Analysis of transactions in the EUR / USD pair

There were several market signals on Wednesday and most of them were very successful. For example, the signal to sell at 1.1734 coincided with the MACD line being at the overbought area, so the pair was able to decline. Following that was a signal to buy in the market, but it had to be ignored because the MACD line was far away from zero. Fortunately, in the afternoon, the indicator started to rise from zero, so EUR / USD was able to climb.

The entire focus of markets yesterday was the statements of the Federal Reserve. Powell told reporters that bond purchases may be reduced after the Fed meeting in November, but he also left the door open for a longer period of buying bonds if necessary. This highlighted the uncertainty brought by the spread of the Delta strain.

Today, there will be a report on EU PMI for the manufacturing and services sectors, which, if turns out better than expected, could lead to a rise in EUR / USD. Economic bulletin and speeches from the ECB will also be a plus for the market. But in the afternoon, the US will release reports on the economy and jobless claims. Strong figures will most likely bring demand for dollar back.

For long positions:

Open a long position when euro reaches 1.1720 (green line on the chart) and then take profit at the level of 1.1754. The pair may climb this week if there are improvements in the EU economic indicators. But 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 1.1700, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1720 and 1.1754.

For short positions:

Open a short position when euro reaches 1.1700 (red line on the chart) and then take profit at the level of 1.1664. A decline will occur if the Euro area reports weak economic data and if the US shows impressive improvements in its labor market. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.

It is also possible to sell at 1.1720, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1700 and 1.1664.

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.