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The EUR/USD currency pair was trading as if it was in a global apocalypse on Monday. Let's start with the fact that even on Friday, the euro already quite casually fell by another 150 points. And it lost another 130 points on Monday night. A fairly quick recovery followed, but as of now, all the losses, even if only on Monday, have not been won back. From a technical point of view, the euro may continue to fall. Moreover, now there is a descending channel, which clearly indicates the continuation of the trend. It doesn't make much sense to consider the fundamental and macroeconomic backgrounds on Friday and Monday, since only business activity indices in the US and the European Union were published on Friday, which could not provoke such a collapse. There was nothing interesting at all on Monday night, just like on the weekend. Someone may mention the elections in Italy, but we believe that the elections in Italy, even with the victory of the far-right political forces, are also not the reason for the collapse of the single currency. The market is in a state of panic and is trying its best to get rid of risky currencies amid a growing geopolitical crisis.
There were no trading signals on the 5-minute timeframe on Monday, and this is very good, since considerable losses could be obtained on such movements and frequent reversals. Let's start with the fact that levels 0.9709 and 0.9554 are new - Monday's low and high. Thus, they did not take part in the trade on Monday. Further, the price has been at its lowest values for more than 20 years, there are simply no levels in this area around which signals could be formed. The very nature of the movement may seem attractive to someone, but in fact, such unreasonable collapses are quite dangerous. Therefore, we urge beginners to be careful in the next few days.
The downward movement is no longer just a downward movement on the 30-minute timeframe, it is a collapse. It can last quite a long time in one variation or another, so you should be prepared for this. We got several levels for trading, but the price can go a long way before the next signal is formed. Macroeconomic reports currently have practically no value for the market. On the 5-minute TF on Tuesday it is recommended to trade at the levels of 0.9554, 0.9709, 0.9813, 0.9877, 0.9910. When passing 15 points in the right direction, you should set Stop Loss to breakeven. The European Union will host a speech by European Central Bank President Christine Lagarde, who can give the necessary comments on the euro's collapse. Also, a report on orders for durable goods in the US will be released, but the market may not take macroeconomic statistics into account right now.
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 US 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.
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.
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