The EUR/USD currency pair continued its upward movement on Thursday. Here we need to take a closer look at the movements and events not on Thursday, but on Wednesday, since the results of the Federal Reserve meeting were announced on Wednesday evening, which we did not consider in yesterday's articles. So, here's what you need to know. The Fed raised its key rate by 0.25%. The key rate means that the cost of borrowing in the US will rise by 0.25%. Credit and deposit rates in banks will increase. That is, monetary policy is tightening, which usually happens when the economy is on the move. And now the US economy is on the move. The Fed intends to fight high inflation, which exceeds the target level by 6% already. That is why the cycle of rate increases begins, which may number six more rounds only this year. All this was supposed to support the US dollar, however, as we can see, this did not happen. The US currency is falling for the fourth consecutive day, although not much. An ascending channel has been formed and at the moment the pair has gone even higher than it. There is an opinion that a downward reversal may occur near the level of 1.1106, but we need a clear signal signaling the end of the upward trend.
There were only two trading signals on the 5-minute timeframe today. Both with "margin of error". The price came close to the level of 1.1019 twice and did not reach it by only 3 points twice. Thus, these signals were not mandatory for consideration. We usually allow an error of 1-2 points. However, if novice traders still decided to open long positions on these signals, they could earn at least on the second trade, when the pair showed an increase of 60 points. The first deal, most likely, closed at breakeven on Stop Loss. We draw your attention to the fact that the pair fell at least once during the day. That is, the market was clearly nervous. But in general, the reaction to the results of the Fed meeting turned out to be extremely weak, even though yesterday's volatility was 100 points. We believe that the reaction to the Fed meeting was somewhat illogical, so we expect the pair to fall in the near future. But the main thing is that the price does not overcome the level of 1,1106. If this happens, the euro currency may continue to grow.
How to trade on Friday:
A new upward trend has been formed on the 30-minute timeframe, but it may be short-term. We believe that the euro currently has no strong grounds for long-term growth, so the pair's decline may resume in the coming days. The euro currency can only count on technical growth now. It is recommended to trade by levels 1.0932, 1.1019, 1.1106, 1.1136, 1.1165, 1.1228 on the 5-minute TF. When passing 15 points in the right direction, you should set the Stop Loss to breakeven. No important events scheduled in either the United States or the European Union for Friday. Nevertheless, the volatility of the euro/dollar pair may remain high, as the geopolitical factor is still influencing the market now, and this week we also observed a not entirely logical reaction to the Fed meeting. And the market may try to neutralize this illogicality by falling on Friday.
