EUR/USD Long Term Technical Analysis July 2018

EUR/USD long-term technical analysis

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The trade tension between U.S and China escalated quickly after the U.S imposed tariff received counter-tariff by China. Equity market tumbled, traders and investors fled from speculative assets. EUR/USD also suffer under this situation especially when U.S rate hike expectation heightened. Fortunately, U.S unemployment data came out worse than expected at 4.0% vs. 3.8% expectation.

Worse than expected U.S data lead the market to believe The Fed would not be able to increase rate as expected. This month, the market will focus on trade wars issue where U.S and China currently under high-level talk to reach agreement on trade.

No change to the global market situation means EUR/USD will retake a lower path. On the other hand, easing trade tension will bring EUR/USD higher.

Click here to see EUR/USD long-term analysis June 2018

New Month

Monthly chart

We are watching EUR/USD at a crucial point. The pair holding out near 1.1700 and the support trendline. The trend continues bullish for long-term despite the short-term bearish pressure. The purple area expected to act as demand area which will reverse the pair. However, there is no significant bullish reaction yet from the area.

Traders need to wait until strong bullish reaction appears near the level.

Weekly chart

The winner has not decided yet on EUR/USD. The pair found support around 1.1550 and bounce toward 1.1700. Although it looks bullish, EUR/USD overall level still below the trendline rejection candlestick. The bull needs to recover 1.1900 and higher to confirm long-term bounce. On the other hand, the bear will attempt to remove 1.1550 floors to continue toward weekly SMA 200.

Daily chart

 

Previous week bearish descending triangle limiting the pair upward movement. If EUR/USD rejected from the trendline, we should see another test on 1.1550. Currently, there is no sign of rejection and traders will continue watching for short position opportunity near the trendline.

Trade plan

The long position could be taken from area 1.1500 – 1.1550 assuming the support area hold out and no close below the level on the monthly or weekly chart. (Same strategy)

The short position could be taken near the top of the purple area or the trendline on the daily chart. (Same strategy)

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