Analysis of transactions in the EUR / USD pair
A signal to buy appeared in the market on Friday, but the rise was limited because the MACD line was far above zero. Some time later, a similar scenario took place, but this time the indicator was at the overbought area. It should have led to a strong fall in EUR / USD, but no such thing happened, dealing losses to bearish traders. There was a slight movement, around 15 pips, but after that the pair turned around and continued growing.
Data on the M3 aggregate of the eurozone money supply and volume of lending in the private sector did not help the euro rise last week, but today the situation may change as there are a number of important reports on the eurozone. In the morning, there will be a report on consumer confidence, which could provoke a surge in volatility. It will be followed by CPI data in Germany, where weak growth will add pressure on EUR / USD. Also scheduled are the speeches of ECB chief Christine Lagarde and Vice President Luis de Guindos. By afternoon, there will be a report on US home sales, followed by a speech from Fed Chairman Jerome Powell. Many anticipate some hints regarding changes in the bank's policy, which, if happens, would lead to a rise in dollar.
For long positions:
Buy euro when the quote reaches 1.1296 (green line on the chart) and take profit at the price of 1.1335. Demand will increase if inflation data on Germany exceed expectations. Hawkish statements from the European Central Bank could also push EUR / USD up.
Before buying, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.1215, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1234 and 1.1265.
For short positions:
Sell euro when the quote reaches 1.1271 (red line on the chart) and take profit at the price of 1.1235. Demand will decline if the situation with COVID-19 escalates. Weak data on the eurozone will also provoke a decrease in EUR / USD.
Before selling, make sure that the MACD line is below zero, or is starting to move down from it. Euro could also be sold at 1.1296, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1271 and 1.1235.
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 decisions based on the current market situation is an inherently losing strategy for an intraday trader.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.