Analysis of Wednesday's Trades

1H Chart of EUR/USD

The EUR/USD currency pair continued its relatively weak upward movement on Wednesday. The price remains above the local trendline, and there was no significant macroeconomic news yesterday. The only event that traders might have focused on was the speech by European Central Bank President Christine Lagarde. Looking ahead, it is important to note that Ms. Lagarde did not provide any groundbreaking information. She mentioned that the European Union should not fear potential tariffs from the United States and should be prepared to respond if they occur. However, she also described the absence of tariffs implemented on Trump's first day in office as a "reasonable step." Regarding inflation, she stated that the ECB aims to achieve a stable rate of 2% by 2025, indicating that the path for rate cuts is clear and predictable. Overall, nothing new was presented in her remarks. The euro continues to correct against its four-month decline, and this correction is not yet complete.

5M Chart of EUR/USD

On the 5-minute timeframe, only one trading signal was generated on Wednesday. The price rebounded from the 1.0433-1.0451 area but did not demonstrate significant downward movement. As of Thursday morning, traders may consider remaining in short positions, placing a stop loss at the breakeven point.

Trading Strategy for Thursday:

On the hourly timeframe, the EUR/USD pair is currently in a downward trend, although there is a local upward trend. We anticipate that the decline of the euro will resume in the medium term, with parity with the dollar coming into reach. The euro's decline is supported by the ongoing fundamental and macroeconomic factors that favor the US dollar. The current correction is assisted by a trendline, and its conclusion can be identified by a breakout below this line.

On Thursday, we may see weak movements in the pair as the dollar attempts to recover losses sustained earlier in the week. The trendline should serve as a useful guide during this period.

On the 5-minute timeframe, the key levels to monitor are 1.0156, 1.0221, 1.0269-1.0277, 1.0334-1.0359, 1.0433-1.0451, 1.0526, 1.0596, 1.0678, 1.0726-1.0733, 1.0797-1.0804, and 1.0845-1.0851. The only scheduled event for Thursday is the US Unemployment Claims Report. However, this report is considered of secondary importance and is unlikely to have a significant impact on the pair's movements 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 speeches and reports, which are consistently featured in the news calendar, can significantly influence the movement of a currency pair. Therefore, during their release, it is advisable to trade with caution or consider exiting the market to avoid potential sharp price reversals against the prior trend.

Beginners in the Forex market should understand that not every transaction will be profitable. Developing a clear trading strategy and practicing effective money management are crucial for achieving long-term success in trading.