Analysis of transactions in the EUR / USD pair
The test of 1.0504 occurred when the MACD line was just starting to move above zero, which was a good reason to buy. However, the euro did not increase, so purchases led to losses. A similar situation happened in the afternoon, when the retest of the level took place just when the MACD was at the overbought area. It seemed to be a great signal to sell the euro, but the price continued to rise, leading to another loss.
Germany's manufacturing orders data and the Eurozone's construction PMI had little impact on the market yesterday morning. The actual reason for euro's brief increase was the news that China might lift some of its Covid-related restrictions, but this did not raise risk appetite much.
Today, Germany will release its report on industrial production, followed by the Euro area's GDP data and employment figures. If all three disappoints, another round of sell-offs is likely to occur, which will continue euro's correction. Speeches by ECB Board members Philip Lane and Fabio Panetta are also unlikely to support euro.
There is nothing scheduled in the afternoon that will have a significant impact on the market. Changes in US non-manufacturing labor productivity and labor costs are of little interest.
For long positions:
Buy euro when the quote reaches 1.0478 (green line on the chart) and take profit at the price of 1.0532. Growth will occur 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 1.0444; however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0478 and 1.0532.
For short positions:
Sell euro when the quote reaches 1.0444 (red line on the chart) and take profit at the price of 1.0397. Pressure will remain if statistics in the Euro area disappoints. 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 1.0478; however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0444 and 1.0397.
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.