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Analysis of transactions in the EUR / USD pair
There was a signal to sell on Monday, but the decrease was limited because the MACD line was at the oversold area. Then, there was a slight increase - 10 pips, followed by a drop of more than 45 pips, thanks to the sell signal that coincided with the MACD line moving below zero.
The data on the foreign trade balance did not affect euro in any way, which cannot be said about the speech of ECB President Christine Lagarde. She talked a lot about inflation, but did not express any fears. "As the recovery continues and supply disruptions resolve, we can expect to see a normalization of price pressures on goods and services," Lagarde said. "We do see that next year's wage growth will grow slightly more than this, but the risk of spillovers remains limited. "
Lagarde also noted that the expected measures from the European Central Bank to curb price increases will now be completely untimely, referring to the "time horizon in which monetary policy is in force." This led to a strong fall in euro, which exacerbated amid good data on the US manufacturing index.
Today it is necessary to pay attention to the report on CPI in France and Italy, as well as the change in the volume of GDP in the Euro area and level of employment, which are of key importance for the European Central Bank when making decisions on monetary policy. Then, in the afternoon, there will be reports on US retail trade and industrial production, which, if exceed expectations, will strengthen the position of dollar against euro even more. Statements from Fed members Raphael Bostic and Mary Daly will also be significant.
For long positions:
Buy euro when the quote reaches 1.1395 (green line on the chart) and take profit at the price of 1.1441. Growth will be observed if the Euro area reports very strong GDP and labor market data and if the ECB says hawkish policy statements.
Before buying, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.1368, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1395 and 1.1441.
For short positions:
Sell euro when the quote reaches 1.1368 (red line on the chart) and take profit at the price of 1.1400. Dovish ECB statements and weak data on EU GDP and labor market will push EUR / USD down.
Before selling, make sure that the MACD line is below zero, or is starting to move down from it. Euro could also be sold at 1.1395, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1368 and 1.1327.
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 decisions based on the current market situation is an inherently losing strategy for an intraday trader.
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