Analysis of previous deals:
30M chart of the EUR/USD pair
The EUR/USD pair resumed its downward movement on Tuesday, which, however, took place within the horizontal channel. However, even this channel does not have clear boundaries at this time. The pair is simply trading in a very limited range, but there are no distinct signs of a flat, nor clear signs of a trend. Today, the pair's quotes fell due to the US inflation report, which continues to grow and has reached 5.4% y/y in June. There has not been such a high inflation rate in the US for more than ten years. Thus, traders are clearly nervous about this, and they are waiting for statements from the Federal Reserve about curtailing the quantitative stimulus program in order to stop price growth. It was this expectation of tightening monetary policy that allowed the dollar to show growth on Tuesday, since the increase in inflation itself is a negative factor for the US currency. However, on a 30-minute timeframe, it is impossible to extract any practical benefit from all these conclusions now. There is no trend or trend line either. Therefore, it is not recommended for novice traders to trade on this timeframe now.
5M chart of the EUR/USD pair
Trading signals are scattered on the 5-minute timeframe during the day. However, it should be noted right away that most of them should have been ignored. Signals began to form as early as the European trading session and one should have been very attentive to them, since you could have made good money. A breakthrough of 1.1851 and the subsequent rebound from it were signals to sell, which should have been worked out with short positions. However, later on, until the US session, the price could not move down, and so, novice traders faced a dilemma before the inflation report was released: either manually close short positions, or set Stop Loss and hope for the pair to fall. In principle, the second option was logical, since the price did not rise above the level of 1.1851 during the time when the inflation report was published. That is, there was no technical reason to close short positions. Moreover, the price also bounced off the 1.1851 level. Therefore, this is exactly the moment when you could risk 10 points, set Stop Loss just above the level of 1.1851 and hope for the necessary market reaction to the report. Subsequently, the price fell by 60 points and this made it possible for beginners to earn at least 30 points of profit (minimum Take Profit). Succeeding signals should not have been worked out, since they were formed either immediately after the report was published, or in the late afternoon, when it is not recommended to open deals in principle.
Trading tips for Wednesday:
The upward trend was canceled on the 30-minute timeframe, but a new one was not formed. Thus, the pair can move absolutely randomly in the near future, that is, in different directions without any logic. At this time, traders do not have a clear trading strategy, so the pair can be thrown from side to side. Volatility can be high due to strong macroeconomic or fundamental background. On the 5-minute timeframe, it is recommended to trade from the levels 1.1784, 1.1807, 1.1851 and 1.1880. 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. Fed Chairman Jerome Powell will deliver a speech in America in the evening. Meanwhile, no important publications or events in the European Union on Wednesday. Novice traders should have already left the market by the time Powell's speech begins.
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.