FX.co ★ Analysis and trading recommendations for EUR/USD on July 29

Analysis of transactions in the EUR / USD pair

There were several market signals on Wednesday, but only few were successful. The first signal, which was to buy, did lead to a strong price increase because it came when the MACD line was at the oversold area. The upward movement by then was as much as 25 pips. Sadly, even though there was another signal to buy, EUR / USD did not go higher and instead moved downwards, which brought investors huge losses. The same thing happened with the signal to sell, when the pair traded upwards instead of declining. Fortunately, the signal to buy that followed, which coincided with the MACD line going up from zero, led to a 20-pip increase.

Trading recommendations for July 29

Euro rose on the news that the Federal Reserve will continue a 0-0.25% base interest rate. However, the central bank revised the bond purchase program, explaining that the economy has made progress towards their goals.

Today, price movement will depend on the employment report from Germany and consumer confidence data in the whole Euro area. If the figures exceed expectations, demand for euro will increase even more. If not, there will be a decline in EUR / USD. Upcoming data on US GDP will also affect the market.

For long positions:

Open a long position when euro reaches 1.1867 (green line on the chart), and then take profit at the level of 1.1924. Demand will increase if the Euro area publishes strong economic data and if the US reports a weaker than expected GDP growth. 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 1.1837 and 1.1785, but the MACD indicator line be in the oversold area in order to bring about a market reversal to 1.1867.

For short positions:

Open a short position when euro reaches 1.1837 (red line on the chart), and then take profit at the level of 1.1785. A decline will occur if Germany releases a weak employment report. 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 1.1867 and 1.1924, but the MACD line should be in the overbought area in order to provoke a market reversal to 1.1837.

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.