19.12.201801:01 Forex Analysis & Reviews: EUR/USD. December 18th. Results of the day. Intrigue: will the Fed be led by Trump?

4-hour timeframe

The amplitude of the last 5 days (high-low): 94p - 72p - 62p - 95p - 60p.

Average amplitude for the last 5 days: 77p (83p).

The EUR/USD currency pair on Tuesday, December 18, quite expectedly continued its upward movement within the side border with inaccurate boundaries, the upper of which lies near the level of 1.1420. Donald Trump today managed to throw another stone in the garden of the Federal Reserve, calling for "feeling the market" and not just "chasing after numbers." It is clear that his post on Twitter belonged to the members of the Fed's monetary committee, whose meeting began yesterday and will end tomorrow. Many expect that the Fed's key rate will be raised by another 0.25%, however, after several "dovish" statements by Jerome Powell and two calls by Trump not to raise the rate in December, the probability of tightening monetary policy is reduced. It becomes even interesting whether the Fed will be led by Trump or at least take into account his arguments? The Fed is not subservient to Trump, but it's probably impossible to completely ignore the US leader. Anyway, we get the intrigue for tomorrow. Almost with a probability of 100% if the rate is not raised, the dollar may collapse or, at least, seriously fall in price. As for today, no important macroeconomic reports have been published. In addition to Trump's tweet, no other macroeconomic information was available to traders. From a technical point of view, the pair is fixed above the Ichimoku cloud, but this does not mean anything in the current conditions of a high probability of a flat. The upward movement can result in the area of 1,1420 – 1,1440, especially if the Fed will raise its key interest rate tomorrow.

Trading recommendations:

The EUR/USD currency pair overcame the Ichimoku cloud. Thus, formally, longs with targets of 1,1408 and 1,1448 are now relevant. But we note that the probability of a reversal in the zone of 1.1420 is high.

Short positions can be considered not earlier than the consolidation of the price below the critical Kijun-sen line with the target of 1.1294. The potential for the instrument to fall is also limited at the moment.

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.