Yesterday's trading on the main currency pair of the Forex market was again determined by the COVID-19 theme. On the one hand, investors' expectations of the early start of the coronavirus vaccine created a positive mood in the market. On the other hand, the ongoing surge in the second wave of COVID-19 in the United States and Europe significantly affected optimism and forced market participants to move into protective assets.
In the United States, since the beginning of the pandemic, about 12 million infected people have been recorded, with deaths close to 250 thousand. The situation in many European countries is no better. In terms of the number of infections, the anti-record is broken by France, where about two million people have been infected with the virus since the beginning of the pandemic, and the death toll from COVID-19 is approaching 47 thousand. The situation on the Apennine Peninsula remains no less difficult, with 730 deaths recorded over the past 24 hours. The official law on quarantine measures was also adopted in Germany, where the situation is not as difficult as in France, but the German authorities preferred to act ahead of the curve. In general, the whole world is waiting for an effective vaccine, and the World Health Organization (WHO) again stated that there is no other solution to the problem of the spread of the coronavirus pandemic, other than vaccination of the population.
Yesterday's statistics from the US housing market and the speeches of senior officials of the Federal Open Market Committee did not have a significant impact on the course of trading. Today, investors' attention may be attracted by another speech by ECB President Christine Lagarde, as well as data from the United States on the number of initial applications for unemployment benefits. For more information about these and other events, see the economic calendar.
Daily
In yesterday's article on EUR/USD, it was not for nothing that it was said that the tasks for the euro bulls have become more complicated. Attempts by players to update the maximum trading values on November 17 failed, the quote did not reach 1.1893 and then turned down. As a result, a candle with a long upper shadow and a small bearish body appeared on the daily chart, which turned out to be inside the previous bullish one. Anyway, yesterday's candle is considered a reversal, but will the market win it back?
In today's trading, the pair was already declining to 1.1831, where it found support in the form of the red line of the Tenkan indicator Ichimoku, and then returned to the opening price of trading. The bullish scenario will continue only if the maximum values of the last two trading days are reached and the session closes higher. However, even in this case, unambiguous conclusions may be premature, since the next and rather strong resistance area of 1.1900-1.1920 passes slightly higher. Bears need to lower the pair under the Tenkan line and close the trades lower. Another more obvious factor is that the market sellers will return prices within the Ichimoku cloud.
The situation is extremely interesting and far from clear, so you should consider both options for positioning the euro/dollar. If the support area of 1.1835-1.1815 shows reversal patterns of candle analysis on the four-hour and (or) hourly timeframes, a signal will appear to open long positions. Sales will become relevant if there are appropriate signals after attempts to break above the levels of 1.1850 and 1.1865.
