Analysis of Wednesday's Trades

1H Chart of EUR/USD

On Wednesday, the EUR/USD currency pair traded in a mixed manner. During the day, the price changed direction several times, and macroeconomic data did not trigger these reversals. The market remains in a state of unrest, and a continuous stream of news is coming from the White House. In our view, most of the information from Donald Trump isn't worth paying attention to. However, traders seem to think otherwise. Initially, the dollar fell on news of Powell's possible dismissal, then rose on reports that he would remain in office. Weak business activity data from the Eurozone was ignored, and the same happened with weak business activity data from the U.S. Overall, the market remains in chaos and confusion that has little to do with macroeconomic data.

5M Chart of EUR/USD

In the 5-minute timeframe, it's visible how often the price changed direction throughout the day and how it interacted with technical levels. We would say that all technical levels were essentially ignored — but that's no surprise since technicals only work when market participants pay attention to them. Currently, the market is focused solely on Donald Trump and his high-profile and contradictory decisions. Yesterday and the day before, the dollar slightly strengthened, but today, it may very well plunge again.

Trading Strategy for Thursday:

The EUR/USD pair maintains an upward trend on the hourly timeframe. The new week started with a fresh rally, but by Tuesday, Trump had triggered a pullback. Overall, the market remains strongly biased against the U.S. dollar and all things American. However, if Trump chooses to de-escalate the trade conflict he initiated, the dollar may improve its position soon.

On Thursday, the pair may again move in any direction, as price action remains entirely dependent on Trump's statements and decisions. No one can predict what the U.S. president might say today, and the market still pays no attention to macroeconomic data.

In the 5-minute timeframe, the following levels should be monitored for trading: 1.0940–1.0952, 1.1011, 1.1091, 1.1132–1.1140, 1.1189–1.1191, 1.1275–1.1292, 1.1330, 1.1413–1.1424, 1.1474–1.1481, 1.1513, 1.1548, 1.1571, 1.1607–1.1622, 1.1666, 1.1689. On Thursday, the U.S. will publish fairly significant reports on new home sales and durable goods orders. However, we doubt the market will want to respond to these particular reports or even pay attention to them.

Core Trading System Rules:

1. Signal Strength: The shorter the time it takes for a signal to form (a rebound or breakout), the stronger the signal.
2. False Signals: If two or more trades near a level result in false signals, subsequent signals from that level should be ignored.
3. Flat Markets: In flat conditions, pairs may generate many false signals or none at all. It's better to stop trading at the first signs of a flat market.
4. Trading Hours: Open trades between the start of the European session and the middle of the US session, then manually close all trades.
5. MACD Signals: On the hourly timeframe, trade MACD signals only during periods of good volatility and a clear trend confirmed by trendlines or trend channels.
6. Close Levels: If two levels are too close (5–20 pips apart), treat them as a support or resistance zone.
7. Stop Loss: Set a Stop Loss to breakeven after the price moves 15 pips in the desired direction.

Key Chart Elements:

Support and Resistance Levels: These are target levels for opening or closing positions and can also serve as points for placing Take Profit orders.

Red Lines: Channels or trendlines indicating the current trend and the preferred direction for trading.

MACD Indicator (14,22,3): A histogram and signal line used as a supplementary source of trading signals.

Important Events and Reports: Found in the economic calendar, these can heavily influence price movements. Exercise caution or exit the market during their release to avoid sharp reversals.

Forex trading beginners should remember that not every trade will be profitable. Developing a clear strategy and practicing proper money management are essential for long-term trading success.