FX.co ★ How to trade EUR/USD on April 18. Simple trading tips and analysis for beginners

Analyzing Monday's trades:

EUR/USD on 30M chart

On Monday, the EUR/USD pair proceeded to trade lower, and it turns out that the decline has been going on for two full days, which we haven't seen in the market for quite some time. Moreover, the decline is quite strong, as the euro quickly loses its hard-earned positions. Recall that we consider last month's upward movement to be illogical and unreasonable. Although Friday's decline was illogical if you look at it from a macroeconomic perspective, nonetheless, we could still find an explanation since Christopher Waller of the Federal Reserve mentioned readiness to continue rate hikes. On Monday, however, there was no macroeconomic or fundamental background, although European Central Bank President Christine Lagarde spoke. However, at the moment, there is no information on this matter. Perhaps, everything is logical and Lagarde announced her refusal to raise the rate by 0.5% in May, but I believe that the pair fell due to technical reasons. The decline has been long overdue, and the euro is extremely overbought.

EUR/USD on 5M chart

There were quite a few signals on the 5-minute chart, but most of them were false, as the trend only started during the US trading session. First, the pair settled above 1.0989, which was deemed irrelevant by the end of the day and replaced by 1.1000. Then the pair couldn't even move up by 10 points... The next sell signal should have been ignored because the nearest target level of 1.0966 was too close. You could have made around 10 points on this. Then the buy signal around 1.0966 could also have been ignored for the same reasons. Only the consolidation below the 1.0966 level could have been traded with a clear conscience, and the price managed to drop below the 1.0920-1.0933 area by the evening, allowing newcomers to earn about 45 points. The position could have been closed manually.

Trading tips on Tuesday:

On the 30-minute chart, the pair started to fall, which could be (like the last couple of times) a pullback before a new strong growth. Unfortunately, the current situation does not allow us to confirm which direction the pair will move in the coming week. The euro is overbought and should decline, but the market may still start forming a new wave of baseless growth. On the 5-minute chart, it is recommended to trade at the levels 1.0792, 1.0857-1.0867, 1.0920-1.0933, 1.0966, 1.1000, 1.1038, 1.1070, 1.1132, 1.1184, 1.1228. As soon as the price passes 15 pips in the right direction, you should set a Stop Loss to breakeven. On Tuesday, both the US and the European Union have scheduled only one speech each from Fed and ECB representatives. From the American side - Michelle Bowman, from the European side - Elderson. We do not have any special expectations for these events.

Basic rules of the trading system:

1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is.

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

3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement.

4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually.

5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel.

6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels.

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 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, and 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 patterns (channels and trendlines).

Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations.

Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.