4-hour timeframe
The amplitude of the last 5 days (high-low): 42p - 43p - 47p - 58p - 29p.
Average amplitude for the last 5 days: 44p (46p).
As is often the case on Mondays, especially when there are no planned macroeconomic reports in countries whose currencies converge in one pair, volatility has dropped to almost zero. From the high to the low of the day, the pair passed (attention!) 18 points. Formally, the euro started a correction, since the last closed bar is bullish, and the MACD indicator moved up. In fact, this is a common market noise and a simple coincidence. Fundamental themes that are significant for the euro/dollar pair, such as the trade wars between the United States and the EU and China, now also have a special influence on the pair's movement. Donald Trump made a statement in his usual manner that American companies had already begun to leave China, since after the introduction of duties on Chinese imports, the importation of goods into the US became more expensive and has less demand in America. Of course, the leader of the United States is a bit crafty, since duties were introduced not more than a week ago, companies could hardly curtail production so quickly and transfer it to neighboring Asian countries. However, if China and the US cannot reach an agreement, which is more dependent on Beijing, then American companies can really begin to leave China. From a technical point of view, we would like to note that the pair has not begun to adjust. That is, even if traders do not currently have grounds to buy the euro, it is clear that markets do not have any reason to take profits on "dollar" positions. A large share of the probability of the formation of a downward trend will continue below 1.11.
Trading recommendations:
The EUR/USD pair formally started the correction. An update of today's low or a reversal of the MACD downward will indicate a resumption of the downward movement and short positions will again become relevant with a target level of 1.1123.
It is recommended that you return to buying if traders manage to gain a foothold above the critical line. In this case, the first target for the longs will be the resistance level of 1.1228.
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