Relevance up to 00:00 2022-03-08 UTC–5
Analysis of transactions in the EUR / USD pair
EUR/USD fell on Friday because strong data on US employment increased demand for dollar. The ongoing geopolitical situation in the world also put pressure on risk appetite.
The situation is still chaotic today as negotiations in Ukraine stalled and hostilities continued. That is why there is a high chance that the euro will fall further, especially since the Federal Reserve is in a more difficult position and will be forced to actively raise interest rates to fight inflation. Such a situation gives a more favorable environment to the dollar.
Two economic reports from Germany are coming out this morning and their growth may help euro slow down the bearish trend. But more important is the eurozone investor confidence indicator as a decrease in the data for March will lead to another wave of sales. The US will also release a report on consumer lending, but it has little chance to affect the market. Meanwhile, the speech of Fed Chairman Jerome Powell could prompt another increase in USD.
For long positions:
Buy euro when the quote reaches 1.0905 (green line on the chart) and take profit at the price of 1.0905 (thicker green line on the chart). However, there is little chance for a rally today because of the expected weak data from the eurozone and ongoing conflict in Ukraine. In any case, before buying, make sure that the MACD line is above zero or is starting to rise from it before taking long positions. It is also possible to buy at 1.0848, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0905 and 1.0978.
For short positions:
Sell euro when the quote reaches 1.0848 (red line on the chart) and take profit at the price of 1.0785. Pressure will return if tension in Ukraine does not ease. Weak data on the Euro area will also prompt a decline in the pair. But before selling, make sure that the MACD line is below zero, or is starting to move down from it. Euro can also be sold at 1.0905, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0848 and 1.0785.
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.
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