EUR/USD. May 2. Results of the day. The euro exhausted its potential?

4-hour timeframe

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The amplitude of the last 5 days (high-low): 45p - 63p - 42p - 53p - 78p.

Average amplitude for the last 5 days: 56p (57p).

There were few important macroeconomic events for today. In the morning, the index of business activity in the manufacturing sector of Markit for the euro area was published, which was 47.9 (slightly higher than the forecast, but still below the key value of 50.0). This release was not very important. In the United States, a report was published on applications for unemployment benefits (a slight excess of the forecast) and a change in the volume of production orders in March (an increase of 1.9% against the forecast of 1.5). However, all these data were of a secondary nature, so they did not have a special influence on the course of trading. Meanwhile, the US dollar continues to regain the losses it incurred at the beginning of the week. We have already mentioned several times that there is not enough weighty fundamental background to sharply strengthen the euro currency. It is the background, not the one-time reports. Thus, from our point of view, the resumption of the EUR/USD pair's fall is quite logical. Of course, the collapse is not worth waiting for, but the downward trend continues. So far, the current downward movement is seen as a downward correction, as the "golden cross" buy signal is retained. Therefore, the upward movement may still resume if the pair rebounds from the critical line. Now we are waiting for the critical line to be overcome, which will be a signal for further downward movement. Instrument volatility has increased slightly in recent days. Now it is a little more than 50 points a day, which is not as bad as it used to be, and contributes to more and more traders returning to the market.

Trading recommendations:

The EUR/USD started a downward correction with an aim of the critical Kijun-sen line. So far, the longs remain relevant with a target of 1,1234. To be able to open long positions, it is recommended to wait for the upward reversal of the MACD or the price rebound from the Kijun-sen.

Short positions are recommended to be considered in small lots while aiming for the level of 1,1124, not earlier than when the price is consolidated below the critical line. In this case, the downward trend may resume.

In addition to the technical picture, one 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.

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