Analysis of transactions in the EUR / USD pair
There were several market signals on Tuesday and most of them were very successful. For example, the signal to buy at 1.1720 coincided with the MACD line being at the oversold area, so the pair was able to climb up by 20 pips. Following that was a signal to sell that coincided with the MACD line being at the overbought area, which pushed EUR / USD down by 5 pips. Another signal to buy appeared in the evening, but it was not successful.
The lack of macro statistics yesterday morning affected euro, so volatility was very low in the market. But in the afternoon, US released a better-than-expected report on new housing construction, which led to a rise in dollar and accordingly, a fall in EUR / USD. This prevented euro bulls from pushing the quote above 1.1745.
Today, there will be a report on EU consumer confidence, which may support euro. But in the afternoon the Fed will announce its decision on monetary policy and give new economic forecasts, which could provoke a surge in volatility. An earlier-than-scheduled cut in bond purchases will set off sharp increases in dollar.
For long positions:
Open a long position when euro reaches 1.1734 (green line on the chart) and then take profit at the level of 1.1774. There is little chance that the pair will climb this week, unless the EU reports strong data on consumer confidence. 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 1.1710, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1734 and 1.1774.
For short positions:
Open a short position when euro reaches 1.1710 (red line on the chart) and then take profit at the level of 1.1674. A decline may occur after the publication of Fed's monetary policy decision today. Also, the lack of clarity on the US debt limit will significantly support dollar this week. 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 1.1734, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1710 and 1.1674.
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.