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EUR/USD. Results of the week. Democrats will delay Trump's impeachment. Deal with China will be signed shortly

24-hour timeframe

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The penultimate working week of December 2019, from our point of view, once again showed the strength of the US economy (at least, judging by current indicators) and the weakness of the EU economy. Thus, we can immediately say that the decline in the European currency is absolutely justified. On Monday, it became known that the index of business activity in the service sector, together with the composite index, in the EU fell again and remained in the recession zone. Thus, in the near future there is no sense in counting on strong growth in industrial production and, as a result, other macroeconomic indicators of the EU. On the contrary, all three business activity indexes remained above the key level of 50.0 in the US, recording an increase in growth rates in all sectors of the economy. Actually, on Tuesday, a report on industrial production in the United States confirmed a good condition, showing an increase of +1.1% in November. On Wednesday, inflation in the EU again did not please market participants, because after accelerating a month earlier from 0.7% to 1.0%, this trend could not continue in November. Well, on Friday, GDP in the United States showed an increase of +2.1% in the third quarter of 2019, which is a fairly high indicator. As a result, we do not have a failed important report from across the ocean, and generally weak data from the European Union.

At the end of the trading week, the EUR/USD currency pair fell below the critical Kijun-sen line on the 24-hour timeframe, thus, the general downward trend is now confirmed on the higher timeframe.

Meanwhile, the United States remains under the canopy of the theme of Donald Trump's impeachment. We have already said that the House of Representatives approved the impeachment, but the likelihood that the impeachment will be approved by the Senate is extremely low. In principle, everyone understood this from the very beginning, since 53 of the 100 seats in the Senate are occupied by Republicans. Thus, transferring the matter to the Senate as quickly as possible (as Trump himself wants) to the Democrats makes no sense. It is important for them that the topic with an investigation of Trump's activities and accusations against him be as long as possible on the front pages of all periodicals and online publications. The speaker of the Lower House, Nancy Pelosi, said that she would not forward the case to the Senate and would not allow the appointment of prosecutors. Republicans believe the entire Senate case needs to be agreed upon. In addition, the Democrats want to conduct a full Senate trial with the challenge and interrogation of new witnesses. According to the Democrats, far from all the "dark affairs" of the president are already covered. Thus, purely theoretically, the consideration of the case by the Senate can now be delayed and postponed even until the presidential election in 2020. On the one hand, this can help Democrats downgrade Trump's political ratings, and on the other hand, the longer this case drags on, the better you see the purely political grounds for this trial.

Many political scientists, by the way, believe that Trump is to blame for everything. One can hardly find at least one president around the world who so purposefully and easily spoils relations with everyone, with the media, with intelligence, with other countries and their leaders, allows himself to make contradictory statements, sometimes even outright insults. Thus, Trump simply refers to that small category of leaders who are absolutely not afraid to say what they really think. It is not surprising that Trump has a huge number of ill-wishers, ranging from ordinary US citizens to entire countries. Tolerance is alien to Trump, and the leader of a huge country should respect everyone. It is also worth noting that the impeachment process itself is extremely rare. Republicans openly state that the process of impeachment of Trump began 20 minutes after his inauguration, saying that his ill-wishers (Democrats) from the very beginning planned to remove Trump from his post. However, this scheme is then quite applicable to absolutely any president. If Trump did not give reasons for such actions of his opposition, then so many problems would not exist.

Trump's entire manner of doing business is perfectly reflected in his statement of December 22 regarding the US-China trade conflict. The US president announced progress in negotiations with Beijing, while not missing the opportunity to brag, saying that "we took the toughest measures against China and it was as a result of this that we reached a trade agreement." Trump also said that Beijing is already buying billions of dollars worth of agricultural products.

Based on the foregoing, we believe that the euro's fall will continue in the long term. Moreover, all indicators have currently turned down now on the 4-hour chart, and are also declining on the 24-hour chart. The bulls could not overcome the level of 1.1175, which is clearly seen in the illustration.

Trading recommendations:

The trend for the euro/dollar is currently changing to a downward trend. Thus, the 4-hour timeframe is already working out a downward trend. On the other hand, the higher chart shows a longer-term trend, within which overcoming the Senkou Span B line can significantly increase the pressure of traders on the European currency.

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

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen is the red line.

Kijun-sen is the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dashed line.

Chikou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and bar graph with white bars in the indicators window.

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