The current situation is very complicated to open the positions
Hello, dear colleagues!
In today's review we are going to outline the fundamental background, general market sentiment and macroeconomic data, which were released yesterday and are expected today. Then, more attention will be commonly directed to the price charts of the main currency pair of the Forex market. Notably, the fundamental background is rather poor lately, while the market sentiment can be characterized as uncertain. Statements of monetary officials (primarily the Fed) do not gain any significance, as well as relevant drivers for price movements. Market participants are now more focused on the future Federal Reserve (Fed) chairman, which should be appointed by US President Joe Biden. Rumor has it that one of the most prospective candidates to head the Fed, Lael Brainard, has already been to the White House and passed the so-called interview, the results of which are not disclosed at the moment.
The other potential candidate for the post of the US chief banker is the current Fed chairman, Jerome Powell. I assume that mature and rather conservative Joe Biden will not make any changes during hard times for the global and the US economy and will support Powell's candidacy for a second term. However, there are two significant things to consider. First, Jerome Powell is a Republican and was appointed to his current position by former President Trump. Secondly, it is unlikely that elderly Biden will personally make the decision regarding the appointment of the Fed head. He will be most likely advised by a high-ranking official in his administration. Moreover, it will be someone whose opinion Biden trusts absolutely.
Soaring motor vehicle and fuel prices, particularly gasoline, caused a rise in US producer prices. This was indicated by yesterday's producer price index figures, which were stronger than forecasted. Today, the main macroeconomic reports will be released in the US again. They are the consumer price index, initial jobless claims and some other less important reports. It is possible to obtain more details, observing today's economic calendar. Now we are going to discuss the technical part of this review.
Daily
As expected before, euro bulls tried to proceed with the rising rate and move the quote above the significant and strong level of 1.1600. The results are shown on the daily chart. It failed. After hitting highs at 1.1609, the daily candlestick deflated and closed at 1.1592 . The red Tenkan line and the blue Kijun line of the Ichimoku indicator, which converged to 1.1603, provided a strong resistance to the pair and did not let it advance. Besides, the author of this article had little doubts about such an outcome. Today, at the moment of completing the review the pair is demonstrating an active downtrend and trading near 1.1562.
As for the trading recommendations, the current situation to open positions is very complicated. First, the decline has already started. Besides, it has also made quite a long way to the south, therefore it may be late and risky to sell now. If the pair rebounds to 1.1580 and forms bearish reversal patterns on the shorter timeframes, it can be a clear signal to open short positions. I also recommend using the same tactics in case of forming bullish Japanese candlestick patterns on the hour and (or) 4h chart in the price zone of 1.1560-1.1550. It would be a good option for those who are not willing to take risks or for beginners to stay out of the market and observe further price movements. That's all for now.
Good luck!
