Analysis of Thursday's Trades

1H Chart of EUR/USD

On Thursday, the EUR/USD currency pair returned to the 1.0451 level. The local upward trend remains intact as the price continues to trade above the trendline. There were no fundamental reasons for the euro to rise yesterday; however, such reasons are not necessary during a corrective move. A correction is essentially a period when market participants close their trades to lock in profits. The balance of supply and demand changes, which leads to movement. In this case, the current movement is driven by position closures rather than new trades initiated based on specific information.

Yesterday, there were no significant events in either the US or the Eurozone. Donald Trump continues to issue statements and directives to various countries, advising them on how to avoid being placed on the US "blacklist," but the market has largely stopped reacting to his comments. As a result, the correction persists, and there are currently no indications of a downtrend resuming.

5M Chart of EUR/USD

On the 5-minute time frame on Thursday, only one trading signal was generated. The price bounced off the 1.0433-1.0451 area but did not show a significant downward movement. The signal appeared relatively late in the day, which likely caused many traders to miss it.

Trading Strategy for Friday:

On the hourly time frame, the EUR/USD pair is currently in a medium-term downtrend, although there is a local uptrend. As previously mentioned, the euro is expected to weaken, as the fundamental and macroeconomic conditions continue to favor the US dollar. The market is currently undergoing a correction that is supported by the trendline. The end of this correction will be confirmed once the trendline is broken.

Movements in the market on Friday are expected to be relatively modest, with the euro likely continuing its slow upward trend. If the euro breaks above the 1.0451 level, it could lead to further upward movement. However, a significant rally for the pair seems unlikely.

On the 5-minute time frame, the following levels should be monitored: 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. Additionally, on Friday, PMI reports for the services and manufacturing sectors will be released in Germany, the Eurozone, and the US. These reports are significant data points, and their release may trigger market reactions during both the European and American trading sessions.

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 speeches and reports, which are consistently featured in the news calendar, can significantly influence the movement of a currency pair. Therefore, during their release, it is advisable to trade with caution or consider exiting the market to avoid potential sharp price reversals against the prior trend.

Beginners in the Forex market should understand that not every transaction will be profitable. Developing a clear trading strategy and practicing effective money management are crucial for achieving long-term success in trading.