FX.co ★ Analysis and trading tips for EUR/USD on October 5

Analysis of transactions in the EUR / USD pair

The price test of 0.9846 happened when the MACD line was just starting to move above zero, which was a good signal to buy. This led to an increase of over 50 pips, and the continuation of the bull market. Some time later, short positions at 0.9895 were also a success as the pair fell by more than 30 pips. No other signals appeared for the rest of the day.

Data on the Eurozone's producer prices coincided with forecasts, so there was not much change in the market yesterday. However, risk appetite did improve a little, so euro saw a new wave of growth in prices.

Talking about rate hikes, many expect the Fed to raise rates by 125 basis points in March next year, up from the 165 points expected after a third three-quarter point hike last month. That is why the speeches of the Fed representatives were ignored.

A lot of reports are scheduled to be released today, such as business activity indices in the services sector in Germany and the eurozone, as well as composite PMI indices. Weak data could hurt bullish sentiment, which will lead to a fall in euro in the morning. By afternoon, similar reports from the US will be published, followed by employment data from the ADP, report on foreign trade balance and a speech from FOMC member Raphael Bostic. If all these are better than expected, demand for the dollar will climb further, which will offset the recent losses against the euro.

For long positions:

Buy euro when the quote reaches 0.9984 (green line on the chart) and take profit at the price of 1.0034. Growth will occur if economic reports in the Euro area exceed expectations.

Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9930, but the MACD line should be in the oversold area as only by that will the market reverse to 0.9984 and 1.0034.

For short positions:

Sell euro when the quote reaches 0.9930 (red line on the chart) and take profit at the price of 0.9860. Pressure may return if statistics from the Euro area are weaker than expected.

Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 0.9984, but the MACD line should be in the overbought area as only by that will the market reverse to 0.9930 and 0.9860.

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 decision based on the current market situation is an inherently losing strategy for an intraday trader.