Hourly chart of the EUR/USD pair
The EUR/USD pair began a new round of upward correction last night and, as we warned, immediately left the descending channel. Therefore, we formally have two buy signals at once. Firstly, the pair failed to overcome the support level of 1.1623 (two rebounds), and secondly, the price left the descending channel. Thus, if there was a soft fundamental background today, we would be certain that a new upward trend would begin. However, the US elections will begin today. Therefore, it is impossible to predict market behavior. From a purely technical point of view, it is possible for the euro to rise to the 1.1673 and 1.1696 levels today. This is supported by a fairly strong drop in quotes in recent days. And after any strong fall there should be a correction. Thus, the pair could try to return to the lower border of the 1.1696 horizontal channel, which, in fact, is not so far away, only about 50 points. Moreover, the US dollar has risen in price on the eve of the elections, so now it would be more logical for the pair to rise.
As for the fundamental background, not a single important macroeconomic event is planned in the European Union and America today. Traders will be completely focused on the US presidential elections. But there are several nuances here. For example, the difference in time zones. For example, it is November 2 in America right now, it is only past midnight in Washington. Thus, polling stations will only be open after eight hours. Accordingly, any events related to the elections can be expected in eight hours. Secondly, the volatility of the EUR/USD pair was extremely weak on Monday, which is rather strange. The pair passed only about 35 points from the low to the high of the day, which is very small even for the euro/dollar. So it looks like traders are hiding and waiting. But it is also quite difficult to say what exactly they are waiting for. One thing is certain - you are advised to be extremely careful today, especially for novice traders. The pair's volatility was extremely strong on Election Day in 2016, almost 400 points, and the day before that - only 58. At the same time, the pair first went up 260 points and then down 400 points. Therefore, something similar could be this time.
Possible scenarios for November 3:
1) Buy positions of the EUR/USD pair have become relevant at the moment, since the price has settled above the descending channel. Thus, from a purely technical point of view, novice traders are advised to trade bullish today with targets at 1.1673 and 1.1696. Traders have at least eight hours before a potential storm. But still, do not forget about Stop Loss levels, or do not enter the market at all today.
2) Trading for a fall at this time has ceased to be relevant, as the price failed to overcome the 1.1623 level. Nevertheless, anything can happen during the day, including the resumption of the downward trend. However, after today's trading, most likely, you will have to revise the whole picture of the state of affairs and wait for the markets to calm down.
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 (14,22,3) 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.
