Analysis of transactions in the EUR / USD pair
Market signals on Friday said to sell EUR / USD, however, the MACD line was far from zero so the decrease was very limited. Fortunately, the indicator moved below zero in the afternoon, so the pair was able to dip by 50 pips.
The latest German PPI did not change consumer sentiment, as did weaker reports on business environment, current situation and economic expectations. Inflation in the Euro area also matched the forecasts, limiting the upside potential of EUR / USD on Friday morning.
There is a chance that the pair will decline today as ECB balance of payments and Bundesbank monthly report are expected. The figures are expected to disappoint, mainly due to the omicron virus. If the number of infected people escalates, EUropean countries may impose lockdown during the Christmas and New Year holidays. This is a bad signal for euro buyers, so it is best to stick to short positions.
In the afternoon, the US will release a report on leading indicators, but it will not bring serious changes to the market.
For long positions:
Buy euro when the quote reaches 1.1265 (green line on the chart) and take profit at the price of 1.1306. Growth will be observed if data from the German central bank exceeds 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 1.1245, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1265 and 1.1306.
For short positions:
Sell euro when the quote reaches 1.1245 (red line on the chart) and take profit at the price of 1.1213. Weak data on the eurozone economy will provoke a decline 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 1.1265, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1245 and 1.1213.
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.
