Analysis of transactions and tips for trading EUR/USD
The test of 1.0793 took place at a time when the MACD line moved upward from zero, provoking a buy signal. As a result, the pair rose in price by more than 50 pips.
Market players ignored the recently-released industrial production report from the eurozone, as they look forward more to the Fed's decision on interest rates. To the surprise of many, Fed Chairman Jerome Powell took a dovish stance, stating that no one else intends to raise them. He also hinted at a minimum of four rate cuts in the coming year, which led to a strong sell-off of dollar.
Today, the ECB will announce its own decision on interest rates, and many expect that they will take a similar dovish position, which could harm the current upward trend of euro.
For long positions:
Buy when euro hits 1.0916 (green line on the chart) and take profit at the price of 1.0957. Growth will occur if the ECB takes a more firm stance than the Fed over interest rates.
When buying, make sure that the MACD line lies above zero or rises from it. Euro can also be bought after two consecutive price tests of 1.0883, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0916 and 1.0957.
For short positions:
Sell when euro reaches 1.0883 (red line on the chart) and take profit at the price of 1.0835. Pressure will return only if the ECB takes a very weak position on interest rates.
When selling, make sure that the MACD line lies under zero or drops down from it. Euro can also be sold after two consecutive price tests of 1.0916, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0883 and 1.0835.
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.
