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FX.co ★ How to trade EUR/USD on August 5? Simple tips for beginners.

How to trade EUR/USD on August 5? Simple tips for beginners.

Analysis of Thursday's deals:

30M chart of the EUR/USD pair

How to trade EUR/USD on August 5? Simple tips for beginners.

The EUR/USD currency pair did not show anything out of the ordinary on Thursday. The pair also continued to trade inside the horizontal channel, which is clearly visible on higher timeframes. We recommend novice traders to pay attention to them. Thus, even yesterday's consolidation below the level of 1.0156 did not contribute to further strengthening of the US currency. Consequently, our conclusions about the resumption of the downward trend have so far turned out to be incorrect. The market is not yet ready to return to the trend movement. No important macroeconomic statistics, except for the report on unemployment claims in the US, was published on Thursday. In general, traders focused on the Bank of England meeting, after which the pound notably "flew". Well, the euro, after falling to the lower border of the horizontal channel, headed for the upper border. There is hope that the pair will leave this channel tomorrow, as the report on Nonfarms in the US may provoke a strong reaction, but the release of the report may be met exactly in the middle of the channel, so the chances of leaving it are minimal.

5M chart of the EUR/USD pair

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How to trade EUR/USD on August 5? Simple tips for beginners.

Thursday's movements on the 5-minute timeframe were not strong and not too trendy. However, the weakness of Thursday's movements this time helped novice traders to earn. The fact is that the price rebounded from the level of 1.0156 at the very beginning of the European trading session, which is ideal in terms of accuracy, after which it rose to the level of 1.0221 by the middle of the US session. Thus, long positions should be closed after this level is worked out. The profit on the long position was about 40 points, which is an excellent result, given the total volatility of the day, equal to 66 points. It was no longer necessary to work out the signal that formed near the level of 1.0221, since it was too late. As a result, one signal, one deal, profit on it. An almost perfect day.

How to trade on Friday:

The upward trend has now been canceled on the 30-minute timeframe, and a new downward trend has been formally formed instead. However, by and large, the pair has been trading inside the horizontal channel for several weeks, which we have repeatedly mentioned in our other articles. It is perfectly visible on the 4-hour TF. Therefore, most likely, the pair will now strive to the upper boundary of this channel, but it is very difficult to say when it will leave it. On the 5-minute TF on Friday it is recommended to trade at the levels of 1.0072, 1.0123, 1.0156, 1.0221, 1.0269-1.0277, 1.0354. When passing 15 points in the right direction, you should set Stop Loss to breakeven. There are no important events or reports scheduled in the EU on Friday. But in the US, reports on Nonfarms, unemployment and wages will be published. Of course, the NonFarm Payrolls report is the most significant, and the greater the deviation of the actual value from the forecast, the higher the likelihood of a strong market reaction.

Basic rules of the trading system:

1) The signal strength is calculated by the time it took to form the signal (bounce or overcome the level). The less time it took, the stronger the signal.

2) If two or more deals were opened near a certain level based on false signals (which did not trigger Take Profit or the nearest target level), then all subsequent signals from this level should be ignored.

3) In a flat, any pair can form a lot of false signals or not form them at all. But in any case, at the first signs of a flat, it is better to stop trading.

4) Trade deals are opened in the time period between the beginning of the European session and until the middle of the US one, when all deals must be closed manually.

5) On the 30-minute TF, using signals from the MACD indicator, you can trade only if there is good volatility and a trend, which is confirmed by a trend line or a trend channel.

6) If two levels are located too close to each other (from 5 to 15 points), then they should be considered as an area of support or resistance.

On the chart:

Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now.

The MACD indicator (14,22,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).

Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.

Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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