FX.co ★ Analysis and trading tips for EUR/USD on July 31

Analysis of transactions and tips for trading EUR/USD

The test of 1.1025 on Friday afternoon, coinciding with the rise of the MACD line from zero, prompted a buy signal that led to a price increase of around 25 pips.

GDP data from France, Spain, and Germany put pressure on euro, but mixed dynamics from the US restored risk appetite by the end of the week. This bullish momentum may continue today if upcoming reports from the eurozone point out further growth in inflation. To be precise, an increase in the main and core consumer price indices will lead to a sharp increase in euro demand, and the same applies to the report on GDP. The more active growth of it will reinforce the upward correction of the pair at the end of the month. Of course, buy only after the release of very good statistics.

For long positions:

Buy when euro hits 1.1043 (green line on the chart) and take profit at the price of 1.1084. Bullish traders will attempt to reenter the market in the event of very positive statistics for the eurozone. 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 1.1006, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0954 and 1.1006.

For short positions:

Sell when euro reaches 1.1006 (red line on the chart) and take profit at the price of 1.0954. Pressure will return in case of inflation reduction and negative GDP in the eurozone. However, when selling, ensure that the MACD line lies below zero or drops down from it.

Euro can also be sold after two consecutive price tests of 1.1043, but the MACD line should be in the overbought area as only by that will the market reverse to 1.1006 and 1.0954.

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.