Analyzing Tuesday's trades:
EUR/USD on 30M chart
EUR/USD continued to provide clear negative trading on Tuesday. The euro's rise during the first half of the day was short-lived. The pair couldn't even reach the nearest level of 1.0613 and immediately resumed its downward movement. What could have pushed traders to sell again? Well, nothing much. This happened in the absence of an influential macroeconomic backdrop. The fundamental backdrop was practically non-existent. So what could traders have possibly focused on? Perhaps the speech by Philip Lane and the report on new home sales in the United States? Lane reiterates the need to maintain the interest rate at its current level for as long as possible, meaning he adheres to the dovish perspective. As for the report on new home sales in the U.S., it turned out to be weaker than expected, but the dollar still rose on Tuesday. Therefore, the euro is falling simply because it had been rising for 11-12 months without much reason and for 5-6 months without a valid foundation.
EUR/USD on 5M chart
There was only one signal on the 5-minute chart. The pair rebounded from the level of 1.0607 at the beginning of the U.S. session, forming a sell signal. This turned out to be quite good, as the price dropped approximately 25 pips after its formation, which could have been executed if beginners closed the trade manually towards the evening. There were no other signals on Tuesday.
Trading tips on Wednesday:
On the 30-minute chart, EURUSD continues to trade lower. In the medium term, we anticipate the euro's further decline, and we are currently witnessing this process. Despite fully supporting the decline, it is still necessary to correct from time to time. But for now we are observing a clear negative trading from the pair. The key levels on the 5M chart are 1.0433, 1.0465, 1.0517-1.0533, 1.0607-1.0613-1.0618, 1.0673, 1,0733, 1.0767-1.0781, 1.0835, 1.0871. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. On Wednesday, there is absolutely nothing interesting scheduled in the European Union. The U.S. will release a report on durable goods orders. This used to be very important, but it's been years since this report triggered any significant market response. However, if the actual value significantly deviates from the forecast, the market might react.
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.
