4-hour timeframe
The amplitude of the last 5 days (high-low): 59p - 67p - 121p - 53p - 94p.
Average amplitude for the last 5 days: 79p (79p).
The EUR/USD currency pair on Monday, November 3, adjusted to the critical line, but in the US trading session began an upward movement. The European currency does not have such a huge mass of reasons to fall in price against the US dollar, as the pound sterling. Although, of course, the US economy still looks much stronger than the European one. Changes in the balance of power between currencies can happen if the Fed stops raising the key rate next year. This was hinted at by Fed chief Jerome Powell at his last speech. And it is now seen as the only chance of the European currency to change anything. Despite the fact that the euro is not cheaper at a pace like the pound, but is still getting cheaper. The published index of business activity in the manufacturing sector of the US ISM turned out to be significantly higher than the forecast (59.3 against 57.5), but the index of gradual acceleration of inflation ISM in November failed, amounting to 60.7 against the forecast 69.1. It is probably the last indicator that helped the European currency in the second half of the day. Otherwise, we would have seen a new decline in the European currency. But the Italian crisis is also putting pressure on the European currency. Recall that the Italian government "made a concession" to the European Commission and reduced the budget deficit by 0.2%. While the EU demanded to reduce this figure by 1.6%. Therefore, we can say that the parties did not reach a consensus. If we add here some concerns related to Brexit and its possible failure, we get several reasons why the euro may well fall in price further.
Trading recommendations:
The EUR/USD pair may complete the correction round, failing to overcome the Kijun-sen line. If the pair will manage to overcome the Ichimoku cloud, then long positions will be relevant with the objectives 1,1390 and 1,1434. Until then, the signal to buy the "Golden cross" will remain weak.
It is recommended to open sell orders not earlier than when traders have overcome the critical line. In this case, the current target for the downward movement will be the support level of 1.1276, and the downtrend will resume.
In addition to the technical picture, fundamental data and the timing of their release should also be taken into account.
Explanation of illustration:
Ichimoku Indicator:
Tenkan-sen-red line.
Kijun-sen – 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:
Red line and histogram with white bars in the indicator window.
The material has been provided by InstaForex Company - www.instaforex.com