EUR/USD – 4H.
As seen on the 4-hour chart, the EUR/USD pair closed above the correction level of 100.0% (1.1106), indicating the intention to continue the growth on Friday. Together with this closure, the pair also "overtook" the upward trend channel, which rises a little slower. One way or another, a new buy signal has been received and now traders can count on further quotes growth in the direction of the level of 1.1164. Emerging divergences are not observed today in any indicator, and the consolidation of the euro/dollar pair under the Fibo level of 100.0% will work in favor of the US dollar and some fall in the direction of the correction level of 127.2% (1.1024).
While the US Congress is in full swing investigating the possible pressure of Donald Trump on the presidents of some countries (Ukraine, Australia) in order to remove his main rival Joe Biden from the election race, and Trump himself is in conflict with Turkish President Erdogan because of the military conflict in Syria, the euro currency is lulling in economic informational background from the USA and the European Union. There is almost no news related to the euro/dollar pair now, and traders even have to pay attention to Brexit, which over the past three years has been reflected mainly on the chart of the GBP/USD currency pair to find reasons to open deals. Since so far everything has been going smoothly regarding Brexit, London and Brussels have been able to agree, which was confirmed by Johnson and Juncker, the euro also rose slightly on this news. Also yesterday, a strong drop in industrial production in America was recorded, which could not but affect the US dollar.
However, constantly on the optimism of traders, the euro currency will not be able to grow. Shortly, regular meetings of the Central Banks of the EU and the United States will be held, at which the issues of reducing key rates will again be on the agenda. Moreover, according to many economists, reducing the rate in America is practically a settled matter. Given yesterday's report on industrial production, I also believe that the rate will again be lowered by 0.25%. Since this will be the third rate reduction, the global downtrend may continue to show signs of a reversal in favor of the European currency. And the more the Fed will lower the rate, it can reach 0% in the future, as Donald Trump wants, the better the euro will feel. In the eurozone, things are frankly bad, but at his last meeting, Mario Draghi is unlikely to go for a new easing of monetary policy. Most likely, changes in it should be expected already with Christine Lagarde at the head of the organization.
What to expect from the euro/dollar currency pair today?
On October 18, traders may well expect the pair to continue growing towards the level of 1.1164, which is the maximum from August 26. The information background is unlikely to support one of the currencies today, thus, the closing of quotations under the level of 100.0% will be regarded by me as the entry of traders for correction at the end of the week and will expect a fall in the direction of 1.1024.
The Fibo grid is based on the extremes of May 23, 2019, and June 25, 2019.
Forecast for EUR/USD and trading recommendations:
I recommend selling the pair with a target of 1.1024 if the close is made below the level of 1.1106 (100.0% Fibonacci). A stop-loss order above the level of 1.1106.
I recommend holding the pair's already open purchases with a target of 1.1164.
