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EUR/USD: Simple trading tips for beginner traders on May 19 (US Session)
May 19, 2023 1:24 pmVideo
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The euro has risen on Germany’s producer prices, although this is likely just a coincidence, and we are observing the closing of short positions. The test price at 1.0800 coincided with when the MACD had gone quite far above the zero mark, limiting the pair’s upward potential. For this reason, I did not buy against the trend.
In the second half of the day, we expect Federal Reserve Board Chairman Jerome Powell to give a speech about serious inflation fighting and the strength of the American economy, which could partially lead to a decrease in EUR/USD. Statements from FOMC members John Williams and Michelle Bowman could also positively affect the dollar, so take your time with purchases at peak times. I will act based on scenario No. 2, as I do not expect directed movement from EUR/USD in the second half of the day.
Buy Signal
Scenario No. 1: Today, you can buy euros when the price reaches around 1.0815 (the green line on the chart) and rises to 1.0847. At 1.0847, I recommend exiting the market and selling the euro in the opposite direction, counting on a move of 30–35 points from the entry point. The euro could rise further against the backdrop of a correction at the end of the week, and you need to survive Powell’s speech. Important! Before buying, ensure the MACD indicator is above the zero mark and is just starting its growth from there.
Scenario No. 2: You can also buy euros today for two consecutive price tests at 1.0790 when the MACD indicator is in the oversold area. This will limit the pair’s downward potential and lead to an upward market turnaround. You can expect growth to the opposite levels of 1.0815 and 1.0847.
Sell Signal
Scenario No. 1: You can sell the euro after reaching 1.0790 (red line on the chart). The target will be level 1.0763. I recommend exiting the market and buying euros immediately in the opposite direction (counting on a move of 20–25 points in the opposite direction from the level). The pressure on the pair will increase with Powell’s hawkish statements, but it will unlikely last long. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just starting to decline from it.
Scenario No. 2: You can also sell the euro today in the event of two consecutive price tests at 1.0815 when the MACD indicator is in the overbought area. This will limit the pair’s upward potential and lead to a downward market turnaround. You can expect a decline to the opposite levels of 1.0790 and 1.0763.
What’s on the chart:
Thin green line – the entry price at which you can buy the trading instrument.
Thick green line – the estimated price at which you can set Take profit or independently fix profits, as further growth above this level is unlikely.
Thin red line – the entry price at which you can sell the trading instrument.
Thick red line – the estimated price at which you can set Take profit or independently fix profits, as further decline below this level is unlikely.
MACD indicator. When entering the market, it’s important to be guided by overbought and oversold zones.
Important. Beginner traders in the forex market must be very careful about deciding to enter the market. It’s best to be out of the market before important fundamental reports are released to avoid getting caught in sharp exchange rate fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. You can quickly lose your deposit without placing stop orders, especially if you do not use money management and trade in large volumes.
And remember, successful trading requires a clear trading plan similar to the one I’ve presented above. Spontaneously making trading decisions based on the current market situation is initially a losing strategy for an intraday trader.
The material has been provided by InstaForex Company – www.instaforex.com
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