Analysis of transactions in the EUR / USD pair
EUR/USD first tested 1.0233 at the time when the MACD was far from zero, which limited the further downside potential of the pair. Its second test, meanwhile, happened at the moment when the MACD was exiting the oversold area, which seemed to be a good signal to buy. However, quotes did not see sharp upward movements, indicating a further decline in the afternoon. That really happened on the third test as the MACD line was moving below zero, leading to a signal to sell that resulted in more than 40 pips price decrease.
Pressure is likely to persist in EUR/USD because of the escalating conflict between the US and China, in which Taiwan is also involved. In addition, a number of statistics are coming in the Euro area, and the most important of them is the data on inflation, which is expected to increase. The US will also release similar reports, followed by a speech from Fed representative Patrick Harker. Look forward to further sell-offs in the pair.
For long positions:
Buy euro when the quote reaches 1.0195 (green line on the chart) and take profit at the price of 1.0239. There is a chance for a rally today, but only after impressive statistics on the Euro area. The pair will continue to fall if the data disappoints.
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 1.0152, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0195 and 1.0239.
For short positions:
Sell euro when the quote reaches 1.0152 (red line on the chart) and take profit at the price of 1.0095. Pressure will return if statistics in the Euro area fell short of forecasts and if the political conflict escalates.
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 1.0195, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0152 and 1.0095.
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.
