EUR/USD hourly chart
On Thursday, September 24, EUR/USD was mainly trading in line with our morning analysis. In the morning article, we recommended that novice traders should consider buying the euro only if the price settles above the descending channel. However, this did not happen during the day. We also recommended selling the pair regardless of the MACD indicator signals with the targets at the support levels of 1.1634 and 1.1608. The price tested the first target, holding for about 6 hours in this area, but failed to break through it. Thus, you could close short positions near this level which could have brought a profit of about 20 pips. Not much, but today's volatility was rather low. At the moment, the pair is trying to exit the descending channel through its upper boundary. If it manages to do so, then in the short term, the uptrend may start. In this case, long positions will become relevant for some time. However, this uptrend may be short-lived.
On Thursday, there were no important economic releases in the EU, while in the US, the data on initial jobless claims was issued. It turned out that the total number of second-time claims for unemployment benefits dropped once again in comparison with the previous report. Yet, the difference was minor. It seems that officially the unemployment rate in the US continues to decline. In the meantime, during their testimonies in the US Congress, Jerome Powell and Steven Mnuchin did not announce anything that could surprise traders today. Or at least this information has not yet been disclosed. In general, the market volatility today was rather low, with only 54 pips difference between the day's high and low. This means that traders did not have any strong signals to react to.
On Friday, September 25, no important macroeconomic events are scheduled for release in the European Union. In the US, traders expect an important report on durable goods orders. This category of goods is distinguished by its high cost. Therefore, this data is crucial for many other macroeconomic indicators and, in particular, for the GDP. According to experts' forecasts, changes in four indicators of durable goods orders are unlikely to be significant compared to July report. The indicators are likely to show a maximum of 1.5% increase. Thus, the US dollar will most likely stay weak amid these reports. We believe that there is a high chance of an upward correction on the last trading day of the week.
Possible scenarios for September 25
1) We still do not recommend buying the pair at this time, since there has been no signal confirming the trend. However, in the near future the price may settle above the descending channel. This will indicate the start of the bullish trend. For long positions, the first targets should be placed at the levels of 1.1702 and 1.1744. However, traders should decide whether they are ready to open long positions in the evening, since it will be quite difficult to monitor the deals during night time. In the current situation, we would take a risk with long positions.
2) Short positions on the pair were relevant throughout the day. However, the price may exit the descending channel in the near future. If this happens, then short positions will no longer be relevant, at least on Friday. To open sell deals on the pair, you need to wait until the current channel is changed or until a new technical pattern is formed to support the downtrend.
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 trendlines 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 (10, 20, and 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 patterns (channels and trendlines).
Important announcements and economic reports that you can always find on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exit the market in order to avoid sharp price fluctuations.
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.
