Analysis of transactions in the EUR / USD pair
A signal to sell emerged after EUR/USD hit 1.1354. However, there was no decrease because the MACD line being far away from zero limited the downside potential of the pair. Fortunately, the second attempt was successful because it led to a fall of about 40 pips. Buying at 1.1315 in the afternoon resulted with a 20-pip increase in the pair.
The speeches made by ECB representatives Frank Elderson and Fabio Panetta did not make an impression on the market, so there was no strong upward movement. CPI data in France and ECB's current account also did not provoke an increase in EUR/USD, while consumer confidence in the euro area prompted a decline because the indicator decreased. As for the speeches of FOMC members John Williams and Lael Brainard, their hawkish statements led to the increase of dollar last Friday afternoon.
Several reports are scheduled to be released today, namely the business activities in the manufacturing and services sectors in Germany, France and Italy. There will also be a report on the composite PMI of the eurozone, which, if posted some growth, may lead to a rise in EUR/USD. But the increase will be brief because the tension in Ukraine threatens the upside potential of risky assets.
Markets will be closed in the afternoon for the US Presidents' Day, so volatility will be very low, as will trading volume.
For long positions:
Buy euro when the quote reaches 1.1379 (green line on the chart) and take profit at the price of 1.1415 (thicker green line on the chart). A rally will occur if data from the eurozone exceed expectations.
But before buying, make sure that the MACD line is above zero or is starting to rise from it before taking long positions. It is also possible to buy at 1.1361, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1379 and 1.1415.
For short positions:
Sell euro when the quote reaches 1.1361 (red line on the chart) and take profit at the price of 1.1319. Pressure will return if data from the eurozone turns out weaker than expected and if tension in Ukraine escalates.
But before selling, make sure that the MACD line is below zero, or is starting to move down from it. Euro can also be sold at 1.1379, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1361 and 1.1319.
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.
