1.1666. Therefore, I advise you to go short after a rebound, expecting a decline of 30-35 pips. Indicator signals: Trading is performed above the 30- and 50-day moving averages, which indicates further growth for the pound. Moving averages Note: The period and prices of moving averages are considered by the author on the one-hour chart, which differs from the general definition of the classic daily moving averages on the daily chart. Bollinger Bands A break of the upper limit of the indicator in the 1.1540 level will lead to a new wave of growth for the pound. Description of indicators Moving average (moving average, determines the current trend by smoothing volatility and noise). The period is 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing volatility and noise). The period is 30. It is marked in green on the graph. MACD indicator (Moving Average Convergence/Divergence - convergence/divergence of moving averages). A fast EMA period is 12. A slow EMA period is 26. The SMA period is 9. Bollinger Bands. The period is 20. Non-profit speculative traders are individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions are the total number of long positions opened by non-commercial traders. Short non-commercial positions are the total number of short positions opened by non-commercial traders. The total non-commercial net position is a difference in the number of short and long positions opened by non-commercial traders.       Relevance up to 07:00 2022-11-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326472

There are no important reports scheduled for today that could significantly affect the markets. Today the attention is focused on the mid-term election in the USA and on the speeches of representatives of central banks on the old continents. Japan Household Spending Japan has published a report on household spending. The result of this report was not satisfactory. The current level of 2.3% was lower than expected. It was expected to drop from 5.1% to 2.7%. This year in Japan, spending is not looking very well. They reached the level below zero several times, and the last scare was a false signal. The monthly change in household spending is already more positive. The current score of 1.8% has increased from 1.7%. Which means that within a month there was an increase in expenses, but compared to last year, the result was negative. Household expenditure is an important factor in building the country's economy and has a significant impact on the GDP level. The less households spend, the smaller the turnover is, which affects the number of companies. The profits of companies in such a situation can sleep. This situation will significantly affect individuals. Observing this indicator, it can be concluded that households have started to save to a greater extent, and thus it gives a signal about the plunging situations of life in this country. BRC Retail Sales Monitor The value of same-store sales in BRC-member retail outlets in the U.K decreased from 1.8% to 1.2%. This is a negative result despite the fact that a decrease has been reported. this decline was 0.5% larger than expected. This year is not the best. After the record level in February, there were declines and sales were negative for several months. Speeches At 9:15 CET there were speeches from the old continent. Speakers were the German Buba President Nagel, member of German Buba Wuermeling and ECB's Enria. They probably spoke at 10:00 CET. Information provided in speeches that the focus is on closing inflation and thus on raising rates. At 10:30 CET, the SNB Gov Board Member Maechler also took the floor and thus gave instructions on Switzerland's moetary policy. At 11:00 CET a representative of the Bank of England also took the floor. The speaker was Huw Pill. His statement may turn out to be a signal for the motoring policy, and thus it may direct the pound's (GBP) situation in the present day. He is expected to speak again at 18:00 CET. Outside the European continent, a representative of the Reserve Bank of Australia (RBA) also spoke at 11:30 CET. The speaker was Governor Philip Lowe. As a key adviser to RBA board members, who decide short term interest rates, Lowe has considerable influence over the value of the Australian dollar. Traders scrutinize his public engagements for clues regarding future monetary policy. EU Retail Sales Retail sales figures from the European bloc were also published today. An improvement was expected in the monthly and in the annual shift. As a result of retail sales, y/y growth was expected from -2.0% to -1.3%. Also in the monthly change, the projected increase from -0.3% to 0.4%. The current readings are positive. The annual change in retail sales rose to 0.6%, and the monthly change met expectations. The current result in such a difficult economic situation is interpreted as a slight improvement, i.e. a positive report. Summary 1:30 CET Japan Household Spending 2:01 CET BRC Retail Sales Monitor 9:15 CET German Buba President Nagel Speaks 9:15 CET German Buba Wuermeling Speaks 9:15 CET ECB's Enria Speaks 10:30 CET SNB Gov Board Member Maechler Speaks 11:00 CET BoE MPC Member Pill Speaks 11:30 CET RBA Governor Lowe Speaks 12:30 CET EU Retail Sales (MoM) (Sep) 18:00 CET BoE MPC Member Pill Speaks Although there were no important reports today, one should watch the following days. Source: https://www.investing.com/economic-calendar/

Markets are anticipating the preliminary results of the midterm elections in the US, which are expected to have a significant impact on government financial policy, on inflation and, of course, the actions of the Fed. Many believe that a change will be seen if Republicans take control of both houses of Congress. This means that many decisions may be changed, especially in taxes, spending and support for the Ukrainian regime, which largely caused the high inflation in the country as demand increased amid significantly low supply, primarily in goods for everyday life. Such a scenario may cause a cautious rally in the stock markets and the weakening of the dollar. And if the data on consumer inflation, which will be presented on Thursday, show at least a slight downward correction, positive sentiment will grow, So far, about half of the Fed members are in favor of raising the rate not by 0.75%, but by 0.50% at the December meeting. This in itself may serve as a signal that the bank may start easing the rate hike, moreso if US inflation does not show a sharp increase. Forecasts for today: EUR/USD The pair is demonstrating a local downward reversal on the wave of a possible downward rollback on the stock markets today ahead of the results of the US Congress elections. But it found support at 0.9990, so a rise above this level may lead to a growth, albeit short-lived. Meanwhile, the pair's decline below 0.9990 may lead a local fall to 0.9895. GBP/USD The pair broke through 1.1465 amid lower risk appetite ahead of the midterm elections in the US. A further decline below this level will lead to a fall to 1.1350.     Relevance up to 09:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326503

Analysis of GBP/USD, 5-minute chart Yesterday, the GBP/USD currency pair continued its sharp and powerful growth, which began on Friday. We still believe that the pair's movement is absolutely illogical, but the market thinks otherwise, and the pound continues to rise. At the moment, the price has overcome all lines of the Ichimoku indicator on the one-hour timeframe and settled above the Ichimoku cloud on the 24-hour timeframe. Therefore, both the pound and the euro finally have concrete technical grounds to count on a new upward trend. It is still unclear how strong and long it will be. We only want to note that the fundamental and macroeconomic background remains unchanged, so it is difficult for us to count on a long upward movement. We fear that this movement will not become a simple "acceleration" before a new fall. This week there will be a small number of fundamental and macroeconomic events. Apart from the inflation report and the elections to the US Parliament, there is nothing special to highlight. Perhaps, by the way, the dollar is falling due to the likely victory of the Republicans in the elections. But this logical chain is absolutely non-obvious. Three trading signals were formed on Tuesday. First, the pair overcame the level of 1.1486, then rebounded from below, then settled above it. The first two sell signals can definitely be considered false, since the price could not reach the nearest target level. In the first case, it went down 28 points, in the second - about 40. That is, in both cases, Stop Loss should have been set to breakeven, at which both positions were closed. The third buy signal should not have been worked out, since the first two turned out to be false. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group closed 8,500 long positions and 11,500 short positions. Thus, the net position of non-commercial traders increased by 3,000, which is very small for the pound. The net position indicator has been slowly rising in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group has now opened a total of 79,000 shorts and 34,000 longs. The difference, as we can see, is still very big. The euro cannot rise even though major players are bullish, and the pound will suddenly be able to grow in a bearish mood? As for the total number of open longs and shorts, here the bulls have an advantage of 21,000. But, as we can see, this indicator also does not help the pound too much. We remain skeptical about the long-term growth of the British currency, although there are certain technical reasons for this. Analysis of GBP/USD, 1-hour chart The pound/dollar pair shows such movements on the one-hour chart that it is very difficult to say which trend it is in at all. First, there was a sharp fall and then it settled below the key lines of the Ichimoku indicator, as well as the trend line. But now the pair has settled above the Kijun-sen and Senkou Span B lines. Grounds for growth that would last even longer have appeared on higher time frames, but the situation is still unsteady. It is extremely difficult to explain why the pound is rising. On Wednesday, the pair may trade at the following levels: 1.1060, 1.1212, 1.1354, 1.1486, 1.1645, 1.1760, 1.1874. Senkou Span B (1.1351) and Kijun-sen (1.1366) lines can also give signals if the price rebounds or breaks these levels. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. Again, no major events are scheduled for Wednesday in the UK and the US, but the market may continue to trade in a volatile manner and trend, which is good for traders anyway. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.   Relevance up to 01:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326590

In my previous reviews, I pointed out that the wave structures of the two instruments I analyze daily were about to see the completion of the ascending sections of the trend. These sections will comprise 5 waves, and they won't be impulse ones. This is the most likely scenario because demand for the dollar may soar in the near term. Let's now analyze possible reasons for a stronger greenback. Future decisions This article is mostly about Goldman Sachs Group. Its analysts have downgraded their forecasts for EUR to $0.94 from $0.97 for the coming three months. In the course of its latest fall, the instrument approached $0.95. Given the latest forecast, we may expect the descending section of the trend to resume its formation or a new section to build up. According to Goldman Sachs, having a floating target, the US Federal Reserve may raise interest rates to 5% by March 2023, with one increase of 0.50% and two increases of 0.25%. Meanwhile, other central banks, including the Bank of England and the ECB, won't have any floating targets. Therefore, monetary policy divergence may deepen towards the US dollar. Economic growth in the United States In addition, Goldman Sachs says there is a 35% probability of the United States entering a recession in the coming 12 months, citing high inflation, the aggressive Federal Reserve, and geopolitical uncertainty. The company underlined that its forecast is more optimistic compared to the outlooks from other firms and banks because it foresees a realistic scenario of an economic path from high inflation to low inflation and without a recession. Economic growth in the United States is expected to fall below the trend line but remain above zero. The balance in the labor market is likely to be restored, and unemployment growth to be limited. The euro and the pound If it is an accurate forecast, the US economy is unlikely to get hurt badly. If a recession is weak and inflation gets back to 2% rather fast, there will be still no reason for an increase in demand for the dollar because analysts do not expect an easy path for the European or British economy. BoE Governor Bailey announced the British economy entered a recession in the third quarter, which may last for 2 years. Meanwhile, the ECB will hardly lift interest rates to 5% because the European Union is not a single country but a union of nations in different financial situations. Some countries will survive high rates painlessly, some may need economic support for quite a long time. By economic aid, we mean new allocations and stimulus programs, and this is something the ECB would like to avoid. Thus, the dollar again looks more promising than the euro and the pound. The sum up Based on the analysis, we may anticipate that the formation of the ascending trend section will become more complex and comprise up to five waves. It may be that the fifth wave of this section is now building up. Therefore, consider buying with targets located above the peak of wave c, based on the reversals of the MACD to the upside. The entire section of the trend after September 28th now has the a-b-c-d-e structure. However, once it is complete, the formation of a new downtrend section may begin.     Relevance up to 05:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326596

Analysis of transactions in the GBP / USD pair The test of 1.1464 occurred at the time when the MACD line had already gone down a lot from zero, which limited the further downside potential of the pair. Some time later, another test took place, but this time the MACD line was in the overbought area, so pound grew by about 40 pips. Selling for a rebound from 1.1585 in the afternoon led to a price decrease of around 50 pips. The lack of statistics on the UK did not become a reason for opening short positions, while the start of the midterm elections in the US fueled risk appetite and weakened dollar. There is nothing important on the UK today other than the speeches of Bank of England members Jonathan Haskel and John Cunliffe. Most likely, Cunliffe will talk about the further course of the monetary policy, which may negatively affect pound. In the afternoon, there is also no important fundamental statistics, so the market will return to balance ahead of tomorrow's inflation data in the US. Statements by FOMC members John Williams and Thomas Barkin, along with US wholesale inventory changes, will be of little interest, and only the next election results will lead to a surge in volatility. For long positions: Buy pound when the quote reaches 1.1563 (green line on the chart) and take profit at the price of 1.1640 (thicker green line on the chart). But growth is unlikely to occur today, so be careful when taking long positions. Also, remember that when buying, the MACD line should be above zero or is starting to rise from it. Pound can also be bought at 1.1504, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.1563 and 1.1640. For short positions: Sell pound when the quote reaches 1.1504 (red line on the chart) and take profit at the price of 1.1434. Pressure will return after a clear lack of signs of further growth, especially ahead of tomorrow's US statistics. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1563, however, the MACD line should be in the overbought area as only by that will the market reverse to 1.1504 and 1.1434. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 08:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326610

The pound has settled above the target level of 1.1500. Were it not for the US election, we would think that the pound is aiming for an upper target of 1.1760, but the clear Democratic hold on the upper house of Congress does not give investors an incentive to continue buying counter-dollar currencies. The daily Marlin Oscillator is turning down, while being in the positive area. The price is also in a growing position, as it develops above the indicator lines. Therefore, even if the pound plans a reversal, it will not happen immediately. Moreover, for a reversal, the price needs to overcome the support of these very indicator lines (1.1315 - the MACD line). The first sign of this reversal will be the price settling below 1.1500. On the H4 chart, the MACD line (1.1478) is under the level of 1.1500, so the price needs to settle below this level. An upward movement to the level of 1.1760 is possible with the price surpassing the October 27 high at 1.1644.   Relevance up to 09:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326632

UK and the European Union are rumored to be close to a major breakthrough in the months-long dispute over Northern Ireland's post-Brexit trading rules. Initially, the problem threatens a full-scale trade war, but the current crisis in which both regions experience record inflation seem to have made authorities do everything to find common ground. According to reports, the EU has begun testing the current UK database that tracks goods moving from the UK mainland to Northern Ireland. If they are satisfied with the system's performance, an agreement on customs checks in the Irish Sea may be signed. This recent upswing regarding negotiations allows Prime Minister Rishi Sunak's government to hope the deal will defuse tensions in the region and help the government resolve a number of problems. However, another key point to be addressed is the UK demanding that the European Court of Justice be stripped of its role in settling Brexit disputes in the region, which is not acceptable to the EU. The representative of the European Commission declined to comment on the progress of the talks, as did the British Foreign Office. Nevertheless, resolving the issue is beneficial as it would help correct supply chain disruptions and ease price pressures, especially if the Bank of England continues to increase rates at the current pace, which could push GDP down by up to 3.0% next year. GBP/USD In terms of GBP/USD, buyers are now focused on defending the support level of 1.1510 and breaking through the resistance level of 1.1590. This limits the upside potential as only a breakdown of 1.1590 will lead to a rise to 1.1690, 1.1730 and 1.1780. If pressure returns and sellers take control of 1.1510, the pair will drop to 1.1430 and 1.1360. EUR/USD In EUR/USD, sellers are not very active yet, so buyers have a chance to push the pair above 1.0090. A breakdown will spur growth to 1.0140, while a drop below 1.0030 will push euro back to 0.9970, 0.9920, 0.9880 and 0.9830.   Relevance up to 08:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326624

