Hourly chart of the EUR/USD pair
The EUR/USD pair continued a new round of corrective movement last night, as we expected. After the price rebounded off the 1.1903 level, we expect the downward movement to continue while aiming for the lower line of the horizontal channel at $1.17-1.19, while the current trend is characterized as a downward trend. Unfortunately, there is still no way to build a trendline or trend channel, which makes the trading process a little difficult for novice traders. Yesterday's MACD sell signal was strong enough, which therefore brought profit to traders. Today the pair has shown a desire to start falling, but the MACD indicator has not yet had time to discharge to the zero level. Therefore, if a new sell signal appears in the next hour or two, then it may not be strong enough, and in this case, novice traders will have to make their own decisions as to whether to work out this signal. In general, as we have mentioned more than once, a horizontal channel will remain present, despite the fact that the quotes leave it from time to time. The price spends most of its time in it anyway. And there is also a short-term downward trend within this channel at this time.
European Central Bank President Christine Lagarde will deliver a speech today, but in addition to it, a rather important report on US inflation will also be published. By and large, everything will depend on what Lagarde says. Novice traders may have already noticed that the head of the ECB does not always make important statements. If she says something important about monetary policy or economics, then the reaction can be, and, most likely, will be quite negative for the euro. The same goes for the US inflation report. If the actual value of the indicator differs from the predicted value, then the market reaction may follow. If the annual inflation is around 1.3%, then, most likely, the markets will ignore this report. Also, a report on applications for unemployment benefits in the United States will be released today, but recently it no longer has the same degree of significance it had back in the spring. US unemployment continues to fall, which is good for both the US economy and the greenback. All other reports of the day are less important.
Possible scenarios for November 12:
1) Buy positions on the EUR/USD pair are irrelevant at the moment, since the upward trend has not been determined. We expect to see a downward movement towards the 1.1696 level. Therefore, you can buy the euro/dollar pair, but only if the current downward trend has clearly ended, which is not expected in the near future, or if the price has gone beyond the 1.1903 level.
2) Trading for a fall is more relevant right now, since the price rebounded from the 1.1903 level. So now novice traders are advised to wait until a new round of upward correction has been completed and, after that, for a new sell signal from the MACD indicator to appear, which can be worked out with targets at 1.1738 and 1.1696. Unfortunately, there is still no downtrend line or channel, which complicates the process of working out an assumed downward 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.
