Analysis of transactions in the EUR / USD pair
There were no strong movements in EUR / USD yesterday because volatility and trading volume were very low. As such, the pair declined by only 15 pips when traders followed the sell signal that appeared at 1.1683, even though it coincided with the time that the MACD line was moving down from zero. No other signals appeared for the rest of the day.
Euro was pressured by the statements of ECB chief Christine Lagarde, which indicated that the central bank is wary of removing incentives too quickly, even in the face of growing inflation. And in the afternoon, the warning of US Treasury Secretary Janet Yellen hit the stock market hard, as losing money will lead to economic paralysis.
Today, it is important to closely follow another speech of ECB President Christine Lagarde, as well as to get acquainted with the data on EU consumer confidence. If the indicator shows a decline, euro will drop even lower. Then, in the afternoon, Fed representatives will speak, followed by a report on pending home sales. The data, however, is unlikely to affect the markets.
For long positions:
Open a long position when euro reaches 1.1695 (green line on the chart) and take profit at the level of 1.1726. The pair will climb higher if the Euro area reports good data on consumer confidence. 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 1.1674, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1695 and 1.1726.
For short positions:
Open a short position when euro reaches 1.1674 (red line on the chart) and take profit at the level of 1.1643. Pressure will continue if demand for dollar persists and if the ECB does not hint at an early tapering of stimulus. Suspension of US programs amid lack of funding will also increase demand for safe haven assets, which include dollar.
But before selling, make sure that the MACD line is below zero, or is starting to move down from it.
Euro could also be sold at 1.1695, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1674 and 1.1643.
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.
