Hello, dear colleagues!
At yesterday's trading the main currency pair of the Forex market showed a rather unclear price dynamics. However, it is better to discuss its details later. Meanwhile, it is time to mention yesterday's events and what is expected today. Amid a weak fundamental background, it is worth focusing attention only on the eurozone consumer price index, which was published yesterday. Notably, this significant indicator reflects inflation pressure in the region. Besides, this is the data released yesterday. The eurozone consumer price index in both monthly and annual terms matched economists' forecasts and amounted to 0.8% and 4.1%, respectively. However, the base value of the consumer price index, where food and energy prices are not taken into account, turned out to be 2%, lower than expected at 2.1%. Evidently, the difference between the forecasted value and the actual one is rather insignificant. However, it can be assumed that the European Central Bank pays more attention to inflation surges and tries to curb inflationary growth.
Time will tell whether the desired result will be achieved. Now we will discuss the events of today. Notably, no macroeconomic indicators from the eurozone will be published today. Moreover, ECB president Christine Lagarde will not deliver another speech. This week's expectations are rather tiresome mainly due to their futility and lacking any significant data. The United States will release its usual initial jobless claims report as well as the Philadelphia Fed manufacturing index. Both indicators will be issued at 16:30 MSK. Besides, some Federal Reserve System (Fed) leaders will give their next speeches. The member of the Federal Open Market Committee Evans' speech should be noted. The fact is that the monetary official also made a speech yesterday, which was mainly dedicated to inflation. Charles Evans expressed his view on tapering the quantitative easing program (QE) by the middle of next year. Evans also noted that the Fed was paying particular attention to inflation growth and he hoped that inflationary pressures would start to ease soon. Overall, the speech of Chicago Fed President Evans can be considered quite optimistic apart from the negative impact of gasoline prices, hitting household budgets. Let's see what this monetarist is going to say tonight, his speech is scheduled at 10:00 pm (MSK).
Daily
As assumed in yesterday's EUR/USD article, there is a Doji candlestick on the daily chart. Besides, it's very long bottom shadow indicates its reversal pattern. Evidently, the market players are unwilling to trade under the significant technical level 1.1300, returned above this level and closed Wednesday's session at 1.1318. The appearance of such candlesticks is usually followed by growth, which can be both correctional and reversal. I suggest adhering to the first variant at the moment and expect a corrective rebound, after which it will be time to open short positions. I believe that selling EUR/USD after a corrective rebound upwards is still the main trading idea for the main currency pair.
H1
On the hourly chart, the pair climbs above 50-simple moving average. However, a little bit higher, at the strong technical level 1.1365, a black 89- exponential moving average passes, which can turn the rate down. I suggest considering the nearest variants to open sell deals from the mentioned level. Slightly above, at 1.1386, there is a resistance level, which is not easy to pass upwards. Moreover, you can also try to sell EUR/USD from this level. Besides, in both cases, near the marked levels it would be quite good to notice confirming signals in the form of bearish reversal candlestick patterns on this and (or) 4-hour charts. Despite yesterday's reversal of daily candlestick and a high probability of attempts to carry out a corrective rebound, I recommend not buying now. It is against the current and fairly strong downtrend, and therefore carries much more risks.
Good luck!