FX.co ★ Analysis and trading recommendations for EUR/USD and GBP/USD on July 23

Analysis of transactions in the EUR / USD pair

Several market signals appeared on Thursday, but not all of them were profitable. For example, selling at 1.1786 led to losses, even though the MACD line was going down from zero. The succeeding signal to buy was also unideal because by that time, the indicator was already at the overbought area. Fortunately on the third market signal, the MACD line was at a correct area, so EUR / USD was able to climb by 20 pips.

Trading recommendations for July 23

Euro declined on Thursday, but it was not that serious because market players already expected that the European Central Bank would maintain their current soft monetary policy.

Today, there will be a fairly large amount of macro statistics, but the most important of them are data on activity in both manufacturing and service sectors. If the euro area publishes better-than-expected reports, then demand for euro will recover. If not, EUR / USD will continue to decline. Similarly, if the US releases strong data in the afternoon, demand for dollar will rise, which will accordingly lead to a decline in the pair.

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 the Euro area reports active growth in both manufacturing and service sectors. 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 the Euro area reports a slowdown in economic activity. 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 1.1785 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 was a signal to buy in the market on Thursday, but it was unideal at first because it appeared when the MACD line was at the overbought area. Fortunately after that, the indicator climbed above zero, so GBP / USD was able to rise by about 40 pips.

Trading recommendations for July 23

Pay attention to the upcoming reports on UK manufacturing activity and retail sales, as both may lead to a surge in volatility. However, there is little chance that GBP / USD will rise beyond weekly highs since in the afternoon the US will publish similar data that could put pressure on pound.

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 UK publishes a strong report on the service sector. 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. A decline will occur if there is bad economic data from UK. 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.