Trade review for Friday:

1H chart of the EUR/USD pair

The EUR/USD currency pair continued to move with minimal volatility on Friday within the sideways channel that formed over the past week. On the hourly timeframe, price is clearly range-bound between 1.1187 and 1.1260. Thus, the market spent the entire past week in a flat. Friday, despite a fairly busy macroeconomic calendar, changed nothing. Although PMIs for Germany, the euro area and the U.S. were published, the pair's intraday volatility was only 40 pips. German and euro-area PMIs came in below forecasts but remained above 50.0, which still makes them expansionary. Therefore, the euro's decline was minimal and hardly noticeable. As expected, the market ignored U.S. PMIs. Thus, after a month of declines, the euro has not managed a normal recovery or correction. The market continues to avoid the euro despite the presence of bullish factors — at least technical ones.

5M chart of the EUR/USD pair

On the 5-minute TF, no trading signals formed on Friday. The pair traded mostly in the 1.1198–1.1218 area and failed to move decisively out of it. Therefore, the basis for opening any positions was insufficient.

How to trade on Monday:

On the hourly timeframe, EUR/USD retains a downward tendency that is a full-fledged trend, but there are reasons to believe it may be over. Considering all events of recent months, we do not think the euro should have fallen like a stone. At the moment, the dollar is heavily overbought, and many euro-bullish factors are being ignored.

On Monday, novice traders can consider short positions if the pair holds below the 1.1198–1.1218 area, targeting 1.1132–1.1140. Open long positions on a confirmed move above the 1.1198–1.1218 area, targeting 1.1267–1.1275.

On the 5-minute TF consider the levels 1.1011, 1.1088, 1.1132–1.1140, 1.1198–1.1218, 1.1267–1.1275, 1.1366–1.1377, 1.1461–1.1474, 1.1527–1.1531, 1.1584–1.1594, 1.1655–1.1665. No important events or releases are scheduled in the EU or the U.S. on Monday, apart from a minor German business-climate index, which we do not expect the market to pay attention to. The pair's volatility may again be weak.

Key Rules of the Trading System:

1. The strength of a signal is determined by the time it takes to form the signal (rebound or breakout). The less time taken, the stronger the signal.
2. If two or more trades were opened at a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a range (flat), any pair can generate many false signals or may not produce any at all. Technical levels may be disregarded.
4. On the hourly timeframe, trading signals from the MACD indicator should be acted upon only when volatility is high, and a trend line or trend channel confirms the trend.
5. If two levels are too close together (within 5-20 pips), treat them as a support or resistance area.
6. After moving 15 pips in the right direction, a stop-loss should be set to break even.

What to Look for on the Charts:

Price levels (areas) of support and resistance serve as targets for opening buy or sell trades or as sources of signals.

Red lines indicate channels or trend lines that show the current trend and the preferred trading direction.

The MACD indicator (14,22,3) — the histogram and signal line — is an auxiliary indicator that can also provide signals.

Important speeches and reports (listed in the news calendar) can significantly influence currency pair movements. Therefore, during their release, traders should approach trading with utmost caution, or exit the market to avoid sudden reversals against the preceding move.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and practicing money management are key to long-term success in trading.