Daily
After the growth shown on Monday and the formation of a reversal pattern of candlestick analysis "Harami", the market ignored this signal and continued the downward trend. In fairness, it should be noted that the "Harami" candlestick analysis model is certainly not particularly strong. In addition, the chances of working out this model are significantly increased when such a candle appears at the very bottom or top of the directional movement. With a high degree of probability, we can assume that yesterday's support for the US dollar was provided by the statements of the country's Finance minister, as well as the former chairman of the US Federal Reserve System (FRS), Janet Yellen. After the intentions of US President Joe Biden to expand investment programs to maintain economic activity in the United States, Janet Yellen did not rule out the possibility of an earlier increase in interest rates to avoid overheating the world's leading economy. It is good news for the US dollar since an increase in interest rates in a particular country leads to a rise in the national currency. However, so far, this is only a possible assumption, nothing more.
Nevertheless, despite the current decline in EUR/USD, the main currency pair of the Forex market is still trading in an upward trend. According to the grid of the Fibonacci instrument, stretched to the growth of 1.1704-1.2150, it is visible that at this stage of trading, the pair is stuck in a strong technical zone of 1.2040-1.2000 and is circling the first corrective level of 23.6 fibo from the indicated growth. From a technical point of view, it is quite logical to assume that the decline will continue to the next fibo level of 38.2. I would venture to assume that this is where the fate of the subsequent direction of the euro/dollar will be decided. First, the price zone of 1.2000-1.1950 is quite strong on its own. Secondly, near 1.1980 lies the black 89 exponential moving average, the level of 38.2 fibo, and at 1.1973 passes the upper limit of the daily cloud of the Ichimoku indicator. Thus, it is quite possible that in the selected zone, namely near 1.1980, the pair will find strong enough support to push off for a change of movement in the north direction. Once again, I note that this week can clarify a lot and affect the dynamics of the US dollar across the entire spectrum of the foreign exchange market.
As you know, this Friday will be the most important data for the US labor market, and with good indicators, investors can again believe in the dollar. But back to the technical analysis. If we have already marked the support zone (and even the level) on the daily chart, then the strong resistance is in the area of 1.2045-1.2075, where the level is 23.6 fibo, resistance at 1.2075 (highs on May 3), as well as the red line of the Tenkan indicator Ichimoku.
H4
The pair is still trading in an ascending channel on the four-hour chart but is getting closer to its support line. This meeting cannot be avoided, and soon we will see attempts to break the channel's lower border. At the end of this review, the euro bears are testing the strength of the orange 200 exponential average, which passes at 1.1988. If reversal candlestick signals appear in the price support zone of 1.1988-1.1968 on this timeframe, you can try buying with the nearest target near 1.2040 / 50. For sales at the 200 EMA and the channel's support line, now is not the best time from a technical point of view. To open short positions, I offer two options. The first one is designed to break the lower border of the channel and consolidate under it, after which, on a rollback to the broken support line, you can try selling. The second option involves selling at higher prices, from the area of 1.2025-1.2070. This option will become relevant only if the EUR/USD cannot go down from the ascending channel and begins to adjust. I consider sales to be the main trading idea for EUR/USD at this stage of time.
