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On Tuesday, the EUR/USD pair continued to trade within a clearly defined horizontal channel. For the past two weeks, the price has fluctuated between 1.0359 and 1.0451, creating a channel that is less than 100 pips wide. As anticipated, the market is currently in a New Year flat phase. The boundaries of this horizontal channel are being respected with high precision, allowing novice traders to base their trades solely on technical factors. There is a lack of significant fundamental and macroeconomic news, with the first economic data releases expected this week. The market is gradually "recovering" from the holiday period, but this does not imply that a trend movement will resume or that the flat phase will end today.
On the 5-minute timeframe, only one trade signal was generated on Tuesday. However, this signal occurred just before the market closed for the New Year. More specifically, the signal appeared today when the price bounced off the 1.0334–1.0359 area. Since this area represents the lower boundary of the horizontal channel, a bounce upward toward 1.0433–1.0451 is indeed possible.
On the hourly timeframe, the EUR/USD pair continues to trade in a flat, stagnant pattern. We believe that the euro's decline is likely to resume in the medium term; however, most market participants are currently hesitant to open new trades, leading to a lack of price movement. Our outlook is that the price will eventually break through the 1.0334–1.0359 range.
On Thursday, the pair may bounce again off the 1.0334–1.0359 area, which is currently a key level. However, a breakout through this range would indicate the resumption of the downtrend.
On the 5-minute TF, the levels of 1.0269-1.0277, 1.0334-1.0359, 1.0433-1.0451, 1.0526, 1.0596, 1.0678, 1.0726-1.0733, 1.0797-1.0804, 1.0845-1.0851, 1.0888-1.0896 should be considered. On Thursday, reports on December manufacturing activity (final readings) are scheduled for release in the Eurozone, Germany, and the United States. Additionally, the US will release its jobless claims report. We consider all these reports secondary and unlikely to trigger significant market movements.
Support and Resistance Levels: These are target levels for opening or closing positions and can also serve as points for placing Take Profit orders.
Red Lines: Channels or trendlines indicating the current trend and the preferred direction for trading.
MACD Indicator (14,22,3): A histogram and signal line used as a supplementary source of trading signals.
Important Events and Reports: Found in the economic calendar, these can heavily influence price movements. Exercise caution or exit the market during their release to avoid sharp reversals.
Forex trading beginners should remember that not every trade will be profitable. Developing a clear strategy and practicing proper money management are essential for long-term trading success.
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