Analysis Of Trades On Thursday:

1H Chart Of The EUR/USD Pair

The EUR/USD currency pair traded lower on Thursday. The previous day, overnight, there was a speech by Donald Trump that caused a crash in both major currency pairs. The US President delivered another series of completely contradictory statements, but the markets were most influenced by phrases like "we will destroy Iran" and "we will deliver a devastating blow within the next two to three weeks." These words forced traders and investors to once again flee from anything associated with "risk." There was no macroeconomic background on Thursday, and the technical picture can currently be overlooked as the price moves solely under the influence of geopolitics. On the hourly timeframe, we adjusted the ascending trend line to keep it relevant, but similarly, one could redraw other trend lines an infinite number of times.

5M Chart Of The EUR/USD Pair

How To Trade On Friday:

On the hourly timeframe, the ascending trendline has been breached, and we have once again not seen any significant upward trend. The new trend line is merely formal. The market continues to trade solely on geopolitics and emotions. Therefore, the "roller coaster" may continue for a long time. Trump continuously provokes both crashes and surges in the US dollar.

On Friday, beginning traders may consider short positions if the price consolidates below the 1.1527-1.1531 area, targeting 1.1455-1.1474. A price bounce from the 1.1527-1.1531 area will allow for long positions with a target of 1.1584-1.1591.

On the 5-minute timeframe, levels to consider include: 1.1267-1.1292, 1.1354-1.1363, 1.1413, 1.1455-1.1474, 1.1527-1.1531, 1.1584-1.1591, 1.1655-1.1666, 1.1745-1.1754, 1.1830-1.1837, and 1.1899-1.1908. On Friday, there are no important events scheduled in the European Union, while in the US, extremely important Non-Farm Payroll reports and unemployment figures will be published. We do not know whether the market will react to them (it ideally should), as for the past month and a half, it has largely ignored almost all macroeconomic and fundamental background.

Key Principles of the Trading System:

1. The strength of the signal is determined by the time it took to form the signal (bounce or level breakthrough). The shorter the time, the stronger the signal.
2. If two or more trades were opened around any level based on false signals, all subsequent signals from that level should be ignored.
3. In a range, any pair can generate a lot of false signals or may not generate them at all. Technical levels may be ignored.
4. On the hourly timeframe, it is advisable to trade signals from the MACD indicator only when there is good volatility and a trend that is confirmed by a trendline or trend channel.
5. If two levels are located too close together (5-20 pips apart), they should be considered a support or resistance area.
6. After moving 15 pips in the correct direction, a Stop Loss should be set to breakeven.

What to Look for on the Charts:

Price levels of support and resistance are levels that serve as targets when opening buys or sells. Take Profit levels can be placed around them.

Red lines represent channels or trend lines that show the current trend and indicate the direction in which it is preferable to trade now.

The MACD indicator (14,22,3) – the histogram and the signal line – is a supporting indicator that can also be used as a source of signals.

Important speeches and reports (always included in the news calendar) can significantly affect the movement of the currency pair. Therefore, during their release, trading should be done with utmost caution, or traders should exit the market to avoid sharp price reversals against the previous movement.

Beginning traders in the forex market should remember that not every trade can be profitable. Developing a clear strategy and effective money management are the keys to long-term trading success.