Hourly chart of the EUR/USD pair
The EUR/USD currency pair was trading mostly sideways during Friday night trading. Thus, the price is exactly between the levels of 1.1903 and 1.1696 at the moment, that is, in the middle of the side channel. Based on this, the euro/dollar pair can move in any direction with the same probability from the current positions. Since the last movement was downward, today novice traders can expect a reversal of the MACD indicator up, which is also located in the middle of its coordinate grid, which will allow them to buy the European currency again. There are still no new technical patterns, such as a trend line or channel. Yesterday afternoon, the dollar was unexpectedly helped by a US report on applications for unemployment benefits. There will also be quite a large number of important data today, so the pair may change the direction of movement more than once during the day. However, in general, it is now impossible to say who is stronger, buyers or sellers.
Today, the European Union will release the most important report on Gross Domestic Product for the second quarter of 2020. According to forecasts, the drop will be 12.1% compared to the first quarter. If the real contraction of the European economy is greater, then there is no doubt that the euro will start to fall in price on Friday. If it turns out less, the single currency (euro) can continue to grow to 1,1903. Thus, novice traders are recommended to trade as carefully as possible when this report is released, since the dynamics of the pair will depend on today's data. A few hours after this report, the US will release data on changes in retail sales for July, as well as industrial production and consumer confidence index from the Institute of Michigan. Here everything is the same as with the eurozone GDP report. Exceeding the forecast values will most likely cause purchases of the US currency and the euro/dollar pair may start falling in this case. And vice versa. The retail sales report has a higher value. You should pay special attention to it. Novice players are also recommended to be cautious and act carefully when the US data are released.
The following scenarios are possible on August 14:
1) Long deals on the pair have become relevant after the price settled above the downward channel, and, in principle, remains relevant now. The pair has corrected down by 60 points, thus, the upward movement may resume on Friday morning. If the MACD indicator turns up (which can happen at the close of the current bar), then long positions with the first target at 1.1858 are recommended. The second target is 1.1903, above which the price is unlikely to go away today.
2) Since the price is exactly in the middle of the side channel, selling is now as relevant as buying. The only thing is that after the sideways movement for new sales at night, you are advised to wait for a new reversal of the MACD indicator downward and only after that it will be possible to open short positions with the targets of 1.1775 and 1.1736. But we remind you once again that today two packs of important information will be released at once, each of which can change the mood of traders and lead to a price reversal.
What's 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 preferable to trade now.
Up/down arrows show where you should sell or buy after reaching or breaking through particular levels.
The MACD indicator 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 (you can always find them in the news calendar) can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal.
Beginners in the Forex market should remember that not every single trade should be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.
