EUR/USD. January 16. Results of the day. In the evening, Theresa May can be dismissed

4-hour timeframe

AlSwusFyF5Kz2VttLdyAh7sgIZKU3zCebChO-ipV

The amplitude of the last 5 days (high-low): 121p - 85p - 83p - 31p - 108p.

Average amplitude for the last 5 days: 86p (76p).

On Wednesday, January 16, the EUR/USD currency pair plummeted to the support level of 1.1386 and, by and large, stood all day in one place. Despite the fact that yesterday an event took place, which in terms of importance is unparalleled, today the activity of traders is practically zero, and the instrument's volatility is rather low. During the last part of the day, not a single important macroeconomic report was published in the eurozone or in the United States. But in the next hour a report on retail sales in America will be released, which is considered to be quite important. It is expected that the increase in December, taking into account and excluding car sales will be 0.2%. Any value above this will support the American currency. At least a small one. However, an even more important event, comparable to yesterday's Brexit vote, will take place tonight in the same British parliament. Deputies will vote for a no-confidence vote for Theresa May. And according to the results of this vote, Theresa May can be dismissed. From our point of view, the probability of such a deplorable outcome for the current prime minister is about 90%. Too big and important defeat she suffered the day before. By and large, its negotiations with the EU now have no special meaning, since it is unclear what awaits the UK, even in the near future. It is also possible to hold parliamentary elections, the choice of a new prime minister. The new government can hold a new referendum or start new negotiations with the EU or even abandon Brexit altogether. In general, despite the fact that these events are more important for the pound, we believe that they can also affect the euro currency.

Trading recommendations:

The EUR / USD pair retains the prospects of a downward movement, but it cannot overcome the level of 1.1386 yet. Thus, a correction may begin, and it is recommended to open new sell positions not earlier than overcoming the level of 1.1386 with the goal of 1.1314.

Long positions can be considered not earlier than the bulls overcoming the level of 1.1487. In this case, long positions with the target of 1.1560 will become relevant again.

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.

The material has been provided by InstaForex Company - www.instaforex.com