Summary:  Market sentiment improved further yesterday before dipping slightly overnight, as China Covid cases are on the rise, pushing back against hopes for a lifting of Covid restrictions. In the US mid-term elections, Democrats are slightly outperforming expectations, possibly set to retain control of the Senate even if Republicans look set to take narrow control of the House of Representatives. FX Trading focus: Next test for struggling USD over tomorrow’s US CPI data. The US mid-term election results are still rolling in this morning in Europe, with the Republicans set to take a small majority in the House and the Senate outcome looking at risk of riding on the outcome of a Georgia run-off election on December 6th as neither candidate looks set to achieve the 50% required for elections there. Remember that we had a similar setup after the 2020 election when two Senate races in Georgia were only decided in a January 5 run-off. There are no real market conclusions from the outcome, even if the Georgia race gives the Republicans a majority in the Senate, as the only scenario that would have guaranteed dramatic potential for fiscal policy would have been the Democrats surprisingly retaining both houses. Other conclusions: Trump is a liability for the Republican party, which likely would have done far better without his involvement, and forensic studies of split-ticket voting will likely confirm this, and it will be interesting to see if this deters his possible renewed ambitions for the presidency. Finally: razor thin Georgia results keep alive the narratives around election fraud, etc. Can the US move beyond its dysfunctional elections by 2024 or will the republic face an existential test in that election cycle? Back to incoming data, with tomorrow’s US October CPI in focus. Let’s recall that the September CPI data point was a real shocker as many qualified slicers and dicers of the data were looking for a deceleration in the core data rather than the acceleration we got. That has me leaning for a slightly softer release tomorrow. But I am far more interested in the nature of the market reaction. As I have discussed the last couple of days on the Saxo Market Call podcast, I find the most interesting test for the US dollar one in which we see inflation decelerating and US treasury yields perhaps easing a bit lower, but in which we also see risk sentiment weak as equity and bond markets are starting to decouple, as equities begin to fret recession rather than being merely led around by the nose by the treasury market. If that is the scenario we get and the USD weakens, then I think USD weakness can extend a bit more forcefully for a time, if not, then the USD could yet reject this breakdown attempt. I withhold judgement for now, as the USD has not yet broken down. But the easiest thing to do is to simply judge what happens on the charts in the wake of the data release (not knee-jerk, but how the day closes), as we have a number of clear-cut levels in play for the major USD pairs. Chart: USDJPY USDJPY has traditionally been a strong focus over US data surprises over the years and will be in focus with the macro event risk of the week, if not the month, coming up tomorrow in the form of the US October CPI release. Reaction in yields and risk sentiment are both worth watching as I have cooked up some thoughts of late (see above) on whether US treasury markets and equity markets could move out of correlation, i.e., that risk sentiment may have a hard time celebrating a drop in treasury yields. So, a weaker than expected US CPI report together with falling treasury yields, but also together with weak risk sentiment could provide the strongest support for the JPY here in a broad sense, though it might be felt more forcefully in JPY crosses. Regardless, if the JPY finds bids tomorrow, the 145.00 level will be a huge focus in USDJPY. Table: FX Board of G10 and CNH trend evolution and strength.The USD is clearly down, but will only be out on sticking further weakness in the wake of the US CPI release tomorrow. Elsewhere, note the sterling momentum turning badly south and SEK trying to look higher, not a surprise given European equities having rallied vertically for weeks – looking a bit much. Table: FX Board Trend Scoreboard for individual pairs.EURGBP is one to focus on around the 0.8800 level. JPY crosses are interesting in places as well as yields have consolidated a bit lower – look at the 165 area in GBPJPY, for example. But it is all about key USD levels after the US data tomorrow, including 1.0100 in EURUSD, 0.6522 in AUDUSD, etc… Upcoming Economic Calendar Highlights 1200 – Mexico Oct. CPI 1300 – UK Bank of England’s Haskel to speak 1530 – EIA's Weekly Crude and Fuel Stock Report 1630 – UK Bank of England’s Cunliffe to speak 1700 – World Agriculture Supply and Demand Estimates (WASDE) 0001 – UK Oct. RICS House Price Balance 0100 – US Fed’s Kashkari (Voter 2023) to speak   Source: https://www.home.saxo/content/articles/forex/fx-update-usd-on-edge-ahead-of-the-us-cpi-data-tomorrow-09112022

Analysis of Wednesday's deals: 30M chart of the GBP/USD pair The GBP/USD pair started a rather powerful fall on Wednesday, which is already in line with the real fundamental and macroeconomic picture. Recall that we consider the pound's growth in the last few days absolutely illogical and unreasonable. If we are right, then the downward movement has now begun to offset the injustice. There was not a single significant event on Wednesday, nor Tuesday, nor on Monday in the UK and the US that could be attributed to the movement of the pound/dollar pair. Moreover, on Monday, the pair's quotes settled above the descending trend line, and it went below this line on Wednesday. Everything goes to the fact that on higher timeframes we will see "swings", and on lower timeframes these will be trends for 3-4 days. The US currency may continue to grow on Thursday if the US inflation report turns out to be weak. The consumer price index should slow down a bit so that the market finds grounds to buy the dollar. To be clear, the weaker inflation falls (or does not fall at all), the higher the likelihood of a longer and stronger tightening of the Federal Reserve's monetary policy becomes, which is always good for the dollar. 5M chart of the GBP/USD pair There were plenty of trading signals on the 5-minute timeframe on Wednesday. Let's try to figure them out. First, the price bounced twice from the 1.1550 level. Neither in the first nor in the second case, it could not go down even 20 points. Therefore, the short position closed at a loss when the price moved above 1.1550. This departure could be regarded as a signal to buy, but it also turned out to be false and also closed at a loss. The third signal near the 1.1550 level turned out to be correct, but it just shouldn't have been worked out, since the first two signals were false. As a result, the next signal was only near the level of 1.1479. The price overcame it and dropped to 1.1435, so there was a profit of about 15 pips. Further, the price rebounded from 1.1435, traders should have opened longs, but in this case, they failed to make a profit, as the price did not reach the target level of 1.1479 by 4 points and returned back to 1.1435. The next sell signal is also false, but we managed to place a Stop Loss on it, as the pair went down more than 20 points. New a sell signal near 1.1435 and this time 42 pips profit as the pair hit the 1.1356 target perfectly. The last signal was formed too late in time, but was profitable. As a result, novice traders could end Wednesday by gaining a small profit. How to trade on Thursday: The pound/dollar pair maintains a downward trend on the 30-minute TF, but the whole movement already looks like a "swing". This week there was no fundamental or other background, however, the pair does not stand still and is traded rather volatilely. We expect a new fall in the pound. On the 5-minute TF on Thursday it is recommended to trade at the levels of 1.1146, 1.1200-1.1211-1.1236, 1.1356, 1.1435, 1.1479, 1.1550, 1.1608, 1.1648. When the price passes after opening a position in the right direction for 20 points, Stop Loss should be set to breakeven. No important reports or other events scheduled for Thursday in the UK, but the inflation report will be released in the United States, which will become the "principle of the day". The pair may continue to trade in a very volatile and trendy manner. Basic rules of the trading system: 1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal. 2) If two or more positions were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored. 3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading. 4) Trade positions are opened in the time period between the beginning of the European session and until the middle of the US one, when all positions must be closed manually. 5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance. 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. 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 speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement. 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.     Relevance up to 19:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326699

Yesterday, the British pound became the leader of the fall: -1.54%, while the dollar index rose by 0.74%. The price is approaching the support of the MACD line (1.1312), having overcome it, it will be able to continue its decline to 1.1170. Today, the US is expected to ease inflationary pressure in October estimates (CPI 8.0% y/y versus 8.2% y/y in September), which may slow down the decline, and tomorrow the British GDP forecasts could show a drop of 0.5%. The Marlin Oscillator is already preparing to move into negative territory this time. The pound is in a completely downward position on the four-hour chart - the price is developing under the MACD indicator line, the signal line of the Marlin Oscillator has overcome the zero line from top to bottom and ended up in the territory of a downward trend. Now the price needs to accumulate strength before attacking 1.1312.   Relevance up to 03:00 2022-11-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326713

The GBP/USD currency pair also began to adjust on Wednesday but, at the same time, failed to overcome the moving average confidently. As in the case of the euro currency, the pair failed to update its last local maximum, so there are certain reasons to assume that the upward trend will be completed at this point. Recall that just a few days ago, the price overcame the Senkou Span B line on the 24-hour TF, which opens up good prospects for it. However, the fundamental and geopolitical backgrounds remain such that it is very difficult to believe in the pound's growth over a long distance. Moreover, we still believe that the growth of the British currency in the last few days was illogical. This week, there was no important macroeconomic event in the US or the UK. At the expense of what did the pound grow then? Thus, we still believe that the pair's fall is more likely than its growth. Recall that bitcoin has been around the important $18,500 level for several months, bouncing 15 or 16 times. But in the end, when everyone thought growth had begun, he took "acceleration" before breaking through the "reinforced concrete" level. Therefore, we can observe something similar in currency pairs. Perhaps the movement we are seeing now is illogical and groundless – it's just an attempt by traders to drive the pairs higher so that they can sell at a more favorable rate. Recall that the UK and its economy are no longer just on the verge of recession. They already have one foot in this "swamp." This Friday, a report on GDP for the third quarter will be published, likely to turn out negative and will be the first in a series of failed reports. Thus, the pound has neither economic grounds for growth nor the support of the Bank of England nor geopolitical grounds. Interim results of the US parliamentary elections One of the most interesting recent topics has been the US Parliament's midterm elections. We want to make a reservation right away that the fall of the dollar is unlikely to be related to them since, at the moment, it is not even clear who will establish control over both chambers. Yes, the interim results speak in favor of the Republicans, but this statement is true only for the lower house. Currently, 199 seats out of 435 go to Republicans and 172 to Democrats. That is, the fate of 64 more seats is still unknown, and even the current leadership of the Republicans can be lost easily. Experts note that the second round of voting may be required in some states, which will occur no earlier than December. In some states, the votes have not yet been fully counted, and the results are very close, so the scales may tilt in either direction. Experts also believe that final results should not be expected in the coming days because counting millions of votes is not a fast process. There are states where the results are obvious, and all votes need not be considered for intermediate results. But such a picture does not develop everywhere. As for the Senate, the Republicans are leading by a margin of 1 vote. However, the fate of 5 more senators remains unknown, so the Democrats can calmly level the gap here. Recall that with equal seats in the Senate, of which there are only 100, the decisive vote will remain with Kamala Harris, who is a representative of the Democratic Party. Therefore, Democratic senators need to get three votes out of the remaining 5 to win the election to the Senate. If Republicans win in the House of Representatives, they will be able to block some of the Democrats' decisions, but they will not be able to make their own decisions alone. Both ruling parties will have to negotiate with each other on all important issues, which is perhaps even good. The average volatility of the GBP/USD pair over the last five trading days is 228 points. For the pound/dollar pair, this value is "high." On Thursday, November 10, thus, we expect movement inside the channel, limited by the levels of 1.1152 and 1.1607. A reversal of the Heiken Ashi indicator upwards will signal a new round of upward movement. Nearest support levels: S1 – 1.1353 S2 – 1.1292 S3 – 1.1230 Nearest resistance levels: R1 – 1.1414 R2 – 1.1475 R3 – 1.1536 Trading Recommendations: The GBP/USD pair has started a new downward movement in the 4-hour timeframe. Therefore, at the moment, you should stay in sell orders with targets of 1.1230 and 1.1152 until the Heiken Ashi indicator turns up. Buy orders should be opened when fixing above the moving average with targets of 1.1536 and 1.1607. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.       Relevance up to 01:00 2022-11-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326709

The pound jumped 357 points on Thursday, almost hitting the September 13 high of 1.1737. Now the price is pulling back from yesterday's peak. With this rollback, a divergence begins to form with the Marlin Oscillator on the daily chart. If the divergence is completed, then the wedge-shaped graphic structure will also be completed, the exit from which will strengthen the downward movement for the pound, at least to the target level of 1.0780. The first such reason may be today's data on British GDP for the third quarter. The forecast for it assumes a contraction of GDP by -0.5% (-0.4% in September). Industrial production for September is projected at -0.2%. The price is not yet thinking of turning around on the four-hour chart - all indicators point to the prospect of growth. Therefore, we are waiting for the release of economic data and monitoring the price reaction after the fact. The indicators in the current situation seem to be in a position driven by the price. The reversal will be confirmed when the price settles under the MACD line, under the level of 1.1500.   Relevance up to 04:00 2022-11-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326845

The pound rally gained new momentum on Friday morning, following a respite after the 3% rise in GBPUSD on Thursday. The British currency was supported predominantly by better-than-expected economic data and comments from the Governor of the Bank of England on the intention for further rate hikes. Forecast The UK economy contracted by 0.2% in the third quarter - noticeably less than the forecasted drop of 0.5%. One year ago, growth in the same period diminished to 2.4% after 4.4% in the second quarter and +2.1% expected. For September, the economy contracted by 0.6%, following a decline of 0.1% in August. Industrial production and manufacturing Industrial production added 0.2% in September, losing 3.1% y/y. Manufacturing is more challenging, holding on to volumes in September after contracting by a cumulative 2.9% in the previous three months. Separately, there is an improvement in the balance of foreign trade. The monthly deficit decreased to 15.6bn compared to 17.2bn a month before, 16.1bn a year ago and a peak of 23 in January. However, this is well above 'normal' levels from 2013 to 2019, near 12bn. Exports are up 46% y/y, or 11.8bn and imports are up 27% or 11.4bn. UK economy The UK economy has started to contract without surprises, evidenced by earlier labour market figures. Nevertheless, so far, it is a softer landing than previously feared. GBP/USD Nevertheless, it is essential for market participants that the published data shows a less tragic slowdown trajectory and that the decline in commodity prices in recent months is easing the pressure on imports and industry. In this environment, there are more and more reasons for long-term buying of the British pound, which renewed its historic low against the dollar in September. As a result, the GBPUSD is now above 1.1750, having beaten off losses since August. The rise in the British currency also shows signs of breaking the downtrend as GBPUSD has surpassed previous local highs and has consolidated above the 50-day average. On the technical analysis side, GBPUSD may encounter little resistance up to the 1.20 area by the end of the month, where the bulls will still have to prove their strength.

