Analysis of transactions in the EUR / USD pair
A signal to buy emerged after EUR/USD hit 1.1123. Coincidentally, the MACD line was starting to move above zero, so the pair rose by about 30 pips. But since it did not reach the target level of 1.1183, there was no other market signal for the rest of the day
Inflation data in Germany came out much higher than expected. That, together with the statements of Christine Lagarde, led to a sharp rise in EUR/USD yesterday morning. As for the March employment data from the ADP, it did not affect dollar demand as it completely coincided with economists' forecasts. Meanwhile, US GDP for the fourth quarter of 2021 was completely revised down to 6.9%, to which the dollar reacted with a fall.
A number of important statistics on the eurozone are coming out today. A surge in volatility is expected after the release of German retail trade and unemployment rate. No less important will be reports on the consumer price index of France and Italy, although it has long been clear to everyone what a difficult situation the European Central Bank has already faced. ECB executive board member Philip Lane's speech and eurozone unemployment data will end the cycle of reports in the morning. During the US session, data on expenses and income will be released, followed by a report on jobless claims. A strong performance could bring back demand for dollar, especially since a jump in consumer spending will have a negative impact on the already excessively high inflation. The speech of FOMC member John Williams is unlikely to affect the market in the afternoon. Considering how much euro is overbought right now, it is better to bet on its decline.
For long positions:
Buy euro when the quote reaches 1.1189 (green line on the chart) and take profit at the price of 1.1250 (thicker green line on the chart). However, a further increase is unlikely today because the pair is already overbought.
In any case, 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 1.1154, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1189 and 1.1250.
For short positions:
Sell euro when the quote reaches 1.1154 (red line on the chart) and take profit at the price of 1.1091. Pressure will return if data on the EU economy comes out much weaker than expected.
But before selling, make sure that the MACD line is below zero, or is starting to move down from it. Euro can also be sold at 1.1189, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1154 and 1.1091.
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.