4-hour timeframe
The amplitude of the last 5 days (high-low): 36p - 58p - 34p - 38p - 43p.
Average amplitude for the last 5 days: 42p (43p).
On Thursday, January 24, the EUR/USD currency pair continued to decline ahead of the announcement of the results of the ECB meeting and the press conference. Immediately it should be noted that the instrument volatility remained extremely low, despite the fact that everything on the chart may seem different. In the past 5 days, the daily volatility did not exceed 60 points, in 4 cases out of 5, the volatility did not exceed 43 points. The ECB's decisions to keep both key rates unchanged did not arouse any interest among traders. No one expected that the regulator would not make any changes, and raising the rate now is out of the question. During his speech, Mario Draghi noted that the risks of the economy shifted downward. This means recognition of the regulator in the deterioration of the situation. Draghi's words that a new stage of the long-term lending program for banks is not required now slightly brightened up the situation. On this statement, the euro has grown a bit. In general, the situation in the European currency has not changed. The downward trend in the instrument persists. Several US reports have no effect on the course of trading. The US shutdown, which has been going on for more than a month, does not prevent traders from continuing to moderate purchases of the US dollar. At the same time, the British pound sterling continues to rise in price against the US currency, although the situation in the British Parliament does not contribute to this. In general, from a fundamental point of view, the movement of the pair is now illogical, and frankly reduced volatility is difficult to explain.
Trading recommendations:
The EUR/USD pair has launched a new correction within a very narrow channel, which is perfectly visible thanks to the Bollinger Bands. Thus, sell orders will be relevant again after its completion with the target of 1.1313, however, we recommend waiting for the completion of the current flat.
Purchase orders will formally become relevant small lots after consolidating above the Kijun-sen line with the first target at 1.1411, however, it is also recommended to wait for the flat to complete.
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-red line.
Kijun-sen – blue line.
Senkou span a – light brown dotted line.
Senkou span B – light purple dotted line.
Chinkou span – green line.
Bollinger Bands Indicator:
3 yellow lines.
MACD:
Red line and histogram with white bars in the indicator window.
The material has been provided by InstaForex Company - www.instaforex.com