Good day, dear colleagues!
Well, another week in the foreign exchange market has ended, which the US dollar can bring to its asset. The US currency strengthened across a wide range of markets, including against the euro.
Although the losses of EUR/USD were not so significant, only 0.24%, in my opinion, there were some changes in the technical picture of the pair, which in the future may affect the price direction of the instrument.
Weekly
It's about the last two weekly candles. If the penultimate candle signaled a likely reversal of the pair in the north direction, the candle of the last five trading days actually showed the insolvency of growth. At least for now.
The quote really started to grow, but after meeting strong resistance at 1.1097, the euro-dollar rate turned to decline. Moreover, the closing price coincided with the lows of trading on November 18-22, which may indicate the serious intentions of the European.
It is also worth noting that in the last three weeks the pair is trading near the Tenkan line of the Ichimoku indicator. As you can see, the closing prices of the weekly sessions are either above or below this line, and this factor indicates the uncertainty of the market. Alternately, the appearance of black and white candles can also be considered an element of uncertainty.
If the trading of the started week closes above the previous highs of 1.1097, we can expect further strengthening and tune in to buy. In this scenario, the next targets will be 1.1145 (Kijun) and 1.1207 (50 MA).
If the bears have control over the pair, after the breakdown of the support of 1.0989, we expect the rate to decline to 1.0941, 1.0920, 1.0900, and 1.0880. Near the last two marks, I do not rule out a reversal on the rise, and in the case of the appearance in this price zone of candlestick signals characteristic of growth on the daily, 4-hour and hourly charts, we plan to buy the euro-dollar pair.
Daily
In this timeframe, it is quite an interesting moment to open short positions. At 1.1042, the Tenkan, 50 MA lines converged, as well as the lower boundary of the Ichimoku indicator cloud.
If we consider a false break of 1.1042, then the next resistance can be exerted already at 1.1056, where the upper boundary of the cloud passes.
Even more distant zone for opening short positions can be considered the price area 1.1080-1.1097, where a strong technical level, the highs of several trading days, Kijun and 89 EMA.
In my opinion, only a true breakdown of the resistance of 1.1097 and consolidation above 1.1100 will indicate the seriousness of the implementation of the bullish scenario. Meantime, the pair continues to so-called "buffeting", and with a bearish bias.
However, the market can change very quickly and quite unexpectedly, so it is worth highlighting important events that this week can become a driver for possible and significant breakthroughs.
US: consumer confidence indicator, durable goods orders, initial jobless claims, basic personal consumption expenditure price index.
Eurozone: data on the German labor market and the eurozone as a whole.
More information on these and other macroeconomic reports can be found in the economic calendar.
Successful trading!