Trade review of Thursday:

1H chart of the EUR/USD pair

EUR/USD again traded cautiously on Thursday, despite at least one important event. Yesterday, the European Central Bank released its meeting results and, for the second time in roughly three months, signaled a hawkish stance and outlook. In other words, the ECB raised key rates for the second time in 2026 and indicated that inflation in the eurozone will accelerate due to the Middle East conflict, the Strait of Hormuz blockade, and higher oil prices. Thus, the ECB is ready to carry out further tightening in the future. However, none of this helped the single currency. Instead of the expected rally, the euro fell, and even Christine Lagarde's press conference did not support it. The market may have pre-priced the meeting outcome — it had been known for about two weeks — but that doesn't change the fact that, for the second time, an ECB rate increase did not lead to euro strength. The market continues to ignore euro-positive factors and awaits Federal Reserve tightening.

5M chart of the EUR/USD pair

On the 5-minute TF on Thursday, one buy signal formed. At the start of the US session, price bounced from the 1.1584–1.1594 area, allowing novice traders to open long positions. The euro gained a bit by the end of the day, but overall volatility remained low.

How to trade on Friday:

On the hourly timeframe, EUR/USD can resume its upward trend. Considering events over recent months, we believe the euro should continue to rise steadily even without local support. The US dollar currently lacks any growth drivers except the market's near-religious belief in a Fed rate hike.

On Friday, novice traders may open short positions targeting 1.1527–1.1531 if price closes below 1.1584–1.1594. Long positions can be opened targeting 1.1655–1.1665 in the event of a bounce from 1.1584–1.1594.

On the 5-minute TF, consider the levels 1.1366–1.1377, 1.1461–1.1474, 1.1527–1.1531, 1.1584–1.1594, 1.1655–1.1665, 1.1745–1.1754, 1.1830–1.1837. On Friday, ECB President Christine Lagarde will speak again in the eurozone, and the US will release the crucial August CPI report. Volatility today may be above the recent monthly norm.

Key Rules of the Trading System:

1. The strength of a signal is determined by the time it takes to form the signal (rebound or breakout). The less time taken, the stronger the signal.
2. If two or more trades were opened at a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a range (flat), any pair can generate many false signals or may not produce any at all. Technical levels may be disregarded.
4. On the hourly timeframe, trading signals from the MACD indicator should be acted upon only when volatility is high, and a trend line or trend channel confirms the trend.
5. If two levels are too close together (within 5-20 pips), treat them as a support or resistance area.
6. After moving 15 pips in the right direction, a stop-loss should be set to break even.

What to Look for on the Charts:

Price levels (areas) of support and resistance serve as targets for opening buy or sell trades or as sources of signals.

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

The MACD indicator (14,22,3) — the histogram and signal line — is an auxiliary indicator that can also provide signals.

Important speeches and reports (listed in the news calendar) can significantly influence currency pair movements. Therefore, during their release, traders should approach trading with utmost caution, or exit the market to avoid sudden reversals against the preceding move.

Beginner forex traders 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.