4-hour timeframe
Technical details:
The senior linear regression channel: direction - up.
The junior linear regression channel: direction - down.
Moving average (20; smoothed) - up.
CCI: 142.3063
The past week ended with a confident growth of the European currency, although it is rather difficult to call it logical and fully justified. As we wrote on Friday, there may be several reasons for such a strong euro strengthening, and they are important for understanding the current trend in the instrument. First, the instrument again failed to overcome an important support zone near the local minimum. At this time, the pair perfectly fulfilled the Murray level of "1/8" and bounced off him. This still indicates that there are no sellers at these lows. Secondly, after so much a fall, the pair needed a purely technical correction. Thirdly, on Friday, it became known about two failed bills, which were designed to complete the "shutdown" in America. Monday began with quiet trading without sudden movements. At the weekend, the US government still managed to record a "shutdown" and sign the law on financing until February 15, 2019. Thus, all state services will work for the next three weeks, after which, a new "shutdown" is possible. The fact is that the resumption of the work of the government does not imply the allocation of funds for the construction of the wall on the border with Mexico. Actually, this is the question that caused the pause in the work of the government.
Nearest support levels:
S1 - 1.1353
S2 - 1.1292
S3 - 1.1230
Nearest resistance levels:
R1 - 1.1414
R2 - 1.1475
R3 - 1.1536
Trading recommendations:
The currency pair EUR / USD has worked at a level of 1.1414. Therefore, it is recommended to open new long positions not earlier than overcoming this target with the goal of the level of 1.1475. There are no signs of the beginning of the correction.
Orders for sale will become relevant not earlier than traders overcome the moving average line and, preferably, the level of 1.1353. In this case, the target will again be Murray's level of "1/8" - 1.1292.
In addition to the technical picture should also take into account the fundamental data and the time of their release.
Explanations for illustrations:
The senior linear regression channel is the blue lines of the unidirectional movement.
The younger linear regression channel is the purple lines of the unidirectional movement.
CCI - blue line in the indicator window.
The moving average (20; smoothed) is the blue line on the price chart.
Murray levels - multi-colored horizontal stripes.
Heikin Ashi is an indicator that colors bars in blue or purple.
