FX.co ★ Analysis and trading tips for EUR/USD on October 16

Analysis of transactions and tips for trading EUR/USD

The test of 1.0532 took place when the MACD line from zero had not yet exited the negative area, making it inadvisable to enter long positions. By mid-day, another price test occurred, but this time at 1.0514. It coincided with the moment when the MACD fell considerably below zero, also preventing market entry. No other signals appeared for the rest of the day.

Euro fell under pressure after the release of CPI data in France and Spain, as well as the report on industrial production in the eurozone. It also declined in the afternoon due to the increase in inflation expectations in the US. As for today, apart from the CPI report from Italy and trade balance for the eurozone, no other important statistics will come out. Therefore, euro buyers will have a chance to continue the upward correction observed during the Asian session.

For long positions:

Buy when euro hits 1.0537 (green line on the chart) and take profit at the price of 1.0565. Growth will occur as an attempt to compensate for Friday's losses. However, when buying, the MACD line should be above zero or rising from it.

Euro can also be bought after two consecutive price tests of 1.0520, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0537 and 1.0565.

For short positions:

Sell when euro reaches 1.0520 (red line on the chart) and take profit at the price of 1.0500. Pressure may return at any moment, especially in the case of weak economic data from the eurozone and unsuccessful attempt to stay above 1.0537. However, when selling, the MACD line should be below zero or dropping down from it.

Euro can also be sold after two consecutive price tests of 1.0537, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0520 and 1.0499.

What's on the chart:

Thin green line - entry price at which you can buy EUR/USD

Thick green line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.

Thin red line - entry price at which you can sell EUR/USD

Thick red line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.

MACD line- it is important to be guided by overbought and oversold areas when entering the market

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.