EUR/USD - 4H.
On December 13, the EUR/USD pair performed a reversal in favor of the US dollar, falling into the lower area of the upward trend area. But after the formation of a bullish divergence in the indicator, CCI performed a reversal in favor of the euro and began a new growth process according to the current direction of the range. At the same time, at the European trading session, bearish traders again show signs of a desire to start active sales of the European currency. It is too early to sell the euro but the consolidation of the pair's quotes under the lower line of the trend range will work in favor of the US dollar and the resumption of the fall towards the levels of 50.0% (1.1080) and 38.2% (1.1057).
The information background of the last day of the past week can be interpreted as you like. The first thing that had a strong impact on the movement of the euro-dollar pair is the elections in the UK. But it was very simple. Following the pound, the euro added to the price, and then, following the same pound, slid to the original price values. The second is the US retail sales report for November, which was worse than traders' expectations. The third is the agreement between Beijing and Washington, which puts the trade war on pause and gives hope for a positive outcome of this trade battle. It is in the latter event that I will dwell in more detail.
What exactly is the essence of the first phase of the agreement, I have already said. Let me remind you briefly. The US cancels the introduction of duties for 160 billion dollars from December 15, reduces the existing duties from 15% to 7.5% and leaves in effect the very first package of duties. China - pledges to buy from America annually for the next two years, goods, raw materials, and agricultural products worth at least $200 billion, of which at least $50 billion should be purchases of farm products, as, according to Trump, it is farmers who have suffered most from China's countermeasures. However, according to many experts, the current agreement is the easiest part of the deal. Much more serious issues, such as unfair competition from China, lie ahead. For example, Donald Trump believes that the Chinese government supports Chinese companies, subsidizes them, which violates trade rules. Trump also accuses China of manipulating the yuan exchange rate, which also negatively affects the sales of American companies. The US President has not recanted his accusations that China steals intellectual property and wants free access to the Chinese financial sector. Thus, although Mr. Trump expects that the second phase of the agreement will be signed before the 2020 presidential election, I believe that the world can see a new escalation of the trade conflict. China is still counting on Trump not to win the 2020 election. And Trump may indeed lose, as Democrats continue to work on impeaching Trump and in the coming weeks, there will be a vote in the House of Representatives on two articles of impeachment, which were previously approved by the Congressional Committee on Jurisprudence.
Forecast for EUR/USD and trading recommendations:
On December 16, traders will try to resume the fall of the euro-dollar pair. Although today there will be several economic reports that may even support the demand for the euro, I believe that e we should expect a close under the trend range, which will allow bearish traders to sell the pair again with the targets of 1.1080 and 1.1057.
The Fibo grid is based on the extremes of October 21, 2019, and November 29, 2019.