The EUR/USD pair continued its downward movement on Wednesday, which had begun the day before. We did not expect the pair to drop 80 points out of the blue. However, 80 points is not that much. It's just that in the last week the average daily volatility was 40-50 points, so a movement of 80 points in the graph looks like a collapse. In fact - a common, banal downward movement. After breaking the upward trend line, the price immediately continued to move down. And the MACD indicator has not turned upward since yesterday's article was written. Thus, novice traders could, all this time, the whole day, continue to remain in short positions that were opened using yesterday's signal to break the trend line. We were aiming for 1.2086. If beginners closed short positions near this level, they could get 20 points of profit. If the closing was made on the MACD reversal to the upside, then the deal should be opened and you could be in profit by around 60 points. Anyway, congratulations on your profit. The trend is now downward. Thus, we recommend waiting for the MACD indicator to discharge and create a new sell signal. It is impossible to form a new trend line or channel now, since there has not yet been a single round of correction in the downward movement.
There was only one interesting report on Wednesday - the report on retail sales in the United States, which quite unexpectedly turned out to be significantly better than forecasts. Analysts predicted an increase by 1.1% in January on a monthly basis, while in reality, retail sales rose by 5.3% m/m. Thus, exceeding the forecast by almost five times. Traders could buy the US dollar after this report was released. However, the dollar was rising all day (growth of the dollar = fall of the euro/dollar pair). Thus, this report only supported the bearish sentiment in the US trading session.
Beginners will have a completely secondary report on applications for unemployment benefits in the United States. The number of secondary applications is expected to continue to decline to 4.4 million. However, not so long ago Federal Reserve Jerome Powell said that the real unemployment in America is now not 6.3%, as the statistics say, but 10 percent. Thus, these data on applications are not particularly significant.
Possible scenarios on February 18:
1) Long positions have lost their relevance, as the price settled below the rising trend line. And so novice traders should not trade bullish right now. Moreover, a new upward trend is unlikely to form tomorrow, therefore, most likely, buy orders will not have to be considered on Thursday.
2) Trading bearish is currently relevant. But after a sufficiently strong downward movement, at least a small upward correction is required, which will allow the MACD indicator to discharge to the zero level and create a new sell signal. Also, an upward pullback can make it possible to form a downward trend line or channel, which will also help in trading. On a new sell signal, you are advised to open short positions while aiming for 1.2076 and 1.2048. Since we do not know how strong the correction will be, the maximum Take Profit should be 40-50 points.
