Analysis of transactions in the EUR / USD pair
There was a signal to buy in EUR / USD on Thursday, but it had to be ignored because it appeared when the MACD line was at the overbought area. Some time after, the indicator moved away from the zone, which opened the opportunity for sellers to short the pair. This resulted to euro slipping by about 15 pips. Then, in the afternoon, there was another signal to buy, but it had to be ignored again because the MACD line was far from zero. Despite this, the market remains bullish, thanks to the strong report on EU producer prices.
Weaker-than-expected data from the US also added support to the pair. A number of statistics are scheduled to be published today, but it is unlikely that the market will turn around and change direction. Nevertheless, investors should pay attention to the reports on retail sales and PMI from the Euro area, as well as on the data on the US labor market, which, if turns out worse than expected, could lead to a further rise in EUR / USD.
For long positions:
Open a long position when euro reaches 1.1886 (green line on the chart), and then take profit at the level of 1.1925 (thicker green line on the chart). The pair will climb higher if service PMI from the Euro area exceeds 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 1.1865, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1886 and 1.1925.
For short positions:
Open a short position when euro reaches 1.1865 (red line on the chart), and then take profit at the level of 1.1825. A decline will occur if the Euro area releases weak data on the services sector and if the US publishes a strong labor market report. 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 1.1886, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1865 and 1.1825.
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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