FX.co ★ Analysis and trading tips for EUR/USD on September 7

Analysis of transactions in the EUR / USD pair

Euro tested 0.9949 at the time when the MACD was far from zero, which limited the downside potential of the pair. Sometime later, it tested the level again, but this time the market signal that was to buy, which only brought losses. No other signals appeared for the rest of the day.

EUR/USD fell on Tuesday amid a decline in the volume of industrial orders in Germany and weak business activity in the construction sector. Then, strong data on US PMI increased pressure on the pair, pushing it to new yearly lows.

A number of reports are scheduled to be published today, such as the volume of GDP in eurozone and Germany, as well as level of employment in the Euro area. Strong numbers will raise the rate of euro ahead of the ECB meeting on Thursday. US trade surplus is due out in the afternoon, but much more important will be speeches from FOMC members Loretta Mester and Lael Brainard. Their statements are likely to support dollar, which will return the pair into a bear market.

For long positions:

Buy euro when the quote reaches 0.9926 (green line on the chart) and take profit at the price of 0.9981. A rally will occur 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 0.9893, but the MACD line should be in the oversold area as only by that will the market reverse to 0.9926 and 0.9981.

For short positions:

Sell euro when the quote reaches 0.9893 (red line on the chart) and take profit at the price of 0.9835. Pressure will return if statistics in the Euro area come out lower than the forecasts, while data in the US exceed expectations.

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 0.9926, but the MACD line should be in the overbought area, as only by that will the market reverse to 0.9893 and 0.9835.

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.