4-hour timeframe
The amplitude of the last 5 days (high-low): 32p - 55p - 42p - 38p - 62p.
Average amplitude for the last 5 days: 46p (42p).
Ahead of the announcement of the ECB results, the EUR/USD currency pair slightly rose against the US dollar. However, it continues to remain inside the Ichimoku cloud and rests against its upper boundary - the Senkou Span B line, which is a powerful resistance, especially in conjunction with the resistance level of 1,1289. Therefore, it will help traders dot the "I" by tomorrow. Either the euro will receive fundamental support, for which there is very little hope, and overcome the cloud thereby, strengthening the "Golden cross", or it will return to the downward channel. Taking into account the fact that there are no special prerequisites for hawkish statements at the ECB press conference or, the more so, monetary policy tightening, the second scenario is more likely. Mario Draghi has already reported that the EU economy needs to be stimulated, which is why a new long-term lending program for eurozone banks was announced. Today, during the day, not a single important macroeconomic report was published, so there was nothing for traders to respond to. Yesterday there was a slight surge in volatility, but today these figures have again dropped to the lowest. The most significant technical factor now is another unsuccessful attempt to overcome the level of 1.1200, which is a powerful reason for the possible further strengthening of the euro. However, without the fundamental support, it will be difficult for the euro to continue growth.
Trading recommendations:
The EUR/USD pair continues a weak upward movement. Thus, orders for buying small lots with targets at 1.1289 and 1.1316 are now relevant, since the "golden cross" is still weak.
It is recommended that you consider sell orders in small lots with the target of 1.1181, if the pair consolidates back below the critical line. To overcome the level of 1.1200, the market will be cautious with new sales.
In addition to the technical picture, one should also take into account the fundamental data and the time of their release.
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.
Chikou span – green line.
Bollinger Bands Indicator:
3 yellow lines.
MACD:
A red line and a histogram with white bars in the indicator window.
The material has been provided by InstaForex Company - www.instaforex.com