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Hourly chart of the EUR/USD pair
The EUR/USD pair still resumed to go down last Friday, August 7. In our morning article, we mentioned that you are not yet advised to consider buying, since three attempts to overcome the 1.1903 level at once were unsuccessful. Sellers also showed no desire to buy the dollar until Thursday and Friday of last week. Nevertheless, the last two trading days of last week still allowed the US dollar to rise by 120 points. Thus, after overcoming the 1.1824 level, novice traders could remain in the sales of the pair (or open new ones) with the targets of 1.1772 and 1.1726, the first of which was eventually successfully reached. Therefore, it was possible to earn about 40-50 points, which is an excellent result for the not very volatile EUR/USD pair. The MACD indicator did not turn upward during Friday, so there was no reason to close sales during the day. The day turned out to be absolutely "bearish" (bears are the players of the foreign exchange market, which sell this or that instrument, while bulls - buy).
Fundamentally, as we said in our morning review of August 7, the Nonfarm Payrolls report was of great importance. As a result, the forecast value of this report has exceeded by around 150-200,000, so traders more actively bought the US dollar during the day. In addition, the unemployment rate in America fell to 10.2%, which also supported the dollar. We can say that, in principle, all the reports on Friday were in favor of the dollar. And we remind novice players that the stronger data from a particular country, the more likely that the national currency of that country will grow. Investors and traders love the currencies of strong economies.
No important news or macroeconomic reports are expected in America or the European Union on August 10, Monday. This means that trading on Monday can be rather sluggish and slightly volatile (this means that during the day the pair can pass a small number of points from the low to the high of the day). The attitude of the sellers is also not clear now. Either they are set for strong sales of the pair, since before that the price had been growing for about three months, therefore, a downward correction by at least 30-50% of the upward movement is necessary. Either the big epidemiological, political and economic problems in the United States will still outweigh and bulls will return to the market. Let's remember that despite the good US data on Friday, the American economy contracted by 33% in the second quarter, while the European one lost only 12.1%.
The following scenarios are possible on August 10:
1) Buying the pair remains irrelevant, since the price was unable to overcome the 1.1903 level. Thus, traders are now simply deprived of buy signals. Based on this, we do not recommend trading the pair up on Monday. An important point: the MACD indicator could move upward at the opening of trading on Monday, but the price may continue to decline. This indicator is now very low and due to its capabilities, it cannot fall constantly. Thus, even an upward reversal of the indicator may not signal the beginning of the pair's growth.
2) Selling the currency pair is still more promising now, at least with the target of 1.1696 (the previous local low). However, there are about 90 points to this goal, so the price will hardly be able to cover such a distance in one day. Especially if it's Monday. In the current situation, it would be best to wait for a slight upward price pullback, after which, upon a downward reversal of the MACD indicator, reopen sales with targets at 1.1726 and 1.1696.
What's on the chart:
Support and Resistance Price Levels - Levels that are targets when buying or selling. You can place Take Profit levels near them.
Red lines - channels or trend lines that display the current trend and show which direction it is preferable to trade now.
Arrows up/down - indicate when you reach or overcome which obstacles you should trade up or down.
MACD indicator is a histogram and a signal line, the crossing of which is a signal to enter the market. It is recommended to use in combination with trend lines (channels, 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 in the forex market should remember that every trade cannot be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.
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