4-hour timeframe
Technical details:
Higher linear regression channel: direction - sideways.
Lower linear regression channel: direction - downward.
Moving average (20; smoothed) - downward.
CCI: -74.5317
The EUR/USD currency pair was trading within the same fairly narrow price range of 1.0817-1.0900 during the second trading day of the week. Thus, the flat is maintained for the time being, but the downward trend is also maintained, since the pair's quotes do not jump up and down, being fixed either above the moving average or below it. Accordingly, the current situation is twofold. If the pair remains between the moving average line and the level of 1.0817, it will be a very narrow price range. In such a narrow channel, the pair is unlikely to be able to spend a long time. Thus, today, there will be a closing over the moving, which will keep the pair in the side channel until the level of 1.0900 is overcome, or there will be closing under the level of 1.0817, which will trigger a resumption of the downward movement. One way or another, but at the moment, there are no signs of completion of the flat. This means that you should either trade inside the channel on lower timeframes or refrain from opening any positions until the end of the flat.
No macroeconomic reports are scheduled for the third trading day of the week in the United States and the European Union. Thus, the fundamental background for the euro/dollar pair today will not be available or it will be reduced only to news, statements, etc., which are not planned in advance and cannot be predicted. In principle, we continue to track all the most important messages anyway. Of course, the main newsmaker in the world remains Donald Trump. In a previous article, we said that at least 15 states of America held a few rallies. The Americans called on the authorities to lift the quarantine, harshly criticized the governors, and called for "giving them their lives back." Immediately, Donald Trump said that he admired these people, calling them "real Americans". However, such attacks of Trump's admiration for the protesters are not surprising. After all, it is the US President who is interested in opening economic borders as soon as possible and ending the quarantine. However, even then, we questioned the legitimacy and integrity of these rallies. First, very few people participated in them. What is a few thousand people at a single rally? For comparison, America now has about 30 million unemployed people who have become so in the last 6 weeks. Where are the 30 million with calls to end the quarantine? That's right, they stay at home and do not violate this very quarantine. Why? Because work is work, economy is economy, and people's life and health are the same. 90% of Americans are not ready to risk their lives so that Donald Trump can restart the economy, so that in six months he has a chance of re-election. Thus, we consider these rallies to be just a show-off. According to recent polls, a large part of the American population just supports the state governors, who insist on maintaining quarantine measures, fearing new outbreaks of the "coronavirus" epidemic. Moreover, more than 50% of the American population believes that Donald Trump and his administration did not cope with the pandemic. Recall that Trump himself previously stated that "if not for his government, up to 250,000 Americans could have died." Well, a little later, he accused the WHO of all the deadly sins. A little later – China. At the moment, the number of deaths in the United States has crossed the 40,000 mark, and the total number of patients is approaching 800,000.
The opinions of protesters who consider "that the Democrats are trying to undermine the economy in order to use it against the president" are also very interesting." We believe that it is absolutely clear to any more or less knowledgeable person how absurd this judgment is during a crisis and pandemic. Any economy will suffer quite a lot in any case. But Donald Trump supports the protesters and has even already declared that he has the necessary authority to complete the quarantine in the country. However, some media immediately reminded the American leader that there are "no kings" in their country. After that, Trump somewhat reduced his fervor and left it to the governors of each state to make their own decisions on the abolition of quarantine measures. The Governor of Washington, one of the most affected states, believes that Trump's actions "incite violence" and the Washington Post has even found several people who urge people to go to rallies and post information about the authorities' strong exaggeration of the danger of "coronavirus." Also, we have already found the threads leading to Donald Trump himself. According to the publication, many rallies were organized by deputies of the Republican party. And of course, the main claims of Trump are addressed to those states whose governors are Democrats. It is even difficult to imagine the scale of political wars here. More recently, Democrats were at war with Trump in an impeachment case. Now, it seems that the confrontation continues under the guise of a worldwide epidemic. It is quite possible that some states really do not want to curtail the quarantine in order to prevent the US economy from recovering for as long as possible, which will significantly reduce the chances of Trump winning the presidential election. However, the position of Democratic governors is now very favorable. The COVID-2019 virus continues to spread across the United States, and no one can blame them for unnecessary quarantine measures.
As a "cherry on the cake" - a law that can be signed by Donald Trump in the coming days, on the prohibition of immigration "under the sauce" to maintain jobs for the American population. This law may prohibit the issuance of green cards and work visas on a temporary basis. It is not known how long this restriction will last. "Against the backdrop of an attack from an invisible enemy, and in order to protect the jobs of our wonderful American citizens, I will sign an order temporarily halting immigration to the United States," Trump wrote on Twitter.
So far, the euro currency paired with the dollar does not react to all these events. Thus, our assumptions come true that now traders will need new serious reasons to trade the pair more actively and start forming a new trend. So far, we do not see how the flat can end. At the same time, we should not lose sight of the fact that the pair may be overwhelmed by a new wave of panic. For example, the British pound is already trading with increased activity. At any moment, major players can start making large transactions, which will provoke new strong price changes in the euro currency exchange rate.
The volatility of the euro/dollar currency pair as of April 21 is 84 points. Thus, fears for a new wave of panic in the market are still untenable, and market participants continue to lower their level of activity. Today, we expect the pair's quotes to move between the levels of 1.0762 and 1.0930, and in general – quiet trading in the side channel of 1.0817-1.0900. A downward reversal of the Heiken Ashi indicator may indicate a new attempt to start a downward trend.
Nearest support levels:
S1 - 1.0742
S2 - 1.0620
S3 - 1.0498
Nearest resistance levels:
R1 - 1.0864
R2 - 1.0986
R3 - 1.1108
Trading recommendations:
The EUR/USD pair continues to trade inside the side channel. Thus, traders are advised to wait for the exit from this channel, fixing below the level of 1.0817 and again trade down with the goals of 1.0762 and 1.0742. It is recommended to consider buying the euro/dollar pair if the price is fixed above the moving average line and the level of 1.0900 with the goals of 1.0930 and 1.0986.
The material has been provided by InstaForex Company - www.instaforex.com