Analysis of transactions in the EUR / USD pair
A signal to sell appeared in the market on Thursday, but there was no downward movement because the MACD line was far below zero. The same thing happened with the buy signal that followed as that time the MACD line was in the oversold area. Another buy signal appeared some time in the afternoon, but it also did not lead to an upward movement.
Foreign trade balance in Germany, which was released yesterday, did not provide strong support for euro in the morning. Meanwhile, the report on US jobless claims exceeded expectations, thereby pushing demand for dollar up. The figure was down 43,000 compared to last week, only reaching 184,000 during the reporting week.
The bearish momentum may continue today as inflation indicators in Germany are likely to put pressure on EUR / USD. But hawkish statements from ECB members Christine Lagarde, Jens Weidmann and Fabio Panetta could raise euro up a bit.
In the afternoon, the entire focus of the markets will shift to US inflation, which is expected to rise even more. CPI for November is projected to increase to 6.8%, the highest since the early 1980s. There will also be a report on consumer sentiment and its growth will also lead to increased demand for dollar.
For long positions:
Buy euro when the quote reaches 1.1307 (green line on the chart) and take profit at the price of 1.1343. Demand will increase if economic data from Germany and Italy exceed expectations.
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 1.1292, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1307 and 1.1343.
For short positions:
Sell euro when the quote reaches 1.1292 (red line on the chart) and take profit at the price of 1.1253. Weak data from Germany and high US inflation 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 1.1307, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1292 and 1.1253.
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.
