4-hour timeframe
The amplitude of the last 5 days (high-low): 72p - 62p - 95p - 60p - 65p.
Average amplitude for the last 5 days: 71p (77p).
The EUR/USD currency pair on Wednesday, December 19, continues a moderate upward movement and reached the zone of 1.1420-1.1440, in which a downward turn is very likely. The European currency received support due to the information that Italy and the EU reached a compromise on the Italian budget for 2019. This was stated by Vice-President of the European Commission Valdis Dombrovskis. Thus, Italy will avoid financial sanctions by the EU, but only if it fulfils all the conditions of the document. There have been no important macroeconomic reports from the eurozone and the United States to date. Thus, in the remaining part of the day, traders will be entirely focused on the results of the Federal Reserve meeting, as well as on the press conference of the Open Market Committee and the accompanying statement. The probability of a rate hike is very high, despite the statements of Donald Trump, in which there was a frank call not to raise the rate. However, what will be said at the press conference? What will be the rhetoric of the Fed representatives? And most importantly, what will Donald Trump say tomorrow if the Fed does raise the key rate? Even now we can say that Jerome Powell will be hit by a new barrage of criticism and accusations. Based on these considerations, we can assume that the US dollar will continue to fall in price. However, if the rhetoric of the Fed representatives is not "dovish", the US currency may once again move into growth.
Trading recommendations:
The EUR/USD pair continues to move up. Thus, at the moment long positions with the target of 1.1499 remain relevant. We still recommend you to be extremely careful in the area of 1.1420-1.1440, where a downward reversal may occur.
Short positions can be considered not earlier than the consolidation of the price below the critical Kijun-sen line with the target of 1.1235. Such a scenario could trigger the Fed, announcing the results of the two-day meeting.
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.