EUR/USD. October 10th. Results of the day. Donald Trump re-escalates the situation

4-hour timeframe

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The amplitude of the last 5 days (high-low): 129 p-79 p-66 p-70 p-71 p.

The average amplitude for the last 5 days: 83 p (84 p).

Finally, a more or less favorable fundamental background begins to take shape for the European currency. First, yesterday Donald Trump once again spoke in a negative way about the Federal Reserve's policy. In his opinion, the key rate rises too often, which can lead to a fall in the growth rate of the US economy. Trump would like to avoid such a scenario. Secondly, the repeated threats against China to impose new trade tariffs worth a total amount of $267 billion. If these duties are imposed, all imports from China will be under "sanctions". If a month ago, any aggravation of the conflict between China and the United States was regarded by traders as a positive moment for the US economy. In recent years, market participants began to reasonably believe that sanctions are also being imposed on the United States, at least from China. And this is also a blow to the economy. Moreover, the lack of consensus between Powell and Trump on monetary policy also makes one think, and hints at a possible slowdown in the economy does not add to the attractiveness of the US dollar. Thus, in the next few days we can observe a moderate growth of the European currency. Unless, of course, any new information arrives that will give traders confidence in the US currency. From a technical point of view, the price has overcome the critical Kijun-sen line, thus, the "dead cross" is weakened, and short positions temporarily lost their relevance. The upward movement may continue with the target of 1.1596.

Trading recommendations:

For the EUR/USD pair, the price overcame the Kijun-sen line. Thus, the upward movement can continue with the target of 1.1596, and it is recommended to work it out in small lots. A turn of the MACD indicator downwards will serve as a signal for a manual reduction of longs.

Sell orders will become relevant again only after the pair is consolidated back below the critical line. In this case, the downtrend will resume with the first targets in the range of 1.1448 – 1.1430.

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.

Chinkou Span - green line.

Bollinger Band 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