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) - sideways.
CCI: -10.3406
The EUR/USD currency pair returned to the moving average line for the second time, showing the current weakness of the bulls again, which cannot build on their success and continue to move up. We also have to note once again that the very low volatility is partly due to the empty calendar of macroeconomic events in the first four trading days of the week. More precisely, there were plenty of interesting reports during the week, but they were all political or geopolitical. And the euro/dollar pair, unlike the pound/dollar pair, does not want to react now to reports of an escalation of the US-China trade conflict or new data on the investigation into the impeachment of Donald Trump. Thus, traders continue to rest, but today, November 22, the market can finally come out of hibernation.
During the last trading day of the week, several quite interesting macroeconomic reports will be published at once. We cannot say that they will be very important, but ignoring them will not work. The day will begin with the publication of GDP in Germany. According to experts' forecasts, in the third quarter, the growth will be 0.5% in annual terms and 0.1% in quarterly terms. These are small numbers, but so far it is still an increase. Further, indices of business activity in the sphere of production, services and composite values for November will be published in Germany. These figures will not be final, but only preliminary, but traders will be able to understand what results are moving towards the end of November. According to the forecast values, all indices of business activity in Germany may improve slightly. However, by and large, such a change will not change anything at all. Business activity in the manufacturing sector will remain well below the mark of 50.0, while the services sector will remain above the mark of 50.0. Literally, in half an hour, three similar indexes will be published in the European Union, and the picture is approximately the same here. Experts expect a slight improvement, but not drastic - business activity in the industry will remain in the "recession zone". And the same three indexes of business activity will be published after lunch in the States, also preliminary values. In America, business activity, at least according to Markit, is much better. All three values are again projected with a slight increase, and all three are confidently located above the mark of 50.0. If there are no surprises on these 9 reports, the US currency may receive small support in the afternoon, but volatility based on these publications is unlikely to increase.
The key event of the day is Christine Lagarde's speech at the European Banking Congress in Frankfurt. This is one of the first speeches of Christine as head of the ECB, and traders continue to wait hard for the head of the ECB to outline the prospects of the monetary policy of the regulator. According to many experts, Christine Lagarde will differ in the manner of government. The differences with Mario Draghi will be closer cooperation with members of the Monetary Committee, and decisions will be made with more careful consideration of the views of the heads of other EU Central banks. It is also expected that at the next meeting, the ECB will not lower rates even lower, although macroeconomic statistics do not show any signs of improvement. However, all this is speculation. If Christine Lagarde herself had clarified these issues, then markets could have perked up and traded more actively. If the speech of the head of the ECB will be neutral, most likely, the nature of trading today will not change.
From a technical point of view, the pair is corrected again, and if it manages to stay above the moving average line, the upward movement may still resume to the Murray level of "6/8" - 1.1108. If not, then the initiative will pass into the hands of the bears, and the euro will return to a downward trend with the prospect of falling to two-year lows.
Nearest support levels:
S1 - 1.1047
S2 - 1.0986
S3 - 1.0925
Nearest resistance levels:
R1 - 1.1108
R2 - 1.1169
R3 - 1.1230
Trading recommendations:
The euro/dollar pair is in a downward correction again. Thus, buy orders with a target of 1.1108 are now relevant if there is a rebound from the moving average. However, given the minimal volatility, we still recommend being careful with opening any positions. It is recommended to buy the US currency not earlier than the consolidation of bears below the moving average line, and preferably below the Murray level of "5/8", with the first target of 1.0986.
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.
