4-hour timeframe
Technical data:
The upper channel of linear regression: direction – down.
The lower channel of linear regression: direction – down.
The moving average (20; smoothed) – up.
CCI: 152.7148
The euro currency ends the week with an advantage over the US dollar. Although small, still an advantage. This is not to say that yesterday the euro received the support of traders due to a weak inflation report in the United States, however, the weakness of the consumer price index at least did not allow the pair to resume the downward movement. Today, October 11, one report will be published – the consumer confidence index from the University of Michigan. According to experts, the indicator may decrease from 93.2 to 92.0. If it turns out that the fall in consumer confidence will be more than expected now, then in the last hours of the working week, the US currency may be under pressure from traders. ECB Chief Mario Draghi will deliver a speech at the European trading session. The day before, Vice Chairman Luis De Gindos said that the regulator could lower rates even further, but he believes that "the current level of rates is the right one." Let's see how Mario Draghi thinks. In addition to these events, nothing more has been planned to date.
In the meantime, although days before information was received about the complete failure in the negotiations between China and the United States, today Donald Trump personally said that the negotiations are progressing well. On Friday, Trump is supposed to receive Vice Premier Liu He at the White House and there, most likely, the final stage of the current round of negotiations will take place. It is difficult to say which information should be trusted more. It has already happened many times that Trump spoke of "progress" or "the imminent signing of the deal," after which he abruptly announced that "China does not adhere to verbal agreements," and introduced new duties. Therefore, we recommend that you wait until official information is received with all the details. Otherwise, negotiations on a trade agreement begin to become similar to negotiations on Brexit, where for three years, information has also been received many times that "the parties have almost agreed," but then it turned out that there was nothing of the kind.
Also, Donald Trump may deliberately mislead the markets and the media, as there is no confirmation from the Chinese side about making progress in the negotiations. Thus, in practice, things may be quite different.
From a technical point of view, the euro/dollar pair tried to start a downward correction, but in general, the upward mood in the forex market remains. But only in the short term. Both channels of linear regression are still directed downward, so you can expect a resumption of the downward trend at any time.
Nearest support levels:
S1 – 1.0986
S2 – 1.0925
S3 – 1.0864
Nearest resistance levels:
R1 – 1.1047
R2 – 1.1108
R3 – 1.1169
Trading recommendations:
The euro/dollar pair continues to be located above the moving average line, so today it is recommended to reconsider the purchases of the euro currency in small lots with the target of 1.1047. The pair's sales will become relevant not earlier than the reverse consolidation under the moving average line with a target of 1.0925.
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 lines of the unidirectional motion.
The lower channel of linear regression – the purple lines of the unidirectional motion.
CCI– the blue line in the indicator window.
The moving average (20; smoothed) – the blue line on the price chart.
Murray levels – multi-colored horizontal stripes.
Heiken Ashi – an indicator that colors bars in blue or purple.
