Analysis of previous deals:
30M chart of the EUR/USD pair
The EUR/USD pair moved mostly sideways on Friday. The volatility of the day was only 30 points. This review can end. Seriously though, we have to return to the topic of pair volatility again. Unfortunately, the euro/dollar pair spends 3 out of 5 trading days with low volatility, which does not allow not only earning, but also, in principle, working with it. Even if you are a genius trader, it is hardly possible to squeeze out a lot if the pair passes 30 points in a day. The technical picture on the 30-minute timeframe does not change. There is still no trend line or channel. The trend formally remains downward, but in the chart it already looks like a full-fledged flat, since the period of time when the pair was in a weak but still downward movement is far behind. Thus, it is still impossible to consider signals from the MACD indicator. As for macroeconomic statistics, two important reports were published on Friday, which did not make any impression on traders. The EU inflation report for June was published early in the morning. It reached 1.9% y/y, which is fully in line with the forecast and the previous value. Therefore, the lack of response to this report is not surprising. But the volume of retail sales in the United States in June rose by 0.6% m/m, although forecasts predicted a decline of 0.4% m/m. Thus, the US dollar had the opportunity to rise in price, but traders ignored this report.
5M chart of the EUR/USD pair
Trading on the 5 minute timeframe was terrible throughout Friday. In the sense that the pair was flat all day. And flat is false signals. It is good that only a few of them were formed, so novice traders managed to avoid losses. All three buy signals formed around 1.1796, which is the previous day's (Thursday) low. The price bounced off this level three times, so only one long position had to be opened. Further, the price simply returned to this level, which did not require closing a deal or opening new ones. The most interesting thing is that at the end of the day the price was unable to settle either below the level of 1.1796, or to reach the level of 1.1851 (the closest target), or to go up at least 30 points (for the least Take Profit). Thus, the long position should have been manually closed towards Friday evening. Hence, one could even earn up to 10 points of profit.
Trading tips for Monday:
There is still no trend on the 30-minute timeframe, so it is not recommended to trade on this timeframe yet. A flat is a very dangerous thing. The pair continues to show very weak volatility, so it is best to immediately switch to the lower chart, and wait for a trend line or channel at the current one. On the 5-minute timeframe, it is recommended to trade from the levels 1.1772, 1.1796, 1.1851 and 1.1880. 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. No reports or important events in either the European Union or the United States on Monday. Thus, it is highly likely that tomorrow the pair will experience low volatility again.
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