The EUR/USD pair recouped losses on Monday as it showed a sluggish movement on Friday without any strong and accurate signals produced. On Monday, however, several accurate signals were formed, according to the chart below. In the M30 time frame, a corrective move began due to an empty macroeconomic calendar. Nevertheless, volatility remained relatively high - about 90 pips. Such volatility is not typical of the euro/dollar pair. Moreover, there were no macro events set for release on Monday. Given all the current geopolitical issues, this seems to be the new reality. Therefore, the upward correction is likely to be short-lived. No improvements have been reported on the geopolitical front although hopes for a breakthrough in Russia-Ukraine peace talks have grown. It is important right now that the parties achieve a ceasefire.
In the M5 time frame on Monday, a few trading signals were made, but all of them were very accurate. The first buy signal had been produced at 1.0902 (the Friday low), even before the European session opened. This signal was not mentioned in the previous analysis, so it could have been ignored. The second buy signal was generated near the 1.0932 level after the price had risen some 40 pips, tested the 1.0990 mark, and pulled back. So, beginner traders were able to receive a 40 pips profit on Monday. After a pullback from 1.0990, a sell signal was also made. The pair went down to 1.0932 but failed to reach it. Nevertheless, the novice had enough time to close the trade manually. The buy signal from the 1.0932 level was not considered because an error of 3 pips was too much for the euro/dollar pair. As a result, the price returned to 1.0990 by the end of the day, but a signal was produced a little too late, so it should have been ignored.
Trading plan for Tuesday:
In the 30M time frame, a new downtrend emerged. So far, neither a trend line nor a channel has formed. If the price fails to break through 1.0990 on Tuesday, either a trend line or a channel will emerge. The target levels in the 5M time frame are seen at 1.0870, 1.0902, 1.0932, 1.0990, and 1.1106. A stop-loss order should be set at the breakeven point as soon as the price passes 15 pips in the right direction. In the eurozone, data on industrial production for January and the ZEW sentiment index will be released. In the United States, no events are expected due to an empty macroeconomic calendar. The eurozone statistics is of secondary importance and will unlikely somehow affect the market. Nevertheless, volatility is anticipated to be rather high due to current market jitters.
