Hello, dear colleagues!
According to the results of the first day of the current trading week, there were no drastic changes in the price dynamics of the main currency pair of the Forex market. Yesterday's data on the index of activity in the manufacturing sector from the Federal Reserve of New York, as well as reports on total and net purchases of US securities by foreign investors were weaker than expected. However, I do not think that these rather minor releases had a decisive impact on the results of trading on April 17, but the fact that they did not support the US currency is a fact.
Speaking of statistics, no reports are scheduled from Europe today, and the United States will provide data on building permits and new housing starts at 13:30 (London time). Much earlier, at 09:00 (London time), there will be a speech by Lela Brainard, a member of the Federal Open Market Committee (FOMC). Although we can assume that today's events will not become a determining factor and will not make significant changes in the trading for the euro/dollar. After all, the main event of the week will be tomorrow's publication of the FOMC minutes, from which market participants will try to get information or at least signals about the next steps of the US Central Bank following its September meeting.
Regarding the COVID-19 pandemic, it should be noted that coronavirus passions do not subside. The United States and India continue to see the largest daily increase in infections, which negatively affects the prospects and timing of economic recovery. Relative to a number of European countries, the situation with a new type of coronavirus infection has also worsened. In particular, fears of the beginning of the second wave of COVID-19 and an increase in daily cases of infection are noted in France, Spain and Italy. Nevertheless, the situation in these European countries is incomparably better than in the United States, and therefore investors fear that the world's leading economy will recover at a slower pace. Such sentiment is also not good for the US dollar, which ended yesterday's trading with losses across a wide range of the market.
Daily
Yesterday's daily candle was the third in a row that closed above the red line of the Tenkan Ichimoku indicator. Based on this, with a high degree of confidence, we can consider the breakdown of this line true, and expect that in the case of a corrective pullback, Tenkan will support the price.
However, there is no question of any corrective rollback yet. After yesterday's trading on EUR/USD closed at 1.1870, today, at the moment of writing, the pair continues to rise and is selected at a significant mark of 1.1900, slightly above which, at 1.1915, the key resistance of sellers passes. Let me remind you once again that in my personal opinion, only a true breakdown of the mark of 1.1915 will open the way for euro bulls to higher goals, among which it is worth highlighting 1.1945, 1.1960, 1.1980 and the most important psychological and technical level of 1.1000. Bears on EUR/USD are still weak, and are not able to turn the course in the south direction. To get a signal about a correction or reversal of the exchange rate, sellers need, first of all, to return the quote under the Tenkan line, which runs at 1.1813. However, to fully control the pair, players on the downside of the exchange rate at all costs need a breakout of strong support in the area of 1.1700. Only with this development of events, the bearish sentiment for the euro/dollar will significantly strengthen and you can count on the subsequent decline of the pair.
H1
After the initial growth during today's Asian session, the pair suspended its upward movement and is trading flat at the end of the article. This may be a consolidation before an attempt to break through a significant resistance zone of 1.1900-1.1915, or the current flat occurs before a corrective pullback, the goals of which may be the levels of 1.1860, 1.1830 and 1.1813.
Taking into account the upward trend, the most likely is the continuation of the rise, during which the resistance level of 1.1915 will once again be tested for strength. If you go to the trading recommendations, then buying under such strong resistance is quite risky. In my opinion, it is better to wait for a pullback to the price zone of 1.1860-1.1850 and (or) 1.1830-1.1815 and from there consider opening long positions on EUR/USD. With this trading plan, in the selected zones, it would be good to enlist the support of the corresponding candle signals and only then open positions to buy. I do not recommend buying at the breakdown of 1.1915. It is better to wait for the actual breakdown of this level and consider opening long positions on the rollback to it. If, under 1.1900 and 1.1915, bearish reversal candlestick analysis patterns appear on the four-hour or hourly charts, you can short sell with targets in the first highlighted area.
Good luck with trading!
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