Hot forecast and trading signals for the EUR/USD pair on April 29



The euro/dollar pair is trading between two strong trend lines on the 4-hour chart on April 29. They are shown on the graph as two yellow lines that are the longest in the opposite direction. Each of the lines has at least two points of support. And the last support point for the downward trend line was formed yesterday. The quotes of the EUR/USD pair rebounded off the downward trend line, which showed that traders are not ready to purchase the European currency further. Thus, we now expect the pair's quotes to decline towards the upward trend line. This option is the main one today, but will the macroeconomic background prevent it?

As we have already mentioned in the fundamental articles, a large number of different reports are planned for today, mainly in the United States. However, only the GDP report can attract the attention of traders. And it is not a fact that traders are already ready to work out macroeconomic statistics again. In any case, if the actual value coincides with the forecast or does not differ too much from it (the projected range of US GDP in the first quarter is -4.0-4.6% y/y), then there will be little chance of a reaction from traders. Participants in the currency market are simply ready for such a decline in GDP, we can say that it is already embedded in the quotes of the pair. Moreover, the US dollar was under market pressure during the first two trading days of the week and yesterday, it began to grow due to technical factors. Late in the evening, the Federal Reserve will hold a meeting and no one can say in advance what the rhetoric of its Chairman Jerome Powell will be and what decisions will be made by the US central bank. The key rate is likely to remain unchanged, but new lending programs or economic stimulus cannot be excluded. Traders are also waiting for the Fed to forecast key economic indicators for 2020-2021 and the timing of a period of low rates and possible economic recovery. The more dovish the Fed's rhetoric and actions are, the more likely the dollar will fall. However, we expect to close all open positions before the evening, so as not to take unnecessary risks.

Based on all of the above we have two trading ideas for April 29:

1) The first condition for resuming the downward movement has already been met. The pair's quotes rebounded off the downward trend line. Therefore, you can now sell the pair with the Stop Loss above this very trend line. You can also wait for the hourly chart to end under the Kijun-sen line of the Ichimoku indicator (1.0808) and trade down to the support level of 1.0733 or slightly higher (the upward trend line). Overcoming the 1.0733 level will allow you to stay in short positions. Take Profit can be from 50 to 90 points.

2) The Second option - bullish - involves overcoming the downward trend line and in this case we recommend buying the euro while aiming for the Senkou Span B line of the Ichimoku indicator at 1.0896, next to which the first resistance level for the 4-hour chart runs – 1.0903. Overcoming these two resistances will allow you to stay in long positions with the goal of 1.0990 - the April 19 high.

The material has been provided by InstaForex Company -