FX.co ★ Analysis and trading recommendations for EUR/USD on July 28

Analysis of transactions in the EUR / USD pair

There were several market signals on Tuesday and almost all of them were successful. The first signal, which was to buy, led to a strong price increase because it came when the MACD line was at the oversold area. Sadly, the subsequent sell signal did not provoke a large decline, even though the indicator was at the overbought area. Instead, the price increased again because in the afternoon, there was a signal to buy that coincided with the MACD line starting to move up from zero. Such pushed EUR / USD up by around 20 pips.

Trading recommendations for July 28

Euro soared yesterday amid positive forecasts from the International Monetary Fund (IMF). Most likely, this bullish momentum will continue provided that the Federal reserve does not announce any changes in its monetary policy. But if there are changes, especially on the bond purchase program, pressure on euro will increase, which will accordingly lead to a decline in EUR / USD.

For long positions:

Open a long position when euro reaches 1.1835 (green line on the chart), and then take profit at the level of 1.1890. Demand will increase if the Federal Reserves maintains a soft policy. 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 1.1803 and 1.1758, but the MACD indicator line be in the oversold area in order to bring about a market reversal to 1.1835.

For short positions:

Open a short position when euro reaches 1.1803 (red line on the chart), and then take profit at the level of 1.1758. A decline will occur if the Federal Reserves announces a change in its monetary policy. 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 1.1835 and 1.1890, but the MACD line should be in the overbought area in order to provoke a market reversal to 1.1803.

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.