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

Analysis of transactions and tips for trading EUR/USD

The test of 1.0679 occurred when the MACD line was already far from zero, so the downside potential was limited. Given the low trading volume due to the weekend in the US, no other signals appeared for the rest of the day.

The Bundesbank report and the eurozone consumer confidence indicator surprisingly had no impact on euro yesterday.

Today promises to be more interesting as ahead are PMI reports for the eurozone. Figures above 50 points will prompt a rise in euro, which will extend if ZEW data on business sentiment and current conditions also show good numbers. In the afternoon, a similar PMI report is expected for the US, but the data are unlikely to be as strong as in the eurozone. Signals of weakening activity will certainly hurt dollar, which will allow euro to continue its rally. Meanwhile, a strong reading will lead to a sharp decline in EUR/USD during the US session.

For long positions:

Buy euro when the quote reaches 1.0696 (green line on the chart) and take profit at the price of 1.0729. Growth will occur if economic data for the eurozone exceeds expectations. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0665, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0696 and 1.0729.

For short positions:

Sell euro when the quote reaches 1.0665 (red line on the chart) and take profit at the price of 1.0624. Pressure may return at any moment. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0696, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0665 and 1.0624.

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.