Analyzing Monday's trades:
EUR/USD on 30M chart
EUR/USD showed a volatility of 37 pips on Monday. In principle, there's nothing more to say as everything is clear from this indicator alone. If the pair stood still all day, then we can't draw any new conclusions compared to previous articles. Nevertheless, we formed a descending trendline. So far, this trendline was quite formal since the trend itself has only lasted for three days at most. If we switch to higher time frames, we can see that the recent movements have been quite chaotic with the pair frequently changing direction. We support the downward movement and would like to remind you that it could be gradual, with frequent corrections and pullbacks.
The only event of the day was European Central Bank President Christine Lagarde's speech. The only thing worth paying attention to is how she evades questions about the ECB's interest rate at the September meeting. We believe this is another hint in favor of a "pause." In this case, the euro may fall further.
EUR/USD on 5M chart
The pair only formed one trading signal on the 5-minute chart. At the beginning of the European session, the price rebounded from the level of 1.0781, and that was it. There was nothing more to take note of. The price moved up by 20 pips at its peak. Therefore, you could have set your Stop Loss to breakeven for this trade. You could also manually close the trade at any time as there were no other signals. You could make profit even with such sluggish movement. However, we already warned you that volatility could be weak.
Trading tips on Tuesday:
The pair's movements on the 30M chart have been quite erratic in recent weeks. It might seem that the bullish correction has ended after the pair fell on Thursday and Friday, but we believe that it could still rise this week. The 1.0767-1.0781 range is currently important. Breaking through this area would suggest a further decline for the euro and a stronger US dollar. The key levels on the 5M chart are 1.0607-1.0613, 1.0673, 1.0733, 1.0767-1.0781, 1.0835, 1.0871, 1.0901-1.0904, 1.0936, 1.0971-1.0981, 1.1011. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. On Tuesday, among the relatively important events, we can highlight another speech by Lagarde, the producer price index, and the EU Services PMI. All three of these events are unlikely to have a strong impact on the pair's movement.
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.
