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How to trade EUR/USD on July 14? Simple tips for beginners.

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Analysis of Wednesday’s deals:

30M chart of the EUR/USD pair

The EUR/USD currency pair tried once again to overcome the 1.0000 level on Wednesday, but failed again. So it looks like it’s still a strong level that will keep the pair above itself for a while. However, the 20-year lows were formally updated as the price dropped to 0.9998. However, this is not the main thing, the main thing is that the market again reacted completely incomprehensibly to important macroeconomic statistics. The most important inflation report was released in America and, as it turned out, the consumer price index rose to 9.1%, although the most daring forecasts predicted growth to 8.8%. This means not only maintaining the probability of raising the Federal Reserve’s key rate by 0.75% (which is very good for the dollar), but also increasing the likelihood of lifting it immediately by 1.00%. Thus, according to all the canons of fundamental analysis, the dollar should have shown an impressive growth on Wednesday. At first, it went up in price, but after half an hour the pair turned up and a stronger upward movement began. The most interesting thing is that the euro still could not go far up. Thus, we still believe that the downward trend continues, and sooner or later the pair will overcome the level of 1.0000 and continue its fall.

5M chart of the EUR/USD pair

Wednesday’s movement looks impressive on the 5-minute timeframe. The pair flew from side to side, which, in principle, is not surprising, since macroeconomic statistics were very important. What is interesting is that the price almost perfectly reached all the levels that came across it on the way. In total, three trading signals were formed. The first one, the rebound from the level of 1.0072, could have been ignored, as the US inflation report was published at that time. However, the signal in the form of a rebound from the level of 1.0000 could already be worked out, since it was almost ideal. As a result, the pair went up almost 100 points after the signal was formed and settled on the road above the level of 1.0072. However, the price failed to reach the next target level of 1.0162, so the long position had to be closed manually in the late afternoon. It managed to earn about 60 points.

How to trade on Thursday:

The new downward trend continues on the 30-minute time frame, but there is still no trend line or channel. The pair failed to overcome the level of 1.0000 from two attempts, so there are still small chances for the euro’s growth. However, you should understand that in the first two trading days of the week, the euro fell without any statistics and foundation. That is, the euro may fall again even out of the blue. On the 5-minute TF on Thursday, it is recommended to trade at the levels of 1.0000, 1.0072, 1.0162-1.0190, 1.0235. When passing 15 points in the right direction, you should set Stop Loss to breakeven. There will be no important publications or events either in the European Union or in the US on Thursday. By and large, all the important events of this week ended on Wednesday’s inflation report. However, this does not mean that now the pair will stand still. The last two days also showed that the upward correction is still a big problem for the pair.

Basic rules of the trading system:

1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal.

2) If two or more deals were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored.

3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading.

4) Trade deals are opened in the time period between the beginning of the European session and until the middle of the US one, when all deals must be closed manually.

5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel.

6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance.

On the chart:

Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now.

The MACD indicator (14,22,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).

Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.

Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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