Hourly chart of the EUR/USD pair
The EUR/USD pair was trading almost "like a textbook" on Monday, November 9. The price reached the 1.1903 level, which we defined as the upper line of the horizontal channel, and so a strong downward movement began after rebounding from this line, as we expected. Thus, novice traders could work on a rebound from this level, and they could also open short positions using a Stop Loss above the 1.1903 level according to our morning recommendations. Yes, the price went slightly above the 1.1903 level, but did not even settle there for an hour. Now traders may well rely on a downward movement to the lower line of the horizontal channel at $1.17-1.19, which is where the euro/dollar pair spends most of its time. Unfortunately, there is still no trendline or trend channel. And so we can only rely on the signals of the MACD indicator in order to sell, since traders could not overcome the 1.1903 level. Therefore, an upward correction is possible now, afterwards it will be possible to catch a sell signal from the MACD.
No macroeconomic reports from America and the European Union on Monday. Thus, the reason why the dollar sharply grew in the afternoon is not fundamental in nature. We have repeatedly warned traders that as soon as the tension in the market starts to subside, the US dollar may start to rise in price, and the tension could and should have started to subside on Monday. And so it happened. Joe Biden won the election. Donald Trump, of course, will try to change the situation in his favor with the help of courts, but, according to most experts, he will not be able to carry out this plan. Until Trump takes any serious action in this direction, the market can be calm.
No important publications and events scheduled for America and the EU on Tuesday. Therefore, novice traders may not keep track of the news calendar. However, it is better for them to pay attention to political news from the United States. The fact is that Trump will most likely begin to actively file lawsuits in all kinds of courts in order to review the voting results, both in individual states and throughout the country. And the more he moves forward on this issue, the more the markets will be nervous again, and so the US currency will be under pressure again. All other news has frankly faded into the background. Everyone forgot about the coronavirus, lockdown in Europe and other minor problems. Separately, I would like to say that today the Pfizer and BioNTech companies have announced more than 90% effectiveness of the vaccine they are currently testing. "Our drug is capable of preventing coronavirus infections," said Pfizer CEO Albert Burla. "A potential candidate for vaccine status has shown more than 90% effectiveness in preventing COVID-19 infection," the company said in a statement. Thus, the US dollar could rise in price in part on this news.
Possible scenarios for November 10:
1) Buying the EUR/USD pair ceased to be relevant after the price failed to overcome the 1.1903 level. Rebounding from this level - and the price will fall to the 1.1696 level. Therefore, you can open long deals on the euro/dollar pair, but only when the downward trend has ended, which is not expected in the near future, or even after overcoming the 1.1903 level.
2) Trading for a fall is more relevant at this time, since the price rebounded from the 1.1903 level. Thus, novice traders are advised to wait for a small upward correction and afterwards, a new sell signal from the MACD indicator, which can be traded with targets at 1.1757 and 1.1720. Unfortunately, there are still no trend lines or channels supporting this or that trend.
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.
