Trade Review for Monday:

1H Chart of the EUR/USD Pair

On Monday, the EUR/USD currency pair continued its downward movement with minimal volatility. The low volatility observed in recent weeks did not raise any concerns, as important macroeconomic reports have been scarce. However, yesterday, the US ISM manufacturing activity index was released, published as a single estimate. Regardless of the report's importance, more significance lies in the relationship between the forecast and the actual value. We learned that manufacturing activity in the US declined again, despite forecasts predicting an increase. Thus, the report turned out to be much worse than market expectations, which should have triggered a decline in the dollar and a rise in the pair. Yet, we did not observe any growth in the pair again. Therefore, we emphasize to our readers that the current movement remains completely illogical, having persisted for more than a month, as in October, we saw very few predictable movements.

5M Chart of the EUR/USD Pair

How to Trade on Tuesday:

On the hourly timeframe, the EUR/USD pair exhibits a desire to continue its decline. A new ascending trend line has been broken, and the overall fundamental and macroeconomic backdrop remains unfavorable for the US dollar. Thus, based solely on technical factors, the European currency may continue to decline. However, the flat trend on the daily timeframe is still relevant, and we anticipate its conclusion and the resumption of an upward trend.

On Tuesday, novice traders can comfortably trade in the 1.3102-1.3107 range. This is not just an area but also the lower boundary of the sideways channel on the daily timeframe. The likelihood of a significant bounce is high, but without buying momentum, we will not see any upward movement in the market.

On the 5-minute timeframe, trading can occur at the following levels: 1.1354-1.1363, 1.1413, 1.1455-1.1474, 1.1527, 1.1571-1.1584, 1.1655-1.1666, 1.1745-1.1754, 1.1808, 1.1851, 1.1908, 1.1970-1.1988. On Tuesday, no significant events or reports are scheduled in the Eurozone or the US, so it is unlikely volatility will rise today, leading to significant trend movements.

Basic Rules of the Trading System:

1. The strength of a signal is determined by the time it took to form (bounce or breach a level). The less time required, the stronger the signal.
2. If two or more trades around any level were based on false signals, all subsequent signals from that level should be ignored.
3. In a flat market, any pair can generate numerous false signals or none at all. In any case, it's best to stop trading at the first signs of a flat market.
4. Trades should be opened during the timeframe between the start of the European session and halfway through the American session; all trades must then be manually closed.
5. On the hourly timeframe, signals from the MACD indicator should ideally be traded only in the presence of good volatility and a trend confirmed by a trendline or trend channel.
6. If two levels are too close to each other (between 5 and 20 pips), they should be treated as a support or resistance area.
7. After the price moves 15 pips in the right direction, a Stop Loss should be set to break even.

What the Charts Show:

• Support and resistance price levels are targets for opening buy or sell positions. Take profit levels can be placed near these.
• The red lines indicate channels or trend lines that show the current trend and suggest the preferred trading direction.
• The MACD indicator (14,22,3) provides a histogram and signal line, serving as an auxiliary indicator that can also be used as a source of signals.

Important: Significant speeches and reports (always listed in the news calendar) can have a significant impact on the movement of the currency pair. Therefore, during their release, one should trade with maximum caution or exit the market to avoid sudden price reversals against the preceding movement.

Beginners trading in the Forex market 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.