Analysis of transactions in the EUR / USD pair

Euro tested 1.0026 at the time when the MACD was just starting to move above zero, which was a good signal to buy. It led to a price increase of around 15 pips, after which pressure returned mainly because of weak statistics on the Euro area. Sometime later, the pair tested 1.0005, but this time the MACD line was far below zero, which should have limited the downward potential. Surprisingly, the quote continued to move down, and long positions from 0.9959 brought losses.

Euro fell yesterday because of the disappointing data on the volume of retail trade in Germany and index of business activity in the manufacturing sector of Germany and the whole Euro area. Similar index from the US also led to its decline as the better-than-expected figure strengthened the positions of euro sellers and dollar buyers. This led to the fall of EUR/USD to yearly lows

Data on the foreign trade balance of Germany and producer price index of the eurozone are scheduled to be released today, but they are of little interest to the market. That is why the focus will shift in the afternoon, after the release of reports on the unemployment rate, change in the number of people employed in the non-farm sector, change in the average hourly wage and share of the economically active population in the US. All of these are likely to lead to a surge in volatility as their numbers are expected to be much better than the forecasts. This will prompt another decrease in EUR/USD. The opposite scenario will start an upward correction.

For long positions:

Buy euro when the quote reaches 0.9978 (green line on the chart) and take profit at the price of 1.0119. A rally will occur only if statistics in the US come out lower than the forecasts.

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 0.9959, but the MACD line should be in the oversold area as only by that will the market reverse to 0.9978 and 1.0019.

For short positions:

Sell euro when the quote reaches 0.9959 (red line on the chart) and take profit at the price of 0.9919. Pressure will return if statistics in the US exceed expectations.

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 0.9978, but the MACD line should be in the overbought area, as only by that will the market reverse to 0.9959 and 0.9919.

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.

Relevance up to 08:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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