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Forex Analysis & Reviews: Indicator Analysis of GBP/USD on April 1, 2024

Today, the price may move upward from the level of 1.2622 (closing of Friday's daily candle) to the 23.6% pullback level at 1.2649 (red dotted line). If this level is reached, a continued upward movement is likely possible to the 38.2% pullback level at 1.2733 (red dotted line). Alternatively, from the level of 1.2622 (closing of Friday's daily candle), the price may move upward to the 61.8% pullback level at 1.2661 (yellow dotted line). If this level is reached, a downward movement is possible to the 23.6% pullback level at 1.2649 (red dotted line).


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-- Edited by IFX bella on Monday 1st of April 2024 11:39:13 AM

Forex Analysis & Reviews: EUR/USD and GBP/USD: Technical analysis on April 3

 

Higher Timeframes At the close of the previous session, the attraction of the weekly support (1.2577) managed to halt the decline and return the market to its influence zone. Therefore, if bearish players want to continue the decline, the targets of which were detailed in yesterday's review, they first need to overcome the attraction and influence of the weekly support at 1.2577. However, if bullish players continue restoring their positions now, the market will first encounter resistance from the daily short-term trend (1.2606), and then the daily cloud may come into play (1.2637 - 1.2671).

 

H4 - H1 On lower timeframes, the pair continues to work within a correction zone. Currently, the central pivot point of the day (1.2563) is being used as support. The next supports during intraday decline will be the classic pivot points S1 (1.2548) - S2 (1.2524) - S3 (1.2509). A change in intraday priorities may occur upon the breakthrough and reversal of the weekly long-term trend (1.2601). To further strengthen bullish sentiments, the resistance levels of classic pivot points located above the trend will be crucial, with today's R3 (1.2626) being the reference point.

 

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Forex Analysis & Reviews: Analysis and trading tips for USD/JPY on April 5 (US session)

 

Analysis of transactions and trading tips on USD/JPY Further growth became limited as the test of 151.40 coincided with the sharp rise of the MACD line from zero. Dollar bulls took advantage of the morning dip, but everything could change upon the release of US data. Weak figures on the growth of new jobs will lead to a decline in USD/JPY, which could end with a retest of weekly lows. Strong statistics, on the other hand, will quickly push the pair back towards the yearly high, although that may be unlikely. FOMC members Thomas Barkin and Michelle Bowman will also speak today.

 

For long positions: Buy when the price hits 151.52 (green line on the chart) and take profit at 152.14. Growth will occur after strong reports from the US and hawkish statements from Fed representatives. When buying, ensure that the MACD line lies above zero or rises from it. Also consider buying USD/JPY after two consecutive price tests of 151.28, but the MACD line should be in the oversold area as only by that will the market reverse to 151.52 and 152.14. For short positions: Sell when the price reaches 151.28 (red line on the chart) and take profit at 150.63. Pressure will return in the case of poor labor market data. When selling, ensure that the MACD line lies below zero or drops down from it. Also consider selling USD/JPY after two consecutive price tests of 151.52, but the MACD line should be in the overbought area as only by that will the market reverse to 151.28 and 150.63.

 

What's on the chart: Thin green line - entry price at which you can buy USD/JPY Thick green line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely. Thin red line - entry price at which you can sell USD/JPY Thick red line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely. MACD line- it is important to be guided by overbought and oversold areas when entering the market 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.

 

 

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Forex Analysis & Reviews: Forecast for USD/JPY on April 9, 2024

USD/JPY


The USD/JPY pair covered the entire range of target levels 150.80-151.95 in two days. On Friday, the price turned upwards from the balance line (red moving average) and from the level of 150.80. This morning, the upper boundary of the range and the embedded line of the global price channel (blue) have been tested.

The signal line of the Marlin oscillator is directed upwards in the positive territory. Consolidating above 151.95 will pave the way for the price to hit the target level of 154.25. A downward movement is possible after the price breaks through 150.80. The pair has a good potential to rise.

