Analysis and trading signals for beginners. How to trade the EUR/USD pair on July 29? Plan for opening and closing deals on Wednesday

The EUR/USD pair continues to trade with an upward trend. There is still an upward channel on the chart, which very clearly illustrates the direction of the pair's movement. Vertical dotted lines separate the day, and we can clearly see that the pair has been decreasing over the past day. This means that the US dollar rose in price on Tuesday, but what could have caused the downward movement? We are almost sure that the whole point is in a banal technical correction. A technical correction is when buyers close (in our case) a part of open positions, which leads to a decrease in demand for the euro (in our case) and provokes a movement opposite to the main trend. Nevertheless, the quotes of the pair remained within the ascending channel, therefore, the correction did not violate the technical picture.

An important event for any pair that has the US dollar present will take place on Wednesday evening. The Federal Reserve (Fed - US central bank) meets eight times a year. This is eight potential chances to change monetary policy. The monetary policy of the central bank is a set of various tools to stimulate industrial production and economic growth, as well as to curb excessive price growth (inflation). The most important instrument of monetary policy is the key rate. The higher the rate, the more expensive loans are in the country and more income is generated by deposits (commercial banks adjust their rates to the rate of the central bank). At the moment, the key rate in the US is 0.25%, which is almost the lowest value. It makes it clear that the Fed lends to commercial banks and other financial institutions almost free of charge. These measures should stimulate economic growth. Going back to today's meeting, the Fed is unlikely to change the rate on July 29, but it may change the volume of economic stimulus programs (programs that involve direct lending or issuing money to businesses, firms, businesses, and workers in order to maintain them in difficult times). If this does not happen, then the Fed meeting can be considered a pass-through and the market does not have a significant reaction towards it. No more news is scheduled for July 29.

The following scenarios are possible on July 29:

1) Buying the euro is still relevant. Thus, we advise you to buy the pair today, however, the very weak activity of traders in the last hours is slightly confusing. The MACD indicator gave a buy signal (circled), but the activity of traders is very confusing. Although it may grow on the eve of the Fed meeting. In any case, as long as the price is within the channel, you are advised to trade bullish with the targets at 1.1760 and 1.1804.

2) We recommend selling the currency pair if the price consolidates below the rising channel at the end of any hour. This will mean a change in trend and sales will then become more relevant. The first targets are levels 1.1685 and 1.1654. In the evening, when the direct summing up of the results of the Fed meeting begins, novice traders are advised to close all positions, since sharp movements in different directions are possible.

What's on the chart:

Support and Resistance Price Levels - Levels that are targets when buying or selling. You can place Take Profit levels near them.

Red lines - channels or trend lines that display the current trend and show which direction it is preferable to trade now.

Arrows up/down - indicate when you reach or overcome which obstacles you should trade up or down.

MACD indicator is a histogram and a signal line, crossing it is a signal to enter the market. It is recommended to use in combination with trend lines (channels, trend lines).

Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.

Beginners in the forex market should remember that every trade cannot be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.