FX.co ★ How to trade EUR/USD on April 4? Simple tips for beginners.

Analysis of previous deals:

30M chart of the EUR/USD pair

The EUR/USD currency pair was in absolute flat on Friday. The volatility of the day was only 48 points, which is very low even for a completely empty day, in terms of macroeconomic statistics. However, Friday was not such a day. At least two major reports have been published in the US and the EU. NonFarm Payrolls and inflation. Thus, even if these reports were neutral, traders could count on strong movements. However, instead they got an absolute flat. The pair simply continued the weak movement that started days earlier, and by the end of the day and the week it slipped to the level of 1.1038. There was a rebound from this level, but it does not change the overall picture of the state of affairs. The European currency will still tend to fall against the dollar due to the difficult geopolitical situation and because of the negative fundamental background for itself. Inflation in the EU, by the way, has already risen to 7.5% y/y and has almost caught up with US inflation. This could mean that the European Central Bank could start tightening its monetary policy soon (which could push the euro higher), but ECB President Christine Lagarde has said many times that the central bank will not raise rates this year. Therefore, the euro did not derive any benefit for itself.

5M chart of the EUR/USD pair

The nature of the pair's movement, which we mentioned, is even more visible on the 5-minute timeframe. It is an absolute flat between the levels of 1.1070 and 1.1038. Since the European trading session, the pair has rebounded at least three times from the first and three times from the second. At the same time, it cannot be said that the price moved from one level to another. Rather, there was a sluggish fall of the euro. Unfortunately, but not surprisingly, nothing could be earned from this movement. The first three sell signals ended with the opening of two short positions, each of which was closed by Stop Loss at breakeven, because the price went down 20 points at least twice, but failed to work out the nearest target level of 1.1038. By the beginning of the US trading session, it became clear that the market was ignoring macroeconomic statistics, and the pair was in a flat. The first signal to buy from the level of 1.1038 should not have been worked out, since the Nonfarm Payrolls report was released in America at this time. All subsequent signals had to be ignored, because after the lack of reaction to the report, it became absolutely clear that there would be no movement.

How to trade on Monday:

On the 30-minute timeframe, the pair is correcting as part of a still ongoing, very formal upward trend. Unfortunately, there is no trend line or channel at the moment, so the trend is determined "by eye". The fundamental and geopolitical backgrounds continue to speak in favor of the fall of the European currency, and we expect such a development of events in the new week, unless there are optimistic news from Ukraine or Russia. On the 5-minute TF tomorrow it is recommended to trade at the levels of 1.0966, 1.1038, 1.1070, 1.1132. When passing 15 points in the right direction, you should set Stop Loss to breakeven. Neither the EU nor the US is scheduled for a single important event or report on Monday. Thus, there may be a slight movement and slight volatility during the day. However, in general the market is still in an excited state, so you need to be prepared for surprises.

Basic rules of the trading system:

1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal.

2) If two or more deals were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored.

3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading.

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

5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel.

6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance.

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.

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 speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, 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 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.