Analysis of Monday's deals:
30M chart of the EUR/USD pair
The EUR/USD currency pair tried to start a new round of upward correction on Monday. It gradually increased to the level of 1.0532 during the day, which it never managed to overcome. Thus, the very first obstacle on the way to the upside stopped the hike. Of course, this level can be overcome by tomorrow. Recall that today, on Monday, there were no important macroeconomic statistics, there were no speeches, and it is a holiday in America. However, the pair has shown quite high volatility, as for a completely empty day. At this time, it is still impossible to form a trend line or channel, and the upward trend is only in words. First, it is formed in just a few days. Secondly, the pair moved a meager distance from its local and 20-year lows. Thirdly, the prospects for the euro remain exclusively corrective, which means that it is very difficult to expect strong growth now, in principle. Thus, for now, we trade between levels. This week there will be a small number of important statistics and fundamental events, so the movements should not be as sharp as last week.
5M chart of the EUR/USD pair
The technical picture looks much more eloquent on the 5-minute timeframe. We see that the main growth in the euro happened during the Asian session, when most traders were asleep. But during the European and US sessions, the price reached the level of 1.0532 four times and formed four signals around it. Recall that this state of affairs indicates a flat. Let's take a look at the signals. The first was for short positions and turned out to be false, like all subsequent ones. The price rebounded from the level of 1.0532 and was able to go down only 12 points, which was not enough even to set Stop Loss to breakeven. This was followed by overcoming the level of 1.0532, but this time the pair failed to go even 10 points in the right direction. The third and fourth signals no longer mattered, since they should not have been worked out. Thus, novice traders could have received a small loss on both trades opened today. However, we remind you that every trade cannot be profitable every day.
How to trade on Tuesday:
The pair started a powerful upward movement on the 30-minute timeframe, but even now there are doubts whether it will continue. So far, the formal upward trend remains, but consolidating the price below the level of 1.0465, most likely, will mean a resumption of the global downward trend. Support for the euro is still nowhere to be expected. On the 5-minute TF on Tuesday, it is recommended to trade at the levels of 1.0400, 1.0465, 1.0532, 1.0564, 1.0607, 1.0636. When passing 15 points in the right direction, you should set Stop Loss to breakeven. No important event or report in the European Union and the United States. Thus, beginners will again have nothing to pay attention to during the day. We recommend that you keep an eye on the market's behavior, as this can help in determining its true mood.
Basic rules of the trading system:
1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal.
2) If two or more deals were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored.
3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading.
4) Trade deals are opened in the time period between the beginning of the European session and until the middle of the American one, when all deals must be closed manually.
5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel.
6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance.
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.
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 speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, 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 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.
