Analysis of transactions in the EUR / USD pair
EUR / USD rose by 20 pips on Wednesday because market signals indicated that it was better to buy in the morning. Then, some time later, another signal emerged, but this time it led to losses even though the MACD line was above zero. This was followed by a signal to sell, which set off a 10-pip decrease in the pair. The last signal was to buy again in the market and it led to a rally of more than 40 pips as it coincided with the MACD line moving above zero.
Risk appetite returned yesterday amid hawkish statements from ECB Vice President Luis de Guindos and other central bank members. Although their stance is not the same as that of the Fed, the fact that the ECB is considering the phase out of support measures is already playing on the side of euro bulls. Robert Holtzman's suggestion of a rate hike before the end of the bond purchase program pushed demand up recently.
Meanwhile, the report on job vacancies and turnover had no impact on the market.
The observed bullish momentum may continue today if foreign trade balance in Germany exceeds expectations. At the same time, the upcoming employment and wholesale inventories report from the US is unlikely to support dollar.
For long positions:
Buy euro when the quote reaches 1.1339 (green line on the chart) and take profit at the price of 1.1378. Demand will increase if statistics in the Euro area exceed expectations. If that happens, EUR / USD will bounce upwards.
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 1.1322, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1339 and 1.1378.
For short positions:
Sell euro when the quote reaches 1.1322 (red line on the chart) and take profit at the price of 1.1292. Lack of bullish activity and weak data on the eurozone will provoke a decrease in EUR / USD.
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 1.1339, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1322 and 1.1292.
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.
