Analysis of Wednesday's Trades

1H Chart of EUR/USD

On Wednesday, the EUR/USD currency pair traded with low volatility for most of the day and showed no intention of moving in either direction. However, by the end of the day, the market woke up, and traders again aggressively started selling the dollar. As we've said many times, no fundamental or macroeconomic backdrop is currently needed for the dollar to continue falling. The dollar can decline at any moment simply because Donald Trump is still the President of the United States. This is the key factor for the market, and all of Trump's actions and decisions so far have led only to the continued depreciation of the U.S. currency.

Currency depreciation is not always bad for the economy and its prospects. However, Trump's policies consistently provoke the dollar's decline. What interests us most is where the dollar is headed next.

5M Chart of EUR/USD

On the 5-minute timeframe, many trading signals were generated on Wednesday and during the night into Thursday. Five signals were formed around the 1.1609 level alone. Four sell signals duplicated each other, resulting in one short position, which ended in a loss. Then, a buy signal emerged, triggering a strong upward movement that ended near the 1.1704 level. Just like that, the dollar lost another 100 pips out of nowhere.

Trading Strategy for Thursday:

On the hourly timeframe, the EUR/USD pair remains in an uptrend, which began under Trump and will likely only end under the next president. For the U.S. dollar to continue falling regularly, it's still sufficient that Trump is in office. Even without news from Trump, this does not guarantee the dollar's stability.

On Thursday, the pair may continue to rise simply because no justification is needed for the current trend. Today is likely to be another quiet day in terms of events, so trading can be based on technical signals.

On the 5-minute TF we should consider the levels of 1.1132-1.1140, 1.1198-1.1218, 1.1267-1.1292, 1.1354-1.1363, 1.1413, 1.1455-1.1474, 1.1527, 1.1561-1.1571, 1.1609, 1.1666, 1.1700, 1.1802, 1.1851. On Wednesday, the only significant events were the U.S. GDP reports and durable goods orders, but what impact could they possibly have if the dollar lost around 100 pips in just the last 12 hours for no apparent reason?

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.