Analysis of Friday's Trades

1H Chart of EUR/USD

On Friday, the EUR/USD currency pair traded in a fairly technical and predictable manner. The US dollar failed to build on the momentum seen on Wednesday and Thursday, when it broke out of the sideways channel near the highs, where it had remained for three weeks. Recall that the Federal Reserve meeting results can be considered "hawkish," as Jerome Powell did not confirm the market's "dovish" expectations. At the same time, the Fed has maintained a hawkish stance for quite a long time, yet the dollar has been falling freely for the past three months without any resistance. Therefore, Donald Trump's trade war remains the main factor for the currency market. The lack of fresh news is the only reason it's not dominating the agenda right now. Trump announced a trade deal with the UK, but provided no details. This makes it impossible to assess how beneficial the agreement is for the US. Still, the US president believes his word is enough: If he claims it is "profitable and good," it must be true. But the market no longer believes Trump—and rightly so. As a result, the dollar hasn't significantly strengthened in recent days.

5M Chart of EUR/USD

On Friday, only one trading signal formed on the 5-minute timeframe, and it occurred in the evening. It probably wasn't worth acting on, since the market was set to close in a few hours. However, if someone had opened a short position, they could have made a profit or at least moved their Stop Loss to break-even and headed worry-free on the weekend. During the Asian session, the price bounced off the 1.1191–1.1198 area, but level 1.1198 is new—it wasn't yet plotted on the charts on Friday.

Trading Strategy for Monday:

In the hourly timeframe, the EUR/USD pair continues to show an upward trend, having been traded sideways for three weeks before finally beginning a downward correction. Overall, market sentiment remains strongly negative toward the US dollar. However, if Trump chooses to de-escalate the trade conflict he initiated, the dollar could improve its position. The severity of this downward correction after a three-month decline is hard to predict.

On Monday, trading will be based entirely on technical factors. The pair seems to have started a correction, but the decline is not substantial, and traders are still hesitant to buy the US currency.

On the 5-minute timeframe, monitor the following levels: 1.0940–1.0952, 1.1011, 1.1091, 1.1132–1.1140, 1.1191–1.1198, 1.1275–1.1292, 1.1413–1.1424, 1.1474–1.1481, 1.1513, 1.1548, 1.1571, 1.1607–1.1622, 1.1666, 1.1689. No important events are scheduled in either the Eurozone or the US on Monday. Therefore, unless Trump returns to the spotlight, we expect subdued movements within the framework of the ongoing downward trend.

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.