Hourly chart of the EUR/USD pair
The EUR/USD pair started a new round of upward correction last night, as we expected. The correction is weak. The MACD indicator started discharging to the zero level and this is the most important thing. We can expect a strong signal to appear in a few hours. Unfortunately, there is still no trendline or trend channel that novice traders could use. Therefore, we conclude that a short-term downward trend is solely based on the price rebound from the 1.1903 level, which did not let the price rise above itself. Based on these considerations, we consider the most probable scenario for the development of events - a further downward movement to the lower border of the 1.1696 horizontal channel. You are advised to return to buy positions in the current conditions after confidently overcoming the 1.1903 level.
The first trading day of the week was quite volatile and interesting. The euro/dollar fell during the US session. We predicted this scenario, as the markets should have started to calm down after the election week in the United States. Consequently, the pressure from the dollar should have subsided. And then there's the news from the United States: American company Pfizer has conducted successful clinical trials on a vaccine against the coronavirus and announced a 90% effectiveness of the drug. This is great news for America and the world. Thus, this could partly be a reason why the dollar strengthened.
There might be even less news today compared to Monday. At least there is nothing interesting in the macroeconomic calendar. Therefore, we advise you to keep track of news concerning the US political sphere throughout the day. Take note that Joe Biden won the presidential elections, and Donald Trump is going to challenge the results in almost all states in which he lost. It is unclear how this story with the court proceedings will end. However, Trump can create a lot of problems for both America and the greenback. Of course, in his understanding, he longs for the good of the United States, but the markets can regard the president's actions in a completely different way. Thus, news that could potentially worsen the political crisis in America could negatively affect the US dollar. In this case, the euro/dollar pair may start to grow again.
Possible scenarios for November 10:
1) Buying the EUR/USD pair ceased to be relevant after the price failed to go beyond the 1.1903 level. Rebounding from this level - and the price fell to 1.1696. Therefore, you can only buy the euro/dollar pair when the downward trend has clearly ended, which is not expected in the near future, or when we overcome the 1.1903 level.
2) Trading for a fall is more relevant at this time, since the price rebounded from 1.1903. So now novice traders are advised to wait until the upward correction has ended and then - a new sell signal from the MACD indicator, which can be rejected with targets at 1.1765 and 1.1717. Unfortunately, there are still no trend lines or channels that support a particular trend at this time.
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 better to trade now.
Up/down arrows show where you should sell or buy after reaching or breaking through particular levels.
The MACD indicator (14,22,3) 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 that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal.
Beginners on Forex should remember that not every single trade has to 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