Yesterday, for the third day in a row, the main currency pair of the Forex market showed a downward trend. This course of trading was due to the continued demand for the US dollar as a safe haven currency, as the surge in the second wave of COVID-19 in Europe, the upcoming US presidential election and the inability of the US authorities to agree with the Democrats on the adoption of a new fiscal stimulus package discourage investors from taking risks.

Currently, the Democratic presidential candidate Joe Biden is about 10% ahead of the current head of the White House, Donald Trump. Trump is unlikely to be able to reduce this gap in the time remaining until November 3. Despite the fact that many experts expect that Biden's victory will increase risk sentiment on global trading platforms, the Trump administration's failure to recognize the results of the vote could lead to a political and social crisis in the United States. With this development, risk appetite is unlikely to be possible, and the US dollar will again be in demand as a protective asset. As for the adoption of a new stimulus package before the election, the recent comments of the Speaker of the House of Representatives, Nancy Pelosi, that this is quite possible, should be considered solely as an election move. I believe that it is not profitable for the Democrats to give such a trump card to the current president on the eve of the election.

Regarding COVID-19, it can already be reliably stated that Europe was covered by the second wave of the pandemic, and the focus of infections is in France, where almost 36,500 infected people were detected over the past day, while 244 people died. Over the past week, the number of deaths in Europe from COVID-19 has increased by almost forty percent. A difficult situation is also observed in Germany, which, along with France, is ready to introduce national isolation. For example, French leader Macron believes that the second wave of coronavirus can take more lives than the first outbreak of the pandemic. And in Germany, for the first time since the beginning of the epidemic, introduced a universal mask mode. The situation is very alarming, and an emergency EU summit online will be held today, where stern EU leaders will decide in what ways to resist the insidious and deadly pandemic COVID-19.

Daily

If you go to the technical picture for the major currency pair, yesterday's decline has not brought major changes. Strong support is still observed near 1.1700, and no less significant resistance of sellers is in the price zone of 1.1788-1.1838.

Despite the increased demand for the US currency, we will consider both scenarios of today's trading. Bears for EUR/USD need to update yesterday's lows at 1.1717, then push through the landmark level of 1.1700, and then break through support at 1.1688, where the minimum trading values were shown on October 15. In the event of a change in market sentiment and growth of the pair, euro bulls will have to face strong resistance from sellers in the area of 1.1788-1.1791, where the 50 simple moving average and the red Tenkan line of the Ichimoku indicator are located, respectively. These, in my opinion, are the current goals of the warring parties.

Now for trading recommendations. Since the demand for the US currency is still strong, and the EUR/USD pair cannot gain a foothold above another very important level of 1.1800, the main trading idea is to sell, which is better to open after corrective pullbacks up. Since today the pair has already risen to 1.1758, and at the end of the review shows an aggressive downward trend, you can sell with a small target near 1.1720 right now. Another option for opening short positions can be tried after another attempt to grow in the price zone of 1.1770-1.1785. If bullish patterns of Japanese candlesticks appear in the support area of 1.1717-1.1688 on the four-hour and (or) hourly charts, this will be a signal to open purchases, but for now only in the expectation of a course correction. Do not forget about the economic calendar, which is scheduled for today reports on the German labor market, as well as data on US GDP. And the main event of today will be the ECB's decision on rates and the press conference of the head of the department, Christine Lagarde.