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The EUR/USD pair continued its downward movement on Wednesday despite no specific local reasons. Look closely at the illustration above—the price is simply drifting downward. This slow yet uninterrupted movement suggests that the US dollar is being purchased continuously, even without waiting for news. This means the market has settled into a medium-term buying mode for the US currency. At least, it will remain oriented toward a downtrend until a significant global event shifts overall market sentiment.
The euro continues its entirely justified decline while everyone expects a correction. For this reason, the price may continue to fall. Today, the US inflation report will be released, essentially the only important event scheduled for this week. Regardless of the report's actual data, we wouldn't be surprised if the market uses this report as an opportunity for further dollar purchases.
Exactly one trading signal was formed in the 5-minute time frame on Wednesday. The price bounced off the 1.0952 level during the European trading session but managed to move up by no more than 15 pips. Therefore, this trade should have triggered a Stop Loss set to breakeven. A consolidation below the 1.0940 level would allow for continued selling of the pair with a target of 1.0888-1.0896.
In the hourly time frame, the EUR/USD pair made a significant move toward a new downtrend last week. Unfortunately, illogical dollar sales could resume in the medium term, as no one knows how much longer the market will adjust to the Federal Reserve's easing monetary policy. However, there is still a downtrend in the hourly time frame. After an upward correction (or even without one), further declines in the euro can be expected since it remains highly overbought.
On Thursday, trading can continue around the 1.0940-1.0951 area. The price has surpassed this area currently, but during the US session today, there may be a sharp upward movement due to the US inflation report.
In the 5-minute time frame, consider the levels of 1.0726-1.0733, 1.0797-1.0804, 1.0838-1.0856, 1.0888-1.0896, 1.0940-1.0951, 1.1011, 1.1048, 1.1091, 1.1132-1.1140, 1.1189-1.1191, and 1.1275-1.1292. No significant events or reports are planned in the Eurozone on Thursday, but the critical US inflation report will be released in the United States. Even if the data is neutral, the market may use it as an opportunity to open new positions.
Support and Resistance Price Levels: These levels serve as targets when opening buy or sell positions. They can also be used as points to set Take Profit levels.
Red Lines: These represent channels or trend lines that display the current trend and indicate the preferred trading direction.
MACD Indicator (14,22,3): The histogram and signal line serve as an auxiliary indicator that can also be used as a source of trading signals.
Important Speeches and Reports (always found in the news calendar) can significantly impact the movement of a currency pair. Therefore, trading should be done with maximum caution during their release, or you may choose to exit the market to avoid a sharp price reversal against the preceding movement.
For Beginners Trading on the Forex Market: It's essential to remember that not every trade will be profitable. Developing a clear strategy and practicing money management is key to achieving long-term success in trading.
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