4-hour timeframe
Technical details:
Higher linear regression channel: direction - upward.
Lower linear regression channel: direction - upward.
Moving average (20; smoothed) - sideways.
CCI: -90.7903
Recently, we often analyze the figure of Donald Trump in our articles, discuss his chances of winning the election in November, as well as the prospects of America with and without Trump. We still believe that a lot will depend on the results of the November 3 elections for the dollar, the United States, and the world. It has happened in recent years that the United States plays a very significant role in the international arena. Their actions and opinions cannot be ignored, even if they are fundamentally wrong, unfair, or absurd. These are the realities of modern international diplomacy. Washington can quite calmly declare that, conditionally, South Korea is engaged in uranium enrichment and that it cannot be engaged in this, since it is a threat to the security of the entire world, and threaten sanctions if Seoul refuses to voluntarily give up its "outrage". And what are sanctions if not for the wealthiest country? This is a blow to the economy, a strong blow. It is China or Russia that can relatively painlessly withstand US sanctions or duties or other restrictions. But this judgment applies only to large countries with strong economies and military power. Countries that can also fight back from a position of strength. Therefore, a strong and powerful state mustn't be headed by a dictator who wants to take over the whole world or just make it dance to his tune, but first of all by a diplomat who knows how to negotiate and conduct international activities wisely, so that his country flourishes, but others do not feel an eternal desire to annoy his country. And this is exactly the quality that Trump does not have. The US President believes that dialogue with China, Russia, and others can only be conducted from a position of strength and threats. And this strategy can only work with Brazil, Mexico, or Guatemala. Therefore, all as one, world experts say that during the Trump presidency, Washington's relations with Russia and China have significantly deteriorated. And if he remains at the helm of the country, they will continue to deteriorate, since it is unlikely that the US leader will wake up one fine morning with the desire to establish relations with everyone and make friends. Thus, the prospects for the whole world are not very bright. At best, these are ongoing trade and cold wars if Trump remains president of the United States.
Although political ratings are now not in favor of Republican Trump, many experts agree that the US leader will not leave his post just like that. First, many fear that Trump will try to do everything possible to spoil the November election. He can give hidden orders to his fellow party members and supporters to block the work of electoral precincts in those regions in which almost 100% probability would have won Joe Biden. Or, for example, using his power to order certain states or counties to be quarantined. Many Republican governors may follow him, who will also fight for power. All this will be in the style of Trump, who does not accept the word "impossible". Trump is ready to use any means to achieve the goal. It is not necessary to go far for the proof of these words. Just recently, Trump was going to use army forces to disperse protesters across the country, referring to the law of 1807 on the suppression of riots, which has never been applied in the United States. He was barely dissuaded from such a step by the Defense Minister and other high-ranking officials. However, not only Trump but also Joe Biden is counting on the help of the army. The Democratic candidate, if he wins the election, is going to resort to the help of the US military to "throw" Trump out of the White House. And all these skirmishes between presidential candidates take place not in any country that is difficult to call civilized and democratic, but in the United States. It turns out that Biden is quite seriously suggesting that Trump may simply refuse to leave the White House if he loses the election. Many traders and readers may say: "this can't be happening". It can. According to American law, the president is not required to leave the White House, even if he lost the election. That is, of course, this does not mean that he will remain president after the term allotted to him, however, he can challenge the election results in the courts, can initiate re-elections in some states where, in his opinion, there were violations. To do this, he does not need to present any evidence, which Trump, however, has never pampered anyone. Thus, the fears of Joe Biden, which he shared a few months ago, are not groundless at all. Donald Trump, who initially clearly intended to win the election fairly, presenting the results of his work for 4 years, now clearly will try to win by any means. And all this will mean not just a political crisis (what is already happening in America), but a constitutional one, when the constitution, the laws of the country, and democracy will be put at risk. In general, as in the case of the UK, the "Brexit" epic dragged on for many years, so in the case of the US, the "Donald Trump" epic can drag on for many months.
On the third trading day of the week, a fairly large number of different events are planned again. The European Union will publish today the value of inflation for May, which may remain at a minimum level of 0.1% y/y. In monthly terms, deflation of -0.1% may be recorded. Also today, ECB Vice-President Luis de Guindos will speak, who often pampers market participants with very serious and important statements. In the afternoon, Federal Reserve Chairman Jerome Powell will address Congress (second performance). The first one took place the day before and you can read about it in a separate article. Yesterday, Powell's speech caused quite a strong reaction to the market, the US currency rose significantly after it. Therefore, today there may be something similar.
In general, we continue to insist that the US currency should continue to grow, despite any statements by the ECB and Fed chairmen and representatives, despite any macroeconomic statistics. The euro currency has returned to the area below the moving average line, so the trend is now again downward.
The average volatility of the euro/dollar currency pair as of June 17 is 115 points. Thus, the value of the indicator is still characterized as "high", thanks to the last two weeks. We expect the pair to move between the levels of 1.1147 and 1.1377 today. A reversal of the Heiken Ashi indicator back up will signal a possible new round of upward correction.
Nearest support levels:
S1 – 1.1230
S2 – 1.1108
S3 – 1.0986
Nearest resistance levels:
R1 – 1.1353
R2 – 1.1475
R3 – 1.1597
Trading recommendations:
The EUR/USD pair returned to the area below the moving average line. Thus, at this time, sell orders with the goals of 1.1147 and 1.1108 are again relevant before the reversal of the Heiken Ashi indicator back up. It is recommended to return to buying the pair not before fixing the price above the moving average with the goals of 1.1353, 1.1377, and 1.1475.
