Hourly chart of the EUR/USD pair
The EUR/USD pair also continues to trade with an increase. However, the euro was not as confident in the last trading day (that is, yesterday) as the previous ones. We continue to draw the attention of novice traders to the upward channel, which shows an upward trend. If the price leaves (through its lower border), this will mean that the trend is over, and the quotes of the pair can finally start falling. At least there will be a signal to sell in this case. An attempt to consolidate below the channel was made yesterday. Right now, the EUR/USD pair is making a second exit attempt. If it succeeds, then sellers will finally be able to enter the market.
An important event took place in the US on Wednesday evening - summing up the Federal Reserve meeting. We have already discussed why this event is so important in previous articles. However, the meeting turned out to be completely passable, as no special changes were made to the Fed's monetary policy. The key rate remained unchanged at 0.25%. There was no talk of economic stimulus programs at this meeting, although what can we say about them, if there are already enough of them for trillions of dollars? Thus, monetary policy remained, in the language of bankers, "ultra-deep", that is, aimed at stimulating the economy by all means. More dovish policy only in the European Union, where the loan rate is 0%, and negative -0.5% on deposits, which means that everyone who wants to put money in the bank for a deposit, must pay an additional 0.5% on top. Yes, in the context of another financial crisis, this is possible. Fed Chairman Jerome Powell expressed confidence that the central bank will continue to do everything possible to stabilize the economy, but called the future, timing and scale of recovery uncertain due to the coronavirus pandemic, and also noted the important role of the US government in this issue. "A full economic recovery is unlikely until people are confident that they can safely go about their normal business," Powell said.
The following scenarios are possible on July 30:
1) Buying the euro is still relevant. Thus, we recommend buying the pair today if it remains inside the ascending channel or, after a short period of time, returns to it according to a new buy signal from the MACD indicator. At this time, the MACD indicator has turned down, which means that it is impossible to trade upward. If the above condition is met, your targets for buying the euro are 1.1826 and 1.1863.
2) We advise you to start selling the pair in the near future. Firstly, the upward trend has dragged on for too long, and secondly, the pair could, in the next hour, perform a clear consolidation below the rising channel. Since the MACD indicator has already turned down, it is possible to open sales of the pair with targets at the levels of 1.1733 and 1.1677.
What's on the chart:
Support and Resistance Price Levels - Levels that are targets when buying or selling. You can place Take Profit levels near them.
Red lines - channels or trend lines that display the current trend and show which direction it is preferable to trade now.
Arrows up/down - indicate when you reach or overcome which obstacles you should trade up or down.
MACD indicator is a histogram and a signal line, the crossing of which is a signal to enter the market. It is recommended to use in combination with trend lines (channels, trend lines).
Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.
Beginners in the forex market should remember that every trade cannot be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.
The material has been provided by InstaForex Company - www.instaforex.com