Analysis of transactions in the EUR / USD pair
A signal to sell emerged after EUR/USD hit 1.1209. Coincidentally, the MACD line was below zero, so the pair dropped more than 30 pips. No other signal appeared for the rest of the day.
EUR/USD fell yesterday because demand for dollar increased amid better-than-expected data on US GDP. The figure for the 4th quarter not only strengthened investor confidence, but also prompted more active actions by the Fed. Having high interest rates will no longer be a problem as economic outlook is improving.
Most likely, this bearish movement will continue because reports from the Euro area are expected to come out weaker. Negative changes in the GDP of France and Germany will return pressure on the pair, while a weak report on German employment and EU consumer confidence lead to a dip towards monthly lows. In the afternoon, US data on income and spending will strengthen demand for the dollar, leading to a further decline in the pair. Reports on consumer sentiment and inflation expectations will also retain a bear market.
For long positions:
Buy euro when the quote reaches 1.1172 (green line on the chart) and take profit at the price of 1.1201. A rally is possible, but only in the morning and amid better-than-expected reports from France and Germany.
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 1.1148, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1172 and 1.1201.
For short positions:
Sell euro when the quote reaches 1.1148 (red line on the chart) and take profit at the price of 1.1114. Lack of bullish activity, even after strong reports from Germany and the whole Euro area, will lead to a decline in the pair. At the same time, strong data from the US will provoke more demand for the dollar.
Before selling, make sure that the MACD line is below zero, or is starting to move down from it. Euro could also be sold at 1.1172, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1148 and 1.1114.
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.