Analysis of transactions in the EUR / USD pair

A signal to sell emerged after EUR/USD hit 1.1094. However, there was no decrease because the MACD line being in the oversold area limited the downside potential of the pair. The same thing happened some time later, but this time the signal was to buy. The key level was the same, however, there was no increase even though the indicator was already in the oversold area. Finally, the third attempt became successful as the sell signal coincided with the MACD line moving below zero. That time, the pair dipped by 30 pips.

The unemployment rate in Germany fell, while inflation in the Eurozone hit a new high of 5.8%. These two capped the fall of euro on Wednesday morning. In the afternoon, the markets turned to Fed Chairman Jerome Powell, who said in his speech that he is inclined to propose and support a 25 basis point rate hike. He told the House Financial Services Committee that the central bank will prepare to act more aggressively if inflation skyrockets too much. These statements coincided with market expectations, so euro grew during the US session.

Several economic reports are scheduled for today, namely the service PMI and composite PMI of Germany, France and Italy. A decline in these indicators may limit the upward potential of euro, but it may be offset if PPI data in the Euro area exceed expectations. In the afternoon, the US will release a report on jobless claims, followed by the data on business activity in the services sector. Growth in the latter indicator will be favorable for dollar.

For long positions:

Buy euro when the quote reaches 1.1115 (green line on the chart) and take profit at the price of 1.1173 (thicker green line on the chart). A rally may occur if data on the Euro area exceed expectations. The minutes of the ECB's meeting, as well as negotiations in Ukraine, will also affect the direction of the market.

In any case, before buying, make sure that the MACD line is above zero or is starting to rise from it before taking long positions. It is also possible to buy at 1.1081, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1115 and 1.1173.

For short positions:

Sell euro when the quote reaches 1.1081 (red line on the chart) and take profit at the price of 1.1035. Pressure will return if tension in Ukraine does not ease. Weak data on the Euro area will also prompt a decline in the pair. But before selling, make sure that the MACD line is below zero, or is starting to move down from it. Euro can also be sold at 1.1115, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1081 and 1.1035.

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.