The EUR/USD pair was trading sideways all day on Wednesday. Although "haggling" is a big word. The range of the pair's movement during the course was at a maximum of 30 points. Thus, we can clearly say that the markets do not expect anything concrete from the Federal Reserve. They are just waiting for the FOMC to notify the markets about its decisions, forecasts, and Fed Chairman Jerome Powell will answer the questions of interest to everyone. In yesterday's article, we recommended opening long positions if the 1.1912 level is surpassed. Today, the quotes did not settle above this level. Therefore, longs should not have been opened. Furthermore, short positions were recommended if there was a clear rebound from the 1.1912 level and this moment should be considered in as much detail as possible. Let's start with the fact that despite the pair's apparent presence around the 1.1912 level throughout the day, there were formally two rebounds from the 1.1912 level. Immediately after forming a rebound, the price simply returned to this level every time. In such cases, you should look for confirmation on other timeframes. And now we are starting to consider two timeframes in detail at once, in order to give novice traders the clearest picture of what is happening.
So let's take a look at the 5-minute timeframe. Overnight trades were absolutely flat and the price simply did not even move. Traders began to rock the market when the European session opened, but we are interested in the 1.1912 level, from which you were advised to trade. There were five rebounds from it on the 5-minute timeframe, which is clearly seen in the chart. After the first and second rebounds, the price still went down by about 14 points, which is certainly very small. Therefore, this signal could be recognized as false and it no longer made any sense to consider further rebounds. Moreover, when the third rebound was being formed, it was already clear that the market was in a flat and was just waiting for the results of the Fed meeting.
The European Union published a report on inflation for February on Tuesday morning. As we feared yesterday, no changes were recorded from the previous value. And so traders did not react to this report. As for the inflation itself, it remained at the level of 0.9% in annual terms. Recall that the European Central Bank, like many other central banks, is aiming for 2% inflation. There were no other important events during the day, either in the United States or in the EU. ECB President Christine Lagarde is scheduled to speak in the European Union tomorrow, and another speech by Powell in the United States. Needless to say, these events can have a strong impact on the foreign exchange market, but it is impossible to predict in advance what exactly the heads of central banks will say. In addition, the US will release a report on applications for unemployment benefits, but traders will only react to this if the actual value is very different from the forecast. Therefore, first you need to survive the summing up of the results of the Fed meeting today and only after that should you look at the technical picture again. We can consider both buy and sell signals tomorrow since the pair is flat on the hourly timeframe. However, you should make sure that the flat is finished on the 5-minute timeframe. As before, we use the MACD indicator and the 1.1912 levels as signals. In any incomprehensible situation, we are looking for clarifications on the 5-minute timeframe. The goals are close - 30-40 points from the entry point. You should move Stop Loss to breakeven when passing 15-20 points in the right direction.
