FX.co ★ Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on March 18

Analysis of transactions in the EUR / USD pair

Two signals appeared in the market yesterday. However, due to low volatility, the first one had to be ignored, especially since the MACD line, during that time, was in the oversold zone. Such a scenario seriously limited the downward potential of EUR / USD. Fortunately, in the afternoon, a buy signal appeared for the pair, but this time, it was successful because the MACD line was near zero. The upward movement was approximately 45 pips and led to the climb towards the target level which is 1.1966.

Trading recommendations for March 18

Although the latest figures on EU inflation did not have much impact on the market, EUR / USD increased because of the statements from the Federal Reserve. Yesterday, its chairman, Jerome Powell, said he expects the US economy to recover much faster than expected, so as a result, he will keep the base interest rate near zero, at least until 2023. More specifically, the Fed said the economy will grow by 6.5% this year, which is obviously better than the previous forecasts.

Today, the European Central Bank will announce as well its decision on monetary policy. Its head, Christine Lagarde, may also address the issue of rising Treasury yield, which may lead to the continued growth of the euro. In the afternoon, Fed chairman Jerome Powell will also speak, then it will be followed by the publication of data on US jobless claims.

For long positions:

Buy the euro when the quote reaches 1.1990 (green line on the chart), and then take profit around the level of 1.2048. EUR / USD will rally if ECB head Christine Lagarde addresses the ongoing rise of Treasury yields in the EU.

Keep in mind that before buying, the MACD line should be above zero and is starting to rise from it.

For short positions:

Sell the euro after the quote reaches 1.1950 (red line on the chart), and then take profit at the level of 1.1883. Pressure on EUR / USD may return because the Federal Reserve said some members are already expecting an earlier rate hike.

Before selling, be sure that the MACD line is below zero and is starting to move down from it.

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 decisions based on the current market situation is an inherently losing strategy for an intraday trader.

Analysis of transactions in the GBP / USD pair

A sell signal appeared in the market yesterday. However, it had to be ignored because the MACD line, during that time, was in the oversold zone. Only at the end of the US session did a buy signal appear in GBP / USD, and fortunately it was during the time that the MACD line was above zero. It resulted in a growth of more than 55 pips, from 1.3912 to 1.3968.

Trading recommendations for March 18

Recent Fed decisions led to a surge in volatility. But today, the market will be influenced by the Bank of England, who will also announce its decision on monetary policy. However, serious changes are not expected, so the pound will most likely continue its growth in the market. In the afternoon, Fed chairman Jerome Powell will speak, then it will be followed by the publication of data on jobless claims in the US.

For long positions:

Buy the pound when the quote reaches 1.3970 (green line on the chart), and then take profit at the level of 1.4044 (thicker green line on the chart). GBP / USD will trade upwards only if the Bank of England maintains its current monetary policy.

Keep in mind that before buying, make sure that the MACD line is above zero and is starting to rise from it.

For short positions:

Sell the pound after the quote reaches 1.3927 (red line on the chart), and then take profit at the level of 1.3850. Do this after the Bank of England announces serious changes on monetary policy.

Of course, when selling, make sure that the MACD line is below zero and is starting to move down from it.

What's on the chart:

The thin green line is the key level at which you can place long positions in the GBP/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 GBP/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 decisions based on the current market situation is an inherently losing strategy for an intraday trader.