Analysis of transactions in the EUR / USD pair
Euro tested 1.0160 at the time when the MACD was far from zero, which limited the upside potential of the pair. Sometime later, it tested 1.0125, but this time the MACD line was just starting to move below zero, which was a good signal to sell. This resulted to a price decrease of more than 130 pips.
CPI and business sentiment in Germany came out almost the same as the forecasts, so it did not particularly disappointed traders. Then, in the afternoon, CPI in the US was released, which rose 8.3% y/y, maintaining price pressure at highs over the past 40 years. Such data is likely to force the Fed to continue aggressively raising rates, which will strengthen dollar.
Today, a report on the volume of industrial production in the eurozone will come out, but it will be of little interest to the market. Attention will be paid to the speeches of ECB representatives instead, as their comments, although unlikely to return bullish sentiment, could at least limit temporarily the further fall of euro. In the afternoon, the US will release data on producer prices, which will likely turn out to be worse than expected. This will lead to a new wave of decline in EUR/USD.
For long positions:
Buy euro when the quote reaches 1.0003 (green line on the chart) and take profit at the price of 1.0040. Although there is little chance for growth today, traders can still open long positions when the MACD line is above zero or is starting to rise from it. Euro can also be bought at 0.9974, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0003 and 1.0040.
For short positions:
Sell euro when the quote reaches 0.9974 (red line on the chart) and take profit at the price of 0.9904. Pressure will intensify if statistics from the US are disappointing. Also, take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can be sold at 1.0003, but the MACD line should be in the overbought area as only by that will the market reverse to 0.9974 and 0.9904.
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.
