Friday's Trade Analysis:

1H EUR/USD Chart:

The EUR/USD currency pair continued its downward movement on Friday. This trend would have continued throughout the day without the University of Michigan Consumer Sentiment Index in the US. The index was much weaker than forecast, which halted the strengthening of the US dollar. The US dollar will continue to strengthen over the next few months. We have mentioned this before. The current fundamental backdrop does not suggest a decline in the dollar, and unlike the GBP/USD pair, the EUR/USD pair reacts to significant news and events. The two-month upward correction is over, so we expect a new, powerful, and prolonged decline in the pair. The ECB has begun easing monetary policy, and the Fed will only start easing for a short time, as inflation still exceeds the target level by more than one and a half times. Until inflation in the US drops to at least 2.5%, the downward trend for the euro should persist.

5M EUR/USD Chart:

On the 5-minute timeframe on Friday, several signals were formed. Early in the European trading session, the pair overcame the 1.0726-1.0733 area, then dropped to the nearest target level of 1.0678. This trade could have earned about 30 points. The bounce from the 1.0678 level could also have been traded, but the profit from the long position was not realized as the trade closed at breakeven with a Stop Loss. The price tested the 1.0678 level again, but at this time, the Michigan Consumer Sentiment Index was to be released in the US. Since it turned out weak, a drop in the US dollar was expected, so buying signals were sought. Such a signal was formed and could have been traded, yielding another 15 points of profit.

How to Trade on Monday:

The pair finally began forming a local downward trend on the hourly timeframe. We expect the pair to descend to 1.0600, 1.0450, and even 1.0200. However, it should be understood that these targets will not be reached in just a couple of weeks; they are medium-term goals. We still do not see any reason for the euro to rise.

On Monday, traders can expect an upward correction as the price has significantly decreased recently. A small rise is possible since the price cannot move in one direction continuously.

On the 5-minute timeframe, consider the levels 1.0483, 1.0526, 1.0568, 1.0611, 1.0678, 1.0726-1.0733, 1.0797-1.0804, 1.0838-1.0856, 1.0888-1.0896, 1.0940, 1.0971-1.0981. No significant events are scheduled in the Eurozone and the US on Monday. Thus, traders will have nothing to react to, and volatility may be low.

Main Trading System Rules:

1. Signal Strength: The strength of a signal is determined by the time taken to form it (bounce or break through a level). The less time it takes, the stronger the signal.
2. False Signals: If two or more trades were opened with false signals near a level, ignore all subsequent signals from that level.
3. Flat Market: In a flat market, any pair can form many false signals or none at all. In any case, stop trading at the first signs of a flat market.
4. Trading Hours: Trades are opened between the start of the European session and the middle of the American session, after which all trades should be closed manually.
5. MACD Signals: On the hourly timeframe, trade MACD signals only with good volatility and a confirmed trend line or channel.
6. Close Levels: If two levels are very close to each other (5 to 20 points), treat them as a support or resistance area.
7. Stop Loss: When the price moves 15 points in the right direction, set Stop Loss to break even.

Chart Elements:

• Support and Resistance Levels: These are the targets for opening buy or sell trades and can be used to place Take Profit levels.
• Red Lines: Channels or lines indicating the current trend direction, showing which way to trade.
• MACD (14,22,3): Histogram and signal line used as an additional signal source.
• Important Events and Reports: (always in the news calendar) can significantly impact the currency pair's movement. Therefore, trade cautiously during their release or exit the market to avoid sudden price reversals.

Beginner forex traders should remember that only some trades can be profitable. Developing a clear strategy and practicing money management are keys to long-term success in trading.