4-hour timeframe
The amplitude of the last 5 days (high-low): 78p - 19p - 64p - 29p - 86p.
Average amplitude for the last 5 days: 55p (53p).
On Friday, July 26, the EUR/USD pair resumed its downward movement, having previously adjusted to the critical line. The ECB meeting was the main event of last week, after which it became clear that the regulator is preparing to reduce rates, restart the quantitative easing program. That is, the current state of the EU economy forces Draghi to go for softening measures. In addition, a preliminary report on US GDP for the second quarter was published on Friday. It turned out that there was a 2.1% growth while the forecast was +1.8%. As we mentioned on Friday morning, it doesn't matter how much GDP growth slows down compared to the first quarter, it's important whether it exceeds the forecast value. It exceeded so the US dollar again received support for the Forex market. In addition, we have repeatedly said that until the ECB begins to tighten monetary policy, it will be difficult for the European currency to expect long-term strengthening, since all US macroeconomic indicators are much higher. Accordingly, even if the "numbers" are falling in the United States, the situation over there still remains better than in the eurozone. Now the Fed may lower the key rate on July 31, but traders are unlikely to actively get rid of the dollar, since this decision was expected by market participants, and the refinancing rate will then be at 2.25%, and in the eurozone it will be at a 0.0% level. Despite expectations of an easing in US monetary policy, the dollar showed no excitement. Technically, the euro/dollar has updated two-year lows this week, respectively, it has all the technical grounds to continue falling.
Trading recommendations:
EUR/USD rebounded from the Kijun-Sen line. Thus, it is now recommended to re-sell the euro with targets at levels 1.1101 and 1.1072 and maintain open shorts until the MACD reverses to the top.
We recommend buying the euro/dollar pair dollar not earlier than when traders overcome the Kijun-sen line with targets at 1.1185 and 1.1269, but with minimal lots, since the bulls remain extremely weak.
In addition to the technical picture should also take into account the fundamental data and the time of their release.
Explanation of the illustration:
Ichimoku indicator:
Tenkan-sen - the red line.
Kijun-sen - the 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 Indicator:
Red line and histogram with white bars in the indicator window.
The material has been provided by InstaForex Company - www.instaforex.com