The EUR/USD pair continued its downward movement right from the very moment trading opened on Monday, March 8. No pre-correction, nothing. A downward movement immediately. Thus, we have a strong downward trend, but novice traders cannot reject it. As we said earlier, in previous articles, each trading system is tailored for a certain type of movement. There are no trading systems that work equally well in a flat, and on a strong movement, and on a regular movement. Our recommendations are based on the simplest possible analysis for beginners. Now the movement is not standard, so trading signals are simply not generated. It turns out to be a paradoxical situation - there is a trend, the trend is strong, but there are no signals to trade bearish. On the other hand, such strong and recoilless movements do not happen often, so if you adjust the trading system to such a movement, the system will generate losses much more often than when the pair moves as usual - with regular corrections. Thus, we recommend that novice traders do not get upset because such a strong movement has practically failed to work out. The main thing is to understand the basic principles of the market, the movement of various instruments and make a profit in the long term.
No important macroeconomic reports released in either the US or the European Union. Thus, the macroeconomic background could not have any impact on the movement of the EUR/USD pair. The same goes for the fundamental background - there were no events today. But, nevertheless, the pair continued to move down. This is the main distinguishing feature of a strong trend - there are no apparent reasons, but the pair is still moving stubbornly in one direction. We can, of course, conclude that US Treasury bonds continued to rise in yield on Monday, and therefore the dollar continued to strengthen. However, this factor, from our point of view, is absolutely contrived. The dollar did not grow against the pound today. The growth in the yield of US bonds began much earlier than the current round of growth of the dollar. You can just as well attract any event in the world to the pair's movement. There is no direct relationship between the rise in bond yields and the rise in the dollar.
The only important report on Tuesday is the change in the volume of GDP in the European Union in the fourth quarter. This is already the second assessment of this indicator, so the markets are morally ready to see the a "-". Thus, if a strong deviation of the actual value from the forecast does not happen, then most likely there will be no reaction to this report.
Possible scenarios on March 9:
1) Long positions are not relevant at the moment, and the situation as a whole remains confusing and ambiguous. You are advised to buy the pair when it has finally surpassed the downward trend line, that is, the cancellation of the current downward trend. Take note that if a signal forms at the moment, the price has already traveled a long distance, then the residual momentum can be extremely weak. At the moment, the price is very far from the trend line, therefore, most likely, no buy signals will be generated on Tuesday.
2) Trading bearish looks more appropriate now, but it will require a signal from the MACD indicator during the day. The closer to the zero level such a signal is formed, the more chances it will work out. The targets are located at a distance of 40-50 points from the entry point. When a clear signal is formed and profit worth 15-20 points is accumulated, we recommend setting Stop Loss to breakeven.
