Analysis of Thursday's Trades

1H Chart of EUR/USD

On Thursday, the EUR/USD currency pair showed very low volatility and limited movement. There were very few significant events or reports concerning the euro or the dollar throughout the day. The only notable report was on Eurozone retail sales, which, as expected, came in weaker than forecasted. This led to a small decline in the euro during the first half of the day, which was reasonable.

We had anticipated that the Bank of England's meeting, its results, and Andrew Bailey's speech might trigger a market reaction in the euro. However, this did not occur. The price tested the 1.0359 level, rebounded, and remained in an upward correction on the daily timeframe. As a result, nothing significant changed during Thursday's session.

5M Chart of EUR/USD

On the 5-minute timeframe, a single trading signal appeared on Thursday. During the European session, the price declined to the 1.0334–1.0359 range, where it traded for about 5 to 6 hours. Eventually, a bounce occurred; however, the signal was weak and lacked clarity. Despite this, novice traders who entered long positions based on the signal would have secured a small profit, as the currency pair moved away from this area by the end of the day.

Trading Strategy for Friday:

On the hourly timeframe, EUR/USD is currently in a medium-term downtrend. Although the local uptrend was invalidated, it has since resumed. We expect further declines in the euro, as the fundamental and macroeconomic conditions continue to favor the U.S. dollar. However, the upward correction on the daily timeframe may still persist for several weeks.

On Friday, the movements of the pair will largely depend on U.S. macroeconomic data, which means both a sharp decline and a strong rally are possible outcomes.

For the 5-minute timeframe, key levels to watch include: 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. No significant economic events are scheduled in the Eurozone on Friday. In contrast, the U.S. will release the highly anticipated Nonfarm Payrolls, unemployment rate, and the University of Michigan Consumer Sentiment Index. As a result, the main market movements and a potential surge in volatility are expected 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.