Analysis of Friday's Trades

1H Chart of EUR/USD

On Friday, the EUR/USD currency pair declined significantly in price, despite no macroeconomic or fundamental reasons. However, the downward trend on the hourly timeframe remains intact and is driven by the easing of global trade tensions, as previously mentioned. While the dollar isn't ready to appreciate at the same pace it depreciated over the past three months, the reduction in tariffs and ongoing negotiations between the U.S. and other countries still provide grounds for a possible rebound. We also want to highlight the Federal Reserve's hawkish stance versus the European Central Bank's dovish one, but this factor still doesn't impact market sentiment. On Friday, all three U.S. reports that could be considered at least moderately important came in weaker than expected. Therefore, the dollar's strength on that day was not connected to those reports.

5M Chart of EUR/USD

On the 5-minute timeframe on Friday, two trading signals were generated, one of which was actionable. During the U.S. trading session, the price moved away from the 1.1198 level, where it had hovered during the Asian and European sessions, and dropped to the nearest target area of 1.1132–1.1140. This gave novice traders an excellent opportunity to open short positions, which yielded a profit of around 45 pips. While modest, this was due to the relatively low volatility on Friday.

Trading Strategy for Monday:

In the hourly timeframe, the EUR/USD pair finally started forming a semblance of a downtrend. In general, market sentiment remains highly negative toward the U.S. dollar, but since Trump has taken steps toward de-escalating the trade conflict he originally initiated, the dollar may improve its position soon. The strength of the dollar's rebound will depend on how many agreements are ultimately signed. Market-moving headlines from Trump, such as firing Powell or threatening new tariffs, could also play a role.

The EUR/USD pair is expected to trade on Monday based on technical factors. The macroeconomic backdrop still has virtually no influence on price movement.

On the 5-minute timeframe, levels to watch include: 1.0940–1.0952, 1.1011, 1.1088, 1.1132–1.1140, 1.1198, 1.1275–1.1292, 1.1413–1.1424, 1.1474–1.1481, 1.1513, 1.1548, 1.1571, 1.1607–1.1622. In the Eurozone, the inflation report for April is scheduled for Monday, but it will be only the second estimate, which is unlikely to differ from the first. The market didn't show much interest in the first estimate either, even though it was more important, so this report is also expected to have a limited impact.

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.