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Forecast for USD price for 29 October 2020

2020-10-29

2020-10-29

November in Forex: will there be a disaster? Forecast for GBPUSD, EURGBP, EURJPY, AUDJPY, NZDJPY, AUDUSD, NZDU…Dmitri Demidenko

The end of the autumn may decide the pound’s fate. At the same time, the global stock market’s reaction to the US presidential election will clear the prospects of the euro, the Australian and New Zealand dollars, and other G10 currencies. Let’s make a trading plan.

Monthly fundamental forecast for the dollar

October shows this whole year’s peculiarities of Forex trading. The market seems to be sensitive to seasonal factors, but an unexpected event then spoils everything for the fans of statistical analysis with a fundamental bias. All was good until October’s last week: the bets on the euro, the pound sterling, and the NZ dollar looked successful. Even the Australian dollar wasn’t upsetting. But in the end, it’s the greenback that regained superiority at the end of October, which isn’t a sign of efficient trading.

In November 1975-2019, the US dollar, the kiwi, the euro, the Swissie, and the Aussie closed most often in the green zone. The pound, the loonie, the yen, and the Scandinavian currencies felt the worst. Interestingly, the Japanese yen, the Swiss franc, and the Swedish krona were most often the outsiders after US elections. The first two currencies are considered safe-haven assets whose rate usually falls when global risk appetite grows.

Growth/fall streaks

Source: BoE, LiteForex’ calculations

The US shares are very likely to rise in November regardless of who wins the election. If Joe Biden becomes President, investors will hope for a massive fiscal stimulus. If Donald Trump wins, concerns about a new trading war will move the capital from Asia to the USA, which will positively impact the [S&P 500][1], like it was in 2016.

According to median estimates, October’s favorites are the greenback, the AUD, the NZD, and the euro. The losers are the British pound, the Norwegian krone, and the Canadian dollar. The last two currencies are closely connected with oil, while the Democrats’ victory may cause new troubles to the black gold.

Average and median values

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Source: BoE, LiteForex’ calculations

The pound would lose more than 2%, the yen - 1.7%, and the franc - 1.6% on unfavorable streaks. On winning streaks, the Australian dollar would grow 2.3% on average, the NZ dollar - 2.4%, the euro - 2.1%.

Quotes’ moves during growth/fall periods

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Source: BoE, LiteForex’ calculations

Monthly trading plan for G10 currencies

Based on statistics, a no-deal Brexit will make the [GBPUSD][2] collapse and the [EURGBP][3] - grow if Britain and the EU fail to make an agreement. I don’t want to believe that. The double recession concerns may drop [Brent][4] and [WTI][5] and continue the rally of the [USDCAD][6] and the [USDNOK][7].

Joe Biden’s victory will be a boon for the global and US stock markets and will allow us to open long positions in the [EURJPY][8], [AUDJPY,][9] [NZDJPY][10], and [USDCHF][11]. If Donald Trump unexpectedly wins, we should sell Australian and NZ dollars amid expectations of a new China-US trading war as those currencies are closely connected with China. The greenback will become a favorite in that case, confirmed by statistical analysis with a fundamental bias.

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Price chart of GBPUSD in real time mode

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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