Overview of Monday's trades
30M chart for EUR/USD
On Monday, EUR/USD climbed a bit and later on it resumed a correctional decline within the overall weak uptrend according to a 30-minute chart. The upward trendline is still valid. So, we expect more buy signals from MACD indicator. Nevertheless, the ongoing price action is still too complicated to trade the pair. EUR/USD is trading under low volatility, the price action remains trendy, albeit just formally. For example, today the price has made a 40-pips move from an intraday low to an intraday high. So, traders are confused about how to earn decent gains and execute successful trades under such low volatility.
Curiously enough, the market has again turned a blind eye to macroeconomic data. The economic calendar contains a series of manufacturing PMIs for the eurozone and the US. The PMIs are data of secondary importance, so the market gave no response to the reports. Last week, market participants ignored much more significant data such as US and EU GDP for Q2 2021.
5M chart for EUR/USD
On Monday, a 5-minute chart generated a few trading signals. However, the bulk of them should be have been filtered. To sum up, all signals were generated around the level of 1.1880. The price has dropped off this level a few times and tested it. Nevertheless, the price was making minor moves, so no take profit orders could be activated. Thus, beginners found it hard to challenge the nearest target level. The first buy signal emerged in the morning. Shortly after, the second signal also appeared when the price dropped off 1.1880.
Hence, traders had an opportunity to open long positions here. However, the price was unable to move even 10 pips upwards. Therefore, when the price rebounded and fixed below 1.1880, traders had to close long positions manually. All in all, trades were closed with 10-15 pips loss. Besides, when the price fixed below 1.1880, it was the wrong idea to open sell positions because a lot of fake signals had been formed at that time at around 1.1880. All subsequent should have been disregarded.
How to trade EUR/USD on Tuesday
On a 30-minute chart, EUR/USD is still trading with the upward bias. The thing is that the trend is very weak and the trendline is making a minor climb. Thus, we cannot expect the price to dip to it frequently and bounce. On the whole, the currency pair is set to trade under low volatility that makes trading complicated. Meanwhile, formally we can consider buy signals generated by MACD indicator, but it should be done with caution. Unfortunately, this indicator seldom sends appropriate signals.
When it comes to a 5-minute chart, the pair can be traded from the following levels: 1.1831, 1.1851, 1.1880, 1.1912, and 1.1921. A take profit is set as usual 30-40 pips away. A stop loss is set at a break-even level when the price goes in the predicted direction 10-20 pips away. Besides, in a 5-minute timeframe, the target can be the nearest level provided that it is not too far or too close. If it is actually too far or too close, we should adjust a trading decision for particular market conditions.
The economic calendar is empty both for the US and the EU on Tuesday. I mean that EUR/USD is likely to continue trading with minor fluctuations in the low volatile market.
What's on the chart:
Support and Resistance levels are the levels that are targets when opening buy or sell orders. Take Profit levels can be placed near them.
Red lines are channels or trend lines that display the current trend and show which direction it is preferable to trade now.
Up / down arrows show whether the pair should be traded up or down when reaching or overcoming particular obstacles.
MACD indicator (14,22,3) is represented by a histogram and a signal line. When they are crossed, this signals a market entry. It is recommended for use in combination with trend patterns (channels, trend lines).
Important speeches and reports in the economic calendar can greatly influence the movement of the currency pair. Therefore, during their release, 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.
*Účelem zde zveřejněné analýzy trhu je zvýšení vašeho povědomí, nikoli dávání pokynů k obchodování.
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