Analysis of Tuesday's Trades

1H Chart of EUR/USD

On Tuesday, the EUR/USD currency pair experienced minimal volatility and a downward bias. There were no significant macroeconomic releases throughout the day, leaving both the euro and the dollar without strong driving forces for movement. In the morning, the ZEW Institute published reports on economic sentiment in Germany and the Eurozone, which showed relatively good results. However, these reports are considered secondary indicators and typically do not provoke strong market reactions.

As a result, the upward trend on the hourly timeframe remains intact, but it could be invalidated by the end of this week. The key factor is the correction on the daily timeframe, which appears as a complex sequence of alternating trends on the hourly chart. This pattern has persisted for an entire month. Currently, there are no reasons for a significant rally in the euro. Its rise to the 1.0500 level is somewhat surprising.

5M Chart of EUR/USD

No trading signals were generated on Tuesday in the 5-minute timeframe. The price steadily drifted toward the 1.0433-1.0451 range but failed to break out by the end of the day. Even by Wednesday morning, it remained within this range due to extremely low volatility this week.

Trading Strategy for Wednesday:

On the hourly timeframe, EUR/USD is in a medium-term downtrend while experiencing a local upward trend. The expectation remains that the euro will decline, as the fundamental and macroeconomic factors continue to favor the U.S. dollar over the euro. However, the upward correction on the daily timeframe could continue for several more weeks. This suggests that the hourly chart may display alternating trends before the primary downtrend resumes.

Market movements on Wednesday may again be erratic, illogical, and weak. The market appears to be leaning towards growth due to the need for a correction on the daily timeframe; however, corrections and downward movements are also likely.

On the 5-minute timeframe, key levels to watch are 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 scheduled in the Eurozone on Wednesday. In the U.S., reports on building permits and new home construction will be released, but these are not expected to be major market movers. In the evening, the FOMC meeting minutes will be published, which is also considered a secondary event.

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.