Hourly chart of the EUR/USD pair
The EUR/USD pair both slightly corrected and slightly grew last night. Unfortunately, it was quite problematic to work with a buy signal from the MACD indicator (marked with circles in the illustration) last night, but could it be for the better? In other articles, we have already mentioned that the euro/dollar pair is now inside a sideways channel, which is capped at approximately 1.17 and 1.19. Thus, at the moment quotes have reached the middle of this channel. But a rebound from the bottom does not necessarily mean a rise to the top. The pair can trade in the lower half of the channel too. Thus, we would say that the pair can move in any direction from the current price values. Moreover, we are inclined to the option that there will be a new downward movement, since the price did not manage to overcome yesterday's high of 1.1817.
Only German inflation will be published in the EU on Thursday, August 13, but this figure is not extremely important for the euro/dollar pair. Meanwhile, in America, novice traders could pay attention to the report on claims for unemployment benefits, however, it does not have any effect on the pair's movement at this time. Therefore, novice traders will not have anything to pay attention to today. General fundamental topics throughout the day may provide some new data, but the topic of coronavirus in the United States is slowly disappearing from the front pages of publications, as the epidemic itself is waning. At the moment, there is no new information on the financial assistance package for the US economy. US President Donald Trump also continues to make "funny" statements, which rarely do not try to mislead. There is also silence in the confrontation between China and the United States. Therefore, we advise novice players to be sure to watch the feed of economic and political news from time to time, especially concerning America. But it is unlikely that important and powerful information will come from the United States today.
The following scenarios are possible on August 13:
1) Buying the pair became relevant after the price consolidated above the descending channel. However, as we mentioned above, traders failed to update the high on Wednesday, so we would recommend returning to buying the euro after another round of correction, at least. The closest target for the pair's growth is 1.1830.
2) Selling the currency pair is more promising now. After the night correctional cycle, buyers could not continue to push the pair up, so a new MACD sell signal (it can form by the end of this hour) will enable novice traders to reopen sales with targets located in the lower area of the sideways channel, for example, near the 1. 1724 level. You can expect a stronger downward movement for the pair after breaking the lower boundary of the sideways channel at 1.1696.
What's on the chart:
Support and Resistance Price Levels - Levels that are targets when buying or selling. You can place Take Profit levels near them.
Red lines - channels or trend lines that display the current trend and show which direction it is preferable to trade now.
Arrows up/down - indicate when you reach or overcome which obstacles you should trade up or down.
MACD indicator is a histogram and a signal line, the crossing of which is a signal to enter the market. It is recommended to use in combination with trend lines (channels, trend lines).
Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal 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 are the key to success in trading over a long period of time.
The material has been provided by InstaForex Company - www.instaforex.com