4-hour timeframe
Technical details:
Higher linear regression channel: direction - downward.
Lower linear regression channel: direction - sideways.
Moving average (20; smoothed) - upward.
CCI: 5.6096
The EUR/USD currency pair again showed nothing outstanding on Tuesday. In principle, these words can start articles almost every day because the pair continues to trade as sluggishly as possible. In most cases, market participants move the pair by 40-50 points per day, which is very small. After all, it should be understood that if the pair goes from the minimum of the day to the maximum, then a specific part of the movement falls at night. Moreover, in the evening, when we do not recommend intraday trading, there is already a maximum of 35 points of movement. And even if traders manage to enter the market as low as possible and exit as high as possible, provided that the transaction will be only one, and the pair will move in the same direction all day, it will be possible to earn 25 points. There are too many "if," and the price does not move like that in reality. Therefore, we get much more complex intraday movements that do not allow us to earn money in principle. On the 4-hour timeframe, the picture is both a little simpler and a little more complicated at the same time. First of all, it should be noted that 80% of the movements of the euro/dollar and pound/dollar pairs in recent months coincide. It means that the factors that drive these two pairs are also the same. Only the States can be the birthplace of these factors since it is the American currency that unites the two main currency pairs. It's easier because you can keep trades open for several days here and pay attention to even older timeframes. For example, on the 24-hour, during the analysis of which we have already concluded several times about a very likely resumption of the upward trend of the global trend.
Consequently, a specific part of traders could open long positions from the level of 1.1760, near which the pair had been hovering for several weeks. It is more difficult – because the movements for a 4-hour timeframe are considered completely scanty. As a result, we can say that the pair is now moving in any direction with great difficulty, and the technical picture does not change at all. And how can it change if the pair grows or falls by 20 points per day?
The same applies to the fundamental background. Although there is always something to pay attention to in the foreign exchange market, if the markets themselves were paying attention to something new, the movements would be more active. Since the pair has been showing "super-volatility" for several months, it means that "foundation" and "macroeconomics" are practically not interesting for traders now. Thus, we can only assume when the current weak movement will end and what may affect it. Recently, a new problem has been brewing in the States, which is not a problem. In the States, the national debt has grown to almost $ 30 trillion, which is the ceiling, and the government cannot climb above this ceiling. If the government cannot take on new debts, it will paralyze the work of the Ministry of Finance, as Janet Yellen has already said several times. Why is this not a problem? Because the debt ceiling has been raised 74 times since the beginning of the 20th century, and it will be raised 75 times. To put it even more simply, Congress can accept an increase in the national debt limit at any time. Thus, the US government can issue new bonds, and it is not in the government's interests for the country to survive a technical default. It is not beneficial to either Democrats or Republicans. Thus, there is no doubt that both ruling parties will agree this time without any problems. What does the figure of $ 28.5 trillion mean in practice (this is how much the US national debt is currently estimated at)? First, this figure is larger than the US GDP, which is estimated at $ 22 trillion. Thus, at the moment, the national debt is more than 130% of GDP. Secondly, it means that every American owes an average of $ 85,000. These figures look quite scary, but in practice, everything is not so bad. First, most of this amount is made up of debts to ourselves. Many countries are holders of American bonds abroad, but their total claims in the United States do not equal $ 28.5 trillion. In other words, only a part of these $ 28.5 trillion is external creditors. A certain part of the debt is the Fed – the American central bank. Another part of the debt is American government funds and domestic debt. For example, state funds own 6 trillion of the US government's debt. Subtract these 6 trillion dollars, and now the ratio of public debt to GDP is 1:1. In addition, the Fed, as an independent central bank from the government, has the right to buy back any debts. The Fed can print any amount of money to pay off the debt of the US government or repurchase it. After all, even within the framework of the QE program, the Fed buys government bonds from the open market (the debts of the American government). And since the US dollar remains the most stable and popular currency in the world, the Fed can print almost any amount of money with complete impunity, which then disappears into the global economy without causing hyperinflation in the US. Because dollars are in use all over the world. If the Bank of Belarus started printing money on such a scale, the country would quickly be overwhelmed by inflation, commensurate with the printed amount of money. And US dollars are rapidly diverging worldwide, so inflation in the US is only 5.4%. And even then, it had become such in the last few months, when quarantine restrictions in the United States were lifted. And 5% inflation is still not enough, considering how many trillions of dollars were poured into the American economy.
The volatility of the euro/dollar currency pair as of August 4 is 53 points and is characterized as "average." Thus, we expect the pair to move today between the levels of 1.1810 and 1.1916. A reversal of the Heiken Ashi indicator upwards will signal a possible resumption of the upward movement.
Nearest support levels:
S1 – 1.1841
S2 – 1.1780
S3 – 1.1719
Nearest resistance levels:
R1 – 1.1902
R2 – 1.1963
R3 – 1.2024
Trading recommendations:
The EUR/USD pair has started a round of downward correction. Thus, today we should consider options for opening new long positions with targets of 1.1902 and 1.1916 after the Heiken Ashi indicator turns up or in the case of a price rebound from the moving average. Sales of the pair will be possible not before the price is fixed back below the moving average line with targets of 1.1810 and 1.1780.