On the 4-hour chart, the price has settled above the balance indicator line, testing resistance at 151.95. The Marlin oscillator is in the uptrend territory. Consolidating above 151.95 opens the nearest target along the MACD line at 152.45. Surpassing yesterday's low at 151.58 will relieve the bullish pressure and shift the focus to 150.80.

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Forex Analysis & Reviews: Overview of the GBP/USD pair on April 11, 2024

 

The GBP/USD pair continues to trade in a flat on the 24-hour timeframe, which is the most important thing. We still expect movement to the south, but below the level of 1.2500, the pair has not been able to break out for 4 months already. Therefore, the flat must be completed first, and only then should the technical picture be analyzed for trading signals to form a new trend. And yesterday's decline in quotes by 200 points fundamentally changes nothing yet. Purchases of the pair are possible if the price fails to overcome the lower boundary of the sideways channel. Then the target will again be the level of 1.2800. But we believe that the time to end the flat has come. Illustration notes: Linear regression channels - help determine the current trend. If both are directed in the same direction, the trend is strong. The moving average line (settings 20.0, smoothed) - determines the short-term trend and direction in which trading should be conducted. Murray levels - target levels for movements and corrections. Volatility levels (red lines) - the probable price channel in which the pair will spend the next day, based on current volatility indicators. CCI indicator - its entry into the oversold zone (below -250) or overbought zone (above +250) indicates that a trend reversal in the opposite direction is approaching.

 

 

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Forex Analysis & Reviews: EUR/USD and GBP/USD: Technical analysis on April 15

EUR/USD

 

Higher Timeframes Last week had a pronounced bearish character due to the significant downward momentum. Bears approached the influence zone of the monthly support at 1.0611, so the results of testing and interaction may determine further priorities and opportunities. The levels passed today act as supports, but due to the remote location (1.0755), they are unlikely to be relevant in the near future.

 

H4 - H1 The main advantage on the lower timeframes currently belongs to the bearish players. However, the pair is trading within an upward correction zone, now testing the central pivot point (1.0665). The next resistance in the development of the correction today can be noted at 1.0706 (R1), but the meeting with the weekly long-term trend (1.0771), which governs the current balance of power, will be of greater significance. A breakout and reversal of the trend could change the market's preferences. If the current correction is completed and the pair returns to the downward trend's development, the bears' focus will be on passing through the supports of classic pivot points (1.0599 - 1.0558 - 1.0492).

 

GBP/USD

 

Higher Timeframes Last week, bearish players managed to assert themselves by closing the week below the current supports (1.2464 - 1.2481 - 1.2503). The main task now is to maintain the achieved level. The next bearish target on the higher timeframes is the final level of the golden cross of the weekly Ichimoku cloud (1.2383). For bullish players to re-enter the market under current conditions, they need to form a rebound from the encountered support zone (1.2464 - 1.2481 - 1.2503)

 

 

 

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Forex Analysis & Reviews: Overview for the GBP/USD pair on April 17th. British inflation could weigh on the pound

The GBP/USD currency pair also attempted to start an upward correction on Tuesday, but volatility throughout the day was again very low. As seen in the illustration below, what we mean by "low volatility" is clear. Out of the last 30 days, there were only nine days when volatility exceeded 90 points. Another nine days ended with volatility below 50 points, indicating a complete lack of movement.

Thus, the British pound has been moving very weakly in recent months. Last week, the pair exited the sideways channel in which it had spent four months, which was an additional "joy" for traders. The market finally considered the entire fundamental and macroeconomic background, which has long been signaling the inevitable rise of the American currency. As with the euro, we want readers to understand us correctly. We do not believe that the dollar should always rise.

Or that the dollar will rise for another year. But the current fundamental background, which indicates that the Fed will begin a cycle of easing at an unknown time, and the Bank of England - within the foreseeable future, supports only the dollar, as the Fed's monetary policy will remain "hawkish" even longer than the Bank of England's policy. Recall that the market was expecting the exact opposite at the beginning of the year. Everyone expected rate cuts from the Fed in March.

