Analysis of transactions in the EUR / USD pair
EUR/USD reaching 1.0495 led to a sell signal in the market, but having the MACD line far from zero limited the downside potential of the pair. Similarly, the upside potential was limited because the indicator was also far from zero when the pair hit 1.0525 and prompted a buy signal. No other signal appeared for the rest of the day.
Pressure in EUR/USD remains as many traders are waiting for fairly tough statements and decisions from the Federal Reserve. In addition, yesterday's employment data on Germany and the eurozone coincided with the forecasts, so euro did not get significant support. But the report on EU producer prices did lead to a surge in the pair, albeit just briefly.
Today, will focus on the reports on business activity and composite PMI in Germany, Italy, France and the eurozone, as well as on retail sales data for March in the Euro area. Strong figures will help euro increase in the morning, but in the afternoon, the speech of Fed Chairman Jerome Powell and reports on business activity, composite PMI and employment in the US will bring demand back to dollar. If the Fed raises rates and signals a further aggressive policy, USD will rise even more, which will lead to a deeper decline in EUR/USD.
For long positions:
Buy euro when the quote reaches 1.0531 (green line on the chart) and take profit at the price of 1.0574 (thicker green line on the chart). A rally is highly likely today, especially amid strong economic data on the eurozone. And given the overbought status of dollar, an upward correction is very possible. However, all that is relevant before the Fed meeting, as the decisions made at it can return pressure on the market. 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 1.0503, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0531 and 1.0574.
For short positions:
Sell euro when the quote reaches 1.0503 (red line on the chart) and take profit at the price of 1.0459. Pressure will return if data on the Euro area turns out weaker than expected and if expectations for a more hawkish Fed policy rise. 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 1.0531, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0503 and 1.0459.
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.
