Analysis of transactions in the EUR / USD pair

EUR/USD hit 1.1296 at a time when the MACD line was far from zero, so the downside potential was limited. On its second attempt, the indicator was in a good area, so a signal to sell was formed, but it did not bring the expected profit.

The same thing happened in the afternoon, but this time the pair was at 1.1316. The MACD line was again far from zero so the upside potential was limited. And when the indicator moved to the overbought area, a signal to sell was formed, but the pair did not go down.

Volume of orders in Germany, as well as PPI data in the Euro area, supported euro yesterday morning. Then, in the afternoon, jobless claims in the US and weak activity in the service sector limited the downside potential of the currency.

EUR / USD may rise today if the upcoming reports on the euro area exceed expectations. Strong industrial output in Germany, better-than-expected consumer spending in France and good retail sales in the eurozone will lead to a surge in volatility. But the highlight will be the CPI report as its growth can seriously strengthen the position of euro in the market.

In the afternoon, the US will release reports on the non-farm sector, where massive growth is expected. If that really happens, the Fed may tighten monetary policy more aggressively this year, which will boost demand for dollar.

For long positions:

Buy euro when the quote reaches 1.1316 (green line on the chart) and take profit at the price of 1.1375. Growth is very unlikely today because upcoming data on the eurozone is expected to be weak. Strong US data will also limit the upside potential of the pair.

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 1.1295, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1316 and 1.1375.

For short positions:

Sell euro when the quote reaches 1.1295 (red line on the chart) and take profit at the price of 1.1241. Strong data from the US could prompt a decline in EUR / USD.

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 1.1316, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1295 and 1.1241.

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.