Then, it became clear that March was a miss, and traders switched to June. According to the FedWatch tool, the probability of a rate cut in June is 24%. This is when, before the US inflation report for March, the probability exceeded 65%, sometimes even reaching 80%. We have repeatedly said that the market is wrong in its expectations regarding the Fed and Bank of England rates. And based on this erroneous opinion, it conducts illogical trading, which only causes bewilderment. However, the market is starting to come back to earth, so movements become more logical.

And if so, you can expect only a decline in the British pound and a rise in the dollar. Today, the inflation report for March will be published in the UK. According to experts' forecasts, the consumer price index will decrease to 3.1% y/y and core inflation to 4.1%. Thus, core inflation will officially be lower than in the US, whose Fed was supposed to cut rates as early as March.

Which of the two central banks is then closer to easing monetary policy? If we had assumed earlier that both central banks could start cutting rates simultaneously, now we believe that the Bank of England would be the first, whose rate is already lower. Thus, the overall conclusion can only be one: the pair should continue moving to the south. From a technical point of view, on the 24-hour TF, the pair has been correcting upwards for about half a year, and now it may resume the downward trend that started last summer. If so, the targets for the decline of the British currency are around the 20th level and below.

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Forex Analysis & Reviews: Overview of the GBP/USD pair on April 19th. The Bank of England may lower the rate in May

 

The GBP/USD currency pair remained stagnant on Thursday. In the EUR/USD article, we used the phrase that the British currency "remains flat even after exiting the flat." Let's explain what it means. The British pound traded in a sideways channel of 1.25-1.28 (approximate boundaries) for 4 months. Last week saw the long-awaited breakthrough below the lower boundary; after that, nothing happened. The super-overbought pound still has yet to decline despite the UK economy being in a recession, and the Bank of England might start easing monetary policy much sooner than the market expects. The pound is reluctant to depreciate, despite the excellent condition of the US economy, labor market, and business activity. The market refuses to buy the dollar, despite the Fed's hawkish policy stance and the absence of inflation slowdown overseas. Thus, the GBP/USD pair is currently trading illogically. In essence, we are still determining the completion of the flat on the 24-hour timeframe. Yes, the pair has exited the sideways channel, but on the 4-hour timeframe, it has been stationary for a week now. Some may argue that this week's macroeconomic backdrop is weak, hence the pair's almost immobilized state. We consider such an opinion erroneous, as at least two events in the past few days should have moved the price off dead center. Inflation in the UK is approaching levels where it would be appropriate for the central bank to start discussing monetary policy easing. Jerome Powell made it clear that any rate cuts in the near future are out of the question.

 

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Forex Analysis & Reviews: GBP/USD: trading plan for the US session on April 23rd (analysis of morning deals). The pound continues to decline



In my morning forecast, I paid attention to the 1.2388 level and planned to make decisions on entering the market from it. Let's look at the 5-minute chart and figure out what happened there. The growth and formation of a false breakdown in the area of 1.2388 led to a sell signal for the pound, which resulted in a drop in the pair by more than 30 points. In the afternoon, the technical picture was revised.

