Analysis of previous deals:
30M chart of the EUR/USD pair
The EUR/USD pair resumed its downward movement on Tuesday. The chart clearly shows the horizontal channel - it is highlighted by a rectangle. This morning, the quotes of the euro/dollar pair settled below this channel, and so the first and only signal was formed. However, this signal was also strengthened by a downward reversal of the MACD indicator (circled). Thus, novice traders immediately received a double sell signal. According to our recommendations, you should close the trade once profit reaches around 30-40 points. After forming a signal to sell, the pair went down 45 points, so beginners should have made a profit on this trade. The downward trend generally continues as the downward trend line remains in effect. Therefore, we advise you to look at sell signals on the 30-minute timeframe tomorrow. Take note that the price also passed the 1.1746 level during the day, which was a support. Surpassing it increased the likelihood that the quotes would decline further. And the next target is now the 1.1689 level.
5M chart of the EUR/USD pair
Now let's take a look at the 5 minute timeframe. No important macroeconomic report today, and not a single significant event. Therefore, novice traders had nothing to react to during the day, nothing to pay attention to. The pair moved in the 1.1763-1.1773 channel before the European session began. The bears only managed to get the pair to settle below the 1.1763 level during the very beginning of the European session, therefore, you could consider opening short positions here. The pair did not stay around the 1.1746 level on the current timeframe, and did not form a single clear signal either. We are only compelled to state that this level has been surpassed. However, a double sell signal had already formed at about the same time on the 30-minute timeframe, so in any case, novice traders should have opened short positions today. In both the first and second cases, the deal should have been closed by Take Profit with a profit of about 30-40 points. The pair stopped falling by the end of the day and formed the 1.1711 level, which is currently the low of the day. Tomorrow this level can play a big role in forming new signals on the 5-minute timeframe.
How to trade on Wednesday:
We recommend trading on the 30-minute sell timeframe on Wednesday, as the downward trend continues. Now you need to wait for the MACD indicator to discharge to the zero level again and a subsequent sell signal to form. But you can also use a rebound from the 1.1746 level from below as a signal or once the quote surpasses 1.1689. Take Profit, as before, is set at a distance of 30-40 points. Stop Loss to breakeven when the price passes in the right direction by 15-20 points. The levels 1.1746 and 1.1711 can be distinguished in the 5-minute timeframe. You can open the corresponding positions in the event of a rebound or once these levels are surpassed. The main thing is that the signal is clear. If the signal is not clear, then it would be better not to enter the market. Novice traders can pay attention to two macroeconomic reports tomorrow: the consumer price index in the eurozone for March, which may accelerate to 1.3% y/y, and the change in the number of employees from ADP, the forecasts for which indicate a strong increase, about 0.5 million. Both the first and second reports can affect the pair's movement, therefore, you should be cautious and brace for sharp reversals once these reports are published.
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.
