Overview of trade on Monday:
30M chart for EUR/USD
On Monday, EUR/USD corrected a bit after another bounce off 1.1990 and resumed the uptrend which is accelerating now. The price action was more vigorous than in the recent days that is clearly seen in the chart. Such a sharp upward move might have caught beginners off guard. EUR/USD has passed over 100 pips from the swing low to swing high. Importantly, this happened amid the empty economic calendar today. Just an ordinary boring Monday. However, the market could be choppy despite the lack of economic data. You may never be 100% sure of anything on Forex.
Now let's figure out what deals could have been opened today. To begin with, MACD indicator reversed upwards in the morning and formed a buy signal. However, novice traders are not recommended to trade at such signals when the indicator moves far away from the zero level. Hence, this signal should have been neglected. Eventually, it could have brought gains. On the other hand, such signals are likely to incur losses in other market situations. Let me remind you that it would be better for beginners to take into account only clear-cut signals. If no such signals are detected, you would rather refrain from entering the market. Then, the next signal was formed when the price fixed above 1.1990. However, it was not a good idea to open long positions here because at the moment of forming this signal, the price had climbed almost 75 pips. Under low volatility in the recent days (no more than 40 pips), the odds were against a further climb of EUR/USD. The same is true about the third buy signal which emerged when the price was overcoming 1.2023. All in all, in the current timeframe, the best solution was not to open any deals at all on Monday.
5M chart for EUR/USD
Now let's look at a 5-minute chart. Two buy signals have been formed here today. Unlike a 30-monute chart, these signals could have worked out well. The first signal appeared when the price foxed above the level of 1.1990. However, beginners could have opened long positions only at 1.2007 because this is the level where a candle which formed a signal closed. As the nearest target was 15 pips away, it would have been better to take profit at a distance of 30-40 pips as I always recommend. As a result, EUR/USD climbed another 40 pips, so beginners could have gained a profit on this deal. 1.2048 is the swing high today. No bounce has happened from the swing high to open a sell deal. Actually, a higher high was made a few hours ago. The pair tried either to fix lower or retrace. Anyway, it was too late to open deals here because of the strong price action during the day. Hence, it doesn't make sense to open any deals late at night.
How to trade EUR/USD on Tuesday
On Tuesday, it would be a good idea to trade the pair according to a 30-minute chart with long positions in view. Indeed, EUR/USD is still following the uptrend. Such market conditions support the idea of long positions. Following the upward move today, MACD needs to discharge to zero. Therefore, we are waiting for a correction which could happen at night. Beginners could try trading from 1.2023 and 1.2082 at price dips. As usual, take profit should be placed 30-40 pips away. Stop loss is triggered when the price moves in the right direction and passes 15-20 pips. In a 5-minute chart, the situation has cleared up. The nearest important levels to watch are 1.2023, 1.1990, 1.2048, and 1.2082. They should be used while trading on Tuesday. The economic calendar on April 20 is also empty for the US and the EU.
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.
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.