Analysis of Thursday's Trades

1H Chart of EUR/USD

On Thursday, the EUR/USD currency pair traded in a near-flat range with very low volatility (around 50 pips). After the storm on Wednesday evening, once again triggered by Donald Trump, the market quickly stabilized, and the pair returned to its previous levels. It's worth noting that the dollar failed twice to consolidate below the 1.1563 level, which could suggest that the current downward trend is nearing its end.

Let's recall that the pair's movement over the past three weeks, in our view, has been a pure technical correction. Over that period, there were plenty of news events and developments that did not justify a stronger U.S. dollar. Many macroeconomic reports were either ignored by the market or interpreted selectively. From a technical standpoint, this is a normal corrective phase, which will end once the price consolidates above the trendline. From a fundamental perspective, the current decline arguably shouldn't have happened at all, but the dollar simply cannot fall indefinitely.

5M Chart of EUR/USD

On the 5-minute timeframe, two buy signals were formed on Thursday. The price rebounded twice from the support area of 1.1563–1.1571, ultimately triggering an upward movement. Novice traders could have manually closed long positions with a modest profit by the evening. However, since the price failed to break below the 1.1563–1.1571 zone twice, we can expect a stronger move, at least toward the trendline.

Trading Strategy for Friday:

On the hourly timeframe, EUR/USD continues to correct, but the six-month-long uptrend remains intact. We do not believe that the dollar's decline is over. The U.S. currency has been declining for six months and is currently undergoing a short-term correction that is expected to last just a few weeks. Trump's policy has not undergone a 180-degree shift, so there is no reason yet to expect medium-term dollar appreciation.

On Friday, the EUR/USD pair may continue moving toward the trendline, as it has failed twice to break below the 1.1563 level. A break above the trendline will signal the end of the downward trend.

On the 5-minute timeframe, consider the following levels: 1.1198–1.1218, 1.1267–1.1292, 1.1354–1.1363, 1.1413, 1.1455–1.1474, 1.1527, 1.1563–1.1571, 1.1655–1.1666, 1.1740–1.1745, 1.1808, 1.1851, 1.1908.

No major events are scheduled in the Eurozone on Friday. In the U.S., the only notable release is the University of Michigan Consumer Sentiment Index.

Core Trading System Rules:

1. Signal Strength: The shorter the time it takes for a signal to form (a rebound or breakout), the stronger the signal.
2. False Signals: If two or more trades near a level result in false signals, subsequent signals from that level should be ignored.
3. Flat Markets: In flat conditions, pairs may generate many false signals or none at all. It's better to stop trading at the first signs of a flat market.
4. Trading Hours: Open trades between the start of the European session and the middle of the US session, then manually close all trades.
5. MACD Signals: On the hourly timeframe, trade MACD signals only during periods of good volatility and a clear trend confirmed by trendlines or trend channels.
6. Close Levels: If two levels are too close (5–20 pips apart), treat them as a support or resistance zone.
7. Stop Loss: Set a Stop Loss to breakeven after the price moves 15 pips in the desired direction.

Key Chart Elements:

Support and Resistance Levels: These are target levels for opening or closing positions and can also serve as points for placing Take Profit orders.

Red Lines: Channels or trendlines indicating the current trend and the preferred direction for trading.

MACD Indicator (14,22,3): A histogram and signal line used as a supplementary source of trading signals.

Important Events and Reports: Found in the economic calendar, these can heavily influence price movements. Exercise caution or exit the market during their release to avoid sharp reversals.

Forex trading beginners should remember that not every trade will be profitable. Developing a clear strategy and practicing proper money management are essential for long-term trading success.