Greetings dear investors and fellow traders!
For your attention, an analytical review of the #EURUSD: EURUSD # 7 currency pair.
• Commentary from last week:
As we expected, the upward movement of the single European currency was limited to the zone 1.1400-1.14200. This resistance is clearly visible on the daily chart and we are revising it towards expansion by 5%.
Now, the zone of the downtrend for us is the zone: 1.1370-1.1460.
Consequently, the pair is still at the very top border of the descending global channel.
All week the euro has been in high demand from investors, in the hope of an EU budget agreement.
However, on Friday, the leaders of the EU countries did not agree on measures.
The stumbling block is the dispute about how exactly the funds will be transferred to the southern countries, which have been hit hardest by the Covid19 pandemic.
The decision was a joint initiative of Germany and France to create a solidarity fund, which will be financed through the issue of special coronabond, the obligations on which will be shared by the entire EU bloc.
The total liabilities of 750 billion units were supposed to be divided by 500 and 250 billion units, respectively.
500 billion e. Were to be issued as grants, and 250 billion e. - loans.
However, on Saturday the European Commission adjusted this balance to 450/300.
But even this 4 thrifty countries (Austria, Denmark, the Netherlands, Sweden) was not enough.
The Netherlands is in favor of receiving reports on the expenditure of all funds of the fund and deny the possibility of countries receiving grants.
Loans should be issued to countries only after certain conditions are met. Thus, in order to receive funds, certain reforms will be required, which, in fact, makes the mechanism very long and not pivotal, and most likely not viable.
Austria, represented by Chancellor Sebastian Kurz, generally rejects any attempts to turn the EU into a debt union.
Such demands of the "Lean Four" are considered unacceptable by Italy and Spain.
On Saturday, on his Facebook, Italian Prime Minister Giuseppe Conte announced a deadlock in the negotiations.
If the negotiations fail in a single European currency, the old trading rule will work: "Buy on rumors, sell on facts."
• Technical analysis (D1):
The currency pair continues to be in the global downtrend channel since September 2018, the volatility that we observed in March-April only expanded the trading range of this trend.
At the close of Friday, the euro was at the uppermost border of this trend.
Divergence is clearly visible on the daily chart.
• Indicative analysis (H4):
1. The 2nd MACD starts to reverse.
2. RSI shows triple divergence.
• Technical analysis (H4-H1):
The currency pair continues to be in an upward channel, however, it met a serious resistance zone at 1.1440-1.1450. The pair tried unsuccessfully to break it for 3 days in a row.
• Levels:
a) Supports: 1.1370, 1.1264 and 1.1195.
b) Resistances: 1.1450, 1.1560 and 1.1600.
• Forecast:
Taking into account the negative news background due to difficult negotiations, a number of indicative and technical factors, we believe that the single European currency will have to be adjusted next week.
The targets for the bearish move are 1.1370, 1.1300 and possibly 1.1264.
Market opening is possible with a gap down.
However, an unlikely bullish scenario cannot be ruled out:
If investors ignore the failure of the negotiations this week and the currency pair can still fix above 1.1470, then in this case we can expect further growth to the resistance levels 1.1500 and 1.1560.
Best regards,
WMCI
!Attention: Trading financial instruments and (or) cryptocurrencies is fraught with high risks, including the risk of losing part or all of the investment, therefore it is not suitable for all investors. Cryptocurrency prices are extremely volatile and can change due to external factors such as financial news, legislative decisions or political events. Margin trading leads to increased financial risks.
Ltd ”Wermelgion & Co” and any provider of the data contained on this website disclaim liability for any loss or loss incurred as a result of trading transactions made with reference to the information provided.[/I]
For your attention, an analytical review of the #EURUSD: EURUSD # 7 currency pair.
• Commentary from last week:
As we expected, the upward movement of the single European currency was limited to the zone 1.1400-1.14200. This resistance is clearly visible on the daily chart and we are revising it towards expansion by 5%.
Now, the zone of the downtrend for us is the zone: 1.1370-1.1460.
Consequently, the pair is still at the very top border of the descending global channel.
All week the euro has been in high demand from investors, in the hope of an EU budget agreement.
However, on Friday, the leaders of the EU countries did not agree on measures.
The stumbling block is the dispute about how exactly the funds will be transferred to the southern countries, which have been hit hardest by the Covid19 pandemic.
The decision was a joint initiative of Germany and France to create a solidarity fund, which will be financed through the issue of special coronabond, the obligations on which will be shared by the entire EU bloc.
The total liabilities of 750 billion units were supposed to be divided by 500 and 250 billion units, respectively.
500 billion e. Were to be issued as grants, and 250 billion e. - loans.
However, on Saturday the European Commission adjusted this balance to 450/300.
But even this 4 thrifty countries (Austria, Denmark, the Netherlands, Sweden) was not enough.
The Netherlands is in favor of receiving reports on the expenditure of all funds of the fund and deny the possibility of countries receiving grants.
Loans should be issued to countries only after certain conditions are met. Thus, in order to receive funds, certain reforms will be required, which, in fact, makes the mechanism very long and not pivotal, and most likely not viable.
Austria, represented by Chancellor Sebastian Kurz, generally rejects any attempts to turn the EU into a debt union.
Such demands of the "Lean Four" are considered unacceptable by Italy and Spain.
On Saturday, on his Facebook, Italian Prime Minister Giuseppe Conte announced a deadlock in the negotiations.
If the negotiations fail in a single European currency, the old trading rule will work: "Buy on rumors, sell on facts."
• Technical analysis (D1):
The currency pair continues to be in the global downtrend channel since September 2018, the volatility that we observed in March-April only expanded the trading range of this trend.
At the close of Friday, the euro was at the uppermost border of this trend.
Divergence is clearly visible on the daily chart.
• Indicative analysis (H4):
1. The 2nd MACD starts to reverse.
2. RSI shows triple divergence.
• Technical analysis (H4-H1):
The currency pair continues to be in an upward channel, however, it met a serious resistance zone at 1.1440-1.1450. The pair tried unsuccessfully to break it for 3 days in a row.
• Levels:
a) Supports: 1.1370, 1.1264 and 1.1195.
b) Resistances: 1.1450, 1.1560 and 1.1600.
• Forecast:
Taking into account the negative news background due to difficult negotiations, a number of indicative and technical factors, we believe that the single European currency will have to be adjusted next week.
The targets for the bearish move are 1.1370, 1.1300 and possibly 1.1264.
Market opening is possible with a gap down.
However, an unlikely bullish scenario cannot be ruled out:
If investors ignore the failure of the negotiations this week and the currency pair can still fix above 1.1470, then in this case we can expect further growth to the resistance levels 1.1500 and 1.1560.
Best regards,
WMCI
!Attention: Trading financial instruments and (or) cryptocurrencies is fraught with high risks, including the risk of losing part or all of the investment, therefore it is not suitable for all investors. Cryptocurrency prices are extremely volatile and can change due to external factors such as financial news, legislative decisions or political events. Margin trading leads to increased financial risks.
Ltd ”Wermelgion & Co” and any provider of the data contained on this website disclaim liability for any loss or loss incurred as a result of trading transactions made with reference to the information provided.[/I]
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.