Analysis of transactions in the EUR / USD pair

EUR/USD reaching 1.0616 led to a sell signal in the market, however, having the MACD line far from zero limited the downside potential of the pair. Nevertheless, pressure persisted in the market, so euro traded down all day. In fact, pressure increased after the US released its data on inflation. As such, no other signal appeared for the rest of the day.

Euro fell last Friday because the report on industrial production in Italy was of little interest to traders, and the speech of the ECB President Christine Lagarde did not carry anything new, no matter what investors knew about the plans of the regulator. In addition, CPI in the US rose to another high in May, prompting an increase in demand for dollar, which led to a decline in EUR/USD.

Today, there are no statistics scheduled to be released in the Euro area, so pressure will most likely continue in the market. There are also no scheduled statistics in the US, so the pair may hit a lower low, then hang in a horizontal channel. The speech of Fed member Lyle Lael Brainard will not provide additional support to the dollar as it is already clear that further interest rate hikes from the Fed cannot be avoided in the near future.

For long positions:

Buy euro when the quote reaches 1.0504 (green line on the chart) and take profit at the price of 1.0549 (thicker green line on the chart). However, there is little chance for a rally today as traders are unlikely to go against a bear market. In any case, note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.0471, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0504 and 1.0549.

For short positions:

Sell euro when the quote reaches 1.0471 (red line on the chart) and take profit at the price of 1.0435. Pressure is likely to return in the market, however, note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0504, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0471 and 1.0435.

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.