In its growth, the British pound reached the range of 5-day consolidation on August 22-26. Here, a divergence began to form with the Marlin Oscillator. Settling under 1.1737 will also fix this reversal. But as long as there is no such consolidation, we can expect the closure of the gap formed today with the opening of the market. The first target of the correction is the support level of 1.1500. If the price settles below the level, then a complex and intricate struggle will begin in the 1.1170-1.1500 range, since a serious consolidation has already been formed here since the beginning of October. On the H4 chart, the Marlin Oscillator at least settles when the price rises, which a little later will turn into a reversal of this indicator. So, when the gap is closed, the price will settle under 1.1737, we are waiting for the pound's corrective decline to the support of 1.1500.       Relevance up to 03:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326986

Early in the European, session the British pound is trading at 1.1776, showing some technical correction after reaching a high of 1.1853 last week. At the opening of trading this week, the British Pound opened with a bearish GAP around 1.1791, some 40 pips from Friday's close. On the 4-hour chart, we can see that this Gap has not been fully covered yet. Therefore, it is likely that in the next few hours there will be a pullback towards the 1.1850 level and then it could be considered an opportunity to sell. On Friday GBP/USD broke sharply the resistance of 8/8 Murray which has now become a key support. In case of a technical bounce around 1.1718, there could be an opportunity to buy with targets at -1/8 Murray located at 1.1962. The price could even reach the psychological level of 1.20. The pound sterling took advantage of the US dollar's weakness as a result of lower-than-expected US inflation data. This positive sentiment in investors assured them to invest in risky assets. Therefore, the pound gained momentum. It is likely to continue its rise this week and could reach the 1.20 level. Conversely, a return below 1.1718 could signify a major technical correction and the price could hit the 21 SMA located at 1.1589. A strong technical bounce is expected around this zone which could be a signal for the bulls to resume buying and GBP/USD could reach 1.1850 and even 1.19 62 (+1/8 Murray). The eagle indicator is breaking a key level of resistance and is likely to continue to give a positive signal in the coming days. Its value could reach the 95-point zone which represents an extremely overbought area. Meanwhile, any technical bounce in the GBP/USD pair could be considered an opportunity to buy. Only a daily close below 1.1580 could be a clear signal for the pound to fall and it could reach the 200 EMA located at 1.1418.   Relevance up to 04:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/300801

Analysis of GBP/USD, 5-minute chart Last Friday, the GBP/USD currency pair continued to practically "collapse", so to speak. The US dollar fell another 140-150 points. If you look at Friday's macroeconomic statistics, it becomes clear that the British currency had no reasons to grow. Early in the morning it became known that the British GDP fell by 0.6% in the third quarter, which can hardly be called a "positive factor". However, the pound continued to rise, and to be more precise, the dollar continued to fall. Thus, the market simply ignored the British statistics, preferring to work out the US inflation report, which provoked a storm of emotions. We have an ascending trend line on the hourly timeframe, and on the 4-hour timeframe, the price is above the Ichimoku indicator lines. Thus, we have an upward trend, which does not raise doubts and questions. Nevertheless, we expect at least a serious correction this week. But in regards to trading signals, the situation on Friday was very bad. Despite the fact that most of the day there was a strong trend movement, all signals were formed only around one level - 1.1760. Thus, traders could work out only the first two. Both were for short positions, in both cases the price went down more than 20 points, but never managed to reach the target level or go a significant distance in the right direction. Therefore, both positions were closed by Stop Loss at breakeven. All subsequent signals should not have been worked out. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group closed 8,500 long positions and 11,500 short positions. Thus, the net position of non-commercial traders increased by 3,000, which is very small for the pound. The net position indicator has been slowly rising in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group has now opened a total of 79,000 shorts and 34,000 longs. The difference, as we can see, is still very big. The euro cannot rise even though major players are bullish, and the pound will suddenly be able to grow in a bearish mood? As for the total number of open longs and shorts, here the bulls have an advantage of 21,000. But, as we can see, this indicator also does not help the pound too much. We remain skeptical about the long-term growth of the British currency, although there are certain technical reasons for this. Analysis of GBP/USD, 1-hour chart The pound/dollar pair continues its crazy growth on the one-hour chart. Even a trend line is not really necessary to determine what the current trend is. We consider such a movement somewhat unfounded, however, the market continues to buy, so the movement can theoretically continue as long as you like. However, this week we still expect a serious downward correction. On Monday, the pair may trade at the following levels: 1.1354, 1.1486, 1.1645, 1.1760, 1.1874, 1.1974-1.2007, 1.2106. Senkou Span B (1.1394) and Kijun-sen (1.1594) lines can also give signals if the price rebounds or breaks these levels. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. There are no major events or reports scheduled for Monday in either the UK or the US. However, the pair may continue to trade in a very volatile manner. As for the direction of movement, we expect a downward correction. The pair cannot rise for the third consecutive day based on the US inflation report alone! What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 01:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326978

Analysis of transactions in the GBP / USD pair The test of 1.1743 occurred at the time when the MACD line moved up quite a lot from zero, which limited the upward potential of the pair. Some time later, another test took place, but this time the MACD line was exiting the overbought area, which was a good reason to sell. The quote decreased, but not that strongly. In the afternoon, another test happened, during which the MACD line was moving above zero, leading to growth of about 50 pips. Although the 3rd quarter GDP data for the UK pointed to a contraction in the economy, it was still better than the forecasts, so pound continued rising in the market. The UK manufacturing output also remained at a fairly good level, and the negative trade balance increased even more. There are no statistics scheduled to be released today, so the situation should more or less level off. This means that traders can bet on the continuation of the bull market, but it is unlikely that it will develop as rapidly as at the end of last week. There are also no reports expected in the afternoon, so the day can go pretty smoothly. For long positions: Buy pound when the quote reaches 1.1782 (green line on the chart) and take profit at the price of 1.1872 (thicker green line on the chart). Growth may occur, following the current bullish trend. But remember that when buying, the MACD line should be above zero or is starting to rise from it. Pound can also be bought at 1.1719, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.1782 and 1.1872. For short positions: Sell pound when the quote reaches 1.1719 (red line on the chart) and take profit at the price of 1.1650. Pressure may increase, but it is best to look for buying options from 1.1719. Also, take note that when selling, the MACD line should be below zero or is starting to move down from it. Pound can also be sold at 1.1782, however, the MACD line should be in the overbought area as only by that will the market reverse to 1.1719 and 1.1650. What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2022-11-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327010

The previous week ended with a noticeable increase in risk appetite and weaker demand for dollar. The main reason was the growing purchases of government bonds in the US, accompanied by a strong drop in yields. The scenario happened because of the latest inflation data in the US, which showed a sharp decrease in the year-on-year ratio and growth in the month-over-month one. Markets have been hoping for this kind of positive news for a long time, believing that the measures taken earlier by the Fed put further pressure on the economy. Now that the figures improved, the US central bank may start easing the pace of rate increases, then take a break. Much will depend on the values of inflation indicators for November, which will be presented in December. If they show, if not a continuation of a strong decline, but at least a stabilization or a slight decrease, then a strong rally may occur in all markets without exception. It could be accompanied by the depreciation of dollar and decrease in Treasury yields. Be that as it may, positive sentiment will continue today. Although stock indices in Europe and the US remain in negative territory this morning, everything may change by the start of the US trading session. In this case, dollar will continue to weaken, then decline further towards the end of the week, especially if the published data on retail sales and their volumes show better values than expected. Data on consumer inflation in the euro area is also important as its figure will affect risk appetite. US statistics will also play an important role since the very position of the ECB on the issue of further aggressive rate hikes remains unclear. Forecasts for today: EUR/USD The pair is trading above 1.0300. If market sentiment worsens, there will be a decline to 1.0235. GBP/USD The pair is trading above 1.1735. If buying pressure remains, it will rise further to 1.1900. But if market sentiment worsens, there will be a decline to 1.1635.   Relevance up to 08:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327022

Whatever problems the government and the Bank of England face, they all pale in comparison with the market's belief in slowing down the process of tightening the Fed's monetary policy. The decline in the growth rate of US consumer prices in October from 8.2% to 7.7% and core inflation from 6.6% to 6.3% was the catalyst for large-scale sales of the US dollar. And even the pound, vulnerable due to the weakness of the British economy, managed to soar above $1.18.—last seen at these levels in late August. The sterling rally was much less violent than the euro or the yen due to the presence of significant uncertainty in monetary and fiscal policies of the UK. On November 17, the government is due to present a new plan showing how it intends to close the £50 billion budget gap. Tax hikes will be likely, which, in a recession already in place, looks like cutting the branch you're sitting on. Indeed, the UK GDP sank by 0.2% QoQ in the third quarter. The final figure was less than Bloomberg experts predicted, but Britain remains the only G7 economy that has not yet recovered from the pandemic. Dynamics of the G7 economies In such circumstances, the appearance of "dovish" speeches from representatives of the Bank of England does not look surprising. Silvana Tenreyro believes that repo rate was in restrictive territory even before the 75 bps increase in November to 3%. It's just that monetary restrictions affect the economy with a time lag, and the current level of borrowing costs is enough to bring inflation back to the 2% target. Personally, I have serious doubts about her words, considering the forecasts of Bloomberg experts about the acceleration of consumer prices in the UK in October from 10.1% to 10.4%. According to Investec, this time, the main driver of the CPI acceleration will be energy: in the second month of autumn, electricity bills for British households rose by 27%. At the same time, economists believe that core inflation has slowed from 6.5% to 6.2% amid weakening domestic demand. Thus, it is very difficult for both the government and the Bank of England to make responsible decisions against the backdrop of a recession, the need to put public finances in order and high inflation. However, the GBPUSD is at risk of further gains due to massive sell-offs in the US dollar. Unlike in Britain, inflation in the United States continues to slow down and, most likely, has already passed its peak. This allows the futures market to assume that the federal funds rate will never reach the 5% mark that everyone expected. If so, then the top of the USD index is left behind. Technically, the Three Indians pattern has formed on the GBPUSD daily chart. However, its implementation requires a drop in quotes below 1.155. Until that happens, the sentiment remains bullish. We use the pair's pullbacks followed by a rebound from the supports at 1.175 and 1.165 for purchases.   Relevance up to 07:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327014

The third quarter saw remarkably strong production as easing supply problems helped production growth. Don’t expect this to continue much from here on as new orders, production expectations and increasing inventories point to weakening production ahead Industrial production increased by 0.9% in September and that resulted in a total quarterly increase of 0.5% for 3Q. This was a surprise that added to the positive GDP figure for the quarter. It is most likely caused by fading supply side problems which industry has battled since mid-2020. This is helping backlogs of work to be dealt with, which is boosting production, despite survey data having disappointed consistently over recent months. In September, production categories were a mixed bag, so there was no broad-based improvement in production. Capital goods and non-durable consumer goods production saw strong growth – just like last month – while intermediate, durable consumer goods, and energy production all declined. Germany was the only large country that recorded growth, while France, Spain and Italy all saw production contract. While August and September both saw surprisingly strong production, there is little hope for this to be the start of a strong recovery. Businesses continue to report falling new orders as demand is fading and inventories have increased. For the winter months we, therefore, continue to expect weaker production as the catch-up effect for production is unlikely to last much longer. TagsGDP Eurozone   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The GBP/USD currency pair also showed no desire to move volatile on Monday. The price continues to be above the moving average line, and at least one linear regression channel is already directed upwards. As in the case of the euro currency, the pound overcame the important lines of the Ichimoku indicator on the 24-hour TF, so it has technical grounds for continuing growth in the medium term. However, there are a lot of questions about the "foundation" and geopolitics. What will happen if the conflict in Ukraine escalates with renewed vigor? What will happen if the Bank of England stops raising the rate in the near future? Recall that the military conflict between Ukraine and Russia has not been completed or frozen, and peace talks are not even "smelling" now. The APU is gradually moving forward, but this hardly means that the Russian army will turn back, which would end the conflict. New rocket attacks on Ukrainian cities are not excluded, the use of new weapons is not excluded, and the intervention of third countries directly into the conflict is not excluded. I don't even want to talk about sanctions because the parties have already introduced almost everything that could have been introduced. We can assume that the worst is over, but the probability of this is not 100%.  Bank of England The same is true with the Bank of England and its monetary policy. The British regulator has already raised the rate eight times in a row, and inflation has been growing and continues to grow. The key rate at the moment is already 3%; this is the value at which it is possible to expect at least a slight slowdown in price growth. However, this week, the next inflation report will be published and judging by the forecasts, there is no point in expecting something good from it. Currently, inflation in the UK is 10.1%, and forecasts for October indicate a new increase to 10.7–11.0%. Consequently, the Bank of England can be expected to tighten monetary policy by another 0.75% in December, but to what extent can it raise the rate? After all, its economy is also going through hard times. The British government So far, it is unclear how the British government will close the "hole" in the budget by 50 billion pounds. The corresponding financial plan from Jeremy Hunt and Rishi Sunak will be presented only on November 17. Most likely, taxes will be raised, which may cause serious discontent among the British population and significantly lower the ratings of the Conservative Party. Therefore, the BA does not have the opportunity, like the Fed, to raise the rate as much as it wants. British inflation British inflation is the most important report of the week. Unemployment rate In the UK, the unemployment rate, changes in average wages, and retail sales will also be published this week. Of course, these reports do not match the inflation report, so we associate the main market reaction with this report. A new increase in the consumer price index can support the pound, as it will likely mean a new increase in the BA rate in December by another 0.75%. But this is just a theory and an assumption, and the market can react as you like. And also, no one can know if this report has not already been worked out because it is very easy and simple to expect a new acceleration of inflation in Britain now. UK Data In the US, retail sales, industrial production, and data on applications for unemployment benefits will be released this week. Also, quite secondary are the reports. With such a macroeconomic background, it will be difficult for the pair to continue growing, which now largely depends on traders' expectations for the Fed and BA rates. We expect a tangible correction after the "take-off" last week. The pound has recovered from its absolute lows by 1400 points and is regularly adjusted downwards. Therefore, this week is a good time for a rollback. As for the longer-term prospects, the pound may continue to grow, but we do not expect a rapid recovery after losses over the past year and a half. Most likely, periods of growth and rather deep corrections will alternate. The pound still needs to look like a stable and safe currency. GBP/USD The average volatility of the GBP/USD pair over the last five trading days is 222 points. For the pound/dollar pair, this value is "very high." On Tuesday, November 15, thus, we expect movement inside the channel, limited by the levels of 1.1516 and 1.1954. The upward reversal of the Heiken Ashi indicator signals the resumption of the upward movement. Nearest support levels: S1 – 1.1719 S2 – 1.1597 S3 – 1.1475 Nearest resistance levels: R1 – 1.1841 R2 – 1.1963 Trading Recommendations: The GBP/USD pair has started a minimal correction in the 4-hour timeframe. Therefore, at the moment, buy orders with targets of 1.1841 and 1.1960 should be considered in the case of a reversal of the Heiken Ashi indicator upwards. Open sell orders should be fixed below the moving average with targets of 1.1475 and 1.1353. Explanations of the illustrations: Linear regression channels – help to determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.       Relevance up to 01:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327097

