1-hour chart of EUR/USD

On Wednesday, September 30, EUR/USD was trading again in a complicated way, especially for beginners. After the price had fixed above the downward channel, the trajectory changed into the upward one. On Wednesday morning, I warned that the pair was about to begin a downward correction because the price climbed 120 pips. Besides, the pair needed a downward retracement in any case so that the MACD indicator could lose steam and traders could use it again to open long positions. That's exactly what has happened today. The pair has started a moderate correction. As a result, the price declined to 1.1687. However, this correction finished rapidly and sharply. The price regained all losses with literally one bar. At the same time, the currency pair managed to hit a higher high following the previous one (1.1755). Well, the situation is rather difficult for understanding. The correction is underway and it is not over yet. Moreover, it is getting more complicated. It would have been wrong to open long positions with the MACD signaling upwards. Why? First, it is getting too late at night. Second, the move upwards began abruptly that always looks suspicious. To sum it up, I would recommend wait for a new round of correction.

On Wednesday, there has been a series of interesting events. Nevertheless, most of them have made no impact on EUR/USD. I'm not going to expand on the televised debate between Donald trump and Joe Biden. This political event was of no importance for the US dollar. The same is true about a report on Q2 US GDP that came in better than expected. ADP employment report also revealed stronger employment in the US private sector in September than the market had projected. Both reports are upbeat. However, the US dollar has not found much support from them. In fact, none of the fundamental events of the day influenced the EUR/USD pair.

On Thursday, October 1, the economic calendar contains a batch of manufacturing PMIs for the EU and the US. Another report to take notice is the unemployment rate in the Eurozone for August. As usual, traders monitor weekly updates on initial unemployment claims for the US. Basically, none of these reports will impact on the EUR/USD trajectory. The exception is the composite PMI for the Eurozone or the US provided that it turns out to be lower than the flash estimate, especially if it sinks below 50.0 points. Thus, I reckon that macroeconomic data which is due tomorrow will be of little importance for EUR/USD.

On October 1, the following scenarios are possible

1)At present, it would be a good idea to plan buying the pair because traders managed to overcome the upper border of the downward channel. Nevertheless, it is common knowledge that the pair always needs correction. So, I believe that a correctional stage will continue. Thus, it is recommended to open buy orders not until the correction is over. Once it is complete, it would be possible to plot the upward trend line. The upward targets are 1.1771 and 1.1801.

2)Traders reject the selling idea because the downward channel has been breached. So, there is a chance for the pair to resume even the downtrend, but the technical picture is in favor of the uptrend. In other words, the development of a new downtrend or cancellation of the uptrend will support the idea of selling. But this scenario has not been confirmed yet.

What's on the chart:

Support and Resistance levels are the levels that are targets when opening buy or sell orders. Take Profit levels can be placed near them.

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

Up / down arrows show whether the pair should be traded up or down when reaching or overcoming particular obstacles.

MACD indicator (10,20,3) - a histogram and a signal line. When they are crossed, this signals a market entry. It is recommended for use in combination with trend lines (channels, trend lines).

Important speeches and reports in the economic calendar can greatly influence the movement of the currency pair. Therefore, during their release, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.

Beginners in the forex market should remember that every trade cannot be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.