Higher linear regression channel: direction - upward.
Lower linear regression channel: direction - upward.
Moving average (20; smoothed) - upward.
The EUR/USD currency pair has resumed its upward movement over the past two trading days after failing to break the moving average line. However, yesterday, after reaching the previous local maximum, the bulls retreated and a new round of downward correction began within the ascending trend. Based on this, we can conclude that buyers still doubt the feasibility of further purchases of the euro currency near its two-year highs and are frankly afraid of them. However, in order for the upward trend to change to a downward trend, you need not only the fear of bulls, but also the desire of bears to take the initiative. This is not the case now. Unfortunately, now only technical factors are on the side of sellers, and even then, not so much "factors" as "assumptions". "Foundation" does not help them in any way.
In fact, the fundamental component remains the same all this time, since no new information is received from the US on the most important key topics. "Coronavirus" in America continues to spread at the same rate. The US government also continues to be inactive and does not want to impose a quarantine. There is little news about the escalation of trade and economic relations with China. Dr. Anthony Fauci, the country's chief epidemiologist, goes on the air much less often than before, and is much more cautious in his comments. Well, Donald Trump still continues to amuse the public with his discouraging statements aimed at distracting Americans from their own internal problems. No important information has been received from Europe in recent weeks. It is still unclear whether the European Parliament is going to approve the budget plan for 2021-2027 and the EU economic recovery fund, which were adopted with such difficulty at the last EU summit.
However, from time to time, information still comes from overseas that deserves attention. For example, yesterday, Joe Biden said in an interview that the trade deal with China that Donald Trump reached is "collapsing." According to Biden, the trade deficit between the US and China increased by 5% in June this year, data from the US Department of Commerce shows that Beijing does not fully meet its obligations to purchase American goods. We would like to clarify Joe Biden's statement. It is not "the deal is crashing," but "the first phase of the trade is failing while the negotiations for the second phase have not even started yet". We want to remind traders that there is no talk of any truce between Washington and Beijing now, and most of the duties and sanctions between the countries remain in force. The first phase of the agreement implied the abolition of only part of the duties, most of them remaining in effect.
At the same time, Donald Trump continues to get into stories that are worthy of some American schoolboy, but not the President of the United States. For the first time, Facebook deleted a message from Donald Trump that contained a small video. In this video, Donald Trump himself, in an interview with FOX, states that "American children have almost complete immunity from coronavirus", so "schools should be opened in September". Recall that a new wave of rallies and protests has now begun in the United States, which are organized this time by teachers who oppose the opening of schools this fall due to a massive pandemic. However, Trump believes that "school children are immune". Unfortunately, no one else thinks so. Neither doctors, nor other politicians and officials, nor Facebook. Representatives of Facebook said that the video contains absolutely false statements about "coronavirus" and violates the policy on the dissemination of false information about COVID-2019. Also, another social network Twitter, which completely blocked the official page of the US President's staff, reported that this decision will remain in force until the video is removed. In the video, the US President also says that "by some miracle, children have a stronger immune system and they do not have problems with this coronavirus". "The facts show that they are not affected by this problem, and we must reopen our schools," Trump concluded. Unfortunately, Trump is not supported by official healthcare institutions. For example, the US Centers for Disease Control and Prevention reports that children are equally at risk of contracting the virus with adults. In principle, even the governors of most states of America do not listen to Trump at this time – most of them have decided not to open schools until at least January 2021 and to conduct classes remotely. And of course, officials from the Trump campaign immediately accused social networks Facebook and Twitter of favoring the Democrats.
In general, half of the country is now against Trump. And we understand why, if the president makes such statements every day, but in order to stop the spread of the "coronavirus", he does nothing. However, the closer the elections, the more we are inclined to believe that in the current situation, with a serious lag behind Joe Biden, Trump is even benefiting from the epidemic. If the epidemic continues to be high on November 3, it will really be a great reason, if not to postpone the election, then at least to block or complicate voting in many cities and states, especially those that are under the power of Republicans and in which Biden can potentially win. Based on this, we are increasingly inclined to the view that these elections can be as "dishonest and falsified" as possible, as Trump himself said. However, the US President hardly meant himself...
There will be no important publications in the European Union on the last trading day of the week. Only in Germany will there be several reports, one of which is on industrial production. The main macroeconomic data will come from overseas, where the average wage for July, the unemployment rate for July and the number of new jobs created outside the agricultural sector (NonFarm Payrolls) will be published. Special attention should be paid to the latest report, although the unemployment rate is also very important. We believe that the data may be worse than forecasts (1.6 million for NonFarm Payrolls and 10.5% for unemployment), as this week's ADP report was significantly worse. Accordingly, from a fundamental point of view, the US dollar may again be under pressure from traders. But from a technical point of view, a strong downward movement has been suggested for a long time.
The volatility of the euro/dollar currency pair as of August 7 is 109 points and is characterized as "high". Thus, we expect the pair to move today between the levels of 1.1765 and 1.1983. The reversal of the Heiken Ashi indicator downwards signals a new round of downward correction within the framework of the still continuing upward trend.
Nearest support levels:
S1 – 1.1841
S2 – 1.1719
S3 – 1.1597
Nearest resistance levels:
R1 – 1.1963
The EUR/USD pair is trying to continue its upward movement, but is not yet able to overcome the level of 1.1909. Thus, at this time, it is formally recommended to continue to stay in long positions with the goals of 1.1963 and 1.1975 until the Heiken Ashi indicator turns downward. But the pair may not overcome the previous high of 1,1909. It is recommended to open sell orders no earlier than when the pair is fixed below the moving average line with the first target of 1.1719.