4-hour timeframe
Amplitude of the last 5 days (high-low): 25p - 38p - 28p - 73p - 42p.
Average volatility over the past 5 days: 42p (average).
As we expected this morning, the EUR/USD currency pair spent a quiet and calm Monday and only resumed some semblance of a downward movement at the US trading session. The upward correction has not yet begun, which indicates a lack of desire on the part of the bears to take profit on dollar positions, as well as the absence of bulls on the market. Today's volatility is low and is only 27 points at the moment. However, it can still reach average values of about 40 points by the end of the trading day. Not a single important macroeconomic report was published on the first trading day of the week. Thus, the fundamental background of today is reduced only to information coming from the White House, from the US Senate and personally from Donald Trump.
Perhaps the topic of the US president's impeachment is absolutely uninteresting for some of the traders. Someone might consider it a farce, and, as Trump himself puts it, "a witch hunt." Everyone has different opinions, but one cannot but note the importance and significance of this process, even if it was fabricated by Democrats. As we have repeatedly noted, the main omission of Trump in this matter is that he was "framed". He gave a chance and a reason for the Democrats to begin an investigation of their illegal actions. He gave reason to start the impeachment proceedings. And if the evidence of the accusatory side were "weak", then the Democrats would hardly have begun the whole procedure, realizing that through the Senate, in which the majority belongs to just the Republicans, it will not be possible to push the accusation, and Trump's political ratings could rise thanks to such "cheap" evidence. In this case, the chances of winning the presidential election will increase precisely with Trump, and not with any Democratic candidate. The evidence and testimony of witnesses close to Trump's people is very strong. For example, as we said in the morning, John Bolton, a former national security adviser to Donald Trump, claims that Trump personally froze aid to Ukraine and refused to "defrost" it. Naturally, Trump needed something to answer these accusations, and immediately followed a post on Twitter in which the US leader said "no, it wasn't, Bolton is lying to increase sales of his book." By and large, this situation looks like a game of tennis, where opponents throw the ball over the net. First, the Democrats or someone from the accusatory side presents his opinion that Trump is to blame for a crime against the people and democracy, after which Trump immediately says that this was not the case and throws the ball back over the net to the opponent's side.
In general, this topic should not be overlooked, especially in those days when, as today, there are no important macroeconomic publications. In those days when no new information is at the disposal of traders. Now the trade war between China and the United States has been put on hold, it is not known when new negotiations on the "second phase" are set to begin, the trade war with the European Union has not yet started, the parties only exchanged mutual threats to introduce duties. The situation with the coronavirus, from which several dozen people have already died in China, is, of course, a serious threat to world security, especially at a time when everyone can buy a plane ticket and go anywhere in the world, but 50 dead are fewer than the death toll in one plane crash of a Ukrainian plane over Iran. Tens of thousands of people die every day in the world from cancer, from AIDS, from various disasters, from natural disasters and even from simpler diseases and misfortunes. Why does no one sound the alarm over AIDS, which cannot be overcome in any way? Thus, coronavirus is, of course, unpleasant, but so far this is not a problem of the scale to sound the alarm and so that it can affect the currency or stock markets.
From a technical point of view, a recoilless downward movement continues. The MACD indicator turned up, however, the price does not rise, respectively, the indicator began to discharge, being at its lowest positions. Thus, the downward movement may continue, and we recommend reducing short positions in the event of a price rebound from any support or volatility level or in case of an increase in the quotes of the euro/dollar pair.
Trading recommendations:
EUR/USD continues to move down. Thus, it is recommended that you either hold open shorts with targets of 1,1008 and 1,0973, until the start of the corrective movement (rebound from any target or turn the MACD indicator up with a parallel increase in price). It will be possible to consider purchases of the euro/dollar pair not earlier than the traders of the Kijun-sen line overcome in small lots with the goals of resistance level 1.1088 and Senkou Span B. line
Explanation of the illustration:
Ichimoku indicator:
Tenkan-sen is the red line.
Kijun-sen is the blue line.
Senkou Span A - light brown dotted line.
Senkou Span B - light purple dashed line.
Chikou Span - green line.
Bollinger Bands Indicator:
3 yellow lines.
MACD indicator:
Red line and bar graph with white bars in the indicators window.
Support / Resistance Classic Levels:
Red and gray dashed lines with price symbols.
Pivot Level:
Yellow solid line.
Volatility Support / Resistance Levels:
Gray dotted lines without price designations.
Possible price movements:
Red and green arrows.
The material has been provided by InstaForex Company - www.instaforex.com