FX.co ★ Analysis and trading tips for EUR/USD on October 14

Analysis of transactions in the EUR / USD pair

The test of 0.9725 happened when the MACD line was far above zero, so the upside potential was limited. Then, after euro moved down, it tested 0.9679, during which the MACD line was starting to going down. This was a good reason to sell and resulted with a price decrease of about 30 pips. Demand returned right after, so there was a test of 0.9725, but there was no signal to buy.

EUR/USD fell on Thursday as Germany's consumer price index, as well as the speech of ECB board member Joachim Nagel, did not impress the market. Lower-than-expected inflation in the US also did not affect risk appetite, which was a surprise.

Today, a report on the foreign trade balance in the Eurozone will be released, followed by a meeting of the Eurogroup. Then, data on US retail sales will come out, and this could force the Fed to raise rates further, provided that the figure indicates the persistence of high inflation. Consumer sentiment and inflation expectations from the University of Michigan will likely be ignored, as will speeches from FOMC members Lisa Cook and Christopher Waller.

For long positions:

Buy euro when the quote reaches 0.9801 (green line on the chart) and take profit at the price of 0.9859. Growth is likely to occur ahead of important retail sales data from the US.

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 0.9764, but the MACD line should be in the oversold area as only by that will the market reverse to 0.9801 and 0.9859.

For short positions:

Sell euro when the quote reaches 0.9764 (red line on the chart) and take profit at the price of 0.9717. Pressure will return after the release of strong retail sales data in the US.

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 0.9801, but the MACD line should be in the overbought area as only by that will the market reverse to 0.9764 and 0.9717.

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.