Analysis of transactions and tips for trading EUR/USD
The test of 1.1036 on Wednesday afternoon, coinciding with the rise of the MACD line from zero and the release of latest US inflation data, prompted a buy signal that led to a price increase of over 90 pips. No other market signal appeared for the rest of the day.
Market players focus on the latest US inflation data, thereby leaving the speech made by ECB board member Philip Lane unnoticed. Since price pressure continued to drop quite actively, dollar demand weakened, resulting in euro breaking out to the area of new yearly highs.
Economic forecasts of the European Commission lie ahead, followed by a report from the ECB about monetary policy. There will also be data on industrial production in the eurozone, where a decline may harm the upward potential of EUR/USD.
For long positions:
Buy when euro hits 1.1149 (green line on the chart) and take profit at the price of 1.1186. Strong statistics from the eurozone will help the pair grow. However, traders should make sure that the MACD line lies above zero or rises from it.
Euro can also be bought after two consecutive price tests of 1.1126, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1149 and 1.1186.
For short positions:
Sell when euro reaches 1.1126 (red line on the chart) and take profit at the price of 1.1092. Pressure will increase in the absence of bullish activity at the yearly highs. However, when selling, traders should make sure that the MACD line lies below zero or drops down from it.
Euro can also be sold after two consecutive price tests of 1.1149, but the MACD line should be in the overbought area as only by that will the market reverse to 1.1126 and 1.1092.
What's on the chart:
Thin green line - entry price at which you can buy EUR/USD
Thick green line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.
Thin red line - entry price at which you can sell EUR/USD
Thick red line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.
MACD line- it is important to be guided by overbought and oversold areas when entering the market
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.
