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Technical Analysis for 02/11/2016

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Technical Analysis for 02/11/2016

Technical Analysis for 02/11/2016
November 02
09:00 2016

EUR / USD – EURO US DOLLAR

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As expected, the US dollar has fallen against the euro against the background of the arisen uncertainty in the United States before the elections due to the growth of Donald Trump’s chances to win and the FBI investigation. Last week, the FBI resumed the case on e-mail leakage of Hillary Clinton that put pressure on the confidence of traders in Clinton’s victory in the elections on 8 November. In case of Trump’s victory, there are risks that Fed will refrain from raising rates in December.

In addition, the low activity on Tuesday was also associated with today’s meeting of the Federal Reserve, from which market participants expect hawkish signals on the policy tightening. On the eve of the elections in the US the market ignored the data from Markit and ISM, according to which the PMI index in the manufacturing sector, the index of gradual acceleration of inflation and the index of business activity in the manufacturing sector had risen in the United States in October, exceeding the predicted figures.

Yesterday the pair updated the maximum from October 12- to 1.1068, while the volatility was 109 points (1,0959-1,1068). EURUSD grew by 81 points- up to 1.1056.

In this way:

The most likely scenario: the growth of the pair EURUSD to the level of 1.1140

The least likely scenario: the reduction of the pair to the level of 1.0990

GBP / USD – BRITISH POUND DOLLAR

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The rate of pound / dollar was rising to the level of 1.2280 during Forex trading on Tuesday, but it suffered from the index of business activity in the manufacturing sector of the United Kingdom. PMI index fell to 54.3 points, while the experts forecast an increase to 55.5 points.

The political pressure on the British currency is being maintained. Supporters of the UK exit from the EU have criticized the Head of the Bank of England Mark Carney as contrary to forecasts of the regulator, there is the noticeable strengthening of the country’s economy after the referendum. There were even talks that Mark Carney wouldn’t finalize a full term as chairman, but the Bank of England had denied these rumors. However, in private conversations the head of the regulator confirmed that he could make such a statement in the near future.

The currency pair GBP / USD showed the expected increase above $ 1.2200. A rebound from the trend line has formed on the relative strength index; we expect the movement to the level of resistance, indicating the rate growth of the pound. Thus, the forecast for GBP / USD for tomorrow suggests the continuation of the correction. The quotations fixation above $ 1.2250 will indicate movement to the area of 1.24.

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