4-hour timeframe
The amplitude of the last 5 days (high-low): 27p - 45p - 102p - 50p - 88p.
Average amplitude for the last 5 days: 62p (55p).
The European currency continues to "fret and fume". As we expected in the morning, the tone of Mario Draghi's speech after the next ECB meeting was negative. Mario Draghi reiterated "the threat of protectionism" and assured market participants that the regulator will not shy away from stimulating the economy if economic growth continues to slow down. The key rate remained predictable at the level of 0.0%, but the terms of the "low rates" are now shifted to mid-2020. In other words, the regulator does not expect an improvement in the economic situation before 2020. According to the forecasts of the European Central Bank, inflation this year will amount to 1.3%, next - 1.4%, in 2021 - 1.6%. Is it worth saying that all these three values are much lower than the target inflation rate of 2.0% y/y? Is it worth it to emphasize once again that with such inflation there can be no tightening of monetary policy? The last meeting of the ECB showed that the attitude of some members of the monetary committee is even more negative than that of its chairman. The issues of reducing the key rate were raised, that is, to a negative level, questions were raised about introducing additional monetary incentives. The program of lending to commercial banks in order to maintain the liquidity of the TLTRO financial system was announced once again. These long-term loans will be issued in September. At the end of his speech, Draghi once again noted that the "period of uncertainty" is already too long and "the light at the end of the tunnel" is not yet visible. Surprisingly, the European currency managed to grow on this absolutely "dovish" rhetoric of the head of the ECB. It is unlikely that traders felt that Powell's rhetoric was more "dovish", and that is why they resumed purchases of the euro. In any case, we should have seen a decline, a moderate drop, no fall, but not a rise in the euro currency. Tomorrow, traders can begin to work out an absolutely illogical reaction of today and start selling the euro.
Trading recommendations:
The EUR/USD pair resumed its upward movement. Thus, now it is recommended to trade for an increase with targets of 1.1317 and 1.1360 before a downward reversal of the MACD indicator, which signals a new round of correction.
Short positions can be considered again if bears manage to gain a foothold back below the critical line. In this case, the nearest target will be the upper boundary of the Ichimoku cloud.
In addition to the technical picture also take into account the fundamental data and the time of their release.
Explanation of the illustration:
Ichimoku indicator:
Tenkan-sen - the red line.
Kijun-sen - the 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 Indicator:
Red line and histogram with white bars in the indicator window.
