EUR/USD - 4H.
As seen on the 4-hour chart, the EUR/USD pair continued the process of falling after closing 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. The rebound of the pair from the Fibo level of 61.8% will work in favor of the European currency and the beginning of growth, but in the current conditions, growth above the upper line of the trend range is unlikely.
The only event of the past day, which can be highlighted, was the speech of Jerome Powell, President of the Fed. It took place already tonight, thus, on Monday, traders unsuccessfully tried to find interesting information to conduct more active trading. Powell's speech can be called neutral, as there were no new hints about the need to reduce the key rate, and Powell did not express any fears about the deterioration of the economic situation. The Fed President said monetary policy is now appropriate to support the labor market and could encourage inflation to return to the 2% target. It is also noted that the US Central Bank in 2018 raised rates 4 times on the basis of positive economic forecasts, however, due to geopolitical tensions and trade wars, forecasts began to decline, but the economic outlook in 2019 remained favorable, mainly due to the timely reaction of the Fed in the form of three key rate cuts. According to Jerome Powell, "economic expansion will expand, and he sees no reason why it would not be possible." Thus, the Fed President did not confirm the expectations of experts and traders that the Federal Reserve takes a pause in the cycle of interest rate cuts, which is a "bullish" factor for the US currency. It is impossible to say how long the pause will be, as everything will depend on the results of trade negotiations between the US and China. If we assume that the conflict will only flare up, and not extinguish, Beijing and Washington will likely impose new duties and sanctions against each other. Many world experts and political analysts already fear that the current relationship between America and China may well be called a "cold war", and some fear that the trade conflict does not escalate into military action. Accordingly, in the future, the world economy may continue to slow down, and with it the American economy. Thus, the Fed may return to monetary policy easing more than once. Don't forget about the factor of Donald Trump, who will surely continue to exert verbal pressure on both Powell and the Fed. The US President still needs low rates to get more trumps in the confrontation with China, but the Fed does not obey him, so Trump can only constantly criticize the inaction of the Fed. We cannot say that such tactics of Trump do not bring results.
Forecast for EUR/USD and trading recommendations:
On November 26, 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 downward corridor, which will mean a change in the mood of traders to "bullish".
The Fibo grid is based on the extremes of October 1, 2019, and October 21, 2019.
