Analysis of transactions and tips for trading EUR/USD
The test of 1.0940 happened when the MACD line was already far from zero, so the upward potential was limited. Sometime later, there was another test, but this time the MACD line was in the overbought area, so bears manage to educe a price decrease of over 40 pips.
Euro fell on Thursday after the US release its report on jobless claims and producer prices. The speech of FOMC member Christopher Waller also led to more demand for dollar, adding to the weakness of euro.
Today, France and Italy will publish data on consumer prices, followed by a speech from ECB board member Joachim Nagel. These could bring back buying pressure in the market. Reports on consumer sentiment from the University of Michigan and inflation expectations in the US could also help euro rise.
For long positions:
Buy euro when the level of 1.0933 (green line on the chart) is reached and then take profit at the price of 1.0970. Growth will be seen, but it will only be an upward correction. Nevertheless, 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 1.0915, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0933 and 1.0970.
For short positions:
Sell euro when the level of 1.0915 (red line on the chart) is reached and then take profit at the price of 1.0895. Pressure will return if there is strong US statistics. However, when selling, make sure that 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 1.0933, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0915 and 1.0895.
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.