Analysis of transactions in the EUR / USD pair
The recently released data on activity in the eurozone disappointed traders as it hinted at the possibility of recession next year. In addition, inflation rose to 10.1% in November, further strengthening the belief that the ECB will continue to raise rates, no matter what it takes. This put euro under pressure.
There is a chance for a rebound today, but it is only after the IFO's report on business expectations, present situation and business climate in Germany. The three indices are projected to rise, which should restore bullish sentiment in the market. However, if the reports turn out weaker than expected, euro will slide further.
Wage levels in the eurozone will not be of much importance in determining the market's direction. There are also no statistics in the afternoon, so expect volatility to be lower and for euro to trade within the channel.
For long positions:
Buy euro when the quote reaches 1.0615 (green line on the chart) and take profit at the price of 1.0661. Growth could occur after a strong report from the IFO. 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 1.0582, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0615 and 1.0661.
For short positions:
Sell euro when the quote reaches 1.0582 (red line on the chart) and take profit at the price of 1.0545. Pressure will increase if Germany reports weak economic statistics. 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 1.0615, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0582 and 1.0545.
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.
