Analysis of transactions in the EUR / USD pair
Euro tested 0.9916 at the time when the MACD was far from zero, which limited the upside potential of the pair. Sometime later, it tested the level again, but this time time MACD line was in the overbought area, which was a good signal to sell. Sadly, there was no price decrease and no other signals appeared for the rest of the day.
Euro only fell slightly despite the weaker-than-expected report on business activity in the services sector of Germany, Italy and the eurozone. In addition, volatility was limited as it was Labor Day in the US.
A number of reports are scheduled to be published today, such as the volume of industrial orders in Germany and the index of business activity in the construction sector. Considering how the market ignored the data on composite PMI yesterday, it is likely that today's indicators, even if they turn out to be worse than expected, will not affect euro. Then, in the afternoon, data on business activity in the services sector and PMI for the US will be released, which will hit the positions of dollar and may lead to a rise in risk appetite, provided that the figures are lower than the forecasts. For this reason, expect growth and upward correction in EUR/USD.
For long positions:
Buy euro when the quote reaches 0.9987 (green line on the chart) and take profit at the price of 1.0030. A rally will occur only if statistics in the Euro area, especially in the construction sector, exceed expectations.
Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9949, but the MACD line should be in the oversold area as only by that will the market reverse to 0.9987 and 1.0029.
For short positions:
Sell euro when the quote reaches 0.9949 (red line on the chart) and take profit at the price of 0.9894. Pressure will return if statistics in the Euro area come out lower than the forecasts, while data in the US exceed expectations.
Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 0.9987, but the MACD line should be in the overbought area, as only by that will the market reverse to 0.9949 and 0.9894.
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 decision based on the current market situation is an inherently losing strategy for an intraday trader.