EUR/USD – 4H.
As seen on the 4-hour chart, the EUR/USD pair continued the process of falling and closed under the Fibo level of 50.0% (1.1030). Thus, the pair's quotes remain within the downward trend corridor and can continue falling towards the next correction level of 61.8% (1.0995). Today, the divergence is not observed in any indicator. A correction today, as well as highly active movements, is unlikely. Most likely, Monday will be held in very restrained trading, as the information background is empty today.
Last week ended with the renewed interest of traders in the US currency against the background of absolutely unacceptable information background from Europe. Thus, it remains to be seen what information background will be present this week and how it will affect the euro-dollar currency pair. News this week will start arriving on early Tuesday. More precisely economic reports. News on the topics of Brexit, the trade war between China and the United States and the impeachment of Trump can arrive at least every day and it is good that they do not excite the currency markets too much, otherwise, it would be extremely difficult and inconvenient to predict the movement of the pair. Federal Reserve Chairman Jerome Powell will make a speech on Tuesday, and this event will certainly arouse strong interest among traders, especially after Christine Lagarde's speech, which stated the need to further stimulate the EU economy, change monetary policy and cooperate with all EU countries and governments to counter the economic recession caused by global political and trade tensions. Powell's latest statements hint that the Fed's monetary policy, on the contrary, is relaxed to the levels when the economy no longer needs additional stimulus, and to fully see the results of the three interest rate cuts, you need to wait a few months. Thus, if Powell's rhetoric remains unchanged, it will be another factor in the fall of the euro currency.
On Wednesday, we recommend paying close attention to the report on durable goods orders in the United States, the preliminary value of GDP for the third quarter reports on changes in the volume of personal income and spending of Americans and the report on the employment rate of ADP. According to preliminary forecasts, the greatest concern is the report on orders for durable goods, which implies a new serious reduction in volumes.
The last significant event of the week will be the publication of the report on inflation in the European Union for November (inconclusive value), where an unexpected acceleration to 0.9% y/y is expected. Thus, if the report on long-term orders on Wednesday fails, as is expected now, and inflation in the EU - accelerates, the euro will be able to count on an increase in traders' demand this week. Much will depend on the speech of Jerome Powell on Tuesday, which will set the tone of trading for the whole week, but I believe that the Fed Chairman will not announce anything new to his listeners.
Forecast for EUR/USD and trading recommendations:
On November 25, traders will continue to trade the euro-dollar pair lower, although there is no information background today. Until the closing of the pair quotes above the Fibo level of 50.0% (1.1030), I consider it appropriate to sell the pair with the target of 1.0995 and the stop-loss order above the level of 1.1030. But I recommend buying the euro currency only after the pair rate leaves the current trend corridor, which will mean a change in the mood of traders to the opposite.
The Fibo grid is based on the extremes of October 1, 2019, and October 21, 2019.
