05.11.202407:56 Forex Analysis & Reviews: How to Trade the EUR/USD Pair on November 5? Simple Tips and Trade Analysis for Beginners

Analysis of Monday's Trades:

1H Chart of EUR/USD Pair

On Monday, the EUR/USD currency pair showed an upward movement, just as we anticipated. The macroeconomic background on Monday was relatively weak, but that alone didn't trigger the dollar's decline. On Friday, the U.S. released a series of disappointing reports on the labor market and business activity, yet the dollar somehow managed to appreciate. Thus, on Monday, we observed a "restoration of fair value." Overall, the upward correction has started (as we predicted) and continues. This week, much will depend on the Federal Reserve's meeting and the U.S. central bank's signals to the public. It's also important to remember that the U.S. presidential elections start today, which could significantly increase volatility. The correction might continue, but the fundamental background will be highly influential this week.

5M Chart of EUR/USD Pair

Two trade signals were generated in the 5-minute timeframe on Monday. First, the pair consolidated above the 1.0888-1.0896 area and then below it. In both cases, the price failed to move even 20 pips in the expected direction. The main upward movement on Monday occurred during overnight trading and a gap at market open.

How to Trade on Tuesday:

The EUR/USD pair continues its correction on the hourly time frame after a month-long decline. At the very least, some grounds exist for the euro to rise. The correction is unlikely to be strong, as it constantly needs euro-supportive news. Even then, the news won't always be enough, as the market now leans toward dollar purchases.

On Tuesday, novice traders may consider trading within the 1.0888-1.0896 area. The price has consolidated below it, so a further decline may continue.

On the 5-minute time frame, consider the levels 1.0678, 1.0726-1.0733, 1.0797-1.0804, 1.0845-1.0851, 1.0888-1.0896, 1.0940-1.0951, 1.1011, 1.1048, 1.1091, and 1.1132-1.1140. European Central Bank President Christine Lagarde's speech in the European Union and the U.S. ISM Services PMI are scheduled for Tuesday. We believe that the ISM index is the most crucial event today. If it falls short of forecasts, it could trigger another dollar decline.

Basic Trading System Rules:

1. The strength of a signal is determined by the time it takes to form (whether a bounce or breakthrough of a level). The quicker the formation, the stronger the signal.
2. If two or more trades have been made near a level due to false signals, any further signals from that level should be ignored.
3. In a flat market, a pair can generate many false signals or none at all. In any case, it's best to stop trading at the first signs of a flat market.
4. Trading occurs between the start of the European and middle of the US sessions, after which all trades should be manually closed.
5. On the hourly time frame, it's recommended to trade MACD indicator signals only when there is good volatility and a trendline or trend channel confirms a trend.
6. If two levels are too close together (5 to 20 pips apart), they should be treated as support or resistance areas.
7. After the price moves 15 pips in the intended direction, set the Stop Loss to breakeven.

What's on the Charts:

Support and Resistance Levels: Levels that serve as targets for opening buys or sells. Take Profit levels can be placed around these areas.

Red Lines: Channels or trend lines that indicate the current trend and the preferred trading direction.

MACD Indicator (14,22,3): Histogram and signal line—an auxiliary indicator that can also be used as a source of signals.

Major speeches and reports (always found in the news calendar) can significantly impact currency pair movements. Therefore, it's advised to trade cautiously or exit the market during their release to avoid sharp price reversals against prior movements.

Beginners trading on the forex market should remember that not every trade will be profitable. A clear strategy and money management are the keys to success in long-term trading.