Analyzing Thursday's trades:
EUR/USD on 30M chart
On Thursday, EUR/USD traded with low volatility again and did not show any interesting movements. The only macroeconomic report of the day was the US unemployment claims, the value of which almost perfectly matched the forecasts. Naturally, there was no market reaction. The only spike in emotions occurred during Federal Reserve Chairman Jerome Powell's speech when he said that the central bank "will not hesitate" to raise interest rates further if needed. However, the market responded with just a 30-point increase in the dollar...
In the last few days, the pair has been inclined to decline, but it is too weak to consider it the start of a new downtrend. Considering the nature of the pair's movement over the last month, it is currently impossible to form a trendline or channel. In general, there is a lack of a short-term trend. We still believe that the dollar should appreciate in the medium term, but it is difficult to predict when this movement will start.
EUR/USD on 5M chart
On the 5-minute chart, there were no trading signals. The pair dropped to the level of 1.0668 by the end of the day, but it was too late to open a position. It's not surprising that there were no trading signals if the pair showed volatility of just 65 points... Not the lowest, but still not enough for good signals and profit.
Trading tips on Friday:
On the 30-minute chart, the corrective phase remains intact, but we don't know how long this will last. Take note that the pair remained stagnant for several weeks until the employment and unemployment data were released in the United States. The start of the new week has progressed in the dollar's favor, but the greenback's growth has been relatively weak. We expect a more significant decline in the pair. The key levels on the 5M chart are 1.0451, 1.0483, 1.0526, 1.0568, 1.0611-1.0618, 1.0668, 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 Friday, European Central Bank President Christine Lagarde will speak, and a secondary report on US consumer sentiment from the University of Michigan will be released. This indicator may provoke a market reaction only if its value significantly deviates from the forecast.
Basic trading rules:
1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.
2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.
3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.
4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, post which all open trades should be manually closed.
5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trend line or trend channel.
6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.
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 represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.
The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.
Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.
Beginning traders should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.
