EUR/USD was rather volatile on Thursday. This was hardly surprising given that the Fed and the ECB summed up the results of their December meetings last night. The European regulator did not announce anything that could surprise the markets. Yet, traders were still digesting the outcome of the Feds' meeting. Therefore, the pair movements were quite good in the morning, in the afternoon, and in the evening. On the 30-minute time frame, however, we could clearly see that the pair bounced off the level of 1.1234 and 1.1355. Thus, we can again define a sideways channel but this time with a broader range. As for the important events and publications that influenced the movement of the euro/dollar pair, the first tick in the illustration above appeared when the business activity index in the eurozone services sector was published. The indicator turned out to be much worse than expected. The second tick coincided with the publication of the results of the ECB meeting. The third one appeared along with the release of the economic data in the US which in fact had no effect on trading.
On the 5-minute time frame, the movements were also strong. The first signal was formed too late and it should not have been used at all since the price crossed the level of 1.1324 exactly at the moment when the ECB meeting results were released. The market reaction could be unpredictable (as in the case with the Fed), so novice traders should have definitely avoided the risk. The next sell signal was formed when the pair pulled back from the resistance area of 1.1348 - 1.1355, and this signal could already be followed. As the signal was formed, the price went down by about 42 pips, so any Take Profit could be triggered. Also, beginners could close the sell position manually after breaking through the level of 1.1324. Even though only one trade was opened on Thursday, it turned out to be profitable, and newcomers avoided trading during a storm in the foreign exchange market.
Trading tips on Friday
On the 30-minute time frame, the EUR/USD pair is in the process of forming a new trend, but at the moment, it is still stuck in a sideways channel between 1.1234 and 1.1355. Moreover, the pair is unlikely to leave this channel in the coming days. Today, traders will most likely take a breather from the two central banks' meetings, so we do not expect to see strong movements. On the 5-minute time frame, the key levels for December 17 are 1.1227 - 1.1234, 1.1324, 1.1348-1.1355, and 1.1422. A Stop Loss should be placed to a breakeven point as soon as the price passes 15 pips in the right direction. On the M5 chart, the nearest level could serve as a target unless it is located too close or too far away. If it is, then you should act according to the situation or trade with a Take Profit. On Friday, the European Union will publish a report on inflation. However, this is its second estimate for November, so it is unlikely to provoke any reaction in the market. No important events are expected on Friday in the US. Therefore, traders will have to rely only on technical factors when making trading decisions.
