Analysis of transactions in the EUR / USD pair

The first test of 1.0624 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, which is a pretty good signal to sell. It resulted in a price decrease of about 35 pips.

Buying on a rebound from 1.0544 was not very successful.

Euro rose on Thursday as PPI in the Euro area showed a decline. However, it did not last long as strong employment change data from ADP led to a sharp strengthening of dollar and a fall in EUR/USD.

Today, Germany will release fresh data on retail trade and factory orders, followed by the consumer price report for the eurozone. Euro will stay afloat if the figures indicate a rise in inflation. But in the afternoon, there could be a fall to new monthly lows if the US reports on the unemployment rate and non-farm payrolls exceed expectations. There is even a chance that EUR/USD will return to parity as a good reading on the service sector business activity index is likely to lead to an even bigger downward move in the pair.

For long positions:

Buy euro when the quote reaches 1.0538 (green line on the chart) and take profit at the price of 1.0574. Although there is a chance for growth today, it is unlikely to last long. Also, buy only when the MACD line is above zero or starting to rise from it. Euro can also be bought at 1.0508, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0538 and 1.0574.

For short positions:

Sell euro when the quote reaches 1.0508 (red line on the chart) and take profit at the price of 1.0471. Pressure will return if economic reports from the US exceed expectations. 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 1.0538, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0508 and 1.0471.

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.