Yesterday's trading on the Forex currency market was influenced by risk sentiment, for which there were several reasons. I will start with the process of vaccination against coronavirus. At the beginning of the week, Pfizer and BioNTech drugs were fully approved in the United States, significantly affecting the pace of vaccination in the United States itself. In general, we must admit that since the beginning of the current weekly trading, the fears of market participants about the spread of the COVID-19 delta strain have significantly decreased. Together with the rise in commodity prices, this has led to an increase in risk sentiment, from which the US dollar cannot extract any benefit for itself. Now investors are focused on the economic symposium in Jackson Hole, which will begin its work on Friday.
It is expected that the chairman of the US Federal Reserve System (FRS), Jerome Powell, can shed light on the timing when the department he heads will begin reducing monetary stimulus. First of all, this concerns the reduction in the volume of the asset purchase program. If we touch on the topic of macroeconomic statistics, yesterday's data on manufacturing activity from the Federal Reserve Bank of Richmond showed a significant decline, which also did not become a plus for the US dollar. Today is very rich in a variety of fundamental data. So, at 09:00 London time, data on the index of current conditions, expectations, and business climate from the IFO will be received from Germany. After lunch, at 13:30 (London time), the US will publish reports on orders for durable goods. That's probably all, and now let's see what changes have occurred on the price charts of the main currency pair.
Daily
As already noted, investors' craving for risk played a cruel joke with the US dollar, and it declined across a wide range of the market. In particular, the EUR/USD currency pair ended trading on August 24, increasing at the level of 1.1757. It is above the broken support level of 1.1752. Thus, its breakdown will have to be considered false, at least at this stage of time. When writing this article, the pair shows a downward trend and is trading near 1.1740. If the market sentiment changes and the quote returns to growth again, its next target may be the blue Kijun line of the Ichimoku indicator, which runs at 1.1787. To further strengthen the bullish sentiment for EUR/USD, it is necessary to break through the Kijun and return above the significant mark of 1.1800. The primary task of the players on the decline will be the return of the price under the red Tenkan line of the same indicator, followed by testing the mark of 1.1700. If the euro bears complete both tasks, they will again meet with a strong support level of 1.1665, where the minimum trading values were shown on August 19-20 this year.
H1
Turning to the hourly chart, I will briefly outline the trading ideas you can implement today. I will immediately note that since EUR/USD is not relatively unambiguous, there are options for both purchases and sales. I suggest considering purchases after a decline to the orange 200 EMA and the black 89 EMA from the price zone of 1.1735-1.1730. The confirmation signal for opening long positions will be the appearance of the corresponding candles. Under the same condition, we consider sales after the rate rises to the area of 1.1745-1.1755. In both cases, I recommend limiting yourself to profits of 25-30 points. It is a very unstable situation, which can change at any moment.
