Hourly chart of the EUR/USD pair
The EUR/USD pair continued a weak upward movement last night, according to our forecasts, which were presented in the previous evening article. Since novice traders have an upward trend line, the trend is clearly visible now – an upward trend. Therefore, you are advised to trade up now. The MACD indicator produced a buy signal last night, and those who used it to enter the market are currently in profit of about 20 points. Now you can wait for any of the new targets to be reached, or you can leave a long position by a downward reversal of MACD. Take note that the EUR/USD pair continues to trade within the $1.17-1.19 horizontal channel. Thus, a reversal in the opposite direction is very likely when the price approaches any of the channel boundaries. Since at the time of this writing, the rate is 1.1860, then one can expect a new downward movement to begin at these positions. However, remember that the trend will remain upward until the price settles below the trendline.
Today we will turn our attention to the US retail sales report for the month of October. Frankly speaking, the market ignored the latest reports on this indicator, however, provided that the real value differs greatly from the forecast, we can see a definite reaction. In addition to this report, the next speech by the Chairman of the European Central Bank Christine Lagarde will take place today. Lately she has been speaking almost every day, but you should understand that speaking also means through video conferences. That is, in fact, Lagarde can discuss various pressing issues with colleagues via video link, and this event is marked on the calendar as a speech. Thus, with a high degree of probability, Lagarde will not mention anything important and of interest to the markets today. Consequently, trading can remain calm for most of the day. However, this does not mean that the pair will simply stand still. Recall that in the long term, the pair has been standing still on higher timeframes for three months, but it has been quite active on lower timeframes, just in a limited price range. Perhaps the US could provide some interesting information today, but now only appalling levels of coronavirus incidence can be noted there. The account is already in the hundreds of thousands. This factor may put pressure on the dollar, but will it be enough to break through the upper boundary of the 1.1900 channel?
Possible scenarios for November 17:
1) Since the price continues to trade above the upward trend line, long positions are now relevant. The growth potential of the euro, as always, is limited by the 1.1903 level, however, you can manage to get a profit even before this level. The MACD indicator is preparing to turn to the downside, which can be used to close long positions. In this case, to open new buy positions, you will need to wait for a new buy signal and trade up while aiming for 1.1875 and 1.1900.
2) Trading for a fall at this time is irrelevant, since there is a pronounced upward trend. Thus, novice traders are advised to wait until the upward trend has ended in order to have a reason to open short positions. Namely, the price should settle below the trend line. In this case, open sell orders while aiming for 1.1820 and 1.1790.
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.
The material has been provided by InstaForex Company – www.instaforex.com
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