18.07.202212:02 Forex Analysis & Reviews: Analysis and trading tips for EUR/USD on July 18

Analysis of transactions in the EUR / USD pair

EUR/USD tested 1.0041 last Friday. At that time, the MACD line was far from zero, so the upside potential was limited. Sometime later, the pair approached 1.0095, where sellers became active. This time, the price successfully fell by 20 pips. No other signals appeared for the rest of the day.

The foreign trade balance report in the Euro area did not affect EUR/USD in any way. Meanwhile, the spike in volatility following the June US retail sales and industrial output reports pushed dollar down, especially since many big players closed positions during the weekend.

Just ahead is the Bundesbank's monthly report, which may indicate the need for more aggressive monetary policy by the European Central Bank. The US will also release data on the NAHB housing market and balance of capital account in the afternoon, but they will be of little interest, so expect continued pressure in USD.

For long positions:

Buy euro when the quote reaches 1.0108 (green line on the chart) and take profit at the price of 1.0153 (thicker green line on the chart). There is a huge chance that the correction that started last week will continue today.

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 1.0070, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0108 and 1.0153.

For short positions:

Sell euro when the quote reaches 1.0070 (red line on the chart) and take profit at the price of 1.0020. 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 1.0108, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0070 and 1.0020.

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.