Analysis of Wednesday's Trades:

1H Chart of the EUR/USD Pair

The EUR/USD currency pair continues to trade within a sideways channel, clearly visible on the hourly timeframe. Traders still cannot find grounds to buy or sell the pair. The macroeconomic backdrop is largely ignored, the fundamentals have little significance, and the market is waiting for important geopolitical news and events rather than more threats, ultimatums, and promises. As a result, we have observed the same picture daily for three weeks: there are events and news, but market movements are nearly nonexistent. For instance, yesterday, the ISM services activity index was released in the US, showing a higher-than-expected reading. Additionally, Iran launched new missile strikes against Kuwait. These appear to be two significant events, each of which should have triggered a rise in the US dollar. And the dollar did rise! But by how much? Only 30 pips, and it still remained within the sideways channel.

5M Chart of the EUR/USD Pair

On the 5-minute timeframe on Wednesday, no trading signals were formed. The last sell signals were generated on Tuesday, when the price bounced twice from the 1.1655-1.1666 area. These short positions could have been carried over to Wednesday, since volatility is currently low and the price needs more time to move significant distances.

How to Trade on Thursday:

On the hourly timeframe, the euro has been in a correction for a month and flat for three weeks. The rise of the US dollar has resumed as the conflict in the Middle East is on the brink of escalation, but we still do not expect prolonged growth for the American currency. The market continues to largely ignore fundamentals and macroeconomics, while it reacts to geopolitical issues very selectively.

On Thursday, novice traders can open short positions targeting 1.1527-1.1531 if the price breaks below the 1.1584-1.1591 area. Buy trades can be considered if the price rebounds from the 1.1584-1.1591 area, targeting 1.1655-1.1666.

On the 5-minute timeframe, consider the following levels: 1.1354-1.1363, 1.1413, 1.1455-1.1474, 1.1527-1.1531, 1.1584-1.1591, 1.1655-1.1666, 1.1745-1.1754, 1.1830-1.1837, and 1.1899-1.1908. On Thursday, European Central Bank President Christine Lagarde is scheduled to speak, and a retail sales report will be released. The most important event in the US will be the jobless claims report. We believe that these events will not even provoke an increase in volatility.

Basic Rules of the Trading System:

1. The strength of a signal is determined by the time it takes to form (a bounce or a breakout). The less time it took, the stronger the signal.
2. If two or more trades were opened at a particular level on false signals, all subsequent signals from that level should be ignored.
3. In a flat, any pair can form many false signals or none at all. Technical levels may be ignored.
4. On the hourly timeframe, trading signals from the MACD indicator should be executed only when volatility is good, and a trend is confirmed by a trend line or channel.
5. If two levels are too close together (5 to 20 pips), they should be considered a support or resistance area.
6. After moving 15 pips in the correct direction, a Stop Loss should be placed at breakeven.

What's on the Charts:

Price levels (areas) of support and resistance are targets when opening long or short positions or sources of signals.

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

The MACD indicator (14,22,3) – histogram and signal line – is a supplementary indicator that can also be used as a source of signals.

Important speeches and reports (contained in the news calendar) can significantly impact the movement of the currency pair. Therefore, during their release, trading should be conducted with maximum caution, or one should exit the market to avoid sharp reversals against preceding movements.

Beginners trading in the forex market should remember that not every trade can be profitable. Developing a clear strategy and practicing money management are keys to success in trading over the long term.