Analysis of transactions and tips for trading EUR/USD
The test of 1.0962 on Friday afternoon, coinciding with the significant rise of the MACD line from zero, limited the upward potential of the pair. Sometime later, another test occurred, but this time the MACD lines lies in the overbought area, providing hope for a downward correction. And with the pair nearing the monthly high, the quote declined by around 30 pips.
Easing inflation in the Euro area limited the rally in euro last Friday. However, strong consumer sentiment data in the US revived demand for dollar, leading to a sharp decline in the pair at the end of the week. Considering the empty economic calendar and the Bundesbank report due out this afternoon, the market situation will remain the same today.
For long positions:
Buy when euro hits 1.0947 (green line on the chart) and take profit at the price of 1.0980. Although growth may not continue as the reasons to buy euro ran out, traders could still do so, especially if the MACD line lies above zero or rises from it. Euro can also be bought after two consecutive price tests of 1.0924, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0947 and 1.0980.
For short positions:
Sell when euro reaches 1.0924 (red line on the chart) and take profit at the price of 1.0890. Pressure may return in the event of inactivity at the highs. However, when selling, traders should make sure that the MACD line lies below zero or drops down from it. Euro can also be sold after two consecutive price tests of 1.0947, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0924 and 1.0890.
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.