Yesterday, the pound sterling fell 74 points under the influence of an overall strengthening of the dollar by 0.44%. Trading volumes were comparable to Friday's (very high), so we can assume that investors are taking profits and closing positions. Settling under the immediate support of 1.1737 will be a sign of investors' intentions to open direct sales of the pound. This will make the 1.1500 target available. The price divergence with the Marlin Oscillator on the daily chart is getting stronger. On the four-hour chart, the signal line of the Marlin Oscillator approached the border with the downtrend area. Settling under 1.1737 may coincide with Marlin's transition to the negative area. This pattern of synchronicity will give the price the momentum for a fall. Aim for 1.1500. The MACD line, which is slightly above the target level, can also be attacked.     Relevance up to 03:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327101

Analysis of GBP/USD, 5-minute chart The GBP/USD currency pair corrected more confidently than EUR/USD on Monday. The pair lost about 100 points during the day, but it still remains above the trend line and above all the Ichimoku indicator lines, so the upward trend continues. There was no macroeconomic background both in the UK and in the US, but this week there will be at least one significant report on Great Britain, which may become crucial for the pound. If traders so zealously worked out the US inflation report last week, then this week they can also work out the British inflation report, which, most likely, will again show acceleration. And the next acceleration of inflation will automatically mean a very likely increase in the rate of the Bank of England in December by 0.75%, which, in turn, may further increase the demand for the British pound. However, inflation may rise or not, it could but not so much, so the movement can easily be reversed. All trading signals on Monday formed around the level of 1.1760, although there was no pronounced flat. However, absolutely all trading signals turned out to be false. At the European trading session, it was difficult to assume that everything would be exactly like this, so traders could work out the first two signals. The first one turned out to be an absolute failure when the price settled below the level of 1.1760, since even 20 points in the right direction were not passed. The position closed at a loss. The second signal was more successful, as the price went up 50 pips, so traders could even make a small profit on this trade, but the signal was still considered false. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group closed 8,500 long positions and 11,500 short positions. Thus, the net position of non-commercial traders increased by 3,000, which is very small for the pound. The net position indicator has been slowly rising in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group has now opened a total of 79,000 shorts and 34,000 longs. The difference, as we can see, is still very big. The euro cannot rise even though major players are bullish, and the pound will suddenly be able to grow in a bearish mood? As for the total number of open longs and shorts, here the bulls have an advantage of 21,000. But, as we can see, this indicator also does not help the pound too much. We remain skeptical about the long-term growth of the British currency, although there are certain technical reasons for this. Analysis of GBP/USD, 1-hour chart The pound/dollar pair continues its upward movement on the one-hour chart. We consider such a movement somewhat unfounded, however, the market continues to buy, so the movement can theoretically continue as long as you like. However, this week we still expect a serious downward correction. This may be facilitated by reports from the UK. On Tuesday, the pair may trade at the following levels: 1.1354, 1.1486, 1.1645, 1.1760, 1.1874, 1.1974-1.2007, 1.2106. Senkou Span B (1.1383) and Kijun-sen (1.1594) lines can also give signals if the price rebounds or breaks these levels. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. The release of unemployment and wages reports is scheduled for Tuesday in the UK. This is not the most important data, but they can also provoke a small reaction. There will be nothing interesting in America today. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 01:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327093

The dollar is inching lower again this morning and we think the ongoing correction could extend a bit more as optimism on US-China relations appears to be lifting sentiment. That said, a broader and sustained USD downtrend on the back of the China and/or Fed pivot story appears premature. Today, keep an eye on the ZEW and UK pre-Budget headlines In this article USD: A bit more pain EUR: Eyes on ZEW GBP: More Budget-related headlines SEK: Riksbank may go for 75bp after all USD: A bit more pain The dollar showed tentative signs of recovery yesterday, but appears to be lacking any strong support at the moment. While we don’t buy the one-way traffic, and the USD-bearish narrative in the longer run, there may be extra downside room for the greenback this week. With the US calendar being rather light, the two main drivers of global sentiment are China and Fed speakers. With respect to the first, there are two aspects to consider: data and diplomatic talks. As discussed here, Chinese industrial production and fixed asset growth numbers for October were in line with consensus, but the retail sales drop (-0.5% year-on-year) came as a surprise. Still, retail sales are highly sensitive to Covid restrictions, and the recent progress towards more flexible rules suggests room for recovery. Asian equities are rallying this morning, and this appears to be due to general optimism after a long meeting between US President Joe Biden and Chinese President Xi Jinping at the G20 meeting yesterday, which was followed by mildly encouraging remarks about diplomatic cooperation. We still suspect it is too early to point at China as the key driver for a broader recovery in risk sentiment (and dollar descent), considering the still sizeable economic challenges affecting China going beyond its Covid policy (e.g. real estate fragility, slowing global demand). On the Fed front, we heard from both sides of the hawk-dove spectrum yesterday. The hawk Christopher Waller dismissed the deceleration in core inflation as just “one data point” and that more data was needed to conclude tightening should slow. The dove Lael Brainard also signalled there is more work to do, but explicitly said the Fed will likely shift to slower rate increases soon. It appears that the FX market was primarily affected by Waller’s remark, with the ultra-Fed-sensitive yen dropping around 1% yesterday. For now, we read recent Fedspeak as further indication that a bearish dollar call on the back of Fed dovish pivot bets still appears premature. Today, we’ll hear from the Fed’s Patrick Harker, while the data calendar includes October Empire Manufacturing and PPI figures. Some extra near-term USD weakness is possible, but we suspect we are reaching the bottom of the recent downtrend. Francesco Pesole EUR: Eyes on ZEW November’s ZEW survey is the main release to watch in the eurozone’s calendar today, and expectations are for a generalised improvement on the back of lower energy prices. Later this morning, it will be worth watching for any revision in the eurozone’s third-quarter GDP numbers. We’ll also hear from the ECB’s Francois Villeroy. EUR/USD strength is largely a USD story, and any support to the euro appears largely driven by energy prices, if anything. We could see another leg higher in the pair over the coming days, and 1.0500 could be at reach, even if we expect a relatively fast descent over the winter. Francesco Pesole GBP: More Budget-related headlines Ahead of the Autumn Budget announcement in the UK this Thursday, markets are being flooded with reports about which measures will be announced. Chancellor Jeremy Hunt is now widely expected to deliver a 40% windfall tax on energy companies’ excess profits, while it’s been reported that the minimum wage will be raised from £9.50 to £10.40 an hour. Expect more headlines – and some sterling reaction – today. On the data front, jobs numbers were released in the UK this morning. As expected, the unemployment rate edged higher but was mostly driven by hiring freezes rather than rising redundancies. Reduced labour supply remains a bigger concern, especially as long-term sickness numbers continue to rise. Our economics team continues to expect a 50bp hike by the Bank of England in December. Francesco Pesole SEK: Riksbank may go for 75bp after all The Swedish inflation report this morning was a mixed bag. Headline inflation rose less than expected (from 10.8% to 10.9% YoY), CPIF inflation surprisingly declined (from 9.7% to 9.3%) but core CPIF rose (7.4% to 7.9%). Ultimately, the latter may matter more than the others for the Riksbank, which announces policy on 24 November, and that may tilt the balance towards a 75bp rate hike. Implications for the krona should however remain quite limited – today’s muted FX reaction to CPI was a case in point. We think SEK remains in a disadvantageous position compared to other procyclical currencies to benefit from an improvement in risk sentiment given the still clouded European outlook. We see room for a return toward 10.90/11.00 in EUR/SEK in the near term. Francesco Pesole TagsUS dollar SEK GBP FX EURUSD   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The British pound managed to jump 270 points yesterday without breaking the divergence with the Marlin Oscillator on the daily chart. This is a sign of a trend reversal, but the price is in the consolidation range of August 22-26 at 1.1737-1.1933, so it is extremely important to wait for the price to exit this range in one direction or another with consolidation. Our main scenario is downward, so the target is the level of 1.1500. A price divergence has formed with the Marlin Oscillator on the four-hour chart. This increases the probability of overcoming the support of 1.1737 on the first attempt. Settling below the level opens the 1.1500 target, but on this way the price is waiting for the MACD line (1.1625), so a slight correction is possible here. The correction resistance will be the 1.1737 level.   Relevance up to 03:00 2022-11-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327224

Analysis of GBP/USD, 5-minute chart The GBP/USD currency pair also continued its upward movement on Tuesday for no reason. Reports of medium importance on unemployment and wages were published in the UK in the morning but neither their values nor their status could in any way provoke a movement of 300 points up. The British pound also managed to fall by 150-170 points in the afternoon. So the volatility just went through the roof yesterday. The upward trend for the pair continues, which is clearly signaled by the trend line and the Ichimoku indicator lines. We would say that the pound has excellent chances for a long-term uptrend, but we consider its current strengthening too fast and too strong. So far, there are no reasons to sell the pair, but we are very afraid because of the groundlessness of the current movement. If the pound grew gradually, everything would be more logical and understandable. Trading signals on the 5-minute chart were perfect yesterday in terms of accuracy and strength. The first was formed literally at the opening of the European trading session near the level of 1.1760. After that, the price rose to 1.1874 and initially rebounded from it. Therefore, traders were forced to close a long position and open shorts. Profit amounted to about 70 points. The signal to sell turned out to be false and closed at a loss of 32 points. However, right there, near the level of 1.1874, a new buy signal was formed, after which the price went to the levels of 1.1974 and 1.2007, from which it rebounded. On this signal, it was necessary to close longs again and open shorts. Profit - another 70 points. The short managed to earn another 70 pips as the price dropped back to 1.1874. Thus, traders managed to earn almost 200 points of profit yesterday. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group closed 8,500 long positions and 11,500 short positions. Thus, the net position of non-commercial traders increased by 3,000, which is very small for the pound. The net position indicator has been slowly rising in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group has now opened a total of 79,000 shorts and 34,000 longs. The difference, as we can see, is still very big. The euro cannot rise even though major players are bullish, and the pound will suddenly be able to grow in a bearish mood? As for the total number of open longs and shorts, here the bulls have an advantage of 21,000. But, as we can see, this indicator also does not help the pound too much. We remain skeptical about the long-term growth of the British currency, although there are certain technical reasons for this. Analysis of GBP/USD, 1-hour chart The pound/dollar pair may begin a long-awaited correction on the one-hour chart. We consider the pound's growth in recent weeks somewhat unfounded. This week we are waiting for another report on British inflation, but it is unlikely to drastically affect the mood of traders. On Wednesday, the pair may trade at the following levels: 1.1645, 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259. Senkou Span B (1.1383) and Kijun-sen (1.1679) lines can also give signals if the price rebounds or breaks these levels. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. The "report of the week" - inflation for October - is scheduled for Wednesday in the UK. It is expected to rise again, which could theoretically support the pound. But it has already risen in price very much in recent weeks, so we do not count on new growth. In America - There are only minor reports in America, which are unlikely to seriously interest the market. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 06:00 2022-11-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327234

Positive sentiment surged on Tuesday, thanks to the latest data in the US, which confirmed the overall inflation dynamics in October both in monthly and yearly terms. According to the report, producer prices rose 0.2% m/m and 8.0% y/y, while the previous value was revised down to 8.4%. This allowed investors to believe again that the Fed would start considering the gradual decrease of interest rate hikes, if not stop it completely. But even though equity markets in both Europe and the US benefited from the news, the reaction in the forex market was rather weak. The reason could be the stabilization of Treasury yields before the release of data on US retail sales. Forecasts say the core retail sales index will show a 0.5% increase in October, while retail sales will rise by 0.9%. If the figures turn out to be no worse than the forecast or exceed it, another growth in stocks will be seen. In this case, Treasury yields may resume their decline, which should also put pressure on dollar. That will push the ICE dollar index down below 106 points, towards 105 points. Forecasts for today: EUR/USD The pair is trading near the strong resistance level of 1.0375. Positive data from the UScould push it towards 1.0500. GBP/USD The pair is below the level of 1.1900. If data from the US does not disappoint or turns out to be higher than expected, pound will resume growth to 1.2000, and then to 1.2020.   Relevance up to 08:00 2022-11-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327256

