4-hour time frame
Technical details:
The upper linear regression channel: direction - up.
The lower linear regression channel: upward direction.
The moving average (20; smoothed) - sideways.
CCI: -22.6779
The first trading day of the week begins with an upward correction for the EUR/USD currency pair, as evidenced by the Heiken Ashi indicator. The price has already reached the moving average line, from which the downward movement can rebound and continue. On the other hand, a non-strong report on Nonfarm payrolls on Friday put pressure on the US currency, which remains at the moment. (Few) traders were also disappointed by the weak wage growth rate and although we continue to believe that nothing catastrophic has happened with the US economy, a certain negative effect of these macroeconomic statistics remains. Now, everything will depend on whether the bulls are strong enough to overcome the moving average. If so, then the euro / dollar may return to a new attempt to start an upward trend. If not, the downward trend will resume, which is more logical from a fundamental point of view.
On the first trading day of a new week, there will be no important macroeconomic publications in the European Union or the United States as often happens. Thus, volatility can be low today, and movements can be multidirectional, subject to technical factors. For example, the most likely scenario is this bounce from the moving and a small pull down. In total, not exceeding 40-50 points of volatility.
Meanwhile, all the topics that have been exciting the currency market recently have calmed down a bit. The conflict between Iran and the States has not been developed, but the situation between the countries remains tense. Unfortunately, the usual innocent citizens - passengers of the Ukrainian Boeing, who was shot down by mistake by the Iranian armed forces, suffered the most in this military conflict. Ironically, most of the passengers were just Iranians. At the moment, mass protests are underway in Iran due to the disaster of the Ukrainian airliner. Protesters demand the resignation of the authorities, who officially admitted that they accidentally shot down a Ukrainian plane. Meanwhile, Donald Trump said that "in principle, he doesn't care whether Iran will now negotiate." According to the American president, the main thing is that the Iranian authorities do not kill the protesters, and the country itself renounces nuclear weapons.
Interesting news came from the camp of the US Democratic Party. Billionaire Michael Bloomberg said he was ready to spend about $ 1 billion on the 2020 presidential election, even if he himself did not participate in them. In addition, Bloomberg is ready to finance the campaigns of Bernie Sanders or Elizabeth Warren, or any other Democratic candidate, the main thing is that Trump does not win the race for the presidency. We can say with confidence that the billionaire who owns the media agency of the same name will direct all his efforts to ensure that Trump's political ratings fall. We will not start a new discussion about whether this is good or bad if Donald Trump remains for a second term. The conclusion is obvious to many. With the advent of Trump, the political, geopolitical situation in the world sharply intensified. The trade wars began
We just have to figure out how all these events will affect the EUR / USD currency pair. So far, there are no signs that traders are interested in all the ups and downs associated with Trump and US foreign policy. The US economy continues to grow, the growth rate is confident, so investors and traders, in principle, can be satisfied. That means that there are still few reasons for the decline of the US dollar. Based on this, we are waiting for the resumption of the downward movement. Tomorrow, the consumer price index in America will be published, which can support the US currency. However, it can create additional pressure on it. Thus, everything will depend on the correspondence of the real value to the forecast of the consumer price index for December.
The average volatility of the EUR / USD currency pair is currently 51 points and continues to decline slowly. Thus, we have volatility levels on January 13 - 1.1066 and 1.1168. It is unlikely that any of these levels will be developed today, given the almost empty fundamental background of Monday. Now, we are inclined that the day will be corrective today.
The nearest support levels:
S1 - 1.1108
S2 - 1.1078
S3 - 1.1047
The nearest resistance levels:
R1 - 1.1139
R2 - 1.1169
R3 - 1.1200
Trading recommendations:
The euro/dollar began to adjust. Thus, at the moment, traders are advised to wait until the correction is complete. The Heiken Ashi Winz indicator is reversing and resuming sales of the Euro currency with targets 1.1078 and 1.1066. It is recommended to return to pair purchases with a target of 1.1168 no earlier than traders moving through the moving average line.
In addition to the technical picture, fundamental data and the time of their release should also be taken into account.
Explanations for illustrations:
The upper channel of linear regression is the blue unidirectional lines.
The lower channel of linear regression is the purple unidirectional lines.
CCI - blue line in the indicator window.
The moving average (20; smoothed) - a blue line on the price chart.
Murray levels - multi-colored horizontal stripes.
Heiken Ashi is an indicator that colors bars in blue or purple.
Possible price movement options:
Red and green arrows.
The material has been provided by InstaForex Company - www.instaforex.com