Analysis of transactions in the EUR / USD pair
There were several signals to buy in the market last Friday and all of them came when the MACD line was at the oversold area. However, volatility was rather low, so EUR / USD only rose around 15-17 pips.
Trading recommendations for July 26
The European Central Bank’s decision to maintain a soft monetary policy put pressure on euro. Meanwhile, manufacturing and service data released last Friday did not cause a surge in volatility, but there was a slowdown in activity growth in all areas. Today, there will be a report on German business environment, which could help euro win back the losses it had last week. However, growth will not last long because in the afternoon, US will release its report on the housing market, which could provoke demand for dollar and accordingly, decline in EUR / USD.
For long positions:
Open a long position when euro reaches 1.1785 (green line on the chart), and then take profit at the level of 1.1828. Demand will increase if Germany releases good economic reports. But before buying, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.1762 and 1.1726, but the MACD indicator line be in the oversold area in order to bring about a market reversal to 1.1785.
For short positions:
Open a short position when euro reaches 1.1762 (red line on the chart). , and then take profit at the level of 1.1726. A decline will occur if business confidence in the Euro area plummets, but this is unlikely to happen since economic recovery in the bloc remains strong and fast amid the lifting of quarantine restrictions. In any case, before selling, make sure that the MACD line is below zero, or is starting to move down from it. It is also possible to sell at 1.1785 and 1.1828, but the MACD line should be in the overbought area in order to provoke a market reversal to 1.1762.
What’s on the chart:
The thin green line is the key level at which you can place long positions in the EUR / USD pair.
The thick green line is the target price, since the quote is unlikely to move above this level.
The thin red line is the level at which you can place short positions in the EUR / USD pair.
The thick red line is the target price, since the quote is unlikely to move below this level.
MACD line – when entering the market, it is important to be guided by the overbought and oversold zones.
Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.
And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.
Analysis of transactions in the GBP / USD pair
There were several signals to buy in the market last Friday and all of them came when the MACD line was at the oversold area. As a result, GBP / USD rose by around 30 pips. No other signals appeared for the rest of the day.
Trading recommendations for July 26
Data released last Friday put slight pressure on pound, but by the end of the day it was won back by bullish traders. Today, there are no strong statistics awaiting the market, so the attention of investors will focus on the interview with Bank of England representatives, who will certainly talk about the future of monetary policy. If they hint at a possible reduction on bond purchases, then demand for pound will increase. However, growth will not last long because in the afternoon, US will release its report on the housing market, which could provoke demand for dollar and accordingly, decline in GBP / USD.
For long positions:
Open a long position when pound reaches 1.3772 (green line on the chart), and then take profit at the level of 1.3824 (thicker green line on the chart). GBP / USD will climb up if the Bank of England voices favorable statements. But before buying, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.3737 and 1.3687, but the MACD line should be in the oversold area in order to set off a market reversal to 1.3772.
For short positions:
Open a short position when pound reaches 1.3737 (red line on the chart), and then take profit at the level of 1.3687. Further decline will occur if bearish traders manage to push GBP / USD below last week’s low. But before selling, make sure that the MACD line is below zero, or is starting to move down from it. It is also possible to sell at 1.3772 and 1.3824, but the MACD line should be in the overbought area in order to trigger a market reversal to 1.3737.
What’s on the chart:
The thin green line is the key level at which you can place long positions in the GBP/USD pair.
The thick green line is the target price, since the quote is unlikely to move above this level.
The thin red line is the level at which you can place short positions in the GBP/USD pair.
The thick red line is the target price, since the quote is unlikely to move below this level.
MACD line – when entering the market, it is important to be guided by the overbought and oversold zones.
Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.
And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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