Trading plan for EUR/USD on August 3. Simple tips for beginners

The EUR/USD pair fell again on the third trading day of the week. It is noteworthy that the price has already broken the descending trend line three times, but it still hasn't started upward movement. We are facing a situation mirroring that which we observed throughout almost the entire 2023 (especially for the pound) – the pair is moving in one direction, while often ignoring many factors (for example, the need to correct). However, the euro's decline could not be more logical. Just after the euro has risen for 10 months, it needs a strong correction. We are still waiting for the pair at around 5-6 levels.

The ADP released a report on changes in the number of employees in the private sector - an analogue of NonFarm Payrolls. This report showed a value almost twice as high as the forecast (as well as a month earlier). The value of the previous month was revised down, but not significantly. The dollar rose, both in the first half of the day and in the second. Therefore, the ADP report, with its resonant value, supported the US currency, but it is growing without its help at the moment.

There were several trading signals on the 5-minute chart, and not the best ones. First, the pair bounced twice from the 1.0971-1.0977 area. In both cases, it could not even go 15 points in the right direction. This was followed by consolidation under the indicated area, after which the pair dropped even below the nearest target level of 1.0932, which was removed from the charts at the end of the day. The next buy signal was a signal to close the shorts, the profit was about 20 points. This is exactly how much novice traders could lose on the first trade. The last long position brought another 20 pips of profit, so the day ended well.

On the 30M chart, the pair is trading lower, which is quite logical and justified both in the local sense of the word and globally. At this time, the euro is getting rid of its own overbought condition, and the market no longer believes that the European Central Bank rate will continuously hike rates. The key levels on the 5M chart are 1.0835, 1.0871, 1.0901-1.0904, 1.0971-1.0977, 1.1038, 1.1091, 1.1132-1.1145, 1.1184, 1.1241, 1.1279-1.1292. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. On Thursday, the European Union will publish the final value of the Services PMI for July. The US will release a similar report, but the ISM data is important. There will also be a report on jobless claims, and don't forget about the Bank of England meeting, which may have an impact on the euro against the dollar.

1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a break). The shorter this period, the stronger the signal.

2) If two or more trades were opened at some level following false signals, i.e. those signals that did not lead the price to Take Profit level or the nearest target levels, then any consequent signals near this level should be ignored.

3) During the flat trend, any currency pair may form a lot of false signals or do not produce any signals at all. In any case, the flat trend is not the best condition for trading.

4) Trades are opened in the time period between the beginning of the European session and until the middle of the American one when all deals should be closed manually.

5) We can pay attention to the MACD signals in the 30M time frame only if there is good volatility and a definite trend confirmed by a trend line or a trend channel.

6) If two key levels are too close to each other (about 5-15 pips), then this is a support or resistance area.

Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.

Red lines are channels or trend lines that display the current trend and show which direction is better to trade.

MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross. This indicator is better to be used in combination with trend channels or trend lines.

Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair. Therefore, during such events, 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 should remember that every trade cannot be profitable. The development of a reliable strategy and money management are the key to success in trading over a long period of time.