EUR / USD
Thursday, October 17, ended for the EUR / USD pair with an increase of 50 basis points and reaching the level of 50.0% Fibonacci. Thus, the alleged wave a continued its construction and now has every chance to complete near the level of 50.0%. An unsuccessful attempt to break through this level will indicate the readiness of the currency market to move away from the reached highs and build a wave b. At the same time, a successful attempt to break through the 50.0% level will show the readiness of the market to further complicate wave a.
The fundamental background for the pair EUR / USD remains quite weak. However, as we see, this does not prevent the markets from continuing to buy the euro, just as they were buying the dollar a few weeks ago. Yesterday, investors in the US dollar are clearly upset with the report on industrial production, which showed a decline of as much as 0.4% m / m. In addition to this report, positive news from the EU summit also affected the euro. Thus, in terms of combination of factors, the euro managed to add another 0.5 cents paired with the US currency. Today, I do not expect economic reports. Therefore, it is time to build a correctional wave b.
1.1145 - 50.0% Fibonacci
1.1208 - 61.8% Fibonacci
1.0879 - 0.0% Fibonacci
General conclusions and recommendations:
The euro-dollar pair continues to build a new upward set of waves. An unsuccessful attempt to break the level of 1.1145 may lead to a departure of quotes from the reached highs and the construction of wave b. On the contrary, a successful attempt will show the intention of the markets to continue to buy the instrument with targets located near the calculated level of 1.1208, which corresponds to 61.8% Fibonacci.
GBP / USD
On October 17, GBP / USD gained another 60 basis points and "pricked" the 127.2% Fibonacci level. An unsuccessful attempt to break through this level casts doubt on the further increase in the quotes of the pound-dollar pair. Even now, it can be assumed that wave 3 or C has completed its construction. If this is true, then the initiated decline in quotations will continue, possibly within the framework of wave 4, and possibly within the framework of a new downward trend section.
The news background is now of the highest importance for the pound / dollar pair. During the summit of the European Union, a decision was made by all 27 member countries of the bloc to approve the agreement proposed by Boris Johnson, the negotiations on which have been conducted in recent weeks are almost non-stop. However, this agreement is only 50% success. Now, it is necessary that the agreement should be approved by a majority vote at tomorrow's emergency meeting of the British Parliament. And with this, according to preliminary information, Johnson may have serious problems. It is already known that the Labor Party is opposed to a new version of the agreement with the EU, together with the DUP, which are considered allies of the conservatives, is also not satisfied with the text of the agreement, while the Scottish Democratic Party is against the deal in any of its variations. By the way, Scottish Prime Minister Nicola Sturgeon refused to vote for the deal. She said that Scotland, in principle, was against leaving the EU. Therefore, it would reject any bills related to exit from the EU, both with and without a deal. Moreover, Sturgeon also reiterated that the issue of holding a referendum on independence in her country is still open, and will be put on the agenda if Britain, nevertheless, leaves the European Union. Thus, the question of whether Parliament will accept an agreement with the European Union tomorrow is open, and so far, it is more likely that the deal will be rejected.
1.2191 - 0.0% Fibonacci
1.2986 - 127.2% Fibonacci
1.3202 - 161.8% Fibonacci
General conclusions and recommendations:
The pound / dollar instrument continues to build an upward trend. However, an unsuccessful attempt to break the level of 1.2986 indicates that the instrument is ready to decline. Since the news background is now at its most importance, the continuation or completion of the construction of wave 3 or B will depend on the outcome of tomorrow's vote.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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