4 hour timeframe
The amplitude of the last 5 days (high-low): 62п – 72п – 119п – 81п – 61p.
The average amplitude over the past 5 days: 79p (85P).
The complete absence of any macroeconomic events and reports did not become an obstacle for the EUR/USD currency pair. After a short break in the Asian trading session, new active purchases of the US dollar began in the European session. As a result, the pair fell to the first support level of 1.1511 and failed to overcome it on the first attempt. Thus, the US dollar continues to almost recoilless strengthening against the euro after it became aware of the results of the Fed meeting. From a technical point of view, the upward correction has been brewing for three days. However, traders are in no hurry to close short positions, which leads to the lack of correction. Tonight will be the speech of Fed Chairman Jerome Powell. Although now the question arises, is it worth it to wait? The dollar has already managed to rise significantly during the day. However, if there is something in Powell's speech that will disappoint the markets, it could trigger a round of long-awaited correction. Although the hope for such an outcome of the Fed chairman's speech is small. The MACD indicator is strongly oversold and in such conditions can react to any non-increase in the price by a discharge. Thus, a reversal of the indicator upward without a simultaneous increase in the price will not be interpreted as the beginning of the correction. The price rebound from the first target can provoke a round of corrective movement, so before overcoming this level, it is preferable to carefully reduce the sell orders.
Trading recommendations:
The EUR/USD pair resumed its downward movement. The price rebound from the first target can provoke a correction, so it is recommended to reduce shorts now, and in case of overcoming this level – to increase with the target of 1.1453.
It is recommended to consider long positions in small lots, if together with the rebound from 1.1511 happen and the reversal of the MACD indicator up with the price increase. The goal of the correctional movement is the critical Kijun-sen line.
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