FX.co ★ Analysis and trading tips for EUR/USD on December 21

Analysis of transactions in the EUR / USD pair

The pair tested 1.0582 when the MACD line was already far from zero, so the downside potential was limited. Sometime later, another test took place, but this time the MACD line was in the oversold area, which was a good reason to buy. This led to a price increase of about 30 pips.

Selling at 1.0617 was not successful, resulting in losses.

Although the decline in Germany's PPI was stronger than expected, it had little impact on euro because the weak US real estate market data led to a larger rise in the pair.

Today, there is another report from Germany which could, to some extent, have a positive effect on euro. This is the leading consumer climate index for January. There is also the consumer confidence index in the US and secondary market housing sales that could weaken dollar and further strengthen euro, however, the former's figures should show a decline. If the data is the same as expected, the pair will continue to trade sideways.

For long positions:

Buy euro when the quote reaches 1.0629 (green line on the chart) and take profit at the price of 1.0680. Growth could occur after strong reports in Germany. 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 1.0597, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0629 and 1.0680.

For short positions:

Sell euro when the quote reaches 1.0597 (red line on the chart) and take profit at the price of 1.0545. Pressure will increase if Germany reports weak economic statistics. 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 1.0629, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0597 and 1.0545.

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.