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Analysis and trading recommendations for EUR/USD and GBP/USD on August 20

Analysis of transactions in the EUR / USD pair

EUR / USD declined by 20 and then 30 pips on Thursday as traders managed to set up short positions, thanks to the signals to sell that appeared when the MACD line was at the overbought area. The driver was the stable decrease in weekly US jobless claims, which provoked increased demand for dollar.

Today, there will be a report on German PPI, but it is unlikely to help euro regain its lost positions. At most, the movement will be horizontal, unless dollar bulls close their positions this weekend.

For long positions:

Open a long position when euro reaches 1.1697 (green line on the chart), and then take profit at the level of 1.1733. 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 1.1675 and 1.1644, but the MACD indicator line must be in the oversold area, as only by that will the market reverse to 1.1697 and 1.1733.

For short positions:

Open a short position when euro reaches 1.1675 (red line on the chart), and then take profit at the level of 1.1644. A decline will occur if Germany releases a weak economic 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 1.1697 and 1.1742, but the MACD line must be in the overbought area, as only by that will the market reverse to 1.1675.

Analysis of transactions in the GBP / USD pair

GBP / USD continued to decline yesterday even though there was a signal to buy that coincided with the MACD line being at the oversold area. This resulted in huge losses, especially since there were no other market signals for the rest of the day.

The main reason for the slump was the continued decrease in weekly jobless claims. And today, this bearish sentiment may continue if the data on UK retail sales turn out bad. But in the afternoon, there may be a slight correction in the market, as dollar bulls may close their positions since it is already the end of the week.

For long positions:

Open a long position when pound reaches 1.3645 (green line on the chart), and then take profit at the level of 1.3688 (thicker green line on the chart). 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 1.3618 and 1.3583, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.3645 and 1.3688.

For short positions:

Open a short position when pound reaches 1.3618 (red line on the chart), and then take profit at the level of 1.3583. 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 1.3645 and 1.3688, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.3618 and 1.3583.