Analysis of Thursday's Trades

1H Chart of EUR/USD

The EUR/USD currency pair traded within a narrow range on Thursday. Although the macroeconomic backdrop was quite weak during the day, it's important to note that in recent days, significant movements in the pair have not always correlated with major economic reports. As a result, strong movements were expected on Thursday as well. However, the market seemed to pause in anticipation of the U.S. labor market and unemployment reports, which are regarded as the most important releases for the week.

Today will play a crucial role in determining the future of the dollar over the coming weeks. Currently, the dollar is in an upward trend, and there are no clear signs that this trend will come to an end anytime soon. The market had hoped for a substantial rise in European inflation in December, which might have led to the European Central Bank (ECB) adopting a less dovish stance. However, inflation rose in line with forecasts, causing the euro to quickly revert to its initial positions after a brief rally based on these expectations. If today's U.S. data meets expectations, the dollar could continue to strengthen in the medium term.

5M Chart of EUR/USD

On the 5-minute timeframe, there were no trading signals generated on Thursday. During the European session, the EUR/USD pair approached the 1.0277 level but did not come close to testing it. As a result, there were no opportunities for entering the market on Thursday.

Trading Strategy for Friday:

On the hourly timeframe, the EUR/USD pair appears to be resuming its three-month downward trend. We believe the decline of the euro has picked up again in the medium term, with parity now just around the corner. As previously mentioned, the euro is expected to continue falling, supported by the current fundamental and macroeconomic conditions favoring the U.S. dollar.

For novice traders, Thursday presented a calm trading environment in the first half of the day, with the potential for increased volatility in the second half. This volatility will largely hinge on upcoming U.S. economic data.

On the 5-minute timeframe, consider the following key levels: 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. There are no significant events or reports scheduled in the Eurozone for Friday; however, four reports are due from the U.S. The most crucial among these will be the NonFarm Payrolls and the unemployment rate data, but wage reports and consumer sentiment indicators may also impact movements in the dollar.

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.