Some key economic events are expectedtoday that can have a significant impact on the EUR/USD pair.
- 14:45 – ECB deposit rate decision;
- 14:45 – ECB key rate decision;
- 15:30 – US initial jobless claims;
- 15:30 – ECB press conference.
Traders who try to avoid high volatility are recommended to stand aside and watch the developments. But those who feel at home in the volatile market should attempt to foresee further movement of the euro/dollar pair with the help of technical analysis. Today we are going to apply patterns, levels, candlestick reversal patterns, and bullish divergences.
Let’s start with the H1 time frame. The Wedge reversal pattern is formed on this chart.
Using the Fibonacci Expansion tool, let’s determine potential points for invalidation of the scenario and a stop loss level:
- 1.0925 – the level at which the scenario can turn invalid;
- 1.0910 – stop loss.
The Fibonacci grid will help us calculate a take profit level:
- take profit 1: 1.1070 - 161.8% Fibonacci level.
The risk/reward ratio is not so favorable, so to determine the target levels, let’s move to the H4 time frame.
- take profit 2: 1.1120 – the price pivot zone;
- take profit 3: 1.1200 – the middle of consolidation zone.
Also I’d like to draw your attention to reinforcing factors such as candlestick reversal patterns and bullish divergences.
Now there is little left to do: place a deal sticking to the money management rule and using the recommended settings. After that, compare the outlook with the data which will be revealed later in the day.
Let your profit never stop increasing!