The British pound has moved higher on Wednesday. In the European session, GBP/USD is trading at 1.1934, up 0.56%. The pound roared on Tuesday, gaining close to 1% and punching past the 1.20 line for the first time in three months. It has been a busy time for sterling, which has been marked by sharp swings that would make an exotic currency blush. The pound’s volatility has been especially pronounced in the month of November. The US dollar has hit a rocky patch and the pound has taken full advantage, climbing 3.5% this month. It’s up, up, up for UK inflation UK inflation continues to rise and hit a staggering 11.1% in October, a 41-year high. The upward trend continued despite the government introducing an energy price guarantee. Inflation jumped from 10.1% in September and ahead of the consensus of 10.7%. Core CPI remained unchanged at 6.5%, but was higher than the forecast of 6.4%. The Bank of England hasn’t been able to stem rising inflation despite tightening policy but will be hoping that its jumbo 0.75% hike earlier in November will take a bite out of the next inflation report. The UK economy is facing a double-whammy of high inflation and a recession, and all eyes will be on Finance Minister Jeremy Hunt, who will announce the government budget on Thursday. Hunt will aim to restore the government’s credibility and stability, after the recent political soap opera which resulted in three different prime ministers in a matter of months and significant financial instability. The UK employment report on Tuesday was lukewarm, with unemployment ticking higher to 3.5%, up from 3.4%. The Bank of England will be concerned about the increase in wage growth, which will create even more inflation. Wages excluding bonuses rose to 5.7%, up from 5.5% and ahead of the consensus of 5.6%. The BoE will be under pressure to continue hiking aggressively, even though this will hurt the struggling UK economy.   GBP/USD Technical GBP/USD has pushed above resistance at 1.1878. The next resistance is 1.2030 1.1767 and 1.1660  are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

FX markets are maintaining very high levels of realised volatility. Driving markets in the very short term is the stand-off between geopolitical risk in Europe and the powerful short squeeze in risk assets on the back of softer US price data. On the calendar today are US retail sales, industrial production, and a host of Fed and ECB speakers In this article USD: Buy-side wants and needs a weaker dollar EUR: Ongoing correction GBP: BoE speakers in focus JPY: Wild ride continues Source: Shutterstock USD: Buy-side wants and needs a weaker dollar Realised levels of FX volatility remain near the highs of the year. For example, one-month EUR/USD realised volatility, at 14%, is back to levels not seen since April 2020. The dominant near-term theme is the aggressive position adjustment in FX, perhaps more so than in other asset classes, on the back of softer US price data. The dollar took another sharp leg lower on yesterday's release of soft October PPI data. Clearly, US price data is the hottest commodity in the macro space right now. Dollar price action does suggest the market is caught long dollars at higher levels and that corrective rallies in the dollar are tending to be relatively shallow. There is also a lot of buy-side interest in expectations (and hopes) that the dollar has peaked. If so, that will release some handsome gains for emerging market local currency bond and equity markets. For example, were it not for the recent dollar correction, returns in the EM local currency bond index would be a lot lower than the current -10% year-to-date figures, and EM hard currency bond indices are down closer to 20% year-to-date.  Given the weight of long dollar positioning after a major 18-month bull trend, it looks too early to expect that this position adjustment has run its course. Yet developments in Poland late yesterday have somewhat clouded the picture. The market will await any announcement from NATO representatives today on the source of the explosion - although President Biden has partially defused the situation by suggesting the missile was not fired from Russia.  Beyond geopolitics today, the focus will be on US retail sales and industrial production data. Both should be reasonably strong, but less market-moving than price data. We will also hear from the Federal Reserve's John Williams and Mary Daly around 16CET. For the DXY today, we did note that the dollar seemed to find a little natural buying interest after the PPI data, but before the Polish news broke. That might tend to favour a 106.00-107.20 DXY trading range today. In terms of the bigger picture, the question is whether 105 is a large enough correction for DXY.   Chris Turner EUR: Ongoing correction EUR/USD turned from a high of 1.0480 yesterday - driven there by the softer US PPI data. By comparison, today's US data is second tier and might prove a weak dollar positive if retail sales and industrial production emerge on the strong side. Attention may also return to the energy markets given events in Poland. And this will also serve as a reminder of the upcoming embargo on Russian oil exports due to start in early December. This potentially is a downside risk to European currencies should energy prices take a leg higher. On the calendar today are plenty of European Central Bank speakers. The ECB will also release its semi-annual financial stability report. Expect plenty of focus on the regulation of the non-bank financial sector after the recent debacle amongst the UK pension fund industry with its LDI hedges in the UK Gilt markets. Remarks earlier this week from the ECB relating to this report drew a conclusion that financial risks had increased. We noted yesterday that EUR/USD seemed to turn naturally from 1.0480, suggesting the corrective rally might have run its course - at least for the very short term. But the bottom of the short-term range has now been defined at 1.0270 - pointing to a 1.0270-1.0500 range over coming sessions. This assumes no major escalation in geopolitics. Bigger picture, we are in the camp that something like 1.05/1.06 may be the best EUR/USD levels between now and year-end. Chris Turner GBP: BoE speakers in focus Bank of England speakers will be in focus today after the release of the October CPI data. This is expected to be peaking around the 11%year-on-year level around now.  BoE Governor Andrew Bailey and colleagues testify to the Treasury Select Committee at 1515CET today. We suspect the message will be very much the same as that given at the policy meeting earlier this month - i.e. do not expect 75bp hikes to become common and that the market pricing of the tightening cycle is too aggressive.  GBP/USD briefly peaked over 1.20 yesterday. We think 1.20 is a good level to hedge GBP receivables. Equally, we have a slight preference for EUR/GBP staying over 0.8700. Tomorrow is the big event risk of the autumn budget - which on paper should be sterling negative. Chris Turner  JPY: Wild ride continues USD/JPY continues to deliver 20% annualised readings in volatility (as do the high beta commodity currencies and those in Scandinavia). We suspect the next five big figures in USD/JPY come to the upside. We see this because the US 10-year Treasury yield typically only trades 50-75bp below the Fed funds rate towards the end of the tightening cycle. And given that our team is looking for the policy rate to still be taken 100bp higher, we think US 10-year Treasury yields will probably return to the 4.25/4.35% area before the end of the year. Equally and once position adjustment has run its course, the yen rather than the dollar should become the preferred funding currency should market conditions begin to settle. Although that does seem an unlikely prospect right now. Chris Turner Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The British pound, like other counter-dollar currencies, rose a bit yesterday, but did not fight the nearest resistance, and this morning it shows signs of a reversal. The divergence of the price with the Marlin Oscillator does not change its shape for the second day. The pressure remains and it will likely lead the price to the first support at 1.1737 (high on September 13). Going under the level will open the 1.1500 target. The price could rise after settling above the level of 1.1933. On the H4 chart, the Marlin Oscillator decreases ahead of the divergence pressure. At the moment, it is already being introduced into the territory of a downward trend. The price is likely to connect a little later, with the release of data on inflation in the eurozone (11:00 London time). October CPI is forecast unchanged at 10.7% YoY. The first task is to overcome the support of 1.1737. Along it is the MACD indicator line (1.1670), which also needs to be overcome to advance to 1.1500.   Relevance up to 04:00 2022-11-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327345

Today's FX highlight will be the UK's autumn statement. Given that the UK's bond market has largely regained its composure from the sell-off in September, we struggle to see what upside there is for sterling today. Positioning could be the wild card, however. Elsewhere, we have five Fed speakers and favour further dollar consolidation In this article USD: Softer renminbi helps support the dollar EUR: Could be dragged around by sterling GBP: Caution advised BRL: Reality check USD: Softer renminbi helps support the dollar Yesterday, we published our 2023 FX Outlook and for professional customers our FX Top Trade ideas. Our core message for FX markets in 2023 is to expect fewer FX trends - i.e. a repeat of a clean 18-month dollar trend is unlikely - and instead look for more volatility as central banks tighten rates into a recession. Feedback on the report is welcome! For today, the dollar has entered a consolidative mode. We note the rise in USD/CNH which may be giving the dollar a little support. Somewhat conversely, the better news out of China seems to be giving the local banks some problems. Here, retail investors have en masse withdrawn from Chinese bond markets in favour of equities, prompting authorities to check with local banks whether they have sufficient liquidity to meet these withdrawals. For today, we have five Fed speakers. Market pricing for the 14 December FOMC meeting is settling on a 50bp hike - such that any further reference to that today need not demand a much weaker dollar. Our slight bias near term is that long dollar position adjustment may have a little further to run, but that something like the 105 area in DXY proves a 4Q22 base. Chris Turner EUR: Could be dragged around by sterling EUR/USD remains in corrective mode and is not reacting much to press reports of the European Central Bank favouring a 50bp over a 75bp hike in December. Notably, the FX options market has shown no more signs of distress - i.e. investors are not scrambling to buy euro call options - and one can argue that this makes the 1.05 area a slightly firmer ceiling for 4Q22. Expect EUR/USD to be dragged around by GBP/USD today - just as it was in September. 1.0270-1.0500 remains our expected near-term trading range for EUR/USD. Chris Turner GBP: Caution advised The big day has arrived. Chancellor Jeremy Hunt will unveil the autumn statement aimed at plugging the fiscal hole that led to the collapse of Gilts and sterling in September. Investor views of UK fiscal credibility have largely returned to pre-Truss levels, where the 10-year German Bund-Gilt spread is now 115bp (versus 228bp in September) and the UK's 5-year sovereign CDS has narrowed to 27bp from 52bp. Arguably then, the positive re-assessment of the UK fiscal position has largely taken place and suggests that sterling does not have to rally a lot more on a credible budget. Indeed, a credible budget will deliver substantial fiscal tightening and cement views of a multi-quarter UK recession and one in which the Bank of England will continue to hike rates into 2023. As a pro-cyclical currency, this cannot be a good environment for sterling. And were Chancellor Hunt to try and back-load fiscal tightening - e.g. until after the next election in 2024 - Gilts and sterling would sell off. Overall, we expect GBP/USD to be unable to hold any gains above 1.20 and would prefer sub 1.15 levels before year-end. Equally, EUR/GBP should find support near 0.86/87. The only thing going for sterling is buy-side positioning. Being short the pound had been one of the most popular buy-side trades going into October. We have seen what positioning has done to crowded long dollar trades over the last week. It is hard to see what sterling positives the market could take from today's budget - but there is an outside risk that investors have some residual sterling shorts to cover. The outside risk near term is a very painful sterling short-squeeze taking GBP/USD to 1.23. However, that squeeze should not last long. Chris Turner   BRL: Reality check It seems fair to say that the Brazilian real has disappointed some of the more bullish expectations made when Luiz Lula won the Presidential election run-off in October. Investors had been attracted to the real because of Brazil's high real interest rates and the idea that a centrist congress could keep some of President-elect Lula's spending plans in check. However, concerns about Brazil's fiscal position and welfare spending plans have come back to the fore. The new administration, taking office in January is looking at a constitutional amendment to exclude around $30bn of welfare spending from the nation's fiscal debt limit. Reuters is also reporting that Lula may be favouring a left-wing choice for Finance Minister - typically a very sensitive topic for Latam currencies. Equally, further choices for Lula's new team are said to be coming from the administration of former left-wing President, Dilma Rousseff, who was widely associated with Brazil's last fiscal crisis. We have been more bearish on the Brazilian real than consensus for some time and in our recently published FX Outlook, we make the case for USD/BRL to be ending 2023 much closer to the 5.80 highs than the consensus estimate of 5.15. Investors looking for yield in Latam should instead continue to favour the less volatile and better fiscally positioned Mexican peso. And near term, BRL/MXN can trade back to the 3.50 lows.  Chris Turner Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  

Yesterday, the British pound made the first attempt to turn around from the resistance of 1.1940, in fact, it had an idea to make a correction from the entire 16-figure growth since September 26. The task is difficult, so the price has not yet decided to attack the support at 1.1737. The price divergence with the Marlin Oscillator is gaining momentum. Such an attack will probably take place next week. The immediate task is for the price to not go up after testing this support. UK retail sales data will be released today – forecast for October is 0.3% after the September collapse of 1.4%. The forecast for sales of secondary housing in the US in October is 4.38 million against 4.71 million a month earlier, so in the end we do not expect active dollar action in the fight against the pound today. The price received support from the balance indicator line on the H4 chart. The Marlin Oscillator is in the downward trend area. Therefore, the development of growth is still difficult. At the moment, the main scenario for the pound is a sideways movement in the range of 1.1737-1.1940. Relevance up to 03:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327455

30M chart of the GBP/USD pair Yesterday, the GBP/USD pair finally corrected as we expected. In many ways, the pound's fall was provoked by the speech of Jeremy Hunt, the British Chancellor of the Exchequer, who presented his financial plan, which provides for a tax increase instead of the cut that Liz Truss wanted to implement. We cannot unequivocally link the pound's fall with Hunt's speech, since the euro was falling at the same time, but the probability of this is still very high. However, the pound continues to be above the trend line, so the upward trend continues. From a technical point of view, the pound may continue to rise, but from a fundamental point of view, it will be even less logical than the pound's growth over the past two weeks. We believe that there were certain reasons to buy the pound from the market, but they were not so strong that the pair rose by 750 points, and the British inflation report, which could have provoked the pound's growth, did not cause such a reaction from the market. 5M chart of the GBP/USD pair Quite a lot of signals were formed on the 5-minute chart, but the movement was not the best. Let's try to figure out how to trade today. The first buy signal was formed at night near the 1.1863-1.1877 area, from which the price bounced. At the opening of the European trading session, the pair moved away from the formation point by only a few points, so a long position could be opened. Subsequently, the pair went up 70 points, but did not reach the nearest target level. The 1.1957 level is a new one that formed instead of 1.1967. Thus, beginners could get a small profit on this transaction if they were manually closed. The next two signals formed again around 1.1863 -1.1877. First, the pair overcame this area, and therefore bounced from it from below. In the first case, 53 points were passed, but here, too, most likely, Stop Loss worked at breakeven. In the second case, the price reached the target level of 1.1793 and even overcame it, so the position should have been closed with a reverse consolidation above this level. Profit at 40 points. Losses on the euro/dollar pair managed to be covered and we even managed to make some money on Thursday. How to trade on Friday: The GBP/USD pair maintains an upward trend on the 30-minute time chart, which continues to be supported by an ascending trend line. Although we still don't see a good reason to show such strong growth, the market can move regardless of our opinion. So we definitely have an upward trend at this time, but we still expect a significant downtrend this week. It has already started after the bounce from 1.2008, the question is how strong will it be in reality? On the 5-minute TF it is recommended to trade at the levels of 1.1550, 1.1608, 1.1648, 1.1716, 1.1793, 1.1863-1.1877, 1.1967, 1.1994, 1.2079. When the price passes after opening a position in the right direction for 20 points, Stop Loss should be set to breakeven. The UK will publish a report on retail sales, but nothing in the US. A slight reaction may follow the only report of the day... Basic rules of the trading system: 1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal. 2) If two or more positions were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored. 3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading. 4) Trade positions are opened in the time period between the beginning of the European session and until the middle of the US one, when all positions must be closed manually. 5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel. 6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance. 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. 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 speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement. 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. Relevance up to 05:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327461

