On Wednesday, the EUR/USD pair was cautiously trading in one direction for the whole day. A day earlier, it formed a new downward channel where the movement took place. During the day, the euro/dollar pair managed to add about 40 pips and approached the upper boundary of the channel and the level of 1.1360. However, the price did not rebound either from the first or from the second one. So no new sell signal was received. As long as the price stays inside the descending channel, the pair is more likely to fall. The volatility was low on Wednesday. There was no macroeconomic background, so novice traders had nothing to analyze during the day.
On the 5-minute timeframe, the movement looks just as sluggish as on the 30-minute chart Throughout the day, there was a slight upward movement, but not a single level on the chart had been tested. This means that no new trading signals were generated. On the one hand, it was good for us since we could hardly earn anything with such a flat movement. However, the pair may now return to the sideways channel that it left just a week ago. If this happens, then we will witness a new long-term flat movement. Only the Fed meeting next week or traders' activity can save the situation. At the same time, we would like to remind you that the last Fed's meeting in December did not help the pair to leave the flat channel. A short-term market reaction is possible, but the price is still likely to stay within the range of 1.1234-1.1360.
Trading tips for Thursday
A new downtrend has been formed on the 30-minute timeframe as well as a descending channel. It is quite narrow, so if the movement continues for more than a few days, this channel may expand over time. The pair is already quite close to its upper boundary. So there is a risk that the price may return to the channel of 1.1234-1.1360. We believe that in the coming weeks, the euro may drop to the level of 1.1234. Hopefully, it will not start a new flat movement. On the 5-minute timeframe, the pair will open the trade on Thursday between 1.1315 and 1.1360. A breakout of any of these levels will serve as a signal. In general, there are quite a lot of levels on the chart now. So you need to be more careful with rebounds within the trend movement on the intraday chart (if a trend is formed on Thursday). The macroeconomic background will be weak tomorrow. Beginners may pay attention to the inflation report in the European Union or the initial jobless claims report in the US. However, we think that this data will hardly cause any market reaction.
