4 hour timeframe
The amplitude of the last 5 days (high-low): 91п – 62п – 72п – 119п – 81п.
The average amplitude over the past 5 days: 85P (83P).
The first trading day of the week for the EUR/USD pair was completely sideways. And this is not bad for the European currency. We expected an upward correction on Friday, but it did not start either on Friday or Monday. The most that the bulls have enough power to do so is to stop the fall. On Monday in Europe, the index of business activity in the manufacturing sector was published, which fell by 0.1 points to 53.2 compared to the previous month. Also published was the unemployment rate, which also fell to 8.1%. However, as we can see, these news did not provide any special support to the European currency. Even the seemingly optimistic unemployment rate is actually quite high. Thus, even its decline was not the basis for the purchase of the European currency. The index of business activity in the US manufacturing sector was also weaker than expected, but still remains very strong in absolute terms. In general, all these macroeconomic reports did not have the necessary degree of importance to move the market from a dead point, as we wrote in the morning. Thus, traders can either wait for new strong information or for the actions of major investors, which can indicate the direction of the pair's movement for the next few days. It is noteworthy that the GBP/USD pair started an upward correction, but the euro did not. Thus, we establish a fact: in the current conditions, the euro is in low demand.
Trading recommendations:
The EUR/USD pair has started a side correction, which you can safely skip. There is no upward movement, although the MACD has turned up. Thus, the pair remain relevant short positions with the target level of support at 1,1511.
Long positions formally became relevant due to the MACD reversal upwards, but with minimum lots. Given the strong oversold indicator, you should wait for confirmation of the beginning of the upward correction with the help of other indicators.
In addition to the technical picture, fundamental data and the timing of their release should also be taken into account.
Explanation of illustration:
Ichimoku Indicator:
Tenkan-sen is a red line.
Kijun-sen is a blue line.
Senkou Span A is a light brown dotted line.
Senkou Span B - a light purple dotted line.
Chikou Span - green line.
Bollinger Bands Indicator:
3 yellow lines.
MACD indicator:
Red line and histogram with white bars in the indicator window.
The material has been provided by InstaForex Company - www.instaforex.com