Analysis of transactions in the EUR / USD pair

A signal to sell emerged after EUR/USD hit 1.1404. However, there was no strong movement because the MACD line being far from zero limited the downside potential of the pair. Then, some time after, the pair hit the level again, and this time the MACD line was in the oversold area. That allowed traders to take long positions, prompting a 30-pip increase in EUR/USD. No other signal appeared for the rest of the day.

Contrary to what was expected, reports about France's trade surplus and Italy's retail sales did not help euro rally yesterday. Data on US small business optimism and foreign trade balance did not affect the market as well.

But today, EUR/USD may increase as better-than-expected data on Germany's foreign trade balance and Italy's industrial production could provoke more demand for euro. US data on wholesale inventories could shake the market as well, but the more important event is the interviews of FOMC representatives Michelle Bowman and Loretta Mester. If they address inflation, demand for dollar may quickly return. If not, EUR/USD will continue to trade upwards.

For long positions:

Buy euro when the quote reaches 1.1433 (green line on the chart) and take profit at the price of 1.1481 (thicker green line on the chart). A rally will occur if reports from the Euro area exceed expectations. 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 1.1404, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.1433 and 1.1481.

For short positions:

Sell euro when the quote reaches 1.1404 (red line on the chart) and take profit at the price of 1.1350. Be careful and cautious when selling at lows because the lower euro falls, the more demand will return to it. Also, before selling, make sure that the MACD line is below zero, or is starting to move down from it. Pound can also be sold at 1.1433, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1404 and 1.1350.

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.