To open long positions on GBP/USD, it is required: The strong data on activity in the UK services sector and the weak report on the reduction in manufacturing activity were received positively, since the British economy is still based more on services. This provoked purchases of the pound, but the euphoria did not last long. The growth was perceived by sellers as an excellent entry point into short positions. In the afternoon, there is a lot of data related to activity in the American economy, so there should be movement. The index of business activity in the manufacturing sector, the index of business activity in the service sector and the composite PMI index will be the warm-up, after which figures on home sales in the primary market and the Fed-Richmond manufacturing index will be released. Strong data will lead to a larger sell-off of the pound on trend, so be careful with purchases. In the case of a decline in the pair, much will depend on the behavior of traders at the level of 1.2340, where only the formation of a false breakdown will give an entry point to buy in order to grow to the resistance of 1.2383 formed at the end of the first half of the day. A breakout and a top-down test of this range will return the chance of a GBP/USD recovery, which will lead to new purchases and allow you to get to 1.2432. In the case of an exit above this range, we can talk about a breakthrough to 1.2482, where I'm going to fix profits. In the scenario of a fall in GBP/USD and the absence of buyers at 1.2340 in the afternoon, sellers will regain control of the market, having the opportunity to continue a major drop in the pair further along the trend. In this case, I will look for purchases in the area of 1.2301. The formation of a false breakdown there will be a suitable option for entering the market. It is possible to open long positions on GBP/USD immediately on a rebound from 1.2265 in order to correct 30-35 points within a day. To open short positions on GBP/USD, you need: The bears have every chance to continue the pair's decline. To do this, you need to protect the new resistance of 1.2383, where the moving averages are located slightly lower, playing on their side. The formation of a false breakdown there will make sure that large sellers are present in the market, which, together with strong data, will lead to a further fall in GBP/USD and an excellent entry point into short positions in order to test the nearest resistance of 1.2340. A breakout and a reverse test from the bottom up of this range will increase the pressure on the pair, giving the bears an advantage and another entry point to sell with the aim of updating 1.2301. The ultimate target will be a minimum of 1.2265, where I will take a profit. In the event of GBP/USD's rise and absence of bears at 1.2383 in the second half of the day, bulls will have the opportunity to build a good correction with upward movement towards the resistance at 1.2432. I will also sell there only on a false breakout. If there is no activity there either, I suggest opening short positions on GBP/USD from 1.2482, counting on a pair's rebound downwards by 30-35 points within the day.


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Forex Analysis & Reviews: EUR/USD. April 25th. Bulls continue to advance and expect a weak US GDP report

The EUR/USD pair made a new turnaround in favor of the European currency on Wednesday, consolidating above the corrective level of 100.0%-1.0696. Thus, the growth process may continue today towards the next Fibonacci level at 76.4% (1.0764). The ascending trend channel characterizes the current sentiment of traders as bullish, but I remind you that the bearish trend persists. Consolidation of the pair's rate below the corridor will favor the US currency and resume the decline of the euro.

The wave situation remains unchanged. The last completed downward wave broke the low of the previous wave (from April 2), while the new upward wave is still too weak to break the last peak from April 9. Thus, we are dealing with a bearish trend, and at the moment, there is no sign of its completion. For such a sign to appear, the new upward wave needs to break the peak of the previous wave (from April 9). Alternatively, the next downward wave should fail to break the last low from April 16. Until then, the bears will maintain the advantage. The information background on Wednesday needed to be more formal for traders. The report on durable goods orders in the US showed an increase of 2.6% in March against market expectations of +2.5%. Orders excluding transportation increased by 0.2% against forecasts of +0.3%. Orders excluding defense increased by 0.2% against market expectations of +0.2%. Thus, all three reports, which could prompt traders to trade more actively, had little impact on their sentiment. Today, we await the US GDP report for the first quarter, which may suffer the same fate as yesterday's publications.

In the last reporting week, speculators opened 3493 long contracts and 23992 short contracts. The sentiment of the "non-commercial" group remains bullish but continues to weaken rapidly. The total number of long contracts held by speculators now stands at 179,000, while short contracts amount to 167,000. The situation will continue to change in favor of bears. In the second column, we see that the number of short positions increased from 92,000 to 167,000 over the last 3 months. Over the same period, the number of long positions decreased from 211,000 to 179,000. Bulls have dominated the market for too long, and now they need strong information to resume the bullish trend. However, the information background has only been supporting bears lately. The European currency could have lost much more ground in recent weeks.


