Analysis of Monday's Trades

1H Chart of EUR/USD

On Monday, the EUR/USD currency pair exhibited mixed movements. Initially, the price dropped before rising again, only to experience a more significant decline later on. These fluctuations occurred without any fundamental or macroeconomic drivers. It's important to note that technical corrections do not necessarily require macroeconomic data releases or major speeches from key policymakers. Currently, the market is influenced by Donald Trump, who consistently generates a stream of news. However, predicting how the market reacts to these developments is challenging, even in hindsight, as Trump can make two contradictory decisions within a single day. Therefore, it doesn't make much sense to base forecasts solely on fundamentals at this time. The focus should remain on the ongoing correction and technical analysis.

The correction is indicated by the ascending trendline. With the FOMC meeting scheduled for tomorrow, a trend reversal is possible. Additionally, the ECB meeting on Thursday will be crucial.

5M Chart of EUR/USD

On the 5-minute timeframe, Monday featured the formation of two nearly perfect trading signals. During the European session, the price rebounded from the 1.0451 level with minimal deviation and subsequently rose to 1.0526. A reversal occurred at this level as well, and the price eventually returned to the 1.0433-1.0451 range overnight. Novice traders could have secured a profit of 80-100 pips from just these two trades.

Trading Strategy for Tuesday:

On the hourly timeframe, the EUR/USD pair is currently in a medium-term downtrend, although there is a local upward correction underway. A decline in the euro is still anticipated, as the fundamental and macroeconomic conditions continue to support the US dollar. Nevertheless, we should wait for the completion of this upward correction, which will be confirmed if the price breaks below the trendline.

On Tuesday, the pair's decline may resume since the price has risen sufficiently without a downward correction. However, today's movements will likely hinge solely on technical factors.

On the 5-minute timeframe, the following levels should be noted: 1.0156, 1.0221, 1.0269-1.0277, 1.0334-1.0359, 1.0433-1.0451, 1.0526, 1.0596, 1.0678, 1.0726-1.0733, 1.0797-1.0804, 1.0845-1.0851. For Tuesday, important events to watch include the U.S. Durable Goods Orders report, which is relatively significant, and a speech by Christine Lagarde; however, it is unlikely that her remarks will provide any major surprises for the market.

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.