Analysis of Thursday's Trades

1H Chart of EUR/USD

On Thursday, the EUR/USD currency pair continued its moderate downward trend after experiencing a rise that lasted a week and a half, driven by developments related to Donald Trump. The market has paused its sell-off of the dollar, but it's uncertain how long this will last. Recently, traders have fixated on tariffs, disregarding all other news. Even when Trump cancels or delays his own tariffs, the dollar does not strengthen. Regardless of the future economic outlook for the U.S. under Trump, we believe the market may have prematurely turned its back on the dollar. A decline of 600 pips in just over a week and a half seems excessive, suggesting that a correction is likely. It's also important to note that on both daily and monthly timeframes, the downtrend remains intact despite a significant upward correction. The macroeconomic data released yesterday was weak and had no effect on the pair's movement.

5M Chart of EUR/USD

On the 5-minute timeframe, several trading signals were generated on Thursday, but the intraday movement was erratic and weak. The market showed little enthusiasm for buying the dollar, making the downward movement appear hesitant. The first sell signal near the 1.0888–1.0896 zone was profitable, but the second signal near the 1.0845–1.0851 zone turned out to be false. The third and fourth signals were also inaccurate.

Trading Strategy for Friday:

On the hourly timeframe, the EUR/USD pair remains in a medium-term downtrend, but the chances of its continuation are decreasing. Since the fundamental and macroeconomic backdrop still favors the U.S. dollar much more than the euro, we continue to expect further declines. However, Donald Trump continues to push the dollar down with his frequent decisions and statements. At the moment, fundamentals and macroeconomics are overshadowed by politics and geopolitics.

On Friday, the euro may trade in any direction, as the macroeconomic and fundamental background currently has little logical influence on the pair's movement. It is impossible to predict what news Trump will announce and when.

On the 5-minute timeframe, consider the following levels: 1.0433–1.0451, 1.0526, 1.0596, 1.0678, 1.0726–1.0733, 1.0797–1.0804, 1.0845–1.0851, 1.0888–1.0896, 1.0940–1.0952, 1.1011, 1.1048. Germany will publish its second estimate of the February Consumer Price Index on Friday, while the U.S. will release the University of Michigan Consumer Sentiment Index. Both reports are of secondary importance.

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.