4-hour timeframe
Technical data:
The upper channel of linear regression: direction - up.
The lower channel of linear regression: direction - up.
The moving average (20; smoothed) - up.
CCI: 166.1718
On Friday, December 13, the EUR/USD currency pair started quite cheerfully. Tonight, the correction that had begun quickly ended, and a strong upward movement was resumed. So strong that by the morning, the euro/dollar pair worked out the upper line of the volatility channel for today. Such growth in the Asian trading session was provoked, of course, by the preliminary results of parliamentary elections in the UK. According to preliminary data, despite all the fears, Boris Johnson's party will be able to win the election by a large margin from the closest pursuers - the Laborites. They will also be able to form a "ruling majority", thus, if this information is confirmed, the probability of a "divorce" of the UK and the European Union at the end of January under the agreement of Boris Johnson is now 99%. Since Brexit also has a very specific relation to the European Union and, accordingly, the European currency, currency traders did not leave aside the EUR/USD pair. However, the elections in the UK will be described in more detail in the article on the British pound.
The last trading day of the week for the EUR/USD currency pair will not be too interesting. Of course, throughout the day, traders can work out the results of the elections in the UK, but we believe that the night movements for the euro/dollar will end. Of the interesting macroeconomic events planned for today, only US retail sales for November can be singled out. This indicator and its derivatives can complement a series of positive macroeconomic reports from the States, which are stubbornly ignored by traders. By the way, now that the parliamentary elections in the UK can be considered complete, the euro and the pound is "minus one" growth factor. We assume that the European currency has also grown in recent days on expectations of a victory for the Conservative Party and on expectations of speedy completion of Brexit, which everyone is already tired of. Now, when it is almost 100% likely that Brexit will take place at the end of January, it will be difficult for the euro currency to show growth based on this geopolitical factor. Also, the question is still in the air, and how much longer will market participants ignore weak macroeconomic statistics from the EU and the UK, as well as strong - from overseas? Theoretically, as much as you like, but this situation is nonsense for the currency market. The fundamental factor is one of the main drivers of the movement of any currency pair.
Meanwhile, the topic of the US-China trade negotiations, which is of interest to all, is getting a new development. Donald Trump, as usual, through social media said that the parties are close to concluding a trade deal. "We are coming very close to a big deal with China. They want it and so do we," Trump wrote on Twitter. According to unconfirmed official information, the States are ready to halve the duties on Chinese imports, which are already in effect, as well as to refuse to introduce additional duties from December 15. In turn, the States require Beijing to guarantee purchases of agricultural products for a fixed amount annually, guarantees regarding intellectual property rights and providing the United States with broad access to China's financial sector. It is difficult to say whether the negotiations are really at the final stage. Several times, Trump has already announced the proximity of signing the agreement, then a few days later accused China of "non-compliance" and imposed new duties. In any case, on December 15, we will find out how things are.
From a technical point of view, the euro/dollar currency pair resumed its upward movement, most likely, it will not continue today. Firstly, no important data will be available to traders during the day (except for one report), and secondly, traders have already shown their daily volatility today. Third, today is Friday, a good time for correction. The upward trend remains.
The average volatility of the euro/dollar currency pair is growing slightly and is now 52 points per day. The average volatility over the last 30 days rose to 43 points. Thus, the channel in which the pair can move today is limited to the levels of 1.1079 and 1.1183. And the upper line of this channel has already been worked out. Thus, we do not expect further strong upward movement. Maximum - working out the Murray level of "7/8" - 1.1200.
Nearest support levels:
S1 - 1.1139
S2 - 1.1108
S3 - 1.1078
Nearest resistance levels:
R1 - 1.1169
R2 - 1.1200
R3 - 1.1230
Trading recommendations:
The euro/dollar pair continues its upward movement. Thus, it is now relevant to buy the euro currency with the targets of 1.1183 and 1.1200 before the reversal of the Heiken Ashi indicator down, which is very likely today. The general fundamental background remains not on the side of the euro, but until the Heiken Ashi indicator turns down, the upward movement can continue, despite this. It is recommended to buy the US dollar not earlier than the crossing of the moving average line by traders with the first target of 1.1078.
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.
