Amplitude of the last 5 days (high-low): 28p - 36p - 32p - 79p - 58p.
Average volatility over the past 5 days: 47p (average).
The second trading day of the week was much more boring than the first one. The currency pair calmly continued the downward movement while maintaining low volatility and threatens to overcome the Kijun-sen critical line at the current bar. It can be recalled that breaking through this line will mean a change in the trend to a downward trend and, in fact, the resumption of a downward trend. In principle, this will be even logical based on the readings of the Ichimoku indicator, as the pair quotes failed to overcome the Senkou Span B strong line and, accordingly, failed to overcome the Ichimoku cloud as well. This moment shows the weakness of the bulls once again, and also proves the existence of the same "paradoxical situation", which we spoke about repeatedly. As a result, we have a declining European currency again. Nevertheless, there are still chances to resume the upward movement, even if it's not strong. However, in general, they will not change the general picture of the state of things since fundamental and macroeconomic factors remain on the side of the US dollar.
Tuesday, February 4, was almost empty in terms of macroeconomic events. An insignificant producer price index for December was published in the European Union, which decreased by 0.7% y / y in full accordance with the forecast values. The United States also published a minor indicator of changes in production orders in December, which significantly exceeded forecast values and amounted to + 1.8% y / y. Thus, American statistics won even in the confrontation between insignificant reports.
We have already said that the final Senate vote on impeachment of the US president will take place tomorrow. Today, the last hearings in the framework of the investigation ended, the prosecution and defense parties made closing speeches. Representatives of the Democrats said that the Senate is simply obliged to remove Trump from his post, as the evidence of guilt is "impressive". One of the initiators of the impeachment, Adam Schiff, said that "Trump violated the oath to defend the US constitution." Well, of course, the defenders of the US president called on the Senate to recognize Trump as innocent. According to the defense, the entire impeachment procedure is nothing more than an attempt by the Democrats to cancel the results of the 2016 elections, as well as to prevent Trump from being re-elected in 2020. It can be recalled that even half of the senators did not vote for calling additional witnesses; however, it was the new witnesses who could bring to the case new evidence and new evidence of Donald Trump's guilt. The Senate did not want this and, most likely, will justify the president tomorrow, February 5.
Meanwhile, the new coronavirus continues to spread across planet Earth. The epidemic is mainly spreading so far in China, but cases have already been reported in European countries, America, and Australia. But scientists at Hong Kong University warn that official data on the number of people infected with the virus can be much lower than real numbers. And unfortunately, this is easy to believe, given the desire of any state and government to hide such facts from the whole world. No one wants to admit what real losses have already been and can be incurred. Thus, China is likely to underestimate the official figures, the spread of the virus is already happening exponentially. Having studied all the data on air travel and railway traffic, scientists came to the conclusion that about 75,000 people should have been infected in Wuhan by January 25. While officially reported about 2,000 infected. In addition, the infection should have spread to neighboring cities and provinces - Chongqing, Beijing, Shanghai, Guangzhou and Shenzhen. Even official data suggests that more and more people become infected every day. It is unlikely that healthy citizens are placed in the hospital, but the likelihood that there is a certain number of patients outside the hospitals is very high. Therefore, the real numbers are in any case higher than the official ones.
From a technical point of view, the downward movement continues. If the bears manage to overcome the critical line, then a downward trend will be formed for the euro / dollar pair again and short positions will become relevant.
Trading recommendations:
EUR / USD continues to adjust against a new upward trend. Thus, it is recommended to buy euro currency in small lots with targets at levels 1.1106 and 1.1128, if the pair rebounds from the Kijun-sen critical line. On the contrary, it will be possible to consider the sales of the euro / dollar pair with the goals of 1.1024, 1.1012 and 1.0956, if traders manage to overcome the critical line.
Explanation of the illustration:
Ichimoku indicator:
Tenkan-sen is the red line.
Kijun-sen is the blue line.
Senkou Span A - light brown dotted line.
Senkou Span B - light purple dashed line.
Chikou Span - green line.
Bollinger Bands Indicator:
3 yellow lines.
MACD indicator:
Red line and bar graph with white bars in the indicators window.
Support / Resistance Classic Levels:
Red and gray dashed lines with price symbols.
Pivot Level:
Yellow solid line.
Volatility Support / Resistance Levels:
Gray dotted lines without price designations.
Possible price movements:
Red and green arrows.
The material has been provided by InstaForex Company - www.instaforex.com