Analysis of transactions in the EUR / USD pair
EUR / USD hit 1.1360 at a time when the MACD line was far from zero. That limited the downside potential of the pair, so traders could not take short positions as it may lead to losses. Some time after, the pair reached the level for the second time. However, the market signal was to buy, so the quote rose by 10 pips. The same signal appeared towards the middle of the day, when the pair moved to 1.1360. The MACD line was at the oversold area that time so long positions prompted a 50-pip increase in the pair.
Industrial output in France and the whole Euro area did not support euro yesterday. Meanwhile, US CPI came out as expected, so dollar did not see a strong rally in the markets. The data indicated that the Fed does not have to be aggressive in raising rates. The Fed Beige Book was ignored as it has no importance to the forex market.
Today, there are no important reports on the Euro area, except for industrial production in Italy and economic bulletin from the European Central Bank. There is little chance that EUR / USD will decline, so it is best to bet on long positions.
In the afternoon, the US will release data on producer prices, but that is unlikely to raise dollar. Perhaps, jobless claims could increase its quote, albeit a little. There will also be speeches from Fed members Lael Brainard and Charles Evans.
For long positions:
Buy euro when the quote reaches 1.1453 (green line on the chart) and take profit at the price of 1.1495. Growth will occur if the upcoming data on the Eurozone 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 1.1420, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1453 and 1.1495.
For short positions:
Sell euro when the quote reaches 1.1420 (red line on the chart) and take profit at the price of 1.1369. EUR / USD will decline if industrial production in Italy is weaker than projected.
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 1.1453, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1420 and 1.1369.
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.
