EUR / USD pair: Results of the day on October 30. Merkel leaves and eurozone GDP declines

4 hour timeframe

cu4FhPg2Spou5Bw5EIm3UKv_aqOUbtwfghdlXDT-

The amplitude of the last 5 days (high-low): 98p - 77p - 85p - 55p - 47p.

Average amplitude for the last 5 days: 72p (74p).

Nothing unexpected happened on the EUR/USD pair on Tuesday, October 30th. Having repulsed several times from the critical line of the Kijun-Sen, the pair resumed, quite expectedly, a downward movement, which fully corresponds to the current trend in the instrument. The preliminary GDP value for the third quarter of the eurozone turned out to be even lower than pessimistic forecasts of only 1.7% instead of a growth rate of 1.8%. Although this is only a preliminary indicator value, there is every reason to assume that the EU economy is slowing down. One of the main topic in the past days is the departure of Angela Merkel from the post as a German chancellor. Merkel will finalize her time limit until the end, after which the party will choose a new leader. Many associate the next fall of the European currency with the events in Italy and Germany. We believe that these events are certainly important, but so far they have a very indirect effect on the euro currency. The departure of Merkel is an important political event and the budget problem of Italy is an important economic event. However, if every departure of one of the leaders from EU countries will be accompanied by a fall in the euro, the long-term outlook for the currency is only downward. Economic problems also constantly arise, as well as disagreements between EU leaders. These are not the factors that are able to exert strong pressure on the European currency but the process of Brexit, negotiations on which are stalled, and the declining GDP growth rate are good reasons to abandon euro purchases in the near future. However, we still believe that sooner or later the fall in the pair will stop, at least for a purely technical correction. Thus, traders now have to follow the trend.

Trading recommendations:

On the EUR / USD pair, the price has resumed its downward movement. Thus, short positions with a target of 1.1309 are still relevant. The reversal of the MACD indicator to the top will indicate the next round of upward correction.

It is recommended to open buy orders only after the price is fixed above the critical line, which will mean a possible change in trend for the instrument. The goal for the upward movement and in this case will be the line of Senkou Span B.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen - the red line.

Kijun-sen - the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dotted line.

Chikou Span - green line.

Bollinger Bands indicator:

3 yellow lines.

MACD Indicator:

Red line and histogram with white bars in the indicator window.

The material has been provided by InstaForex Company - www.instaforex.com