12.09.201908:16 Forex Analysis & Reviews: Overview of EUR/USD on September 12th. Forecast on the system "Regression Channels". Judgment day for the euro has come. Will traders be disappointed?

4-hour timeframe

Technical data:

The upper channel of linear regression: direction – down.

The lower channel of linear regression: direction – down.

The moving average (20; smoothed) – sideways.

CCI: -133.6179

From the very beginning of the week, the whole community of traders "trashed" the topic of what will be the results of the ECB meeting on Thursday, and did it for a reason, and out of despair, there were no other macroeconomic reports and messages. As a result, the bulls that had previously held the euro/dollar pair above the moving average gave up. Yesterday, with an empty news background, the EUR/USD currency pair fell, which can only be associated with the upcoming meeting of the European regulator, as the pound/dollar pair did not collapse anywhere, but continues to trade in a narrow sideways range. Thus, we can say that traders have already worked out a possible reduction in the deposit rate by 0.1%, as well as a possible message from the Bank of EU to restart the quantitative easing program. As a result, if Mario Draghi and the company announced a slight easing of monetary policy, then there may no longer be any new fall in the euro currency. Based on this, the conclusion: a new fall in the euro will be possible if the ECB will reduce the deposit rate by 0.2% (or more) and 100% likely to announce the beginning of the redemption of bonds from the market soon. In this case, we can say that the foreign exchange market has not yet fully worked out the results of the ECB meeting.

Well, do not forget about Mario Draghi's press conference. Firstly, it is one of Mario Draghi's last two conferences as head of the ECB. Secondly, it is important not only what decision the regulator will make today, but also what decision will be made in October. Thus, all the fears of Mario Draghi, the risks to the economy of the European Union, which he will name, and the forecasts of GDP and inflation will have a fairly high value. For the euro, unfortunately, nothing optimistic in the speech of the head of the ECB is expected. His rhetoric is unlikely to be "hawkish" or even "neutral."

Also, do not forget that the consumer price index in the States for August will also be published today. The consensus forecast is equal to 1.8% y/y, which coincides with the previous value, but some statistical agencies are inclined to believe that inflation will accelerate slightly and will be +1.9% y/y. Indirectly, the same idea is suggested by yesterday's publication of the producer price index in the US, which also accelerated slightly.

What is the result? As a result, the euro's chances today are connected only with the fact that the European Central Bank will not soften monetary policy too much, and inflation in America will not accelerate. In all other options, the euro is almost guaranteed to fall under a new wave of sales. At the moment, the technical picture does not even indicate a correction of the pair. That is, the fall as it began yesterday, is still preserved. We also remind once again that the pair is near two-year lows and may very well try to update them today.

Nearest support levels:

S1 – 1.0986

S2 – 1.0956

S3 – 1.0925

Nearest resistance levels:

R1 – 1.1017

R2 – 1.1047

R3 – 1.1078

Trading recommendations:

The euro/dollar pair was fixed below the moving average line, so the trend changed to a downward one. Today, therefore, it is recommended to sell the euro and buy the US dollar with the target at the levels of 1.0986 and 1.0956. The fundamental background is likely to be on the side of the US currency. It is recommended to return to the pair's purchases not before the new bulls overcome the moving.

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

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) – the blue line on the price chart.

Support and resistance – red horizontal lines.

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