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Yesterday was optimistic for the US dollar, as it received local support, which led to a sharp price growth. The impulse for the growth of dollar positions was the news that the American pharmaceutical giant Pfizer and the German biotechnology company BioNTech announced a successful third phase of clinical trials of a vaccine against COVID-19, and registration is expected in November. According to research, the vaccine has been shown to be more than 90% effective among subjects.
Such positive news had a sharp impact on the dynamics of the market, where the EUR/USD pair managed to decline by more than 100 points in a short period of time. At that moment, the US dollar was strengthening in the market.
In turn, similar dynamics was observed for the GBP/USD pair, in favor of the strengthening of the US dollar, but only on a smaller scale.
In terms of the economic calendar, the main event today is the UK labor market data, which reflected an increase in unemployment in the country from 4.5% to 4.8%, which was in line with analysts' expectations. The employment in September fell more than expected by 164 thousand instead of the forecasted 148 thousand.
Considering the above data, the labor market in the UK is going through difficult times, which may affect the pound's exchange rate.
Meanwhile, for the technical analysis, we can see that the quote of GBP/USD is clamped in a variable range between 1.3175 and 1.3200, where a breakdown of the lower limit (1.3175) can be followed by a decline towards the coordinates 1.3155 ---> 1.3120.
On another note, the publication of statistical data on the EUR/USD pair is not expected today, thus technical analysis may become a priority for market participants. Analyzing the quotes' dynamics, you can see a variable range in the form of values 1.1807/1.1837, where the quote hovered after a sharp decline.
The most optimal trading tactic will be the method of breaking through the established boundaries, working on the principle of entering an impulse.
- Buying a pair is recommended at a price above 1.1840, with the prospect of moving to 1.1875.
- Selling a pair is recommended at a price below 1.1830, with the prospect of moving to 1.1800-1.1760.
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