Hourly chart of the EUR/USD pair
The EUR/USD pair reached the 1.1903 level again on Thursday, August 6, which we mentioned as an important resistance level in the previous review. This is the peak from July 31, and we could not overcome the price on August 5. Thus, we already have three rebounds from this level. The latter formed today, and the MACD indicator gave us a sell signal a day earlier, and since then it has not turned up. Thus, the rebound from the 1.1903 level can and should have been rejected with the goal of 1.1802. Unfortunately, trade was not that active today. The euro/dollar pair went down by only 40-50 points for eight hours (starting from the morning article). In principle, this is not very little, but also not much. Therefore, novice traders could earn 30-35 points on this trade. And the conclusions are quite simple: sellers are extremely weak now and could not even pull down the pair by at least 100 points after three rebounds from an important level. Thus, it is possible that buyers will make a fourth attempt to overcome the 1.1903 level by tomorrow.
Fundamentally, the pair was trading using America's global problems again. Also, traders of the EUR/USD pair were only interested in one report during the day. This is the data on applications for unemployment benefits, which, incidentally, showed a decrease in the total number of repeated applications to 16.1 million from 17.0. Thus, unemployment in the US continues to fall, which cannot but please the buyers of the dollar. However, the US currency did not rise in price for a long time, and the upward trend in general remains. Thus, sellers cannot seize the initiative in any way.
Three important US reports will be released at once on Friday, August 7. The unemployment rate and the average wage level are not the most important. But the Nonfarm Payrolls report – the number of new jobs created outside the agricultural sector is extremely important. Forecasts say that 1,600,000 new jobs were created in July. If this forecast is surpassed, the US dollar will simply have to rise in price, although in general it will take a serious excess of forecasts to outweigh all the negative that is coming from America now. Thus, if the value of Nonfarm payrolls is higher than 2 million, you can expect the dollar to increase based on this report.
The following scenarios are possible on August 7:
1) Purchases are still relevant, as the price has left the ascending channel and cannot overcome the 1.1903 level. However, given the euro's growth in the past three days, it is possible for the upward trend to resume. Therefore, for novice traders, we still recommend buying the euro if the price closes above the 1.1903 line, which passes through the last three price highs. The targets in this case will be the resistance levels of 1.1966 and 1.2026. Although it is recommended to take profit near the first target.
2) Selling the currency pair is still more promising now, but sellers are very weak. The pair has already rebounded from the 1.1903 level three times, and each time, the fall was less than the previous one. Thus, we are leaning towards the option that forming a new downward trend will be postponed again for an indefinite period, judging by the technical data that are now available in the illustration.
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.
