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Forex Analysis & Reviews: Analysis and trading tips for EUR/USD on December 5
time 05.12.2022 09:02 AM
time Relevance up to, 06.12.2022 09:02 AM

Analysis of transactions in the EUR / USD pair

The test of 1.0513 occurred when the MACD line was just starting to move below zero, which was a good reason to sell. It resulted in a price decrease of over 40 pips. Meanwhile, the buy signal at did not lead to strong gains as the data on the US labor market caused euro to plummet. No other signals appeared for the rest of the day.

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The unemployment rate in the US remained unchanged, but the non-farm payrolls beat expectations and almost reached October levels, which momentarily led to a rise of dollar in the market. Traders took advantage of this to buy out all of the previous downward movement.

Today's report on Germany and the Euro area's service and composite PMIs may cause a decline as a further contraction in activity could lower the demand for euro. In the afternoon similar reports are expected for the US, but this time their decline will lead to a fall in dollar. Changes in manufacturing orders will not affect market sentiment, so better bet on the further growth of EUR/USD.

For long positions:

Buy euro when the quote reaches 1.0586 (green line on the chart) and take profit at the price of 1.0637. Growth will occur only when economic reports on the Euro area exceed expectations. But remember that when buying, the MACD line should be above zero or is starting to rise from it.

Euro can also be bought at 1.0554; however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0586 and 1.0637.

For short positions:

Sell euro when the quote reaches 1.0554 (red line on the chart) and take profit at the price of 1.0501. Pressure will return if statistics in the Euro area are weaker than expected. 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 1.0586; however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0554 and 1.0501.

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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.

Jakub Novak,
Analytical expert of InstaForex
© 2007-2023
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