4-hour timeframe

The amplitude of the last 5 days (high-low): 75p - 78p - 19p - 64p - 29p.

Average amplitude for the last 5 days: 53p (54p).

On Thursday, July 25, the EUR/USD pair adjusted to the critical Kijun-Sen line, from which it could rebound and resume a downward trend. A fairly strong growth in the euro was due to the wrap-up of the ECB meeting. Although, from our point of view, Mario Draghi didn't please traders in any way, the euro still managed to show growth, mainly due to the consolidation of the greenback's positions. During the press conference, Mario Draghi announced that rates would remain at the same level or even lower until the first half of 2020, or until the return of inflation to the ECB's target level of 2.0%. Thus, monetary policy should be extremely stimulating, according to a press release. Mario Draghi also noted that eurozone economic growth is likely to slow down in the second and third quarters, while trade wars and protectionism continue to put pressure on the global economy. In general, Draghi almost openly stated that at the next meeting, monetary policy would be relaxed. Now on to the US Federal Reserve. We have already mentioned that the euro's current rate most likely takes into account the ECB rate cut, however, this has not yet declined. Therefore, in the short term, the euro can even get some support from the forex market. The Fed will hold a meeting next week, at which a reduction in the key rate of 0.25 - 0.50% can be announced. Reducing the rate by 0.25% is already taken into account by the market, but a decrease of 0.5% will be an unpleasant surprise for dollar investors. In this case, it will be possible to expect the European currency to significantly grow due to the massive closure of short positions.

Trading recommendations:

EUR/USD adjusted to the Kijun-Sen line. Thus, it is now recommended to wait for a rebound from the Kijun-sen line and once again sell the euro with the aim of a support level of 1.1101.

We recommend buying the euro/dollar pair not earlier than when traders overcome the Kijun-sen line with initial targets at 1.1209 and 1.1269, but with minimal lots, as bulls remain extremely weak.

In addition to the technical picture 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.

Chikou Span - green line.

Bollinger Bands indicator:

3 yellow lines.

MACD Indicator:

Red line and histogram with white bars in the indicator window.