The EUR / USD currency pair, moving along the course of the correction that started from the local low of 1.1612, found a strong resistance in the area of the sideways channel 1.1700 // 1.1810 // 1.1910, so as result, a slowdown occurred, followed by a price reversal towards the level of 1.1800.
For several times already, 1.1810 acted as a strong resistance as well as support, with which traders could prepare in advance for a stop and a possible rebound, so, because of this, the euro remained trading in a flat market, not rising nor declining sharply in the charts.
Only a consolidation below 1.1690 / 1.1700 will trigger a full-fledged downward move, therefore, as long as the quote remains above this area, the movement will be classified as just a correction, not a bearish trend.
On that account, if we analyze the M15 chart and look at the positions set up in the EUR / USD pair yesterday, we will see that activity arose at 19:45, during which the quote traded within the values 1.1770 / 1.1800. A rather high degree of speculation, as well as short positions were the main driver of this development.
In terms of daily dynamics, a value of 76 points was recorded, which is practically the same as the average level of volatility. The highest rate of acceleration was recorded in the minute and hourly time frames.
This is because traders, following the recommendations on the previous review , opened short positions after a consolidation below 1.1765, which would trigger a price rebound from the level of 1.1810.
But if we look at the daily chart, we will see that the movement is only a correction, and this can complicate the work of short positions.
In another note, the latest data on JOLTS was published yesterday, and it revealed a 204 thousand decrease in the statistics for August. The report showed that jobs only to 6.493 million, lower than the 6.697 million record the earlier month.
In Europe, ECB board member Philip Lane presented his assessment of the macroeconomic prospects, commenting that low inflation for a long period of time can greatly harm the economy. In this situation, he said that it is necessary to use all kinds of regulator tools, subtly hinting that the scope of the quantitative easing program should be further expanded, and that the program should be extended until the end of 2020.
Accordingly, ECB president Christine Lagarde said that the regulator has developed a new plan to rescue the economies of European countries and, if necessary, is ready to adopt new monetary incentives. Within the framework of the plan in question, key interest rate is presumed to be reduced.
As for the US Federal Reserve, Chairman Jerome Powell spoke about the pace of economic recovery in the United States.
"Economic recovery is progressing faster than generally expected. The most recent forecasts by the FOMC members at our meeting last September showed that recovery continues at a solid pace. However, there is a risk that a slowdown could occur, especially once the economy comes closer to full recovery. Although the unemployment rate fell to 7.9% in September from 14.7% at the peak of the pandemic, the labor market still has a long way to go, "he said.
Today, the Federal Reserve will release its latest protocol, which will inevitably affect the rate of the US dollar in the market.
19:00 - FOMC Protocol
As we can see on the trading chart, the euro faced a strong resistance at the level of 1.1810, so as a result, price reversed and resumed trading downwards in the market. If the EUR / USD pair continues to trade above the level of 1.1700, the quote will remain in the long-standing sideways channel (1.1700 / 1.1810 / 1.1910), but if it consolidates below 1.1690 / 1.1700 (entry point 1.1685), a full -fledged decline will occur.
Indicators on the M15 time frame signal BUY due to the price rebound during the Asian and European sessions, while the hourly time frame emits a neutral signal due to the downward move yesterday. As for the daily time frame, it signals BUY since the quote remains within the long-standing sideways channel.
Weekly volatility / Volatility measurement: Month; Quarter; Year
Volatility is measured relative to the average daily fluctuations, which are calculated every Month / Quarter / Year.
(The dynamics for today is calculated, all while taking into account the time this article is published)
Volatility is currently at 42 points, which is 46% below the average daily level.
Local acceleration is still possible in the EUR / USD pair, but only at the minute and hourly time frames.
Resistance zones: 1.1755 / 1.1770 *; 1.1910 **; 1.2000 ***; 1.2100 *; 1.2450 **; 1.2550; 1.2825 Support Zones: 1.1700; 1.1650 *; 1,1500; 1.1350; 1.1250 *; 1.1180 **; 1.1080; 1.1000 ***.
* Periodic level
** Range level
*** Psychological level