Analysis of Monday's Trades
1H Chart of EUR/USD
On Monday, the EUR/USD currency pair continued swinging wildly back and forth. What's happening across all markets now can be described in many ways: panic, chaos, madness, apocalypse. However, the core issue remains the same: there are no logical or technical movements. News is pouring in non-stop, market participants constantly shift sentiment, and price directions change just as frequently. Forecasting price movement even a day ahead seems like an impossible task.
Even yesterday, during the trading day, reports emerged that Trump might suspend all tariffs for 90 days. An hour later, the White House said the president never said that. A few hours later, it was reported that Trump plans to impose additional tariffs on China if it dares to retaliate against what the U.S. calls "fair" tariffs. Naturally, market direction changes five times a day! We are currently in the initial phase of a global trade war. High volatility will likely persist for a while, just as we warned earlier because major players and alliances are now preparing retaliatory sanctions against the U.S.
5M Chart of EUR/USD
On Monday, several trading signals were formed in the 5-minute timeframe. Trading could have been initiated from the 1.1048 level, but let's reiterate once more—movements are currently sharp and erratic. The price often pierces through multiple levels and reverses direction within the hour. Beginners in trading should exercise extreme caution at this time.
Trading Strategy for Tuesday:
In the one-hour timeframe, the EUR/USD pair continues its upward trend. It is unknown how long this will last, as no one knows how many more tariffs Trump plans to introduce. Multiple escalations in the trade war cannot be ruled out since many countries are preparing mirror-like retaliations against the U.S. Trump has already said that any response will provoke new tariffs from Washington.
On Tuesday, markets will likely remain in a state of shock. We won't attempt to forecast movements, as it is quite challenging to describe what is happening globally.
For the 5-minute timeframe, relevant levels to watch on Tuesday are: 1.0596, 1.0678, 1.0726–1.0733, 1.0797–1.0804, 1.0859–1.0861, 1.0888–1.0896, 1.0940–1.0952, 1.1011, 1.1048, 1.1091, 1.1132–1.1140, 1.1189–1.1191, 1.1275–1.1292.
On Tuesday, no macroeconomic reports will be released in either the U.S. or the Eurozone—but at this point, they are hardly relevant. The market will continue to focus exclusively on any and all news related to the global trade war and react only to that.
Core Trading System Rules:
- Signal Strength: The shorter the time it takes for a signal to form (a rebound or breakout), the stronger the signal.
- False Signals: If two or more trades near a level result in false signals, subsequent signals from that level should be ignored.
- 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.
- Trading Hours: Open trades between the start of the European session and the middle of the US session, then manually close all trades.
- 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.
- Close Levels: If two levels are too close (5–20 pips apart), treat them as a support or resistance zone.
- 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.