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Forex Analysis & Reviews: GBP/USD: trading plan for the US session on April 29th (analysis of morning deals). The pound continues to be bought at every opportunity

 

 

In my morning forecast, I paid attention to the 1.2510 level and planned to make decisions on entering the market from it. Let's look at the 5-minute chart and figure out what happened there. The decline and the formation of a false breakdown there after an unsuccessful attempt to gain a foothold below 1.2510 allowed us to get a buy signal, which resulted in a 30-point increase in the pair. In the afternoon, the technical picture was not revised.

 

o open long positions on GBP/USD, you need: The lack of statistics for the UK helped the buyers of the pound to beat off 1.2510 and now let's see if they will be able to achieve an update to the weekly maximum or not. The reason for the low volatility in the afternoon will be the complete absence of any data on the United States and the impending meeting of the Federal Reserve System, which will be able to change the current "rules of the game". For this reason, it is not necessary to force events: the formation of a false breakdown in the support area of 1.2510, by analogy with the first half of the day, will give an entry point to buy in order to grow to the resistance of 1.2573. The moving averages also pass around 1.2510, so you can again count on the active actions of the bulls. A breakout and a top-down test of 1.2573 will give a chance for GBP/USD growth, which will allow you to reach 1.2621. In the case of an exit above this range, we can talk about a breakthrough to 1.2658, where I'm going to fix profits. A test of this level is unlikely today, but anything is possible in the market. In the scenario of a fall in GBP/USD and the absence of buyers at 1.2510 in the afternoon, the market will maintain balance, and trading will move within the framework of the side channel. In this case, I will look for purchases in the area of 1.2449. The formation of a false breakdown there will be a suitable option for entering the market. It is possible to open long positions on GBP/USD immediately on a rebound from 1.2383 in order to correct 30-35 points within a day. To open short positions on GBP/USD, you need: The bears still have a chance to continue to return to the pair's decline, but for this they need to take 1.2510, which they failed to do in the first half of the day. In case of further growth of the pair, I will postpone sales until the test of the new resistance of 1.2573, which buyers have been looking at with great interest for a long time. Only the formation of a false breakdown there will make sure that large sellers are present in the market, which will lead to a fall in GBP/USD to the area of 1.2510, where the moving averages are located. A breakout and a reverse test from the bottom up of this range will increase the pressure on the pair, giving the bears an advantage and another entry point to sell with the aim of updating 1.2449. The ultimate target will be the minimum of 1.2383, where I will take a profit. In the scenario of GBP/USD rising and the absence of bears at 1.2573 in the second half of the day, bulls will have the opportunity to continue building an upward trend with movement towards the resistance at 1.2621. I will only enter there on a false breakout. If there is no activity there either, I suggest opening short positions on GBP/USD from 1.2658, expecting a pair to rebound down by 30-35 points within the day.

 

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Forex Analysis & Reviews: Trading plan for GBP/USD on May 6. Simple tips for beginners

 

The GBP/USD pair continued its upward movement on Friday. As seen in the chart above, the price consolidated below the ascending trend line last week. At this point, the upward correction was supposed to end. However, a series of weak reports on the US labor market, unemployment, business activity, and job vacancies triggered a new and predictable decline in the US currency. We still believe that the fundamental background largely supports the dollar, while the pound's current rise is part of a corrective move. Therefore, we expect the global downward trend to resume. Over the past two weeks, economic data have disappointed the dollar, but this may not always be the case. The state of the British economy has been less than ideal for several years now. A bounce from the level of 1.2611 could mark the start of a new downward trend.

