Analysis of Wednesday's Trades

1H Chart of EUR/USD

The EUR/USD currency pair continued to trade within the sideways channel on Wednesday, which is visible on the hourly timeframe. As we warned, the Federal Reserve meeting did not change anything. While we saw minimal market reaction, it had no real impact. The Fed decided to leave the key interest rate unchanged, and Jerome Powell once again spoke about economic uncertainty and the need to wait some time to see the full effect of Trump's tariffs. As a result, there were no changes to monetary policy, and Powell made no announcements about potential future easing. The U.S. dollar could have strengthened, but the market continues to ignore nearly all news unrelated to the trade war. The sideways trend continues.

5M Chart of EUR/USD

On the 5-minute timeframe, no trading signals were generated on Wednesday, and volatility remained low until the evening. As a reminder, we do not recommend opening positions right before or immediately after the announcement of central bank decisions. Therefore, movements during that period are excluded from our analysis. Even including those movements, only a buy signal was formed late at night near the 1.1292 level, which should not have been acted upon.

Trading Strategy for Thursday:

On the hourly chart, EUR/USD maintains a bullish trend, but the market has been in a three-week sideways range at high levels. Overall, sentiment remains extremely negative toward the U.S. dollar, but if Trump signals a move toward de-escalating the trade conflict, which he initiated, then the dollar could recover. Whether that happens, or when it happens, remains unknown.

The pair can move in either direction on Thursday, as market movements still depend on Trump's statements and decisions. Since there has been little news from him lately, we anticipate that the sideways movement will likely continue. A bounce from the lower boundary of the range (1.1275) triggered growth in the pair, and a bounce from the 1.1292 level may also fuel further upside.

On the 5-minute timeframe, consider the following levels: 1.0940–1.0952, 1.1011, 1.1091, 1.1132–1.1140, 1.1189–1.1191, 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. On Thursday, the Eurozone will release a largely irrelevant report on German industrial production, while the U.S. will publish an even less important report on jobless claims. It's unlikely that the sideways trend will end today.

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.