November 16, 2021

Trading plan for EUR/USD on November 16: simple tips for beginners. Euro plunges unexpectedly late Monday

 On Monday, November 15, EUR/USD was traded in a usual manner, being stuck in the sideways channel of 30 pips for most of the day. It can be clearly seen in the image below. However, in the late Amerian session, quotes started falling unexpectedly despite the fact that there have been no important macroeconomic releases. Still, market participants were actively buying the American dollar for no reason. As a result, EUR/USD shed about 80 pips for the day, thus demonstrating high volatility. Interestingly, Christine Lagarde's speech in the European Parliament, the only event that could have been of any interest to traders, has passed almost unnoticed. So, amid today's developments, the bearish bias remains valid. Moreover, the downward trend line has been formed. The pair has approached the level of 1.1371. Below it, no support levels can be found yet, as the quotes were last seen at this level at least one year ago.


The 5M chart provides an even clearer picture. Before Monday afternoon, EUR/USD was barely moving, while later in the day, it suddenly started falling and broke the level of 1.1422. Near this level, the only trading signal of today was formed - the signal to sell. Normally, beginning traders would have used this signal. But this time, a wiser decision was to close all trades and exit the market without opening new ones. So, we ignored this signal, though it has proved to be profitable. There were no other trading signals during the day, as the pair barely moved in morning trades.


As seen on the 30M time frame, the downward trend remains valid, and a trend line has even been formed. However, traders need to pay attention to the fact that this trend line has no definite pivot points. Besides, the recent dollar's bullish run has no solid reason, so it will possibly end soon. However, it is worth buying the pair only after any certain buy signals appear or if the downward trend reverses. On the 5M time frame, the key levels for November 16 are 1.1371 and 1.1422. The take profit should be set at a distance of 30-40 pips while the stop loss is better to be placed 15 pips away from the breakeven point. On the 5M chart, the target can be found at the closest level unless it is not too close or too far. If it is, then it is better to focus on the Take Profit. On Tuesday, traders will pay attention to the EU GDP and Industrial Production reports, but they are unlikely to influence the market sentiment. Lately, the pair has been unaffected by the industrial production data while the secondary GDP estimate is unlikely to differ greatly from the first one. Markets have already priced in a 2.2% increase q/q. The United States will publish the retail sales data that can trigger some reaction but judging by today's developments, the dollar can rise without any reason.