Analysis of Wednesday's Trades

1H Chart of EUR/USD

On Wednesday, the EUR/USD currency pair attempted to begin a new round of downward correction, and the result of this attempt is visible on any timeframe. The U.S. dollar, although it appreciated, did so very weakly and for a short period of time. Notably, yesterday's EUR/USD movements can easily be tied to the macroeconomic background, which, however, was very weak.

In the morning, the Eurozone unemployment report came out, which unexpectedly rose to 6.3%. In the afternoon, the U.S. ADP private sector employment change report was released, and completely flopped. Therefore, it was logical that the euro declined in the first half of the day and the U.S. dollar weakened in the second. However, in general, the macroeconomic backdrop still cannot override the broader fundamental picture.

5M Chart of EUR/USD

On the 5-minute timeframe, two trading signals were formed on Wednesday. During the night, the price rebounded from the 1.1808 level and then dropped toward the 1.1740–1.1745 range. With minimal deviation, this range was tested precisely when the disastrous ADP report was published in the U.S.

Thus, novice traders could have taken advantage of this buy signal, and by the end of the day, the price had increased by approximately 40 pips.

Trading Strategy for Thursday:

On the hourly timeframe, the EUR/USD pair continues its uptrend, despite breaking through the ascending trendline. In general, the fact that Trump is the U.S. President still seems sufficient for the dollar to consistently weaken. Naturally, there will be occasional corrections, but the overall fundamental background remains such that expecting strong dollar growth is still extremely difficult.

On Thursday, the EUR/USD pair may continue its downward correction, as the trendline has been broken. However, today we expect Non-Farm Payrolls and unemployment data. So, the question is: Will the dollar rise if both reports turn out to be weak?

On the 5-minute TF, the following levels should be considered: 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, 1.1740-1.1745, 1.1808, 1.1851, 1.1908. On Thursday, the final June services PMI data for the Eurozone and Germany will be released. However, we believe these reports are unlikely to spark significant interest. In the U.S., three critical reports are due: NonFarm Payrolls, unemployment rate, and ISM Services PMI. We believe the market reaction to these data may be very strong.

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.