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High activity led the euro to break out of its previous price range (1.1700 / 1.1770), reaching a quote of 1.1800. However, another slowdown occurred afterwards, so the EUR / USD pair returned back to its previous rate of 1.1770.
As a matter of fact, trading still fluctuated within the levels of the previous flat (1.1700 // 1.1810 // 1.1910), and the only difference is that 1.1700 is no longer the lower limit and main support. Nonetheless, the movement already has a scale of more than 180 points, which exceeds the structure of the downward cycle from September 1.
So, if we look at the M15 chart to analyze the trades set up yesterday, we will see that the bullish mood appeared in the euro during the Asian session, with which the main upward movement took place at 08: 15-14: 45, from the level of 1.1771 to a quote of 1.1797.
The surge in activity also resulted in the daily dynamics coming out at an amount of 90 points, which is 14% higher than the average level.
This is because as discussed in the previous review , traders focused on the range 1.1700 / 1.1770, relative to which they planned for a breakout from one limit or another.
With regards to news, strong performance on the euro area's retail sales was published, revealing a rather good increase to 3.7% on an annualized basis, and 4.4% rise on a monthly basis (August).
In the afternoon, data for the US manufacturing PMI was released, and it came out the same as the forecast, which is 54.6 points. The service PMI also showed an increase from 62.4 to 63.0 points.
In another note, European Commission president, Ursula von der Leyen, announced that she is leaving for self-isolation due to a possible contraction of coronavirus.
"I was informed that the meeting I attended last Tuesday was also attended by a person who tested positive for COVID-19. Therefore, in accordance with the current rules, I will isolate myself, "von der Leyen said.
Brexit and COVID-19 updates are hot topics in the market, so pay attention to news about it.
Latest data on JOLTS will be published today, and the forecast for which is an increase from 6.618 million to 6.685 million jobs in the United States.
Further development
As we can see on the trading chart, activity surged yesterday in the EUR / USD pair, as a result of which the euro returned to a quote of 1.1770. If the decline continues to below 1.1765, price may reach a level of 1.1700.
However, an opposite scenario may happen if the euro consolidates above 1.1810 on the four-hour time frame.
Indicator analysis
Indicators on the M15 time frame already signal SELL due to the rebound from 1.1800, while the indicators on hourly and daily TFs are still signaling BUY, but they may change if the euro reaches a quote of 1.1700.
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 34 points, which is 56% below the average daily level.
It is presumed that if speculation persists in the market, activity will continue to increase in the EUR / USD pair.
Key levels
Resistance zones: 1.1910 **; 1.2000 ***; 1.2100 *; 1.2450 **; 1.2550; 1.2825.
Support Zones: 1.1770 *; 1.1700; 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.
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