In yesterday's trading, the US dollar showed a significant drop against the single European currency. In general, it should be noted that on the first day of weekly trading, the market was dominated by risk sentiment, caused by an inexplicable optimism that a new package of stimulus measures could be adopted in the United States before the presidential election. In particular, the Speaker of the House of Representatives of the US Congress, Nancy Pelosi, did not rule out this possibility. However, she also noted the many remaining disagreements on this issue with the administration of President Trump. As for yesterday's speech by Federal Reserve Chairman Jerome Powell, he touched on the issue of issuing a digital currency. According to the head of the Fed, this possibility is being considered, however, this requires careful study and great caution.
Further, the European Union is preparing to impose new tariffs on imports from the United States of America for four billion dollars annually, in response to the introduction of US duties on goods from the European Union. The EU is due to receive official approval from the World Trade Organization (WTO) next week. Let me remind you that the demand of the EU and the US arose regarding subsidies to the world-famous Boeing company. Thus, in addition to China, the United States has worsened trade relations with its European allies.
As for the COVID-19 pandemic, it does not subside. As of last night, there are already more than 40 million people infected with a new type of coronavirus infection in the world. The first place in the number of infected people is held by the United States, followed by India and Brazil. In fourth place in terms of the number of infected people was Russia. Of the European countries, the most difficult situation is observed in Belgium and the Czech Republic. Belgian hospitals are overflowing with patients infected with COVID-19, which is why non-urgent operations are being postponed. Belgian authorities have imposed a curfew, and catering establishments have stopped working for one month.
In this situation, the prospects for the world's leading economies look disappointing. But China, where COVID-19 began to spread around the world, is experiencing an economic recovery. One can only imagine how furious this is with the "great friend" of the Celestial Empire, Donald Trump. However, he now has slightly different problems, since the gap between him and presidential candidate Joe Biden has not yet been reduced.
Daily
If we go to the technical picture of the main currency pair and put aside all these assumptions that the growth occurred against the background of Nancy Pelosi's comments and investors' desire for risk, we see that the level of 1.1700 continues to play as support. This mark is mentioned in every review for EUR/USD, and yesterday it was from 1.1702 that the pair started in the north direction, closing Monday's trading at 1.1767. Yes, it was not a typical Monday, when the market is sweetly stretching after the weekend and slowly swaying. It is becoming more interesting to watch how the auction will be held in the future.
Although the pair was fixed under the Tenkan and Kijun lines of the Ichimoku indicator for more than three candles in a row, as a result of yesterday's growth, the quote returned higher, which may indicate its further growth. At the same time, active resistance to attempts to continue the rise is provided by the 50 simple moving average, which is colored blue on the chart and is located at the level of 1.1794. It was the 50 MA that stopped yesterday's rise and pushed the price down. To continue growth, it is necessary to break through this moving average, then break through the resistance of sellers at 1.1830 and bring the price up from the daily Ichimoku cloud. Bears, in my opinion, have a more difficult situation, which means that they need to return the course to the Tenkan and Kijun lines, breakthrough 1.1700, and with the mandatory fixing under this important mark.
Trading recommendations for EUR/USD:
Given that the pair is thrown up and down, the situation and technical picture for EUR/USD is constantly changing. At the moment, in my personal opinion, there is a high probability of continuing yesterday's upward movement, so the most priority positioning is buying, which is better to consider short-term declines in the price zone of 1.1765-1.1755.
At the same time, the probability of effective sales remains, which will become relevant after the appearance of bearish candle signals near 1.1800 on the four-hour and hourly timeframes.
