FX.co ★ Analysis and trading recommendations for EUR/USD on July 7

Analysis of transactions in the EUR / USD pair

Several market signals appeared on Tuesday, but sadly all of them had to be ignored because they came when the MACD line was not in a good area. To be more specific, the buy signals appeared when the indicator was at the overbought area, while the sell signals came when the MACD line was at the oversold area. But since the latest economic reports were weak, bearish traders were still able to open short positions, so EUR / USD still fell to 1.1819.

Trading recommendations for July 7

Data released on Tuesday led to a sharp decline in euro, especially since the ZEW Institute reported that investor sentiment in Germany was significantly weaker than expected. And despite a decrease in US service PMI, demand for dollar rose, so EUR / USD was kept under pressure.

Today, price movement will depend on the revised economic forecast of the European Commission. If the data was changed for the better, euro will rebound in price. But if it is changed for the worse, another drop will be seen in EUR / USD.

Upcoming minutes from the June Fed meeting will also be released today, which will indicate the plans of the central bank towards monetary policy. If investors find hints for a policy change, demand for dollar will increase again, which will result in another decline in EUR / USD.

For long positions:

Open a long position when euro reaches 1.1838 (green line on the chart), and then take profit around the level of 1.1894. EUR / USD will rise if Germany releases strong economic indicators, and if the European Commission revises its forecasts for the better. But before buying, make sure that the MACD line is above zero, or is starting to rise from it.

For short positions:

Open a short position when euro reaches 1.1815 (red line on the chart), and then take profit at the level of 1.1770. Further decline will occur if the Eurozone posts weak economic indicators, and if the European Commission revises its forecasts for the worse. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.

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.