Analysis of GBP/USD, 5-minute chart The GBP/USD currency pair showed two good movements on Thursday. The pair began a rather sharp fall in the middle of the European trading session, which, from our point of view, was provoked by the presentation of the budget plan for the next financial year by the UK Secretary of the Treasury Jeremy Hunt (which we wrote about in more detail in the fundamental review of the pound), but in the late afternoon there was already an upward movement and at the moment the pair has returned to its original positions. Therefore, formally, it corrected this week, as we expected, but the correction turned out to be very weak, we expected and still expect a stronger fall in quotes. There were no important reports and events of a macroeconomic nature in the UK yesterday. Reports on the construction market were published in the US, as well as on applications for benefits by the American population. Both reports rarely cause at least some market reaction. Therefore, we do not associate yesterday's movements with macroeconomics. The ascending trend line remains relevant, so from a technical point of view, further growth can be expected. And no fundamental and macroeconomic reports. Trading signals on the 5-minute chart were not the best on Thursday, but still not as bad as the euro. First, the price bounced off the level of 1.1874 and went up 55 points. Therefore, there could not be a loss on a long position (Stop Loss at breakeven). Then the price formed a sell signal below the Kijun-sen line, after which it managed to reach the target level of 1.1760. Traders managed to get about 35 pips of profit on this trade. There were two rebounds from the level of 1.1760. After the first one, the price went up 40 points, but did not reach the critical line - Stop Loss at breakeven. The second rebound was formed too late, it should not have been worked out. As a result, the day ended with a small profit. COT report The latest Commitment of Traders (COT) report on the British pound showed a slight weakening of the bearish sentiment. In the given period, the non-commercial group closed 8,500 long positions and 11,500 short positions. Thus, the net position of non-commercial traders increased by 3,000, which is very small for the pound. The net position indicator has been slowly rising in recent weeks, but this is not the first time it has risen, but the mood of the big players remains "pronounced bearish" and the pound remains on a downward trend in the medium term. And, if we recall the situation with the euro, then there are big doubts that based on the COT reports, we can expect a strong growth from the pair. How can you count on it if the market buys the dollar more than the pound? The non-commercial group has now opened a total of 79,000 shorts and 34,000 longs. The difference, as we can see, is still very big. The euro cannot rise even though major players are bullish, and the pound will suddenly be able to grow in a bearish mood? As for the total number of open longs and shorts, here the bulls have an advantage of 21,000. But, as we can see, this indicator also does not help the pound too much. We remain skeptical about the long-term growth of the British currency, although there are certain technical reasons for this. Analysis of GBP/USD, 1-hour chart The pound/dollar pair began a long-awaited, but so far very weak, correction on the one-hour chart. We consider the pound's growth in recent weeks somewhat unfounded, and this week the pound began to correct only on Thursday. However, we expect it to continue falling. On Friday, the pair may trade at the following levels: 1.1486, 1.1645, 1.1760, 1.1874, 1.1974-1.2007, 1.2106, 1.2185, 1.2259. The Senkou Span B (1.1500) and Kijun-sen (1.1867) lines can also give signals if the price rebounds or breaks these levels. The Stop Loss level is recommended to be set to breakeven when the price passes in the right direction by 20 points. The lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. Also, there are support and resistance levels that can be used to lock in profits. The UK will publish a report on retail sales, which is far from the most important, and the calendar is empty in the US. Thus, we do not expect a strong market reaction today. Most likely, it will again trade on technique. What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.     Relevance up to 06:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327471

OANDA Senior Market Analyst Craig Erlam discusses how the pound has performed against the dollar recently and what impact the UK Autumn Statement had. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

OANDA Senior Market Analyst Craig Erlam discusses how the pound has performed against the dollar recently and what impact the UK Autumn Statement had.   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

In our 2023 FX Outlook, we argued that G10 currencies should face less trend and more volatility in 2023. We saw an example this week, as the fading bear-dollar trend did not prevent some wide swings in risk-sensitive currencies (like NOK and SEK). In the UK, the pound survived the Autumn Statement, but downside risks persist in GBP/USD In this article USD: Bearish sentiment cooling off EUR: Lagarde's speech in focus GBP: Most painful fiscal measures delayed NOK: Strong domestic story may not matter USD: Bearish sentiment cooling off As recently discussed in our 2023 FX Outlook, we are quite sceptical of a clean bear dollar trend from the current levels. This week’s moves in the FX market may have offered a glimpse of what we expect to be the main theme in G10 FX next year: less trend, more volatility. The dollar has stabilised after the big correction, but regional stories triggered significant swings in some crosses. Scandinavian currencies fell by around 2% this week, hit by equity volatility and geopolitical tensions, while NZD and GBP have appreciated on some domestic optimism. In New Zealand, next week’s central bank meeting will be a key risk event: here is our preview. We think this consolidation phase in the dollar may extend for a little longer, before a re-appreciation of the greenback into the end of the year. Indeed, markets will remain highly sensitive to Fed speakers: today, only Susan Collins is scheduled to speak, but we have a number of other members lined up for next week. FOMC minutes will also be released on Wednesday. So far, post-CPI comments have indicated some lingering caution on the inflation battle as most Fed members tried to curb the market’s enthusiasm about an imminent dovish pivot. The future market has now fully priced back in a 5.00% peak rate in the first half of 2023. The US calendar is rather light today and only includes existing home sales and the Leading Index. With the dovish pivot narrative softening, we expect some re-appreciation of the dollar in the near term, but that is a trend that could only start from next week or the one after. DXY may stay around 106/107 today.    Francesco Pesole EUR: Lagarde's speech in focus ECB President Christine Lagarde will deliver a keynote speech at a banking conference this morning. Two more ECB speakers are on the list today: Joachim Nagel and Klaas Knot, both hawkish voices in the Governing Council. If the Fed remains the key driver for the dollar, the ECB continues to have a rather marginal role for the euro, which instead remains primarily tied to global risk sentiment and geopolitical/energy dynamics. EUR/USD may stay in the 1.0350-1.0400 trading range into the weekend and while we don’t exclude another short-term mini-rally, we think that the macro picture continues to point to sub-parity levels in the coming months. Francesco Pesole GBP: Most painful fiscal measures delayed The pound survived the much-feared Autumn Statement by Chancellor Jeremy Hunt yesterday. The build-up to the statement seemed to signal more restrictive measures on the economy, but Hunt counted on a calmer market backdrop and – as discussed in detail by our economist – delayed some of the most painful measures. Ultimately, the impact on next year's growth should not prove huge, especially compared to expectations. The tax hike will only affect high incomes and energy companies, and the National Insurance cut by the previous government has not been reversed. The most relevant change was the increase in the energy bill guarantee from £2,500 to £3,000 from April 2023, which should generate some drag on consumers. That is only marginally more generous than the average household energy bill under current wholesale prices (which we estimate at around £3,200). The risk is obviously that wholesale prices spike again, meaning a higher cost for the energy support package. We think it is too early to call for a prolonged stabilisation in the gilt market, and our debt team notes that there is still a lot of extra supply for private investors to absorb. We continue to see downside risks for GBP/USD as the dollar may start to recover into year-end, and target sub-1.15 levels in the near term. However, we forecast some outperformance in EUR/GBP (primarily due to EUR weakness), which could rise to 0.89 by year-end. Francesco Pesole NOK: Strong domestic story may not matter Norwegian GDP data for the third quarter surprised on the upside this morning, showing a rather strong 1.5% quarter-on-quarter growth. This is a testament to how the domestic story should remain largely supportive of NOK, also into the new year. Whether this will ultimately feed into a stronger krone is another question, and mostly depends on whether markets will prove calm enough to allow fundamentals to play a role. The last week clearly showed that the road to a recovery in NOK is going to prove quite uneven, as the low-liquidity krone should continue to face large swings. We really think volatility will be the name of the game for EUR/NOK next year, even though our base-case scenario is downward-sloping in 2023. In the short run, a return to 10.60+ is a tangible possibility. Francesco Pesole TagsNOK FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

