The EUR/USD pair was trading mainly sideways on Thursday. The price was holding near 1.1360 for the entire day, retreating from it by only 30 pips. Unfortunately, the price left the descending channel due to such a distinct flat movement. We mentioned this scenario in the previous article, saying that the current channel was very narrow and was built within a trend in just three days. Therefore, this channel was far from strong. It should be noted that it was not the price that settled above the channel. Instead, the channel went below the price while it was simply moving sideways throughout Thursday. After a short break, the downward movement may well resume, and we believe that this is the main scenario for now. Moreover, bulls failed to gain a foothold above 1.1360 which means traders are not ready to buy the pair. The macroeconomic background was very weak today. The inflation report was published in the EU. This time, it was the second estimate which did not differ much from the first one. However, traders showed no reaction to this data. In the afternoon, the initial jobless claims report was released in the US, which unexpectedly turned out to be much worse than expected. This triggered some sell-offs in the US dollar. But the overall reaction was very weak, with volatility of only 20 pips.
On the 5-minute time frame, the movement looked just as sluggish as on the 30-minute chart. Throughout the day, the price was trapped in a sideways channel. However, it managed to form one trading signal. In the middle of the European session, the quote rebounded from the resistance area of 1.1360 - 1.1366. At this point, traders should have opened short positions. The signal was rather clear and accurate. However, due to low volatility, the pair failed to develop a strong downtrend. It made several attempts to move lower but the decline was limited to only 20 pips. Therefore, the maximum profit beginners could have earned today was 20 pips. Given the total daily volatility of 40 pips, this was a good result.
Trading tips on Friday
A new downtrend was formed on the 30-minute time frame, but the price had already left the descending channel. We expect that the pair will retest the channel in the near future and will signal a downward movement. However, there is a possibility that the price will stay in the sideways channel of 1.1234 - 1.1360. It spent one week above this range and returned there today. Moreover, the price failed to break above its upper boundary. Even so, the decline towards the lower boundary is considered the main scenario for now. On the 5-minute time frame, the pair will open the trade on Friday between the levels of 1.1315 and 1.1360. Therefore, a breakout or a rebound from 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 on the intraday chart (if there is one at all). The fundamental background will be completely absent on Friday both in the EU and the US. US Treasury Secretary Janet Yellen will speak tomorrow but her speech will hardly affect the forex market.
