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26.10.201802:00 Forex Analysis & Reviews: EUR/USD. the 25th of October. Results of the day. ECB leaves key rate unchanged

Long-term review

4-hour timeframe

Exchange Rates 26.10.2018 analysis

The amplitude of the last 5 days (high-low): 78 p – 102 p – 94 p – 55 p – 98 p.

The average amplitude for the last 5 days: 85 p (83 p).

The fourth trading day of the week for the EUR/USD pair was completely calm. On the eve of the announcement of the results of the meeting, traders practically did not open new positions, preferring to wait for the main event of the day. Not even the announcement of decisions on rates, and the ECB press conference. Despite the fact that it is not expected to disclose important information, information on rates with a probability of 99% was predicted. No changes were expected. In principle, this is also clearly seen in the reaction of traders in the first half hour after the release of rates from the ECB. There is practically no reaction. Thus, the report on orders for durable goods in the United States could have even more influence than the ECB meeting on the movement of the pair. This report is expected to be much weaker than in the previous month, which may cause some dissatisfaction among market participants. From a technical point of view, the upward correction is also brewing, although no important level of the pair has worked. However, the MACD indicator turned up. Thus, it is likely to move up to the critical line during the day and tomorrow morning. Friday, by the way, is often the day of fixing positions and, accordingly, corrections. Thus, today or tomorrow, despite the nature of the published information, we expect the beginning of a corrective movement.

Trading recommendations:

For the EUR/USD pair, the price has started a weak correction, which could increase today or tomorrow. Thus, in order to open new sell orders with a target of 1.1334, it is recommended to wait for the completion of this correction.

Buy orders can be considered only after the bulls overcome the critical Kijun-sen line, and ideally the Ichimoku clouds. In this case, we can expect the formation of an uptrend, although from a fundamental point of view, this is now an unlikely option.

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.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Paolo Greco,
Analytical expert of InstaForex
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