Analysis of transactions and tips for trading EUR/USD
Ahead are key figures from the eurozone, which can determine the next steps of the ECB regarding monetary policy. Growth in core prices will force interest rates to rise further, which will strengthen euro’s position and return a bull market, at least in the short term. But if the numbers show a decline, pressure on the market will intensify, especially before the key Fed meeting scheduled for this Wednesday. Weak data on manufacturing activity in both Germany and the eurozone will also discourage traders from buying euro.
The economic calendar in the US is empty today, so it is likely that volatility will decrease, which will result in trading within a sideways channel. Reports on the volume of manufacturing orders and level of vacancies and labor force turnover are unlikely to change the balance of power in the market.
For long positions:
Buy euro when the level of 1.1020 (green line on the chart) is reached and then take profit at the price of 1.1086. Growth will be seen if there is a sharp increase in inflation in 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 1.0979, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1020 and 1.1086.
For short positions:
Sell euro when the level of 1.0979 (red line on the chart) is reached and then take profit at the price of 1.0930. Pressure may return if year-on-year data shows that there is a decrease in inflation in the eurozone. However, make sure that before selling, 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 1.1020, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0979 and 1.0930.
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
Ahead are key figures from the eurozone, which can determine the next steps of the ECB regarding monetary policy. Growth in core prices will force interest rates to rise further, which will strengthen euro’s position and return a bull market, at least in the short term. But if the numbers show a decline, pressure on the market will intensify, especially before the key Fed meeting scheduled for this Wednesday. Weak data on manufacturing activity in both Germany and the eurozone will also discourage traders from buying euro.
The economic calendar in the US is empty today, so it is likely that volatility will decrease, which will result in trading within a sideways channel. Reports on the volume of manufacturing orders and level of vacancies and labor force turnover are unlikely to change the balance of power in the market.
For long positions:
Buy euro when the level of 1.1020 (green line on the chart) is reached and then take profit at the price of 1.1086. Growth will be seen if there is a sharp increase in inflation in 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 1.0979, but the MACD line should be in the oversold area as only by that will the market reverse to 1.1020 and 1.1086.
For short positions:
Sell euro when the level of 1.0979 (red line on the chart) is reached and then take profit at the price of 1.0930. Pressure may return if year-on-year data shows that there is a decrease in inflation in the eurozone. However, make sure that before selling, 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 1.1020, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0979 and 1.0930.
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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