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Forex Analysis & Reviews: EUR/USD and GBP/USD: Trading plan for novice traders for August 6, 2021
time 06.08.2021 11:11 AM
time Relevance up to, 07.08.2021 09:10 AM

Details of the economic calendar from August 5

The Bank of England kept its base interest rate at 0.1% per annum and kept the volume of bond-buying unchanged at £895 billion on Thursday.

Thus, the regulator did not dare to change anything in the parameters of monetary policy or hint about changes, which upset speculators, and this led to price stagnation.

The pound sterling remained in place during the publication of the results of the meeting of the Bank of England.

Meanwhile, United States weekly jobless claims recorded a decline in their volume.

Details of statistics:

The volume of initial claims for benefits decreased from 399,000 to 385,000.

The volume of continuing claims for benefits decreased from 3.2 million to 2.9 million.

We study and analyze

• Claims for unemployment benefits reflect the number of citizens currently not working and receiving unemployment benefits. This indicator is considered the state of the labor market, where the growth of the indicator negatively affects the level of consumption and economic growth. Reducing claims for benefits has a positive effect.

Thus, a decrease in the number of applications for benefits may lead to a strengthening of the US dollar. In this case, positive data on the labor market played into the hands of the US dollar, which led to its strengthening during the publication of statistical indicators.

Analysis of trading charts from August 5

After a slight stagnation, the Euro/Dollar currency pair resumed its downward movement. The recovery of the quotes in relation to the corrective move 1.1750 ---> 1.1900 is approximately 50%, which signals an increase in the volume of short positions. Thus, the corrective move is considered complete, and the base of July 21 - 1.1752 stands in the way of the market.

The trading plan of August 5 was a scenario of a downward development, which was confirmed at the time of the breakdown of the lower border of the side channel 1.1850-1.1900.

The Pound/Dollar currency pair follows the reference points of 1.3900 and 1.4000 for the fourth day in a row, signaling the process of accumulation of trading forces. This can lead to acceleration in the market at the time of the breakdown of one or another border of the range.

Thus, the breakout method is considered the most optimal trading strategy.

The trading plan of August 5 was a scenario of working on the breakdown of a particular border, where pending orders were placed on the market.

We study and analyze

• Short positions, or Short, means sell positions.

• The accumulation process is price fluctuations in a closed amplitude, where at the moment of a breakdown of one or another stagnation boundary, there is often a local acceleration towards the breakdown.

• A pending order is an order to buy or sell an asset (currency) when the desired price level of the order is reached.

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Economic calendar for August 6

Today, in terms of the economic calendar, a report by the United States Department of Labor will be published, which in the world of finance is considered one of the most important economic events.

Expectations for the report:

The unemployment rate in July may decrease from 5.9% to 5.7%

Outside agriculture, 870,000 new jobs can be created against 850,000 in the previous reporting period.

As you can see from the details of statistical expectations, experts predict a further recovery process, and this may lead to an increase in the US dollar if the forecast coincides.

The time of publication of the report is 12:30 UTC.

Trading plan - EURO/DOLLAR (August 6)

Market participants are working to depreciate the euro, which corresponds to the process of recovery of the downward movement in relation to the correction. Trading expectations consider the value of 1.1752 as a possible outlook for the downward trend. In this scenario, we will receive a full price recovery relative to the corrective move, as well as a signal to prolong the downward cycle from the beginning of June.

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Trading Plan - POUND/DOLLAR (August 6)

The price movement along a sideways trajectory is still relevant in the market, but traders are already ready for changes since working within the established boundaries does not have high profits.

Traders will consider an upward movement if the price holds above the level of 1.4000, opening the way in the direction of the values 1.4100-1.4150.

A downward movement will be relevant if the price is kept below the level of 1.3885, opening the way in the direction of 1.3825-1.3800.

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What is reflected in the trading charts?

The candlestick chart view is represented by white and black graphic rectangles with lines at the top and bottom. With a detailed analysis of each candlestick, you can see its characteristics relative to a particular time period: open price, close price, high and low prices.

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 where the price of history has reversed. This highlighting in color indicates horizontal lines that may put pressure on the quote in the future.

The up/down arrows are indications of the possible direction of the price in the future.

IMPORTANT TO REMEMBER

Golden Rule: Before you start trading with real money, you need to figure out what you are dealing with. Trading education is important for novice traders because the market is constantly in dynamics and it is important to understand what is happening on it.

Gven Podolsky,
Analytical expert of InstaForex
© 2007-2022
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