Analyzing Friday's trades:
EUR/USD on 30M chart
EUR/USD traded with low volatility and a slight bullish bias on Friday. In general, the movement was nearly flat and weak. Therefore, the fact that the price stayed above the descending trendline does not necessarily mean that the downtrend is broken. Take note that there are certain periods when prices remain relatively stable. However, many indicators and technical formations cannot account for such "quiet" periods, which leads to false signals. Therefore, it wouldn't be surprising if the euro falls again this week.
There was practically no macroeconomic data or fundamental background on Friday. Germany's Consumer Price Index stood as the sole report, which was also in its second estimate, and had a small impact on the pair's movement. The past week turned out to be rather dull and weak in terms of price movements. Let's hope that this week will be more exciting and interesting.
EUR/USD on 5M chart
There was only one trading signal on Friday. During the US session, the price bounced off the level at 1.0733, forming a sell signal. While the bounce wasn't accurate, beginners could still open short positions, which turned out to be profitable, even in the absence of strong movements. By the end of the day, the price managed to fall by about 20 pips, which traders could earn if they manually closed the trade.
Trading tips on Monday:
Movements on the 30-minute timeframe over recent weeks have been somewhat erratic but maintain a near-perfect trend alignment. Despite breaking the trendline, the euro doesn't have any strong bullish factors it can use. A continued bearish movement is anticipated. Medium-term projections are aligned with this trend, irrespective of the macroeconomic and fundamental backdrop. This week, the fundamental backdrop is expected to be quite strong, so the pair can start a bullish correction. The key levels on the 5M chart are 1.0517-1.0533, 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. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. On Monday, there are no significant events or reports lined up in either the eurozone or the United States. Most likely, we should brace ourselves for another flat or a low-volatility kind of day.
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.
