FX.co ★ Analysis and trading tips for EUR/USD on May 24

Analysis of transactions and tips for trading EUR/USD

The test of 1.0800 happened when the MACD line was just starting to move downward from zero, which was a signal to sell. This, together with weak PMI data for the eurozone, led to a price decrease of about 17 pips. No other market signal appeared for the rest of the day.

Disappointing PMI data from the US only led to a small upward correction in EUR/USD, as issues with the US debt limit have not disappeared, causing risk appetite to remain extremely low.

Today, there is data from the IFO regarding the business climate, present situation, and economic expectations for Germany, which could increase pressure on the pair as long as a decrease in all indicators is reported. A speech from ECB President Christine Lagarde will take place in the afternoon.

For long positions:

Buy euro when the level of 1.0803 (green line on the chart) is reached and then take profit at the price of 1.0835. Growth will be seen after very good data from IFO. 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 1.0776, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0803 and 1.0835.

For short positions:

Sell euro when the level of 1.0776 (red line on the chart) is reached and then take profit at the price of 1.0744. Pressure is likely to persist due to the lack of progress in debt limit negotiations. However, when selling, traders should 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 1.0803, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0776 and 1.0744.

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.