The EUR/USD currency pair started falling on Thursday, which we warned about in previous articles, but this fall is quite weak. The price continues to be located above the moving average line, so the upward trend is still maintained. Although we still believe that the growth of the European currency (or the fall of the US dollar?) in the last two weeks was 70 percent, it should be recognized that almost all technical indicators signal "up." Thus, there are certain reasons for the pair to grow. However, we still expect a more powerful fall, and that's why.

First, more than one report on inflation in the US is needed for the dollar to fall by 500–600 points. Second, the decrease in the probability of an aggressive increase in the key rate in the US is a good reason, but again, not so much that the pair fell for two weeks in a row. Third, the geopolitical factor remains in force, so new sales of risky currencies are not excluded based on the escalation of the conflict between the Russian Federation and the West and the military conflict in Ukraine. If we talk about geopolitics, absolutely nothing has changed in recent weeks. The West is also pumping Ukraine with weapons, helping it to survive the conflict. The APU has already successfully recaptured more than 50% of the territories lost after February 24, 2022. The origin of the rocket that fell on Polish territory is still unknown, but almost all EU countries and the United States have said that Russia is to blame for this. Therefore, the geopolitical situation may worsen again this winter. The G-20 summit in Bali yielded absolutely nothing. Presidents Zelensky and Putin did not even visit it. Vladimir Zelensky spoke at it via video link, and Vladimir Putin delegated Sergey Lavrov to the summit, who just made a speech and left the event very quickly. Thus, no negotiations with either the Ukrainian or Russian sides failed.

Republicans will make life difficult for Democrats in the next two years.

Meanwhile, the first official results of the congressional elections have finally appeared in the United States. It became known that the Republicans had crossed the threshold of 218 seats in Congress, which allowed them to control the Lower House. However, control of the Upper House remains with the Democrats. The American media have already written that this state of affairs will make life very difficult for President Biden and all Democrats. However, it is quite fair that all power is not concentrated in the hands of one party. Now the leaders of both parties will have to negotiate with each other and not just "take into account" the other side's opinion. Also, the American media are confident that, after the victory of the Republicans, Nancy Pelosi's career as speaker has ended. Instead, Kevin McCarthy was nominated by the Republican Party. They also note that the Republicans will not have an "easy life" either since their gap from the Democrats is minimal, only about ten mandates. At the same time, Republicans will slow down the Democrats' "agenda," making life difficult for them.

Political experts predict fierce battles over tax policy, government spending, and financial and military assistance to Ukraine. Joe Biden has already congratulated the Republicans on their victory in the House of Representatives and said he is ready to work closely with them on the issue of helping American families. It is also reported that Republicans can use their victory to resume a whole series of investigations concerning Joe Biden personally, including his son Hunter, to complicate the president's life in the 2024 elections, in which he will run for president again. Donald Trump has already submitted an official application, so we can expect a "rematch" in two years. There is no doubt that Trump will use all the weapons available to him to recover from the defeat of 2020. Recall that Trump never acknowledged this defeat, calling the election "the most dishonest in the history of America." Thus, we are waiting for a very fun two remaining years of Biden's presidency and an attraction called "elections."

The average volatility of the euro/dollar currency pair over the last five trading days as of November 18 is 141 points and is characterized as "high." Thus, on Friday, we expect the pair to move between the levels of 1.0179 and 1.0479. The upward reversal of the Heiken Ashi indicator signals the resumption of the upward movement.

Nearest support levels:

S1 – 1.0254

S2 – 1.0132

S3 – 1.0010

Nearest resistance levels:

R1 – 1.0376

R2 – 1.0498

R3 – 1.0620

Trading Recommendations:

The EUR/USD pair has started to adjust. Thus, now we should consider new long positions with targets of 1.0479 and 1.0498 in the case of a reversal of the Heiken Ashi indicator upwards. Sales will become relevant by fixing the price below the moving average line, with targets of 1.0197 and 1.0132.

Explanations of the illustrations:

Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction.

The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now.

Murray levels are target levels for movements and corrections.

Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators.

The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.