Forex technical analysis: EUR/USD July 18

EUR/USD has gained more than 1,000 pips since June and technical analysis suggest we might see a short term downtrend this week. As I am going to trade forex this week, I will be looking for sell signals mainly and I will always keep an eye on different timescale forex charts, so that I won’t get surprised. I believe a bounce at 1.3250 is more than possible and a retracement may evolve afterwards. However I do think we have seen the lowest price of the currency pair and all that remains is to find out whether it will fully reverse in a strong uptrend or trade sideways.

Forex trading is all about entering and exiting at the right time. I personally trade forex in 1-min forex charts and looking at the corresponding 30-min charts. Many forex traders prefer 5-min charts due to significant noise in faster charts but in my case I can pinpoint easier the retracement levels and any other indicator of technical analysis I use in those charts. In the end, what matters the most is what makes you trade forex more comfortably. There is no better investment advice than than this!

So, in the daily forex chart of EUR/USD I have indicated the MACD divergence that took place in June. Then came a fail bottom since the currency pair was trading downward, followed by a strong green candlestick, which overcame the moving average. The price is now trading towards the upper level of the Bollinger bands and I expect to meet it in combination with the previous resistance level. If those two events do occur, I believe it would be a great time to short EUR/USD but only in order to trade out close to the moving average. My investment advice is not to wait to see it fall back quickly below 1.2500. Look closely at the 5-min graph or even 15-min one to exit in time. But until then, it’s better to pay close attention in the following days for a short entry if you are a swing trader.