Analysis of Monday's Trades
1H Chart of EUR/USD
On Monday, the EUR/USD currency pair demonstrated fairly strong movements. Initially, market volatility was not particularly high, although the news flow could have triggered "flights" as early as during the night. However, the strongest movements occurred during the most active trading session — the U.S. session. As anticipated, the dollar failed to gain any benefit from the escalating situation in the Middle East. We had previously warned that the U.S. is now a full-fledged participant in the war, and by yesterday, reports had already emerged about Iranian attacks on Qatar, Israel, and other Persian Gulf countries where American military bases are located.
Thus, the dollar — which in 2025 is no longer viewed by anyone as a "safe-haven currency" — can now definitively no longer be considered one. As a result, the EUR/USD pair quickly, easily, and effortlessly returned to the highs of the current year. All signs point to the continuation of the upward movement.
5M Chart of EUR/USD
On Monday, many solid trading signals were formed on the 5-minute timeframe. In the first half of the day, the price mostly declined, generating several overlapping sell signals around the 1.1474–1.1481 area. One short position could have been opened based on these signals, but it turned out to be a losing trade.
However, a strong upward rally followed. The price generated a buy signal in the same area and has since continued to rise, simultaneously forming new buy signals. Thus, those who opened long positions during the U.S. session could have earned at least 80–90 pips.
Trading Strategy for Tuesday:
The EUR/USD pair continues its upward trend on the hourly timeframe, which began under Donald Trump and may only end under the next president. In principle, the fact that Trump remains President of the United States is still enough to keep the U.S. dollar in decline. Even the escalation of the Iran–Israel conflict has not significantly influenced the dollar's overall standing, as the U.S. has become an active party in the conflict. The market continues to refrain from purchasing the dollar in the medium term, even though it doesn't sell it every day.
On Tuesday, the EUR/USD pair may continue rising since the descending trendline has been broken, and the dollar has already been priced in all positive factors.
On the 5-minute timeframe, relevant levels to watch are 1.1132–1.1140, 1.1198–1.1218, 1.1267–1.1292, 1.1354–1.1363, 1.1413–1.1424, 1.1474–1.1481, 1.1527, 1.1561–1.1571, 1.1609, 1.1666, 1.1704, 1.1802.
Among Tuesday's important events are speeches by ECB President Christine Lagarde and Fed Chair Jerome Powell. While we do not expect any major or new information from them, such events should not be overlooked. Still, the Middle East conflict remains the market's top priority in terms of influence.
Core Trading System Rules:
- Signal Strength: The shorter the time it takes for a signal to form (a rebound or breakout), the stronger the signal.
- False Signals: If two or more trades near a level result in false signals, subsequent signals from that level should be ignored.
- 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.
- Trading Hours: Open trades between the start of the European session and the middle of the US session, then manually close all trades.
- 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.
- Close Levels: If two levels are too close (5–20 pips apart), treat them as a support or resistance zone.
- 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 Events and Reports: Found in the economic calendar, these can heavily influence price movements. Exercise caution or exit the market during their release to avoid sharp reversals.
Forex trading beginners should remember that not every trade will be profitable. Developing a clear strategy and practicing proper money management are essential for long-term trading success.
