01.07.202209:19 Forex Analysis & Reviews: Analysis and trading tips for EUR/USD on July 1

Analysis of transactions in the EUR / USD pair

EUR/USD tested 1.0442 yesterday. At that time, the MACD line had just started to move above zero, so the pair rose by more than 40 pips. Shortly after, it fell to 1.0396, where another 40-pip movement occurred, but in the opposite direction. No other signal appeared for the rest of the day.

Euro fell yesterday morning because of the weak unemployment report in Germany. However, the sharp decline in US spending and slight increase in income put pressure on the dollar in the afternoon, partially offsetting the losses in EUR/USD at the end of the month.

Ahead are important reports that could further drive the market, such as the CPI data in the Euro area. In the event that inflation rises higher than expected, euro will rally because the central bank will be forced to raise rates more aggressively. In the afternoon, the US will release data on business activity and employment in the manufacturing sector, which, if exceed expectations, will lead to a surge in market volatility. This will continue the pressure in the pair.

For long positions:

Buy euro when the quote reaches 1.0486 (green line on the chart) and take profit at the price of 1.0537 (thicker green line on the chart). There is a chance for a rally today, but only after strong statistics in the Euro area. Also, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0442, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0486 and 1.0537.

For short positions:

Sell euro when the quote reaches 1.0442 (red line on the chart) and take profit at the price of 1.0387. Pressure will return if upcoming dta in Germany and the whole Euro area are worse than expected. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0486, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0442 and 1.0387.

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.