Hourly chart of the EUR/USD pair

The EUR/USD pair began to correct to the upper limit of the descending channel last night. And so, the pair, first of all, slightly corrected, and secondly, the MACD indicator slightly discharged. The indicator went above the zero level, so the condition for creating a new strong sell signal has been met. Thus, novice traders are lucky that a new signal did not appear during the evening. Of course, it isn't certain that it will be created. The price can, for example, overcome the descending channel, but in this case a signal will be formed, but for a purchase. Thus, wherever you throw it, there is still a wedge everywhere. The most negative scenario assumes that there is no clear rebound from the upper channel line, no clear break, no clear signal from MACD. You should only open positions if there is a clear and accurate signal. In the meantime, the downward trend continues, so we still expect the dollar to strengthen, which was hit hard in 2020.

In terms of foundation, there is still nothing to expect for today. Yesterday, the low volatility from the pair was partly due to the celebration of Martin Luther King Day in America, so today's trading may be more volatile. However, we still do not expect news, reports, and events today. As we said earlier, there are several topics that are interesting and can be tracked by traders, but all of them do not have an immediate impact on the pair's movement and the mood of the markets. We would say that the most important event will take place tomorrow. After all, tomorrow is Joe Biden's Inauguration Day. On this day, riots are possible, for which the special services and the US National Guard are already actively preparing. But, perhaps, everything will be quiet and peaceful. One way or another, the markets simply have nothing to react to now. Therefore, we recommend focusing all your attention on technical factors.

Possible scenarios on January 19:

1) Long positions are still irrelevant at the moment, as the downward trend remains in force. However, the price is already in the immediate vicinity of the upper limit of the descending channel, therefore, it is possible to settle above it. And this will be a buy signal with targets at 1.2125 and 1.2160. All support/resistance levels are too close to each other, because they are based on the previous day's trades. And yesterday the volatility of the pair was 34 points...

2) Trading bearish is still more relevant. You are advised to open new short positions with targets at support levels 1.2059 and 1.2040 after a sell signal from the MACD indicator, which has already been sufficiently discharged, or when the price has rebounded from the upper line of the descending channel.

On the chart:

Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now.

Up/down arrows show where you should sell or buy after reaching or breaking through particular levels.

The MACD indicator (14,22,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).

Important announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal.

Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.