Analysis of Thursday's Trades
1H Chart of EUR/USD
The EUR/USD currency pair showed no significant movements on Thursday and remained in low volatility, despite it being the most eventful day of the week in terms of macroeconomic and fundamental data. Business activity indices in the services and manufacturing sectors were published in Germany, the Eurozone, and the US; however, their values are not worth mentioning, as they had no impact on the pair's movement or overall trend. The European Central Bank meeting also had little impact on trader sentiment, as the ECB made no significant decisions, and the final communique contained no striking or market-moving statements.
From a technical standpoint, the pair consolidated below the ascending trendline overnight. However, we believe this should be approached with caution. Yesterday was essentially a flat market day. And when the price is in a range, signals often turn out to be false. At this moment, we cannot say that the uptrend is over.
5M Chart of EUR/USD
On the 5-minute timeframe, only one trading signal was generated on Thursday. At the very beginning of the European session — right around the time the ECB meeting results were being released — the price bounced slightly off the 1.1740–1.1745 area, although not accurately. We would not consider this signal valid, as it formed during the ECB announcement, a moment of high probability for sharp and emotional price spikes in either direction.
Trading Strategy for Friday:
On the hourly timeframe, the EUR/USD pair has likely completed its corrective movement, which lasted for three weeks. Since Donald Trump's policies have not changed, and the conflicts with Jerome Powell and the trade war have intensified, we still do not see any medium-term factors supporting dollar strength. At this point, we do not consider the uptrend to be over.
On Friday, the EUR/USD pair may resume its upward movement, and we advise novice traders to closely monitor the 1.1740–1.1745 area. A flat session is possible today as well, since there will again be few important events and the market has not shown much volatility recently. Nevertheless, signals for both buying and selling may form around the 1.1740–1.1745 zone.
On the 5-minute timeframe, monitor the following levels: 1.1198–1.1218, 1.1267–1.1292, 1.1354–1.1363, 1.1413, 1.1455–1.1474, 1.1527, 1.1563–1.1571, 1.1655–1.1666, 1.1740–1.1745, 1.1808, 1.1851, 1.1908.
No significant events are scheduled in the Eurozone on Friday, while in the US, the durable goods orders report is expected to be released today.
Core Trading System Rules:
- Signal Strength: The shorter the time it takes for a signal to form (a rebound or breakout), the stronger the signal.
- False Signals: If two or more trades near a level result in false signals, subsequent signals from that level should be ignored.
- Flat Markets: In flat conditions, pairs may generate many false signals or none at all. It's better to stop trading at the first signs of a flat market.
- Trading Hours: Open trades between the start of the European session and the middle of the US session, then manually close all trades.
- MACD Signals: On the hourly timeframe, trade MACD signals only during periods of good volatility and a clear trend confirmed by trendlines or trend channels.
- Close Levels: If two levels are too close (5–20 pips apart), treat them as a support or resistance zone.
- Stop Loss: Set a Stop Loss to breakeven after the price moves 15 pips in the desired direction.
Key Chart Elements:
Support and Resistance Levels: These are target levels for opening or closing positions and can also serve as points for placing Take Profit orders.
Red Lines: Channels or trendlines indicating the current trend and the preferred direction for trading.
MACD Indicator (14,22,3): A histogram and signal line used as a supplementary source of trading signals.
Important Events and Reports: Found in the economic calendar, these can heavily influence price movements. Exercise caution or exit the market during their release to avoid sharp reversals.
Forex trading beginners should remember that not every trade will be profitable. Developing a clear strategy and practicing proper money management are essential for long-term trading success.
