4-hour timeframe
Technical details:
Higher linear regression channel: direction - up.
Lower linear regression channel: upward direction.
Moving average (20; smoothed) - down.
CCI: -253.4152
Well, dear traders, although the New Year will come in a week, the beginning of the week can rightly be considered as pre-holiday. Firstly, because it precedes the New Year holidays, secondly, because it will celebrate Christmas, thirdly, because the calendar of macroeconomic events practically does not contain any important events and publications. On Tuesday and Wednesday, Christmas Eve will be celebrated and, in fact, Christmas itself and for these days no publications are planned at all, even secondary ones. Thus, more than half of the days in a week can be considered a weekend even if trading continues. Thus, we can well expect a fall in the volatility of the EUR/USD currency pair (and other pairs and instruments), since most of the traders will leave the market on the eve of the holidays. Accordingly, the market becomes "thin", and trading takes place with low volatility. However, the most important publication awaits us on Monday - orders for durable goods in the US in November. Market participants expect growth of 1.4% M/M compared to the previous month, however, some forecasts predict an increase of only +1.1% M/M, which is still higher than in October. In addition, there are several variations of this indicator, such as orders for goods excluding defense and aviation, excluding transport, and excluding defense. And all other indicators, according to experts, will show a very weak increase, not exceeding 0.1%, and the indicator, excluding defense and aviation, may even decline by 0.3%. Thus, the market reaction to this data can be unpredictable. Although in any case, if forecasts are exceeded, this will provide additional support for the US currency.
In the meantime, more and more details are being received on the Trump impeachment case. We already wrote that the Democrats brought the procedure to the Senate, but are not in a hurry to hand over the baton to senators, most of whom belong to the Republican Party. It just doesn't make much sense, since the Senate will support Donald Trump by a majority vote. Thus, Democrats should try to get the most out of their struggle with the current US leader. For example, to seek and find new evidence of the guilt of the US president, to find new witnesses who will give new evidence. Then, perhaps, the whole case will be brought to a point where the senators simply can not justify Trump. If there is sufficient evidence and guilt, the Senate may flinch. Thus, now the Democrats have nowhere to rush, and in the meantime, information has arrived that military assistance to Ukraine was blocked by Trump an hour after a telephone conversation with President Vladimir Zelensky. Moreover, a month before this conversation, Trump made official requests to the Pentagon regarding detailed information on the provision of military assistance to Ukraine ...
Thus, interesting news of a political nature can come in the last days of the outgoing year. For example, new information may also appear regarding the negotiation process between China and the United States. However, any such information can have a very indirect effect on the movement of the euro/dollar currency pair. Thus, we expect a fall in volatility and, possibly, even the beginning of a flat movement, although in general we expect the euro to fall further. The question is only whether it will continue in 2019 or will traders have to wait for 2020 already?
The average volatility of the euro/dollar currency pair continues to decline and is already about 45 points per day. Over the past 30 days, volatility is approximately 43 points a day. Thus, both indicators almost coincide and give us fairly accurate levels on Monday, December 23, - 1.1030 and 1.1120. If macroeconomic statistics from across the ocean turn out to be strong, then it will be possible to expect a fall to 1.1030, however, an upward correction or at least a slight pullback, which can be determined by turning the Heiken Ashi indicator up, is still more likely.
Nearest support levels:
S1 - 1.1047
S2 - 1,1017
S3 - 1,0986
The nearest resistance levels:
R1 - 1,1078
R2 - 1,1108
R3 - 1,1139
Trading recommendations:
The euro/dollar pair maintains the prospects for a downward movement, however, it is also possible for a flat to begin in the near future. Thus, it is now recommended to consider selling the euro while aiming for 1.1047 and 1.1030. The general fundamental background does not remain on the side of the euro, therefore, the fall of the pair is more preferable, most likely, after a correction. It is recommended to buy the euro/dollar pair no earlier than when quotes return to the area above the moving average line.
In addition to the technical picture, fundamental data and the time of their release should also be taken into account.
Explanations for illustrations:
The oldest linear regression channel is the blue unidirectional lines.
The smallest linear regression channel is the purple unidirectional lines.
CCI - blue line in the indicator window.
Moving average (20; smoothed) - a blue line on the price chart.
Murray levels - multi-colored horizontal stripes.
Heikin Ashi is an indicator that colors bars in blue or purple.
Possible price movement options:
Red and green arrows.
The material has been provided by InstaForex Company - www.instaforex.com