After an 18-month bull trend in the dollar, the FX outlook has become less clear. Further position adjustment could prompt a little more short-term dollar weakness, but we do not believe the conditions are in place for a major dollar bear trend just yet. Instead, we expect FX markets in 2023 to be characterised by less trend and more volatility. Source: Shutterstock G10: Less trend, more volatility The final quarter of 2022 has seen a breakdown in the otherwise orderly dollar bull trend – a trend which had been worth 5% per quarter over the first nine months of the year. That dollar rally had largely been driven by a Federal Reserve wanting to take policy into restrictive territory – a trend only exacerbated by the war in Ukraine. For all the current discussions about peak dollar and peak macro pessimism, we think it is still worth examining whether the conditions will be in place to deliver an orderly dollar bear trend in 2023. We think not and here are three reasons why: Driving the dollar bull trend since summer 2021 has been a Fed at first abandoning Average Inflation Targeting and then trying to get ahead of the inflation surge. A call on a benign dollar decline in 2023 requires the Fed to be taking a back seat. That seems unlikely. The stark message from both the Fed’s Jackson Hole symposium and the IMF autumn meetings was that central banks should avoid relaxing too early in their inflation battle – a move which would deliver the pain of recession without any of the sustained gains on inflation. We suspect it will be too early for the Fed to sound relaxed at its 14 December meeting and March 2023 may be the first opportunity for a decisive turn in Fed rhetoric. While a softer Fed profile may be a necessary condition for a turn in the dollar, a sufficient condition requires a global economic environment attractive enough to draw funds out of the dollar. 2023 global growth forecasts are still being cut – dragged lower especially by recession in Europe. ING forecasts merchandise world trade growth below 2% in 2023 – not a particularly attractive story for the trade-sensitive currencies in Europe and emerging markets. A liquidity premium will be required of non-dollar currencies. 2023 will be a year when central banks are initially still hiking into a recession and shrinking balance sheets. The Fed will reduce its balance sheet by a further $1.1tn in 2023 and the European Central Bank will be looking at quantitative tightening, too. Lower excess reserves will tighten liquidity conditions still further and raise FX volatility levels. Again, the bar not to invest in dollar deposits remains high – especially when those dollar deposits start to pay 5% and the dollar retains its crown as the most liquid currency on the planet. What do these trends mean for G10 FX markets? This probably means that the dollar can bounce around near the highs rather than embark on a clean bear trend in 2023. If the dollar is to turn substantially lower, we would favour the defensive currencies such as the Japanese yen and Swiss franc outperforming. Here, the positive correlation between bonds and equity markets may well break down via the bond market rallying on the back of a US recession and easier Fed policy. ING forecasts US 10-year Treasury yields ending 2023 at 2.75% - USD/JPY could be trading at 130 under that scenario.  Recession in Europe means that EUR/USD could be trading in a 0.95-1.05 range for most of the year, where fears of another energy crisis in the winter of 2023 and uncertainty in Ukraine will hold the euro back. Sterling should also stay fragile as the new government attempts to restore fiscal credibility with Austerity 2.0. We cannot see sterling being rewarded much more on austerity and suspect that GBP/USD struggles to hold gains over 1.20.  Elsewhere in Europe, some differentiation could emerge between the Scandinavian currencies. The Swedish krona may struggle to enter a sustained uptrend next year given its elevated exposure to the eurozone’s growth story, while the Norwegian krone could benefit from its attractive commodity exposure. However, NOK is an illiquid and more volatile currency, and would therefore face a bigger downside in a risk-off scenario. As shown in the chart below, commodity currencies look undervalued versus the dollar on a fundamental basis. However, a stabilisation in risk sentiment is a necessary condition to close the misvaluation gap. For the Australian and New Zealand dollars, an improvement in China’s medium-term outlook is also essential, so the Canadian dollar may emerge as a more attractive pro-cyclical bet given low exposure to the economic woes of Europe and China. Another factor to consider is the depth of the forthcoming house price contraction. We think central banks will increasingly take this into consideration and will try to avert an uncontrolled fall in the housing sector. However, this is potentially a very sizeable downside risk, especially for the currencies of commodity-exporting countries, which generally display the most overvalued property markets in the G10. To conclude, we think FX trends will become less clear in 2023 and volatility will continue to rise. FX option volatility may seem expensive relative to historical levels, but not at all when compared to the volatility FX pairs are actually delivering. We suspect risk management through FX options may become even more popular in 2023.   Valuation, volatility and liquidity in G10 Source: ING, Refinitiv EUR/USD: Dollar bromance will take some breaking   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/USD 1.035 Bearish 0.98 0.95 0.98 1.00 1.00 Bullish leap of faith is too dangerous: We are bearish on EUR/USD into the end of the first quarter of 2023. Key factors which have driven EUR/USD lower this year will remain largely in place. The softish US October CPI print may give the Fed some pause for thought, but should not be enough to derail it from some further tightening – taking the policy rate close to 5.00% in the first quarter of 2023. Another key factor for EUR/USD this year has been energy. Here, our team sees prices for both natural gas and oil rising from current levels through 2023. A difficult 2023 European winter for energy may well restrain the EUR/USD recovery later in the year, continuing to depress the eurozone’s traditionally large current account surplus.   Necessary but not sufficient: Tighter Fed policy has been at the forefront of this year’s dollar rally and a shift in the Fed tone (more likely in March 2023 than December 2022) will be necessary to see the short end of the US yield curve soften appreciably and the dollar weaken. But the sufficient condition for a EUR/USD turnaround is the state of affairs amongst trading partners. Are they attractive enough to draw funds away from USD cash deposits potentially paying 5%? That is a high bar and why we would favour the EUR/USD 2023 recovery being very modest, rather than the ‘V’ shape some are talking about. ECB will blink first: The case for a central bank pivot is stronger for the ECB than the Fed. The German economy looks set to contract 1.5% next year and at its 15 December meeting, the ECB may well use its 2025 forecast round to show inflation back on target. We see the ECB tightening cycle stalling at 2.25% in February versus the near 3% currently priced by the market for 2023. This all assumes a seamless ECB introduction of quantitative tightening and one that does not upset peripheral bond markets. Add in global merchandise trade barely growing above 1% next year (recall how the 2017-19 trade wars weighed on the euro) plus the risk of tighter liquidity spilling into financial stability – all suggest the market’s bromance with the dollar will continue for a while yet.  USD/JPY: 1Q23 will be a crucial quarter   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/JPY 140.00 Bearish 145.00 145.00 140.00 135.00 130.00 Clash of the titans: The stark divergence in monetary policy between the Fed and the Bank of Japan has been the primary driver of this year’s 15%+ rally in USD/JPY. In 2023, investors may question whether the BoJ is ready to tighten. The default view is that the perma-dovish BoJ Governor, Haruhiko Kuroda, will not be moved. However, the end of Governor Kuroda’s term on 8 April 2023 will no doubt lead to frenzied speculation on his replacement and whether a less dovish candidate emerges. Interest rate markets are starting to price a change – e.g. the BoJ’s 10-year target sovereign yield of 0.25% is priced at 0.50% in six months’ time. March 2023 will be especially volatile: The first quarter of 2023 will also see huge focus on the Japanese wage round, where a rise in wages is a prerequisite for the BoJ to tighten policy. Japanese politicians have been encouraging business leaders to raise wages, while at the same time, the government has been quite aggressive with fiscal stimulus to offset the cost-of-living shock. This period will also see the Fed release its dot plots (22 March), which may be the first real chance for the Fed to acknowledge a turn in the inflation profile. As such, this period (March/April) could see a big reversal lower in USD/JPY. FX Intervention slows the move: Most agree that USD/JPY is higher for good reasons (including the energy crisis) and that Japanese FX intervention can only slow, not reverse the move. The Japanese have already spent around $70bn in FX intervention between the 146 and 151 region in USD/JPY and will likely be called into further action based on our view of a stronger dollar over coming months. FX reserves are not limitless, of course, but Japan’s large stockpile of $1.1tn means that this campaign can continue for several more months. The purpose here is to buy time before the Fed cycle turns. Unless we end up with 6%+ policy rates in the US next year, we would expect USD/JPY to be ending 2023 nearer 130. GBP/USD: Running repairs   Spot Year ahead bias4Q221Q232Q233Q234Q23 GBP/USD 1.19 Mildly Bearish 1.10 1.07 1.11 1.14 1.14 Fiscal rescue plan: After September’s government-inflicted flash crash, GBP/USD is now recovering on the expectation of more credible UK fiscal plans and the softer dollar. As above, we doubt 2023 will prove the year of a benign dollar decline. And the risk is that the Fed keeps rates at elevated levels for longer. Given sterling’s large current account deficit and its transition to high beta on the external environment, we think it is too early to be expecting a sustained recovery here. Instead, we favour a return to the 1.10 area into year-end as the government introduces Austerity 2.0 and the Bank of England cycle is repriced lower. Tighter fiscal/looser monetary mix: At its meeting in early November, the BoE pushed back against the market pricing of the rate cycle – arguing that hikes close to 5% would see the UK economy contract 5%. Our call is that the BoE terminal rate will be closer to the 3.75% area than the 4.50% that the market prices today. As the BoE assesses the degree of tightening needed to curtail inflation, the government is discussing ways to fill around a £60bn hole in the budget. The plan will be revealed on 17 November, probably in a roughly 50:50 split between tax hikes and real terms spending cuts. We look for the UK economy to contract every quarter in 2023 – making it a very difficult environment for sterling. Sterling suffers from liquidity outages: This year’s BIS triennial FX survey saw sterling retain its position as the fourth most traded currency pair. Despite this, sterling does occasionally suffer from flash crashes. We think liquidity will be at a premium in 2023 and that a Fed taking real rates even higher as economies head into recession is a dangerous combination for sterling – where financial services make up a large section of the economy. GBP/USD realised volatility is now back to levels seen during Brexit and our market call for 2023 is that these types of levels will become more, not less, common. EUR/JPY: A turn in the cycle   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/JPY 144.50 Bearish 142.00 138.00 137.00 135.00 130.00 Downside risks into 1Q23: EUR/JPY has defied typical relationships with risk assets by gently rallying all year even as both bond and equity benchmarks sold off 20%. Driving that JPY underperformance has probably been BoJ policy and USD/JPY’s strong relationship with US 10-year yields. Both the eurozone and Japan have been hit by the energy shock, where external surpluses have quickly dwindled. As above, we tend to think there are downside risks to EUR/JPY in the first quarter of 2023 as speculation mounts over BoJ Kuroda's successor as well as the ECB potentially calling time on their tightening cycle at the February meeting. US10yr can drag EUR/JPY to 130 in 2H23: A large part of the JPY underperformance during 2022 has been driven by developments in the US bond market. USD/JPY consistently shows the most positive correlation to US 10-year Treasury yields of any of the G10 FX pairs – and far higher than EUR/USD. Consistent with ING’s view on the Fed cutting rates in the third quarter of 2023, our debt strategy team sees US 10-year yields starting to edge lower in the second quarter of 2023, and then falling 100bp in the second half of 2023. In theory, this should heavily pressure EUR/JPY into the end of the year. Financial stability risks increase: Lower growth and tighter liquidity conditions – at least through the early part of 2023 – increase the prospect of financial stability risks. Recall the Fed will be shrinking its balance sheet by $1.1tn in 2023 even as liquidity and bid-offer spreads continue to create difficult market conditions. The yen lost its shine as a safe-haven currency in 2022, but we suspect relative to the euro, some of that shine can be regained in a softer US rate environment. The EUR/JPY cycle should also turn if the ECB calls time on its tightening cycle at the 2 February meeting. EUR/GBP: Listless in London   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/GBP 0.87 Neutral 0.89 0.89 0.88 0.88 0.88 In the same macro boat: Both the eurozone and UK economies have been hit hard by the war in Ukraine and the surge in energy prices. Both saw sharp terms of trade declines into August and then a sharp reversal as natural gas prices dipped into the warm winter. There is not a substantial amount of difference between our German and UK quarterly growth profiles for 2023 – both contracting every quarter of the year. Perhaps one could argue that the UK is more exposed to higher mortgage rates given the shorter duration of fixed-rate mortgages in the UK. This could all make for a trendless EUR/GBP environment. Energy price guarantees could differentiate: One important determinant for UK growth in 2023 will be how the new government handles the Energy Price Guarantee. Former UK Prime Minister, Liz Truss, offered a two-year programme – subsequently cut back to six months after the UK fiscal crisis. How the UK consumer copes with having to pay market prices for energy will be key to the UK story in 2023 as well as how the EU as a whole copes with similar challenges. Currently, it seems that the ECB is concerned that the fiscal programmes in Europe are too generous and not particularly targeted – adding to the inflation challenge.    Political wild cards: To pick out a few political wild cards, the first is a re-run of the Scottish independence referendum. The Scottish National Party (SNP) has picked 19 October 2023 as the date – although such an exercise would likely have to be approved by the UK parliament. Currently, the SNP is pursuing an action through the Supreme Court to see whether London can indeed still veto the referendum. In Europe, the focus will probably be on the fiscal path taken by the new right-wing Meloni government and also the reform of the Stability and Growth Pact. Budgets submitted in late 2023 could become an issue were the rules to be tightened again.   EUR/CHF: Swiss National Bank to guide it lower   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/CHF 0.98 Bearish 0.95 0.93 0.90 0.90 0.92 Does the SNB want a stronger Swiss franc?: The Swiss National Bank this year said it made a conscious decision to allow nominal Swiss franc appreciation in light of the inflation environment. The three-month policy rate has been raised 125bp to 0.50% and the SNB says it wants to keep the real exchange rate stable. With inflation running at 3% in Switzerland versus 10% in its largest trading partner, the eurozone, the SNB in theory should be happy with something like 5-7% per annum nominal appreciation in the Swiss franc. That certainly was the story into the end of September but does not quite explain the Swiss franc's weakness over the last six weeks. Two-sided intervention: When hiking rates earlier this year the SNB also said it would be engaging in two-sided FX intervention. Ever since the start of the financial crisis in 2008, the SNB has been more familiar as a seller of the Swiss franc – including its 1.20 floor in 2011-2015. Now its strategy is changing and we read that as an objective to potentially manage the Swiss franc stronger in line with its ambitions to tighten monetary conditions. Earlier this year, we estimated that the SNB could possibly drive EUR/CHF to the 0.90 area in summer 2023 based on expected inflation differentials and the need for a stable real exchange rate. The risk environment should favour the franc: Central banks are communicating that they need to tighten rates into recession and remove the excess liquidity poured out during a series of monetary bailouts. Tighter monetary and financial conditions typically spell stormy waters for risk assets. With its still sizable current account surplus (worth 8% of GDP in the second quarter of 2022) the Swiss franc should perform well during this stage of the global economic cycle. Closer to home, the European economic cycle and the ECB discussing quantitative tightening into early 2023 will prove a challenge to peripheral eurozone debt markets and likely reinforce the franc as a eurozone hedge. EUR/NOK: Not for the faint of heart   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/NOK 10.33 Bearish 10.30 10.15 9.95 9.70 9.60 Risk sentiment remains key: The krone is not a currency for the faint of heart. It is the least liquid currency in the G10 space, making it considerably exposed to negative shifts in global risk sentiment and equity market turmoil. It is, at this stage, way too early to call for a turn in equities, and a hawkish Fed into the new year may actually mean more pain for risk assets, at least in the near term. A recovery in global sentiment should offer support to NOK in the second half of next year, but restoring market confidence in a very high-beta currency is no easy feat. Norges Bank policy: The krone’s underperformance in 2022 was exacerbated by Norges Bank effectively sterilising oil and gas profits via a large increase in daily NOK sales. In November, FX daily sales have been scaled back from NOK4.3bn to NOK3.7bn, and we think there could be some interest by NB to further ease the pressure on the currency via smaller FX sales. With recent dovish hints suggesting that the NB hiking cycle may peak at 3.0% (with most of the country on variable mortgage rates, many more rate hikes could be difficult to tolerate), allowing a stronger currency to do some inflation-fighting sounds reasonable.  Energy prices: If indeed markets enjoy a calmer environment in 2023 and NB favours a stronger currency, then NOK is left with considerable room to benefit from a still strong energy market picture for Norway. There is probably an optimal range for oil and – above all – gas prices to trade at elevated levels but not such high levels that would significantly hit risk sentiment. For TTF, this could be somewhere around 150-200 €/MWh. This a plausible forecast for next year, but the margin for error can be very large. We see EUR/NOK at 10.50 in the fourth quarter of 2023, but NOK hiccups along the way are highly likely. EUR/SEK: Eurozone exposure a drag on SEK   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/SEK 10.80 Neutral 10.85 10.70 10.60 10.40 10.50 Riksbank’s policy: The Riksbank delivered more than one hawkish surprise in 2022, including a 100bp rate hike. This appeared to be part of a front-loading operation where lifting the krona was seen as a welcome side effect. In practice, and like in many other instances in the G10, the high volatility environment meant that short-term rate differentials played a negligible role in FX. So, despite a wide EUR-SEK negative rate differential throughout 2022, SEK was unable to draw any real benefit. That differential has now evaporated, but we expect 125bp of tightening (rates at 3.0%) in Sweden versus 75bp in the eurozone, which could suggest some EUR/SEK downside room in a more stable market environment. Also, a slowdown in FX purchases by the RB, now that reserves are back to the 1H19 levels, should remove some of the pressure on SEK. European picture: Sweden is a very open economy with more than half of its exports heading to other EU countries. Our expectations are that 2023 will see a rather pronounced eurozone recession and that the energy crisis will extend into the end of next year. Barring a prolonged period of low energy prices (and essentially an improvement in the geopolitical picture) in Europe, we doubt SEK will be able to enter a sustainable appreciation trend in 2023 as sentiment in the eurozone should remain depressed. Valuation: We are not fans of the euro in 2023, which means that our EUR-crosses forecasts reflect the weaker EUR profile. We see some room for EUR/SEK to move lower throughout the year – also considering that we estimate the pair to be around 9.0% overvalued. However, the high risk of a prolonged energy crisis in the eurozone means that SEK is significantly less attractive than other pro-cyclical currencies next year. Incidentally, SEK is highly correlated to the US tech stock market, which looks particularly vulnerable at the moment. A return to 10.00 or below would likely require a significant improvement in European sentiment. USD/CAD: Loonie is an attractive pro-cyclical bet   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/CAD 1.33 Bearish 1.34 1.32 1.30 1.26 1.24 Commodities and external factors: Our commodities team expects Brent to average slightly above $100/bbl next year, and Western Canadian Select around $85/bbl. Along with our expectations for higher gas prices, the overall commodity picture should prove rather supportive for the Canadian dollar in 2023. In our base-case scenario, where global risk sentiment gradually recovers but two major risk-off forces – Ukraine/Europe and China – remain, CAD would be in an advantageous position, since Canada has much more limited direct exposure to China and Europe compared to other commodity-exporting economies.  Domestic economy: If the US proves to be a relative 'safe-haven' in the global recession, therefore withstanding the downturn better than other major economies like the eurozone, this should offer a shield to Canada’s economy, which is heavily reliant on exports to the US. There is probably one major concern for the domestic economy: house prices. Canada is among the most vulnerable housing markets in the world, with price-to-income ratios around 9x in many cities (compared to 5-6x in the US). Whether we’ll see a sizeable but controlled descent or a fully-fledged housing crash will depend on the Bank of Canada and the depth of the recession. Monetary policy and valuation: It does appear that the BoC has started to consider domestic warning signals (probably, also house prices), and recently shifted to a more moderate pace of tightening. Markets are currently expecting rates to peak around 4.25/4.50% in Canada, and we tend to agree. Barring a rapid acceleration in the unemployment rate, a housing crash should be averted. It is also likely that the BoC will start cutting before the Fed in 2023. All in all, accepting the downside risks stemming from the housing market and/or a further deterioration in risk sentiment, we see room for a descent in USD/CAD to the 1.25 level towards the end of 2023. In our BEER model, CAD is around 20% undervalued in real terms. AUD/USD: Riding Beijing’s roller coaster   Spot Year ahead bias4Q221Q232Q233Q234Q23 AUD/USD 0.68 Mildly Bullish 0.66 0.66 0.68 0.69 0.70 Exposure to China: The Australian dollar is a high-beta currency, and the direction of global risk sentiment will be the key driver next year. We think that a gradual recovery in sentiment will be accompanied by a still challenging energy picture, which may force investors to choose which pro-cyclical currencies to bet on. When it comes to AUD, the China factor will remain very central, as Australia has the most China-dependent export machine in the G10. Our economics team’s baseline scenario is that the real estate crisis will be the main drag on growth in China and while retail should recover on looser Covid rules, slowing global demand should hit exports. One positive development: the new Australian government is seeking a more friendly relationship with Beijing, paving the way for the removal of export curbs next year. Commodities and growth: Iron ore remains Australia’s main export (estimated at $130bn in 2022), and it is a very sensitive commodity to China's real estate sector. Our commodities team thinks a return to $100+ levels is unlikely given the worsening Chinese demand picture, but still forecasts prices to average $90/t in 2023. The second and third largest exports are oil and natural gas ($100bn combined). Here, we see clearly more upside room for prices, especially on the natural gas side. On balance, we expect the commodity picture for Australia to be rather constructive next year, which could offer a buffer to the Australian economy during the downturn. Growth in 2022 should have topped the 4% mark, but that will be much harder to achieve in 2023. The combination of higher rates, reset mortgages, a slowing housing market and possibly softening labour market should bring growth back closer to 3%. This would still be an extremely strong outcome against the backdrop of global weakness.   Monetary policy and valuation: The Reserve Bank of Australia has been one of the 'pioneers' of the dovish pivot, and a return to 50bp increases seems unlikely, as the Bank is probably monitoring the rather overvalued housing market, and the inflation picture is less concerning than in the US or in Europe. Most Australian households have short-term fixed mortgage rates, and we could see a deterioration in disposable income (especially at the start of the year). We think the RBA will be careful to avert an excessively sharp housing contraction, and we expect rates to peak at 3.60% (well below the Fed and the Reserve Bank of New Zealand) and cuts from 3Q23. This would mean a less attractive carry – and less upside risk in an optimistic scenario for global sentiment; but also less damage to the economy, which may play in AUD’s favour in our baseline scenario. Valuation highly favours AUD, as the positive terms of trade shock means that AUD/USD is 20% undervalued in real terms, according to our behavioural equilibrium exchange rate (BEER) model. We have a moderately upward-sloping profile for the pair in 2023, but high sensitivity to risk sentiment and China suggests downside risks remain high. NZD/USD: Dodging the housing bullet   Spot Year ahead bias4Q221Q232Q233Q234Q23 NZD/USD 0.62 Mildly Bullish 0.60 0.60 0.62 0.63 0.64 Monetary policy: The Reserve Bank of New Zealand has given very few reasons to believe it is approaching a dovish pivot. Markets are currently expecting the Bank to hike well into 2023, and take rates to around 5.0%. While inflation (7.2% year-on-year) and job market tightness (unemployment at 3.3%) both remained elevated in the third quarter, there are growing concerns about the rapid downturn in the New Zealand property market, which in our view will trigger either an earlier-than-expected end to the tightening cycle or a faster pace of rate cuts in 2023. Housing troubles: The RBNZ recently published its financial stability report, where it showed relatively limited concern about households’ ability to withstand the forthcoming downturn in house prices. In its August 2022 forecasts, the RBNZ estimated that the YoY contraction in house prices will reach 11.6% in the first quarter of 2023. However, that implied an Official Cash Rate at 4.0%, so only 50bp of extra tightening from now, which seems too conservative now. House prices have fallen 7.5% from their first quarter 2022 peak so far, but the trend may well accelerate, especially given a hawkish RBNZ and the risk of slowing global demand hitting the very open New Zealand economy. External drivers and valuation: Even assuming a constructive domestic picture in the housing market and an attractive yield for the currency in 2023, external factors will determine how much NZD can draw any benefit. As for AUD, risk sentiment and China are the two central themes. The New Zealand dollar is more exposed to risk sentiment (as it is less liquid and higher-yielding) than AUD, but probably less exposed to China’s story. In particular, the real estate troubles in China may well hit Australia via the iron ore channel, while NZ exports (primarily dairy products) are much more linked to China’s Covid restrictions, which look likely to be gradually scaled back. In our base case, the two currencies should largely move in tandem next year. The real NZD/USD rate is 15% undervalued, according to our BEER model. EUR/DKK: Tricky mix of intervention and rates   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/DKK 7.44 Neutral 7.44 7.44 7.44 7.44 7.45 Central bank policy: Danmarks Nationalbank delivered FX intervention worth DKK45bn in September and October to defend the EUR/DKK peg. On 27 October, it opted for a smaller rate hike (60bp) compared to the ECB (75bp), which briefly sent EUR/DKK close to the 7.4460 February highs before rapidly falling back to 7.4380/90. We think it will be a busy year ahead for the central bank, as we expect very limited idiosyncratic EUR strength and potentially more pressure on EUR/DKK. Having now exited negative rate territory, DN has much more room to adjust the policy rate for a wider rate differential with the ECB if needed. However, with inflation running above 10% in Denmark, DN may prefer FX intervention over dovish monetary policy to support the peg. We have recently revised our EUR/DKK forecast, and expect a return to 7.4600 only in 2024. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  

