Analysis of transactions in the EUR / USD pair
EUR/USD reaching 1.0722 led to a buy signal in the market, however, there was no large price increase even though the MACD line moved above zero. The same thing happened in the afternoon, bringing losses to traders. A little bit later, a sell signal was formed around 1.0705, and this time there was a decrease of about 50 pips. The pair hit 1.0672, but long positions opened there again led to losses.
EU's manufacturing PMI report for May helped euro maintain its positions yesterday morning, but demand quickly ended after the US released its employment data in the manufacturing sector. The speech of Fed member James Bullard also added pressure on risky assets, leading to the further fall of the pair.
Bundesbank representatives will deliver a speech today, and there will also be a report on EU producer prices. Although the data is unlikely to show a rapid jump in inflation for April, the euro would still not see a strong price increase. Also during the American session, a fairly large number of statistics on the US labor market will be released, which may further raise dollar demand provided that the figures exceed expectations. Following it are reports on productivity in the non-agricultural sector and volume of industrial orders, as well as a speech from FOMC member Loretta Mester. If euro buyers fail to get ahold of 1.0685 in the morning, there is a high chance that the pair will see sell-offs throughout the day.
For long positions:
Buy euro when the quote reaches 1.0684 (green line on the chart) and take profit at the price of 1.0723 (thicker green line on the chart). There is a chance for a rally today, but only amid strong data on the eurozone. If buyers fail to make up for their losses soon, the uptrend will be in jeopardy. Nevertheless, make sure that when buying, the MACD line is above zero or is starting to rise from it. It is also possible to buy at 1.0655, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0684 and 1.0723.
For short positions:
Sell euro when the quote reaches 1.0655 (red line on the chart) and take profit at the price of 1.0609. Pressure will return if the attempt to rise above 1.0684 fails. However, 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 1.0684, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0655 and 1.0609.
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.