4-hour timeframe
Amplitude of the last 5 days (high-low): 49p - 101p - 70p - 30p - 25p.
Average volatility over the past 5 days: 55p (average).
The euro continues to slowly fall against the US dollar and crept close to the lows of last Friday. Volatility in the US trading session increased, as several interesting reports were published in the United States at once. In the morning we said that all the reports of today are interesting, but they are unlikely to cause a serious reaction from traders, since all the "numbers" are preliminary. We already learned that the unemployment rate in Germany did not change in August (5%), and the inflation rate fell to 1.4%, which came as a surprise even to the most pessimistic analysts. Of course, as we have said, this is not the final meaning, it can still change for the better ... or for the worse. What is important is dynamics. And the dynamics show that inflation in individual countries of the eurozone continues to fall. As a whole in the eurozone.
In the afternoon, a no less interesting report on US GDP for the second quarter was released from the Bureau of Economic Analysis. According to this report, GDP will drop to 2.0%, and this is also not the final value, but a decrease in the indicator may be a consequence of the trade war that Donald Trump is actively unleashing against China. One way or another, but we would like to note one important factor - US GDP (albeit an intermediate value) is declining, but the US currency still rises in price on Thursday, August 29. Thus, traders are unequivocally set to a "bearish" trend and see no serious reason to complete medium-term and long-term sales of the euro/dollar pair. Also in the United States, a report was published on the number of pending home sales transactions and it turned out that their number was reduced by 2.5% mom in July. This was a negative and was also ignored by market participants.
The bottom line, we have the fact that today's macroeconomic statistics were generally ignored by traders. If it weren't, the dollar would not have risen in price. And so we have overcome the support level of 1.1078 and open the road to the second support level of 1.1015. On the last trading day of the week and month, that is, tomorrow, we will find out if we were right in the forecasts of a slowdown in EU inflation based on the fall in inflation in Germany. According to analysts, inflation in the EU in August will be "whole" 1.0% y/y and will not change compared to the previous month. We believe that a slowdown is possible, therefore it is entirely possible to count on a new fall in the euro currency on Friday, August 30.
The technical picture is as clear as the fundamental one. A sell signal from Ichimoku "dead cross" has formed, the EUR/USD pair has overcome the level of 1.1078, bears continue to hold the initiative in their hands.
Trading recommendations:
EUR/USD continues to move down. At the moment, we can consider sell orders with the target support level of 1.1015. Bulls remain extremely weak, so buying the pair is now impractical.
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 indicator window.
