How to Trade the EUR/USD Pair on September 29? Simple Tips and Trade Analysis for Beginners

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Friday Trade Review:

1H Chart of EUR/USD

On Friday, the EUR/USD pair began a natural upward movement. Over the past week, we observed another technical correction, as the euro had no fundamental reasons for a significant decline. The results of the Federal Reserve and European Central Bank meetings could have been interpreted in different ways — and that's precisely what the market did. Speeches from Jerome Powell and Christine Lagarde also did not materially alter the situation and did not indicate a shift in central bank sentiment. The only support for the dollar came from the U.S. Q2 GDP report. On Friday, however, the University of Michigan Consumer Sentiment Index once again showed a disappointing result, which partly helped traders make the right decision. Later, Donald Trump introduced a new package of tariffs. As a result, the U.S. dollar resumed its decline. We believe the uptrend on the daily timeframe will soon resume, as the dollar still lacks any medium-term drivers for growth.

5M Chart of EUR/USD

On the 5-minute timeframe, two buy signals were formed on Friday. The price twice rebounded from the 1.1655–1.1666 area, triggering an upward move. Novice traders could have entered long positions on either of these signals, as they essentially duplicated each other. By Friday evening, the trade could be closed in profit or protected with a Stop Loss at breakeven before the weekend. During Monday's Asian session, the nearest target at 1.1737 was reached.

How to Trade on Monday:

On the hourly timeframe, the EUR/USD pair has entered a new corrective phase globally, supported by the U.S. Q2 GDP report. However, the overall fundamental and macroeconomic backdrop remains unfavorable for the U.S. dollar, so we still do not expect strong, sustained growth of the greenback. From our perspective, the dollar may continue to rely solely on technical corrections, and that is precisely what we are currently seeing.

On Monday, the pair will likely move based on technical factors. The 1.1737–1.1745 area is key: a rebound from it would allow for short positions, while a breakout would open the way for new longs.

On the 5-minute timeframe, the following levels should be considered: 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, 1.1970–1.1988. On Monday, the macro calendars in both the Eurozone and the U.S. are essentially empty, aside from a series of speeches from ECB and Fed representatives. However, at this stage, there are not many open questions regarding the monetary policy stance of either central bank.

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.

The material has been provided by InstaForex Company - www.instaforex.com