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The EUR/USD currency pair displayed a fairly strong upward move on Monday, which continued into the end of the day. The week began with a decline that was entirely predictable given the failure of negotiations between Iran and the US, as well as Trump's further blockade of the Strait of Hormuz. Yes, you heard right; Donald Trump has also decided to block the Strait, specifically for Iranian tankers and for tankers that pay Iran for passage through the Strait. Does anyone still want to blockade the Strait? The more countries that join the blockade, the better the situation will be for oil and gas worldwide. Trump's goal is clear: to cut Iran off from financial inflows from oil exports. But what will this change? Iran has already made it clear that it will not abandon nuclear energy, and a new blockade of the Strait will change nothing. In summary, the overall chaos continues, and oil prices are soaring again. But... the US dollar is no longer rising, as the geopolitical factor has already been factored into the market. In other words, the economy and Trump's policies are coming back into focus.
On the hourly timeframe, the upward trend is maintained and is even gaining momentum, despite the newly worsening geopolitical situation. After two months of continuous dollar growth based solely on geopolitical factors, the market seems to have concluded that it cannot continue indefinitely. For the second consecutive week, the market has effectively ignored the geopolitical backdrop. Thus, traders may once again focus on the economy and Trump's politics.
On Tuesday, novice traders may consider short positions if the price consolidates below the 1.1745-1.1754 range, targeting 1.1655-1.1666. A consolidation above the 1.1745-1.1755 area allows holding long positions with a target of 1.1830-1.1837.
On the 5-minute timeframe, levels to consider are 1.1267-1.1292, 1.1354-1.1363, 1.1413, 1.1455-1.1474, 1.1527-1.1531, 1.1584-1.1591, 1.1655-1.1666, 1.1745-1.1754, 1.1830-1.1837, and 1.1899-1.1908. On Tuesday, Christine Lagarde will give a speech in the Eurozone, and in the US, two secondary reports—ADP and PPI—will be published. We consider these events to have no significant impact on the pair's movement.
Price levels of support and resistance are levels that serve as targets when opening buys or sells. Take Profit levels can be placed around them.
Red lines represent channels or trend lines that show the current trend and indicate the direction in which it is preferable to trade now.
The MACD indicator (14,22,3) – the histogram and the signal line – is a supporting indicator that can also be used as a source of signals.
Important speeches and reports (always included in the news calendar) can significantly affect the movement of the currency pair. Therefore, during their release, trading should be done with utmost caution, or traders should exit the market to avoid sharp price reversals against the previous movement.
Beginning traders in the forex market should remember that not every trade can be profitable. Developing a clear strategy and effective money management are the keys to long-term trading success.
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