Trading plan for EUR/USD on June 16. Simple tips for beginners
June 16, 2023 3:23 am
Analyzing Thursday’s trades:
EUR/USD on 30M chart
The EUR/USD pair is holding firm to gains. It is difficult to determine the exact reason for this as there were several significant events influencing the market. The results of the Federal Reserve meeting were announced on Wednesday evening, and Fed Chairman Jerome Powell gave a speech. The European Central Bank meeting results and ECB President Christine Lagarde’s speech took place on Thursday. The US trading session opened, and the pair suddenly surged, indicating the market’s reaction to the Fed meeting. In addition, several reports were published in the United States that did not support the greenback, which could also be related to the pair’s growth.
Let’s focus on the most important aspects: the outcome of the Fed meeting can be considered “neutral,” the ECB meeting was “moderately hawkish,” and the US data are “bearish” for the dollar. Thus, overall, the pair’s movement on Thursday was quite logical. From a technical perspective, the pair extends its corrective movement after a month-long decline. We expect this correction to end soon.
EUR/USD on 5M chart
On the 5-minute chart, there were calm movements during the European trading session, but a new “storm” began with the opening of the US session. There were no signals during the European session, but the pair broke through the 1.0857-1.0867 range during the US session, indicating that novice traders should have opened long positions. Shortly after, the pair reached the 1.0920 level, so the long position could be closed, resulting in a profit of about 40 pips. Since the day was coming to an end, it was not advisable to consider opening new positions or wait for a sell signal to close long positions.
Trading tips on Friday:
On the 30-minute chart, the pair continues to form an uptrend. In the medium term, we anticipate a resumption of the downtrend, but it may take some time to bring back this trend. The most significant events of this week have already been accounted for. The key levels on the 5M chart are 1.0607-1.0613, 1.0673, 1.0733, 1.0761, 1.0803, 1.0857-1.0867, 1.0918-1.0933, 1.0980, 1.1038. When a move of 15 pips in the right direction occurs, a stop loss can be set at breakeven. On Friday, only a couple of secondary reports are scheduled for release. The eurozone will release the second estimate of the inflation indicator for May, which is unlikely to differ significantly from the first estimate. In the US, the University of Michigan Consumer Sentiment Index will be released. Market reaction will only be possible if the actual values deviate from the forecast.
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 Thursday’s trades:
EUR/USD on 30M chart
The EUR/USD pair is holding firm to gains. It is difficult to determine the exact reason for this as there were several significant events influencing the market. The results of the Federal Reserve meeting were announced on Wednesday evening, and Fed Chairman Jerome Powell gave a speech. The European Central Bank meeting results and ECB President Christine Lagarde’s speech took place on Thursday. The US trading session opened, and the pair suddenly surged, indicating the market’s reaction to the Fed meeting. In addition, several reports were published in the United States that did not support the greenback, which could also be related to the pair’s growth.
Let’s focus on the most important aspects: the outcome of the Fed meeting can be considered “neutral,” the ECB meeting was “moderately hawkish,” and the US data are “bearish” for the dollar. Thus, overall, the pair’s movement on Thursday was quite logical. From a technical perspective, the pair extends its corrective movement after a month-long decline. We expect this correction to end soon.
EUR/USD on 5M chart
On the 5-minute chart, there were calm movements during the European trading session, but a new “storm” began with the opening of the US session. There were no signals during the European session, but the pair broke through the 1.0857-1.0867 range during the US session, indicating that novice traders should have opened long positions. Shortly after, the pair reached the 1.0920 level, so the long position could be closed, resulting in a profit of about 40 pips. Since the day was coming to an end, it was not advisable to consider opening new positions or wait for a sell signal to close long positions.
Trading tips on Friday:
On the 30-minute chart, the pair continues to form an uptrend. In the medium term, we anticipate a resumption of the downtrend, but it may take some time to bring back this trend. The most significant events of this week have already been accounted for. The key levels on the 5M chart are 1.0607-1.0613, 1.0673, 1.0733, 1.0761, 1.0803, 1.0857-1.0867, 1.0918-1.0933, 1.0980, 1.1038. When a move of 15 pips in the right direction occurs, a stop loss can be set at breakeven. On Friday, only a couple of secondary reports are scheduled for release. The eurozone will release the second estimate of the inflation indicator for May, which is unlikely to differ significantly from the first estimate. In the US, the University of Michigan Consumer Sentiment Index will be released. Market reaction will only be possible if the actual values deviate from the forecast.
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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