Trade Review for Wednesday:

1H Chart of the EUR/USD Pair

The EUR/USD pair calmly continued its downward move on Wednesday, falling another 70 pips during the day. Is it worth saying that none of the day's events or releases could even theoretically have triggered the euro's decline? Business activity indices in Germany and the EU showed quite decent readings that beat forecasts. Yet the market paid them no attention, which no longer surprises, given that the European Central Bank's two policy tightenings were also ignored. US business activity indices were released practically in the evening, so they had no relation to the dollar's intraday rise. A reduction in geopolitical tension and increased hopes for a deal between Iran and the US? Such an event should lower demand for the safe-haven dollar, not increase it. Thus, in fact, the market continues buying the dollar based on... the Federal Reserve tightening factor. The third week in a row, not counting the regular summer increases at each Kevin Warsh appearance.

5M Chart of the EUR/USD Pair

On the 5-minute TF on Wednesday, only one trading signal was formed — toward the end of the day. Price reached and rebounded from the support area 1.1366–1.1377, allowing traders to open long positions hoping the pair would show at least some gain on Thursday. However, recall that on Tuesday two sell signals were formed in the 1.1461–1.1474 area, which generated profits by the end of Wednesday.

How to Trade on Thursday:

On the hourly timeframe, EUR/USD continues a downward trend that is now a full-fledged trend. Considering all the events of recent months, we do not believe the euro should fall like a stone. But for the market, the Fed's monetary policy remains the top priority and has become much more favorable to the US currency. The market ignores the other factors.

On Thursday, novice traders can open short positions with a target of 1.1267–1.1275 if the price consolidates below the 1.1366–1.1377 area. Open long positions with a target of 1.1461–1.1474 if price rebounds from the 1.1366–1.1377 area.

On the 5-minute TF, consider the levels 1.1267–1.1275, 1.1366–1.1377, 1.1461–1.1474, 1.1527–1.1531, 1.1584–1.1594, 1.1655–1.1665, 1.1745–1.1754. On Thursday, Germany will publish the business climate index, and the US will release initial jobless claims. We would not be surprised if these two "important reports" again "trigger" a rise in the US currency.

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.