Analyzing Thursday's trades:
EUR/USD on 30M chart
The EUR/USD recovery phase has ended as it has experienced more decline than growth. It could be that traders have overestimated Federal Reserve Chairman Jerome Powell's remarks in Congress (which, in our opinion, should be regarded as hawkish), or it could be a simple technical correction, but the euro has depreciated and remains within an ascending channel. Therefore, although the uptrend persists, the euro lacks the necessary background for further growth. This does not mean that it cannot or will not rise. The pair can still move in any direction, regardless of the fundamental background. However, if we do take that into consideration, then there are no reasons for the single currency to rise. We still expect the pair to hold below the ascending channel.
Among Thursday's macroeconomic reports, we can only take note of the US unemployment claims, which did not provoke a market reaction as the actual and forecast values were nearly identical.
EUR/USD on 5M chart
On the 5-minute chart, the pair tried to extend its upward movement during the European trading session, but it started to fall even before the start of the US session. Perhaps the outcome of the Bank of England meeting influenced it, although in this case, it would have been more logical for the pair to rise. In any case, the first buy signal led to a 20-point growth, although traders managed to catch the very beginning of the movement. It was a small gain, but the trade closed at breakeven due to the Stop Loss. Then there was a consolidation below the 1.0980 level, after which the pair fell by about 20 points. Beginners could have made this profit since the trade should have been manually closed closer to the evening.
Trading tips on Friday:
On the 30M chart, the pair continues to follow an uptrend. In the medium term, we expect the euro to fall again, but it may take quite a long time before the downtrend returns. As long as the price does not consolidate below the channel, there is no point in expecting the euro's decline. The key levels on the 5M chart are 1.0733, 1.0761, 1.0803, 1.0857-1.0867, 1.0918-1.0933, 1.0980, 1.1038, 1.1070, 1.1132. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. On Friday, June PMIs for the services and manufacturing sectors in the European Union and the United States are slated for release. No significant changes are expected, so we don't expect a strong market response. There will also be routine speeches by representatives of the Federal Reserve and the European Central Bank.
Basic trading rules:
1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a break). The shorter this period, the stronger the signal.
2) If two or more trades were opened at some level following false signals, i.e. those signals that did not lead the price to Take Profit level or the nearest target levels, then any consequent signals near this level should be ignored.
3) During the flat trend, any currency pair may form a lot of false signals or do not produce any signals at all. In any case, the flat trend is not the best condition for trading.
4) Trades are opened in the time period between the beginning of the European session and until the middle of the American one when all deals should be closed manually.
5) We can pay attention to the MACD signals in the 30M time frame only if there is good volatility and a definite trend confirmed by a trend line or a trend channel.
6) If two key levels are too close to each other (about 5-15 pips), then this is a support or resistance area.
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 are channels or trend lines that display the current trend and show which direction is better to trade.
MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross. This indicator is better to be used in combination with trend channels or trend lines.
Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair. Therefore, during such events, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.
Beginners should remember that every trade cannot be profitable. The development of a reliable strategy and money management are the key to success in trading over a long period of time.
