The upper channel of linear regression: direction – up.
The lower channel of linear regression: direction – down.
The moving average (20; smoothed) - up.
The EUR/USD currency pair continues a moderate upward movement after overcoming the moving average line. Yesterday, at the US trading session, the euro currency unexpectedly began to grow, and although its strengthening did not exceed 30 points, against the background of the current minimum volatility, the growth seemed impressive. However, as we have already said, it did not exceed 30 points, quickly ended, and the quotes managed to roll back down before the end of the day. This growth was provoked by the arrival on the markets of unexpected information about the meeting of US President Donald Trump and Fed Chairman Jerome Powell in the White House. However, as we all see, traders did not show any special reaction to the results of the meeting. This proves that yesterday's purchases by traders of the European currency are associated exclusively with a kind of panic, very short-term and weak.
What can be said about the meeting between Powell and Trump? Since it was held behind "closed doors", then we could judge its content only by the statements of Powell and Trump themselves. Immediately, traders faced serious inconsistencies in the opinions of the US President and the Fed leader. After the meeting, Donald Trump said that the meeting was "good", it discussed the issues of interest rates, low inflation, a strong dollar and its impact on the economy and, in particular, industry, trade with China and the European Union and other issues. And just an hour later, the Fed releases its press release, which says that Jerome Powell did not discuss his plans for monetary policy with the US President, and the regulator, as before, will act based on an objective and non-political analysis of the economic situation. So it turns out that Trump discussed the rate, and Powell did not? It's worth noting that Donald Trump regularly makes controversial statements or posts on social media. Only the President of the United States can declare "progress in negotiations" with China within one week, and then announce the introduction of new duties if "China does not sign an agreement or is in no hurry with this issue." Trump has repeatedly stated about "good negotiations" with Beijing, but in fact we see that all duties remain in effect, no one cancels them, moreover, China does not want to follow Washington's demand and buy agricultural products for exactly $ 50 billion year, and the States do not want to cancel the already imposed duties on Chinese imports. So much for the "good negotiations." So they look in reality. Thus, Trump's words about a safe meeting with Powell can be safely divided into eight. Recall that the last year for Powell was held under the auspices of ongoing criticism from just Trump, and then suddenly a "cordial meeting". Even the Fed's official press release cannot be considered true. Both sides, which are not subject to each other, still pursue different goals, which is why completely contradictory messages get into the media.
We believe that this meeting between Powell and Trump should be forgotten by traders as soon as possible. What the president and the Fed leader talked about, we are unlikely to ever find out how unlikely we will find out whether the meeting was of an emergency and unplanned nature or just a few people knew about it. One way or another, traders have nothing to respond to. Well, the US President and Fed Chairman discussed the key rate. So what?
On Tuesday, October 19, important macroeconomic publications will again be neither in the States nor in the European Union. In America, a few minor reports will be published, such as the dynamics of obtaining construction permits or the number of homes started. However, it is unlikely that these data will interest market participants. Thus, we expect today to maintain minimal volatility. From a technical point of view, the upward movement may continue, as, despite yesterday's downward pullback, the Heiken Ashi indicator continues to paint the bars purple. Also, the upward movement is supported by the senior linear regression channel.
Nearest support levels:
S1 – 1.1047
S2 – 1.0986
S3 – 1.0925
Nearest resistance levels:
R1 – 1.1108
R2 – 1.1169
R3 – 1.1230
The euro/dollar pair continues a weak upward movement. Thus, long positions with a target of 1.1108 are now relevant before the Heiken Ashi indicator turns down. However, given the minimal volatility, we recommend being careful with opening any positions. It is recommended to return to the sales of the euro/dollar pair not earlier than the consolidation of traders below the moving average line with the first target of 1.0986.
In addition to the technical picture, fundamental data and the time of their release should also be taken into account.
Explanation of the illustrations:
The upper channel of linear regression – the blue line of the unidirectional movement.
The lower channel of linear regression – the purple line of the unidirectional movement.
CCI – the blue line in the indicator window.
The moving average (20; smoothed) – the blue line on the price chart.
Support and resistance – the red horizontal lines.
Heiken Ashi – an indicator that colors bars in blue or purple.
Possible variants of the price movement:
Red and green arrows.