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During trading on Monday, the EUR/USD currency pair returned to the area of 1.1366-1.1377, which acts as the lower boundary of the sideways channel that the pair has been within for a month. Thus, today will mark the third attempt either to rebound from this boundary or break through it. There is little point in discussing the reasons for the pair's new drop, as there were none, and the geopolitical backdrop can change three times a day. For example, yesterday the only somewhat significant report on durable goods orders in the US turned out to be much weaker than forecasts. Nevertheless, the dollar rose for most of the day. During the night, the market processed the information that Iran and the US had ceased hostilities in the region, but the response to this event was very short-lived, leaving it unclear what caused the dollar to rise again. One can say with certainty that the market continues to ignore all positive factors for the euro currency. So, how can one speak of a rise in the euro?
On the 5-minute timeframe, no trading signals were generated on Monday. Only by the end of the day did the price return to the range of 1.1366-1.1377, but it failed to create a new signal. Therefore, new signals should be expected today, on Tuesday.
On the hourly timeframe, both trend lines have been broken and are no longer relevant. Considering all the events and market movements over the past months, we believe that the euro 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 Tuesday, novice traders can open short positions targeting 1.1267-1.1275 if the price settles below the area of 1.1366-1.1377. Long positions can be opened upon a third rebound from the range of 1.1366-1.1377 with a target of 1.1461-1.1466. Volatility may once again be low today.
On the 5-minute timeframe, traders should consider the levels of 1.1267-1.1275, 1.1366-1.1377, 1.1461-1.1474, 1.1527-1.1531, 1.1584-1.1594, 1.1655-1.1666, and 1.1745-1.1754. On Tuesday, there are no significant publications or events planned in either the Eurozone or the US. Thus, traders will find little to react to today. Technical factors will take precedence, but movements may again be weak.
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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