4-hour timeframe
Amplitude of the last 5 days (high-low): 29p - 102p - 69p - 46p - 110p.
Average amplitude over the last 5 days: 71p (57p).
The European currency managed to successfully recover to the level of 1.1250, after which a rebound occurred and the euro/dollar began to fall. However, it is now unclear whether the upward movement has ended or whether the currency market has observed a banal correction during the day. The fundamental factor does not provide any clues at the moment, since, following it, there is only one suggested conclusion: the euro will continue to fall. However, recent days have shown that bears are ready for a timeout and correction. Now the question remains: how strong and long will this correction be, given that in the near future extra-important messages from the European Union and the United States are not expected. Both meetings of the central bank have already passed, Nonfarms and GDP have been published. We believe that since the euro's current growth was more technical than fundamental, then first we need to pay attention to technical factors. The technique will speak in favor of the resumption of the downward trend until the pair updates the high of July 19 - 1.1282. From a fundamental point of view, there is simply nothing to be noted on August 6, since not a single macroeconomic report has been published in the United States and the European Union today. The public continues to discuss the escalation of the trade conflict between Beijing and Washington, as well as prospects for further easing of the monetary policy of the Fed. However, in terms of exchange relations between the dollar and the euro, this does not really matter, as traders do not pay attention to Trump's angry statements about Powell or Xi Jinping, but to the Fed's economic indicators and actions. In addition, since the ECB is also preparing to ease monetary policy, there may not be a special profit for the euro from lowering the Fed rate.
Trading recommendations:
The EUR/USD pair started to correct against the short-term upward trend. Thus, it is now recommended to buy the euro in small lots with the target at the level of 1.1233, after the MACD has turned up or when the price has rebounded from the Kijun-sen line.
It will be possible to sell the euro/dollar pair while aiming for a support level of 1.1035, when bears take the initiative back into their own hands, and the rate consolidates below the critical line.
In addition to the technical picture, fundamental data and the time of their release should also be taken into account.
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 indicator window.
