FX.co ★ Analysis and trading tips for EUR/USD on July 26

Analysis of transactions in the EUR / USD pair

EUR/USD tested 1.0212. At that time, the MACD line had just started to move above zero, which is a good signal to buy. Without a doubt, taking long positions was correct because the pair rose in price by about 40 pips. However, the target of 1.0263 was not reached, and after that no other signals appeared for the rest of the day.

Weak data on business environment, present situation and economic expectations in Germany limited the upward potential of EUR/USD, so the quote did not reach 1.0263. Then, it fell further during the US session because many traders closed positions amid the lack of US statistics.

Volatility may decrease today because there are also no economic reports scheduled to be released in the Euro area. Nevertheless, buyers will try to resume a rally, but a lot will depend on the market's reaction to the test of the nearest support at 1.0233. In the afternoon, the US will post the data on consumer confidence and volume of home sales in the primary market, which may put pressure on dollar, provided that they are much worse than expected. The Richmond Fed manufacturing index and the housing price index, meanwhile, will not affect the market in any way because they are of little interest.

For long positions:

Buy euro when the quote reaches 1.0233 (green line on the chart) and take profit at the price of 1.0276. There is a chance for a rally today, but only after the breakdown of weekly highs

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 1.0211, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0233 and 1.0276.

For short positions:

Sell euro when the quote reaches 1.0211 (red line on the chart) and take profit at the price of 1.0173. Pressure will return if the attempt to hit new local highs fail.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 1.0233, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0211 and 1.0173.

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.