4-hour timeframe
Technical data:
The upper channel of linear regression: direction - up.
The lower channel of linear regression: direction - up.
The moving average (20; smoothed) - up.
CCI: 64.8784
The EUR/USD currency pair made another upward leap yesterday and perfectly worked out the Murray level of "4/8" - 1.1108, from which a rebound and an equally strong drop in the pair's quotes immediately followed. Thus, yesterday ended without strengthening the European currency. We can once again conclude that even despite the weak macroeconomic statistics from overseas and seemingly good from the European Union, traders are still very reluctant to buy the euro. Yesterday, the indices of business activity in the services sectors of Germany and the European Union showed a positive trend. There were no major changes in these indices, so we can assume that there was no reaction to them and should not have been, but then the report on the change in the number of employees in the US private sector from ADP completely failed. A little later, the US ISM index of business activity in the services sector failed, amounting to only 53.9 in November, with a forecast of 54.5 and the previous value of 54.7. However, the euro currency did not continue to grow, as could be expected, it began to decline, that is, the US dollar began to grow again.
Thus, it follows from all the above that the bulls remain extremely weak, despite any fundamental factors. Quite a strong imbalance between the monetary policy of the Fed and the ECB continues to play a key role in the exchange rate of the euro/dollar. The threat that Donald Trump will impose new duties on Chinese goods on December 15 applies to the European Union too, and also, Trump may begin to impose duties and apply sanctions against EU member states. Yesterday, we already found out that soon, France may fall under 2.4 billion sanctions because of its tax for IT companies with a high level of turnover, under which American companies also fall. Also, the automotive sector of the European Union may fall under sanctions. Thus, although the trade wars fueled by Trump relate primarily to America itself and the American currency, the euro is experiencing a greater burden on the foreign exchange market.
Today, the European Union will publish quite important statistics on GDP for the third quarter and retail sales for October. According to experts, retail sales will show an increase of no more than 2.2% y/y, and GDP will be +1.2% in annual terms. We believe that both of these forecast values are quite low, so if the real values are even lower, then traders can gladly rush to sell the euro currency. In the United States today, there will be no important macroeconomic publications, but Donald Trump is again on the front pages of newspapers and periodicals.
The story of the impeachment of the incumbent US president is extremely controversial. Firstly, because in the entire history of America, as a result of impeachment, the president left his office only 1 time, and another 1 time - the president voluntarily resigned. Thus, the probability that impeachment will take place in the case of Trump is extremely low. Secondly, the US Senate, which will have to approve the decision of Congress on impeachment, in its composition has more Republicans than Democrats, respectively, it is unlikely that the Senate will approve the initiative to remove Trump from his post. Third, the presidential election is less than one year away. Does it make sense to remove Trump in less than a year before the moment when he leaves? Yes, the American president is trying his best to be re-elected for a second term, but the probability of this, from our point of view, is extremely small. Trump will be remembered as the president who ignited trade wars around the world and fell out with everyone he could. It doesn't matter whether it is good for the States or not, but no one will deny the fact that Trump is a very "complex person".
Last night, the Congressional Intelligence Committee approved the text of the impeachment investigation. Now, this document is transferred to the Legal Committee of the House of Representatives, which will determine whether Donald Trump is guilty. The Democrats' accusations are the same: Donald Trump tried to put pressure on Ukrainian President Vladimir Zelensky to initiate an investigation into his main rival Joe Biden. "The president put his personal and political interests ahead of America's national interests, took actions aimed at undermining the US presidential election process and jeopardized US national security," the document said. Trump himself immediately called the document and the accusations in it "a laughing stock", but history, as we see, takes a new turn.
The technical picture of the currency pair is now again reduced to a weak movement without a clear direction. We still believe that the prospects for the euro currency are very vague, so we expect a new decline in the European currency. However, there is still an upward trend above the moving average line and it is not recommended to sell the pair in this area.
As for the average volatility of the euro/dollar pair, it is now 53 points. Thus, in the maximum case, we can expect today to move between the levels of 1.1024 and 1.1130. However, this is the maximum case, in practice, the range of movement of the euro/dollar on Tuesday may be much narrower unless GDP in the eurozone fails and does not cause a massive sell-off of the euro.
Nearest support levels:
S1 - 1.1078
S2 - 1.1047
S3 - 1.1017
Nearest resistance levels:
R1 - 1.1108
R2 - 1.1139
R3 - 1.1169
Trading recommendations:
The euro/dollar pair is again correcting against the continuing upward trend. Thus, now purchases of the euro currency formally remain relevant, however, it is recommended to open them no earlier than turning the Heiken Ashi indicator back up with targets between 1.1108 and 1.1130. It is recommended to return to the pair's sales not earlier than the back fixing of the bears below 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 - the 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