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4 hour timeframe
The amplitude of the last 5 days (high-low): 67p - 92p - 95p - 37p - 68p.
Average amplitude for the last 5 days: 72p (71p).
Most of Wednesday, June 26, the EUR / USD currency pair was trading in a narrow price range. However, with the opening of the US trading session and the publication of the only important report today, traders became a bit more active and started modest purchases of the US dollar. Orders for durable goods in May decreased by 1.3%, with a forecast of -0.1%. Excluding defense orders - by 0.6%. Without transport, an increase of 0.3% was observed, and while excluding defense and aviation orders, the figure rose by 0.4%. However, from our point of view, the most important indicator fell by 1.3% and turned out to be much worse than forecast, which explains the fall in US currency after lunch. Moreover, purchases of euros are very sluggish. It seems that traders want to forget this report as soon as possible and go back to buying American currency, despite that Jerome Powell's rhetoric remains "dovish". The likelihood of a Fed rate cut at the next meeting is already 90%, and macroeconomic reports from overseas continue to disappoint. In addition, FOMC member James Bullard gave a speech yesterday, and he said that "the time has come for a reinsurance reduction of the key rate". However, according to Bullard, reducing the rate by 0.5% immediately is a lot. Most likely, FOMC members will approve a decline of 0.25%. Well, this is another bad news for the US dollar, but most importantly, as traders interpret it, and especially bears. After all, even a reduction in the rate to 2.25% still leaves the Fed as the leader, since the ECB rate is 0%, and in the coming months, it may go into the negative area. Therefore, in any case, monetary easing should have a negative impact on the dollar.
Trading recommendations:
The EUR / USD pair continues to adjust Thus, long positions remain relevant for the euro / dollar pair with the target of 1.1438. On the other hand, the reversal upwards or a rebound of the MACD from the Kijun-Sen line will indicate the completion of the downward correction.
It will be possible to sell a pair of euro / dollar in small lots, if the bears will be able to gain a foothold below the critical line, with targets 1,1296 and 1,1241. In this case, the initiative for the pair EUR / USD may return to the hands of bears.
In addition to the technical picture, we should also take into account the fundamental data and the time of their release.
Explanation of the illustration:
Ichimoku indicator:
Tenkan-sen - the red line.
Kijun-sen - the blue line.
Senkou Span A - light brown dotted line.
Senkou Span B - light purple dotted line.
Chinkou Span - 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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