4-hour timeframe
Amplitude of the last 5 days (high-low): 60p - 68p - 47p - 38p - 41p.
Average amplitude over the last 5 days: 51p (54p).
Wednesday, August 21, passed in the same calm direction as the first two trading days of the week. The only macroeconomic event of the past day was the publication of the Fed meeting's minutes. As we expected, the minutes did not contain anything interesting. In general, it rarely happens that a minutes can surprise traders with something. This time, based on the minutes, two members of the monetary committee opposed the rate cut, but Jerome Powell spoke in favor of cutting the rate (the impact of Donald Trump?), The minutes also said that the rate cut was caused by some adjustment in the middle of the cycle in response to changing economic prospects. Also, as always, emphasis was placed on inflation, which used to be significantly higher than 2.0%, and has currently been below the Fed target for quite some time.
Since there are practically no movements on the market, we can once again suggest the prospects for the euro/dollar pair in the coming weeks. Firstly, the next Fed meeting will be held on September 17-18, accordingly, there will not be a new rate cut until this time. Secondly, this Friday, Fed Chairman Jerome Powell will give a speech and his rhetoric will tell traders whether the regulator is preparing for a new decline in any case, or will nevertheless analyze economic indicators before deciding to change monetary policy. If Powell does not give clear signals about the rate cut in September, the US dollar will remain in the leading position, as there are still no special reasons, besides correctional ones, to buy the euro.
Trading recommendations:
The EUR/USD pair continues to adjust against the downward trend, and the Bollinger bands reversed to the side and narrowed to a low. Thus, now we have a pronounced flat. It is recommended to wait until its completion and only after that resume trading on the euro/dollar pair.
In addition to the technical picture, fundamental data and the time of their release should also be considered.
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.
The material has been provided by InstaForex Company - www.instaforex.com