27.10.202010:48 Ανάλυση και κριτικές Forex: Analysis and forecast for EUR/USD on October 27, 2020

In yesterday's trading, the US dollar was in demand as a protective asset and strengthened across a wide range of markets. This demand for the US currency was caused by the lack of a compromise on the adoption of a stimulus package in the US, as well as the increase in the daily number of COVID-19 infected in Europe and the United States. So, in the United States, the highest daily number of coronavirus infections has been observed for several days. The situation is no better in France, where the daily number of infections last Sunday reached 52 thousand people. According to yesterday's data, the number of infected people in the country was slightly less (27,000), however, this is a fairly high figure. Against this background, the French authorities are ready to introduce new stricter restrictions, which include extending the curfew and strengthening quarantine in places where the greatest number of infections is observed. And the United States, as expected, seems to be covered by the second wave of COVID-19, which does not bode well for either the country's citizens or the American economy. By the way, the Russian Federation is introducing a mandatory mask regime, and penalties will be applied to those who do not comply with the instructions of the authorities. In general, the COVID-19 pandemic does not think to subside, rather the opposite.

If you look at today's economic calendar, the price dynamics of the main currency pair of the Forex market can be influenced by data from the United States on orders for durable goods, which will be published at 13:30 London time.


Exchange Rates 27.10.2020 analysis

Turning to the technical part of the review, we see that the pair draws a so-called "fence" on the daily chart, this is when white and black candles alternate in turn. The quote was not able to demonstrate the true exit up from the Ichimoku indicator cloud, and this is an absolute minus for the euro bulls. If you follow this logic, today is a day of growth, but after such attempts and reaching the mark of 1.1835, the daily candle began to deflate like a balloon, and at the moment of writing, almost nothing remained of the bullish body of the candle, but a long upper shadow was formed. Of course, the main events of today's trading are still ahead, but judging by the mood of investors, the US currency has every chance to continue to enjoy increased demand in the foreign exchange market. The pair has already moved into negative territory and the euro/dollar is trading below today's opening price of 1.1808.

Once again, a strong and important level of 1.1800 appears in the focus of attention, leaving under which consolidation below will send the pair to the no less significant mark of 1.1700. However, the 50 simple moving average, which runs at 1.1793, and the red Tenkan line of the Ichimoku indicator, which runs slightly lower at 1.1784, can provide strong support and provoke a good rebound up, if not a reversal. The nearest and quite strong resistance of sellers is in the price zone of 1.1835-1.1847, where the current highs of today's trading were shown and the upper limit of the daily cloud passes.


Exchange Rates 27.10.2020 analysis

At the end of the review, the EUR/USD pair shows a fairly strong downward trend and risks falling to the area of 1.1795-1.1786, where the moving averages of 89 EMA and 50 MA are used, as well as the support level. If bullish patterns (or a model) of candle analysis appear in the designated zone, this will be a signal to open purchases for EUR/USD. It's too late for sales right here and now. For those who are bearish in relation to the euro/dollar, I suggest waiting for a pullback to the price area of 1.1815-1.1830, and if there are signals to sell, open short positions on the main currency pair.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Ivan Aleksandrov,
Analytical expert
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