Hourly chart of the EUR/USD pair
The EUR/USD pair initially tried to resume its upward movement on Monday, although it has been more sideways in the last eleven days, but this time it failed to surpass the 1.2177 level, from which it had already rebounded off, and began a downward movement, which also ended very quickly, near the new upward trend line. And so today the euro/dollar pair was trading in different directions and could neither resume its upward movement, nor start moving downward, nor leave the horizontal channel for the entire day. Therefore, trading the pair is now quite difficult, especially for novice traders. In the last review, we advised you to open long positions only if the 1.2159-1.2177 area has been overcome, which did not happen on Monday. We advised you to consider short positions if a new sell signal from MACD is generated. However, the pair had already gone down by around 50 points once this new signal had appeared, and so novice traders could have entered during the very end of the movement, so it was not worth opening short deals. Especially now, when the downward trend line has already been formed.
The European Union only released one report, the industrial production data, which turned out to be slightly better than traders expected. Therefore, the morning upward movement and the evening downward movement can hardly be associated with macroeconomic data or any news. Especially considering the fact that market participants continue to ignore most of the news and reports. Thus, we continue to believe that a purely speculative growth remains for the pair, which is not substantiated either by fundamental events or by anything else. Nevertheless, the upward trend is generally preserved.
No important data scheduled in the European Union on Tuesday, while a report on industrial production will be released in the US, which is also unlikely to cause at least some reaction. Since traders have a trend line that they can use, they should trade from it. And there will practically be no fundamental background on Tuesday, unless something extraordinary happens. Novice traders can only prepare for the Federal Reserve meeting this Wednesday.
Possible scenarios for December 15:
1) Long positions are not relevant at the moment, since we have not surpassed the 1.2159-1.2177 area. Therefore, you need to wait until the specified area has been overcome and afterwards, you can finally open buy orders while aiming for 1.2184 and 1.2206 and slightly higher, by 20 points. You also need to be prepared for the fact that the upward movement can end near this area.
2) Trading for a fall looks more appropriate, however, a strong bullish sentiment is still present in the market, and now there is also an upward trend line. Therefore, we recommend waiting for the price to settle below the trend line and then you can open short positions while aiming for 1.2092 and 1.2070.
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.
