Positive news about the beginning of the transfer of power to President-elect of the United States Joe Biden, as well as news of vaccines and a possible candidate for the post of US Treasury Secretary Janet Yellen, have brought optimism to financial markets, but risks , fear, and uncertainty remain.
The last alarm signal from the United States was the news that the current administration decided to make life difficult for Joe Biden in the form of deprivation of his funds. Treasury Secretary Steven Mnuchin announced the transfer of $455 billion from the stabilization fund to the general fund. In simple terms, the new administration will now need congressional approval in order to manage these funds.
Not the best signal for investors who may face a delay or lack of cash injections into the economy.
In Europe, things are no better, the seven-year budget is slipping, and the coronavirus is still not abating. German Chancellor Angela Merkel acknowledges the lack of success in the fight against COVID-19, and there are rumors that she is considering even harsher restrictive measures. A discussion of the COVID-19 situation is scheduled for November 25, the Chancellor will speak with the regions where it is assumed that partial restrictions will continue until December 20.
In turn, French President Emmanuel Macron, following the UK, announced the easing of quarantine measures in the country from November 28. It is understood that outdoor sports, extracurricular activities of schoolchildren on the street, and shops will be allowed to work until 21: 00 is subject to strict sanitary measures. However, restaurants and bars will remain closed until January 20.
It can be seen that the fear of investors is driven by a multitude of fears related to political, economic, and force majeure. Therefore, no one is in a hurry to make long-term forecasts, the optimal approach in the market, as before, remains in the form of local manipulations in the market, in the stream of the above concerns.
In terms of technical analysis, you can see that the European currency, on November 24, won back all losses and returned to the range level 1.1890 / 1.1900 / 1.1920. No fundamental changes were observed in the market, the quotes, as before, are concentrated between the coordinates 1.1810 and 1.1920 for a week and a half already.
The market dynamics for November 24 to 58 points, which is 25% lower than the average level, while the ratio of the speculative transaction is high, which suggests that the market may accelerate in the very near future.
Considering the trading chart in general terms (daily period), it can be seen that the market moves within the boundaries of the medium-term sideways channel, where the range level is part of the upper border.
A large package of statistics for the US is expected on Wednesday in terms of the economic calendar. The main event is considered to be the publication of the second estimate of GDP for the third quarter, where the rate of economic decline may slow down from -9.0% to -2.8%, which is better than the first estimate.
The US labor market will report on the volume of applications for unemployment benefits, where they expect a reduction in applications.
Primary applications can be reduced from 742,000 to 730,000.
Repeated applications for benefits may even decrease immediately by 372,000, from 637,200 to 600,000.
An important indicator of economic recovery can serve as the publication of the volume of durable goods, which predict the growth of 0.8%.
In the case of coincidence of expectations regarding statistical data, the dollar can receive support.
As before, the meeting of German Chancellor Angela Merkel with regional authorities on the topic of restrictive measures remains a factor of uncertainty.
Analyzing the current trading chart, you can see that during the start of the European session there was a risk of a breakdown of the range level 1.1890 / 1.1900 / 1.1920, but once again there was a sharp reduction in the volume of long positions, which led to a halt and a rebound in the price.
The control levels, as before, remain the coordinates 1.1810 and 1.1920, fixing the price higher or lower in a four-hour period may indicate the next move in the market.
If something dramatic in terms of information flow does not happen before the release of Western traders, then positive statistics for the United States may direct the quote towards 1.1810.
Indicator analysis
Analyzing different sectors of timeframes (TF), it can be seen that indicators of technical instruments on the hourly and daily periods signal a purchase due to price fluctuations within the range level. Minute intervals signal a sell by reducing the volume of long positions.
Weekly volatility / Volatility measurement: Month; Quarter; Year
The volatility measurement reflects the average daily fluctuations, calculated per Month / Quarter / Year.
(November 25 was built taking into account the publication time of the article)
The dynamics of the current time is 40 points, which is not much, but due to the tight economic calendar and the risk of unexpected information noise, volatility may accelerate.
Key levels
Resistance zones: 1.1890-1.1900-1.1920 **; 1.2000 ***; 1.2100 *; 1.2450 **; 1.2550; 1.2825.
Support zones: 1.1810 *; 1.1700; 1.1612 *; 1.1500; 1.1350; 1.1250 *; 1.1180 **; 1.1080; 1.1000 ***.
* Periodic level
** Range level
*** Psychological level
