Analysis of previous deals:
30M chart of the EUR/USD pair
The EUR/USD pair was trading very sluggishly again on Monday. At the moment, volatility of the day is around only 50 points, which is very small even for the euro/dollar pair, which is traditionally considered not a very volatile pair. The pair generally stood in one place for most of the day, so it was absolutely impossible to trade. However, in recent articles, we have repeatedly warned novice traders that a flat is very likely and so we recommended ignoring all signals from the MACD indicator on the 30-minute chart. Especially since the flat was clearly visible today. The price simply refused to move. The most interesting thing is that the MACD indicator formed a good buy signal, near the zero level, and the price subsequently went up the necessary 30 points. However, the overall picture of the situation has not changed and still implies trading in a very narrow price range in nature close to flat. Neither the European Union nor the United States has had a single important report or other event today. Therefore, novice traders had nothing to react to during the day.
5M chart of the EUR/USD pair
The picture is more interesting on the 5-minute timeframe, but not as much. Take note that several quite interesting signals could be formed during the day, but the price fell short of reaching the level of 1.2181 by just a few points every time. And so there wasn't a signal during the European trading session. The price finally started to move a little during the US session, which resulted in forming a buy signal, and even then in the late afternoon, we recommended closing all positions. Formally, this buy signal - a breakthrough of the level of 1.2215 - could be worked out. In this case, at the moment, this transaction should have been manually closed. Beginners could earn around 10 points.
Trading tips for Tuesday:
The upward trend is still maintained on the 30-minute timeframe, so we continue to recommend considering long positions. However, the movement remains complex and ambiguous, so the MACD indicator can generate false signals. Thus, tomorrow we recommend that novice traders continue to monitor buy signals, but if flat signs appear again, then ignore the signals from the MACD indicator. It is recommended to trade from the levels 1.2159, 1.2181, 1.2215 and 1.2266 on the 5-minute timeframe. 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. At 5M TF, the target can be the nearest level if it is not too close or too far away. If located - then you should act according to the situation. On Tuesday, the European Union will publish reports on inflation and business activity in the field of manufacturing for May, as well as the unemployment rate for April. We recommend paying special attention to inflation, while the rest of the reports, most likely, will not interest the markets. In America, there is a rather important index of business activity in the ISM manufacturing sector, but if its value does not decrease significantly compared to the previous month, we also do not expect a strong market reaction.
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 th
e 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.
The material has been provided by InstaForex Company - www.instaforex.com