4-hour timeframe
The amplitude of the last 5 days (high-low): 38p - 43p - 101p - 117p - 54p.
Average amplitude for the last 5 days: 71p (67p).
The second trading day of the week for the EUR/USD currency pair ended with the preservation of the upward trend, but the volatility fell again after just two days of high values. No more or less significant macroeconomic report has been published to date. Thus, traders simply did not have anything to react to. On the basis of this, low volatility and practically marking the pair in one place are quite reasonable. What follows from this? From this it follows that in order to increase volatility one should wait for any important news from the USA or the eurozone. While there is neither one nor the other, it is difficult to count on the growth of market activity. From a technical point of view, the price worked the Senkou Span B line and bounced off of it, so it is possible to start a downward correction on the instrument to the Kijun-sen line. Theoretically, tomorrow traders can start actively trading again, as a Federal Reserve meeting and a press conference are scheduled for January 30. The rate is unlikely to be raised, but the statements of the Fed's top officials may give new food for thought to the markets. Earlier, the Fed repeatedly gave signals to the market that the highest possible rate level in the current conditions is already close. Only two rate hikes are planned for 2019, and if the economic situation is unfavorable, they may be less. Markets saw this as the end of a period of improvement, respectively, the US dollar began to lose advantage against its major competitors in the long run. The euro is still near its lows, but the US dollar is no longer able to continue its strengthening.
Trading recommendations:
The EUR/USD pair started the weakest correction, which was signaled by the MACD indicator. The volatility remains low, in case of a reversal of the MACD indicator upwards, it will be possible to re-consider the longs with the targets of 1.1453 and 1.1497.
Sell positions will become relevant not earlier than the consolidation of the price below the Kijun-sen line with the target of 1.1325. In case of" hawkish "comments by the Fed, the dollar may get support tomorrow night or a little earlier, if traders' expectations are exactly like that.
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