The EUR/USD currency pair continued to trade inside the horizontal channel on Wednesday. The price approached its upper limit twice, but never once tried to overcome it. Thus, the euro/dollar flat remains, and today even a potentially strong and important inflation report failed to help the price get out of it. The inflation report, as we expected, turned out to be highly neutral. This means that it turned out to be better than the value of the previous month, but worse than the forecast. As we said, there was no reason to expect that inflation would suddenly begin to slow down at the same pace that it had been growing in recent months. Moreover, for the month of April, the Federal Reserve raised the rate by 0.25% only once and that's all. Thus, there were no strong reasons for long positions on the dollar at the market today, but there were no reasons to sell it. We still indicate that we need to wait for the price to leave the horizontal channel to determine the further trend. Or you can trade on a rebound from any of the borders on the lower TF.
The technical picture on the 5-minute timeframe is still very simple. The pair continued to trade today inside the horizontal channel, so nothing has changed compared to the previous day. There are few trading signals being formed now, but this is even for the better, since there is always the possibility of false signals being formed during a flat. Today, however, both signals were not false. The price bounced from the level of 1.0578 twice , each time not reaching it by 2 points. But this is an acceptable error. At the first signal to sell, the price went down 57 points, at the second - 25 (if you count until the evening). However, in the first case, it was necessary to close the short position manually just before the release of the US inflation report. Although the pair continued to fall after it, there was a high probability that the price would move in the opposite direction. It was also possible to set Stop Loss to breakeven before the inflation report was published. On average, this deal could earn 15-20 points. The same amount could be received on the second short position.
How to trade on Thursday:
The trend remains downward on the 30-minute timeframe, despite the formed flat. We believe that the decline can resume at any moment, but we draw your attention to the fact that the euro has been falling for quite a long time and a correction will begin sooner or later. But for now, the pair cannot even consolidate above the horizontal channel, and European Central Bank President Christine Lagarde's speeches cause a feeling of hopeless despondency among euro bulls. On the 5-minute TF tomorrow it is recommended to trade at the levels of 1.0369, 1.0471-1.0490, 1.0578-1.0593, 1.0636, 1.0697. When passing 15 points in the right direction, you should set Stop Loss to breakeven. No important reports are scheduled for Thursday in the European Union. Only a completely minor report on jobless claims and the producer price index will be released in America. The market reaction to them is unlikely to follow, so tomorrow the pair will have almost no reason to leave the horizontal channel. The macroeconomic picture will be no more optimistic on Friday.
