Analysis of previous deals:
30M chart of the EUR/USD pair
The EUR/USD pair started trading quite calmly on Thursday, but we all remember that ahead of us was the announcement of the results of the European Central Bank meeting and the speech of its head Christine Lagarde. Thus, the closer the "X hour" approached, the more it was necessary for us to be cautious when opening any deals. In general, the upward trend continued throughout the day and lasted in the end. Only one signal was generated on the 30-minute timeframe, which was duplicated. Around the middle of the European session, the pair dropped to the 1.2023 level and made a clear rebound from this level. A little later, the MACD indicator turned up as well. And so, long positions should have been opened here. As a result, the pair went up 40 points, which would be enough for Take Profit, as we advised, 30-40 points, and for setting Stop Loss to zero. Thus, novice traders could have earned at least 30 points here. Afterwards, summing up the results of the ECB meeting began, so any form of signals should no longer be considered, and they were no longer on this timeframe. The results of the ECB meeting were, to put it mildly, not in favor of the European currency, since neither the rate nor the volumes of the PEPP program were changed. There weren't any changes at all. However, Lagarde's press conference was of great importance, which informed the markets that the ECB is not going to end the PEPP program in the near future, or to reduce the pace of asset purchases under this program, or to raise rates in the foreseeable future. On the contrary, Lagarde gave the markets signals that if necessary the rate could be lowered, the PEPP program - expanded, and the pace of asset purchases will remain high. Thus, such information quite justifiably provoked pressure on the euro currency.
5M chart of the EUR/USD pair
Now let's take a look at the 5 minute timeframe. Everything was much more complicated here, only because seven signals were formed during the day. However, most of them should have been filtered out and we'll find out why. The first signal was very fuzzy. The pair approached the 1.2044 level and could neither rebound nor overcome it. The second signal - a rebound from the 1.2023 level was identical to a similar signal on the 30-minute timeframe. Here it even formed faster, so novice traders could open a deal earlier. The rebound was accurate, so there should be no questions about opening a deal. Further, the price bounced twice from the 1.2044 level , but by that time the buy deal had not yet been closed, since neither Stop Loss nor Take Profit was triggered. The publication of the results of the ECB meeting started at the beginning of the US session, and half an hour later - Lagarde's press conference. Therefore, at this time, one should not open any deals on any signals. Accordingly, signals 4, 5, 6 and 7 should be ignored. Formally, it was possible to work out the last, seventh signal, by that time the main movement had already ended, and the rebound from the 1.2023 level from below was clear, but we would not risk it. In any case, even if a short position was opened here, it is currently in profit, so it can be closed manually.
How to trade on Friday:
On Friday, we recommend trading on the 30-minute timeframe, still buying, as the upward trend continues at the moment. The upward trend line continues to support bull traders. The MACD indicator was discharged quite well on Thursday, and the pair is correcting again. Therefore, you can expect strong buy signals by tomorrow. Also, novice traders can trade from 1.2023, 1.2082 and 1.1990 for a rebound or breakthrough in both directions. 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 situation on the 5-minute timeframe has become a little more complicated due to the large number of different levels. We remind you to use only the most accurate and clear signals possible. On April 23, the European Union is scheduled to publish indexes of business activity in the services and manufacturing sectors, while the same indexes will also be published in America and Finance Minister Janet Yellen will make a speech.
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.
