Analysis of transactions in the EUR / USD pair
EUR/USD reaching 1.0489 led to a buy signal in the market, however, having the MACD line far from zero limited the upside potential of the pair. Some time later, the pair tested the level again, but this time the signal was to sell. It led to a more than 30 pips decrease, as the MACD line was in the overbought area. Exactly the same situation was repeated in the middle of the day, with euro falling by more than 80 points. As such, after the Fed meeting, the pair hit 1.0375, where a buy signal was formed. That, in turn, prompted the pair to rise by more than 70 pips.
EU's trade surplus and industrial production fell short of the market, as did US retail sales. But the decrease in sales was seen as a good sign by the Fed because it obviously reduced inflationary pressures.
With regards to interest rates, the US central bank announced a 0.75% hike, which many already expected. What was new was the statements of Fed Chairman Jerome Powell that hinted that the committee would most likely do the same at the next meeting.
A report on wages will be released in the eurozone today, followed by a meeting of the Eurogroup. No less interesting is the speech of ECB representative Fabio Panetta, which may have a positive impact on euro. In the afternoon, the US will publish data on building permits and new homes, followed by reports on the manufacturing index and jobless claims. The latter two, however, will not affect the market, as risk appetite will return during the US trading session.
For long positions:
Buy euro when the quote reaches 1.0444 (green line on the chart) and take profit at the price of 1.0505 (thicker green line on the chart). There is a chance for a rally today, but only after strong statistics on the euro area and hawkish statements by ECB representatives. Nevertheless, note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.0409, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0444 and 1.0505.
For short positions:
Sell euro when the quote reaches 1.0409 (red line on the chart) and take profit at the price of 1.0375. Pressure will return in the morning, but buyers may use this as an opportunity to open new long positions. Nevertheless, 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 1.0444, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0409 and 1.0375.
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.