Analysis of transactions in the EUR / USD pair
Market signals on Monday morning said to sell, but since the MACD line was so far below zero, few traders took short positions, resulting in a little downward movement. Then, some time later, a signal to buy appeared, and this time it provoked a 30-pip increase because the MACD indicator was in the oversold area. The pair fell immediately after that, which led to another signal to sell that coincided with the MACD line being at the overbought area. This led to another downward movement of around 10 pips. By mid-US session, another buy signal appeared, but the transactions brought losses even though the MACD indicator was above zero.
Contrary to what was expected, the change in the volume of orders in Germany, volume of retail trade in Italy and investor confidence from Sentix were low, resulting in a price drop in EUR / USD. The pair did not even manage to hit 1.1300 before going down. But today demand for euro may return if upcoming reports in the Euro area exceed expectations. Many await the data on industrial production in Germany, business sentiment in both Germany and the Euro area, volume of GDP in the eurozone and level of employment in the whole bloc. And since the upcoming report on the foreign trade balance in the US is unlikely to shake the market, traders should stick to bullish transactions in EUR / USD.
For long positions:
Buy euro when the quote reaches 1.1299 (green line on the chart) and take profit at the price of 1.1343. Demand will increase if statistics in the Euro area exceed expectations. But growth will be limited by possible problems with the new coronavirus strain.
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 1.1280, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1299 and 1.1343.
For short positions:
Sell euro when the quote reaches 1.1280 (red line on the chart) and take profit at the price of 1.1250. Weak data on the eurozone will 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 1.1299, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1280 and 1.1250.
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.
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