EUR / USD. 22nd of August. The trading system “Regression channels”. Negotiations on trade disagreements between China and
The senior channel of linear regression: direction – down.
The younger channel of linear regression: direction – down.
The moving average (20; flattened) is up.
The currency pair EUR / USD continued its upward movement on August 21, as evidenced by the purple bars of the indicator Heiken Ashi, and fulfilled the level of Murray “6/8”. There are still no important macroeconomic reports at the disposal of traders. But today, two-day talks between China and the States on trade disagreements start. The Chinese delegation has already arrived in Washington. The Chinese Foreign Ministry hopes that the parties will manage to reach a mutually beneficial agreement. However, to be honest, at this stage it is difficult to imagine what a mutually beneficial agreement can be discussed. Trump is clearly pushing its terms of trade, simultaneously blaming China for the theft of intellectual property and other mortal sins. Accordingly, the leader of the States will arrange concessions to the Chinese side. He himself is unlikely to make an equal concession, since reciprocal and equal concessions are unlikely to help the States reduce the trade balance deficit with China. Thus, we believe that the parties will not be able to agree, and the conflict will only grow. Proceeding from this, it can be assumed that the demand for the US currency may again grow again in the near future, as the pair has already been sufficiently adjusted and current levels are already quite attractive for new sales, especially in anticipation of a new Fed rate hike in September.
Nearest support levels:
S1 – 1.1536
S2 – 1.1475
S3 – 1,1414
Nearest resistance levels:
R1 = 1.1597
R2 = 1.1658
R3 = 1.1719
The currency pair EUR / USD could not overcome the first target of 1.1597. Thus, correction may begin now, which can be confirmed by the turn of the indicator of Heikin Ashi down. In this case, small lots can be bargained for this movement with a view to removals.
Long positions can be opened in case of overcoming the level of 1,1597 with a target of 1,1658. Overcoming the first target will add confidence to the bulls, and the uptrend will continue its formation.
In addition to the technical picture, one should also take into account the fundamental data and the time of their release.
Explanations for illustrations:
The upper channel of linear regression is the blue lines of unidirectional motion.
The lowest linear regression channel is the violet lines of unidirectional motion.
CCI – the blue line in the indicator window.
Moving average (20; smoothed) – the blue line on the price chart.
Levels of Murray – multi-colored horizontal stripes.
Heikin Ashi is an indicator that color bars in blue or purple.