Analysis and tips on how to trade EUR/USD
The price tested the 1.0868 mark when the MACD was slightly below zero, which limited the downside potential of the pair. Another test of this range took place when the MACD approached the oversold zone, which created a buy entry point. The pair rose by over 20 pips.
A bearish correction occurred on Friday amid a rise in Germany's unemployment and a slight drop in the eurozone's consumer prices. Data on manufacturing business activity in the eurozone and Germany are on tap today. The pair is likely to face pressure and go down in the European session if figures disappoint. The speech of an ECB official will be of little interest to the market. In the North American session, the United States will see the release of the ISM manufacturing PMI. The pair may recover somewhat after the release.
Signal to buy:
Scenario 1: we buy today when the price reaches the mark of 1.0841 (green line of the chart), targeting 1.0897, where we exit the market and sell the euro, allowing a correction of 30-35 pips from the entry point. The pair may rise today if data in the eurozone comes upbeat. Important! Before buying the instrument, make sure the MACD is above zero and just starts moving up from this level.
Scenario 2: we also buy when the price tests the mark of 1.0805 twice, with the MACD being in the oversold zone at that moment. This will limit the pair's downside potential and lead to a bullish reversal in the market. The quote may go either to 1.0841 or 1.0897.
Signal to sell:
Scenario 1: we sell today after the price tests the mark of 1.0805 (red line on the chart). The target is seen at 1.0750 where we exit the market and buy the euro, allowing a correction of 20-25 pips in the opposite direction. The pair may feel pressure at any moment, especially if macro reports come disappointing. Important! Before selling the instrument, make sure the MACD is below zero and just starts moving down from this level.
Scenario 2: we also sell when the price tests the mark of 1.0841 twice, with the MACD being in the overbought zone at that moment. This will limit the pair's upside potential and lead to a bearish reversal in the market. The quote may then go either to 1.0805 or 1.0750.
Indicators on charts:
A thin green line indicates a buy entry point.
A thick green line is the estimated price where you should place a take-profit order or close positions manually since the quote is unlikely to grow above this level.
A thin red line indicates a sell entry point.
A thick red line is the estimated price where you should place a take-profit order or close positions manually since the quote is unlikely to fall below this level.
MACD. When entering the market, it is important to pay attention to the overbought and oversold zones.
Remember that novice forex traders should be very careful when deciding to enter the market. Before the release of important fundamentals, you should stay out of the market in order to avoid sharp fluctuations in the rate. If you decide to trade during news releases, make sure always to place a stop-loss order to minimize losses. Without it, you may quickly lose your entire deposit, especially if you do not use money management but trade large volumes.
Remember that in order to succeed in the market, you should have a clear trading plan, like the one I presented above. Spontaneous decisions based on the current state of the market are a losing strategy for an intraday trader.
