4-hour timeframe
Technical details:
Higher linear regression channel: direction - upward.
Lower linear regression channel: direction - upward.
Moving average (20; smoothed) - upward.
CCI: 106.2500
The EUR/USD currency pair was trading very calmly and at the same time actively on Tuesday. There were no sharp reversals, however, the pair maintained an upward trend and continued its upward movement for most of the day. It is the continuation of the rise in the price of the European currency and the fall of the dollar that still raises a huge number of questions. However, along with the bewilderment, we have repeatedly talked about the possible reasons for the fall of the US currency. The two most likely causes are: 1) the actions of major players do not follow the logic of the market; 2) speculative growth of the euro. The first reason suggests that major players (central and commercial banks, large companies, and enterprises) can carry out transactions in the foreign exchange market without starting from macroeconomic indicators, as most ordinary traders do. They buy and sell currency based on their calculations, analysis, and needs. It turns out that now is a time when the analysis of ordinary traders does not coincide with the analysis of major players. And since the market is not driven by small traders, then the movement turns out to be illogical. The second reason is even more simple. The instrument (or currency) becomes more expensive for a long time and more traders want to join the trend and "skim the cream". Therefore, without any reason, they buy a more expensive asset (bright examples: Bitcoin, oil), which leads to their even greater growth. At this time, the euro and the pound are rampant in price, so they can buy without hesitation.
At the end of the year, the markets receive almost no important information. Certain news is available, however, they are not important for currencies and traders. We have already said that at the end of the year, the United States managed to avoid a new "shutdown", and the budget for 2021 and a package of economic stimulus measures were finally signed. Trump has about 22 days left in power, and he does not want to spend them on a "shutdown". We believe that now is the time to take stock of the presidency of Donald Trump.
If you survey the world, 90% of respondents will answer that Trump is the most controversial US president in recent decades, and maybe a century. Many high-ranking politicians in the United States are also businessmen, however, Trump is a businessman in the square. And this quality of his, which can bring him billions of dollars, played a cruel joke on him as president of the country. Perhaps in business, it is possible to conduct business from a position of force, pressure, threats, and other various "tricks". However, when it comes to politics, especially international politics, Trump has forgotten that any of his actions and words will be carefully analyzed, discussed, and criticized. Roughly speaking, Trump was 4 years under the microscope of the American public, and especially the media, for which "finding information" is bread. Thus, in the case of Trump, a whole bunch of information got out. It is enough to recall the most high-profile scandals with Trump: the impeachment case, an attempt to put pressure on Ukrainian President Zelensky in the investigation of the Biden cases in Ukraine (to remove the main competitor in the fight for the 2020 election), concealment and tax evasion (when it turned out that Trump's companies show losses in financial reports from year to year). Also, Trump managed to be remembered for a whole series of breaks in international treaties (the climate treaty, the treaty on the elimination of intermediate-range and short-range missiles, the nuclear agreement with Iran, the withdrawal from the WHO). Trump also became the first president who tried to communicate with people through social networks. However, it was not communication, but information. Trump probably figured that 20 posts a day on Twitter would make him closer to the people and miscalculated. The number of unverified, blatantly false statements and posts that Trump made every day, sooner or later should have raised questions for all Americans. They did. Almost every message of Trump was marked as "misleading" and "inconsistent with the truth" on Twitter and Facebook. Can you imagine this level of absurdity when a social network openly declares that the president is lying or talking nonsense? This state of affairs is the norm. Do not forget that Trump completely quarreled with all the media, which should have published and shown only the information that would be beneficial to him. Trump suddenly forgot that the media in the United States is independent. Although everyone supports a particular political party or presidential candidate, they are still the same business structures like the one that Trump himself owns. This means that profit comes first. A separate story on the wall on the border with Mexico can be recalled. Wanting to stop the endless flow of illegal migrants from this country, Trump proposed to build a wall on the border with it. Naturally, Trump said that Mexico itself would pay for the wall, then began frantically looking for money for this project, which led to the longest "shutdown" in the country's history in January 2019. Trump did not find the funds in full, so only 700 kilometers of the wall were built out of the total length of the border of 3.1 thousand kilometers. A wall that is not difficult to climb with the help of an ordinary ladder. Also, Trump failed to repeal the Affordable Care Act, which was passed by Barack Obama, the so-called Obamacare. Further. How can we not recall Trump's attitude to health care and the environment? Ecology, according to the president, only hindered economic growth, and health issues were at the last place in the list of important tasks of the president. What this led to is visible at the end of 2020. Trump withdrew from the Trans-Pacific Partnership, revised the terms of the North American Free Trade Agreement, launched a trade war with China, imposed trade duties against several other countries, unilaterally withdrew from the nuclear deal with Iran, and lying that Tehran violates its terms, although the other parties to the agreement (Russia, China, Germany, France, Great Britain) stated that the terms were not violated by Iran. In general, Trump has destroyed and broken more than he has created and improved in 4 years.
The volatility of the euro/dollar currency pair as of December 29 is 70 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.2176 and 1.2316. The reversal of the Heiken Ashi indicator downwards signals a new round of downward correction.
Nearest support levels:
S1 – 1.2207
S2 – 1.2146
S3 – 1.2085
Nearest resistance levels:
R1 – 1.2268
R2 – 1.2329
Trading recommendations:
The EUR/USD pair has started a new round of upward movement. Thus, today it is recommended to keep open long positions with a target of 1.2316 until the Heiken Ashi indicator turns down. It is recommended to consider sell orders if the pair is again fixed below the moving average with a target of 1.2146.
