Long positions surged in the market yesterday, as a result of which the euro reached a price of 1.1686. However, since the quote is still below the seven-week flat (1.1700 / 1.1810 / 1.1910), the EUR / USD could resume its downward movement in the medium term.

This is because the market is still controlled by the sentiment of participants, which arises speculative positions. In such a case, local operations are the best trading strategy, especially if you want to avoid getting any losses.

Going back to the EUR / USD pair, if we look at the M15 chart, we will see that a wave of long positions appeared around 09:15 am to 12:15 pm, and during it, the quote reached the level of 1.1670 / 1.1666.

But since the movement was little with which it failed to even enter the earlier flat, acceleration slowed, so volatility came out below the average level.

In addition, if we look in the daily chart, we will see that the correction can hardly be called a pullback, and this is because the quote remained below the earlier price range.

With regards to news, the only noteworthy yesterday was the speech of ECB president Christine Lagarde, during which she said that the real GDP of the eurozone would recover to pre-crisis levels at the end of 2022. Rising incidence of coronavirus in Europe also set -off concerns regarding an uncertain economic situation, so the regulator announced that it would expand its program if such a scenario happens.

Further development

As we can see in the trading chart, the quote traded at a range of 1.1665-1.1666, but then activity decreased, signaling the possible end of the correction. If a bearish sentiment resumes in the market, the euro will return to its low price levels. But if the quote holds at the level of 1.1720, the euro could rise to a price of 1.1780.

Indicator analysis

Looking at the different time frames (TF), we can see that the indicators on minute and hourly periods signal BUY due to the correction, but the daily period still signals SELL since the current quote is still below the seven-week flat.

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 at 25 points, which is 68% below the average value. If activity jumps in the market, volatility will rise to at least 35-40 points.

Key levels

Resistance zones: 1.1700; 1.1910 **; 1.2000 ***; 1.2100 *; 1.2450 **; 1.2550; 1.2825.

Support Zones: 1.1650 *; 1,1500; 1.1350; 1.1250 *; 1.1180 **; 1.1080; 1.1000 ***.

* Periodic level

** Range level

*** Psychological level

Also check trading recommendations for the GBP/USD pair here, or brief trading recommendations for the EUR/USD and GBP/USD pairs here.