FX.co ★ Analysis and trading tips for EUR/USD on November 2

Analysis of transactions in the EUR / USD pair

The test of 0.9907 occurred at the time when the MACD line was just starting to move below zero, which was a good signal to sell. This led to the pair falling by more than 40 pips. Purchases on a rebound from 0.9862 also brought about a movement of around 20 pips.

Pressure on EUR/USD continued as there was no important report in the Euro area yesterday, and the US ISM manufacturing index exceeded expectations. But today, a number of data are coming out, such as the unemployment report in Germany and the index of business activity in the manufacturing sector of Germany and other eurozone countries. Most likely, a decrease in the figures will lead to another price decline even before the publication of the Fed's decision. In the afternoon, ADP's data on US employment will be released, followed by the Fed's decision on interest rates. Many expect rates to hit 4.0%, but more important is what course the central bank will take. If it does not change and remains super-aggressive, dollar will strengthen further.

For long positions:

Buy euro when the quote reaches 0.9898 (green line on the chart) and take profit at the price of 0.9946. Growth will occur if data from Germany and 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 0.9865, but the MACD line should be in the oversold area as only by that will the market reverse to 0.9898 and 0.9946.

For short positions:

Sell euro when the quote reaches 0.9865 (red line on the chart) and take profit at the price of 0.9821. Pressure will return if the Euro area reports weak economic data and if the Fed continues its aggressive policy.

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 0.9898, but the MACD line should be in the overbought area as only by that will the market reverse to 0.9865 and 0.9821.

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.