Hourly chart of the EUR/USD pair
The EUR/USD pair was trading very ambiguously on Friday. Considering the fact that important macroeconomic reports were not released on that day, the pair traded quite actively (more actively than this week's average). The nature of the movement was even stranger. At first, the US dollar began to rise in price, but by the end of the trading day it had lost almost all its advantage. Thus, the euro/dollar pair's quotes left the horizontal channel, in which they spent a couple of days, and tried to form a new downward trend. However, at the same time there is a feeling that the upward trend is preserved, and Friday's downward movement is simply a rollback within its framework. Recall that the trend line should be built at least on two distinct extreme points. Such a second point has formed at the moment. However, we are still not sure that this is not a downward trend, so the trend line was imposed using a dotted line. Nevertheless, we are leaning towards the option of continuing the upward movement and consider it as the main one. In our last euro review, we advised beginners to trade the pair if the price leaves the horizontal channel. It happened on Friday - the price settled lower. Therefore, in this case, you are advised to open short positions while aiming for 1.2089 and 1.2071. The first goal was eventually reached, but the second was not. Therefore, beginners could earn only 10-15 points that day. But, given the multidirectional movements during the day, this is also a good result.
The macroeconomic background was extremely weak again on Friday, February 12. By and large, there were no important macroeconomic reports that day, just as there were no fundamental events. Thus, novice traders could only pay attention to the consumer sentiment index of the University of Michigan, which turned out to be weaker than the predicted values. However, we are at a time when traders calmly ignore reports on GDP or inflation. Therefore, the upward movement in the afternoon is unlikely to be associated with it.
The European Union will publish a report on industrial production for December on Monday, February 15. However, it is also unlikely to have any effect on the pair's movement. Thus, technique, technique and again technique. This greatly simplifies the life of novice traders, since it will be necessary to analyze and make trading decisions only for one type of analysis. The pair might move in a calm manner on Monday, as it did for the entire period of last week.
Possible scenarios on February 15:
1) Long positions are currently conditionally relevant, since an upward trend line has formed. So now novice traders are advised to wait for a new buy signal from the MACD indicator and start trading bullish with targets at the resistance levels 1.2149 and 1.2167.
2) Trading for a fall is currently irrelevant, as the upward trend remains in force. However, if the price settles below the upward trend line, then it will be possible to carefully open short positions while aiming for support levels of 1.2077 and 1.2059.
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 in the Forex market should remember that every trade cannot be profitable. Developing a clear strategy and money management are the keys to success in trading over a long period of time.
The material has been provided by InstaForex Company - www.instaforex.com