4-hour timeframe
Amplitude of the last 5 days (high-low): 31p - 46p - 74p - 44p - 44p.
Average volatility over the past 5 days: 48p (average).
The new trading week for the EUR/USD currency pair begins absolutely prosaically, with minimal changes in price, with the absence of a trend, with the absence of even the beginnings of a new trend or the continuation of the old one. Formally, the upward trend for the euro/dollar pair persists, however, recently the bulls have clearly weakened, as there are no solid fundamental reasons and reasons for further purchases of the euro currency. The Federal Reserve made it clear that in the near future there will be no new easing of monetary policy, while the ECB, on the contrary, may "distinguish itself" in the near future with new changes in monetary policy. The reason is obvious - Mario Draghi resigned, Chrisitine Lagarde took his place, and her first speech in the new position will take place tonight. Thus, it is still difficult to say what the new chairman of the ECB is planning, what policy, dovish or hawkish, she will adhere to, is also unknown. Moreover, it is unlikely that Lagarde will begin her rule in the European Central Bank by revealing all the cards. That is, today traders are unlikely to expect coverage of the nearest actions of the regulator from Christine. Most likely, this will be a welcome speech, overflowing with general phrases about goals and plans for the next 8 years. However, until the new head of the ECB clearly outlines his ideas, and ideally, at least a month or two of its work does not take place and at least one meeting does not take place, the euro will go along the edge of the cliff, floating in complete uncertainty. Formally, the ECB already has every reason for a new reduction in the key rate, as macroeconomic indicators of the eurozone continue to slow down and decline.
Today, five indexes of business activity were published at once in the manufacturing sectors of Italy, Spain, France, Germany and the European Union as a whole. Out of the five indices, only one remained above the 50 key mark, French. Four out of five indices showed positive dynamics compared with forecast values, however, what does it matter if, in general, such values of business activity are interpreted as a decline in industrial production. Macroeconomic statistics from the United States were no better. Monday's only report - September production orders - showed a 0.6% decline in their volumes.
Thus, the euro continues to stay afloat and even bargains near its local highs only thanks to the United States. It's even hard to say exactly which factor is related to the US. Macroeconomic statistics in the United States is also not the best, but it is not a failure. NonFarm Payrolls, for example, were above the predicted value. Unemployment increased slightly, but this is absolutely not critical, since it remains at low values. Wages are steadily growing, meeting the expectations of traders. Thus, it is most likely now that traders are hiding, as in the United States the Democrats are waging a mighty war against Donald Trump. Trump made a mistake in a telephone conversation with Ukrainian President Vladimir Zelensky, which could cost him victory in the 2020 election. Yes, it is in the elections, since impeachment is unlikely to be announced to him, given the current composition of the Senate, which consists mainly of Republicans. But the current president of the United States clearly spoiled his reputation, so we would say that the investigation of the "Trump case" is being continued by Congress solely to find as much dirt as possible on the president and convict him of as many mistakes and violations as possible. Most of the Congress is made up of Democrats ... Donald Trump himself is confident of his victory in the 2020 presidential election. "I am sure of victory. I think we will get a good victory. We are doing well, judging by the polls," said the odious leader in a recent interview. "People do not want to hear about impeachment. The only one who wants to talk about impeachment is the false media and the Democrats, who mainly work for these media, "said Trump.
The technical picture now implies a new round of corrective movement. This is what the MACD indicator is now signaling, which has turned down. The correction goal is the Kijun-sen line. A rebound from it will give a new chance to the bulls to resume the upward movement, however, from a fundamental point of view, the euro still has little reason to continue to strengthen.
Trading recommendations:
The EUR/USD pair continues to adjust. Selling the euro is advised to be considered not earlier than overcoming both the Kijun-sen line and the Ichimoku cloud, and at the same time the support level of 1.1100, since all these supports are extremely close to each other and together form a strong support area. A rebound in the price from the critical line may trigger a new round of upward movement, in which case it will be possible to open purchases of the euro with the goal of the first resistance level of 1.1203.
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 indicators window.
Support / Resistance Classic Levels:
Red and gray dotted lines with price symbols.
Pivot Level:
Yellow solid line.
Volatility Support / Resistance Levels:
Gray dotted lines without price designations.
Possible price movement options:
Red and green arrows.
