Hot forecast for EUR / USD on 11/05/2019 and a trading recommendation

Trading 05 nov 2019 Donner votre avis

If you look at the data released yesterday, it's not at all clear why the dollar went up. After all, the index of business activity in the manufacturing sector in Europe grew from 45.7 to 45.9, while manufacturing orders in the United States fell by 0.6%. In other words, there are signs of improvement in Europe, and in the New World, more and more evidence indicates the possibility of a recession. Nevertheless, the dollar was growing steadily. The reason for such a strange behavior of the dollar lies in the trade confrontation between Washington and Beijing. Everyone has long dubbed everything that is happening with the trade war, and for more than a year, rumors have continued that the United States and China are close to concluding a comprehensive trade agreement that will put an end to the confrontation that impedes the growth of the global economy. However, all these forecasts cannot come true in any way, and the warring parties, only increase mutual trade barriers. Although, yesterday it was reported that Washington and Beijing had made some progress, and soon, the United States could reduce the tax burden on Chinese goods by a total of 112 billion dollars. Thus, the prospect of ending the trade confrontation provided a serious support to the dollar.

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Today, it is unlikely that something will change, since this time, macroeconomic statistics themselves indicate a further potential for strengthening the dollar. The main negative factor for the single European currency is producer prices, the decline of which should increase from -0.8% to -1.2%. If these forecasts are confirmed, then in Europe, there remains the possibility of lowering inflation and the development of deflation. In addition, the United States predicts an increase in the number of open vacancies, from 7,051 thousand to 7,211 thousand. This means that finding work has become a little easier, and the recent increase in unemployment may be temporary. Of course, it is likely that, as yesterday, politics will intervene. Nevertheless, this factor is difficult to predict. Moreover, the refutation of yesterday's rumors is unlikely, since no official statement has been released. That is, there is simply nothing to refute.

Producer Prices (Europe):

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The EUR / USD pair has found a resistance point in the face of the control level of 1.1180 once again, where after a short deceleration, the development has occurred once again. In fact, nothing dramatic has happened, the resistance point has stood, the oblong correction still retains its leadership, and market participants are trying to drive the quotation into a wide side channel in a certain phase of uncertainty. In terms of a general review of the trading chart, we see the prerequisites for a slowdown in the oblong correction, but so far, within 1.1080 / 1.1180.

It is likely to assume a temporary fluctuation within 1.1010 / 1.1030, where if we maintain the existing downward mood, we can return to the area of 1.1080 again, where a stop with a pullback will already be considered.

Concretizing all of the above into trading signals:

- We consider long positions in the case of a clear price fixing higher than 1.1035.

- We consider short positions in the case of maintaining a downward mood and fixation lower than 1.1010.

From the point of view of a comprehensive indicator analysis, we see that only a medium-term indicator restrains purchases with restraint, reflecting the same inertia. On the other hand, minute and hour intervals work in a downward direction signaling sales.

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

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