Analysis of transactions in the EUR / USD pair
Although there were several market signals last Friday, there was no strong movement in EUR / USD because traders were not that active. For example, even though a signal to sell appeared when the MACD line was going down from zero, euro did not decline much as there were few sellers in the market. Similarly, there was no large upward movement despite a signal to buy that coincided with the indicator being at the oversold area. The reason why volatility was low is because the released data turned out just as expected.
But today the market promises to be more active since in the morning there will be business indices for both manufacturing and service sectors. Weaker-than-expected figures will end with a decline in EUR / USD, while better numbers will result in a slight increase.
There will also be a report on consumer confidence, which is predicted to decline. Then, in the afternoon, similar data is expected, but this time it will be from the United States. There may be an upward correction in the pair, but on the condition that indicators post a slower growth than last month.
For long positions:
Open a long position when euro reaches 1.1723 (green line on the chart), and then take profit at the level of 1.1755. EUR / USD may climb higher if data on the services sector 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 1.1698 and 1.1666, but the MACD indicator line must be in the oversold area, as only by that will the market reverse to 1.1723 and 1.1755.
For short positions:
Open a short position when euro reaches 1.1698 (red line on the chart), and then take profit at the level of 1.1666. A decline will occur if the Euro area releases weak economic indicators. 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 1.1723 and 1.1755, but the MACD line must be in the overbought area, as only by that will the market reverse to 1.1698.
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.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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