FX.co ★ Analytics and trading signals for beginners. How to trade the EUR/USD currency pair on July 20? Plan for opening and closing deals on Monday.

Hourly chart of the EUR/USD pair.

Friday, as well as the whole end of the past week, was quite difficult for trading. The problem was that traders were frankly nervous before an important event – the EU summit. In addition, on Thursday, the results of the meeting of the European Central Bank were summed up. And although no important changes were made to the monetary policy, the euro/dollar currency pair managed to fly up and fall down no less rapidly on this day. On Friday, traders again bought the euro, which provoked its strengthening. Buyers clearly expect that the EU countries will be able to agree on the budget for 2021-2027, as well as the recovery fund. Let's remind you why this is important for the euro currency and the currency market. Without the approval of all 27 EU countries, the budget will simply not be adopted, but this is not terrible, since the parties will have at least six months to agree on it. But the issue of the recovery fund, simply put, a project to raise 750 billion euros, which will be divided among the most affected EU countries,is extremely urgent. The longer countries wait for financial assistance from the EU, the longer the recovery will be. Business is a thing that can't be paused for a few months or six months. Therefore, in times of crisis, they need urgent cash injections, even in the form of loans, even in the form of gratuitous assistance, otherwise they will die. But this is exactly what problems arise, since some EU countries do not agree to distribute the accumulated amount as free aid, as the European Commission and the head of the European Council, Charles Michel, suggests doing. Thus, the euro may become cheaper at the beginning of the week.

Technical analysis for the third time in recent days suggests that the pair is preparing for a new fall. This time, the pair's quotes rose to the resistance line (red on the chart), which does not let the price go up. Thus, starting from this line, it is recommended to trade the pair today. On July 20, the following scenarios are possible:

1) We do not recommend to consider buying the euro currency yet, since the price can not be fixed above the resistance line of 1.1442. However, if buyers still manage to overcome it at the end of the next hour, we recommend opening purchases with the goal of 1.1500. The target range corresponds to the pair's volatility.

2) As the pair continues to trade below the level of 1.1442, sales are now more preferable with targets of 1.1371 and 1.1325. Moreover, we have a sales signal in the form of a rebound from 1.1442. On Monday, do not forget that the final results of the EU meeting will be known, so if there are any surprises, they should be taken into account when opening any deals.

Important speeches and reports (always contained in the news calendar) can greatly affect the movement of the currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp reversal of the price against the previous movement.

Beginners in the Forex market should remember that every trade cannot be profitable. The development of a clear strategy and money management is the key to success in trading for a long period of time.