Trading plan for EUR/USD on October 10. Analysis and simple tips for beginners
October 9, 2023 8:25 pm
Analysis of Monday trades
EUR/USD 1H chart
The EUR/USD pair demonstrated perplexing movements on Monday, challenging to characterize in one word. A downward correction was anticipated due to the European currency’s illogical rise amidst strong American statistics. Post-correction, the pair embarked on baffling movements, neglecting established levels and displaying overt chaos on the youngest TF, despite an ostensibly logical hourly chart.
Following a correction against its illogical Friday rise, the pair resumed its upward trajectory, given the yet incomplete ascending correction against a 2-month decline. A resumption of the pair’s decline is anticipated in the coming weeks. Today saw no macroeconomic statistics or fundamental backdrop in either the USA or the EU, with only Germany releasing an industrial production report, which did not impact the pair’s movement.
EUR/USD 5M chart
On Monday, the EUR/USD pair retracted downwards on the 5-minute TF initially, stagnated in a flat zone for approximately 5-6 hours, and then attempted to resume its upward movement. All trading signals for the day were formed during the 5-6 hour flat, all around the level of 1.0533, which had previously served as support or resistance to the price. However, traders overlooked it today, resulting in a plethora of false signals. Consequently, novice traders might have acted on the first two of them. Unfortunately, not one allowed even for a break-even Stop Loss to be set. While today was unsuccessful, we had warned of weak volatility and a lack of trend movement yesterday.
Trading idea for Tuesday
On the hourly timeframe, the pair continues to shape a new wave of ascending correction. In the medium-term perspective, we anticipate a fall of the euro in almost any scenario, but a purely technical rise may continue for the next couple of days. On the 5-minute TF tomorrow, the key levels can be found at 1.0391, 1.0433, 1.0451, 1.0491, 1.0533, 1.0611-1.0618, 1.0673, 1.0733, 1.0767-1.0781, and 1.0835. Upon passing 15 points in the correct direction, a break-even Stop Loss can be set. The only significant event on Tuesday is a speech by Christine Lagarde, the ECB President. However, we’ve repeatedly stated that the market currently has a clear understanding of what to expect from the ECB and the Fed, so the representatives’ speeches do not carry much intrigue.
Basic rules of a trading system:
1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.
2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.
3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.
4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, post which all open trades should be manually closed.
5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trend line or trend channel.
6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.
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 represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.
The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.
Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.
Beginning traders should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.
The material has been provided by InstaForex Company – www.instaforex.com
Analysis of Monday trades
EUR/USD 1H chart
The EUR/USD pair demonstrated perplexing movements on Monday, challenging to characterize in one word. A downward correction was anticipated due to the European currency’s illogical rise amidst strong American statistics. Post-correction, the pair embarked on baffling movements, neglecting established levels and displaying overt chaos on the youngest TF, despite an ostensibly logical hourly chart.
Following a correction against its illogical Friday rise, the pair resumed its upward trajectory, given the yet incomplete ascending correction against a 2-month decline. A resumption of the pair’s decline is anticipated in the coming weeks. Today saw no macroeconomic statistics or fundamental backdrop in either the USA or the EU, with only Germany releasing an industrial production report, which did not impact the pair’s movement.
EUR/USD 5M chart
On Monday, the EUR/USD pair retracted downwards on the 5-minute TF initially, stagnated in a flat zone for approximately 5-6 hours, and then attempted to resume its upward movement. All trading signals for the day were formed during the 5-6 hour flat, all around the level of 1.0533, which had previously served as support or resistance to the price. However, traders overlooked it today, resulting in a plethora of false signals. Consequently, novice traders might have acted on the first two of them. Unfortunately, not one allowed even for a break-even Stop Loss to be set. While today was unsuccessful, we had warned of weak volatility and a lack of trend movement yesterday.
Trading idea for Tuesday
On the hourly timeframe, the pair continues to shape a new wave of ascending correction. In the medium-term perspective, we anticipate a fall of the euro in almost any scenario, but a purely technical rise may continue for the next couple of days. On the 5-minute TF tomorrow, the key levels can be found at 1.0391, 1.0433, 1.0451, 1.0491, 1.0533, 1.0611-1.0618, 1.0673, 1.0733, 1.0767-1.0781, and 1.0835. Upon passing 15 points in the correct direction, a break-even Stop Loss can be set. The only significant event on Tuesday is a speech by Christine Lagarde, the ECB President. However, we’ve repeatedly stated that the market currently has a clear understanding of what to expect from the ECB and the Fed, so the representatives’ speeches do not carry much intrigue.
Basic rules of a trading system:
1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.
2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.
3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.
4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, post which all open trades should be manually closed.
5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trend line or trend channel.
6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.
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 represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.
The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.
Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.
Beginning traders should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.
The material has been provided by InstaForex Company – www.instaforex.com
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