Relevance up to 03:00 2022-07-29 UTC–4
Analysis of transactions in the EUR / USD pair
EUR/USD tested 1.0153. At that time, the MACD line had just started to move above zero, which is a good signal to buy. Unexpectedly, the pair resumed moving downwards after rising by just 16 pips. It headed towards 1.0118 and tested it, just when the MACD line was far from zero. Traders took this opportunity to buy, leading to a price increase of around 20 pips.
The report on consumer climate in Germany did not allow euro to rise properly, so traders shifted their focus on the decision of the Federal Reserve on interest rates. The soft rhetoric helped euro rise against dollar.
Just ahead are data on consumer confidence in the eurozone, as well as consumer price index in Germany, which will certainly harm the upside potential of EUR/USD. How buyers cope with this will determine whether the quotes will continue to grow or not. In the afternoon, much more important reports on the US will be released, such as the change in GDP for the 2nd quarter and the number of initial applications for unemployment benefits. Stronger numbers will offset dollar’s losses yesterday, while disappointing data will push euro up.
For long positions:
Buy euro when the quote reaches 1.0223 (green line on the chart) and take profit at the price of 1.0252. There is a chance for a rally today, but only after good statistics for Germany.
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 1.0200, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0223 and 1.0252.
For short positions:
Sell euro when the quote reaches 1.0200 (red line on the chart) and take profit at the price of 1.0165. Pressure will return if the attempt to hit new local highs fail and if reports on Germany are weaker than expected.
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 1.0223, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0200 and 1.0165.
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.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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