Hello!
As it became known yesterday, the European Central Bank (ECB) kept the interest rate at zero, and this decision coincided with the expectations of market participants. At the same time, the purchase of assets will continue as necessary.
Most likely, soon, the ECB will refrain from changes in monetary policy and take a wait-and-see position. As for the press conference of the President of the European Central Bank, Christine Lagarde, it turned out to be quite faceless. Lagarde chose to sidestep many thorny issues and left investors to their thoughts and arguments.
Simply put, with weak macroeconomic indicators in the euro area, the option of easing monetary policy is not excluded, in which the main interest rate will be lowered, as an option, by 10 basis points and will move into negative territory. In this scenario, in the medium and long term, the single European currency will be under pressure, and the EUR/USD pair will be under the control of bears.
If the statistics from the eurozone are neutral or moderately positive, the ECB will continue to monitor the further situation but will refrain from changes in monetary policy. In my personal opinion, such conclusions can be drawn from yesterday's press conference of Christine Lagarde. However, as noted above, the new ECB President, for the most part, refrained from specifics.
Well, let's move on to the price charts of the main currency pair of the market and see what are the prospects for closing the next trading week.
Daily
Yesterday's candle "Long-legged Doji" perfectly reflected the mood of investors and the reaction to the speech of the head of the ECB. In a word - uncertainty. In its essence and form, yesterday's candle is a reversal model of candle analysis, especially since it appeared in a strong technical zone and not so far from the peaks.
But what are we seeing today? At the moment, the euro/dollar pair shows a very decent strengthening and tests the strength of the strong technical resistance level of 1.1178, as well as testing for a breakdown of at least a strong 233-exponential moving average. Now in the area of 1.1175, there is a struggle of the warring parties, the winner of which we will know only after the close of trading. The closing price can clarify a lot!
Judging by the daily chart, the targets are at the top of 1.1200 and 1.1250. In turn, the bears will try to push the quote to 1.1155 and 1.1115.
H4
On the 4-hour timeframe, the pair is trading in the range of 1.1102-1.11199. It is characteristic that only 1 point fell short of the strong and significant technical level of 1.1200. In my opinion and the experience accumulated over the years, this may indicate that the players on the rate increase will face very serious problems in the price area of 1.1200-1.1250. If so, after the appearance here (or under 1.1180) of bearish candlestick analysis models, you can try neat sales with small stops and goals. So far, only counting on the correction. On the turn, it's hard to judge after the appearance of clear signals from higher timeframes, in the first place on the weekly chart.
At the moment, the most relevant are the purchases of the euro/dollar, which I think is inappropriate to open at the peak of the market, and even before the close of weekly trading.
I recommend staying out of the market. Do not go into hell, let the market shark close the auction. On Monday, we will summarize the results of the current five-day period, calmly assess the situation and decide on positioning on the main currency pair of the forex market.
Have a good week and a good weekend!
