Analysis of previous deals:
30M chart of the EUR/USD pair
The EUR/USD pair broke all volatility records on Thursday against the background of the last two weeks, when it was trading in a horizontal channel. Over the course of today, a lot of various reports have been published and, what is most interesting, most of it has been worked out by traders! Moreover, not only somehow, but very, very tangibly. Yesterday we recommended that novice traders pay close attention to the ADP report and the ISM index. It turned out that these two reports became the "culprits" of the strong strengthening of the US dollar. In addition, the EUR/USD pair broke out of the horizontal channel (apparently) and even formed a downward channel, in which it can stay for some time. Of course, it is still too early to declare that the global upward trend is over, but at this time traders have taken a step towards a new downward trend.
5M chart of the EUR/USD pair
The picture on the 5-minute timeframe turned out to be very, very interesting. There are many events and several signals. It was rather difficult to combine them together, but we will still try to figure it out. So, the first buy signal was formed at the European session exactly at the time when the EU PMI was published. We said that this is far from being the most significant report, but it, quite unexpectedly, caused a moderate reaction from traders in the form of growth. And so this signal could be worked out with a long position, but this deal could only bring a small profit and only if it was manually closed before the US session itself, which is when US reports began to be published. The quotes did not reach the target level of 1.2215 and did not go up 30 points. Moreover, novice traders might not have opened a deal here, since the signal was formed exactly at the time when the European report was released. The next two signals (a breakthrough of 1.2181 and a rebound from the level of 1.2159) should not have been worked out, as they also clearly formed when US reports from ADP and on the number of new applications for unemployment benefits were released. Looking ahead, it should be noted that almost all the data from America turned out to be strong, so the pair's downward movement (= growth of the US dollar) is absolutely logical. But the fourth sell signal in the form of a breakthrough of the level of 1.2159 could be rejected. This deal did not bring much profit, but the nearest level (1.2133) was worked out, and the price went down 30 points, sufficient for Take Profit. Thus, in the end, novice traders could earn from 16 to 30 points today.
Trading tips for Friday:
A new downward trend has formed on the 30-minute timeframe, so now it is recommended to look for sell signals from the MACD indicator. At the moment, this indicator is very low, so you should wait for it to discharge to zero. On the 5-minute timeframe, it is recommended to trade from the levels 1.2056, 1.2092, 1.2133, 1.2159 and 1.2181. 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. At the 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. On Friday, there will again be a fairly large number of different events in the European Union and the States. In the European Union, a report on retail sales will be published and a speech by the head of the ECB Christine Lagarde will take place. In America - the most important reports on NonFarm Payrolls and the unemployment rate will be released, as well as a speech by Fed Chairman Jerome Powell. Therefore, tomorrow could be a very active and volatile day again.
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.
