Analysis of Thursday's Trades

1H Chart of EUR/USD

On Thursday, the EUR/USD currency pair traded mostly sideways, albeit with a slight upward bias. The uptrend on the hourly timeframe remains intact. This week, the euro has been trading in a highly unconventional manner, with traders operating under an unusual fundamental backdrop.

To recap, the first half of the week was dominated by the theme "End the war in the Middle East and win the Nobel Prize," with Donald Trump doing everything he could to stop the conflict. In the end, the conflict was paused but could reignite at any moment. The market reasonably decided that the dollar still wasn't worth holding on to—especially since the geopolitical risk had subsided, and there was no longer a reason to flee to safe-haven assets.

In the second half of the week, the narrative shifted. The new theme became "Fire Powell, criticize the Fed." Naturally, Powell won't be fired—only Congress has the authority to do that, and Trump dislikes dealing with Congress. The market watched this latest "will-he-won't-he" drama and resumed selling the dollar.

5M Chart of EUR/USD

On the 5-minute timeframe, Thursday's trading was very choppy, as the market alternated between sideways consolidation and sudden buying spurts without much consistency. These bursts of upward movement didn't always coincide with new information. Several trade signals were generated yesterday, but the key level shifted from 1.1700 to 1.1740. It's important to note that current levels are somewhat outdated, as the price is now at three-year highs.

Trading Strategy for Friday:

On the hourly chart, EUR/USD continues to follow the uptrend that began under Trump, and, likely, this trend won't end until a new president takes office. In reality, the mere fact that Trump is president is enough for the dollar to keep weakening. Even when there's no news from Trump, that doesn't mean the dollar is safe.

On Friday, the EUR/USD could continue rising, with no specific catalyst required at this point. There are expected to be few major events, so technical signals can be used for trading.

On the 5-minute chart, consider the following levels: 1.1132–1.1140, 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, 1.1802, 1.1851. Among the relatively significant events on Friday, we can highlight the Core PCE Price Index and the University of Michigan Consumer Sentiment Index, both from the United States.

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.