Analyzing Tuesday's trades:
EUR/USD on 1H chart
EUR/USD traded with very low volatility on Tuesday. Traders did not become more active despite the release of the US inflation report. The pair continued to move with a small downward slope, surpassing the ascending trend line. The inflation report helped the dollar edge up. The US Consumer Price Index (CPI) increased by 0.1% in annual terms to 3.2% in February. In general, this is all you need to know about US inflation right now. It has not decreased since last summer, so we see no reason for the Federal Reserve to rush with the rate cut. As a result, the Fed's hawkish stance will persist even longer, which should support the dollar. However, none of this matters to the market right now. It is trading in an illogical manner and completely contradicts the fundamental background. Formally, we expect the euro to fall in the coming days, but again: there is no logic in the movements right now.
EUR/USD on 5M chart
On the 5-minute timeframe, the price bounced from the level of 1.0940 twice. In the first case, it managed to fall by 5 pips, and at around 20 pips in the second. In both cases, beginners had no chance of making a high profit. Traders could gain around 10 pips on the second trade, as it had to be manually closed closer to the evening.
Trading tips on Wednesday:
On the hourly chart, EUR/USD left the sideways channel and appears willing to resume the upward trend, although it has no fundamental reasons. We still expect the euro to resume its downward movement, which, in our opinion, should continue for quite some time. Unfortunately, at the moment, we are seeing illogical movements that can be attributed to the need for an upward correction. However, even when the market has a good reason to sell, it still prefers not to do so.
The key levels on the 5M chart are 1.0568, 1.0611-1.0618, 1.0668, 1.0725, 1.0785-1.0797, 1.0855, 1.0888-1.0896, 1.0940, 1.0971-1.0981, 1.1011, 1.1043, 1.1091. On Wednesday, traders may look to the release of the Eurozone industrial production data. Meanwhile, the US economic calendar is empty. Most likely, we are in for another day with low volatility and no significant movements.
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, after 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 trendline 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.
