FX.co ★ Analysis and trading tips for EUR/USD on October 20 (US session)

Analysis of transactions and trading tips on EUR/USD

The test of 1.0580, which occurred earlier in the day, coincided with the upward movement of the MACD line from zero, leading to a signal to buy. This resulted in a price increase of around 10 pips.

Further growth may still occur before the day ends, but this will depends on the statements from the Federal Reserve. A dovish rhetoric, similar to what came from Chairman Jerome Powell yesterday, will trigger this increase. In addition, the empty macroeconomic calendar will give buyers a chance to revisit the weekly high. However, if they fail to show any strength, there will be a reversal, most likely during the mid-US session.

For long positions:

Buy when euro hits 1.0599 (green line on the chart) and take profit at the price of 1.0632. Growth will occur in the event of another round of dovish statements from Fed representatives. However, when buying, ensure that the MACD line lies above zero or rises from it.

Euro can also be bought after two consecutive price tests of 1.0580, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0599 and 1.0632.

For short positions:

Sell when euro reaches 1.0580 (red line on the chart) and take profit at the price of 1.0547. Pressure will return in the absence of buyer activity at the current daily highs. However, when selling, make sure that the MACD line lies below zero or drops down from it.

Euro can also be sold after two consecutive price tests of 1.0599, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0580 and 1.0547.

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.