Analytics and trading signals for beginners. How to trade EUR/USD on May 20? Overview of trade on Wednesday. Getting ready for trade on Thursday - Kakiforex | Forex markets for the smart money. Analytics and trading signals for beginners. How to trade EUR/USD on May 20? Overview of trade on Wednesday. Getting ready for trade on Thursday Analytics and trading signals for beginners. How to trade EUR/USD on May 20? Overview of trade on Wednesday. Getting ready for trade on Thursday

May 20, 2021

Analytics and trading signals for beginners. How to trade EUR/USD on May 20? Overview of trade on Wednesday. Getting ready for trade on Thursday

 On Wednesday, EUR/USD was trading mainly within a downward correction, though the pair made an upward move. The correction started after the price rebounded off 1.2242 which was a rather strong level. On the whole, the uptrend is still valid. Therefore, it is still recommended to consider trading the pair upwards according to buy signals generated by MACD indicator on a 30-minute chart. Two such signals have emerged today. Both signals should have been neglected because they were generated far away from a zero level. I'm going to discuss a bounce off 1.2242 in a 5-minute chart because it became evident there a bit earlier. All in all, it was the wrong idea to open any positions on Wednesday.


Today traders got to know inflation data for the EU. However, I warned you yesterday that the market would give no response to the report. This is what actually happened. Consumer inflation rose to 1.6% in April from 1.3% in March. At the same time, core CPI eased to 0.7% in annual terms from 0.8% a year ago. Core inflation is seen as more significant.


Now let's have a look at a 5-minute chart. Here the picture is more interesting. Indeed, more signals have been formed and some of them should have been worked out. EUR/USD was challenging important levels during the day that enabled beginners to open new positions. Let's start from the early European session. The price surpassed the level of 1.2234. The next level of 1.2242 was not far away. So, the level of 1.2234 should be been worked out first and watch how the price was moving around it. As a result, EUR/USD rebounded off that level twice, thus generating two sell signals almost in parallel. These signals could have been used by opening a single short position.


Besides, we could have waited until the price fixes below 1.2234. But even in this case, the price went downwards deep (more than 30 pips) to activate a take profit order. Afterwards, the price rebounded to 1.2234 without challenging the level downwards. Here traders encountered the same dilemma like in the morning. I would recommend waiting until the level of 1.2242 is tested and not open any positions. However, this time, the price did not bounced off 1.2242 because it undershot a few pips. Hence, traders did not manage to open a new short deal. Nevertheless, a 30-pips profit is a good trading result. In this screenshot, I ticked the time when the EU CPI report was released. As we see, nothing changed following the publication and EUR/USD carried on with its downward move.


How to trade EUR/USD on Thursday


It would be better for beginners to trade following the uptrend which is seen in a 30-minute chart. In other words, beginners are recommended to plan buy positions. MACD indicator is at about a zero level, so it could produce signals in the nearest hours. Nevertheless, I would advise beginners against trading at night. They should wait until morning. According to a 5-minute chart, it would be a good idea to trade from the following levels: 1.2169, 1.2174, 1.2234 and 1.2242. As always, take profit is set 30-40 pips away. Stop loss could be activated at break even when the price goes 15-20 pips in the right direction. In a 5-minute chart, the target could be the nearest level unless it is too close or too far away. Everything depends on EUR/USD volatility.


On Thursday, ECB President Christine Lagarde is due to speak which is a market catalyst for the euro. Please make sure you trade cautiously during her speech. A stop loss is a must-do. Otherwise, keep away from the market. In fact, Lagarde will hardly unveil any important information. On the dollar's front, the US Labor Department will post a weekly update on unemployment claims which is a report of secondary importance.