Friday Trade Recap:
1H Chart – EUR/USD
On Friday, the EUR/USD pair once again traded in a "neither fish nor fowl" manner. Volatility remained minimal, as it had been throughout the previous week. We reiterate our earlier observation: it was a very strange week. Even without the missing Non-Farm Payrolls and unemployment reports, there were plenty of fundamental and macroeconomic events—and many of them were significant.
What explains the lack of volatility and overall reluctance to trade remains unclear. Even Friday's ISM Services PMI, which came in well below forecasts, could have easily triggered a 50–60 pip drop in the dollar.
From a technical perspective, the upward trend is still considered over, as the trendline was broken. However, a new uptrend still hasn't truly begun—even though multiple bearish factors for the dollar emerged just last week.
5M Chart – EUR/USD
On the 5-minute timeframe on Friday, the price spent the entire day trying to bounce off the 1.1745–1.1754 area—but failed to do so. Technically, novice traders could have entered short positions, but by the U.S. session, it had already become clear that no significant movements would develop.
How to Trade on Monday
On the hourly timeframe, the EUR/USD pair broke the trendline several times, which technically switches the trend to bullish. Fundamentally and macroeconomically, the outlook for the U.S. dollar remains poor; therefore, we don't expect any significant upward movement in the greenback. As before, we believe that any strength in the dollar will be limited to technical corrections—like the one currently unfolding.
On Monday, the EUR/USD pair is likely to trade again in the vicinity of the 1.1745–1.1754 area. A bounce from this zone provides an opportunity for fresh short positions with a target of 1.1666. A confirmed breakout above this area will offer a logical entry point for long positions, targeting 1.1808.
On the 5-minute chart, the following levels should be observed: 1.1354–1.1363, 1.1413, 1.1455–1.1474, 1.1527, 1.1571–1.1584, 1.1655–1.1666, 1.1745–1.1754, 1.1808, 1.1851, 1.1908, 1.1970–1.1988. On Monday, ECB President Christine Lagarde will deliver another speech, and retail sales data will be released in the eurozone. Recently, Lagarde has spoken frequently; she is scheduled to speak three times this week. In most cases, her remarks offer little new market-moving information.
Core Rules of the Trading System:
- The strength of a signal is determined by how long it takes to form (a bounce or a breakout). The shorter the formation time, the stronger the signal.
- If two or more false signals are triggered near a certain level, it is recommended to ignore further signals from that level.
- In a flat market, any currency pair may produce multiple false signals, or none at all. It's best to quit trading at the first signs of flat movement.
- Trades should be opened between the start of the European session and the midpoint of the U.S. session. All trades should be manually closed afterward.
- On the hourly timeframe, MACD signals should only be used in conditions of strong volatility and when accompanied by a trend confirmed with a trendline or channel.
- If two levels are positioned too closely (5–20 pips apart), treat the entire area as a single support or resistance zone.
- Once a trade moves 15 pips in the correct direction, set the Stop Loss to breakeven to protect against reversals.
Chart Elements Explained:
- Support and resistance levels – Target zones for opening buy/sell positions. Take Profit levels can be set near these.
- Red lines – Trendlines or channels indicating the current market trend and preferred trading direction.
- MACD indicator (14,22,3) – Histogram and signal line used as an auxiliary signal source.
- Important speeches and reports (always listed in the news calendar) can strongly affect price movement. Caution is advised when trading during such events, or consider exiting the market altogether to avoid sharp reversals.
Note for Beginner Traders: Not every trade will be profitable. A clear strategy and proper money management are essential for long-term success in Forex trading.
