Analysis of transactions in the EUR / USD pair
EUR/USD first tested 1.0195 at the time when the MACD was far from zero, which limited the further upside potential of the pair. Its second test, meanwhile, happened at the moment when the MACD was in the overbought area, which seemed to be a good signal to sell. It proved to be correct because the pair did fall by 17 pips. By mid-day, a third test occurred, just when the MACD line was starting to move above zero. This was a good signal to buy, which resulted in a price increase of around 15 pips. The sell signal at 1.0152 had to be ignored because the MACD line was in the oversold area. No other signals appeared for the rest of the day.
Diverse data on business activity in France, Germany and Italy hindered euro from moving in just one direction. Then, the composite PMI of the euro area stopped it from getting out of the daily highs. In the US, a strong report on business activity led to the immediate rise of dollar, completely crossing out all hopes for a correction.
A number of reports are coming in the Euro area, but the most important is the economic bulletin from the European Central Bank. Positive forecasts will certainly affect the mood of buyers. In the US, data on jobless claims will be released, followed by a report on the foreign trade balance. Most likely, imports will continue to decline, while exports will grow, which will support dollar. The speech of FOMC member Loretta Mester could also be hawkish, which will aggravate risk appetite.
For long positions:
Buy euro when the quote reaches 1.0185 (green line on the chart) and take profit at the price of 1.0239. However, there is little chance for a rally today, moreso if data on the Euro area 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 1.0185 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 Bank of England turns dovish regarding 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 1.0185, 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.
