The EUR / USD currency pair has started a microscopic correction during Monday night trading, rebounding from the upper line of the ascending channel, which we already talked about at the weekend. Thus, by and large, we have at our disposal a new sell signal with the target of the lower channel line. However, in general, the correction is still extremely weak, so far the pair has gone down no more than 15 points. Thus, formally novice traders can try to work out the correction, but we once again remind you about Stop Loss orders in case a sharp resumption of upward movement follows. And I must say that, despite the ascending channel, this option cannot be ruled out. The main option is to move up and buy the euro/dollar pair.
The fundamental background for the EUR/USD pair remains the same and, in fact, does not change. On Monday, the calendar of macroeconomic events includes only the speech of Christine Lagarde, who has made statements quite often in recent weeks, so there are no secrets for the market regarding the vision of the future and the current situation of the ECB. So we absolutely don't expect Lagarde to say anything really important today. Moreover, markets continue to ignore most of the speeches from Central Banks. Thus, if we consider only the news calendar, we can assume that trading today will be very boring and sluggish. But as is often the case, the movements can be strong when you don't expect it at all. Therefore, we recommend that novice traders do not relax and remember that nothing can be predicted with a 100% probability in the foreign exchange market.
We also remind you that the US presidential election is approaching (November 3), and all the events related to it gravely concern market participants – both large and small. In general, the greenback continues to depreciate against the euro (growth of the EUR/USD pair = growth of the Euro = fall of the dollar). Thus, markets are still unwilling to buy the US dollar in the face of complete uncertainty about the future of the country and its economy. Many experts believe that the support for the dollar will be provided by the election victory of Joe Biden, who, in principle, is now leading in all political ratings and polls. However, we should not forget that in the 2016 US presidential elections, initial statistics and polls turned out different from the actual result.
On October 12, the following scenarios are possible:
1) Purchases of the EUR / USD pair are currently relevant due to the fact that an upward channel has been formed, in which the price is now moving. However, you need to first wait for the price correction to the lower area of this channel, as well as the MACD indicator discharges to zero. Only after that, we recommend opening new purchases with targets in the area of 1.1830-1.1850.
2) Selling has lost its relevance at the moment since we do not recommend novice traders to trade against the trend. However, the quotes will most likely begin to fall, as the price on Friday worked out the upper line of the ascending channel. Thus, the probability of a 50-60 pips correction downward is extremely high. The riskiest traders may even try to work out this pullback, but in this case, we recommend not forgetting about the restrictive Stop Loss orders. In general, short positions will become more attractive only after the price consolidates below the rising channel.
Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.
Beginners in the Forex market should remember that every trade cannot be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.
