4-hour timeframe
Amplitude of the last 5 days (high-low): 84p - 59p - 54p - 63p - 64p.
Average volatility over the past 5 days: 65p (average).
The EUR/USD currency pair adjusted for the second consecutive day. For the euro currency, this event can be considered an achievement, since the currency did not lose its position against the US dollar for two whole days. Moreover, today the currency of the European Union managed to overcome the critical Kijun-sen line, which to a greater extent "came" to the price itself, rather than the pair rose to it. Nevertheless, there is a consolidation over the Kijun-sen line, which is a critical trend-supporting line. Now the bulls can feel a surge of strength and buy the euro with a vengeance. We could if there were enough fundamental factors.
On Wednesday, October 2, the only macroeconomic report was published in the States. The ADP report showed that the number of employees in the US increased by 135,000 in September. Forecasts predicted an increase of 140,000. Well, a slight discrepancy. However, either the bear positions were too weak in recent days, or traders were so impressed with the shortage of 5,000 workers in the United States, but the euro has shown steady growth in the last 6 hours.
The most interesting thing is that this growth can hardly be connected with the speech of the ECB President Mario Draghi in Athens, which once again, though indirectly, indicated the weakness of the bloc's economy. This time it was about investment. Mario Draghi called on all EU member states to introduce fiscal stimulus measures to support investment. That is, according to Draghi, the measures taken by the European regulator are not enough to save the economy of the entire bloc. Each country should also take responsibility for maintaining and stimulating the economy of the entire union. Draghi also expressed a positive attitude towards the decision to create a common eurozone budget since 2021, but nevertheless he paid more attention to problems during his speech. At the end of the speech, Draghi once again reminded the audience that in any case, monetary policy will fulfill its function, that is, stimulate the economy. What can be said as a conclusion? Mario Draghi, who has less than a month to spend at his post, has once again stepped on the euro currency. Perhaps he says the right thing, because the ECB is more interested in the stability and condition of the entire EU economy, and the value of the euro in the foreign exchange market is not the biggest problem. At least, the central bank has never voiced its goal - to maintain the exchange rate of the single European currency. Nevertheless, Draghi again stepped on the euro. By miracle, the bears were not provoked during his speech and did not rush to buy the US dollar again.
It is unlikely that the fall of the US dollar today can be connected with the next matches of Donald Trump to the Federal Reserve and Jerome Powell. That's all, as always. It is not even worth it to know exactly what Trump's criticism is. Of course, "too high rates and Powell's reluctance to lower them as quickly as possible." In addition, the Trump party announced a record collection of voluntary donations for the election campaign - $125 million. This is almost twice as much as Barack Obama collected when he wanted to run for a second term.
What is the result? What are the prospects for the European currency today? From our point of view, high technical factors can provoke a strengthening of the euro and a fall in the dollar. There are not many of these technical factors at the moment. Until the euro/dollar pair overcomes the Ichimoku cloud, all upward movement will be regarded as a banal correction. The fundamental growth factors for the euro have not increased in recent days. Moreover, yesterday's reports on business activity in the eurozone showed that there are no improvements in reality. There is only a minimal correction of business activity indicators in the manufacturing sector, which should not be regarded as the first step towards improving the situation.
Trading recommendations:
The EUR/USD pair continues its corrective movement. Since the bulls managed to gain a foothold above the critical line, the first goal for the upward movement is now the upper boundary of the Ichimoku cloud, the Senkou span B line. You can trade on this target, but very carefully, since the pair has few growth factors.
In addition to the technical picture, fundamental data and the time of their release should also be taken into account.
Explanation of the illustration:
Ichimoku indicator:
Tenkan-sen is the red line.
Kijun-sen is the blue line.
Senkou Span A - light brown dotted line.
Senkou Span B - light purple dashed line.
Chikou Span - green line.
Bollinger Bands Indicator:
3 yellow lines.
MACD indicator:
Red line and bar graph with white bars in the indicator window.
