The EUR/USD pair began the day with the resumption of the upward movement. Moreover, quite strong, which has already cast doubt on its validity. In the morning the European Union published a report on inflation for November, which, as it turned out, rose from 4.1% y/y to 4.9% y/y. However, this report did not generate any strong movement (the first checkbox in the chart below). The whole upward movement (the growth of the euro currency) happened just before this publication. The most interesting thing is that the growth of the euro was, it turns out, logical, since the acceleration of inflation in the EU increases the likelihood of a tightening of monetary policy by the central bank, which is a bullish factor for the currency. By a similar principle, the US dollar has grown in recent weeks and even months. However, how to explain the fact that the markets started buying up the euro much earlier than the report? Insider information? If so, then it was impossible to predict such a movement of the pair. It is also quite interesting that in the second half of the day the euro fell, but rather, it must be said: the dollar rose. Because the dollar rose in price against the euro and the pound after Federal Reserve Chairman Jerome Powell's speech began. As a result, the pair dropped to the upward trend line and bounced off it, which could be used as a buy signal.
The picture on the 5-minute timeframe on Tuesday was almost shocking. The volatility of the pair was about 140 points, with a strong movement in the first half of the day and in the second. Both up and down. Thus, a huge number of trading signals were formed during the day. It remains only to figure out how they should have been worked out. It all started pretty badly for novice traders. The pair bounced off the 1.1321 level, forming a false sell signal, which resulted in a 12 pips loss. The next buy signal was more successful, and the pair worked out and bounced off the level of 1.1371, where the long position should have been closed at 35 pips profit. And immediately open short positions on a sell signal. The downward movement did not last long, as the price settled back above the level of 1.1356. However, the levels 1.1356 and 1.1371 should be considered in a pair, as they are too close to each other. As a result, it was only necessary to work out a signal to sell for consolidation below 1.1356, and not for a rebound from 1.1371. It was formed at the opening of the US session, and could be canceled, since the price went far enough from the point of formation. However, with the start of Powell's speech (the second check mark), it began to move in the right direction, allowing novice traders to earn decent money - about 75 more points. True, the sale deal was very complex and controversial. It could have been skipped, but the newcomers in any case remained in profit after Tuesday. Moreover, it was also possible to work out a buy signal from the level of 1.1259, which also turned out to be profitable.
How to trade on Wednesday:
The downward trend has reversed on the 30-minute timeframe, but the upward movement is not strong. Thus, the growth of the European currency may continue for some time, but the movement is unlikely to be strong. However, as long as the upward trend line remains relevant, purchases remain appropriate. The key levels on the 5-minute timeframe as of December 1 are 1.1192, 1.1231, 1.1259, 1.1290, 1.1321, 1.1356, 1.1371. Take Profit, as before, is set at a distance of 30-40 points. Stop Loss - to breakeven when the price passes in the right direction by 15 points. At 5M TF, the target can be the nearest level if it is not too close or too far away. If it is, then you should act according to the situation or work according to Take Profit. On Wednesday, the European Union will publish a report on business activity in the manufacturing sector (weak). In the US, the ADP report on changes in the number of employees in the private sector and the ISM manufacturing index. US reports are more likely to be used up by the markets.
