Analysis of previous deals:
30M chart of the EUR/USD pair
The EUR/USD pair continued to trade quite calmly on Friday. If it were not for Federal Reserve Chairman Jerome Powell's speech in the afternoon, we would probably see volatility worth 40 points. But the head of the Fed could not help provoking a reaction from the market, since the markets had been waiting for his speech in Jackson Hole all week. Another thing is that Powell did not tell the markets anything important, as we expected. As a reminder to novice traders, the markets are waiting for specific dates and plans from the Fed to cut the quantitative stimulus program. That is, tightening monetary policy. However, representatives of the Fed still doubt the expediency of this step at the present time. At the very least, the fact that Powell did not provide any important information on this issue suggests that the markets will have to wait for the September Fed meeting. Also, an hour and a half earlier, the US published reports on the expenses and incomes of the American population, which provoked a slight strengthening of the greenback. Both of these events are marked with check marks in the chart below. The pair initially settled below the trend line on the 30-minute timeframe,, after which it resumed its upward movement. Movements on this timeframe continue to be as inconvenient as possible.
5M chart of the EUR/USD pair
The picture of the pair's movements on the 5-minute timeframe was extremely complex on Friday. The first buy signal that formed during the European trading session was very inaccurate and could be ignored altogether. However, even if the newcomers opened long positions on it, in any case, they should have been manually closed at the beginning of the US session, as the time for the publication of reports in America and Powell's speech was approaching. Thus, neither profit nor loss was obtained on the long position. Further, all other trading signals of the day were formed either during important events, or immediately after them, when the movement had already ended. Therefore, it was definitely not necessary to work out all these signals. Thus, in fact, no trade was opened on the super-important Friday. However, novice traders had to conclude: the Fed does not plan to announce the curtailment of the quantitative stimulus program in the near future. Therefore, it will be quite problematic for the US dollar to rise in price in the coming weeks.
Trading tips for Monday:
The EUR/USD pair continues to be in an upward trend on the 30-minute timeframe, but the trend line is broken, and the upward movement itself is very weak. Only 140 points passed in seven trading days. That is, 20 points a day. Since we again do not have an actual trend line, the signals from the MACD indicator should be ignored again until a new trend line or channel is formed. On the 5-minute timeframe, it is recommended to trade from the levels 1.1730, 1.1756, 1.1779, 1.1802, 1.1831. Take Profit, as before, is set at a distance of 30-40 points. Stop Loss - to breakeven when the price passes in the right direction by 15 points. At the 5M TF, the target can be the nearest level if it is not too close or too far away. If located - then you should act according to the situation. Neither the United States nor the European Union is scheduled to have a single important report or event on Monday. Therefore, volatility may be extremely low again, and the movements might be very weak.
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.
