4-hour time frame
Technical data:
Upper linear regression channel: direction - up.
Lower linear regression channel: direction - down.
Moving average (20; smoothed) - down.
CCI: -37.2052
The next trading week came to an end, and the currency pair managed to show the maximum amplitude of the movement of points 20-25 during the first four trading days, despite the fact that there were important macroeconomic publications on some days and simply important news of a political and geopolitical nature. However, traders continue to stubbornly remain "on the fence." Thus, we still believe that the "paradoxical situation", which we have already described several times, is to blame. At current minimum levels, sellers are simply afraid of new sales of the European currency, remembering the main postulate of the currency market: "Sell at the highs, buy at the lows". It is only at this time a fundamental background continues to work in favor of the American currency, in contrast with this postulate. Thus, the news speaks in favor of further sales of the euro / dollar pair, although it is trading around two-year lows. Traders might be glad to go purchasing, but there is no fundamental reason for this.
Yesterday, inflation in Germany frankly failed, remaining at + 1.1% y / y, although experts expected acceleration to 1.3% y / y. What can we expect from pan-European inflation today if inflation in a country with a locomotive economy for the entire EU is not accelerating? We believe that the value of the consumer price index in the European Union will also remain at the same level - 0.7% y / y, although forecasts here also predict an acceleration to 0.9% y / y. However, even if the consumer price index rises to 0.9%, this is unlikely to support the euro and cause high demand for it. Just because the current inflation rate is very low and very far from the target level of the ECB. Moreover, it's worth adding that this is not the final value of the November CPI. That is, whatever the actual value of the indicator, the market is unlikely to react to it at all. In addition to this single macroeconomic report, no publications are planned for either the EU or the States today.
Thus, from the last trading day of the week, November 29, we do not expect anything extraordinary. We don't think that traders will activate today and stop sitting on the fence, even if new information is received on the topics "US-China trade negotiations" or "Beijing countermeasures against the Hong Kong law". Most likely, we really have to wait now either for the next ECB meeting, where Christine Lagarde can either announce a reduction in the key rate in the near future, or immediately lower it, or a major player entering the international currency market that sets the tone for trading. Unfortunately, the second scenario is impossible to predict. Therefore, for those traders who do not want to trade in the 20-point range, there is only one thing left - to wait for the growth of volatility and the resumption of trend movement.
From a technical point of view, everything rests on the level of 1.0989 now, which is the last local minimum. Until traders manage to overcome this level, it makes no sense to expect further strengthening of the American currency. Traders, in turn, still show a weak desire to sell a pair of euro/dollar in the area of two-year lows and near the previous local minimum. Thus, in order to have the opportunity to sell the currency pair again, it is recommended to wait until the level indicated above is overcome. By the way, the Bollinger bands narrowed as much as possible and turned to the side, which now signals a flat on the 4-hour time frame. Although with an average daily volatility of 30 points, nothing else was to be expected.
The nearest support levels:
S1 - 1,0986
S2 - 1.0925
S3 - 1,0864
The nearest resistance levels:
R1 - 1,1047
R2 - 1,1108
R3 - 1,1169
Trading recommendations:
The euro / dollar is correcting again, as indicated by the Heiken Ashi indicator, but the downward trend remains. Thus, it is now recommended that you wait for the correction to complete and trade the pair again for a decline with the first target of 1.0986. However, this level is very close to the level of 1.0989, so we even recommend waiting for it to be overcome and only then selling the pair. It is recommended to buy Euro currency no earlier than fixing traders above the moving average line with the first target of 1.1047.
In addition to the technical picture, fundamental data and the time of their release should also be taken into account.
Explanations for illustrations:
The upper linear regression channel is the blue unidirectional lines.
The lower linear regression channel is purple unidirectional lines.
CCI - blue line in the indicator window.
Moving average (20; smoothed) - a blue line on the price chart.
Murray levels - multi-colored horizontal stripes.
Heiken Ashi is an indicator that colors bars in blue or purple.
Possible price movement options:
Red and green arrows.
