Analysis of transactions and tips for trading EUR/USD
The test of 1.0875 happened when the MACD line was quite far from zero, so the upward potential was limited. Sometime later, there was another test, but this time the market signal was to sell, which resulted in a price decrease of about 20 pips. Due to low volatility, no other signal appeared for the rest of the day.
Euro rose on Monday as the European Commission revised its forecasts for inflation and the economy for the better. Today, however, there is little chance for bullish traders to see further growth as quite weak economic data are expected. It is likely that the reports on business sentiment for Germany and the Euro area, the second estimate for 1st quarter GDP, changes in employment levels, and the balance of foreign trade are going to come out lower than forecasts. The speech of ECB President Christine Lagarde will also be important even if she does not say anything new.
In the afternoon, the US will release reports on retail sales, industrial output and the NAHB housing market index. Strong data will lead to a rise in dollar. Speeches of FOMC members John Williams, Austan Goolsbee and Lorie Logan will also be in the spotlight.
For long positions:
Buy euro when the level of 1.0886 (green line on the chart) is reached and then take profit at the price of 1.0916. Growth will be seen if there is good statistics for the eurozone. However, before buying, traders should make sure that the MACD line is above zero or is starting to rise from it. Euro can also be bought after two consecutive price tests of 1.0864, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0886 and 1.0916.
For short positions:
Sell euro when the level of 1.0864 (red line on the chart) is reached and then take profit at the price of 1.0831. Pressure will return if there is no bullish activity in the morning. 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 after two consecutive price tests of 1.0886, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0864 and 1.0831.
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 1.0875 happened when the MACD line was quite far from zero, so the upward potential was limited. Sometime later, there was another test, but this time the market signal was to sell, which resulted in a price decrease of about 20 pips. Due to low volatility, no other signal appeared for the rest of the day.
Euro rose on Monday as the European Commission revised its forecasts for inflation and the economy for the better. Today, however, there is little chance for bullish traders to see further growth as quite weak economic data are expected. It is likely that the reports on business sentiment for Germany and the Euro area, the second estimate for 1st quarter GDP, changes in employment levels, and the balance of foreign trade are going to come out lower than forecasts. The speech of ECB President Christine Lagarde will also be important even if she does not say anything new.
In the afternoon, the US will release reports on retail sales, industrial output and the NAHB housing market index. Strong data will lead to a rise in dollar. Speeches of FOMC members John Williams, Austan Goolsbee and Lorie Logan will also be in the spotlight.
For long positions:
Buy euro when the level of 1.0886 (green line on the chart) is reached and then take profit at the price of 1.0916. Growth will be seen if there is good statistics for the eurozone. However, before buying, traders should make sure that the MACD line is above zero or is starting to rise from it. Euro can also be bought after two consecutive price tests of 1.0864, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0886 and 1.0916.
For short positions:
Sell euro when the level of 1.0864 (red line on the chart) is reached and then take profit at the price of 1.0831. Pressure will return if there is no bullish activity in the morning. 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 after two consecutive price tests of 1.0886, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0864 and 1.0831.
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
Related Posts: