Analysis of previous deals:
30M chart of the EUR/USD pair
The EUR/USD pair was trading higher on Wednesday. However, the movement during the day was no longer as strong as the day before. In general, after the overnight trading, the price simply continued its upward movement from the point at which it ended on Tuesday. Unfortunately, the MACD indicator failed to discharge to the zero level, and since we have an upward trend, only buy signals should be considered. So, the MACD indicator did not form a strong buy signal during the day. However, it reached the 1.1912 level and the price rebounded from it. And it was this clear rebound that could be used as a sell signal. This signal is counter-trend though. Nevertheless, in yesterday's review we listed the levels from which a rebound can occur, and from one of them, it turns out, it happened. Thus, at the moment, novice traders should be in short positions while aiming for 1.1836. Or by setting Take Profit at a distance of 30-40 points. At this point, traders make decisions themselves. In both cases, Stop Loss can already be set at breakeven, that is, at the 1.1901 level. We believe that tomorrow the pair will have a fairly high probability of retreating.
5M chart of the EUR/USD pair
Now let's take a look at the 5-minute timeframe. Two new levels appeared during the day - 1.1864 and 1.1878. The first is the day's low, and the second is the previous day's high. As you can see, the price bounced six times from the level that was formed yesterday (1.1878). However, if it moved neatly between the levels 1.1864 and 1.1878 (there was no level 1.1864 at that time, but it doesn't matter) at night and in the morning, then it surpassed 1.1878, which could be used as a buy signal. In addition to a breakthrough, the price returned to this level twice and rebounded off it. Thus, there were two more potential opportunities to buy the pair from the 1.1878 level. As a result, the price reached the nearest target of 1.1912, from which it rebounded. Therefore, you could earn around 25 points on a buy signal, and another 25 on a sell signal (if you close it right now, since the price fell to 1.1878) . As a result, 50 points, which is very good for a day with volatility only 50 points. The European Union published an index of business activity in the services sector, but it did not provoke any market reaction.
How to trade on Thursday:
We recommend trading on the 30-minute buy timeframe on Thursday, as the upward trend continues at the moment. A new upward trend line has been built, which cannot be called strong, but, nevertheless, it is. The MACD indicator is currently discharging, afterwards it will be able to form new and strong buy signals again. Thus, in any case, you need to wait for it to drop to zero. It can happen during the night. Also, novice traders may still have a short position open on a rebound from the 1.1912 level. In this case, the trade must be left overnight with Stop Loss. 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. The levels 1.1878, 1.1864, 1.1912 and 1.1836 can be distinguished on the 5-minute timeframe, from which rebounds or breakthroughs can occur. As before, the main thing is that the signal is clear. If the signal is not clear, then it is better not to enter the market.
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.