Monday Trade Review:

1H Chart of EUR/USD

The EUR/USD pair continued its upward movement for most of Monday. It cannot be said that the dollar fell too sharply, but the decline has now lasted for two consecutive days. Nor can it be said that the threat of a U.S. government shutdown or Donald Trump's new import tariffs triggered a collapse of the dollar, although in the first half of 2025, such factors would almost certainly have done so. Thus, under current conditions, the U.S. dollar remains relatively stable.

On the hourly timeframe, we have drawn a descending trendline, but it is rather tentative. On Monday, there were no important macroeconomic releases in either the U.S. or the Eurozone, which explains the day's low volatility. In our view, the dollar has no prospects for medium-term growth. Even if the market is currently ignoring the fundamental background, this cannot last forever. This week, the U.S. currency faces a significant number of risk factors, with new macroeconomic reports on labor, unemployment, and business activity due to be released.

5M Chart of EUR/USD

On the 5-minute timeframe, several trading signals could be found on Monday, but all of them left much to be desired. We have adjusted the range 1.1737–1.1745, which is now the 1.1745–1.1754 area. Therefore, traders should work with this updated resistance zone today.

How to Trade on Tuesday:

On the hourly timeframe, EUR/USD still retains its downward tendency. The overall fundamental and macroeconomic backdrop remains unfavorable for the U.S. dollar, so we still do not expect the American currency to appreciate significantly. From our perspective, as before, the dollar can only count on technical corrections, one of which we are currently observing.

On Tuesday, the EUR/USD is expected to trade within the 1.1745–1.1754 range. A bounce from this zone already occurred yesterday, which could lead to a decline with a target of 1.1655–1.1666. Breaking above this area would open the way for long positions with a target at 1.1808. However, we remind you that this week's macroeconomic backdrop will be strong, while Donald Trump is once again doing everything to push the dollar down.

On the 5-minute timeframe, the following levels should be considered: 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 Tuesday, Germany is expected to release reports on retail sales, unemployment, and inflation, which may impact market sentiment. In the U.S., the JOLTs report will be published, although this release is not considered highly important.

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.