Trading recommendations
Sell Stop 1.0910. Stop-Loss 1.0950. Targets 1.0865, 1.0825, 1.0710, 1.0600
Buy in the market. Stop-Loss 1.0910. Targets 1.0970, 1.1030, 1.1050, 1.1135, 1.1285
Technical analysis
The EUR/USD soared yesterday by almost 1.0% to the level of 1.1300 (Fibonacci 23.6% retracement level of the last wave decline from 2014 highs), but then began to decline rapidly and closed yesterday below 1.0910. The volatility in the EUR/USD pair yesterday was almost 400 points. With the opening of today's trading day the EUR/USD pair rose by about 30 points, rebounding from the level of 1.0910.
OsMA and Stochastic indicators on the 1-hour and 4-hour charts went over to the customer, indicating the correction. Possible immediate objectives of this correction – are 1.0970, 1.1030 (EMA200 the 1-hour chart), 1.1050 (EMA200 on 4-hour chart). However, the pressure on the pair EUR/USD is stored, and the pair is in the downlink on the daily chart. Indicators OsMA and Stochastic on the daily chart have moved to the side of the sellers.
The signal for the continuation of decrease in pair EUR/USD will be the breakdown of the support level 1.0910 (yesterday's lows and lows achieved in the referendum on the day of publication Brexit). The objectives may be levels of 1.0865, 1.0800, 1.0710, and 1.0600. The reverse scenario assumes consolidation above 1.1050 levels and continued growth to resistance level 1.1135 and the balance line (EMA200 on the daily chart, EMA50 on the weekly chart). A break of this level could trigger further growth of the EUR/USD to the level of 1.1285 (Fibonacci 23.6% retracement level of the last wave decline from 2014 highs of the year).
Support levels: 1.0910, 1.0865, 1.0825, 1.0710, 1.0600
Resistance levels: 1.0970, 1.1030, 1.1050, 1.1135, 1.1285
Overview and Dynamics
So, the majority of votes in the election, Donald Trump became the 45th US president. The unexpected victory of Donald Trump in the presidential elections in the United States has become a shock to the world markets. Immediately after the announcement of the first results of the elections during the Asian session, the dollar fell sharply against the safe-haven assets and Eurocurrency, but rose against the commodity currencies. Stock markets suffered the most severe losses in a few months immediately after the announcement of the election results, but then at the beginning of the trading session in Europe rebounded half, and by the end of yesterday's trading day closed in positive territory.
The dollar recovered all their losses. The WSJ dollar index, which tracks the US dollar's value against a basket of other currencies, rose yesterday by 0.7% to 88.66%. It is likely that before the end of the week the financial markets stabilize. The agency S & P, after the election of Donald Trump's confirmed the credit rating of the US to AA + level, and stated that the rating outlook remains stable. In recent weeks, many expressed the assumption that Trump may have on Yellen pressure, forcing her to resign as head of the Fed. Among the participants of the market it has been suggested that the Fed may delay a rate hike in December. Uncertainty about the economic outlook and policy that emerged after winning Trump can destroy the Fed plans. The president of the Federal Reserve Bank of Minneapolis Neil Kashkari said yesterday that the central bank will assess the impact over time of Trump as president on the economy. "We're going to wait and see what decides to do Congress and the executive branch" -Kashkari said. Another member of the Fed's FOMC Williams curled today that "it is necessary to evaluate all the economic data before making a decision on a rate hike in December." If the Fed really will not raise rates in December, the dollar will come under pressure on the foreign exchange market.
Today the foreign exchange market is experiencing a correction to yesterday's movements. Economic calendar until the end of the day is not full of important news, and the restoration of the pair EUR/USD, probably may continue until the end of the day. However, you should pay attention to news out of the US, which may exacerbate volatility in the currency market. At 13:30 (GMT) will be issued the number of new (primary) applications for the grant on unemployment in the US last week. The result is higher than expected indicates a weakness of the labor market that negatively affects the US dollar, and vice versa. The previous value – 265000, the forecast – is 260000. At 19:00 publishes a monthly report on the budgetary situation in the US in October.
