FOMC protocols will put everything in its place.

Hello, dear colleagues!

After yesterday's review of EUR/USD, I was thinking of returning to the main currency pair on Monday, however, I think it is worth it to pay attention on what is happening at the moment, on the past and upcoming events.

Yesterday's reports on initial applications for unemployment benefits in the United States were positive and exceeded the economists' expectations. It was predicted to be 225 thousand, but received 222 thousand instead. I believe that this factor did not go unnoticed by the market participants, and supported the US dollar. The US currency, however, has already started trading confidently in 2020, strengthening against the Euro.

Today, we are waiting for a block of statistics on Germany, but the main event of the day and the whole week will be the publication of the FOMC report, scheduled for 20:00 (London time). I believe that this will put everything in its place, and the technical picture for EUR/USD will finally be clear.

Weekly

In the meantime, you should pay attention to the candle, which at the moment of writing, is formed on the weekly chart. This is nothing but a reversal model of candlestick analysis "Tombstone". The model is very strong, especially when it is formed after an unsuccessful attempt to break the key resistance zone. In our case, the price area 1.1230-1.1250, as expected, showed a strong resistance and turned the quote down. I believe that the 50 simple moving average played the least role, which also prevented any further upwards movement of the pair.

If trading ends at 1.1174 and below 50 MA, there will be less doubt on the course reversal. At the moment, it is difficult to imagine what should happen and what negative should be contained in the Fed's for the US dollar's situation to change dramatically. Right now, the pair is clearly dominated by bearish sentiment, and in my opinion, it is unlikely that the Eurobonds will find the strength to turn the market up and restore the losses suffered before, which were significant, as indicated by the huge upper shadow of the weekly candle. All would be nothing, and now, it is already possible to look for options regarding selling of EUR/USD, however, the report's publication is still ahead and much may still change.

Daily

At the moment of writing, the pair is testing the Tenkan line of the Ichimoku indicator for a break down. Passing this line will open the way to the area of 1.1111-1.1088, where Kijun, 89 EMA and 50 MA have accumulated. In my opinion, this is technically a good area to consider buying, however, before that, it is better to enlist the support of a bullish candlestick model before opening long positions. At the same time, I am not excluding the possibility that after the publication of the report, there will be a sharp and rapid decline in the area of 1.1111-1.1080, which from there, the price will bounce up, giving today's daily candle a long lower shadow.

With this, the candlestick signals on the weekly and daily charts may turn out to be in conflict. Let's wait and see. In any case, the signals on the higher timeframes are considered to be stronger, so the priority is on the Weekly timeframe.

For trading ideas, in my opinion, there is a reversal for the EUR/USD pair, which began after an unsuccessful attempt to break through the resistance area of 1.1174-1.1190 and the zone of 1.1200-1.1250. This makes selling the priority position for EUR/USD. From a technical point of view, I assume that the price zone 1.1174-1.188 is quite good for opening short positions.

Purchases, in my opinion, are more risky and will be designed exclusively for corrective and short-term upward movements. However, for more definite conclusions, it is beneficial to wait the closing of the current weekly candle. I don't think that it makes sense to open fresh positions before the close of trading, or even before the publication of the FOMC report. However, everyone has their own opinion.

Good luck!