Trading plan for EUR/USD on August 14. Simple tips for beginners
August 14, 2023 11:20 am
Analyzing Friday’s trades:
EUR/USD on 30M chart
On Friday, EUR/USD showed quite modest movements. Thursday was the only day of the week that was more or less volatile. On average, the pair moved about 60-70 points a day, which isn’t much. On Friday, the pair remained stagnant for over half the day. The dollar managed to edge up in the latter half of the day. However, in recent weeks, the overall movement looked more like a flat trend. If we put it another way, the pair is moving within a sideways channel without clear boundaries. Yet, this description doesn’t change the main point – the pair is moving sideways.
Several minor reports were released in the US, which aided the dollar’s growth. To be precise, there was only one relatively important report – the Producer Price Index. It exceeded the forecasted value by only 0.1%, but that was enough for the market to start buying the US dollar, given the growing chances of more rate hikes.
EUR/USD on 5M chart
There were only two entry points on the 5-minute chart, neither of which were promising. First, the pair rebounded from the 1.0981 level, then surpassed the 1.0971-1.0981 area. In the first instance, traders could only gain 15 points, enough to set a Stop Loss at breakeven, at which the trade closed. In the second instance, the pair fell by about 20 points, which traders could potentially capitalize on, as the trade should have been manually closed towards the evening.
Trading tips on Monday:
On the 30M chart, the pair continues to correct, and is generally trading in a sideways channel. We still expect it to fall since it is significantly overbought in the long term and also lacks significant reasons to enter a new rally. There are hardly any important reports this week, so in theory, nothing should hinder the decline. The main thing is to break out of the flat. The key levels on the 5M chart are 1.0761, 1.0835, 1.0871, 1.0901-1.0904, 1.0936, 1.0971-1.0977, 1.1011, 1.1038, 1.1091, 1.1132-1.1145, 1.1184, 1.1241. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. On Thursday, there are no important reports lined up in the EU or the US. Most likely, we should brace ourselves for another low-volatility day, predominantly marked by sideways movement.
Basic trading rules:
1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a break). The shorter this period, the stronger the signal.
2) If two or more trades were opened at some level following false signals, i.e. those signals that did not lead the price to Take Profit level or the nearest target levels, then any consequent signals near this level should be ignored.
3) During the flat trend, any currency pair may form a lot of false signals or do not produce any signals at all. In any case, the flat trend is not the best condition for trading.
4) Trades are opened in the time period between the beginning of the European session and until the middle of the American one when all deals should be closed manually.
5) We can pay attention to the MACD signals in the 30M time frame only if there is good volatility and a definite trend confirmed by a trend line or a trend channel.
6) If two key levels are too close to each other (about 5-15 pips), then this is a support or resistance area.
How to read charts:
Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.
Red lines are channels or trend lines that display the current trend and show which direction is better to trade.
MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross. This indicator is better to be used in combination with trend channels or trend lines.
Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair. Therefore, during such events, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.
Beginners should remember that every trade cannot be profitable. The development of a reliable 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
Analyzing Friday’s trades:
EUR/USD on 30M chart
On Friday, EUR/USD showed quite modest movements. Thursday was the only day of the week that was more or less volatile. On average, the pair moved about 60-70 points a day, which isn’t much. On Friday, the pair remained stagnant for over half the day. The dollar managed to edge up in the latter half of the day. However, in recent weeks, the overall movement looked more like a flat trend. If we put it another way, the pair is moving within a sideways channel without clear boundaries. Yet, this description doesn’t change the main point – the pair is moving sideways.
Several minor reports were released in the US, which aided the dollar’s growth. To be precise, there was only one relatively important report – the Producer Price Index. It exceeded the forecasted value by only 0.1%, but that was enough for the market to start buying the US dollar, given the growing chances of more rate hikes.
EUR/USD on 5M chart
There were only two entry points on the 5-minute chart, neither of which were promising. First, the pair rebounded from the 1.0981 level, then surpassed the 1.0971-1.0981 area. In the first instance, traders could only gain 15 points, enough to set a Stop Loss at breakeven, at which the trade closed. In the second instance, the pair fell by about 20 points, which traders could potentially capitalize on, as the trade should have been manually closed towards the evening.
Trading tips on Monday:
On the 30M chart, the pair continues to correct, and is generally trading in a sideways channel. We still expect it to fall since it is significantly overbought in the long term and also lacks significant reasons to enter a new rally. There are hardly any important reports this week, so in theory, nothing should hinder the decline. The main thing is to break out of the flat. The key levels on the 5M chart are 1.0761, 1.0835, 1.0871, 1.0901-1.0904, 1.0936, 1.0971-1.0977, 1.1011, 1.1038, 1.1091, 1.1132-1.1145, 1.1184, 1.1241. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. On Thursday, there are no important reports lined up in the EU or the US. Most likely, we should brace ourselves for another low-volatility day, predominantly marked by sideways movement.
Basic trading rules:
1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a break). The shorter this period, the stronger the signal.
2) If two or more trades were opened at some level following false signals, i.e. those signals that did not lead the price to Take Profit level or the nearest target levels, then any consequent signals near this level should be ignored.
3) During the flat trend, any currency pair may form a lot of false signals or do not produce any signals at all. In any case, the flat trend is not the best condition for trading.
4) Trades are opened in the time period between the beginning of the European session and until the middle of the American one when all deals should be closed manually.
5) We can pay attention to the MACD signals in the 30M time frame only if there is good volatility and a definite trend confirmed by a trend line or a trend channel.
6) If two key levels are too close to each other (about 5-15 pips), then this is a support or resistance area.
How to read charts:
Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.
Red lines are channels or trend lines that display the current trend and show which direction is better to trade.
MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross. This indicator is better to be used in combination with trend channels or trend lines.
Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair. Therefore, during such events, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.
Beginners should remember that every trade cannot be profitable. The development of a reliable 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
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