Analysis of transactions in the EUR / USD pair
A signal to buy emerged after EUR/USD hit 1.0863. Supposedly, the upside potential should be limited because the MACD line was quite far from zero, however, the pair went up by 40 pips and reached 1.0901. Sell positions, on the other hand, led to losses as the euro continued to move upwards. No other signal appeared for the rest of the day.
EUR/USD extended its rally on Thursday because EU inflation data for March showed a slowdown. However, sellers took advantage of the fact that Fed Chairman Jerome Powell had a scheduled speech, so the increase was quite limited.
According to Powell, the Fed's 0.5% rate hike in May is a done deal and that the central bank will do the same during the July meeting. Although this is far from the rumored 75 basis point rise, the hawkish statements still led to a sharp increase in dollar demand.
Today, a series of statistics on the Euro area will be released, namely the April indices on business activity in the manufacturing and service sector, as well as composite PMI. Good performance will force euro buyers to break above 1.0863. In the afternoon, similar reports for the US will be published, which, if there is no decline in indicators, will return demand for dollar and prompt a decline in EUR/USD.
For long positions:
Buy euro when the quote reaches 1.0863 (green line on the chart) and take profit at the price of 1.0901 (thicker green line on the chart). However, a further increase will occur only if there are strong statistics in the Eurozone and aggressive statements from the ECB.
In any case, when buying, make sure that the MACD line is above zero or is starting to rise from it. It is also possible to buy at 1.0835, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0863 and 1.0901.
For short positions:
Sell euro when the quote reaches 1.0835 (red line on the chart) and take profit at the price of 1.0787. Pressure is likely to return at any moment because hawkish statements by the Fed will increase demand for dollar.
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 1.0863, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0835 and 1.0787.
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.
