4-hour timeframe
Amplitude of the last 5 days (high-low): 20p - 47p - 87p - 27p - 49p.
Average volatility over the past 5 days: 53p (average).
Following yesterday's retreat from monthly highs, the EUR/USD pair resumed the upward movement, which is still identified as rather weak. Bulls continue to resist the bears with all their might, but on the whole neither the first nor the second now have the advantage. The paradoxical situation seems to have been left behind, since the euro/dollar pair still managed to move away from the area of two summer lows. However, this does not mean that an upward trend will now begin to form. Neither the bulls nor the bears have a sufficient number of grounds for action.
Meanwhile, traders continue to selectively tear away all the macroeconomic data at their disposal. Recall that yesterday the euro had good chances to show strong growth against the US dollar, as the American report on the change in the number of employees in the private sector, as well as the index of business activity in the ISM services sector failed at the same time, while reports from the eurozone showed a slight improvement compared to the previous period. However, the price of the pair fell instead of continuing the upward movement. Today the situation looks completely opposite to yesterday. If the report on EU GDP for the third quarter fully coincided with the forecast values of +1.2% Y/Y and + 0.2% Q/Q, then the data on retail sales for October were much weaker than the weak forecast. Experts expected an increase of 2.2% Y/Y, compared with the previous month +3.1% Y/Y. In reality, everyone saw the figure of +1.4% Y/Y. However, just today, traders decided that it was not worth selling the euro on the basis of these macroeconomic data. Thus, we are forced to say that either market participants do not pay any attention to macroeconomic publications at all, or the market is now extremely thin (which is partly confirmed by weak volatility), therefore, any reaction of traders to this or that news is easily blocked by transactions of large players who do not seek profit due to exchange rate differences. It's all the more interesting to see what will happen on the market tomorrow, when the United States will publish a large package of important macroeconomic information, which includes unemployment, average hourly wages, NonFarm Payrolls, and the University of Michigan consumer confidence index. Especially considering the fact that the forecast for Nonfarm is quite high - 180,000, and the less significant report on the labor market by ADP failed this week. Based on this, it can be assumed that tomorrow's statistics from across the ocean will also disappoint traders, and if it is unlikely that anyone will pay attention to the unemployment rate (this indicator, although important, but more statistical), then the value of Nonfarm is less than 180,000 almost certainly disappoint traders. It remains only to understand whether traders will react to what is happening tomorrow or will the pair move in absolute disagreement with the nature of the published macroeconomic information?
Meanwhile, according to assurances from various sources, including the media and anonymous sources close to the participants in the negotiation process, negotiations between China and the United States continue despite the aggravation of relations between the countries due to two laws passed by America, which provoke indignation of the Chinese government . Nevertheless, sources assure that although negotiations have been difficult, they will still continue. However, no specific information is provided. That is, it remains completely incomprehensible at what stage of the negotiations, what concessions the parties made, on what issues have yet to be agreed, and most importantly, what are the chances that Beijing and Washington will be able to agree before December 15? We still believe that the parties take one step towards each other, and then three back. Over the past year, we have already received several times reports that the parties are close to consensus and each time it all ended with an escalation of the conflict, recriminations and the introduction of new trade duties and sanctions. Thus, in the best case, Trump simply does not introduce a fee of another $160 billion on December 15, motivating this decision with a desire to continue the negotiation process. However, knowing Trump's manner of doing business, it can be assumed that duties will be introduced just so that China does not take time and is more accommodating.
From a technical point of view, the upward movement is continuing now, but we still believe that the euro/dollar pair has few fundamental reasons for this. Thus, traders can continue with not actively purchasing the euro (no one can forbid them), but, from the point of view of macroeconomic statistics, the euro's growth is not justified. And even the technical picture, which implies continued growth, in practice looks like regular pullbacks, open flat periods, followed by a sharp but slight increase.
Trading recommendations:
The EUR/USD pair retains the prospects for an upward movement, but volatility is low again today. Thus, it is still recommended to buy the euro very carefully, since it is growing very reluctantly. Tomorrow there will be a lot of important and significant information, but not the fact that traders will work it out. It will be better to sell the euro, which has more fundamental reasons, after traders overcome the critical Kijun-sen line.
Explanation of the illustration:
Ichimoku indicator:
Tenkan-sen is the red line.
Kijun-sen is the blue line.
Senkou Span A - light brown dotted line.
Senkou Span B - light purple dashed line.
Chikou Span - green line.
Bollinger Bands Indicator:
3 yellow lines.
MACD indicator:
Red line and bar graph with white bars in the indicator window.
Support / Resistance Classic Levels:
Red and gray dotted lines with price symbols.
Pivot Level:
Yellow solid line.
Volatility Support / Resistance Levels:
Gray dotted lines without price designations.
Possible price movement options:
Red and green arrows.
