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Analysis of transactions in the EUR / USD pair
EUR/USD hitting 1.0590 prompted a buy signal in the market; however, there was no strong price increase even though the MACD line was moving above zero. The pair went down immediately after rising by just 15 pips, trading around 1.0590 most of the day. Sometime later, it reached 1.0565, but since the MACD line was far from zero, the downside potential was limited. Only the long positions at 1.0518 resulted in a large movement, that is, a 20-pip price increase. No other signal appeared for the rest of the day.
The statements of ECB chief Christine Lagarde once again did little to help euro, while poor data on Germany's consumer climate and other reports on the eurozone returned pressure on the pair. As for US statistics, its good figures sustained dollar demand yesterday.
Lagarde will give another speech today, but its contents will most likely be the same as her earlier ones. As such, the markets will shift their focus on the data on EU consumer confidence, as well as on the expectations in the services sector and the index of industrial sentiment. Also ahead is the inflation report in Germany, but even a decline in it is unlikely to help the euro rally. In the afternoon, Fed Chairman Jerome Powell and FOMC member James Bullard are expected to speak, followed by the release of US GDP data for the first quarter of 2022. If the report is revised for the better, demand for dollar will increase.
For long positions:
Buy euro when the quote reaches 1.0523 (green line on the chart) and take profit at the price of 1.0561 (thicker green line on the chart). There is a chance for a rally today, but only after strong statistics in the Euro area. Also, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0491, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0523 and 1.0561.
For short positions:
Sell euro when the quote reaches 1.0491 (red line on the chart) and take profit at the price of 1.0450. Pressure will return if Germany reports weak economic data and if ECB chief Christine Lagarde says dovish rhetoric on monetary policy. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0523, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0491 and 1.0450.
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.
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