Analysis of transactions in the EUR / USD pair
A signal to sell emerged after EUR/USD hit 1.0835. Coincidentally, the MACD line was just starting to move below zero, so the pair fell by more than 40 points. It almost reached the target level of 1.0787. No other signal appeared for the rest of the day.
EUR/USD fell on Friday because the latest reports on the Euro area, namely the April indices on business activity in the manufacturing and service sector, as well as composite PMI, turned out much weaker than expected. Statements made by ECB representatives were also not full of optimism. In the afternoon, similar reports were released for the US, where the situation was slightly better than in the eurozone.
Today, a series of statistics on Germany will be released, namely the IFO's data on business environment, present situation and economic expectations. A bad performance will make the euro fall deeper than the current price levels.
In the afternoon, there are no reports for the US, but there will be a speech from Fed board member Fabio Panetta, which could significantly affect market sentiment. Considering the current position of risky assets, it would be quite correct to expect an extended downtrend for EUR/USD.
For long positions:
Buy euro when the quote reaches 1.0764 (green line on the chart) and take profit at the price of 1.0810 (thicker green line on the chart). However, there is little chance for a rally today because statistics from Germany were weaker than expected.
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 1.0712, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0764 and 1.0810.
For short positions:
Sell euro when the quote reaches 1.0712 (red line on the chart) and take profit at the price of 1.0670. 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 1.0764, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0712 and 1.0670.
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.
