Konstantin Boykachev

CEO Proforexea LLC

Honest Coder

Professional Trader


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Konstantin Boykachev

CEO Proforexea LLC

Honest Coder

Professional Trader

Blog Post

EUR / USD. October 26th. The trading system “Regression Channels”. ECB meeting: traders have not received any positive signals

October 27, 2018 Analytics


4-hour timeframe


Technical details:

The senior linear regression channel: direction – sideways.

The younger linear regression channel: direction – down.

Moving average (20; smoothed) – down.

CCI: -117.8720

The EUR / USD instrument on Friday, October 26th, continues its downward movement after the minimal upward correction. As we expected, no important decisions and statements were made during the announcement of the results of the ECB meeting. Mario Draghi is already familiar to everyone and noted that economic growth remains stable, and risks balanced. Salaries are rising, and inflation, despite a decline in the previous month, should still remain near the target level. He also touched on the topics of the budget problem with Italy. However, in our opinion, this was not the reason for the next fall of the European currency. Despite the fact that the problem with the budget of Italy remains, it can hardly have such a devastating effect on the euro. Moreover, both the euro and the pound sterling are falling, and the fall did not start because of problems with Italy. Thus, we believe that traders simply did not receive any positive signal from the EU regulator and, accordingly, did not change their trading strategy, which means selling the euro and buying the dollar. Even a report on durable goods orders in the United States could have a greater impact on the pair than the ECB report. This figure unexpectedly turned out to be significantly higher than the forecast value (+ 0.8% versus -0.9%) and, most likely, also caused another strengthening of the American currency.

Nearest support levels:

S1 – 1.1353

S2 – 1,1292

S3 – 1.1230

Nearest resistance levels:

R1 – 1,1414

R2 – 1.1475

R3 – 1.1536

Trading recommendations:

The EUR / USD currency pair continues to move down. If the bears manage to overcome the level of 1.1353, which has already been almost worked out, then short positions can be increased with the goal of 1.1292.

Buy positions will become relevant no earlier than price fixing above the moving average line with the first target of 1.1536. However, this requires a change in market sentiment, and there are still no fundamental reasons for this.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanations for illustrations:

The senior linear regression channel is the blue lines of the unidirectional movement.

The junior linear regression channel is the purple lines of the unidirectional movement.

CCI – blue line in the indicator window.

The moving average (20; smoothed) is the blue line on the price chart.

Murray levels – multi-colored horizontal stripes.

Heikin Ashi is an indicator that colors bars in blue or purple.

The material has been provided by InstaForex Company – www.instaforex.com


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