The EUR/USD pair calmly moved down on Thursday night, preventing the MACD indicator from easing to the zero levels. Let me remind you that this is necessary in order for the signals generated by this indicator to be more timely. However, as long as there are no upward corrections, the indicator will not ease as it should. On the other hand, a descending channel has finally appeared at the disposal of novice traders, within which the pair is traded. Therefore, you can now trade in relation to this channel: as long as the price is inside it - you can trade lower, as soon as the price settles above it - you can open long positions. The euro/dollar pair went below the horizontal channel $1.17-1.19 by 50 points, which only increases the likelihood of forming a new downward trend.
The fundamental background for today may be interesting, or it may be absent altogether. Federal Reserve Chairman Jerome Powell and US Treasury Secretary Stephen Mnuchin are set to appear before the Congress. The problem is that both financiers have already spoken this week in the same setting, but before a different committee and, most likely, the content of their speeches today will not differ from what was on Tuesday. If so, then the markets will not bear any new information for themselves. Accordingly, they will have nothing to react to during the day. Nevertheless, both economists can still tell the traders something new, therefore you should not skip their speeches and also be prepared that there might be no significant reaction. In general, the US dollar made a significant step forward against the euro - it left the horizontal channel. Thus, the initiative is now on the side of this currency, as well as the advantage. The data on applications for unemployment benefits, which will be released in the US in the afternoon, is interesting only from a general point of view. If the number of secondary claims for benefits continues to decrease, this, in fact, will mean a decrease in the unemployment rate in the country, which is good for the US dollar...
Possible scenarios for September 24:
1) Novice traders are recommended to not consider buying at this time since there is not a single signal to them yet. However, now we have a descending channel that we can use, setting the price above will allow us to start trading upward. In this case, the first targets for long positions are the levels of 1.1782 and 1.1744. If this scenario is realized, then the pair may return to the $1.17-1.19 horizontal channel.
2) Selling does not look appropriate at this time, however, if quotes settle above the descending channel, it will break the entire technical picture. The MACD indicator still needs to be discharged to the zero levels, but the pair is likely to leave the descending channel and all sell signals will no longer be relevant. Thus, we recommend trading for a decline within the descending channel while aiming for support levels 1.1634 and 1.1608, and move the Stop Loss levels outside the channel in case the price leaves it.
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 is the key to success in trading over a long period of time.
