Analyzing Monday's trades:
EUR/USD on 30M chart
The EUR/USD pair traded higher on Monday, without really correcting. We expected a correction after Friday's growth, which can be viewed differently. However, the market did not deem it necessary to lock in some of the profits from long positions and also to revise its attitude towards the US labor market data. Despite the fact that the euro has been trading more logically and substantiated than the pound in recent months, we are again seeing growth, which is quite difficult to explain.
On the one hand, everything is logical - the Nonfarm Payrolls report on Friday turned out to be weaker than forecasts, and the value of the previous month was revised downwards. On the other hand, the market completely ignored the unemployment report, which turned out to be better than forecasts. Of course, NonFarm Payrolls are more important than unemployment, but this is far from the first time when the market ignores news positive for the dollar, but works off negative ones. At this time, the pair is once again aiming for an uptrend.
EUR/USD on 5M chart
Two entry points materialized on the 5-minute chart, and volatility is 52 points. Thus, the movements were weak. During the European trading session, the pair formed a sell signal around the level of 1.0971, after which it went in the right direction for 18 points. This was enough to set a Stop Loss at breakeven, which worked on the US session when a buy signal was formed in the form of surpassing the 1.0971-1.0977 area. In the second case, the price went in the right direction even less - only about 10 points, but beginners could earn 10 points, as the deal should have been closed manually closer to the evening.
Trading tips on Tuesday:
On the 30M chart, the pair began to form a new uptrend. A short-term ascending trend line has been formed, but it isn't stable yet. Either way, the pair didn't even manage to correct on Monday, so it is understandable that the pair moved upward. The key levels on the 5M chart are 1.0733, 1.0761, 1.0835, 1.0871, 1.0901, 1.0932, 1.0971-1.0977, 1.1038, 1.1091, 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 Tuesday, the ZEW Economic Expectation indices will be published in Germany and the European Union. Not the most significant data, the reaction to them is unlikely to be strong. In the US - only the speech of the Federal Reserve's Monetary Committee representative James Bullard.
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.
