On Tuesday, March 16, the euro/dollar pair was trading mixed. As the price has crossed the ascending trendline, it was recommended to open short deals. It was possible to open buy positions only after a rebound from the level of 1.1912 which did not happen during the day. Therefore, short positions were a priority. There were two sell signals generated by the MACD indicator. They are marked with circles in the picture. The first signal turned out to be false as an upward movement began right after its formation. The second one was correct. Following the first signal, beginners could have received a loss of 27 pips. The second signal could bring a profit of 30-40 pips, depending on where the Take Profit was placed. In general, today traders could close the session with a minimal profit. However, it is clear that the pair has changed its trajectory several times during the day. Moreover, the pair's movement was not influenced by macroeconomic statistics or other events. All the data was ignored. At the moment, we have a continuing downtrend, so short positions remain relevant. The level of 1.1912 will also play an important role tomorrow as bulls may try to settle above it.
On Tuesday, several relatively important reports were released in Europe and the US. In the EU, the ZEW Indicator of Economic Sentiment was published and it exceeded analysts' expectations. Markets may have reacted to this data as the rise in the euro continued. At the same time, statistics from the US were completely ignored. Both industrial production and retail sales were far below market expectations. Therefore, they should have provoked a fall in the US currency (that is, an increase in the euro/dollar pair). However, this did not happen at the time of the publication and in the next few hours.
On Wednesday morning, the EU will publish inflation data for February which is unlikely to differ from the previous period and will amount to 1.1% year-on-year. A rise in inflation rate will drive the euro higher. The main event of the day will take place in the evening when the US Federal Reserve will announce the results of its 2-day meeting. The regulator is expected to leave the monetary policy unchanged. So, the accompanying statement from the Fed, the economic outlook and a press conference with Fed Chairman Jerome Powell will be of greater importance. Jerome Powell's speech may have a significant influence on the markets. We would recommend that traders do not to leave the market before this event, or at least set Stop Loss.
Possible scenarios for March 17:
1) Long positions have lost their relevance at the moment as the price has consolidated below the second trendline. Consolidation of the price above the level of 1.1912 can be regarded as a buy signal. In this case, it is recommended to open long positions with the targets located 30-40 pips higher.
2) Trading short is more relevant now. If MACD generates a new sell signal or the price rebounds from the level of 1.1912, it is recommended to open short positions with the targets located 30-40 pips below the entry point. When a clear signal is formed and a profit of 15-20 pips is accumulated, we recommend moving Stop Loss to breakeven point
