On the third trading day of the week, the EUR/USD currency pair once more declined to the level of 1.0669 and bounced off it twice. Yesterday's decline in the value of the euro was quite predictable given the dollar's advantage in the macroeconomic figures. Retail sales in the US increased far more than anticipated, while industrial production in the EU decreased more than expected. We don't want to imply that the strengthening of the US dollar was caused by these two studies. The decline of the euro was anticipated when the price failed to surpass the 1.0792 level for a second time. Although the pair is currently in a side channel, the downward trend is being kept up. As a result, we may anticipate seeing the euro break through 1.0669 and continue to decline. But after a while, the pair may be seen moving sideways.
5M chart of the EUR/USD pair.Using trading indications yesterday, everything was fairly straightforward. The movement was weak, and only during the US trading day did the pair finally breach a crucial level. The two entered the area between 1.0669 and 1.0697, where they spent the rest of the day. Thus, no trading signals were generated, and inexperienced traders shouldn't have initiated trades. If the flat persists, we will not have the most pleasant days ahead of us. It is certainly conceivable to trade for a rebound from the upper or lower side channel boundary, but even in this scenario, numerous false signals may arise. Be cautious.
How to trade on Thursday:
The pair attempted to develop a new upward correction in the 30-minute timeframe, but it is also tough to declare it successful. The pair only touched its prior local maximum before rapidly rebounding and rushing back down. We believe the pair will continue to fall or resume its decline, but a flat may be seen for a while. The levels to be taken into consideration for the 5-minute TF tomorrow are 1.0535, 1.0587-1.0607, 1.0669, 1.0697, 1.0792, and 1.0857-1.0867. You can set the Stop Loss to break even if you pass 15 positive points. There aren't any significant events or publications scheduled for Thursday in the European Union, but several reports will be released there, which could conceivably influence the attitude of traders. All of them will be published in the afternoon. Even among the so-called "inflationary" indicators, we don't think it's possible to focus solely on the producer price index because it's far from the most significant one.
General guidelines for the trading system:
1) The amount of time it took to generate the signal is used to determine its strength (rebound or overcoming the level). The shorter the time, the stronger the signal.
2) All following signals from a level should be ignored if two or more trades were opened there on false signals.
3. Every pair in a flat has the potential to generate numerous false signals or none at all. In any case, it is advisable to stop trading at the first indications of a flat.
4) Trades are opened between the start of the European session and the middle of the American session when all trades must be manually closed.
5) Only when there is strong volatility and a trend that is supported by a trend line or a trend channel can signals from the MACD indicator on a 30-minute TF be traded.
6) Two levels should be regarded as a support or resistance area if they are too near to one another (within 5 to 15 points).
What's on the charts:
Target levels for opening purchases or sales are price support and resistance levels. Take Profit levels may be positioned close by.
Red channels or trend lines represent the current trend and indicate the direction in which trading is now more profitable.
The MACD indicator (14, 22, 3) is a histogram and a signal line, an auxiliary indicator that can also be utilized as a signal source.
Major speeches and reports that are always on the news calendar can have a big impact on how a currency pair moves. To prevent a fast price reversal against the prior movement, you should trade as carefully as you can throughout their withdrawal.
Novice forex traders should keep in mind that not all transactions will be profitable. Long-term trading success is mostly dependent on developing a clear plan and practicing sound money management.