The EUR/USD pair essentially stood in one place last Thursday night. The pair slightly increased after our evening review. This increase was enough for the pair to settle above the previous descending channel, thus, it ceased to be relevant, and the trend formally changed to an upward one. However, the euro did not grow at night. And the previous downward trend channel was so narrow that almost any correction brought it out of it. Instead of the higher channel (now shown with a dotted line), a new descending channel has appeared, which is wider and provides more opportunities. However, there are also problems with it. First of all, it was built using only three control points, the last one was obtained yesterday. In other words, it may not be a reference point, in which case the entire channel can be rebuilt several times. However, for lack of anything better, we believe that the channel is correctly built. And if so, then the price will continue to trade in its lower area, respectively, there is a high probability of an upward correction to the upper area of the channel. We would not recommend novice traders to work with corrections. Therefore, we are not interested in today's upward movement (if it happens).
The fundamental background for Friday may be extremely weak. First, traders ignored several speeches from Federal Reserve Chairman Jerome Powell and US Treasury Secretary Stephen Mnuchin this week. Of course, both figures did not mention anything fundamentally new and important, but nevertheless. A report on orders for durable goods in the US (the indicator has four variations at once) is scheduled for release today. We believe that this report will not have any impact on the pair's movement. Forecasts for it are very weak in terms of changes in indicators in relation to the previous period. Maximum change at +1.5%. Therefore, if predictions come true, then traders will simply have nothing to react to. It will be another matter if the report comes out much worse than the weak forecasts. Then the US dollar might be under pressure, which will contribute to an upward correction (growth of the pair = fall of the dollar). In general, we do not recommend losing sight of this report. Apart from it, there are no other planned publications for today.
Possible scenarios for September 24:
1) Novice traders are advised to not consider buy positions at this time, since, even according to the new descending trend channel, the downward trend remains in effect. Accordingly, any upward movement is acknowledged as corrective until the pair leaves the downward channel through its upper border. As part of the upward correction, it may start growing today with targets at 1.1694 and 1.1721.
2) Selling still looks more appropriate despite the fact that there is a high probability of a correction, and the price is also in the lower area of the descending channel. Even the MACD indicator has eased, as expected, to the zero levels and is now ready to generate sell signals. One of these signals can appear in the next hour, this will allow you to sell the pair while aiming for support levels of 1.1633 and 1.1599. However, once again we warn traders that there is a high probability of an upward correction today, and the report on orders for US durable goods, set to be released in the afternoon, may turn out to be weaker than expected and could provoke an increase in the EUR/USD pair.
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.
