The EUR/USD currency pair continued to trade in the same horizontal channel on Thursday. The only change on the 30-minute timeframe is that we moved the upper border of the channel a little higher, to the level of 1.0765. Now this border is almost perfect, as it passes through two price peaks at once. Today's volatility was very high - more than 130 points. However, there is absolutely nothing to be surprised about here. Firstly, the pair still remained inside the horizontal channel. Secondly, such a movement was provoked by the European Central Bank meeting and the announcement of its results. I would like to note right away that, from our point of view, the market worked out the results absolutely illogically. But the results themselves were twofold. The ECB did not raise any of the rates, but announced the end of the APP stimulus program from July 1, and also announced rate hikes in July and September. Considering that no one expected the ECB to raise the rate in June, we can say that the results turned out to be hawkish. Therefore, they had to support the European currency. However, the euro grew only at the beginning, and then stumbled upon the level of 1.0765 and fell.
The technical picture on the 5-minute timeframe looks quite complicated due to the movements that were provoked by the results of the ECB meeting. As you can see in the chart above, for most of the European trading session, the pair moved quite calmly and even formed a good buy signal near the level of 1.0697. Further, volatile movements began, the direction of which could not be predicted. First, the pair rose to the level of 1.0749, then collapsed to 1.0697, then rose again to 1.0749 and overcame it, and then collapsed by 130 points. Thus, there is no need to talk about any clear and unambiguous reaction to the results of the ECB meeting. Therefore, all trading signals that formed after this event should have been ignored. Even the latest signals, during which the fundamental background no longer had such a strong impact on the pair. Consequently, only the very first signal could be worked out, which had to be closed manually before the announcement of the results of the central bank's meeting. Profit on this deal amounted to 25-35 points.
How to trade on Friday:
The pair continues to trade inside the horizontal channel on the 30-minute timeframe, so the technical picture has not changed over the past day. As long as the price is between the levels of 1.0636 and 1.0765, there is no need to count on a trend movement. Even the ECB meeting could not lead to the exit of the euro quotes from the specified range. On the 5-minute TF, it is recommended to trade at the levels of 1.0607, 1.0636, 1.0663, 1.0697, 1.0765, 1.0787-1.0806, 1.0837. When passing 15 points in the right direction, you should set Stop Loss to breakeven. There will be nothing interesting in the European Union in macroeconomic or fundamental terms. Meanwhile, the inflation report will be published in America, which is very important and can provoke a strong market reaction. It is impossible to say now which one, so you need to be ready for any movements.
