Analysis of transactions in the EUR / USD pair

Although the strong PMI reports broke the bearish trend in the euro, sell signals still appeared in the market yesterday. However, the first one had to be ignored because the MACD line was in the oversold area that time.

Fortunately, on the second try, the MACD line was finally close to zero, so the euro was able to move down by 15 pips.

Trading recommendations for May 6

Pay attention to the upcoming macroeconomic reports today as those will certainly affect the market. For example, if Germany publishes good data on its economy, demand for the euro will increase.

Statements from the ECB will also affect investor sentiment, especially if Christine Lagarde addresses the issue on inflation.

In the afternoon, the US will release reports on jobless claims and labor productivity, but those will have very little effect on the market.

For long positions:

Enter a long position when the quote reaches 1.2019 (green line on the chart), and then take profit around the level of 1.2074. The euro will turn up if Germany publishes strong macroeconomic reports and if the ECB addresses the issue on inflation.

When buying, make sure that the MACD line is above zero, or is starting to rise from it.

For short positions:

Enter a short position when the quote reaches 1.1990 (red line on the chart), and then take profit at the level of 1.1935. The euro will decline if Germany publishes weak macroeconomic reports.

But before selling, make sure that the MACD line is below zero or is starting to move down from it.

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.

Analysis of transactions in the GBP / USD pair

A number of signals appeared in the market yesterday, but only one of them was successful. This is because when the pound hit 1.3892 for the first time, the MACD line was in the oversold area. Traders had to ignore the sell signal as the downward potential was limited. Fortunately, when the pound hit the level for the second time, the MACD line had already moved close to zero. Hence, the price was able to drop by as much as 20 pips.

As for the buy signal at 1.3920, traders had to ignore it because the MACD line was in the overbought area.

Trading recommendations for May 6

Pay attention to the decisions the Bank of England will announce today as those will certainly affect investor sentiment. For example, if the central bank decides to instill any changes on its monetary policy, demand for the pound will increase. But if they decide to maintain the current policy, pressure on the pound will return.

The US will also release reports on jobless claims and labor productivity, but those will have very little effect on the market.

For long positions:

Enter a long position when the quote reaches 1.3917 (green line on the chart), and then take profit at the level of 1.4015 (thicker green line on the chart). Longs are ideal at the moment because the policy decisions of the Bank of England may raise demand for the pound. But before opening a position, make sure that the MACD line is above zero or is starting to rise from it.

For short positions:

Enter a short position when the quote reaches 1.3877 (red line on the chart), and then take profit at the level of 1.3812. Pressure on the pound will return if there are no changes in the Bank of England's monetary policy. But before selling, make sure that the MACD line is below zero or is starting to move down from it.

What's on the chart:

The thin green line is the key level at which you can place long positions in the GBP / 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 GBP / 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.