Analysis of Friday deals:
30M chart of the EUR/USD pair
The EUR/USD pair moved up and down, and then up again last Friday, March 19. There was a multidirectional movement during the day, although the macroeconomic background was completely empty. However, there were a lot of important events that week, so the markets could not decide on the direction at the end of the week. The trend line on the 30-minute timeframe was only formed in the middle of the working day. And so the price approached this line by the end of the day. Therefore, on Monday novice traders can expect a rebound from this line or a downward reversal of the MACD indicator, which will mean the creation of a sell signal. Also, if the trend line is surpassed and the MACD indicator crosses the zero level, this will mean the creation of a buy signal. Take note that the pair, by and large, remains within the horizontal channel. Trading will still be between 1.1836 and 1.1990. The downward trend line, of course, has a certain weight, but it is very short-term, and even inside the horizontal channel.
5M chart of the EUR/USD pair
Let's take a look at the 5 minute timeframe. It clearly shows that the MACD indicator formed five signals at once last Friday, which deserved your attention. For the convenience of traders, the vertical lines in the charts indicate the time points when this or that session began. Recall that the strongest movements take place in the European and US sessions, and at night, a flat is most often observed. Thus, trading the pair on a 5-minute timeframe is, of course, better during the day. The MACD turned to the upside and went around 15 points immediately when the European session opened. The target could be 1.1937, from which the price rebounded off the day before. Since there was a rebound from this level, it was necessary to immediately sell the EUR/USD pair while aiming for 1.1912. This level is strong enough as it is taken from higher timeframes. It was possible to take profit near it, which brought around 15 more points. Since this level was quickly surpassed, short positions could have been left open, but in this case the closest target was 1.1836, which was not reached in the end. Therefore, it was possible to leave the short position by the MACD indicator reversal to the upside or by Stop Loss, which we advised you to place at breakeven when passing at least 15 points in the right direction. The MACD turned up first, and even then 4-5 points could have been earned. It was not necessary to open long positions on this signal, since at that moment a downward trend line had already formed on the 30-minute chart. Therefore, from that moment on, we only consider sell signals. Such a signal was generated immediately when the US session opened and it could bring around 10 more points of profit. We no longer open a trade to buy, so the fifth signal is missed.
How to trade on Monday:
On Monday, we recommend trading based on the downward trend line on the 30-minute timeframe. A rebound from it or a reversal of the MACD indicator below it = formation of a sell signal. The targets are 1.1874 and 1.1836. You can take profit when working off any of these. Stop Loss is set to zero if the price goes down by about 15 points. We do not consider buy signals before price taking on the 30-minute timeframe. If the price settles above the trend line, trade for an increase while aiming for 1.1937 and 1.1990. The Take Profit and Stop Loss strategy is the same as for short positions. The macroeconomic background will be very weak tomorrow, as the news calendar does not contain any important information.
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 the channels or trend lines that display the current trend and show in which direction it is better to trade now.
Up/down arrows show where you should sell or buy after reaching or breaking through particular levels.
The MACD indicator (14,22,3) 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 lines (channels and trend lines).
Important announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal.
Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.
