On Tuesday, the EUR/USD currency pair made an unsuccessful attempt to continue its upward movement. Unfortunately, the price could not go far above the highs of the previous day. The closer the pair gets to its 3-year high at 1.2348, the more resistance it faces. Thus, the upward trend continues and has been in place for two months already. During this time, the euro/dollar pair managed to advance by 560 points, which means that, on average, the price grew by 13 pips per day. This is a very weak movement. On Tuesday, the MACD indicator formed only one buy signal during the whole day. However, this signal should not have been followed, since it was formed well above the zero level and was not preceded by a downward correction. There were also no major reports or other fundamental events throughout the day. Therefore, the day was rather boring for traders, and beginners had to rely purely on the technical indicators which were also far from perfect.
Now let's take a look at the 5-minute time frame. In the course of the day, 5 signals were generated there, most of which should have been ignored. Let's start with the European session. At the very beginning of the trade, a buy signal was formed when the price broke through the level of 1.2230. This signal should have been left without attention, since the February high was located just above it, and the price could rebound from there. At the same time, there was not a single level above, towards which the price could move. So, on the other hand, this signal could still be used by setting Stop Loss below 1.2230 and without waiting until the price passes15 pips to the upside. Yet, the pair managed to move up by15 pips easily, immediately breaking through the level of 1.2242. Ultimately, the movement ended after the price had passed 30 pips which was enough to trigger a Take Profit order. Further on, two obviously false buy signals were generated when the price rebounded from the level of 1.2242. Following the first signal, novice traders should have opened long positions. According to the second one, no positions should have been opened at all since at the time of its formation, long deals were already there. As a result, the pair consolidated below the level of 1.2242, so the buy order should have been closed with a loss of 17 pips. The last signal in the form of a rebound from the level of 1.2242 should also have been ignored for two reasons. Firstly, it was already the end of the trading session in the evening. Secondly, two false signals had already been formed near the level of 1.2242 by that time. Thus, the most that beginners could have earned today was13 pips.
Trading tips for Wednesday
There is still a clear uptrend on the 30-minute time frame, so it is recommended to consider long positions. The MACD indicator is currently moving towards the zero level. So, by the morning, it will have reached the zero level, which will allow it to form new buy signals. Notably, it has not generated any strong buy signals for quite a long time. In general, the technical picture for the pair has been the same for some time. On the 5-minute time frame, it is recommended to trade from the levels 1.2174, 1.2230, 1.2242, and 1.2266. As always, set Take Profit at a distance of 30-40 pips. Stop Loss should be placed to breakeven when the price passes 15-20 pips in the right direction. On the 5M time frame, the nearest level can serve as a target unless it is located too close or too far away. Otherwise, you should act according to the situation. On Wednesday, no important events are planned either in the European Union or in the United States.
