FX.co ★ Trading recommendations for EURUSD pair on October 13

The EUR/USD pair failed to update the local high of 1.1830 yesterday, instead of which there was a pullback to 1.1800. The characteristic pressure from the average level of 1.1810 even after the breakdown affects market participants, which leaves a chance of resuming downward interest.

A correctional move from the local low of 1.1612 made significant changes to the structure of the downward tact of 1.2010 --- > 1.1612, as holding the price above 1.1830 reflects a recovery from the decline in September by 55%, and this may lead to the resumption of the medium-term upward trend.

The situation is not easy, and if we consider the fact that the market is filled with speculative positions, then it becomes more difficult to talk about a certain direction in the week-month perspective.

Even with clear signals indicating the medium-term price movement, it is suggested to make an adjustment for speculative hype, which can make adjustments to logically based signals of technical and fundamental analysis due to high activity.

If the market is so restless, it would be correct to work for the short term for 1-2 days, unless you have a strict money management system that can bypass speculative activity and preserve the liquidity of the medium-term position.

Analyzing yesterday's fifteen-minute, we can see low activity, where the concentration of trading forces was within the area of 1.1800/1.1830.

In terms of daily dynamics yesterday, the lowest indicator for 25 trading days was recorded. It amounted to 39 points, which is 49% below the average. The low volatility reflects the ambiguity of market participants, while we received a signal of early acceleration due to an unusual low indicator.

Looking at the trading chart in general terms (daily period), you can see that the level of 1.1800/1.1830 has an intersection with the Fibonacci level of 50%, which can benefit the downward development.

Yesterday's news background did not have any significant statistical data on Europe and the United States.

In terms of the information background, there was news that a number of EU countries are planning to tighten restrictive measures due to the high rate of development of the second wave of COVID-19. In Italy, Germany and Belgium, they plan to increase fines for non-observance of the mask regime to €1000, while in the Czech Republic, they decided to close all cinemas and fitness centers for two weeks. Cafes and restaurants, in turn, are open only until 17:00 UTC+00, and a maximum of four people can sit at the tables.

On the other hand, the head of the European Commission Ursula von der Leyen said that the EU does not intend to introduce a general quarantine and close the borders.

As we can see from the above material, the coronavirus is one of the important topics, and any information related to this strongly influences the speculative positions.

For the economic calendar, we have US inflation data today, which is very important for financial markets, since it is the dynamics of consumer prices that determines the monetary policy of central banks. Here, the projected growth of US inflation from 1.3% to 1.5% automatically removes all possible fears about the prospects of any easing of the Fed's monetary policy. And in view of ECB's actions, the dollar will benefit from this, which may seriously strengthen its position if the forecasts are confirmed.

USA 12:30 Universal time - Inflation for September

Further development

Analyzing the current trading chart, the price can be seen consolidating below 1.1800, which can positively affect short positions in terms of the recovery process. Yesterday's slowdown may become a lever for acceleration, thus the first step in the form of consolidating already indicates the prevailing trading interest on the part of sellers.

It is worth noting that the speculative hype has not disappeared, and we still see a high coefficient of speculative operations, so you should always be ready to change the polarity of trading positions.

If the price is kept below the level of 1.1800, it is highly likely that the quote will move to the recovery stage in the direction of 1.1750-1.1700. An alternative scenario will be considered if speculative jumps occur and the price is fixed above 1.1830.

Indicator analysis

Analyzing different sectors of time frames (TF), we see that the indicators of technical instruments on hourly and minute TFs signal a sale by consolidating the price below 1.1800. The daily TF, in turn, still has a buy signal due to the correction scale.

Weekly volatility / Volatility measurement: Month; Quarter; Year

The volatility measurement reflects the average daily fluctuations, calculated per Month / Quarter / Year.

(It was built considering the time of publication of the article)

The volatility of the current time is 37 pips, which is already considered a local acceleration relative to yesterday. At the same time, further acceleration is still likely on the market, while we are following the information and news background.

Key levels

Resistance zones: 1.1810; 1.1910; 1.2000 ***; 1.2100 *; 1.2450 **; 1.2550; 1.2825.

Support zones: 1.1700 1.1650 *; 1,1500; 1.1350; 1.1250 *; 1.1180 **; 1.1080; 1.1000 ***.

* Periodic level

** Range level

*** Psychological level