FX.co ★ Analysis and trading recommendations for EUR/USD on October 27

Analysis of transactions in the EUR / USD pair

Euro fell by 20 pips on Tuesday morning as traders took short positions amid a signal to sell that coincided with the MACD line being in the overbought area. Then, in the afternoon, a similar situation occurred, but this time it is on the opposite side. Traders took long positions amid a signal to buy that coincided with the MACD line being at the oversold area.

Euro fell yesterday amid increased demand for dollar brought by the strong reports on US consumer confidence and primary home sales. But today a slight increase may be observed as data on the leading consumer climate and German import prices will be released, along with the M3 aggregate of the money supply and lending growth in the Euro area. Then, in the afternoon, US will publish data on orders for durable goods, which may bring demand back to dollar if the figures exceed expectations. There will also be reports on the foreign trade balance and inventories in wholesale warehouses.

For long positions:

Open a long position when euro reaches 1.1612 (green line on the chart) and take profit at 1.1652. Price will increase if data from Germany and the whole Euro area exceed expectations.

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 1.1593, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1612 and 1.1652.

For short positions:

Open a short position when euro reaches 1.1593 (red line on the chart) and take profit at 1.1560. Strong US data could bring back pressure on the pair.

Before selling, make sure that the MACD line is below zero, or is starting to move down from it. Euro could also be sold at 1.1612, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1593 and 1.1560.

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.