Hourly chart of the EUR/USD pair
The EUR/USD pair spent most of the day in a downward correction. The correction was not that strong, however, it allowed the MACD indicator to discharge to the zero level. So in the next few hours, this indicator can create a new buy signal, turning to the upside. The upward trend remains unquestionable. Two trend lines support bull traders at once. In addition to the standard buy signal from the MACD indicator, a signal in the form of a price rebound from the trend line (the closest, of course) can also be created. However, take note that the signal must be strong and accurate. If the pair trades for some time directly "on" the trend line, then neither a rebound nor being able to surpass it will work. In our last review, we advised you to buy the pair if a new buy signal is generated. It did not appear on Tuesday, therefore, novice traders who followed our recommendations should not have opened long positions on this day. You were advised to sell the pair when the price has finally surpassed the first trend line, which also did not happen during the day. Tuesday's volatility is only 45 points, which is low. Not surprisingly, no signal generated for the day.
The only macroeconomic report that was released on Tuesday was the EU inflation report for January. However, firstly, its actual value did not differ from the forecast and the previous one, and secondly, it was ignored. However, this is perfectly noticeable based on today's volatility. If there was a reaction to this report, the pair would not have gone 45 points in a day. There was also no reaction to Federal Reserve Chairman Jerome Powell's speech in the US Congress. As we expected, Powell did not mention anything extremely important either to Congress or to the markets.
The calendar of macroeconomic events is empty for the European Union on Wednesday. Meanwhile, Jerome Powell's second speech in the US Congress will take place. Typically, these two speeches (Powell speaks to Congress twice a year in front of different committees on monetary policy reports) are no different. Accordingly, if the markets ignored it on Tuesday, they will also ignore it on Wednesday. Thus, the macroeconomic background will be extremely weak, but this does not mean that trading will be unambiguously sluggish.
Possible scenarios on February 24:
1) Long positions are still relevant now, since traders already have two upward trend lines at their disposal. In the next few hours, a buy signal from the MACD indicator with targets at the resistance levels of 1.2188 and 1.2219 may form. Also, the price rebound from the trend line can be considered as a buy signal, the targets are the same.
2) Trading bearish is currently irrelevant, since the price continues to be above the trend lines. If traders manage to get the pair to settle below the first trend line, then you can open short positions with the targets of support levels 1.2109 and, in fact, the trend line.
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 in the Forex market should remember that every trade cannot be profitable. Developing a clear strategy and money management are the keys to success in trading over a long period of time.
