Monday Trade Review:

1H Chart of EUR/USD

The EUR/USD currency pair traded higher on Monday, with no particular reasons given. The macroeconomic backdrop was essentially absent on Monday, except for a few reports from Germany, which aroused no interest among traders, as expected. However, we'd like to remind you that in recent weeks, while the pair was stuck in a clear flat trend, we repeatedly said we expected only the euro to rise and the dollar to fall. The fundamental background for the US currency remains downright disastrous, so nothing but further decline can be expected. Also, recall that the US labor market and unemployment data published on Friday failed spectacularly. This means the Fed will already take a dovish stance in September. Today, another NonFarm Payrolls report—the annual one—will be released. In our view, the dollar shouldn't expect anything positive from that report either. The price has consolidated above the sideways channel, so now is the best time to resume the upward trend of 2025.

5M Chart of EUR/USD

On the 5-minute timeframe, two trading signals were formed on Monday. During the European session, the price bounced off the 1.1737–1.1745 area but failed to begin a new downswing within the flat range. In the US session, this area was breached, allowing traders to open long positions that can be safely held into Tuesday with a Stop Loss set to break-even or at the minimum value.

How to Trade on Tuesday:

On the hourly timeframe, the EUR/USD pair has every chance to resume the uptrend that has been forming since the beginning of this year, and the flat can be considered over. The fundamental and macroeconomic backdrop for the US dollar remains dire, so we still do not expect any strengthening in the American currency. As before, we believe the dollar can only count on technical corrections.

On Tuesday, the EUR/USD pair may continue its upward movement since it exited the sideways channel the previous day, where it had been stuck for three consecutive weeks. Thus, the first target for the euro is now the 1.1808 level.

On the 5-minute timeframe, you should watch the levels: 1.1198–1.1218, 1.1267–1.1292, 1.1354–1.1363, 1.1413, 1.1455–1.1474, 1.1527, 1.1571–1.1584, 1.1655–1.1666, 1.1737–1.1745, 1.1808, 1.1851, 1.1908. On Tuesday, the US will publish the annual NonFarm Payrolls report, which may have an even greater impact than Friday's monthly report. Most likely, the value will be negative, which may trigger a fresh collapse in the US dollar.

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.