EUR / USD Trading system "Regression Channels" on March 21. Fed statements created pressure on the US dollar

4 hour timeframe


Technical details:

Senior linear regression channel: direction - down.

Junior linear regression channel: direction - down.

Moving average (20; smoothed) - up.

CCI: 210.0263

On Thursday, March 21, the EUR/USD currency pair made a strong upward breakout as part of the continuing uptrend. The Federal Reserve has left the key rate unchanged but lowered GDP forecasts for 2019 and 2020. They also stated that the rate hike is likely in 2019 amid fears of a slowdown in the country's economic growth. Thus, it was precisely the open statement in 2019 that was no longer enough to rely on monetary policy tightening, which provoked the sale of the American currency. By and large, no more important information from the Fed has been received but Donald Trump can rejoice. He has long criticized Jerome Powell for raising the key interest rate too quickly, which makes the dollar more expensive but Trump opposes and complicates the servicing of public debt. Euro currency broke through the trend line yesterday, which connected several lower peaks at once. At the moment, we can assume makes that the global downward trend of the euro has broken. Of course, as before, a lot will depend on the nature of the fundamental news in the coming months. The EU economy still looks much weaker than the American one. Nevertheless, the euro received certain chances of forming an upward trend.

Nearest support levels:

S1 - 1.1322

S2 - 1,1292

S3 - 1.1261

Nearest resistance levels:

R1 - 1.1353

R2 - 1.1383

R3 - 1,1414

Trading recommendations:

The EUR/USD currency pair resumed its upward movement. Hence, significant targets for long positions will be at 1.1444 and 1.1475. Heiken Ashi's reversal will indicate a downward correction round.

Sell positions will become relevant not earlier than the fixation of the pair below the moving average line with targets at 1.1322 and 1.1292, given that the trend of the pair will change to downward.

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 unidirectional movement.

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

CCI - blue line in the indicator window.

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

Murray levels - multi-colored horizontal stripes.

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

The material has been provided by InstaForex Company -