Analysis of transactions in the EUR / USD pair

Although volatility was quite good in the market last Friday, EUR / USD did not show any large movement. Thus, there was only one signal in the pair - to sell - and it coincided with the MACD line going down from zero. This provoked a 30-pip decline in euro, after which pressure on the currency eased.

Most likely, data on the German business environment hampered euro buyers from pushing growth in the pair, as two of the three indicators fell sharply. Afterwards, statements from Fed representatives fueled further demand for dollar, which accordingly retained EUR / USD in a bear market.

Today, there will be reports on lending in the Euro area, more specifically on the M3 aggregate of the money supply and the volume of lending in the private sector. If they turn out better than expected, EUR / USD could rise in price. There will also be a monthly report from the Bundesbank where economists will publish their forecasts, and statements from the ECB which may discuss potential actions on monetary policy. In the afternoon, a series of similar interviews and speeches are for Fed representatives such as John Williams and Lael Brainard.

For long positions:

Open a long position when euro reaches 1.1730 (green line on the chart) and then take profit at the level of 1.1753. The pair may climb this week if data from the Euro area exceed expectations and if the ECB hints at potential early tapering of its support measures. 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 1.1713, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1730 and 1.1753.

For short positions:

Open a short position when euro reaches 1.1713 (red line on the chart) and then take profit at the level of 1.1684. A decline will occur if the Euro area reports weak economic data and if the ECB does not show any intention of cutting its support measures earlier than scheduled. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.

It is also possible to sell at 1.1730, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1713 and 1.1684.

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.