EUR / USD Hourly chart (H1 chart)
The euro continues to climb up in the markets even amid fairly low volatility. The movement is quite stable and confident, and is very similar to a "Christmas tree" - a pattern in which each high reached is several pips above the previous one. The levels are often updated, and corrections are frequent and shallow. Such a movement did not allow the MACD line to drop to zero, therefore, traders were deprived of the opportunity to open new long positions. In that regard, the best option is to wait for a strong trading signal, which is likely to be formed as early as next year. Nonetheless, it is unlikely that on the last day of the year, the EUR / USD pair will sharply change its direction and collapse by 70-80 points.
Also, from the start of this trading week, there was no news or any macroeconomic report from the US and the EU that instigated traders to react in the market. There were factors, however, that made the dollar continue its decline. One of which is the ratification of Donald Trump of the US '2021 budget, which also contains a stimulus package for the economy. This is a "bearish" factor for the dollar since more money supply means a decrease in the demand for the currency.
Thus, here are possible scenarios for today, December 31: 1) Long positions are good at the moment, especially since the upward trend persists in the EUR / USD pair. However, it is extremely difficult to find a new buy signal right now, since the price does not bounce off the trend line and does not even approach it. To add to that, the MACD line cannot go to zero.
Nonetheless, traders could set up positions up to 1.2322 and 1.2347, though there are no strong signals at this time.
2) Opening short positions seem inappropriate now. But if you really want to short the pair, wait first for the quote to consolidate below the rising trend line, and then set the targets at 1.2223 and 1.2198.
What's on the chart:
Support and resistance price levels - target levels when buying or selling. Traders can take profit near them.
Red lines - channels or trend lines that display the current trend and show which direction it is preferable to trade now.
Up / down arrows - show where traders should buy or sell after reaching or breaking through particular levels.
MACD line - a histogram and a signal line, the crossing of which is a signal to enter the market. Use this in combination with trend lines.
Important speeches and economic reports - can greatly influence the movement of a currency pair. Therefore, at the time of their release, it is recommended to trade as carefully as possible, or exit the market in order to avoid a sharp price reversal.
Beginners in the forex market should remember that every trade cannot be profitable. Developing a clear strategy, as well as money management, are the key to success in trading.