Analysis of Thursday's Trades

1H Chart of EUR/USD

The EUR/USD currency pair fell on Thursday after the results of the Federal Reserve meeting were announced. At last, we've seen some strengthening of the U.S. dollar, and finally, the market reacted somewhat logically. Let's recall that the FOMC meeting could be considered hawkish. In recent weeks, the market has been panicking, dumping the dollar while pricing everything at once—a U.S. recession, aggressive Fed rate cuts, hyperinflation, and more. However, Jerome Powell and the FOMC clarified that there is no reason for concern: the U.S. economy is stable, the labor market is strong, the Fed expects only two rate cuts in 2025, and reducing inflation remains the central priority. Yes, GDP forecasts were lowered, but inflation forecasts were raised—and higher inflation implies rates will stay elevated longer or be reduced more slowly.

5M Chart of EUR/USD

On Thursday, two decent trade signals formed in the 5-minute timeframe. First, the pair broke through the 1.0888–1.0896 zone and later through the 1.0845–1.0851 zone. Unfortunately, the bears failed to reach the 1.0797–1.0804 zone, so the price retreated to the second zone, where novice traders could close short positions. The profit amounted to around 30 pips.

Trading Strategy for Friday:

On the hourly chart, EUR/USD continues to follow a medium-term downtrend, although the chances of a full resumption are fading. Since the fundamental and macroeconomic backdrop still supports the U.S. dollar much more than the euro, we continue to expect a decline. However, Donald Trump keeps pushing the dollar into the abyss with his frequent tariff decisions and statements about global order. As a result, fundamentals and macro data are overshadowed by politics and geopolitics, leading to persistent dollar weakness.

On Friday, the euro may continue to decline, as for the first time in a while, the market has responded to fundamentals appropriately. From a technical perspective, the pair broke out of the ascending channel. The dollar is oversold and undervalued without justification—a correction is at least reasonable.

On the 5-minute chart, consider trading around the levels: 1.0433–1.0451, 1.0526, 1.0596, 1.0678, 1.0726–1.0733, 1.0797–1.0804, 1.0845–1.0851, 1.0888–1.0896, 1.0940–1.0952, 1.1011, 1.1048. No major events are expected in the U.S. or Eurozone on Friday, which may lead to low volatility; however, the euro could still experience a slight decline.

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.