Analysis of previous deals:
30M chart of the EUR/USD pair
The EUR/USD pair traded more calmly and changed its direction to an upward movement on Monday. There is still no trend line or channel on the 30-minute timeframe, so the downward trend, although very strong, is very conditional. Simply put, the downward movement has no support right now, and the dollar's growth in the second half of last week was triggered solely by one event - the Federal Reserve meeting and its results. Now it is no longer necessary to talk about their influence on the pair and the mood of traders, so the upward movement can recover very easily. We remind you that until the quotes' last decline, the pair was trading near its 3-year highs in a narrow price range for about a month. There were no major macroeconomic reports or fundamental events during Monday.
5M chart of the EUR/USD pair
There was quite an interesting movement on the 5-minute timeframe, which was very easy to work out. Unfortunately, there was not a single important level near the lows of the day, around which a buy signal could form. Thus, novice traders missed more than half of today's movement. Nevertheless, two trading signals were formed during the day. Both are near the 1.1878 level. At first, the quotes bounced off it, which is very inaccurate, but it could still be called a rebound. Here, novice traders had to open short positions, but they did not bring profit, since the price did not go down after forming a 30-point signal and did not reach the nearest level. The deal was closed by Stop Loss at breakeven. The second signal was formed when the quote surpassed the 1.1878 level, and novice traders could profit from it by opening long positions. At the moment, the quotes have come close to the level of 1.1924, around which you can take profit on long positions. And in any case, the EUR/USD pair went up after forming a buy signal worth 30 points, which was enough to trigger Take Profit. Thus, newbies could have earned about 30 points today, which is not too bad considering the total volatility of the day was 72 points.
Trading tips for Tuesday:
A strong downward movement ended and an upward correction began on the 30-minute timeframe. Unfortunately, the downward trend still has no benchmarks other than the usual levels. Thus, on this timeframe, we continue to expect the formation of a clear trend and do not recommend using the MACD indicator to search for signals. On the 5-minute timeframe, it is recommended to trade from the levels 1.1800, 1.1851, 1.1878, 1.1924 and 1.1943. 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 the 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. Late Tuesday, Fed Chairman Jerome Powell will speak, and there will be no macroeconomic events during the day. Thus, in theory, there should be a rather calm movement from the pair on Tuesday, possibly with an upward bias as part of a correction against a strong fall.
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.
The material has been provided by InstaForex Company - www.instaforex.com