FX.co ★ Analysis and trading tips for EUR/USD on October 26

Analysis of transactions and tips for trading EUR/USD

Further growth became limited because the test of 1.0690 coincided with the sharp upward move of the MACD line from zero. After a short period of time, another test took place, but the MACD line went in the overbought area, leading to a signal to sell. This resulted in a price decrease of over 25 pips.

Euro fell even though the reports from Germany came out better than expected. A sell-off also occurred due to the strong housing market data from the US. Today, the downward momentum may continue if the ECB keeps interest rates unchanged and announces a more accommodative approach to future monetary policy. This will be announced during the press conference of Christine Lagarde.

For long positions:

Buy when euro hits 1.0557 (green line on the chart) and take profit at the price of 1.0591. Growth will occur, but only in the event of a hawkish stance by the ECB regarding future interest rates.

When buying, make sure that the MACD line lies above zero or rising from it. Euro can also be bought after two consecutive price tests of 1.0538, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0557 and 1.0591.

For short positions:

Sell when euro reaches 1.0538 (red line on the chart) and take profit at the price of 1.0501. Pressure will increase in continuation of yesterday's trend, following the ECB's soft stance on monetary policy.

When selling, make sure that the MACD line lies under zero or drops down from it. Euro can also be sold after two consecutive price tests of 1.0557, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0538 and 1.0501.

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.