EUR/USD: Buy and Sell levels on September 30, 2021. Analysis of yesterday's trades
Analysis of trades. Entry/exit recommendations
Pressure on the euro has significantly increased. Risk appetite is decreasing, while US stocks are falling ahead of the vote in the Senate to raise the government debt ceiling. What is more, China is hit by the energy crisis. Yesterday, several entry points were formed. The sell entry point at 1.1674 was not convenient enough from a technical point of view. At the moment the price tested the mark and a sell signal was formed, the MADC went well below zero. Amid low volatility in the market yesterday, the bearish trend is unlikely to extend. The buy entry point was at 1.1643. It was formed at the moment the MACD was in the oversold zone. Taking into account the current situation in the market, speeches and interviews made by the FOMC members boosted demand for the US dollar. The speech of ECB President Christine Lagarde went unnoticed. She repeated everything she had said a few days earlier. Today's macroeconomic calendar in the eurozone is full of reports. The focus will be on household consumption in France, the unemployment rate in Germany and the euro area, as well as consumer prices in Germany and Italy. Nevertheless, this will not be enough to boost the euro that is currently under strong bearish pressure. In the United States, the FOMC members will continue making speeches today. Chair Jerome Powell and Treasury Secretary Janet Yellen are also expected to make a few announcements. Market participants will focus on the initial jobless claims report that will unlikely exert pressure on the greenback in case of disappointing results.
Buy signal
You should consider buying the euro when the price reaches 1.1621 (the green line of the chart) with the target at 1.1670. It would be wise to lock in profits at 1.1670 and sell the pair instead, allowing a 10-15 pips correction. The euro is expected to recover considerably in case of strong data in the eurozone where inflation indicators should come better than expected and make the ECB start to take action. Make sure that the MACD is above zero and starts rising from this line before buying the pair. You should also consider opening long positions if the quote reaches 1.1588 and the MACD is in the oversold zone at that moment. This should limit the pair's downside potential and lead to a reversal in the market. I expect the quote to rise to 1.1621 and 1.1670.
Sell signal
You should consider selling the euro after the quote reaches 1.1588 (the red line on the chart). The target is seen at 1.1537, where you should close your short positions and open long ones instead, allowing a 10-15 pips correction. The pair is expected to remain under pressure because of a stronger US dollar amid rising inflation caused by high energy prices and the reluctance of the ECB to start tapering earlier. Demand for safe-haven assets remains strong due to the possibility of a shutdown in the US. Make sure that the MACD is below zero and starts going down from this line before selling the pair. You should also consider selling the pair if the quote reaches 1.1621 and the MACD is in the overbought zone at that moment. This should limit the pair's upside potential and lead to a reversal in the market. I expect the price to fall to 1.1588 and 1.1537.
What's on the chart:
The thin green line indicates a buy entry point.
The thick green line is the estimated price where you should place a take-profit order or lock in profit since the quote is unlikely to grow above this level.
The thin red line indicates a sell entry point.
The thick red line is the estimated price where you should place a take-profit order or lock in profit since the quote is unlikely to fall below this level.
MACD. When entering the market, it is important to pay attention to the overbought and oversold zones.
Remember that novice forex traders should be very careful when deciding to enter the market. Before the release of important fundamental reports, you should stay out of the market in order to avoid sharp fluctuations in the rate. If you decide to trade during news releases, make sure to always place a stop-loss order to minimize losses. Without it, you may quickly lose your entire deposit, especially if you do not use money management but trade large volumes.
Remember that in order to succeed in the market, you should have a clear trading plan, like the one I presented above. Spontaneous decisions based on the current state of the market are a losing strategy for an intraday trader.