4-hour timeframe
Technical details:
Higher linear regression channel: direction - upward.
Lower linear regression channel: direction - downward.
Moving average (20; smoothed) - downward.
CCI: -99.1177
On the fourth trading day, the EUR/USD pair continued to trade with a downward bias, which has already assured everyone of the completion of the sideways movement in the $ 1.17 - $ 1.19 channel. The US dollar is finally strengthening, which we have been expecting for at least the last month. Thus, there was only a logical development of events, since after 1300-point growth, traders could not be satisfied with just 200 points of correction. Thus, the current downward movement is just a technical correction of the US currency after the previous growth. Thus, if we were traders, we would not even look for any fundamental reasons for strengthening the US currency. Just because they're not there right now. It is impossible to interpret the speeches of Jerome Powell and Steven Mnuchin in the US Congress in any way unambiguously. It is impossible to unambiguously interpret the results of the Fed meeting. It should be understood that the more pessimistic Powell and Mnuchin are, the more negative the impact will be on the stock market. If the fall of the US currency against its main competitors is in the hands of the US government, as Donald Trump himself has repeatedly stated, then the fall of the stock market is completely unprofitable for the States. After all, it is with the growth of the stock market that the strength and power of the American economy are identified. And this is one of the biggest misconceptions of many traders and readers. They equate the growth of the capital of rich Americans with the growth of the general welfare of the country. However, back to the US dollar. There has been no overtly positive news from America recently. Powell and Mnuchin said the US economy is recovering at a faster-than-expected pace. It's good. At the same time, both noted the high degree of uncertainty in the issue of further economic recovery, and also called on Congress to quickly approve a new package of stimulus measures for the economy. This is bad. This means that the economy cannot recover on its own, and the many trillion-dollar measures already taken are not enough for a full recovery. The situation with the "coronavirus" is also not improving. No important macroeconomic reports have been published recently. There was also no really important news on key topics for the States and the dollar. These topics are: the confrontation with China, the "coronavirus", and preparations for the elections. The key theme remains the "elections". Both candidates continue to throw mud at each other, trying to prove to the electorate why it is not worth voting for the opponent. The media and publications continue to calculate the probability of a candidate's victory. At the same time, both candidates are preparing not even for the elections and voting themselves, but for legal proceedings after them. As strange as it may sound, but almost no one doubts that the elections will smoothly move from the election commissions to the US Supreme Court. We have already written about this.
In the meantime, let's return to the figure of Donald Trump and his results as President of the United States for 4 years. Apart from the absolute obvious failures like counter "coronavirus", a complete collapse of the economy in the second quarter, rising unemployment, falling labor market, we can also highlight some not so obvious failures of the Trump administration. First, according to many political analysts, it was during the Trump presidency that the country was strongly divided in opinion. It was in the last 4 years that the problems of racism flared up again in the States. And all this against the backdrop of a global epidemic that has killed 200,000 people in America alone. Secondly, all of trump's statements about the growth of the economy, about the growth of the welfare of Americans in practice are another lie. Absolutely all economists note that Trump's policy is particularly loyal to rich people. They are the ones who got richer during the Trump era. The US stock market, which does not stop growing even in times of crisis, is a collection of investors. Investors are not American farmers, sellers, and Walmart. 92% of all shares are owned by 10% of Americans. So if the stock market is rising, it means that the rich are getting richer, not the wealth of the American people is growing. The rich get richer, their capital grows, so "on average in the house" some farmer from Texas also began to "live better" under Donald Trump. Though I didn't notice it. We don't know what will happen in Trump's second term (if he wins), but in the first term, taxes for billionaires and corporations were lowered. That is, Trump is a President who is primarily convenient for rich people, not for the middle and lower class. Under Barack Obama, health care reform was implemented, and the number of people with health insurance grew under the Democrat. Under Trump, the opposite trend is observed. And everything would be fine if the "coronavirus" did not come to America (and to the whole world). And then the availability of insurance became a very important condition for life and health for every American. Thus, under Trump, health levels, and life expectancy dropped, and the entire country was engulfed in an epidemic. Third, as we have said several times, Trump has not solved his "main mission". It failed to establish "fair and just" trade relations with China. Of course, Trump himself constantly declares that under him America has ceased to be completely dependent on China. However, the trade deficit under Trump has grown, not decreased, as the President wanted. Also, the country found itself in a situation of "shutdown" two or three times, when the money to finance the government and the functioning of public services simply ran out. Under Trump, the country's national debt has grown and fewer jobs have been created than under Barack Obama. That is, in almost all indicators that grew under Trump, this growth was only a continuation of the growth that began under Obama. And as a result of all the above – the first place in the world in the number of cases of the disease; the first place in the world in the number of deaths from the "coronavirus"; one of the maximum drops in GDP (recall that in the European Union in the second quarter of 2020, a drop of only 12% was recorded). Thus, from our point of view, such depressing results are not a coincidence or accident. We believe that these are fair results of the rule of Trump, who is indeed a great businessman, but hardly anyone can call him a great President of the country and leader of the nation.
The volatility of the euro/dollar currency pair as of September 25 is 78 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.1588 and 1.1744. A reversal of the Heiken Ashi indicator upward signals a round of upward correction.
Nearest support levels:
S1 – 1.1658
S2 – 1.1597
Nearest resistance levels:
R1 – 1.1719
R2 – 1.1780
R3 – 1.1841
Trading recommendations:
The EUR/USD pair continues its downward movement. Thus, now you can continue to hold short positions with targets of 1.1597 and 1.1588 until the Heiken Ashi indicator turns upward. It is recommended to re-consider options for opening long positions if the pair is fixed above the moving average with the first targets of 1.1780 and 1.1841.
