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EUR/USD. 17 October. Results of the day. The EU summit started: euro and pound fell
October 18, 2018 2:22 amVideo
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4-hour timeframe
The amplitude of the last 5 days (high-low): 65 p-81 p-77 p-67 p-55 p.
The average amplitude for the last 5 days: 69 p (72 p).
On Wednesday, October 17, the EUR/USD pair continued the downward movement that began the previous day. So far, there is no information about the negotiations between the UK and the EU within the framework of the two-day summit. However, the fact that both the euro and the pound declined speaks volumes. First, it can be negative expectations of traders. As we have repeatedly said, there is no good reason to assume that the parties will agree. Moreover, the President of the European Council Donald Tusk said that the deadline during which the negotiations will last is December 2018. After this deadline, it will be possible for Britain to leave the EU without a “deal”. Secondly, insider information could be leaked to major players, which, as it is easy to guess, is also of a negative nature. It is also possible that traders have started to get rid of the euro because of the weak core consumer price index that was published today. However, the usual inflation was fully consistent with the forecast both in monthly and annual terms. Thus, we believe that the reasons lie in the EU summit. In the evening, the minutes of the FOMC meeting will be published, but we believe that there will be no significant market reaction to this event. Thus, we recommend traders to keep track of any information related to the course of negotiations at the EU summit. This topic is now the priority for both the EUR/USD and GBP/USD.
Trading recommendations:
For the EUR/USD pair, the price went below the critical line. Thus, the “golden cross” is weakened, and the longs have temporarily lost their relevance. It will be possible to re-open long positions after the pair is fixed above the critical line.
Short positions can now be opened with the target of 1.1470, however, first of all, you need to be extremely careful, as the unexpected appearance of important information from the EU summit can change the direction of the pair and increase its volatility.
In addition to the technical picture, fundamental data and the timing of their release should also take be taken into account.
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.
Chikou Span – green line.
Bollinger Bands indicator:
3 yellow lines.
MACD Indicator:
Red line and histogram with white bars in the indicator window.
The material has been provided by InstaForex Company – www.instaforex.com
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