Analysis of transactions in the EUR / USD pair
Euro tested 0.9974 at the time when the MACD was far from zero, which limited the downside potential of the pair. Sometime later, it tested the level again, but this time the signal that emerged was to buy, which led to a price increase of more than 30 pips. As for the test of 1.0003 in the afternoon, it occurred when the MACD was far from zero, so the upside potential was limited.
Euro fell on Wednesday over the disappointing report on the volume of industrial production in the Euro area. The statements of ECB representatives also did not help, but the market balance returned in the afternoon amid US data on producer prices.
Today, a report on Italy's consumer price index will be released, followed by the data on the foreign trade balance of the eurozone. ECB Vice President Luis de Guindos will also speak, which will most likely address the future of the monetary policy. In the afternoon, much more important reports will be published by the US, such as the volume of retail sales in August, which, if falls, will ease inflationary pressures, but also lead to a slowdown in economic growth. If the data is better than expected, demand for dollar will continue to rise. There will also be a weekly report on jobless claims and manufacturing indices, which could force EUR/USD to decline further.
For long positions:
Buy euro when the quote reaches 0.9978 (green line on the chart) and take profit at the price of 1.0019. 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 0.9951, but the MACD line should be in the oversold area as only by that will the market reverse to 0.9978 and 1.0019.
For short positions:
Sell euro when the quote reaches 0.9951 (red line on the chart) and take profit at the price of 0.9904. Pressure will intensify if statistics from the US exceed expectations. But 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 0.9978; however, the MACD line should be in the overbought area as only by that will the market reverse to 0.9951 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.
