FX.co ★ Analysis and trading tips for EUR/USD on October 10

Analysis of transactions in the EUR / USD pair

The test of 0.9808 happened when the MACD line had just started to move above zero, which was a good signal to buy. Sadly, there was not much price increase as the market already expected strong statistics from the US. A little later, a similar test took place, but the MACD line had already gone up far from zero, limiting the further growth of the pair. The third update of the level, meanwhile, led to sell-offs, which resulted in a large downward move by about 50 pips.

EUR/USD fell on Friday as the data on industrial production and retail sales in Germany did not help euro much, while the sharp decline in unemployment and growth in the number of non-farm payrolls in the US prompted a strong rise in dollar. Most likely, this scenario will continue today as few reports are scheduled to be released in the Eurozone. Two of which is the index for investor confidence in the Euro area and speech from Bundesbank and ECB representatives. There will also be statements from Fed representatives, but they are unlikely to lead to a surge in market volatility because it is already obvious that the dollar will continue to strengthen in the near future.

For long positions:

Buy euro when the quote reaches 0.9751 (green line on the chart) and take profit at the price of 0.9806. Growth will occur only after hawkish statements from the European Central Bank.

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 0.9716, but the MACD line should be in the oversold area as only by that will the market reverse to 0.9751 and 0.9806.

For short positions:

Sell euro when the quote reaches 0.9716 (red line on the chart) and take profit at the price of 0.9683. Pressure will return if the attempt for price growth fails.

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 0.9751, but the MACD line should be in the overbought area as only by that will the market reverse to 0.9716 and 0.9683.

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.