Hourly chart of the EUR/USD pair.
The EUR/USD currency pair continued its almost sideways correction movement during Monday night trading after a surge last week up to the level of 1.1903 and a subsequent pullback to the initial levels. Thus, at this time, the pair's quotes are moving more sideways than up or down. However, we managed to form a small upward trend line. It cannot be concluded that the trend is now upward since it is too short-term. However, if the price is fixed below, it will be possible to conclude that the downward movement will resume. Thus, we are still inclined to the option in which the fall in quotes will continue. The main thing is that the markets will stir up a little. At the same time, we remind novice traders that all this time (for more than a month and a half), the euro/dollar pair continues to trade inside the side channel of 1.17-1.19. There were only two attempts to leave this channel, however, each time the price invariably returned to it. Thus, we still do not expect a pair below 1.1700.
On September 14, novice traders are advised to pay attention to one macroeconomic report – industrial production in the European Union. Industrial production is an important indicator for any economy, and the head of the European Central Bank, Christine Lagarde, has repeatedly emphasized the recovery of this indicator after the crisis. However, the direct reaction of traders to this report is rarely strong. The forecast for July is -8% in annual terms and +4% in monthly terms. This means that experts expect production to grow by 4% compared to June. If the forecasts come true and are exceeded, the euro currency may receive very restrained support from market participants. Weaker real values of this indicator can help quotes overcome a small trend line and resume falling. In general, most likely, trading today will be quite boring and sluggish. The general fundamental background (such topics as the trade war with China, the US presidential election, the "coronavirus" in America, and the possible constitutional crisis) cannot take the pair out of the range of 1.17-1.19 for a long time. Thus, even the appearance of news on one of these topics is unlikely to help at the beginning of the new week to leave the side channel.
As of September 14, the following scenarios are possible:
1) It is still not recommended for novice traders to consider buying the pair at this time, since the price bounced from the level of 1.1903, which is the upper line of the side channel, so there is a high probability of continuing the downward movement. Also, there is not a single pattern that would support increasing trading at this time. Accordingly, buyers need to wait for the formation of this most upward trend or consolidation of the price above the level of 1.1903.
2) Sales now still look more attractive, if only because traders failed to overcome the level of 1,1903. However, the downward trend is not expressed by any technical patterns (trend lines, channels, etc.). We only have an upward trend line. If the price is fixed below it, it will be a signal for new sales of the pair with the targets of support levels 1.1813 and 1.1781. The MACD indicator is near zero, which indicates that the movement is weak and there is no trend. This type of traffic may continue throughout Monday.
What's on the chart:
Price support and resistance levels – the levels that are targets when opening purchases or sales. You can place Take Profit levels near them.
Red lines – channels or trend lines that display the current trend and indicate which direction is preferable to trade now.
Up/down arrows – show when you reach or overcome which obstacles you should trade up or down.
MACD indicator(10,20,3) – a histogram and a signal line, the intersection of which is a signal to enter the market. It is recommended to use it in combination with trend lines(channels, trend lines).
Important speeches and reports (always included in the news calendar) can greatly influence the movement of the currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market to avoid a sharp reversal of the price against the previous movement.
Beginners in the Forex market should remember that every trade cannot be profitable. The development of a clear strategy and money management is the key to success in trading over a long period.The material has been provided by InstaForex Company - www.instaforex.com