Relevance up to 01:00 2022-07-16 UTC–4
Analysis of transactions in the EUR / USD pair
EUR/USD tested 1.0032 on Thursday. At that time, the MACD line was just starting to move above zero, so buying was quite appropriate. However, the increase was just brief because after moving by 15 pips, the pair reversed and went down again. Sometime later, euro approached 0.9964, and buyers became active again. This time, the signal was successful as the pair rose by more than 60 pips.
EUR/USD remained afloat yesterday morning. However, June producer prices in the US pushed the dollar higher, leading to a sharp fall in the pair in the afternoon. The statements of Fed member Christopher Waller appealed to dollar bulls as well.
Today, there will be a report on the foreign trade balance in the Euro area, but it is unlikely to help the pair. At the same time, the US will release data on retail sales and industrial production, as well as reports on consumer expectations and consumer sentiment. Strong values will keep dollar demand high, forcing EUR/USD to continue declining throughout the day.
For long positions:
Buy euro when the quote reaches 1.0041 (green line on the chart) and take profit at the price of 1.0095 (thicker green line on the chart).
Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0000, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0032 and 1.0081.
For short positions:
Sell euro when the quote reaches 1.0011 (red line on the chart) and take profit at the price of 0.9964. Pressure will return if the US releases a better-than-expected report on retail sales, as that will push the Fed to take more aggressive actions in the fight against inflation.
Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0041, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0011 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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