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EUR/USD. Results of the week. Another failure of the Brexit negotiations
October 22, 2018 8:22 amVideo
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4-hour timeframe
The amplitude of the last 5 days (high-low): 67 p-55 p-85 p-78 p-102 p.
The average amplitude for the last 5 days: 77 p (72 p).
Most of the trading week, the European currency became cheaper against the US dollar. It was caused by the fact that traders stopped expecting any progress in the negotiations on Brexit. If earlier only the pound reacted to the topic Brexit, now it is the euro. The EU summit, which took place on Wednesday-Thursday, confirmed that no fundamentally new agreements were reached between the parties. Thus, almost until the close of trading, the dollar continued to rise steadily. Only in the last hours of the trading week, traders began to take profit on short positions, which led to the beginning of an upward correction. The price worked perfectly on the Kijun-sen line and stopped. Thus, the price rebound from the critical line may trigger a resumption of the downtrend. No important macroeconomic publications in the European Union and the United States are planned for the coming week until Thursday. The EU will announce the results of the ECB meeting on Thursday, but no radical decisions are expected from the regulator. On Thursday, the United States will release the report on orders for durable goods, and on Friday – GDP for the third quarter. Thus, until Thursday, the main factor affecting the course of trading will be technical. Also, do not overlook the possible unplanned speeches of EU leaders or Theresa May on the topic of Brexit. This information could potentially affect both the pound sterling and the euro.
Trading recommendations:
For the EUR/USD pair, the price maintains the downward trend. The rebound in prices from the Kijun-sen line will serve as a signal for opening new short positions with targets at 1.1456 – 1.1439. A reversal of the MACD indicator downwards will confirm the end of the correction.
Buy orders are recommended to be considered no earlier than fixing the price above the critical line with a target of 1.1588. In this case, the bulls will get a new opportunity to form an uptrend, but from a fundamental point of view, there are not very many chances for that now.
In addition to the technical picture, fundamental data and the timing of their release should also 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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