EUR / USD
Friday, September 20, ended for the EUR / USD pair in a decline of 20 basis points. The instrument fell to the level of 23.6% Fibonacci and made an unsuccessful attempt to break through. Thus, since the previous minimum was not broken, good chances remain for constructing the alleged wave 3 or C and the composition of the upward trend section, originating on September 12. There is still the possibility that this section will transform into wave 4 with the subsequent continuation of the construction of the downward trend section within wave 5. On the other hand, the news background for the euro-dollar pair was neutral on Friday. However, the markets found reasons to sell the pair.
Monday should be a more interesting day for the foreign exchange market compared to Friday. Today, the news background will be strong enough. First, there will be indicators of business activity in the services and production of Germany.
German business activity indicators have been catastrophically low for a long time, and there is no hope that the situation will change in the coming months. A value of 43.5 and a forecast of 44.0 confirms this.
In the services sector, the situation is much better. Indicators confidently hold above 50 and it is precisely due to them that the composite index of business activity is also kept above this level.
A little later, the index of business activity in the European Union is released.
Business activity in the manufacturing sector is also bad. The previous value is 47.0, while the forecast is 47.3.
In the service sector in Germany, everything is better. Fears that indicators will fall below 50 are now groundless.
In the afternoon, we have the same index of business activity in America.
In industry, business activity risks falling below 50 is already this month or next.
In the service sector, the situation is the same. In September or October, indicators may begin to indicate recessions in both areas.
I draw the attention of traders that these figures for September are not final, however, it will already be possible to judge by them what to expect from business activity by the end of the month. The euro-dollar pair still needs weak news from America to build a three-wave upward structure.
1.1128 - 61.8% Fibonacci
1.1175 - 76.4% Fibonacci
1.0927 - 0.0% Fibonacci
General conclusions and recommendations:
The euro-dollar pair allegedly completed the construction of a bearish wave 3 or C, as well as wave 2 or b as part of a new trend section, which originates on September 12. If this is true, then the pair is still expected to increase quotes. I recommend buying a pair with targets near the calculated levels of 1.1128 and 1.1175, calculated on the construction of wave 3 or C, not forgetting protective orders below the minimum of wave 2 or b.
GBP / USD
On September 20, the pair GBP / USD lost 50 basis points, but remains within the framework of the construction of the alleged wave c. There was no news background on Friday, however, the "Briton" still has an "eternal" news background in the form of Brexit. By the way, there is no new data on this topic. The Supreme Court of Great Britain continues to consider the case of illegal suspension of parliament by Boris Johnson. Thus, everyone is waiting for a court decision, which can be issued today or tomorrow. Will the deputies returned to their work earlier, before October 14? It will depend on this decision. If so, then we have the right to expect new parliamentary battles against Boris Johnson and his desire to withdraw the country from the European Union by October 31 at any cost.
On Monday, September 23, the UK news calendar is empty. Thus, we are hoping to receive news from the Supreme Court of Great Britain or from the government of Boris Johnson. One of the latest messages on the subject of Brexit was a speech by Jean-Claude Juncker, in which he stated that even in the case of a hard Brexit, the border between Northern Ireland, which leaves the EU along with Britain, and Ireland, which also remains part of the European Union, will appear. Accordingly, one of the main desires of the British government to prevent the appearance of a border between these countries will not be realized anyway, which nullifies the whole meaning of hard Brexit. Now, it is the turn for comments on this issue from the Prime Minister of Great Britain.
1.2016 - 0.0% Fibonacci
1.2602 - 76.4% Fibonacci
1.2784 - 100.0% Fibonacci
General conclusions and recommendations:
The upward trend section continues its construction. Thus, quotes are now expected to increase with targets located near the calculated levels of 1.2602 and 1.2784, which corresponds to 76.4% and 100.0% Fibonacci. Wave c can still complete its construction in the near future, however, a successful attempt to break through the 61.8% Fibonacci level indicates that the market is ready for a new increase in the instrument.