Analysis of transactions in the EUR / USD pair
EUR/USD tested 1.0120 on Monday. At that time, the MACD line was far from zero, so the downside potential was limited. Some time later, the pair fell to 1.0075. Although a buy signal emerged, the downward movement still continued.
Euro fell yesterday because following the results of the Eurogroup meeting, no decisions affecting markets were made. At the same time, demand for dollar continues to rise in anticipation of the upcoming US inflation data this week. The obvious pressure on risky assets pushed EUR/USD to yearly lows.
Ahead are reports from ZEW regarding current economic conditions and economic sentiment in Germany and the whole Euro area. A sharp decrease in values will put even more pressure on the pair. In the afternoon, there is nothing that could reflect badly on dollar as the NFIB report on small business confidence and the US Redbook index are of little concern.
For long positions:
Buy euro when the quote reaches 1.0032 (green line on the chart) and take profit at the price of 1.0085 (thicker green line on the chart). There is little chance for a rally today, especially after the continuation of the bear market, formed as a result of Friday's statistics on the US and statements from the European Central Bank. Nevertheless, when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9989, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0032 and 1.0085.
For short positions:
Sell euro when the quote reaches 0.9989 (red line on the chart) and take profit at the price of 0.9949. Pressure will continue as there are no reasons for growth in risky assets at the moment. However, when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0032, but the MACD line should be in the overbought area, as only by that will the market reverse to 0.9989 and 0.9949.
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.
