Analysis of transactions and tips for trading EUR/USD
The pair tested 1.0840 at a time when the MACD line was already far from zero, limiting the upside potential of the pair. Sometime later, there was another test, but this time it was at 1.0868 and the market signal was to sell. That caused a downward movement of around 30 pips. No other signal appeared for the rest of the day.
The completely empty macroeconomic calendar in the eurozone yesterday pushed euro up, but comments from Fed officials limited the upside potential. For today, markets will pay attention to data on eurozone's consumer confidence and Germany's consumer price index. A rise in both indicators will certainly bring back demand for euro. Traders will also be interested in the ECB's economic update. In the afternoon, there will be weekly jobless claims and GDP change for Q4 2022 in the US. Equally important will be speeches from FOMC member Neel Kashkari, as well as Treasury Secretary Janet Yellen, who may reveal details of a new program to support US banks. This will put pressure on dollar and return risk appetite.
For long positions:
Buy euro when the quote reaches 1.0850 (green line on the chart) and take profit at the price of 1.0886. Traders will see gains only when Germany publishes better-than-expected reports on inflation and consumer sentiment. However, when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0832, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0840 and 1.0886.
For short positions:
Sell euro when the quote reaches 1.0832 (red line on the chart) and take profit at the price of 1.0801. Pressure will return if there is no bullish activity around the daily high and if the eurozone releases weak economic data. However, when selling, the MACD line should be under zero or is starting to move down from it. Euro can also be sold at 1.0850, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0832 and 1.0801.
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.