Analysis of trades and tips for trading EUR
The 0.9957 price test came at a time when the MACD indicator went down quite a lot from zero, which in my opinion limited the downward potential of the pair. For this reason, I did not open short positions on the euro. Given that the pair was trading around 0.9957 until the end of the day, there were no other signals.
The euro/dollar pair declined slightly in the first half of the day following the release of GDP data by France and Germany, as well as Germany's Consumer Price Index in the first half of the day. However, the bulls quickly opened long positions at lows. Hence, the pair got stuck within the sideways channel. Today, traders are awaiting a batch of crucial economic reports, namely Germany's retail sales the Eurozone's Consumer Price Index, which is likely to exceed the 10.0% level, as well as the Eurozone's GDP for the 3rd quarter, which may dwindle. It appears the speech of Member of the ECB Executive Board Philippe Lane will hardly affect the trajectory of the pair. There will be no economist reports in the second half of the day that would lead to a surge in volatility. This is why the market is likely to stay calm. Only the Chicago PMI index is due. However, traders are sure to pay zero attention to it.
Entry points to go long
Scenario No.1: today, it is recommended to buy the euro if the price reaches 0.9969 (the green line on the chart) with the prospect of a rise to 1.0040. At the 1.0040 level, it is better to close long positions and open short ones, keeping in mind an upward correction of 30-35 pips from the given level. The pair is likely to rise only amid the euro area's strong economic reports. Important! Before opening long positions, make sure that the MACD indicator is above the zero level and it has just started to grow from it.
Scenario No. 2: it is also possible to buy the euro today if the price approaches 0.9932. At this moment, the MACD indicator should be in the oversold area. It may limit the downward movement of the pair and lead to an upward reversal. The pair is expected to climb to the opposite levels of 0.9969 and 1.0040.
Entry points to go short
Scenario No.1: it is recommended to sell the pair if it hits 0.9932 (the red line on the chart). The target will be the 0.9882 level where it is better to close short positions and open long ones, keeping in mind a downward correction of 20-25 pips from the given level. The pressure on the pair will return if the eurozone reveals weak reports. Important! Before opening short positions, make sure that the MACD indicator is below the zero level and it has just started to decline from it.
Scenario No.2: it is also possible to sell the euro today if the price drops to 0.9969. At this moment, the MACD indicator should be in the overbought area. It could limit the upward potential of the pair and lead to a downward reversal. The pair is projected to decrease to the opposite level of 0.9932 and 0.9882.
What's on chart:
The thin green line is the entry point where you can buy the trading instrument.
The thick green line is the estimated price where you can place a Take Profit order or lock in profits manually as the pair is unlikely to rise above this level.
The thin red line is the entry price where you can sell the trading instrument.
The thick red line is the estimated price where you can place a Take Profit order or lock in profits manually as it is unlikely to decline below this level.
The MACD indicator. When entering the market, it is important to pay attention to overbought and oversold zones.
Important. Novice traders need to make very careful decisions when entering the market. Before the release of important fundamental reports, it is better to stay out of the market. It helps traders avoid losses due to sharp fluctuations in the exchange rate. If you decide to trade during the news release, then always place Stop Loss orders to minimize losses. Without placing Stop Loss orders, you can lose the entire deposit very quickly, especially if you do not use money management but trade in large volumes.
Remember that for efficient trading it is necessary to have a clear trading plan, following the example of the one I presented above. Relying on spontaneous trading decisions based on the current market situation is a losing strategy of an intraday trader.