FX.co ★ Analysis and trading tips for EUR/USD on May 10

Analysis of transactions and tips for trading EUR/USD

The test of 1.0991 happened when the MACD line had just started to move below zero, which was a good reason to sell. However, due to low volatility, there was not much price decrease. Pressure immediately weakened after the pair fell down by 18 pips.

Speeches by ECB members Philip Lane and Isabel Schnabel led to another sell-off in the afternoon.

Key event for today is the release of CPI data from Germany, as well as speeches by Bundesbank representatives. However, much more important is the report on US consumer prices, which could help dollar determine its further direction. Another rise in inflation is likely to prompt a decline in EUR/USD, while a decrease in the figures, especially the core one, could lead to a rise in euro. The US Budget Execution Report will not be of great interest.

For long positions:

Buy euro when the level of 1.0988 (green line on the chart) is reached and then take profit at the price of 1.1015. Growth will be seen after weak inflation data from the US. However, before buying, traders should make sure that the MACD line is above zero or is starting to rise from it. Euro can also be bought after two consecutive price tests of 1.0965, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0988 and 1.1015.

For short positions:

Sell euro when the level of 1.0965 (red line on the chart) is reached and then take profit at the price of 1.0935. Pressure will return if there is weak buyer activity and strong US inflation report. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Euro can also be sold after two consecutive price tests of 1.0988, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0965 and 1.0935.

What's on the chart:

Thin green line - entry price at which you can buy EUR/USD

Thick green line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.

Thin red line - entry price at which you can sell EUR/USD

Thick red line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.

MACD line- it is important to be guided by overbought and oversold areas when entering the market

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.