28.10.202003:36 Forex Analyse & Reviews: Hot forecast and trading signals for EUR/USD on October 28. COT report. Complete flat and hopes for it to finish

EUR/USD 1H

Exchange Rates 28.10.2020 analysis

The euro/dollar pair was absolutely flat on the hourly timeframe on Tuesday, October 27. The pair could not even approach the Senkou Span B line during the day, so the bears could not form a favorable situation for themselves. Also, traders failed to overcome the Kijun-sen line, so buyers were also out of work all day. The technical picture has not changed at all. Formally, we now have a descending channel, but it is so blurred and directed more sideways than down. Take note that globally, the pair continues to trade within the $1.17-1.19 horizontal channel. Therefore, it is absolutely flat in all time frames. Accordingly, you need to wait for it to end.

EUR/USD 15M

Exchange Rates 28.10.2020 analysis

The lower linear regression channel turned to the upside on the 15-minute timeframe, indicating a new round of upward movement on the hourly chart. However, in fact, all channel reversals on the current chart have no value, since we still have a flat.

COT report

Exchange Rates 28.10.2020 analysis

The EUR/USD pair fell by around 40 points during the last reporting week (October 13-19). But in general, no significant price changes have been observed for the pair in recent months. Therefore, data from any Commitment of Traders (COT) report can only be used for long-term forecasting. The new COT report showed even fewer changes in the mood of professional traders than the previous one. Non-commercial traders, who, we recall, are the most important group of traders in the foreign exchange market, opened 1,081 Buy-contracts (longs) and 673 Sell-contracts (shorts). Take note that the "non-commercial" group decreased its net position in the last two weeks, which may indicate the end of the upward trend. However, the data provided by the latest COT report does not tell us anything at all. There are no changes, since non-commercial traders have opened almost 300,000 euro contracts. Thus, opening or closing of 1,000-2.000 contracts does not indicate anything. The lines of net positions of the "non-commercial" and "commercial" groups (upper indicator, green and red lines) continue to barely narrow, while the pair itself continues to trade in a horizontal channel. Therefore, we stick to our opinion - the upward trend is completed or is about to be completed, and the high reached near the 1.2000 level may remain the peak of this trend.

The US published a macroeconomic report on Tuesday, which had no impact on the pair's movement. The data was for orders for durable goods. Yesterday we drew the attention of traders to the fact that the probability of market reaction to this report is negligible. And so it happened. Volatility during the day was "unreal", by 43 points, which is extremely low even on the smallest timeframes. In principle, all four derivatives of durable goods orders exceeded their forecasts. However, the dollar failed to extract any dividends for itself. Thus, we can only state what we have said many times. The markets on the eve of the 2020 US presidential elections, which are already exactly a week away, are not going to risk in vain. The global flat has been persistent for three months now, and a local flat has also begun. Thus, we can only wait until the elections in the US are held, the results will be announced and market participants will begin to behave more actively. Until then, trading the pair is extremely inconvenient.

We have two trading ideas for October 28:

1) The pair is trading in full flat, plus a descending channel has appeared. Thus, traders are advised to try to resume trading upward while aiming for the resistance area of 1.1887-1.1912 and the 1.1926 level, but not before the quotes have settled above this channel. Take Profit in this case can be up to 70 points. The 1.1887-1.1912 and 1.1900-1.1920 areas are extremely strong and the bulls are unlikely to be able to overcome them in the current environment.

2) Bears continue to remain in the shadows and, despite the descending channel, there is no downward movement. Sellers still need to wait until the Senkou Span B line (1.1784) has been overcome in order to have reasons to open sell positions with targets at the 1.1748 level and the support area at 1.1692-1.1699. The potential Take Profit in this case is from 30 to 70 points.

Hot forecast and trading signals for the GBP/USD pair

Explanations for illustrations:

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.

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

Uitgevoerd door Paolo Greco,
Analytische expert
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