Trading plan for EUR/USD on July 13. Simple tips for beginners

The EUR/USD pair rallied upwards strongly on Wednesday. There was only one event in the market that could have triggered such a move – the US inflation report. On Tuesday, we speculated that the market had been factoring in this report since the beginning of the week, expecting a sharp slowdown in the consumer price index. We thought we were right, but we saw the euro rally, which led to the dollar's fall. So, what triggered it if traders had been factoring in this report since the beginning of the week?

The point was that US inflation cooled even more than the most optimistic forecasts. By the end of June, inflation had slowed down to 3%, and core inflation had dropped to 4.8%, which is also below forecast values. Therefore, the market reacted with new short positions on the dollar, as an even greater decline in inflation implies that the Federal Reserve may abandon one additional hike in the key rate.

Several entry points materialized on the 5-minute chart. From the very start of the day, the pair bounced off the level of 1.1038, afterwards it managed to fall about a whole 10 points in about 4-5 hours. The European trading session witnessed a total flat. Then a buy signal was formed when the pair surpassed the 1.1038 mark. Since this signal formed precisely at the time of the release of the US inflation report, there was a certain risk, but the report was unequivocally not in favor of the dollar, so it was possible to take a risk. The short position should have been closed manually before the report (profit of 10 points). We would like to note that after the inflation report, the price grew quite systematically, confirming the stability of the movement. Therefore, it was possible to stay in the deal until the level of 1.1132. The profit was about 80 points.

On the 30M chart, the pair continues to form a new upward trend. An upward trend line has formed, which is becoming stronger every day. The euro had a logical reason to rise, but this is not the case every day. This week, it turns out that the market has been factoring in one inflation report for three days. The key levels on the 5M chart are 1.0835, 1.0871, 1.0901, 1.0932, 1.0971-1.0977, 1.1038, 1.1091, 1.1132, 1.1184, 1.1228, 1.1279. After passing 15 points in the right direction, you can set Stop Loss to break even. On Thursday the EU will release its industrial production report for May, which is not excessively important. The US will release data on the producer price index and claims for unemployment benefits. Reports are of medium importance.

1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a break). The shorter this period, the stronger the signal.

2) If two or more trades were opened at some level following false signals, i.e. those signals that did not lead the price to Take Profit level or the nearest target levels, then any consequent signals near this level should be ignored.

3) During the flat trend, any currency pair may form a lot of false signals or do not produce any signals at all. In any case, the flat trend is not the best condition for trading.

4) Trades are opened in the time period between the beginning of the European session and until the middle of the American one when all deals should be closed manually.

5) We can pay attention to the MACD signals in the 30M time frame only if there is good volatility and a definite trend confirmed by a trend line or a trend channel.

6) If two key levels are too close to each other (about 5-15 pips), then this is a support or resistance area.

Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.

Red lines are channels or trend lines that display the current trend and show which direction is better to trade.

MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross. This indicator is better to be used in combination with trend channels or trend lines.

Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair. Therefore, during such events, 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 should remember that every trade cannot be profitable. The development of a reliable strategy and money management are the key to success in trading over a long period of time.