Analysis of Wednesday's Trades

1H Chart of EUR/USD

The EUR/USD currency pair traded flat on Wednesday, breaking the ascending trend line. However, it is important to note that a trendline breakout in a flat market is often a false signal of a trend reversal. The current technical outlook for the euro is quite complex. On one hand, the price has been hovering near the upper boundary of the range on the daily chart for the past two weeks. On the other hand, it has struggled to continue rising, as market conditions remain stagnant. The pair has been flat for a week, and the trendline has been breached. Therefore, we recommend focusing not on the trendline break but rather on the 1.0451 level. While this is not the most critical level, it serves as the lower boundary of the local flat established this week. There was no significant fundamental or macroeconomic news from the Eurozone or the U.S. on Wednesday.

5M Chart of EUR/USD

On the 5-minute chart, two trading signals emerged as the price tested the 1.0526 level twice and rebounded both times. This level represents the upper boundary of the range on the daily chart. Since the price has been unable to break above it, each rebound provided an opportunity for short positions. Given the low volatility, there were no significant price declines, but each signal still allowed for small gains of a few dozen pips.

Trading Strategy for Thursday:

On the hourly timeframe, EUR/USD remains in a medium-term downtrend and a local uptrend. As before, we expect the euro to decline since the fundamental and macroeconomic backdrop favors the U.S. dollar more than the euro. Before the broader downtrend resumes, we may see several short-term trends forming. However, we anticipate a decline soon.

Movements on Thursday may remain weak. Even breaking the trendline might not significantly affect volatility, as the price remains within a range-bound market.

On the 5-minute chart, key levels to consider are 1.0156, 1.0221, 1.0269-1.0277, 1.0334-1.0359, 1.0433-1.0451, 1.0526, 1.0596, 1.0678, 1.0726-1.0733, 1.0797-1.0804, and 1.0845-1.0851. The Eurozone's economic calendar for Thursday remains uneventful, while in the U.S., reports on GDP, durable goods orders, and jobless claims will be released. These figures could trigger volatility during the U.S. trading session.

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.