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FX.co ★ Tips for beginner traders in EUR/USD and GBP/USD on August 5

Tips for beginner traders in EUR/USD and GBP/USD on August 5

Details of the economic calendar last August 4

The Bank of England decided to raise interest rates by 50 basis points to 1.75%. Although it was expected, the move is considered historic as it is the largest increase since 1995.

The main reason is sky-high inflation, which led to a slowdown in GDP growth in the UK. Forecasts say the economy will enter recession starting from the fourth quarter of this year.

Unsurprisingly, the negative outlook frightened investors, thereby causing pound to lose around 150 pips. But during the US trading session, weekly data on jobless claims showed a sharp increase in volume, leading to a sell-off in dollar and increase in the rate of GBP/USD.

Details of the US jobless claims report:

Repeated claims for benefits increased from 1,368 thousand to 1,416 thousand, while first-time claims rose from 254,000 to 260,000.

Analysis of trading charts on August 4

EUR/USD continues to fluctuate within the range of 1.0150/1.0270. Although there was a slight rebound, it is clear that traders remain undecided on where to go, which attracts abundant attention from speculators. This means that sooner or later, there will be strong price movements.

Despite the impressive activity yesterday, GBP/USD remains moving within the deviation of 1.2155, which indicates multidirectional interest that is actively used by speculators.

Tips for beginner traders in EUR/USD and GBP/USD on August 5

Economic calendar for August 5

The key event for today is the report of the US Department of Labor, which predicts that the unemployment rate will remain unchanged at 3.6%, while 230,000 new jobs could be created outside of agriculture. The latter is noticeably less than the 381,000 previously recorded last month, indicating a slowdown in growth and beginning of the deterioration of the situation.

Schedule:

Employment report by the US Department of Labor - 08:30 ET

Trading tips for EUR/USD on August 5

Despite the obvious signs of overheating, a rebound is still possible in the market. This means that another increase in the volume of short positions around 1.0250/1.0270 could happen, which will lead to a move towards the lower border. Take note that a huge change will occur if euro stays outside 1.0300 - 1.0100. Wait for signals in the four-hour (H4) chart.

See also: Start Forex trading with a European level broker!
Tips for beginner traders in EUR/USD and GBP/USD on August 5

Trading tips for GBP/USD on August 5

There will be an attempt to restore the downward trend relative to the recent correction. The first signal is to sell when the quote holds below 1.2100 in the H4 chart. In this case, pound will head towards the psychological level of 1.2000.

The current correction will extend if the quote returns above 1.2200 in the H4 chart.

Tips for beginner traders in EUR/USD and GBP/USD on August 5

What is shown on the trading charts?

This candlestick chart has white and black graphic rectangles, with lines at the top and bottom. Detailed analysis of each candle will show characteristics relative to a particular time period, such as opening price, closing price, maximum and minimum price.

Horizontal levels are price coordinates, relative to which a stop or price reversal may occur. In the market, these levels are called support and resistance.

Circles and rectangles are highlighted examples of where the price reversed before. They indicate horizontal lines that may put pressure on the pair in the future. The up/down arrows are reference points of where the pair could go in the future.

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