EUR/USD hourly chart
EUR/USD resumed an uptrend on Thursday, even despite the previous consolidation of quotes below the ascending line. At the moment, the upward movement remains in place. It would continue anyway since there is also a second ascending line on the chart. The first upward line was canceled as the price had settled below it. In general, trading was very active on Thursday, and beginners could earn good profit. In our previous review, we recommended opening long positions if a buy signal from the MACD indicator is generated. This indicator generated a buy signal near the zero level. That is why the signal was strong. Therefore, beginners could have earned 64 pips if they had kept their buy orders open until MACD began to turn down, which happened just two candlesticks ago. We suggested the resistance levels at 1.2174 and 1.2200 as the upward targets. Taking profit near these levels would have generated gains of 25 and 50 pips. There was no reason to open short positions during the day. We could ignore the sell signal, which was formed two hours ago, because it was generated amid a clear uptrend. If the uptrend had not been resumed, then the sell signal would have been valid.
On February 25, the most interesting news came from the US. At first, there was no reaction to the published macroeconomic data. However, later a strong downward movement began, which means traders have taken into account strong reports from the US. According to the report, GDP rose to 4.1% in the fourth quarter of 2020. The number of orders for durable goods significantly exceeded the forecasts. Besides, the data on the initial and second-time jobless claims was much better than expected. Thus, the US dollar had advanced, and the markets had finally reacted to macroeconomic statistics.
On Friday, no important events are expected in either the EU or the US. A couple of minor reports will be published in the US, including the level of income and consumer expenditures, but this information is unlikely to be important for traders. On Friday, the markets will have to calm down a little after a hectic trading session on Thursday and return to the usual trading routine.
Possible scenarios on February 26:
1) Long positions remain relevant at the moment as the uptrend has been resumed. Thus, we advise novice traders to monitor buy signals from the MACD indicator with the targets located within 40-50 pips from the entry point. Also, a rebound from the trendline can be considered a buy signal, but it seems unlikely to happen now.
2) Trading downwards is currently not a good option as the uptrend persists. A correction is possible, but it is not recommended to open positions at this time. The first ascending line has been canceled, but there is also a second one. Those who are selling the pair need to wait for a clear trend reversal.
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 trendlines 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, and 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 patterns (channels and trendlines).
Important announcements and economic reports that you can always find on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exit the market in order to avoid sharp price fluctuations.
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.