Analysis of Monday deals:
30M chart of the EUR/USD pair
The EUR/USD pair moved quite clearly on Monday, March 22nd. We already said in the previous article that the pair is currently trading within the 1.1836-1.1990 horizontal channel. Thus, the downward trend line from last Friday was initially described as very weak, since it appeared inside the horizontal channel. And so we were not surprised to surpass it on Monday. Since this trend line was broken, a buy signal was generated at the point of its intersection. And it was a strong enough signal that had to be worked out. It was possible to support this buy trade on the 5-minute timeframe or to set Take Profit of 30-40 points, which is more than enough for the EUR/USD pair. Basically, by the end of the day, this was the level of profit that was shown. In general, we already have an upward trend, but inside the same horizontal channel. Thus, buy orders will be more preferable tomorrow. A rebound may occur from the 1.1990 level.
5M chart of the EUR/USD pair
Let's take a look at the 5 minute timeframe. We remember that a buy signal was generated on the 30-minute timeframe, which should have been worked out. But even earlier, a buy signal was generated in the form of a price rebound from 1.1875 on the 5-minute timeframe. Moreover, the rebound was perfect and it was impossible to interpret it in two ways. At the point of the rebound from the 1.1875 level, it was also possible to open long positions with the target - the nearest level at 1.1912. It was possible to earn around 25 points on this deal. Since the 1.1912 level was immediately overcome, and later the price rebounded off it, it turns out that two more strong buy signals were formed (also marked with circles in the chart). Take note that all signals on the 5-minute timeframe were ideal in terms of accuracy. It was impossible to interpret them in different ways. They were unambiguous, which is very good for trading. One should strive to process such signals, filter out fuzzy and implicit signals. The pair reached 1.1937 by the end of the trading day, which was also set by us yesterday. Therefore, beginners could earn on the second signal to buy another 16-17 points of profit. We would not recommend opening more new longs after surpassing 1.1937, since the trading day ends. Not a single important macroeconomic report has been released today. Thus, the fundamental and macroeconomic backgrounds had no influence on the pair's movement and the mood of the markets today.
How to trade on Tuesday:
We recommend trading on the 30-minute buy timeframe on Tuesday, since the downward trend line has been broken. Therefore, you should wait for the MACD indicator to discharge to the zero level and form a new buy signal. Take Profit at 30-40 points or we support the deal on the 5-minute timeframe. We sell the EUR/USD pair in case the price rebounds from the 1.1990 level. You are also advised to trade up on the 5-minute timeframe. Accordingly, we are considering buy signals from the MACD indicator. Among the important events on Tuesday, one can single out the speeches of US Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell. The speeches of these officials can provoke a surge of emotions in the foreign exchange market. You should be extremely careful during their speeches.
On the chart:
Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.
Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now.
Up/down arrows show where you should sell or buy after reaching or breaking through particular levels.
The MACD indicator (14,22,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).
Important announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal.
Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.
