Analysis of previous deals:
30M chart of the EUR/USD pair
The EUR/USD currency pair mainly moved upwards on Wednesday, but in the middle of the European trading session there was a segment during which the price jumped up and down, causing a lot of trouble and problems for traders. But first things first. We should start with the fact that the European Union published a report on industrial production today, which turned out to be much worse than analysts' forecasts. Yesterday we said that this report is unlikely to have any impact on the euro/dollar pair. And so it happened. Traders did not even notice this report. Thus, the most important and significant event of the day was Jerome Powell's speech to the US Congress, which began a couple of hours ago. Based on the pair's movement in the past few hours, Federal Reserve Chairman Jerome Powell has not reported anything important to Congress. Or, nothing is known about this yet, since it is unlikely that Powell's speech is being broadcast live from Congress. Thus, it is likely that what Powell said will be known in the morning. Then you should expect a reaction from traders.
5M chart of the EUR/USD pair
Four signals were formed on the 5-minute timeframe during the day, which should have attracted the attention of novice traders. The first signal, like the second, like the third, formed around the level of 1.1784, which is losing its relevance from today. However, the pair initially overcame it, then bounced off it, and then made a false breakout, which novice traders could falsely take as a sell signal. Thus, the open deal to buy at the very beginning of the European session did not bring any profit, but only losses worth 13 points. Also, the second short position became unprofitable, which newbies could open since the quotes settled below the level of 1.1784. The loss on it was worth 16 points. Unfortunately, this happens. However, the price went beyond the level of 1.1784 again, which should have been worked out with a long position, which eventually covered all the losses from the previous two deals. The price moved up by more than 40 points in total, which was enough for the long position to be closed by Take Profit. Thus, at the end of the day, beginners could even make a small profit, although the morning trade was certainly terrible.
Trading tips for Thursday:
The upward trend was canceled on the 30-minute timeframe, but the new one was not formed. Thus, the pair can continue to move in an absolutely random manner in the near future, that is, in different directions without any logic. At this time, traders do not have a clear trading strategy, so the pair can be thrown from side to side. Volatility can be high due to strong macroeconomic or fundamental background and weak if news and publications are not available. On the 5-minute timeframe, it is recommended to trade from the levels 1.1772, 1.1807, 1.1851 and 1.1880. Take Profit, as before, is set at a distance of 30-40 points. Stop Loss - to breakeven when the price passes in the right direction by 15-20 points. At the 5M TF, the target can be the nearest level if it is not too close or too far away. If located - then you should act according to the situation. There will be no important publications or events in the European Union on Thursday, meanwhile, Jerome Powell's second speech in Congress will take place in the United States. In general, we advise you to trace the essence of Powell's speech tomorrow morning, as the Europeans and Americans can work it out during Thursday.
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.
Up/down arrows show where you should sell or buy after reaching or breaking through particular levels.
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 announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal.
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.
The material has been provided by InstaForex Company - www.instaforex.com