4-hour timeframe
Amplitude of the last 5 days (high-low): 98p - 54p - 73p - 78p - 90p.
The average amplitude for the last 5 days is 79n (74p).
From the very first day of the presidency of Donald Trump, he declared and continues to say that the country does not need a strong dollar. Actually, such a policy with low currency rate held by many countries but the US, in particular as Trump himself noted, does not need an expensive dollar due to the fact which makes it more difficult to service the country's huge external debt. However, with the contradictory statements, various scandals and other unfair play methods in the first year of the board, Trump managed to restrain the growth of the US currency. Moreover, it became cheaper, everyone was happy. But in early 2018, Trump's protectionism policy began to be interpreted in the world markets as a sign of US strength and traders began to expect a real strengthening of the US economy, buying dollars and American securities accordingly. It led to a strong growth of the dollar against almost all competitors. Now Trump is trying to walk already along the usual road. With the help of scandals, contradictory statements, he will try at least to contain the growth of the dollar. It all began with the criticism of Jerome Powell. Trump naturally does not support the rate increase, as this further strengthens the dollar. However, Powell and Trump seem to be on the same side, but the US leader does not care. The main thing is to reach the goal and the main goal now is to obtain new trading conditions with the countries with the largest turnover, in particular, Canada, China and the EU. Thus, we believe that firstly, Trump will try to improve by any means the trading conditions, which by the way, can lead to the transfer part of the production capacity of American companies back to the States.
Trading recommendations:
For the EUR/USD pair, the price worked out the resistance level of 1.1539 and could not overcome it. If the bulls manage to push this level, it will be possible to continue trading on the rise with the next target of 1.1609. However, it should be remembered that the fundamental background for the growth of the euro is now rather doubtful.
Short positions in small lots can be considered if the MACD indicator turns down, which will mark the beginning of the downward correction (at least) with the targets of the support level 1.1451 and the critical Kijun-sen line.
In addition to the technical picture, one should also take into account the fundamental data and the time of their release.
Explanations to the illustration:
Ichimoku Indicator:
Tenkan-sen is a red line.
Kijun-sen is the blue line.
Senkou Span A is a light brown dotted line.
Senkou Span B - a light purple dotted line.
Chikou Span is a 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