4-hour timeframe
Technical data:
The upper channel of linear regression: direction – sideways.
The lower channel of linear regression: direction – upward.
The moving average (20; smoothed) – sideways.
CCI: -51.6646
The first trading day of the week for the currency pair ended with a minimal downward movement, but even it was enough for the pair to consolidate below the moving average line and, thus, change the trend to a downward movement. Those macroeconomic reports that took place on Monday could not support the euro, but also could not create additional pressure on it. Indices of business activity in the manufacturing sectors of the countries with the largest economies in the European Union almost all showed weak growth and continuing declines in their industries. Thus, in the illustration, we see three rebounds from the Murray level of "7/8" – 1.1169, which at the moment did not let traders above themselves. Potentially, this means the end of the upward trend. In favor of this option, there is also a fundamental background, in which there are no news and events that can support the single European currency.
As for the speech of the new head of the ECB Christine Lagarde, there is absolutely nothing to tell traders. As we warned yesterday, it is unlikely that Christine would have started her reign at the Central Bank with the disclosure of all the cards and plans relating to monetary policy. Moreover, the first speech of Lagarde had to be welcome, that is, it was not originally planned to consider the issues of monetary policy. However, now that Lagarde has welcomed everyone, we can already expect the first steps from the new ECB Chairman, or at least speeches related to her immediate duties.
The topic with the possible impeachment of Donald Trump is overgrown with new scandalous details, not least of all that Trump himself delivers. For example, yesterday the President of the United States, through his favorite medium of communication with the people, Twitter, spoke out again about the Congress investigation against himself. He stated: "The scammer gave false information and dealt with a corrupt politician Schiff. He must appear to testify. Written answers are not suitable! Where is the second scammer? It disappeared after I posted the transcript. Did he even exist? Where is the informant? Scam! " As you can see, Trump managed to pour out all his anger in such a short message, but at the same time, he could not do without a new portion of the accusations. This message was a response to the information that the Informant, who had informed about the conversation between Trump and Zelensky, was ready to give written answers to all the questions of the Republicans.
Tuesday, November 5th, will be one of those boring days when nothing interesting happens for currency traders. Before the US trading session, no macroeconomic report will be published. During it – indexes of business activity in the US services sector from Markit and ISM, as well as a composite index of business activity. According to experts, all three indices will remain in the "green zone", that is, safe. The ISM index should even rise to 53.4. However, the composite index may suffer, as business activity in the industrial sector has been showing negative dynamics for several months in a row. Most importantly, now traders should understand the question, who will hold the initiative in their hands soon? So far, it comes down to bears. But they also need to overcome Murray's level of "6/8" to confirm their intentions to "come into play." The technical picture of the euro/dollar currency pair looks ambiguous now, as there is no pronounced trend in recent days. Thus, overcoming Murray's level of "6/8", from our point of view, will open the way for the bears to new sales of the pair, and from a fundamental point of view, this will be a more logical scenario.
Nearest support levels:
S1 – 1.1108
S2 – 1.1047
S3 – 1.0986
Nearest resistance levels:
R1 – 1.1169
R2 – 1.1230
R3 – 1.1292
Trading recommendations:
The euro/dollar pair overcame the moving, thus, short positions have become relevant now. However, before overcoming Murray's level of "6/8", we would treat sales with caution. In the case of overcoming the level of 1.1108, it will be possible to buy the US dollar with the target of 1.1047. It is recommended to re-consider purchases not earlier than the reverse consolidation of the pair above the moving average line.
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 line of the unidirectional movement.
The lower channel of linear regression – 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.
Possible variants of the price movement:
Red and green arrows.
The material has been provided by InstaForex Company - www.instaforex.com