Analysis of previous deals:
30M chart of the EUR/USD pair
The EUR/USD pair continued to trade very sluggishly on Wednesday. In principle, nothing new can be said in comparison with yesterday. The pair spent the entire day in a horizontal channel with a width of 40 points, that is, in a complete flat. Thus, formally, an upward trend continues, which has already reached five days in total. Of these five days, the pair stood in one place for four (in the side range 30-40 points wide). Thus, the current upward trend is purely nominal. Moreover, there is no trend line or upward channel to support it. There was only one report during the day - a report on orders for durable goods in the US - and it did not have any impact on the movement of the euro/dollar pair. According to the results of the past two days, the price could not even overcome the level of 1.1756, from which it rebounded four times in total. One signal for the MACD indicator formed today (circled in the chart), but at the time of its formation, the price returned to the level of 1.1756. However, even if traders opened long positions here, they remained even in a small profit, about 10 points.
5M chart of the EUR/USD pair
The picture of the pair's movements on the 5-minute timeframe was extremely eloquent on Wednesday. In principle, even without special chart patterns, it can be seen that the price stood between the levels of 1.1730 and 1.1765 all day. However, today even several interesting signals have formed, which, even in an absolute flat, could bring profit to novice traders. For example, the first trading signal to sell is a rebound from the level of 1.1756 in the European session. After its formation, the price went down 22 points and reached the nearest level of 1.1730, from which it rebounded. Thus, short positions should have been opened on this signal and manually closed near the 1.1730 level. As a result, about 10 points of profit. This was followed by two buy signals - rebounds from the level of 1.1730 - with very accurate signals, not twofold. It was possible to open long positions on them. The price returned to the level of 1.1756, from which it also bounced at first, therefore, the deal had to be manually closed here too. About 8 more points. The last two signals should not have been worked out, as it was approaching evening, and volatility was very weak again. Nevertheless, in the end, it was possible to earn about 20-25 points of profit for three open trades, which is an excellent result for an absolute flat.
Trading tips for Thursday:
The EUR/USD pair continues to be above the downward trend line on the 30-minute timeframe, so buy signals should still be considered tomorrow. However, we once again draw attention to very weak volatility, in which the MACD indicator can also generate false or very weak signals. Therefore, we recommend considering buy signals from the MACD indicator on Wednesday, when it falls to the zero level, but do it with the utmost caution. It is better to trade at the lowest timeframe now. On a 5-minute timeframe, it is recommended to trade from the levels of 1.1704, 1.1730, 1.1756 - 1.1765, 1.1802. 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 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. The US is set to publish its second quarter GDP report on Thursday, while the EU does not have a single major publication planned. The US report can be worked out by the markets, but we believe that it is much more likely that it will be ignored.
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