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The EUR/USD currency pair continued its absolutely stagnant movements on Tuesday, resembling a mockery of traders. The sideways channel remains relevant, with the price within it for a whole month. There is hope that today the Federal Reserve will provoke market movement, but if it leads to a rise, the price will simply remain within the flat. For almost two weeks, the European currency has been sliding from the upper boundary of the channel to the lower one, and now it may start a similar upward movement. The macroeconomic and fundamental backdrop was absent yesterday in both the Eurozone and the US, and no significant geopolitical news was reported. Traders had nothing to react to throughout the day, but overall, the market continues to ignore factors in favor of the euro, and its activity leaves much to be desired. Three bounces from the lower boundary of the sideways channel still indicate a likely rise towards the upper boundary.
On the 5-minute timeframe, two trading signals formed on Tuesday, and we remind novice traders that in the absence of good market movements, any signals will not yield profit. In the current circumstances, traders must settle for scalping or hold trades for several days, as volatility is low.
On the hourly timeframe, both trend lines have been broken and are no longer relevant, but the flat persists. Considering all events and market movements over the past months, we believe that the European currency should begin a confident rise. However, the EUR/USD pair has been trading within a sideways channel for a month, and the market continues to ignore all factors in favor of the euro.
On Wednesday, novice traders may open short positions targeting 1.1267-1.1275 if the price settles below the area of 1.1366-1.1377. Long positions can be kept open, as the price has already bounced three times from the area of 1.1366-1.1377, aiming for targets of 1.1461-1.1466.
On the 5-minute timeframe, levels to consider include 1.1267-1.1275, 1.1366-1.1377, 1.1461-1.1474, 1.1527-1.1531, 1.1584-1.1594, and 1.1655-1.1666, as well as 1.1745-1.1754. On Wednesday, there are no significant publications or events scheduled in the Eurozone, but in the US, the results of the Fed meeting will be announced this evening, which is expected to provoke volatility. The only question is: in which direction? The market may interpret Kevin Warsh's vague statements in various ways, and they are unlikely to provide any specifics regarding future meetings.
Price levels (areas) of support and resistance are targets when opening long or short positions or sources of signals.
Red lines indicate channels or trend lines that display the current trend and indicate the preferred direction for trading.
The MACD indicator (14,22,3) – histogram and signal line – is a supplementary indicator that can also be used as a source of signals.
Important speeches and reports (contained in the news calendar) can significantly impact the movement of the currency pair. Therefore, during their release, trading should be conducted with maximum caution, or one should exit the market to avoid sharp reversals against preceding movements.
Beginners trading in the forex market should remember that not every trade can be profitable. Developing a clear strategy and practicing money management are key to long-term success in trading.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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