The EUR/USD pair sharply dropped to the lower border of the rising channel, as we expected a day earlier. Neither the speech of European Central Bank President Christine Lagarde nor US reports could stop the fall of the European currency. The pair started falling early in the morning and kept it up all day. Thus, traders simply ignored the US reports. But in vain. There was something to pay attention to. For example, a retail report. Its volume decreased by almost 2% in December, although forecasts predicted that the value would remain unchanged. Or take a report on industrial production, the volume of which fell by 0.1% instead of growing by 0.2%. However, if the market has ignored these, the most important, reports, then what can we say about others? Friday's move was purely technical.
The movement was just fine on the 5-minute time frame, because the pair only moved in one direction during the day. A trend movement is always good. The levels were also located at a good and almost equal distance from each other. Therefore, it was possible to avoid double interpretations of the signals. From the very beginning of the European trading session, when we recommend that novice traders start tracking signals, a downward movement began. The price immediately rebounded from the level of 1.1478, forming the first sell signal. In the future, the slow fall of the European currency continued and by the beginning of the US trading session, the pair reached the nearest level of 1.1453. Traders overcame this level almost immediately, however, in the first two hours of the session, when the reports we mentioned above were released in America, there was an attempt by the bulls to seize the initiative and settle above the level of 1.1453, which would be a buy signal. However, instead, a rebound from 1.1453 followed, which should have been interpreted as a signal to keep the movement going. Therefore, it was necessary to stay in short positions as well. A few hours later, the pair dropped to the level of 1.1422 and overcame it in five minutes, which also indicated the bears' firm intentions to take the pair as low as possible on Friday. The price remained below this level until the end of the working day and week, providing a huge amount of time for novice traders to close the deal in profit.
How to trade on Monday:
You can see that the price has dropped to the lower border of the rising channel on the 30-minute timeframe. Thus, on Monday everything will depend on overcoming this line or not overcoming it. Carefully! False rebound possible! If this breakthrough happens, then the euro currency may continue its fall on Monday and Tuesday. The nearest important level is 1.1360, which can be the first target for short positions. On the 5-minute timeframe, the pair will start Monday between 1.1422 and 1.1387. Therefore, overcoming any of them will be a signal. It is possible that the price will also rebound from any of these levels, which will also be a signal to open deals. A flat is possible on Monday, which is typical for these days of the week. There will be no macroeconomic statistics on that day either in America or in the European Union. Therefore, the market has nothing to react to during the day.
