At yesterday's trading, the main currency pair of the Forex market showed growth, which can be considered moderate with good reason. Since the US Federal Reserve System (FRS) does not see the need to rush to tighten its monetary policy, the expectations of some investors that this will happen in the middle of next year are significantly reduced. On the other hand, the tightening of the Fed's monetary policy is already partly embedded in the value of the US currency. Thus, the US dollar has got into a rather ambiguous situation, and this is why it is trading extremely unstable. Some large commercial banks believe that the Fed may announce a program to reduce quantitative easing as early as December this year. The analytical departments of other major global commercial banks predict that this will happen later, around the middle of 2022. At the same time, I would like to draw attention to the fact that he announced the reduction of QE. A fairly decent period may pass before its actual start, during which the economic or epidemiological situation may change.
If events develop exactly according to this scenario, I do not rule out that the Fed will reverse course and declare that as a result of the current (at that time). However, the time for tightening monetary policy is not yet the right time. If we talk about other leading world central banks, everyone will be waiting for the first step to tighten monetary policy from the Fed. It is unlikely that anyone will risk tightening monetary policy before the Fed does it first. However, we'll wait and see. There are too many factors that can affect the change of decisions and (or) the course of monetary policy. In addition, despite the current active recovery of the world and American economies, the epic with COVID-19 is not yet completely over, which means that a new outbreak of coronavirus cannot be ruled out, especially since we are witnessing the constant appearance of new strains of this damned pandemic.
Today is a very busy day for the euro/dollar currency pair with macroeconomic reports. From the eurozone, I recommend paying attention to the consumer price index. After lunch, reports on retail sales will be received from the United States, and the consumer sentiment index from the University of Michigan will also be published. All today's statistics, the time of its release, and forecasts for published indicators can be found in the economic calendar.
So, as already noted at the beginning of today's article, according to the results of yesterday's trading, the EUR/USD currency pair declined. However, there were no significant changes. The path of the euro/dollar in the north direction is still blocked by the red Tenkan line of the Ichimoku indicator. It applies to the near-term bullish prospects of this trading instrument. The opposing side does not succeed in a true breakdown of the strong and significant technical level of 1.1800 for the market. So yesterday's trading, despite the decline in the quote, closed at 1.1812. Because neither side can solve its problems, we can only wait or consider opening positions in both directions, but so far with small goals. I recommend using the first option for those who are relatively new to the market and those who do not want to take risks. For the rest, I suggest considering purchases after a short-term decline to the area of the key support level of 1.1800 or after fixing above yesterday's highs at 1.1850. Sales will become relevant after the appearance of the corresponding candle models on the four-hour or hourly charts. I recommend trying from the price zone 1.1820-1.1840. In more detail, taking into account the closing price of the current week, we will discuss trading ideas for EUR/USD on Monday.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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