Trading plan for EUR/USD on May 16. Simple tips for beginners
May 15, 2023 9:23 pm
Analysis of trades on May 15
EUR/USD 30M chart
The EUR/USD currency pair attempted to initiate an upward correction on Monday, but it was unsuccessful. The volatility for the day was a mere 45 pips, indicating virtually no movement. For the most part of the day, the pair moved sideways, which can be clearly seen on the 5-minute timeframe. There was virtually no macroeconomic data on Monday. A report on German industrial production was released in the morning, which was almost twice as bad as forecasts. Still, it had no effect on the Euro. Also, several speeches by Federal Reserve representatives took place during the day, but again there was no reaction to them. Hence, no significant information was relayed to the market by the members of the monetary committee. Admittedly, resonant statements are extremely rare.
EUR/USD 5M chart
On the 5-minute timeframe, it’s apparent that there was virtually no activity on Monday. During the European trading session, the pair barely broke through the area of 1.0857-1.0867, but for the rest of the day, it hovered just above this area. Although traders received a buy signal, it neither yielded profits nor incurred losses due to the lack of market movements. It was possible to exit trades at any point with no significant outcome, as the pair essentially flatlined all day. No sell signals were generated.
Trading strategy for Tuesday:
On the 30-minute timeframe, the pair was generally trending downward. For the first time in a while, the pair may exhibit a significant downtrend, which aligns with the technical analysis. We have been anticipating the dollar’s strength for a while, and it seems to be materializing. On the 5-minute timeframe on Tuesday, there may be the following key levels: 1.0692, 1.0737, 1.0792, 1.0857-1.0867, 1.0920-1.0933, 1.0965-1.0980, 1.1038, 1.1070. If the price moves 15 pips in the favorable direction, you can adjust the Stop Loss to breakeven.
On Tuesday, the European Union is slated to publish the second estimate of Q1 GDP. However, we expect that the ZEW Economic Sentiment Index in Germany may have a more significant impact on trader sentiment and potentially trigger market reactions. In the US, there will be reports on industrial production and retail sales, as well as several speeches by Federal Reserve committee members. However, we should remember that impactful statements are infrequent. Overall, we believe that tomorrow’s events are less likely to trigger significant market movements, although volatility should somewhat increase.
Key rules of the trading system:
The strength of a signal is assessed by the time it took to form the signal (bounce or breakout of a level). The shorter the time required, the stronger the signal.
If two or more false signal trades were opened around any level, all subsequent signals from that level should be ignored.
In a flat market, any pair can generate a lot of false signals or not generate them at all. However, it’s best to stop trading at the first signs of a flat market.
Trades are opened during the period between the start of the European session and the middle of the American session, when all trades should be manually closed.
On the 30-minute timeframe, trading based on MACD signals should only be done amid high volatility and a definite trend, which is confirmed by a trend line or a trend channel.
If two levels are too close to each other (from 5 to 15 pips), they should be considered as a support or resistance zone.
How to read charts:
Support and resistance price levels are targets when opening long or short positions. Take Profit levels can be placed around them.
Red lines represent channels or trend lines that display the current trend and indicate the preferred direction for trading.
MACD indicator (14,22,3) – histogram and signal line – is an auxiliary indicator that can also be used as a source of signals.
Important speeches and reports (always included in the news calendar) can significantly influence the movement of the currency pair. Therefore, one should trade very cautiously during their release or exit the market to avoid sharp price reversals against the previous movement.
Beginning traders should remember that not every trade can be profitable. Developing a clear strategy and practicing sound money management are the key to sustainable trading success.
The material has been provided by InstaForex Company – www.instaforex.com
Analysis of trades on May 15
EUR/USD 30M chart
The EUR/USD currency pair attempted to initiate an upward correction on Monday, but it was unsuccessful. The volatility for the day was a mere 45 pips, indicating virtually no movement. For the most part of the day, the pair moved sideways, which can be clearly seen on the 5-minute timeframe. There was virtually no macroeconomic data on Monday. A report on German industrial production was released in the morning, which was almost twice as bad as forecasts. Still, it had no effect on the Euro. Also, several speeches by Federal Reserve representatives took place during the day, but again there was no reaction to them. Hence, no significant information was relayed to the market by the members of the monetary committee. Admittedly, resonant statements are extremely rare.
EUR/USD 5M chart
On the 5-minute timeframe, it’s apparent that there was virtually no activity on Monday. During the European trading session, the pair barely broke through the area of 1.0857-1.0867, but for the rest of the day, it hovered just above this area. Although traders received a buy signal, it neither yielded profits nor incurred losses due to the lack of market movements. It was possible to exit trades at any point with no significant outcome, as the pair essentially flatlined all day. No sell signals were generated.
Trading strategy for Tuesday:
On the 30-minute timeframe, the pair was generally trending downward. For the first time in a while, the pair may exhibit a significant downtrend, which aligns with the technical analysis. We have been anticipating the dollar’s strength for a while, and it seems to be materializing. On the 5-minute timeframe on Tuesday, there may be the following key levels: 1.0692, 1.0737, 1.0792, 1.0857-1.0867, 1.0920-1.0933, 1.0965-1.0980, 1.1038, 1.1070. If the price moves 15 pips in the favorable direction, you can adjust the Stop Loss to breakeven.
On Tuesday, the European Union is slated to publish the second estimate of Q1 GDP. However, we expect that the ZEW Economic Sentiment Index in Germany may have a more significant impact on trader sentiment and potentially trigger market reactions. In the US, there will be reports on industrial production and retail sales, as well as several speeches by Federal Reserve committee members. However, we should remember that impactful statements are infrequent. Overall, we believe that tomorrow’s events are less likely to trigger significant market movements, although volatility should somewhat increase.
Key rules of the trading system:
How to read charts:
Support and resistance price levels are targets when opening long or short positions. Take Profit levels can be placed around them.
Red lines represent channels or trend lines that display the current trend and indicate the preferred direction for trading.
MACD indicator (14,22,3) – histogram and signal line – is an auxiliary indicator that can also be used as a source of signals.
Important speeches and reports (always included in the news calendar) can significantly influence the movement of the currency pair. Therefore, one should trade very cautiously during their release or exit the market to avoid sharp price reversals against the previous movement.
Beginning traders should remember that not every trade can be profitable. Developing a clear strategy and practicing sound money management are the key to sustainable trading success.
The material has been provided by InstaForex Company – www.instaforex.com
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