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Analysis of previous deals:
30M chart of the EUR/USD pair
The EUR/USD pair was trading much more actively on Monday than on Friday. The volatility of the day reached almost 80 points, despite the fact that only one report was published during the day, and it was in the afternoon – the ISM index in the United States. For example, when the most important reports on Nonfarm Payrolls and unemployment were published in America last Friday, the pair's volatility was only 40 points... Thus, such a sharp surge in volatility and, most importantly, overcoming the downward trend line, we believe, speaks volumes. First, the trend has changed to an upward trend on the 30-minute timeframe. Secondly, a new global trend in the euro currency could begin. It should become more or less clear this week whether this is a false bullish run up. Perhaps tomorrow they will give up their positions? But for now we will deal with Monday's trading signals. There were two of them on the 30-minute timeframe. The first one appeared early in the morning in the form of a downward reversal of the MACD indicator. At that time, the downward trend was still relevant, so it was recommended to work out a sell signal. However, the price went down by only 20 points, which was enough to set the Stop Loss level to breakeven, afterwards the price turned up and started a strong growth. The trend line was overcome in the US session and, thus, a second signal was formed – to buy. The price went up 36 points after this signal was formed. Since we usually recommend setting Take Profit after 30-40 points, and the price has also reached the 1.1805 level, then you can close the long position now.
5M chart of the EUR/USD pair
Now let's take a look at the 5-minute timeframe. The movements on it were more difficult than it was on the 30-minute one. First, the 1.1746 level, which the price surpassed several times, was very much a let down. The 1.1738 level was formed later – this is the day's low, which you can use for tomorrow. The pair pushed near the 1.1746 level for around five hours until an upward movement finally began. A short position was already opened on the 30-minute timeframe while the price was hovering around this level, so it was no longer necessary to open new deals on the current timeframe. A clear signal near the 1.1746 level did not appear. Therefore, novice traders did not receive a timely and accurate buy signal. Therefore, it was possible to trade only on a higher timeframe. The ISM index of business activity in the US services sector was published, which significantly exceeded the forecast value and reached 63.7. This place is marked with a check mark in the chart. Novice traders can see for themselves that there was no reaction to this report, although it was supposed to push the dollar to rise (that is, a decline in the euro/dollar pair).
How to trade on Tuesday:
On Tuesday, we recommend trading bullish on the 30-minute timeframe, since the downward trend has changed to an upward one. The MACD indicator has risen very high at the moment and it needs to be discharged in order to form new buy signals. Thus, in any case, we are waiting for its descent to the zero level. This can happen during the night. There was no rebound near the 1.1805 level. Therefore, if the price rebounds from the 1.1836 level, it can be regarded as a sell signal. Take Profit, as before, is set at a distance of 30-40 points. Stop Loss to break even when the price passes in the right direction by 15-20 points. You can highlight the levels 1.1786, 1.1805 and 1.1836 on the 5-minute timeframe, from which rebounds or breakthroughs can occur. As before, the main thing is that the signal is clear. If the signal is not clear, then it is better not to enter the market.
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.
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