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4-hour timeframe
Technical data:
The upper linear regression channel: direction – down.
The lower linear regression channel: direction – up.
The moving average (20; smoothed) – up.
CCI: 105.9181
After Friday's growth, the euro/dollar pair began a downward correction. On Friday, American macroeconomic statistics were disappointed again and traders had no options other than further purchases of the euro and sales of the dollar. We once again draw the attention of traders to the fact that the current strengthening of the euro is caused solely by the failure of macroeconomic statistics from overseas in recent weeks. However, the problems of the European Union are not solved. The European Union cannot boast of stable economic growth and inflation, corresponding to the target values of the ECB. If the problems in the US began just a few weeks ago, although talks about the recession have been going on for a long time, the European Union still remains at zero rates and moreover, the last speech of Mario Draghi showed frankly dovish-like attitude of the ECB head, which traders successfully ignored. That is why we believe that the position of the euro remains weaker than that of the US dollar. In order for the euro to form a long-term upward trend, it is necessary that the US economy begins to experience serious problems in the long-term temporary section. This may contribute to the policy of protectionism of Donald Trump, who recently said he was ready to remain President of the United States for a second term. However, there are big doubts that Trump will win the next election. So far, the euro will be inclined to a correction to the moving, but the technique retains an upward trend. Bears on the euro/dollar pair remain in the shade.
Nearest support levels:
S1 – 1.1292
S2 – 1.1261
S3 – 1.1230
Nearest resistance levels:
R1 – 1.1322
R2 – 1.1353
R3 – 1.1383
Trading recommendations:
The EUR/USD currency pair started a new round of correction against the upward trend. Now, long positions on the euro remain relevant with the targets at 1.1353 and 1.1383, which is recommended to be opened after the current correction.
It is recommended to sell the euro currency after the bears return the initiative to their hands and the euro/dollar pair will be fixed under the moving average line with the first targets at 1.1230 and 1.1200.
In addition to the technical picture should also take into account the fundamental data and the time of their release.
Explanation of illustrations:
The upper linear regression channel – the blue line of the unidirectional movement.
The lower linear regression channel – the purple line of the unidirectional movement.
CCI – the blue line in the indicator window.
The moving average (20; smoothed) is the blue line on the price chart.
Murray levels – multi-colored horizontal stripes.
Heiken Ashi is an indicator that colors bars in blue or purple.
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