 

An excellent buy signal was formed during the European trading session, although the pair remained relatively unchanged throughout the session. However, significantly weaker-than-expected US macro data prompted a rise, which traders needed. In the afternoon, the range of 1.2605-1.2611 was tested, from which there was an imprecise rebound. This rebound could also have been interpreted as a signal, but this time it was for selling. However, it was difficult to say whether traders should have acted on it or not. It was also difficult to expect the dollar to rise with such weak US data. Nevertheless, those who opened short positions made profit, as the price returned to the range of 1.2541-1.2547 by the end of the day. Trading tips on Monday: On the hourly chart, the GBP/USD pair has excellent prospects for forming a downward trend, but is currently going through a correction. This corrective phase has been quite strong. The fundamental backdrop continues to support the dollar much more than the British pound. Therefore, we only expect downward movement from the pair. On Monday, the market is in a flat state, and there's a high chance that it will be another "boring Monday". Investors may trade from the range of 1.2541-1.2547, but as mentioned, there's also a very high chance of a flat market. The key levels on the 5M chart are 1.2270, 1.2310, 1.2372-1.2387, 1.2457, 1.2502, 1.2541-1.2547, 1.2605-1.2611, 1.2648, 1.2691, 1.2725, 1.2787-1.2791. Today, there are no scheduled events or reports in the UK and the US. Therefore, we don't expect strong movements today.

 

 

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Forex Analysis & Reviews: GBP/USD. May 8th. The pound does not expect a rate cut by the Bank of England


On the hourly chart, the GBP/USD pair continued its decline on Tuesday and confirmed consolidation below the ascending trend channel. Bulls lost their advantage on the hourly chart, and bears continue to maintain it on the 4-hour chart. Thus, the British pound has every reason to continue falling against the dollar. The rebound of quotes from the Fibonacci level of 50.0% (1.2464) allowed the pair to show a slight increase, but I expect consolidation below this level, which will allow counting on further decline towards the corrective level of 61.8% (1.2363).


The wave situation remains unchanged. The last completed upward wave did not surpass the peak of the previous wave, and the new downward wave is still too weak to break the low of April 22. Thus, the trend for the GBP/USD pair remains "bearish," and there are currently no signs of its completion. The first sign of bulls turning aggressive could be the breakthrough of the peak on May 3. A new downward wave, if it turns out to be weak and does not break the low of April 22, could also indicate a trend reversal. Waves in recent months have been quite large, so it is necessary to reduce the scale of the hourly chart to understand the current trend clearly. On Monday, Tuesday, and Wednesday, there was no news from the UK or the US. However, this Thursday, the Bank of England meeting will conclude, and this event could leave a mark on the GBP/USD pair charts. Currently, traders do not believe that the rate will be cut. There are no grounds for this. Inflation in the UK continues to decline, but it is still too high for the regulator to take action. Most likely, the easing of monetary policy will begin in the autumn of 2024, but only if inflation continues to slow down. And we know that the opposite could also happen, as is currently the case in the US. On the 4-hour chart, the pair rose to the level of 1.2620 and bounced off it. The upper line of the descending trend channel has been broken, but it is still not time to bury the "bearish" trend. This week, a decline towards the levels of 1.2450 and 1.2289 has begun. Consolidation of the pair's rate below the level of 1.2450 will increase the probability of further decline towards the next correction level of 50.0% (1.2289). There are no imminent divergences today.


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Forex Analysis & Reviews: EUR/USD. May 13th. Bears and bulls have found a balance

 

The EUR/USD pair traded strictly between the levels of 1.0764 and 1.0785 on Friday. Trader activity was nonexistent, with horizontal movement observed all day. The zone 1.07641.0785 is part of the zone 1.07641.0806. Bulls will find it very difficult to overcome these levels. Therefore, I expect further growth of the European currency only after closing above 1.0806. The upward trend channel continues to characterize traders' sentiment as "bullish." After closing below this channel, I expect a significant decline in the euro.

