Analysis of previous deals:
30M chart of the EUR/USD pair.
The EUR/USD pair stood in one place for most of the day again on Tuesday. In principle, this is perfectly visible in the chart above. The quotes of the pair were between the levels of 1.1700 and 1.1666 all day, and the volatility of the day was only 35 points. Low volatility is not so bad. But the absence of trend movement greatly complicates the already difficult conditions for trading. Recall that the pair crossed the downward trend line last week, which could mean the beginning of the formation of a new upward trend. However, instead, the downward movement resumed, but over the last three trading days (when a new round of the downward movement took place), the pair managed to decline by only 60 points. This is approximately 20 points per day. Thus, the markets still do not find a compelling reason to actively trade the pair. Today, the European Union hosted a speech by European Central Bank President Christine Lagarde, and the United States - speeches by Federal Reserve Chairman Jerome Powell and US Treasury Secretary Janet Yellen. However, the markets did not receive any important statements from them. Moreover, in their speeches it is very difficult to find theses that could support the US dollar. Thus, we tend to think that the markets have simply ignored these events as of little significance.
5M chart of the EUR/USD pair
The technical picture on the 5-minute timeframe did not look the best on Tuesday. A lot of signals were formed during the day, but most of them were formed in an absolute flat, which is highlighted by a rectangle for clarity. As you can see, almost all trading signals formed around the level of 1.1685, which is the previous day's low, which is a sign of a flat. Nevertheless, the pair formed a sell signal at the very beginning of the day, which deserves attention. Quotes bounced off the level of 1.1704 (error 1 point), after which it fell by 26 points. Recall that we recommend placing Take Profit at a distance of 30 points at least from the market entry. The quote surpassed the level of 1.1685 on the way, which only strengthened the sell signal. However, the pair did not reach TP and the nearest target level either. Nevertheless, novice traders could still get out of the market with a small profit, since a short position could be closed in a flat or when the price has overcome the level of 1.1689 from the bottom up. In this case, you could take 5-10 points, which is better than nothing. All sell signals formed in the flat should be ignored, since by that time a short position had already been opened. Two buy signals that formed during the day should also be ignored, since by that time it had already become clear that there would be no serious movements today.
How to trade on Wednesday:
The EUR/USD pair tried to form an upward trend on the 30-minute timeframe, but in fact it has been moving in a flat with a minimum downward slope for more than a week. Therefore, at this time, we do not recommend considering signals from the MACD indicator. First, the pair needs to complete the flat and form a trend line or channel. The key levels on the 5-minute timeframe for September 29 are 1.1666, 1.1704, 1.1735, 1.1750. 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 the 5M TF, the target can be the nearest level if it is not too close or too far away. If it is, then you should act according to the situation or work according to Take Profit. On Wednesday, novice traders can again pay attention to the speeches of Powell and Lagarde, but they will take place in the evening. By that time, newbies can leave the market and already calmly observe the development of events. There will be no important publications or events during the day.
What's on the charts:
Support and Resistance Price Levels - Levels that are targets when buying or selling. You can place Take Profit levels near them.
Red lines - channels or trend lines that display the current trend and show which direction it is preferable to trade now.
MACD indicator (14,22,3) - a histogram and a signal line, the crossing of which is a signal to enter the market. It is recommended to use in combination with trend plots (channels, trend lines).
Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.
Beginners in the Forex market should remember that every trade cannot 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