12.11.201907:27 Forex Analysis & Reviews: Overview of EUR/USD on November 12th. Forecast according to the "Regression Channels". The dollar holds a key advantage in the fight against the euro

4-hour timeframe

Technical data:

The upper channel of linear regression: direction – up.

The lower channel of linear regression: direction – down.

The moving average (20; smoothed) – down.

CCI: -72.9228

The first trading day of the week passed for the EUR/USD pair, as we expected, in a correction movement, weak, which may end today. In general, nothing interesting happened in the European Union and the States on Monday. Nothing interesting that could be reflected in the chart of the euro/dollar currency pair. Thus, the downward trend remains, the lower channel of linear regression turned down, supporting the downward movement in the medium term.

On Tuesday, November 12, market participants will be able to turn their attention only to the data from the ZEW Institute. We are talking about the index of assessment of current economic conditions and the index of sentiment in the business environment of Germany, as well as the index of economic expectations in the European Union. However, firstly, these indices have the status of secondary macroeconomic indicators, and secondly, they have long been in the negative zone, indicating negative investor sentiment and are unlikely to return to the "green" zone today. Thus, traders will only be able to make sure once again that in terms of the business and investment climate in Germany and the European Union, everything remains in place, no more. Well, the European currency may well resume falling today. Not because the above indices will exert pressure, but because, as we have already said, traders have been getting rid of the euro for several days in a row (despite the presence or absence of a fundamental background of intraday). This suggests that the bulls have lost the initiative, respectively, the market is now in the "bearish paws". And the euro will tend to fall to its two-year lows, which are not so far from the current exchange rate of the pair, just 130 points.

However, calm in the market will not last long, as we think. Tomorrow, in Germany, the consumer price index will be released, in the European Union – industrial production, and in the States – inflation and Jerome Powell will speak in Congress. Thus, surges in volatility are possible tomorrow, and until the evening the euro can continue to remain under pressure since few people now believe that industrial production or inflation in Europe can "rise". The head of the Fed will speak first to the Joint Economic Committee, and later to the budget committee of the House of Representatives. In principle, the main questions to the Fed chairman will remain the same. What is the Fed going to do with the rate in the coming months? According to many experts, the Fed will take a pause, and the pause is not short-term, but at least for a year. Donald Trump, of course, will not be delighted with Jerome's decision, however, it certainly makes no sense to lower the rate for the fourth time in a row. Thus, if the euro did not grow much after three easing of the US monetary policy, now that the pause is indeed very likely, the euro has excellent chances to go to conquer new lowlands, since the ECB has not hinted at any pauses in the cycle of changing the key rate. Accordingly, a new easing can be expected in the coming months from the European Central Bank, led by Christine Lagarde. But even if this does not happen, the US monetary policy is still much more "hawkish" than the ECB's policy. Thus, the US currency retains an advantage over the euro.

From a technical point of view, the pair continues to adjust, but one closed blue bar indicates readiness for the resumption of the downward trend. Two bars of blue color is already a signal for new sales. The bulls still have no chance, because the fundamental backdrop today will once again be empty. There are no grounds for a sharp change in sentiment in the forex market today.

Nearest support levels:

S1 – 1.0986

S2 – 1.0925

S3 – 1.0864

Nearest resistance levels:

R1 – 1.1047

R2 – 1.1108

R3 – 1.1169

Trading recommendations:

The euro/dollar pair is still in a weak upward correction. The reversal of the Heiken Ashi indicator downwards will indicate the completion of the correction and in this case, it is recommended to sell the euro again with the target of the Murray level of "4/8" - 1.0986. Purchases of the pair are now impractical since there are no fundamental or technical reasons for this.

In addition to the technical picture, fundamental data and the time of their release should also be taken into account.

Explanation of the illustrations:

The upper channel of linear regression – the blue lines of the unidirectional movement.

The lower channel of linear regression – the purple line of the unidirectional movement.

CCI – the blue line in the indicator window.

The moving average (20; smoothed) – the blue line on the price chart.

Support and resistance – red horizontal lines.

Heiken Ashi – an indicator that colors bars in blue or purple.

Possible variants of the price movement:

Red and green arrows.