The EUR/USD pair resumed its downward movement several times last Friday. Since the pair's quotes settled below the rising trend line earlier, the trend is currently downward. As such, we advised you to consider trading bearish on Friday. However, we also recommended waiting for a strong sell signal from MACD, which did not appear during the day. The MACD indicator turned down twice, but both times it did it well below the zero level. Therefore, both sell signals were considered weak and should not be rejected. Therefore, in principle, no positions should have been opened on Friday. The downward trend was not reversed on that day. On the contrary, a new downward trend channel was created, which supports bear traders. The price just rebounded off its lower border. And so, we are expecting a round of upward correction on Monday, and after that - the downward movement.
The European Union did not publish a significant macroeconomic report last Friday. But the United States released several important reports. The unemployment rate did not increase or decrease in December, while the average wages rose by 0.8% m/m. However, it was not these reports that caught the attention of traders. The most important was the NonFarm Payrolls report - the number of jobs created outside the agricultural sector. This is a very important report on the state of the US labor market. Unfortunately, market participants ignored it too. Once again. The number of NonFarm Payrolls decreased by 140,000, although forecasts predicted an increase of 70-100,000. Naturally, this is bad news for the US economy and the dollar. However, as we can see, the dollar rose in price on Friday (fall of the euro/dollar pair = growth of the dollar). Thus, macroeconomic reports were once again ignored, and the pair continued to trade according to its own rules.
No major releases scheduled in the United States or Europe on Monday, January 11. Thus, traders will have nothing to pay attention to. Although Friday showed us that all statistics, even the most important reports, are still ignored. The pair continues to trade according to its own rules, so the best advice for novice traders is to trade exclusively on technical signals and, most importantly, on strong technical signals.
Possible scenarios on January 11:
1) Long positions are currently irrelevant, since the quote overcame the upward trend line. Thus, those who wish to buy the EUR/USD pair on such a market should wait for a new upward trend or the end of the downward trend (quotes would have to settle above the downward channel). In this case, you can consider long positions with targets around the 1.2328 level.
2) Trading for a fall is more relevant now, since a downward channel has formed. Thus, you are advised to open new short positions with targets at the support levels 1.2188 and 1.2130 (they will be revised in the morning) if a new MACD sell signal is generated, which should be discharged to zero before that. Also, a rebound from the upper border of the descending channel can be considered as a sell signal.
