FX.co ★ Analysis and trading recommendations for EUR/USD and GBP/USD on August 13

Analysis of transactions in the EUR / USD pair

There were several market signals on Wednesday, but only those that appeared in the afternoon were successful. The main reasons were very low volatility and trading volume, which did not allow the market to move in a certain direction. Nevertheless, the signal to sell still managed to provoke a 10-pip decline, thanks to the MACD line moving down from zero. However, right after that, the pair turned around and continued its previous trajectory.

This move clearly shows that the recently published data on EU industrial output did not affect euro, which was quite expected. And surprisingly, even the reports on the US labor market and producer prices did not shake the market.

Today, EUR / USD will move depending on the reports on the Euro area and United States. If France releases good data on consumer prices and the EU publishes a better-than-expected foreign trade balance report, the pair may climb to new highs. And if US follows it with weak consumer sentiment data, demand for dollar will decrease, which will result in a further climb in EUR / USD.

For long positions:

Open a long position when euro reaches 1.1744 (green line on the chart), and then take profit at the level of 1.1780. Demand will increase if the Euro area publishes good macro statistics. 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 1.1728 and 1.1696, but the MACD indicator line must be in the oversold area in order to bring about a market reversal to 1.1724 and 1.1780.

For short positions:

Open a short position when euro reaches 1.1728 (red line on the chart), and then take profit at the level of 1.1696. A decline will occur if the Euro area releases weaker-than-expected macro statistics and if US publishes strong economic indicators. 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 1.1744 and 1.1780, but the MACD line must be in the overbought area in order to provoke a market reversal to 1.1728.

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 were several market signals on Wednesday. However, the first one, which was to sell, had to be ignored because it appeared when the MACD line was far away from zero. Afterwards, there was a signal to buy which coincided with the indicator being at the oversold area, but it unfortunately did not lead to a strong move upwards. This shows that even though the UK GDP report and industrial production data were good, demand for pound was still not enough to push the quote up. And, in the afternoon, there was a large sell-off in the pair, which led to a strong decrease to new weekly lows.

Most likely, pressure will remain in the market today as there are no UK statistics scheduled to be published. At the same time, US will report data on consumer sentiment, which could provoke a rise in dollar and decrease in GBP / USD if the data exceeds expectations. But if it turns out worse than expected, GBP / USD will bounce back.

For long positions:

Open a long position when pound reaches 1.3822 (green line on the chart), and then take profit at the level of 1.3876 (thicker green line on the chart). 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 1.3803 and 1.3762, but the MACD line should be in the oversold area in order to set off a market reversal to 1.3822 and 1.3876.

For short positions:

Open a short position when pound reaches 1.3803 (red line on the chart), and then take profit at the level of 1.3762. The downturn yesterday will most likely continue today. 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 1.3822 and 1.3876, but the MACD line should be in the overbought area in order to trigger a market reversal to 1.3803 and 1.3762.

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.