Analysis of transactions and tips for trading EUR/USD
The test of 1.0935 on Wednesday afternoon, coinciding with the significant decline of the MACD line from zero, limited the downward potential of the pair. Meanwhile, buying on the rebound from 1.0903 led to a price movement of around 20 pips.
Market players ignored the data on M3 money supply aggregate and private sector lending in the eurozone, but reacted to the speeches of leading central banks presidents, whose statements hinted at potential rate hikes in the future. This reduced risk appetite, including demand for euro.
Ahead lies the ECB’s economic bulletin, as well as reports on the eurozone’s consumer confidence and Germany’s consumer price index. Any increase in inflation will convince traders that the economy needs further rate hikes, even though this will certainly lower demand for euro and increase the risk of a recession in the next years.
For long positions:
Buy when euro hits 1.0912 (green line on the chart) and take profit at the price of 1.0943. The upward movement will continue if inflation data in Germany exceeds expectations. However, when buying, traders should make sure that the MACD line lies above zero or rises from it. Euro can also be bought after two consecutive price tests of 1.0885, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0912 and 1.0943.
For short positions:
Sell when euro reaches 1.0885 (red line on the chart) and take profit at the price of 1.0853. Pressure will increase if market players ignore good statistics from the eurozone. However, when selling, traders should make sure that the MACD line lies below zero or drops down from it. Euro can also be sold after two consecutive price tests of 1.0912, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0885 and 1.0853.
What’s on the chart:
Thin green line – entry price at which you can buy EUR/USD
Thick green line – estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.
Thin red line – entry price at which you can sell EUR/USD
Thick red line – estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.
MACD line- it is important to be guided by overbought and oversold areas when entering the market
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.
The material has been provided by InstaForex Company – www.instaforex.com
Analysis of transactions and tips for trading EUR/USD
The test of 1.0935 on Wednesday afternoon, coinciding with the significant decline of the MACD line from zero, limited the downward potential of the pair. Meanwhile, buying on the rebound from 1.0903 led to a price movement of around 20 pips.
Market players ignored the data on M3 money supply aggregate and private sector lending in the eurozone, but reacted to the speeches of leading central banks presidents, whose statements hinted at potential rate hikes in the future. This reduced risk appetite, including demand for euro.
Ahead lies the ECB’s economic bulletin, as well as reports on the eurozone’s consumer confidence and Germany’s consumer price index. Any increase in inflation will convince traders that the economy needs further rate hikes, even though this will certainly lower demand for euro and increase the risk of a recession in the next years.
For long positions:
Buy when euro hits 1.0912 (green line on the chart) and take profit at the price of 1.0943. The upward movement will continue if inflation data in Germany exceeds expectations. However, when buying, traders should make sure that the MACD line lies above zero or rises from it. Euro can also be bought after two consecutive price tests of 1.0885, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0912 and 1.0943.
For short positions:
Sell when euro reaches 1.0885 (red line on the chart) and take profit at the price of 1.0853. Pressure will increase if market players ignore good statistics from the eurozone. However, when selling, traders should make sure that the MACD line lies below zero or drops down from it. Euro can also be sold after two consecutive price tests of 1.0912, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0885 and 1.0853.
What’s on the chart:
Thin green line – entry price at which you can buy EUR/USD
Thick green line – estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.
Thin red line – entry price at which you can sell EUR/USD
Thick red line – estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.
MACD line- it is important to be guided by overbought and oversold areas when entering the market
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.
The material has been provided by InstaForex Company – www.instaforex.com
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