FX.co ★ Analysis and trading tips for EUR/USD on May 20

Analysis of transactions in the EUR / USD pair

EUR/USD reaching 1.0478 led to a sell signal in the market, but having the MACD line far from zero limited the downside potential of the pair. In the afternoon, the pair surprisingly rose from 1.0507 to 1.0557 even though the MACD line was also far from zero. Short positions from this level did not bring profit.

EUR/USD rose on Thursday because demand increased, thanks to the speech of ECB Vice President Luis de Guindos. The latest data on US jobless claims also put pressure on the dollar, leading to a further upward wave in the pair. The ECB report from the monetary policy meeting did not affect the market.

Today, although there are no important statistics that could help euro continue to grow, it is likely that the pair will reach new weekly highs because coming is the speech of ECB board member Joachim Nagel, as well as the data on consumer confidence in the eurozone . An improvement in the indicator will prompt the continuation of the bull market, while disappointing data will return pressure on the pair. In the afternoon, there are no statistics on the US, so the session should pass quite calmly.

For long positions:

Buy euro when the quote reaches 1.0593 (green line on the chart) and take profit at the price of 1.0634 (thicker green line on the chart). There is a chance for a rally today, but it will be limited as there are no important EU statistics scheduled to be released. Nevertheless, make sure that when buying, the MACD line is above zero or is starting to rise from it. It is also possible to buy at 1.0566, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0593 and 1.0634.

For short positions:

Sell euro when the quote reaches 1.0566 (red line on the chart) and take profit at the price of 1.0523. Pressure will return if there is no bullish activity in the pair after the price hits a new daily high. But note that when selling, make sure that the MACD line is below zero, or is starting to move down from it. Euro can also be sold at 1.0593, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0566 and 1.0523.

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.