4-hour timeframe
Technical data:
The upper channel of linear regression: direction – down.
The lower channel of linear regression: direction – down.
The moving average (20; smoothed) – down.
CCI: -71.8103
Traders will not receive a large number of macroeconomic reports on Monday. Today, September 30, we can only note the unemployment rate in the European Union and the consumer price index (preliminary value) in Germany for September. Traders traditionally do not react to the first indicator, the second is insignificant and interest is only in the context of forecasting the future inflation report in the European Union. The fact is that European inflation has fallen to record lows of around 1.0% in recent months, which is much lower than the target level set by the ECB (2.0%). Thus, a slowdown in inflation in Germany, the main economy of the European Union, could mean an automatic slowdown in inflation in the EU. Is it worth saying once again that the new fall in inflation in the EU will cause new sales of the euro?
By the way, the EUR/USD pair managed to adjust slightly at the end of Friday. It is too early to signal the completion of the correction, but the chances that it has already been completed are high. If the euro resumes falling today, we will assume that traders have shown the general mood for this week, as there are almost no macroeconomic reports today.
From foreign policy news, we can note the continuation of the Democratic war with Donald Trump. Although there is nothing to note here. The US dollar completely ignored the topic of possible impeachment of the President. The US Department of Justice found no sign of Trump's pressure on Ukraine in a publicly announced telephone conversation. Democrats, on the other hand, called for deciphering Trump's conversations with Russian President Putin, citing the need for verification "did the president violate the principles of national security and use power in his interests?" In principle, Democrats can now demand to decipher all of Trump's conversations with world leaders over the past few years. The Democrats have not managed to play the card with pressure on Ukraine, at least not yet. However, since Joe Biden is a representative of the Democratic Party, the constant pressure on Trump in anticipation of the presidential election is logical. Moreover, in some ways, Trump himself provoked a war with the Democrats with his requests to investigate the activities of his main rival in Ukraine.
From a technical point of view, the euro/dollar pair maintains a downward trend, all indicators are directed downwards. The reversal of the Heiken Ashi indicator down today will indicate the resumption of the downward trend, and bears will be able to update the two-year lows of the pair again. In general, we believe that there are no special obstacles for the further fall of the pair now.
Nearest support levels:
S1 – 1.0925
S2 – 1.0864
S3 – 1.0803
Nearest resistance levels:
R1 – 1.0986
R2 – 1.1047
R3 – 1.1108
Trading recommendations:
The euro/dollar pair is preparing to complete the correction and resume the downward movement. Thus, it is recommended to wait for the color of 1-2 bars in blue and sell the euro with a target of 1.0864. It is not recommended to return to the purchases of the currency pair now.
In addition to the technical picture, fundamental data and the time of their release should also be taken into account.
Explanation of illustrations:
The upper linear regression channel – the blue line of the unidirectional movement.
The lower linear regression channel – the purple line of the unidirectional movement.
CCI – the blue line in the indicator window.
The moving average (20; smoothed) – the blue line on the price chart.
Support and resistance – red horizontal lines.
Heiken Ashi – an indicator that colors bars in blue or purple.
The material has been provided by InstaForex Company - www.instaforex.com