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: -75.2883
The second trading day of the week ended for the pair EUR/USD with sluggish trading with minimal volatility. Although at this time the fundamental background is quite interesting, there were no macroeconomic data in the first two trading days of the week. Thus, the bears continue to hold the initiative in their hands and count on the further fall of the European currency. After yesterday's minimum correction, the downward movement may resume today, at least the indicator of Heiken Ashi in the morning shows the readiness to turn down.
While the euro/dollar currency pair continues to stand in one place at the beginning of the trading week, US President Donald Trump poured in compliments to Xi Jinping, saying that he has excellent relations with the Chinese leader, and the parties to the negotiation process are in the last stages of working on a very important agreement. Trump is probably referring to the "first phase" of the trade agreement. The US leader also said that the country continues to support the protesters in Hong Kong and wants peace to reign in the region. It is difficult to say how much these words correspond to the truth, as we have repeatedly faced situations where it seems that the reconciliation between China and the United States ended with an escalation of the trade conflict. Therefore, we continue to believe that to rejoice and open the champagne should not be before the official statement of the parties on the signing of the agreement. Up to this point, all statements by Beijing and Washington about "progress in negotiations" are nothing more than lyrics.
After two days of macroeconomic calm, traders will receive important information today, all from overseas. First, a report on the level of employment in the private sector from ADP will be published. This is not the most significant indicator of the state of the labor market, however, traders will not leave it without attention. Second, an important report on the change in the volume of orders for durable goods for October. According to forecasts, the overall figure will decline by 0.8% m/m after a month earlier reduction by 1.1%. Derivatives from the main are also preparing for losses. Thus, in the US trading session, the US dollar may come under pressure from traders. Third, preliminary GDP data for the third quarter will be published. According to experts, we should expect about +1.9% y/y, and any value below the forecast will put pressure on the US currency again. Fourth, the figures for changes in personal income and expenses of the US population will become known. Both indicators are expected to increase by 0.3% m/m. The greatest interest among traders will undoubtedly be caused by the report on orders for durable goods, it will depend on the dynamics of the pair on Wednesday, November 27. It should also be noted that the pair continues to trade with minimal volatility and not far from two-year lows, thus, more serious fundamental information than today's reports may be required for further downward movement. More precisely, if we are talking about going down another 50-60 points, then this should not be a problem, however, according to the "paradoxical situation" that we have already described several times, really good reasons are needed to leave the pair quotes at two-year lows. As for the fundamental background that would be able to support the euro, now there is no such background and it is difficult to even imagine what could provoke the strengthening of the European Union currency, except for the failed statistics from the States.
The technical picture implies a resumption of the downward trend, as most indicators are directed downward. Bulls have lost control of the market and continue to be extremely weak.
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 trying to resume a slight downward movement. Thus, it is now recommended to trade the pair lower with the first target of 1.0986. Overcoming the first target will open the way for traders to new lows. It is recommended to buy the euro currency not earlier than the consolidation of traders above the moving average line and the Murray level of "5/8" with the first target of 1.1108.
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 line 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 - the red horizontal lines.
Heiken Ashi - an indicator that colors bars in blue or purple.
Possible variants of the price movement:
Red and green arrows.