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30.10.202016:26 Przeglądy analityczne: Analysis for EUR/USD on October 30. Reports on GDP and inflation in the Eurozone may cause a new fall in the European currency

Exchange Rates 30.10.2020 analysis

The wave marking of the EUR/USD instrument in global terms has undergone certain changes after the quotes fell below the minimum of wave b. Thus, the entire section of the trend, which begins on September 23, now looks three-wave and completed. If this is true, then the decline in the instrument's quotes will continue with targets located around 15 figures and below. Perhaps another three-wave structure will be built down.

Exchange Rates 30.10.2020 analysis

Smaller-scale wave markings also indicate certain changes. The option with a further increase in quotes is canceled at the moment, and now I expect to build at least three waves down. Accordingly, just a few days before the US election, the dollar, according to the wave markup, received good reasons to increase in pair with the euro. However, it should also be noted that the news background is superior to wave analysis. In other words, it is the news background that can easily cause a new increase in the instrument's quotes, and the wave markup will have to adjust.

Yesterday, the next ECB meeting ended in the European Union. These meetings usually have a high value for the market, however, the European regulator did not intend to change rates or expand the quantitative stimulus program. The pandemic (second wave) in the European Union began relatively recently, but rapidly. Thus, the EU economy has not yet started to need help due to the new wave of the epidemic. However, the President of the ECB Christine Lagarde clearly outlined the prospects for the European economy in the coming months. Lagarde said that the economic recovery was not super-fast even in the summer when the situation with the coronavirus was relatively calm and stable, and now, when anti-records on the incidence are noted throughout the European Union, and many countries are re-introducing a "lockdown", the EU economy may begin to slow down again. It follows that the program to counter the economic consequences of the pandemic (PEPP) may be revised again in the near future, as well as the usual program of quantitative stimulation. What else is there to do? The quarantined economy will not recover, it will shrink. To prevent this from happening, or at least to smooth out the negative process, the ECB will have to pour new money into the economy. And the longer the complex epidemiological situation persists, the more cash injections will be required. Today, the European Union released a report on GDP for the third quarter, which was slightly better than the markets expected. Yesterday, for example, US GDP in the third quarter showed very strong growth, by 33.1% q/q. European GDP did not disappoint, but it did not overly please. The decline in the euro currency did not continue during the day. The European Union also released a report on inflation, which remained at -0.3% y/y.

General conclusions and recommendations:

The euro/dollar pair has presumably completed the construction of a three-wave upward trend section. Thus, at this time, I recommend selling the instrument with targets located near the 1.1519 mark, which corresponds to 38.2% Fibonacci, for each MACD signal "down", based on the construction of a downward wave a.

*Prezentowana analiza rynku ma charakter informacyjny i nie jest przewodnikiem po transakcji.

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