16.11.202011:49 Forex Analysis & Reviews: Trading recommendations of EUR/USD and GBP/USD pair on 11/16/20

The Euro showed low activity last Friday, which was aimed to strengthen it. So, in terms of the economic calendar, there were no reasons for the single currency to grow. The second estimate of Eurozone GDP for the third quarter reflected a slow down in the economic downturn from -14.8 to -4.4%, although it was predicted that GDP would coincide with the first estimate, which was -4.3.

Thus, the euro's strengthening is clearly connected not with the flow of statistical news, but with something else. In view of this, there is speculation that investors are intimidated by the ongoing US presidential race, where incumbent president Mr. Trump managed to achieve a recount in Georgia.

In terms of technical analysis, it is worth highlighting that there was an upward trend last Wednesday (Nov 11), when the pivot point 1.1745 was found, relative to which the European currency strengthened.

As for last Friday's trade recommendation, things are doing well here. We suggested to take a closer look at the amplitude 1.1787/1.1823 and work on the breakdown of a particular border. As a result, a breakdown of the upper limit (1.1823) occurred, where a buy position was opened, which brought an income of about 25 points.

The pound showed an active upward interest last Friday, As a result, it managed to strengthen around 90 points. The most interesting thing is that there was no publication of UK statistics that time.

There were no reasons for the pound to strengthen, and so, it is likely that speculative activity played a role, which led to growth. The lever for changing direction could be the same background for the United States regarding investors' fear, as described above.

From the point of view of technical analysis, it can be seen at first glance that there was a sharp decline in the limits of 1.3105/13123, followed by an acceleration. Moreover, a round of speculative activity arose after the breakdown of the level of 1.3132, which led to a consistent growth in the pound's volume of positions.

Speculative hype

In terms of the economic calendar, we do not have statistics on Europe and the United States worthy of attention today. In case that speculators pay attention, it will only be the information flow in the US regarding Trump and Biden.

From the point of view of technical analysis, we stand on the border of the balance of trade forces, which reflects the price level of 1.1850. Thus far, the subsequent course in the market will depend on whether the quote is held above or below the price level.

The following scenarios can be considered as possible perspectives and entry points:

- Buying a pair is considered at a price above the level of 1.1855, with the prospect of moving to 1.1900.

- Selling a pair is considered at a price below the level of 1.1840, with the prospect of a moving to 1.1800.

Today, no statistics are expected for the UK. Therefore, we will focus our special attention on technical analysis, as well as on the continuous information flow regarding hot topics such as COVID-19, Brexit, and conflict between Trump and Biden.

From the point of view of technical analysis, it is noteworthy that pound's strengthening led to a variable resistance area of 1.3225/1.3235, which may affect the volume of buy positions. If the price continues to hold below this area, sellers will have a chance to decline, which may lead to an increase in the volume of positions for selling the pound and as a result, a decline towards the range of 1.3155-1.3125.

An alternative scenario will be considered if the area of 1.3225/1.3235 breaks down in the upward direction, where holding the price above the level of 1.3240 in the four-hour (H4) time frame will lead to movement directed towards the November 11 high - 1.3300.