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How to trade EUR/USD on March 8. Simple trading tips and analysis for beginners

Analyzing Tuesday's trades:

EUR/USD on 30M chart

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EUR/USD fell on Tuesday. Naturally, a movement of more than 100 points could not happen out of the blue. The reason was the speech of Federal Reserve Chairman Jerome Powell in the US Congress, where he said that the central bank is ready, if necessary, to increase the pace of monetary tightening, as well as the prolonged fight against inflation. After that the possibility of a stronger key rate hike in the U.S. immediately spiked, triggering a sharp rise in the dollar. On the 30-minute chart, however, the whole movement of the previous weeks does not look like a trend at all. Even today's decline fits into the horizontal channel. I think that the pair will continue to fall, since it cannot stay in a flat forever and there is not much reason for the euro to rise, nevertheless, the flat could persist.

EUR/USD on 5M chart

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On the 5-minute chart, only good signals were formed, and beginners were rewarded after a few bad days. In the European trading session, the price rebounded perfectly from 1.0692 twice, which allowed beginners to open a short position. By the time Powell made his speech, the pair had already gone quite far downwards, so beginners could just set a Stop Loss in case the event provoked the quotes rise. But it provoked the fall. The 1.0587-1.0607 area was surpassed, after which the fall still persists. Thus, it was possible to close the deal manually in the evening and the profit was at least 110 pips. Once again we are convinced that when there is a trend, you can make good profit, overcoming even the losses of the least profitable days.

Trading tips on Wednesday:

On the 30-minute chart, the pair is still formally inside the horizontal channel. However, now there is a high probability of the end of the flat and I expect the pair to fall. The nearest events, which may bring back the demand for EUR, will be the NonFarm and unemployment report in US on Friday. I don't expect a strong reaction from Christine Lagarde's speech. On the 5-minute chart, it is recommended to trade at the levels 1.0433, 1.0465-1.0483, 1.0535, 1.0587-1.0607, 1.0692, 1.0792, 1.0857-1.0867. As soon as the price passes 15 pips in the right direction, you should set a Stop Loss to breakeven. On Wednesday, the European Union will release its third-quarter GDP report and ECB President Christine Lagarde will speak. The events are important enough, but may be ignored by the market. The U.S. will have another speech from Powell, which is unlikely to be any different in content than today, and an ADP report.

Basic rules of the trading system:

1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is.

2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored.

3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement.

4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually.

5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel.

6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels.

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

The MACD indicator (14, 22, and 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 patterns (channels and trendlines).

Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations.

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

The material has been provided by InstaForex Company - www.instaforex.com

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