Analysis of transactions in the EUR / USD pair
The test of 1.0402 happened when the MACD line went up quite a lot from zero, which limited the upward potential of the pair. Some time later, another test took place, but this time the MACD line was already in the overbought area and even decreased from it, which was a good reason to sell. However, it only ended with losses as euro made another rally before it began to decline.
ECB President Christine Lagarde's speech did not change the direction of EUR/USD much. But more significant pressure was formed in the afternoon, after the release of higher-than-expected retail sales data in the US.
Today, there will be another speech from Lagarde, but much more interesting is the report on consumer prices in the Eurozone. Analysts expect it to remain unchanged in October, not showing any growth. If so, pressure will return on euro because the ECB will have fewer objective reasons for further aggressive policy. In the afternoon, data on jobless claims will be released in the US, followed by a report in real estate, particularly on the volume of issued building permits and the number of new foundations laid. A decrease in the two will put pressure on dollar. The speech of FOMC member Loretta Mester, who has recently changed her aggressive tone, will also be an interesting event.
For long positions:
Buy euro when the quote reaches 1.0402 (green line on the chart) and take profit at the price of 1.0463. Growth could occur, but there needs to be hawkish statements from the ECB president and bad statistics on the US. Also, remember that when buying, the MACD line should be above zero or is starting to rise from it.
Euro can also be bought at 1.0361, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0402 and 1.0463.
For short positions:
Sell euro when the quote reaches 1.0361 (red line on the chart) and take profit at the price of 1.0284. Pressure could return at any moment, especially if the US data demonstrates the strength of the economy. 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 1.0402, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0361 and 1.0284.
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.
