FX.co ★ Analysis and trading tips for EUR/USD on December 14

Analysis of transactions in the EUR / USD pair

The test of 1.0555 occurred when the MACD line was far above zero, so the upside potential was limited. Sometime later, another test took place, but this time the MACD line was in the overbought area, so the pair fell by around 30 pips. No other signals appeared for the rest of the day.

The decline in the US consumer price index has led to a sharp rise in EUR/USD, which was quite expected. Today's report on industrial output in the eurozone is likely to have little impact on the market, so there is a high chance that the pair will continue to rise. But the focus will be on the US statistics due out in the afternoon, as well as the Fed's decision on interest rates. The economic outlook of the central bank will also play a very important role as Fed Chairman Jerome Powell is likely to discuss the plans for next year, making a couple of hints on how the Fed is going to proceed with a further slowdown in price growth. A dovish rhetoric could lead to another rise in euro and fall in dollar.

For long positions:

Buy euro when the quote reaches 1.0655 (green line on the chart) and take profit at the price of 1.0716. Growth could occur after the speech of Fed Chairman Jerome Powell. But remember that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0618, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0655 and 1.0716.

For short positions:

Sell euro when the quote reaches 1.0618 (red line on the chart) and take profit at the price of 1.0556. Pressure may increase if the Fed says something that the markets do not expect. But 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 1.0655, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0618 and 1.0556.

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.