Analysis of Monday's Trades

1H Chart of EUR/USD

On Monday, the EUR/USD currency pair is likely to have completed a three-week downward trend. As a reminder, over the past two weeks, at least, a massive flow of information has come from the United States that has offered no justification for strengthening the American currency. Notably, the administration of Donald Trump accused Jerome Powell of fraud related to Federal Reserve building renovations, and a new wave of tariffs is set to take effect on August 1. Moreover, no trade agreements have been signed over the last three weeks. Thus, there were no fundamental grounds for a dollar rally. At the same time, as we've mentioned repeatedly, even against such a negative fundamental backdrop, the market cannot endlessly sell off the dollar. What we witnessed was a purely technical correction, which, logically, now appears to be over. On Monday, there were no major events in either the EU or the US—only Trump once again announced a potential hike in tariffs on all EU imports.

5M Chart of EUR/USD

On the 5-minute timeframe, one trading signal was generated on Monday. At the start of the US session, the price broke through the 1.1655–1.1666 area and then advanced upward by about 40–50 pips. The signal was very clear, and novice traders could easily interpret it and profit on what was otherwise a "quiet Monday."

Trading Strategy for Tuesday:

On the hourly timeframe, the EUR/USD pair has likely completed a corrective movement that lasted three weeks. Since Trump's policy has remained unchanged and the issues surrounding his conflict with Powell and the trade war have only intensified, there is still no basis for the dollar to appreciate in the medium term. The trendline has been broken, so a new leg of euro appreciation can be expected.

On Tuesday, the EUR/USD pair may continue moving upward, as the important 1.1666 level and the trendline have been broken. The U.S. continues to release information that encourages market participants to sell the dollar further.

On the 5-minute timeframe, consider the following levels: 1.1198–1.1218, 1.1267–1.1292, 1.1354–1.1363, 1.1413, 1.1455–1.1474, 1.1527, 1.1563–1.1571, 1.1655–1.1666, 1.1740–1.1745, 1.1808, 1.1851, 1.1908.

Only one moderately important event is scheduled for Tuesday: Fed Chair Jerome Powell's speech. We do not expect significant statements regarding monetary policy, but Powell may address the accusations of financial misconduct made against him.

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 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.