Trading plan for EUR/USD on July 14. Analysis and simple tips for beginners
July 13, 2023 8:23 pm
Analysis of Thursday trades:
EUR/USD 30M chart
The EUR/USD pair demonstrated a solid growth during the fourth trading day of the week. Although volatility decreased compared to Wednesday, the pair steadily moved upward throughout the day. Even the slightest correction did not occur after yesterday’s rise. Therefore, for anyone who still has doubts about the logicality of the current movement, there is plenty of evidence every day. Specifically, today the European Union released a report on industrial production, which turned out to be weaker than the forecasted values. However, the euro did not react to this report.
In the United States, the producer price index slowed down slightly more than expected, while the number of unemployment benefit claims was slightly lower than forecasts. Overall, the data was neutral, but this “neutrality” somehow helped the euro currency once again. Thus, the market is mostly bullish every day, so the incoming data are basically ignored. Even if Christine Lagarde suddenly declares that the tightening cycle is over, the euro will still show growth in that case.
EUR/USD 5M chart
On the 5-minute time frame on Thursday, several trading signals were formed. Regardless of the debates about the logicality of the movements, their quality is commendable. It’s probably what a trader dreams of when the pair constantly moves in only one direction. Today, at the opening of the European session, there was a bounce from the level of 1.1132, after which the pair rose to the nearest target level of 1.1184. Initially, the bounce from this level forced novice traders to close their long positions with a profit of about 20 pips. However, it wasn’t advisable to rush into selling on such a strong upward trend. By the time the signal was formed, the pair had already dropped 25 pips downwards (presumably in response to the report on claims), within just 5 minutes. It was quite problematic to enter a trade in time. However, shortly after, everything fell into place when the pair consolidated above 1.1184 and continued to rise, allowing beginning traders to earn an extra 20–30 pips.
A trading strategy for Friday:
On the 30-minute timeframe, the pair continues to form a new upward trend. An ascending trend line has been formed, which is growing stronger with each passing day. Today, there were no specific reasons for the pair to rise, yet the upward movement persisted. On the 5-minute timeframe, the key levels for tomorrow are: 1.0871, 1.0901, 1.0932, 1.0971-1.0977, 1.1038, 1.1091, 1.1132, 1.1184, 1.1228, 1.1279-1.1292, and 1.1330. Once the pair moves in the correct direction by 15 pips, you can set the stop-loss to breakeven. On Friday, there are no important events scheduled in the European Union, and in the United States, only the University of Michigan’s consumer sentiment index is anticipated.
The basic principles of a trading system:
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.
Beginning traders 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
Analysis of Thursday trades:
EUR/USD 30M chart
The EUR/USD pair demonstrated a solid growth during the fourth trading day of the week. Although volatility decreased compared to Wednesday, the pair steadily moved upward throughout the day. Even the slightest correction did not occur after yesterday’s rise. Therefore, for anyone who still has doubts about the logicality of the current movement, there is plenty of evidence every day. Specifically, today the European Union released a report on industrial production, which turned out to be weaker than the forecasted values. However, the euro did not react to this report.
In the United States, the producer price index slowed down slightly more than expected, while the number of unemployment benefit claims was slightly lower than forecasts. Overall, the data was neutral, but this “neutrality” somehow helped the euro currency once again. Thus, the market is mostly bullish every day, so the incoming data are basically ignored. Even if Christine Lagarde suddenly declares that the tightening cycle is over, the euro will still show growth in that case.
EUR/USD 5M chart
On the 5-minute time frame on Thursday, several trading signals were formed. Regardless of the debates about the logicality of the movements, their quality is commendable. It’s probably what a trader dreams of when the pair constantly moves in only one direction. Today, at the opening of the European session, there was a bounce from the level of 1.1132, after which the pair rose to the nearest target level of 1.1184. Initially, the bounce from this level forced novice traders to close their long positions with a profit of about 20 pips. However, it wasn’t advisable to rush into selling on such a strong upward trend. By the time the signal was formed, the pair had already dropped 25 pips downwards (presumably in response to the report on claims), within just 5 minutes. It was quite problematic to enter a trade in time. However, shortly after, everything fell into place when the pair consolidated above 1.1184 and continued to rise, allowing beginning traders to earn an extra 20–30 pips.
A trading strategy for Friday:
On the 30-minute timeframe, the pair continues to form a new upward trend. An ascending trend line has been formed, which is growing stronger with each passing day. Today, there were no specific reasons for the pair to rise, yet the upward movement persisted. On the 5-minute timeframe, the key levels for tomorrow are: 1.0871, 1.0901, 1.0932, 1.0971-1.0977, 1.1038, 1.1091, 1.1132, 1.1184, 1.1228, 1.1279-1.1292, and 1.1330. Once the pair moves in the correct direction by 15 pips, you can set the stop-loss to breakeven. On Friday, there are no important events scheduled in the European Union, and in the United States, only the University of Michigan’s consumer sentiment index is anticipated.
The basic principles of a trading system:
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.
Beginning traders 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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