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) – up.
CCI: 137.5426
The last trading day of a very busy week came. The week in which EUR/USD managed to win back some of the positions of the US currency and move away from the 2-year lows. However, macroeconomic statistics from the European Union still does not give the euro to look forward with optimism. This week, it became clear that business activity in the services and manufacturing sectors of the European Union is declining, and inflation continues to slow down. And just because macroeconomic indicators in the United States began to fall (the same indices of business activity in the services and manufacturing sectors), the euro was a little lucky this week. I repeat once again: from the EU itself, no positive news has been received and is not received.
The last trading day of the week will be no less interesting than the whole week. All statistics today will come from overseas, and there will be a speech by the head of the Fed Jerome Powell in the evening. Among the reports, the most interesting for traders is, of course, the number of new jobs created outside the agricultural sector, or Nonfarm Payrolls, in September. It is expected that the "figure" will be equal to 145,000. Also, an important report will be published on changes in average hourly wages (forecast +3.2% y/y in September), the unemployment rate (+3.7 y/y) and the trade balance. As before, if the aggregate real values of the indicators are higher than traders' expectations, then today we can expect the resumption of the downward trend, as the demand for the US dollar can grow significantly. However, this requires that NonFarm Payrolls did not fail, and wages were not below the forecast values. Otherwise, bulls will get new fundamental grounds for buying the euro/dollar pair.
Meanwhile, the topic that led to the talk of Trump's impeachment has developed. The US leader rightly considered that since all the details of his talks with Ukrainian President Vladimir Zelensky were published, there is nothing to hide. Trump takes a new step forward, which can be interpreted in different ways. He openly stated that China could also investigate the activities of Biden in his territory and he, the US president, "advises them to do this." The question immediately arises: why is it for China, against which the same Donald Trump is waging a trade war? The correct answer: for nothing. Therefore, the words of Trump – this is just another game for the public. The US President shows the Americans that he has nothing to hide, and calls to investigate the Biden cases in Ukraine and China are just a concern for the national security of the country, and not an unfair attempt to eliminate the rival before the US presidential election in 2020. It is difficult to say whether the electorate will believe this, but in any case, all these proceedings between Trump and Biden will lower the political ratings of both.
The technical picture of the pair suggests an upward movement, as traders managed to overcome the moving average. However, it was not possible to gain a foothold above the Murray level of "4/8" – 1.0986. Thus, to continue growing, the pair must overcome this level.
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 continues its corrective movement, already above the moving average. Thus, the bears are still advised to wait until the correction is completed and resume selling the Euro currency with the goal of a Murray level of "2/8" – 1.0864 after re-fixing below the moving average line. Purchases of the pair can be considered as small lots now with a target of 1.1047 if the level of 1.0986 is overcome.
In addition to the technical picture, fundamental data and the time of their release should also be taken into account.
Explanation of the illustrations:
The upper channel of linear regression – the blue lines of the unidirectional movement.
The lower channel of linear regression – the purple lines 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