EUR/USD – 4H.
As seen on the 4-hour chart, the EUR/USD pair returned to the correctional level of 127.2% (1.1024), rebounded from it and a reversal in favor of the US currency. As a result, the process of falling quotes resumed in the direction of the correction level of 161.8% (1.0918 or 1.0927). Also yesterday, a bearish divergence was formed at the CCI indicator, which significantly increases the probability of a fall of the euro/dollar pair. The pair is still trading inside the downward trend channel, and today, there is no reason to assume or expect the quotes to exit from its limits. Thus, the situation remains in the hands of bear traders, they continue to "rule the ball."
The information background, at first glance, is zero for the pair. Only on Monday, there were important and interesting news and economic reports that caused the reaction of traders. Yesterday and today, there was no economic news and is not expected. But there is news of a political nature. We have somehow got used to the fact that only the UK receives interesting political messages that have a strong impact on the movement of the domestic currency. However, in America, whose leader is even more odious and unpredictable than the leader of the UK, there is also something to pay attention to. The case, of course, is the impeachment of Donald Trump, which may be announced soon. This news has already been covered by many media, but I will consider its possible impact on the movement of the EUR/USD pair.
What is the essence of the problem first? The problem is that, like Boris Johnson in the UK, Trump has a huge number of opponents to his policy in the United States. There are presidents to whom the attitude is neutral. Everyone understands that a leader can make a single wrong decision, but he does not have the character and power to influence the economy so much as to cause strong structural changes in it. With Trump, the situation is the opposite. The US President does not disdain any measures to achieve what is desired. This is evidenced by trade wars, and intransigence in negotiations, and Trump's unwavering stance on his own beliefs, and pressure on the Fed, which never happened at all. And at the same time, if necessary, Trump changes his mind easily and naturally. It is Trump's unpredictability, his frequent game not according to the rules that have been formed for decades, that is the reason why he has enough opponents in Congress. Now, the presidential election looms, and Trump wants to be elected for a second term. This is precisely the reason for the possible impeachment of Trump.
Trump's accusations are that the US President put pressure on Ukraine, called to investigate the activities of Joe Biden (Trump's main rival in the presidential election) and his son Hunter Biden in Ukraine in 2015, and froze military aid to Ukraine. Trump promised to provide a transcript of the conversation, saying that there was no pressure on Ukrainian President Vladimir Zelensky. Military aid was removed allegedly due to insufficient assistance from the European States, in particular, Germany and France. However, Trump's opponents have enough of this reason to start a war against him, similar to the war against Johnson on the sidelines of the British Parliament.
What to expect today from the euro/dollar currency pair?
On September 25, I expect the euro/dollar pair to fall further in the direction of the correction level of 161.8% (1.0918). Since the information background will be absent today, the activity of traders may not be at its height again. So far, the topic of a possible impeachment to Trump does not particularly affect the US currency. However, as new messages on this topic arrive, the mood of traders can change to the opposite. I recommend that you closely monitor the situation.
The Fibo grid is based on the extremes of May 23, 2019, and June 25, 2019.
Forecast for EUR/USD and trading recommendations:
I recommend selling the pair today (or staying at the previously opened sales) with the target of 1.0927 since the rebound from the level of 1.1024 was performed. A stop-loss order above the level of 1.1029.
It will be possible to buy a pair after closing above the downward trend channel, but it is better to wait until the consolidation above the correction level of 100.0% (1.1106).
