Analyzing Thursday's trades:
EUR/USD on 1H chart
On Thursday, EUR/USD continued to gradually correct higher, and once again tested the level of 1.0781. The bounce from this level could revive the downward movement, especially since this is the second bounce. Take note that the downtrend is still intact, as shown by the descending trendline. Therefore, beginners can expect a decline from the euro.
The macroeconomic and fundamental background was practically absent. We can only highlight the US jobless claims, the value of which almost completely matched the forecasts. Although it was a weak report, the market still reacted and the dollar rose by 25 pips. However, the greenback immediately stopped rising, and the price returned to its original positions. There were no other significant events during the day.
EUR/USD on 5M chart
Only one trading signal was generated on the 5-minute timeframe. It took about 6-7 hours to form, which shows its strength. The overall volatility was 47 pips, so it wouldn't have made sense to expect high profit. The pair fell by 20 pips after the signal was formed, which was enough to set the Stop Loss to breakeven. The trade closed based on this order.
Trading tips on Friday:
On the hourly chart, the downtrend remains intact, but it is quite clear that the market is not interested in selling the EUR/USD pair every day. We will likely see slow movement. However, we still expect the euro to show a pronounced decline, as the fundamental and macroeconomic background cannot support it at the moment.
The key levels on the 5M chart are 1.0568, 1.0611-1.0618, 1.0668, 1.0725, 1.0767-1.0781, 1.0835, 1.0896-1.0904, 1.0940, 1.0971-1.0981, 1.1011, 1.1043, 1.1091. On Friday, we can only highlight the German inflation report. Obviously, this report will not be able to trigger a strong market reaction, and there will be no other events during the day. This week has been quite poor in terms of important events and reports, which is why we are observing very sluggish movements.
Basic trading rules:
1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.
2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.
3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.
4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, after which all open trades should be manually closed.
5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trendline or trend channel.
6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.
How to read charts:
Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.
Red lines represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.
The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.
Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.
Beginning traders should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.
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