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4-hour timeframe
Amplitude of the last 5 days (high-low): 43p - 86p - 51p - 41p - 57p.
The average amplitude for the last 5 days is 56p (57p).
On Wednesday, August 8, the EUR / USD currency pair continued an upward correction at night trades. However, with the opening of the European trading session, the US dollar again began to be in demand. There are at least two reasons for this. First, the correction, as we wrote earlier, was purely technical in nature, since there have been no important macroeconomic publications and reports in recent days. Secondly, there was information that a new duty on Chinese goods for a total of $ 16 billion will start operating on August 23. As we have repeatedly said, traders (for now) interpret any escalation of the US-China conflict in favor of the US. Therefore, the American currency, after receiving such information, was completely expected to grow. Trump in his Twitter has already had time to rejoice in the fall of the Chinese market, while forgetting to mention that the US trade deficit last month increased. Thus, the first "bells" of the fact that the trade war will adversely affect not only China's economy, but also the States themselves, the market has received. Beijing, by the way, has enough instruments of influence on the American economy. At a minimum, China is the largest holder of US government securities. Furthermore. As one of the largest economies in the world, China can make a "move with a knight" and abandon dollar calculations. It should also be noted that Beijing introduces and will probably continue to respond in the future also with new sanctions on US imports. Thus, it is quite possible that Trump, who was accustomed to achieving the goals set by the attack, sooner or later can understand that his plan did not work here, and the trade balance deficit is growing. Proceeding from this, the chances that sooner or later the parties will still sit at the negotiating table is growing. But negotiations will be complex ...
Trading recommendations:
For the currency pair EUR / USD, the MACD indicator turned down, signaling the completion of the correction. Thus, now the short positions are again relevant with the target of 1.1536. Turning the MACD indicator to the top will indicate a new turn of correction and will serve as a signal for manual shortening of shorts.
Orders for purchase can be considered small lots, if the indicator MACD will turn up. In this case, the targets for long positions will be the levels of 1.1650 and 1.1689, and the bulls can try to develop their success.
In addition to the technical picture, one should also take into account the fundamental data and the time of their release.
Explanations to the illustration:
Ichimoku Indicator:
Tenkan-sen is a red line.
Kijun-sen is a blue line.
Senkou Span A is a light brown dotted line.
Senkou Span B - a light purple dotted line.
Chinkou Span is a green line.
Bollinger Bands Indicator:
3 yellow lines.
MACD indicator:
Red line and histogram with white bars in the indicator window.
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