 

The wave situation remains unchanged. The last downward wave failed to approach the low of the previous wave, while the new upward wave had already broken the peak of the previous wave. Thus, a "bullish" trend has formed, but its prospects raise doubts for me. In the last 2-3 weeks, the news background has supported bull traders, but will it continue to support them further? This is a big question, as the European Union's economy is going through challenging times, and the ECB is ready to start easing monetary policy earlier than the Fed, which already has a much lower interest rate. The news background on Friday was very weak. There was no news in Europe, and the University of Michigan's consumer sentiment index was released in America. This indicator in May was only 67.4 points against expectations of 76-78 points. Thus, this report also did not show a high value, and the dollar was fortunate that its decline did not continue. Despite weak statistics from the US recently, I still expect a new downward trend for EUR/USD. The trend has been ongoing for four weeks and cannot be called strong. The weakening of the American currency is temporary, and traders will soon remember the ECB's rate cut in June. They will also remember that inflation in the US will only allow the Fed to count on easing monetary policy later.

 

On the 4-hour chart, the pair returned to the upper line of the "wedge." A new rebound from this line will again favor the US dollar and a new downward process towards the corrective level of 23.6%-1.0644. Consolidation above the "wedge" will increase the probability of continued growth towards the next Fibonacci level of 50.0%-1.0862 and change the "bearish" trend to "bullish." There are no imminent divergences observed today. Commitments of Traders (COT) report: During the last reporting week, speculators opened 3409 long contracts and closed 7958 short contracts. The sentiment of the "Non-commercial" group turned "bearish" a couple of weeks ago, but now there is a balance between bulls and bears. The total number of long contracts held by speculators now stands at 170 thousand, while short contracts amount to 166 thousand. However, the situation will continue to change in favor of bears. In the second column, the number of short positions has increased from 140 thousand to 166 thousand over the last three months. Long positions decreased from 202 thousand to 170 thousand during the same period. Bulls have dominated the market for too long, and now they need a strong news background to resume the "bullish" trend. A series of poor reports from the US have supported the euro, but in the long run, more is needed.

 

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Forex Analysis & Reviews: EUR/USD: trading tips for beginners for European session on May 16

 

The price test of 1.0837 occurred at a time when the MACD indicator was just starting to move up from the zero mark, which confirmed the entry point to buy the euro. As a result, the EUR/USD pair rose to the area of the target level at 1.0882, so traders could earn approximately 50 pips of profit. There was no market reaction to reports on the Consumer Price Index in France, Eurozone GDP, employment, and industrial production. However, the US inflation data turned the market around, giving euro buyers a very strong impetus. Today, the uptrend may persist, but this requires good forecasts from the European Commission and a decent report on the financial stability of the Eurozone. There are no other reports, so if the market withstands weak data and pressure from sellers, then obviously, the euro may continue to rise in the afternoon. It is better to act according to the trend and look for buy signals. As for the intraday strategy, I will rely more on the implementation of scenarios No. 1 and 2.

 

Buy signals Scenario No 1. Today, you can buy the euro when the price reaches 1.0897 plotted by the green line on the chart, aiming for growth to the level of 1.0942. At the level of 1.0942, I plan to exit the market and also sell the euro in the opposite direction, counting on a movement of 30-35 pips from the entry point. You can count on the euro to rise today within the framework of an emerging uptrend, as well as after good news on the Eurozone. Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it. Scenario No 2. I am also going to buy the euro today in case of two consecutive tests of the price of 1.0872 at the time when the MACD indicator is in the oversold area. This will limit the downward potential of the instrument and lead to an upward reversal of the market. We can expect growth to the opposite levels of 1.0897 and 1.0942. Sell signals Scenario No 1. I plan to sell the euro after EUR/USD reaches the level of 1.0872 plotted by the red line on the chart. The target will be the level of 1.0835, where I am going to exit the market and buy immediately in the opposite direction (expecting a movement of 20-25 pips in the upward direction from the level). Pressure on EUR/USD will increase if it fails to consolidate near the daily high and weak Eurozone data. Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decline from it. Scenario No 2. I am also going to sell the euro today in case of two consecutive price tests of 1.0897 at the time when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward reversal of the market. We can expect a decline to the opposite level of 1.0872 and 1.0835.

 

Analysis are provided by InstaForex.

 

 

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