On Tuesday, March 23, EUR/USD was moving in one direction throughout the day. However, the pair was not moving upwards. Let us remind you that in yesterday's review, we recommended trading upwards on Tuesday since the price had broken through the descending line. Thus, we assumed that a short-term uptrend had been formed within the sideways channel. Unfortunately, this scenario was not confirmed. During the day, the MACD indicator did not turn to the upside which is very good since novice traders did not receive false signals. However, one signal that was formed during the day deserves our attention. In particular, the prices passed the level of 1.1912. For your reference, the red horizontal lines on the 30-minute chart are the strongest levels at that moment because the price has already pulled back from them. Therefore, a breakout of these levels can also be considered a signal. Accordingly, after the price had passed the 1.1912 level, it was necessary to open short positions with Take Profit set at 30-40 pips. As a result, at the time of this writing, the euro/dollar pair has already gone down by 45 pips. So, beginners could have gained profit from this signal.
Now let's take a look at the 5-minute time frame. Here, the technical picture is simple and confusing at the same time. A sell signal was formed immediately at the beginning of the European session, so it was no longer necessary to consider the signals that were formed on the 5-minute time frame. By this time, a short position had already been opened following a sell signal on a 30-minute time frame. The level of 1.1874 could have been used as Take Profit. Later, the price tested this level. If traders had closed the trade following this signal, they could have gained about 30 pips. All buy signals formed by MACD on this timeframe should have been ignored since a sell position was held open throughout the day. When the price broke through the level of 1.1875, it became clear that there would be no upward movement. Thus, the uptrend has been fully canceled, and only a sideways channel remains in place. The channel is located between the levels of 1.1836 and 1.1990. Since the price had broken through the level of 1.1875, traders could have opened new short positions with the target at 1.1836. Right after the trade was opened, the price went down by only 10 pips. You can set Stop Loss to breakeven point at 15 pips. Today, there were no important reports published in the EU. Meanwhile, in the US, markets expected the speeches by Treasury Secretary Janet Yellen and Fed Chairman Jerome Powell in the US House Committee on Financial Services. However, both officials made general statements and did not report anything of interest to the markets.
How to trade on Wednesday:
On Wednesday, we recommend trading short on the 30-minute time frame as the short-term downtrend has resumed. This is confirmed by the breakout of the previous local low. Thus, the pair can continue to move towards the target at 1.1836. A rebound from this level will allow opening buy positions. Take Profit should be set at 30-40 pips for every trade. Consolidation below the 1.1836 level will allow us to open new sell positions with Take Profit set at 30-40 pips. To get the sell signal from the MACD indicator, you need to wait for it to discharge to the zero level. Tomorrow, it is recommended to trade on the 5-minute chart using the same levels as on the larger time frame. Today, the pair has been moving without any pullbacks. So, the MACD signals are not very strong at this time. The price and the indicator do not correlate with each other.
