4-hour timeframe
Technical data:
The upper channel of linear regression: direction – up.
The lower channel of linear regression: direction – down.
The moving average (20; smoothed) – up.
CCI: 75.9541
The currency pair continues to trade with minimal volatility and minimal upward bias. Thus, it is certainly possible to expect further strengthening of the European currency, especially given the fact that no fundamental data is available to traders now. But this growth is unlikely to be strong. We have already said that the only day this week when enough interesting data will be published, is Friday. Christine Lagarde will also speak on the same day, potentially giving the market new food for thought. Until that day, the "calm" may continue. "Calm," but not flat. Today, the only event of the day that you can pay attention to is the minutes of the last meeting of the Fed. Also potentially quite an interesting event. However, when was the last time there was a strong reaction to the publication of the protocol, and the protocol itself contained unexpected and unknown information to traders? After all, market participants react to important and unknown information, the minutes usually contain everything that traders already know from the summing up of the meeting and the press conference of Jerome Powell. Moreover, the protocol will be published late in the evening, so during the day, the fundamental background will still be empty.
What could be the main message of the Fed minutes? After a series of speeches by Jerome Powell, traders saw hints that the key rate is reduced enough (3 times in a row) to support the economy, and monetary policy no longer needs to change. Accordingly, the Fed minutes should contain more "hawkish" than before, the theses of the Fed representatives, more confident and strong forecasts, optimistic expectations. It is unlikely that it will contain information about the need for new monetary policy easing. And if so, then theoretically the US currency can get support after the publication of this document. But, unfortunately, only theoretically. As we have said, the Fed protocol is rare when it can surprise markets.
Well, instead of signing an agreement in the "first phase", the trade conflict between the US and China can escalate and develop. On Tuesday, November 19, Donald Trump once again publicly stated that if an agreement with Beijing is not concluded, he will raise tariffs on Chinese imports. In the same speech, the US President managed to say that he had "good relations with China", although he repeatedly called China an enemy that damages the American economy, and the trade war between the countries does not fit the definition of "good relations". But this is Donald Trump, we also heard more contradictory words from him. China, it should be noted, has also chosen the tactic of "calming the markets." As recently as Saturday, Chinese media outlets reported that telephone conversations had been held between Chinese Vice Premier Liu He and US representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, which they called "constructive." As you can see, there are not so many constructs so far.
From all the above, it follows that soon the general fundamental background for the euro/dollar pair will not change. China and the United States, most likely, will not sign an agreement soon, the Fed will not lower rates, as we found out from the speeches of representatives of the ECB, the European regulator also does not intend to lower the key rate at the next meeting. Thus, we remain in the former "paradoxical situation" in which there are no grounds for further growth of the euro, but also new growth of the dollar. Thus, it remains to rely only on technical factors when trading the pair, which now indicates a weak upward trend.
Nearest support levels:
S1 – 1.1047
S2 – 1.0986
S3 – 1.0925
Nearest resistance levels:
R1 – 1.1108
R2 – 1.1169
R3 – 1.1230
Trading recommendations:
The euro/dollar pair continues a weak upward movement. Thus, long positions with a target of 1.1108 are now relevant before the Heiken Ashi indicator turns down. However, given the minimal volatility, we recommend being careful with opening any positions. It is recommended to buy the US dollar not earlier than the consolidation of traders below the moving average line with the first target of 1.0986.
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 line of the unidirectional movement.
The lower channel of linear regression – the purple line of the unidirectional movement.
CCI – the blue line in the indicator window.
The moving average (20; smoothed) – the blue line on the price chart.
Support and resistance – the red horizontal lines.
Heiken Ashi – an indicator that colors bars in blue or purple.
Possible variants of the price movement:
Red and green arrows.
