Analysis of transactions in the EUR / USD pair

EUR/USD reaching 1.0489 led to a sell signal in the market, but having the MACD line far from zero limited the downside potential of the pair. Similarly, the upside potential was limited because the indicator was also far from zero when the pair tested 1.0446 and prompted a buy signal. No other signal appeared for the rest of the day.

The lack of statistics in the Euro area led to a sell-off yesterday, while the published US data reinforced the bear market even despite the increase in initial jobless claims and decrease in producer prices.

Most likely, the decline will extend today as the upcoming CPI reports from France and Spain, as well as data on EU industrial production, will put pressure on the European currency. But in the afternoon, a correction may take place, as a dip in US consumer sentiment will have a bad effect on the dollar. It could be saved though by the statements of FOMC members Neel Kashkari and Loretta Mester.

For long positions:

Buy euro when the quote reaches 1.0417 (green line on the chart) and take profit at the price of 1.0454 (thicker green line on the chart). There is a chance for a rally today, but only if the upcoming reports in the Euro area exceed expectations. Nevertheless, when buying, make sure that the MACD line is above zero or is starting to rise from it. It is also possible to buy at 1.0388, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0417 and 1.0454.

For short positions:

Sell euro when the quote reaches 1.0388 (red line on the chart) and take profit at the price of 1.0349. Pressure will return after the release of strong US data in the afternoon. But note that when selling, make sure that the MACD line is below zero, or is starting to move down from it. Euro can also be sold at 1.0417, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0388 and 1.0349.

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.