FX.co ★ Analysis and trading tips for EUR/USD on July 25

Analysis of transactions and tips for trading EUR/USD

The test of 1.1085 on Monday afternoon, coinciding with the drop of the MACD line from zero, prompted a sell signal that resulted in a price decrease of around 20 pips.

Disappointing business activity indexes in the eurozone led to massive sell-offs in EUR/USD, which persisted in the afternoon amid the release of fairly good PMI data from the US. Most likely, this downward momentum will extend to today, as reports from IFO over Germany's business expectations, business climate, and assessment of the present situation may come out weaker than expected. Market players should not rush with buying the pair.

For long positions:

Buy when euro hits 1.1105 (green line on the chart) and take profit at the price of 1.1142. Bullish traders will attempt to reenter the market after good IFO reports. However, before buying, ensure that the MACD line lies above zero or just starting to rise from it.

Euro can also be bought after two consecutive price tests of 1.1069, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1105 and 1.1142.

For short positions:

Sell when euro reaches 1.1069 (red line on the chart) and take profit at the price of 1.1025. Pressure will increase in the event of poor data from Germany. However, ensure that when selling, the MACD line lies below zero or drops down from it.

Euro can also be sold after two consecutive price tests of 1.1105, but the MACD line should be in the overbought area as only by that will the market reverse to 1.1069 and 1.1025.

What's on the chart:

Thin green line - entry price at which you can buy EUR/USD

Thick green line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.

Thin red line - entry price at which you can sell EUR/USD

Thick red line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.

MACD line- it is important to be guided by overbought and oversold areas when entering the market

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.