Hourly chart of the EUR/USD pair
The EUR/USD pair unexpectedly moved up Monday night and is currently approaching the upper line of the 1.17-1.19 sideways channel again. Therefore, in the next few hours, the pair can either rebound off this line again, or break it for the third time in the last month and a half and attempt to resume forming an upward trend. It is not clear which of these options will be implemented. Fundamental and macroeconomic backgrounds are practically non-existent at the beginning of the new week, so it is rather strange to see that there is a trend during overnight trading. Nevertheless, our small trendline continues to be relevant, and we still do not recommend trading up, since it is more worthwhile to sell the pair in the upper area of the side channel, rather than buy it. Nevertheless, this does not mean that the pair cannot continue moving up. The Federal Reserve meeting and Jerome Powell's speech may decide the fate of the euro and the dollar for the next few days.
Novice traders won't have much to pay attention to on September 15. Fundamentally more interesting events are currently taking place in the UK or are related to it. Everything is relatively calm in the European Union and the United States. We only have secondary reports on economic sentiment in Germany and the EU from the ZEW institute, and in the afternoon - industrial production for July in the US. By and large, everyone in the United States has already focused on the upcoming presidential elections, and few people are interested in other topics. Democrats and Republicans have finally quarreled, they still can not agree on a package of new economic assistance to all unemployed, small businesses, schools and other structures and people affected by the coronavirus crisis, which should have been adopted by August 1. Therefore, the US dollar is under pressure from the market again. Take note that the coronavirus has only slightly receded in America, but it was not possible to suppress or stop it. The total number of cases has already exceeded 6.5 million, 30-45,000 new cases are recorded daily. Thus, we would say that the probability of overcoming the 1.19 level and continuing to move up is greater than 50%.
Possible scenarios for September 15:
1) Novice traders are advised to not consider buying the pair at this time, since the price rebounded off the 1.1903 level, which is the upper line of the side channel, and there is a high probability that it will continue to move down. Also, the price is just around the 1.19 level, which means that the probability of a reversal and downward movement is higher. Nevertheless, once the 1.19 level has been overcome, then it will be possible to consider new longs on the pair and you can count on forming an upward trend while aiming for 1.1918, 1.1947 and 1.2011.
2) Selling still looks more attractive, only because traders are unable to overcome the 1.1903 level. 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 settles below it, this will be a signal for new shorts while aiming for support levels of 1.1835 and 1.1806. In general, trading is not too volatile.
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 (10,20,3) 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.The material has been provided by InstaForex Company - www.instaforex.com