Analysis of Tuesday's Trades

1H Chart of EUR/USD

On Tuesday, the EUR/USD currency pair continued its upward movement, as expected. Recall that the day before, the price consolidated above the descending trendline, thus completing a three-week downward trend. Therefore, at the very least, there were technical reasons to expect a new rise. In recent weeks, technical factors have been the primary tool for analysis and forecasting. As a reminder, over the past few weeks, President Donald Trump has imposed approximately twenty tariffs and introduced new ones. In addition, the confrontation with Jerome Powell continues, now even involving various "dirty" methods to remove the Federal Reserve Chair from his post. All this news pointed to one thing: the dollar should continue to weaken. However, the U.S. currency had been appreciating for three weeks, and this disorder had to end sooner or later. Therefore, we believe that considering the fundamental background, the euro will continue to grow.

5M Chart of EUR/USD

On the 5-minute timeframe on Tuesday, the price moved only during the U.S. session. During that time, the euro's exchange rate soared sharply over several hours, while the rest of the day saw low-volatility sideways movement. Only one trading signal was formed, and it appeared when the upward movement was already ending. Therefore, we do not consider this buy signal to have been worth acting upon.

Trading Strategy for Wednesday:

On the hourly timeframe, the EUR/USD pair has presumably completed a corrective movement that lasted three weeks. Since Trump's policy has not changed recently, and the topics of confrontation with Powell and the trade war have become even more pressing, we still see no reason for the dollar to strengthen in the medium term. The trendline has been broken, so a new upward phase in the euro may be expected.

On Wednesday, the EUR/USD pair may continue its upward movement, as the key level at 1.1666 and the trendline have been breached. The flow of information from the U.S. continues to prompt market participants to engage in renewed dollar selling.

On the 5-minute timeframe, the following levels should be considered: 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. On Wednesday, there are no significant events or reports scheduled in either the Eurozone or the U.S. However, this does not mean the dollar cannot fall again.

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.