24-hour timeframe
Another trading week on the Forex market has ended. During this week, the EUR/USD pair failed to exit the side channel, limited by the levels of 1.0750-1.0990. Quotes worked out the upper limit of the channel and rebounded, so now a downward movement to 1.0750 is expected. On a 24-hour timeframe, the side channel is particularly visible. Over the past week, nothing has changed for the euro/dollar pair. Traders still lack motivation and desire for a new trend, as it implies a strong rise in the price of one of the currencies. And there are no fundamental reasons for this. The US and EU economies are simultaneously declining and it is impossible to predict which of them will eventually lose more. The monetary policies of the Fed and ECB are almost identical, with both central banks pouring in multibillion-dollar and even trillion-dollar tranches to support businesses and consumers. Thus, neither the dollar nor the euro currency has an advantage now.
The last trading day of the week ended without any excesses. Following the technical picture, the euro/dollar quotes continued to fall. At the same time, the theme of Donald Trump's re-election to a second term is becoming a key topic almost all over the world. By and large, the situation for the whole world looks like this. If Trump is re-elected, it will mean that trade wars and general destabilization around the world will continue. It is because the American President, who is always dissatisfied with the way other countries treat America, will continue to foment conflicts, fully adhering to the postulate: "Peace is war, war is peace", described by George Orwell in the "1984" novel. Moreover, after what China did to the United States (in fact, with the whole world, but Donald Trump believes that it is with the United States), infecting them with a "coronavirus" that has already claimed the lives of more than 90,000 Americans and infected more than 1.5 million, Trump will seek revenge. After all, the matter is for the US leader, who also "lost five acquaintances from the virus," not even in people, but in the fact that the country's economy suffered a crushing blow while the Chinese economy got off with a slight startle and was already beginning to recover. Either China was ready for an epidemic, or the Chinese authorities took the pandemic very seriously and immediately localized the infection with the help of "draconian" quarantine. It doesn't matter now. It is important that due to the epidemic, quarantine, and the resulting crisis, the US economy continues to decline, and the Chinese economy will continue to grow by the end of 2020, according to experts' forecasts, and will add 1.2%. And of course, it's about personal ambition. After all, it turns out that the one against whom Trump has been fighting for the past two years, and struck back at him, from which the entire country will recover in at least a year (and even then in the best case), and this blow may cost Trump the presidential chair.
Trump himself is confidently optimistic in public and exudes confidence that he will be re-elected for a second term although China supports Joe Biden, and Barack Obama and all the Democrats opposed him back in 2016 and may repeat this feint in 2020. However, political ratings do not lie. They say that it is Joe Biden who will become the new President of the United States. Moreover, various simulations show that the results of the vote in November can become disastrous for Trump. And all because of the coronavirus and the crisis. Based on all this, the President of the United States has two possible options. And they can be implemented in parallel with each other. The first plan of action involves the maximum possible denigration of "all the enemies of America" (that is, opponents of Trump). And this list includes WHO (it was supportive of China and failed to confront the epidemic in its early stages), China (as the source of the epidemic, which misinformed the entire world in the early stages of the pandemic, which led to the infection of the entire world), Joe Biden (supports China, and China supports him), Barack Obama (led the campaign to prevent Trump from becoming President in 2016), all the Democrats (who set up a "witch hunt", impeach Trump and just don't like him at all). Trump's task is to make American voters believe that he is personally not to blame. The above-mentioned people and countries are to blame. He, as the president of the United States, on the contrary, did everything possible so that the number of victims was not in the millions. The second plan of action will be to try to postpone the election. By the way, this was stated by Trump's rival Joe Biden in April. According to Biden, Trump will do everything possible to prevent the elections in November, since he is unable to hold a large-scale election campaign due to the quarantine, and his election speeches have been greatly reduced due to the consequences of the epidemic (high unemployment, a weak labor market, a drop in GDP). The same opinion is held by some mass media and periodicals. "The US President will not be afraid to use the coronavirus as a reason for postponing the election, given the depth of the political hole that he dug for himself," said the Fox News channel, which is traditionally loyal to Trump.
Thus, many experts believe that the Trump administration will wait for the fall to assess its chances and ratings for re-election and only after that it will launch "Plan B" with the cancellation or postponement of the election. Donald Trump himself has repeatedly stated ironically that he is ready to become the President of the United States for life... or to remain in office as president "five years, nine years, 13 years, 17 years, 21 years, 25 years, 29 years". The media estimated that this joke was used by Trump at least 20 times over the past 3.5 years. Trump also admired Chinese leader Xi Jinping after the Communist Party of China abolished the rule that a president cannot be elected for more than 2 terms. "I think it's great. Maybe we should try to do it sometime," Trump commented.
What are the actual options for Trump? According to US law, only Congress can postpone the election date, and the Democrats have a majority in the House of Representatives. So it won't even get to the Senate vote, where the Republicans already have the majority. Moreover, the law sets the exact date of the vote, as well as the date when the President must leave the office. Thus, even if the vote does not take place, Trump will still have to leave the office on January 20, 2021. However, experts and political analysts are already saying that certain "feints" at the disposal of Trump and his team still exist. For example, on election day, states controlled by Republican governors may be quarantined due to the "coronavirus" epidemic. This is especially true in districts that traditionally vote for Democrats. There will be no quarantines in polling stations that vote for Republicans. So the election can be held, but Joe Biden may not count a decent number of votes. In any case, Trump will not just give up, there is no doubt about it.
Trading recommendations:
On the 24-hour timeframe, the euro/dollar pair continues to consolidate in the side channel. Since there was a rebound from the upper border of the channel, now traders can trade for a decrease with goals around the level of 1.0750. Overcoming the lower border of the channel will notify that the consolidation process is complete and the EUR/USD pair can start forming a new downward trend.
The material has been provided by InstaForex Company - www.instaforex.com