Daily F.X. Analysis, October 25 – Top Trade Setups In Forex - German IFO Business Climate Up Next! 

A day before, the ECB Statement, which was released at 16:45 GMT, mentioned that European Central Bank voted to maintain its interest rates unchanged in October Meeting. It was as expected because the bank would hold rates at present or lower levels until near Inflation Goal. 

Bank would continue to purchase bonds for as long as needed and would only stop the bond purchases shortly before the raising of rates. ECB would reinvest the Quantitative Easing debt for an extended period after the 1st rate hike. It also confirmed the beginning of 20Billion Euro worth Bond purchases at the starting of November.

Now investors eye German IFO Business Climate figures during the European session. 

Economic Calendar - German Ifo Business Climate

BTC/USD - Daily Analysis

Bitcoin lately slipped beneath a long-term consolidation pattern to indicate that a downtrend is in process, and has just dropped beneath a short-term bearish correction formation.

Facebook Inc CEO Mark Zuckerberg admitted on Wednesday that the company’s proposed digital currency Libra was a “risky project.” He merely tried to convince skeptical U.S. legislators that it could reduce the cost of electronic payments and extend the global financial system to more people.

The value of BTC/USD, the world’s best-known virtual currency, plunged over 7% on Wednesday to $7,412. This is the lowest level since May mid.

It was not instantly apparent why the price, which began its slide around 13:40 GMT, had dropped so sharply. Bitcoin’s price on the Luxembourg-based Bitstamp exchange was last down at $7,474.

BTC/USD - Daily Technical Levels

Support     Resistance 

7,156.7         7,864.28

6,876.63      8,291.79

6,169.05      8,999.37

Pivot Point 7,584.21

BTC/USD – Daily Forecast

The BTC/USD hasn't changed a lot since yesterday. Yesterday, the violation of the triple bottom support level of 7750 triggered a massive drop in the BTC/USD. The daily candle has closed below the 7750 areas, which has opened further room for selling in the BTC/USD. 

At the moment, the BTC/USD is trading at 7430 levels, and we may expect a slight bullish retracement until 7550 before noting further sell-off until 7200. Further, the violation of 7200 can lead the BTC/USD prices towards the $6850 area. We need to keep an eye 7520 - 7350 as the breakout of this range will help us determine further trends.

EUR/USD – Retracement Completed

The EUR/USD was opened at 1.11296 and has placed a high of 1.11626 and low of 1.10930 since then. The overall movement for pair remained Bearish throughout the day, and the pair is currently trading at 1.11025.

At 12:00 GMT, the Spanish Unemployment Rate came as 13.9% against the expectations of 13.8%. At 12:15 GMT, the French Flash Services PMI showed a growth of 52.9 in comparison to the previous month’s 51.1. The French Flash Manufacturing PMI also showed growth to 50.5 against the expectations of 50.0.

However, the German Flash Services PMI at 13:00 GMT showed a decline to 51.2 for the month of September from 51.4 of August. And the German Flash Manufacturing PMI also dropped to 41.9 from the expectations of 42.0.

The Flash Manufacturing PMI for bloc also dropped for the month of September to 45.7 against the expectations of 46.1. The Flash Services PMI of bloc fell a little to 51.8 from expectations of 51.9.

After the release of French PMI, the EUR/USD showed a sudden jump on Thursday and continued to move in the corresponding trend until the release of German PMI. The weaker than expected German PMI weighed on Euro and pulled back the gains of EUR/USD. 

The lower than expected PMI for the whole bloc of Europe added in the downward trend of EUR/USD and kept the movement of pair in Bearish trend on Thursday.

The investors decided not to react on ECB Statement before Draghi’s press conference. The last appearance of European Central Bank Governor Mario Draghi at the ECB Conference was awaited in the market on Thursday. Christine Lagarde is replacing Mario Draghi as the Governor of the European Central Bank.

At 17:30, Mario Draghi, in his speech, warned that slowing global growth and Brexit uncertainties pose a risk in the eurozone economic growth and said that Germany was on the brink of recession.

He further said that Import tariffs from the US had reduced the confidence of business as well as consumers. He also noted that the incoming data confirmed our previous assessment of prolonged weakness in eurozone growth, downside risk, and muted inflation pressure since the last Meeting.

EUR/USD - Daily Technical Levels

Support Resistance 

1.1112      1.1146

1.1092     1.116

1.1058     1.1195

Pivot Point 1.1126

EUR/USD – Daily Forecast

The EUR/USD tosses in profits and losses above 1.1100 area after forming a Doji pattern on the daily chart. On Thursday, the EUR/USD has closed a bearish engulfing candle, which typically drives the bearish trend in the market. For now, all eyes stay on 1.1100 area as the violation of this level can extend sell-off until 1.1060. In case, the EUR/USD also violates 1.1060; the next support will be found at 1.1028.

GBP/USD - Sideways Range In Play

The GBP/USD was opened at 1.29085 and has placed a high of 1.29494 and a low of 1.27881 since then. The overall movement for pair remained Bearish throughout the day, and the pair is currently trading at 1.28487.

The Brexit drama continues and is showing no signs of ending anytime soon. Earlier this week, lawmakers rejected the bill presented by the government with a tight schedule to pass Brexit Deal by October 31st, the date which was set by the UK to leave the European Union. The bold UK Prime Minister, Boris Johnson, pulled the Brexit bill and said that he would call for General Elections, but for that, he would need the majority of parliament by his side. 

European Union has granted the demanded three months extension for Brexit, and the final decision would be taken by the court of the UK Government now. There is still a possibility for a no-deal Brexit, and if Traders see no sign of deal settlement within the time, then Pound would see a sudden fall and would weigh on GBP/USD.

On the economic data front, the high street lending from the United Kingdom was released at 13:30 GMT as 42.3K against the expectations of 42.2K from the United States, the Manufacturing and services PMI were released at 18:45 GMT. Manufacturing PMI showed growth to 51.5, and services PMI came in as expected 51.0 for the month of September.

Strong US Dollar due to stable macroeconomic release on Thursday added in the downward trend of GBP.

GBP/USD - Daily Technical Levels

Support Resistance 

1.2863      1.2943

1.2813      1.2974

1.2732      1.3054

Pivot Point 1.2893

GBP/USD – Daily Forecast

Yesterday, the GBP/USD failed to break above 1.2925 level, and below this, it was expected to trade bearish until 1.2860. The pair actually

Dropped even below this level to 1.2789 level. At the moment, the same level is working as a support. Closing of 4-hour candle is half bullish and half bearish, suggesting neutral bias among traders.

Today, closing below 1.2830 can extend sell-off until 1.2790. Alternatively, a closing of above 1.2860 can drive the buying trend until 1.2890.

All the best for today.