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22.07.202109:01 Forex Analysis & Reviews: Analysis and trading recommendations for EUR/USD and GBP/USD on July 22

Analysis of transactions in the EUR / USD pair

Several market signals appeared on Wednesday. The first one, which was to sell, coincided with the time that the MACD line was going down from zero. As a result, EUR / USD dropped by around 15 pips. Then, a similar scenario took place in the afternoon, but this time the decrease was only 10 pips. After that, the pair rose rather sharply, which led to a signal to buy in the market. Such came when the MACD line was rising from zero, so EUR / USD climbed by about 17 pips.

Exchange Rates 22.07.2021 analysis

Trading recommendations for July 22

Members of the European Central Bank will meet today, during which they will decide future actions on monetary policy. If they maintain the current soft policy, then EUR / USD will decline. But if they announce a future rate hike and decrease in bond purchases, then demand for euro will soar.

In the afternoon, there will be a report on US jobless claims, but it is unlikely to shake the market. There will also be data on EU consumer confidence, which could provoke a rise in EUR / USD.

For long positions:

Open a long position when euro reaches 1.1805 (green line on the chart), and then take profit at the level of 1.1849 (thicker green line on the chart). Demand will increase if the European Central Bank announces that it would scale back bond purchases. But before buying, make sure that the MACD line is above zero, or is starting to rise from it.

It is also possible to buy at 1.1786 and 1.1744, but the MACD indicator line be in the oversold area in order to bring about a market reversal to 1.1805.

For short positions:

Open a short position when euro reaches 1.1786 (red line on the chart), and then take profit at the level of 1.1744. A decline will occur if the ECB announces a future rate hike. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.

It is also possible to sell at 1.1805 and 1.1849, but the MACD line should be in the overbought area in order to provoke a market reversal to 1.1786.

Exchange Rates 22.07.2021 analysis

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 decisions based on the current market situation is an inherently losing strategy for an intraday trader.

Analysis of transactions in the GBP / USD pair

Several market signals appeared on Wednesday. The first one, which was to buy, coincided with the time that the MACD line was at the oversold area. As a result, GBP / USD rose around 30 pips. Then, a similar scenario occurred in the afternoon, but this time it was to sell, which coincided with the indicator being at the overbought area. Such led to a 20-pip decline in the pair. No other signals appeared after.

Exchange Rates 22.07.2021 analysis

Trading recommendations for July 22

Pay attention to upcoming statements from the Bank of England, as those will certainly affect the market. If monetary policy is tightened, then demand for pound will increase. Otherwise, another decline will occur in GBP / USD.

In the afternoon, there will be a report on US jobless claims, which may raise demand for dollar.

For long positions:

Open a long position when pound reaches 1.3730 (green line on the chart), and then take profit at the level of 1.3794 (thicker green line on the chart). GBP / USD will climb up if the Bank of England tightens monetary policy. But before buying, make sure that the MACD line is above zero, or is starting to rise from it.

It is also possible to buy at 1.3688 and 1.3623, but the MACD line should be in the oversold area in order to set off a market reversal to 1.3730.

For short positions:

Open a short position when pound reaches 1.3688 (red line on the chart), and then take profit at the level of 1.3623. A decline will occur if the Bank of England decides to maintain a soft policy, or if the situation with COVID-19 worsens. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.

It is also possible to sell at 1.3730 and 1.3794, but the MACD line should be in the overbought area in order to trigger a market reversal to 1.3688.

Exchange Rates 22.07.2021 analysis

What's on the chart:

The thin green line is the key level at which you can place long positions in the GBP/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 GBP/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 decisions 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.

Jakub Novak,
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