Analysis of transactions and tips for trading EUR/USD
Macroeconomic reports from the Euro area are coming out today, which could either support the euro or prompt a massive sell-off in the market. Of particular importance will be Germany's inflation data for December, which, if indicates a drop in the figure, will certainly weaken euro's price this morning. But business sentiment index for Germany and the eurozone could trigger a rally if the reports show good numbers as expected. Meanwhile, there are no important reports that will seriously affect the market in the afternoon. The Empire Manufacturing index is likely to be ignored, but a speech from FOMC member John Williams could lead to a spike in volatility.
For long positions:
Buy euro when the quote reaches 1.0839 (green line on the chart) and take profit at the price of 1.0890. Growth will occur if Germany and Eurozone's statistics exceed expectations. However, before buying, make sure that the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0807, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0839 and 1.0890.
For short positions:
Sell euro when the quote reaches 1.0807 (red line on the chart) and take profit at the price of 1.0761. Pressure will return if the upcoming reports are weaker than expected and if the attempt to consolidate above 1.0840 fails. 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 1.0840, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0807 and 1.0761.
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.
