Analysis of transactions in the EUR / USD pair
The test of 1.0655 occurred when the MACD line was far above zero, so the upside potential was limited. Sometime later, another test took place, but this time the MACD line had just started its upward movement, which was a good reason to buy. This led to a price increase of about 20 pips. No other signals appeared for the rest of the day.
The Fed's interest rate decision led to a decline in EUR/USD because Jerome Powell did not change the policy of the bank, surprising market players. Now, many are anticipating whether the ECB will follow this, or hint at a less aggressive move in the future. The latter will certainly put pressure on euro.
Also this afternoon is the release of reports on retail sales, weekly jobless and industrial output in the US. The retail sales report is likely to be the main determinant of the market's direction for the rest of the week. A rise in sales will push dollar up, resulting in a further decline in EUR/USD.
For long positions:
Buy euro when the quote reaches 1.0679 (green line on the chart) and take profit at the price of 1.0727. Growth could occur after a hawkish speech from ECB chief Christine Lagarde. But remember that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0645, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0679 and 1.0727.
For short positions:
Sell euro when the quote reaches 1.0645 (red line on the chart) and take profit at the price of 1.0595. Pressure will increase if the ECB takes a softer approach on monetary policy. But 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 1.0679, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0645 and 1.0595.
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.