Hello, dear colleagues!
In yesterday's trading, the main currency pair euro/dollar continued its inglorious fall. Bearish sentiment on EUR/USD is so strong that the bulls are unable to make a more or less intelligible adjustment.
And then yesterday's data on the business sentiment index from the ZEW Institute in both Germany and the euro area as a whole turned out to be frankly bad. Although I am not sure that the situation would have changed dramatically in favor of the single European currency with good reports from the ZEW Institute. A trend is a trend.
Since I mentioned yesterday's data, I should also mention today's events. No statistics are expected from the eurozone, except for the balance of payments without seasonal adjustments. However, there will be a whole stream of information from the US today. In addition to data on producer prices, bookmarks of new homes and building permits, speeches are expected from members of the Open Market Committee Mester, Kashkari, Kaplan, and the President of the Federal Bank of Atlanta Bostic.
However, the most important event of today, and perhaps of the whole week, will be the publication of the FOMC minutes at 20:00 (London time). Perhaps this event will be the reason for a decent corrective rollback. We are not talking about changing the trend yet. But this will only happen if the protocols are negative for the US currency.
In the meantime, let's look at the technical picture, which at the time of writing is observed for the main currency pair, and analyze several charts of the euro/dollar.
Daily
Yesterday's drop was quite impressive. The pair dropped to 1.0785 and ended Tuesday's session at 1.0790. Now the Fibonacci grid is stretched for a downward movement of 1.1094-1.0785.
In fact, nothing has changed. It would be nice to wait for a correction in the area of 1.0858-1.0879 and consider selling from this zone. Especially if there is a confirmation in the form of a bearish candlestick pattern or models. There are no other ideas.
H4
In this timeframe, there is a bullish divergence of the MACD indicator, however, I do not recommend purchases and even against such a strong trend. It's too risky!
At the moment, the pair is trading in a relatively narrow range. Before important events such as the FOMC protocols, consolidation often occurs, but in the last couple of years, movements begin before important news is released.
In principle, with the appropriate candlestick signals, it would be possible to buy aggressively and riskily from the current levels. At the same time, the stop is small and the goal is around 1.0875. As you can see, there is a 50 simple moving average and a broken support level of 1.0879. Thus, the idea of sales after the rise to 1.0879 is confirmed on both the daily and 4-hour charts. If we consider opening short positions at more attractive prices, this is the area of 1.0900-1.0920. However, at the moment, it is hard to believe that the pair, with such a strong downward trend, will be able to make such an impressive upward movement. One hope for the Fed's minutes.
H1
But on the hourly chart, the quote shows the readiness to make a correction. Another question is whether it will be possible to do this or not.
At the end of the review, the pair is growing moderately. If it is possible to rewrite the highs of the Asian session at 1.0803, I do not rule out a rise in the price zone of 1.0821-1.0833, where the 50 simple and 89 exponential moving averages are located.
In my personal opinion, the selected area can be considered the closest to open short positions. Above the sale and on this chart, it should be considered near 1.0879, where in addition to the broken support level, there is also 200 EMA. If you select the second zone for sales, it is 1.0860-1.0880. Most often, such significant levels as the ex-support of 1.0879 are given a rollback. We will find out how it will be this time after 20:00 (London time) when the Fed's minutes will be published.
Good luck!
