Overview of yesterday's trading and tips on EUR/USD
The first price test of 1.0637 in the afternoon occurred at a time when the MACD indicator sharply moved up from the zero mark, which limited the pair's bullish potential near the daily high. The second test of this price came at a time when the MACD was already in overbought territory. As a result, the pair fell by more than 20 pips. Good data on the ZEW business sentiment index for the euro area, as well as German reports on the ZEW business sentiment index, the ZEW current situation index and the balance of foreign trade supported the euro in the morning, while a weak US construction report, published during the US session, buoyed the single currency as well. However, the more expensive the euro became, the more there were those willing to sell it further down the trend.
Today, the Eurozone Consumer Price Index may provide impetus, and I advise you to pay attention to the main CPI - the so-called basic prices. If it sharply decreases, this will strengthen the chances of a European Central Bank rate cut in the near future. If the market ignores the report, then the EUR/USD may correct higher. As for the intraday strategy, I will rely more on scenarios No 1 and No 2.
Buy signal
Scenario No 1. Today you can buy the euro when the price reaches 1.0638 plotted by the green line on the chart, aiming for growth to the level of 1.0672. At the level of 1.0672, I plan to exit the market and also sell the euro in the opposite direction, counting on a movement of 30-35 pips from the entry point. You can count on the euro to rise today on the condition of good data on the eurozone. Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.
Scenario No 2. I am also going to buy the euro today in case of two consecutive tests of the price of 1.0615 at the time when the MACD indicator is in the oversold area. This will limit the downward potential of the instrument and lead to an upward reversal of the market. We can expect growth to the opposite levels of 1.0638 and 1.0672.
Sell signal
Scenario No 1. I plan to sell the euro after EUR/USD reaches the level of 1.0615 plotted by the red line on the chart. The target will be the level of 1.0585, where I am going to exit the market and buy immediately in the opposite direction (expecting a movement of 20-25 pips in the upward direction from the level). Pressure on EUR/USD will increase if it fails to consolidate in the area of the daily high. Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decline from it.
Scenario No 2. I am also going to sell the euro today in case of two consecutive price tests of 1.0638 at the time when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward reversal of the market. We can expect a decline to the opposite level of 1.0615 and 1.0585.
What's on the chart:
The thin green line is the entry price at which you can buy the trading instrument.
The thick green line is the price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.
The thin red line is the entry price at which you can sell the trading instrument.
The thick red line is the 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 in the cryptocurrency market need to be very cautious when making decisions to enter the market. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade with large volumes.
Remember, for successful trading, it is necessary to have a clear trading plan, similar to the one I presented above. Spontaneously making trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.
