Analysis of transactions in the EUR / USD pair
There was a signal to buy in EUR / USD in the morning, but traders had to ignore it because it came when the MACD line was at the overbought area. This resulted to euro dropping by another 20 pips, which, in turn, formed a signal to sell in the market. But since the MACD indicator was far away from zero, the pair did not go down much. Following that was another signal to buy, but it also did not result in a large movement. Obviously, the minutes of the July ECB meeting and data on money supply and lending did not affect the market much.
And today, since there are no important macro statistics scheduled to be released, the market will most likely remain calm in the morning. But by afternoon Fed Chairman Jerome Powell will make a speech, which will be decisive to the EUR / USD pair. Data on German import price index and US income will most likely be ignored.
For long positions:
Open a long position when euro reaches 1.1770 (green line on the chart), and then take profit at the level of 1.1800 (thicker green line on the chart). EUR / USD trade upwards if the Federal Reserve does not hint on future policy changes. 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 1.1750 and 1.1708, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1770 and 1.1800.
For short positions:
Open a short position when euro reaches 1.1750 (red line on the chart), and then take profit at the level of 1.1708. A decline will occur if US releases strong economic reports and if the Fed indicates potential changes in the monetary policy. 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 1.1770 and 1.1800, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1750.
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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