EUR/USD – 4H.
As seen on the 4-hour chart, the EUR/USD pair performed a consolidation above the correction level of 38.2% (1.1066), which allows traders to expect further growth of quotations in the direction of the next correction level of 23.6% (1.1110). However, on the way to this goal, the pair now has the upper line of the downward trend range. Thus, a rebound is very likely from this line, which will allow us to expect a reversal of quotations in favor of the American currency and a resumption of the decline. A close of the pair's course below the Fibo level of 38.2% will increase the likelihood of a continued decline in the direction of the next correction level of 50.0% (1.1030).
In the second half of Monday, the news was immediately received from two central banks, which potentially have quite an interesting meaning and significance. Naturally, we are talking about the ECB and the Fed. Let's start with the European Central Bank. One of the ECB members, as well as the head of the Central Bank of Slovenia, Bostjan Vasle, said that the monetary policy of the regulator works as it should and as the regulator expects from it. He noted that the stimulus package introduced by the Central Bank in September requires more time for markets to assess. Mr. Vasle also sees no reason to change forecasts for economic growth prospects, clearly hinting at the end of the period of slowing EU economic indicators. "The economy is developing as indicated in our latest forecasts; at the moment everything is under control," Vasle concluded. The speech of the head of the Central Bank of Slovenia was probably intended to reduce the tension in the foreign exchange market and among various business entities, as over the past year, the EU economy has repeatedly caused serious concerns. Economic reports from month to month showed a decline in the main indicators of the state of the economy. Thus, if we look at Mr. Vasle's speech through this prism, it seems that he is too optimistic about the current state of the EU economy and its prospects. It may still take some time for the stimulus package to fully manifest and show results, but at this stage, according to the latest economic reports, the special effect of restarting the quantitative easing program and lowering the deposit rate by 0.1%.
Also yesterday, there was a meeting between US President Trump and Fed President Powell. According to unconfirmed information, President Trump tried to put pressure on Jerome Powell again, trying to prove to him that the current level of rates is extremely high, drawing the attention of the Fed President to low inflation and economic growth that has undergone a certain decline in growth rates. Following the meeting, Donald Trump wrote on Twitter about the "friendly" meeting but did not cover any details of the conversation. Let me remind you that not so long ago, Powell himself noted the highest state debt of the United States, which under Donald Trump began to grow even faster and will soon reach $ 1 trillion. Powell noted that these are the consequences of improper budgeting and an incorrect tax system, thereby casting a shadow on Finance Minister Steven Mnuchin and Trump himself. Thus, this meeting seemed to have a dual character.
Forecast for GBP/USD and trading recommendations:
On November 19, traders will try to turn the euro/dollar pair down, as the graphic picture suggests this option. Thus, I recommend buying the euro only if the bull traders prove strong enough to close above the trend range. Otherwise, the rebound from the upper line of the range or the closure under the Fibo level of 38.2% will work in favor of the US dollar and sales with the target of the Fibo level of 50.0% (1.1030). The information background today will remain empty, judging by the content of the news calendar.
The Fibo grid is based on the extremes of October 1, 2019, and October 21, 2019.
