Hourly chart of the EUR/USD pair
The EUR/USD pair corrected to the upward trend line, working it out from top to bottom, rebounding off it and resuming its downward movement. Thus, as we said in the morning, the pair corrected and moved down again with targets at the support levels of 1.1823 and 1.1800. The first goal was achieved, the second was not. However, novice traders could have earned 20-25 points on a sell signal from MACD at the moment. Now we recommend leaving the market, as it is impossible to predict how the market will react to the results of the Federal Reserve meeting and the speech of its chairman. It is always a surprise or "pig in a poke". Thus, it does not even make sense to predict in which direction the pair will move in an hour or two. The most important thing to note is that the pair remains in the sideways channel at 1.17-1.19, which we have already mentioned many times. If traders are overly disappointed by the evening events in the US, then the dollar may begin to fall in price, but is unlikely to go beyond the upper line of the side channel. Thus, even today, the pair's quotes are practically deprived of the opportunity to leave the side channel, in which they have been trading for a month and a half.
The background was quite interesting on Wednesday. In America, for example, a report on retail sales for August was published and it turned out that the indicator increased by 0.6%, which is below forecasts (+1.0%) and lower than the previous value (+1.2%). Excluding auto sales, retail sales rose 0.7%, also below forecasts and July figures. Nevertheless, the US currency strengthened in the afternoon, which makes it possible to conclude that market participants are fully focused on the forthcoming announcement of the results of the Fed meeting. As we said earlier, no one knows exactly what Federal Reserve Chairman Jerome Powell will announce and what his rhetoric will be. Therefore, we recommend that novice traders do not trade in the coming hours and wait until tomorrow morning.
The EU will publish inflation for August on Thursday, September 17. The euro may begin to exert pressure on itself after this report is released, since negative inflation or "deflation"may be recorded for the second consecutive month. Deflation, like hyperinflation, is a negative phenomenon for any economy. Especially for one recovering from one of the most serious crises in decades. Therefore, falling prices is a headache for the European Central Bank. It is possible that the ECB will have to stimulate the economy again in order to spur inflation. In general, this is an absolutely bearish factor for the euro. No major reports from America are scheduled for September 17.
Possible scenarios for September 17:
1) Novice traders are still recommended to not consider buying at this time, since the price failed to overcome the 1.1903 level once again, which is the upper line of the side channel. Therefore, the upward movement is canceled again. Also, there is not a single serious pattern that would support the upward trend now.
2) Selling still looks more attractive now, as traders have not overcome the 1.1903 level, and the price has settled below the uptrend line. Thus, novice traders can now place shorts, which can be left open until morning with targets of 1.1800 and 1.1761, while setting the Stop Loss level at breakeven in order to protect themselves from a possible sharp change in direction of movement, which is very likely. You can also close short positions at minimal profit and tomorrow morning a new market analysis deal.
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 (10,20,3) 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.