Analysis of transactions in the EUR / USD pair
There were several signals to buy yesterday, however, it did not lead to large movements because volatility was quite low. In addition, the first signal had to be ignored because it appeared when the MACD line was at the overbought area. Fortunately, in the next two signals, the indicator was going up from zero, so EUR / USD was able to rise by 12-15 pips.
Trading recommendations for July 27
Data on German business environment put pressure on euro yesterday, so growth potential was significantly limited. As for the report on the US housing sector, it did not lead to a surge in volatility as expected. Today, there will be reports on EU money supply and lending, which may increase demand for euro provided that the data are better than the forecasts. Upcoming reports on US durable goods orders and consumer confidence could help as well, but only if they turn out much weaker than expected.
For long positions:
Open a long position when euro reaches 1.1816 (green line on the chart), and then take profit at the level of 1.1855. Demand will increase if the Euro area publishes a strong report on lending. 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 1.1786 and 1.1749, but the MACD indicator line be in the oversold area in order to bring about a market reversal to 1.1816.
For short positions:
Open a short position when euro reaches 1.1786 (red line on the chart), and then take profit at the level of 1.1749. A decline will occur if lending in the Euro area decreases. 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 1.1816 and 1.1855, but the MACD line should be in the overbought area in order to provoke a market reversal to 1.1786.
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 market signals yesterday, but all of them were unprofitable. In fact, the signal to sell in the morning was in vain because even though the MACD line was going down in the chart, EUR / USD still traded upwards. Then, in the afternoon, the indicator was already far from zero, so there was no choice but to ignore the signal.
Trading recommendations for July 27
Statements from Bank of England representatives led to a slight increase in pound, but most likely it was an echo of the bullish trend that we saw at the end of last week. Thus, there is a chance that price will pull back today, especially if the data on UK retail sales indicate a slow down. But in the afternoon, a slight recovery could be expected once US publishes weaker-than-expected reports on durable goods orders and consumer confidence.
For long positions:
Open a long position when pound reaches 1.3835 (green line on the chart), and then take profit at the level of 1.3885 (thicker green line on the chart). GBP / USD will climb up if UK publishes strong retail sales data. 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 1.3800 and 1.3746, but the MACD line should be in the oversold area in order to set off a market reversal to 1.3835.
For short positions:
Open a short position when pound reaches 1.3800 (red line on the chart), and then take profit at the level of 1.3746. Further decline will occur if UK releases weak economic reports and if GBP / USD drops below 1.3800. 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 1.3835 and 1.3885, but the MACD line should be in the overbought area in order to trigger a market reversal to 1.3800.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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