Analysis of trades and tips on trading EUR
The euro/dollar pair made an attempt to break through 1.0907 for the first time when the MACD indicator had risen significantly from the zero level. In my opinion, it limited the upward movement of the pair. For this reason, I refrained from opening long positions. After the release of fresh eurozone macro stats a bit later, the pair once again tried to test 1.0907. At that moment, the MACD had just started to move up from the zero level, opening a good entry point in long positions on the euro. As a result, the pair added about 30 pips. However, it was unable to reach a major resistance level of 1.0945. There were no other entry points.
Yesterday, bulls managed to regain momentum amid a slowdown in the euro area producer price index and ECB Vice President Luis de Guindos's speech. However, traders were mostly focused on the publication of the FOMC meeting minutes in the US session. The content of the protocol coincided with economists' forecasts, which led only to a small surge in volatility. Overall, the market remained calm. Now, the pair is moving in the sideways channel and there is a high chance of a correction. It would be quite positive for the bulls. Today, in the first half of the day, it is necessary to pay attention to the EU retail sales report and Germany's industrial production data. Apart from that, speculators are looking forward to the release of the ECB meeting minutes for March. The hawkish comments of the central bank may boost the euro in the first half of the day. This is why it is recommended to stick to scenario No.1 and open long positions. In the afternoon, there will be several interviews and speeches by US policymakers. Speeches of FOMC members - James Bullard, Charles Evans, and Raphael Bostic are of high importance. Therefore, traders will hardly notice the speech of the US Treasury Secretary. As for the macroeconomic reports, market sentiment is unlikely to be affected by US weekly initial jobless claims data and the consumer lending report. Yet, these reports may push the weakening US dollar higher before it resumes a downward movement.
Buy signal
Scenario No.1: today, it is recommended to open long positions on the euro when the price reaches 1.0933 (the green line on the chart) with an upward target of 1.0971. I would advise closing long positions at 1.0971 and opening short ones, keeping in mind a 20-25 pip correction in the opposite direction from the given level. The euro may climb today following the release of the ECB meeting minutes. The euro is extremely oversold. Judging by technical indicators, bulls may assert strength. Important! Before opening long positions, make sure that the MACD indicator is above the zero mark and it has just started to rise from this level.
Scenario No. 2: it is also possible to buy the euro today if the price approaches 1.0903. At this moment the MACD indicator should be in the oversold area, which will limit the downward potential of the pair. It may also trigger an upward reversal. The pair is expected to grow to the opposite levels of 1.0933 and 1.0971.
Sell signal
Scenario No.1: it is recommended to open short positions on the euro when the price hits 1.0903 (the red line on the chart). The target level will be 1.0850. It is better to close long positions at this level and open long ones, keeping in mind a 20-25 pips correction in the opposite direction from the given level. The euro may again face bearish pressure provided that the tone of the ECB meeting minutes will be dovish. Important! Before selling, make sure that the MACD indicator is below the zero mark and it has just started to decline from this level.
Scenario No. 2: it is also possible to sell the euro today if the price drops to 1.0933. At this moment, the MACD indicator should be in the overbought area, which will limit the upward potential of the pair. It may also trigger a downward reversal. The pair is expected to slide down to the opposite levels of 1.0903 and 1.0850.
Description of the chart:
What's on the chart:
The thin green line shows the entry point where you can buy a trading instrument.
The thick green line is the estimated price where you can place a Take profit order or lock in profit manually as the price is unlikely to rise above this level.
The thin red line is the entry point where you can sell the instrument.
The thick red line is the estimated price where you can place a Take profit order or lock in profit manually as the price is unlikely to decline below this level.
The MACD indicator. When entering the market, it is important to pay attention to overbought and oversold zones.
Important. Novice traders need to make very careful decisions when entering the market. It is best to stay out of the market before the release of important fundamental reports. It will help avoid losses due to sharp fluctuations in the exchange rate. If you decide to trade during the news release, always place stop orders to minimize losses. Without placing stop orders, you can lose the entire deposit very quickly, especially if you do not use money management, but trade in large volumes.
Remember that for successful trading it is necessary to have a clear trading plan like the one I presented above. Relying on spontaneous trading decisions based on the current market situation is a losing strategy of an intraday trader.
