FX.co ★ Trading recommendations for the EURUSD currency pair – placement of trade orders (November 19)

The first stage of recovery plays the role of resistance, but whether it has the strength to fully return sellers to the market – we will analyze this question in our article.

From technical analysis, we can see how the quote quickly returned to the area of the range level of 1.1080, where it felt resistance and as a fact slowed down the movement. So, the reverse course did not return us somewhere, but to the first stage of recovery relative to the oblong correction, which served as the lower boundary of the flat formation of 1.1080/1.1180. Is it worth it to put an end to the entire recovery process, I don't think since there is still a chance of a price returning to degree #2 (1.1000). In this scenario, the stage #1 (1.1000) can play a significant role, which in the form of a mirror level will give acceleration to short positions in case of proper accumulation effect, as it was in history. In terms of the emotional mood of market participants, there are no characteristic signals of the resumption of a rapid inertial course, but there is still a kind of positive correlation between the emotional state of the currency pairs GBPUSD and EURUSD, where the last days were in some sense symmetrical. In turn, volatility has been showing weakness for seven trading days, working at values below the daily average.

Analyzing the past day hourly, we see that the characteristic consolidation at the periodic level of 1.1065 lasted quite a short time, and already in the period of 16:00 - 18:00 (time on the trading terminal), there was a local surge in long positions, where the quote returned to the limits of the main level of 1.1080. Further development occurred between the values of 1.1065/1.1080.

As discussed in the previous review, speculators closely watched the scope of consolidation 1.1054/1.1067, trying to identify a surge in the price, which eventually managed to do with a local stretch to 1.1080. No further action was taken, as there was no retention of the characteristic mood.

Considering the trading chart in general terms (the daily period), we see that oblong correction remains on the market for like 1.5 months, incorporating both the inertial course (the first phase of formation) and the flat formation (second phase of development, which in theory is finished). In turn, the downward trend is still unchanged, and there is still plenty of distance to its breaking point, thus there should not be excessive anxiety among strategic traders.

The news background of the last day did not have in itself the necessary statistical data on Europe and the United States, which cannot be said about the information background, which still concentrates on itself special attention.

So, we will start with a meeting between US President Donald Trump and Fed Chairman Jerome Powell. Mr. President has repeatedly criticized the actions of the regulator and his chapter regarding actions that are too mild, but this time he changed the stick to gingerbread and designated the meeting as "very good and cordial".

"I just finished a very good and cordial meeting in the White House with Jerome Powell from the Federal Reserve. All issues were discussed, including interest rates, negative interest, low inflation, weakening, the strengthening of the dollar and its impact on production, trade with China, the EU and others." – twitter @realDonaldTrump.

At first glance, everything seems to be fine, but this morning a new tweet from Trump arrived, and then everything is the same, the rate is very high and we urgently need to lower it. Thus, there is no need to worry that Trump's rhetoric regarding the regulator has changed in the other direction.

"At my meeting with Jerome Powell this morning, I protested the fact that our interest rate was set too high compared to interest rates in other countries. Our rate should be lower than that of everyone else (we are the United States). A too-strong dollar harms producers and growth!" – twitter @realDonaldTrump.

In turn, among the representatives of the Chinese leadership, a pessimistic mood prevails regarding the trade agreement between the United States and China. So, a source in the Chinese government claims that China is very concerned about the actions of Donald Trump regarding the refusal to abolish duties, which may complicate the settlement of existing trade disputes.

Completes the information and news background on Brexit. So, market participants on pseudo-emotions were inspired by the fact that the Conservative Party of Britain can win the upcoming parliamentary elections and that, as a consequence, will lead to the approval of the deal on the withdrawal of the United Kingdom from the European Union.

Today, in terms of the economic calendar, we have data on the construction sector of the United States, where the volume of construction of new homes for October should rise from 1.256M to 1.320M, and the number of building permits issued will decrease from 1.391M to 1.385M.

Further development

Analyzing the current trading chart, we see the same sideways movement between the two coordinates 1.1065/1.1080, where the quote seems to be hiding in the indecision of market participants. So, the upward move was subjected to massive fixation of long positions due to fear of rebound. In turn, the downward trend is not yet fully ready to return due to the lack of trading volumes, so we are faced with stagnation in the form of accumulation. In terms of volatility, we see a downturn, where there are extremely low indicators, which can be a kind of signal for the upcoming acceleration.

Detailing the available time interval per minute, we see a zigzag course, which contains quite a lot of versatile Doji candles, which once again confirms the characteristic ambiguity.

In turn, speculators are out of the market, carefully analyzing the price-fixing points relative to the framework of 1.1065/1.1080. The work will be carried out after the breakdown of borders, with the next impulse, as it was on the example of yesterday.

It is likely to assume that the sideways oscillation of 1.1065/1.1080 will last extremely long, and perhaps today there will be an exit from it, where it is worth working both on the rebound from the conditional range level, returning us to the recovery stage, and on the alternatives, in case the quote manages to gain a foothold higher than 1.1080, and the looped course of 1.1080/1.1180 will resume.

Based on the above information, we derive trading recommendations:

• Buying positions are considered if the quotation leaves the area of 1.1095/1.1100.

• We consider selling positions in the area of 1.1060/1.1055.

Indicator analysis

Analyzing different sector timeframes (TF), we see that the short-term perspective works variably on the existing accumulation, where the signal is not stable. The intraday perspective took an upward position due to the existing price return back to the first stage. The medium-term outlook for a long time has changed interest from downward to neutral due to a fairly significant rebound from the second stage of the recovery.

Volatility per week / Measurement of volatility: Month; Quarter; Year.

Measurement of volatility reflects the average daily fluctuation, calculated for the Month / Quarter / Year.

(November 19 was built taking into account the time of publication of the article)

The volatility of the current time is 19 points, which is extremely low for this period. It is likely to suggest that the acceleration of volatility is still possible at the time of the breakdown of accumulation. Do not wait for high fluctuations, with a higher probability the fluctuation will be inside the daily average.

Key levels

Resistance zones: 1.1080**; 1.1180* ; 1.1300**; 1.1450; 1.1550; 1.1650*; 1.1720**; 1.1850**; 1.2100.

Support zones: 1.1000***; 1.0900/1.0950**; 1.0850**; 1.0500***; 1.0350**; 1.0000***.

* Periodic level

** Range level

*** Psychological level

***** The article is based on the principle of conducting transactions, with daily adjustments.