FX.co ★ Analysis and trading tips for EUR/USD on September 5

Analysis of transactions in the EUR / USD pair

Euro tested 0.978 at the time when the MACD was far from zero, which limited the upside potential of the pair, especially ahead of the report on the US labor market. Sometime later, it tested 1.0019, and this time a sell signal was formed, which led to a price decrease of around 25 pips. A larger downward move did not occur until the close of the US session as no other signals appeared for the rest of the day.

Data on the foreign trade balance of Germany and producer price index of the eurozone coincided with the forecasts, so market reaction was as expected. However, uncertainty arose in the afternoon, when the US released mixed report on the labor market.

A number of reports are scheduled to be published today, such as the index of business activity in Germany, Italy and the eurozone. A decline in these indicators will increase pressure on euro. Meanwhile, the volume of retail sales in the Euro area will be of little interest.

There are no important statistics in the afternoon, so the market may change direction in case of an upward correction. Even so, traders are likely to continue selling risky assets.

For long positions:

Buy euro when the quote reaches 0.9916 (green line on the chart) and take profit at the price of 0.9964. A rally will occur only if statistics in the Euro area exceed expectations.

Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9883, but the MACD line should be in the oversold area as only by that will the market reverse to 0.9916 and 0.9964.

For short positions:

Sell euro when the quote reaches 0.9883 (red line on the chart) and take profit at the price of 0.9843. Pressure will return if statistics in the Euro area and Germany come out lower than the forecasts.

Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 0.9916, but the MACD line should be in the overbought area, as only by that will the market reverse to 0.9883 and 0.9843.

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