4-hour timeframe
The amplitude of the last 5 days (high-low): 62p - 95p - 60p - 65p - 78p.
Average amplitude for the last 5 days: 72p (71p)
The EUR/USD currency pair on Thursday, December 20, resumed the increased upward movement and confidently overcame the strong resistance zone of 1.1420 - 1.1440. Thus, now the barriers for the upward movement of the pair are clearly less. As for such a strong take-off of the European currency, we consider the whole thing to be a late reaction of the market to the results of the Federal Reserve meeting. European markets at the time of publication of the results of the meeting and the press conference were already closed. In general, we still believe that Jerome Powell did not say anything super-negative. Also, low projections for GDP and inflation for 2018–2020 are not of great importance. First, this is just a forecast. Already at the next Fed meeting, the forecast may be increased. Secondly, be that as it may, but the US economy remains the strongest, and certainly in comparison with the EU economy. Third, even in 2019, two monetary tightening plans are planned. The Fed in any case could not raise rates constantly. The moment has come when it is necessary to take a pause, this does not mean a global slowdown of the US economy. Certain dovish signals may also be associated with Donald Trump, who reasonably believes that servicing the public debt becomes more complicated with an increase in the key rate and the achievement of that "neutral" rate level above which new grounds are needed for raising it.
Trading recommendations:
The EUR/USD pair resumed its upward movement. Thus, at the moment it is recommended to trade for an increase in the resistance level of 1.1512. In the US trading session, on the contrary, the pair may decline, which may mean the beginning of a correction.
Sell-positions will become relevant not earlier than overcoming the critical line and Ichimoku cloud by traders. However, there is a rather high probability that the pair has found the bottom and will now slowly but surely form an uptrend.
In addition to the technical picture, fundamental data and the timing of their release should also be taken into account.
Explanation of illustration:
Ichimoku Indicator:
Tenkan-sen-red line.
Kijun-sen – 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:
Red line and histogram with white bars in the indicator window.
The material has been provided by InstaForex Company - www.instaforex.com