Analysis of transactions in the EUR / USD pair
EUR/USD reaching 1.0505 led to a sell signal in the market, however, having the MACD line far from zero limited the downside potential of the pair. Sometime later, the pair tested the level again, but there was still no sharp decrease even though the MACD line started to move below zero. It was only on the third test that a strong movement occurred, bringing the price 50-pip down to 1.0458. Then, long positions opened at that level set off a 30-pip price increase.
Inflation in the Euro area last May was in line with forecasts, upsetting buyers who were counting on more aggressive price growth. At the same time, the Fed spoke about further increases in US interest rates, raising demand for dollar, which, in turn, prompted a further decrease in EUR/USD.
There are no statistics scheduled to be released in the Eurozone today, but there will be speeches from ECB and Bundesbank representatives, and those will be decisive for the market. There will also be a speech from Fed representatives in the afternoon, but the statements may not have much effect as the tone will most likely remain aggressive.
For long positions:
Buy euro when the quote reaches 1.0548 (green line on the chart) and take profit at the price of 1.0598 (thicker green line on the chart). There is a chance for a rally today, but only if the statements of ECB representatives are hawkish. Nevertheless, make sure that when buying, the MACD line is above zero or is starting to rise from it. It is also possible to buy at 1.0512, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0548 and 1.0598.
For short positions:
Sell euro when the quote reaches 1.051 (red line on the chart) and take profit at the price of 1.0451. Pressure will return in the morning, especially amid weak statistics on Germany and dovish statements by Christine Lagarde. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0548, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0512 and 1.0451.
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 decision based on the current market situation is an inherently losing strategy for an intraday trader.