On Monday, the euro/dollar pair continues dropping without any sign of correction. Thus, the price is within the downward channel. It means the downward trend will continue. There was no correction and the MACD indicator failed to reach the zero level. As a result, a new buy signal was not formed. Consequently, beginning traders should wait for the upward correction. However, we should remember that the current downward channel is really narrow. It means that any correction may allow the pair to leave it. After that, the downtrend is likely to be finished. Thus, for the technical point of view, the current market situation is quite ambiguous.
As for the fundamental background, the European Union and the United States will reveal data on business activity in the manufacturing sectors today. These reports are of minor importance in the current situation. In the context of a full-scale second wave of the pandemic, services are the first to suffer, since quarantine restrictions mostly affect them. Thus, business activity in the industry should remain at high levels or decrease slightly. However, a much more important event for the US currency will take place tomorrow, and traders can perform deals today (and indeed in recent days) taking into account the US Presidential elections. For the past three months, any process in the United States has been viewed through the prism of future elections. Thus, the voting will be officially completed tomorrow, and the results will be revealed within this week. The US dollar may just get more expensive ahead of the election. The main reason for that is that big players may open deals depending on the candidate they believe in. After the election, the US dollar may, for example, fall. The point is that there is no good result for the greenback. And this currency will grow or fall because the election cannot be ignored by market participants and each of them has its own opinion about it. Thus, novice traders should trade today and tomorrow remembering that sharp price changes are possible.
Possible scenarios for November 2.
1) It is not a good idea to open buy deals on the euro/dollar pair as the price is within the downward channel. Thus, newbies are recommended to wait until the price consolidates above the mentioned channel. The fact is that only after that the uptrend will be possible. The first target is at 1.1696.
2) It is possible to open sell deals despite the fact that the pair has already lost 200 pips and is still falling. Until the price leaves the downward channel, it is better to open sell deals. This downward channel is really narrow. It means that any correction may allow the pair to leave it. The downtrend may be changed in the several days. Nevertheless, at the moment, we have such targets as 1.1623 and 1.1600.
