4-hour timeframe
Amplitude of the last 5 days (high-low): 43p - 80p - 67p - 60p - 54p.
Average volatility over the past 5 days: 61p (average).
The EUR/USD currency pair continued its upward movement on the fourth trading day of the week, which is still interpreted as a correction against a three-week fall in the euro. As already mentioned, the upward movement unexpectedly intensified today. It happened in the morning when no important macroeconomic statistics were published either in the European Union or in the United States, there were no important and high-profile speeches. Moreover, for example, the pound has been in a downward movement for most of the day, thus showing no correlation with the euro. From this we can already conclude that the reason for the strong growth of the euro was news and news not from the United States. Thus, Donald Trump's talk about coronavirus (to be discussed below) is definitely not to blame. Perhaps a strong rise in the European currency could be related to the speech of Christine Lagarde? However, as of the current moment, there is not a single news in the media related to the speech of the head of the ECB. Perhaps macroeconomic statistics from the eurozone had such a strong impact on the euro? In total, five indexes and indicators were published at the European trading session, reflecting the mood in the economy, consumer confidence and so on. None of these indices turned out to be lower than forecasted values, 3 out of 5 were better than forecasts, and 2 of the last 3 remained in the negative zone. Thus, we believe that they could not have three absolutely minor indexes, 2 of which remained in the negative zone to provoke the strengthening of the European currency by 100 points. Despite the fact that the normal volatility for the euro/dollar is 40-50 points per day. Moreover, a closer examination of the illustration makes it clear that the euro began to grow even at night, so daytime events and publications are certainly not reasons for strong purchases by euro traders. And one more fact, just to immediately close the topic of the impact of macroeconomic statistics on today's euro growth. Just half an hour ago, data on orders for durable goods in the United States were published, and all four indicators exceeded the forecast values, and the preliminary GDP value coincided with the forecast. Thus, statistics from overseas would simply have to cause the strengthening of the US currency, or at least stop the euro's growth, but this did not happen. Thus, we believe that the only reason for the upward movement of the euro/dollar pair is technical on Thursday, February 27. All the same technical need for correction after a long fall.
Now we'll take a closer look at all the published statistics and try to determine how it can affect the balance of power between currencies in the future. European statistics, as already mentioned, turned out to be very good, but initially it was secondary. The economic sentiment index in February amounted to 103.5 against the forecast of 102.8, the mood indicator in the services sector was 11.2 against the forecast of 11.0, the level of consumer confidence in February remained unchanged at -6.6, the business climate indicator exceeded forecasts of -0.28 and amounted to -0.04, and the index of business optimism in industry added 1.2 and amounted to -6.1. Thus, the figures even more eloquently indicate that European data could not cause such a strong growth of the euro. Since we figured out that non-economic data caused the euro to strengthen, we will look at all US statistics in the article on GBP/USD. Unlike the euro, the pound at least showed a hint of a reaction to the published data.
Meanwhile, U.S. President Donald Trump said that the United States is in full swing developing a vaccine against coronavirus. It is difficult to say how to interpret the words of the American leader, if literally at the same time, the director of the US National Institute of Allergy and Infectious Diseases Anthony Fauci said that the vaccine would be ready for use no earlier than a year later. Nevertheless, Donald Trump, who previously promised a quick death of the virus due to natural warming due to the arrival of spring, believes that the risk of contracting an American is minimal. Earlier, the US presidential administration requested Congress $2.5 billion to accelerate the process of creating a vaccine.
From a technical point of view, all three resistance levels and the upper limit of the volatility channel are overcome thanks to today's movement. Thus, traders now can only wait for the MACD indicator to turn down and begin a downward correction. The signal to buy the Golden Cross is strong.
Trading recommendations:
EUR/USD continues to move up. Thus, it is now possible to consider long positions, but all the goals have been worked out and overcome. Thus, you should turn to the higher timeframe for new goals. A downward correction may begin in the near future. It will be possible to return to selling the euro/dollar pair with the target of 1.0826, when traders will be able to gain a foothold back below the critical line.
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 indicators window.
Support / Resistance Classic Levels:
Red and gray dashed lines with price symbols.
Pivot Level:
Yellow solid line.
Volatility Support / Resistance Levels:
Gray dotted lines without price designations.
Possible price movements:
Red and green arrows.
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