FX.co ★ Analysis and trading recommendations for EUR/USD on August 24

Analysis of transactions in the EUR / USD pair

There was a signal to buy in EUR / USD on Monday, but it had to be ignored at first because the MACD line was far away from zero. Fortunately in the afternoon, the indicator managed to move up from zero, so traders were able to open long positions which, in turn, led to a 20-pip increase in the pair.

The reason was the released data on business activity from the EU and the United States. Although the figures in the Euro area fell a bit short of forecasts, the drop in the US set off the increase in the pair.

And today this bullish move may continue provided that the upcoming GDP report from Germany exceeds expectations. Statements from the ECB regarding the monetary policy will affect the market as well. Data on US home sales and manufacturing index may also contribute to the rally, but only if the figures are worse than expected as such would put pressure on dollar.

For long positions:

Open a long position when euro reaches 1.1754 (green line on the chart), and then take profit at the level of 1.1796. EUR / USD may climb higher if GDP data from Germany and the whole Euro area exceed expectations. But before buying, make sure that the MACD line is above zero, or is starting to rise from it.

It is also possible to buy at 1.1733 and 1.1693, but the MACD indicator line must be in the oversold area, as only by that will the market reverse to 1.1754 and 1.1796.

For short positions:

Open a short position when euro reaches 1.1733 (red line on the chart), and then take profit at the level of 1.1693. A decline will occur if Germany releases weak GDP data and if the ECB takes a wait-and-see position on monetary policy. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.

It is also possible to sell at 1.1754 and 1.1796, but the MACD line must be in the overbought area, as only by that will the market reverse to 1.1733.

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.