Analysis of transactions in the EUR / USD pair
The test of 1.0540 occurred when the MACD line was far above zero, so the upside potential was limited. No other signals appeared for the rest of the day.
The speech of ECB Supervisory Board member Kerstin Jochnick was ignored, perhaps because today is a more interesting day as ahead is Germany's inflation data, which is set to slow down. That will have a negative impact on euro, especially after the ZEW Institute's business sentiment index for Germany and the eurozone. But the whole focus will be on the afternoon, particularly on the data on US consumer prices. A decline in the index will most likely lead to a sharp rise in euro to new December's highs, as well as on a new yearly high. Meanwhile, a surge in US inflation will put an end to the bullish outlook, which will negatively affect risk appetite.
For long positions:
Buy euro when the quote reaches 1.0555 (green line on the chart) and take profit at the price of 1.0605. Growth will occur only when inflation data in Germany exceeds expectations. But remember that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0515, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0555 and 1.0605.
For short positions:
Sell euro when the quote reaches 1.0515 (red line on the chart) and take profit at the price of 1.0461. Pressure may increase after weak Eurozone statistics and before important US data. But 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 1.0555, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0515 and 1.0461.
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.
