FX.co ★ Analysis and trading tips for EUR/USD on July 19

Analysis of transactions in the EUR / USD pair

EUR/USD tested 1.0108 on Monday. At that time, the MACD line had just started to move above zero, so buying was appropriate. These long positions opened by traders resultantly led in a price increase of more than 20 pips. Sometime later, sellers became active around 1.0153, leading to a 20-pip decline. No other signals appeared for the rest of the day.

Surprisingly, the Bundesbank's monthly report, which economists predicted to show a slight slowdown due to high energy prices, did little harm to euro yesterday.

Ahead is the June CPI report from the Euro area, which is expected to remain unchanged. If real data matches this, euro will attempt to break above yesterday's highs. However, growth will be limited. In the afternoon, the US will release reports on the number of building permits issued and the volume of construction of new homes. The two are unlikely to affect the market significantly, but could lead to a surge in volatility, which will be used by speculative traders.

For long positions:

Buy euro when the quote reaches 1.0171 (green line on the chart) and take profit at the price of 1.0215 (thicker green line on the chart). There is a chance for a rally today, but only if inflation data in the Euro area exceed expectations.

Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0133, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0171 and 1.0215.

For short positions:

Sell euro when the quote reaches 1.0133 (red line on the chart) and take profit at the price of 1.0085. However, pressure will return only after an unsuccessful attempt to consolidate at weekly highs.

Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0171, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0133 and 1.0085.

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 decision based on the current market situation is an inherently losing strategy for an intraday trader.