4-hour timeframe
The amplitude of the last 5 days (high-low): 34p - 38p - 43p - 101p - 117p.
Average amplitude for the last 5 days: 67p (55p).
The first trading day of the week for the EUR/USD currency pair ended with a continuation of the upward movement that began on Friday. There were no important macroeconomic publications on Monday, January 28, in the United States and the European Union. However, in the next few hours a speech by ECB head Mario Draghi is expected. Potentially, as usual, this speech can affect the movement of the currency pair. For now, we need to figure out why the downward movement ended and what awaits the pair in the coming days. We have already written about the reasons for the completion of the hike down near the level of 1.1290, now we can say that the main reason why the pair did not continue to fall is technical, since the pair bounced off the area of this level more than once, that is, there are pending orders for the purchase near it. From a fundamental point of view, perhaps traders have noticed that Donald Trump, along with Congress, though launched work for three weeks, but after this period, if Trump does not receive the necessary amount for the construction of the wall on the border with Mexico, a new "shutdown"can begin. Of course, a repeated "shutdown" is a bad thing for the United States. Losses due to the first "shutdown" amounted to 6 billion. Trump for the construction of the wall asks 5.7 billion. And if he does not receive this money, it threatens not only a new "shutdown", but the sole decision to allocate the necessary funds by imposing a state of emergency, which, however, can be challenged by Congress in court. Anyway, Trump is not going to give up, and in the coming days more chances for euro currency to grow.
Trading recommendations:
The EUR/USD pair continues its upward movement. Thus, long positions in small lots with targets at 1.1453 and 1.1499 are now relevant. A turn of the MACD indicator downwards will indicate a downward correction round.
Sell positions can be considered again no earlier than the price consolidating below the Kijun-Sen line. However, from our point of view, this option is still unlikely now without serious fundamental support of the US currency.
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.
Chikou span – green line.
Bollinger Bands Indicator:
3 yellow lines.
MACD:
Red line and histogram with white bars in the indicator window.
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