The EUR/USD currency pair again did not show any interesting movement during Wednesday. In recent articles, we have drawn attention to the fact that an extremely small number of important fundamental and macroeconomic events are planned for this week. Thus, the market has nothing to react to. In addition, last week the pair showed very strong volatility, and two meetings of central banks have already been left behind. Therefore, now the market has moved into a phase of calm and consolidation. On the 4-hour TF, the "swings" that have managed to form over the past few days are visible. The pair ignores the moving and gets fixed, then above it, then below it. And both linear regression channels continue to be directed downward. And the euro, in turn, continues to remain near its local and 20-year lows. Thus, even a small respite cannot be recorded in the euro asset. It is still trading low, traders are in no hurry to buy it, and there are still very few reasons for its purchases. Therefore, at the moment, it looks as if the resumption of the global downward trend is just a matter of time. We assume that with great difficulty, the euro can grow to the area of its last local maximum, that is, to the Murray level of "+1/8"-1.0803. However, even in this case, the technical picture will not change much.
Meanwhile, the US dollar is experiencing almost its best times. Recall that just a few months ago we expected that the downward trend was nearing its end, but then a "special operation" began, a bunch of sanctions was imposed, blockades of Ukraine began, embargoes against Russia began, and now there is still unrest around Taiwan, in Transnistria, Belarus, and the Baltic States. Thus, it does not even make sense to guess which of the factors, geopolitical or fundamental, has a more destructive effect on the euro currency. They're both working against it now.
Lithuania partially blocks Kaliningrad.
Meanwhile, the Baltic states, which openly believe that Moscow can conduct the next "special operation" already on their territory, are doing everything possible to prevent this. First, Estonia, Latvia, and Lithuania are providing all the assistance in their power to Ukraine. Second, they call on the European Union and the whole world to impose new sanctions against the Kremlin to stop its aggression in Ukraine. Third, as it turned out just the other day, Lithuania blocked the transit of goods through its territory that was heading to the Kaliningrad region. We are not talking about all cargoes, but only about the sub-sanctions, which were previously approved by the European Parliament and the European Commission. Nevertheless, this is still a fairly large proportion of product categories and experts are already predicting a shortage of medicines and some food products in the region. It doesn't even matter what kind of goods will not be enough in Kaliningrad. The European Union must continue to put pressure on Russia by all available means.
Recall that Lithuania is a member of both the European Union and NATO. That is, Moscow's aggression against Lithuania will mean a direct conflict in NATO, which the Kremlin would like to avoid. But to be honest, NATO would also like to avoid a direct conflict with the Russian Federation, since it would mean the beginning of the Third World War. The State Duma of the Russian Federation has already voiced phrases about an "immediate and commensurate response" to the Lithuanian people, and in a few days, they promised to make public the decision that will be made regarding the once Soviet republic. How this story will end, we do not undertake to guess, but the fact remains that the geopolitical conflict in Ukraine is not the first time it has risks spilling out of its territory. If a possible hot spot in Scandinavia has been extinguished thanks to Turkey, which simply blocked the entry of Finns and Swedes into NATO, then Moscow has only two options here. Either to go into direct conflict with Lithuania, and therefore with the entire European Union and NATO, or to deliver cargo by air overflying the whole of Europe, since the airspace for Russian aircraft is closed. In any case, the situation in Europe is not improving but is only heating up even more, which is bad for everyone.
The average volatility of the euro/dollar currency pair over the last 5 trading days as of June 23 is 118 points and is characterized as "high". Thus, we expect the pair to move today between the levels of 1.0474 and 1.0710. A reversal of the Heiken Ashi indicator back down will signal a new round of downward movement.
Nearest support levels:
S1 – 1.0559
S2 – 1.0498
S3 – 1.0437
Nearest resistance levels:
R1 – 1.0620
R2 – 1.0681
R3 – 1.0742
Trading recommendations:The EUR/USD pair started trading in different directions every day. Thus, now it is necessary to trade on the reversals of the Heiken Ashi indicator since there is no clear trend. There is a fairly high probability of a "swing".
Explanations of the illustrations:
Linear regression channels - help determine the current trend. If both are directed in the same direction, then the trend is strong now.
Moving average line (settings 20.0, smoothed) - determines the short-term trend and the direction in which trading should be conducted now.
Murray levels - target levels for movements and corrections.
Volatility levels (red lines) - the likely price channel in which the pair will spend the next day, based on current volatility indicators.
CCI indicator - its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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