Trading plan for EUR/USD on May 28. Simple tips for beginners

EUR/USD edged up on Monday, and it continues to advance. Lately, we've repeatedly discussed how the euro appreciates even on days when there are no apparent reasons or grounds for it. This was the case on Friday, Monday, and now even on Tuesday. Therefore, we deduced that the EUR/USD pair is exhibiting illogical movement. So what can traders do? There are two options. The first is to wait until the market starts paying attention to the fundamental and macroeconomic background, and only then will they decide to enter the market because it's extremely difficult even in hindsight to explain why the pair shows such movement. The second option is to trade purely on technical analysis, disregarding the macroeconomic and fundamental background.

On the 5-minute timeframe, EUR/USD saw volatility that amounted to around 30 pips. As shown in the chart above, there were no significant movements. The pair traded sideways for the entire day and only tried to consolidate above the range of 1.0838-1.0856 once. Given such volatility and movements, we believe that it doesn't make sense to enter the market at this time.

On the hourly chart, the bullish correction remains intact, which increasingly resembles an independent trend. We believe that the euro should fall in the medium term, and the global trend is downward. Nevertheless, the market still refuses to buy the dollar for unknown reasons and volatility also remains low. Traders should consider these factors before they decide to open any trades.

On Tuesday, novice traders may look for signals around the area of 1.0888-1.0896. Sell signals are still considered, but the euro is persistent about its growth. In any case, one should take note of the low volatility.

The key levels on the 5M chart are 1.0483, 1.0526, 1.0568, 1.0611, 1.0678, 1.0725-1.0733, 1.0785-1.0797, 1.0838-1.0856, 1.0888-1.0896, 1.0940, 1.0971-1.0981. Today, no significant reports or events are scheduled in the United States or the European Union. Most likely, we can expect another "boring day" with minor price changes and small growth from the euro, which rises under any circumstances.

1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.

2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.

3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.

4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, after which all open trades should be manually closed.

5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trendline or trend channel.

6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.

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

Red lines represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.

The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.

Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.

Beginning traders should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.