Fundamental analysis

Tips for beginner traders in EUR/USD and GBP/USD on October 26, 2022

Details of the economic calendar of October 25

The macroeconomic calendar was empty, thus statistical data in Europe, the United Kingdom, and the United States were not published.

For this reason, investors and traders paid special attention to the information flow, where Rishi Sunak officially took office as Prime Minister of Great Britain.

The main theses of the speech of the new Prime Minister:

– The effects of the pandemic on the economy remain.

– We will put economic stability at the center of the agenda.

– There will be difficult decisions;

– We will build an economy that will take full advantage of Brexit.

– I’m not scared, I understand that I must restore trust.

The British financial sector welcomed the new prime minister; the pound sterling was actively strengthening in value, pulling up the euro.

Analysis of trading charts from October 25

The EURUSD currency pair completed fluctuations within the intermediate level of 0.9850. As a result, an inertial upward move appeared on the market, which brought the euro rate close to the parity level.

During the past day, the euro exchange rate strengthened at the peak by about 1%, which is about 100 points.

The GBPUSD currency pair, during an intensive upward movement, has overcome the lower border of the resistance area of 1.1410/1.1525. This move indicates a high hype for long positions in the pound sterling by market participants.

During the past day, the pound sterling appreciated at the peak by about 2%, which is about 200 points.

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Economic calendar for October 26

Today, the macroeconomic calendar is half empty, only the data on new home sales in the US is expected. September sales may fall sharply, which is a negative factor for the country’s economy, which may put pressure on dollar positions.

Time targeting:

US new home sales – 14:00 UTC

Trading plan for EUR/USD on October 26

After an upward rally, the quote temporarily formed a stagnation that lasted throughout the Pacific and Asian sessions. This consolidation led to the accumulation of trading forces, which resulted in a new speculative surge in activity.

As for the direction of movement, everything here will depend on how market participants behave within the parity level. In this situation, it would be reasonable to see a rebound due to the technical signal of the euro being overbought in the short term.

If the parity level is broken, and the quote is firmly held above it in the daily period, then there is a high probability of a subsequent upward move. In this case, we can see a gradual recovery of the euro.

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Trading plan for GBP/USD on October 26

At the opening of the European session, buyers of the pound sterling again broke into the market, which led to a new upward impulse. As a result, the quote rose above the resistance area, which may indicate the possibility of prolongation of the current ascending cycle from the low of the downward trend.

It should be noted that the technical signal of the prolongation will be confirmed only after the stable holding of the price above the level of 1.1525 in the daily period.

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What is shown in the trading charts?

A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices.

Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market.

Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future.

The up/down arrows are the reference points of the possible price direction in the future.

The material has been provided by InstaForex Company – www.instaforex.com


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