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Hello!
This article will focus on both fundamental factors and technical analysis of the main currency pair of the market. To begin with, briefly about the important events and macroeconomic reports that took place yesterday, as well as what is expected today.
As you know, yesterday, Fed Chairman Jerome Powell spoke before the Joint Economic Committee of the US Congress. The main thing from Powell's report is the assessment of monetary policy, which the head of the Federal Reserve, in general, considers adequate to the current situation. In other words, given the strong labor market and finding inflation near the 2% target, the Federal Reserve will probably not change the parameters of monetary policy shortly and will leave rates unchanged.
At the same time, among the risks, the head of the Fed noted the inflationary global weakening of economic growth, as well as trade tensions between the US and China.
Speaking of inflation. A report by the US Department of Labor yesterday showed that in October, consumer prices in the United States rose more than economists had expected. On an annualized basis, growth was 1.8% against the forecast of 1.7%, while monthly, the consumer price index rose 0.4% despite expectations of 0.3%.
Today, the main events for EUR/USD will be the eurozone GDP data, as well as the continuation of the Fed chairman's speech on monetary policy. From the American statistics, it is worth highlighting the producer price index and primary applications for unemployment benefits. Both figures will be published at 14:30 (London time).
Well, it's time to move on to the charts of the main euro/dollar currency pair.
Daily
According to the results of yesterday's trading day, a Doji candle appeared with approximately equidistant shadows. As a rule, such candles indicate market uncertainty or some respite, which investors took before continuing the existing dynamics. I think there is no doubt that the current trend is downward.
However, everything ends sooner or later, so you should never say "never". In the market, as in life, everything happens and you have to be ready for everything.
What is it? And to the fact that today, we should not exclude the possibility of growth of EUR/USD. Moreover, the trading week is nearing its end and a correction of the pair is quite possible against the background of profit-taking.
If this happens, I expect the quote to rise to the price zone of 1.1035 and possibly higher, to the area of 1.1050/60. Do not discount the presence of EUR/USD near the important psychological and technical level of 1.1000, which only increases the probability of a rebound up. At least a rebound.
In the case of the continuation of the downward dynamics, I assume today's goals in the area of 1.0967. It is here that the lower border of the Ichimoku Indicator cloud passes, the exit from which will only confirm the strength of the bears for this currency pair.
H4
The probability of an upward scenario on this timeframe is confirmed by the presence of a bullish divergence (or simply convergence) of the MACD indicator.
The second interesting point. If the current candle closes above the opening price of the previous one, it will absorb it, which can also be considered as a basis for opening long positions on the euro/dollar.
So. What we have – Doji candle on the daily chart, which often turns the price, divergence in growth, and possible bullish absorption.
In such a situation, it is worth waiting for the closing of the current 4-hour candle above 1.1003, and if that happens, try to buy the pair with a small stop and targets in the area of 1.1060. You can also consider the sale of EUR/USD, and confirmation will be bearish candlestick signals on the 4-hour and (or) hourly chart.
Good luck and big profits!
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