Analysis of transactions and tips for trading EUR/USD
The test of 1.2306 happened when the MACD line was already far from zero, so the upside potential was limited. Sometime later, there was another test at 1.2374, but this time the market signal was to sell, which resulted in a price decrease of about 20 pips.
Pound continued to rise on Wednesday as the inflation data in the UK fell slightly. The sharp drop in US retail sales also triggered a very strong rally during the US session.
No important statistics are scheduled to be released today aside from the house price balance from RICS and credit conditions in the UK. This means that sellers have a chance to trigger a correction, especially since in the afternoon, the US will release data on issued building permits and number of new foundations. A rise in the figures will certainly strengthen dollar demand, which will lead to another downward trend in GBP/USD. A surge in initial jobless claims, on the other hand, will hurt dollar.
For long positions:
Buy pound when the quote reaches 1.2365 (green line on the chart) and take profit at the price of 1.2426 (thicker green line on the chart). Growth could occur if the upcoming US data is very weak. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Pound can also be bought at 1.2327, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2365 and 1.2426.
For short positions:
Sell pound when the quote reaches 1.2327 (red line on the chart) and take profit at the price of 1.2267. Pressure will increase if there is no bullish activity at the new highs. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2365, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2327 and 1.2267.
What's on the chart:
The thin green line is the key level at which you can place long positions in the GBP/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 GBP/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.
