4-hour timeframe
Amplitude of the last 5 days (high-low): 160p - 54p - 94p - 85p - 62p.
Average volatility over the past 5 days: 91p (high).
The Federal Reserve meeting and the second consecutive key rate cut were left behind. It is time for traders to turn their attention to other macroeconomic data and forget about yesterday's event. No important macroeconomic statistics were published in the European Union and the United States today on September 19. There were only a few minor reports that attracted no attention from market participants. Meanwhile, without any problems, the euro offset all of yesterday's losses and without fundamental grounds. It is on the basis of this fact that we believe that traders simply ignored all the results of the Fed meeting, simply not impressed by them. Forex market participants were certain of a rate cut, they worked out this decision in advance. Yes, there was a small reaction, perhaps the reaction of small players, but most of the foreign exchange market did not work out the easing of the Fed's monetary policy by 0.25%, as well as a speech by Jerome Powell, as well as another angry tweet from Donald Trump. On this topic, the Fed meeting can be closed.
No more interesting information from the United States and Europe is expected this week, and according to the EUR/USD pair chart, it is now clear that traders no longer understand where to move next. Sell the euro currency in the same way as in the last nine months? But the Fed trimmed the rate twice in a row and may well do so in the future, given Trump's constant pressure on the Fed. Buy the euro? But macroeconomic indicators of the eurozone leave much to be desired. And if a trade war with America also begins, then you will not envy the EU economy at all. Here it will be no longer about keeping the euro exchange rate, but about saving the bloc's economy. Without the trade war, the EU is already experiencing serious problems with economic growth and inflation. So serious that it lowers the negative deposit rate and resumes the quantitative stimulus program. But Trump is exactly what is needed: so that competitors feel bad. It is on the basis of this consideration that we believe that a trade war between the European Union and the United States is inevitable. The US president, most likely, will simply undertake to "finish off" the economy of the European Union, simultaneously trying to get a more favorable trade agreement for his country. In any case, profit: either the EU economy will begin to experience even greater problems, or the United States will receive a profitable deal.
The only thing that Trump will be unprofitable in this war with the European Union is that the US dollar is almost guaranteed to continue to rise, and the euro to fall. Thus, the effect of the introduction of trade duties on imports from Europe will be somewhat offset by the falling exchange rate of the European currency. Here the odious US leader will have to come up with something new. Or simply continue to exert verbal pressure on the Fed and Jerome Powell, who formally remain beyond his control. Moreover, there are results in the form of two easing of monetary policy.
From a technical point of view, the euro/dollar pair may go into flat. Firstly, today and tomorrow no important publications will take place. Secondly, since September 5, the pair's rate has not changed much, there were just a few volatile days. Thirdly, the Fed meeting did not clarify the situation for the pair in the medium term. Fourth, the Bollinger Bands indicator has turned sideways and is narrowing. Thus, it is advised that you keep the idea of a possible flat in mind in the coming days.
Trading recommendations:
The EUR/USD pair is trying to continue the upward movement, but the Ichimoku indicator has already formed a "dead cross" and is also weak, while the Bollinger Bands have turned sideways. In general, the technical picture for trading the euro/dollar pair is now completely unattractive. The fundamental background will be absent today and tomorrow, which again does not add a desire to open new positions.
In addition to the technical picture, fundamental data and the time of their release should also be taken into account.
Explanation of the illustration:
Ichimoku indicator:
Tenkan-sen is the red line.
Kijun-sen is the blue line.
Senkou Span A - light brown dotted line.
Senkou Span B - light purple dashed line.
Chikou Span - green line.
Bollinger Bands Indicator:
3 yellow lines.
MACD indicator:
Red line and bar graph with white bars in the indicator window.
