It has been a long time since I saw the main currency pair change its direction every trading day of the week. On Monday, the dollar took revenge on the euro for the ECB meeting amid the conflict in the Middle East, which inflated oil prices and increased demand for safe-haven assets. On Tuesday, the EUR/USD bulls recouped some of the losses due to the correction of Brent and WTI and the dissatisfaction of the ECB hawks with the results of the meeting of the Governing Council. On Wednesday, the "American" strengthened thanks to the Fed. On Thursday, it was time for the euro, which grew amid rumors of an orderly Brexit. On Friday, the ball was again ruled by the "bears" on the main currency pair. Investors get hot and cold, and uncertainty is to blame.

Of course, the US economy looks better than the European one. Yes, the OECD has reduced US GDP forecasts for 2019-2020 from 2.8% to 2.4% and from 2.3% to 2%, but the latest figures are still better than for the currency bloc (+1% this year). Judging by the latest macro statistics and the strong growth of the index of economic surprises, the States are showing increased resistance to trade wars, while the conflict between Washington and Beijing is likely to send Germany into recession in the third quarter. Two-thirds of the old world debt market shares are trading at negative yields, while in the US borrowing rates look quite attractive. Donald Trump and the Fed will do everything possible to continue the S&P 500 rally, while EuroStoxx does not have such serious patrons. Why are the chances of "bulls" on EUR/USD estimated such as the "bears", and maybe even higher?

OECD forecasts for the world's leading economies

For most of 2019, speculators actively built up short positions on the main currency pair due to fears of a disorderly Brexit, trade wars and expectations of an aggressive monetary stimulus from the ECB. In September, the British Parliament passed a law requiring the Prime Minister to write to the EU asking for the extension of the transition period from October 31 to January 31, if the parties fail to reach an agreement by that time. The chances of a no-deal plummeted, and the rates of European currencies, including the pound and the euro, went up.

The proximity of the next round of trade talks between Washington and Beijing, the abolition of China's duties on certain American goods, Donald Trump's readiness to conclude a temporary agreement were perceived by investors as a de-escalation of the conflict. The ECB has not been able to give the markets everything they expected from it. As a result, the closing of short positions on the euro began. "Bulls" can develop their attack when there are signs of improvement in the health of the eurozone economy. To do this, they need strong statistics on the currency bloc's business activity and Germany's business climate.

Technically, the EUR/USD pair fell into a consolidation in the range of 1.0995-1.1095. Breaking its upper limit will increase the risks of activating the Shark pattern with the target by 88.6% (1.137). On the contrary, a successful assault on the support of 1.0995 will allow the bears to continue their southern campaign towards the target by 127.2% according to the AB=CD model (1.087).