Relevance up to 01:00 2022-06-18 UTC–4
Analysis of transactions in the EUR / USD pair
EUR/USD reaching 1.0409 led to a sell signal in the market, however, having the MACD line far from zero limited the downside potential of the pair. Sometime later, the pair tested 1.0444 and formed a buy signal, but the upside potential was again limited as the MACD line was still far from zero. Short positions at 1.0505 also brought losses.
The report on wages in the Euro area and statements of ECB representative Fabio Panetta did not have a strong impact on the market, while very weak data on building permits, home sales, and manufacturing index in the US led to a sharp fall in dollar, resulting in an increase in EUR/USD. But today the situation may turn around as ahead is a report on EU inflation for May. A decrease in the indicator will be followed by a dip in euro, while further growth will lead to another rise in the currency’s demand. In the afternoon, Fed Chairman Jerome Powell will deliver his speech, which may talk about the need for tough policy. Data on US industrial production is also expected, where a decline in the figure will lead to pressure on the dollar.
For long positions:
Buy euro when the quote reaches 1.0538 (green line on the chart) and take profit at the price of 1.0588 (thicker green line on the chart). There is a chance for a rally today, but only if inflation data exceed expectations. Nevertheless, note that when buying, the MACD line should be above zero or is starting to rise from it. It is also possible to buy at 1.0505, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0538 and 1.0588.
For short positions:
Sell euro when the quote reaches 1.0505 (red line on the chart) and take profit at the price of 1.0458. Pressure will return in the morning, especially amid weak statistics on the Euro area. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0538, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0505 and 1.0458.
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.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
Benefit from analysts’ recommendations right now
Top up trading account
Open trading account
InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.