October 25, 2020

WELTRADE Blog | Will the pound grow? Can I sell oil? Crypto blown away?

In this article, the Weltrade Forex broker provides up-to-date analytics of the latest financial events. markets, and also consider options for the development of basic trading tools.

The dynamics of recent days in the financial marketsdictated solely by interest factors in risky assets. That is, in this case, a very tight correlation is obtained: if there is interest in risk, then risky assets go to growth, respectively, in the reverse process, asylum assets go to growth. In fact, while this dynamics is not in danger.

We see that the market is moderateoptimism regarding the development of events. The two main annoying factors of recent weeks, the Brexit negotiation process and the trade relations of the United States of China, now do not cause sharp pessimism, on the contrary there are quite positive expectations. It can be noted that this affects the general condition of the market.

In short, a situation can be described.as follows: risky assets, that is, in this case, the euro, pound, Australian, New Zealand and Canadian dollars, all these currencies are growing; as for the safe haven assets, the Japanese yen and gold are under pressure, and apparently this situation will continue in the near future.

For a better understanding, we will turn to each specific financial instrument separately.

EUR / USD

Here, after a break above the level of 1.10, it is notedsteady technical picture. Progress is not the highest, there is no rapid growth. This pair meets a lot of liquidity in its path, so there is no linear growth here.

WELTRADE Blog | Will the pound grow? Can I sell oil? Crypto blown away?

The fact that it’s time has successfully risen abovemarks 1,11 and was fixed there, this indicates a very likely continuation of further growth to 1,120 and 1,125. So far, the global range that can be designated is approximately 1.09-1.13. At the moment, we are slowly moving towards the upper border. Even despite the fact that the ECB is ready to further delve into the zone of negative interest rates. By and large, now this factor is not critical and the dynamics are affected only by a steady increase in investor interest in risk. In this case, the euro looks quite attractive, which is noted here in the dynamics.

Thus, we can assume that the nearestgrowth attempt time in the direction of 1.12 will continue, and below the critical support level of 1.10. On the contrary, we are even above the 1.11 mark and while consolidation between 1.11-1.12 is the business of the coming days, and maybe weeks.

GBP / USD

In this pair, a very remarkable growth, whichdue to the fact that there is a large-scale displacement of short positions from the market. We see that the 1.30 mark has already been tested for strength, there have even been attempts to drop higher, but so far sales of 1.30-1.31 are holding back growth. Since the market evaluates the prospects of brexit only in a positive way, there is no serious decline here.

WELTRADE Blog | Will the pound grow? Can I sell oil? Crypto blown away?

It can be assumed that until October 31a certain intrigue in the brexit process: on what conditions will Britain exit from the European Union, if it happens at all; will there be a delay? There is ambiguity with this question, but we see that the market views it as follows: since the negotiation process continues, the parties make every effort, it can be described as a positive trend for the pound.

It is precisely under these factors that theNow the dynamics of the pound / dollar pair, but it should be noted that over time, the chances for negative moments increase, which can potentially affect the pair and push it lower, it is over time that this situation may worsen. That is, surprises in our case can only be downward and the larger the increase, the greater the risk of a quick and deep correction down.

While we note that it is time to confidently entrenched above1.29, and will continue its growth attempts towards 1.30. Since the market has now absorbed most of the market optimism, sharp growth has not yet been noted. If the growth happens above the 1.30 mark, then the crowding out of short positions can continue and at some stage it cannot be ruled out that a period of total surrender of shorts will happen. Against this background, the time can jump out above 1.31 and even towards 1.32-1.33. While the consolidation period is being proposed, it is marked approximately at 1.29-1.30 with possible spikes in one direction or another of 50 points, but this does not change the picture globally.

XAU / USD

Surprisingly enough remains in goldnarrow trading range: from below - this is the mark of $ 1480, there have been multiple attempts to break below, but regularly below $ 1480 there is a demand immediately and returned the metal; above, you can only indicate the level of $ 1,500 - a round figure and a psychological barrier that is currently holding back growth.

WELTRADE Blog | Will the pound grow? Can I sell oil? Crypto blown away?

Gold is under a certain pressure,interest in risk is not conducive to growth, moreover, quite substantial long positions have been accumulated, therefore long crowding out here is more than likely. With such a moderate decline below $ 1480, when demand is just below this mark will be absorbed, the surrender of the longs may increase and then we will see a failure in the direction of $ 1470 and $ 1460.

If in the world the risk situation worsens, thengold will react first. The first sign of this will be a sharp increase above 1500. Here you need to be very careful, because from a technical point of view, a break above 1500 will formally return gold to an uptrend.

Brent

We turn our attention to oil, heresignificant changes have not yet been noted. Such a global trading range of $ 58-61 has been going on for a long time and apparently this situation will continue. The very fact that amid growing interest in risk, oil cannot restore its growing trend, indicates that there will be a failure below $ 58 and oil will move towards $ 57 or even $ 56.

WELTRADE Blog | Will the pound grow? Can I sell oil? Crypto blown away?

Of course, oil will be pressured by suchfundamental factors, such as the global slowdown in global demand and attempts to surge higher, will be at some aggravation of geopolitical conflicts. Now, any attempt to break above should be used to form shorts. Because the global situation is unlikely to change in the near future, fundamental factors will put pressure, and short-term surges will be used for sales.

Bitcoin

To conclude our review, let's look atcryptocurrency market situation. Some stabilization took place here, Bitcoin moved away from the level of $ 8000, most recently it was about $ 7900 and even slightly lower, demand nevertheless was and leveled the situation. Of course, a larger part is speculative demand associated with fixing short positions, but some speculative longs are also present here.

WELTRADE Blog | Will the pound grow? Can I sell oil? Crypto blown away?

The situation in the altcoin market contributes to such great confidence, here the situation has improved.
WELTRADE Blog | Will the pound grow? Can I sell oil? Crypto blown away?

Altcoins look a bit more vigorous. This applies to Ethereum, Litecoin and Ripple.
WELTRADE Blog | Will the pound grow? Can I sell oil? Crypto blown away?

Thus, we can state that the phasesuch a powerful decline is being postponed, if at all it will happen, now consolidation is noted. This is due to the fact that the market has already absorbed the negative news, the delayed launch date for the telegram cryptocurrency and the situation around the libra cryptocurrency, all this is negative, but the market managed to cope, managed to digest it, and there was no global fall.

The dynamics of the cryptocurrency market will be left at the mercyshort-term speculators, and they have recently not welcome long-term trends. Most likely, the consolidation will continue here, we can mark it with marks of 8000-8500 dollars and if steady growth happens above $ 8500, then there is every chance to return to the zone of 9000-9200 dollars - this level will be fundamental for a possible large-scale growing and long-term the trend. Otherwise, if Bitcoin falls below $ 7,700, the decline will continue and the closure of long-term long positions is more than likely.

Vasily Barsukov (Chief Dealer WELTRADE)