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FX.co ★ How to trade EUR/USD on August 8? Simple tips for beginners.

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Forex Analysis:::2022-08-07T14:34:13

How to trade EUR/USD on August 8? Simple tips for beginners.

Analysis of Friday's deals:

30M chart of the EUR/USD pair

How to trade EUR/USD on August 8? Simple tips for beginners.

The EUR/USD currency pair was trading very calmly for most of the day on Friday. And the pair fell after the planned reports were released in the US and lost about 100 points in half an hour. In principle, there is nothing surprising about the pair's movement. The reports were expected only in the US, they had to come out at the same time, they were important, and their values impressed the market very much. Therefore, before the statistics from the US, we observed calm trades, after - too, and at the time of release - a "storm". Let's move on to the reports themselves. The most significant NonFarm Payrolls report turned out to be twice as strong as forecasts, the number of new jobs in July amounted to more than 500,000. Naturally, the market reacted with powerful long positions on the dollar. And in addition to Nonfarms, a report on unemployment was also published, which showed a decrease to 3.5%. Recall that unemployment in the US is already at 50-year lows, but, as we can see, it continues to decline. Thus, the statistics from overseas on Friday were very strong, and we are even a little surprised that the dollar rose so weakly on such strong data. But the most important thing is that the euro/dollar pair still remains inside the horizontal channel. Thus, despite the good statistics, the strong reaction of the market, this did not affect the technical picture of the pair in any way. The flat can continue for as long as you like.

5M chart of the EUR/USD pair

How to trade EUR/USD on August 8? Simple tips for beginners.

You can clearly on the 5-minute timeframe see what we talked about above. The pair showed a strong surge of volatility only once for half an hour, and the rest of the time it was trading very calmly. Trading signals on Friday were not that much. Novice traders could open longs during the European trading session, when the price rebounded from the level of 1.0221. However, the long position had to be closed manually before the very beginning of the US session, as the data on Nonfarm and unemployment could have provoked a strong market reaction. And so it happened. The sell signal near the level of 1.0221 could not be worked out, since at the time of its formation the price had already gone down by about 60 points. This was followed by a buy signal near the level of 1.0156, but we would not take risks and work it out, since the signal itself was very inaccurate, and the market was still under the impression of Nonfarms. Only the last buy signal turned out to be quite good, but it was formed quite late in time and it would be better to filter it too.

How to trade on Monday:

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. On the 5-minute TF tomorrow 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. On Monday, by tradition, not a single important event or publication is planned neither in the US nor in the European Union. However, this is clearly not a problem for the euro, since it has been trading in a horizontal channel for almost a month now.

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.

Analyst InstaForex
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