Trade Analysis for Friday:

1H Chart of the EUR/USD Pair

On Friday, the EUR/USD currency pair moved with low volatility due to the U.S. Independence Day. All trading venues in America were closed that day, and reports on unemployment and the labor market were even postponed to Thursday. As a result, there were neither interesting events nor notable movements. Overall, the EUR/USD pair continues to correct within a downward trend, as clearly visible on the hourly timeframe. The descending trend line has been broken once, but this did not end the trend. The market continues to ignore all factors favoring the euro, and the most recent rise in the pair is too weak to constitute a trend. Thus, it appears the U.S. dollar's rise will resume. For this to happen, the ascending trend line needs to be overcome. There were no interesting events on Friday in either the Eurozone or the U.S. The last Nonfarm report triggered a drop in the dollar, but traders still do not seem to be considering medium-term buying of the pair.

5M Chart of the EUR/USD Pair

On the 5-minute timeframe, one buy signal was generated on Friday. During the Asian trading session, the price bounced off the 1.1420-1.1432 area, but traders did not see any strong growth throughout the day. Nevertheless, the signal proved valid, and today it may be duplicated with a second bounce from the indicated area.

How to Trade on Monday:

On the hourly timeframe, a two-month downward trend remains intact. With the agreement between Iran and the U.S. signed, the market has one less reason to buy the U.S. dollar. However, the market pays no attention to this fact and generally ignores almost all factors favoring the euro. Therefore, the current strengthening of the U.S. dollar lacks clear and understandable reasons. The correction could finish at any moment.

On Monday, novice traders can open short positions targeting 1.1354-1.1363 if the price consolidates below the 1.1420-1.1432 area. Long positions can be initiated with targets at 1.1527-1.1531 if the price bounces from the 1.1420-1.1432 area.

On the 5-minute timeframe, levels to consider include 1.1292, 1.1354-1.1363, 1.1420-1.1432, 1.1527-1.1531, 1.1584-1.1594, 1.1655-1.1666, 1.1745-1.1754, and 1.1830-1.1837. On Monday, a new speech by European Central Bank President Christine Lagarde and reports on retail sales and producer prices are scheduled in the Eurozone. In the U.S., the ISM Services PMI, which holds an "important" status, will be released today.

Basic Rules of the Trading System:

1. The strength of a signal is determined by the time it takes to form (a bounce or a breakout). The less time it took, the stronger the signal.
2. If two or more trades were opened at a particular level on false signals, all subsequent signals from that level should be ignored.
3. In a flat, any pair can form many false signals or none at all. Technical levels may be ignored.
4. On the hourly timeframe, trading signals from the MACD indicator should be executed only when volatility is good, and a trend is confirmed by a trend line or channel.
5. If two levels are too close together (5 to 20 pips), they should be considered a support or resistance area.
6. After moving 15 pips in the correct direction, a Stop Loss should be placed at breakeven.

What's on the Charts:

Price levels (areas) of support and resistance are targets when opening long or short positions or sources of signals.

Red lines indicate channels or trend lines that display the current trend and indicate the preferred direction for trading.

The MACD indicator (14,22,3) – histogram and signal line – is a supplementary indicator that can also be used as a source of signals.

Important speeches and reports (contained in the news calendar) can significantly impact the movement of the currency pair. Therefore, during their release, trading should be conducted with maximum caution, or one should exit the market to avoid sharp reversals against preceding movements.

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.