The EUR/USD currency pair traded with minimal volatility on Thursday, showing little desire to move in any direction. Overall, the currency market saw little change by the end of the day. While the UK had at least the Bank of England meeting, whose results could surprise traders, the EU published two routine reports that absolutely no one found interesting. This is not surprising, as this week the market comfortably ignored much more significant ISM and ADP reports. Thus, it is no wonder that the market paid no attention to industrial production in Germany (which, as usual, turned out worse than expected) and retail sales (which also fell short of expectations).

For over a month, we have been stating that the current decline of the euro and the strengthening of the dollar are completely illogical. It all began back in early October when Donald Trump started imposing new tariffs. Recall that the "tariffs" affected all trucks imported into the United States, pharmaceuticals, and even furniture. Shortly after, Donald Trump announced a 50% tariff increase for India, and a little later, a 100% tariff increase for China. Throughout this time, the dollar rose calmly. Yes, towards the end of the month, trade tensions between the United States and China eased somewhat, and the parties even managed to sign some sort of truce. For one year. But how can it be said that the dollar rose on this news when it rose just as much on the escalation of tensions between the two "giants" of the political world?

One should also not forget about the "shutdown." When it just began, experts were trumpeting at every corner that now the dollar would be in trouble. But, as we can see, throughout October, the American currency appreciated, and the "shutdown" became yet another factor that the market simply ignored.

It is also worth recalling the Federal Reserve's "dovish" policy. In September and October, the Fed lowered the key rate twice, but even in this case, the dollar continued to rise. This is despite the European Central Bank and the Bank of England keeping their key rates unchanged. Of course, many "experts" immediately began to talk about the "not sufficiently dovish stance of the Fed" to attempt to explain the rise of the American currency. We remind you that there are plenty of market movements that are extremely difficult, if not impossible, to explain. Therefore, when such movements are observed, it is essential to face the reality rather than concoct justifications.

From our perspective, the only thing that can explain the current decline of the pair is the flat on the daily timeframe. A flat is a specific period, not just a price within a range. The price does not simply exist for no reason. A flat usually signifies accumulation or distribution of positions by market makers. Thus, movements within a flat can be any and in no way correspond to fundamentals or macroeconomics.

The average volatility of the EUR/USD currency pair over the last five trading days as of November 7 is 48 pips, characterized as "low." We expect the pair to trade between 1.1491 and 1.1587 on Friday. The upper channel of the linear regression is directed downwards, signaling a downward trend, but in fact, a flat continues on the daily timeframe. The CCI indicator entered the oversold area twice in October (!!!), which may provoke a new wave of the upward trend.

Nearest support levels:

S1 – 1.1475

S2 – 1.1414

S3 – 1.1353

Nearest resistance levels:

R1 – 1.1536

R2 – 1.1597

R3 – 1.1658

Trade Recommendations:

The EUR/USD pair occasionally attempts to start a new upward trend on the 4-hour timeframe, but overall, it continues to decline. On all upper timeframes, the upward trend remains, but a flat has persisted on the daily timeframe for several months. The global fundamental backdrop continues to exert a strong influence on the American currency. Recently, the dollar has been rising, but the local reasons, at least, are ambiguous. However, the flat on the daily timeframe explains everything.

With the price positioned below the moving average, short positions can be considered on purely technical grounds with targets at 1.1475 and 1.1414. Above the moving average line, long positions remain relevant with targets of 1.1841 and 1.1902 as part of the ongoing trend.

Explanations for Illustrations:

• Linear regression channels help determine the current trend. If both are directed in the same way, it indicates that the trend is currently strong.
• The moving average line (settings 20,0, smoothed) defines the short-term trend and the direction in which trading should currently be conducted.
• Murray levels are target levels for movements and corrections.
• Volatility levels (red lines) represent the likely price channel in which the pair will spend the following days, based on current volatility indicators.
• The CCI indicator entering the oversold territory (below -250) or overbought territory (above +250) indicates that a trend reversal in the opposite direction is approaching.