Analysis of transactions and tips for trading EUR/USD
Euro tested 1.0937 when the MACD line was just starting to climb above zero, which was a pretty good reason to buy. This resulted in a price increase of about 60 pips. Meanwhile, selling on the rebound from 1.0996 brought about 25 pips of profit.
It is obvious that the numbers for the consumer price index and core inflation impressed traders, which is why there was an upward trend in euro.
Falling US inflation means that the Fed no longer needs to raise interest rates. Accordingly, the central bank could begin lowering them, which will allow more active pumping of money into the economy. However, doing so will reduce the strength of dollar in the market.
Today, CPI data from Germany is expected, followed by a report on industrial production in the eurozone. The former is likely to demonstrate growth, while the latter will show some recovery, which will positively affect euro. The speech of ECB board member Joachim Nagel will not be of great interest, but it should be noted. In the afternoon, there are important data from the US: the number of initial jobless claims and the producer price index. Both may weaken dollar's position, leading to another surge of euro upwards.
For long positions:
Buy euro when the quote reaches 1.0998 (green line on the chart) and take profit at the price of 1.1042. Growth will occur if the upcoming eurozone statistics exceed expectations. However, before buying, traders should make sure that the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0966, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0998 and 1.1042.
For short positions:
Sell euro when the quote reaches 1.0966 (red line on the chart) and take profit at the price of 1.0923. Pressure is likely to return this morning, but it will only cause a small correction. Even so, traders should make sure that before selling, the MACD line is under zero or is starting to move down from it. Euro can also be sold at 1.0998; however, the MACD line should be in the overbought area as only by that will the market reverse to 1.0966 and 1.0923.
What's on the chart:
Thin green line - entry price at which you can buy EUR/USD
Thick green line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.
Thin red line - entry price at which you can sell EUR/USD
Thick red line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.
MACD line- it is important to be guided by overbought and oversold areas when entering the market
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.