Analysis of transactions in the EUR / USD pair
There was a signal to buy in EUR / USD on Wednesday, but it had to be ignored because the MACD line was far from zero. Following that was a signal to sell, but there was no large movement in the pair. By afternoon though another buy signal appeared, and this time it was able to provoke a 30-pip increase. Apparently, the MACD line at that time was going up from zero, allowing traders to safely take long positions.
Disappointing data from the Euro area pushed euro down yesterday, but by afternoon the situation reversed, thanks to the data on US inflation. The figure weakened fears over a more active curtailment of bond purchases, which led to the growth of euro.
Today, there will be a report on Spanish CPI, followed by data on US jobless claims and PPI. There will also be speeches from FOMC members Raphael Bostic and Thomas Barkin, who may discuss the ongoing rise of inflation in the United States and advocate policy tapering, which is a bullish signal for dollar.
For long positions:
Open a long position when euro reaches 1.1606 (green line on the chart) and take profit at 1.1639. There is a huge chance that price will increase because the pair has left the side channel and is ready for a new upward trend. But before buying, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.1580, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1606 and 1.1639.
For short positions:
Open a short position when euro reaches 1.1580 (red line on the chart) and take profit at 1.1545. Pressure may return during the speech of Fed representatives, and if the US releases a strong PPI report. But before selling, make sure that the MACD line is below zero, or is starting to move down from it. Euro could also be sold at 1.1606, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1580 and 1.1545.
What's on the chart:
The thin green line is the key level at which you can place long positions in the EUR / 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 EUR / 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 decisions based on the current market situation is an inherently losing strategy for an intraday trader.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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