Analysis of transactions in the EUR / USD pair
A signal to sell appeared in the market on Friday, which provoked a 30-pip decline in EUR / USD. Apparently, the signal came when the MACD line was going down from zero, so traders were able to open short positions in the market.
The improved situation in the US labor market contributed to such a sharp downward movement, especially since good employment figures are evidence of strong economic recovery. Meanwhile, other data released last Friday, such as reports on industrial production in Germany and foreign trade balance in France, were not remarkable at all.
Today, the market will move depending on the reports scheduled to be published. In the morning, there will be data on the foreign trade balance in Germany and investor confidence from the Euro area, which are expected to post a decline. If this happens, demand for euro will continue to decrease. Then, later in the afternoon, the situation may exacerbate as Fed representatives will deliver speeches, which could provoke increased demand for dollar and accordingly, a further decline in EUR / USD.
For long positions:
Open a long position when euro reaches 1.1779 (green line on the chart), and then take profit at the level of 1.1828. Demand will increase if the Euro area publishes good data on investor confidence. But 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 1.1741 and 1.1705, but the MACD indicator line must be in the oversold area in order to bring about a market reversal to 1.1741 and 1.1705.
For short positions:
Open a short position when euro reaches 1.1741 (red line on the chart), and then take profit at the level of 1.1705. A decline will occur if the Federal Reserve hints at a future policy change. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.
It is also possible to sell at 1.1779 and 1.1828, but the MACD line must be in the overbought area in order to provoke a market reversal to 1.1741.
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.
Analysis of transactions in the GBP / USD pair
There were several market signals on Friday, but only some were successful. In fact, the first one, which was to sell, had to be ignored because it came when the MACD line was far away from zero, which significantly limited the downward potential of GBP / USD. Fortunately by afternoon, the indicator had moved down from zero, so the pair was able to decline by about 50 pips. And today, price has reached the target level, which is 1.3855.
Surprisingly, long-term prospects for bond purchases did not help pound, which cannot be said about the data on the US labor market, which exceeded all expectations. Meanwhile today, there are no macro statistics scheduled to be published, so pound will most likely undergo an upward correction. But later in the afternoon, the situation may change as Fed representatives will deliver speeches, which could provoke increased demand for dollar and accordingly, a decline in GBP / USD.
For long positions:
Open a long position when pound reaches 1.3881 (green line on the chart), and then take profit at the level of 1.3919 (thicker green line on the chart). GBP / USD may climb today since there are no macro statistics scheduled to be published. But 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 1.3854 and 1.3820, but the MACD line should be in the oversold area in order to set off a market reversal to 1.3881.
For short positions:
Open a short position when pound reaches 1.3854 (red line on the chart), and then take profit at the level of 1.3820. A decline could occur in the afternoon, during the speech of Fed representatives. But before selling, make sure that the MACD line is below zero, or is starting to move down from it.
It is also possible to sell at 1.3881 and 1.3919, but the MACD line should be in the overbought area in order to trigger a market reversal to 1.3854.
What's on the chart:
The thin green line is the key level at which you can place long positions in the GBP/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 GBP/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 material has been provided by InstaForex Company - www.instaforex.com