4-hour timeframe
The amplitude of the last 5 days (high-low): 78p - 54p - 37p - 40p - 50p.
Average amplitude for the last 5 days: 52p (61p).
The EUR/USD currency pair on Thursday, February 7, continued its downward movement throughout the day, but immediately reached the support level of 1.1329. However, not far at the moment. News related to the decline in economic growth forecasts from the European Commission, put additional pressure on the euro. For example, the most important indicator of GDP in the entire eurozone for 2019 is now projected at a level of 1.3%, rather than 1.9%. Even worse is the new inflation forecast for 2019 at 1.4%. Recall that the target level is 2.0%. Given such "excellent" forecasts, the ECB may again return to monetary stimulus this year. At the moment, the pair is getting close to the lowest values, around which a turn up is very possible. We believe that the instrument may try to continue moving downward, to the area of 1.1290 - 1.1300, but a reversal can occur at current levels. An upward movement is expected to be around 1.1500, above which it is still very difficult to imagine the course of the pair. In general, the pair remains sandwiched in the side corridor. In order to get out of its lower boundary, we need strong fundamental reasons, which are not there yet, despite the disappointing forecasts of the European Commission and on the whole not the best state of the EU economy and its recent macroeconomic indicators. From a technical point of view, the reversal of the MACD upward indicator, which can already happen on the current bar, will signal the start of an upward correction with the goal of the Kijun-Sen line.
Trading recommendations:
The EUR/USD pair continues a slight downward movement. The price rebound from 1,1329 indicates the beginning of the correction, and the MACD confirms it. A break of this level in the next few hours will be a signal for new shorts with targets of 1,1290 – 1,1298.
Buy-positions can be considered not earlier than the consolidation of the price above the critical line with the target of 1.1453. But even in this case, growth above the level of 1,1500 is not expected in the current conditions.
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.