Long-term outlook. The GBP/USD currency pair has risen by only 30 points in the current week. Remember that a week ago, the increase was 500 points. As you can see, traders ignored the report on American inflation, which caused the dollar to fall sharply in recent weeks. Rather than inflation, the decrease in the likelihood of aggressive tightening of the Fed's monetary policy is to blame. But remember that this was known even before the inflation figures were released because the Fed cannot keep raising interest rates indefinitely. It is currently 4%, with a maximum level of 5% considered. As a result, a "slowdown" had to occur in any case, and the market had to be prepared for it. Another issue is the Bank of England and the British pound. Sincerely speaking, traders have no interest in the work being done in Britain by the regulator. Remember that at least seven of the BA's eight rate hikes went unheeded, and this week the UK's inflation rate updated a record set 40 years prior without causing the pound to make a significant rise or decline. The report on British inflation is generally identical to the report on American inflation. If the consumer price index continues to rise, the Central Bank's aggressive monetary policy will be more likely to be maintained. There was justification for the pound to increase this week. In the end, neither the first nor the second occurred. As a result, this report was ignored by the market. The same is true of the budget proposal that UK Treasury Chief Jeremy Hunt unveiled on November 17. Taxes won't significantly increase, but the cutoff points for applying various tax rates will be adjusted. In other words, because their annual incomes are now considered higher than before, those who previously paid at a lower rate will now pay a higher rate. Additionally, it was revealed that Liz Truss had underestimated the amount of money given to the British people as compensation for their electricity bills. Even so, this news did not significantly impact the pair's movement. Technically speaking, the pound and the euro are trading almost identically once again and continue to have the same chances of growth. COT evaluation. The "bearish" sentiment continued to weaken, according to the most recent COT report on the British pound. The non-commercial group closed 1,900 buy contracts and 8,800 sell contracts for the week. As a result, non-commercial traders' net position increased by 7,000. The net position indicator has been gradually increasing over the past few months. However, the major players' outlook is still "bearish," and despite the pound's recent rise, it is not yet clear that it is getting ready for a protracted upward trend. Furthermore, if the situation with the euro is anything to go by, it is improbable that the pair will experience significant growth based on COT reports. The market is waiting for new geopolitical shocks to return to dollar purchases, as demand for the US currency remains very high. The non-commercial group has now opened 67,500 sales contracts and 34,500 purchase contracts. As we can see, the difference is still significant. Remember that the euro cannot show strong growth while major players are "bullish." In terms of the total number of open buy and sell positions, the bulls have a 17-thousand-position advantage. However, as we can see, this indicator only helps the pound a little. Despite technical grounds for doing so, we remain skeptical of the British currency's long-term growth. Fundamental event analysis This week, several significant reports were released in the UK. Naturally, the inflation report comes first. It has already increased to 11.1% y/y and should, in theory, cause a significant market response. Additionally, there were reports on average wages (+6%), retail sales (+0.6% m/m in October), and unemployment (growth to 3.6%). The other reports, on the other hand, were even less likely to elicit a response if inflation did not. The growth potential of the pound sterling has been reached at this point. We stated a week ago that all technical indicators supported the pair's medium-term growth, but now we require a slight downward correction. The outcome is unchanged as of right now. Trading strategy for the week of November 21–25: 1) The pound/dollar pair has broken through the Ichimoku indicator's key lines, giving it the technical support necessary to establish a new long-term upward trend. We continue to be dubious about this possibility because we must see clear fundamental and geopolitical justifications. Still, we also understand that the couple can survive on nothing but technology. 1.2080 and 1.2824 are the closest targets; 2) The pound has advanced significantly, but it is still challenging to wait for rapid growth. The pair's decline can resume with targets in the range of 1.0632-1.0357 if the price fixes back below the Kijun-sen line. Sales, though, are no longer important. Explanations of the illustrations: Price levels of support and resistance (resistance and support), Fibonacci levels – target levels when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators (standard settings), Bollinger Bands (standard settings), MACD (5, 34, 5). The net position size of each trading category is represented by Indicator 1 on the COT charts. The net position size for the "Non-commercial" group is indicated by indicator 2 on the COT charts. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327566

Early in the American session, the British pound (GBP/USD) is trading around 1.1901, above the 21 SMA and below the strong resistance of 1.1962 (+1/8 Murray). According to the 4-hour chart, the latest candlesticks show that the pound is showing some exhaustion of the bullish force and a technical correction could follow if GBP/USD breaks and consolidates below 1.1873. On the other hand, the pound is likely to consolidate below 1.1962-1.1880 in the next few hours. If the price manages to break below the 21 SMA (1.1873), this level could give an opportunity to continue selling with targets at 1.18 and 1.1718 (8/8 Murray). This level coincides with the bottom of the uptrend channel and could offer a technical bounce. Additionally, a sharp break below the 8/8 Murray and the uptrend channel formed since the beginning of November could mean a change in trend and the pound could fall rapidly towards the psychological level of 1.15 and even towards the area of 7/ 8 Murray located at 1.1473. On the other hand, for the pound to resume its bullish cycle, we should expect a daily close above 1.1970. Above this level, we could expect the pound to reach the psychological level of 1.20 and even +2/8 Murray located at 1.2207. The eagle indicator is at a turning point. It remains above an uptrend line, which gives us a positive signal. On the contrary, in case the moving average of the indicator breaks this support, we could expect a pound to fall towards the zone of 1.1718 in the coming days.     Relevance up to 16:00 2022-11-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301662

After three days of the pound's unsuccessful attacks on resistance at 1.1940, the price is now pulling back with the intention to overcome support at 1.1737. This is indicated by the Marlin Oscillator intensifying the downward movement after creating a divergence with the price. Settling below 1.1737 would open the 1.1500 target. On the four-hour chart, the price is currently struggling with the support of the balance line indicator, a withdrawal under which can develop a decline in the medium term. The MACD line is at the 1.1737 level, accordingly, overcoming this support will strengthen the pound's downward mood in the medium-term. The price is currently regaining the initial impulse, set by the reversal of the Marlin Oscillator from the zero line (arrow).     search   g_translate     Relevance up to 03:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327604

On Friday, the GBP/USD currency pair also carried on with apparent reluctance. In theory, both currency pairs traded in line with their best practices and had a dull trading week. The technical images for the euro and the pound are thus identical. Most technical indicators point to an upward trend on almost all TF, both currencies are above the moving averages, and one of the linear regression channels is pointing upwards. As anticipated, there was no significant correction; instead, both pairs remained stationary for a full week. Since they moved in tandem this week, the euro and the pound have formal reasons to keep rising. But we still don't know why both currencies have appreciated so much over the past few weeks or what will allow them to do so. New or invented reasons can always be "found." However, we make an effort to refrain from doing this. As usual, there are more issues with the British pound than with the euro or the dollar. If the US economy's recession is only "possible to start," the European Union's recession "will begin, but it may be weak," and the UK's recession "has already started and will be at least long," respectively. If inflation is high throughout the European Union and the US but is already declining, it is extremely high in the UK and is still rising despite eight rate increases by the Bank of England. Additionally, a 50 billion pound "hole" in the British budget will be "patched up" in the simplest way possible by reducing spending and raising taxes. In reality, tax rates won't go up; however, in place of the high-income tax rate that previously applied to Britons with incomes over 150,000 pounds annually, the low-income tax rate will now apply to those with incomes under 125,000 pounds. Consequently, a specific group of people will see an increase in tax rates. On the other hand, the state will reduce its support for paying electricity bills, which have increased significantly. The most intriguing news of the week is the business activity index. This week, the same "gentleman's" set of macroeconomic principles will apply in the UK and the EU. Members of the central bank's monetary committee made the same speeches, and business activity indices were used. All three business activity indices share the same fundamental characteristics: They are all below the "waterline" of 50.0. They are all unlikely to experience significant growth (there is simply no basis for this). They are all likely to keep declining. Regarding Cunliffe and Pill's speeches, both adhere to the rhetoric regarding the ongoing fight against inflation and speak frequently. The most intriguing aspect is that the same business activity indices and speeches by Fed members will be published in the US. Only the manufacturing sector's business activity index, among the others, may stay above 50.0, but predictions indicate that it will also dip below this level. We won't see or hear anything new because James Bullard, Loretta Meister, and other Fed members are likely to discuss the need to slow down the pace of monetary policy tightening. The States will also release "standard" reports on orders for long-term goods and applications for unemployment benefits, to which the market rarely responds. This week, we would say, has the best chance of flat-like movement. Given the fundamental and macroeconomic context, it is challenging to anticipate new growth in the euro and the pound. Once more, a downward correction would be a far more sensible course of action. Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 162 points. This value for the dollar/pound exchange rate is "very high." Thus, we anticipate movement inside the channel on Monday, November 21, constrained by 1.1734 and 1.2048. The Heiken Ashi indicator's upward reversal suggests that the upward trend may continue. Nearest levels of support S1 – 1.1841 S2 – 1.1719 S3 – 1.1597 Nearest levels of resistance: R1 – 1.1963 R2 – 1.2085 R3 – 1.2207 Trading Suggestions: In the 4-hour timeframe, the GBP/USD pair has begun a new round of downward correction. Therefore, in the event of an upward reversal of the Heiken Ashi indicator, buy orders with targets of 1.2048 and 1.2085 should still be considered. With targets of 1.1719 and 1.1597, open sell orders should be fixed below the moving average. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels – target levels for movements and corrections. Volatility levels (red lines) – the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite di