Analysis of transactions in the EUR / USD pair
The pair tested 1.0629 when the MACD line was already far from zero, so the upside potential was limited. Sometime later, another test took place, but this time the MACD line was in the overbought area, which was a good reason to sell. This led to a price decrease of about 25 pips.
There was a slight decline in EUR/USD on Wednesday as the report on Germany's leading consumer climate index for January did not help euro, while data on US consumer confidence brought back demand for dollar. However, the dynamics did not last very long.
Most likely, euro will remain trading within the sideways channel this morning as there are no reports expected to be released in the eurozone. The US GDP data that is due out in the afternoon could change the situation, but there is little chance that it would cause a large spike in volatility as the third estimate is expected to be unrevised. The weekly report on US jobless claims will also be ignored.
For long positions:
Buy euro when the quote reaches 1.0650 (green line on the chart) and take profit at the price of 1.0695. Although there is little chance for growth today, traders can still buy if the MACD line is above zero or starting to rise from it. Euro can also be bought at 1.0624, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0650 and 1.0695.
For short positions:
Sell euro when the quote reaches 1.0624 (red line on the chart) and take profit at the price of 1.0582. Pressure will increase if the US reports strong GDP 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 1.0650, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0624 and 1.0582.
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.
