4-hour time frame
Technical data:
The upper linear regression channel: direction - up.
The lower linear regression channel: direction - down.
Moving average (20; smoothed) - down.
CCI: -66.6205
The first three working days of the week for the EUR/USD currency pair ended the same way - with minimal changes and with minimal fluctuations. If in the first two days not a single important macroeconomic report was published, then yesterday in the States, there were several important and significant publications. However, as we see, these reports did not have any impression on the traders. Despite the fact that macroeconomic statistics from the USA turned out to be strong and the US dollar, accordingly, could start to rise in price at a faster pace, nothing has changed during the trading process. That is, as if there was no news at all. At present, we continue to associate such illogical market behavior with the "paradoxical situation" that we have repeatedly described. The situation now is that almost all macroeconomic events support the US currency, but at the same time, it continues to be near two-year lows, and at such levels, sellers are clearly cautious. Thus, we have repeatedly suggested that in order for the euro / dollar pair to quickly move down, some kind of impulse is needed, for example, in the form of lowering the ECB key rate or entering a major player on the market, which will contribute to increased volatility.
The penultimate trading day of the week is fundamentally completely empty. The only publication that you can pay attention to is the consumer price index in Germany, its preliminary value for November. According to forecasts' experts, we expect growth to 1.3% y / y. And if it really will be, then we will have the right to expect acceleration from Friday's inflation in the EU. On the other hand, even if acceleration of inflation in the European Union does occur, it still remains at a very low level (less than 1.0% y / y), so it can hardly be regarded as a positive factor for the European currency. No more important data is planned for today.
Meanwhile, US President Donald Trump signed the law, which had previously been approved by Congress and the Senate, "Human Rights Act in Hong Kong." It was this law that many political analysts associated with the escalation of the trade conflict between the United States and China, and also feared that the situation would not worsen even more than now. It can be recalled that the PRC regards the adoption of this law as a direct interference in the domestic policy of the country and has officially declared a protest to the States regarding this law. However, as we see, Trump went all the way in this matter and signed the bill. Now, U.S. officials in Hong Kong will need to confirm Hong Kong's sufficient autonomy at least once a year. It is in this case that Washington's trade preferences with respect to Hong Kong will continue. Moreover, the law also provides for sanctions against Hong Kong authorities for violating human rights. "I signed these laws out of respect for President Xi, China and the people of Hong Kong. They are being put into action in the hope that the leaders of China and Hong Kong will be able to peacefully and calmly resolve differences, which will contribute to overall long-term peace and prosperity." the American president said after signing the bill. However, there has not yet been an official response from China, but we believe that Beijing will not be pulling with this. As for trade negotiations between countries, it is now difficult to imagine what direction they can turn into. China has already officially warned that if Trump enacts the Hong Kong law, then retaliatory actions will follow and responsibility for what is happening will fall on the US shoulders. Now, it turns out that we need to wait for these "response actions".
From a technical point of view, the situation with the euro/dollar pair is now completely unchanged. The Heiken Ashi indicator signals a weak upward correction, and the general
volatility remains at a level at which, in principle, it does not matter what is happening now - a correction or a trend.
The nearest support levels:
S1 - 1.0986
S2 - 1.0925
S3 - 1.0864
The nearest resistance levels:
R1 - 1,1047
R2 - 1,1108
R3 - 1.1169
Trading recommendations:
The euro / dollar began a new round of correction, but the downward trend continues. Thus, it is now recommended that you wait for the correction to complete and trade the pair again for a fall with the first target of 1.0986. Moreover, breaking through the first target will open the way for traders to new lows. Thus, it is recommended to buy Euro currency no earlier than consolidating above the moving average line with the first target of 1.1047.
In addition to the technical picture, fundamental data and the time of their release should also be taken into account.
Explanations for illustrations:
The upper linear regression channel is the blue unidirectional lines.
The lower linear regression channel is purple unidirectional lines.
CCI - blue line in the indicator window.
Moving average (20; smoothed) - a blue line on the price chart.
Murray levels - multi-colored horizontal stripes.
Heiken Ashi is an indicator that colors bars in blue or purple.
Possible price movement options:
Red and green arrows.