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: 93.8712
The last trading day of the first week of December has come. And to this day, the EUR/USD currency pair is coming in a completely ambiguous state. Yesterday, we said that the reaction of traders to the published macroeconomic data this week was not always logical, and sometimes simply absent. Thus, we assumed that market participants now either do not pay attention to macroeconomic statistics, or the market is too "thin" and the transactions of traders reacting to the news are covered by the transactions of large players who buy a particular currency for their own needs and purposes. In light of such findings, today's data package, which is due to be published in the States, becomes much less interesting, although it is full of important and interesting information. Now traders need to guess whether the majority of market participants will work out data from overseas? But anyway, we cannot pass by such important reports that will be released today in the United States.
The least significant report today is the unemployment rate. Recall that it has been at its lowest levels in the United States for several decades, but traders rarely pay attention to this indicator, since unemployment itself does not matter, the strength of the labor market and the strength of the economy matter. Unemployment only reflects the burden on the country's budget due to the payment of unemployment benefits. A more important indicator is the average wage. The more people earn, the more they spend, which is good for any economy and spurs inflation. The forecast is 3% y/y in November. Even more important is the number of jobs created outside the agricultural sector or Nonfarm Payrolls, with a forecast of 180,000. From our point of view, the forecast is very high, and the real value will be lower, especially given the failed indicator of the state of the private sector of the labor market from ADP. The latest will be the University of Michigan consumer confidence index for December with a forecast value of 96.5, which is slightly less than a month earlier. Thus, the greatest concern is the Nonfarm Payrolls, which can significantly lag behind its forecast value. And in this case, traders will be able to count on some growth of the euro/dollar pair today, as weak NonFarm will not be in favor of the US dollar.
Meanwhile, the list of countries on which Donald Trump imposed trade duties or deprived of trade preferences may expand soon. Turkey, China, Argentina, and Brazil are now on the list. They may be joined by France, as well as NATO countries, which, according to Trump, contribute an insufficient amount of money to the defense organization. "Many countries are close and getting closer to the necessary level of NATO funding. And some are not so close, and we can take measures related to trade. It's not fair: they get protection from the US and do not increase spending," Donald Trump said. Thus, knowing the manner of conducting international affairs of Trump, it is possible to count on the introduction of new duties soon. As for China, the situation remains confusing and tense. According to many insiders, negotiations are ongoing, but there were no details. And until December 15, it's not so much time. And on December 15, Trump will need to decide whether to impose new trade duties against China for $160 billion or not. And the second option is possible if there is significant progress in the negotiations and the proximity of the signing of the agreement or if the deal is signed before December 15. We still believe that the option with the introduction of new duties has a higher probability.
The overall technical picture of the euro currency now implies the continuation of the upward movement, since absolutely all trend indicators speak in favor of this. The price came back to the Murray level of "4/8" - 1.1108, and only overcoming this target will allow traders to continue to trade on the increase. At the same time, the pair's movements remain ragged, with frequent pullbacks and corrections, low volatility, and rarely coincide with the nature of the news.
As for the average volatility of the euro/dollar pair, it is now 49 points. Thus, in the maximum case, we can expect today to move between levels of 1.1055 and 1.1153. Macroeconomic data from overseas may trigger more volatile trading, but we believe the more realistic target for today is the Murray level of "5/8" - 1.1139.
Nearest support levels:
S1 - 1.1078
S2 - 1.1047
S3 - 1.1017
Nearest resistance levels:
R1 - 1.1108
R2 - 1.1139
R3 - 1.1169
Trading recommendations:
The euro/dollar resumed its upward movement. Thus, now purchases of the euro with targets between 1.1139 and 1.1153 remain relevant. The reversal of the Heiken Ashi indicator downwards will indicate a new round of corrective movement. It is recommended to return to the EUR/USD pair sales not earlier than the reverse consolidation of bears below the moving average line.
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.
