EUR/USD. 16th of May. Results of the day. Donald Trump refused to conduct a trade war on two fronts

4-hour timeframe

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The amplitude of the last 5 days (high-low): 77p - 41p - 42p - 43p - 47p.

Average amplitude for the last 5 days: 50p (47p).

In recent days, the EUR/USD currency pair clearly can not determine the direction of its movement. First, traders are happy to buy the dollar, but only intraday, on the news about the escalation of the trade conflict with China. Then they buy the dollar on the news that Trump has postponed the decision to impose trade duties on the European auto industry. In this case, it is extremely important to pay close attention to the technical picture. The graph clearly shows that every next highest price is lower than the previous one. Although there are some corrections, there is a steady downward trend in 2019. Just a few days ago, the pair made another attempt to move above the previous high. It was unsuccessful. Thus, we currently expect an update of the previous low, the level of 1.1111 in particular. There were no important macroeconomic reports today in the European Union nor in the United States. Secondary reports from the US were unambiguously in the dollar's favor (the number of applications for unemployment benefits is less than the forecast, the number of houses being built is more than the forecast). Meanwhile, Donald Trump signed a decree imposing a national emergency in communications in connection with a threat to national security. As you can guess, we are talking about Chinese suppliers of equipment and, first of all, Huawei. A national emergency is introduced for a period of one year. The reason is the US leader's suspicion that China can conduct espionage at various levels with the help of its equipment imported into the US. We are also talking about banning the sale of Huawei's US parts.

Trading recommendations:

The EUR/USD pair has adjusted to the critical line and is now trying to resume a downward movement. Just like the day before, it is recommended to consider sell orders with a target of 1.1131, but after overcoming the level of 1.1181, since the pair could rebound from this level again.

Buy-positions can be returned if traders manage to consolidate above the critical line. In this case, the first target for longs will be the resistance level of 1.1268.

In addition to the technical picture 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.

Chikou Span - green line.

Bollinger Bands 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