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04.08.202111:10 Forex Analysis & Reviews: Analysis and trading recommendations for EUR/USD and GBP/USD on August 4

Analysis of transactions in the EUR / USD pair

A signal to buy appeared in the market on Tuesday, however, it had to be ignored because it came when the MACD line was at the overbought area. Meanwhile, the sell signal that followed it managed to provoke a decline, which then resulted in another signal to buy in the market. This time, the MACD line was at the oversold area, but EUR / USD still failed to increase in price.

The unsuccessful attempts mainly occurred before the release of the EU PPI report, which was surprisingly better than expected, thanks to a strong recovery in energy prices. However, the report on US factory orders returned the market to the control of dollar bulls, so the pair declined again.

Today, the market will move depending on the reports from the Euro area and United States. Both will release latest data on composite PMI, but US has an additional report, which is the employment data for the US private sector. If the statistics from US turn out much stronger than expected, demand for dollar will rise, which will accordingly lead to a decline in EUR / USD.

Exchange Rates 04.08.2021 analysis

For long positions:

Open a long position when euro reaches 1.1887 (green line on the chart), and then take profit at the level of 1.1935. Demand will increase if the Euro area publishes a strong service PMI report. 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 1.1857 and 1.1815, but the MACD indicator line must be in the oversold area in order to bring about a market reversal to 1.1887.

For short positions:

Open a short position when euro reaches 1.1857 (red line on the chart), and then take profit at the level of 1.1815. A decline will occur if the Euro area releases weak economic reports. 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 1.1887 and 1.1935, but the MACD line must be in the overbought area in order to provoke a market reversal to 1.1857.

Exchange Rates 04.08.2021 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

A signal to sell appeared in the market on Tuesday, but it surprisingly did not provoke a large decline even though the MACD line was not at the oversold area. Apparently, having the indicator well below zero already limits the downside potential of GBP / USD.

Also, many investors were trading very carefully in the market because they do not want to lose profit amid the Bank of England policy decisions on Thursday. But today, there may be strong price movements due to the upcoming reports on UK and US PMI, as well as on the data for the US private sector. If US releases better-than-expected figures, demand for dollar will increase, which will accordingly lead to a decline in GBP / USD.

Exchange Rates 04.08.2021 analysis

For long positions:

Open a long position when pound reaches 1.3937 (green line on the chart), and then take profit at the level of 1.3975 (thicker green line on the chart). GBP / USD will climb higher if UK publishes good data on the service sector. 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 1.3908 and 1.3846, but the MACD line should be in the oversold area in order to set off a market reversal to 1.3937.

For short positions:

Open a short position when pound reaches 1.3908 (red line on the chart), and then take profit at the level of 1.3846. A decline will occur if UK releases a bad composite PMI report. 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 1.3937 and 1.3975, but the MACD line should be in the overbought area in order to trigger a market reversal to 1.3908.

Exchange Rates 04.08.2021 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,
Analytical expert of InstaForex
© 2007-2021
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