Relevance up to 03:00 2022-07-14 UTC–4
Analysis of transactions in the EUR / USD pair
EUR/USD tested 1.0032 on Tuesday. At that time, the MACD line was just starting to move above zero, so buying was quite appropriate. However, there was no upward movement in the pair, so long positions led to losses. Some time later, euro tested the level again, but this time the MACD line was far from zero. That situation limited the upside potential. No other signal appeared for the rest of the day.
Very weak reports from ZEW regarding the current economic conditions and economic sentiment in Germany and the whole Euro area limited the upward correction of euro yesterday morning. Then, in the afternoon, there was nothing that could boost volatility, so trading remained within the channel.
Just ahead is data on the volume of industrial production in the Euro area for May, which, if shows a strong decline, will put even more pressure on the euro. The US will also release a report on consumer prices in the afternoon, which will most likely show a jump to 9.0%. Core CPI will also increase, and this will prompt a rise in dollar demand as it could force the Federal Reserve to implement more rate hikes in the future. The report on the US federal budget will be of little interest to the market.
For long positions:
Buy euro when the quote reaches 1.0064 (green line on the chart) and take profit at the price of 1.0128 (thicker green line on the chart). A rally will occur if upcoming reports in the Euro area exceed expectations. However, when buying, make sure that the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0020, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0064 and 1.0128.
For short positions:
Sell euro when the quote reaches 1.0020 (red line on the chart) and take profit at the price of 0.9964. Pressure will continue as there are no reasons for growth in risky assets at the moment. However, when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0064, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0020 and 0.9964.
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 decision based on the current market situation is an inherently losing strategy for an intraday trader.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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