Hourly chart of the EUR/USD pair.
The EUR/USD currency pair, after overnight trading, which continued the upward movement within the upward trend (upward trend line) since Friday, still began a downward correction, having previously reached the 1.1865 level, which is the first target for buying on Monday, August 17. Novice traders could close buy trades near the 1.1865 level and make a profit of about 50 points, or they could close them on the MACD indicator signal for a correction and make a profit of about 25 points, which is not so little for intraday trading. However, a few hours later, the MACD indicator performed an upward reversal again, but this reversal took place near the end of the day, so each trader decided for himself whether to open new positions overnight.
!!! Important: the signal line of the MACD indicator and the histogram have more accurate numeric values than displayed on the chart. If you hover the mouse over any bar, you can see the exact numeric value of both the signal line and the histogram bar. In other words, this indicator can generate a reversal signal earlier than it will be shown on the chart (the signal line and the histogram may coincide, but in fact the reversal occurred).
From a fundamental point of view, traders had nothing to pay attention to on Monday. No important news released in the media and online publications, and no important macroeconomic reports were released. Thus, novice traders only needed to analyze the readings of technical indicators today.
No macroeconomic reports on August 18, Tuesday. Instead, you are advised to track news feeds for news from US President Donald Trump and other top US officials, as well as just important people like Anthony Fauci. But in general, trading on Tuesday will most likely be extremely calm and "purely technical". Accordingly, as long as the price continues to be located above the upward trend line, novice traders are advised to only consider purchases. Given the proximity of the 1.1903 level, we believe that the pair may start attempting to move down and start going towards 1.1696 in the near future. Settling below the trend line will confirm this. Beginners can start looking for sales signals only after this point. If the price settles above the 1.1903 level at the end of the next hour, this will seriously increase the chances of a further upward movement of the pair and will allow further consideration of purchases of the euro currency.
The following scenarios are possible:
1) Buying the pair at this time continues to be relevant, as the price continues to be above the upward trend line. Thus, at this time, we recommend that novice traders wait for a new round of a downward correction, after which, expect a new reversal of the MACD indicator upwards in the area of the next morning. We also remind you that a downward reversal is very likely near the upper line of the sideways channel, that is, near the 1.1903 level.
2) Selling the currency pair is temporarily irrelevant, since the price is above the trend line. We suggest novice traders to close the price at the end of the hour under the trend line, in this case, it will be possible to consider a drop in quotes to 1.1696 through the intermediate goals of 1.1797 and 1.1756, which you are advised to reach.
What's on the chart:
Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.
Red lines are the channels or trend lines that display the current trend and show in which direction it is preferable to trade now.
Up/down arrows show where you should sell or buy after reaching or breaking through particular levels.
The MACD indicator consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).
Important announcements and economic reports (you can always find them in the news calendar) can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal.
Beginners in the Forex market should remember that not every single trade should 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