Analysis of transactions in the EUR / USD pair
When EUR/USD tested 1.0250, the MACD line had just started to move above zero, so buying was appropriate. However, after rising by just 17 pips, the pair fell and tested 1.0210. At that time, the MACD line had begun to move below zero, which is a good reason to sell. Resultantly, the pair declined by more than 25 pips, and the target of 1.0166 was reached at the end of the US session.
EUR/USD fell because PPI in Germany, consumer confidence in the whole Euro area, and current account balance of the eurozone showed much weaker numbers than expected. But there is a chance that the situation will turn around today, after the meeting of the European Central Bank. There are rumors that rates will be raised by 0.5%, which will lead to increased demand for euro and a dip in dollar. Upcoming reports over manufacturing activity from the Philadelphia Fed and US jobless claims will be of little interest, unless they exceed expectations. Such a scenario will return demand for dollar and cause a larger fall in the pair.
For long positions:
Buy euro when the quote reaches 1.0245 (green line on the chart) and take profit at the price of 1.0290. There is a chance for a rally today, but only after the meeting of the European Central Bank.
Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0210, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0245 and 1.0290.
For short positions:
Sell euro when the quote reaches 1.0210 (red line on the chart) and take profit at the price of 1.0160. Pressure will return if the ECB is dovish and less aggressive over its monetary policy.
Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0245, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0210 and 1.0160.
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.
