EUR / USD. September 3. The trading system “Regression channels”. 5 components of the strengthening of the US dollar
The senior channel of linear regression: direction – down.
The younger channel of linear regression: the direction is up.
Moving average (20; flattened) – sideways.
The currency pair EUR / USD was fixed on August 31 below the moving average line and fulfilled the level of Murray “6/8”. It seems that traders have completed the procedure for fixing profits on dollar positions. Thus, the current appreciation of the US currency can be regarded as a new round of medium-term dollar purchases. From a technical point of view, this is exactly the conclusion. The trend for the instrument has changed to a downward trend, so short positions have now become relevant. On Friday, no important macroeconomic reports were published in Europe and the US (the preliminary value of inflation in the EU is not counted). Also, there were no high-profile messages from the White House. Thus, if Trump does not make any new application in the near future, or if there is no encouraging information from Europe, the US dollar is likely to continue its strengthening. Market participants are not confused by the high US public debt, problems with its servicing due to the high dollar rate, and the absence of a reduction in the trade deficit, despite the introduction of trade duties by the States and against the States. Traders are interested in the stability of the economy, the profitability of American enterprises, the profitability of American securities and the state of the stock market. And all four of these components give grounds for buying US currency. If we add here also the FRS’s tough mood for tightening monetary policy, the further strengthening of the US dollar becomes even more probable.
Nearest support levels:
S1 – 1.1597
S2 – 1.1536
S3 – 1.1475
Nearest resistance levels:
R1 = 1.1658
R2 = 1.1719
R3 = 1.1780
The currency pair EUR / USD overcame removals. Thus, it is now recommended to consider shorts with a target of 1.1536. Signal to manual closing of orders for sale will be the color of 1-2 bars indicator Heikin Ashi in purple.
Buy-positions can be considered only after the reverse fixing of the price above the moving average line (and at the same time the Murray level “7/8”). In this case, the initiative will go back to the bulls, and the first target will be the level of 1,1719.
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.