4-hour timeframe
The amplitude of the last 5 days (high-low): 39p - 96p - 78p - 54p - 37p.
Average amplitude for the last 5 days: 61p (64p).
The European currency paired with the US dollar, slowly but surely, continues to move down. During the day, business activity indices in the services and production sectors of the European Union were published, which turned out to be slightly higher than the forecast values and slightly higher than the value of 50. Thus, both of these indicators could support the euro currency, but did not. Furthermore, the indicator of retail sales for December was published, which also exceeded the forecast (0.8% y/y) and also did not support the euro currency. During the US trading session, three indices of business activity were published at once, one of them from ISM and two of these three indices turned out to be worse than market expectations. However, this did not help the euro currency. Based on this, we still believe that the pair will fall to the level of 1.1290, where it has already dropped at least five times. At the same time, the pair remains within the not very clear side side, limited by the levels of 1.1290 and 1.1500. More global fundamental data during February 5 were not available to traders. From a technical point of view, the pair came close to the Senkou Span B line and the level 1.1392, from which it can rebound and start a round of upward correction. However, we expect the stop near these resistances to be short. Near the level of 1.1290, it is quite possible to turn upward with the pair back to 1.1500. Fast indicators, like MACD, will show the beginning of the upward spiral.
Trading recommendations:
The EUR/USD pair continues a slight downward movement. So now the actual short positions in small lots with targets of 1,1392 and 1,1355. In general, we expect a smooth decline of the pair to the level of 1.1290.
Buy-positions can be considered after consolidating the price above the Kijun-sen line with a target of 1.1516. However, this would require either a compelling fundamental reasons or a preliminary decrease in the pair to the area of 1.1290.
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.