Analysis of transactions and tips for trading EUR/USD
There was a test of 1.1039, but the MACD line was already far from zero, so the upward potential was limited. The downward movement was also not as large as expected.
Although the labor market report from ADP was better than expected, Service PMI from ISM indicated growth on business activity, and there was another increase in interest rates in the US by 0.25%, dollar continued to decline as a recession is likely to occur at the beginning of next year.
Today, the ECB is due to announce its latest decision on interest rates, which will determine the further direction of the pair. Following it are Service PMI data from Germany and the eurozone, as well as a report on the producer price index in the eurozone. Growth in these indicators will convince the ECB to maintain an aggressive policy, which is good for euro but bad for dollar.
A report on US jobless claims will also be released in the afternoon, followed by data on the foreign trade balance. But considering that the market ignored strong data yesterday, it is unlikely that these reports will affect the direction of EUR/USD.
For long positions:
Buy euro when the level of 1.1093 (green line on the chart) is reached and then take profit at the price of 1.1159. Growth will be seen if the ECB announces another rate hike. 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 after two consecutive price tests of 1.1053, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1093 and 1.1159.
For short positions:
Sell euro when the level of 1.1053 (red line on the chart) is reached and then take profit at the price of 1.1000. Pressure will return if the ECB signals that it has no further intentions to raise rates. However, make sure that before selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold after two consecutive price tests of 1.1093, but the MACD line should be in the overbought area as only by that will the market reverse to 1.1053 and 1.1000.
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.